Prepared by MERRILL CORPORATION www.edgaradvantage.com QuickLinks [LETTERHEAD] November 23, 1999 To each of the Lenders party to the Credit Agreement (as defined below) and to U.S. Bank National Association, as Administrative Agent and The Board of...

Prepared by XXXXXXX CORPORATION xxx.xxxxxxxxxxxxxx.xxx

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[LETTERHEAD] November 23, 1999 To each of the Lenders party to the Credit Agreement (as defined below) and to U.S. Bank National Association, as Administrative Agent and The Board of Directors of Xxxxxxx Corporation and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation as Initial Purchaser of the Senior Subordinated Notes Ladies and Gentlemen: Xxxxxxx Corporation ("Holdco") is party to an Agreement and Plan of Merger, dated July 14, 1999, as amended, (the "Merger Agreement") with Viking Merger Sub, Inc. ("Merger Sub") pursuant to which, among other things, Holdco intends to consummate a leveraged recapitalization of Holdco through a reorganization thereof, whereby (i) Merger Sub will merge (the "Merger") with and into the Holdco with Holdco being the surviving corporation, and (ii) immediately upon the effectiveness of the Merger, Holdco will contribute (the "Asset Contribution") all or substantially all of its assets (other than certain "Retained Interests", as such term is defined in the Credit Agreement) to Xxxxxxx Communications LLC (the "Company"), a wholly owned subsidiary of Holdings, and enter into an Administrative Services Agreement with the Company pursuant to which Holdco will provide the benefits of all such Retained Interests to the Company and the Company will assume all performance obligations and other liabilities with respect to such Retained Interests. The cash merger consideration required under the Merger Agreement is $22.00 per share or approximately $359,200,000 in aggregate. Substantially simultaneously with the Merger, Holdco shall (i) receive a common equity contribution ("Common Equity Contribution") of not less than $92,100,000 of which not less than $70,600,000 will consist of shares of common stock of Merger Sub purchased for cash or in exchange for shares of common stock of Holdco by certain equity investors (the "DLJMB Entities") and not less than $21,500,000 will be provided by certain members of management of the Company through retention of existing shares of Holdco's capital stock, (ii) receive a preferred equity contribution ("Preferred Equity Contribution") of $40,000,000 consisting of shares of Merger Sub purchased for cash by the DLJMB Entities and/or other investors and converted into shares of preferred stock of Holdco pursuant to the Merger, (iii) fund up to $10,000,000 in management deferred compensation plans, (iv) refinance existing debt not to exceed $87,500,000, plus accrued and unpaid interest thereon, and (v) pay transaction fees and expenses of approximately $23,900,000. The Company is party to (i) a Credit Agreement dated as of November 23, 1999 (the "Credit Agreement"), with various lenders party thereto from time to time, U.S. Bank National Association, as Administrative Agent, DLJ Capital Funding, Inc., as Syndication Agent and Lead Arranger, and Xxxxx Fargo Bank, N.A. as Documentation Agent, pursuant to which new credit facilities will be made available to the Company. Loans under the Credit Agreement are secured by a valid and enforceable perfected security interest in and Lien on substantially all of the property superior to and prior to all third Persons (except to the extent of any permitted encumbrances which have priority as a matter of applicable law) in favor of the Administrative Agent for the benefit of the Secured Parties. In addition, each Subsidiary Guarantor and Holdco has guaranteed the Obligations. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Credit Agreement. The facilities under the Credit Agreement consist of (i) a Tranche A Term Loan not to exceed $65,000,000, (ii) a Tranche B Term Loan not to exceed $155,000,000 and (iii) up to $50,000,000 in Revolving Loans (including Letters of Credit of up to $15,000,000 and Swing Line Loans of up to $10,000,000). Loans under the Credit Agreement mature on their respective Stated Maturity Date. The funds required to pay the aggregate consideration required under the Merger Agreement, repay Existing Debt, fund the management deferred compensation plans, and pay fees and expenses related to the Transaction (as defined below) will be provided by (i) the Common Equity Contribution, (ii) the Preferred Equity Contribution, (iii) gross cash proceeds of not less than $140,000,000 from the issuance of Subordinated Indebtedness by Xxxxxx, and (iv) Lenders' advances to the Company under the Credit Agreement. Contemporaneously with the consummation of the Merger, the Asset Contribution, the Common Equity Contribution, the issuance of Subordinated Indebtedness, the Preferred Equity Contribution and the initial Borrowing of Term Loans and up to $6,500,000 in Revolving Loans, the Company shall make an intercompany loan ("Intercompany Loan") and/or declare a dividend equal to the amount of the net proceeds of the initial Borrowing of Terms Loans and such Revolving Loans (other than proceeds used by the Company to pay fees and expenses). From time to time after the date hereof, advances of Revolving Loans may be made to the Company and Letters of Credit will be issued for the account of the Company or any of its Restricted Subsidiaries for general corporate purposes. The Recapitalization, the Merger, and the Refinancing and all related agreements and transactions contemplated thereunder, including the incurrence of the New Financing (as defined below), are defined as the "Transaction". This letter is provided by Valuation Research Corporation ("Valuation") reporting the performance of certain agreed upon procedures undertaken by Valuation which form the basis for Valuation's opinion, as of the date hereof, stated below ("Opinion") and delivered at the request of the Administrative Agent pursuant to Section 5.1.10 of the Credit Agreement, that immediately after and giving effect to the consummation of the Transaction:

