ROCHESTER TELEPHONE CORP /NEW/, 10-K405, 1996-03-25

ROCHESTER TELEPHONE CORP /NEW/
10-K405, 1996-03-25
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1995

Commission File Number 33-91250

------------
ROCHESTER TELEPHONE CORP.
(Exact name of Registrant as specified in its charter)
------------

New York 16-1469713
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

180 South Clinton Avenue 14646-0700
Rochester, New York (Zip Code)
(Address of principal executive offices)

Registrant's telephone number, including area code: (716) 777-1000

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]

As of March 20, 1996, all 772 outstanding shares of the
registrant's no par, no stated value common stock were held
by Frontier Corporation.

OMISSION OF INFORMATION BY CERTAIN WHOLLY-OWNED SUBSIDIARIES

The registrant meets the conditions set forth in general
instruction J(1)(a) and (b) of Form 10-K and is therefore
filing this Form with the reduced disclosure format.

<PAGE>
<PAGE>
PART I

ITEM 1. BUSINESS

The Company

Rochester Telephone Corp. (the "Company") is a
regulated independent telephone company that serves
customers in the Rochester, New York market. The Company is
the primary provider of basic telephone services in the
Rochester market and offers its customers a full complement
of local network services, access to long distance network
services, and directory and other operator services. The
Company also offers all of its network services for sale on
a wholesale basis to other telecommunication service
providers in the Rochester market. In addition, the Company
operates retail phone centers for the direct sale of
telephone equipment and maintenance centers where customers
can drop off leased telephone equipment in need of repair.

The Company was incorporated under the laws of the
State of New York in November 1994 and is a wholly owned
subsidiary of Frontier Corporation ("Frontier"). Frontier
has served the Rochester market since 1920 and has evolved
into a major U.S. diversified telecommunications firm. The
Company's operations represented approximately 14.7% of
Frontier's consolidated revenues for the year ended December
31, 1995, and 21.4% of Frontier's consolidated assets as of
December 31, 1995.

The principal executive offices of the Company are
located at 180 South Clinton Avenue, Rochester, New York
14646-0700. The telephone number is (716) 777-1000.

General

The Company derives revenue primarily from fees for
local service, network access fees for interconnection of
long distance companies, fees for directory advertising and
fees for billing and other services provided to long
distance companies. The Company also derives revenue from
the sale, leasing and maintenance of telephone equipment and
the sale of voice mail, custom calling features and advanced
number identification products such as caller ID. In
addition, the Company offers its network services on a
tariff basis for wholesale purchase by other
telecommunication service providers, including Frontier
Communications of Rochester, Inc., a subsidiary of Frontier.
The Company's expenses are primarily related to the
development and maintenance of its local exchange network
and costs associated with customer service, billing and
other general and administrative expenses.

The Company operates 58 central office and remote
switching centers in Rochester, New York. As of December
31, 1995, the Company served 524,630 access lines in the
Rochester market, of which 349,201 were residence lines and
175,429 were business lines. As of December 31, 1995 the
Company had 33 employees per ten thousand access lines,
which approaches the most efficient ratio in the industry.

Since the beginning of 1988, the Company has invested
over $394 million in upgrading its local exchange business
in the Rochester market. Over this period, the Company's
switching networks have been fully digitized, making
Rochester one of the largest cities in the United States to
be served by an all-digital network.

As part of the Company's continuing strategy to provide
a greater selection of value-added products, the Company has
introduced advanced services such as Caller ID, Caller ID
with Name, distinctive ringing, directory-assistance call
completion, and an enhanced voice mail platform. The
Company has also conducted marketing trials and tests of new
technologies such as video-on-demand service using a hybrid
fiber-optic/coaxial cable network.

Regulatory Matters

The Open Market Plan

In February 1993, Frontier (then known as Rochester
Telephone Corporation) filed a petition for reorganization
with its primary regulator, the New York State Public
Service Commission (NYSPSC), which became known as the "Open
Market Plan." The Open Market Plan permits Frontier to
operate its non-New York State businesses free from NYSPSC
regulation, in exchange for the opening to competition of
telecommunications services in the Rochester market. The
NYSPSC and Frontier's shareholders approved the Open Market
Plan in late 1994, and Frontier's local exchange operations
in the Rochester market were transferred to the Company on
January 1, 1995.

During the seven year period of the Open Market Plan
which became effective on January 1, 1995, the Company will
no longer be regulated by rate-of-return regulation, but
instead will be regulated under pure price cap regulation.
Over this period, planned rate reductions of $21 million
will be implemented by the Company to its customers. The
agreement calls for the Company to reduce rates by an
annualized revenue requirement of $11 million on January 1,
1995, $2.5 million on January 1, 1996, and $1.5 million each
succeeding January 1 through and including January 1, 2001.
In addition, for regulatory reporting, a total of $17
million is to be credited to the regulated depreciation
reserve during this seven year period. During 1995 the
Company recorded in its regulated depreciation reserve
accounts the required increase of $5.0 million and reflected
the 1995 rate reductions by eliminating its charge for
residential touchtone service, increasing the base of
customers qualifying for lifeline service, and reducing its
rates on business touchtone, access charges, and local
measured service.

The Open Market Plan has increased local telephone
competition in the Rochester, New York market by providing
for (1) the full interconnection of competing local networks
including reciprocal compensation for terminating traffic,
(2) equal access to network databases, (3) access to local
telephone numbers (4) telephone number portability and (5)
resale of the Company's existing services. Competitors,
such as AT&T, MFS and Time Warner have already begun
providing alternative transmission services and access to
local exchange services in the Rochester market. The
inherent risk associated with opening the Rochester market
is the potential loss of revenues to competitors. However,
results in 1995 indicate that a stimulation in demand in the
use of the network and new product revenue can offset the
losses from customer migration. Increased competition may
also lead to additional price decreases for some services,
adversely impacting the Company's margins. However the Open
Market Plan does not require the Company to rebate any
additional earnings achieved through operating efficiencies
that previously would have been shared with customers.

The Open Market Plan also imposes conditions on the
declaration of dividends from the Company to Frontier such
that the Company may only pay dividends on its common stock
when the payment of such dividends will impair neither the
Company's service quality nor its ability to finance its
short and long term capital needs at reasonable terms, while
maintaining specified debt ratings (a target debt rating of
"A" from S&P).

Regulatory Accounting

As of September 30, 1995, the Company discontinued the
application of Financial Accounting Standards No. 71 (FAS
71), "Accounting for the Effects of Certain Types of
Regulation." The Company discontinued the use of FAS 71
based upon changes in regulation and increasingly rapid
advancements in telecommunications technology and other
factors creating competitive markets. The discontinuance of
regulatory accounting methods resulted in a non-cash post-
tax extraordinary charge of $60.4 million, net of applicable
income taxes of $34.9 million, primarily caused by the
reduction in the recorded value of long-lived telephone
plant assets.

Environmental and Other Matters

The Environmental Protection Agency (EPA) and other
agencies regulate a number of chemicals and substances that
may be present in facilities used in the provision of
telecommunications services. These include preservatives in
some wood poles, asbestos in certain underground duct
systems, and lead in some cable sheathing. Some components
of the Company's network may include one or more of these
substances. The Company believes that, in their present
uses, any such facilities of the Company pose no significant
environmental or health risk that derives from EPA regulated
substances. If EPA regulation of any such substance is
increased, or if any facilities are disturbed or modified in
such a way as to require removal; special handling, storage
and disposal may be required for any such facilities removed
from use.

Employees and Labor Relations

As of December 31, 1995 the Company had 1,730
employees, of which 282 were management employees and 1,448
were clerical, service and craft workers. The Rochester
Telephone Workers Association ("RTWA") represents 720 of
such clerical and service workers and the Communications
Workers of America, Local 1170 ("CWA")
represents 728 craft and service workers. The union labor
contracts are negotiated in three year cycles.

Under the current three-year contract between the
Company and the RTWA, effective August 12, 1994, bargaining
unit employees received a 2.0% general increase. On
February 12, 1995 they received a 1.0% general increase.
The contract provides that they will receive the same amount
of increase on February 18, 1996 and February 16, 1997. The
RTWA contract will expire on August 12, 1997.

The CWA contract with the Company expired on January
31, 1996. Bargaining for a new contract has been underway
for some time. To date, no new agreement has been reached.

ITEM 2. PROPERTIES

The Company owns its telephone property, which
includes: connecting lines between customers' premises and
the central office switching equipment; buildings, land and
miscellaneous property; and customer premises equipment
under lease agreement with the Company.

The connecting lines include aerial and underground
cable, conduit, poles and wires, and microwave equipment.
These facilities are located on public streets and highways
or on privately owned land. The Company has permission to
use these lands pursuant to local governmental consent or
lease, permit, easement, or other agreement.

The central office switching equipment includes digital
electronic switches and peripheral equipment.

The Company owns or leases the land and buildings in
which its central offices, warehouse space, office and
traffic headquarters are located. The Company's
headquarters are located in a leased seven-story building at
180 South Clinton Avenue, Rochester, New York. The lease
expires in 2003 and is renewable for two successive ten-year
periods.

ITEM 3. LEGAL PROCEEDINGS

On October 3, 1995, AT&T Communications of New York
filed a formal complaint with the NYSPSC requesting changes
to the Open Market Plan. AT&T asked the NYSPSC to reduce
the Company's wholesale rates to resellers by increasing
the "wholesale discount" (the margin between wholesale and
retail rates) for most services from 5% to 35%. AT&T also
complained about other rates and about the terms and
conditions of the provisioning of service to resellers.
The NYSPSC considered AT&T's new petition in December,
1995. The NYSPSC comments indicated a desire for the
Company and AT&T to meet first to discuss their
differences, with a formal proceeding to follow. On
February 2, 1996 the NYSPSC issued an order reconvening the
parties to the Open Market Plan, to consider access to
electronic systems, the existing wholesale/retail rate
differential, the usage surcharge for residential service
and information availability. The Company filed a response
in early March. Management cannot now predict the ultimate
result.

In its Opinion and Order in Case 87-C-8959, issued
July 6, 1993, the NYSPSC, by a three-to-two vote, imposed a
royalty upon the Company in the amount of two percent of
the total capitalization of the Company's unregulated
operations. The NYSPSC justified the royalty on two
grounds: first, that ratepayers are entitled to protection
from the potential for cost misallocations and increased
risk that accompany diversification of the Company's basic
telephone business; and second, that the Company's
unregulated operations benefit from their use of the
Rochester name and reputation. The NYSPSC rejected the
Company's statutory and constitutional defenses and
concluded that it possessed the authority under the Public
Service Law to impose a royalty and that its imposition is
not unconstitutional. The Company estimates that its
potential impact is in the range of $2 million per year.
The royalty, if implemented, would be an imputation against
the Company's intrastate revenue requirement. The NYSPSC
ordered the Company to file, by August 5, 1993, an
accounting plan to account for the royalty amount, together
with a plan for returning such amount to ratepayers. The
NYSPSC denied a request for waiver and, on August 5, 1993,
the Company filed its plan.

On June 30, 1994, the Appellate Division unanimously
upheld the Commission's Order. The Court of Appeals, on
October 31, 1995, unanimously confirmed the Commission's
authority, as a generic matter, to utilize the royalty as a
ratemaking tool subject to review of its application in
individual cases, including any application to the Company,
in the future. The Company has agreed within the context of
the Rate Stabilization Plan, which is part of the Open
Market Plan, that no additional revenue requirement
adjustments resulting from the Royalty proceeding will be
made during the duration of the Open Market Plan.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Omitted pursuant to General Instruction J.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SECURITY MATTERS

The Company is a wholly-owned subsidiary of Frontier.
Therefore there is no established public trading market for the
no par value, common stock of the Company.

The Open Market Plan, discussed under Item I, imposes
conditions on the declaration of dividends from the Company to
Frontier such that the Company may only pay dividends on its
common stock when the payment of such dividends will impair
neither the Company's service quality nor its ability to finance
its short and long term capital needs at reasonable terms, while
maintaining specified debt ratings (a target debt rating of
"A" from S&P).

ITEM 6. SELECTED FINANCIAL DATA

Omitted pursuant to General Instruction J.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company increased operating income in 1995 by $15.0
million or 20.8% over 1994. Strong increases in local
service revenues coupled with continued reductions in
operating expenses were the primary factors contributing to
this growth.

Overall for the year ended December 31, 1995 the
Company reported a net loss of $12.5 million as compared to
1994's reported net income of $28.3 million. The reason for
the reported net loss for the year was the Company's
decision to discontinue the provisions of Financial
Accounting Standards Board Statement No. 71 ("FAS 71"),
"Accounting for the Effects of Certain Types of Regulation"
in the third quarter of 1995. The Company discontinued the
use of FAS 71 based upon changes in regulation and
increasingly rapid advancements in telecommunications
technology and other factors creating competitive markets.
The discontinuance of regulatory accounting methods resulted
in a non-cash extraordinary charge of $60.4 million, net of
taxes. In addition the Company adopted FAS 116, "Accounting
for Contributions Received and Contributions Made" in the
third quarter resulting in an additional one-time cumulative
effect charge to earnings of $1.0 million, net of taxes.

Income before extraordinary item and cumulative effect
of changes in accounting principles was $49.0 million for
the year ended December 31, 1995 as compared to $35.0
million for the year ended December 31, 1994. Income before
taxes, extraordinary item and cumulative effect of changes
in accounting principles for 1995 was $77.9 million or a
45.8% increase over the comparable 1994 number of $53.4
million. Details of specific line item changes are discussed
below.

RESULTS OF OPERATIONS

Revenues. In 1995, revenues increased $7.0 million to
$315.3 million, an increase of 2.3% over 1994. Access line
growth was 4.5% in 1995, more than double the 1994 growth
rate of 1.9%. Higher demand for enhanced services in the
environment of the Open Market Plan also contributed to the
1995 revenue increase. In general, prices being charged
both to customers and long distance companies for access
service usage have declined over the past three years due to
regulatory requirements and to increased competition in the
Company's largest markets. The Company expects retail and
wholesale prices to decline as competition increases and
regulatory controls are relaxed.

Operating Costs and Expenses. Operating expenses in
1995 decreased by $5.2 million or 3.5% over total operating
expenses for 1994. The primary reasons for the operating
expense reductions included lower labor costs due to the
transfer of some employees and some operational functions
such as sales and marketing from the Company to Frontier
Communications of Rochester and Frontier ($3.3 M), a
permanent reduction in employee benefits ($3.2M), and a
reduction in the amortization of software development costs
($1.8M). These reductions in operating expense were
partially offset by increases in yellow page commission
expenses ($1.1M), advertising expenses ($1.0M) and other
maintenance expenses ($1.0M). Operating taxes decreased
$3.1 million or 10.7% over 1994. The primary reason for the
operating tax reduction was a utility tax law change in 1995
that shifted the access charge deduction from interexchange
carriers to local exchange carriers.

Operating Income. Operating income for 1995 was $87.0
million compared to $72.0 million in 1994, an increase of
20.8%. Income before extraordinary item and cumulative
effect of changes in accounting principles was $49.0
million, an increase of $14.0 million or 40% compared to
1994. These increases in operating income were caused by
both the continuing growth in local service revenues and the
continued reduction in operating expenses as discussed
above.

Other Income Statement Items

Interest Expense. Interest expense was down 46.0% from
$11.6 million in 1994 to $6.2 million in 1995. The primary
reasons for the reduction in interest expense are lower
average outstanding debt levels under the Revolving
Credit Agreement during 1995 and a lower effective composite
interest rate on the Company's outstanding debt during 1995
as compared to 1994. In 1994, the allocation of interest
expense to the Company was based on the effective composite
interest rate paid on the consolidated debt of the Company
and Frontier. The Company's average outstanding debt during
1995 was $90.2 million as compared to $125.0 million in
1994. This reduction reflects the Company's decision during
1995 to use internally generated cash flows to reduce
outstanding debt before the declaration of cash dividends.
The composite interest rate applicable to the outstanding
debt during 1995 was 6.9% as compared to a composite
interest rate of 9.2% on the debt outstanding during 1994.

Other Expense, Net. Other expense, net, was $2.8
million for 1995 compared to $7.0 million in 1994. The
primary reason for this reduction was the elimination in
1995 of the legal and administrative costs of filing the
Open Market Plan.

Income Taxes. The effective tax rate in 1995 was
37.1%. This compares to an effective income tax rate of
34.4% in 1994 and 36.0% in 1993. The primary reason for the
increase in the effective tax rate for 1995 is a reduction
of tax exempt interest income to the Company.

Nonrecurring charges. In 1995, the Company discontinued
the application of FAS 71 (See Note 2 in the financial
statements). The impact of discontinuing FAS 71 amounted to
a one-time charge of $60.4 million in the third quarter of
1995. In addition, the Company adopted FAS 116. The
cumulative effect of the adoption of this standard resulted
in a charge of $1.0 million also reflected in the third
quarter of 1995.

LIQUIDITY AND CAPITAL RESOURCES

Cash and Cash Equivalents

At December 31, 1995, the Company had $5.6 million in
cash and cash equivalents. Cash generated from operations
amounted to $98.6 million in 1995 as compared to $96.7
million in 1994. Capital expenditures increased $3.7
million to a total of $38.6 million in 1995 compared to
$34.9 million in 1994. No dividends were declared during
1995. Total debt repayments during 1995 amounted to $99.7
million. Net proceeds from new debt offerings were $39.6
million. These proceeds were from the issuance of $40
million of medium term notes in March 1995, the Company's
public debt requirement under the Open Market Plan (See Note
4 in the financial statements).

Debt

As of December 31, 1995 the Company's total outstanding
long-term debt amounted to $60.3 million. This debt
consisted of $20.3 million under the Company's Revolving
Credit Agreement and $40.0 million of medium term notes
issued on March 27, 1995. The net proceeds from the medium
term notes were used to pay down $40.0 million of the
Company's outstanding balance under the Revolving Credit
Agreement. Cash generated from operations was used to repay
an additional $59.7 million under the Revolving Credit
Agreement during 1995. The current debt ratings on the
Company's medium term notes from Standard & Poor's and Duff
& Phelps is AA, from Fitch, AA-, and from Moody's, A1.

Debt Ratio and Interest Coverage

The Company's debt ratio was 19.4% as of December 31,
1995. This compares to a debt ratio of 29.1% at December
31, 1994. This change is primarily due to the retirement of
outstanding debt under the Revolving Credit Agreement. Pre-tax
interest coverage was 13.5 times for the year ended
December 31, 1995 as compared with 5.6 times for the year
ended December 31, 1994, excluding nonrecurring charges.

Capital Spending

The Company plans to spend a total of approximately $45
million on its capital program during 1996. The total 1996
capital program represents an increase of $6.4 million or
16.5% over 1995.

Cash Flows

Cash Flow from Operating Activities. Cash flow from
operations amounted to $98.6 million during 1995 as compared
to $96.7 million in 1994. The primary drivers of the cash
flow increase were increases in operating income, trade
accounts payable, affiliate accounts payable and the
postretirement benefit obligation offset by decreases in,
accounts receivable, accrued interest and taxes and prepaid
directory costs.

Cash Flow from Investing Activities. Expenditures on
property, plant and equipment for 1995 amounted to $38.6
million, an increase of $3.7 million from the $34.9 million
spent during 1994.

Cash Flow from Financing Activities. Net cash flow
from financing activities amounted to an outflow of $54.4
million during 1995, compared with net outflows of $61.8
million during 1994. During 1995, the Company issued $40.0
million of new medium term notes, using the net proceeds of
the debt issuance to pay down $40.0 million of outstanding
debt under the Revolving Credit Agreement. In addition, the
Company paid down an additional $59.7 million of outstanding
debt under the Revolving Credit Agreement during 1995. No
dividends were declared during 1995.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements, together with the report
thereon of Price Waterhouse LLP, dated January 22, 1996, is
presented on pages 23 through 44 of this Form 10-K report
and is incorporated by reference into this item 8.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Omitted pursuant to General Instruction J.

ITEM 11. EXECUTIVE COMPENSATION

Omitted pursuant to General Instruction J.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

Omitted pursuant to General Instruction J.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Omitted pursuant to General Instruction J.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K.

(a) (1) Index to Financial Statements (As required by
Part II, Item 8)

Report of Independent Accountants
Statements of Income for the years ended
December 31, 1995, 1994 and 1993
Balance Sheets as of December 31, 1995,
1994 and 1993
Statements of Shareowner's Equity for the years ended
December 31, 1995, 1994 and 1993
Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993
Notes to Financial Statements

(2) Financial Statement Schedule for the years 1995, 1994
and 1993:

Report of Independent Accountants on Financial Statement
Schedule
Valuation and Qualifying Accounts and Reserves - Schedule II

All other schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto.

(3) See Exhibit Index for list of exhibits filed with this
report.

The Registrant hereby agrees to furnish the Commission a
copy of each of the Indentures or other instruments defining the
rights of security holders of the long-term debt securities of the
Registrant and any of its subsidiaries for which consolidated or
unconsolidated financial statements are required to be filed.

(b) Reports on Form 8-K - The Company did not file any Form 8-K
reports in 1995.

(d) Schedules other than set forth in response to Item 14(a)(2)
above for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and
therefore have been omitted.
<PAGE>

<PAGE>
SIGNATURES
__________

Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

ROCHESTER TELEPHONE CORP.
(Registrant)

By:/s/Anthony J. Cassara
_____________________________
Anthony J. Cassara, President

Date: March 20, 1996

Pursuant to the requirements of the Securities Exchange
Act of 1934, this Annual Report on Form 10K has been signed
below by the following persons in their respective capacities
on its behalf of the registrant and on the dates indicated.

Signature Title

/s/ Jeremiah T. Carr
____________________
Jeremiah T. Carr Chairman of the Board and Director
March 20, 1996

/s/ Anthony J. Cassara
______________________
Anthony J. Cassara President and Director
March 20, 1996

/s/ Martin Mucci
__________________
Martin Mucci Vice President and Treasurer
March 20, 1996 (principal financial and
accounting officer)

_______*__________
Harlan D. Calkins Director
March 20, 1996

_______*__________
Maurice F. Holmes Director
March 20, 1996

<PAGE>
<PAGE>
SIGNATURES

_______*__________
Thomas H. Jackson Director
March 20, 1996

_______*__________
Richard P. Miller, Jr. Director
March 20, 1996

_______*__________
Christine B. Whitman Director
March 20, 1996

*By /s/Anthony J. Cassara
--------------------- Manually signed powers of
Anthony J. Cassara attorney for each Director
Attorney-in-Fact are attached hereto and filed
herewith pursuant to
Regulation S-K Item 601(b)24
as Exhibit 24.

<PAGE>
<PAGE>
Report of Independent Accountants on
Financial Statement Schedule

To the Shareowner of
Rochester Telephone Corp.

Our audits of the financial statements referred to
in our report dated January 22, 1996, also
included an audit of the Financial Statement
Schedule listed in Item 14 of this Form 10-K. In
our opinion, based on our audits, this Financial
Statement Schedule presents fairly, in all
material respects, the information set forth
therein when read in conjunction with the related
financial statements.

By/s/Price Waterhouse LLP
--------------------
PRICE WATERHOUSE LLP

Rochester, New York
January 22, 1996
<PAGE>
<PAGE>
<TABLE>

ROCHESTER TELEPHONE CORP.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
AND RESERVES FOR THE YEAR ENDED
DECEMBER 31, 1995
(Table 1 of 3)

In thousands of dollars
Additions
----------------------------
Balance at Charged to Charged to
beginning costs other Balance at
Description of year expenses accounts (1) Deductions (2) end of year
----------- ---------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C>
Reserve for
uncollectible accounts $1,017 $2,563 $6,344 $8,503 $1,421
=====================================================================

(1) Primarily recoveries of uncollectible accounts.

(2) Amounts written off against reserve.
(/TABLE>
<PAGE>
<PAGE>

</TABLE>
<TABLE>
ROCHESTER TELEPHONE CORP.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND
RESERVES FOR THE YEAR ENDED DECEMBER 31, 1994
(Table 2 of 3)

In thousands of dollars
Additions
---------------------------
Balance at Charged to Charged to
beginning costs and other Balance at
Description of year expenses accounts (1) Deduction (2) end of year
----------- ---------- ---------- ------------ ------------- -----------

<S> <C> <C> <C> <C> <C>
Reserve for
uncollectible accounts $431 $3,229 $6,720 $9,363 $1,017
==================================================================

(1) Primarily recoveries of uncollectible accounts.

(2) Amounts written off against reserve.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
ROCHESTER TELEPHONE CORP.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND
RESERVES FOR THE YEAR ENDED DECEMBER 31, 1993
(Table 3 of 3)

Reserve for
uncollectible accounts $269 $4,322 $7,345 $11,505 $431
=====================================================================

(1) Primarily recoveries of uncollectible accounts.

(2) Amounts written off against reserve.
</TABLE>
<PAGE>
<PAGE>

Report of Independent Accountants

To the Shareowner of
Rochester Telephone Corp.

In our opinion, based upon our audits, the
accompanying balance sheets and the related
statements of income, shareowner's equity and cash
flows present fairly, in all material respects,
the financial position of Rochester Telephone
Corp. at December 31, 1995, 1994 and 1993, and the
results of its operations and its cash flows for
the years then ended in conformity with generally
accepted accounting principles. These financial
statements are the responsibility of the Company's
management; our responsibility is to express an
opinion on these financial statements based on our
audits. We conducted our audits of these
statements in accordance with generally accepted
auditing standards which require that we plan and
perform the audit to obtain reasonable assurance
about whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence supporting
the amounts and disclosures in the financial
statements, assessing the accounting principles
used and significant estimates made by management,
and evaluating the overall financial statement
presentation. We believe that our audits provide
a reasonable basis for the opinion expressed
above.

As discussed in Note 9 to the financial
statements, during the third quarter of 1995 the
Company adopted the provisions of Statement of
Financial Accounting Standards No. 116,
"Accounting for Contributions Received and
Contributions Made."

As discussed in Note 2 to the financial
statements, during the third quarter of 1995 the
Company discontinued accounting in accordance with
Statement of Financial Accounting Standards No.
71, "Accounting for the Effects of Certain Types
of Regulation."

As discussed in Note 9 to the financial
statements, during the first quarter of 1994 the
Company adopted the provisions of Statement of
Financial Accounting Standards No. 112,
"Employers' Accounting for Post Employment
Benefits."

The accompanying financial statements represent
the carve out of the Company's results from
operations and net assets from the December 31,
1994 and 1993 historical consolidated financial
statements of Frontier Corporation (formerly
Rochester Telephone Corporation).

By/s/Price Waterhouse LLP
------------------
PRICE WATERHOUSE LLP

January 22, 1996
1900 Chase Square
Rochester, New York 14604
<PAGE>
<PAGE>
<TABLE>
ROCHESTER TELEPHONE CORP.
STATEMENTS OF INCOME

- -------------------------------------------------------------------------------------------------

In thousands of dollars Years Ended Ended December 31, 1995 1994 1993
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $315,335 $308,349 $301,348
- -------------------------------------------------------------------------------------------------

Operating Costs and Expenses
- ----------------------------
Operating expenses 146,236 151,472 151,486
Depreciation and amortization 56,549 56,235 54,040
Taxes other than income taxes 25,589 28,647 28,453
Software write-off - - 3,300
- -------------------------------------------------------------------------------------------------
Total Operating Costs and Expenses 228,374 236,354 237,279
- -------------------------------------------------------------------------------------------------

Operating Income 86,961 71,995 64,069
Interest expense 6,237 11,550 11,275
Other expense, net 2,839 7,013 4,333
- -------------------------------------------------------------------------------------------------

Income Before Taxes, Extraordinary Item and Cumulative
Effect of Changes in Accounting Principles 77,885 53,432 48,461
Income taxes 28,878 18,386 17,441
- -------------------------------------------------------------------------------------------------

Income Before Extraordinary Item and Cumulative
Effect of Changes in Accounting Principles 49,007 35,046 31,020
Extraordinary item (60,441) - -
Cumulative effect of changes in accounting principles (1,020) (6,729) -
- -------------------------------------------------------------------------------------------------

Net (Loss) Income $ (12,454) $ 28,317 $ 31,020
- -------------------------------------------------------------------------------------------------

See accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<PAGE>
<TABLE>
ROCHESTER TELEPHONE CORP.
BALANCE SHEETS

- --------------------------------------------------------------------------------
In thousands of dollars December 31, 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 5,643 $ - $ -
Accounts receivable, (less allowance for
uncollectibles of $1,421, $1,017, and $431
respectively) 54,450 53,608 53,037
Accounts receivable - affiliates 2,273 - -
Materials and supplies 3,084 3,623 3,274
Prepaid directory 13,038 10,767 9,570
Other prepayments 1,752 1,805 2,102
- --------------------------------------------------------------------------------
Total Current Assets 80,240 69,803 67,983
- --------------------------------------------------------------------------------
Property, plant and equipment, net 340,545 465,747 496,554
Prepaid pension 28,305 11,739 6,117
Deferred and other assets 1,799 21,592 31,335
- -------------------------------------------------------------------------------
Total Assets $450,889 $568,881 $601,989
===============================================================================

LIABILITIES AND SHAREOWNER'S EQUITY
Current Liabilities
Accounts payable $ 42,054 $ 29,995 $ 28,316
Accounts payable - affiliates 9,770 - -
Advances from affiliate 5,753 - -
Advance billings 5,120 7,597 7,688
Taxes accrued 5,602 4,970 5,252
Interest accrued 784 2,748 4,127
Other current liabilities 4,736 2,888 2,733
- -------------------------------------------------------------------------------
Total Current Liabilities 73,819 48,198 48,116
- -------------------------------------------------------------------------------
Long-term debt 60,300 120,000 130,000
Deferred income taxes 36,196 75,384 89,216
Postretirement benefits obligation 20,253 15,597 8,646
Other long-term liabilities 9,238 17,604 10,429
Common stock, no par, no stated value 263,537 292,098 292,098
Retained earnings (12,454) - 23,484
- -------------------------------------------------------------------------------
Total Liabilities and Shareowner's Equity $450,889 $568,881 $601,989
===============================================================================

See accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<PAGE>
<TABLE>
ROCHESTER TELEPHONE CORP.
STATEMENTS OF SHAREOWNER'S EQUITY

- -------------------------------------------------------------------------------
In thousands of dollars 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>

COMMON STOCK
1,000 shares authorized, no par value
(772 shares issued and outstanding)
Balance, January 1 $292,098 $292,098 $292,098
Equity adjustment on assets transferred 1/1/95 (28,561) - -
- -------------------------------------------------------------------------------
Balance, December 31, $263,537 $292,098 $292,098
===============================================================================

RETAINED EARNINGS
Balance, January 1 $ - $ 23,484 $ 38,399
Net (loss) income (12,454) 28,317 31,020
Common stock dividends - (51,801) (45,935)
- -------------------------------------------------------------------------------
Balance, December 31, $(12,454) $ - $ 23,484
===============================================================================

See accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<PAGE>
<TABLE>
ROCHESTER TELEPHONE CORP.
STATEMENTS OF CASH FLOWS
- ----------------------------------------------------------------------------------------
In thousands of dollars Years Ended December 31, 1995 1994 1993
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net (Loss) Income $ (12,454) $ 28,317 $ 31,020
- -----------------------------------------------------------------------------------------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Extraordinary item 95,317 - -
Cumulative effect of change in accounting
principle 1,569 10,352 -
Depreciation and amortization 56,549 56,235 54,040
Depreciation reserve adjustment - 9,500 -
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (54,450) (571) 3,030
Increase in accounts receivable - affiliates (2,273) - -
Decrease (increase) in materials and supplies 170 (349) 1,349
(Increase) decrease in prepaid directory (2,271) (1,197) 497
(Increase) decrease in other prepayments (208) 297 (29)
Increase in prepaid pension (16,566) (5,622) (3,370)
Decrease (increase) in deferred and other
assets 5,210 9,743 (12,757)
Increase (decrease) in accounts payable 40,401 1,679 (2,900)
Increase in accounts payable - affiliates 9,770 - -
(Decrease) increase in advance billings (2,207) (91) 24
Increase (decrease) in accrued interest 1,344 (1,661) (953)
& taxes
Increase in other current liabilities 1,848 155 2,733
Increase in postretirement benefits
obligation 5,262 6,951 8,646
(Decrease) increase in deferred income (30,418) (13,832) 7,407
Increase (decrease) in other long term
liabilities 2,046 (3,177) 8,294
- ------------------------------------------------------------------------------------------
Total Adjustments 111,095 68,412 66,011
- ------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 98,641 96,729 97,031
- ------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Expenditures for property, plant and equipment (38,619) (34,928) (41,096)
- ------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (38,619) (34,928) (41,096)
- ------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Repayments of long-term debt (99,700) (10,000) (10,000)
Proceeds from long-term debt 39,568 - -
Advances from affiliates 5,753 - -
Dividends paid - (51,801) (45,935)
- ------------------------------------------------------------------------------------------
Net Cash Used in Financing Activities (54,379) (61,801) (55,935)
- -------------------------------------------------------------------------------------------
Net Increase in Cash & Cash Equivalents 5,643 - -
Cash and Cash Equivalents at Beginning of Year - - -
- -------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 5,643 $ - $ -
===========================================================================================
See accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<PAGE>

ROCHESTER TELEPHONE CORP.

Notes to Financial Statements

Note 1: Significant Accounting Policies
_______________________________

Basis of Accounting

The accounting policies of Rochester Telephone Corp.
(the "Company"), a wholly owned subsidiary of Frontier
Corporation ("Frontier"), are in conformity with generally
accepted accounting principles. Preparation of financial
statements in conformity with generally accepted accounting
principles requires the use of management estimates. During
the third quarter of 1995 the Company discontinued
accounting for its operations under Statement of Financial
Accounting Standards No. 71 (FAS 71), "Accounting for the
effects of Certain Types of Regulation" (see Note 2).

Comparative Financial Statements

The Company's net assets were transferred from its
parent company, Frontier, on January 1, 1995. The Company's
comparative financial statements for 1994 and 1993 represent
the carve-out of the Company's results from operations and
net assets from the historical financial statements of
Frontier. The historical financial statements of the
Company were included in the consolidated financial
statements of Frontier. The 1994 and 1993 comparative
financial statements assumed that the net cash flow
generated from operating activities, less those expenditures
for property, plant and equipment and repayment of long term
debt, was paid to Frontier in the form of a cash dividend.
The Company's management believes that the assumptions used
in preparing the carve-out financial statements provide a
reasonable basis for presenting the results of operations
and net assets of the Company.

Allocation of Corporate Overhead

The results of operations of the Company include
allocations of corporate expenses from Frontier. These
costs include primarily executive, corporate planning,
legal, tax, treasury, corporate communications, and
corporate accounting functions. They are allocated to the
Company based on a weighted average of four mutually
beneficial factors; employees, revenues, capitalization and
common equity. The methodology used to allocate these
corporate mutually beneficial costs is considered reasonable
and has been approved for use by the New York State Public
Service Commission ("NYSPSC") prior to the separation of the
companies under the Open Market Plan agreement (see Note
11).

Common Stock

The value assigned to common stock of the Company was
determined based on the historical net book value of the
assets transferred from Frontier to the Company on January
1, 1995. The adjusted net book value of the assets
transferred, as of January 1, 1995, was $263.5 million. For
1994 and 1993, the value assigned to common stock of the
Company was based on the historical net book value of the
assets represented by the carve-out, as if they were
transferred from Frontier on January 1, 1993.

Fair Value of Financial Instruments

Cash and cash equivalents are valued at their carrying
amounts, which are reasonable estimates of fair value. The
fair value of long-term debt is estimated using rates
currently available to the Company for debt with similar
terms and maturities. The fair value of all other financial
instruments approximates cost as stated.

Materials and Supplies

Materials and supplies are stated at the lower of cost
or market, based on weighted average unit cost.

Property, Plant and Equipment

Additions to and replacements of property, plant and
equipment are capitalized at original cost, including the
costs of benefits and supervision applicable to construction
labor. The cost of depreciable property units retired, plus
removal costs less salvage is charged to accumulated
depreciation. Replacement of items not considered units of
property and all repairs and maintenance are charged to
operating expense. The Company's provision for depreciation
is based on the straight-line, average remaining life method
for the various classes of plant. The range of service
lives were adjusted during 1995 as a result of the Company
discontinuing the application of FAS 71 (see note 2). The
current service lives as of December 31, 1995 are as
follows:

Furniture and fixtures 12 to 20 years
Central office equipment 8 to 13.5 years
Local and toll service lines 12 to 25 years
Station Equipment 10 to 21 years
Buildings and building improvements 5 to 35 years

Federal Income Taxes

The Company is included in the consolidated federal
income tax return of Frontier. The Company pays Frontier
for the federal income tax liability resulting from the
filing by Frontier of a consolidated U.S. federal income tax
return, determined on a separate entity basis. For federal
income tax purposes, the Company takes maximum advantage of
available tax incentives. In addition, certain interest and
other costs capitalized for financial statement purposes are
deducted in computing federal income taxes. Deferred income
tax assets and liabilities are determined based on differences
between the financial reporting and tax basis of assets and
liabilities and are measured using the enacted tax rates and
laws that will be in effect when those differences are
expected to reverse.

Cash Flows

For purposes of the Statement of Cash Flows, the
Company considers all highly-liquid investments with an
original maturity of three months or less to be cash
equivalents.

Actual interest paid was $9.3 million, $14.0 million,
and $12.7 million for the years ended December 31, 1995,
1994, and 1993 respectively. In addition, actual income
taxes paid were $33.2 million, $28.6 million, and $10.0
million for the years ended December 31, 1995, 1994, and
1993 respectively.

Software Write-off

During 1993, as part of the Settlement Agreement with
the NYSPSC, the Company agreed to write-off one-half of the
costs ($3.3 million), previously deferred in prior years, as
part of a project to redesign customer account records,
order flow and customer billing records. The project was
abandoned after it was determined that the cost to complete
it was substantially greater than initially estimated.

Revenue Recognition

Customers are billed as of monthly cycle dates.
Revenue is recognized as service is provided and unbilled
usage is accrued.

Reclassifications

Certain prior year amounts have been reclassified to
conform to current year presentation.

Note 2: Discontinuation of Regulatory Accounting Principles
___________________________________________________

Effective September 30, 1995, the Company discontinued
the application of FAS 71 on its regulated telephone
operations. This change was based on the Company having
achieved full price regulation on both the intrastate and
interstate regulated telephone operations and recognition of
the fact that competition has increased to the point where
the Company believes traditional rate-base, rate of return
regulation for setting prices based on historical and future
costs is no longer feasible.

As a result of the discontinuance of FAS 71, the
Company recorded a non-cash extraordinary charge of $60.4
million, net of an income tax benefit of $34.9 million, as
of September 30, 1995. The components of the extraordinary
charge follow:

In Millions of dollars Pre-Tax After-Tax
- -----------------------------------------------------------------------
Increase to the accumulated depreciation balance $ 105.4 $ 68.5
Elimination of other net regulatory liabilities (10.1) (0.9)
Accelerated amortization of tax credits - (7.2)
- -----------------------------------------------------------------------
$ 95.3 $ 60.4
- -----------------------------------------------------------------------

The adjustment of $105.4 million to net plant was
necessary because estimated useful lives and depreciation
methods historically prescribed by regulators did not keep
up with the rapid pace of technological changes in the
Company and differed significantly from those used by
unregulated enterprises. Net plant balances were adjusted
by increasing the accumulated depreciation balance. The
increase to the accumulated depreciation balance was
determined by a depreciation reserve study that identified
inadequate accumulated depreciation levels by individual
asset categories. The Company believes the reserve
shortfalls developed over the years as a result of the
systematic underdepreciation of assets resulting from the
regulatory process.

When adjusting its net telephone plant, the Company
gave effect to shorter, more economically realistic lives.
These depreciable lives were benchmarked against industry
standards and also reviewed with independent
telecommunications technology consultants. The following is
a summary of average depreciable lives before and after the
discontinuation of FAS 71.

Asset Category Before After
- ----------------------------------------------------------------------
Central Office Equipment
Digital Switching 20.0 13.5
Analog Switching 12.0 8.0
Circuit Equipment 12.0 8.0
Cable & Wire Facilities
Aerial Metallic 27.0 19.0
Underground Metallic 35.0 12.0
Buried Metallic 24.0 18.0
Fiber Optic 35.0 25.0
- ----------------------------------------------------------------------

The discontinuance of FAS 71 also required the Company
to eliminate for financial reporting the effects of any
actions of regulators that had been previously recognized as
regulatory assets and liabilities pursuant to FAS 71. These
net regulatory liabilities primarily consist of pension
credits, interest on unfunded OPEB liability, deferred
software costs and other deferred costs being amortized over
time for regulatory reporting.

Tax-related adjustments were required to adjust excess
deferred tax levels to the currently enacted statutory rates
and to eliminate tax-related regulatory assets and
liabilities. Prior to the discontinuance of FAS 71, the
Company had recorded deferred income taxes on the cumulative
amount of tax benefits previously flowed through to
ratepayers and recorded a regulatory asset for the same
amount. Also, the Company had recorded a regulatory
liability for the difference between deferred taxes at
higher historical tax rates than with those currently
enacted. At the time the Company discontinued the
application of FAS 71, the above tax-related regulatory
assets and liabilities were eliminated and deferred tax
balances adjusted to reflect the application of FAS 109
consistent with unregulated enterprises. In addition to
these tax impacts, the Company, prior to the discontinuance
of FAS 71, used the deferral method of accounting for
investment tax credits. This method provided for the
amortization of the credits as a reduction to tax expense
over the life of the assets that gave rise to the tax
credit. The impact of discontinuing FAS 71 will not be
significant to the results of operations in the future.

Note 3: Property, Plant and Equipment
_____________________________

Major classes of property, plant and equipment are summarized
below:

December 31,
In thousands of dollars 1995 1994 1993
_______________________ __________________________________

Land, buildings and building
improvements $ 46,182 $ 45,939 $ 45,179
Local and toll service lines 418,918 408,234 394,705
Central office equipment 339,390 337,468 332,019
Station equipment 11,357 11,790 10,542
Furniture and fixtures 44,019 41,223 42,401
Plant under construction 17,716 21,228 18,663
Less: Accumulated Depreciation 537,037 400,135 346,955
_______________________________
$340,545 $465,747 $496,554
================================

Depreciation expense was $56.5 million, $56.2 million, and
$54.0 million for the years ending December 31, 1995, 1994 and 1993,
respectively.

Note 4: Long-Term Debt
______________
December 31,
In thousands of dollars 1995 1994 1993
_______________________ ___________________________________
Debentures
10.46 % convertible, due
October 27, 2008 $ - $ 5,300 $ 5,300
9 %, due January 1, 2020 - 69,785 100,000
9 %, due August 15, 2021 - 100,000 100,000
_________________________________
- 175,085 205,300

Medium-term notes, 8.77 % - 9.30 %,
due 2000 to 2004 - 179,000 179,000
Medium-term notes, 7.51 %,
due 2002 (a) 40,000 - -
Revolving credit and term loan 20,300 120,000 -
agreements (b) ____________________________________
Sub-total 60,300 474,085 384,300
Less - Discount on long-term debt, - 2,977 3,422
net of premium ____________________________________
Total long-term debt 60,300 471,108 380,878
Long-term debt allocated to
Frontier (c) _ (351,108) (250,878
------------------------------------
$ 60,300 $120,000 $130,000
====================================

At December 31, 1995, aggregate debt maturities were:
(in thousands of dollars)

1996 1997 1998 1999 2000
---- ---- ---- ---- ----
$ - $ - $ - $20,300 $ -

(a) In accordance with the Open Market Plan agreement, the
Company issued $40 million of medium-term notes on
March 27, 1995. Interest is payable semi-annually on
March 27 and September 27 through the maturity date of
March 27, 2002. This debt is registered under the
Securities Act of 1933 and maintains current debt
ratings of AA from Standard & Poor's and Duff & Phelps,
AA-from Fitch and A1 from Moody's.

(b) In December 1994, the Company entered into a Revolving
Credit agreement with seven commercial banks. The
agreement established a $160 million secured line of
credit until December 18, 1999. This agreement was
amended at the end of the first quarter of 1995 to
reduce the maximum line of credit under the agreement
from $160 million down to $100 million and release
the security interest in the assets of the Company.
Commitment fees during the revolving loan period are
.07% per year on the outstanding commitment and are
paid quarterly. Interest on amounts drawn down are
based on either the prime rate, the London Interbank
Offered rate plus .13% or a competitive bid. As of
December 31, 1995, the Company had two outstanding
short-term borrowings under the revolving credit
agreement; one for $10.3 million at 6.15% and one
for $10.0 million at 6.06%.

Borrowings under the Revolving Credit Agreement are
classified as long-term debt as the Company intends
to refinance the debt on a short-term basis either
through continued short-term borrowings or available
credit facilities with unused commitments extending
beyond one year.

(c) The allocation of debt to the Company for the years
1994 and 1993 was based on a ratio of debt to total
capital of 30%. In accordance with Open Market Plan
with the NYSPSC, the initial ratio of long-term debt
to total capital was not to exceed 40.37%, and the
amount of public long-term debt to be maintained by
the Company could not be less than $40 million.

(d) In accordance with FAS 107, "Disclosures about Fair
Value of Financial Instruments," the Company
estimates that the fair value of the debt, based on
rates currently available to the Company for debt
with similar terms and remaining maturities, is
$63.4 million.

Note 5: Income Taxes
____________

The provision for income taxes consists of the following
(in thousands):

December 31,
______________________________
In thousands of dollars 1995 1994 1993
- ----------------------- ------------------------------
Federal
Current $30,358 $26,012 $21,841
Deferred (1,480) (7,626) (4,400)
-------------------------------
$28,878 $18,386 $17,441
================================

The Company is taxed under Article 9 of the New York
State Tax Law on the basis of gross receipts, not net
taxable income. Therefore, there is no current state tax
provision for income taxes.

The reconciliation of the federal statutory income tax
rate with the effective income tax rate reflected in the
financial statements is as follows:

December 31,
_____________________________________________
In thousands of dollars 1995 1994 1993
_______________________ _____________________________________________
Federal income tax expense $27,260 35.0% $18,701 35.0% $16,961 35.0%
at statutory rate
Accelerated depreciation 2,521 3.2% 2,650 5.0% 2,496 5.2%
Investment tax credit (597) -0.8% (934) -1.8% (1,164) -2.4%
Miscellaneous (306) -0.3% (2,031) -3.8% (852) -1.8%
---------------------------------------------
Total federal income tax $28,878 37.1% $18,386 34.4% $17,441 36.0%
=============================================

Deferred tax liabilities (assets) are comprised of the following:

December 31,
----------------------------------
In thousands of dollars 1995 1994 1993
- ----------------------- ----------------------------------
Accelerated depreciation $35,507 $65,340 $69,795
Investment tax credit - 7,853 8,788
Pension - FAS 87 7,277 4,291 2,296
Miscellaneous 873 5,710 12,538
----------------------------------
Gross deferred tax
liabilities 43,657 83,194 93,417
----------------------------------
Postretirement benefits
obligation (5,767 (5,378) (3,106)
Deferred compensation (85) (486) (543)
Miscellaneous (1,609) (1,946) (552)
-----------------------------------
Gross deferred tax assets (7,461) (7,810) (4,201)
-----------------------------------
Net deferred tax
liabilities $36,196 $75,384 $89,216
===================================

Note 6: Service Pensions and Benefits

The Company, through various contributory and
non-contributory retirement plans, provides retirement
benefits for substantially all employees. Benefits are based
on years of service and average salary. During 1995, the
Company recognized a curtailment gain of $1.7 million reflecting
the freezing of defined benefit plans sponsored by Frontier
for non-bargaining unit employees as of December 31, 1996.
"Freezing" the plan means the Company will cease making
future contributions to the plan and that the future monthly
pension benefits of eligible participants will be based on
the participant's accrued years-of-service and final average
compensation as of December 31, 1996. In addition retirement
and service requirements are being reduced by three years,
pension benefit formulas will be increased by a factor of
20% for all participants with five or more years of service
on December 31, 1996 and all employees with a date of hire
prior to January 1, 1995 will become 100% vested under the
plan amendments.

The allocation of net pension assets and expense to the
Company was based on the ratio of the number of employees who
were transferred from Frontier to the Company as of
January 1, 1995, the effective date of independent operations
of the Company.

December 31,
---------------------------
In thousands of dollars 1995 1994 1993
---------------------------
Actuarial present value of benefit
obligations:
Vested benefit obligation $78,348 $244,842 $223,147
Accumulated benefit obligation 87,053 255,216 242,463
---------------------------
Plan assets at fair value,
primarily fixed income
securities and common stock 102,477 303,793 317,250
Projected benefit obligation (88,098) (266,331) (277,824)
----------------------------
Funded status 14,379 37,462 39,426
Unrecognized net loss (gain) 14,911 (23,195) (32,909)
Unrecognized net transition asset (1,211) (2,063) (2,766)
Unrecognized prior service cost 226 625 3,068
Less: Allocation of pension assets - (1,090) (702)
to Frontier ----------------------------
Pension asset reflected in the
Balance Sheet $ 28,305 $ 11,739 $ 6,117
============================

December 31,
----------------------------
In thousands of dollars 1995 1994 1993
- ----------------------- ----------------------------
Service cost 2,853 5,328 5,289
Interest cost on projected benefit 5,950 19,322 19,050
obligation
Actual (return) loss on plan assets (22,485) 1,406 (32,610)
Net amortization and deferral 10,039 (30,731) 5,911)
-----------------------------
Net periodic pension benefit (3,643) (4,675) (2,360)
Benefit resulting from regulatory (1,090) (1,453) (1,453)
agency actions
Amount due to curtailment benefit (1,712) - -
-----------------------------
Net periodic pension benefit
recognized $ (6,445) (6,128) (3,813)
=============================

The projected benefit obligation at December 31, 1995,
1994 and 1993 was determined using an assumed weighted
average discount rate of 7.5%, 8.5% and 7.25%, respectively,
and an assumed weighted average rate of increase in future
compensation levels of 5.0%, 5.5% and 5.0%, respectively.
The weighted average expected long-term rate of return on
plan assets was assumed to be 9.0% at December 31, 1995 and
1994 and 8.75% at December 31, 1993. The unrecognized net
transition asset of January 1, 1987 is being amortized over
the estimated remaining service lives of employees. As of
December 31, 1995 there are two years of amortization
remaining on the transition asset.

The Company also participates in several defined
contribution plans. The most significant plan covers
substantially all management employees, who make
contributions through payroll deductions. Under a revised
matching formula beginning January 1, 1996, the Company will
match up to 100% of the first 3% of an employee's
contribution up to a maximum of $3,000 for 1996. Prior to
this change, the Company would match 75% of the employee's
contribution up to the first 6% of the employee's annual
salary. Any employee contributions above 6% of annual
salary would not receive a company match. All company
contributions are invested into the Frontier stock fund.
The total cost recognized by the Company under this defined
contribution plan was $1.3 million for 1995, $1.8 million
for 1994 and $1.6 million for 1993.

Note 7: Postretirement Benefits Other Than Pensions

The Company provides health care, life insurance, and
certain other retirement benefits for substantially all
employees. Plan assets consist principally of life
insurance policies and money market instruments. In
adopting FAS 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," the Company elected to defer
the recognition of the transition benefit obligation of $90
million over a period of twenty years.

During the fourth quarter of 1995, the Company amended
its health benefits plan to cap the cost absorbed by the
Company for health care and life insurance costs for non-
bargaining unit employees who retire after December 31,
1996. All other benefits are discontinued. The effect of
this amendment was to reduce the December 31, 1995
accumulated postretirement obligation by $2.3 million.

The status of the plan is as follows:

December 31,
-----------------------------
In thousands of dollars 1995 1994 1993
- ----------------------- -----------------------------
Accumulated postretirement benefit
obligation (APBO) attributable to:
Retirees $ 51,936 $ 57,781 $ 52,432
Fully eligible plan participants 13,892 17,768 18,213
Other active plan participants 11,105 15,236 19,179
Total APBO 76,933 90,785 89,824
Plan assets at fair value 3,619 3,813 3,944
APBO in excess of plan assets 73,314 86,972 85,880
Unrecognized transition obligation (74,481) (80,684) (85,167)
Unrecognized net prior service cost (1,076) (3,935) -
Unrecognized net gain 22,496 14,098 8,706
Less: Allocation of postretirement - (854) (773)
benefit obligation to Frontier
Accrued postretirement benefit -----------------------------
obligation $ 20,253 $ 15,597 $ 8,646
=============================

The components of the estimated postretirement benefit cost are as
follows:

December 31,
-----------------------------
In thousands of dollars 1995 1994 1993
- ----------------------- -----------------------------
Service cost $ 467 $ 664 $ 1,422
Interest on APBO 5,817 6,587 7,128
Return on plan assets (320) (350) (290)
Amortization of:
Transition obligation 4,381 4,482 4,482
Prior service cost 196 195 -
Gains and losses (2,228) (870) -
-----------------------------
Net postretirement benefit cost $ 8,313 $ 10,708 $ 12,742
=============================

To estimate these costs, health care costs were
assumed to increase 10.5%, 11.2% and 12.0% in 1996, 1995 and
1994, respectively, with the rate of increase declining
consistently to 5.0% by 2006 and thereafter. The weighted
discount rate was assumed to be 7.5%, 8.5% and 7.25% and the
rate of salary increase was assumed to be 5.0%, 5.5% and
5.0% at December 31, 1995, 1994 and 1993, respectively. The
expected long-term rate of return on plan assets was 9.0% at
December 31, 1995 and 1994 and 7.4% at December 31, 1993.
If the health care cost trend rates were increased by one
percentage point, the accumulated postretirement benefit
health care obligation as of December 31, 1995 would
increase by approximately $6.7 million while the sum of the
service cost and interest cost components of the net
postretirement benefit cost for 1995 would increase by
approximately $0.6 million.

Note 8: Stock Option Plans

Executive officers and directors of the Company are
eligible to receive Frontier stock options under the
"Management Stock Incentive Plan" and the "Directors Stock
Incentive Plan". Under the terms of the Directors Stock
Incentive Plan all non-employee directors of the Company are
entitled to receive up to 3,000 stock options annually.
Executive stock options are issued under the authority of
the Frontier Board of Directors. Under the Management Stock
Incentive Plan the aggregate number of shares available for
grant cannot exceed 1% of the number of issued shares
including treasury shares of the Company's common stock
during any calendar year. Under the Directors Stock
Incentive Plan the maximum number of shares available for
grant is 1,000,000 shares.

The exercise price is the fair market value of the
stock on the date of the grant of the stock option. One-
third of the options become exercisable on the first year
anniversary of the grant date. Another third become
exercisable on the second year anniversary and the final
third become exercisable on the third year anniversary of
the grant date. The options expire ten years from the date
of the grant.

Information with respect to options granted to
executive officers and directors of the Company are as
follows:

Option Price
Shares Per Share
- -----------------------------------------------------------------
Outstanding at January 1,1993 9,400 $15.69-$15.75
Granted in 1993 20,960 $19.06-$19.75
- -----------------------------------------------------------------
Outstanding at December 31, 1993 30,360 $15.69-$19.75
Granted in 1994 38,000 $21.19-$22.69
Exercised in 1994 (666) $15.69
- -----------------------------------------------------------------
Outstanding at December 31,1994 67,694 $15.69-$22.69
Granted in 1995 121,200 $19.88-$27.13
Cancelled in 1995 (9,800) $19.06-$21.88
- -----------------------------------------------------------------
Outstanding as of December 31, 1995 179,094 $15.69-$27.13
=================================================================
Exercisable at December 31, 1995 32,828 $15.69-$22.69
=================================================================

At December 31, 1995, 2,468,007 shares were available for
future grant.

Restricted Stock Plan - During 1995, Frontier issued
restricted shares of Frontier stock to certain key employees
of the Company under its Management Stock Incentive Plan.
The stock vests over a period of three years based on
Frontier's stock price and continued employment. During
1995, 10,000 shares were issued and outstanding under the
plan.

Note 9: Accounting Pronouncements Adopted

In September 1995, the Company adopted FAS 116,
"Accounting For Contributions Received and Contributions
Made." FAS 116 requires that the Company reflect in
current expenses an accrual for the cost of unconditional
multi-year contributions or pledges. The Company recognized
this obligation by recording a one-time cumulative effect
charge to net income of $1.0 million, net of income taxes of
$0.6 million.

In January 1994, the Company adopted FAS 112,
"Employers' Accounting for Postemployment Benefits." FAS
112 requires that projected future costs of providing
postemployment, preretirement benefits, such as disability,
prepension leave (salary continuation) and severance pay, be
recognized as an expense as employees render service rather
than when the benefits are paid. The Company recognized the
obligation for postemployment benefits through a cumulative
effect charge to net income of $6.7 million, net of taxes of
$3.6 million.

In January 1993, the Company adopted FAS 109,
"Accounting For Income Taxes." In accordance with state and
federal regulatory orders that required the Company to adopt
FAS 109 on a revenue neutral basis, deferred regulatory
assets and deferred regulatory liabilities were established.
These net regulatory assets and liabilities recorded under
FAS 109 were removed as part of the extraordinary adjustment
made in September 1995 when the Company discontinued the
application of FAS 71 (see Note 2).

Note 10: Commitments and Contingencies

Legal Matters - The Company is party to a number of
judicial and administrative proceedings involving matters
incidental to its business. The Company's management does
not believe that any material liability will be imposed as a
result of these matters.

Leases - The Company leases buildings, land, office
space, switching and other equipment under various operating
lease contracts. Total rental expense amounted to
$3.2 million in 1995, $3.4 million in 1994, and $3.7 million
in 1993.

Minimum annual rental commitments under noncancelable
operating leases in effect on December 31, 1995 were as
follows (in thousands):

Non-Cancellable Leases
Years Buildings Equipment
- --------------------------------------------------------------
1996 $ 825 $ 829
1997 788 741
1998 701 741
1999 634 741
2000 329 741
2001 and thereafter 374 -
----------------------
Total $3,651 $3,793
======================

Other Matters - It is anticipated that the Company
will expend approximately $45 million for additions to
property, plant, and equipment during 1996. In connection
with this capital program, the Company has made certain
commitments for the purchase of materials and equipment.

Note 11: Regulatory Matters

Open Market Plan

At its public meeting on October 13, 1994, the NYSPSC
unanimously approved Frontier's Open Market Plan and
Corporate Restructuring (Open Market Plan). The Open Market
Plan was approved by shareowners in December 1994 and became
effective on January 1, 1995. The Open Market Plan promotes
telecommunications competition in the Rochester, New York
market by providing for (1) interconnection of competing
local networks including reciprocal compensation for
terminating traffic, (2) equal access to network databases,
(3) access to local telephone numbers, (4) service provider
telephone number portability and (5) resale of the Company's
existing services. The inherent risk associated with
opening the Rochester market to competition is that some
customers are able to purchase services from competitors,
which reduces the number of retail customers and potentially
causes a decrease in the revenues and profitability for the
Company. However, results in 1995 indicate that a
stimulation of demand in the use of the network and new
product revenue can offset the losses from customer
migration. Increased competition may also lead to
additional price decreases for some services, adversely
impacting the Company's margins. However the Open Market
Plan does not require the Company to rebate any additional
earnings achieved through operating efficiencies that
previously would have been shared with customers.

During the seven year period of the Open Market Plan
Agreement, rate reductions of $21 million, $11.0 million of
which occurred in 1995, will be implemented for Rochester
area consumers and rates charged for basic residential and
business telephone service may not be increased. Under the
Open Market Plan Agreement, the Company is no longer
subject to rate of return regulation and thus the Company is
able to retain any expense savings as well as additional
revenue generated from the sale of new products and
services.

The Open Market Plan temporarily resolves certain
financial questions that are linked to the royalty
proceeding, a contested proceeding that has been in
litigation since 1994. On October 31, 1995 the New York
State Court of Appeals confirmed the general authority of
the NYSPSC to utilize a royalty as a ratemaking adjustment.
The NYSPSC has agreed that a royalty will not be imposed
against Frontier or the Company during the seven year period
of the Open Market Plan. The NYSPSC is not precluded from
seeking any royalties pursuant to the Royalty Order
subsequent to the expiration of the Open Market Plan.

Costs incurred for the development and implementation
of the Open Market Plan were reflected in the category
"other expense" for the years 1994 and 1993. Total
incremental costs recognized were $5.1 million in 1994 and
$2.4 million in 1993.

Dividend Policy

Incentive Regulation

Prior to the Open Market Plan, an incentive
regulation agreement between the Company and the NYSPSC had
been in effect. As part of that agreement, the Company
agreed to share with ratepayers 50% of earnings above a
threshold rate of return. As a result, the Company's
revenue requirement was reduced by $9.5 million in 1994,
plus interest. This revenue reduction was credited to the
Company's depreciation reserve to alleviate a reserve
deficiency rather than refunding cash to ratepayers.

Note 12: Related Party Transactions

The advances from affiliate balance at December 31,
1995 of $5.7 million represents funds advanced to the Company
by Frontier. In addition, accounts payable to affiliates at
December 31, 1995 includes $4.1 million due to Frontier and
accounts receivable from affiliates includes $0.1 million due
from Frontier. Interest paid to Frontier on these funds was
$0.05 million in 1995. There were no outstanding receivables
or payables to Frontier at December 31, 1994 and 1993 as all
intercompany transactions were assumed to have been settled
prior to the end of the accounting period.

The Company paid $11.9 million 1995, $10.7 million in
1994 and $6.4 million in 1993 to Frontier for allocated corporate
charges primarily for executive, legal and financial
assistance. The Company also paid $17.2 million and
$20.4 million to an affiliate, Frontier Information
Technologies for data processing services and support during
1995 and 1994, respectively. Other services purchased from
affiliates include supplies, materials management,
telemarketing, long distance, cellular and paging services.
These services amounted to $12.8 million, $7.4 million, and
$6.0 million during 1995, 1994 and 1993, respectively.

In addition, the Company provides to its affiliates,
Frontier Communications International and Frontier
Communications of Rochester, billing and collection
services, operator services, and business office support
services. The Company also provides administrative support
services for other regulated telephone company affiliates.
The total of all these services amounted to $7.8 million,
$4.2 million and $4.2 million during 1995, 1994 and 1993,
respectively.

Note 13: Subsequent Events

On January 19, 1996 the Board of Directors passed a
resolution to declare an annual dividend payment of $56.0
million to its parent company, Frontier, for the fiscal year
1996. The dividend is to be paid in equal installments of
$14.0 million at the close of each quarter, with the first
$14.0 million quarterly dividend payable March 29, 1996.
<PAGE>
<PAGE>

ROCHESTER TELEPHONE CORP.
EXHIBIT INDEX

Exhibit
Number Exhibit Description Reference
- ------- ------------------- ---------

3.1 Certificate of Filed herewith
Incorporation dated
December 8, 1994

3.2 Certificate of Amendment Filed herewith
to Certificate of
Incorporation dated
December 20, 1994

3.3 By-Laws Filed herewith

4.1 Copy of Credit Agreement Filed herewith
between the Company and
Chase Manhattan Bank, N.A.
dated December 19, 1994
and adopted January 1, 1995

4.2 Copy of Indenture between Filed herewith
the Company and Chemical
Bank, as Trustee, dated
March 14, 1995

10.1 Copy of the Restated Incorporated by reference
Supplemental Management to Exhibit 10-14 to Frontier
Pension Plan and Amendments Corporation's Form 10-K for the
Nos. 1 and 2 therto year ended December 31, 1990

10.2 Copy of the Restated Incorporated by reference
Performance Unit Plan to Exhibit 10-15 to Frontier
Corporation's Form 10-K for
the year ended
December 31, 1990

10.3 Copy of Amendment No. 1 to Incorporated by reference
Restated Performance Unit to Exhibit 10-21 to
Plan Frontier Corporation's
Form 10-K for the year
ended December 31, 1991

10.4 Copy of the Restated Incorporated by reference
Supplemental Retirement to Exhibit 10-23 to
Savings Plan and Amendment Frontier Corporation's
No. 1 thereto Form 10-K for the year
ended December 31, 1991
<PAGE>
<PAGE>

ROCHESTER TELEPHONE CORP.
EXHIBIT INDEX

Exhibit
Number Exhibit Description Reference
- ------ ------------------- ---------
10.5 Copy of Amendment No. 3 to Incorporated by reference
to Restated Supplemental to Exhibit 10-22 to
Management Pension Plan Frontier Corporation's
Form 10-K for the year
ended December 31, 1991

10.6 Copy of Amendment No. 2 to Incorporated by reference
Restated Performance Unit to Exhibit 10-21 to
Plan Frontier Corporation's
Form 10-K for the year
ended December 31, 1992

10.7 Copy of Amendment No. 4 to Incorporated by reference
to Restated Supplemental to Exhibit 10-22 to
Management Pension Plan Frontier Corporation's
Form 10-K for the year
ended December 31, 1992

10.8 Copy of Amendment No. 2 to Incorporated by reference
the Supplemental Retirement to Exhibit 10-24 to Savings
Plan Frontier Corporation's
Form 10-K for the year
ended December 31, 1992

10.9 Copy of Amendment No. 3 to Incorporated by reference
the Performance Unit Plan to Exhibit 10-30 to Frontier
Corporation's Form 10-Q for
the quarter ended March 31, 1993

10.10 Copy of Amendment No. 5 to Incorporated by reference
the Supplemental Management to Exhibit 10-33 to Frontier
Pension Plan Frontier Corporation's
Form 10-Q for the quarter
ended June 30, 1993

10.11 Copy of Amendment No. 3 to Incorporated by reference
the Supplemental Retirement to Exhibit 10-35 to Frontier
Savings Plan Corporation's Form 10-Q for
the quarter ended June 30, 1993

10.12 Copy of Amendment No. 6 to Incorporated by reference to
the Supplemental Management Exhibit 10-33 to Frontier
Pension Plan Corporation's Form 10-K for the
year ended December 31, 1993
<PAGE>
<PAGE>

ROCHESTER TELEPHONE CORP.
EXHIBIT INDEX

Exhibit
Number Exhibit Description Reference
- ------ ------- ----------- ---------

10.13 Copy of the Plan for the Incorporated by reference
Deferral of Directors Fees to Exhibit 10-34 to Frontier
Corporation's Form 10-K for the
year ended December 31, 1994

10.14 Copy of Amendment No. 4 to Incorporated by reference
the Supplemental Retirement to Exhibit 10-31 to
Savings Plan Frontier Corporation's
Form 10-K for the year
ended December 31, 1994

10.15 Copy of the Directors' Incorporated by reference
Common Stock Deferred to Exhibit 10-36 to
Growth Plan Frontier Corporation's
Form 10-K for the year
ended December 31, 1994

10.16 Copy of Amendment Nos. 7 and Incorporated by reference
8 to the Supplemental to Exhibit 10.19 to
Management Pension Plan Frontier Corporation's
Form 10-K for the year
ended December 31, 1995

10.17 Copy of the restated Incorporated by reference
Management Pension Plan to Exhibit 10.20 to
Frontier Corporation's
Form 10-K for the year
ended December 31, 1995

10.18 Copy of Executive Bonus Plan Incorporated by reference
to Exhibit 10.21 to
Frontier Corporation's
Form 10-K for the year
ended December 31, 1995

10.19 Copy of the restated Incorporated by reference
Directors Stock Incentive to Exhibit 10.22 to
Plan dated April 26, 1995 Frontier Corporation's
Form 10-K for the year
ended December 31, 1995
<PAGE>
<PAGE>

ROCHESTER TELEPHONE CORP.
EXHIBIT INDEX

Exhibit
Number Exhibit Description Reference
- ------ ------------------- ---------

10.20 Copy of the Management Stock Incorporated by reference
Incentive Plan dated to Exhibit 10.23 to
April 26, 1995 Frontier Corporation's
Form 10-K for the year
ended December 31, 1995

10.21 Form of management contract Filed herewith
as amended with Mr. Carr

23 Consent of Independent Filed herewith
Accountants - Price Waterhouse

24 Powers of Attorney for a Filed herewith
majority of Directors naming
Anthony J. Cassara
attorney-in-fact

27 Financial Data Schedule Filed herewith

<PAGE>1
EXHIBIT 3-1

CERTIFICATE OF INCORPORATION

R-NET CORP.
Pursuant to Section Three of the
Transportation Corporations Law

The undersigned, in order to form a corporation for the
purposes hereinafter stated, under and pursuant to Section Three
of the New York Transportation Corporations Law, hereby certifies
that:
FIRST: The name of the Corporation is R-Net Corp.

SECOND: The purposes for which the Corporation is
formed are:

(a) To carry on, promote, conduct and transact any
business or businesses of a character connected directly or
indirectly with the telephone or kindred businesses or capable of
being carried on in connection therewith, or which may be useful
or convenient in connections with the powers, purposes or
business of the Corporation.

(b) To take, hold, own, lease, purchase, acquire,
sell, convey, transfer, mortgage, let and dispose of, real and
personal estate or interests or rights therein, without limit as
to amount;

(c) To construct, maintain, purchase, acquire,
manufacture, operate, sell, mortgage, pledge, let, hire, furnish
and deal in and with telephone instruments, wires, cables, poles,
ducts, conduits, and all kinds of works, property, machinery,
apparatus, conveniences, appliances, devices, and things which
are or may be capable of being used in connection with the
conduct and operation of any of its powers, purposes and
business;

<PAGE>
<PAGE>2

(d) To apply for, purchase, or in any manner acquire,
lease, hold, own, use and operate, and to sell, grant, let,
mortgage, pledge, or in any manner dispose of, licenses or other
rights in respect of, and in any manner to deal in and with any
and all rights, inventions, improvements processes used in
connection with or secured under letters patent or copyrights of
the United States or other countries, or otherwise, and to work,
operate, manufacture, develop, sell, grant and let the same;

(e) To purchase, acquire, hold and dispose of the
stocks, bonds and other evidences of indebtedness of any
corporation, domestic or foreign, and may issue in exchange
therefor its stocks, bonds or other obligations to the extent
permitted by and subject to the Laws governing corporations of
like character; and

(f) To engage in any lawful act or activity for which
corporations may be organized under the Business Corporation Law
of the State of New York, except that the Corporation is not
organized to engage in any act or activity requiring the consent
or approval of any official, department, board, agency or other
body of the State of New York without first obtaining such
consent or approval.

THIRD: (A) The Corporation shall be a telephone
corporation as defined in Section 25 of the New York
Transportation Corporations Law.

(B) The territory in which the operations of
the Corporation are to be carried on and the points to be
connected shall be in, upon, along, over, under, through and
across the public roads, streets, avenues, highways and other
places and waters of the City of Rochester, Monroe County, New
York, from or to any point or points in said City or Rochester;
thence in, upon, along, over, under, through and across the
public roads, streets, avenues, highways and other places,
rivers, lakes and waters of that portion of the State of New York
included within the Counties of Monroe and Livingston; the Towns
of Ontario, Walworth and Macedon in Wayne County; the Towns of
Manchester, Hopewell, Gorham, Farmington, Canandaigua, Victor,
East Bloomfield, West Bloomfield, Richmond, Bristol, South
Bristol, Canadice and Naples in Ontario County; the Towns of
Middlesex, Potter and Italy in Yates County; the Towns of
<PAGE>
<PAGE>3
Prattsburg, Cohocton, Wayland, Dansville, Fremont and Avoca in
Steuben County; the Towns of Burns, Grove, Granger, Hume and
Centerville in Allegany County; the Towns of Eagle, Wethersfield,
Orangeville, Attica, Pike, Gainesville, Warsaw, Middlebury,
Covington, Perry, Castile and Genesee Falls in Wyoming County;
the Towns of Alexander, Bethany, Pavilion, Stafford, LeRoy, Byron
and Bergen in Genesee County, and the Towns of Kendall, Murray
and Clarendon in Orleans County, in the State of New York, from
or to any point or points within the aforesaid territory, and in,
upon, along, over, under, through and across the public roads,
streets, avenues, highways and other places, rivers, lakes and
waters of each of the Cities, Towns and Villages within the
aforesaid territory, from or to any point or points therein, for
the purpose of connecting the exchanges and sub-exchanges of the
Corporation, and the residences, offices, factories, buildings,
premises, works, places of business and places of amusement and
other places and points in said territory, and the terminals of
other lines of telegraph and telephone leading to points and
places within and outside of the territory hereinbefore
described.

FOURTH: The office of the Corporation in the State of
New York is located in the County of Monroe, State of New York.

FIFTH: The total number of shares which the
Corporation shall have authority to issue is one thousand (1,000)
shares of Common Stock at no par value.

SIXTH: The Secretary of State of the State of New
York is hereby designated as an agent of the Corporation upon
whom all process in any action or proceeding against the
Corporation may be served within the State of New York. The
address to which the Secretary of State shall mail a copy of any
process against the Corporation which may be served upon him or
her is 180 South Clinton Avenue, Rochester, New York 14646-0700,
Attention: Secretary.

SEVENTH: The term of existence of the Corporation
shall be perpetual.

<PAGE>
<PAGE>4

EIGHTH: The number of directors of the Corporation
shall be not less than six (6) nor more than fourteen (14), of
whom a majority shall be "Independent Directors". For purposes
of this Article EIGHTH, a director of the Corporation shall be an
Independent Director if such director is neither an officer or
employee of the Corporation nor a director, officer or employee
of any corporation controlling or under common control with the
Corporation. Not more than one (1) director of the Corporation
shall be a director, officer or employee of any corporation
controlling or under common control with the Corporation.

There shall be an Audit Committee of the Board of
Directors of the Corporation of not less than three (3)
directors, all of whom shall be Independent Directors, which
committee shall have the responsibilities, functions and powers
provided for in the Bylaws.

There shall be a Committee on Directors of the Board of
Directors of the Corporation consisting of three (3) directors,
all of whom shall be Independent Directors, which committee shall
have the responsibilities, functions and powers provided for in
the Bylaws.

Any or all directors may be removed, with or without
cause, by vote of the shareholders.

NINTH: Pursuant to Section 715(b) of the New York
Business Corporation Law, the officers of the Corporation shall
be elected by the shareholders of the Corporation.

TENTH: The approval of the shareholders shall be
required for the Corporation to take or directly or indirectly
engage in any of the following actions:

(a) the adoption of any operating or capital budgets
or financing plans, or, to the extent not provided for in a
budget or plan approved by the shareholders, the making or
incurrence of any investments, capital expenditures, indebtedness
or off-balance sheet liabilities, in each case in excess of $10
million in the aggregate during any fiscal year of the Company;
or
<PAGE>
<PAGE>5

(b) the entering into of any agreement or contract, or
any amendment, supplement or waiver to any agreement or contract,
which would be required to be filed pursuant to Item 601(b)(10)
of Regulation S-K promulgated by the Securities and Exchange
Commission (as in effect on December 1, 1994) if the Corporation
were a public company which was subject to the filing
requirements of such Item.

ELEVENTH: No director of the Corporation shall be
personally liable to the Corporation or its shareholders for
damages for any breach of duty as a director unless the
elimination or limitation of liability is expressly prohibited by
the New York Business Corporation Law as currently in effect or
as it may be amended. No amendment, modification or repeal of
this Article shall adversely affect any right or protection of
any director that exists at the time of such change.

IN WITNESS WHEREOF, the undersigned has signed and
acknowledged this Certificate of Incorporation this 8th day of
December, 1994.

/s/ Josephine S. Trubek
------------------------
Josephine S. Trubek,
Incorporator
180 South Clinton Avenue
Rochester, New York 14646-0700

/s/ Helen A. Zamboni
-------------------------
Helen A. Zamboni, Incorporator
180 South Clinton Avenue
Rochester, New York 14646-0700

/s/ Barbara J. LaVerdi
---------------------------
Barbara J. LaVerdi,
Incorporator
180 South Clinton Avenue
Rochester, New York 14646-0700
<PAGE>
<PAGE>6

STATE OF NEW YORK
(COUNTY OF MONROE) ss:

On December 8, 1994, before me personally came
Josephine S. Trubek, to me known to be the individual described
in and who executed the foregoing Certificate of Incorporation,
and acknowledged that she executed the same.

/s/ Karen L. Markle
---------------------------
Notary Public

STATE OF NEW YORK
(COUNTY OF MONROE) ss:

On December 8, 1994, before me personally came Helen A.
Zamboni, to me known to be the individual described in and who
executed the foregoing Certificate of Incorporation, and
acknowledged that she executed the same.

/s/ Karen L. Markle
-------------------------
Notary Public

STATE OF NEW YORK
(COUNTY OF MONROE) ss:

On December 8, 1994, before me personally came Barbara
J. LaVerdi, to me known to be the individual described in and who
executed the foregoing Certificate of Incorporation, and
acknowledged that she executed the same.

/s/ Karen L. Markle
-----------------------
Notary Public

<PAGE>
EXHIBIT 3.2

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION OF

R-NET CORP.

Under Section 805 of the Business Corporation Law

IT IS HEREBY CERTIFIED THAT:

(1) The name of the corporation is:

R-NET CORP.

(2) The Certificate of Incorporation was filed at the
Department of State of the State of New York on the 9th day of
December, 1994.

(3) The Certificate of Incorporation is hereby amended to
effect a change in corporate name:

Paragraph One (1) of the Certificate of Incorporation is
hereby amended to read:

The name of the corporation is:

ROCHESTER TELEPHONE CORP.

(4) The amendment to the Certificate of Incorporation was
authorized by a vote of the Board of Directors, followed by a
vote of the holders of a majority of all outstanding shares
entitled to vote thereon at a meeting of shareholders.

IN WITNESS WHEREOF, this certificate has been subscribed this
20th day of December, 1994 by the undersigned, who affirm that
the statements made herein are true under the penalties of
perjury.

/s/ Jeremiah T. Carr /s/ Gregg C. Sayre
- --------------------------- -------------------------
Jeremiah T. Carr, President Gregg C. Sayre, Secretary

<PAGE>1

EXHIBIT 3.3

ROCHESTER TELEPHONE CORP.

By-Laws

Effective January 1, 1995

ARTICLE I

SHAREOWNERS

Section 1 - Annual Meeting.

An annual meeting of shareowners for the election of
Directors and the transaction of other business shall be held at
such time on any day in each year as shall be fixed by the Board
of Directors.

Section 2 - Special Meetings.

Special Meetings of the shareowners may be called by the
Board of Directors. Such meeting shall be held at such time as
may be fixed in the notice of meeting.

Section 3 - Place of Meeting.

Meetings of shareowners shall be held at such place, within
or without the State of New York, as may be fixed in the notice
of meeting.

Section 4 - Notice of Meeting.

Notice of each meeting of shareowners shall be in writing
and shall state the place, date and hour of the meeting and the
purpose or purposes for which the meeting is called.
<PAGE>
<PAGE>2

A copy of the notice of any meeting shall be given,
personally, or by mail, not less than ten or more than fifty days
before the date of the meeting, to each shareholder entitled to
vote at such meeting. If mailed, such notice is given when
deposited in the United States mail, with postage thereon
prepaid, directed to the shareholder at the shareholder's address
as it appears on the record of shareowners, or, if the
shareholder shall have filed with the Secretary of the
Corporation a written request that notices be mailed to some
other address, then directed to the shareholder at such other
address.

Section 5 - Qualification of Voters.

Every shareowner of record of common stock of the
Corporation shall be entitled at every meeting of shareowners to
one vote for every share of common stock held by the shareowner
in the shareowner's name on the record of shareowners.

Section 6 - Quorum of Shareowners.

The holders of a majority of the shares entitled to vote at
such meeting shall constitute a quorum at a meeting of
shareowners for the transaction of any business, provided that
when a specified item of business is required to be voted on by a
class or series, voting as a class, the holders of a majority of
the shares of such class or series shall constitute a quorum for
the transaction of such specified item of business.

The shareowners present, in person or by proxy, and
entitled to vote may, by a majority of votes cast, adjourn the
meeting despite the absence of a quorum.

Section 7 - Vote of Shareowners.

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<PAGE>3

Directors shall, except as otherwise required by law, or by
the certificate of incorporation as permitted by law, be elected
by a plurality of the votes cast at a meeting of shareowners by
the holders of shares entitled to vote in the election.

Whenever any corporate action, other than the election of
Directors, is to be taken by vote of the shareowners, it shall,
except as otherwise required by law, or by the certificate of
incorporation as permitted by law, be authorized by a majority of
the votes cast at a meeting of shareowners by the holders of
shares entitled to vote thereon.

Section 8 - Proxies.

Every shareholder entitled to vote at a meeting of
shareowners or to express consent or dissent without a meeting
may authorize another person or persons to act for that
shareholder by proxy. Every proxy must be signed by the
shareholder or the shareholder's attorney-in-fact. No proxy
shall be valid after the expiration of eleven months from the
date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the shareholder executing
it except in those cases where an irrevocable proxy permitted by
statute has been given.

Section 9 - Fixing Record Date.

For the purpose of determining the shareowners entitled to
notice of or to vote at any meeting of shareowners or any
adjournment thereof, or to express consent or dissent from any
proposal without a meeting, or for the purpose of determining
shareowners entitled to receive payment of any dividend or the
allotment of any rights, or for the purpose of any other action,
the Board of Directors may fix, in advance, a date as the record
date for any such determination of shareowners. Such date shall
not be more than fifty nor less than ten days before the date of
such meeting, nor more than fifty days prior to any other action.

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<PAGE>4
ARTICLE II

BOARD OF DIRECTORS

Section 1 - Power of Board and Qualification of Directors.

The business of the Corporation shall be managed under the
direction of its Board of Directors, each of whom shall be at
least twenty-one years of age.

Section 2 - Number of Directors.

At the annual meeting of shareowners, the shareowners shall
elect no more than fourteen and no less than six directors. A
majority of the membership of the Board of Directors of the
Corporation shall be outside directors, i.e., they may not be
officers or employees of the Corporation nor may they be
directors, officers or employees of Frontier Corporation or of
any affiliate of Frontier Corporation. Only one of the
Corporation's Directors may simultaneously serve as a Director,
Officer or employee of Frontier Corporation or any of Frontier
Corporation's Affiliates other than the Corporation.

Section 3 - Election, Term and Qualifications of Directors.

At each annual meeting of shareowners, Directors shall be
elected to hold office until the next annual meeting and until
their successors have been elected and qualified. No person
shall be eligible for election or reelection to the Board of
Directors after reaching seventy years of age, or in the case of
a retired Chairman of the Board of Directors or a retired
President of the Corporation, after reaching sixty-seven years of
age. The term of any Director who is also an Officer of the
Corporation or any affiliate of the Corporation, other than the
Chairman of the Board or the President of the Corporation, shall
end on the date of termination from active employment and such
officer shall thereafter be ineligible for reelection to the
Board of Directors.
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<PAGE>5

Section 4 - Quorum of the Board: Action by the Board.

One-third of the entire Board of Directors shall constitute
a quorum for the transaction of business, and the vote of a
majority of the Directors present at the time of such vote, if a
quorum is then present, shall be the act of the Board.

Section 5 - Action Without a Meeting.

Any action required or permitted to be taken by the Board or
any committee thereof may be taken without a meeting if all
members of the Board or of the committee consent in writing to
the adoption of the resolution authorizing the action. The
resolution and the written consents thereto by the members of the
Board or committee shall be filed with the minutes of the
proceedings of the Board or committee.

Section 6 - Participation in Board Meetings by Conference
Telephone.

Any one or more members of the Board of Directors or any
committee thereof may participate in a meeting of such Board or
committee by means of a conference telephone or similar
communications equipment allowing all persons participating in
the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.

Section 7 - Meetings of the Board.

An annual meeting of the Board of Directors shall be held in
each year directly after adjournment of the annual shareowners'
meeting. Regular meetings of the Board shall be held at such
times as may from time to time be fixed by resolution of the
Board. Special meetings of the Board may be held at any time
upon the call of the Chairman of the Board of Directors, if such
there be, the President or any two Directors.

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<PAGE>6

Meetings of the Board of Directors shall be held at such
place, within or without the State of New York, as from time to
time may be fixed by resolution of the Board for annual and
regular meetings and in the notice of meeting for special
meetings. If no place is so fixed, meetings of the Board shall
be held at the office of the Corporation in Rochester, New York.

No notice need be given of annual or regular meetings of the
Board of Directors. Notice of each special meeting of the Board
shall be given by oral, telegraphic or written notice, duly given
or sent or mailed to each Director not less than one (1) day
before such meeting.

Section 8 - Resignation.

Any Director may resign at any time by giving written notice
to the Chairman of the Board of Directors, if such there be, to
the President or to the Secretary. Such resignation shall take
effect at the time specified in such written notice, or if no
time be specified, then on delivery. Unless otherwise specified
in the written notice, the acceptance of such resignation by the
Board of Directors shall not be needed to make it effective.

Section 9 - Newly Created Directorships and Vacancies.

Newly created directorships resulting from an increase in
the number of directors and vacancies occurring in the Board of
Directors may be filled by vote of the Board. If the number of
the directors then in office is less than a quorum, such newly
created directorships and vacancies may be filled by vote of a
majority of the directors then in office. A director elected to
fill a vacancy shall be elected to hold office for the unexpired
term of such director's predecessor.

Section 10 - Committees of Directors.

The Board of Directors, by resolution by a majority of the
entire Board, may designate from among its members an Audit
Committee consisting of three or more outside directors. The
Audit Committee shall, among other things, review the scope of
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<PAGE>7
audit activities, review with management significant issues
concerning litigation, contingencies or other material matters
which may result in either potential liability of the Company or
significant exposure to the Company, review significant matters
of corporate ethics, review security methods and procedures,
review the financial reports and notes, and make reports and
recommendations with respect to audit activities, findings, and
reports of the independent public accountants and the internal
audit staff of the Company.

The Board of Directors, by resolution adopted by a majority
of the entire Board, may designate from among its members a
Committee on Directors consisting of three or more outside
directors. The Committee on Directors shall, among other things,
review performance of incumbent directors, act as a nominating
committee, and consider and report to the entire Board of
Directors on all matters relating to the selection,
qualification, compensation and duties of the members of the
Board of Directors and any committees of the Board of Directors.

The Board of Directors, by resolution adopted by a majority
of the entire Board, may designate from among its members other
committees each consisting of three or more directors.

Unless a greater proportion is required by the resolution
designating a committee of the Board of Directors, a quorum for
the transaction of business of a committee shall consist of
one-third of the entire authorized number of members of any other
committee of the Board of Directors, but in no event fewer than
two persons. The vote of a majority of the members of a
committee present at the time of the vote concerning the
transaction of business of that committee or of any specified
item of business of that committee if a quorum is present at such
time, shall be the act of such committee.

Any committee may fix the time and place of holding its
regular meetings and, if so fixed, no notice of such regular
meeting shall be necessary. Special meetings of any committee
may be called at any time by the Chairman of the Board of
Directors, if such there be, by the chief executive officer, by
the President, by the Chairperson of that committee, or by any
two members of that committee. Notice of each special meeting of
any committee shall be given by oral, telegraphic or written
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<PAGE>8
notice, including notice via facsimile machine, duly given or
sent or mailed to each member of that committee not less than one
day before such meeting.

Section 11 - Compensation of Directors.

The Board of Directors of Frontier Corporation shall have
authority to fix the compensation of directors of the Corporation
for services in any capacity.

Section 12 - Indemnification.

(a) Generally.

To the full extent authorized or permitted by law, the
Corporation shall indemnify any person ("indemnified Person")
made, or threatened to be made, a party to any action or
proceeding, whether civil, at law, in equity, criminal,
administrative, investigative or otherwise, including any action
by or in the right of the Corporation, by reason of the fact that
he, his testator or intestate, ("Responsible Person"), whether
before or after adoption of this Section 12, (1) is or was a
director or officer of the Corporation, or (2), if a director or
officer of the Corporation, is serving or served, in any
capacity, at the request of the Corporation, any other
corporation, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, or (3), if not a director or
officer of the Corporation, is serving or served, at the request
of the Corporation, as a director or officer of any other
corporation or any partnership, joint venture, trust, employee
benefit plan or other enterprise, against all judgments, fines,
penalties, amounts paid in settlement (provided the Corporation
shall have given its prior consent to such settlement, which
consent shall not be unreasonably withheld by it) and reasonable
expenses, including attorneys' fees, incurred by such Indemnified
Person with respect to any such threatened or actual action or
proceeding, and any appeal therein, provided only that (x) acts
of the Responsible Person which were material to the cause of
action so adjudicated or otherwise disposed of were not (i)
committed in bad faith or (ii) were not the result of active and
deliberate dishonesty, and (y) the Responsible Person did not
<PAGE>
<PAGE>9
personally gain in fact a financial profit or other advantage to
which he was not legally entitled.

(b) Advancement of Expenses.

All expenses reasonably incurred by an Indemnified Person in
connection with a threatened or actual action or proceeding with
respect to which such person is or may be entitled to
indemnification under this Section 12 shall be advanced or
promptly reimbursed by the Corporation to him in advance of the
final disposition of such action or proceeding, upon receipt of
an undertaking by him or on his behalf to repay the amount of
such advances, if any, as to which he is ultimately found not to
be entitled to indemnification or, where indemnification is
granted, to the extent such advances exceed the indemnification
to which he is entitled. Such person shall cooperate in good
faith with any request by the Corporation that common counsel be
used by the parties to an action or proceeding who are similarly
situated unless to do so would be inappropriate due to an actual
or potential conflict of interest.

(1) Not later than thirty (30) days following final
disposition of an action or proceeding with respect to which the
Corporation has received written request by an Indemnified Person
for indemnification pursuant to this Section 12, if such
indemnification has not been ordered by a court, the Board of
Directors shall meet and find whether the Responsible Person met
the standard of conduct set forth in paragraph (a) of this
Section 12, and, if it finds that he did, or to the extent it so
finds, shall authorize such indemnification.

(2) Such standard shall be found to have been met unless (a)
a judgment or other final adjudication adverse to the Indemnified
Person establishes that subparagraphs (x) or (y) of paragraph (a)
of this Section 12 were violated, or (b) if the action or
proceeding was disposed of other than by judgment or other final
adjudication, the Board finds in good faith that, if it had been
disposed of by judgment or other final adjudication, such
judgment or other final adjudication would have been adverse to
the Indemnified Person and would have established a violation of
subparagraphs (x) or (y) of paragraph (a) of this Section 12.
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<PAGE>10
(3) If indemnification is denied, in whole or part, because
of an adverse finding by the Board in the absence of a judgment
or other final adjudication, or because the Board believes the
expenses for which indemnification is requested to be
unreasonable, such action by the Board shall in no way affect the
right of the Indemnified Person to make application therefor in
any court having jurisdiction thereof, and in such action or
proceeding the issue shall be whether the Responsible Person met
the standard of conduct set forth in paragraph (a) of this
Section 12, or whether the expenses were reasonable, as the case
may be (not whether the finding of the Board with respect thereto
was correct) and the determination of such issue shall not be
affected by the Board's finding. If the judgment or other final
adjudication in such action or proceeding establishes that the
Responsible Person met the standard set forth in paragraph (a) of
this Section 12, or that the disallowed expenses were reasonable,
or to the extent that it does, the Board shall then find such
standard to have been met or the expenses to be reasonable, and
shall grant such indemnification, and shall also grant to the
Indemnified Person indemnification of the expenses incurred by
him in connection with the action or proceeding resulting in the
judgment or other final adjudication that such standard of
conduct was met, or if pursuant to such court determination such
person is entitled to less than the full amount of
indemnification denied by the Corporation, the portion of such
expenses proportionate to the amount of such indemnification so
awarded.

(4) A finding by the Board pursuant to this paragraph (c)
that the standard of conduct set forth in paragraph (a) of this
Section 12 has been met shall mean a finding of the Board or
shareowners as provided by law.

(d) Contractual Article.

This Section 12 shall be deemed to constitute a contract
between the Corporation and each person who is a Responsible
Person at any time while this Section 12 is in effect. No repeal
or amendment of this Section 12, insofar as it reduces the extent
of the indemnification of any person who could be a Responsible
Person shall without his written consent be effective as to such
person with respect to any event, act or omission occurring or
allegedly occurring prior to (1) the date of such repeal or
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<PAGE>11
amendment if on that date he is not serving in any capacity for
which he could be a Responsible Person, or (2) the thirtieth
(30th) day following delivery to him of written notice of such
repeal or amendment as to any capacity in which he is serving on
the date of such repeal or amendment, other than as a director or
officer of the Corporation, for which he could be a Responsible
Person, or (3) the later of the thirtieth (30th) day following
delivery to him of such notice or the end of the term of office
(for whatever reason) he is serving as director or officer of the
Corporation when such repeal or amendment is adopted, with
respect to being a Responsible Person in that capacity. No
amendment of the Business Corporation Law shall, insofar as it
reduces the permissible extent of the right of indemnification of
a Responsible Person under this Section 12, be effective as to
such person with respect to any event, act or omission occurring
or allegedly occurring prior to the effective date of such
amendment irrespective of the date of any claim or legal action
in respect thereto. This Section 12 shall be binding on any
successor to the Corporation, including any corporation or other
entity which acquires all or substantially all of the
Corporation's assets.

(e) Non-exclusivity.

The indemnification provided by this Section 12 shall not be
deemed exclusive of any other rights to which any person covered
hereby may be entitled other than pursuant to this Section 12.
The Corporation is authorized to enter into agreements with any
such person or persons providing them rights to indemnification
or advancement of expenses in addition to the provisions therefor
in this Section 12 to the full extent permitted by law.

<PAGE>
<PAGE>12

ARTICLE III

OFFICERS

Section 1 - Officers.

The shareowners of the Corporation, at the time of the
annual election of directors, may elect a Chairman of the Board
of Directors and shall elect a President, a Secretary and a
Treasurer, and such other officers as they may determine. Any
two or more offices may be held by the same person, except the
office of President and Secretary.

Section 2 - Term of Office and Removal.

Each officer shall hold office for the term for which each
officer is elected or appointed, and until a successor has been
elected or appointed and qualified.

Section 3 - Powers and Duties.

The officers of the Corporation shall each have such powers
and authority and perform such duties in the management of the
Corporation as set forth in these By-Laws and as from time to
time prescribed by the Board of Directors or the shareowners. To
the extent not set forth in these By-Laws or so prescribed by the
Board of Directors or shareowners, they shall each have such
powers and authority and perform such duties in the management of
the Corporation, subject to the control of the Board, as
generally pertain to their respective offices.

In addition to the powers and authority above, each officer
has the powers and duties set out below.

(a) Chairman of the Board of Directors

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<PAGE>13

The Chairman of the Board of Directors, if such there be,
shall preside at all meetings of the Board. The Chairman of
the Board of Directors may be the chief executive officer of
the Corporation, and if so designated, may preside at all
meetings of shareowners.

(b) President

The President shall be the chief operating officer and shall
have responsibility for the general management of the
business of the Corporation, subject only to the supervision
of the Board of Directors or shareowners, and the Chairman
of the Board of Directors, as chief executive officer, if
such there be. If there is no Chairman of the Board of
Directors or if the Chairman of the Board of Directors is
not the chief executive officer, then the President shall be
the chief executive officer of the Corporation. The
President may preside at all meetings of shareowners, when
present, and at meetings of the Board of Directors in the
absence of the Chairman of the Board, if such there be.

The Secretary shall issue notices of all meetings of
shareowners and directors where notices of such meetings are
required by law or these By-Laws, and shall keep the minutes
of such meetings. The Secretary shall sign such instruments
and attest such documents as require signature or
attestation and affix the corporate seal thereto where
appropriate and shall possess such other powers and perform
such other duties as usually pertain to the office or as the
Board of Directors may prescribe.

(d) Treasurer

The Treasurer shall have general charge of, and be
responsible for, the fiscal affairs of the Corporation and
shall sign all instruments and documents as require such
signature, and shall possess such other powers and perform
such other duties as usually pertain to the office or as the
Board of Directors may prescribe.

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<PAGE>14

(e) Assistant Officers

Any Assistant Officer elected by the shareowners or by the
Board of Directors shall assist the designated officer and
shall possess that officer's powers and perform that
officer's duties as designated by that officer, and shall
possess such other powers and perform such other duties as
the shareowners or the Board of Directors may prescribe.

Section 4 - Records.

The Corporation shall keep (a) correct and complete books
and records of account; (b) minutes of the proceedings of the
shareowners, Board of Directors and any committees of the Board;
and (c) a current list of the directors and officers and their
residence addresses.

The Corporation shall also keep at its office in the State
of New York or at the office of its transfer agent or registrar
in the State of New York, if any, a record containing the names
and addresses of all shareowners, the number and class of shares
held by each and the dates when they respectively became the
owners of record thereof.

Section 5 - Checks and Similar Instruments.

All checks and drafts on the Corporation's bank accounts and
all bills of exchange and promissory notes and all acceptances,
obligations and other instruments, for the payment of money,
shall be signed by facsimile or otherwise on behalf of the
Corporation by such officer or officers or agent or agents as
shall be thereunto authorized from time to time by the Board of
Directors.

Section 6 - Voting Shares Held by the Corporation.

Either the President or the Secretary may vote shares of
stock held by the Corporation in other corporations and may
execute proxies for and on behalf of the Corporation for such
purpose.
<PAGE>
<PAGE>15

ARTICLE IV

SHARE CERTIFICATES AND LOSS THEREOF - TRANSFER OF SHARES

Section 1 - Form of Share Certificate.

The shares of the Corporation shall be represented by
certificates, in such forms as the Board of Directors may from
time to time prescribe, signed by the Chairman of the Board if
such there be, or the President or a Vice President, and the
Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and may be sealed with the seal of the
Corporation or a facsimile thereof. The signatures of the
officers upon a certificate may be facsimiles if the certificate
is countersigned by a transfer agent or registered by a registrar
other than the Corporation or its employee. In case any officer
who has signed or whose facsimile signature has been placed upon
a certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Corporation with
the same effect as if such person were such officer at the date
of issue.

Section 2 - Lost, Stolen or Destroyed Share Certificates.

No certificate or certificates for shares of the Corporation
shall be issued in place of any certificate alleged to have been
lost, stolen or destroyed, except upon production of such
evidence of the loss, theft or destruction, and upon such
indemnification and payment of costs of the Corporation and its
agents to such extent and in such manner as the Board of
Directors may from time to time prescribe. The Board of
Directors, in its discretion, and as a condition precedent to the
issuance of any new certificate, may require the owner of any
certificate alleged to have been lost, stolen or destroyed to
furnish the Corporation with a bond, in such sum and with such
surety or sureties as it may direct, as indemnity against any
claim that may be made against the Corporation in respect of such
lost, stolen or destroyed certificate.
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Section 3 - Transfer of Shares.

Shares of the Corporation shall be transferable on the books
of the Corporation by the registered holder thereof in person or
by the registered holder's duly authorized attorney, by delivery
for cancellation of a certificate or certificates for the same
number of shares, with proper endorsement consisting of either a
written assignment of the certificate or a power of attorney to
sell, assign or transfer the same or the shares represented
thereby, signed by the person appearing by the certificate to be
the owner of the shares represented thereby, either written
thereon or attached thereto, with such proof of the authenticity
of the signature as the Corporation or its agents may reasonably
require. Such endorsement may be either in blank or to a
specified person, and shall have affixed thereto all stock
transfer stamps required by law.

Except as otherwise provided by law, not more than twenty
percent of the aggregate number of shares of stock of the
Corporation outstanding in any class or series shall at any time
be owned of record or beneficially or voted by or for the account
of aliens (as defined below). Shares of stock shall not be
transferable on the books of the Corporation to any alien if, as
a result of such transfer, the aggregate number of shares of
stock in any class or series owned by or for the account of
aliens shall be twenty percent or more of the number of shares of
stock then outstanding in such class or series. The Board of
Directors may make such rules and regulations as it shall deem
necessary or appropriate so that accurate records may be kept of
the shares of stock of the Corporation owned of record or
beneficially or voted by or for the account of aliens or to
otherwise enforce the provisions of this Section 3.

As used in this Section 3, the word "alien" shall mean the
following and their representatives: any individual not a citizen
of the United States of America; a partnership, unless a majority
of the partners are non-aliens and a majority interest in the
partnership profits is held by nonaliens; a foreign government; a
corporation, joint-stock company or association organized under
the laws of a foreign country; any other corporation of which any
officer or more than one-fourth of the directors are aliens, or
of which more than one-fourth of any class or series of stock is
owned of record or voted by or for the account of aliens; and any
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<PAGE>17
other corporation, joint-stock company or association controlled
directly or indirectly by one or more of the above.

ARTICLE V

OTHER MATTERS

Section 1 - Corporate Seal.

The corporate seal shall have inscribed thereon the name of
the Corporation and such other appropriate legend as the Board of
Directors may from time to time determine. In lieu of the
corporate seal, when so authorized by the Board, a facsimile
thereof may be affixed or impressed or reproduced in any other
manner.

Section 2 - Amendments.

By-Laws of the Corporation may be amended, repealed or
adopted by vote of the holders of the shares at the time entitled
to vote in the election of any directors. By-Laws may also be
amended, repealed, or adopted by the Board of Directors, but any
By-Law adopted by the Board may be amended or repealed by the
shareowners entitled to vote thereon as hereinabove provided.

If any By-Law regulating an impending election of directors
is adopted, amended or repealed by the Board of Directors, there
shall be set forth in the notice of the next meeting of
shareowners for the election of directors the By-Law so adopted,
amended or repealed, together with a concise statement of the
changes made.

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Section 3 - Dividends.

As a condition of any decision by the Board of Directors to
pay dividends on the Corporation's common stock, the Board of
Directors shall certify quarterly that the payment of dividends
will neither impair the Corporation's service quality nor its
ability to finance its short and long term capital needs at
reasonable rates while maintaining a debt rating target of "A"
(for Standard and Poors, or the equivalent for other rating
agencies). Unless authorized by the New York Public Service
Commission, the Board of Directors shall not authorize the
payment of dividends on the Corporation's common stock while the
service quality or senior debt credit rating conditions apply
under which the payment of dividends is prohibited in Opinion No.
94-25 of the Public Service Commission in Case 93-C-0103 -
Petition of Rochester Telephone Corporation for Approval of
Proposed Restructuring Plan (issued and effective November 10,
1994).

<PAGE>

EXHIBIT 4.1

CREDIT AGREEMENT

dated as of December 19, 1994

among

ROCHESTER TELEPHONE CORPORATION

the Banks signatory hereto

and

THE CHASE MANHATTAN BANK, N.A.

as Agent
<PAGE>
<PAGE>
Table of Contents

ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS. . . . . . . . . . . . . . 5

Section 1.01 Definitions. . . . . . . . . . . . . . . . . . . . 5
Section 1.02 Accounting Terms . . . . . . . . . . . . . . . . .12

ARTICLE 2 THE CREDIT.. . . . . . . . . . . . . . . . . . . . . . .12

Section 2.01 The Loans. . . . . . . . . . . . . . . . . . . . .12
Section 2.02 The Notes. . . . . . . . . . . . . . . . . . . . .12
Section 2.03 Purpose. . . . . . . . . . . . . . . . . . . . . .12
Section 2.04 Borrowing Procedures . . . . . . . . . . . . . . .13
Section 2.05 Prepayments and Conversions. . . . . . . . . . . .13
Section 2.06 Interest Periods; Renewals . . . . . . . . . . . .13
Section 2.07 Changes of Commitments . . . . . . . . . . . . . .14
Section 2.08 Certain Notices. . . . . . . . . . . . . . . . . .14
Section 2.09 Minimum Amounts. . . . . . . . . . . . . . . . . .14
Section 2.10 Interest . . . . . . . . . . . . . . . . . . . . .15
Section 2.11 Fees . . . . . . . . . . . . . . . . . . . . . . .15
Section 2.12 Payments Generally . . . . . . . . . . . . . . . .16
Section 2.13 Quoted Rate Loans. . . . . . . . . . . . . . . . .16

ARTICLE 3 YIELD PROTECTION; ILLEGALITY; ETC. . . . . . . . . . . .17

Section 3.01 Additional Costs . . . . . . . . . . . . . . . . .17
Section 3.02 Limitation on Types of Loans . . . . . . . . . . .19
Section 3.03 Illegality . . . . . . . . . . . . . . . . . . . .19
Section 3.04 Certain Conversions. . . . . . . . . . . . . . . .19
Section 3.05 Certain Compensation . . . . . . . . . . . . . . .20

ARTICLE 4 CONDITIONS PRECEDENT.. . . . . . . . . . . . . . . . . .21

Section 4.01 Documentary Conditions Precedent . . . . . . . . .21
Section 4.02 Additional Conditions Precedent. . . . . . . . . .22
Section 4.03 Deemed Representations . . . . . . . . . . . . . .22

ARTICLE 5 REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . . . .22

Section 5.01 Incorporation, Good Standing and Due . . . . . . . .
Qualification. . . . . . . . . . . . . . . . . . 22
Section 5.02 Corporate Power and Authority;\
No Conflicts . . . . . . . . . . . . . . . . . . .22
Section 5.03 Legally Enforceable Agreements. . . . . . . . . . .23
Section 5.04 Litigation. . . . . . . . . . . . . . . . . . . . .23
Section 5.05 Financial Statements. . . . . . . . . . . . . . . .23
Section 5.06 Ownership and Liens . . . . . . . . . . . . . . . .24
Section 5.07 Taxes . . . . . . . . . . . . . . . . . . . . . . .24
Section 5.08 ERISA . . . . . . . . . . . . . . . . . . . . . . .24

ARTICLE 6 AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . .24

Section 6.01 Maintenance of Existence. . . . . . . . . . . . . .25
Section 6.02 Conduct of Business . . . . . . . . . . . . . . . .25
Section 6.03 Maintenance of Insurance. . . . . . . . . . . . . .25
Section 6.04 Compliance with Laws. . . . . . . . . . . . . . . .25
Section 6.05 Reporting Requirements. . . . . . . . . . . . . . .25

ARTICLE 7 NEGATIVE COVENANTS.. . . . . . . . . . . . . . . . . . .28

Section 7.01 Mergers . . . . . . . . . . . . . . . . . . . . . .28
Section 7.02 Liens . . . . . . . . . . . . . . . . . . . . . . .28

ARTICLE 8 FINANCIAL COVENANTS. . . . . . . . . . . . . . . . . . .29

Section 8.01 Minimum Tangible Net Worth. . . . . . . . . . . . .29
Section 8.02 Leverage Ratio. . . . . . . . . . . . . . . . . . .30

ARTICLE 9 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . .30

Section 9.01 Events of Default . . . . . . . . . . . . . . . . .30
Section 9.02 Remedies. . . . . . . . . . . . . . . . . . . . . .31

ARTICLE 10 THE AGENT; RELATIONS AMONG BANKS AND BORROWER. . . . . .32

Section 10.01 Appointment, Powers and Immunities
of Agent. . . . . . . . . . . . . . . . . . . . . .32
Section 10.02 Reliance by Agent . . . . . . . . . . . . . . . . .32
Section 10.03 Defaults. . . . . . . . . . . . . . . . . . . . . .33
Section 10.04 Rights of Agent as a Bank . . . . . . . . . . . . .33
Section 10.05 Indemnification of Agent. . . . . . . . . . . . . .33
Section 10.06 Documents . . . . . . . . . . . . . . . . . . . . .34
Section 10.07 Non-Reliance on Agent and Other Banks . . . . . . .34
Section 10.08 Failure of Agent to Act . . . . . . . . . . . . . .34
Section 10.09 Resignation or Removal of Agent . . . . . . . . . .35
Section 10.10 Amendments Concerning Agency Function . . . . . . .35
Section 10.11 Liability of Agent. . . . . . . . . . . . . . . . .35
Section 10.12 Transfer of Agency Function . . . . . . . . . . . .35
Section 10.13 Non-Receipt of Funds by the Agent . . . . . . . . .35
Section 10.14 Withholding Taxes . . . . . . . . . . . . . . . . .36
Section 10.15 Several Obligations and Rights of Banks . . . . . .36
Section 10.16 Pro Rata Treatment of Loans, Etc. . . . . . . . . .36
Section 10.17 Sharing of Payments Among Banks . . . . . . . . . .37

ARTICLE 11 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . .37

Section 11.01 Amendments and Waivers. . . . . . . . . . . . . . .37
Section 11.02 Usury . . . . . . . . . . . . . . . . . . . . . . .38
Section 11.03 Expenses. . . . . . . . . . . . . . . . . . . . . .38
Section 11.04 Survival. . . . . . . . . . . . . . . . . . . . . .38
Section 11.05 Assignment; Participations. . . . . . . . . . . . .38
Section 11.06 Notices . . . . . . . . . . . . . . . . . . . . . .39
Section 11.07 Setoff. . . . . . . . . . . . . . . . . . . . . . .39
Section 11.08 Jurisdiction; Immunities. . . . . . . . . . . . . .40
Section 11.0 Table of Contents; Headings. . . . . . . . . . . . .40
Section 11.10 Severability. . . . . . . . . . . . . . . . . . . .40
Section 11.11 Counterparts. . . . . . . . . . . . . . . . . . . .41
Section 11.12 Integration . . . . . . . . . . . . . . . . . . . .41
Section 11.13 Governing Law . . . . . . . . . . . . . . . . . . .41
Section 11.14 Confidentiality . . . . . . . . . . . . . . . . . .41
Section 11.15 Treatment of Certain Information. . . . . . . . . .41
Section 11.16 Substitution of R-Net As Borrower . . . . . . . . .42
Section 11.17 Treatment of Certain Information. . . . . . . . . .44

EXHIBITS

Exhibit 2.02 Promissory Note . . . . . . . . . . . . . . . . . .54
Exhibit 4.01(b) Authorization Letter. . . . . . . . . . . . . . .57
Exhibit 4.01(e) Security Agreement. . . . . . . . . . . . . . . .59
Exhibit 4.01(f) Opinion of Borrower . . . . . . . . . . . . . . .72
Exhibit 11.16 Certificate of Adoption . . . . . . . . . . . . . .74
Exhibit 11.16(f) Rnet Financial Structure . . . . . . . . . . . .80
Exhibit 11.16(h) Opinion of R-Net . . . . . . . . . . . . . . . .81
<PAGE>
<PAGE>

CREDIT AGREEMENT dated as of December 19, 1994 among
ROCHESTER TELEPHONE CORPORATION, a corporation organized under
the laws of New York (the "Borrower" and "Rochester Tel"), each
of the banks which is a signatory hereto (individually a "Bank"
and collectively the "Banks") and THE CHASE MANHATTAN BANK ,
N.A., a national banking association organized under the laws of
the United States of America, as agent for the Banks (in such
capacity, together with its successors in such capacity, the
"Agent").

The Borrower desires that the Banks extend credit as
provided herein and the Banks are prepared to extend such credit.
Accordingly, the Borrower, the Banks and the Agent agree as
follows:

ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.

Section 1.01. Definitions. As used in this Agreement the
following terms have the following meanings (terms defined in the
singular to have a correlative meaning when used in the plural
and vice versa):

"Affiliate" means any Person: (a) which directly or
indirectly Controls, or is Controlled by, or is under common
Control with, the Borrower or any of its Subsidiaries; (b) which
directly or indirectly beneficially owns or holds 5% or more of
any class of voting stock of the Borrower or any such Subsidiary;
(c) 5% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Borrower or such
Subsidiary; or (d) which is a partnership in which the Borrower
or any of its Subsidiaries is a general partner.

"Agreement" means this Credit Agreement, as amended or
supplemented from time to time. References to Articles,
Sections, Exhibits, Schedules and the like refer to the Articles,
Sections, Exhibits, Schedules and the like of this Agreement
unless otherwise indicated.

"Authorization Letter" means the letter agreement executed
by the Borrower in the form of Exhibit 4.01(b) .

"Banking Day" means any day on which commercial banks are
not authorized or required to close in New York City and whenever
such day relates to a Eurodollar Loan or notice with respect to
any Eurodollar Loan, a day on which dealings in Dollar deposits
are also carried out in the London interbank market.

"Borrower" shall mean, initially, Rochester Tel, and it
shall mean R-Net at such time as R-Net may become the Borrower
pursuant to Section 11.16.

"Capital Lease" means any lease which has been or should be
capitalized on the books of the lessee in accordance with GAAP.

"Closing Date" means the date this Agreement has been
executed by the Borrower, the Banks and the Agent.

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

"Commitment" means, with respect to each Bank, the
obligation of such Bank to make Variable Rate Loans and
Eurodollar Loans under this Agreement, in the following aggregate
principal amount, as such amount may be reduced or otherwise
modified from time to time:

The Chase Manhattan Bank, N.A.: $35,000,000;

Chemical Bank: $30,000,000;

Union Bank of Switzerland: $25,000,000;

Marine Midland Bank: $20,000,000;

NationsBank of Texas, N.A.: $20,000,000;

PNC Bank, N.A.: $20,000,000;

Manufacturers and Traders Trust
Company: $10,000,000.
-----------
Total: $160,000,000.
============

"Consolidated Funded Debt" means Funded Debt of the
Borrower and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.

"Consolidated Subsidiary" means any Subsidiary whose
accounts are or are required to be consolidated with the accounts
of the Borrower in accordance with GAAP.

"Consolidated Tangible Net Worth" means Tangible Net Worth
of the Borrower and its Consolidated Subsidiaries, as determined
on a consolidated basis in accordance with GAAP.

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

"Default" means any event which with the giving of notice
or lapse of time, or both, would become an Event of Default.

"Default Rate" means, with respect to the principal of any
Loan and, to the extent permitted by law, any other amount
payable by the Borrower under this Agreement or any Note that is
not paid when due (whether at stated maturity, by acceleration or
otherwise), a rate per annum during the period from and including
the due date, to, but excluding the date on which such amount is
paid in full equal to 1% above the Variable Rate as in effect
from time to time (provided that, if the amount so in default is
principal of a Fixed Rate Loan and the due date thereof is a day
other than the last day of the Interest Period therefor, the
"Default Rate" for such principal shall be, for the period from
and including the due date and to but excluding the last day of
the Interest Period therefor, 2% above the interest rate for such
Loan as provided in Section 2.10 hereof and, thereafter, the rate
provided for above in this definition).

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

"Environmental Laws" means any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes.

"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, including any rules and
regulations promulgated thereunder.

"ERISA Affiliate" means any corporation or trade or
business which is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which the
Borrower is a member, or (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f)
of ERISA and Section 412(n) of the Code, described in Section
414(m) or (o) of the Code of which the Borrower is a member.

"Eurodollar Loan" means any Loan when and to the extent
the interest rate therefor is determined on the basis of the
definition of "Fixed Base Rate."

"Event of Default" has the meaning given such term in
Section 9.01.

"Facility Documents" means this Agreement, the Notes, the
Authorization Letter and the Security Agreement.

"Financing Statements" has the meaning given such term in
Section 4.01(e).

"Fixed Base Rate" means with respect to any Interest
Period for a Eurodollar Loan, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) quoted at
approximately 11:00 a.m. London time by the principal London
branch of the Reference Bank two Banking Days prior to the first
day of such Interest Period for the offering to the Reference
Bank in the London interbank market of Dollar deposits in
immediately available funds, for a period, and in an amount,
comparable to the Interest Period and principal amount of the
Eurodollar Loan which shall be made by the Reference Bank and
outstanding during such Interest Period.

"Fixed Rate" means, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to
be equal to the quotient of (i) the Fixed Base Rate for such Loan
for such Interest Period divided by (ii) one minus the Reserve
Requirement for such Loan for such Interest Period.

"Fixed Rate Loan" means any Eurodollar Loan and any Quoted
Rate Loan.

"Funded Debt" means, with respect to any Person, all
indebtedness of such Person (including current maturities), for
money borrowed which by its terms matures more than one year from
the date as of which such Funded Debt is incurred, and any
indebtedness of such Person for money borrowed maturing within
one year from such date which is renewable or extendable at the
option of the obligor to a date beyond one year from such date
(whether or not theretofore renewed or extended), including any
such indebtedness renewable or extendable at the option of the
obligor under, or payable from the proceeds of other indebtedness
which may be incurred pursuant to, the provisions of any
revolving credit agreement or other similar agreement.

"GAAP" means generally accepted accounting principles in
the United States of America as in effect from time to time,
applied on a basis consistent with those used in the preparation
of the financial statements referred to in Section 5.05 (except
for changes concurred in by the Borrower's independent public
accountants).

"Interest Period" means, with respect to any Fixed Rate
Loan, the period commencing on the date such Loan is made,
converted from another type of Loan or renewed, as the case may
be, and ending, as the Borrower may select pursuant to Section
2.06 or Section 2.13 as the case may be: (a) in the case of
Eurodollar Loans, on the numerically corresponding day in the
first, second, third, or sixth calendar month thereafter,
provided that each such Interest Period which commences on the
last Banking Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Banking Day of
the appropriate calendar month; and (b) in the case of Quoted
Rate Loans, on the date established by the lending Bank.

"Lending Office" means, for each Bank and for each type of
Loan, the lending office of such Bank (or of an affiliate of such
Bank) designated as such for such type of Loan on its signature
page hereof or such other office of such Bank (or of an affiliate
of such Bank) as such Bank may from time to time specify to the
Agent and the Borrower as the office by which its Loans of such
type are to be made and maintained.

"Lien" means any lien (statutory or otherwise), security
interest, mortgage, deed of trust, priority, pledge, charge,
conditional sale, title retention agreement, financing lease or
other encumbrance or similar right of others, or any agreement to
give any of the foregoing.

"Loan" means any loan made by a Bank pursuant to Section
2.01 or Section 2.13.

"Margin" means for each Eurodollar Loan, a rate determined
pursuant to the grid set forth below, based on Borrower's senior
unsecured debt rating established from time to time by Standard &
Poor's Ratings Group ("S & P") and Moody's Investors Service,
Inc. ("Moody's"). For purposes of this grid, (i) if the S & P
and Moody's ratings are different, the higher one shall be used
to determine the Margin, (ii) the symbol ">/=" shall mean greater
than or equal to, and (iii) the symbol "<=/" shall mean less than
or equal to. If at any given time neither S & P nor Moody's has
established a debt rating for the Borrower, the Margin shall be
17 basis points.

S & P/Moody's Margin
------------- ------------
(In basis points)

>/= AA / Aa2 13
>/= A / A2 17
>/= BBB+ / Baa1 25
BBB / Baa2 30
BBB- / Baa3 40
</= BB+ / Ba1 100

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

"Note" means a $160,000,000 promissory note of the Borrower
in the form of Exhibit 2.02 hereto evidencing the Loans made by
a Bank hereunder.

"OMP" means Rochester Tel's Open Market Plan as contemplated
in the Joint Stipulation and Agreement between the New York State
Public Service Commission ("NYSPSC") and Rochester Tel (among
others), Case 93-C-0103 and Case 93-C-0033 and the subsequent
Order No. 94-25 issued therein by the NYSPSC dated November 10,
1994. The term OMP shall include any amendments to such Open
Market Plan that may become effective from time to time, provided
that such term shall not include any such amendments that may
reasonably be expected to have a material adverse effect on the
risks assumed or to be assumed by the Banks, or the prospect of
repayment of any present or future obligations of Borrower,
pursuant to this Agreement or any other Facility Documents.

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

"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other
entity of whatever nature.

"Plan" means any employee benefit or other plan established
or maintained, or to which contributions have been made, by the
Borrower or any ERISA Affiliate and which is covered by Title IV
of ERISA, other than a Multiemployer Plan.

"Prime Rate" means that rate of interest from time to time
announced by the Reference Bank at its Principal Office as its
prime commercial lending rate.

"Principal Office" means the principal office of the Agent,
presently located at 4 Chase Metro Tech Center, 13th Floor,
Brooklyn, New York, 11245.

"Quoted Rate Loan" means a Loan the interest rate on which
is offered by the lending Bank and accepted by the Borrower
pursuant to Section 2.13.

"Reference Bank" means The Chase Manhattan Bank, N.A.

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

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

"Regulatory Change" means, with respect to any Bank, any
change after the date of this Agreement in federal, state,
municipal or foreign laws or regulations (including without
limitation Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a
class of banks including such Bank of or under any federal,
state, municipal or foreign laws or regulations (whether or not
having the force of law) by any court or governmental or monetary
authority charged with the interpretation or administration
thereof.

"R-Net" means a corporation which the OMP contemplates that
Rochester Tel will establish as its wholly-owned Subsidiary on
the effective date of the OMP, and to which Rochester Tel intends
to transfer its name, its public utility franchise and business
for the Rochester New York local exchange, and certain of its
assets.

"Required Banks" means, at any time while no Loans are
outstanding, Banks having at least 66 2/3% of the aggregate
amount of the Commitments and, at any time while Loans are
outstanding, Banks holding at least 66 2/3% of the aggregate
principal amount of the Loans.

"Reserve Requirement" means, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under
Regulation D by member banks of the Federal Reserve System in New
York City with deposits exceeding $1,000,000,000 against
"Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes
deposits by reference to which the Fixed Base Rate for Eurodollar
Loans is to be determined as provided in the definition of "Fixed
Base Rate" in this Section 1.01 or (ii) any category of
extensions of credit or other assets which include Eurodollar
Loans (as the case may be).

"SEC" means the Securities and Exchange Commission.

"Security Agreement" means the Security Agreement in the
form of Exhibit 4.01(e), to be delivered by Rochester Tel
pursuant to Section 4.01(e).

"Subsidiary" means, with respect to any Person, any
corporation or other entity of which at least a majority of the
securities or other ownership interests having ordinary voting
power (absolutely or contingently) for the election of directors
or other persons performing similar functions are at the time
owned directly or indirectly by such Person.

"Tangible Net Worth" means, at any date of determination
thereof, the excess of total assets of the Borrower over total
liabilities of the Borrower, excluding, however, from the
determination of total assets all intangible assets.

"Termination Date" means December 18, 1999; provided that if
such date is not a Banking Day, the Termination Date shall be the
next succeeding Banking Day (or, if such next succeeding Banking
Day falls in the next calendar month, the next preceding Banking
Day).

"Unfunded Benefit Liabilities" means, with respect to any
Plan, the amount (if any) by which the present value of all
benefit liabilities (within the meaning of Section 4001(a)(16) of
ERISA) under the Plan exceeds the fair market value of all Plan
assets allocable to such benefit liabilities, as determined on
the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability
of the Borrower or any ERISA Affiliate under Title IV of ERISA.

"Variable Rate" means, for any day, the Prime Rate for such
day.

"Variable Rate Loan" means any Loan when and to the extent
the interest rate for such Loan is determined in relation to the
Variable Rate.

Section 1.02. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP, and all financial data required to be delivered hereunder
shall be prepared in accordance with GAAP.

ARTICLE 2. THE CREDIT.

Section 2.01. The Loans. (a) Subject to the terms and
conditions of this Agreement, each of the Banks severally agrees
to make loans ( "Loans") to the Borrower, which bear interest at
either the Variable Rate or a Fixed Rate, from time to time from
and including the date hereof to but excluding the Termination
Date, up to but not exceeding in the aggregate principal amount
at any one time outstanding, the amount of its Commitment. Loans
may also be made, at the option of the lending Bank, pursuant to
Section 2.13. Consequently, Loans may be outstanding as Variable
Rate Loans, Quoted Rate Loans or Eurodollar Loans (each a "type"
of Loan). Each type of Loan of each Bank shall be made and
maintained at such Bank's Lending Office for such type of Loans.

(b) The Loans shall be entirely due and payable on the
Termination Date; provided that each Quoted Rate Loan shall be
due and payable on the last day of the Interest Period therefor,
which shall in no event be later that the Termination Date.

Section 2.02. The Notes. The Loans of each Bank shall be
evidenced by a single $160,000,000 promissory note in favor of
such Bank in the form of Exhibit 2.02, dated the date of this
Agreement, duly completed and executed by the Borrower.

Section 2.03. Purpose. The Borrower shall use Loan
proceeds for any proper corporate purpose. Borrower shall not
use such proceeds for the purpose, whether immediate, incidental
or ultimate, of buying or carrying "margin stock" within the
meaning of Regulation U.

Section 2.04. Borrowing Procedures. The Borrower shall
give the Agent notice of each Variable Rate Loan and each
Eurodollar Loan to be made under Section 2.01 as provided in
Section 2.08; and the Borrower shall give the Agent notice of
each Quoted Rate Loan as provided in Section 2.13. Not later
than 2:00 p.m. New York, New York time on the date of such
borrowing, each Bank shall, or in the case of a Quoted Rate Loan,
the lending Bank shall, through its Lending Office and subject to
the conditions of this Agreement, make the amount of the Loan to
be made by it on such day available to the Agent at the Principal
Office and in immediately available funds for the account of the
Borrower. The amount so received by the Agent shall, subject to
the conditions of this Agreement, be made available to the
Borrower, in immediately available funds, by the Agent crediting
an account of the Borrower designated by the Borrower and
maintained with the Agent at the Principal Office.

Section 2.05. Prepayments and Conversions. The Borrower
shall have the right to make prepayments of principal, or to
convert one type of Loans into another type of Loans, at any time
or from time to time; provided that: (a) the Borrower shall give
the Agent notice of each such prepayment or conversion as
provided in Section 2.08; and (b) Fixed Rate Loans may be prepaid
or converted only on the last day of an Interest Period for such
Loans, except that (i) if after giving effect to any reduction or
termination of the Commitments pursuant to Section 2.07, either
the outstanding aggregate principal amount of all Loans exceeds
the aggregate amount of the Commitments or the outstanding
aggregate principal amount of Variable Rate and Eurodollar Loans
from one or more Banks exceeds the aggregate amount of such
Banks' Commitments, the Borrower shall pay or prepay, on the date
of such reduction or termination, one or more Loans selected by
Borrower, which may include Fixed Rate Loans, in an aggregate
principal amount equal to the excess, together with interest
thereon accrued to the date of such payment or prepayment, and
(ii) if Borrower receives a notice pursuant to either Section
3.01(a) or 3.01(c) that the Bank is entitled to compensation as
contemplated therein, Borrower may prepay any Fixed Rate Loan(s)
with respect to which such compensation is due, provided that
Borrower then pays interest thereon accrued to the date of such
prepayment(s) or conversion.

Section 2.06. Interest Periods; Renewals. (a) In the case
of each Eurodollar Loan, the Borrower shall select an Interest
Period of any duration in accordance with the definition of
Interest Period in Section 1.01, subject to the following
limitations: (i) no Interest Period shall have a duration less
than one month and if any such proposed Interest Period would
otherwise be for a shorter period, such Interest Period shall not
be available; (ii) if an Interest Period would end on a day which
is not a Banking Day, such Interest Period shall be extended to
the next Banking Day, unless such Banking Day would fall in the
next calendar month in which event such Interest Period shall end
on the immediately preceding Banking Day; (iii) no Interest
Period shall end after the Termination Date; and (iv) no more
than five Eurodollar Loans of each Bank may be outstanding at any
one time.

(b) Upon notice to the Agent as provided in Section 2.08,
the Borrower may renew any Eurodollar Loan on the last day of the
Interest Period therefor as the same type of Loan with an
Interest Period of the same or different duration in accordance
with the limitations provided above. If the Borrower shall fail
to give notice to the Agent of such a renewal, such Eurodollar
Loan shall automatically become a Variable Rate Loan on the last
day of the current Interest Period; provided that the foregoing
shall not prevent the conversion of any Eurodollar Loan into a
Quoted Rate Loan in accordance with Section 2.05.

Section 2.07. Changes of Commitments. The Borrower shall
have the right to reduce or terminate the amount of unused
Commitments at any time or from time to time, provided that: (a)
the Borrower shall give notice of each such reduction or
termination to the Agent as provided in Section 2.08; and (b)
each partial reduction shall be in an aggregate amount at least
equal to $10,000,000. The Commitments once reduced or terminated
may not be reinstated.

Section 2.08. Certain Notices. Notices by the Borrower to
the Agent of each borrowing pursuant to Section 2.04 or 2.13, and
each prepayment or conversion pursuant to Section 2.05 and each
renewal pursuant to Section 2.06(b), and each reduction or
termination of the Commitments pursuant to Section 2.07 shall be
irrevocable and shall be effective only if received by the Agent
not later than 12:00 noon New York, New York time, and (a) in the
case of borrowings and prepayments of, conversions into and (in
the case of Eurodollar Loans) renewals of (i) Variable Rate
Loans, given on the Banking Day thereof; and (ii) Eurodollar
Loans, given three Banking Days prior thereto; and (iii) Quoted
Rate Loans, given on the Banking Day thereof; and (b) in the case
of reductions or termination of the Commitments, given three
Banking Days prior thereto. Each notice referred to in this
Section 2.08 shall specify the Loans to be borrowed, prepaid,
converted or renewed and the amount (subject to Section 2.09) and
type of the Loans to be borrowed, or converted, or prepaid or
renewed (and, in the case of a conversion, the type of Loans to
result from such conversion and, in the case of a Eurodollar or
Quoted Rate Loan, the Interest Period therefor) and the date of
the borrowing or prepayment, or conversion or renewal (which
shall be a Banking Day). Each such notice of reduction or
termination shall specify the amount of the Commitments to be
reduced or terminated. The Agent shall promptly notify the Banks
of the contents of each such notice.

Section 2.09. Minimum Amounts. Except for borrowings which
exhaust the full remaining amount of the Commitments, prepayments
or conversions which result in the prepayment or conversion of
all Loans of a particular type or conversions made pursuant to
Section 3.04, each borrowing, prepayment, conversion and renewal
of principal of Loans of a particular type shall be in an amount
at least equal to $1,000,000 in the aggregate for all Banks
(borrowings, prepayments, conversions or renewals of or into
Loans of different types or, in the case of Fixed Rate Loans,
having different Interest Periods at the same time hereunder to
be deemed separate borrowings, prepayments, conversions and
renewals for the purposes of the foregoing, one for each type and
Interest Period). Anything in this Agreement to the contrary
notwithstanding, the aggregate principal amount of Eurodollar
Loans of each type having concurrent Interest Periods shall be at
least $5,000,000.

Section 2.10. Interest. (a) Interest shall accrue on the
outstanding and unpaid principal amount of each Loan for the
period from and including the date of such Loan to but excluding
the date such Loan is due at the following rates per annum: (i)
for a Variable Rate Loan, at a variable rate per annum equal to
the Variable Rate; (ii) for a Eurodollar Loan, at a fixed rate
equal to the Fixed Rate plus the Margin; and (iii) for a Quoted
Rate Loan, at the fixed rate for such Loan established pursuant
to Section 2.13. If the principal amount of any Loan and any
other amount payable by the Borrower hereunder or under a Note
shall not be paid when due (at stated maturity, by acceleration
or otherwise), interest shall accrue on such amount to the
fullest extent permitted by law from and including such due date
to but excluding the date such amount is paid in full at the
Default Rate.

(b) The interest rate on each Variable Rate Loan shall
change when the Variable Rate changes and interest on each such
Loan shall be calculated on the basis of a year of 365 (or, in
the case of a leap year, 366) days for the actual number of days
elapsed. Interest on each Fixed Rate Loan shall be calculated on
the basis of a year of 360 days for the actual number of days
elapsed. Promptly after the determination of any interest rate
provided for herein or any change therein, the Agent shall notify
the Borrower and the Banks.

(c) Accrued interest shall be due and payable in arrears
upon any payment of principal or conversion and (i) for each
Variable Rate Loan, on the last day of each March, June,
September and December, commencing the first such date after such
Loan; (ii) for each Fixed Rate Loan, on the last day of the
Interest Period with respect thereto and, in the case of an
Interest Period greater than three months, at three-month
intervals after the first day of such Interest Period; provided
that interest accruing at the Default Rate shall be due and
payable from time to time on demand of the Agent.

Section 2.11. Fees. The Borrower shall pay to the Agent
for the account of each Bank a facility fee on the daily average
total amount of the Commitment of such Bank for the period from
and including the date hereof to the earlier of the date the
Commitments are terminated or the Termination Date at a rate per
annum determined pursuant to the grid set forth below, calculated
on the basis of a year of 360 days for the actual number of days
elapsed. The accrued facility fee shall be due and payable in
arrears upon any reduction or termination of the Commitments and
on the last day of each March, June, September and December, for
the calendar quarter then ended, commencing on the first such
date after the Closing Date. The facility fee shall be
calculated on the basis of the Borrower's senior unsecured debt
rating established from time to time by Standard & Poor's Ratings
Group ("S & P") and Moody's Investors Service, Inc. ("Moody's").
For purposes of this grid, (i) if the S & P and Moody's ratings
are different, the higher one shall be used to determine the
facility fee, (ii) the symbol ">/=" shall mean greater than or
equal to, and (iii) the symbol "</=" shall mean less than or
equal to. If at any given time neither S & P nor Moody's has
established a debt rating for the Borrower, the fee shall be
computed at the rate of eight basis points.
<PAGE>
<PAGE>
S & P/Moody's Facility Fee
------------- ------------
(In basis points)

>/= AA / Aa2 7
>/= A / A2 8
>/= BBB+/ Baa1 12.5
BBB / Baa2 15
BBB-/ Baa3 20
</= BB+ / Ba1 50

Section 2.12. Payments Generally. All payments under this
Agreement or the Notes shall be made in Dollars in immediately
available funds not later than 1:00 p.m. New York, New York time
on the relevant dates specified above (each such payment made
after such time on such due date to be deemed to have been made
on the next succeeding Banking Day) to the Agent's account number
maintained at the Principal Office for the account of the
applicable Lending Office of each Bank. The Agent, or any Bank
for whose account any such payment is to be made, may (but shall
not be obligated to) debit the amount of any such payment which
is not made by such time to any ordinary deposit account of the
Borrower with the Agent or such Bank, as the case may be, and any
Bank so doing shall promptly notify the Agent. Subject to
Section 10.16, the Borrower shall, at the time of making each
payment under this Agreement or the Notes, specify to the Agent
the principal or other amount payable by the Borrower under this
Agreement, the Notes and the type of Loan(s) to which such
payment is to be applied; but in the event that it fails to so
specify, or if a Default or Event of Default has occurred and is
continuing, the Agent may apply such payment as it may elect in
its sole discretion subject also to Section 10.16. If the due
date of any payment under this Agreement or the Notes would
otherwise fall on a day which is not a Banking Day, such date
shall be extended to the next succeeding Banking Day and interest
shall be payable for any principal so extended for the period of
such extension. Each payment received by the Agent hereunder or
under any Note for the account of a Bank shall be paid promptly
to such Bank, in immediately available funds, for the account of
such Bank's Lending Office.

Section 2.13. Quoted Rate Loans. From time to time the
Borrower may request that any Bank or Banks, at the option of
each, offer to make Loans to the Borrower under this Agreement at
any time prior to the Termination Date, bearing interest at such
rates (other than those provided for in Section 2.10 hereof), and
for such Interest Period(s), as may be specified by the Bank in
its offer. Each such Loan shall be due and payable on the last
day of the Interest Period therefor and shall have such other
terms as may be set forth in the Bank's offer. If the Borrower
accepts any such offer within the time period for acceptance
specified therein and such Loan is made by the Bank to the
Borrower, such Loan (a "Quoted Rate Loan") shall constitute a
"Loan" for all purposes of, and shall be governed by, this
Agreement, except to the extent the terms specifically applicable
to such Loan are inconsistent with the provisions of this
Agreement. The Borrower shall give the Agent notice of each
Quoted Rate Loan as provided in Section 2.08. Each Quoted Rate
Loan made by each Bank shall be deemed a separate "type" of Loan
and Quoted Rate Loans shall be excepted from the pro rata
borrowing and payment requirements of Section 10.16. No Quoted
Rate Loan shall be deemed to utilize the individual Commitment of
the lending Bank, but it shall be deemed to utilize the aggregate
amount of the Commitments of all of the Banks as then in effect.
Consequently, although a Bank may have one or more Quoted Rate
Loans outstanding at any one time, its obligation to make
Variable Rate Loans and Eurodollar Loans shall not be affected
thereby, and it shall be required to advance its pro rata share
of the Loans of such other types as provided in this Agreement,
even though the aggregate unpaid principal balance of its
outstanding Loans will thereafter exceed the amount of its
Commitment. However, the aggregate unpaid principal balance of
all outstanding Loans shall at no time exceed the aggregate
amount of the Commitments of all of the Banks, as then in effect.

ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.

Section 3.01. Additional Costs. (a) The Borrower shall pay
directly to each Bank from time to time on demand such amounts as
such Bank may determine to be necessary to compensate it for any
costs which such Bank determines are attributable to its making
or maintaining any Fixed Rate Loans under this Agreement or its
Note or its obligation to make any such Loans hereunder, or any
reduction in any amount receivable by such Bank hereunder
(including any amount receivable under this Section 3.01) in
respect of any such Loans or such obligation (such increases in
costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or its Note (including any amounts
payable under this Section 3.01) in respect of any of such Loans
(other than taxes imposed on the overall net income of such Bank
or of its Lending Office for any of such Loans by the
jurisdiction in which such Bank has its principal office or such
Lending Office); or (ii) imposes or modifies any reserve, special
deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions
of credit or other assets of, or any deposits with or other
liabilities of, such Bank (including any of such Loans or any
deposits referred to in the definition of "Fixed Base Rate" in
Section 1.01); or (iii) imposes any other condition affecting
this Agreement or its Note (or any of such extensions of credit
or liabilities). Each Bank will notify the Borrower of any event
occurring after the date of this Agreement which will entitle
such Bank to compensation pursuant to this Section 3.01(a) as
promptly as practicable after it obtains knowledge thereof and
determines to request such compensation. Any demand for payment
under this Section 3.01(a) may include on a prospective basis any
amounts required to be deducted from such payment to the extent
that such amounts would be reimbursable hereunder when incurred.
If any Bank requests compensation from the Borrower under this
Section 3.01(a), or under Section 3.01(c), the Borrower may, by
notice to such Bank (with a copy to the Agent), require that such
Bank's Loans of the type with respect to which such compensation
is requested be prepaid in accordance with Section 2.05 or be
converted in accordance with Section 3.04.

(b) Without limiting the effect of the foregoing provisions
of this Section 3.01, in the event that, by reason of any
Regulatory Change, any Bank either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the
amount of a category of deposits or other liabilities of such
Bank which includes deposits by reference to which the interest
rate on Eurodollar or then outstanding Quoted Rate Loans is
determined as provided in this Agreement or in the lending Bank's
offer with respect to a Quoted Rate Loan, or a category of
extensions of credit or other assets of such Bank which includes
Eurodollar or then outstanding Quoted Rate Loans or (ii) becomes
subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Bank so
elects by notice to the Borrower (with a copy to the Agent), the
obligation of such Bank to make or renew, and to convert Loans of
any other type into, Loans of such type hereunder shall be
suspended until the date such Regulatory Change ceases to be in
effect (and all Loans of such type held by such Bank then
outstanding shall be, at Borrower's election, prepaid in
accordance with Section 2.05 or converted in accordance with
Section 3.04).

(c) Without limiting the effect of the foregoing provisions
of this Section 3.01 (but without duplication), the Borrower
shall pay directly to each Bank from time to time on request such
amounts as such Bank may determine to be necessary to compensate
such Bank for any costs which it determines are attributable to
the maintenance, by it or any of its affiliates pursuant to any
law or regulation of any jurisdiction or any interpretation,
directive or request (whether or not having the force of law and
whether in effect on the date of this Agreement or thereafter) of
any court or governmental or monetary authority, of capital in
respect of its Loans hereunder or its obligation to make Loans
hereunder (such compensation to include, without limitation, an
amount equal to any reduction in return on assets or equity of
such Bank to a level below that which it could have achieved but
for such law, regulation, interpretation, directive or request).
Each Bank will notify the Borrower if it is entitled to
compensation pursuant to this Section 3.01(c) as promptly as
practicable after it determines to request such compensation.

(d) Determinations and allocations by a Bank for purposes of
this Section 3.01 of the effect of any Regulatory Change pursuant
to subsections (a) or (b), or of the effect of capital maintained
pursuant to subsection (c), on its costs of making or maintaining
Loans or its obligation to make Loans, or on amounts receivable
by, or the rate of return to, it in respect of Loans or such
obligation, and of the additional amounts required to compensate
such Bank under this Section 3.01, shall be conclusive, provided
that such determinations and allocations are made on a
demonstrably reasonable basis.

Section 3.02. Limitation on Types of Loans. Anything herein
to the contrary notwithstanding, if:

(a) the Agent determines (which determination shall be
conclusive) that quotations of interest rates for the relevant
deposits referred to in the definition of "Fixed Base Rate" in
Section 1.01 are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining the rate
of interest for any Eurodollar Loans as provided in this
Agreement; or

(b) the Required Banks determine (which determination shall
be conclusive) and notify the Agent that the relevant rates of
interest referred to in the definition of "Fixed Base Rate" in
Section 1.01 upon the basis of which the rate of interest for any
Eurodollar Loans is to be determined do not adequately cover the
cost to the Banks of making or maintaining such Loans;

then the Agent shall give the Borrower and each Bank prompt
notice thereof, and so long as such condition remains in effect,
the Banks shall be under no obligation to make or renew
Eurodollar Loans or to convert Loans of any other type into
Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for any outstanding
Eurodollar Loans, either prepay such Loans or convert such Loans
into another type of Loans in accordance with Section 2.05.

Section 3.03. Illegality. Notwithstanding any other
provision in this Agreement, in the event that it becomes
unlawful, in the reasonable opinion of any Bank, for such Bank
or its Lending Office to (a) honor its obligation to make or
renew any Eurodollar or Quoted Rate Loan hereunder or convert
Loans of any type into Loans of such type, or (b) maintain any
Eurodollar or Quoted Rate Loan hereunder, then such Bank shall
promptly notify the Borrower thereof (with a copy to the Agent)
and such Bank's obligation to make or renew such Eurodollar or
Quoted Rate Loan, as the case may be, and to convert other types
of Loans into Loans of such type hereunder shall be suspended
until such time as such Bank may again make, renew, or convert
and maintain such affected Loans, in which event such Bank shall
promptly notify the Borrower thereof (with a copy to the Agent)
and such Bank's outstanding Eurodollar or Quoted Rate Loan, as
the case may be, shall be, at Borrower's election, either
prepaid in accordance with Section 2.05 or converted in
accordance with Section 3.04.

Section 3.04. Certain Conversions pursuant to Sections 3.01
and 3.03. If the Fixed Rate Loans of any Bank of a particular
type (Loans of such type being herein called "Affected Loans" and
such type being herein called the "Affected Type") are to be
converted pursuant to Section 3.01 or 3.03, by reason of
Borrower's failure to prepay such Loans in accordance with
Section 2.05, such Bank's Affected Loans shall be automatically
converted into Variable Rate Loans on the last day(s) of the then
current Interest Period(s) for the Affected Loans (or, in the
case of a conversion required by Section 3.01(b) or 3.03, on such
earlier date as such Bank may specify to the Borrower with a copy
to the Agent) and, unless and until such Bank gives notice as
provided below that the circumstances specified in Section 3.01
or 3.03 which gave rise to such conversion no longer exist:

(a) to the extent that such Bank's Affected Loans have been
so converted, all payments and prepayments of principal which
would otherwise be applied to such Bank's Affected Loans shall be
applied instead to its Variable Rate Loans into which the
Affected Loans have been converted; and

(b) if Eurodollar Loans are the Affected Type, all Loans
which would otherwise be made or renewed by such Bank as Loans of
the Affected Type shall be made instead as Variable Rate Loans
and all Loans of such Bank which would otherwise be converted
into Loans of the Affected Type shall be converted instead into
(or shall remain as) Variable Rate Loans.

If such Bank gives notice to the Borrower (with a copy to the
Agent) that the circumstances specified in Section 3.01 or 3.03
which gave rise to the conversion of such Bank's Eurodollar Loans
pursuant to this Section 3.04 no longer exist (which such Bank
agrees to do promptly upon such circumstances ceasing to exist)
at a time when Eurodollar Loans of other Banks are outstanding,
such Bank's Variable Rate Loans into which its Eurodollar Loans
were converted shall be automatically converted, on the first
day(s) of the next succeeding Interest Period(s) for such other
Banks' outstanding Eurodollar Loans occurring at least three (3)
Banking Days after such circumstances ceased to exist, to the
extent necessary so that, after giving effect thereto, all
Eurodollar Loans held by other Banks and by such Bank are held
pro rata (as to principal amounts and Interest Periods) in
accordance with their respective Commitments.

Section 3.05. Certain Compensation. The Borrower shall pay
to the Agent for the account of each Bank, upon the request of
such Bank through the Agent, such amount or amounts as shall be
sufficient (in the reasonable and demonstrable opinion of such
Bank) to compensate it for any loss, cost or expense which such
Bank determines is attributable to:

(a) any payment, prepayment, conversion or renewal of a Fixed
Rate Loan made by such Bank on a date other than the last day of
an Interest Period for such Loan (whether by reason of required
prepayment, required conversion, acceleration or otherwise); or

(b) any failure by the Borrower to borrow, convert into or
renew a Fixed Rate Loan to be made, converted into or renewed by
such Bank on the date specified therefor in the relevant notice
under Section 2.04, 2.05, 2.06 or 2.13, as the case may be.

Without limiting the foregoing, such compensation shall
include an amount equal to the excess, if any, of: (i) the
amount of interest which otherwise would have accrued on the
principal amount so paid, prepaid, converted or renewed or not
borrowed, converted or renewed for the period from and including
the date of such payment, prepayment or conversion or failure to
borrow, convert or renew to but excluding the last day of the
then current Interest Period for such Loan (or, in the case of a
failure to borrow, convert or renew, to but excluding the last
day of the Interest Period for such Loan which would have
commenced on the date specified therefor in the relevant notice)
at the applicable rate of interest for such Loan provided for
herein; over (ii) the amount of interest (as reasonably
determined by such Bank) such Bank would have paid during the
same period if it had bid on the first day of the then current
Interest Period for such Loan in the London interbank market (if
such Loan is a Eurodollar Loan) or in any other relevant market
(if such Loan is a Quoted Rate Loan) for Dollar deposits for
amounts comparable to such principal amount and maturities
comparable to such Interest Period.

ARTICLE 4. CONDITIONS PRECEDENT.

Section 4.01. Documentary Conditions Precedent. The
obligations of the Banks to make the Loans constituting the
initial borrowing are subject to the condition precedent that the
Agent shall have received on or before the date of such Loans
each of the following, in form and substance satisfactory to the
Agent and its counsel:

(a) the Notes duly executed by the Borrower;

(b) the Authorization Letter duly executed by the Borrower;

(c) a certificate of the Secretary or Assistant Secretary of
the Borrower, dated the Closing Date, attesting to all corporate
action taken by the Borrower, including resolutions of its Board
of Directors, authorizing the execution, delivery and performance
of the Facility Documents and each other document to be delivered
pursuant to this Agreement;

(d) a certificate of the Secretary or Assistant Secretary of
the Borrower, dated the Closing Date, certifying the names and
true signatures of the officers of the Borrower authorized to
sign the Facility Documents and the other documents to be
delivered by the Borrower under this Agreement and certifying
that attached thereto are true and correct copies of the
Borrower's certificate of incorporation and by-laws as in effect
on the date thereof;

(e) the Security Agreement duly executed by Rochester Tel
together with (i) duly executed financing statements (UCC-1) in
the form included in Exhibit 4.01(e) hereto (the "Financing
Statements") for filing with the Secretary of State of the State
of New York and the Monroe County Clerk's Office; and (ii)
certified copies of searches acceptable to the Agent of the
Uniform Commercial Code records of the New York Secretary of
State and the Monroe County Clerk identifying all of the
financing statements on file with respect to Rochester Tel in the
New York Secretary of State's office and the Monroe County
Clerk's Office, and indicating no prior claims and interests in
any of the Collateral (as defined in the Security Agreement);

(f) a favorable opinion of John T. Pattison, Esq., Managing
Attorney, counsel for the Borrower, dated the Closing Date, in
substantially the form of Exhibit 4.01(f) and as to such other
matters as the Agent or any Bank may reasonably request.

Section 4.02. Additional Conditions Precedent. The
obligations of the Banks to make any Loan (including the initial
borrowing), to convert any Loans pursuant to Section 2.05 or to
renew or convert any Loans pursuant to Section 2.06, shall be
subject to the further conditions precedent that on the date of
any such Loan, conversion or renewal the following statements
shall be true:

(a) the representations and warranties contained in
Article 5 are true and correct on and as of the date of such
Loan, conversion or renewal as though made on and as of such
date, provided that the representations and warranties in
Section 5.04 are made only as of the date of this Agreement;
and

(b) no Default or Event of Default has occurred and is
continuing, or would result from such Loan, conversion or
renewal.

Section 4.03. Deemed Representations. Each notice of
borrowing, conversion or renewal hereunder, each automatic
conversion pursuant to Section 2.06(b), and acceptance by the
Borrower of such conversion or renewal or of the proceeds of
such borrowing, shall constitute a representation and warranty
that the statements contained in Sections 4.02(a) and (b) are
true and correct both on the date of such notice and as of the
date of such borrowing, conversion or renewal.

ARTICLE 5. REPRESENTATIONS AND WARRANTIES.

The Borrower hereby represents and warrants that:

Section 5.01. Incorporation, Good Standing and Due
Qualification. Each of the Borrower and its Subsidiaries is duly
incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate
power and authority to own its assets and to transact the
business in which it is now engaged or proposed to be engaged,
and is duly qualified as a foreign corporation and in good
standing under the laws of each other jurisdiction in which such
qualification is required.

Section 5.02. Corporate Power and Authority; No Conflicts.
The execution, delivery and performance by the Borrower of the
Facility Documents to which it is a party have been duly
authorized by all necessary corporate action and do not and will
not: (a) require any consent or approval of its stockholders;
(b) contravene its charter or by-laws; (c) to the extent material
to the Borrower's financial condition, business, operations or
properties, violate any provision of, or require any filing,
registration, consent or approval under, any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability
to the Borrower or any of its Subsidiaries or Affiliates; (d) to
the extent material to the Borrower's financial condition,
business, operations or properties, result in a breach of or
constitute a default or require any consent under any indenture
or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its
properties may be bound or affected; (e) except for the security
interest in favor of the Agent on behalf of the Banks granted
pursuant to the Security Agreement, result in, or require, the
creation or imposition of any Lien, upon or with respect to any
of the properties now owned or hereafter acquired by the
Borrower, as long as Rochester Tel is the Borrower, or by the
Borrower and its Subsidiaries, so long as R-Net is the Borrower ;
or (f) cause the Borrower (or any Subsidiary or Affiliate, as the
case may be) to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or
instrument.

Section 5.03. Legally Enforceable Agreements. Each Facility
Document is, or when delivered under this Agreement will be, a
legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, except to the
extent that such enforcement may be limited by applicable
bankruptcy, insolvency and other similar laws affecting
creditors' rights generally.

Section 5.04. Litigation. As of the date of this Agreement,
other than as disclosed in Borrower's reports previously filed
with the SEC under the Securities Exchange Act of 1934, there are
no actions, suits or proceedings pending or, to the knowledge of
the Borrower, threatened, against or affecting the Borrower or
any of its Subsidiaries before any court, governmental agency or
arbitrator, which could, in any one case or in the aggregate,
materially adversely affect the financial condition, operations,
properties or business of the Borrower or any such Subsidiary or
the ability of the Borrower to perform its obligations under the
Facility Documents.

Section 5.05. Financial Statements. The consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries
as at December 31, 1993, and the related consolidated income
statement and statements of cash flows and changes in
stockholders' equity of the Borrower and its Consolidated
Subsidiaries for the fiscal year then ended, and the accompanying
footnotes, together with the opinion thereon, of Price
Waterhouse, independent certified public accountants included in
Borrower's 1993 annual report to its shareholders filed with the
SEC, and the interim consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as at September 30, 1994, and
the related consolidated income statement and statements of cash
flows and changes in stockholders' equity for the nine month
period then ended, included in Borrower's Form 10-Q Quarterly
Report for the nine months then ended, as filed with the SEC,
copies of which have been furnished to each of the Banks, are
complete and correct in all material respects and fairly present
the financial condition of the Borrower and its Consolidated
Subsidiaries as at such dates and the results of the operations
of the Borrower and its Consolidated Subsidiaries for the periods
covered by such statements, all in accordance either with GAAP
consistently applied (subject to year end adjustments in the case
of the interim financial statements), or with the rules and
regulations of the SEC. There are no liabilities of the Borrower
or any of its Consolidated Subsidiaries, fixed or contingent,
which are material but are not reflected in such financial
statements or in the notes thereto, other than liabilities
arising in the ordinary course of business since September 30,
1994. No information, exhibit or report furnished by the
Borrower to the Banks in connection with the negotiation of this
Agreement contained any material misstatement of fact or omitted
to state a material fact or any fact necessary to make the
statements contained therein not materially misleading. Since
December 31, 1993, there has been no material adverse change in
the condition (financial or otherwise), business, operations or
prospects of the Borrower or any of its Subsidiaries.

Section 5.06. Ownership and Liens. Each of the Borrower and
its Consolidated Subsidiaries has title to, or valid leasehold
interests in, all of its properties and assets, real and
personal, including the properties and assets, and leasehold
interests reflected in the financial statements referred to in
Section 5.05 (other than any properties or assets disposed of in
the ordinary course of business), and none of the properties and
assets owned by the Borrower or any of its Subsidiaries and none
of its leasehold interests is subject to any Lien, except as
disclosed in such financial statements or as may be permitted
hereunder, and except for Liens not material, individually or in
the aggregate, with respect to Borrower's business, properties,
operations or financial condition.

Section 5.07. Taxes. Each of the Borrower and its
Subsidiaries has filed all tax returns (federal, state and local)
required to be filed and has paid all taxes, assessments and
governmental charges and levies shown thereon to be due,
including interest and penalties, to the extent material to
Borrower's business, properties, operations or financial
condition.
Section 5.08. ERISA. Each Plan, and, to the best knowledge
of the Borrower, each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material
respects in compliance with, the applicable provisions of ERISA,
the Code and any other applicable Federal or state law, and no
event or condition is occurring or exists concerning which the
Borrower would be under an obligation to furnish a report to the
Banks in accordance with Section 6.08(h) hereof.

ARTICLE 6. AFFIRMATIVE COVENANTS.

So long as any of the Notes shall remain unpaid or any Bank
shall have any Commitment under this Agreement, the Borrower
shall:

Section 6.01. Maintenance of Existence. To the extent
material to Borrower's business, properties, operations or
financial condition, preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its corporate existence
and good standing in the jurisdiction of its incorporation, and
qualify and remain qualified, and cause each of its Subsidiaries
to qualify and remain qualified, as a foreign corporation in each
jurisdiction in which such qualification is required.

Section 6.02. Conduct of Business. Continue, and cause each
of its Subsidiaries to continue, to engage in an efficient and
economical manner in a business of the same general type as
conducted by it on the date of this Agreement.

Section 6.03. Maintenance of Insurance. Maintain, and cause
each of its Subsidiaries to maintain, insurance with financially
sound and reputable insurance companies or associations in such
amounts and covering such risks as are usually carried by
companies engaged in the same or a similar business and similarly
situated, which insurance may provide for reasonable
deductibility from coverage thereof.

Section 6.04. Compliance with Laws. Comply, and cause each
of its Subsidiaries to comply, in all material respects with all
applicable laws, rules, regulations and orders, such compliance
to include, without limitation, paying before the same become
delinquent all taxes, assessments and governmental charges
imposed upon it or upon its property.

Section 6.05. Reporting Requirements. Furnish to the Agent
for distribution to each of the Banks:

(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a copy of
Borrower's annual report to shareholders as filed with the SEC
or, if Borrower does not prepare such a report, a copy of
Borrower's Form 10-K Annual Report as filed with the SEC or, if
Borrower does not prepare either such report, a separate
document. In any such case, the report or separate document shall
contain a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year and a
consolidated income statement and statement of cash flows and
changes in stockholders' equity of the Borrower and its
Consolidated Subsidiaries for such fiscal year, all either
complying with the rules and regulations of the SEC, (if
contained in a report filed with the SEC), or prepared in
accordance with GAAP (if contained in a separate document) and
accompanied by an opinion thereon acceptable to the Agent and
each of the Banks by Price Waterhouse or other independent
accountants of national standing selected by the Borrower;

(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal
year of the Borrower, a copy of Borrower's Form 10-Q Quarterly
Report for such quarter as filed with the SEC, or, if Borrower
does not prepare such report, a separate document. In either such
case, the report or separate document shall contain a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and a consolidated
income statement and statement of cash flows and changes in
stockholders' equity, of the Borrower and its Consolidated
Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, all either
complying with the rules and regulations of the SEC (if contained
in a report filed with the SEC) or prepared in accordance with
GAAP (if contained in a separate document) and certified by the
chief financial officer of the Borrower (subject to year-end
adjustments);

(c) as soon as possible and in any event within 10 days after
the occurrence of each Default or Event of Default a written
notice setting forth the details of such Default or Event of
Default and the action which is proposed to be taken by the
Borrower with respect thereto;

(d) as soon as possible, and in any event within ten days
after the Borrower has actual knowledge that any of the events or
conditions specified below with respect to any Plan or
Multiemployer Plan have occurred or exist, a statement signed by
a senior financial officer of the Borrower setting forth details
respecting such event or condition and the action, if any, which
the Borrower or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed
with or given to PBGC by the Borrower or an ERISA Affiliate with
respect to such event or condition):

(i) any reportable event, as defined in Section 4043(b)
of ERISA, with respect to a Plan, as to which PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such
event (provided that a failure to meet the minimum funding
standard of Section 412 of the Code or Section 302 of ERISA
including, without limitation, the failure to make on or
before its due date a required installment under Section
412(m) of the Code or Section 302(e) of ERISA, shall be a
reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code) and any request
for a waiver under Section 412(d) of the Code for any Plan;

(ii) the distribution under Section 4041 of ERISA of a
notice of intent to terminate any Plan or any action taken by
the Borrower or an ERISA Affiliate to terminate any Plan;

(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Borrower or any ERISA Affiliate of a notice
from a Multiemployer Plan that such action has been taken by
PBGC with respect to such Multiemployer Plan;

(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Borrower or any ERISA Affiliate
that results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt of the Borrower
or any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate
or has terminated under Section 4041A of ERISA;

(v) the institution of a proceeding by a fiduciary or
any Multiemployer Plan against the Borrower or any ERISA
Affiliate to enforce Section 515 of ERISA, which proceeding
is not dismissed within 30 days;

(vi) the adoption of an amendment to any Plan that
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA would result in the loss of tax-exempt status of the
trust of which such Plan is a part if the Borrower or an
ERISA Affiliate fails to timely provide security to the Plan
in accordance with the provisions of said Sections;

(vii) any event or circumstance exists which may
reasonably be expected to constitute grounds for the Borrower
or any ERISA Affiliate to incur liability under Title IV of
ERISA or under Sections 412(c)(11) or 412(n) of the Code with
respect to any Plan; and

(viii) the Unfunded Benefit Liabilities of one or more
Plans increase after the date of this Agreement in an amount
which is material in relation to the financial condition of
the Borrower and its Subsidiaries, on a consolidated basis.

(e) promptly after the written request of any Bank, copies
of each annual report filed pursuant to Section 104 of ERISA with
respect to each Plan (including, to the extent required by
Section 104 of ERISA, the related financial and actuarial
statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section
103) and each annual report filed with respect to each Plan under
Section 4065 of ERISA; provided, however, that in the case of a
Multiemployer Plan, such annual reports shall be furnished only
if they are available to the Borrower or an ERISA Affiliate;

(f) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports (in
addition to those described above) which the Borrower or any of
its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, (in addition to those
described above), and all registration statements which the
Borrower or any such Subsidiary files with the SEC or any
governmental authority which may be substituted therefor, or with
any national securities exchange;

(g) promptly after sending or filing, or other receipt
thereof, copies of any material amendments or notices sent, filed
or received with respect to the OMP; and

(h) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as the Agent or any Bank may from time to time
reasonably request.

ARTICLE 7. NEGATIVE COVENANTS.

Section 7.01. Mergers. So long as any of the Notes shall
remain unpaid or any Bank shall have any Commitment under this
Agreement, Borrower shall not merge or consolidate with, or sell,
assign, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to, any Person,
(or enter into any agreement to do any of the foregoing), except,

(a) for mergers and consolidations in which Borrower is the
surviving entity; and

(b) for transactions contemplated in the OMP.

provided, that, in either case, no Default or Event of Default
either exists or will result therefrom.

Section 7.02. Liens. For so long as it may be the Borrower
under this Agreement, R-Net shall not create, incur, assume or
suffer to exist, or permit any of its Subsidiaries to create,
incur, assume or suffer to exist, any Lien, upon or with respect
to any of its properties, now owned or hereafter acquired,
except:

(a) Liens in favor of the Agent on behalf of the Banks
securing the Loans hereunder;

(b) Liens for taxes or assessments or other government
charges or levies if not yet due and payable or, if due and
payable, if they are being contested in good faith by appropriate
proceedings and for which appropriate reserves are maintained;

(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar
Liens, securing obligations incurred in the ordinary course of
business which are not past due for more than 30 days, or which
are being contested in good faith by appropriate proceedings and
for which appropriate reserves have been established;

(d) Liens under workers' compensation, unemployment
insurance, social security or similar legislation (other than
ERISA);

(e) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of
money), leases (permitted under the terms of this Agreement),
public or statutory obligations, surety, stay, appeal, indemnity,
performance or other similar bonds, or other similar obligations
arising in the ordinary course of business;

(f) judgment and other similar Liens arising in connection
with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and by
appropriate proceedings;

(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere
with the occupation, use and enjoyment by R-Net or any such
Subsidiary of the property or assets encumbered thereby in the
normal course of its business or materially impair the value of
the property subject thereto;

(h) Liens securing obligations of such a Subsidiary to R-Net
or another such Subsidiary;

(i) purchase money Liens on any property hereafter acquired
or the assumption of any Lien on property existing at the time of
such acquisition, or a Lien incurred in connection with any
conditional sale or other title retention agreement or a Capital
Lease; provided that:

(i) any property subject to any of the foregoing is
acquired by R-Net or any such Subsidiary either (x) in the
ordinary course of its business and the Lien on any such
property is created contemporaneously with such acquisition,
or (xx) pursuant to the OMP;

(ii) the obligation secured by any Lien so created,
assumed or existing shall not exceed 100% of the lesser of
cost or fair market value as of the time of acquisition of
the property covered thereby to R-Net or such Subsidiary
acquiring the same; and

(iii) each such Lien shall attach only to the property
so acquired and fixed improvements thereon.

ARTICLE 8. FINANCIAL COVENANTS.

So long as any of the Notes shall remain unpaid or any Bank
shall have any Commitment under this Agreement, as of the end of
each fiscal quarter:

Section 8.01. Minimum Tangible Net Worth. So long as
Rochester Tel is the Borrower, Rochester Tel shall maintain a
Consolidated Tangible Net Worth of not less than $400,000,000.
So long as R-Net is the Borrower, R-Net shall maintain a
Consolidated Tangible Net Worth of not less than $220,000,000.

Section 8.02. Leverage Ratio. The Borrower shall maintain
at all times a ratio of Consolidated Funded Debt to Consolidated
Tangible Net Worth of not greater than 2 to 1.

ARTICLE 9. EVENTS OF DEFAULT.

Section 9.01. Events of Default. Any of the following
events shall be an "Event of Default":

(a) the Borrower shall: (i) fail to pay the principal of any
Note as and when due and payable; or (ii) fail to pay interest on
any Note or any fee or other amount due hereunder as and when due
and payable and such failure shall continue for ten days;

(b) any representation or warranty made or deemed made by the
Borrower in this Agreement or in any other Facility Document or
which is contained in any certificate, document, opinion,
financial or other statement furnished at any time under or in
connection with any Facility Document shall prove to have been
incorrect in any material respect on or as of the date made or
deemed made;

(c) the Borrower shall: (i) fail to perform or observe any
term, covenant or agreement contained in Section 2.03 or Articles
7 or 8; or (ii) fail to perform or observe any term, covenant or
agreement on its part to be performed or observed (other than the
obligations specifically referred to elsewhere in this Section
9.01) in any Facility Document and such failure shall continue
for 30 consecutive days;

(d) the Borrower , so long as Rochester Tel is the Borrower,
or the Borrower or any of its Subsidiaries, so long as R-Net is
the Borrower, shall: (i) fail to pay any indebtedness, including
but not limited to indebtedness for borrowed money (other than
the payment obligations described in (a) above), of the Borrower
(and its Subsidiaries, when R-Net is the Borrower) or any
interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or
otherwise); or (ii) fail to perform or observe any term, covenant
or condition on its part to be performed or observed under any
agreement or instrument relating to any such indebtedness, when
required to be performed or observed, if the effect of such
failure to perform or observe is to accelerate, or to permit the
acceleration of, after the giving of notice or passage of time,
or both, the maturity of such indebtedness, whether or not such
failure to perform or observe shall be waived by the holder of
such indebtedness; or any such indebtedness shall be declared to
be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated
maturity thereof;

(e) the Borrower, so long as Rochester Tel is the Borrower,
or the Borrower or any of its Subsidiaries, so long as R-Net is
the Borrower: (i) shall generally not, or be unable to, or shall
admit in writing its inability to, pay its debts as such debts
become due; or (ii) shall make an assignment for the benefit of
creditors, or petition or apply to any tribunal for the
appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute
of any jurisdiction, whether now or hereafter in effect; or (iv)
shall have had any such petition or application filed or any such
proceeding shall have been commenced, against it, in which an
adjudication or appointment is made or order for relief is
entered, or which petition, application or proceeding remains
undismissed for a period of 30 days or more; or shall be the
subject of any proceeding under which its assets may be subject
to seizure, forfeiture or divestiture (other than a proceeding in
respect of a Lien permitted under Section 7.02 (b)); or (v) by
any act or omission shall indicate its consent to, approval of or
acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or
trustee for all or any substantial part of its property; or (vi)
shall suffer any such custodianship, receivership or trusteeship
to continue undischarged for a period of 30 days or more;

(f) one or more judgments, decrees or orders for the payment
of money in excess of $2,000,000 in the aggregate shall be
rendered against the Borrower, so long as Rochester Tel is the
Borrower, or against the Borrower and/or any of its Subsidiaries,
so long as R-Net is the Borrower, and such judgments, decrees or
orders shall continue unsatisfied and in effect for a period of
30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;

(g) any event or condition shall occur or exist with respect
to any Plan or Multiemployer Plan concerning which the Borrower
is under an obligation to furnish a report to the Bank in
accordance with Section 6.05(d) hereof and as a result of such
event or condition, together with all other such events or
conditions, the Borrower or any ERISA Affiliate has incurred or
in the opinion of the Bank is reasonably likely to incur a
liability to a Plan, a Multiemployer Plan, the PBGC, or a Section
4042 Trustee (or any combination of the foregoing) which is
material in relation to the financial position of the Borrower
and its Subsidiaries, on a consolidated basis; provided, however,
that any such amount shall not be deemed to be material so long
as all such amounts do not require payments by Borrower in excess
of $2,000,000 in the aggregate; and

(h) Any Person or group (as such term is defined pursuant to
the Securities Exchange Act of 1934, and the regulations
promulgated thereunder), acquires Control of Rochester Tel ,
during such period as either Rochester Tel or R-Net is the
Borrower; or, after R-Net becomes the Borrower, Rochester Tel
ceases to Control R-Net.

Section 9.02. Remedies. If any Event of Default shall occur
and be continuing, the Agent shall, upon request of the Required
Banks, by notice to the Borrower, (a) declare the Commitments to
be terminated, whereupon the same shall forthwith terminate, and
(b) declare the outstanding principal of the Notes, all interest
thereon and all other amounts payable under this Agreement and
the Notes to be forthwith due and payable, whereupon the Notes,
all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that, in the case of an Event of
Default referred to in Section 9.01(e) above, the Commitments
shall be immediately terminated, and the Notes, all interest
thereon and all other amounts payable under this Agreement shall
be immediately due and payable without notice, presentment,
demand, protest or other formalities of any kind, all of which
are hereby expressly waived by the Borrower.

ARTICLE 10. THE AGENT; RELATIONS AMONG BANKS AND BORROWER.

Section 10.01. Appointment, Powers and Immunities of Agent.
Each Bank hereby irrevocably (but subject to removal by the
Required Banks pursuant to Section 10.09) appoints and authorizes
the Agent to act as its agent hereunder and under any other
Facility Document with such powers as are specifically delegated
to the Agent by the terms of this Agreement and any other
Facility Document, together with such other powers as are
reasonably incidental thereto. The Agent shall have no duties or
responsibilities except those expressly set forth in this
Agreement and any other Facility Document, and shall not by
reason of this Agreement be a trustee for any Bank. The Agent
shall not be responsible to the Banks for any recitals,
statements, representations or warranties made by the Borrower or
any officer or official of the Borrower or any other Person
contained in this Agreement or any other Facility Document, or in
any certificate or other document or instrument referred to or
provided for in, or received by any of them under, this Agreement
or any other Facility Document, or for the value, legality,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Facility Document or
any other document or instrument referred to or provided for
herein or therein, for the perfection or priority of any
collateral security for the Loans or for any failure by the
Borrower to perform any of its obligations hereunder or
thereunder. The Agent may employ agents and attorneys-in-fact
and shall not be responsible, except as to money or securities
received by it or its authorized agents, for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or
them hereunder or under any other Facility Document or in
connection herewith or therewith, except for its or their own
gross negligence or willful misconduct. The Borrower shall pay
any fee agreed to by the Borrower and the Agent with respect to
the Agent's services hereunder.

Section 10.02. Reliance by Agent. The Agent shall be
entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent.
The Agent may deem and treat each Bank as the holder of the Loans
made by it for all purposes hereof. As to any matters not
expressly provided for by this Agreement or any other Facility
Document, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance
with instructions signed by the Required Banks, and such
instructions of the Required Banks and any action taken or
failure to act pursuant thereto shall be binding on all of the
Banks and any other holder of all or any portion of any Loan.

Section 10.03. Defaults. The Agent shall not be deemed to
have knowledge of the occurrence of a Default or Event of Default
(other than the non-payment of principal of or interest on the
Loans to the extent the same is required to be paid to the Agent
for the account of the Banks) unless the Agent has received
notice from a Bank or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of
Default." In the event that the Agent receives such a notice of
the occurrence of a Default or Event of Default, the Agent shall
give prompt notice thereof to the Banks (and shall give each Bank
prompt notice of each such non-payment). The Agent shall
(subject to Section 10.08) take such action, including action as
the Secured Party under the Security Agreement, with respect to
such Default or Event of Default which is continuing as shall be
directed by the Required Banks; provided that, unless and until
the Agent shall have received such directions, the Agent may take
such action, or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable in
the best interest of the Banks; and provided further that the
Agent shall not be required to take any such action which it
determines to be contrary to law.

Section 10.04. Rights of Agent as a Bank. With respect to
its Commitment and the Loans made by it, the Agent in its
capacity as a Bank hereunder shall have the same rights and
powers hereunder as any other Bank and may exercise the same as
though it were not acting as the Agent, and the term "Bank" or
"Banks" shall, unless the context otherwise indicates, include
the Agent in its capacity as a Bank. The Agent and its
affiliates may (without having to account therefor to any Bank)
accept deposits from, lend money to (on a secured or unsecured
basis), and generally engage in any kind of banking, trust or
other business with, the Borrower (and any of its Affiliates) as
if it were not acting as the Agent, and the Agent may accept fees
and other consideration from the Borrower for services in
connection with this Agreement or otherwise without having to
account for the same to the Banks. Although the Agent and its
affiliates may, in the course of relationships with the Borrower
and its Affiliates other than those related to this Agreement,
and in the course of relationships with other Persons, acquire
information about the Borrower, its Affiliates and such other
Persons, the Agent shall have no duty to disclose such
information to the Banks.

Section 10.05. Indemnification of Agent. The Banks agree to
indemnify the Agent (to the extent not reimbursed under Section
11.03 or under the applicable provisions of any other Facility
Document, but without limiting the obligations of the Borrower
under Section 11.03 or such provisions), ratably in accordance
with the aggregate unpaid principal amount of the Loans made by
the Banks (without giving effect to any assignments or
participations, in all or any portion of such Loans, sold by them
to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses which the
Borrower is obligated to pay under Section 11.03 or under the
applicable provisions of any other Facility Document but
excluding, unless a Default or Event of Default has occurred,
normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of
any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Bank shall be liable for any of
the foregoing to the extent they arise from the gross negligence
or willful misconduct of the party to be indemnified.

Section 10.06. Documents. The Agent will forward to each
Bank, promptly after the Agent's receipt thereof, a copy of each
report, notice or other document required by this Agreement or
any other Facility Document to be delivered to the Agent for such
Bank.

Section 10.07. Non-Reliance on Agent and Other Banks. Each
Bank agrees that it has, independently and without reliance on
the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of Rochester Tel, R-Net and the current and contemplated
Subsidiaries of each and its own decision to enter into this
Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking
action under this Agreement or any other Facility Document. The
Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower of this Agreement or
any other Facility Document or any other document referred to or
provided for herein or therein or to inspect the properties or
books of Rochester Tel, R-Net or any Subsidiary of either.
Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning
the affairs, financial condition or business of Rochester Tel,
R-Net or any Subsidiary (or any of their Affiliates) which may
come into the possession of the Agent or any of its affiliates.
The Agent shall not be required to file this Agreement, any other
Facility Document or any document or instrument referred to
herein or therein, for record or give notice of this Agreement,
any other Facility Document or any document or instrument
referred to herein or therein, to anyone, except for the
Financing Statements which shall be filed with the offices of the
New York Secretary of State and the Monroe County Clerk.

Section 10.08. Failure of Agent to Act. Except for action
expressly required of the Agent hereunder, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder
unless it shall have received further assurances (which may
include cash collateral) of the indemnification obligations of
the Banks under Section 10.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or
continuing to take any such action.

Section 10.09. Resignation or Removal of Agent. Subject to
the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving written notice
thereof to the Banks and the Borrower, and the Agent may be
removed at any time with or without cause by the Required Banks;
provided that the Borrower and the other Banks shall be promptly
notified thereof. Upon any such resignation or removal, the
Required Banks shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the
Required Banks and shall have accepted such appointment within 30
days after the retiring Agent's giving of notice of resignation
or the Required Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor
Agent, which shall be a bank having a minimum capital and surplus
of $50,000,000 and having an office in New York State. The
Required Banks or the retiring Agent, as the case may be, shall
upon the appointment of a successor Agent promptly so notify the
Borrower and the other Banks. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Article 10 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 the Agent.

Section 10.10. Amendments Concerning Agency Function. The
Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement or any other Facility Document
which affects its duties hereunder or thereunder unless it shall
have given its prior consent thereto.

Section 10.11. Liability of Agent. The Agent shall not have
any liabilities or responsibilities to the Borrower on account of
the failure of any Bank to perform its obligations hereunder or
to any Bank on account of the failure of the Borrower to perform
its obligations hereunder or under any other Facility Document.

Section 10.12. Transfer of Agency Function. Without the
consent of the Borrower or any Bank, the Agent may at any time or
from time to time transfer its functions as Agent hereunder to
any of its offices in New York State, wherever located, provided
that the Agent shall promptly notify the Borrower and the Banks
thereof.

Section 10.13. Non-Receipt of Funds by the Agent. Unless
the Agent shall have been notified by a Bank or the Borrower
(either one as appropriate being the "Payor") prior to the date
and time as of which such Bank is to make payment hereunder to
the Agent of the proceeds of a Loan or the Borrower is to make
payment to the Agent, as the case may be (either such payment
being a "Required Payment"), which notice shall be effective upon
receipt, that the Payor does not intend to make the Required
Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available
to the intended recipient on such date and, if the Payor has not
in fact made the Required Payment to the Agent, the recipient of
such payment (and, if such recipient is the Borrower and the
Payor Bank fails to pay the amount thereof to the Agent forthwith
upon demand, the Borrower) shall, on demand, repay to the Agent
the amount made available to it together with interest thereon,
for the period from the date such amount was so made available by
the Agent until the date the Agent recovers such amount at a rate
per annum equal to the average daily federal funds rate for such
period.

Section 10.14. Withholding Taxes. Each Bank represents that
it is entitled to receive any payments to be made to it hereunder
without the withholding of any tax and will furnish to the Agent
such forms, certifications, statements and other documents as the
Agent may request from time to time to evidence such Bank's
exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable
laws or regulations relating thereto. Without limiting the
effect of the foregoing, if any Bank is not created or organized
under the laws of the United States of America or any state
thereof, in the event that the payment of interest by the
Borrower is treated for U.S. income tax purposes as derived in
whole or in part from sources from within the U.S., such Bank
will furnish to the Agent Form 4224 or Form 1001 of the Internal
Revenue Service, or such other forms, certifications, statements
or documents, duly executed and completed by such Bank as
evidence of such Bank's exemption from the withholding of U.S.
tax with respect thereto. The Agent shall not be obligated to
make any payments hereunder to such Bank in respect of any Loan
or such Bank's Commitment until such Bank shall have furnished to
the Agent the requested form, certification, statement or
document.

Section 10.15. Several Obligations and Rights of Banks. The
failure of any Bank to make any Loan to be made by it on the date
specified therefor shall not relieve any other Bank of its
obligation to make its Loan on such date, but no Bank shall be
responsible for the failure of any other Bank to make a Loan to
be made by such other Bank. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt,
and each Bank shall be entitled to protect and enforce its rights
arising out of this Agreement, and it shall not be necessary for
any other Bank to be joined as an additional party in any
proceeding for such purpose.

Section 10.16. Pro Rata Treatment of Loans, Etc. Except to
the extent provided in Section 2.13 and as may be otherwise
provided in this Agreement: (a) each borrowing under Section
2.04 shall be made from the Banks, each reduction or termination
of the amount of the Commitments under Section 2.07 shall be
applied to the Commitments of the Banks, and each payment of
facility fee accruing under Section 2.11 shall be made for the
account of the Banks, pro rata according to the amounts of their
respective Commitments; (b) each conversion under Section 2.05 of
Loans of a particular type (but not conversions provided for by
Section 3.04), shall be made pro rata among the Banks holding
Loans of such type according to the respective principal amounts
of such Loans by such Banks; and (c) each prepayment (but not
prepayments provided for in clause (b)(ii) of Section 2.05) and
payment of principal of or interest on Loans of a particular type
and a particular Interest Period shall be made to the Agent for
the account of the Banks holding Loans of such type and Interest
Period pro rata in accordance with the respective unpaid
principal amounts of such Loans of such type and Interest Period
held by such Banks.

Section 10.17. Sharing of Payments Among Banks. If a Bank
shall obtain payment of any principal of or interest on any Loan
made by it through the exercise of any right of setoff, banker's
lien, or counterclaim, or by any other means during the existence
of a Default or Event of Default, it shall promptly purchase from
the other Banks participations in (or, if and to the extent
specified by such Bank, direct interests in) the Loans made by
the other Banks in such amounts, and make such other adjustments
from time to time as shall be equitable to the end that all the
Banks shall share the benefit of such payment (net of any
expenses which may be incurred by such Bank in obtaining or
preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans held by each of them. To
such end the Banks shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if
such payment is rescinded or must otherwise be restored. The
Borrower agrees that any Bank so purchasing a participation (or
direct interest) in the Loans made by other Banks may exercise
all rights of setoff, banker's lien, counterclaim or similar
rights with respect to such participation (or direct interest).
Nothing contained herein shall require any Bank to exercise any
such right or shall affect the right of any Bank to exercise, and
retain the benefits of exercising, any such right with respect to
any other indebtedness of the Borrower.

ARTICLE 11. MISCELLANEOUS.

Section 11.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in
writing signed by the Borrower, the Agent and the Required Banks,
or by the Borrower and the Agent acting with the written consent
of the Required Banks and any provision of this Agreement may be
waived by the Required Banks or by the Agent acting with the
written consent of the Required Banks; provided that no
amendment, modification or waiver shall, unless by an instrument
signed by all of the Banks or by the Agent acting with the
written consent of all of the Banks: (a) increase or extend the
term, or extend the time or waive any requirement for the
reduction or termination, of the Commitments, (b) extend the date
fixed for the payment of principal of or interest on any Loan or
any fee payable hereunder, (c) reduce the amount of any payment
of principal thereof or the rate at which interest is payable
thereon or any fee payable hereunder, (d) alter the terms of this
Section 11.01, (e) amend the definition of the term "Required
Banks" or (f) waive any of the documentary conditions precedent
set forth in Section 4.01 hereof and provided, further, that any
amendment of Article 10 hereof or any amendment which increases
the obligations of the Agent hereunder shall require the consent
of the Agent. No failure on the part of the Agent or any Bank to
exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof or preclude any other or further
exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

Section 11.02. Usury. Anything herein to the contrary
notwithstanding, the obligations of the Borrower under this
Agreement and the Notes shall be subject to the limitation that
payments of interest shall not be required to the extent that
receipt thereof would be contrary to provisions of law applicable
to a Bank limiting rates of interest which may be charged or
collected by such Bank.

Section 11.03. Expenses. The Borrower shall pay the Agent on
demand for all costs, expenses, and charges (including, without
limitation, reasonable fees and charges of external legal counsel
for the Agent and costs allocated by its internal legal
department) incurred by the Agent in connection with the
preparation, execution and delivery of this Agreement, the other
Facility Documents and the other documents to be executed
contemporaneously herewith. In addition, the Borrower shall pay
the Agent and the Banks on demand for all costs, expenses, and
charges (including, without limitation, fees and charges of
external legal counsel for the Agent and each Bank and costs
allocated by their respective internal legal departments)
incurred by the Agent or the Banks in connection with the
performance or enforcement of this Agreement, the Notes and any
other Facility Documents. The Borrower hereby indemnifies the
Agent and each Bank and their respective directors, officers,
employees and agents from, and holds each of them harmless
against, any and all losses, liabilities, claims, damages or
expenses (each an "Indemnified Liability") incurred by any of
them arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to or
arising out of this Agreement or any actual or proposed use by
the Borrower or any Subsidiary of the proceeds of the Loans,
including without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation or litigation or other proceedings (but excluding
any Indemnified Liability, incurred by reason of the negligence
or willful misconduct of the Person to be indemnified). The
Borrower agrees that any Indemnified Liability will be promptly
paid to the Person to be indemnified upon the written demand of
such Person.

Section 11.04. Survival. The obligations of the Borrower
under Sections 3.01, 3.05 and 11.03 shall survive the repayment
of the Loans and the termination of the Commitments.

Section 11.05. Assignment; Participations. (a) This
Agreement shall be binding upon, and shall inure to the benefit
of, the Borrower, the Agent, the Banks and their respective
successors and assigns, except that neither the Borrower nor any
Bank may assign or transfer its rights or obligations hereunder
other than as specifically permitted in this Section 11.05.
Notwithstanding the foregoing, provided that it obtains the prior
written consent of the Borrower, which consent may not be
unreasonably withheld or delayed, each Bank may sell
participations in all or any part of its Commitment and/or
Loan(s), in principal amounts aggregating at least $5,000,000, to
one or more other banks or other entities, provided that the
participant(s) shall have no rights under the Facility Documents
and all amounts payable by the Borrower under Article 3 shall be
determined as if such Bank had not sold such participation(s).
The agreement executed by such Bank in favor of any participant
shall not give the participant the right to prevent such Bank
from taking any action hereunder except action directly relating
to (i) the extension of the Termination Date, (ii) the extension
of a payment date with respect to any portion of the principal,
interest or fees allocated to such participant that may be
outstanding or payable hereunder, (iii) the reduction of the
principal amount outstanding hereunder or (iv) the reduction of
the rate of interest payable on such amount or any amount of fees
payable hereunder to a rate or amount, as the case may be, below
that which the participant is entitled to receive under its
agreement with such Bank. Such Bank may furnish any information
concerning the Borrower in the possession of such Bank from time
to time to participants (including prospective participants);
provided that such Bank shall require any such prospective
participant to agree to maintain the confidentiality of such
information.

(b) Notwithstanding the prohibition set forth in the first
sentence of Section 11.05(a), in addition to the participations
permitted under Section 11.05(a), any Bank may assign and pledge
all or any portion of its Loans and Note to (i) any affiliate of
such Bank or (ii) any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning
Bank from its obligations hereunder.

Section 11.06. Notices. All notices, requests and other
communications provided for herein (including, without
limitation, any modifications of, or waivers, requests or
consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telex or facsimile
transmission), or, with respect to notices given pursuant to
Section 2.08 hereof, by telephone, confirmed in writing by
facsimile transmission by the close of business on the day the
notice is given, delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature
pages hereof; or, as to any party, at such other address as shall
be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when
transmitted by telex or facsimile transmission or personally
delivered or, in the case of a mailed notice, upon receipt, in
each case given or addressed as aforesaid.

Section 11.07. Setoff. The Borrower agrees that, in
addition to (and without limitation of) any right of setoff,
banker's lien or counterclaim a Bank may otherwise have, each
Bank shall be entitled, at its option, to offset balances
(general or special, time or demand, provisional or final) held
by it for the account of the Borrower at any of such Bank's
offices, in Dollars or in any other currency, against any amount
payable by the Borrower to such Bank under this Agreement or such
Bank's Note which is not paid when due (regardless of whether
such balances are then due to the Borrower), in which case it
shall promptly notify the Borrower and the Agent thereof and
shall share such payments as set forth in Section 10.17; provided
that such Bank's failure to give such notice shall not affect the
validity thereof. Payments by the Borrower hereunder shall be
made without setoff or counterclaim.

SECTION 11.08. JURISDICTION; IMMUNITIES. (a) THE AGENT, THE
BANKS AND THE BORROWER HEREBY IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY NEW YORK STATE SUPREME OR UNITED STATES
FEDERAL COURT SITTING IN MONROE COUNTY OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
NOTES, AND EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE SUPREME OR FEDERAL COURT. EACH
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS TO THE OTHER AT ITS ADDRESS SPECIFIED IN SECTION 11.06,
WITH, IN BORROWER'S CASE, A COPY TO ITS CORPORATE COUNSEL. EACH
PARTY AGREES THAT, SUBJECT TO ANY RIGHTS OF APPEAL, A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. EACH PARTY FURTHER WAIVES
ANY OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN
ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON
CONVENIENS. EACH PARTY FURTHER AGREES THAT ANY ACTION OR
PROCEEDING BROUGHT AGAINST THE AGENT SHALL BE BROUGHT ONLY IN NEW
YORK STATE SUPREME OR UNITED STATES FEDERAL COURT SITTING IN
MONROE COUNTY. THE BORROWER, THE AGENT AND EACH BANK WAIVES ANY
RIGHT IT MAY HAVE TO JURY TRIAL.

(b) Nothing in this Section 11.08 shall affect the right of
any party to serve legal process in any other manner permitted by
law or affect the right of the Agent or any Bank to bring any
action or proceeding against the Borrower or its property in the
courts of any other jurisdictions.

Section 11.09. Table of Contents; Headings. Any table of
contents and the headings and captions hereunder are for
convenience only and shall not affect the interpretation or
construction of this Agreement.

Section 11.10. Severability. The provisions of this
Agreement are intended to be severable. If for any reason any
provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the
extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any
other jurisdiction or the remaining provisions hereof in any
jurisdiction.

Section 11.11. Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may
execute this Agreement by signing any such counterpart.

Section 11.12. Integration. The Facility Documents set
forth the entire agreement among the parties hereto relating to
the transactions contemplated thereby and supersede any prior
oral or written statements or agreements with respect to such
transactions.

SECTION 11.13. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.

Section 11.14. Confidentiality. Each Bank and the Agent
agrees (on behalf of itself and each of its affiliates,
directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with
safe and sound banking practices, any non-public information
supplied to it by the Borrower pursuant to this Agreement which
is identified by the Borrower as being confidential at the time
the same is delivered to the Banks or the Agent, provided that
nothing herein shall limit the disclosure of any such information
(i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for any of the Banks or the
Agent, (iii) to bank examiners, auditors or accountants, (iv) in
connection with any litigation to which any one or more of the
Banks is a party or (v) to any assignee or participant (or
prospective assignee or participant) pursuant to Section 11.05;
provided, further, that, unless specifically prohibited by
applicable law or court order, each Bank shall, prior to
disclosure thereof, notify the Borrower of any request for
disclosure of any such non-public information (x) by any
governmental agency or representative thereof (other than any
such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or (y)
pursuant to legal process; and provided finally that in no event
shall any Bank or the Agent be obligated or required to return
any materials furnished by the Borrower. Each Bank agrees to
indemnify the Borrower with respect to any breach by such Bank of
this Section 11.14.

Section 11.15. Treatment of Certain Information. The
Borrower (a) acknowledges that services may be offered or
provided to it (in connection with this Agreement or otherwise)
by each Bank or by one or more of their respective subsidiaries
or affiliates and (b) acknowledges that any information delivered
to each Bank or its subsidiaries or affiliates regarding the
Borrower may be shared among such Bank and such subsidiaries and
affiliates. This Section 11.15 shall survive the repayment of
the Loans and the termination of the Commitments.

Section 11.16. Substitution of R-Net as Borrower. In the
event that Rochester Tel transfers to its future Subsidiary,
(referred to in the OMP and herein as "R-Net"), its public
utility franchise for the Rochester, New York local exchange
business, and certain assets related thereto, in all material
respects as contemplated in the OMP and as otherwise set forth
herein, Rochester Tel and R-Net shall have the right to
substitute R-Net for Rochester Tel as the Borrower and Rochester
Tel shall thereupon be released from all then existing and future
liabilities and obligations under this Agreement and the other
Facility Documents. The terms and conditions on which such
substitution may be made are set forth below.

(a) The terms R-Net and Rochester Tel are used herein
for identification purposes only, as they are used in the OMP.
The actual name of R-Net at the time of such transactions will
be "Rochester Telephone Corp." and Rochester Tel's name at that
time will be Frontier Corporation, or such other name as may be
as chosen by Rochester Tel, consistent with the OMP.

(b) R-Net shall be a corporation formed under the New
York Transportation Corporations Law, authorized to operate as a
transportation corporation and hold the public utility franchise
for the Rochester, New York local exchange business currently
held by Rochester Tel. R-Net shall be a wholly- owned Subsidiary
of Rochester Tel.

(c) On the effective date of the OMP, Rochester Tel
shall have transferred to R-Net the public utility franchise
currently held by Rochester Tel for the Rochester, New York local
exchange business, and Rochester Tel shall have ceased, on that
date, to be a telephone corporation under the provisions of the
New York Public Service Law. R-Net shall succeed to all of
Rochester Tel's regulatory rights, duties and responsibilities as
a telephone corporation, except as provided in the OMP.

(d) Rochester Tel shall, in exchange for shares of R-Net
common stock, transfer to R-Net all of Rochester Tel's Rochester
New York local exchange business, including its assets, accounts,
personnel and customer base, as well as its liabilities, with
the exception of the assets, accounts, personnel and liabilities
retained by Rochester Tel pursuant to paragraph I.A.2. of the OMP
or transferred to other entities pursuant to paragraphs I.C.3.
and I.E. of the OMP. The assets so transferred shall include all
of the assets of Rochester Tel that are subject to the security
interest created by the Security Agreement. All items so
transferred to R-Net shall be reflected on its books in the
amounts that they had been reflected on the books of Rochester
Tel immediately prior to the transfer. R-Net shall, at the time
of its substitution as Borrower, deliver to the Agent, for
delivery to the Banks, a pro-forma balance sheet of R-Net
reflecting the transfers contemplated in this Section as of the
effective date of the transfer. Such balance sheet shall show
R-Net's Consolidated Tangible Net Worth to be not less than
$220,000,000 and its ratio of Consolidated Funded Debt to
Consolidated Tangible Net Worth to be not greater than 2 to 1.

(e) R-Net shall execute and deliver to the Agent, for
delivery to each Bank, a Note payable to such Bank, which Note
will be substantially identical to that delivered by Rochester
Tel to such Bank, with the exception that the maker will be R-Net.
Each Bank shall, as soon as practicable after receiving its
R-Net Note and the other documents provided for in this Section
11.16, return to Rochester Tel the Note executed by Rochester
Tel.

(f) R-Net and Rochester Tel must each execute and
deliver to the Agent, for delivery to each Bank, a Certificate of
Adoption, in the form of Exhibit 11.16, containing
representations and warranties to the effect (i) that the
transfer from Rochester Tel to R-Net of Rochester Tel's public
utility franchise and assets as described above has been
accomplished in all material respects in accordance with the OMP,
(ii) that R-Net's capital structure is not materially different
from and adverse to that set forth in Exhibit 11.16(f), (iii)
that there has been no material adverse change in such business,
assets or financial condition from that contemplated in the OMP,
(iv) as of the date of the certificate and as of the date of the
substitution, no Default or Event of Default has occurred and is
continuing, and (v) no Default or Event of Default will result
from R-Net's substitution for Rochester Tel as Borrower. All of
such representations and warranties shall in fact be true in all
material respects as of the dates of the certificate and of the
substitution. In addition, the Certificate of Adoption shall
provide that R-Net assumes (x) all rights, duties, liabilities
and obligations of Rochester Tel under this Agreement, including
all liability for all unpaid principal, interest and fees on all
outstanding Loans, and all other amounts owing by Rochester Tel
pursuant to this Agreement, the Notes, and all other Facility
Documents and (xx) all rights, duties, liabilities and
obligations as Borrower under this Agreement, the Notes and all
other Facility Documents.

(g) R-Net must execute a copy of the Security Agreement
in the blank provided after the signature page thereof,
evidencing its adoption of such agreement, along with new
Financing Statements showing R-Net as the Debtor, and deliver
them to the Agent.

(h) R-Net must deliver a favorable opinion of John T.
Pattison, Esq., Managing Attorney, dated the date of the
substitution, in substantially the form of Exhibit 11.16(h) and
as to such other matters as the Agent or any Bank may reasonably
request.

(i) Upon the Agent's receipt of the documents and
instruments described in Section 11.16 (e) through (h), in form
reasonably acceptable to the Agent, R-Net shall thereupon succeed
to all of the rights under this Agreement of Rochester Tel, as
Borrower, and shall assume all of the Borrower's liability and
responsibility for all then outstanding Loans and all other
liabilities of the Borrower under this Agreement, the Notes and
the other Facility Documents; and Rochester Tel shall thereupon
have no further rights, and it shall be released from all
existing and future liabilities and obligations, as Borrower
under this Agreement, the Notes and all other Facility Documents.

Section 11.17. Release of Security Agreement. The Security
Agreement and the security interest created thereby shall be
terminated and of no further force or effect in the event that
the aggregate amount of the Commitments are reduced to
$100,000,000 or less, provided that no Default or Event of
Default then exists.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.

ROCHESTER TELEPHONE CORPORATION

/s/ Louis L. Massaro
By ------------------------
Name: Louis L. Massaro
Title:Corporate Vice President-
Finance

Address for Notices:

180 S. Clinton Avenue
Rochester, New York 14646
Telephone: (716) 777-7729
Facsimile: (716) 325-7639

AGENT:
THE CHASE MANHATTAN BANK, N.A.

/s/ Benedict A. Smith
By:------------------------
Name: Benedict A. Smith
Title:Vice President

Address for Notices:

New York Agency
4 Chase Metro Tech Center
13th Floor
Brooklyn, New York 11245
Telephone:
Facsimile:

BANKS:
THE CHASE MANHATTAN BANK, N.A.

/s/ Benedict A. Smith
By:-----------------------------
Name: Benedict A. Smith
Title:Vice President

Lending Office and Address for Notices:
1 Chase Square
Rochester, New York 14643
Attn: Benedict A. Smith
Telephone: (716) 258-5669
Facsimile: (716) 258-4258
<PAGE>

<PAGE>
BANKS:
CHEMICAL BANK

/s/ Bradley H. Goddard
By:----------------------
Name: Bradley H. Goddard
Title:Vice President

Lending Office and Address for Notices:
300 Linden Oaks
Rochester, New York 14625
Attn: Brian R. Maloney
Telephone: (716) 387-3624
Facsimile: (716) 586-2749

BANKS:
UNION BANK OF SWITZERLAND

/s/ Paul R. Morrison
By:--------------------------
Name: Paul R. Morrison
Title:Asst. Vice President

/s/ Dieter Hoeppl
By:--------------------------
Name: Dieter Hoeppl
Title:Vice President

Lending Offices and Address for Notices:
299 Park Avenue
New York, New York 10171-0026
Attn: Paul R. Morrison
Telephone: (212) 821-3358
Facsimile: (212) 821-3383

BANKS:
MARINE MIDLAND BANK

/s/ Ellen M. Wayne
By:--------------------------
Name:Ellen M. Wayne
Title:Vice President

Lending Offices and Address for Notices:
One Marine Midland Plaza
Rochester, New York 14639
Attn: Ellen M. Wayne
Telephone: (716) 238-7286
Facsimile: (716) 238-7992
<PAGE>
BANKS:
NATIONSBANK OF TEXAS, N.A.

/s/ Doug Stuart
By:--------------------------
Name: Doug Stuart
Title:Vice President

Lending Offices and Address for Notices:
901 Main Street, 64th Floor
Dallas, Texas 75202
Attn: Chad Coben
Telephone: (214) 508-0988
Facsimile: (214) 508-9390

BANKS:
PNC BANK, National Association

/s/ Karen M. Wolters
By:--------------------------
Name: Karen M. Wolters
Title:Vice President

Lending Offices and Address for Notices:
Broad & Chestnut Streets
Philadelphia, Pennsylvania 19110
Attn: Karen M. Wolters
Telephone: (215) 585-6376
Facsimile: (215) 585-6680

BANKS:
MANUFACTURERS AND TRADERS
TRUST COMPANY

/s/ John P. Chantra
By:--------------------------
Name: John P. Chantra
Title: Vice President

Lending Offices and Address for Notices:
44 Exchange Street
P.O. Box 22900
Rochester, New York 14692
Attn: John P. Chantra
Telephone: (716) 258-8218
Facsimile: (716) 325-5105
<PAGE>
<PAGE>
EX. 2.02

PROMISSORY NOTE

$160,000,000 December ___, 1994

ROCHESTER TELEPHONE CORPORATION [R-Net] (the "Borrower"), a
corporation organized under the laws of New York, for value
received, hereby promises to pay to the order of [BANK X] (the
"Bank") at the principal office of THE CHASE MANHATTAN BANK,
N.A., at 4 Chase Metro Tech Center, 13th Floor, New York, New
York 11245 (the "Agent'), for the account of the appropriate
Lending Office of the Bank, the principal sum of ($160,000,000)
or, if less, the amount loaned by the Bank to the Borrower [or,
in the case of R-Net, assumed by the Borrower] pursuant to the
Credit Agreement referred to below, in lawful money of the United
States of America and in immediately available funds, on the date
and in the manner provided in said Credit Agreement. The
Borrower also promises to pay interest on the unpaid principal
balance hereof, for the period such balance is outstanding, at
said principal office for the account of said Lending Office, in
like money, at the rates of interest as provided in the Credit
Agreement described below, on the date(s) and in the manner
provided in said Credit Agreement.

The date and amount of each type of Loan made by the Bank to
the Borrower under the Credit Agreement referred below, and each
payment of principal thereof, shall be recorded by the Bank on
its books and, prior to any transfer of this Note (or, at the
discretion of the Bank, at any other time), endorsed by the Bank
on the schedule attached hereto or any continuation thereof.

This is one of the Notes referred to in that certain Credit
Agreement (as amended from time to time the "Credit Agreement")
dated as of December ___, 1994 among the Borrower, the Banks
named therein (including the Bank) and the Agent and evidences
the Loans made by the Bank thereunder. All terms not defined
herein shall have the meanings given to them in the Credit
Agreement.

The Credit Agreement provides for the acceleration of the
maturity of principal upon the occurrence of certain Events of
Default and for prepayments on the terms and conditions specified
therein.

The Borrower waives presentment, notice of dishonor, protest
and any other notice or formality with respect to this Note.

This Note shall be governed by, and interpreted and construed
in accordance with, the laws of the State of New York.

ROCHESTER TELEPHONE CORP.
[R-Net]

By:_______________________________
Name:
Title:

Amount Amount of Balance Notation
Date of Loan Payment Outstanding By
<PAGE>
<PAGE>
EX. 4.01(b)

December --, 1994

The Chase Manhattan Bank, N.A., as Agent
One Chase Square
Rochester, New York 14643
Attn: Benedict A. Smith

Re: Credit Agreement dated as of December 19, 1994 (the
"Credit Agreement") among Rochester Telephone
Corporation, the Banks named therein (the "Banks"), and
The Chase Manhattan Bank, N.A., as Agent for the Banks

Ladies and Gentlemen:

In connection with the captioned Credit Agreement, we hereby
designate to you and to each of the Banks, any one of the
following persons to give to you and any Bank instructions,
including notices required pursuant to the Credit Agreement,
orally or by telephone or facsimile:

NAME (Typewritten)
--------------------------
--------------------------
--------------------------
--------------------------

Instructions may be honored on the oral, telephonic or
facsimile instructions of anyone purporting to be any one of the
above designated persons even if the instructions are for the
benefit of the person delivering them. We will furnish you and
each Bank to whom any such instructions are directed, with
confirmation of each such instruction either by telex (whether
tested or untested) or in writing signed by any person designated
above (including any facsimile which appears to bear the
signature of any person designated above) on the same day that
the instruction is provided to you or such Bank, but your and
such Bank's responsibility with respect to any instruction shall
not be affected by your or such Bank's failure to receive such
confirmation or by its contents.

You and each of the Banks shall be fully protected in, and
shall incur no liability to us for, acting upon any instructions
which any of you in good faith believe to have been given by any
person designated above, and in no event shall any of you be
liable for special, consequential or punitive damages. In
addition, we agree to hold each of you and your agents harmless
from any and all liability, loss and expense arising directly or
indirectly out of instructions that we provide to any of you in
connection with the Credit Agreement except for liability, loss
or expense occasioned by the gross negligence or willful
misconduct of you or your agents.

Upon notice to us, you or any Bank may, at your or its
option, refuse to execute any instruction, or part thereof,
without incurring any responsibility for any loss, liability or
expense arising out of such refusal if you or such Bank in good
faith believe that the person delivering the instruction is not
one of the persons designated above or if the instruction is not
accompanied by an authentication method that we have agreed to in
writing.

Please provide a copy of this letter to each of the Banks, on
receipt of which each Bank will be entitled to rely on the
designations, agreements and other provisions hereof. We will
promptly notify you, for transmission to each of the Banks, in
writing of any change in the persons designated above and, until
you and each Bank have actually received such written notice and
have had a reasonable opportunity to act upon it, you and each
such Bank are authorized to act upon instructions, even though
the person delivering them may no longer be authorized.

Very truly yours,

ROCHESTER TELEPHONE CORPORATION

By:______________________________
Name:
Title:
<PAGE>

<PAGE>
EX. 4.01(e)

SECURITY AGREEMENT

This Security Agreement is entered into as of the 19th day of
December, 1994, by and between THE CHASE MANHATTAN BANK, N.A., as
Agent, a national banking association, with an address at 4 Chase
Metro Tech Center, 13th Floor, Brooklyn, New York 11245, (the
"Secured Party") acting as Agent on behalf of THE CHASE MANHATTAN
BANK, N.A., CHEMICAL BANK, UNION BANK OF SWITZERLAND, MARINE
MIDLAND BANK, NATIONSBANK OF TEXAS, N.A., PNC BANK, NATIONAL
ASSOCIATION and MANUFACTURERS AND TRADERS TRUST COMPANY
(collectively, the Banks), and ROCHESTER TELEPHONE CORPORATION, a
New York corporation with an address at 180 S. Clinton Avenue,
Rochester, New York 14646, the ("Debtor").

ARTICLE I
DEFINITIONS

All words and terms used in this Agreement shall have the
meanings as set forth in the following Sections; and where not
otherwise defined herein, they shall be deemed to have the
meanings accorded to them in the New York Uniform Commercial
Code, as amended from time to time (the "UCC").
Section 1.1 "Agreement" shall mean this Security Agreement
and all documents and instruments executed and delivered in
conjunction herewith.
Section 1.2 "Collateral" shall mean the property subject
to the security interest created by this Agreement, being all of
the Debtor's personal property described below, wherever located,
now owned or hereafter acquired, and the proceeds thereof:
(a) All of Debtor's Equipment (as defined in Section
9-109(2) of the UCC), consisting of central office (switching
locations) equipment, and outside plant, property, and equipment,
located in Monroe County, New York, all attachments, accessories,
parts or tooling related thereto and all replacements for the
foregoing, in each case now existing or hereafter acquired, and
the proceeds thereof (the "Equipment");
(b) All of Debtor's Insurance with respect to Equipment
against risks of fire, theft or any other physical damage or
loss, now owned or hereafter acquired and the proceeds thereof
(collectively, the "Insurance");
(c) All of Debtor's right, title and interest in all of
its books, records, ledger sheets, files and other data and
documents, now owned or hereafter existing, relating to any of
the items listed in Section (a) above.
Section 1.3 "Credit Agreement" means the Credit Agreement
dated as of December 19, 1994 among Debtor, the Agent and the
Banks, and unless otherwise specifically provided in this
Agreement, the terms defined in the Credit Agreement are used
herein as so defined.
Section 1.4 "Obligations" shall mean any and all
liabilities and obligations of the Debtor to the Secured Party
and the Banks, whether now existing or hereafter incurred,
pursuant to or represented by the Credit Agreement, the Notes and
the other Facility Documents.

ARTICLE II
SECURITY INTEREST

As security for the payment of the Obligations of the Debtor,
the Debtor hereby grants to Secured Party, as Agent for the
Banks, and to the Banks, a security interest in the Collateral
and agrees that such security interest has attached and shall
continue until terminated as provided in Section 11.17 of the
Credit Agreement or by a written agreement executed by Secured
Party.

ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEBTOR

The Debtor represents, warrants and covenants, to the Agent
and the Banks and shall be deemed to do so continually as long as
this Agreement shall remain in force, that:
Section 3.1 Ownership of Collateral. It is the owner of
the Collateral, with good, marketable and indefeasible title
thereto, free of all liens, security interests, claims,
liabilities, mortgages, leases, pledges, encumbrances,
restrictions, charges or imperfections of title whatsoever,
except as set forth in Schedule A to the Agreement and for the
security interest of the Secured Party.
Section 3.2 Authority. The Debtor is authorized to enter
into and implement this Agreement and has taken all necessary
actions, corporate or otherwise, in relation to such
authorization.
Section 3.3 Location of Collateral. The Debtor is engaged
in business at the address stated above and at other locations in
Monroe County, New York; and the Collateral and all Debtor's
records relating to the Collateral shall not be removed from
Monroe County without the prior written consent of the Secured
Party. Debtor shall immediately advise Secured Party in writing
of the opening of any place of business in Monroe County, the
closing of any existing office or place of business in Monroe
County or any other change of any office or place of business of
Debtor in Monroe County.
Section 3.4 Payment of Obligations. The Debtor shall pay
or otherwise satisfy all Obligations, when the same shall become
due, by acceleration or otherwise.
Section 3.5 Maintenance of Collateral. The Debtor shall
continually take such steps as may be necessary and prudent to
protect the interest of Secured Party in the Collateral
including, but not limited to the following:
(a) Maintain separate books and records relating to the
Collateral satisfactory to Secured Party and allow Secured Party
or its representatives access to such records and the Collateral
at all reasonable times for the purpose of examination,
verification, copying, extracting and other reasonable purposes
as Secured Party may require;
(b) Execute and deliver to Secured Party such financing
statements and/or other and further documentation as Secured
Party may, in its sole discretion, deem necessary or advisable in
order to evidence, effectuate or perfect its security interest in
the Collateral;
(c) Defend the Collateral against all claims and
demands of third parties at any time claiming the same or any
interest therein;
(d) The Debtor will not without prior written consent
of Secured Party sell, transfer or otherwise dispose of the
Collateral or any interest therein, in bulk or otherwise, except
for transfers anticipated by the OMP and for the sale or
replacement of Collateral in the ordinary course of business;
(e) Notify Secured Party in the event of material loss
or damage to the Collateral or of any material adverse change in
the Collateral, or of any other occurrences which could
materially and adversely affect the security of Secured Party in
the Collateral;
(f) Pay all expenses incurred in the delivery, storage
or other handling of the Collateral and all taxes which are or
may become a lien on the Collateral, promptly when due, and in
any event reimburse Secured Party, on demand, for any expenses
which it might incur in satisfying such expenses or taxes, which
Secured Party, in its sole discretion, deems necessary in order
to protect the Collateral; and
(g) Maintain insurance on the Collateral of such types,
coverage, form and amount as is usually carried on similar
property by similar enterprises, and shall supply Secured Party
with certificates as to the continuance of such insurance, at its
request. In the event the Debtor fails to maintain such
insurance, the same may be maintained by Secured Party, at its
option, and the Debtor shall reimburse Secured Party for the cost
thereof, on demand. Insurance proceeds received by Secured Party
during the existence of a Default or an Event of Default under
the Credit Agreement, or of an event of default under this
Agreement, may be applied by it against the Obligations, whether
or not then due, and/or to the replacement, restoration or repair
of the Collateral, as Secured Party may determine in its
discretion. Debtor shall timely make, file, settle and adjust
all claims under all such insurance, provided, that during the
existence of a Default or an Event of Default under the Credit
Agreement, or of an event of default under this Agreement,
Secured Party shall have the right at its election, to do so
directly or to direct the Debtor in taking such action.
Section 3.6 Reimbursement to Secured Party. All expenses
of Debtor paid by Secured Party pursuant to paragraphs (f) or (g)
of Section 3.5 shall be reimbursed by Debtor on demand, shall be
Obligations secured hereby, and shall bear interest, payable on
demand, from the date of Secured Party's payment of such expenses
until payment in full is made by Debtor, at the highest rate
charged from time to time on any of the Obligations.

ARTICLE IV
EVENTS OF DEFAULT

Any of the following events or occurrences shall constitute
an "event of default" under this Agreement:
(a) The occurrence of an Event of Default under the
Credit Agreement;
(b) The attachment or restraint of a material portion
of the Collateral or the same being subject at any time to any
mandatory court order or other legal process;
(c) The failure of the Debtor to perform any of its
material duties as specified in, or the material breach of any
representation, warranty or covenant contained in or made
pursuant to, this Agreement.

ARTICLE V
RIGHTS OF SECURED PARTY

Section 5.1 General Rights. The rights of Secured Party
shall at all times be those of a secured party under the New York
UCC; and without limiting the generality of the foregoing,
Secured Party shall have the additional rights set forth in this
Article.
Section 5.2 Rights on Default. Upon the occurrence of
any event of default, in addition to and without limiting any
rights Secured Party may have under any agreement, document or
instrument evidencing or representing any Obligation or executed
in connection with any Obligation, Secured Party may declare any
or all of the Obligations to be immediately due and payable, and
the rights and remedies of Secured Party with respect to the
Collateral shall be as set forth herein, in the UCC and as
otherwise available under applicable law.
Section 5.3 Realization Upon the Collateral. On the
occurrence of an event of default, in the event Secured Party
determines that the Collateral should be sold to satisfy all or
any part of the Obligations, Secured Party may dispose of the
Collateral in whole or part at public or private sale, and any
notice required to be given to the Debtor shall be deemed
reasonable if in writing and given to the Debtor at its address
as stated above, thirty (30) days before the proposed sale. The
Debtor shall remain liable for any deficiency.
Section 5.4 Expense of Collection and Sale. The Debtor
agrees to pay all costs and expenses incurred by Secured Party in
determining its rights under, and in enforcing and collecting the
Obligations, and in determining its rights under and enforcing
the security interests created by this Agreement, including, but
without limitation, costs and expenses relating to taking,
holding, insuring, preparing for sale, appraising, selling or
otherwise realizing on the Collateral, and reasonable attorneys'
fees in connection with any of the foregoing. All such costs and
expenses shall be payable on demand, shall be Obligations secured
hereby, and shall bear interest, payable on demand, from the date
of Secured Party's payment of such costs and expenses until
payment in full is made by Debtor, at the highest rate charged
from time to time on any of the Obligations.
Section 5.5 Application of Proceeds. Proceeds realized
by Secured Party from the sale or disposition of any or all of
the Collateral pursuant to this Agreement may be applied by
Secured Party among the Obligations in the manner prescribed by
the Credit Agreement.
Section 5.6 Insurance Proceeds. Any insurance proceeds
received by Secured Party may be applied by it against the
Obligations.

ARTICLE VI
MISCELLANEOUS

Section 6.1 Waivers. The Debtor expressly waives notice
of nonpayment, demand, presentment, protest or notice of protest
in relation to the Obligations or the Collateral. No delay or
omission of Secured Party in exercising or enforcing any of its
rights, powers, privileges, options or remedies under this
Agreement shall constitute a waiver thereof, and no waiver by
Secured Party of any default by the Debtor shall operate as a
waiver of any other default. This Agreement constitutes the
entire agreement between the Debtor and Secured Party with
respect to the security interest created and supersedes all prior
written or oral communications or understandings with respect to
the subject matter hereof. No term or provision of this
Agreement shall be waived, altered or modified except by written
amendment signed by the parties. All rights and remedies of
Secured Party under this Agreement shall be cumulative and not
alternative or exclusive, may be exercised by Secured Party at
such time or times and in such order as Secured Party, in its
sole discretion, may determine, and are for the sole benefit of
Secured Party. The exercise or failure to exercise such rights
and remedies shall not result in liability to the Debtor or
others except in the event of willful misconduct or bad faith by
Secured Party, and in no event shall Secured Party be liable for
more than it actually receives as a result of the exercise or
failure to exercise such rights and remedies.
Section 6.2 Successors and Survival. This Agreement shall
be binding upon and shall inure to the benefit of the respective
parties, their successors and assigns, and shall remain in force
and effect until terminated by written agreement of the parties.
All representations, warranties and covenants shall survive the
execution hereof.
Section 6.3 Notices. Any notices under or pursuant to
this Agreement shall be in writing and shall be delivered in the
same manner as is provided in Section 11.06 of the Credit
Agreement.
Section 6.4 Headings. The headings of Articles and
Sections in this Agreement are for convenience only. They form
no part of this Agreement and shall not affect its
interpretation.
Section 6.5 Severability. If any provision of this
Agreement shall be or become illegal or unenforceable in whole or
in part for any reason whatsoever, the remaining provisions shall
nevertheless be deemed valid, binding and subsisting.
Section 6.6 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be
performed wholly within New York State, without giving effect to
conflict of laws principles.

<PAGE>

<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of
the day and year first above written.

ROCHESTER TELEPHONE CORPORATION

By: _________________________

Its:_________________________

THE CHASE MANHATTAN BANK, N.A.

By: _________________________

Its:_________________________

<PAGE>

<PAGE>
ROCHESTER TELEPHONE CORP. ACCEPTANCE

Terms defined in the Credit Agreement are used herein as so
defined.

As described in a certain Certificate of Adoption of even
date herewith executed in favor of the Agent and each Bank,
Frontier Corporation (formerly known as Rochester Telephone
Corporation), the Debtor, has transferred to Rochester Telephone
Corp. all of Frontier Corporation's Rochester, New York local
exchange telephone business, including its assets, accounts,
personnel and customer base, as well as its liabilities, with the
exception of those items which were not transferred pursuant to
the OMP. The assets so transferred include all of the assets of
Frontier Corporation that are subject to the security interest
created by the foregoing Security Agreement. Pursuant to the
Certificate of Adoption, Rochester Telephone Corp. has replaced
Frontier Corporation as Borrower pursuant to the Credit Agreement
and has received all of the Collateral from Frontier Corporation
subject to the security interest created by the Security
Agreement. By its signature set forth below, Rochester Telephone
Corp. hereby (i) makes to the Agent and to each Bank all of the
representations and warranties set forth in Article III of the
Security Agreement, and (ii) assumes and accepts all of the
rights, duties and obligations of the Debtor pursuant to the
Security Agreement and agrees that all of the Collateral
continues to be subject to the security interest created thereby
and that Rochester Telephone Corp. will perform all of the duties
and obligations of the Debtor set forth in the Security
Agreement. Included among such duties and obligations are the
Debtor's obligations under Section 3.5(b) of the Security
Agreement to execute and deliver to Secured Party such financing
statements and/or other and further documentation as Secured
Party may, in its sole discretion, deem necessary or advisable in
order to evidence, effectuate or perfect its security interest in
the Collateral; and Rochester Telephone Corp. delivers herewith
to the Agent financing statements, containing the Collateral
description in the form attached to the Security Agreement,
executed by Rochester Telephone Corp. as Debtor.

ROCHESTER TELEPHONE CORP.

By:_____________________________

Its:_____________________________
<PAGE>

<PAGE>
SCHEDULE A

TITLE EXCEPTIONS AND OTHER LIENS

The Collateral is or may be subject to the security interests
identified in the ____ page Uniform Commercial Code search
attached to this Schedule A. Debtor hereby represents and
warrants to the Agent and to each of the Banks that the aggregate
book value of all Collateral subject to such security interests
does not exceed 31% of the total book value of all of the
Collateral and that each such security interest complies with
Section 7.02 of the Credit Agreement.
<PAGE>
<PAGE>
SCHEDULE A TO UCC-1 FINANCING STATEMENT

All of the Debtor's personal property described below, wherever
located, now owned or hereafter acquired, and the proceeds
thereof, as follows:

(a) All of Debtor's Equipment (as defined in Section 9-109(2) of
the UCC), consisting of central office (switching locations)
equipment, and outside plant, property and equipment, located
in Monroe County, New York, all attachments, accessories,
parts or tooling relating thereto and all replacements for
the foregoing, in each case now owned or hereafter acquired,
and the proceeds thereof (the "Equipment");

(b) All of Debtor's Insurance with respect to Equipment against
risks of fire, theft or any other physical damage or loss,
now owned or hereafter acquired, and the proceeds thereof
(collectively, the "Insurance");

(c) All of Debtor's right, title and interest in all of its
books, records, ledger sheets, files and other data and
documents, now owned or hereafter existing, relating to any
of the items listed in Section (a) above.

<PAGE>

<PAGE>
EX. 4.01(f)

(Letterhead of John T. Pattison, Esq., counsel to the Borrower)

[Closing Date]

The Chase Manhattan Bank, N.A.
1 Chase Square
Rochester, New York 14643

[other Banks]

Ladies and Gentlemen:

I have acted as counsel to Rochester Telephone Corporation
(the "Borrower") in connection with the execution and delivery of
that certain Credit Agreement (the "Credit Agreement") dated as
of December 19, 1994 among the Borrower, the Banks signatory
thereto and The Chase Manhattan Bank, N.A. as Agent. Except as
otherwise defined herein, all terms used herein and defined in
the Credit Agreement or any agreement delivered thereunder shall
have the meanings assigned to them therein.

In connection with this opinion, I have examined executed
copies of the Facility Documents and such other documents,
records, agreements and certificates as I have deemed
appropriate. I have also reviewed such matters of law as I have
considered relevant for the purpose of this opinion.

Based upon the foregoing, I am of the opinion that:

1. Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of New
York, has the corporate power and authority to own its assets and
to transact the business in which it is now engaged or proposed
to be engaged, and is duly qualified as a foreign corporation and
in good standing under the laws of each other jurisdiction in
which such qualification is required.

2. The execution, delivery and performance by the Borrower
of the Facility Documents have been duly authorized by all
necessary corporate action and do not and will not: (a) require
any consent or approval of its stockholders; (b) contravene its
charter or by-laws; (c) violate any provision of, or require any
filing, registration, consent or approval under, any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability
to the Borrower or any of its Subsidiaries or affiliates; (d)
result in a breach of or constitute a default or require any
consent under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which the Borrower is a
party or by which it or its properties may be bound or affected;
(e) result in, or require, the creation or imposition of any
Lien, upon or with respect to any of the properties now owned or
hereafter acquired by the Borrower, except for a Lien in favor of
the Agent, on behalf of the Banks; or (f) cause the Borrower (or
any Subsidiary or affiliate, as the case may be) to be in default
under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or any such indenture,
agreement, lease or instrument.

3. Each Facility Document is, or when delivered under the
Credit Agreement will be, a legal, valid and binding obligation
of the Borrower, enforceable against the Borrower in accordance
with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar
laws affecting creditors' rights generally.

4. To the best of my knowledge (after due inquiry), except
as disclosed in Borrower's reports filed with the SEC pursuant
to Section 13 of the Securities Exchange Act of 1934, there are
no pending or threatened actions, suits or proceedings against or
affecting the Borrower or any of its Subsidiaries before any
court, governmental agency or arbitrator, which may, in any one
case or in the aggregate, materially adversely affect the
financial condition, operations, properties or business of the
Borrower or of any such Subsidiary or the ability of the Borrower
to perform its obligations under the Facility Documents.

Very truly yours,
<PAGE>

<PAGE>
EX. 11.16

CERTIFICATE OF ADOPTION

Each of the undersigned hereby certifies to THE CHASE
MANHATTAN BANK, N.A., CHEMICAL BANK, UNION BANK OF SWITZERLAND,
MARINE MIDLAND BANK, NATIONSBANK OF TEXAS, N.A., PNC BANK,
NATIONAL ASSOCIATION and MANUFACTURERS AND TRADERS TRUST COMPANY
(each a "Bank"), and to THE CHASE MANHATTAN BANK, N.A., as Agent
for the Banks (the "Agent"), pursuant to Section 11.16 of the
Credit Agreement dated as of December 19, 1994 among ROCHESTER
TELEPHONE CORPORATION, the Banks and the Agent (such Credit
Agreement being hereinafter referred to as the "Credit
Agreement", and except as otherwise herein provided, the terms
defined in the Credit Agreement being used herein as so defined),
as follows:
1. Rochester Telephone Corporation has changed its name to
Frontier Corporation.
2. R-Net is a corporation formed pursuant to the New York
Transportation Corporations Law under the name of Rochester
Telephone Corp., and it is authorized to operate as a
transportation corporation and hold the public utility franchise
for the Rochester, New York local exchange telephone business
previously held by Frontier Corporation. Rochester Telephone
Corp. is a wholly owned subsidiary of Frontier Corporation.
3. The execution, delivery and performance by Frontier
Corporation of the OMP have been duly authorized by all necessary
corporate action and the OMP became effective on
________________, 1995. The OMP has not been amended since the
date of the Credit Agreement except as described in Exhibit 3
hereto. Frontier Corporation has transferred to Rochester
Telephone Corp. the public utility franchise previously held by
Frontier Corporation for the Rochester, New York local exchange
telephone business, and Frontier Corporation has ceased to be a
telephone corporation under the provisions of the New York Public
Service Law. Rochester Telephone Corp. has succeeded to all of
Frontier Corporation's regulatory rights, duties and
responsibilities as a telephone corporation under New York law,
except as otherwise provided in the OMP.
4. Frontier Corporation has, in exchange for shares of
Rochester Telephone Corp. common stock, transferred to Rochester
Telephone Corp. all of Frontier Corporation's Rochester, New York
local exchange telephone business, including its assets,
accounts, personnel and customer base, as well as its
liabilities, with the exception of the assets, accounts,
personnel and liabilities retained by Frontier Corporation
pursuant to paragraph 1.A.2. of the OMP or transferred to other
entities pursuant to paragraphs 1.C.3. and 1.E. of the OMP. The
assets so transferred include all of the assets of Frontier
Corporation that are subject to the security interest created by
the Security Agreement. All items so transferred to Rochester
Telephone Corp. are reflected on its books in the amounts that
had been reflected on the books of Frontier Corporation
immediately prior to the transfer.
5. Attached to this Certificate is a pro forma balance
sheet of Rochester Telephone Corp. reflecting the asset and
liability transfers contemplated in this paragraph as of the
effective date of the transfer. Such balance sheet shows
Rochester Telephone Corp.'s Consolidated Tangible Net Worth to be
not less than $220,000,000 and its ratio of Consolidated Funded
Debt to Consolidated Tangible Net Worth to be not greater than
2 to 1. Such pro forma balance sheet completely and accurately
sets forth the information purported to be set forth therein, and
has been prepared in accordance with GAAP.
6. Rochester Telephone Corp. has executed and delivered to
the Agent, for delivery to each Bank, a Note payable to such
Bank, which Note is identical to that delivered by Frontier
Corporation to such Bank, with the exception that the Maker is
Rochester Telephone Corp. and not Frontier Corporation.
7. Each of the undersigned hereby represents and warrants
to each of you as follows:
A. The transfer from Frontier Corporation to Rochester
Telephone Corp. of Frontier Corporation's public utility
franchise and assets as described above has been accomplished in
all material respects in accordance with the OMP.
B. Rochester Telephone Corp.'s capital structure is
not materially different from and adverse to that set forth in
Exhibit 11.16(f) to the Credit Agreement.
C. There has been no material adverse change in
Frontier Corporation's Rochester, New York local exchange
telephone business, assets or financial condition from that
contemplated in the OMP.
D. As of the date of this Certificate, no Default or
Event of Default has occurred and is continuing.
E. No Default or Event of Default will result from
Rochester Telephone Corp.'s substitution for Frontier Corporation
as Borrower pursuant to the Credit Agreement.
F. Attached hereto is a true and correct copy of
Rochester Telephone Corp.'s Certificate of Incorporation and
By-Laws as in effect on the date hereof.
G. Each of the representations and warranties set
forth in Sections 5.01, 5.02, 5.03, 5.06, 5.07 and 5.08 of the
Credit Agreement, is true and correct on and as of the date
hereof, assuming that the Borrower referred to in each such
representation and warranty is Rochester Telephone Corp.
H. There are no actions, suits or proceedings pending
or, to the knowledge of either of the undersigned, threatened,
against or affecting Rochester Telephone Corp. or any of its
Subsidiaries before any court, governmental agency or arbitrator,
which could, in any one case or in the aggregate, materially
adversely affect the financial condition, operations, properties
or business of Rochester Telephone Corp. or any such Subsidiary,
or the ability of Rochester Telephone Corp. to perform its
obligations under the Facility Documents.
8. Delivered herewith is a copy of the Security Agreement
executed by Rochester Telephone Corp. in the blank provided after
the signature page thereof, evidencing its adoption of such
agreement, along with new Financing Statements showing Rochester
Telephone Corp. as the Debtor.
9. Delivered with this Certificate is an opinion of John T.
Pattison, Esq., managing attorney, dated the date hereof, in
substantially the form of Exhibit 11.16(h).
10. On and as of the date hereof, in consideration for the
substitution of Rochester Telephone Corp. for Frontier
Corporation as the Borrower pursuant to Section 11.16 of the
Credit Agreement, and in consideration for Rochester Telephone
Corp.'s assumption of all of the rights and benefits of the
Borrower thereunder, Rochester Telephone Corp. hereby assumes (i)
all duties, liabilities and obligations of Frontier Corporation
under the Credit Agreement, including all liability for all
unpaid principal, interest and fees owed thereunder on the date
hereof, and all other amounts owing by Frontier Corporation
pursuant to the Credit Agreement, the Notes, and all other
Facility Documents, and (ii) all duties, liabilities and
obligations as Borrower under the Credit Agreement, the Notes and
all other Facility Documents. The foregoing assumption shall
become effective upon the Agent's execution of a copy of this
Certificate of Adoption in the blank provided after the close
hereof, affirming, on behalf of the Banks and itself, in
accordance with the written instructions of each of the Banks,
that Rochester Telephone Corp. has been accepted by the Banks and
the Agent as the Borrower pursuant to the Credit Agreement, and
has therefore succeeded to all of the rights of the Borrower
under and pursuant to the Credit Agreement, the Notes, and all
other Facility Documents, and that Frontier Corporation shall
thereupon have no further rights, and is thereby released from
all existing and future liabilities and obligations, as Borrower
under the Credit Agreement, the Notes, and all other Facility
Documents.

IN WITNESS WHEREOF, the undersigned have executed this
Certificate of Adoption as of the ____ day of January, 1995.

ROCHESTER TELEPHONE CORP.

By:_____________________________

Its:______________________________

FRONTIER CORPORATION

By:_____________________________

Its:_____________________________
<PAGE>

<PAGE>

AGENT'S ACCEPTANCE

As required by paragraph 10 of the foregoing Certificate, the
undersigned, as Agent for each of the Banks and in accordance
with the written instructions of each of the Banks, hereby
accepts Rochester Telephone Corp. as the Borrower pursuant to the
Credit Agreement, with the effect that Rochester Telephone Corp.
has succeeded to all of the rights of the Borrower under and
pursuant to the Credit Agreement, the Notes and all other
Facility Documents. The undersigned further affirms that
Frontier Corporation shall hereafter have no further rights, and
it is hereby released from all existing and future liabilities
and obligations, as Borrower under the Credit Agreement, the
Notes and all other Facility Documents. On behalf of the Banks,
the undersigned agrees to deliver the Notes of Frontier
Corporation to Frontier Corporation as soon as practicable after
the date hereof.

THE CHASE MANHATTAN BANK, N.A.,
AS AGENT FOR THE BANKS

By:______________________________

Its:______________________________
<PAGE>

<PAGE>
EX. 11.16(f)

R-Net Financial Structure

Open Market Plan Capital Structure Provisions

1. R-Net Capital Structure:

Dollars Percent

Long-Term Debt $160M 40.3%
Customer Deposit 2M 0.5%
Common Equity 235M 59.2%

Total Capitalization $397M 100.0%

2. Long-Term debt for R-Net may not exceed 40.37% of Total
Capitalization.
<PAGE>

<PAGE>
EX. 11.16(h)

(Letterhead of John T. Pattison, Esq., counsel to the Borrower)

[Closing Date]

The Chase Manhattan Bank, N.A.
1 Chase Square
Rochester, New York 14643

[other Banks]

Ladies and Gentlemen:

I have acted as counsel to Rochester Telephone Corporation
("Rochester Tel") and {R-Net} ("R-Net" and "Borrower") in
connection with the execution and delivery by each of the documents
and instruments described below (the "Adoption Documents"), for the
purpose of replacing Rochester Tel with R-Net as the Borrower
pursuant to Section 11.16 of that certain Credit Agreement (the
"Credit Agreement") dated as of December 19, 1994 among the
Borrower, the Banks signatory thereto and The Chase Manhattan Bank,
N.A. as Agent. Except as otherwise defined herein, all terms used
herein and defined in the Credit Agreement or any agreement
delivered thereunder shall have the meanings assigned to them
therein.

[List Documents]

In connection with this opinion, I have examined executed
copies of the Adoption Documents and such other documents, records,
agreements and certificates as I have deemed appropriate. I have
also reviewed such matters of law as I have considered relevant for
the purpose of this opinion.

Based upon the foregoing, I am of the opinion that:

1. Borrower is a corporation duly incorporated, validly
existing and in good standing under the Transportation Corporation
Law of the State of New York, has the corporate power and authority
to own its assets and to transact the business in which it is now
engaged or proposed to be engaged, and is duly qualified as a
foreign corporation and in good standing under the laws of each
other jurisdiction in which such qualification is required.

2. The execution, delivery and performance by Rochester Tel
and R-Net of the Adoption Documents executed by each have been duly
authorized by all necessary corporate action and do not and will
not: (a) require any consent or approval of its stockholders; (b)
contravene its charter or by-laws; (c) violate any provision of, or
require any filing, registration, consent or approval under, any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to
the Borrower or any of its Subsidiaries or affiliates; (d) result
in a breach of or constitute a default or require any consent under
any indenture or loan or credit agreement or any other agreement,
lease or instrument to which it is a party or by which it or its
properties may be bound or affected; (e) result in, or require, the
creation or imposition of any Lien, upon or with respect to any of
the properties now owned or hereafter acquired by it, except for a
Lien in favor of the Agent, on behalf of the Banks; or (f) cause it
(or any Subsidiary or affiliate, as the case may be) to be in
default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument.

3. Each Adoption Document is a legal, valid and binding
obligation of Rochester Tel and R-Net, as the case may be,
enforceable against it in accordance with its terms, and each
Facility Document is a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its
terms, except in each case to the extent that such enforcement may
be limited by applicable bankruptcy, insolvency and other similar
laws affecting creditors' rights generally.

4. To the best of my knowledge (after due inquiry), there are
no pending or threatened actions, suits or proceedings against or
affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator, which may, in any one case or in
the aggregate, materially adversely affect the financial condition,
operations, properties or business of the Borrower or of any such
Subsidiary or the ability of the Borrower to perform its
obligations under the Facility Documents and the Adoption
Documents.

5. R-Net is a wholly-owned Subsidiary of Rochester Tel and is
authorized to operate as a transportation corporation and hold the
public utility franchise for the Rochester, New York local exchange
business previously held by Rochester Tel. Pursuant to the OMP,
Rochester Tel has transferred to R-Net such public utility
franchise previously held by Rochester Tel for the Rochester, New
York local exchange business, and R-Net has succeeded to all of
Rochester Tel's regulatory rights, duties and responsibilities as
a telephone corporation, except as otherwise provided in the OMP.
Rochester Tel has, in exchange for shares of R-Net common stock,
transferred to R-Net all of Rochester Tel's Rochester New York
local exchange business, including its assets, accounts, personnel
and customer base, as well as its liabilities, with the exception
of the assets, accounts, personnel and liabilities retained by
Rochester Tel pursuant to paragraph I.A.2. of the OMP or
transferred to other entities pursuant to paragraphs I.C.3. and
I.E. of the OMP. The assets so transferred include all of the
assets of Rochester Tel that are subject to the security interest
created by the Security Agreement.

Very truly yours,
<PAGE>

<PAGE>
CERTIFICATE OF ADOPTION

Each of the undersigned hereby certifies to THE CHASE
MANHATTAN BANK, N.A., CHEMICAL BANK, UNION BANK OF SWITZERLAND,
MARINE MIDLAND BANK, NATIONSBANK OF TEXAS, N.A., PNC BANK,
NATIONAL ASSOCIATION and MANUFACTURERS AND TRADERS TRUST COMPANY
(each a "Bank"), and to THE CHASE MANHATTAN BANK, N.A., as Agent
for the Banks (the "Agent"), pursuant to Section 11.16 of the
Credit Agreement dated as of December 19, 1994 among ROCHESTER
TELEPHONE CORPORATION, the Banks and the Agent (such Credit
Agreement being hereinafter referred to as the "Credit
Agreement", and except as otherwise herein provided, the terms
defined in the Credit Agreement being used herein as so defined),
as follows:
1. Rochester Telephone Corporation has changed its name to
Frontier Corporation.
2. R-Net is a corporation formed pursuant to the New York
Transportation Corporations Law, under the name R-Net Corp., and
it is authorized to operate as a transportation corporation and
hold the public utility franchise for the Rochester, New York
local exchange telephone business previously held by Frontier
Corporation. R-Net Corp. is a wholly owned subsidiary of
Frontier Corporation.
3. The execution, delivery and performance by Frontier
Corporation of the OMP have been duly authorized by all necessary
corporate action and the OMP became effective on January 1, 1995.
The OMP has not been amended since the date of the Credit
Agreement except as described in Exhibit 3 hereto. Frontier
Corporation has transferred to R-Net Corp. the public utility
franchise previously held by Frontier Corporation for the
Rochester, New York local exchange telephone business, and
Frontier Corporation has ceased to be a telephone corporation
under the provisions of the New York Public Service Law. R-Net
Corp. has succeeded to all of Frontier Corporation's regulatory
rights, duties and responsibilities as a telephone corporation
under New York law, except as otherwise provided in the OMP.
4. Frontier Corporation has, in exchange for shares of
R-Net Corp. common stock, transferred to R-Net Corp. all of
Frontier Corporation's Rochester, New York local exchange
telephone business, including its assets, accounts, personnel and
customer base, as well as its liabilities, with the exception of
the assets, accounts, personnel and liabilities retained by
Frontier Corporation pursuant to paragraph 1.A.2. of the OMP or
transferred to other entities pursuant to paragraphs 1.C.3. and
1.E. of the OMP. The assets so transferred include all of the
assets of Frontier Corporation that are subject to the security
interest created by the Security Agreement. All items so
transferred to R-Net Corp. are reflected on its books in the
amounts that had been reflected on the books of Frontier
Corporation immediately prior to the transfer.
5. Attached to this Certificate is a pro forma balance
sheet of R-Net Corp. reflecting the asset and liability transfers
contemplated in this Certificate as of the effective date of the
transfer. Such balance sheet shows R-Net Corp.'s Consolidated
Tangible Net Worth to be not less than $220,000,000 and its ratio
of Consolidated Funded Debt to Consolidated Tangible Net Worth to
be not greater than 2 to 1. Such pro forma balance sheet
completely and accurately sets forth the information purported to
be set forth therein, and has been prepared in accordance with
GAAP.
6. R-Net Corp. has executed and delivered to the Agent,
for delivery to each Bank, a Note payable to such Bank, which
Note is in all material respects identical to that delivered by
Frontier Corporation to such Bank, with the exception that the
Maker is R-Net Corp. and not Frontier Corporation.
7. Each of the undersigned hereby represents and warrants
to each of you as follows:
A. The transfer from Frontier Corporation to R-Net
Corp. of Frontier Corporation's public utility franchise, assets
and liabilities as described above has been accomplished in all
material respects in accordance with the OMP.
B. R-Net Corp.'s capital structure is not materially
different from and adverse to that set forth in Exhibit 11.16(f)
to the Credit Agreement.
C. There has been no material adverse change in
Frontier Corporation's Rochester, New York local exchange
telephone business, assets or financial condition from that
contemplated in the OMP.
D. As of the date of this Certificate, no Default or
Event of Default has occurred and is continuing.
E. No Default or Event of Default will result from
R-Net Corp.'s substitution for Frontier Corporation as Borrower
pursuant to the Credit Agreement.
F. Attached hereto is a true and correct copy of
R-Net Corp.'s Certificate of Incorporation and By-Laws as in
effect on the date hereof.
G. Each of the representations and warranties set
forth in Sections 5.01, 5.02, 5.03, 5.06, 5.07 and 5.08 of the
Credit Agreement, is true and correct on and as of the date
hereof, assuming that the Borrower referred to in each such
representation and warranty is R-Net Corp.
H. There are no actions, suits or proceedings pending
or, to the knowledge of either of the undersigned, threatened,
against or affecting R-Net Corp. or any of its Subsidiaries
before any court, governmental agency or arbitrator, which could,
in any one case or in the aggregate, materially adversely affect
the financial condition, operations, properties or business of
R-Net Corp. or any such Subsidiary, or the ability of R-Net Corp.
to perform its obligations under the Facility Documents.
8. Delivered herewith is a copy of the Security Agreement
executed by R-Net Corp. in the blank provided after the signature
page thereof, evidencing its adoption of such agreement, along
with new Financing Statements showing R-Net Corp. as the Debtor.
9. Delivered with this Certificate is an opinion of John
T. Pattison, Esq., managing attorney, dated the date hereof, in
substantially the form of Exhibit 11.16(h).
10. On and as of the date hereof, in consideration for the
substitution of R-Net Corp. for Frontier Corporation as the
Borrower pursuant to Section 11.16 of the Credit Agreement, and
in consideration for R-Net Corp.'s assumption of all of the
rights and benefits of the Borrower thereunder, R-Net Corp.
hereby assumes (i) all duties, liabilities and obligations of
Frontier Corporation under the Credit Agreement, including all
liability for all unpaid principal, interest and fees owed
thereunder on the date hereof, and all other amounts owing by
Frontier Corporation pursuant to the Credit Agreement, the Notes,
and all other Facility Documents, and (ii) all duties,
liabilities and obligations as Borrower under the Credit
Agreement, the Notes and all other Facility Documents. The
foregoing assumption shall become effective upon the Agent's
execution of a copy of this Certificate of Adoption in the blank
provided after the close hereof, affirming, on behalf of the
Banks and itself, in accordance with the written instructions of
each of the Banks, that R-Net Corp. has been accepted by the
Banks and the Agent as the Borrower pursuant to the Credit
Agreement, and has therefore succeeded to all of the rights of
the Borrower under and pursuant to the Credit Agreement, the
Notes, and all other Facility Documents, and that Frontier
Corporation shall thereupon have no further rights, and is
thereby released from all existing and future liabilities and
obligations, as Borrower under the Credit Agreement, the Notes,
and all other Facility Documents.

<PAGE>

<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Certificate of Adoption the 1st day of January, 1995.

R-Net Corp.

By:_____________________________
Its:_____________________________

FRONTIER CORPORATION

By:_____________________________

Its:_____________________________
<PAGE>

<PAGE>
AGENT'S ACCEPTANCE

As required by paragraph 10 of the foregoing Certificate,
the undersigned, as Agent for each of the Banks and in accordance
with the written instructions of each of the Banks, hereby
accepts R-Net Corp. as the Borrower pursuant to the Credit
Agreement, with the effect that R-Net Corp. has succeeded to all
of the rights of the Borrower under and pursuant to the Credit
Agreement, the Notes and all other Facility Documents. The
undersigned further affirms that Frontier Corporation shall
hereafter have no further rights, and it is hereby released from
all existing and future liabilities and obligations, as Borrower
under the Credit Agreement, the Notes and all other Facility
Documents. On behalf of the Banks, the undersigned agrees to
deliver the Notes of Frontier Corporation to Frontier Corporation
as soon as practicable after the date hereof.

THE CHASE MANHATTAN BANK,
N.A., AS AGENT FOR THE BANKS

By:_______________________

Its:______________________

<PAGE>

<PAGE>
EX. 3

CHANGES TO OMP

NONE

<PAGE>
EXHIBIT 4.2

ROCHESTER TELEPHONE CORP.

CHEMICAL BANK, Trustee

-----------------------
INDENTURE
-----------------------

Dated as of March 14, 1995

Debt Securities
<PAGE>

<PAGE>
TABLE OF CONTENTS

Page

Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions. . . . . . . . . . . . . . . . . . . 1
Act. . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate. . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . 2
Company. . . . . . . . . . . . . . . . . . . . . 2
Company Request" and "Company Order. . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . 3
Corporation. . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . 3
Holder . . . . . . . . . . . . . . . . . . . . . 3
Indenture. . . . . . . . . . . . . . . . . . . . 3
Interest . . . . . . . . . . . . . . . . . . . . 3
Interest Payment Date. . . . . . . . . . . . . . 3
Maturity . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate. . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . 4
Original Issue Discount Security . . . . . . . . 4
Outstanding. . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . 5
Place of Payment . . . . . . . . . . . . . . . . 5
Predecessor Security . . . . . . . . . . . . . . 5
Redemption Date. . . . . . . . . . . . . . . . . 5
Redemption Price . . . . . . . . . . . . . . . . 6
Regular Record Date. . . . . . . . . . . . . . . 6
Responsible Officer. . . . . . . . . . . . . . . 6
Security" or "Securities . . . . . . . . . . . . 6
Security Register" and "Security Registrar . . . 6
Special Record Date. . . . . . . . . . . . . . . 6
Stated Maturity. . . . . . . . . . . . . . . . . 6
Trustee. . . . . . . . . . . . . . . . . . . . . 6
Trust Indenture Act. . . . . . . . . . . . . . . 7

Section 102. Compliance Certificates and Opinions . . . . . . 7
Section 103. Form of Documents Delivered to Trustee . . . . . 8
Section 104. Acts of Holders. . . . . . . . . . . . . . . . . 8
Section 105. Notices, etc., to Trustee and
the Company. . . . . . . . . . . . . . . . 9
Section 106. Notice to Holders; Waiver. . . . . . . . . . . . 10
Section 107. Conflict with Trust Indenture Act. . . . . . . . 10
Section 108. Effect of Headings and Table of Contents . . . . 11
Section 109. Successors and Assigns . . . . . . . . . . . . . 11
Section 110. Separability Clause. . . . . . . . . . . . . . . 11
Section 111. Benefits of Indenture. . . . . . . . . . . . . . 11
Section 112. Governing Law. . . . . . . . . . . . . . . . . . 11
Section 113. Legal Holidays . . . . . . . . . . . . . . . . . 11

ARTICLE TWO

SECURITY FORMS

Section 201. Forms Generally. . . . . . . . . . . . . . . . . 12
Section 202. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . 12
Section 203. Securities in Global Form. . . . . . . . . . . . 13
Section 204. Additional Interest. . . . . . . . . . . . . . . 13

ARTICLE THREE

THE SECURITIES

Section 301. Amount Unlimited; Issuable in Series . . . . . . 15
Section 302. Denominations. . . . . . . . . . . . . . . . . . 17
Section 303. Execution, Authentication and Delivery . . . . . 17
Section 304. Temporary Securities . . . . . . . . . . . . . . 19
Section 305. Registration, Transfer and Exchange. . . . . . . 20
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . 21
Section 307. Payment of Interest; Interest Rights
Preserved. . . . . . . . . . . . . . . . . . 22
Section 308. Persons Deemed Owners. . . . . . . . . . . . . . 23
Section 309. Cancellation . . . . . . . . . . . . . . . . . . 23
Section 310. Computation of Interest. . . . . . . . . . . . . 24
Section 311. CUSIP Number . . . . . . . . . . . . . . . . . . 24
Section 312. Book-Entry Provisions for Global Securities. . . 24
Section 313. Authentication and Delivery of Original Issue. . 26

ARTICLE FOUR

SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture. . . . . 26
Section 402. Application of Trust Money . . . . . . . . . . . 28

ARTICLE FIVE

REMEDIES

Section 501. Events of Default. . . . . . . . . . . . . . . . 28
Section 502. Acceleration of Maturity; Rescission
and Annulment. . . . . . . . . . . . . . . 30
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . 31
Section 504. Trustee May File Proofs of Claim . . . . . . . . 31
Section 505. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . 32
Section 506. Application of Money Collected . . . . . . . . . 33
Section 507. Limitation on Suits. . . . . . . . . . . . . . . 33
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest. . 34
Section 509. Restoration of Rights and Remedies . . . . . . . 34
Section 510. Rights and Remedies Cumulative . . . . . . . . . 34
Section 511. Delay or Omission Not Waiver . . . . . . . . . . 34
Section 512. Control by Holders . . . . . . . . . . . . . . . 35
Section 513. Waiver of Past Defaults. . . . . . . . . . . . . 35
Section 514. Undertaking for Costs. . . . . . . . . . . . . . 36
Section 515. Waiver of Stay or Extension Laws . . . . . . . . 36

ARTICLE SIX

THE TRUSTEE

Section 601. Certain Duties and Responsibilities. . . . . . . 36
Section 602. Notice of Defaults . . . . . . . . . . . . . . . 38
Section 603. Certain Rights of Trustee. . . . . . . . . . . . 38
Section 604. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . 39
Section 605. May Hold Securities. . . . . . . . . . . . . . . 40
Section 606. Money Held in Trust. . . . . . . . . . . . . . . 40
Section 607. Compensation and Reimbursement . . . . . . . . . 40
Section 608. Disqualifications; Conflicting Interests . . . . 41
Section 609. Corporate Trustee Required;
Eligibility. . . . . . . . . . . . . . . . 41
Section 610. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . 42
Section 611. Acceptance of Appointment by Successor . . . . . 43
Section 612. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 45

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND THE COMPANY

Section 701. The Company to Furnish Trustee
Names and Addresses of Holders . . . . . . 45
Section 702. Preservation of Information;
Communications to Holders. . . . . . . . . 46
Section 703. Reports by Trustee . . . . . . . . . . . . . . . 47
Section 704. Reports by the Company . . . . . . . . . . . . . 47

ARTICLE EIGHT

CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

Section 801. Consolidations and Mergers of the Company
and Sales, Leases and Conveyances
Permitted Subject to Certain Conditions. . . 48
Section 802. Rights and Duties of Successor . . . . . . . . . 49
Section 803. Officers' Certificate and Opinion of
Counsel. . . . . . . . . . . . . . . . . . 49

ARTICLE NINE

SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures without Consent
of Holders . . . . . . . . . . . . . . . . 49
Section 902. Supplemental Indentures with Consent of
Holders. . . . . . . . . . . . . . . . . . 52
Section 903. Execution of Supplemental Indentures . . . . . . 53
Section 904. Effect of Supplemental Indentures. . . . . . . . 53
Section 905. Conformity with Trust Indenture Act. . . . . . . 53
Section 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . 53

ARTICLE TEN

COVENANTS

Section 1001. Payment of Principal, Premium, if any,
and Interest . . . . . . . . . . . . . 54
Section 1002. Maintenance of Office or Agency . . . . . . . . 54
Section 1003. Money for Securities Payments to Be
Held in Trust. . . . . . . . . . . . . 54
Section 1004. Notice of Certain Defaults. . . . . . . . . . . 56
Section 1005. Waiver of Certain Covenants . . . . . . . . . . 56
Section 1006. Lien on Assets. . . . . . . . . . . . . . . . . 57
Section 1007. Corporate Existence . . . . . . . . . . . . . . 57

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

Section 1101. Applicability of Article. . . . . . . . . . . . 58
Section 1102. Election to Redeem; Notice to Trustee . . . . . 58
Section 1103. Selection by Trustee of
Securities to be Redeemed. . . . . . . 58
Section 1104. Notice of Redemption. . . . . . . . . . . . . . 59
Section 1105. Deposit of Redemption Price . . . . . . . . . . 60
Section 1106. Securities Payable on Redemption Date . . . . . 60
Section 1107. Securities Redeemed in Part . . . . . . . . . . 60

ARTICLE TWELVE

SINKING FUNDS

Section 1201. Applicability of Article. . . . . . . . . . . . 61
Section 1202. Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . . . . . 61
Section 1203. Redemption of Securities for Sinking Fund. . . . 62

ARTICLE THIRTEEN

REPAYMENT AT THE OPTION OF HOLDERS

Section 1301. Applicability of Article. . . . . . . . . . . . 62

ARTICLE FOURTEEN

MISCELLANEOUS PROVISIONS

Section 1401. Currencies. . . . . . . . . . . . . . . . . . . 63

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INDENTURE, dated as of March 14, 1995, between
ROCHESTER TELEPHONE CORP., a New York corporation (hereinafter
called the "Company"), having its principal executive offices at
180 Clinton Avenue, Rochester, New York 14646-0700, and CHEMICAL
BANK, a New York corporation, as Trustee (hereinafter called the
"Trustee"), having its Corporate Trust Office at 450 West 33rd
Street, New York, New York 10001.

Recitals of the Company

The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time
to time of its unsecured and unsubordinated debentures, notes or
other evidences of indebtedness (hereinafter called the
"Securities"), unlimited as to principal amount, to bear such
rates of interest, to mature at such time or times, to be issued
in one or more series and to have such other provisions as shall
be fixed as hereinafter provided.

All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been
done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of series thereof, as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions.

For all purposes of this Indenture except as otherwise
expressly provided or unless the context otherwise requires:

(1) the terms defined in this Article have the
meanings assigned to them in this Article, and include
the plural as well as the singular;

(2) all other terms used herein that are
defined in the Trust Indenture Act, either directly or
by reference therein, have the meanings assigned to
them therein;

(3) all accounting terms not otherwise
defined herein have the meanings assigned to them in
accordance with generally accepted accounting
principles and, except as otherwise herein expressly
provided, the term "generally accepted accounting
principles" with respect to any computation required or
permitted hereunder shall mean such accounting
principles as are generally accepted at the date of
such computation; and

(4) the words "herein", "hereof" and
"hereunder" and other words of similar import refer to
this Indenture as a whole and not to any particular
Article, Section or other subdivision.

Certain terms, used principally in Article Six, are
defined in that Article.

"Act" when used with respect to any Holders has the
meaning specified in Section 104.

"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing.

"Board of Directors" means the Board of Directors of
the Company or any duly authorized committee of that board.

"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification,
and delivered to the Trustee.

"Business Day", except as may otherwise be provided in
the form of Securities of any particular series pursuant to the
provisions of this Indenture, means any day, other than Saturday
or Sunday, that is neither a legal holiday nor a day on which
banks and trust companies are authorized or required by law,
executive order or regulation to remain closed in The City of New
York.

"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Securities Exchange Act of 1934, or if at any time after the
execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.

"Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor
corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.

"Company Request" and "Company Order" mean,
respectively, a written request or order signed in the name of
the Company by the Chairman, the Vice Chairman, the President or
a Vice President and by the Treasurer, an Assistant Treasurer,
the Controller, an Assistant Controller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.

"Corporate Trust Office" means the office of the
Trustee at which at any particular time its corporate trust
business shall be administered.

"Corporation" includes corporations, associations,
companies and business trusts.

"Defaulted Interest" has the meaning specified in
Section 307.

"Depositary" means, with respect to the Securities of
any series issuable or issued in whole or in part in the form of
one or more Global Securities, the Person designated as
Depositary by the Company pursuant to Section 301 until a
successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one
such Person, "Depositary" as used with respect to the Securities
of any such series shall mean the Depositary with respect to the
Global Securities of that series.

"Event of Default" has the meaning specified in
Section 501.

"Global Security" or "Global Securities" means a
Security or Securities evidencing all or a part of a series of
Securities, issued to the Depositary for such series in
accordance with and bearing the legend prescribed in Section 203.

"Holder" when used with respect to any Security, means
a Person in whose name such Security is registered in the
Security Register.

"Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.

"Interest", when used with respect to an Original Issue
Discount Security that by its terms bears interest only after
Maturity, means interest payable after Maturity.

"Interest Payment Date" means the Stated Maturity of an
installment of interest on the applicable Securities.

"Maturity", when used with respect to any Security,
means the date on which the principal of such Security or an
installment of principal becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration
of acceleration, notice of redemption, request for repayment or
otherwise.

"Officers' Certificate" means a certificate signed by
the Chairman, the Vice Chairman, the President or a Vice
President and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.

"Opinion of Counsel" means a written opinion of
counsel, who may (except as otherwise expressly provided in this
Indenture) be an employee of or counsel for the Company, and who
shall be acceptable to the Trustee.

"Original Issue Discount Security" means a Security
issued pursuant to this Indenture that provides for declaration
of an amount less than the principal thereof to be due and
payable upon acceleration pursuant to Section 502.

"Outstanding", when used with respect to Securities,
means, as of the date of determination, all Securities
theretofore authenticated and delivered under this Indenture,
except:

(i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;

(ii) Securities for whose payment or redemption money
in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside
and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for
the Holders of such Securities, provided that,
if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to
this Indenture or provision therefor
satisfactory to the Trustee has been made; and

(iii) Securities that have been paid pursuant to
Section 306 or exchanged for or in lieu of which
other Securities have been authenticated and
delivered pursuant to this Indenture, other than
any such Securities in respect of which there
shall have been presented to the Trustee proof
satisfactory to it that such Securities are held
by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Securities have given
any request, demand, authorization, direction, notice, consent or
waiver hereunder, the principal amount of an Original Issue
Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such
purposes shall be equal to the amount of the principal thereof
that could be declared to be due and payable pursuant to the
terms of such Original Issue Discount Security at the time of the
taking of such action by the Holders of such requisite principal
amount is evidenced to the Trustee as provided in Section 104(a),
and, provided further, that Securities owned beneficially by the
Company, or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor, shall be
disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the Trustee knows to be
so owned shall be so disregarded. Securities so owned that have
been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.

"Paying Agent" means any Person authorized by the
Company to pay the principal of (and premium, if any) or interest
on any Securities on behalf of the Company.

"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof.

"Place of Payment", when used with respect to the
Securities of any series, means the place or places where the
principal of (and premium, if any) and interest on the Securities
of that series are payable as provided pursuant to Section 301.

"Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same
debt as that evidenced by such particular Security; and, for the
purposes of this definition, any Security authenticated and
delivered under Section 306 in exchange for or in lieu of a lost,
destroyed, mutilated or stolen Security shall be deemed to
evidence the same debt as the lost, destroyed, mutilated or
stolen Security.

"Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such redemption
by or pursuant to such Security.

"Redemption Price", when used with respect to any
Security to be redeemed, means the price at which it is to be
redeemed as determined pursuant to such Security.

"Regular Record Date" for the interest payable on any
Security on any Interest Payment Date means the date, if any,
specified in such Security as the "Regular Record Date".

"Responsible Officer", when used with respect to the
Trustee, means the Chairman or Vice-Chairman of the board of
directors, the chairman or vice-chairman of the executive
committee of the board of directors, the president, any vice
president (whether or not designated by a number or a word or
words added before or after the title "vice president"), the
secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any senior trust
officer, any trust officer or assistant trust officer, the
controller and any assistant controller or any other officer of
the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means,
with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge
of and familiarity with the particular subject.

"Revolver Security Agreement" means the Security
Agreement entered into as of December 19, 1994, executed by
Frontier Corporation ("Frontier"), and assumed on Frontier's
behalf by the Company on January 1, 1995, in favor of Chase
Manhattan Bank, N.A., as agent for the banks party to the
Revolving Credit Agreement among Frontier, as assumed on
Frontier's behalf by the Company on January 1, 1995, the agent
and such banks.

"Security" or "Securities" means any Security or
Securities, as the case may be, authenticated and delivered under
this Indenture.

"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.

"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section
307.

"Stated Maturity" when used with respect to any
Security or any installment of principal thereof or interest
thereon means the date specified in such Security as the fixed
date on that the principal of such Security or such installment
of principal or interest is due and payable.

"Trustee" means the Person named as the "Trustee" in
the first paragraph of this instrument until a successor Trustee
shall have become such with respect to one or more series of
Securities pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean each Person who is
then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" shall mean each such Person and as
used with respect to the Securities of any series shall mean the
Trustee with respect to the Securities of that series.

"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended, as in force at the date as of which this
instrument was executed, except as provided in Section 905.

Section 102. Compliance Certificates and Opinions.

Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture,
the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or
request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating
to such particular application or request, no additional
certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:

(1) a statement that each individual signing
such certificate or opinion has read such condition or
covenant and the definitions herein relating thereto;

(2) a brief statement as to the nature and
scope of the examination or investigation upon which
the statements or opinions contained in such
certificate or opinion are based;

(3) a statement that, in the opinion of each
such individual, he has made such examination or
investigation as is necessary to enable him to express
an informed opinion as to whether or not such condition
or covenant has been complied with; and

(4) a statement as to whether, in the
opinion of each such individual, such condition or
covenant has been complied with.

Section 103. Form of Documents Delivered to Trustee.

In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.

Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company,
unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations
with respect to such matters are erroneous.

Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.

Section 104. Acts of Holders.

(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders of a series of
Securities may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by Holders of
such series in person or by agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company
and any agent of the Trustee or the Company, if made in the
manner provided in this Section.

(b) The fact and date of the execution by any Person
of any such instrument or writing may be proved in any reasonable
manner that the Trustee deems sufficient.

(d) If the Company shall solicit from the Holders of a
series of Securities any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may,
at its option, by Board Resolution, fix in advance a record date
for the determination of Holders of such series entitled to give
such request, demand, authorization, direction, notice, consent,
waiver or other Act but the Company shall have no obligation to
do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the
Holders of such series of record at the close of business on such
record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of
Outstanding Securities of such series have authorized or agreed
or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities of such series shall be computed as of
such record date, provided that no such authorization, agreement
or consent by the Holders of such series on such record date
shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six
months after the record date.

(e) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any
series of Security shall bind every future Holder of the same
Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done or suffered to be done
by the Trustee, any Security Registrar, any Paying Agent or the
Company in reliance thereon, whether or not notation of such
action is made upon such Security.

Section 105. Notices, etc., to Trustee and
the Company.

Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished
to, or filed with,

(1) the Trustee by any Holder or by the
Company shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office,
Attention: Corporate Trustee Administration, or

(2) the Company by the Trustee or by any
Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the
Company addressed to the attention of its Treasurer at
the address of its principal office specified in the
first paragraph of this instrument or at any other
address previously furnished in writing to the Trustee
by the Company.

Section 106. Notice to Holders; Waiver.

Where this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such
event, at his address as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable
to give such notice by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder.

In case, by reason of the suspension of publication of
any newspaper customarily published in the English language on
each Business Day and of general circulation in each Place of
Payment, or by any other cause, it shall be impossible to make
publication of any notice in a newspaper or newspapers
customarily published in the English language on each Business
Day and of general circulation in each Place of Payment, as
required by this Indenture, then such method of publication or
notification as shall be made with the approval of the Trustee
shall constitute a sufficient publication of such notice.

Section 107. Conflict with Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts
with another provision that is required or deemed to be included
in this Indenture by any of the provisions of the Trust Indenture
Act, such required or deemed provisions shall control.

Section 108. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the
construction hereof.

Section 109. Successors and Assigns.

All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so
expressed or not.

Section 110. Separability Clause.

In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.

Section 111. Benefits of Indenture.

Nothing in this Indenture or in the Securities, express
or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent and their
successors hereunder and the Holders of Securities, any benefit
or any legal or equitable right, remedy or claim under this
Indenture.

Section 112. Governing Law.

This Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New
York.

Section 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business
Day, then (notwithstanding any other provision of this Indenture
or the Securities) payment of interest or principal (and premium,
if any) need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, and no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, provided that if such next
succeeding Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on
such date.

ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
The Securities of each series shall be in the form
established by or pursuant to a Board Resolution or in one or
more indentures supplemental hereto, shall have appropriate
insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such
legends or endorsements placed thereon, as may be required to
comply with the rules of any securities exchange, or as may,
consistently herewith, be determined by the officers of the
Company executing such Securities, as evidenced by their
execution of such Securities. Any portion of the text of any
Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.

If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered
to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery
of such Securities.

The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be
produced in any other manner permitted by the rules of any
securities exchange, all as determined by the officers of the
Company executing such Securities, as evidenced by their
execution of such Securities.

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Section 202. Form of Trustee's Certificate of
Authentication.

The Trustee's certificate of authentication with respect to
each Security shall be substantially in the following form:

This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.

CHEMICAL BANK, as Trustee

By--------------------------
Authorized Officer
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Section 203. Securities in Global Form.

If the Company shall establish pursuant to Section 201
that the Securities of a series are to be issued in the form of
one or more Global Securities, then the Company shall execute and
the Trustee shall, in accordance with this Section and the
Company Order with respect to such series, authenticate and
deliver one or more Global Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series issued
and not yet cancelled, (ii) shall be registered in the name of
the Depositary for such Global Security or Securities or the
nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or
in part for Securities in definitive registered form, this
Security may not be transferred except as a whole by the
Depositary to the nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."

Each Depositary designated pursuant to Section 301
must, at the time of its designation and at all times while it
serves as Depositary, be a clearing agency registered under the
Securities Exchange Act of 1934 and any other applicable statute
or regulation.

Section 204. Additional Interest.

(a) The provisions of this Section 204 shall only be
applicable to a Security that expressly states that the interest
rate of such Security is subject to increase in accordance with
this Section 204.

(b) In connection with the execution and delivery of
this Indenture, the Company shall enter into a Registration
Rights Agreement, substantially in the form of Exhibit A hereto
(such agreement, as it may be amended in accordance with its
terms, the "Registration Rights Agreement"). Terms used in this
Section 204 and not otherwise defined herein shall have the
meanings given to such terms in the Registration Rights
Agreement.

(c) If the Company fails to file the Exchange Offer
Registration Statement within 180 days after March 31, 1995, or,
if an Exchange Offer Registration Statement has been filed but a
Shelf Registration Statement is required to be filed pursuant to
Sections 3(i), (iii) or (iv) of the Registration Rights Agreement
and the Company fails to cause the Shelf Registration Statement
to be filed within the later of (x) 180 days after March 31, 1995
and (y) the time specified therefore in Sections 3 and 3(a) of
the Registration Rights Agreement, then, at such time, the per
annum interest rate of the Securities will increase by 20 basis
points. Such increase will remain in effect until the date on
which an Exchange Offer Registration Statement or a Shelf
Registration Statement is filed, on which date the interest rate
on the Securities will revert to the interest rate originally
borne by the Securities, plus any increase in such interest rate
pursuant to the following paragraph.

(d) In the event that the Company fails to cause the
Exchange Offer Registration Statement to be declared effective
within 240 days after March 31, 1995, then at such time the per
annum interest rate on the Securities (which interest rate shall
be the original interest rate on the Securities plus any increase
in such interest rate pursuant to the preceding paragraph) will
increase by an additional 15 basis points, provided that if the
Company is required to file a Shelf Registration Statement, such
additional 15 basis point increase shall only be applicable if
the Shelf Registration Statement has not been declared effective
on or prior to the date that is 90 days after the Company is so
required to file such Shelf Registration Statement pursuant to
Sections 3 and 3(a) of the Registration Rights Agreement (and, in
such case, such additional 15 basis point increase shall only be
applicable on and after such date). Any increase pursuant to the
last sentence will remain in effect until the date on which such
Exchange Offer Registration Statement or Shelf Registration
Statement is declared effective, on which date the interest rate
on the Securities will revert to the interest rate originally
borne by the Securities.

(e) In the event that within 65 days after the
Exchange Offer Registration Statement was declared effective the
Exchange Offer has not been consummated for any reason (other
than pursuant to a determination by the Company, upon the advice
of its outside counsel, that it is not permitted to effect the
Exchange Offer), at such time the per annum interest rate on the
Securities will increase by 25 basis points. Such increase will
remain in effect until the date the Exchange Offer is
consummated, or the date on which a Shelf Registration Statement
is declared effective. Thereafter the interest rate on the
Securities will revert to the interest rate originally borne by
the Securities.

(f) If the Company files the Shelf Registration
Statement and fails to cause it to be kept effective for a period
of three years or such shorter period that will terminate when
all Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement, then, at
the time that the Shelf Registration Statement ceases to be
effective, the per annum interest rate on the Securities will
increase by an additional 25 basis points. Such increase or
increases will remain in effect from the date such Shelf
Registration Statement ceases to be effective until the earlier
of (1) the time that such Shelf Registration Statement is again
declared effective, and (2) three years after the initial date of
effectiveness of the Shelf Registration Statement. Thereafter,
the interest rate on the Securities will revert to the interest
rate originally borne by the Securities.

(g) If the Interest Rate of any Securities is subject
to an increase or decrease pursuant to Sections 204(c), (d), (e)
or (f), then within five days of the effective date of any such
increase or decrease, the Company will notify the Trustee of the
amount of such increase or decrease and the effective date
thereof. Unless and until the Trustee has received notice from
the Company with respect to any change in the Interest Rate of
any Securities, the Trustee may conclusively assume and rely that
the Interest Rate previously set forth in the form of the
Security or in the most recently received notice remains
unchanged and in effect.

(h) Any other provision to this Indenture
notwithstanding, any Securities subject to this Section 204 that
are outstanding after the consummation of an Exchange Offer
together with any Exchange Securities shall vote and consent
together on all matters as one class and that neither such
Securities nor the Exchange Securities will have the right to
vote or consent as a separate class on any matter.

ARTICLE THREE

THE SECURITIES

Section 301. Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities that may
be authenticated and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series.
There shall be established in or pursuant to a Board Resolution
and set forth in an Officers' Certificate, or established in one
or more indentures supplemental hereto:

(1) the title of the Securities and the
series in which such Securities shall be included;

(2) any limit upon the aggregate principal
amount of the Securities of such title or the
Securities of such series that may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration or
transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305,
306, 906 or 1107);

(3) the date or dates on which the principal
of such Securities is payable or the manner in which
such dates are determined;

(4) the rate or rates at which such
Securities shall bear interest, if any, or the manner
in which such rates are determined, the date or dates
from which such interest shall accrue, the Interest
Payment Dates on which such interest shall be payable
and the Regular Record Date for the interest payable on
any Interest Payment Date, and the basis upon which
interest shall be calculated if other than that of a
360-day year of twelve 30-day months;

(5) the period or periods within which, the
price or prices at which and the terms and conditions
upon which such Securities may be redeemed, in whole or
in part, at the option of the Company;

(6) the obligation, if any, of the Company
to redeem or purchase such Securities at the option of
a Holder thereof and the period or periods within
which, the price or prices at which and the terms and
conditions upon which such Securities shall be redeemed
or purchased, in whole or in part, pursuant to such
obligation;

(7) if other than denominations of $1,000
and any integral multiple thereof, the denominations in
which such Securities shall be issuable;

(8) if other than the principal amount
thereof, the portion of the principal amount of such
Securities that shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to
Section 502;

(9) the Place of Payment for the principal,
premium, if any, and interest on such Securities;

(10) the Person to whom any interest on a
Security of the series shall be payable, if other than
the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest;

(11) any other terms of such Securities (which
terms shall not be inconsistent with the provisions of
this Indenture); and

(12) if such Securities are to be issued in whole
or in part in the form of one or more temporary or
permanent Global Securities, the identity of the
depositary (the "Depositary") for such securities and
any special provisions with respect to such temporary
or permanent Global Securities.

All Securities of any one series shall be substantially
identical except as to denomination and the rate or rates of
interest, if any, and maturity and except as may otherwise be
provided in or pursuant to such Board Resolution and set forth in
such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at
the same time and, unless otherwise provided, a series may be
reopened for issuances of additional Securities of such series.

At the option of the Company, interest, other than
interest payable at Maturity, on the Securities of any series
that bear interest may be paid by mailing a check to the address
of the Person entitled thereto as such address shall appear in
the Security Register.

If any of the terms of the Securities of any series
were established by action taken in or pursuant to a Board
Resolution, a copy of an appropriate record of such action shall
be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery
of the Officers' Certificate setting forth the terms of such
series or any other documents that the Trustee may reasonably
request.

Section 302. Denominations.

The Securities of each series shall be issuable in
registered form without coupons in denominations of $1,000 and
any integral multiple thereof, or in such other forms,
denominations and amounts as may from time to time be fixed by or
pursuant to a Board Resolution or supplemental indenture.

Section 303. Execution, Authentication and Delivery.

The Securities shall be executed on behalf of the
Company by its Chairman, Vice Chairman, President or one of its
Vice Presidents under its corporate seal reproduced thereon and
attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities may be
manual or facsimile.

Securities bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

Prior to the issuance of Securities of any series the
Trustee shall have received and (subject to Section 601) shall be
fully protected in relying upon:

(a) the Board Resolution or indenture supplemental
hereto establishing the form of the Securities of
that series pursuant to Section 201 and the terms
of the Securities of that series pursuant to
Section 301;

(b) an Officers' Certificate pursuant to Sections 201
and 301 complying with Section 102;

(i) that the form of such Securities has
been established by or pursuant to a
Board Resolution or by an indenture
supplemental hereto as permitted by
Section 201 in conformity with the
provisions of this Indenture;

(ii) that the terms of such Securities have
been established by or pursuant to a
Board Resolution or by an indenture
supplemental hereto as permitted by
Section 301 in conformity with the
provisions of this Indenture;

(iii) that such Securities, when authenticated
and delivered by the Trustee and issued
by the Company in the manner and subject
to any conditions specified in such
Opinion of Counsel, will constitute
valid and legally binding obligations of
the Company, enforceable in accordance
with their terms, subject to bankruptcy,
insolvency, reorganization and other
laws of general applicability relating
to or affecting the enforcement of
creditors' right and to general equity
principles;

(iv) that all laws and requirements in
respect of the execution and delivery by
the Company of the Securities have been
complied with; and

(v) such other matters as the Trustee may
reasonably request.

The Trustee shall have the right to decline to
authenticate and deliver any Securities of such series:

(i) if the Trustee, being advised by counsel,
determines that such action may not lawfully be
taken;

(ii) if the Trustee by its Board of Directors,
executive committee or a trust committee of
directors and/or Responsible Officers of the
Trustee in good faith determines that such action
would expose the Trustee to personal liability to
Holders of any outstanding series of Securities;
or

(iii) if the issue of such Securities pursuant to this
Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this
Indenture or otherwise in a manner that is not
reasonably acceptable to the Trustee.

Each Security shall be dated the date of its
authentication. Notwithstanding the provisions of Section 301
and of the preceding paragraph, if all Securities of a series are
not to be originally issued at one time, it shall not be
necessary to deliver the Officers' Certificate otherwise required
pursuant to Section 301 or the Company Order and Opinion of
Counsel otherwise required pursuant to Sections 303(b) and (c) at
or prior to the authentication of each Security of such series if
such documents are delivered at or prior to the authentication
upon original issuance of the first Security of such series to be
issued.

No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there
appears on such Security a certificate of authentication
substantially in the form provided for in Section 202 executed by
or on behalf of the Trustee by the manual signature of one of its
authorized officers, and such certificate upon any Security shall
be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.

Section 304. Temporary Securities.

Pending the preparation of definitive Securities of any
series, the Company may execute and deliver to the Trustee, and
upon Company Order the Trustee shall authenticate and deliver, in
the manner provided in Section 303, temporary Securities of such
series, which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized
denominations substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other
variations as the officers of the Company executing such
Securities may determine, as evidenced by their execution of such
Securities.

If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities of such series
shall be exchangeable upon request for definitive Securities of
such series containing identical terms and provisions upon
surrender of the temporary Securities of such series at an office
or agency of the Company maintained for such purpose pursuant to
Section 1002, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any
series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of authorized denominations of
the same series containing identical terms and provisions. Until
so exchanged the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.

Section 305. Registration, Transfer and Exchange.

With respect to each series of Securities, the Company
shall cause to be kept, at an office or agency of the Company
maintained pursuant to Section 1002, a register (herein sometimes
referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall
provide for the registration of that series of Securities and of
transfers of that series of Securities. Such office or agency
shall be the "Security Registrar" for that series of Securities.
In the event that the Trustee shall not be the Security
Registrar, it shall have the right to examine the Security
Register at all reasonable times.

Upon surrender for registration of transfer of any
Security of any series at any office or agency of the Company
maintained for that series pursuant to Section 1002, the Company
shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more
new Securities of the same series of any authorized
denominations, of a like aggregate principal amount bearing a
number not contemporaneously outstanding and containing identical
terms and provisions.

At the option of the Holder, Securities of any series
may be exchanged for other Securities of the same series
containing identical terms and provisions, in any authorized
denominations, and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at any such office or
agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is
entitled to receive.

All Securities issued upon any registration of transfer
or exchange of Securities shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.

Every Security presented or surrendered for
registration of transfer or for exchange shall (if so required by
the Company or the Security Registrar for such series of Security
presented) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and
such Security Registrar of such Series duly executed by the
Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section
304, 906 or 1107 not involving any transfer.

The Company shall not be required (i) to issue,
register the transfer of or exchange any Securities of any series
during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such
mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part.

Section 306. Mutilated, Destroyed, Lost and Stolen
Securities.

If (i) any mutilated Security is surrendered to the
Trustee, or the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security,
and (ii) there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company
shall execute and upon its request the Trustee shall authenticate
and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Security, a new Security of the same
series containing identical terms and provisions and principal
amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security,
pay such Security.

Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith.

Every new Security of any series issued pursuant to
this Section in lieu of any destroyed, lost or stolen Security
shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series
duly issued hereunder.

The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.

Section 307. Payment of Interest; Interest Rights
Preserved.

Interest on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date shall, if so provided in such Security, be paid to the
Person in whose name that Security (or one or more Predecessor
Securities) is registered as of the close of business on the
Regular Record Date for such interest.

Any interest on any Security of any series that is
payable, but is not punctually paid or duly provided for, on any
Interest Payment Date for such Security (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on
the relevant Regular Record Date by virtue of having been such
Holder; and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in Clause (1) or (2)
below:

(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities affected (or their respective Predecessor
Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Security
and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than ten days prior to
the date of the proposed payment and not less than ten days
after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of such Securities at the Holder's
address as it appears in the Security Register not less than
ten days prior to such Special Record Date. The Trustee
may, in its discretion, in the name and at the expense of
the Company, cause a similar notice to be published at least
once in a newspaper, customarily published in the English
language on each Business Day and of general circulation in
each Place of Payment, but such publication shall not be a
condition precedent to the establishment of such Special
Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names such Securities
(or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following Clause
(2).

(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the
Securities affected may be listed, and upon such notice as
may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed
practicable by the Trustee.

Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security
shall carry the right to interest accrued and unpaid, and to
accrue, that was carried by such other Security.

Section 308. Persons Deemed Owners.

Prior to due presentment of a Security for registration
of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the
purpose of receiving payment of principal of (and premium, if
any), and (subject to Section 307) interest on, such Security and
for all other purposes whatsoever, whether or not such Security
is overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the
contrary.

Section 309. Cancellation.

All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any
sinking fund payment shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee, and any such
Securities and Securities surrendered directly to the Trustee for
any such purpose shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that
the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this
Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be destroyed and
certification of their destruction delivered to the Company by it
unless by a Company Order the Company shall direct the cancelled
Securities be returned to it.

Section 310. Computation of Interest.

Except as otherwise specified as contemplated by
Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a
360-day year of twelve 30-day months.

Section 311. CUSIP Number.

The Company in issuing the Securities may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in
notices of redemption or exchange as a convenience to Holders,
provided that any such notice may state that no representation is
made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may
be placed only on the other identification numbers printed on the
Securities.

Section 312. Book-Entry Provisions for Global
Securities.

(a) Global Securities initially shall (i) be
registered in the name of the Depositary or the nominee of such
Depositary and (ii) be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions.

Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect
to any Global Security held on their behalf by the Depositary, or
the Trustee as its custodian, or under the Global Security, and
the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee
or any agent of the Company or the Trustee from giving effect to
any written certification, proxy or other authorization furnished
by the Depositary or impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.

(b) Notwithstanding any provision of Section 203,
unless and until it is exchanged in whole or in part for
Securities in definitive registered form, a Global Security
representing all or a portion of the Securities of a series may
not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or nominee of such successor
Depositary.

(c) If at any time the Depositary for any Securities
of a series represented by one or more Global Securities notifies
the Company that it is unwilling or unable to continue as
Depositary for such Securities or if at any time the Depositary
for such Securities shall no longer be eligible under Section
203, the Company shall appoint a successor Depositary eligible
under Section 203 with respect to such Securities. If a
successor Depositary eligible under Section 203 for such
Securities is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware of such
ineligibility, the Company's election pursuant to Section 203
that such Securities be represented by one or more Global
Securities shall no longer be effective and the Company will
issue, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities of such
series, will authenticate and deliver, Securities of such series,
in definitive registered form, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Securities in
exchange for such Global Security or Securities.

(d) The Company may at any time and in its sole
discretion determine that the Securities of any series issued in
the form of one or more Global Securities shall no longer be
represented by a Global Security or Securities. In such event
the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver,
Securities of such series, in definitive registered form, in any
authorized denominations, in an aggregate principal amount equal
to the principal amount of the Global Security or Securities
representing such Securities, in exchange for such Global
Security or Securities.

(e) If specified by the Company pursuant to Section
301 with respect to Securities represented by a Global Security,
the Depositary for such Global Security may surrender such Global
Security in exchange in whole or in part for Securities of the
same series in definitive registered form on such terms as are
acceptable to the Company and such Depositary. Thereupon, the
Company shall execute, and the Trustee shall authenticate and
deliver, without service charge,

(i) to the Person specified by such Depositary a
new Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate
principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and

(ii) to such Depositary a new Global Security in
a denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the
aggregate principal amount of Securities authenticated and
delivered pursuant to clause (i) above.

(f) Upon the exchange of a Global Security for
Securities in definitive registered form in authorized
denominations, such Global Security shall be cancelled by the
Trustee or an agent of the Company or the Trustee. Securities in
definitive registered form issued in exchange for a Global
Security pursuant to this Section 312 shall be registered in such
names and in such authorized denominations as the Depositary for
such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee or
an agent of the Company or the Trustee. The Trustee or such
agent shall deliver such Securities to or as directed by the
Persons in whose names such Securities are so registered.

(g) The Holder of any Global Security may grant
proxies and otherwise authorize any person, including Agent
Members and persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take
under this Indenture or the Securities.

Section 313. Authentication and Delivery of Original
Issue.

Forthwith upon the execution and delivery of this
Indenture, or from time to time thereafter, Securities up to the
aggregate principal amount of $80,000,000 may be executed by the
Company and delivered to the Trustee for authentication upon
original issue, and shall thereupon be authenticated and
delivered by the Trustee upon Company Order, without any further
action by the Company.

ARTICLE FOUR

SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

Upon the direction of the Company by a Company Order
this Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of
such series of Securities, or the payment of principal of,
premium, if any, and interest on the Securities of such series
herein expressly provided for), and the Trustee, on demand of and
at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

(1) either

(A) all Securities of that series
theretofore authenticated and delivered (other than (i)
Securities of that series that have been destroyed, lost or
stolen and that have been replaced or paid as provided in
Section 306 and (ii) Securities of that series for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee
for cancellation; or

(B) all such Securities of that series not
theretofore delivered to the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated
Maturity within one year, or

(iii) if redeemable at the option of the Company,
are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company,

and the Company, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an
amount sufficient to pay and discharge the entire
indebtedness on such Securities of that series not
theretofore delivered to the Trustee for cancellation,
for principal (and premium, if any) and interest to the
date of such deposit (in the case of Securities that
have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;

(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and

(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture
have been complied with.

In the event there are Securities of two or more series
hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only
if requested to do so with respect to Securities of all series as
to which it is Trustee and if the other conditions thereto are
met. In the event there are two or more Trustees hereunder, then
the effectiveness of any such instrument shall be conditioned
upon receipt of such instruments from all Trustees hereunder.

Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under
Section 607 and, if money shall have been deposited with the
Trustee pursuant to subclause (B) of Clause (1) of this Section,
the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.

Section 402. Application of Trust Money.

Subject to the provisions of the last paragraph of
Section 1003, all money deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose
payment such money has been deposited with the Trustee.

ARTICLE FIVE

REMEDIES

Section 501. Events of Default.

"Event of Default", wherever used herein with respect
to Securities of any series, means any one of the following
events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation
of law pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or
governmental body):

(1) default in the payment of any interest upon any
Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; or

(2) default in the payment of the principal of (and
premium, if any, on) any Security of that series when it becomes
due and payable at Maturity; or

(3) default in the deposit of any redemption or
sinking fund payment, when and as due by the terms of any
Security of that series; or

(4) if an event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or by
which there may be secured or evidenced, any indebtedness of the
Company for money borrowed, whether such indebtedness now exists
or shall hereafter be created, shall happen and shall result in
such indebtedness in principal amount in excess of $5,000,000
becoming or being declared due and payable prior to the date on
which it would otherwise become due and payable, and such
acceleration shall not be rescinded or annulled, or such
indebtedness shall not have been discharged, within a period of
10 days after there shall have been given, by registered or
certified mail to the Company by the Trustee, or to the Company
and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of that series, a written
notice specifying such event of default and requiring the Company
to cause such acceleration to be rescinded or annulled or to
cause such indebtedness to be discharged and stating that such
notice is a "Notice of Default" hereunder; or

(5) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other than
a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or
that has been expressly included in this Indenture solely for the
benefit of a series of Securities other than that series), and
continuance of such default or breach for a period of 30 days
after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company, and the Trustee by
the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or

(6) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company in
an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Company or for any substantial part
of its property, or ordering the winding-up or liquidation of its
affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or

(7) the Company shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entirety of an order
for relief in an involuntary case under any such law, or shall
consent to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or for any substantial part of
its property, or shall make any general assignment for the
benefit of creditors, or shall admit in writing that the Company
shall fail generally to pay its debts as they become due or shall
take any Company action in furtherance of any of the foregoing;
or

(8) any other Event of Default provided with respect
to Securities of that series.

Section 502. Acceleration of Maturity; Rescission
and Annulment.

If an Event of Default with respect to Securities of
any series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities of
that series may declare the principal of all the Securities of
that series, or such lesser amount as may be provided for in the
Securities of that series, to be due and payable immediately, by
a notice in writing to the Company (and to the Trustee if given
by the Holders), and upon any such declaration such principal or
such lesser amount shall become immediately due and payable.

At any time after such declaration of acceleration with
respect to Securities of any series has been made and before a
judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the
Holders of a majority in principal amount of the Outstanding
Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its
consequences if

(1) the Company has paid or deposited with the Trustee
a sum sufficient to pay

(A) all overdue installments of interest on
all Securities of that series,

(B) the principal of (and premium, if any,
on) any Securities of that series that have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate or rates borne by such
Securities,

(C) to the extent that payment of such
interest is lawful, interest upon overdue installments
of interest at the rate or rates borne by or provided
for in such Securities, and

(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel; and

(2) all Events of Default with respect to Securities
of that series, other than the non-payment of the principal
of Securities of that series that has become due solely by
such declaration of acceleration, have been cured or waived
as provided in Section 513.

No such rescission shall affect any subsequent default
or impair any right consequent thereon.

Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.

The Company covenants that if

(1) default is made in the payment of any installment
of interest on any Security when such interest becomes due
and payable and such default continues for a period of 30
days, or

(2) default is made in the payment of the principal of
(or premium, if any, on) any Security at its Maturity, the
Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount
then due and payable on such Securities for principal (and
premium, if any) and interest, with interest upon the
overdue principal (and premium, if any) and, to the extent
that payment of such shall be legally enforceable, upon
overdue installments of interest, at the rate or rates borne
by such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.

If the Company fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an
express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, and may prosecute such
proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and
collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any
other obligor upon such Securities, wherever situated.

If an Event of Default with respect to Securities of
any series occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the
rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.

Section 504. Trustee May File Proofs of Claim.

In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the
property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of
the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for that
payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,

(i) to file and prove a claim for the whole amount
of principal (and premium, if any) and interest owing
and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee,
its agents and counsel) and of the Holders allowed in
such judicial proceeding, and

(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and
to distribute the same;

and any receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the
Trustee under Section 607.

Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights
of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

Section 505. Trustee May Enforce Claims Without
Possession of Securities.

All rights of action and claims under this Indenture or
any of the Securities may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or the
production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery or
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment
has been recovered.

Section 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this
Article with respect to a series of Securities shall be applied
in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of
principal (and premium, if any) or interest, upon presentation of
the Securities of that series and the notation thereon of the
payment if only partially paid and upon surrender thereof if
fully paid:

FIRST: To the payment of all amounts due the Trustee
under Section 607;

SECOND: To the payment of the amounts then due and
unpaid upon that series of the Securities for principal (and
premium, if any) and interest in respect of which or for the
benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
aggregate amounts due and payable on such series of
Securities for principal (and premium, if any) and interest,
respectively;

THIRD: The balance, if any, to the Company.

Section 507. Limitation on Suits.

No Holder of any Security of any series shall have any
right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless

(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to
the Securities of that series;

(2) the Holders of not less than 25% in principal
amount of the Outstanding Securities of that series shall
have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own
name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and
liabilities, including expenses of its counsel, to be
incurred in compliance with such request;

(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to
institute any such proceeding; and

(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of
the Outstanding Securities of that series;

it being understood and intended that no one or more of such
Holders of Securities of such series shall have any right in any
manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any
other such Holders or Holders of any other series, or to obtain
or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit
of all such Holders.

Section 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest.

Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal
of (and premium, if any) and (subject to Section 307) interest on
such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent
of such Holder.

Section 509. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case the Company, the Trustee
and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their
former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

Section 510. Rights and Remedies Cumulative.

Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Securities in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity
or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

Section 511. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of
any Security to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.

Section 512. Control by Holders.

The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to the Securities
of such series, provided that

(1) such direction shall not be in conflict with any
rule of law or with this Indenture, expose the Trustee to
personal liability, or be unduly prejudicial to the rights
of other Holders of Securities of such series not joining
therein,

(2) the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such
direction, and

(3) subject to the provisions of Section 601, the
Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine,
and the Trustee shall have received a legal opinion stating,
that the proceeding so directed would involve the Trustee in
personal liability.

Section 513. Waiver of Past Defaults.

The Holders of not less than a majority in principal
amount of the Outstanding Securities of any series may on behalf
of the Holders of all the Securities of such series waive any
past default hereunder with respect to such series and its
consequences, except a default

(1) in the payment of the principal of (and premium,
if any) or interest on any Security of such series, or

(2) in respect of a covenant or provision hereof that
under Article Nine cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such
series affected.

Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.

Section 514. Undertaking for Costs.

All parties to this Indenture agree, and each Holder of
any Security by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in
such suit, other than the Trustee, of an undertaking to pay the
costs of such suit, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, including the Trustee,
having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee or
by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any
series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (and premium, if
any) or interest on any Security on or after the respective
Stated Maturities expressed in such Security (or, in the case of
redemption, or repayment on or after the Redemption Date or the
repayment date) or interest on any overdue principal of any
Security.

Section 515. Waiver of Stay or Extension Laws.

The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.

ARTICLE SIX

THE TRUSTEE

Section 601. Certain Duties and Responsibilities.

(a) Except during the continuance of an Event of
Default,

(1) the Trustee undertakes to perform such
duties, and only such duties, as are specifically set
forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against
the Trustee; and

(2) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any
such certificates or opinions that by any provisions
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to
the requirements of this Indenture.

(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.

(c) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that

(1) this Subsection shall not be construed
to limit the effect of Subsection (a) of this Section;

(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with
respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of
the Holders of a majority in principal amount of the
Outstanding Securities of any series, relating to the
time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such
series; and

(4) no provision of this Indenture shall
require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

(d) Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.

Section 602. Notice of Defaults.

Within 90 days after the occurrence of any default
hereunder with respect to the Securities of any series, the
Trustee shall transmit by mail to all Holders of Securities of
such series, as their names and addresses appear in the Security
Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of
the principal of (and premium, if any) or interest on any
Security of such series or in the payment of any redemption or
sinking fund installment with respect to Securities of such
series, if any, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interests of the Holders
of Securities of such series; and provided, further, that in the
case of any default of the character specified in Section 501(5)
with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this section, the term
"default" means any event that is, or after notice or lapse of
time or both would become, an Event of Default, with respect to
Securities of such series.

Section 603. Certain Rights of Trustee.

Except as otherwise provided in Section 601:

(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper
party or parties;

(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request
or Company Order (other than delivery of any Security to the
Trustee for authentication and delivery pursuant to Section
303, which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;

(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be
herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;

(d) the Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction;

(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit,
and if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally
or by agent or attorney; and

(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties thereunder either
directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed
with due care by it hereunder.

Section 604. Not Responsible for Recitals or
Issuance of Securities.

The recitals contained herein and in the Securities,
except the Trustee's certificate of authentication, shall be
taken as the statements of the Company, and the Trustee assumes
no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of
Securities or the proceeds thereof.

Section 605. May Hold Securities.

The Trustee, any Paying Agent, any Security Registrar
or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and,
subject to Section 608, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Paying
Agent, Security Registrar or such other agent.

Section 606. Money Held in Trust.

Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by
law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with
the Company.

Section 607. Compensation and Reimbursement.

The Company agrees

(1) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a
trustee of an express trust);

(2) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its
agents and counsel), except any such expense,
disbursement or advance as may be attributable to its
negligence or bad faith; and

(3) to indemnify the Trustee and its agents
for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad
faith on their part, arising out of or in connection
with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of
defending themselves against any claim or liability in
connection with the exercise or performance of any of
their powers or duties hereunder.

As security for the performance of the obligations of
the Company under this Section, the Trustee shall have a lien
prior to the Securities of any series upon all property and funds
held or collected by the Trustee as such, except funds held in
trust for the payment of principal of (or premium, if any) or
interest on particular Securities.

Section 608. Disqualifications; Conflicting Interests.

The Trustee shall comply with the terms of Section
310(b) of the Trust Indenture Act.

Section 609. Corporate Trustee Required;
Eligibility.

There shall at all times be a Trustee hereunder that
shall be a corporation organized and doing business under the
laws of the United States of America, any State or the District
of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
$5,000,000 and subject to supervision or examination by Federal,
State or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

A different Trustee may be appointed by the Company for
any series of Securities prior to the issuance of such
Securities. If the initial Trustee for any series of Securities
is to be a trustee other than Chemical Bank, the Company and such
Trustee shall, prior to the issuance of such series of
Securities, execute and deliver an indenture supplemental hereto,
which shall provide for the appointment of such Trustee as
Trustee for the Securities of such series and shall add to or
change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall
constitute Chemical Bank and such other trustee as co-trustees of
the same trust and that each such trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee.

Section 610. Resignation and Removal; Appointment of
Successor.

(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee under Section 611.

(b) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice
thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a
successor Trustee with respect to such series.

(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the Holders of
a majority in principal amount of the Outstanding Securities of
such series, delivered to the Trustee and to the Company.

(d) If at any time:

(1) the Trustee shall fail to comply with
Section 608 after written request therefor by the
Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or

(2) the Trustee shall cease to be eligible
under Section 609 and shall fail to resign after
written request therefor by the Company or by any such
Holder, or

(3) the Trustee shall become incapable of
acting or shall be adjudged bankrupt or insolvent or a
receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or
liquidation,

then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee with respect to all series of Securities as to
which the Trustee is acting as such hereunder, or (ii) subject to
Section 514, any Holder who has been a bona fide Holder of a
Security of any series for at least six months may, on behalf of
the Holder and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with
respect to all Securities of such series and the appointment of a
successor Trustee or Trustees.

(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, with respect to the Securities of one or
more series, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any
time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year
after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to
the Securities of any series shall not have been appointed by the
Company, a successor Trustee with respect to the Securities of
such series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee,
and the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with
respect to the Securities of such series. If no successor
Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any Holder who
has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of the Holder and all others
similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the
Securities of such series.

(f) The Company shall give notice of each resignation
and each removal of the Trustee with respect to the Securities of
any series and each appointment of a successor Trustee with
respect to the Securities of any series by mailing written notice
of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses
appear in the Security Register. Each notice shall include the
name of the successor Trustee with respect to the Securities of
such series and the address of its Corporate Trust Office.

Section 611. Acceptance of Appointment by Successor.

(a) In case of the appointment hereunder of a
successor Trustee with respect to all Securities, every such
successor Trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer
and deliver to such successor Trustee all property and money held
by such retiring Trustee hereunder.

(b) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of one or more
(but not all) series, the Company, the retiring Trustee and each
successor Trustee with respect to the Securities of that or those
series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and
that (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with respect
to all Securities, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee and that no Trustee shall be responsible for any notice
given to, or received by, or any act or failure to act on the
part of any other Trustee hereunder, and upon the execution and
delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein, such retiring Trustee shall with respect
to the Securities of that or those series to which the
appointment of such successor Trustee relates have no further
responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee
under this Indenture other than as hereinafter expressly set
forth, and each such successor Trustee without any further act,
deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment
of such successor Trustee relates; but, on request of the Company
or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee, to the
extent contemplated by such supplemental indenture, the property
and money held by such retiring Trustee hereunder with respect to
the Securities of that or those series to which the appointment
of such successor Trustee relates.

(c) Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in paragraph (a) or
(b) of this Section, as the case may be.

(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.

Section 612. Merger, Conversion, Consolidation or
Succession to Business.

Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided that such corporation shall be
otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part
of any of the parties hereto. In case any Securities shall have
been authenticated but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as
if such successor Trustee had itself authenticated such
Securities.

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND THE COMPANY

Section 701. The Company to Furnish Trustee
Names and Addresses of Holders.

The Company will furnish or cause to be furnished to
the Trustee

(a) semi-annually, not later than fifteen days after
the Regular Record Date for interest for each series of
Securities, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the
Holders of such series as of such Regular Record Date,
or if there is no Regular Record Date for interest for
such series of Securities, semi-annually, upon such
dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series,
and

(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the
Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the
time such list is furnished, provided, however, that,
so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.

Section 702. Preservation of Information;
Communications to Holders.

(a) The Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders
contained in the most recent list furnished to the Trustee for
each series as provided in Section 701 and the names and
addresses of Holders received by the Trustee for each series in
the capacity of Security Registrar if the Trustee is then acting
in such capacity. The Trustee may destroy any list furnished to
it as provided in Section 701 upon receipt of a new list so
furnished.

(b) If three or more Holders of Securities of any
series (hereinafter referred to as "applicants") apply in writing
to the Trustee, and furnish to the Trustee reasonable proof that
each such applicant has owned a Security of such series for a
period of at least six months preceding the date of such
application, and such application states that the applicants
desire to communicate with other Holders of Securities of such
series with respect to their rights under this Indenture or under
the Securities and is accompanied by a copy of the form of proxy
or other communication that such applicants propose to transmit,
then the Trustee shall, within five business days after the
receipt of such application, at its election, either

(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with
Section 702(a), or

(ii) inform such applicants as to the approximate
number of Holders of such series whose names and
addresses appear in the information preserved at the
time by the Trustee in accordance with Section 702(a),
and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if
any, specified in such application.

If the Trustee shall elect not to afford such
applicants access to such information, the Trustee shall, upon
the written request of such applicants, mail to each Holder whose
name and address appears in the information preserved at the time
by the Trustee in accordance with Section 702(a), a copy of the
form of proxy or other communication that is specified in such
request, with reasonable promptness after a tender to the Trustee
of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such
applicants and file with the Commission, together with a copy of
the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be
contrary to the best interests of the Holders or would be in
violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to
sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all
such Holders with reasonable promptness after the entry of such
order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants
respecting their application.

(c) Every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any Paying Agent nor any
Security Registrar shall be held accountable by reason of the
disclosure of any such information as to the names and addresses
of the Holders in accordance with Section 702(b), regardless of
the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under Section 702(b).

Section 703. Reports by Trustee.

(a) Within 60 days after March 15 of each year
commencing with the year 1996, the Trustee shall transmit by mail
to all Holders, as their names and addresses appear in the
Security Register, a brief report dated as of such March 15 in
accordance with, and to the extent required under, Section 313 of
the Trust Indenture Act.

(b) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each
stock exchange upon which the Securities are listed, with the
Commission and with the Company. The Company will notify the
Trustee when any Securities are listed on any stock exchange.

Section 704. Reports by the Company.

The Company shall:

(1) file with the Trustee, within 15 days
after the Company is required to file the same with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission
may from time to time by rules and regulations
prescribe) that the Company may be required to file
with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); or, if the Company is not
required to file information, documents or reports
pursuant to either of said Sections, then it shall file
with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by
the Commission, such supplementary and periodic
information, documents and reports that may be required
pursuant to Section 13 of the Exchange Act in respect
of a security listed and registered on a national
securities exchange as may be prescribed from time to
time in such rules and regulations;

(2) file with the Trustee and the
Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such
additional information, documents and reports with
respect to compliance by the Company with the
conditions and covenants of this Indenture as may be
required from time to time by such rules and
regulations; and

(3) transmit by mail to all Holders, as
their names and addresses appear in the Security
Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information,
documents and reports required to be filed by the
Company pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations
prescribed from time to time by the Commission.

ARTICLE EIGHT

CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

Section 801. Consolidations and Mergers of the Company
and Sales, Leases and Conveyances
Permitted Subject to Certain Conditions.

The Company may consolidate with, or sell, lease or
convey all or substantially all of its assets to, or merge with
or into any other Person, provided that in any such case, (i)
either (A) the Company shall be the continuing Person, or (B) the
successor shall be a corporation organized and existing under the
laws of the United States of America or a state thereof, and such
successor shall expressly assume the due and punctual payment of
the principal of (and premium, if any) and interest on all the
Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions
of this Indenture to be performed by the Company by a
supplemental indenture satisfactory to the Trustee, executed and
delivered to the Trustee by such successor and (ii) immediately
after such merger or consolidation, or such sale, lease or
conveyance, no Event of Default, and no event that, after notice
or lapse of time, or both, would become an Event of Default,
shall have happened and be continuing.

Section 802. Rights and Duties of Successor.

In case of any such consolidation, merger, sale, lease
or conveyance and upon any such assumption by the successor, such
successor shall succeed to and be substituted for the Company,
with the same effect as if it had been named herein as the party
of the first part, and the predecessor, except in the event of a
lease, shall be relieved of any further obligation under this
Indenture and the Securities. Such successor thereupon may cause
to be signed, and may issue either in its own name or in the name
of the Company, any or all of the Securities issuable hereunder
which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor,
instead of the Company, and subject to all the terms, conditions
and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously
shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Securities
which such successor thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so
issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the
execution hereof.

In case of any such consolidation, merger, sale, lease
or conveyance, such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued
as may be appropriate.

Section 803. Officers' Certificate and Opinion of
Counsel.

The Trustee, subject to the provisions of Sections 601
and 603, shall receive an Officers' Certificate and an Opinion of
Counsel each stating that any such consolidation, merger, sale,
lease or conveyance, and any such assumption, and such
supplemental indenture comply with the provisions of this Article
and that all conditions precedent herein provided for relating to
such transaction have been complied with.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures without Consent
of Holders.

Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any
of the following purposes:

(1) to evidence the succession of another
Person to the Company, and the assumption by any such
successor of the covenants of the Company herein and in
the series of Securities contained; or

(2) to add to the covenants of the Company
for the benefit of the Holders of all or any series of
Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating
that such covenants are expressly being included solely
for the benefit of such series of Securities) and to
make the occurrence, or the occurrence and continuance,
of a default in any such additional covenants an Event
of Default permitting the enforcement of all or any of
the several remedies provided in this Indenture as
herein set forth; provided, however, that in respect of
any such additional covenant such supplemental
indenture may provide for a particular period of grace
after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may
provide for an immediate right of acceleration and/or
enforcement upon the occurrence of such an Event of
Default or may limit the remedies available to the
Trustee upon the occurrence of such an Event of Default
or may limit the right of the Holders of a majority in
aggregate principal amount of the Securities of such
series to waive such an Event of Default; or

(3) to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Securities of
one or more series any property or assets; or

(4) to establish the form or terms of
Securities of any series as permitted by Sections 201
and 301; or

(5) to provide for the issuance of Securities of
any series in coupon form (including Securities
registrable as to principal only) and to provide for
exchangeability of such Securities for the Securities
issued hereunder in fully registered form and to make
all appropriate changes for such purpose; or

(6) to evidence and provide for the
acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of
this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder
by more than one Trustee, pursuant to the requirements
of Section 611(b); or

(7) to evidence and provide for the acceptance of
appointment hereunder of a Trustee other than Chemical
Bank as Trustee for a series of Securities and to add
to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 609
hereof; or

(8) to add to or modify the provisions hereof as
may be necessary or desirable to provide for the
denomination of a series of Securities in foreign
currencies which shall not adversely affect the
interests of the Holders of such series of Securities
in any material respect; or

(9) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary
to effect the qualification of this Indenture under the
Trust Indenture Act, or under any similar federal
statute hereafter enacted, and to add to this Indenture
such other provisions as may be expressly permitted by
the Trust Indenture Act, excluding, however, the
provisions referred to in Section 316(a)(2) of the
Trust Indenture Act as in effect at the date as of
which this instrument was executed or any corresponding
provision provided for in any similar federal statute
hereafter enacted; or

(10) to cure any ambiguity, to correct or
supplement any provision herein that may be defective
or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or
questions arising under this Indenture that shall not
be inconsistent with the provisions of this Indenture
and that shall not adversely affect the interest of the
Holders of Securities of any series in any material
respect; or

(11) to modify the covenants or Events of Default
of the Company solely in respect of, or add new
covenants or Events of Default of the Company that
apply solely to a series of Securities not Outstanding
on the date of such supplemental indenture; or

(12) to add to, delete from or revise the
conditions, limitations and restrictions on the
authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein
set forth.

Section 902. Supplemental Indentures with Consent of
Holders.

With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities of
each series affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities
of such series under this Indenture; provided, however, that no
such supplemental Indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,

(1) change the Stated Maturity of the
principal of, or any installment of interest on, any
Security, or reduce the principal amount thereof or the
rate of interest thereon, or any premium payable upon
the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that
would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to
Section 502, or change any Place of Payment where, or
the coin or currency in which, any Security or any
premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the
Redemption Date), or

(2) reduce the percentage in principal
amount of the Outstanding Securities of any series, the
consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders
is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this
Indenture, or

(3) modify any of the provisions of this
Section or Section 513, except to increase any such
percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security
affected thereby.

A supplemental indenture that changes or eliminates any
covenant or other provision of this Indenture that has been
expressly included solely for the benefit of one or more
particular series of Securities, or which modifies the rights of
the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any
other series.

It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.

Section 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this Article
or the modifications thereby of the trust created by this
Indenture, the Trustee shall be entitled to receive, and (subject
to Section 601) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.

Section 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

Section 905. Conformity with Trust Indenture Act.

Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act as then in effect.

Section 906. Reference in Securities to Supplemental
Indentures.

Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as
to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.

ARTICLE TEN

COVENANTS

Section 1001. Payment of Principal, Premium, if any,
and Interest.

The Company covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly and
punctually pay the principal of (and premium, if any) and
interest on the Securities of that series in accordance with the
terms of such series of Securities and this Indenture.

Section 1002. Maintenance of Office or Agency.

The Company will maintain an office or agency in each
Place of Payment where Securities of that series may be presented
or surrendered for payment, where Securities of that series may
be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations,
surrenders, notices and demands.

The Company may also from time to time designate one or
more other offices or agencies where the Securities of one or
more series may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain
an office or agency in each Place of Payment for Securities of
any series for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other
office or agency. Unless otherwise set forth in a Board
Resolution or indenture supplemental hereto with respect to a
series of Securities, the Company hereby initially appoints the
Trustee at its Corporate Trust Office as the Company's office or
agency for each of such purposes.

Section 1003. Money for Securities Payments to Be
Held in Trust.

If the Company shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or
before each due date of the principal of (and premium, if any),
or interest on, any of the Securities of that series, segregate
and hold in trust for the benefit of the Person entitled thereto
a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying
Agents for any series of Securities, it will, on or prior to each
due date of the principal of (and premium, if any) or interest
on, any Securities of that series, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure
so to act.

The Company will cause each Paying Agent for any series
of Securities other than the Trustee to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that
such Paying Agent will

(1) hold all sums held by it for the payment
of the principal of (and premium, if any) or interest
on Securities of that series in trust for the benefit
of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as
herein provided;

(2) give the Trustee notice of any default
by the Company (or any other obligor upon the
Securities of that series) in the making of any payment
of principal of (and premium, if any) or interest on
the Securities of that series; and

(3) at any time during the continuance of
any such default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held
in trust by such Paying Agent.

The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of
the principal of (and premium, if any) or interest on any
Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become
due and payable shall be paid to the Company on Company Request,
or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the
Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day
and of general circulation in each Place of Payment, or to be
mailed to such Holder, or both, notice that such money remains
unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will
be repaid to the Company.

Section 1004. Notice of Certain Defaults.

The Company will deliver to the Trustee, within 120
days after the end of each fiscal year, a written statement
signed by the principal executive officer, principal financial
officer or principal accounting officer of the Company, stating
that

(1) a review of the activities of the Company during
such year and of performance under this Indenture has been made
under his supervision; and

(2) to the best of his knowledge, based on such
review, the Company has fulfilled all its obligations under this
Indenture throughout such year, or, if there has been a default
in the fulfillment of any such obligation, specifying each such
default known to him and the nature and status thereof.

The Company will deliver to the Trustee, within five
days after the occurrence thereof, written notice of any event
that after notice or lapse of time or both would become an Event
of Default pursuant to Clauses (4), (6) and (7) of Section 501.

Section 1005. Waiver of Certain Covenants.

The Company may omit in any particular instance to
comply with any term, provision or condition set forth in
Sections 1002-1004, inclusive, with respect to the Securities of
any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and
effect.

Section 1006. Lien on Assets.

If at any time the Company mortgages, pledges or
otherwise subjects to any lien the whole or any part of any
property or assets now owned or hereafter acquired by it, except
as hereinafter provided in this Section 1006, the Company will
secure the Outstanding Securities, and any other obligations of
the Company that may then be outstanding and entitled to the
benefit of a covenant similar in effect to this covenant, equally
and ratably with the indebtedness or obligations secured by such
mortgage, pledge or lien, for as long as any such indebtedness or
obligation is so secured. The foregoing covenant does not apply
to liens granted under the Revolver Security Agreement or the
creation, extension, renewal or refunding of purchase-money
mortgages or lien, landlords' liens with respect to the sale or
financing of accounts or chattel paper or other liens to which
any property or asset acquired by the Company is subject as of
the date of this acquisition by the Company, or to the making of
any deposit or pledge to secure public or statutory obligations
or with any governmental agency at any time required by law in
order to qualify the Company to conduct its business or any part
thereof or in order to entitle it to maintain self-insurance or
to obtain the benefits of any law relating to worker's
compensation, unemployment insurance, old age, pensions or other
social security, or with any court, board, commission or
governmental agency as security incident to the proper conduct of
any proceeding before it. Nothing contained in this Indenture
prevents any Person other than the Company from mortgaging,
pledging or subjecting any lien on any property or assets,
whether or not acquired by such Person from the Company.

Section 1007. Corporate Existence.

Subject to Article Eight, the Company will do or cause
to be done all things necessary to preserve and keep in full
force and effect its corporate existence rights (charter and
statutory) and franchises; provided, however, that the Company
shall not be required to preserve any right or franchise if the
Board of Directors shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the
Company and that the loss thereof is not disadvantageous in any
material respect to the Holders.

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

Section 1101. Applicability of Article.

Redemption of Securities of any series at the option of
the Company as permitted or required by the terms of such
Securities shall be made in accordance with the terms of such
Securities and this Article.

Section 1102. Election to Redeem; Notice to Trustee.

The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of the Securities of
any series with the same issue date, interest rate, Stated
Maturity and other variable terms and provisions, the Company
shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the
principal amount of Securities of such series to be redeemed.

Section 1103. Selection by Trustee of
Securities to be Redeemed.

If less than all the Securities of any series with the
same issue date, interest rate, Stated Maturity and other
variable terms and provisions are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee from the Outstanding
Securities of such series not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and
that may provide for the selection for redemption of portions of
the principal amount of Securities of such series; provided,
however, that no such partial redemption shall reduce the portion
of the principal amount of a Security of such series not redeemed
to less than the minimum denomination of a Security of that
series established pursuant to Section 302.

The Trustee shall promptly notify the Company and the
Security Registrar (if other than itself) in writing of the
Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount
thereof to be redeemed.

For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed
or to be redeemed only in part, to the portion of the principal
of such Securities that has been or is to be redeemed.

Section 1104. Notice of Redemption.

Notice of redemption shall be given by first class
mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, unless a shorter period is
specified in the Securities to be redeemed, to each Holder of
Securities to be redeemed, at the Holder's address appearing in
the Security Register, but failure to give such notice by mailing
in the manner herein provided to the Holder of any Securities
designated for redemption as a whole or in part, or any defect in
the notice to any such Holder, shall not affect the validity of
the proceedings for the redemption of any other Securities or
portion thereof.

Any notice that is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether
or not the Holder receives the notice.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price,

(3) if less than all Outstanding Securities
of any series are to be redeemed, the identification (and, in the
case of partial redemption, the principal amount) of the
particular Securities to be redeemed,

(4) in case any Security is to be redeemed
in part only, the notice that relates to such Security shall
state that on and after the Redemption Date, upon surrender of
such Security, the Holder will receive, without charge, a new
Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,

(5) that on the Redemption Date the
Redemption Price will become due and payable upon each such
Security to be redeemed, and, if applicable, that interest
thereon shall cease to accrue on and after said date,

(6) the place or places where such
Securities are to be surrendered for payment of the Redemption
Price;

(7) the CUSIP number for such Securities;
and

(8) that the redemption is for a sinking fund, if
that is the case.

Notice of redemption of Securities to be redeemed at
the election of the Company shall be given by the Company or, at
the Company's request, by the Trustee in the name and at the
expense of the Company.

Section 1105. Deposit of Redemption Price.

On or prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in
trust as provided in Section 1003) an amount of money sufficient
to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof that are to be redeemed on
that date.

Section 1106. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid,
the Securities so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified,
and from and after such date (unless the Company shall default in
the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date; provided,
however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the
Regular Record Dates according to their terms and the provisions
of Section 307.

If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal (and
premium, if any) shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the Security.

Section 1107. Securities Redeemed in Part.

Any Security that is to be redeemed only in part shall
be surrendered at any office or agency of the Company maintained
for that purpose pursuant to Section 1002 (with, if the Company
or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or the Holder's
attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or
Securities of the same series, containing identical terms and
provisions, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to and in exchange for
the unredeemed portion of the principal of the Security so
surrendered. If a Global Security is so surrendered, the Company
shall execute, and the Trustee shall authenticate and deliver to
the Depositary as shall be specified in the Company Order to the
Trustee with respect thereto, without service charge, a Global
Security in a denomination equal to and in exchange for the
unredeemed portion of the principal amount of the Global Security
so surrendered.

ARTICLE TWELVE

SINKING FUNDS

Section 1201. Applicability of Article.

The provisions of this Article shall be applicable to
any sinking fund for the retirement of Securities of a series,
except as otherwise permitted or required by any form of Security
of such series issued pursuant to this Indenture.

The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series is herein referred
to as a "mandatory sinking fund payment", and any payment in
excess of such minimum amount provided for by the terms of
Securities of such series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of
Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of
Securities of such series.

Section 1202. Satisfaction of Sinking Fund Payments
with Securities.

The Company may, in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such
series to be made pursuant to the terms of such Securities as
provided for by the terms of such series (1) deliver Outstanding
Securities of such series (other than any of such Securities
previously called for redemption), and (2) apply as a credit
Securities of such series that have been redeemed either at the
election of the Company pursuant to the terms of such series of
Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities,
provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in
such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced
accordingly. If as a result of the delivery or credit of
Securities of any series in lieu of cash payments pursuant to
this Section 1202, the principal amount of Securities of such
series to be redeemed in order to exhaust the aforesaid cash
payment shall be less than $100,000, the Trustee need not call
Securities of such series for redemption, except upon Company
Request, and such cash payment shall be held by the Trustee or a
Paying Agent and applied to the next succeeding sinking fund
payment, provided, however, that the Trustee or such Paying Agent
shall at the request of the Company from time to time pay over
and deliver to the Company any cash payment so being held by the
Trustee or such Paying Agent upon delivery by the Company to the
Trustee of Securities of that series purchased by the Company
having an unpaid principal amount equal to the cash payment
requested to be released to the Company.

Section 1203. Redemption of Securities for Sinking
Fund.

Not less than 60 days prior to each sinking fund
payment date for any series of Securities, the Company (i) will
deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for
that series pursuant to the terms of that series, the portion
thereof, if any, that is to be satisfied by payment of cash and
the portion thereof, if any, that is to be satisfied by
delivering and crediting of Securities of that series pursuant to
Section 1202, and the optional amount, if any, to be added in
cash to the next ensuing mandatory sinking fund payment, and (ii)
will also deliver to the Trustee any Securities to be so credited
and not theretofore delivered. If such Officers' Certificate
shall specify an optional amount to be added in cash to the next
ensuing mandatory sinking fund payment, the Company shall
thereupon be obligated to pay the amount therein specified. Not
less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103
and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided
in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in
the manner stated in Sections 1106 and 1107.

ARTICLE THIRTEEN

REPAYMENT AT THE OPTION OF HOLDERS

Section 1301. Applicability of Article.

Securities of any series that are repayable at the
option of the Holders thereof before their Stated Maturity shall
be repaid in accordance with the terms of the Securities of such
series. The repayment of any principal amount of Securities
pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section
309, shall not operate as a payment, redemption or satisfaction
of the indebtedness represented by such Securities unless and
until the Company, at its option, shall deliver or surrender the
same to the Trustee with a directive that such Securities be
cancelled.

ARTICLE FOURTEEN

MISCELLANEOUS PROVISIONS

Section 1401. Currencies.

Except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of
this Indenture, all references in this Indenture or in the
Securities to "dollars", "$" or any similar reference shall be to
the currency of the United States of America.

This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.

ROCHESTER TELEPHONE CORP.

/s/ Martin Mucci
[SEAL] By------------------------
Name: Martin Mucci
Title: Treasurer

Attest:

/s/ John T. Pattison
- ---------------------
John T. Pattison

CHEMICAL BANK

/s/ R. Lorenzen
By------------------------
Name: R. Lorenzen
Title:Senior Trust Officer

Attest:

/s/ illegible
- -----------------------
Assistant Secretary
<PAGE>
STATE OF NEW YORK)
: ss.:
COUNTY OF MONROE )

On the 14th day of March, 1995, before me personally
came Martin Mucci, to me known, who, being by me duly sworn, did
depose and say that he is Treasurer of ROCHESTER TELEPHONE CORP.,
a New York corporation, one of the persons described in and which
executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such
corporation's seal; that it was so affixed by authority of the
Board of Directors of said corporation and that he signed his
name thereto by like authority.

/s/ Holly M. James
------------------
Notary Public

[NOTARIAL SEAL]

<PAGE>
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)

On the 14th day of March, 1995, before me personally
came R. Lorenzen, to me known, who, being by me duly sworn, did
depose and say that he is a Senior Trust Officer of CHEMICAL
BANK, one of the persons described in and which executed the
foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporation's
seal; that it was so affixed by authority of the Board of
Directors of said corporation and that he signed his name thereto
by like authority.

/s/ Emily Fayan
-----------------------
Notary Public

[NOTARIAL SEAL]
<PAGE>

<PAGE>
ROCHESTER TELEPHONE CORP.

Reconciliation and tie between Trust Indenture Act of 1939, as
amended and Indenture, dated as of March 14, 1995

Trust Indenture Act Section Indenture Section

Sec. 310(a)(1). . . . . . . . . . . . . . 609
(a)(2). . . . . . . . . . . . . . . . 609
(a)(3). . . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 608,610
(c) . . . . . . . . . . . . . . . . . Not Applicable
Sec. 311(a) . . . . . . . . . . . . . . . 613(a),(c)
(b) . . . . . . . . . . . . . . . . . 613(b),(c)
(b)(2). . . . . . . . . . . . . . . . 703(a)(2),703(b)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Sec. 312(a) . . . . . . . . . . . . . . . 701,702(a)
(b) . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . 702(c)
Sec. 313(a) . . . . . . . . . . . . . . . 703(a)
(b)(1). . . . . . . . . . . . . . . . Not Applicable
(b)(2). . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . . 703(a),703(b)
(d) . . . . . . . . . . . . . . . . . 703(c)
Sec. 314(a) . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . 102
(c)(2). . . . . . . . . . . . . . . . 102
(c)(3). . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . 102
(f) . . . . . . . . . . . . . . . . . Not Applicable
Sec. 315(a) . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . 602,703(a)(6)
(c) . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . 601(c)
(d)(1). . . . . . . . . . . . . . . . 601(a)(1), (c)(1)
(d)(2). . . . . . . . . . . . . . . . 601(c)(2)
(d)(3). . . . . . . . . . . . . . . . 601(c)(3)
(e) . . . . . . . . . . . . . . . . . 514
Sec. 316(a) . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . 502,512
(a)(1)(B) . . . . . . . . . . . . . . 513
(a)(2). . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 508
Sec. 317(a)(1). . . . . . . . . . . . . . 503
(a)(2). . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . 1003
Sec. 318(a) . . . . . . . . . . . . . . . 107
______________
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture

<PAGE>1
EXHIBIT 10.21

August 16, 1995

[Name]
[Address]

Dear [Name]:

The Board of Directors (the "Board") of Frontier Corporation, on
behalf of Frontier and its subsidiaries and affiliates (together,
the "Company") has determined that it is in the best interests of
the Company and its shareowners to be able to avail itself of
your continued dedication and service to the Company in the
immediate future and in case of Change of Control, as defined
later in this letter agreement ("Agreement"). It is therefore
the intent of this Agreement to encourage your complete
dedication to the Company by providing you with compensation and
benefits arrangements while you fulfill your duties now and
during the pendency of a Change of Control, should such an event
occur, which provide you with a measure of security commensurate
with your importance to the Company.

Therefore, upon your signature on a counterpart of this
Agreement, the following terms and conditions shall become
effective as of August 16, 1995 and shall supersede any prior
agreements between the Company and you related to the subject
matter hereof. However, this Agreement does not supersede any
stock option agreements, restricted stock grant agreements or
agreements related to the bridging of your prior service with
other employers for pension service credit purposes which may
exist as of August 16, 1995 between the Company and you, all of
which shall remain in full force and effect.

1. Employment.

1.1 Term. The Company shall employ you in a senior
executive management capacity as the Company, with your consent,
<PAGE>
<PAGE> 2
may from time to time designate. This Agreement shall become
effective as of August 16, 1995 and shall continue until December
31, 1998, unless earlier terminated or extended in accordance
with its terms. Beginning on January 1, 1998 and on each
anniversary of that date thereafter, the term of this Agreement
(the "Term") shall automatically be extended for one additional
year unless either the Company or you has given written notice to
the other no later than September 30 of the preceding year that
the giver of the notice does not elect to extend the Term. Even
if the Company has given you such a notice, if a Change of
Control has occurred during the Term and you have met your
obligations in the next paragraph of this Section 1.1, the Term
will be automatically extended and this Agreement will remain in
full force and effect until the last day of the 36th month
following the month in which the Change of Control occurs. You
acknowledge that, except as set forth in this Agreement, your
employment is "at will".

If, during the Term, a person (as that term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) commences any action that, if
consummated, would result in a Change of Control of the Company,
or if any person publicly announces an intention or proposal to
commence any such action, you agree that you will not leave the
Company's employ (other than as a result of death, Disability or
Retirement) and will render the services contemplated in this
Agreement for the reasonable duration of the Company's defense
against such action and until such action has been abandoned or
terminated or a Change in Control has occurred.

Any termination of your employment during the Term for
reasons other than your death shall be evidenced by a written
Notice of Termination, which shall specify the provision of this
Agreement relied upon for such termination and describe with
reasonable detail the facts and circumstances claimed by the
sender of such Notice of Termination to provide the basis for
termination. Any such Notice of Termination shall also specify
the effective date of termination (the "Termination Date"). If
you die during the Term the Termination Date shall be the date of
your death.
<PAGE>
<PAGE> 3
1.2 Duties. You shall perform all duties incidental to
your position with the Company, or as may be assigned to you by
the Chief Executive Officer of the Company or the Board.
You agree to use your best efforts in the business of
the Company and to devote your full time attention and energy to
the business of the Company. You agree not to work, either on a
part-time or independent contracting or consulting basis, with or
without compensation, for any other business or enterprise during
the Term without the Company's prior consent. Such consent shall
not be unreasonably withheld in the case of service on the boards
of directors of other corporations and community organizations.

1.3 Base Compensation. The Company shall pay you as base
compensation an annual salary of $ , in installments in
accordance with the Company's policies from time to time in
effect, until January 1, 1996. Thereafter, your annual salary
may be adjusted by the Company consistent with the Company's
results and your performance during the prior year. However,
unless the annual salaries of all senior executives of the
Company are reduced across-the-board, your annual salary in any
year shall not be less than your annual salary during the prior
year.

1.4 Incentive Compensation. The Company shall establish
and review with you from time to time the performance goals
("Performance Goals") for the Company and you individually, and a
methodology for calculating the amount of incentive compensation
to be paid upon achievement of such Performance Goals. Incentive
compensation shall be payable to you at such time or times as are
established under the Company's policies (including the Company's
Executive Compensation Program) in effect from time to time.

1.5 Benefits; Perquisites. You shall be entitled to
receive the retirement and welfare benefits and perquisites
provided by the Company under its Executive Compensation program
in effect from time to time for executives at the
Chief Executive Officer level.

<PAGE>
<PAGE> 4
1.6 Expenses. You shall be reimbursed for any reasonable
expenses you incur in connection with your employment during the
Term, upon presentation to the Company of an itemized account and
receipts of such expenses as required by the Company's policies
from time to time in effect.

2. Developments and Intellectual Property. You acknowledge
that all developments, including but not limited to trade secrets
(including strategies, business plans and customer lists),
discoveries, improvements, ideas and writings which either
directly or indirectly relate to or may be useful in the business
of the Company (the "Developments") which you, either alone or in
conjunction with any other person or persons, shall conceive,
make, develop, acquire or acquire knowledge of during the Term
are the sole and exclusive property of the Company. You will
cooperate with the Company's reasonable requests to obtain or
maintain rights or protections under United States or foreign law
with respect to all Developments. The Company will reimburse you
for all reasonable expenses incurred by you in order to comply
with this provision of this Agreement, regardless of when such
expenses may be incurred.

3. Confidential Information. You acknowledge that by reason
of your employment by the Company, especially as a senior
executive thereof, you will in the future have (and you have had
prior to August 16, 1995), access to information of the Company
that the Company deems to be confidential and/or proprietary,
including but not limited to, information about the Company's
strategies, plans, products and services, methods of operation,
employees, sales, profits, expenses, customer lists and the
relationships between the Company and its customers, suppliers
and others who have business dealings with the Company. You
covenant and agree that during the Term and thereafter, you will
not disclose any such information to any person without the prior
written authorization of the Chief Executive Officer or the Board.

4. Non-Competition.

4.1 Covenant. In consideration of the benefits provided
to you under this Agreement, which you acknowledge are
<PAGE>
<PAGE> 5
independent consideration, you covenant and agree that during the
Restricted Period (as defined below), you will not, directly or
indirectly, without the Company's prior consent: (i) own, manage,
operate, finance, join, control or participate in the ownership
or control of, or be associated as an officer, director,
executive, partner or principal, agent, representative,
consultant or otherwise with, or use or permit your name to be
used in connection with, any enterprise that directly or
indirectly competes (as defined below) with the business of the
Company in a Restricted Area (as defined below); or (ii) offer or
provide employment to, or solicit, interfere with or attempt to
entice away from the Company any individual who either is
employed by the Company at the time of such offer, employment,
solicitation, interference or enticement or has been so employed
by the Company within 12 months prior to such offer, employment,
solicitation, interference or enticement. This Section shall not
be construed to prohibit the ownership by you of not more than 1%
of any class of securities of any corporation which competes with
the Company and which has a class of securities registered
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").

4.2 Definitions.

4.2.1 "Competes" means the production, marketing or
selling of any product or service of any person or entity
other than the Company which resembles or competes with a
product or service produced, marketed or sold by the Company
(or to your knowledge was under development by the Company)
during the period of your employment by the Company (whether
under this Agreement or otherwise).

4.2.2 "Restricted Area" means:

(a) The Standard Metropolitan Statistical Area (or
the equivalent) in which any office, place of
employment, business address or POP maintained by the
Company is located; or

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(b) Any state of the United States, any province of
Canada or any foreign country from which the Company or
any of its material subsidiaries or affiliates derives
5% or more of its annual net income.

4.2.3 "Restricted Period" means:

(a) The period of your employment by the Company
(whether under this Agreement or otherwise), if your
employment is terminated because of your death or
Disability;

(b) The period of your employment by the Company
(whether under this Agreement or otherwise) and 24
months thereafter, if your employment is terminated
because of your Retirement, or by the Company for Cause
or without Cause (and not by the Company following
Change of Control);

(c) The period of your employment by the Company
(whether under this Agreement or otherwise) and, if
this Agreement is still in effect at the Termination
Date, the number of months remaining in the Term at the
Termination Date or 12 months, whichever is longer (but
in no event more than 24 months), if you terminate your
employment voluntarily (and not for Good Reason); or

(d) The period of your employment by the Company
under this Agreement, if your employment is terminated
by you for Good Reason or by the Company following
Change of Control.

4.3 Savings Clause. If any of the provisions of this
Section 4 are ever determined by a court to exceed the time,
geographic scope or other limitations permitted by applicable law
in any jurisdiction, then such excessive provisions shall be
deemed reduced, in such jurisdiction only, to the maximum time,
geographic scope or other limitation permitted in such
jurisdiction.

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<PAGE> 7
5. Equitable Relief. You acknowledge that the restrictions
contained in Sections 2, 3 and 4 of this Agreement are, in view
of the nature of the business of the Company, reasonable and
necessary to protect the legitimate interests of the Company, and
that any violation of the provisions of those Sections will
result in irreparable injury to the Company. You also
acknowledge that the Company shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving
actual damages, and to an equitable accounting of all earnings,
profits and other benefits arising from such violation. These
rights shall be cumulative and in addition to any other rights or
remedies to which the Company may be entitled. You agree to
submit to the jurisdiction of any New York State court located in
Monroe County or the United States District Court for the Western
District of New York or of the state court or the federal court
located in or presiding over the county in which the Company has
its corporate headquarters at the applicable time in any action,
suit or proceeding brought by the Company to enforce its rights
under Sections 2, 3 and/or 4 of this Agreement.

6. Company's Obligations upon Termination. The sole
obligations of the Company upon the termination of your
employment prior to the failure of either you or the Company to
extend the Term in accordance with Section 1.1 of this Agreement
are as set forth in this Section 6. Any and all amounts to be
paid to you in connection with your termination shall be paid in
a lump sum promptly after the Termination Date, but not more than
30 days thereafter.

6.1 Termination upon Disability or Death. If your
employment with the Company ends by reason of your death or
Disability (as defined later in this Agreement), the Company
shall pay you all amounts earned or accrued through the
Termination Date but not paid as of the Termination Date,
including:

6.1.1 Base compensation;

6.1.2 Reimbursement for reasonable and necessary expenses
incurred by you on behalf of the Company during the Term;
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<PAGE> 8
6.1.3 Pay for earned but unused vacation and floating
holidays;

6.1.4 All compensation you previously deferred (if any) to
the extent not yet paid; and

6.1.5 An amount equal to your "Pro Rata Bonus". Your Pro
Rata Bonus shall be determined by multiplying the "Bonus
Amount" (as defined below) by a fraction, the numerator of
which is the number of days in the fiscal year through the
Termination Date and the denominator of which is 365. The
term "Bonus Amount" means: (i) a bonus calculated using the
performance metrics of the Company's results and your
individual performance for the fiscal year ended prior to
the year in which the Termination Date occurs, applied to
the payouts set forth under the incentive compensation
program in effect for the year in which the Termination Date
occurs; or (ii) if the Termination Date occurs after the end
of a fiscal year but before any bonus related thereto was
paid, the bonus you would have received for that fiscal
year.

The amounts described in Sections 6.1.1 through 6.1.4,
inclusive, are called elsewhere in this Agreement, collectively,
the "Accrued Compensation".

Except as otherwise provided in this Section 6.1, your
entitlement to any other compensation or benefits shall be
determined in accordance with the Company's employee benefit
plans and other applicable programs and practices then in effect.

6.2 Termination Without Cause. If the Company terminates
your employment without Cause (as defined later in this
Agreement), the Company shall pay you:

6.2.1 All Accrued Compensation;

6.2.2 A Pro Rata Bonus (as defined in Section 6.1.5
above); and

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<PAGE> 9
6.2.3 Severance ("Severance") equal to: (a) twice the sum
of (i) the annual base compensation you would have received
for the entire fiscal year in which the Termination Date
occurs plus (ii) the Bonus Amount plus (iii) $
(being the agreed cash equivalent of the annual value of the
perquisites provided to you under the Company's Executive
Compensation Program) plus (iv) the Company contributions
which would have been made on your behalf to the 401(k)
retirement savings plan maintained by the Company (b)
reduced by the present value (determined as provided in
Section 280G(d)(4) of the Internal Revenue Code of 1986 as
amended (the "Code")) of any other amount of severance
relating to salary or bonus continuation to be received by
you upon termination of your employment under any severance
plan, policy or arrangement of the Company.

In addition, the Company shall continue to provide to you
and your family at the Company's expense, for 24 months following
the Termination Date, the life insurance, disability, medical,
dental, vision and hospitalization benefits provided to you and
your family immediately prior to the Termination Date.

Lastly, the Company shall credit you with an additional 24
months of service and age for the purposes of determining the
level of your retirement benefits under any qualified or
nonqualified defined benefit pension, supplemental or excess
retirement plan maintained by the Company in which you are a
covered employee (the "Retirement Plans").

Except as otherwise provided in this Section 6.2, your
entitlement to any other compensation or benefits shall be
determined in accordance with the Company's employee benefit
plans and other applicable programs and practices then in effect.

6.3 Termination for Cause or Voluntary Termination. If
your employment is terminated for Cause (as defined later in this
Agreement), or if you voluntarily terminate your employment other
than for Good Reason, the Company shall pay you all Accrued
Compensation. Except as otherwise provided in this Section 6.3,
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<PAGE> 10
your entitlement to any other compensation or benefits shall be
determined in accordance with the Company's employee benefit
plans and other applicable programs and practices then in effect.

6.4 Termination for Good Reason or by Company Following
Change of Control. If you terminate your employment for Good
Reason or the Company terminates your employment following a
Change of Control, the Company shall pay you:

6.4.1 All Accrued Compensation;

6.4.2 A Pro Rata Bonus;

6.4.3 Severance equal to: (a) three times the sum of (i)
the annual base compensation you would have received for the
entire fiscal year in which the Termination Date occurs plus
(ii) the Bonus Amount plus (iii) $ (being the agreed
cash equivalent of the annual value of the perquisites
provided to you under the Company's Executive Compensation
Program) plus (iv) the Company contributions which would
have been made on your behalf to the 401(k) retirement
savings plan maintained by the Company (b) reduced by the
present value (determined as provided in Section 280G(d)(4)
of the Code or any other amount of severance relating to
salary or bonus continuation to be received by you upon
termination of your employment under any severance plan,
policy or arrangement of the Company;

6.4.4 An amount equal to your "Supplemental Retirement
Amount". Your Supplemental Retirement Amount shall be equal
to the difference between (a) the benefit payable under the
Retirement Plans which you would have received had your
employment continued for 36 months following the Termination
Date and (b) your actual benefit paid or payable, if any,
under the Retirement Plans. Your Supplemental Retirement
Amount will be determined in accordance with the procedures
set forth in an Addendum to this Agreement, which is made a
part hereof (the "Addendum"); and

<PAGE>
<PAGE> 11
6.4.5 An amount equal to your "SERP Payment". Your SERP
Payment shall satisfy the Company's obligations to you under
the supplemental or excess retirement plan or plans
maintained by the Company for its executive employees (the
"SERP") and shall be the actuarial equivalent (using the
Actuarial Assumptions, as defined in the Addendum) of your
benefit accrued under the SERP through the Termination Date.
If all or a part of the SERP Payment is funded through a
trust of which you are a beneficiary, the SERP Payment shall
be paid from such trust to the extent of such funding.

In addition, the Company shall continue to provide to you
and your family at the Company's expense, for 36 months following
the Termination Date, the life insurance, disability, medical,
dental, vision and hospitalization benefits provided to you and
your family immediately prior to the Termination Date.

The Company shall reimburse you for all reasonable legal
fees and expenses which you may incur following a Change of
Control as a result of the Company's attempts to contest the
validity or enforceability of this Agreement or your attempts to
obtain or enforce any right or benefit provided to you under this
Agreement, unless a court determines your actions to be
frivolous.

Except as otherwise provided in this Section 6.4, your
entitlement to any other compensation or benefits shall be
determined in accordance with the Company's employee benefit
plans and other applicable programs and practices then in effect.

7. Gross-Up Payment. Notwithstanding anything else in this
Agreement, if it is found that any or all of the payments made to
you, including but not limited to payments made by the Company,
or under any plan or arrangement maintained by the Company, to
you or for your benefit (other than any additional payments
required under this Section 7) (the "Payments") would be subject
to the excise tax imposed by Section 4999 of the Code or you
incur any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and penalties,
<PAGE>
<PAGE> 12
collectively the "Excise Tax"), then you are entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such
that, after you pay all taxes (including any interest or
penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, you will retain an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. The
procedures for the calculation and contesting of any claim that
such Excise Tax is due are set forth in the Addendum.

8. No Obligation to Mitigate Damages. You are not require to
mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, and the
amounts to be paid to you under Section 6 of this Agreement shall
not be reduced by any compensation you may earn from other
sources. However, if, during any period that you would otherwise
be entitled to receive any payments or benefits under this
Agreement, you breach your obligations under Section 2, 3 or 4 of
this Agreement, the Company may immediately terminate any and all
payments and the provision of benefits (to the extent permitted
by law and the terms of the benefit plans maintained by the
Company from time to time) hereunder.

9. Successor to Company. The Company will require any
successor or assignee to all or substantially all of the business
and/or assets of the Company, whether by merger, sale of assets
or otherwise, by agreement in form and substance reasonably
satisfactory to you, to assume and agree to perform the Company's
obligations under this Agreement in the same manner and to the
same extent that the Company would be required to perform them if
such succession or assignment had not taken place. Such
agreement of assumption must be express, absolute and
unconditional. If the Company fails to obtain such an agreement
within three business days prior to the effective date of such
succession or assignment, you shall be entitled to terminate your
employment under this Agreement for Good Reason.

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<PAGE> 13
10. Survival. Notwithstanding the expiration or termination of
this Agreement, except as otherwise specifically provided
herein, your obligations under Sections 2, 3 and 4 of this
Agreement and the obligations of the Company under this Agreement
shall survive and remain in full force and effect.

This Agreement shall inure to the benefit of, and be
enforceable by, your personal and legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If you die while any amounts are still
payable to you, all such amounts, unless otherwise provided in
this Agreement, shall be paid in accordance with the terms of
this Agreement to your devisee(s), legatee(s) or other
designee(s) or, if there is no such designee(s), to your estate.

11. Definitions. Whenever used in this Agreement, the
following terms shall have the meanings below:

11.1 "Cause" means:

11.1.1 You have willfully and continually failed to
substantially perform your duties (other than due to an
incapacity resulting from physical or mental illness or due
to any actual or anticipated failure after you have given a
Notice of Termination for Good Reason) after a written
demand for substantial performance is delivered to you by
the Chief Executive Officer or the Board which specifically
identifies the manner in which it is believed that you
have not substantially performed your duties; or

11.1.2 You have willfully engaged in conduct which is
demonstrably and materially injurious to the Company
(monetarily or otherwise); or

11.1.3 You have willfully engaged in conduct which is
illegal or in violation of the Company's Code of Ethics; or

11.1.4 You have been convicted of a felony; or

11.1.5 You have violated the provisions of Section 2
and/or Section 3 and/or Section 4 of this Agreement
<PAGE>
<PAGE> 14
and, in any of the events described in Sections 11.1.1 through
11.1.5 above, the Board adopts a resolution finding that in the
good faith opinion of the Board you were culpable for the conduct
set forth in any of Sections 11.1.1 through 11.1.5 and specifying
the particulars thereof in detail. For the purposes of this
Agreement, no act or failure to act on your part shall be
considered willful unless done, or omitted to be done, by you not
in good faith and without reasonable belief that your action or
omission was in the best interests of the Company. Any such
resolution of the Board must receive the affirmative vote of not
less than three-quarters of the entire membership of the Board at
a meeting of the Board called and held for the purpose of
considering the issue, and you must receive reasonable notice of
the meeting and have an opportunity, with your counsel, to
present your case to the Board.

11.2 "Change of Control" means:

11.2.1 The consummation of a consolidation or merger of
the Company in which the Company is not the continuing or
surviving corporation or pursuant to which the shares of the
Company's common, voting equity are to be converted into
cash, securities or other property. For the purposes of
this Agreement, a consolidation or merger with a corporation
which was a wholly-owned direct or indirect subsidiary of
the Company immediately before the consolidation or merger
is not a Change of Control; or

11.2.2 The sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the Company's assets; or

11.2.3 The approval by the Company's shareowners of any
plan or proposal for the liquidation or dissolution of the
Company; or

11.2.4 Any person, as that term is used in Section 13(d)
and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities of the Company
under an employee benefit plan of the Company, a direct or
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<PAGE> 15
indirect wholly-owned subsidiary of the Company or any other
company owned, directly or indirectly, by the shareowners of
the Company in substantially the same proportions as their
ownership of the Company's common, voting equity), is or
becomes the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act), directly or indirectly, of
30% or more of the Company's then outstanding common, voting
equity; or

11.2.5 During any period of two consecutive years,
individuals who at the beginning of such period constitute
the Board, including for this purpose any new director
(other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in this Section 11.2.5) whose election
or nomination for election by the Company's shareowners was
approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of
the period or whose election or nomination for election was
previously so approved (the "Incumbent Board"), cease for
any reason to constitute a majority of the Board.

11.3 "Disability" means:

11.3.1 Your absence from your duties with the Company on a
full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness; or

11.3.2 A physical or mental condition which prevents you
from satisfactorily performing your duties with the Company
and such incapacity or condition is determined to be total
and permanent by a physician selected by the Company or its
insurers and reasonably acceptable to you and/or your legal
representative.

11.4 "Good Reason" means:

11.4.1 Without your express written consent, after a
Change of Control, the assignment to you of duties with the
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<PAGE> 16
Company or with a person, as that term is used in Section
13(d) and 14(d) of the Exchange Act, in control of the
Company materially diminished from the duties assigned to
you immediately prior to a Change of Control; or

11.4.2 Without your express written consent, after a
Change of Control, any reduction by the Company or any
person, as that term is used in Section 13(d) and 14(d) of
the Exchange Act, in control of the Company in your annual
base compensation or annual bonus at Standard (or
equivalent) rating from the amounts of such compensation
and/or bonus in effect immediately before and during the
fiscal year in which the Change of Control occurred (except
that this Section 11.4.2 shall not apply to across-the-board
salary or bonus reductions similarly affecting all
executives of the Company and all executives of any person
in control of the Company); or

11.4.3 Without your express written consent, after a
Change of Control, the failure by the Company or any person,
as that term is used in Section 13(d) and 14(d) of the
Exchange Act, in control of the Company to increase your
annual base compensation or annual bonus at Standard (or
equivalent) rating at the times and in comparable amounts as
they are increased for similarly situated senior executive
officers of the Company and of any person, as that term is
used in Section 13(d) and 14(d) of the Exchange Act, in
control of the Company; or

11.4.4 Without your express written consent, after a
Change of Control, the failure by the Company or by any
person, as that term is used in Section 13(d) and 14(d) of
the Exchange Act, in control of the Company to continue in
effect any benefit or incentive plan or arrangement (except
any benefit plan or arrangement which expires by its own
terms then in effect upon the occurrence of a Change of
Control) in which you are participating at the time of the
<PAGE>
<PAGE> 17
Change of Control, unless a replacement plan or arrangement
with at least substantially similar terms is provided to
you; or

11.4.5 Without your express written consent, after a
Change of Control, the taking of any action by the Company
or by any person, as that term is used in Section 13(d) and
14(d) of the Exchange Act, in control of the Company which
would adversely affect your participation in or materially
reduce your benefits under any benefit plan or arrangement
or deprive you of any other material benefit (including any
miscellaneous benefit which is not represented and protected
by a written plan document or trust) enjoyed by you at the
time of a Change of Control; or

11.4.6 You terminate your employment (other than because
of your death, Disability or Retirement) by giving the
Company a Notice of Termination with a Termination Date not
later than the first anniversary of the Change of Control;
or

11.4.7 Any failure by the Company to comply with any of
its material obligations under this Agreement, after you
have given notice of such failure to the Company and the
Company has not cured such failure promptly after its
receipt of such notice.

11.5 "Retirement" means a voluntary or involuntary
termination of your employment after age 65 or any voluntary
termination at age 65 or earlier that entitles you to receive a
normal or early retirement service pension under the Retirement
Plans (or any successor or substitute plan or plans the Company
puts into effect prior to a Change in Control).

12. Notice. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be
deemed given when mailed by certified mail, return receipt
requested, or by nationally recognized overnight courier, receipt
requested, when addressed to you at your official business
address when employed by the Company or at your home address as
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<PAGE> 18
reflected in the Company's records from time to time and when
addressed to the Company at its corporate headquarters, to the
attention of the Board, with a required copy to the Company's
Corporate Counsel.

13. Amendment and Assignment. This Agreement cannot be
changed, modified or terminated except in a writing. You may not
assign your duties with the Company to any other person.

14. Severability. If any provision of this Agreement or the
application of this Agreement to anyone or under any
circumstances is determined by a court to be invalid or
unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect any other provisions or
applications of this Agreement which can be effective without the
invalid or unenforceable provision or application, and such
invalidity or unenforceability shall not invalidate or render
unenforceable such provision in any other jurisdiction.

15. Remedies Cumulative; No Waiver. No remedy conferred on you
or on the Company by this Agreement is intended to be exclusive
of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to any other remedy given
under this Agreement or now or later existing at law or in
equity. No delay or omission by you or by the Company in
exercising any right, remedy or power under this Agreement or
existing at law or inequity shall be construed as a waiver of
such right, remedy or power, and any such right, remedy or power
may be exercised by you or the Company from time to time and as
often as is expedient or necessary.

16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York,
without regard to any applicable conflicts of laws.

17. Counterparts. This Agreement may be signed by you and on
behalf of the Company in one or more counterparts, each of which
shall be one original but all of which together will constitute
one and the same instrument.
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<PAGE> 19
If this Agreement correctly sets forth our agreement on its
subject matter, please sign and return to me the enclosed copy of
this Agreement. Please keep the other copy for your records.

Sincerely,

FRONTIER CORPORATION

By:
--------------------------------------

Agreed to on
------------------------------

- -------------------------------------------
[Name]
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<PAGE> 20

ADDENDUM TO LETTER AGREEMENT DATED AUGUST 16, 1995

The following provisions shall apply to the determination of
the Supplemental Retirement Amount in accordance with Section
6.4.4 of the Agreement.

1. The Supplemental Retirement Amount shall be determined
using the actuarial equivalent of the benefit payable under the
Retirement Plans which you would have received had your
employment continued for 36 months following the Termination Date
and, using the Actuarial Assumptions (as defined below) of your
actual benefit paid or payable, if any, under the Retirement
Plans. The actuarial equivalent shall be determined by using the
actuarial assumptions applied by the Company during the 90 day
period immediately prior to a Change of Control in connection
with the Retirement Plans (the "Actuarial Assumptions").

2. The calculation of your Supplemental Retirement Amount
shall also be based on the assumptions that your annual base and
incentive compensation would have remained the same over those 36
months, all accrued benefits under the Retirement Plans are fully
vested and the benefit accrual formulas are those provided for in
the Retirement Plans during the 90 day period immediately prior
to a Change of Control.

3. If all or a part of your Supplemental Retirement Amount
is derived under a supplemental or excess retirement plan
maintained by the Company for its executive employees (a "SERP"),
then the amount of your Supplemental Retirement Amount which is
derived from the SERP shall be paid from any trust of which you
are a beneficiary to the extent of funding actuarially available
in that trust to pay your Supplemental Retirement Amount.

The following provisions shall apply to the calculation and
procedures relating to the Gross-Up Payment in accordance with
Section 7 of the Agreement.

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<PAGE> 21

1. The Company's independent auditors in the fiscal year
in which the Change of Control occurs (the "Accounting Firm")
shall determine whether and when a Gross-Up Payment is required,
the amount of such Gross-Up Payment and the assumptions to be
used in making such determination. The Accounting Firm shall
provide detailed supporting calculations, together with a written
opinion with respect to the accuracy of such calculations, to you
and the Company within 15 business days of the receipt of a
written request from either you or the Company. If the
Accounting Firm is serving (or has served within the three years
preceding the Change in Control) as accountant or auditor for the
person in control of the Company following the Change of Control
or any affiliate thereof, you may appoint another nationally
recognized accounting firm to make the determinations required in
connection with the Gross-Up Payment and the substitute
accounting firm shall then be referred to as the Accounting
Firm). The Company shall pay you any Gross-Up Payment,
determined in accordance with this Addendum, within five days of
the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that you will not be liable for any
Excise Tax, it shall furnish you with a written opinion that your
failure to report the Excise Tax on the applicable federal income
tax return would not result in the imposition of a negligence or
similar penalty. Any determination by the Accounting Firm shall
be binding upon you and the Company.

2. If there is uncertainty about how Section 4999 is to be
applied when the Accounting Firm makes its initial determination,
and as a result the Gross-Up Payment made to you by the Company
is determined (after following the procedures set forth in this
Addendum) to be less than it should have been made (an
"Underpayment"), and you are thereafter required to pay any
Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment and any such Underpayment shall be promptly paid by
the Company to you or for your benefit.

<PAGE>
<PAGE> 22

3. You shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require
the Company to pay you the Gross-Up Payment. Your notice shall
be given as soon as practicable but no later than ten business
days after you have been informed in writing of such claim and
shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. You shall not
pay such claim prior to the expiration of the 30 day period
following the date on which you gave such notice to the Company
(or any shorter period, if the taxes claimed are due sooner). If
the Company notifies you in writing prior to the expiration of
such period that it desires to contest such claim, you shall:
(a) give the Company any information reasonably requested by it
relating to such claim, (b) take such action in connection with
contesting such claim as the Company shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company, (c) cooperate with
the Company in good faith in order effectively to contest such
claim, and (d) permit the Company to participate in any
proceedings relating to such claim.

4. The Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue
or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in connection
with the claim and may, at its sole option, either direct you to
pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and you agree to prosecute the contest to
a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts as the
Company shall determine.

5. Any extension by the Company of the statute of
limitations relating to payment of taxes for the taxable year for
which such contested amount is claimed to be due shall be limited
solely to such contested amount. The Company's control of the
contest shall be limited to issues with respect to which a
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<PAGE> 23
Gross-Up Payment would be payable under this Agreement and you
shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other
taxing authority.

6. If the Company directs you to pay such claim and sue
for a refund, the Company shall advance the amount of such
payment to you, on an interest-free basis, and shall indemnify
and hold you harmless, on an after-tax basis, from any Excise Tax
or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to
any imputed income with respect to such advance.

7. If you receive a refund of any amount advanced to you
by the Company, you will promptly pay to the Company the amount
of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If the Company advanced
to you any amounts and a determination is made that you will not
be entitled to any refund with respect to such claim and the
Company does not notify you in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and you
will not be required to be repay it. The amount of such advance
shall offset the amount of the Gross-Up Payment required to be
paid.

8. The Company shall pay all fees and expenses of the
Accounting Firm. The Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and
hold you harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment
of costs and expenses.

<PAGE>
EXHIBIT 23

Consent of Independent Accountants

We hereby consent to the incorporation by reference in the
Prospectus constituting part of the Registration Statement on
Form S-4 (File No. 33-91250) of Rochester Telephone Corp. of
our report dated January 22, 1996 appearing on pages 23 and 24
of Form 10-K. We also consent to the incorporation by reference
of our report on the Financial Statement Schedule, which appears
on page 19 of this Form 10-K.

/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP

Rochester, New York
March 22, 1996

<PAGE>
EXHIBIT 24

POWER OF ATTORNEY

I, the undersigned, hereby constitute and appoint ANTHONY J.
CASSARA as my true and lawful agent and attorney-in-fact to act
with full power and authority and in my name, place and stead as
I, myself, could act for the sole purpose of executing the Form
10-K of Rochester Telephone Corp. for the year ended December 31,
1995, pursuant to Instruction D(2)(a) of the Form 10-K and in
accordance with Regulation S-K Item 601(b)(24) of the Securities
Act of 1933 and the Securities Exchange Act of 1934, and with
full and unqualified authority to delegate such power to any
person or persons as my attorney-in-fact shall select.

IN WITNESS WHEREOF, THIS INSTRUMENT HAS BEEN SIGNED AND DELIVERED
BY THE UNDERSIGNED AS OF MARCH 20, 1996.

/s/ Harlan D. Calkins
-----------------------------
Harlan D. Calkins

/s/ Maurice F. Holmes
-----------------------------
Maurice F. Holmes

/s/ Thomas H. Jackson
-----------------------------
Thomas H. Jackson

/s/ Richard P. Miller, Jr.
-----------------------------
Richard P. Miller, Jr.

/s/ Christine B. Whitman
-----------------------------
Christine B. Whitman

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
ROCHESTER TELEPHONE CORP.'S FINANCIAL STATEMENTS FOR THE YEAR
ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000936105
<NAME> ROCHESTER TELEPHONE CORP.
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 5,643
<SECURITIES> 0
<RECEIVABLES> 58,140
<ALLOWANCES> (1,417)
<INVENTORY> 3,084
<CURRENT-ASSETS> 80,240
<PP&E> 877,582
<DEPRECIATION> (537,037)
<TOTAL-ASSETS> 450,889
<CURRENT-LIABILITIES> 73,819
<BONDS> 60,300
0
0
<COMMON> 263,537
<OTHER-SE> (12,454)
<TOTAL-LIABILITY-AND-EQUITY> 450,889
<SALES> 315,335
<TOTAL-REVENUES> 315,335
<CGS> 0
<TOTAL-COSTS> 228,374
<OTHER-EXPENSES> 2,839
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,237
<INCOME-PRETAX> 77,885
<INCOME-TAX> 28,878
<INCOME-CONTINUING> 49,007
<DISCONTINUED> 0
<EXTRAORDINARY> (60,441)
<CHANGES> (1,020)
<NET-INCOME> (12,454)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>