<PAGE>   1
                                                                   EXHIBIT 10.1


                                         Form 234 KGT 12-85 (Second Revised) NS
                                         OPIC Contract of Insurance No. E136


                   OVERSEAS PRIVATE INVESTMENT CORPORATION


                            CONTRACT OF INSURANCE


                                   Against


                               Inconvertibility
                                 Expropriation
                              Political Violence


                              as defined below,


       between the Overseas Private Investment Corporation ("OPIC") and


                              The Pioneer Group, Inc.
                              60 State Street, 19th Floor  
                              Boston, Massachusetts 02109-1975


                              a corporation organized and existing under the
                              laws of the State of Delaware


                                                            (the "Investor").
<PAGE>   2

                              TABLE OF CONTENTS


<TABLE>
<CAPTION>
                    Title                                                Page
                    -----                                                ----
<S>                 <C>                                                  <C>  
Article I - Subject of Insurance and Exchange of Promises

          1.01      Subject ............................................  I-1
          1.02      Promises ...........................................  I-2
          1.03      Maximum Aggregate Compensation .....................  I-2
          1.04      Full Faith and Credit ..............................  I-3
          1.05      Term ...............................................  I-3
          1.06      Premiums and Active Amount Elections ...............  I-3
          1.07      Administrative Fee .................................  I-3

Article II - Inconvertibility - Scope of Coverage*

          2.01      Inconvertibility of Local Currency ................. II-1
          2.02      Exclusions ......................................... II-1

Article III - Inconvertibility - Amount of Compensation*

          3.01      Rate of Compensation for Inconvertibility ..........III-1
          3.02      Limitation .........................................III-1

Article IV - Expropriation - Scope of Coverage*

          4.01      Total Expropriation ................................ IV-1
          4.02      Expropriation of Funds ............................. IV-1
          4.03      Provocation Exclusion .............................. IV-1

Article V - Expropriation - Amount of Compensation*

          5.01      Total Expropriation ................................  V-1
          5.02      Expropriation of Funds .............................  V-1
          5.03      Adjustments ........................................  V-1
          5.04      Limitations ........................................  V-2

Article VI - Political Violence - Scope of Coverage*

          6.01      Loss Due to Political Violence ..................... VI-1
          6.02      Exclusions ......................................... VI-1
</TABLE>
______________

*This Table of Contents applies to all coverages offered by OPIC whether or not
 all of those coverages are provided in this contract.

<PAGE>   3

                    Title                                                 Page
                    -----                                                 ----

Article VII - Political Violence - Amount of Compensation*

          7.01      Basis of Compensation .............................. VII-1
          7.02      Limitations ........................................ VII-1
          7.03      Investor's Share ................................... VII-2
          7.04      Book Value of Insured Investment ................... VII-2
          7.05      Appraisal .......................................... VII-3
          7.06      Estimated Compensation ............................. VII-3

Article VIII - Procedures

          8.01      Application for Compensation .......................VIII-1 
          8.02      Assignment of OPIC .................................VIII-1
          8.03      Security ...........................................VIII-2
          8.04      Excess Salvage Value ...............................VIII-2
          8.05      Arbitration ........................................VIII-2
          8.06      Election of Active Amounts and Coverage Ceilings ...VIII-3
          8.07      Termination ........................................VIII-3
          8.08      Legal and Miscellaneous ............................VIII-3
          8.09      Notices ............................................VIII-3
          8.10      Refund of Premiums .................................VIII-3

Article IX - Investor's Duties

          9.01      Duties .............................................  IX-1
          9.02      Default ............................................  IX-3
          9.03      Non-Waiver .........................................  IX-3
          9.04      Cure ...............................................  IX-3

Article X - Amendments .................................................   X-1


                                     -ii-
<PAGE>   4
                                      I-1

           Article I - Subject of Insurance and Exchange of Promises.

1.01    Subject

        1.      Investment. The Investor promises that the Investor contributed
                or will contribute up to $22,800,750 in United States dollars
                consisting of

                (a) $22,000,750 in United States dollars consisting of

                        (i)  $750 in United States dollars in the form of an
                        equity investment; and 

                        (ii) $22,000,000 in United States dollars in the form of
                        100 percent participation in a loan made or to be
                        made by State Street Bank and Trust Company
                        ("State Street Bank")

to

                Forest-Starma Joint Stock Company
                ul. Koprovaya 4, Komsomolsk-on-Amur
                Khabarovsk 681005, Russia

                a joint stock company of the closed type organizaed under the
                laws of Russia

                                                   (the "foreign enterprise")

and

                (b) $800,000 in United States dollars

to              Starma-Holding
                ul. Koprovaya 4, Komsomolsk-on-Amur
                Khabarovsk 681005, Russia

for which the Investor has acquired or will acquire up to

                (c) 750 shares of common stock for the investment identified in
                paragraph (a)(i) above, representing 50 percent equity interest
                in the foreign enterprise; and

                (d) 100 percent participation interest in a loan made by State
                Street Bank to Forest-Starma under the terms of the Master
                Short-Term Credit Agreement dated June 9, 1995, as evidenced by
                the participation certificates purchased by the Investor from
                State Street Bank pursuant to the Participation Agreement
                between the Investor and State Street Bank dated June 9, 1995,
                for the investment identified in paragraph (a)(ii) above; and
<PAGE>   5
                                      I-2

                (e) 195 shares of common stock for the investment identified in
                paragraph (b) above, representing 13 percent equity interest in
                the foreign enterprise

                                                  (together, the "investment").

Ninety percent of each of these interests acquired by the Investor is insured 
under this contract (the "insured investment").

        2.      Project. The investment will be applied to

                timber harvesting, reforestation, and wood processing in 
                Khabarovsk Krai in Russia


                                                               (the "project").

        3.      "Foreign governing authority" means the governmental 
authority(ies) in effective control in all or part of Russia. The term "foreign 
governing authority" includes not only the federal government of the project 
country and its agencies and instrumentalities exercising governmental (as 
distinguished from commercial) functions but also subordinate levels of 
government, local and municipal governments, and agencies and instrumentalities 
through which they exercise such governmental functions. The term "foreign 
governing authority" does not include any entity in which the foreign governing 
authority has an ownership interest if the entity performs commercial functions 
directly related to the project.

1.02    Promises.

        OPIC promises that if acts occur during the term of this contract which 
satisfy the requirements for coverage in Article II, IV or VI, OPIC will pay 
the Investor the amount of compensation provided in Article III, V or VII, in 
accordance with the procedures in Article VIII.

        The Investor promises to comply with the duties in Article IX. If the 
Investor violates any of those duties, the Investor may lose rights, including 
the right to compensation.

        Amendments to Articles I through IX may be contained in Article X.

1.03    Maximum Aggregate Compensation

        OPIC will not pay compensation under this contract in an aggregate 
amount that exceeds $47,000,000.
<PAGE>   6
                                      I-3


1.04    Full Faith and Credit.

        The full faith and credit of the United States of America is pledged to 
secure the full payment by OPIC of its obligations under this contract.

1.05    Term

        This contract shall enter into force on the date it has been signed by 
OPIC and the Investor and shall terminate 20 years afterward unless terminated 
earlier (Sec. 807; Sec. 9.02).

1.06    Premiums and Active Amount Elections.

        The Investor shall elect amounts of coverage (Sec. 8.06) and pay 
premiums on or before each annual anniversary of the effective date of the 
contract. 

        The coverages and premiums for the first period shall be as follows:

<TABLE>
<CAPTION>
                       Inconvertibility    Expropriation    Political Violence
                       ----------------    -------------    ------------------
<S>                      <C>               <C>                <C> 
Coverage Ceiling          $1,800,000        $47,000,000        $47,000,000
Active Amount             $1,800,000        $16,400,000        $16,400,000
Premium Rate is          x  0.40000%       x   0.72000%        x  0.63000%
                          ----------        -----------        -----------
Total premium is:         $ 7,200.00       +$118,080.00       +$103,320.00       = $228,600.00
                                                                                   -----------
</TABLE>

1.07    Administrative Fee. The Investor will pay an annual fee for contract 
administration of 0.25% of the Investment amount (Sec. 1.01.1) on or before the 
contract effective date and on or before each annual anniversary of the 
contract effective date, but only if the administrative fee exceeds the premium 
due for the contract for that period. If the administrative fee exceeds the 
premium due for that period, the premium will be waived.

<PAGE>   7
                                      II-1


               Article II - Inconvertibility - Scope of Coverage.

2.01    Inconvertibility of Local Currency.  Local currency shall be deemed 
inconvertible and compensation shall be payable, subject to the exclusions 
(section 2.02) and limitation (section 3.02), if neither the Investor nor the 
foreign enterprise is able legally

        (a) to convert earnings from or returns of the insured investment into
        United States dollars through any channel during the 180 days
        immediately prior to a claim to OPIC, except at an exchange rate that is
        less favorable than the then-prevailing exchange rate described under
        section 3.01.2, or

        (b) to transfer such converted earnings to the United States during such
        period.

2.02    Exclusions. No compensation for inconvertibility shall be payable if

        (a)   Pre-existing Restrictions.

              (1) An investor in comparable circumstances would have been unable
              legally (a) to convert local currency into United States dollars
              on the date of this contract or (b) to transfer such dollars to
              the United States on the date of this contract; and

              (2) The Investor knew or should have known about the restriction;
              or

        (b)   Investor Diligence. The Investor has not made all reasonable
        efforts to convert the local currency into United States dollars or to
        transfer such dollars to the United States through all direct and
        indirect legal mechanisms reasonably available; or

        (c)   Reconversions. The local currency represents funds which were
        previously converted into another currency; or

        (d)   Provocation. The preponderant cause is unreasonable action
        attributable to the Investor, including corrupt practices.

        (e)   Use Restricted by Expropriation. The use of such local currency is
        restricted by an expropriatory action (section 4.02).

<PAGE>   8
                                     III-1

            Article III - Inconvertibility - Amount of Compensation

3.01    Rate of Compensation for Inconvertibility.

        1.  Date. If the requirements of inconvertibility are satisfied 
(Article II), subject to the limitation (Sec. 3.02), OPIC shall pay compensation
        
            (a) against prior delivery of the inconvertible local currency, or

            (b) if the Investor is unable legally to deliver the local currency
            or if OPIC so requests, against prior assignment of the Investor's
            right to receive the payment that is the subject of the claim. 

If the Investor delivers local currency or an assignment of rights denominated 
in local currency, compensation shall be the United States dollar equivalent of 
the local currency at the exchange rate in effect 0 days before OPIC receives 
the completed application for compensation.

If the Investor delivers an assignment of rights denominated in United States 
dollars, compensation shall be the United States dollar amount of the rights 
so assigned.

        2.  Exchange Rate.

            (a) The exchange rate shall be the official exchange rate applicable
            to the type of remittance involved. 


            (b) If, however,

                (1) United States dollars were not generally available at the
                applicable official exchange rate; and 

                (2) exchanges of local currency for United States dollars were
                effected legally and customarily through another channel; 

            then the exchange rate shall be the effective rate obtained through
            that channel. 

            (c) In either case, the exchange rate shall be net of all deductions
            for governmentally imposed charges, such as taxes and commissions. 

3.02    Limitation.  Compensation shall not exceed the Active Amount (Sec. 8.06)
        in effect 180 days before OPIC receives the application for
        compensation. 
<PAGE>   9
                                      IV-1

                 Article IV - Expropriation - Scope of Coverage.

4.01    Total Expropriation.  Compensation is payable for total expropriation
(Sec. 5.01), subject to the exclusions (Sec. 4.04) and limitations (Sec. 5.04),
if an act or series of acts satisfies all of the following requirements: 

        (a) the acts are attributable to a foreign governing authority which is
        in de facto control of the part of the country in which the project is
        located; 

        (b) the acts are violations of international law (without regard to the
        availability of local remedies) or material breaches of local law; 

        (c) the acts directly deprive the Investor of fundamental rights in the
        insured investment (Rights are "fundamental" if without them the
        Investor is substantially deprived of the benefits of the investment);
        and  

        (d) the violations of law are not remedied (Sec. 9.01.9) and the
        expropriatory effect continues for six months. 

4.02    Expropriation of Funds.  Compensation is payable for an expropriation 
of funds that constitute a return of the insured investment or earnings on the 
insured investment (Sec. 5.02) if an act or series of acts

        (a) satisfies the governmental action, illegality and duration
        requirements (Sec. 4.01(a), (b) and (d)); and

        (b) directly results in preventing the Investor from

            (1) repatriating the funds; and
             
            (2) effectively controlling the funds in the country in which the
            project is located.  

4.03    Exclusions.  No compensation for expropriation shall be payable if

        (a) Provocation.  The preponderant cause is unreasonable action
        attributable to the Investor, including corrupt practices. 

        (b) Government Action.  The action is taken by the foreign governing
        authority in its capacity or through its powers as a purchaser,
        supplier, creditor, shareholder, director or manager of the foreign
        enterprise. 

<PAGE>   10
                                      V-1


              Article V - Expropriation - Amount of Compensation.

5.01    Total Expropriation. For total expropriation (section 4.01), OPIC shall
pay compensation in United States dollars in the amount of the book value of the
insured investment, subject to adjustments (section 5.03) and limitations
(section 5.04).

        Compensation is computed as of the date the expropriatory effect 
commences (section 4.01(c)) and is based on financial statements maintained in 
accordance with section 9.01.6 for the foreign enterprise. However, OPIC may

        (1) conform the financial statements to principles of accounting
        generally accepted in the United States; and

        (2) make adjustments (section 5.03).

OPIC shall be bound by the Investor's choice among generally accepted 
accounting principles, if the choice is consistent with the Investor's own 
accounting, unless such choice results in a substantial overstatement of the 
fair market value of the insured investment or the foreign enterprise as an 
independent entity.

5.02    Expropriation of Funds. For expropriation of funds (section 4.02), OPIC 
shall pay compensation in the amount of the United States dollar equivalent of 
the expropriated funds at the exchange rate determined in accordance with 
section 3.01.2, computed as of the date the expropriation begins. Compensation 
for expropriation of funds shall be subject to the adjustments and limitations
(section 5.03 and section 5.04).

5.03    Adjustments.

        1. Investments of Property. Non-cash items contributed as part of the 
investment shall be adjusted if necessary to reflect the fair market value of 
the items furnished at the time of contribution to the project, plus freight, 
installation and other reasonable direct costs incurred in furnishing the items 
to the project.

        2. Non-Insured Contribution. Any direct or indirect contribution (and 
retained earnings thereon) by the Investor after the insured investment is made 
shall be deducted from the book value of the foreign enterprise.

        3. Special Accounting Rules. Dealings among related parties shall be
adjusted if necessary to reflect transactions as they would have occurred had
they been at arm's length, and forgiveness of obligations shall be disregarded.
Each entity shall be accounted for as if it were a separate person for income
tax purposes, and the effect of tax shifting arrangements shall be disregarded.
Obsolescence or


        
<PAGE>   11
                                      V-2

permanent reduction in recoverable values shall be recognized by adjusting the 
book value of assets to realizable value. OPIC may adjust financial statements 
to reflect the effect of events that occur before the expropriatory effect 
commences, such as events of loss which are later confirmed.

        4.      Other Compensation and Retained Property.  OPIC may reduce 
compensation by the amount of

        (a)  compensation received from other sources on account of the loss
        (excluding compensation payable under other insurance policies, except
        to the extent necessary to prevent the Investor from recovering more
        than the amount of the loss as recognized under any of the policies
        under which compensation is due, without regard to policy limits); and

        (b)  the book value of commercially viable property which remains
        subject to the Investor's effective disposition and control after the
        expropriatory effect commences (unless OPIC requires the Investor to
        assign the property (Section 8.02)); and

        (c)  any obligation the Investor is relieved of by the expropriation.

The reduction shall be proportionate to the extent that these items are 
attributable to the insured investment.

        5.      Start-up Expenses.  If the book value of the insured investment 
of a new foreign enterprise in the development stage is less than the insured 
amount originally contributed, the accumulated loss will be disregarded if

        (a)  the foreign enterprise is newly formed for the principal purpose of
        undertaking the project.

        (b)  the foreign enterprise is a going concern as of the date the
        expropriatory effect commences.

        (c) that date is within three years of the date this contract is issued,
        and

        (d)  it is clear that no adjustment to book value is necessary by reason
        of obsolescence or permanent reduction in recoverable values of
        productive facilities or assets.

5.04    Limitations.  Compensation shall not exceed any of the 
following limitations:

        (a)  Active Amount.  The Active Amount (Section 8.06) on the date the
        expropriatory effect commences;

<PAGE>   12
                                      V-3

        (b)  Insolvency.  If the liabilities of the foreign enterprise exceed
        its assets as of the date the expropriatory effect commences, the amount
        that the Investor would have been entitled to receive in insolvency
        proceedings with respect to the insured investment if assets had been
        liquidated at book value on that date:

        (c)  Self-Insurance.  The maximum amount which could be received by the
        Investor from OPIC without breaching Section 9.01.3.

<PAGE>   13
                                      VI-1

             Article VI -- Political Violence -- Scope of Coverage.


6.01    Loss Due to Political Violence.  Compensation is payable, subject to 
the exclusions (Section 6.02) and limitations (Section 7.02), if political 
violence is the direct and immediate cause of the permanent loss (including 
loss of value by damage or destruction) of tangible property of the foreign 
enterprise used for the project.

        "Political violence" means a violent act undertaken with the primary
        intent of achieving a political objective, such as declared or
        undeclared war, hostile action by national or international armed
        forces, civil war, revolution, insurrection, civil strife, terrorism or
        sabotage. However, acts undertaken primarily to achieve labor or student
        objectives are not covered.

6.02    Exclusions.  No compensation for political violence shall be payable

        (a)  Excluded Property.  For loss of precious metals, gems, works of
        art, money or documents;

        (b)  Minimum Loss.  If the amount of compensation payable would be less
        than $5,000;

        (c)  Reasonable Protective Measures.  If the loss results from the
        failure to take reasonable measures to protect or preserve the property;
        or

        (d)  Provocation.  If the preponderant cause of the loss is unreasonable
        action attributable to the Investor, including corrupt practices.

<PAGE>   14
                                     VII-1

           Article VII - Political Violence - Amount of Compensation

7.01    Basis of Compensation.  If the requirements of Article VI are 
satisfied, and subject to the limitations (Sec. 7.02), OPIC shall pay 
compensation for a loss in United States dollars in the amount of

        (a) Adjusted Cost. Adjusted cost is the Investor's share (Sec. 7.03) of
        the lowest of 

            (1) the original cost;

            (2) fair market value; or

            (3) the reasonable cost of repair;

        less anything of value received by the Investor on account of the
        property lost and less the Investor's share of any such receipts by the
        foreign enterprise; or               

        (b) Replacement Cost. If the Investor so elects, OPIC will pay the
        reasonable cost to repair any item of lost property or to replace it
        with equivalent new property, less anything of value received by the
        Investor or the foreign enterprise on account of the property lost. Such
        compensation shall not exceed 200% of the original cost of the item. To
        receive such compensation, the Investor must repair or replace the lost
        property to the project within three years of the loss. 

OPIC shall not reduce the compensation payable under subsections (a) or (b) 
above by the amount of compensation payable under other insurance policies on 
account of the property lost, except to the extent necessary to prevent the 
Investor from recovering more than the amount of the loss as recognized under 
any of the policies under which compensation is due, without regard to policy 
limits. 

7.02    Limitations.  Compensation shall not exceed any of the following
limitations: 

        (a) Active Amount. The Active Amount (Sec. 8.06) on the date of the
        loss. 

        (b) Self-insurance. The maximum amount which could be recovered by the
        Investor from OPIC without breaching Sec. 9.01.3. 

        (c) Aggregate Adjusted Cost Compensation. Aggregate compensation for
        property compensated at adjusted cost shall not exceed the book value of
        the insured investment (Sec. 7.04) at the time of loss. 

<PAGE>   15
                                     VII-2

7.03    Investor's Share. "Investor's share" means the ratio that the equity 
owned by the Investor bears to the total equity of the foreign enterprise.

7.04    Book Value of Insured Investment.

        (a)  Book Value. Book value is based on financial statements maintained
        by the Investor in accordance with Section 9.01.6 for the foreign
        enterprise. However, OPIC may
             
             (1)  conform the financial statements to principles of accounting
             generally accepted in the United States; and
        
             (2)  make adjustments (Section 7.04(b)).

        OPIC shall be bound by the Investor's choice among generally accepted
        accounting principles, if the choice is consistent with the Investor's
        own accounting, unless such choice results in a substantial
        overstatement of the fair market value of the insured investment or the
        foreign enterprise as an independent entity.

        (b)  Adjustments.

             (1)  Investments of Property.  Non-cash items contributed to the
             investment shall be adjusted if necessary to reflect the fair
             market value of the items furnished at the time of contribution to
             the project, plus freight, installation and other reasonable direct
             costs incurred in furnishing the items to the project.

             (2)  Non-Insured Contribution.  Any direct or indirect contribution
             (and retained earnings thereon) by the Investor after the insured
             investment is made shall be deducted from book value of the foreign
             enterprise.

             (3)  Special Accounting Rules.  Dealings among related parties
             shall be adjusted if necessary to reflect transactions as they
             would have occurred had they been at arm's length, and forgiveness
             of obligations shall be disregarded. Each entity shall be accounted
             for as if it were a separate person for income tax purposes, and
             the effect of tax shifting arrangements shall be disregarded.
             Obsolescence or permanent reduction in recoverable values shall be
             recognized by adjusting the book value of assets to realizable
             value. OPIC may adjust financial statements to reflect the effect
             of events that occur before the loss of property, such as events of
             loss which are later confirmed.
<PAGE>   16
                                     VII-3

            (4) Start-up Expenses. If the book value of the insured investment
            of a new foreign enterprise in the development stage is less than
            the insured amount originally contributed, the accumulated loss will
            be disregarded if 

                (a) the foreign enterprise is newly formed for the principal
                purpose of undertaking the project. 

                (b) the foreign enterprise is a going concern as of the date of
                the loss. 

                (c) that date is within three years of the date this contract is
                issued, and 

                (d) it is clear that not adjustment to book value is necessary
                by reason of obsolescence or permanent reduction in recoverable
                values of productive facilities or assets. 

        (c) Insolvency. If the labilities of the enterprise exceed its assets as
        of the date of the loss, book value of the insured investment shall not
        exceed the amount that the Investor would have been entitled to receive
        in insolvency proceedings with respect to the insured investment if
        assets had been liquidated at book value on the day prior to the loss. 

7.05    Appraisal.  If OPIC determines that compensation is payable but OPIC 
and the Investor are unable to agree on a question of valuation, either may 
demand the appointment of an impartial appraiser. If the parties are unable to 
agree on the appraiser, the appointment shall be made by the American 
Arbitration Association. The appraiser's itemized appraisal shall be binding. 
Appraisal costs shall be borne equally by OPIC and the Investor.

7.06    Estimated Compensation.  If OPIC determines that compensation is 
payable but conditions in the project country preclude reasonable efforts by 
OPIC to determine the precise amount due, OPIC may pay estimated compensation 
based on the information then available. OPIC may revise its estimate and 
recover any excess or pay any additional amount due upon receipt of additional 
information. 
<PAGE>   17
                                     VIII-1

                           Article VIII - Procedures.

8.01    Application for Compensation.  An application for compensation shall 
demonstrate the Investor's right to compensation in the amount claimed. The 
Investor shall provide such additional information as OPIC may reasonably 
require to evaluate the application. The Investor may amend or withdraw an 
application for compensation at any time, but the right to recover compensation 
will be lost for any acts covered by a withdrawn application.

        (a) There is no time limit on application for inconvertibility
        compensation (Article III); however, compensation shall not exceed the
        Active Amount applicable in accordance with Section 3.02. 

        (b) An application for expropriation compensation (Article V) must be
        filed within six months after the Investor has reason to believe that
        all requirements of Article IV have been satisfied. 

        (c) A notice demonstrating the Investor's entitlement to political
        violence compensation for loss of assets (Article VI) must be filed
        within six months of the loss. The notice together with proof of the
        amount of compensation due will be considered a completed application,
        which must be filed within three years of the loss. The Investor may
        request adjusted cost compensation (Sec. 7.01(a)) and later amend the
        application within three years of the loss to elect replacement cost
        compensation (Sec. 7.01(b)).  

        (d) OPIC shall have a reasonable time in which to complete processing of
        any application for compensation. 

8.02    Assignment to OPIC.  Within sixty days after OPIC notifies the Investor
of the amount of compensation OPIC will pay under expropriation or political
violence coverage, and concurrent with payment, the Investor shall transfer to
OPIC (a) for expropriation, all interests attributable to the insured investment
(Sec. 4.01) or funds (Sec.4.02) as of the date the expropriatory effect
commences, including claims arising out of the expropriation, or (b) for
political violence, claims arising out of the loss due to political violence
(Sec. 6.01). The Investor shall transfer the interests and claims free and clear
of, and shall agree to indemnify OPIC against, claims, defenses, counterclaims,
rights of setoff and other encumbrances (except defenses relating to the
expropriation). 

<PAGE>   18

                                     VIII-2

        In connection with an inconvertibility claim, immediately upon receipt 
of instructions from OPIC together with notification that it intends to pay 
such claim, the Investor shall deliver the local currency to OPIC by draft 
subject to collection (or, at OPIC's option, in cash), or, if the Investor is 
unable legally to deliver the local currency or if OPIC so requests, shall 
instead deliver an assignment of the Investor's rights with respect to the 
payment that is the subject of the claim.

        OPIC may decline all or any portion of the Investor's interests or 
claims; if so, the Investor's right to compensation shall be affected only as 
provided in Sec. 5.03.4(b).

8.03    Security. As a condition for paying compensation (including estimated 
compensation (Sec. 7.06)) prior to a final determination of its liability, OPIC 
may require the Investor to provide security, satisfactory to OPIC in its 
reasonable judgment, for repayment pursuant to section 9.02(b).

8.04    Excess Salvage Value. With respect to compensated expropriation and 
political violence claims, OPIC shall pay to the Investor any amounts OPIC 
realizes in United States dollars from the rights transferred (Sec. 8.02) in 
excess of

        (a) the compensation paid by OPIC; plus

        (b) reasonable interest; plus

        (c) OPIC's out-of-pocket expenses in maintaining and realizing funds 
        from the transferred property.

However, this provision shall not in any way restrict OPIC's discretion to deal 
with the rights transferred. OPIC shall have no obligation to take action with 
respect to the rights transferred and shall incur no liability to the Investor 
for any actions taken or not taken after the transfer.

8.05    Arbitration. Any controversy relating to this contract shall be settled 
by arbitration in Washington, D.C. according to the then prevailing Commercial 
Arbitration Rules of the American Arbitration Association. Unless the Investor 
initiates arbitration, OPIC's liability shall expire one year after OPIC 
notifies the Investor of its determination concerning an application for 
compensation. A decision by arbitrators shall be final and binding, and any 
court having jurisdiction may enter judgment on it.


<PAGE>   19

                                     VIII-3

8.06    Election of Active Amounts and Coverage Ceilings. By prior notice to 
OPIC effective as of the next due date for premiums (Sec. 1.06), the Investor 
may increase or decrease the Active Amount for any coverage for the remainder 
of the contract term, subject to the following limitations:

        (a) Active Amount shall not exceed the Coverage Ceiling (Sec. 1.06);

        (b) The Coverage Ceiling shall be reduced automatically by compensation
        paid by OPIC; Active Amount shall also be reduced for the remainder of
        the annual election period to which the claim relates (Sec. 3.02, Sec.
        5.04(a), or Sec. 7.02(a));

        (c) For inconvertibility, expropriation, and political violence
        coverages, Active Amount shall not be less that the lesser of book value
        (Sec. 5.01) or the Coverage Ceiling for that coverage.

8.07    Termination. The Investor may terminate this contract effective as of 
any premium due date unless the premium is already paid. However, termination 
shall not affect any rights or obligations of either party relating to prior
periods.

8.08    Legal and Miscellaneous. This contract shall be governed by the law of 
the District of Columbia, its conflict of law rules excepted. This contract 
constitutes the complete agreement between the parties, superseding any prior 
understandings. This contract may be modified, or its terms waived, only in 
writing.

8.09    Notices. Notices must be in writing and shall be effective when 
received. Notices may be given to the Investor at the address on the title page 
(unless changed in writing), and to OPIC at

        Overseas Private Investment Corporation
        Washington, D.C. 20527
          Attention: Vice-President, Insurance.

8.10    Refund of Premiums. Upon timely written request, OPIC will refund 
premiums pro rata if

        (a) excess coverage is elected while a valid claim for compensation is
        pending; or

        (b) the Investor becomes ineligible for coverage or ceases to hold all
        or a portion of the insured investment, in which case any refund shall
        be calculated from the later of (i) the date the Investor becomes
        ineligible or ceases to hold the insured investment, or (ii) the date
        OPIC receives such written request.


<PAGE>   20
                                      IX-1

                        Article IX - Investor's Duties.


9.01    Duties.

        1.      Representations and Project Execution. The Investor understands 
that OPIC has issued this contract based on statutory policy goals (22 U.S.C. 
Sec. 2191) as well as underwriting considerations. All statements made by the 
Investor to OPIC in connection with this contract are true and complete, and 
the investment and the project shall be carried out as described.

        2.      Ownership and Eligibility. The Investor shall at all times 
remain the beneficial owner of the insured investment and shall remain eligible 
for OPIC insurance as

        (a) a citizen of the United States; or

        (b) a corporation or other association created under the laws of the
        United States, its states or territories, or which more than 50% of both
        the total interest and of each class of shares is beneficially owned by
        citizens of the United States; or

        (c) an entity created under foreign law in which a 95% interest is owned
        by entities eligible under (a) or (b).

        3.      Self-Insurance. The Investor shall continue to bear the risk of 
loss of at least 10% of the book value of its interest in the foreign 
enterprise.

        4.      Assignment. The Investor shall not assign this contract, or any 
of its rights, without OPIC's written consent, which shall not be withheld 
unreasonably.

        5.      Premiums. The Investor shall pay the premiums for this contract 
in accordance with Article I. In the event that premiums are not paid when due, 
the Investor shall be in default but may cure this default within sixty days by 
paying the premiums plus interest at a rate of 12% per annum.

        6.      Accounting Records.

        (a) The Investor shall maintain in the United States true and complete
        copies of the records, books or account and current financial statements
        for the foreign enterprise necessary to compute and substantiate
        compensation, including

          (1) records documenting the investment;

          (2) annual balance sheets;

<PAGE>   21

                                     IX-2


             (3)  annual statements of income, retained earnings, cash flow
             and related footnotes.

        (b)  Accounting records shall be maintained and financial statements
        prepared in United States dollars in accordance with principles of
        accounting generally accepted in the United States (including
        principles of accounting generally accepted in the United States
        (including principles of currency translation), as modified by the
        special accounting rules (Section 5.03.3 and Section 7.04(b)(3)).

        (c)  Subject to the obligations of the Investor under Section 9.01.6,
        the Investor or the foreign enterprise shall retain all accounting
        records until

             (1)  the deadline for filing an application for compensation has
             expired (Section 8.01); or

             (2)  final action has been taken on an application for
             compensation (including arbitration and judicial appeals).

        However, if compensation has been paid, the accounting records shall be
        retained for three years after the Investor receives the compensation.

        7.      Reports and Access to Information. In order that OPIC may
perform its statutory duties, including settling claims and reporting to the
Congress (22 U.S.C. Section 2200a), the Investor shall furnish OPIC with such
information as OPIC may reasonably request, including

        (a)  making available for interviews any persons subject to the
        Investor's practical control (including employees of the project and
        independent accountants);

        (b)  making available for inspection and copying all documents and
        accounting records relating to the project (including workpapers of
        independent accountants if available);

        (c)  permitting OPIC to inspect the project; and

        (d)  furnishing available information concerning the effects of the
        project on the economy of the United States, the environment, and the
        economic and social development of the country in which the project
        is located.

        The Investor's duties under this paragraph shall continue for the
periods specified for retention of accounting records (Section 9.01.6(c)).

        8.      Compulsory Notice. The Investor shall notify OPIC promptly if
it has reason to believe that the Investor or the foreign enterprise will not
be able to convert or transfer local currency during the waiting period (Article
II). The Investor shall notify OPIC promptly of any acts or threats to act in a
manner which may come within the scope of the expropriation or political
violence coverage (Articles IV and VI) and shall keep OPIC informed as to all
relevant developments.


<PAGE>   22

                                     IX-3


        9.      Preservation, Transfer and Continuing Cooperation. At OPIC's
request, the Investor shall promptly assign rights with respect to the
investment, as required by Section 8.02. Prior to the assignment of rights
required by Section 8.02, the Investor shall, in consultation with OPIC, take
all reasonable measures to preserve property, to pursue available
administrative and judicial remedies, and to negotiate in good faith with the
governing authority of the country in which the project is located and other
potential sources of compensation. After a transfer of rights or delivery of
local currency, in exchange for reimbursement of reasonable out-of-pocket
expenses, the Investor shall take all actions reasonably requested by OPIC to
assist OPIC in preserving the property and rights transferred to OPIC and in
prosecuting related claims.

        10.     Other Agreements. The Investor shall not enter into any
agreement with any foreign governing authority with respect to compensation for
ay acts within the scope of coverage (Article II, IV or VI) without OPIC's
prior written consent.


9.02    Default.  Material breach or misrepresentation by the Investor shall
constitute default, and OPIC may:

        (a)  refuse to make payments to the Investor.

        (b)  recover payments made; and

        (c)  terminate this contract effective as of the date of the breach by
        giving notice to the Investor.


9.03    Non-Waiver. Neither OPIC's failure to invoke its rights, nor its
acceptance of premiums, shall constitute waiver of any of its rights, even
though OPIC knows of the Investor's breach.


9.04    Cure. OPIC may permit the Investor to cure a breach in a manner 
satisfactory to OPIC, but shall have no obligation to allow breaches to 
be cured.
<PAGE>   23

                                     X-1


                            ARTICLE X - AMENDMENTS


The following amendments are hereby incorporated as part of this Contract of
Insurance No. E136:

10.01   The issuance by OPIC of this Contract of Insurance shall not constitute
an acknowledgment or assurance by OPIC of the validity of any agreement or
arrangement constituting or relating to the investment under the laws of
Russia.

10.02   Anything in the contract to the contrary notwithstanding, the book
value of the portion of the issued investment described in Section
1.01.1(a)(ii) and Section 1.01.1(d) shall be the lesser of (a) the aggregate
unpaid balance of the amount thereof actually received by the recorded as a
liability on the books of the foreign enterprise, as evidenced by promissory
notes or other documentation satisfactory to OPIC in the reasonable exercise of
its discretion, together with unpaid interest accrued thereon, (the
"Liability") reduced by the amount of any provision for uncollectibility of the
Liability on the books of the Investor, and (b) the amount of the Liability
that would be recoverable by the Investor as a liability of the foreign
enterprise, in accordance with the priority of the Liability among the
creditors of the foreign enterprise, if the assets of the foreign enterprise
were liquidated at book value on the relevant date.

10.03   Section 1.05, "Term", is amended in its entirety to read as follows:

        "1.05   Term.

                This contract shall enter into force on the date it has been
        signed by OPIC and the Investor and shall terminate as follows:

                (a)  20 years afterward unless terminated earlier (Section
                8.07; Section 9.02), with respect to the individual investment
                component identified in subparagraph 1.01.1(a) above and the
                corresponding shares of common stock identified in subparagraph
                1.01.1(c) above; and

                (b)  April 30, 1996, with respect to the individual investment
                component identified in subparagraph 1.01.1(b) above and the
                corresponding participation interest identified in subparagraph
                1.0.1(d) above unless otherwise agreed in writing by OPIC
                prior to such date."

10.04   Notwithstanding any other provision of this contract to the contrary,
the Investor shall not file applications for compensation under, and OPIC shall
have no liability for claims under, inconvertibility coverage (Articles II and
III) in excess of $450,000 in any 91-day period.

10.05   Subsection 4.01(b) is amended by deleting the words "or material breach
of local law".

10.06   Notwithstanding any other provision of this contract to the contrary,
any amount of value-added tax under the laws of the Russian Federation imposed
on the loan shall be deducted from compensation paid by OPIC shall have no
liability for such value-added tax.

<PAGE>   24

                                      X-2

10.07   Section 9.01.  "Duties", is amended by adding the following new 
subsections 11, 12, 13 and 14 at the end thereof:

        "11. Legality.  The Investor has implemented and shall implement the
        investment and the project in compliance in all material respects with
        all applicable laws, decrees, regulations, administrative determinations
        and procedures of the foreign governing authority.

        "12.  Workers Rights. The Investor agrees not to take actions to prevent
        employees of the foreign enterprise from lawfully exercising their right
        of free association and their right to organize and bargain
        collectively. The Investor further agrees to observe applicable laws
        relating to a minimum age for employment of children, acceptable
        conditions of work with respect to minimum wages, hours of work, and
        occupational health and safety, and not to use forced labor. The
        Investor agrees not to interfere with or coerce an employee of the
        foreign enterprise on the basis of trade union activities or membership.
        The Investor further agrees not to take any action on the basis of such
        activities or membership which may result in the termination,
        suspension, demotion, or transfer of said employee by the foreign
        enterprise, or by an officer, agent or other representative thereof. The
        Investor is not responsible under this paragraph for the actions of a
        foreign government.

        "13.  Environmental Covenants.  The Investor covenants that with respect
        to the project.

              (a)  The foreign enterprise will comply with in all material
              respects, and shall conduct its business, operations, assets,
              equipment, property, leaseholds, and other facilities materially
              in compliance with, the provisions of all applicable
              environmental, health and safety laws, codes and ordinances, and
              all rules and regulations promulgated thereunder. The foreign
              enterprise shall maintain all material required permits, licenses,
              certificates and approvals relating to: (i) air emissions, (ii)
              discharges to surface water or ground water, (iii) noise
              emissions, (iv) solid or liquid waste disposal, (v) the use,
              generation, storage, transportation or disposal of toxic or
              hazardous substances or wastes, or (vi) other environmental,
              health or safety matters, to the extent applicable.

              (b)  The foreign enterprise will annually obtain a logging ticket
              and duly comply with the provisions of the environmental
              guidelines set forth in Annex A hereto (the "environmental
              guidelines"). The foreign enterprise shall appoint an independent
              environmental advisory committee (the "oversight group"), to be
              composed of three members chosen by the foreign enterprise, with
              OPIC's prior approval (such approval not to be unreasonably
              withheld) and one representative of the foreign enterprise. The
              oversight group will (i) review the foreign enterprise's
              harvesting plan submitted to the Khabarovsk Kray Forest Natural
              Resources Authority for approval (the "harvesting plan"), and (ii)
              annually monitor the foreign enterprise's compliance with the
              harvesting plan and Annex A.
<PAGE>   25
                "14.  Modifications.  The Investor shall not terminate, amend or
                grant any waiver of, or assign any of the respective duties or
                obligations under, the Participation Agreement dated June 9,
                1995, between State Street Bank and the Investor (other than
                amendments or waivers, either to correct manifest error or which
                are of a formal, minor, or technical nature and do not change
                materially any party's rights or obligations) without OPIC's
                prior written consent, which consent shall not be withheld
                unreasonably. The Investor shall not permit State Street Bank
                and Trust Company to terminate, amend or grant any waiver of, or
                assign any of the respective duties or obligations under, the
                Master Short-Term Credit Agreement dated June 9, 1995, between
                State Street Bank and Trust Company and the foreign enterprise
                (other than amendments or waivers, either to correct manifest
                error or which are of a formal, minor, or technical nature and
                do not change materially any party's rights or obligations)
                without OPIC's prior written consent, which consent shall not be
                withheld unreasonably."

10.08  Notwithstanding any other provision of this contract, neither the 
non-renewal of the licenses and land leases granted by the foreign governing 
authority related to the project nor cancellation of the licenses and leases by 
the foreign governing authority due to non-fulfillment by the Investor of its 
obligations under the licenses and leases shall constitute compensable acts 
under Articles IV and V of this contract.

THE PIONEER GROUP, INC.

By: /s/ JOHN F. LAWLOR                     Date: 9/29/95
    ----------------------------                 ----------------------------
                                                 Effective September 29, 1995


                         John F. Lawlor, Vice-President
-----------------------------------------------------------------------------
Print Name and Title


OVERSEAS PRIVATE INVESTMENT CORPORATION

By: /s/ DANIEL W. RIORDAN                  Date: 10/2/95
    ----------------------------                 ----------------------------
                                                 Effective September 29, 1995


        Daniel W. Riordan, 
        Vice President for Insurance
--------------------------------------------
Print Name and Title

<PAGE>   26
                      ANNEX A -- ENVIRONMENTAL GUIDELINES

The foreign enterprise will conduct its operations in accordance with the 
"Environmental Impact Assessment of the Siziman Timber Project" prepared by 
Jaakko Poyry Consulting Oy dated September 15, 1994 and revised on November 14, 
1994, and attached hereto as Annex B, as amended by this Annex A. The foreign 
enterprise shall do so in compliance in all material respects with all 
applicable laws, decrees, regulations, administrative determinations and 
procedures of the foreign governing authority.

-  Harvesting of timber in the "coastal protection forest" will use selective 
logging techniques only. No clearcutting will take place in the coastal 
protection forest.

-  In the "Siziman Production Forest," clearcutting will be conducted in a 
manner consistent with the June, 1992 U.S.F.S. Policy Guidelines, unless 
application of the U.S.F.S. Policy Guidelines (attached hereto as Annex C) 
clearly support a different approach.

-  Consistent with effective fire prevention policy and Russian law, the 
foreign enterprise will seek to leave as much slash as possible in harvested 
areas, so as to maximize conditions for regeneration and soil protection.

-  No clearcutting of timber or road building will take place on slopes greater
than 17 degrees. Any selective harvesting of timber on slopes of between 17 and
27 degrees will make use of cables rather than heavy machinery wherever
feasible.

-  Any exceptions to the clearcutting or slope standards noted above will be 
reviewed by a committee of experts appointed jointly by OPIC, the Investor, and 
Starma-Holding, a shareholder in Forest-Starma (together, the "sponsors").

-  Natural reforestation will be favored wherever feasible and will be
supplemented by artificial reforestation as necessary to attain maximum
regeneration of harvested areas in a manner approximating natural forest
conditions.

-  The sponsors will fund a local study of possible internationally protected 
species' habitats in the Project area and will take effective measures to 
protect such habitats.

-  As part of its monitoring requirements, OPIC will have the right to review
timber management plans for consistency with the above representations, in
advance of their submission to regional or federal authorities for final
approval.