(a)Fair Market Value The amount at which the aggregate assets of an entity would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, neither being under any compulsion to act, with equity to both.

(b)Present Fair Saleable Value The aggregate amount that may be realized by an independent willing seller from an independent willing buyer if an entity's assets are sold as an entirety with reasonable promptness in an arm's-length transaction under present conditions for the sale of assets as an entirety of comparable business enterprises.

(c)Stated Liabilities The recorded liabilities of Holdco and its Subsidiaries on a consolidated basis pursuant to the unaudited balance sheet as of July 31, 1999 adjusted pursuant to the terms of the Merger Agreement. Stated Liabilities excludes Existing Debt that will be repaid in connection with the New Financing. Valuation has made inquiries of management of Holdco (the "Management") and has been advised by Management that there are no material adverse changes in the Stated Liabilities between the date of the information shown on such balance sheet and the date hereof. Based upon our inquiries in connection with this letter, we have no reason to believe that there has been any such material adverse change.

(d)New Financing The indebtedness being incurred, assumed, or guaranteed by Xxxxxx and its Subsidiaries under Loans from the Lenders and issuance of Letters of Credit by the Issuing Bank under the Credit Agreement and the Subordinated Indebtedness.

(e)Identified Contingent Liabilities The maximum reasonably estimated amount of liabilities of Holdco and its Subsidiaries that may result from pending litigation, asserted claims and assessments, guaranties, indemnities, environmental conditions, uninsured risks, and other contingent liabilities as identified and explained to us in terms of their nature and estimated dollar magnitude by Management. We do not give any opinion as to whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standards No. 5. Based on our reasonable inquiries and analysis in connection with this letter, we have no reason to believe that Identified Contingent Liabilities are materially understated, and nothing has come to our attention suggesting that material contingent liabilities have not been identified or disclosed.

(f)Unreasonably Small Capital This phrase relates to the ability of Holdco and its Subsidiaries on a consolidated basis after giving effect to the consummation of the Transaction, to continue as a going concern and not lack sufficient capital for its present needs and anticipated needs, including, without limitation, Identified Contingent Liabilities, without substantial unplanned dispositions of assets outside the ordinary course of business, restructuring of debt, externally forced revisions of its operations, or similar actions. We believe the foregoing definitions are reasonable and appropriate for purposes of rendering the Opinion, and we believe that the methodologies we used in our analysis are appropriate for determining Fair Market Value, Present Fair Saleable Value and Unreasonably Small Capital as defined herein. Based on our inquiry, we believe it is appropriate for us to value Holdco and its Subsidiaries on a consolidated basis as a going concern as part of our analysis relating to this Opinion. In expressing its Opinion, Valuation has relied on information and analyses furnished by and/or discussions held with Management and Holdco, which information and analyses have been the subject of review by Valuation and have been the subject of discussion and inquiry. Valuation does not assume any responsibility for the sufficiency and accuracy of the information. Nothing has come to Valuation's attention in the course of its review that would lead it to believe that any such information is incorrect in any material respect or that it was unreasonable for Valuation to utilize and rely upon the information. Such data has been accepted as reasonably reflecting the Transaction, the financial condition of Holdco and its Subsidiaries on a consolidated basis, and their past and future operations. All items subject to audit pursuant to generally accepted auditing standards and in conformity with generally accepted accounting principles ("GAAP") have been relied upon without review, check, or verification, but nothing has come to our attention that would cause us to believe the information is incorrect in any material respect or that it was unreasonable for Valuation to utilize and rely upon the information. Valuation has performed certain analyses, studies, and investigations more fully described herein in support of its Opinion. Further, the Opinion expressed herein is subject to the General Limiting Conditions and Assumptions attached hereto as Exhibit A. Valuation has reviewed the audited financial statements of Holdco for the fiscal years ended January 31, 1999, 1998, and, 1997 and the interim period ended July 31, 1999, as well as background data and material considered appropriate to the Opinion expressed and referenced below. Such areas of investigation include, but are not limited to: