<PAGE>   1
                                                                 EXHIBIT 10.11



                                US$149,100,000


                             FINANCING AGREEMENT


                        DATED AS OF OCTOBER 25, 1999,


                           AS AMENDED JUNE 23, 2000


                 AND AMENDED AND RESTATED AS OF JUNE 11, 2001


                                 BY AND AMONG


                                 IMPSAT S.A.


                                 AS BORROWER,


                           NORTEL NETWORKS LIMITED,


                           AS ADMINISTRATIVE AGENT,


                            BANKERS TRUST COMPANY,


                             AS COLLATERAL AGENT


                                     AND


                  THE LENDERS PARTY HERETO FROM TIME TO TIME


                                  AS LENDERS




<PAGE>   2
                             FINANCING AGREEMENT



THIS FINANCING AGREEMENT, dated as of October 25, 1999, as amended June 23,
2000 and amended and restated as of June 11, 2001 (this "AGREEMENT"), by and
among IMPSAT S.A., a corporation (sociedad anonima) organized pursuant to the
laws of the Republic of Argentina (the "BORROWER"); NORTEL NETWORKS LIMITED
(formerly known as Nortel Networks Corporation) ("NORTEL"), a corporation
organized pursuant to the laws of the Province of Ontario, Canada, as
administrative agent (the "ADMINISTRATIVE AGENT"); BANKERS TRUST COMPANY, a
New York banking corporation, as collateral agent (the "COLLATERAL AGENT");
and the several lenders party hereto from time to time, as lenders (together
with Nortel, the "LENDERS").


                             W I T N E S S E T H:


        WHEREAS, (i) the Borrower, Nortel Networks de Argentina S.A. ("NORTEL
ARGENTINA") and Nortel have entered into a Turnkey Project Agreement dated as
of September 6, 1999 (as amended from time to time, the "TURNKEY CONTRACT")
and (ii) the Borrower, Nortel Argentina, Nortel and certain Affiliates of
Nortel and the Borrower have entered into a Supply Contract dated as of
November 5, 1999 (as amended from time to time, the "SUPPLY AGREEMENT") (the
Turnkey Contract and the Supply Agreement, collectively, the "NORTEL
CONTRACTS") pursuant to which the Borrower will purchase telecommunications
equipment and/or services manufactured or supplied by Nortel or its Affiliates
related to the design, procurement, installation, commissioning, and operation
of a broadband telecommunications network in Argentina (the "PROJECT");

        WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower under the terms and conditions hereof a credit facility in a
principal amount not to exceed one hundred forty nine million one hundred
thousand Dollars (US$149,100,000) to finance the purchase of products and
services under the Turnkey Contract and the Supply Agreement;

        WHEREAS, the Borrower is a Subsidiary of IMPSAT Fiber Networks, Inc.
(formerly known as IMPSAT Corporation), a corporation organized pursuant to
the laws of the State of Delaware, U.S.A. ("IMPSAT");

        WHEREAS, as a material inducement to the Lenders to extend the credit
under this Agreement, IMPSAT has agreed to guarantee the obligations of the
Borrower to the Lenders under this Agreement and to make certain agreed equity
contributions to the Borrower;

        WHEREAS, Nortel has entered into a financing agreement dated as of
October 25, 1999, as amended and restated from time to time (the "NORTEL
BRAZIL FINANCING AGREEMENT") with the Borrower's Affiliate, IMPSAT
Comunicacoes Ltda., a company organized pursuant to the laws of Brazil
("IMPSAT BRAZIL"), to finance the purchase of products and services under the
Supply





<PAGE>   3



Agreement and under the Turnkey Project Agreement dated September 6, 1999
among IMPSAT Brazil, Nortel and Northern Telecom do Brasil Comercio e Servicos
Ltda. ("NORTEL BRAZIL") (such Turnkey Project Agreement, as amended from time
to time, the "BRAZIL TURNKEY Contract") and together with the Supply
Agreement, the "BRAZIL NORTEL CONTRACTS");

        WHEREAS, the Lenders are willing to provide the credit facility
requested by the Borrower upon the terms and subject to the conditions
hereinafter set forth;

        NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged, the Parties
agree as follows:


                           SECTION 1. DEFINITIONS.


SECTION 1.1    DEFINED TERMS.

        The following capitalized terms shall have the meanings set forth in
this Section 1.1 when used in this Agreement, including its preamble and
recitals:

        "ADDITIONS TO DEFERRED REVENUES" for any period means the additions to
Deferred Revenues during such period.

        "ADJUSTED EBITDA" for any period means the sum of the Borrower's (i)
Annualized EBITDA for such period, plus (ii) Additions to Deferred Revenues
for such period, minus (iii) Revenue Recognition from IRUs and Long Term
Leases for such period.

        "AFFILIATE" means, as to any Person, any other Person Controlled by,
Controlling, or under common Control with, such Person.

        "AGENTS" means the Administrative Agent and the Collateral Agent.

        "ALTERNATIVE PREPAYMENT QUOTIENT" means, as of any date of
determination, the quotient Q resulting from the following calculation:

                             Q  =        __       A ____
                                   -------------------------
                                   A + B + C + D + E + F + G
where
            A is the lesser of (i) one hundred forty nine million one hundred
            thousand Dollars (US$149,100,000) and (ii) the sum of all
            outstanding Loans and the Commitment Amount,

            B is the lesser of (i) one hundred forty eight million three
            hundred thousand Dollars (US$148,300,000) and (ii) the sum of all
            outstanding Loans and the Commitment Amount (as those terms are
            defined in the Nortel Brazil Financing Agreement),



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<PAGE>   4
            C is the lesser of (i) twenty seven million Dollars
            (US$27,000,000) and (ii) the sum of all outstanding loans and the
            commitment amount under the Lucent Argentina Financing Agreements,

            D is the lesser of (i) twenty two million Dollars (US$22,000,000)
            and (ii) the sum of all outstanding loans and the commitment
            amount under the Lucent Brazil Financing Agreement,

            E is the lesser of (i) five million Dollars (US$5,000,000) and
            (ii) the sum of all outstanding loans and the commitment amount
            under the Lucent Colombia Financing Agreement,

            F is the lesser of (i) three million Dollars (US$3,000,000) and
            (ii) the sum of all outstanding loans and the commitment amount
            under the Lucent U.S. Financing Agreement, and

            G is the lesser of (i) four million Dollars (US$4,000,000) and
            (ii) the sum of all outstanding loans and the commitment amount
            under the Lucent Venezuela Financing Agreement,

in each case, calculated immediately prior to the Prepayment for which Q is
being determined.

        "ANNUALIZED EBITDA" (i) for any period of four (4) consecutive
calendar quarters ending on or prior to June 30, 2001 means the Borrower's
EBITDA for such period and (ii) for any period of four (4) consecutive
calendar quarters ending after June 30, 2001, the Borrower's EBITDA for the
most recently ended two (2) consecutive calendar quarters of such period,
multiplied by two (2).

        "APPLICABLE LAW" means any statute, law, regulation, ordinance, rule,
judgment, writ, rule of common law, common law duty, code, order, decree,
governmental approval, administrative order, directed duty, request, license,
authorization, permit, approval, concession, grant, franchise, directive,
guideline, policy, requirement, or other governmental restriction, or any
similar form of decision of, determination by, agreement with, or requirements
of (or any interpretation or administration of any of the foregoing by) any
Governmental Authority, whether in effect as of the date hereof or thereafter
(including any Environmental Laws).

        "APPLICABLE PERMITS" means the Applicable Permits as defined in the
Turnkey Contract.

        "ARGENTINA" means the Republic of Argentina.

        "ARGENTINE GAAP" means generally accepted accounting principles in
Argentina as established from time to time by the Consejo Profesional de
Ciencias Economicas.



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<PAGE>   5


        "ASSIGNMENT AND ASSUMPTION AGREEMENT" means an assignment and
assumption agreement between a Lender and an Eligible Assignee, and accepted
by the Administrative Agent, substantially in the form of Exhibit A.

        "AUTHORIZED OFFICER" means, with respect to any Person, each of the
following officers of such Person: (a) the Chief Executive Officer; (b) the
Chief Operating Officer; or (c) the Chief Financial Officer.

        "BORROWER BUSINESS PLAN" means the 10-year consolidated Business Plan
of the Borrower dated as of January 25, 2001, and not including any subsequent
amendments, supplements or replacements thereof.

        "BORROWER CAPITAL MARKETS TRANSACTION" means any public offering or
private placement of debt securities of the Borrower or an Affiliate thereof
other than IMPSAT or IMPSAT Brazil; provided, that any such offering of debt
securities of an Affiliate of the Borrower shall be deemed to be a Borrower
Capital Markets Transaction only in the event that the Net Proceeds thereof
are distributed to or at the order of the Borrower for use by the Borrower or
its Subsidiaries.


        "BORROWER'S ADJUSTED EXCESS CASH FLOW" means, for any fiscal year of
the Borrower, fifty percent (50%) of the Borrower's Excess Cash Flow, if any,
for such fiscal year, minus the aggregate principal amount of the Loans
prepaid during such fiscal year pursuant to Sections 3.2(a)(5), 3.2(a)(6) or
3.2(b).

        "BORROWER'S NET DEBT" means, on any date, (a) the Borrower's Total
Debt outstanding on such date; minus (b) the amount of the Borrower's Quasi
Equity outstanding on such date; minus (c) the aggregate amount of cash and
Temporary Cash Investments of the Borrower and its Subsidiaries that are
subject to a Lien in favor of the Lenders pursuant to the Security Documents.

        "BRAZIL" means the Federative Republic of Brazil.

        "BRAZIL AGREEMENTS" means, collectively, the Financing Documents as
defined in the Nortel Brazil Financing Agreement and the Brazil Nortel
Contracts.

        "BRAZIL EQUIPMENT PLEDGE AGREEMENT" means the Equipment Pledge
Agreement as defined in the Nortel Brazil Financing Agreement.

        "BRAZIL GUARANTEE" means the IMPSAT Guarantee as defined in the Nortel
Brazil Financing Agreement.

        "BRAZIL MORTGAGE DEEDS" means the Mortgage Deeds as defined in the
Nortel Brazil Financing Agreement.



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<PAGE>   6


        "BRAZIL PLEDGED SHAREHOLDER NOTE" means a Pledged Shareholder Note as
defined in the Nortel Brazil Financing Agreement.

        "BRITISH TELECOM" means British Telecommunications plc, a corporation
organized pursuant to the laws of the United Kingdom.

        "BUSINESS DAY" means a day other than a Saturday, Sunday, or any other
day on which commercial banks in New York City, United States of America, and
the City of Buenos Aires, Argentina are authorized or required by Applicable
Law to close.

        "BUSINESS PLANS" means, collectively, the Borrower Business Plan and
the IMPSAT Business Plan.

        "CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
Applicable Law, whether or not having the force of law, in each case of
general applicability regarding capital adequacy of banks and branches thereof
or corporations controlling banks.

        "CAPITAL EXPENDITURES" means, with respect to any Person for any
period, the additions to property, plant and equipment and other capital
expenditures of such Person and its Subsidiaries for such period, as the same
are or would be set forth in a consolidated statement of cash flows of such
Person and its Subsidiaries for such period.

        "CAPITAL STOCK" means, with respect to any Person, all shares,
interests, rights to purchase, warrants, options, or other equivalents of or
interests in the common or preferred equity of such Person.

        "CENTRAL BANK" means the Banco Central de la Republica Argentina.

        "CHANGE OF CONTROL" means an event or circumstance as a result of
which: (i) a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) becomes the ultimate "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of Voting Stock representing
more than thirty percent (30%) of the total voting power of the Voting Stock
of IMPSAT on a fully diluted basis and such ownership represents a greater
percentage of the total voting power of the Voting Stock of IMPSAT, on a fully
diluted basis, than is held by the Existing Stockholders on such date; (ii)
individuals who on the date hereof constitute the board of directors of IMPSAT
(together with any new directors whose election by the board of directors or
whose nomination for election by IMPSAT's stockholders was approved by a vote
of at least two-thirds of the members of the board of directors of IMPSAT then
in office who either were members of the board of directors of IMPSAT on the
date hereof or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of the
board of directors of IMPSAT then in office; (iii) IMPSAT is the "beneficial
owner" of less than fifty percent (50%) of the Voting Stock of the Borrower;
or (iv) any of the Indebtedness outstanding under any of the IMPSAT Indentures
is redeemed by IMPSAT prior to its stated maturity date as a result of a
"Change of Control" (as such term is





                                     -5-
<PAGE>   7




defined in the respective IMPSAT Indenture) in accordance with the terms of
the respective IMPSAT Indenture.

         "CHARTER DOCUMENTS" means, with respect to any Person (other than an
individual), its founding act, charter, certificate of incorporation, by-laws,
memorandum and articles of association, estatutos sociales and other similar
documents regarding its organization or constitution.

        "CLOSING DATE" means November 5, 1999 or such other date as the
Parties may agree.

        "COMMITMENT" means, with respect to each Lender, such Lender's
obligation to lend its proportional share of the Commitment Amount, subject to
the terms and conditions hereof.

        "COMMITMENT AMOUNT" means the sum of the Tranche A Commitment Amount,
the Tranche B Commitment Amount and the Tranche C Commitment Amount.

        "COMMITMENT PERIOD" means the period commencing on the date hereof and
ending on the Commitment Termination Date.

        "COMMITMENT TERMINATION DATE" means the earliest of (a) the date six
(6) months following the second (2nd) anniversary of the date hereof; (b) the
first date on which the sum of all Disbursements equals the Commitment Amount;
and (c) the date of termination of the Commitment pursuant to Section 10.2(a).

        "CONSOLIDATION DATE" means the date six (6) months after the date of
this Agreement (being the same day of the calendar month) and each successive
date that is six (6) calendar months thereafter (being the same day of the
calendar month), provided, that if such date is not a Business Day, the next
succeeding Business Day unless it falls in the next calendar month, in which
case the Consolidation Date shall be the Business Day immediately preceding
such date.

        "CONTROL" means: (a) the beneficial ownership of more than fifty
percent (50%) of the total Voting Stock then outstanding of a Person; or (b)
even if less than such percentage of outstanding Voting Stock is owned, the
power to direct the management and policies of such Person, directly or
through one or more intermediaries, whether through the ownership of voting
securities, by contract, or otherwise.

        "DEBT SERVICE" means, with respect to any Person for any period, the
sum of (i) the total Interest Expense of such Person and its Subsidiaries
during such period, plus (ii) all amounts of principal and premium, if any,
paid or required to be paid during such period in respect of Total Debt
(excluding Indebtedness in respect of guarantees except to the extent paid by
such Person during such period) of such Person and its Subsidiaries (except
principal paid in respect of Indebtedness contemplated by clauses (b) and (c)
of the definition of "Permitted Indebtedness" where the funds to pay such
principal are provided by a contribution to Paid in Capital and the payment of
principal is made within ten (10) days after receipt of such contribution);
provided, however, that amounts of principal which are paid under revolving
credit or similar facilities and then reborrowed during the same calendar
quarter shall be counted without duplication.





                                     -6-
<PAGE>   8

        "DEFAULT" means any event, occurrence, factual or legal condition
which, if continued uncured or unchanged would, with the passage of time or
the giving of notice or both, become or constitute an Event of Default.

        "DEFAULT INTEREST RATE" means an interest rate per annum equal to (i)
the interest rate then in effect under Section 3.3(a), plus (ii) two hundred
fifty (250) basis points.

        "DEFERRED REVENUES" as of any date of determination means the deferred
Revenues attributable to IRUs and Long Term Leases as of such date.

        "DISBURSEMENT" means any disbursement of Loan proceeds by the Lenders
hereunder.

        "DISBURSEMENT DATE" means the date on which a Disbursement is made in
accordance with Section 2.3.

        "DISBURSEMENT REQUEST" means a requisition for a Disbursement
substantially in the form of Exhibit B, duly completed and signed by an
Authorized Officer of the Borrower.

        "DISPOSAL" means, with respect to any property of the Borrower or any
Subsidiary thereof, any direct or indirect sale, conveyance, transfer,
alienation, lease, IRU, loan, sale-and-repurchase, sale-leaseback or other
transaction or arrangement as a result of which the Borrower or Subsidiary
party to such transaction or arrangement relinquishes all or substantially all
marketable rights in and to such property; and the verb "DISPOSE OF" has a
corresponding meaning.

        "DOLLARS AND US$" means the lawful currency of the United States of
America.

        "EBITDA" means, with respect to any Person for any period, the Net
Income of such Person and its Subsidiaries for such period after (a) restoring
thereto amounts deducted for, without duplication, (1) Interest Expense for
such period, (2) taxes based upon net income, (3) depreciation and
amortization, and (4) other non-cash charges and (b) deducting therefrom
non-cash income or losses to the extent included in determining Net Income.

        "ELIGIBLE ASSIGNEES" means, (a) a Lender; (b) a commercial bank or
savings and loan association or savings bank organized under the laws of the
United States of America (or any State thereof) or Canada (or any Province
thereof), and having total assets in excess of one hundred million Dollars
(US$100,000,000); (c) a commercial bank organized under the laws of any other
country that is a member of the Basel Accord and the Organization of Economic
Cooperation and Development or has concluded special lending arrangements with
the International Monetary Fund associated with its general arrangements to
borrow, or a political subdivision of any such country, and having total
assets in excess of one hundred million Dollars (US$100,000,000), so long as
such bank is acting through a branch or agency located in the country in which
it is organized or another country that is described in this clause (c); (d) a
finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is
principally engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and having total




                                     -7-
<PAGE>   9



assets in excess of one hundred million Dollars (US$100,000,000); (e) Sirti;
and (f) any other Person designated by the Administrative Agent and approved
by the Borrower (such approval not to be unreasonably withheld).

        "ENVIRONMENTAL LAWS" means any and all applicable statutes, laws,
judicial decisions, regulations, ordinances, rules, judgments, orders,
decrees, codes, injunctions, permits, concessions, grants, franchises,
licenses, agreements, and other governmental restrictions relating to the
environment or the effect of the environment on human health or to emissions,
discharges or release of pollutants, contaminants, 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, Hazardous Substances, or
wastes or the clean-up or other remediation thereof.

        "ENVIRONMENTAL LIABILITIES" means all liabilities in connection with,
or relating to, the business, assets, presently or previously owned or leased
property, activities (including, without limitation, off-site disposal) or
operations of the Borrower or any of its Subsidiaries, whether vested or
unvested, contingent or fixed, actual or potential, known or unknown, which
arise under or relate to matters covered by the Environmental Laws.

        "EQUIPMENT" has the meaning ascribed to such term in the Nortel
Contracts.

        "EQUIPMENT PLEDGE AGREEMENT" means (i) the contract of registered
pledge (contrato de prenda con registro) dated September 4, 2000, as amended
January 2, 2001 and from time to time thereafter, among the Borrower, Deutsche
Bank, S.A., as subagent of the Collateral Agent, Nortel, Sirti and Lucent
Argentina (the "EXISTING EQUIPMENT PLEDGE AGREEMENT"); and (ii) any other
contract of registered pledge (contrato de prenda con registro), substantially
in the form of the Existing Equipment Pledge Agreement, among the Borrower,
the Collateral Agent (or a subagent thereof), the Lenders and the lenders
under either or both of the Lucent Argentina Financing Agreements, pursuant to
which the Borrower shall pledge Equipment to the Collateral Agent for the
benefit of the Lenders, as security for the Loans, and the lenders under
either or both of the Lucent Argentina Financing Agreements, as security for
the loans thereunder.

        "EQUITY" means, with respect to any Person at any date, the
consolidated stockholders' equity of such Person and its Subsidiaries as of
such date, determined in accordance with U.S. GAAP.

        "EVENT OF SOVEREIGN RISK" means (a) failure by the Central Bank to
exchange or to approve or permit the exchange of Pesos for Dollars, the
unavailability of Dollars in any legal exchange market in Argentina in
accordance with normal commercial practice, or any other action of any
Argentine Governmental Authority that has the effect of restricting such
exchange or the transfer of Pesos for Dollars outside Argentina and (b) a
declaration of a banking moratorium or any suspension of payments by banks in
Argentina, or the imposition by any Argentine Governmental Authority of any
moratorium on the required rescheduling of or required approval of the payment
of any indebtedness in Argentina.


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<PAGE>   10


        "EXCESS CASH FLOW" means, with respect to any Person, for any period:
(a) such Person's EBITDA for such period; plus (b) the Net Proceeds of any
Long Term Lease received by such Person or any of its Subsidiaries during such
period (excluding the portion, if any, of such Net Proceeds included in EBITDA
for such period); minus (c) the sum of the following items, determined for
such Person and its Subsidiaries on a consolidated basis: (i) Debt Service for
such period, (ii) Capital Expenditures for such period (but by the Borrower
only to the extent permitted by Section 8.3(f) and by IMPSAT only to the
extent contemplated in the IMPSAT Business Plan), (iii) the net increase (or
minus any net decrease) in working capital, excluding cash, from the opening
of business on the first day, to the close of business on the last day, of
such period, and (iv) taxes based upon net income payable with respect to such
period; and minus (d) the portion, if any, included in EBITDA for such period
of the Net Proceeds of any Long Term Lease received by such Person or any of
its Subsidiaries during any prior period; provided, that after a Prepayment is
made pursuant to Section 3.2(a)(5), Section 3.2(a)(6) or Section 13.4, and
provided that there shall not then exist a Default or an Event of Default, the
Net Proceeds of Long Term Leases shall not be included in the calculation of
Excess Cash Flow for purposes of Prepayments under Sections 3.2(a)(4),
3.2(a)(5) or 3.2(a)(6).

        "EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934, as
amended.

        "EXISTING STOCKHOLDERS" means (i) the Individual Stockholders, (ii)
the estate or any guardian, custodian or other legal representative of any
Individual Stockholder, (iii) any foundation or similar organization organized
under Applicable Law which affords voting Control to such Individual
Stockholder, (iv) any trust for the benefit of any Individual Stockholder or
his family members which affords voting Control to such Individual
Stockholder, (v) British Telecom, and (vi) any Person in which all of the
equity interests are owned directly, or indirectly, by any of the Persons
named in clauses (i) through (v).

        "EXPROPRIATION EVENT" means: (i) any taking by condemnation,
nationalization, seizure, expropriation or other appropriation by any
Governmental Authority of all or any material portion of the Collateral, (ii)
any assumption by any Governmental Authority of control of all or any material
portion of the Collateral or the business operations of the Borrower or any of
its Subsidiaries or any of any such Person's share capital, (iii) any taking
of any action by a Governmental Authority which results in the involuntary
dissolution or disestablishment of the Borrower or any of its Subsidiaries, or
(iv) any taking of any action by any Governmental Authority that prevents the
Borrower and its Subsidiaries, taken as a whole, from carrying on their
business or operations or a material part thereof.

        "FACILITY" means the multi-drawdown, non-revolving credit facility in
an aggregate principal amount of up to the Commitment Amount provided by the
Lenders to the Borrower under this Agreement.

        "FINANCING DOCUMENTS" means this Agreement, the Notes, all Assignment
and Assumption Agreements, the Security Documents, the IMPSAT Guarantee, the
Pledged Shareholder Notes, the Intercreditor Agreement, the Lucent Argentina
Financing Agreements






                                     -9-
<PAGE>   11


and any other instruments, documents and agreements executed by or on behalf
of the Borrower or for the benefit of the Lenders in connection with the
Facility.

        "FORCE MAJEURE" means, with respect to any Person, any cause which is
beyond the reasonable control of such Person, including, without limitation,
the elements, riots, civil disturbances, wars, states of belligerency or acts
of the public enemy, labor disputes, or the laws, regulations, acts or failure
to act of any Governmental Authority.

        "GLOBAL CROSSING IRU" means the IRU granted by the Borrower to South
American Crossing Ltd. in respect of one duct on the Network between Buenos
Aires and Mendoza in accordance with Article 2 of the TAC Turnkey Construction
and IRU Agreement among the Borrower, IMPSAT S.A. (Chile) and South American
Crossing Ltd. dated September 22, 1999.

        "GOVERNMENTAL APPROVALS" means any authorization, consent, license,
approval, grant, franchise, concession, identification number, lease, ruling,
certification, exemption, action, filing, registration, permit, sanction, or
other authorization of any nature to be granted by any Governmental Authority,
as now or hereafter necessary under any Applicable Law.

        "GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof (including, but not limited to, federal,
national, state, provincial, regional and municipal) and any entity exercising
executive, legislative, judicial, regulatory, or administrative authority.

        "HAZARDOUS SUBSTANCE" means any substance subject to regulation under
Environmental Laws because of its toxic, radioactive, caustic or otherwise
dangerous or hazardous qualities.

        "IMPSAT BUSINESS PLAN" means the 10-year consolidated business plan of
IMPSAT and its Subsidiaries dated as of January 25, 2001, and not including
any subsequent amendments, supplements or replacements thereof.

        "IMPSAT CAPITAL MARKETS TRANSACTION" means any public offering or
private placement of debt securities of IMPSAT or an Affiliate thereof other
than the Borrower or IMPSAT Brazil; provided, that any such offering of debt
securities of an Affiliate of IMPSAT shall be deemed to be an IMPSAT Capital
Markets Transaction only in the event that the Net Proceeds thereof are
distributed to or at the order of IMPSAT for use by IMPSAT or its
Subsidiaries; and provided further, that any such offering of debt securities
by any of IMPSAT's Subsidiaries in Colombia, Venezuela, Ecuador, Mexico,
Chile, Peru and the United States appearing on Schedule 7.1 shall not be
deemed an IMPSAT Capital Markets Transaction if the Net Proceeds of such
offering are distributed to the respective Subsidiary for its own use.

        "IMPSAT GUARANTEE" means the Guarantee Agreement dated as of October
25, 1999 executed by IMPSAT in favor of the Lenders, a copy of which is
attached hereto as Exhibit C.

        "IMPSAT INDENTURES" means the 2003 Indenture, the2005 Indenture and
the 2008 Indenture.



                                     -10-
<PAGE>   12


        "INDEBTEDNESS" means, with respect to any Person at any time and from
time to time, the sum, without duplication, of the following: (a) all
obligations of such Person for money borrowed (whether by loan, the issuance
of debt securities or otherwise); (b) the available amount at such time of all
letters of credit issued for the account of such Person and all outstanding
reimbursement obligations with respect thereto; (c) all liabilities or
obligations secured by any Lien on any property owned by such Person; (d) all
capitalized lease obligations; (e) all Indebtedness of others guaranteed by
such Person; (f) all obligations of such Person to pay the deferred purchase
price or acquisition price of property or services, other than Trade Payables
and accrued expenses incurred, that are not past due by more than sixty (60)
days; (g) all obligations of such Person under trade or bankers' acceptances
or under agreements providing for swaps, ceiling rates, ceiling and floor
rates, or contingent participation or other hedging mechanisms with respect to
the payment of interest; and (h) all indebtedness, liabilities and obligations
of such Person to redeem or retire shares of Capital Stock of such Person.

        "INDEPENDENT AUDITOR" means with respect to IMPSAT, Deloitte & Touche
LLP, and with respect to the Borrower, Deloitte & Touche Argentina or such
other internationally recognized firm of certified public accountants as may
be approved by the Administrative Agent.

        "INDIVIDUAL STOCKHOLDERS" means, collectively, Pescarmona, Verdaguer
and Vivo, and each an "INDIVIDUAL STOCKHOLDER".

        "INITIAL DISBURSEMENT DATE" means the date on which the first
Disbursement is made.

        "INTERCREDITOR AGENT" means the intercreditor agent under the
Intercreditor Agreement.

        "INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral
Agency Agreement dated November 22, 2000, as amended and restated June 11,
2001, among the Borrower, the Lenders, the Administrative Agent, the
Collateral Agent and Lucent Argentina.

        "INTEREST EXPENSE" means, with respect to any Person for any period,
interest expense, both expensed and capitalized, of such Person and its
Subsidiaries for such period, including accrued interest and the interest
component of capital lease obligations, all commissions, discounts, fees and
charges.

        "INTEREST PAYMENT DATE" means, (a) with respect to any LIBOR Loan, the
last day of each Interest Period; and (b) with respect to any Prime Loan, the
last day of each March, June, September and December.

        "INTEREST PERIOD" means, with respect to each LIBOR Loan, each period
commencing, initially, on the Disbursement Date of such LIBOR Loan, and ending
on the next following Consolidation Date, and thereafter, commencing on the
last day of the preceding Interest Period with respect to such LIBOR Loan, and
ending, except as otherwise provided in Section 3.3 hereof, on the same day in
the sixth (6th) calendar month thereafter; provided, that,





                                     -11-
<PAGE>   13

               (a)    if any Interest Period otherwise would end on a day that
is not a Business Day, such Interest Period shall end on the next succeeding
Business Day; provided, further, that should such next succeeding Business Day
fall in the next calendar month, such Interest Period shall end on the
immediately preceding Business Day,

               (b)    any Interest Period that begins on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period shall end on the last Business Day of the calendar month at
the end of such Interest Period (e.g., March 31 to September 30 for a six (6)
month Loan), and

               (c)    no Interest Period shall extend beyond the next
Principal Repayment Date.

        "INVESTMENT" means the acquisition of any Capital Stock, evidence of
Indebtedness, securities (including any option, warrant or other right to
acquire any of the foregoing) of, the making of any loans or advances to, the
guaranteeing of any obligations of any Person, or the purchase or other
acquisition (in one transaction or a series of transactions) of any assets
constituting a business unit.

        "IRU" means the creation of an usufructo under Argentine law of any
portion of the Network by the Borrower or any Subsidiary thereof.

        "IRU COST" means (i) for any Permitted IRU granted in respect of any
duct, the number of kilometers of duct subject to the IRU, multiplied by (A)
in the case of a Long Haul IRU, four thousand two hundred seventy eight and
06/100 Dollars (US$4,278.06) and (B) in the case of a Metropolitan IRU, twenty
two thousand six hundred sixty four and 32/100 Dollars (US$22,664.32); and
(ii) for any Permitted IRU granted in respect of fiber optic cable, the number
of kilometers of fiber optic cable subject to the IRU multiplied by the
product of one hundred fifteen Dollars (US$115.00) and the number of strands
of fiber optic cable over which the IRU is granted.

         "LENDING OFFICE" means, with respect to any Lender, the office of
that Lender designated as its Lending Office by notice to the Administrative
Agent and the Borrower.

        "LIBOR" means, with respect to any Interest Period for any LIBOR Loan,
the per annum interest rate (rounded upward, if necessary, to the nearest 1/16
of one percent) equal to the arithmetic mean of the rates per annum at which
Dollar deposits are offered in an amount substantially equal to the
outstanding principal amount of the Loan and for a period approximately equal
to the duration of such Interest Period appearing on the display page
designated as page "LIBOR" on the Reuters Monitor Money Rates Service, or such
other page as may replace the LIBOR page on that service for the purpose of
displaying London Interbank Offered Rates for Dollar deposits of leading banks
at or about 11:00 a.m. (London time) two (2) London business days prior to the
commencement of such Interest Period. For purposes hereof, a "LONDON BUSINESS
DAY" shall mean any day on which dealings in deposits in Dollars are conducted
in the London Euro-currency market.




                                     -12-
<PAGE>   14

        "LIBOR LOAN" means a Loan that bears interest at LIBOR.

        "LICENSES" means the Spectrum Authorization and the other licenses
listed in Schedule 7.15 and such other licenses, concessions, authorizations,
permits, or the like (including any additions or amendments thereto) issued or
granted by the SC or any other Governmental Authority from time to time in
favor of the Borrower or any of its Subsidiaries and required for the
completion of the Project, the operation of the Network and the conduct of the
Telecommunications Business.

        "LIEN" means, with respect to any Person, any security interest, lien,
pledge, mortgage, charge, or encumbrance (including any agreement to give any
of the foregoing), title retention agreement, finance lease or trust receipt,
or a consignment or bailment for security purposes, or other security
arrangement or any other arrangement on or with respect to any asset or
revenue of such Person.

        "LONG HAUL IRU" means an IRU which is not a Metropolitan IRU.

        "LONG TERM LEASE" means any lease or similar agreement or arrangement
pursuant to which the Borrower or a Subsidiary thereof grants the right to use
any portion of the Network to any Person for a period of time of five (5) or
more years in exchange for consideration payable in a form other than periodic
payments at quarterly or more frequent intervals.

        "LUCENT ARGENTINA" means Lucent Technologies S.A. Argentina.

        "LUCENT ARGENTINA 2000 FINANCING AGREEMENT" means the Financing
Agreement dated as of September 29, 2000, as amended and restated as of June
11, 2001, among the Borrower, Lucent Argentina, as a lender and as
administrative agent, Bankers Trust Company, as collateral agent, and the
other lenders party thereto from time to time, pursuant to which Lucent
Argentina has made available to the Borrower a credit facility in a principal
amount not to exceed sixteen million Dollars (US$16,000,000) to finance the
purchase of certain products and services from Lucent Argentina and/or its
Affiliates for construction and operation of the Project.

        "LUCENT ARGENTINA 2001 FINANCING AGREEMENT" means the Financing
Agreement dated as of June 11, 2001 among the Borrower, Lucent Argentina, as a
lender, and the other parties thereto from time to time, pursuant to which
Lucent Argentina and the other lenders, if any, parties thereto will make
available to the Borrower a credit facility in a principal amount not to
exceed eleven million Dollars (US$11,000,000) to finance the purchase of
certain products and services from Lucent Argentina and/or its Affiliates for
construction and operation of the Project.

        "LUCENT ARGENTINA FINANCING AGREEMENTS" means the Lucent Argentina
2000 Financing Agreement and the Lucent Argentina 2001 Financing Agreement.

        "LUCENT BRAZIL FINANCING AGREEMENT" means the financing agreement to
be entered into among IMPSAT Brazil, as borrower, an Affiliate of Lucent
Argentina, as a lender, and the other parties thereto from time to time,
substantially in the form of the Nortel Brazil Financing Agreement, pursuant
to which such Affiliate and the other lenders, if any, parties thereto will










                                     -13-
<PAGE>   15



make available to IMPSAT Brazil a credit facility in a principal amount not to
exceed twenty two million Dollars (US$22,000,000) to finance the purchase of
certain products and services from Affiliates of Lucent Argentina for
construction and operation of the Project (as defined in the Nortel Brazil
Financing Agreement);

        "LUCENT COLOMBIA FINANCING AGREEMENT" means the financing agreement to
be entered into among IMPSAT S.A., a Colombian company, as borrower, an
Affiliate of Lucent Argentina, as a lender, and the other parties thereto from
time to time, having a final maturity, average life, rate of interest, fee
structure, security interest and other terms and conditions in the aggregate
no more favorable to the lender(s) thereunder than the terms and conditions of
the Facility are to the Lenders, pursuant to which such Affiliate and the
other lenders, if any, parties thereto will make available to such borrower a
credit facility in a principal amount not to exceed five million Dollars
(US$5,000,000) to finance the purchase of certain products and services from
Affiliates of Lucent Argentina for construction and operation of a
telecommunications network in Colombia.

        "LUCENT FINANCING AGREEMENTS" means the Lucent Argentina Financing
Agreements, the Lucent Brazil Financing Agreement, the Lucent Colombia
Financing Agreement, the Lucent U.S. Financing Agreement and the Lucent
Venezuela Financing Agreement.

        "LUCENT SECURITY DOCUMENTS" means the Security Documents as defined in
the Lucent Argentina Financing Agreements.

        "LUCENT SUPPLY AGREEMENTS" means the Supply Agreements as defined in
the Lucent Argentina Financing Agreements.

        "LUCENT U.S. FINANCING AGREEMENT" means the financing agreement to be
entered into among IMPSAT USA, Inc., as borrower, an Affiliate of Lucent
Argentina, as a lender, and the other parties thereto from time to time,
having a final maturity, average life, rate of interest, fee structure,
security interest and other terms and conditions in the aggregate no more
favorable to the lender(s) thereunder than the terms and conditions of the
Facility are to the Lenders, pursuant to which such Affiliate and the other
lenders, if any, parties thereto will make available to such borrower a credit
facility in a principal amount not to exceed three million Dollars
(US$3,000,000) to finance the purchase of certain products and services from
Affiliates of Lucent Argentina.

        "LUCENT VENEZUELA FINANCING AGREEMENT" means the financing agreement
to be entered into among Telecomunicaciones IMPSAT, S.A., as borrower, an
Affiliate of Lucent Argentina, as a lender, and the other parties thereto from
time to time, having a final maturity, average life, rate of interest, fee
structure, security interest and other terms and conditions in the aggregate
no more favorable to the lender(s) thereunder than the terms and conditions of
the Facility are to the Lenders, pursuant to which such Affiliate and the
other lenders, if any, parties thereto will make available to such borrower a
credit facility in a principal amount not to exceed four million Dollars
(US$4,000,000) to finance the purchase of certain products and services from
Affiliates of Lucent Argentina.







                                     -14-
<PAGE>   16




        "MATERIAL ADVERSE CHANGE" means an event, circumstance or development
of whatever nature that has had or could reasonably be expected to have a
Material Adverse Effect; provided, however, that clause (f) of the definition
of Material Adverse Effect shall not apply to the determination of either an
Event of Default under Section 10.1 or a condition to any Disbursement under
Section 6.3(h), other than the initial Disbursement.

        "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, results of operations, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole, or IMPSAT;
(b) the ability of the Borrower or IMPSAT to perform their respective
obligations under any of the Project Agreements; (c) the rights and remedies
of the Lenders or the Agents under the Financing Documents; (d) the validity
or enforceability of this Agreement or any of the other Project Agreements;
(e) the Licenses or the rights of the Borrower and its Subsidiaries
thereunder; (f) Argentine, U.S. or international loan syndication, financial
or capital markets or in the economic, political or regulatory conditions in
Argentina which in the Administrative Agent's opinion in its sole discretion
could impair the assignment or syndication of the Facility; or (g) the ability
of the Lenders to make funds available to the Borrower in Dollars.

        "MATURITY DATE" means the seventh (7th) anniversary of the date
hereof.

        "METROPOLITAN IRU" means an IRU granted in respect of a portion of the
Network which is located within one of the metropolitan areas of Buenos Aires,
Rosario, Cordoba and Mendoza.

        "MORTGAGE DEEDS" means (i) the deeds of mortgage dated August 2, 2000,
August 4, 2000 and August 8, 2000, among the Borrower and Nortel, as
collateral agent on behalf of the Lenders (the "EXISTING MORTGAGE DEEDS"); and
(ii) any other deed or deeds, substantially in the form of the Existing
Mortgage Deed, pursuant to which the Borrower or its Subsidiaries shall grant
mortgages from time to time in favor of the Collateral Agent (or its subagent)
for the benefit of the Lenders, to secure the repayment of the Loans, and the
lenders under either or both of the Lucent Argentina Financing Agreements, to
secure the repayment of the loans thereunder.

        "MU EXPENSES" means, for any period, the salary, Selling G&A and other
expenses of the Borrower which are properly attributable to the employment and
activities during such period of IMPSAT management personnel employed by the
Borrower.

        "NEGATIVE CASH FLOW" means, if the amount resulting from the
calculation described in the definition of Excess Cash Flow is a negative
amount, such amount stated as a positive number.

        "NET INCOME" means, for any period, the net income (loss) of a Person
and its Subsidiaries, determined on a consolidated basis, for such period in
accordance with U.S. GAAP.

        "NET PROCEEDS" means, with respect to any event (a) the proceeds
received in respect of such event in the form of cash and Temporary Cash
Investments, including (i) any cash received in respect of any non-cash
proceeds, but only as and when received, (ii) in the case of an insured


                                     -15-
<PAGE>   17




casualty event, insurance proceeds, and (iii) in the case of an Expropriation
Event or similar event, expropriation awards and similar payments, net of (b)
the sum of (i) all reasonable fees and out-of-pocket expenses paid by the
Borrower and its Subsidiaries to third parties other than Affiliates of
Borrower (except Morgan Stanley Dean Witter in the case of a public offering
or private placement) in connection with such event, (ii) in the case of a
Disposal, the amount of all payments required to be made by the Borrower and
its Subsidiaries as a result of such event to repay Indebtedness (other than
Indebtedness secured under the Security Documents) secured by the asset or
property Disposed of or otherwise subject to mandatory prepayment as a result
of such event, (iii) the amount of all taxes paid (or reasonably estimated to
be payable) by the Borrower and its Subsidiaries in connection with such
event, and (iv) the amount of any reserves established by the Borrower and its
Subsidiaries to fund contingent liabilities reasonably estimated to be
payable, in each case during the year that such event occurred or the next
succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the
Borrower).

        "NET PROCEEDS ACCOUNT" means the net proceeds account to be
established by the Intercreditor Agent for the purpose of holding Net Proceeds
in the circumstances contemplated in Section 3.2(a)(2).

        "NETWORK" has the meaning ascribed to such term in the Turnkey
Contract.

        "NOTE" means a promissory note of the Borrower, substantially in the
form of Exhibit D, provided, however, that at the request of any Lender, all
Loans to be made by such Lender may be evidenced by promissory notes of the
Borrower in a form different from Exhibit D if the purpose of such request is
that such Notes be capable of characterization as executive instruments
("titulos ejecutivos") under Argentine law and if the alternate form of Note
is approved by the Agents, which approval shall not be unreasonably withheld.

        "OBLIGATIONS" means all present and future obligations, liabilities
and other amounts, whether or not contingent, owing to any Lender pursuant to
this Agreement or any other Financing Document, including principal, accrued
interest and fees.

        "PAID IN CAPITAL" means, with respect to any Person, at any time, the
aggregate amount of capital contributed to such Person in the form of cash or
capitalized Indebtedness.

        "PARTY" means the Borrower, each Lender, the Administrative Agent and
the Collateral Agent, individually, and "PARTIES" means two (2) or more of
them.

        "PERMITTED INDEBTEDNESS" means (a) Indebtedness pursuant to the
Financing Documents; (b) Indebtedness of the Borrower to IMPSAT or to any
Subsidiary of the Borrower or of any such Subsidiary to the Borrower, in each
case for money borrowed, provided, that such Indebtedness of the Borrower to
IMPSAT shall have a stated final maturity not earlier than the Maturity Date
and shall otherwise be on terms and conditions not less favorable to the
Borrower than the terms of this Agreement; (c) Indebtedness of the Borrower
for money borrowed from financial institutions which Indebtedness is either
fully collateralized by cash deposits of




                                     -16-
<PAGE>   18




IMPSAT or fully funded by IMPSAT through the acquisition of one hundred
percent (100%) participation in such Indebtedness from such financial
institution; (d) guarantees by the Borrower of obligations of any Subsidiary
thereof or guarantees by any such Subsidiary of obligations of the Borrower;
(e) contingent Indebtedness in respect of bonds or letters of credit provided
to guarantee bids or performance under contracts in the ordinary course of
business; (f) Indebtedness of the Borrower which is in existence on June 11,
2001 and set forth on Schedule 7.11; (g) Quasi Equity; (h) Indebtedness for
money borrowed having an original stated final maturity of three (3) years or
less up to a maximum aggregate amount at any time outstanding not to exceed
ten million Dollars (US$10,000,000); (i) Indebtedness for money borrowed
having a stated final maturity not earlier than the first anniversary of the
Maturity Date and having a weighted average maturity of not less than four (4)
years from October 25, 1999; (j) Indebtedness of the Borrower (A) in an amount
not to exceed twelve million Dollars (US$12,000,000) to Citibank N.A. in
respect of equipment financing to be guaranteed by Eximbank and otherwise
substantially on the terms and conditions contemplated in the letter dated
August 26, 1999 from Citibank N.A., (B) in an amount not to exceed fifteen
million Dollars (US$15,000,000) under an equipment lease facility between the
Borrower and Citibank N.A., Buenos Aires branch, substantially on the terms
and conditions contemplated in the letter dated February 8, 2001 from Citibank
N.A. to IMPSAT and (C) in respect of guarantees by the Borrower of the
Indebtedness of IMPSAT Brazil to AmTrade Bank and El Camino Resources de Latin
America, Inc., permitted under the Nortel Brazil Financing Agreement; (k)
Indebtedness for money borrowed having an original stated final maturity of
three (3) years or more up to an aggregate outstanding amount which, added to
the amount of Indebtedness outstanding under clause (h) above, shall at no
time exceed fifty million Dollars (US$50,000,000); and (l) Indebtedness
incurred and applied to refinance Indebtedness permitted by each of clauses
(a), (f), and (j) above; provided, with respect to any such refinancing
Indebtedness, that (i) the principal amount of such refinancing Indebtedness
does not exceed the principal amount of the Indebtedness so refinanced; (ii)
such refinancing Indebtedness has a final maturity date equal to or later than
the final maturity date of, and has an average life to maturity equal to or
greater than the average life to maturity of, the Indebtedness being
refinanced; and (iii) such Indebtedness is incurred and/or guaranteed by the
Borrower and any Subsidiary which had incurred or guaranteed, as the case may
be, the Indebtedness to be refinanced.

        "PERMITTED INVESTMENTS" means: (a) Temporary Cash Investments; (b)
Investments in the form of inter-company Indebtedness which constitutes
Permitted Indebtedness; (c) accounts receivable owing to the Borrower or any
Subsidiary thereof if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; (d)
payroll, travel and similar advances and advances to suppliers to cover
matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (e) stock, obligations or securities received in
satisfaction of judgments, work-outs, assignments for the benefit of creditors
or other similar judicial proceedings; and (f) investments in Capital Stock of
the International Telecommunications Satellite Organization ("INTELSAT") or
New Skies Satellites N.V. ("NEW SKIES") to the extent permitted by the IMPSAT
Indentures.



                                     -17-
<PAGE>   19


        "PERMITTED IRU" means an IRU with an IRU Cost of eight million Dollars
(US$8,000,000) or less, provided, however, that the maximum number of ducts
that may be subject to Permitted IRUs shall be three (3) (including the Global
Crossing IRU) in the case of Long-Haul IRUs, and four (4) in the case of
Metropolitan IRUs.

        "PERMITTED LIENS" means:

               (a)  Liens under the Financing Documents;

               (b)  Liens securing taxes not yet due or being contested in
good faith by appropriate proceedings for which adequate reserves determined
in accordance with Argentine GAAP have been established (and as to which the
property subject to any such Lien is not yet subject to foreclosure, seizure,
arrest, sale, collection, levy or loss on account thereof);

               (c)  nonconsensual statutory Liens which are imposed by
Applicable Law arising in the ordinary course of business and securing
obligations which are not yet due and payable or which are being contested in
good faith by appropriate proceedings for which adequate reserves determined
in accordance with Argentine GAAP have been established (and as to which the
property subject to any such Lien is not yet subject to foreclosure, sale or
loss on account thereof);

               (d)  pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation insurance, unemployment
insurance, pensions or social security programs;

               (e)  easements, rights-of-way, restrictions and other similar
encumbrances on real property which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from the value of the
property to the Borrower or materially interfere with the ordinary conduct of
the business of the Borrower or a Subsidiary;

               (f)  Liens arising by virtue of any Applicable Law in favor of
banks or other financial institutions on cash or rights of setoff or similar
rights as to deposit accounts or other funds maintained with a creditor
depository institution;

               (g)  Liens on goods (and the documents of title relating
thereto) the purchase price, shipment or storage of which is financed by a
documentary letter credit issued for the account of the Borrower or a
Subsidiary thereof in the ordinary course of business, provided that such Lien
secures only the obligations of the Borrower or such Subsidiary in respect of
such letter of credit;

               (h)  any interest or title of a lessor or vendor in the
property subject to any lease or installment sale;

               (i)  Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods in the ordinary





                                     -18-
<PAGE>   20


course of business (and as to which the property subject to any such Lien is
not yet subject to foreclosure, seizure, arrest, sale, collection, levy or
loss on account thereof);

               (j)  Liens on the Borrower's interests in Intelsat and New
Skies in favor of Credit Lyonnais in an amount not to exceed nine million six
hundred thousand Dollars (US$9,600,000);

               (k)  Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, contracts (other than for Indebtedness),
performance and return-of-money bonds and other obligations of a similar
nature incurred in the ordinary course of business (exclusive of obligations
for the payment of borrowed money);

               (l)  Liens (including extensions and renewals thereof) upon
real or personal property, in each case other than in respect of the Network;
provided that (i) such Lien is created solely for the purpose of securing
Indebtedness incurred (1) to finance the cost (including the cost of design,
development, acquisition, construction, installation, improvement,
transportation or integration) of the item of property or assets subject
thereto and such Lien is created prior to, at the time of or within six (6)
months after the later of the acquisition, the completion of construction or
the commencement of full operation of such property or (2) to refinance any
Indebtedness previously so secured, (ii) the principal amount of the
Indebtedness secured by such Lien does not exceed one hundred percent (100%)
of such cost and (iii) any such Lien shall not extend to or cover any property
or assets other than such item of property or assets and any improvements on
such item;

               (m)  Liens arising from the rendering of a final judgment or
order against the Borrower or any of its Subsidiaries that does not give rise
to an Event of Default;

               (n)  Liens existing on June 11, 2001 and listed on Schedule
7.12; and


               (o)  Liens arising (i) in respect of the Global Crossing IRU
and (ii) under any Permitted IRU or other IRU approved by the Administrative
Agent under Section 8.2(j).

        "PERSON" means an individual, a partnership, a joint venture, a
corporation, a trust, a limited liability company, an unincorporated
organization or a Governmental Authority.

        "PESCARMONA" means Mr. Enrique Pescarmona.

        "PESOS" means the lawful currency of Argentina.

        "PLEDGED SHAREHOLDER NOTE" means a promissory note of the Borrower
endorsed and delivered in pledge to the Administrative Agent, in form and
substance satisfactory to the Lenders, evidencing Indebtedness of the Borrower
for money borrowed from IMPSAT, (i) the principal amount of which is payable
in a single payment not earlier than the first anniversary of the Maturity
Date and (ii) the interest on which is payable at a per annum rate no greater
than the rate payable on the securities issued under the 2008 Indenture.



                                     -19-
<PAGE>   21



        "PREPAYMENT EVENT" means (a) any Disposal (other than an IRU or a Long
Term Lease) of all or part of the Network or the Collateral; (b) any
Expropriation Event; and (c) any casualty or other insured damage to any
material asset of the Borrower or any Subsidiary thereof.

        "PREPAYMENT QUOTIENT" means the quotient Q resulting from the
following calculation:

                             Q    =      A
                                      -------
                                       A + B
where
            A is the lesser of (i) one hundred forty nine million one hundred
            thousand Dollars (US$149,100,000) and (ii) the sum of all
            outstanding Loans and the Commitment Amount, and

            B is the lesser of (i) twenty seven million Dollars
            (US$27,000,000) and (ii) the sum of all outstanding loans and the
            commitment amounts under the Lucent Argentina Financing
            Agreements,

in each case, unless otherwise specified herein, calculated immediately prior
to the Prepayment for which Q is being determined.

        "PRIME LOAN" means a Loan that bears interest at the Prime Rate.

        "PRIME RATE" means the per annum rate of interest announced publicly
from time to time by the Toronto Dominion Bank (or such other bank as the
Borrower and the Administrative Agent may agree) as the prime rate in effect
on such date at its principal office in New York City, which rate may not be
the lowest rate of interest charged by the Toronto Dominion Bank (or such
other agreed bank) to its customers. Each change in any interest rate provided
for herein resulting from a change in the Prime Rate shall take effect on the
beginning of the day of such change in the Prime Rate.

        "PRINCIPAL REPAYMENT DATE" means, initially, the second (2nd)
anniversary of the date hereof (being the same day of the calendar month) and
each successive date that is six (6) calendar months thereafter (being the
same day of the calendar month) until the Maturity Date.

        "PROJECT AGREEMENTS" means the Financing Documents, the Nortel
Contracts, the Lucent Supply Agreements and the other agreements entered into
by the Borrower and its Subsidiaries in connection with the Project.

        "PROJECT PARTY" means any party to a Project Agreement.

        "QUASI EQUITY" means the aggregate principal amount of all Pledged
Shareholder Notes or, in the case of IMPSAT Brazil, of all Brazil Pledged
Shareholder Notes.

        "REQUIRED LENDERS" means, at any time, Lenders holding more than fifty
percent (50%) in aggregate principal amount of the Loans then outstanding or,
if no Loan is outstanding, of the total Commitment Amount.




                                     -20-
<PAGE>   22

        "REVENUE RECOGNITION FROM IRUs AND LONG TERM LEASES" for any period
means the part of the Deferred Revenues that the Borrower recognizes as
Revenues during such period.

        "REVENUES" means, with respect to any Person for any period, the
consolidated revenues of such Person and its Subsidiaries.

        "SC" means the Argentine Secretariat of Communications ("Secretaria de
Comunicaciones").

        "SECURED PARTIES" means, collectively, the Agents and the Lenders, and
each a "SECURED PARTY".

        "SECURITIES ACT" means the U.S. Securities Act of 1933, as amended.

        "SECURITY DOCUMENTS" means the Mortgage Deeds, the Equipment Pledge
Agreements, the Lucent Security Documents and any other agreements entered
into pursuant to Section 9.

        "SIRTI" means Sirti Argentina S.A.

        "SIRTI SUBCONTRACT" means the Construction Services Agreement dated as
of September 6, 1999 between Nortel Argentina and Sirti.

        "SPECTRUM AUTHORIZATION" means the authorization granted by the SC,
revocable in nature, to use the radioelectric spectrum in accordance with the
Argentine Telecommunications Law 19,798, as it may be amended from time to
time.

        "SUBSIDIARY" means, with respect to any Person, any other Person that
is directly or indirectly Controlled by the first Person.

        "TELECOMMUNICATIONS BUSINESS" means telecommunications services, value
added telecommunications services, radio paging, mobile telecommunications,
personal telecommunications services, trunking, transport of broadcasting
signals, information technology, Internet services and related and ancillary
services in Argentina in which the Borrower or any of its Subsidiaries is from
time to time engaged.

        "TEMPORARY CASH INVESTMENT" means any of the following: (a) direct
obligations of the United States of America or any agency thereof or
obligations fully and unconditionally guaranteed by the United States of
America or any agency thereof, (b) time deposit accounts, certificates of
deposit and money market deposits maturing within one year of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess of
fifty million Dollars (US$50,000,000) (or the foreign currency equivalent
thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money market fund sponsored by a registered broker dealer or mutual fund
distributor, (c) repurchase obligations with a term of not more than thirty







                                     -21-
<PAGE>   23

(30) days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b)
above, (d) commercial paper, maturing not more than one year after the date of
acquisition, issued by a corporation (other than an Affiliate of the Borrower)
organized and in existence under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of
America with a rating the time as of which any investment therein is made of
"P-1" (or higher) according to Moody's Investor Service, Inc. ("Moody's") or
"A-1" (or higher) according to Standard & Poor's Ratings Services ("S&P"), (e)
securities with maturities of six (6) months or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least "A" by S&P or
Moody's, and (f) certificates of deposit maturing not more than one (1) year
after the acquisition thereof by the Borrower or a Subsidiary thereof and
issued by any of the ten (10) largest banks (based on assets as of the last
December 31) organized under the laws of Argentina, provided that such bank is
not under intervention, receivership or any similar arrangement at the time of
the acquisition of such certificates of deposit.

        "TOTAL DEBT" means, with respect to any Person at any time and from
time to time, the aggregate amount of any and all Indebtedness of such Person
and its Subsidiaries then outstanding.

        "TOTAL EQUITY" means, with respect to any Person at any date, the sum
of (a) the Equity of such Person as of such date, plus (b) the Quasi Equity of
such Person as of such date.

        "TRADE PAYABLES" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or guaranteed by such Person or any of its Subsidiaries
arising in the ordinary course of business in connection with the acquisition
of goods or services and required to be paid within one year.

        "TRANCHE" means any of Tranche A, Tranche B or Tranche C.

        "TRANCHE A" means the portion of the Facility consisting of the
Tranche A Commitment Amount and the Tranche A Loans.

        "TRANCHE A COMMITMENT AMOUNT" means an amount equal to one hundred
four million ninety five thousand seven hundred forty one Dollars
(US$104,095,741) to be used as provided in Section 2.2(a), as such amount is
reduced by Disbursements and may be reduced from time to time pursuant to
Section 2.5 or otherwise in accordance with this Agreement; provided, however,
that during the last six (6) months of the Commitment Period, the Tranche A
Commitment Amount shall be limited to the amount, if any, that has not
theretofore been disbursed for payments of Invoices under the Supply Agreement
pursuant to Section 2.2(a)(ii).

        "TRANCHE A LENDER" means Nortel and any Eligible Assignee which
assumes all or part of the Tranche A Commitment Amount and Tranche A Loans in
accordance with Section 12.1.

        "TRANCHE B" means the portion of the Facility consisting of the
Tranche B Commitment Amount and the Tranche B Loans.






                                     -22-
<PAGE>   24




        "TRANCHE B COMMITMENT AMOUNT" means an amount equal to twenty five
million sixteen thousand six hundred forty seven Dollars (US$25,016,647) to be
used as provided in Section 2.2(b), as such amount is reduced by Disbursements
and may be reduced from time to time pursuant to Section 2.5 or otherwise in
accordance with this Agreement.

        "TRANCHE B LENDER" means Sirti, and any Eligible Assignee which
assumes all or part of the Tranche B Commitment Amount and Tranche B Loans in
accordance with Section 12.1.

        "TRANCHE C" means the portion of the Facility consisting of the
Tranche C Commitment Amount and the Tranche C Loans.

        "TRANCHE C COMMITMENT AMOUNT" means an amount equal to nineteen
million nine hundred eighty seven thousand six hundred twelve Dollars
(US$19,987,612) to be used as provided in Section 2.2(c), as such amount is
reduced by Disbursements and may be reduced from time to time pursuant to
Section 2.5 or otherwise in accordance with this Agreement.

        "TRANCHE C LENDER" means Nortel and any Eligible Assignee which
assumes all or part of the Tranche C Commitment Amount and Tranche C Loans in
accordance with Section 12.1.

         "U.S. GAAP" means generally accepted accounting principles as adopted
by the American Institute of Certified Public Accountants, consistently
applied.

        "VERDAGUER" means Mr. Ricardo Verdaguer.

        "VIVO" means Mr. Robert Vivo.

        "VOTING STOCK" means, with respect to any Person, Capital Stock
ordinarily having the power to vote for the election of directors, managers or
other voting members of the governing body of such Person.

        "2003 INDENTURE" means the Indenture dated as of July 30, 1996 among
IMPSAT, as Issuer, the Borrower, as Guarantor, and The Bank of New York, as
Trustee, relating to the 12 1/8% Senior Guaranteed Notes due 2003 of IMPSAT.

        "2005 INDENTURE" means the Indenture dated as of February 16, 2000
between IMPSAT, as Issuer, and The Bank of New York, as Trustee, relating to
the 13 3/4% Senior Notes due 2005 of IMPSAT.

        "2008 INDENTURE" means the Indenture dated as of June 17, 1998 between
IMPSAT, as Issuer, and The Bank of New York, as Trustee, relating to the
12 3/8% Senior Notes due 2008 of IMPSAT.






                                     -23-
<PAGE>   25





SECTION 1.2    OTHER DEFINITIONS.

        The following terms shall have the meaning given to them in the
Section indicated below:

<TABLE>
<CAPTION>
        TERM                                    SECTION
<S>                                           <C>
        Administrative Agent                    Preamble
        Agreement                               Preamble
        Bankruptcy Code                         10.1(g)
        Bonex                                   4.2(a)
        Borrower                                Preamble
        Borrower Capital Increase               6.2(d)
        Brazil Nortel Contracts                 Fifth Recital
        Brazil Turnkey Contract                 Fifth Recital
        Collateral                              9.1
        Collateral Agent                        Preamble
        Commitment Fee                          3.4(a)
        Deferred Payment Date                   4.2(c)
        Deposit Account                         3.6(a)
        Event of Default                        10.1
        Excluded Taxes                          5.1(a)
        Financing Agreements                    13.1
        FRBs                                    4.2(b)
        Funding Breakage Costs                  5.2
        IMPSAT                                  Third Recital
        IMPSAT Brazil                           Fifth Recital
        IMPSAT Capital Contribution             6.2(d)
        Indemnitees                             11.2
        Information                             16.11
        Intelsat                                "Permitted Investments" definition
        Invoices                                2.2
        Loan(s)                                 2.1(a)
        New Skies                               "Permitted Investments" definition
        Nortel                                  Preamble
        Nortel Argentina                        First Recital
        Nortel Brazil                           Fifth Recital
        Nortel Brazil Financing Agreement       Fifth Recital
        Nortel Contracts                        First Recital
</TABLE>


                                     -24-
<PAGE>   26


<TABLE>
<CAPTION>
        TERM                                    SECTION
<S>                                           <C>
        Note(s)                                 2.4(a)
        Par Bonds                               4.2(b)
        Placement Agent                         16.12
        Prepayment                              3.2(a)
        Project                                 First Recital
        Reference Dealers                       4.2(b)
        Register                                2.3(d)
        Release                                 9.3(b)
        Release Instruments                     9.3(b)
        Release Notice                          9.3(b)
        Released Collateral                     9.3(b)
        Replacement Notes                       13.1
        Second Currency                         4.1
        Security Reinforcement                  8.1(q)
        Sovereign Event Deferral Period         4.2(c)
        Specified Place of Payment              4.1
        Supply Agreement                        First Recital
        Syndication Agents                      16.12
        Taxes                                   5.1(a)
        Tranche A Loans                         2.1(a)(i)
        Tranche B Loans                         2.1(a)(ii)
        Tranche C Loans                         2.1(a)(iii)
        Turnkey Contract                        First Recital
</TABLE>



SECTION 1.3    INTERPRETATION.

        In this Agreement: (a) the singular includes the plural and the plural
the singular; (b) words importing any gender include the other gender; (c)
references to statutes or regulations are to be construed as including all
statutory or regulatory provisions consolidating, amending or replacing the
statute or regulation referred thereto; (d) references to "writing" include
printing, typing, lithography and other means of reproducing words in a
tangible visible form; (e) references to articles, sections (or subdivisions
of sections), exhibits, annexes or schedules are to this Agreement unless
otherwise indicated; (f) references to agreements and other contractual
instruments shall be deemed to include all schedules and exhibits to such
agreements and all subsequent amendments and other modifications to such
agreements and contractual instruments, but only to the extent such amendments
and other modifications are not prohibited by the terms




                                     -25-
<PAGE>   27




hereof; (g) references to Persons include their respective permitted
successors and assigns and, in the case of Governmental Authorities, Persons
succeeding to their respective functions and capacities, and (h) the terms
"date of this Agreement" and "date hereof" mean October 25, 1999.


SECTION 1.4    ACCOUNTING PRINCIPLES AND TERMS.

        Except as otherwise provided in this Agreement: (a) all computations
and determinations as to financial matters, and all financial statements to be
delivered under this Agreement, shall be made or prepared in accordance with
U.S. GAAP (including principles of consolidation where appropriate) applied on
a consistent basis; (b) all accounting terms used in this Agreement shall have
the meanings respectively ascribed to such terms by U.S. GAAP.


                        SECTION 2. THE CREDIT FACILITY


SECTION 2.1    LOANS.

        (a)    LENDERS' AGREEMENT TO LEND. Each Lender severally agrees, upon
the terms and conditions set forth herein, to make loans to the Borrower (each
such loan a "LOAN" and collectively the "LOANS"), as follows:

               (i)    Tranche A. Each Tranche A Lender severally agrees to
        make Loans, from time to time during the Commitment Period, in an
        aggregate principal amount not to exceed the Tranche A Commitment
        Amount of such Lender, to be used as provided in Section 2.2(a) (each
        such Loan, a "Tranche A Loan" and, collectively, the "Tranche A
        Loans");

               (ii)   Tranche B. Each Tranche B Lender severally agrees to
        make Loans, from time to time during the Commitment Period, in an
        aggregate principal amount not to exceed the Tranche B Commitment
        Amount of such Lender, to be used as provided in Section 2.2(b) (each
        such Loan, a "Tranche B Loan" and, collectively, the "Tranche B
        Loans"); and

               (iii)  Tranche C. Each Tranche C Lender severally agrees to
        make Loans, from time to time during the Commitment Period, in an
        aggregate principal amount not to exceed the Tranche C Commitment
        Amount of such Lender, to be used as provided in Section 2.2(c) (each
        such Loan, a "Tranche C Loan" and, collectively, the "Tranche C
        Loans").

        (b)    FACILITY NOT REVOLVING. Each Lender's Commitment and the
Facility are not revolving in nature. Any amounts that are repaid or prepaid
may not be reborrowed, and the amount of the Facility shall be reduced by the
amount of any repayment or prepayment. The aggregate principal amount of all
Loans shall not at any time exceed the Commitment Amount.



                                     -26-
<PAGE>   28

SECTION 2.2    USE OF PROCEEDS.

        (a)    The proceeds of the Tranche A Loans shall be used as follows:

               (i)    up to eighty one million eight hundred forty nine
        thousand two hundred twenty two Dollars (US$81,849,222) to pay
        invoices issued from time to time to the Borrower or its Affiliates in
        respect of products or services purchased under the Turnkey Contract
        other than products or services provided under the Sirti Subcontract;

               (ii)   up to twenty million Dollars (US $20,000,000) to pay
        invoices issued from time to time to the Borrower or its Affiliates in
        respect of products or services purchased under the Supply Agreement;
        and

               (iii)  up to two million two hundred forty six thousand five
        hundred nineteen Dollars (US $2,246,519) to pay invoices in respect of
        real property to be purchased for use in the Network.

        (b)    The proceeds of the Tranche B Loans shall be used to pay
invoices issued from time to time to the Borrower or its Affiliates under the
Turnkey Contract solely in respect of products or services provided under the
Sirti Subcontract.

        (c)    The proceeds of the Tranche C Loans shall be used to pay
invoices issued from time to time to the Borrower or its Affiliates under the
Supply Agreement solely in respect of the purchase of Optical Equipment and
Qtera Equipment (as such terms are defined in the Supply Agreement) and
related services.

        The invoices to be issued under paragraphs (a), (b) and (c) above are
collectively referred to as the "INVOICES".


SECTION 2.3    PROCEDURE FOR BORROWING; DISBURSEMENTS.

        (a)    DISBURSEMENTS. During the Commitment Period, the Borrower may
request a Disbursement of a Loan by delivering to the Administrative Agent a
Disbursement Request, duly completed with all required information and
executed by an Authorized Officer of the Borrower, together with copies of or
proper references or identification to the Invoices to be paid with the
proceeds of such Loan, not later than 10:00 a.m., New York time, at least
three (3) Business Days prior to the Disbursement Date requested in such
Disbursement Request. Each Disbursement Request shall specify the Disbursement
Date for such Disbursement, the principal amount to be disbursed and whether
the Loan to be disbursed is a Tranche A Loan, Tranche B Loan or Tranche C
Loan. During any one calendar month of the Commitment Period, the Borrower
shall not request, and the Lenders shall not make, more than one (1)
Disbursement per Tranche. Each Disbursement shall be in an amount of not less
than One Million Dollars (US$1,000,000) per Tranche. The Disbursements for
each Tranche to be made in a given month shall be made on the same date.




                                     -27-
<PAGE>   29


               (1)    Upon receipt of the corresponding documentation and
subject to the limitations set forth herein, the Administrative Agent shall
promptly give each Lender of each Tranche notice of the proposed Disbursement
under such Tranche, of such Lender's proportionate share thereof and of the
other matters required by Section 2.3(a) to be specified in the Disbursement
Request.

               (2)    Not later than 10:00 a.m. (New York time) on the date
specified in each Disbursement Request, each Lender shall make available in
Dollars and in immediately available funds at the office of the Administrative
Agent its pro rata share of each Disbursement of such Lender's Tranche
requested; provided, however, that in the case of a Tranche B Loan where Sirti
is the Tranche B Lender, the Disbursement of such Loan may be effected by the
appropriate book entries by the Administrative Agent, Nortel Argentina, the
Borrower and Sirti if so agreed by such Persons.

               (3)    Not later than 3:00 p.m. (New York time) (to the extent
of funds actually received by the Administrative Agent at or prior to 12:00
noon), the Administrative Agent shall disburse the funds in accordance with
Section 2.3(b).

               (4)    In the event that any Lender shall fail to make
available to the Administrative Agent such Lender's portion of any
Disbursement as provided in Section 2.3(a)(2), the Administrative Agent shall
disburse the funds it has received from other Lenders of the same Tranche
pursuant to the procedures set forth in Section 2.3(b); provided, that nothing
in this Section 2.3(a)(4) shall relieve or be deemed to relieve such
defaulting Lender or any other Lender from their respective obligations to
make Loans hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any failure by such Lender to make Loans
hereunder.

        (b)    PAYMENT. Except as otherwise provided in Section 6.2(h) and (in
the case of Tranche B Loans where Sirti is the Lender) Section 2.3(a)(2), the
proceeds of each Disbursement shall be paid for the account of the Borrower by
wire transfer of such amounts to the account designated by Nortel or Nortel
Argentina which shall be set forth in the Disbursement Request relating to
such Disbursement. The Borrower hereby acknowledges that the Borrower shall be
deemed to have received the funds upon the disbursement by the Administrative
Agent of such funds pursuant to the procedures set forth in this Section 2.3.

        (c)    CONSOLIDATION. On each Consolidation Date, (i) all Loans of the
same Tranche disbursed since the immediately preceding Consolidation Date (or,
in the case of the first Consolidation Date, all Loans of the same Tranche
disbursed prior thereto) shall be consolidated into a single Loan of the
respective Tranche. To this end, the Borrower shall deliver to the
Administrative Agent, before 10:00 a.m., New York time, at least six (6)
Business Days prior to each Consolidation Date a notice of consolidation
substantially in the form of Exhibit E, which notice shall indicate the amount
of the Loans to be consolidated.

        (d)    REGISTER. The Administrative Agent shall maintain at its
address a register (the "REGISTER") on which it shall record, from time to
time, the names and addresses of the Tranche



                                     -38-
<PAGE>   30



A Lenders, Tranche B Lenders and Tranche C Lenders, the Commitment under each
Tranche of each Lender, the amount and Tranche of the Loans made by each
Lender and each repayment and prepayment in respect of the Loans of each
Lender. The entries made on the Register shall, to the extent permitted by
Applicable Law, be prima facie evidence of the existence and amounts of the
Obligations therein recorded, and the Borrower, the Agents and the Lenders
shall treat each Person whose name is recorded in the Register as the owner of
a Loan or Note hereunder as the owner thereof for all purposes of this
Agreement, notwithstanding any notice to the contrary; provided, however, that
the failure of the Administrative Agent to maintain the Register or any error
therein shall not in any manner affect the obligation of the Borrower to repay
(with applicable interest) the Loans of such Lender in accordance with the
terms of this Agreement. The Register shall be available for inspection by the
Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice.


SECTION 2.4    NOTES.

        (a)    EXECUTION AND DELIVERY. The Borrower's obligation to pay the
principal of, and interest on, each Loan made by each Lender shall be
evidenced by a Note duly executed and delivered by the Borrower to the
Administrative Agent and payable to the order of the relevant Lender. Each
Note shall be entitled to the benefits of this Agreement and the other
Financing Documents and (subject to variations in form approved by the Agents
as provided in the definition of "NOTE" contained herein) shall (1) be dated
the respective Disbursement Date; (2) be in a stated principal amount equal to
such Lender's pro rata share of the requested Disbursement; (3) be payable in
installments as provided in Section 3.1; and (4) bear interest as provided in
Section 3.3. The Administrative Agent shall deliver to each Lender each Note
payable to such Lender.

        (b)    DELIVERY OF EXECUTION COPIES. By 10:00 a.m. New York time on
the day three (3) Business Days prior to each Disbursement Date and each
Consolidation Date, the Administrative Agent shall provide the Borrower with
execution copies of all Notes required to be issued by the Borrower on such
Disbursement Date or Consolidation Date which Notes shall contain the dates,
denominations and payees of the Notes evidencing the corresponding Loans.

        (c)    FAILURE TO DELIVER EXECUTION COPIES. If the Administrative
Agent shall fail to timely deliver to the Borrower the execution copies of any
Notes required to be issued by the Borrower in accordance with Section 2.4(b),
then, notwithstanding the provisions of Section 6.3(b), the Borrower shall be
required to promptly sign and return copies of such Notes by facsimile to the
Administrative Agent and to deliver the executed originals of such Notes for
the Administrative Agent's receipt by 10:00 a.m. New York time on the day two
(2) Business Days following the receipt by the Borrower of execution copies of
such Notes.

        (d)    EXCHANGE. Notes evidencing Loans consolidated under Section
2.3(c) shall be executed and delivered to the Administrative Agent, but shall
only be released to any Lender upon the exchange of the existing Notes held by
such Lender.



                                     -29-
<PAGE>   31

        (e)    RELEASE. Subject to Section 2.4(d), each Note shall be
surrendered to the Borrower against final payment thereof on the Maturity Date
or such earlier date as the Loans are paid in full.

        (f)    INTERPRETATION. In the event of any inconsistencies between
this Agreement and any Note, the terms of this Agreement shall control;
provided, however, that nothing in this clause (f) shall limit the rights of
any Lender to bring any action or enforce its rights or remedies under any
Note.


SECTION 2.5    VOLUNTARY TERMINATION OR REDUCTION OF THE COMMITMENT AMOUNT.

        (a)    VOLUNTARY TERMINATION OR REDUCTION.

        The Borrower may, upon not less than three (3) Business Days' (but not
more than thirty (30) days') prior notice to the Administrative Agent,
terminate or permanently reduce any or all of the Tranche A Commitment Amount,
Tranche B Commitment Amount or Tranche C Commitment Amount by an aggregate
amount of ten million Dollars (US$10,000,000) or a higher integral multiple of
one million Dollars (US$1,000,000); provided, that any such reduction or
termination shall be subject to the Administrative Agent's receipt of a
certificate of the Borrower evidencing that the Borrower has sufficient funds
available to complete the Project.

        (b)    MANDATORY REDUCTION.

        The Tranche A Commitment Amount and/or the Tranche C Commitment Amount
shall be automatically and permanently reduced upon the effective date of the
termination by the Borrower and its Affiliates of the Supply Agreement in
accordance with its terms, in an amount equal to the portion of the respective
Commitment Amount which remains unapplied to purchases under the Supply
Agreement as of such effective date (less the amount of purchase orders which
remain unfilled as of such date).

        (c)    GENERAL.

        Once reduced in accordance with this Section 2.5, the Commitment
Amount may not be reinstated. Any reduction of the Tranche A Commitment
Amount, Tranche B Commitment Amount or Tranche C Commitment Amount shall be
applied pro rata to each Lender's share of the Commitment Amount of the
respective Tranche. All accrued and unpaid Commitment Fees corresponding to
the amount of the Commitment Amount reduced or terminated to the effective
date of any such reduction or termination shall be paid by the Borrower on the
effective date of such reduction or termination.


SECTION 2.6    LOANS MADE AT REQUEST OF LENDERS.

        Notwithstanding anything to the contrary contained in this Agreement,
the Administrative Agent shall, at the request of Nortel or any Lender that is
an Affiliate of Nortel (collectively, the "NORTEL LENDERS") so long as the
Nortel Lenders and Sirti are the only Lenders with


                                     -30-
<PAGE>   32


Commitments hereunder, cause Loans to be advanced by the Lenders for and on
behalf of the Borrower whether or not (i) any Disbursement Request is given in
accordance with Section 2.3(a), (ii) any of the conditions precedent set forth
in Section 6 hereof are satisfied, (iii) any Default or Event of Default
exists, or (iv) any other fact or circumstance exists, if the Nortel Lenders
shall have given three Business Days' prior written notice to the
Administrative Agent and Borrower of the Nortel Lenders' desire to cause the
Lenders to make such Loans, and all proceeds of such Loans are used to pay the
purchase price of Equipment that has not been disputed and that has not been
paid when due or will become due on or after the date of the Loan that is to
be made pursuant to this Section.


               SECTION 3. PAYMENT OF PRINCIPAL , INTEREST AND FEES


SECTION 3.1    REPAYMENT OF PRINCIPAL.

        The principal amount of each Loan shall be repaid by the Borrower in
eleven (11) consecutive semi-annual installments on the Principal Repayment
Dates, provided that the final installment shall be payable on the Maturity
Date. The amount of each installment shall be equal to the aggregate principal
amount of all Loans outstanding as of the Principal Repayment Date on which
such installment is payable, divided by the number of Principal Repayment
Dates, including such Principal Repayment Date, which have not yet occurred.


SECTION 3.2    PREPAYMENTS.

        (a)    MANDATORY PREPAYMENTS.

        The Borrower shall prepay the principal amount of the Loans, in whole
or in part, together with interest accrued thereon to the date of prepayment
(each such prepayment, a "PREPAYMENT") upon the occurrence of any of the
following events, as follows:

               (1)    ILLEGALITY. The Borrower shall make Prepayments on the
dates and in the amounts specified in Section 5.3(b) if so required pursuant
to such Section.

               (2)    PREPAYMENT EVENTS. The Borrower shall make Prepayments
upon the receipt of Net Proceeds in respect of any Prepayment Event in an
amount equal to the product of such Net Proceeds multiplied by the Prepayment
Quotient in effect as of the date of receipt of such Net Proceeds; provided,
however, that in the case of a Prepayment Event consisting of a casualty or
other insured damage, the Borrower shall not be subject to such prepayment
obligation (i) if the property that was the subject of such casualty or damage
is subject to a Lien permitted under paragraph (l) of the definition of
"Permitted Liens" and the Person secured by such Lien is named as the loss
payee of the insurance proceeds payable with respect to such casualty or
damage, or (ii) if within the period of thirty (30) days following the receipt
of such Net Proceeds the Borrower (A) notifies the Administrative Agent that
it intends to reinvest such Net Proceeds within the six (6) months thereafter
in the payment of the costs of repairing,




                                     -31-
<PAGE>   33


restoring, rebuilding or replacing the portion of the property that was the
subject of such casualty or damage; and (B) certifies that such repair,
restoration, rebuilding or replacement will be completed within a period of
six (6) months from the occurrence of the relevant casualty event; and
provided further, that if the Net Proceeds from such a casualty event or
damage exceed ten million Dollars (US$10,000,000), the full amount thereof
shall be paid to the Intercreditor Agent to be held by the Intercreditor Agent
in the Net Proceeds Account and shall be released by the Intercreditor Agent
to or at the direction of the Borrower as and when required for payment of
such costs of repair, restoration, rebuilding or replacement.

               (3)    PREPAYMENT UNDER IMPSAT INDENTURES. Concurrently with
the making of any voluntary or mandatory prepayment in respect of the
securities issued pursuant to any of the IMPSAT Indentures (not including any
voluntary or mandatory prepayment made in connection with the refinancing of
the aggregate principal and interest due under such securities), the Borrower
shall make a Prepayment in an amount which bears to the aggregate principal
amount of the Loans then outstanding the same ratio as the amount of the
prepayment of the relevant securities bears to the aggregate principal amount
of such securities then outstanding.

               (4)    EXCESS CASH FLOW OF THE BORROWER. Within fifteen (15)
Business Days after the Borrower shall have submitted to the Administrative
Agent its annual financial statements pursuant to Section 8.1(a) in respect of
any fiscal year of the Borrower ending after the Commitment Termination Date,
the Borrower shall make a Prepayment in an aggregate amount equal to the sum
of (i) 27.5% of the Borrower's Adjusted Excess Cash Flow for such fiscal year,
plus (ii) the product of 72.5% of the Borrower's Adjusted Excess Cash Flow for
such fiscal year, multiplied by the Prepayment Quotient in effect on the date
of the submission of the Borrower's annual financial statements for such year
to the Administrative Agent.

               (5)    BORROWER CAPITAL MARKETS TRANSACTIONS. The Borrower
shall make a Prepayment upon its receipt of the Net Proceeds of any Borrower
Capital Markets Transaction (other than any Borrower Capital Markets
Transaction effected after December 31, 2002 the Net Proceeds of which are
used to refinance or pay the securities issued pursuant to the 2003 Indenture)
equal to the sum of (i) 37.5% of such Net Proceeds, plus (ii) the product of
62.5% of such Net Proceeds, multiplied by the Prepayment Quotient in effect on
the date of the Borrower's receipt of such Net Proceeds; provided, however,
that in the event of any such Borrower Capital Markets Transaction which is
commenced after December 31, 2002 or, if earlier, the date of completion of
the application of the Net Proceeds of Replacement Notes in accordance with
Section 13.4, the amount of the Prepayment required by this section shall be
equal to the product of the Prepayment Quotient in effect as of the date of
receipt of such Net Proceeds, multiplied by twenty five percent (25%) of
either (x) such Net Proceeds plus the Borrower's projected Excess Cash Flow or
(y) such Net Proceeds minus the Borrower's projected Negative Cash Flow,
calculated, in each case, on a pro forma basis, for the four (4) fiscal
quarters following the fiscal quarter during which such Net Proceeds are
received; provided, however, that such percentage shall be fifty percent (50%)
after December 31, 2002. The Prepayment contemplated in this paragraph shall
not apply to an offering or placement of debt securities which are




                                     -32-
<PAGE>   34




purchased and held exclusively by IMPSAT, but shall apply to any secondary
offering or placement of such securities.

               (6)    IMPSAT CAPITAL MARKETS TRANSACTION. The Borrower shall
make a Prepayment upon IMPSAT's receipt of the Net Proceeds of any IMPSAT
Capital Markets Transaction (other than any IMPSAT Capital Markets Transaction
effected after December 31, 2002 the Net Proceeds of which are used to
refinance or pay the securities issued pursuant to the 2003 Indenture) in
accordance with Section 13.4; provided, however, that in the event of any such
IMPSAT Capital Markets Transaction (other than any issuance of Replacement
Notes) which is commenced after December 31, 2002 or, if earlier, the date of
completion of the application of the Net Proceeds of Replacement Notes in
accordance with Section 13.4, the amount of the Prepayment required by this
Subsection 3.2(a)(6) shall be equal to the product of the Alternative
Prepayment Quotient in effect on the date of IMPSAT's receipt of such Net
Proceeds, multiplied by twenty five percent (25%) of either (i) such Net
Proceeds plus IMPSAT's projected Excess Cash Flow or (ii) such Net Proceeds
minus IMPSAT's projected Negative Cash Flow, calculated, in each case, on
a pro forma basis, for the four (4) fiscal quarters following the fiscal
quarter during which such Net Proceeds are received; provided, however, that
such percentage shall be fifty percent (50%) after December 31, 2002.

               (7)    IRUs. Promptly after the Borrower's receipt of the Net
Proceeds of each Permitted IRU (or, in the case of a Permitted IRU payable in
more than one payment, after receipt of the first payment), the Borrower shall
make a Prepayment in an amount equal to the product of the Prepayment Quotient
in effect on the date of the Borrower's receipt of such Net Proceeds,
multiplied by 125% of the IRU Cost of such Permitted IRU. In the case of IRUs
other than Permitted IRUs (except the Global Crossing IRU), promptly after the
Administrative Agent's approval of the creation of an IRU pursuant to Section
8.2(j), the Borrower shall make a Prepayment upon its receipt of the Net
Proceeds of such IRU in an amount equal to the product of the Prepayment
Quotient in effect on the date of the Borrower's receipt of such Net Proceeds,
multiplied by the sum of (i) the cost (including the cost of design,
development, construction, improvement, installation and integration) of the
item of property or assets in respect of which the IRU is granted plus (ii) an
amount of up to fifty percent (50%) of such cost, such amounts to be agreed by
the Administrative Agent and the Borrower as a condition to the Administrative
Agent's approval.

               All amounts required to be prepaid under this Section 3.2(a)
shall be paid to the Administrative Agent promptly (but in any case within ten
(10) Business Days) after the receipt by the Borrower and/or its Affiliates of
such amount.

        (b)    OPTIONAL PREPAYMENTS. Upon not less than seven (7) Business
Days prior written notice to the Administrative Agent, the Borrower may make a
Prepayment without premium or penalty, on any Interest Payment Date, subject
to the limitations imposed by Applicable Law, if any, provided that such
Prepayment shall only be allowed if the amount thereof is equal to one million
Dollars (US$1,000,000) or an integral multiple thereof, except that if the
aggregate principal amount of the Loans then outstanding is less than one
million Dollars




                                     -33-
<PAGE>   35


(US$1,000,000), the Borrower may prepay such aggregate principal amount. Upon
receipt of such notice by the Administrative Agent, the Borrower's obligation
to make such Prepayment shall be irrevocable and binding.

        (c)    ORDER OF APPLICATION. All Prepayments under this Section 3.2
shall be applied in inverse order of scheduled future installment repayments
of the Loans.


SECTION 3.3    INTEREST.

        (a)    INTEREST RATE. The Borrower shall pay to the Lenders interest
on the outstanding principal amount of each Loan on each Interest Payment
Date, for the period commencing on the Disbursement Date of such Loan until
such Loan is paid in full, at a rate per annum equal to LIBOR determined for
each Interest Period of such Loan, plus the number of basis points indicated
below or, if such Loan shall have been converted to a Prime Loan pursuant to
Section 3.3(b), at a rate per annum equal to the Prime Rate plus the number of
basis points indicated below.




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
       INTEREST PERIOD         LIBOR LOAN BASIS POINTS  PRIME LOAN BASIS POINTS
--------------------------------------------------------------------------------
<S>                           <C>                       <C>
  First through sixth                    525                      311
--------------------------------------------------------------------------------

  Seventh and eighth                     600                      386
--------------------------------------------------------------------------------

  Ninth and tenth                        625                      411
--------------------------------------------------------------------------------

  Eleventh and thereafter                650                      436
--------------------------------------------------------------------------------
</TABLE>



        (b)    CONVERSION FROM LIBOR TO PRIME RATE. Notwithstanding, anything
herein to the contrary, if, on or prior to the determination of LIBOR for any
Interest Period, (1) the Administrative Agent reasonably determines (which
determination shall be conclusive absent manifest error) that by reason of any
event affecting the relevant market, quotations of interest rates for the
relevant deposits are not being provided for purposes of determining LIBOR for
such Interest Period; or (2) the Administrative Agent receives notice from the
Required Lenders that by reason of any event generally affecting the London
interbank market the LIBOR determined or to be determined for such Interest
Period does not adequately and fairly reflect the cost to such Lenders of
making or maintaining their affected Loans during such Interest Period (as
conclusively certified by such Required Lenders), then the Administrative
Agent shall give the Borrower and the Lenders prompt written notice thereof.
If such notice is given, (i) any LIBOR Loans requested to be made on the first
day of such Interest Period shall be made as Prime Loans; and (ii) any
outstanding LIBOR Loans shall be converted, on the first day of such


                                     -34-
<PAGE>   36




Interest Period, to Prime Loans. The Administrative Agent shall use reasonable
efforts to determine whether the circumstances which have caused such notice
to be given continue to exist, and, if the Administrative Agent shall at any
time determine that such circumstances no longer exist, it shall, as soon as
practicable thereafter, notify the Borrower and the Lenders that the
Administrative Agent is withdrawing such notice whereupon any then outstanding
Prime Loan shall be converted to a LIBOR Loan.

        (c)    DEFAULT INTEREST. Notwithstanding the provisions of Section
3.3(a), the Borrower shall pay to the Lenders interest at the Default Interest
Rate on the unpaid principal amount, and on any other amount payable by the
Borrower hereunder or under the Notes, which has not been paid in full when
due (whether at stated maturity, by acceleration, prepayment or otherwise),
for the period from and including the due date thereof to and including the
date the same is paid in full (both before and after judgment), whether or not
any notice of default in the payment thereof has been delivered. Interest
payable under this Section 3.3(c) shall be compounded on any overdue amount at
three (3) month intervals commencing on the date on which the default
occurred.

        (d)    COMPUTATION. Interest on all LIBOR Loans shall be computed on
the basis of three hundred sixty (360) days and actual days elapsed (including
the first day but excluding the last) in the period for which payable.
Interest on all Prime Loans shall be computed on the basis of a year of three
hundred sixty-five/sixty-six (365/366) days and actual days elapsed (including
the first day but excluding the last).


SECTION 3.4    FEES.

        (a)    COMMITMENT FEE. The Borrower shall pay to the Administrative
Agent for the account of the Lenders a non-refundable per annum fee
("COMMITMENT FEE") equal to three quarters of one percent (0.75%) of the daily
average of the undisbursed portion of the Commitment Amount during the
Commitment Period, computed on the basis of a year of three hundred sixty
(360) days and actual days elapsed (including the first day but excluding the
last day other than the Commitment Termination Date) and payable in arrears on
the last Business Day of each calendar quarter.

        (b)    FRONT-END FEE. The Borrower shall pay to the Administrative
Agent for the account of the Lenders on the Initial Disbursement Date a
non-refundable one-time fee in an amount equal to one and one half percent
(1.50%) of the Commitment Amount.


        (c)    AGENTS' FEES. The Borrower shall pay (i) to the Administrative
Agent an annual fee of sixty thousand Dollars (US$60,000) and (ii) to the
Collateral Agent the reasonable and customary fee charged by the Collateral
Agent for acting in such capacity as shall be agreed between the Borrower and
the Collateral Agent, such fees to be payable in advance to the respective
Agent.


                                     -35-
<PAGE>   37



SECTION 3.5    NATURE OF PAYMENTS.

        All payments under this Agreement and under the Notes shall be paid on
the dates when due without presentment, demand, protest, or notice of any
kind, all of which are hereby expressly waived. Such payments shall be made in
Dollars and in immediately available funds, without setoff, recoupment,
counterclaim, or any other deduction of any nature.


SECTION 3.6    PAYMENT PROCEDURES.

        (a)    DEPOSIT ACCOUNT. All payments hereunder and under the Notes
shall be made to the Administrative Agent for the ratable account of each
Lender entitled thereto, in Dollars by wire transfer of immediately available
funds to the Administrative Agent's account indicated below, or such other
account as the Administrative Agent may designate to the Borrower in writing
(the "DEPOSIT ACCOUNT"), not later than 1:00 P.M. New York time on the date
when due.

               Administrative Agent's Deposit Account:
               Citibank N.A. New York
               Swift Number CITIUS33
               ABA # 021000089
               For Credit to the account of Nortel Networks Limited
               Account #38545364

        Any payments under this Agreement that are made later than 1:00 p.m.
(New York time) shall be deemed to have been made on the next succeeding
Business Day.

        (b)    BUSINESS DAYS. Whenever any payment to be made hereunder or
under any Note shall be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day, provided, that
should such next succeeding Business Day fall in the next calendar month, such
due date shall be the immediately preceding Business Day.


SECTION 3.7    ADMINISTRATIVE AGENT'S DETERMINATION.

        Any determination made by the Administrative Agent as to the interest
rate, the Default Interest Rate, and the amounts of interest, principal and
other amounts due hereunder shall be conclusive in the absence of manifest
error.


SECTION 3.8    PAYMENTS PRO RATA.

        (a)    PRO RATA. The Administrative Agent agrees that promptly after
its receipt of each payment from or on behalf of the Borrower in respect of
any amount due and payable by the Borrower hereunder, except as otherwise
expressly provided herein, it shall distribute such payment to the Lenders pro
rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.





                                     -36-
<PAGE>   38

        (b)    EXCESS PAYMENTS. Each of the Lenders agrees that, if it should
receive any payment hereunder (either by voluntary payment, by realization
upon security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, or otherwise), which is applicable to the
payment of the principal of or interest on the Loans or the fees, with the
result that such Lender receives a greater proportion of the amount then due
to it hereunder than any other Lender receives in respect of the amount due to
such other Lender hereunder, then such Lender receiving such excess payment
shall purchase for cash without recourse or warranty from the other Lenders an
interest in the Obligations of the Borrower to such other Lenders in such
amount as shall result in a proportional participation by all the Lenders in
such payment; provided, however, that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest.


            SECTION 4. PAYMENT IN DOLLARS; EVENT OF SOVEREIGN RISK


SECTION 4.1    OBLIGATION TO PAY IN DOLLARS; JUDGMENT CURRENCY.

        This is an international transaction in which the specification of
Dollars and payment in the place specified pursuant to this Agreement (the
"SPECIFIED PLACE OF PAYMENT"), is of the essence, and Dollars shall be the
currency of account in all events. The Obligations of the Borrower shall not
be discharged by an amount paid in another currency or in another place,
whether pursuant to a judgment or otherwise, to the extent that the amount so
paid on conversion to Dollars and transferred to the Specified Place of
Payment under normal banking procedures does not yield the amount of Dollars
in the Specified Place of Payment due hereunder. If for the purpose of
obtaining judgment in any court it is necessary to convert a sum due hereunder
in Dollars into another currency (the "SECOND CURRENCY"), the rate of exchange
which shall be applied shall be that at which in accordance with normal
banking procedures the Lenders could purchase Dollars with the Second Currency
on the Business Day next preceding that on which judgment is rendered. The
obligation of the Borrower in respect of any such sum due to the Lenders
hereunder or under the Notes shall, notwithstanding the rate of exchange
actually applied in rendering such judgment, be discharged only to the extent
that on the Business Day following receipt by the Lenders of any sum adjudged
to be due hereunder or under the Notes in the Second Currency, the Lenders may
in accordance with normal banking procedures purchase and transfer to the
Specified Place of Payment Dollars with the amount of the Second Currency so
adjudged to be due; and the Borrower hereby, as a separate obligation and
notwithstanding any such judgment, agrees to indemnify the Lenders against,
and to pay the Lenders on demand in Dollars, any difference between the sum
originally due to the Lenders in Dollars and the amount of Dollars so
purchased and transferred (including, without limitation, all costs and
expenses of the Lenders incurred in connection therewith, such as transfer
taxes, commissions and fees).



                                     -37-
<PAGE>   39


SECTION 4.2    EVENT OF SOVEREIGN RISK.

        Without prejudice to Section 4.1, in the event that not less than
three (3) Business Days before any payment is due hereunder any Lender
notifies the Administrative Agent that an Event of Sovereign Risk has occurred
and is continuing, the Administrative Agent shall notify the Borrower and each
Lender of the occurrence of such event and the Borrower shall at its own
expense and at each Lender's sole option (which option shall be deemed to be
that set forth in Section 4.2(b) below unless notice shall have been received
from such Lender as described in Section 4.2(b) or (c) below):

        (a)    DOLLARS. Obtain the required amount of Dollars through (1) the
sale of Bonos Externos de la Republica Argentina, Series 1989 ("BONEX") or of
any other public or private bond or tradable security, (2) the purchase of
Dollars in New York, with whatever legal tender, or (3) failing both (1) and
(2), any other legal mechanism for the acquisition of Dollars in any exchange
market; or

        (b)    BEST FIRM BID PRICE. If a Lender shall have notified the
Administrative Agent and the Borrower prior to a date of payment that its
option shall be that set forth in this Section 4.2(b), make the required
payment in the city of Buenos Aires, Argentina, by the delivery of, at such
Lender's sole option, (1) Bonex, (2) Argentine Floating Rate Bonds ("FRBs"),
(3) Argentine Par Bonds ("PAR BONDS") or (4) any other securities exchangeable
for Bonex, FRBs or Par Bonds in accordance with Argentine regulations, which,
in any of cases (1) through (4) if sold at the best firm bid price quoted, for
the relevant amount, on the date of payment in New York by the Reference
Dealers would cause such Lender to receive, after taxes, fees, commissions and
any other costs, an amount of Dollars equal to the amount required to be paid
by the Borrower for the account of such Lender on such payment date (for
purposes of this Section 4.2(b), the "best firm bid price" shall be determined
on the basis of quotes obtained from the Reference Dealers and, if only one
quote is obtained, on the basis of such quote; and "REFERENCE DEALERS" shall
mean The Chase Manhattan Bank, Banque Nationale de Paris, JP Morgan and
Merrill Lynch & Co. or, if none of the foregoing is quoting a firm bid price
for such payment date, then the "Reference Dealers" shall be those dealers
(which may be as few as one dealer) selected by such Lender to be Reference
Dealers for the purposes of this Section 4.2(b)); or

        (c)    DEFERRAL. If a Lender shall have notified the Administrative
Agent and the Borrower prior to a date of payment that its option shall be
that set forth in this Section 4.2(c), defer payment of the amount due as
specified in such notice until the earlier of (1) the date which is one
Business Day following the date on which such Lender shall, in its sole
discretion, notify the Administrative Agent and the Borrower that such Event
of Sovereign Risk is no longer in effect, or (2) the date (which date shall be
not more than ninety (90) calendar days following the date on which the
payment was originally due) on which such Lender shall notify the
Administrative Agent and the Borrower that payment is to be made in accordance
with the procedure outlined in either Section 4.2(a) or (b) above, as such
Lender shall elect. If a payment obligation of the Borrower is so deferred
pursuant to this Section 4.2(c), then the period between





                                     -38-
<PAGE>   40


the original payment date and the deferred date for payment determined in
accordance with the first sentence of this Section 4.2(c) (the "DEFERRED
PAYMENT DATE") shall be the "SOVEREIGN EVENT DEFERRAL PERIOD", which shall
also constitute an "Interest Period" for purposes of such Lender's Loan(s) and
Note(s). If such Lender shall subsequently provide notice that the Borrower is
to make payment as specified in (x) Section 4.2(c)(1) above or (y) Section
4.2(c)(2) above pursuant to an election to apply the mechanism set forth in
Section 4.2(a) above (which subsequent notice shall specify the Dollar amount
due on the Deferred Payment Date concerned), then the Borrower shall make
payment in Dollars of all outstanding amounts due hereunder (including,
without limitation, interest accrued during the Sovereign Event Deferral
Period) on such Deferred Payment Date in accordance with the terms of this
Agreement. Alternatively, if such Lender shall subsequently provide notice
that the Borrower is to make payments pursuant to the mechanism set forth in
Section 4.2(b) above (which subsequent notice shall specify the Dollar amount
due on the Deferred Payment Date concerned, as well as the securities to be
used for payment and the account in Argentina to which such securities are to
be delivered), then the Borrower shall make payment of all outstanding amounts
due hereunder (including, without limitation, interest accrued during the
Sovereign Event Deferral Period) on such Deferred Payment Date in accordance
with such Lender's notice.

        (d)    ACCRUAL OF INTEREST UNAFFECTED. Payments made in accordance
with this Section 4.2 shall include any amounts required to be paid under
Section 5.2. Any undertaking of operations to obtain Dollars according to this
Section 4.2 shall not affect the accrual of interest (including default
interest) in accordance herewith. Nothing in this Section 4.2 shall impair any
of the rights of the Agents or the Lenders under this Agreement or be
construed to entitle the Borrower to refuse to make payments hereunder in
Dollars for any reason whatsoever, including, without limitation, any of the
following:

                      (1)    the purchase of Dollars in Argentina by any means
becomes more onerous or burdensome for the Borrower than as of the date
hereof; and

                      (2)    the exchange rate in force in Argentina for the
conversion of Pesos to Dollars changes significantly from that in effect as of
the date hereof.


                   SECTION 5. FUNDING AND YIELD PROTECTION


SECTION 5.1    TAXES.

        (a)    PAYMENT NET OF TAXES. Any and all payments by the Borrower in
respect of amounts due under this Agreement, the Notes and any other Financing
Document shall be made free and clear of, and without withholding or deduction
for or on account of, any present or future taxes (including, without
limitation, income taxes, value added taxes, sales taxes, use taxes, stamp or
documenting taxes, excise taxes, property taxes and asset taxes), duties,
levies, fees, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, of whatever nature now or hereafter imposed,
assessed or levied by any Argentine Governmental





                                     -39-
<PAGE>   41



Authority or by any other Governmental Authority from or through which any
payment is made hereunder or under the other Financing Documents ("TAXES"),
except income or franchise taxes imposed on any Lender by the laws of the
jurisdiction, whether federal, state or local, in which it is resident or
organized ("EXCLUDED TAXES"). If any Taxes, other than any Excluded Taxes, are
required by Applicable Law to be withheld or deducted from or in respect of
any sum payable under this Agreement, the Notes or any other Financing
Document:

               (1)    the Borrower shall pay such additional amount as may be
necessary to ensure that after reduction for all required withholdings or
deductions for Taxes, other than Excluded Taxes (including withholdings or
deductions applicable to additional sums payable under this Section 5.1), the
net amount actually received by the Lenders free and clear of such withholding
or deduction is equal to the amount the Lenders would have received had no
such withholdings or deductions been made;

               (2)    the Borrower shall make such withholdings or deductions;
and

               (3)    the Borrower shall pay the full amount withheld or
deducted to the relevant Governmental Authorities in accordance with the
Applicable Laws and prior to the date on which penalties attach thereto.

        (b)    INDEMNITY. The Borrower shall indemnify and hold the Agents and
the Lenders harmless from and against, and shall reimburse the Lenders on
demand for, the full amount of Taxes (including, without limitation, any Taxes
imposed on amounts payable under this Section 5.1) paid by the Lenders other
than Excluded Taxes, and for any loss, liability, claim or expense (including
penalties, interest, and legal fees) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted, and
which the Agents or the Lenders may incur at any time arising out of, or in
connection with, any failure of the Borrower to make any payment of such Taxes
when due.

        (c)    OTHER TAXES. The Borrower shall pay all Taxes (including notary
public and filing fees), other than Excluded Taxes, associated with the
execution, delivery, filing, recording, or registration of, or foreclosure
with respect to, this Agreement, the Notes and the other Financing Documents,
and shall indemnify and hold the Agents and the Lenders harmless from and
against any and all liabilities with respect to, or resulting from, any
failure or delay in paying such Taxes.

        (d)    SURVIVAL. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the Obligations of the Borrower under
this Section 5.1 shall survive the payment in full of all principal and
interest hereunder and under the Notes.

        (e)    TAX RECEIPTS. Within thirty (30) days after the date of any
payment of Taxes required to be made under this Section 5.1, the Borrower
shall furnish to the Administrative Agent a copy of any official tax receipts
evidencing such payment.




                                     -40-
<PAGE>   42



SECTION 5.2    FUNDING BREAKAGE COSTS.

        If the Lenders incur any costs, expenses or losses as a result of (a)
any failure by the Borrower to borrow after giving the Administrative Agent a
Disbursement Request; (b) any payment, including any payment due on
acceleration, by the Borrower on a date other than an Interest Payment Date;
or (c) any failure by the Borrower to make any Prepayment after the Borrower
has given the notice required hereunder regarding such Prepayment, then, in
any such event, the Borrower shall pay or cause to be paid, in Dollars, to the
Administrative Agent for the account of the Lenders the amount which the
Administrative Agent shall notify the Borrower as being the aggregate of such
costs, expenses and losses (collectively, the "FUNDING BREAKAGE COSTS"). The
certificate of the Administrative Agent setting forth in reasonable detail the
amount of Funding Breakage Costs for which demand is made shall, in the
absence of manifest error, be conclusive and binding as to the amount of such
Funding Breakage Costs for all purposes. For purposes of this provision, each
LIBOR Loan (and each related reserve, special deposit or similar requirement)
conclusively shall be deemed to have been funded at the LIBOR applicable to
such LIBOR Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such LIBOR Loan is in fact so funded.


SECTION 5.3    ILLEGALITY.

        (a)    NOTICE AND SUSPENSION. If the introduction of any Applicable
Law, or any change in any Applicable Law, or any change in the interpretation
or administration of any Applicable Law, makes or has made it unlawful for a
Lender or its applicable Lending Office to make or fund its Loans, then the
Lender shall give notice thereof to the Borrower through the Administrative
Agent, and the obligation of that Lender to make or fund its Loans shall be
suspended until such Lender shall notify the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exists.

        (b)    PREPAYMENT. If, as a result of any circumstances set forth in
Section 5.3(a) it is unlawful for a Lender to maintain any Loan, the Borrower
shall, upon receipt of notice of such determination and demand from such
Lender (with a copy to the Administrative Agent), prepay in full the Loan of
such Lender then outstanding, together with any accrued and unpaid interest
thereon and any fees required to be paid under Section 3.4, on the next
Interest Payment Date for such Loan following the date the notice is given;
provided, however, that if such Lender notifies the Borrower that earlier
Prepayment is necessary in order to enable such Lender to comply with such
Applicable Law or change and specifies an earlier date for the Prepayment, the
Borrower shall make the Prepayment on the date so specified together with any
amounts required to be paid under Section 5.2.

        (c)    LENDER'S DUTY TO MITIGATE. Before giving notice to the
Administrative Agent under this Section 5.3, the affected Lender shall
endeavor to designate a different Lending Office with respect to its Loan or
endeavor in good faith to provide another structure for its Loan if such
designation or alternative structure will avoid the need for giving such
notice or making such




                                     -41-
<PAGE>   43


demand and will not, in the Lender's sole determination, be illegal or cause
such Lender to suffer any economic, legal, regulatory or other disadvantage.


SECTION 5.4    INCREASED COSTS AND YIELD PROTECTION.

        (a)    NOTICE; ADDITIONAL PAYMENTS. If due to either (1) the
introduction of, any change in, or any change in the interpretation or
administration by any competent authority of, any Applicable Law, or (2) the
compliance by a Lender with any guideline or request from any central bank or
any other Governmental Authority (whether or not having the force of law), in
each case, made subsequent to the date of this Agreement, there shall be any
increase in the cost to such Lender of agreeing to make or making, funding or
maintaining its Loan, then such Lender shall notify the Administrative Agent
and the Borrower accordingly, and the Borrower shall pay to the Administrative
Agent for the account of such Lender, such additional amounts as are
sufficient to compensate such Lender for such increased costs; provided, that
any such additional amounts shall not duplicate any amounts payable by the
Borrower under Section 5.3.

        (b)    CAPITAL ADEQUACY REGULATIONS. If (1) the effectiveness of any
Capital Adequacy Regulation, (2) any change in any Capital Adequacy
Regulation, (3) any change in the interpretation or administration of any
Capital Adequacy Regulation by any competent authority, including with respect
to compliance by a Lender (or its Lending Office) or any corporation
controlling the Lender with any Capital Adequacy Regulation, in each case,
made subsequent to the date of this Agreement, affects the amount of capital
required or expected to be maintained by such Lender (or its Lending Office)
or any corporation controlling such Lender and, after taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy and otherwise anticipated return on capital, such Lender
determines that the amount of such capital is increased as a consequence of
its Commitment, Loans and other obligations under this Agreement, then the
Borrower, upon receipt from such Lender (through the Administrative Agent) of
a demand for payment of additional amounts, shall pay to such Lender
additional amounts sufficient to compensate such Lender, the Lending Office or
the corporation for the increased cost to such Lender, Lending Office or other
corporation or the reduction in the rate of return to such Lender, Lending
Office or other corporation on its capital caused by its compliance with such
Capital Adequacy Regulation, provided, however, that any such additional
amounts shall not duplicate any amounts payable by the Borrower under Section
5.4(a).

        (c)    LENDER'S DUTY TO MITIGATE. Before giving notice to the
Administrative Agent under this Section 5.4, the affected Lender shall
endeavor to designate a different Lending Office with respect to its Loan if
such designation will avoid the need for giving such notice or making such
demand and will not, in the Lender's sole determination, be illegal or cause
such Lender to suffer any economic, legal, regulatory or other disadvantage.



                                     -42-

<PAGE>   44

                   SECTION 6. DELIVERIES; CONDITIONS PRECEDENT


SECTION 6.1     CONCURRENT DELIVERIES.

        Concurrently with the execution of this Agreement, the Borrower has
delivered, or caused to be delivered to the Administrative Agent an original or
certified copy of each of (a) the executed Turnkey Contract, (b) the Business
Plans, (c) the executed Nortel Brazil Financing Agreement and (d) the executed
Brazil Turnkey Contract.


SECTION 6.2     CONDITIONS PRECEDENT TO INITIAL DISBURSEMENT; CLOSING.

        The obligations of the Lenders to make the initial Disbursement is
subject to (i) the conditions precedent contained in Section 6.3 and (ii) the
delivery to the Administrative Agent on the Closing Date of the following
documents, each in form and substance satisfactory to the Administrative Agent:

        (a)     PROJECT DOCUMENTS. An original executed counterpart of each of
the IMPSAT Guarantee and the Supply Agreement.

        (b)     BRAZIL FINANCING DOCUMENTS. An original or certified copy of the
executed Brazil Guarantee.

        (c)     OFFICER'S CERTIFICATES. Certificates, dated the Closing Date,
signed by an Authorized Officer of IMPSAT and the Borrower, respectively, and
certifying the authenticity of IMPSAT's and the Borrower's respective Charter
Documents and corporate resolutions attached thereto and indicating IMPSAT's and
the Borrower's current officers, their respective signatures and their corporate
authority.

        (d)     CAPITALIZATION. A certificate dated the Closing Date signed by
an Authorized Officer of the Borrower certifying that, as of the Closing Date,
the Borrower's Paid in Capital is equal to or greater than the equivalent in
Pesos of twenty six million four hundred forty five thousand Dollars
(US$26,445,000) (determined according to U.S. GAAP), such certificate to be
accompanied by original or certified copies of the following documents: (i)
evidence of the Borrower's receipt of an irrevocable contribution on account of
a future capital increase made by IMPSAT in the amount of US$50,000,000 (fifty
million Dollars) (the "IMPSAT CAPITAL CONTRIBUTION"); (ii) the minutes of the
Borrower's Board of Directors accepting the IMPSAT Capital Contribution and
calling for a shareholders meeting to consider the Borrower's capital increase
in the amount of the IMPSAT Capital Contribution (the "BORROWER CAPITAL
INCREASE") and (iii) the written undertaking of IMPSAT containing its
irrevocable commitment not to withdraw, in whole or in part, or transfer or
encumber any rights in respect of the IMPSAT Capital Contribution prior to the
effective date of the Borrower Capital Increase.

        (e)     IMPSAT BRAZIL CAPITALIZATION. The certificate of an Authorized
Officer of IMPSAT Brazil required by Section 6.2(e) of the Nortel Brazil
Financing Agreement.



                                     - 43 -
<PAGE>   45

        (f)     LICENSES. Documents which evidence, to the satisfaction of the
Administrative Agent, the Borrower's ownership of the Licenses and that the
Licenses are in full force and effect.

        (g)     OPINIONS OF COUNSEL. An opinion addressed to the Administrative
Agent, the Collateral Agent and each of the Lenders and dated the Closing Date
from each of:

                (1)     Arnold & Porter, special U.S. Counsel to the Borrower,
and

                (2)     Nicholson & Cano, Argentine Counsel to the Borrower.

        (h)     PAYMENT OF FEES. A letter of instruction dated the Closing Date
addressed to the Administrative Agent and signed by an Authorized Officer of the
Borrower (1) setting forth a statement of all costs, fees, out-of-pocket
expenses and other compensations and payments (including under any fee letters)
due by the Borrower to Nortel or any other Lender on or before the initial
Disbursement Date under or with respect to the Financing Documents and the
Collateral, including all reasonable legal fees and expenses incurred by Nortel
or its Affiliates under Section 11.1 (2) acknowledging and consenting to the
payment of all such amounts, and (3) directing the payment of all such amounts
by the Administrative Agent from the proceeds of the first Disbursement.

        (i)     GOVERNMENTAL APPROVALS. Evidence that the following Governmental
Approvals have been obtained and are in full force and effect, and all
registrations, applications, tariffs, reports and other documents in connection
therewith required to be filed and/or registered with any Person have been filed
and registered:

                (1)     All Governmental Approvals, if any, then necessary in
connection with the execution, delivery or performance by the Borrower of this
Agreement and any other Financing Documents to which the Borrower is a party;

                (2)     All Governmental Approvals, if any, then necessary in
connection with the exercise by the Administrative Agent, the Collateral Agent
or any Lender of its rights or remedies under this Agreement or any other
Financing Documents; and

                (3)     All material Governmental Approvals (other than the
Applicable Permits), if any, then necessary in connection with the continuing
operation of the Telecommunications Business by the Borrower and its
Subsidiaries and the implementation of the Project.

        (j)     PROCESS AGENT. A letter from CT Corporation System, currently
located at 111 Eighth Avenue, New York, New York 10011, in a form satisfactory
to the Administrative Agent in its sole discretion, indicating its consent to
its appointment as agent for service of process by the Borrower; and evidence
that the fees of such agent have been paid in full for the period commencing on
the date hereof until six (6) months after the Maturity Date.

        (k)     INSURANCE. Certificates of all insurance required by Section
8.1(d), which certificates (1) state the names of the insurance companies, the
amounts of the insurance, the



                                     - 44 -
<PAGE>   46

dates of the expiration thereof and the properties and risks covered thereby,
(2) have been executed by an Authorized Officer of the respective insurer, and
(3) certify that all premiums and other payments have been timely paid and that
such insurance is otherwise not subject to cancellation by the insurer during
its term, except for nonpayment of premiums, in which case at least fifteen (15)
days prior written notice of termination must be given to the Administrative
Agent.

        (l)     BUSINESS PLANS. Copies of the Business Plans.


SECTION 6.3     CONDITIONS PRECEDENT TO ALL DISBURSEMENTS.

        The obligation of the Lenders to make any and all Disbursements
(including the initial Disbursement) is subject to the satisfaction of the
following conditions precedent on the relevant Disbursement Date to the
satisfaction of the Administrative Agent:

        (a)     DISBURSEMENT REQUEST. The Borrower shall have delivered to the
Administrative Agent a duly completed and executed Disbursement Request.

        (b)     NOTES. The Borrower shall have duly completed, executed, and
delivered to the Administrative Agent a Note or Notes dated the applicable
Disbursement Date and payable to the order of each Lender participating in such
Disbursement, in the principal amount of the Loan to be made by such Lender on
such date.

        (c)     SECURITY DOCUMENTS. All Security Documents theretofore executed
and delivered shall be in full force and effect and the Borrower shall have
executed and delivered one or more Equipment Pledge Agreements or Security
Reinforcements over the Equipment and Mortgage Deeds over the real property, if
any, that has been acquired by the Borrower since the last Disbursement Date and
is required to become part of the Collateral in accordance with this Agreement
and all of such agreements and deeds which require registration with a
Governmental Authority in order to perfect the Liens provided therein shall have
been duly registered or filed for registration and a certified copy of the
registered agreement or deed or of the official receipt or other document
evidencing such filing, as the case may be, shall have been delivered to the
Administrative Agent.

        (d)     REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the Borrower, any Subsidiary thereof or IMPSAT in the
Financing Documents shall be true and correct in all material respects on and as
of such Disbursement Date with the same force and effect as if made on and as of
such Disbursement Date (except to the extent that such representations and
warranties expressly refer to an earlier date, in which case they shall have
been true and correct as of such earlier date).

        (e)     COVENANTS. The Borrower shall be in compliance with all
covenants contained in Section 8 as of such Disbursement Date.



                                     - 45 -
<PAGE>   47

        (f)     LITIGATION. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority shall be pending, or to the
knowledge of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective properties or revenues
which challenges the validity or legality of this Agreement or any other Project
Agreement or any of the transactions contemplated hereby or thereby.

        (g)     NO DEFAULTS. No Default or Event of Default shall exist
hereunder and no default or event of default shall exist under any of the Brazil
Agreements (regardless of whether or not there has been a notice of default or
acceleration thereunder) on or as of such Disbursement Date.

        (h)     MATERIAL ADVERSE CHANGE. Since the last Disbursement Date (or,
in the case of the initial Disbursement, since the date hereof), no Material
Adverse Change shall have occurred and be continuing.

        (i)     INSURANCE. All insurance required to be maintained by the
Borrower or its Subsidiaries pursuant to Section 8.1(d) shall be in full force
and effect and all premiums due and payable as of such Disbursement Date shall
have been paid in full.

        (j)     LICENSES AND GOVERNMENTAL APPROVALS. All Licenses and all
Governmental Approvals referred to in Section 6.2(i) shall be in full force and
effect as of such Disbursement Date.

        (k)     OTHER DOCUMENTS; OPINIONS. The Administrative Agent shall have
received: (1) such other documents and evidence as the Administrative Agent may
reasonably request in connection with the transactions contemplated hereby; and
(2) if requested by the Required Lenders, a legal opinion or opinions, in form
and substance satisfactory to the Administrative Agent, of counsel acceptable to
the Administrative Agent, with respect to any matters incident to such
Disbursement, including without limitation as to the due registration of the
Security Documents then in effect.


SECTION 6.4     ENGLISH TRANSLATIONS.

        All Charter Documents and other documents and resolutions required to be
delivered pursuant to this Agreement, the other Project Agreements, and the
Licenses shall, if not in English, and if the Administrative Agent so requests,
be accompanied by an English translation (which, if the Administrative Agent so
requests, shall be a certified translation prepared by an Argentine certified
translator) which the Administrative Agent shall have the right to rely upon for
all purposes hereof and the other Project Agreements. All costs of translation
shall be payable by the Borrower.


SECTION 6.5     TERMINATION BY THE LENDERS.

        In the event the conditions precedent to the initial Disbursement shall
not have occurred on or before November 6, 1999, the Required Lenders shall have
the right, by notice to the



                                     - 46 -
<PAGE>   48

Borrower through the Administrative Agent, to terminate this Agreement, without
prejudice to the rights of the Lenders under Section 11 hereof. Any fees and
expenses payable hereunder by the Borrower to the Lenders shall thereupon become
immediately due and payable.


                   SECTION 7. REPRESENTATIONS AND WARRANTIES.

        The Borrower hereby represents and warrants to each Agent and each
Lender that the statements contained in this Section 7 are true, correct and
complete as of the date hereof and shall be true, correct and complete as of
each Disbursement Date.


SECTION 7.1     CORPORATE STATUS.

        Each of the Borrower and its Subsidiaries and IMPSAT (a) is a sociedad
anonima or corporation, as the case may be, duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, and
(b) has the power and authority to own its property and assets, to carry on its
business in each jurisdiction in which it operates, and to incur Indebtedness
and to create or suffer to exist Liens on its properties created under the
Security Documents. IMPSAT is the holder, directly or indirectly, of at least
ninety-five (95%) of the Capital Stock of the Borrower. Set forth on Schedule
7.1 hereto is a complete list of the Subsidiaries of IMPSAT and the Borrower,
the jurisdiction of organization of each such Subsidiary and the amount and
percentage of Capital Stock of each such Subsidiary owned by IMPSAT and the
Borrower.


SECTION 7.2     CORPORATE POWER.

        (a)     AUTHORITY. Each of the Borrower and IMPSAT and their respective
Subsidiaries has full power and authority to enter into the Project Agreements
to which it is a party or, when executed and delivered, it will become a party,
all of which have been duly authorized by all proper and necessary corporate
action, and has duly executed and delivered each such Project Agreement which
has been entered into as of the date hereof or the applicable Disbursement Date,
as the case may be.

        (b)     VALIDITY AND ENFORCEABILITY. Assuming due execution and delivery
thereof by the other parties thereto, each such Project Agreement constitutes,
or when executed and delivered will constitute, a legal, valid and binding
obligation of the Borrower, IMPSAT and their respective Subsidiaries, as the
case may be, enforceable against them in accordance with its terms, except, in
each case, to the extent such enforceability may be restricted by bankruptcy,
insolvency or similar Applicable Laws affecting the enforcement of creditors'
rights generally or by general principles of equity.




                                     - 47 -
<PAGE>   49

SECTION 7.3     GOVERNMENTAL APPROVALS.

                (a)     FINANCING DOCUMENTS. All Governmental Approvals that are
required by the Borrower or any other party in connection with the execution,
delivery or performance by, or enforcement against, the Borrower and any other
party of this Agreement and all other Financing Documents to which the Borrower
or such other party is a party have been obtained, are in full force and effect,
and the Borrower and each such party is in compliance in all material respects
with such Governmental Approvals.

               (b)      OPERATIONS. All Governmental Approvals (other than the
Applicable Permits) that are required by the Borrower or any other party to the
Financing Documents in connection with the business, operations and activities
of the Borrower and its Subsidiaries as now conducted or as contemplated by the
Borrower Business Plan have been obtained.

                (c)     NO PROCEEDINGS. There is no proceeding pending or, to
the knowledge of the Borrower or any of its Subsidiaries, threatened against the
Borrower or any other party to the Financing Documents that seeks to rescind,
terminate, suspend, modify or otherwise affect any Governmental Approvals, in
each case that would have a Material Adverse Effect.


SECTION 7.4     NO VIOLATION.

        Neither the execution, delivery or performance by the Borrower, IMPSAT
or any of their respective Subsidiaries of any Project Agreement to which it is
a party, nor the use by the Borrower of the proceeds of the Loans as
contemplated by this Agreement:

                (a)     will violate or conflict with any term or condition of
any License or any Governmental Approval;

                (b)     will contravene any material provision of any Applicable
Law binding on the Borrower, IMPSAT or any of their respective Subsidiaries or
any of their assets;

                (c)     will conflict with, or be inconsistent with, or result
in any breach of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (other than
Permitted Liens) upon any of the properties or assets of the Borrower, IMPSAT or
any of their respective Subsidiaries pursuant to the terms of any indenture,
mortgage, credit agreement, loan agreement or any other agreement, contract or
instrument to which the Borrower, IMPSAT or any such Subsidiary is a party or by
which each such Person or any of its respective properties or assets are bound
or to which they may be subject; or

                (d)     will violate any provision of the Charter Documents of
the Borrower, IMPSAT or any of their respective Subsidiaries;

except to the extent that any of the violations contained in clauses (c) and (d)
above could not reasonably be expected to have a Material Adverse Effect.




                                     - 48 -
<PAGE>   50

SECTION 7.5     PROCEEDINGS.

        (a)     NO PROCEEDINGS. There is no litigation, investigation or
proceeding pending or, to the knowledge of the Borrower or IMPSAT after
reasonable inquiry, threatened before any arbitrator or Governmental Authority,
nor, to the knowledge of the Borrower after reasonable inquiry, any
circumstances or conditions that might give rise to any such proceedings, which
could reasonably be expected to have a Material Adverse Effect.

        (b)     NO ORDERS. No injunction, writ, temporary restraining order or
any order of any nature has been issued by any court or Governmental Authority
(1) purporting to enjoin or restrain the execution, delivery or performance of
this Agreement or any other Financing Documents, or (2) which could reasonably
be expected to have a Material Adverse Effect.


SECTION 7.6     TAXES.

        The Borrower, IMPSAT and their respective Subsidiaries have timely filed
all required returns and have paid all applicable taxes shown thereon to be due
and payable except for such taxes, if any, as are being contested in good faith
by appropriate proceedings and as to which (a) adequate reserves have been
established in accordance with U.S. or Argentine GAAP, as applicable, on the
books of the Borrower, IMPSAT and such Subsidiaries, as the case may be, or (b)
the aggregate amount of such unpaid taxes, assessments and charges is less than
five hundred thousand Dollars (US$500,000).


SECTION 7.7     FINANCIAL STATEMENTS.

        (a)     BALANCE SHEETS, ETC. Except as indicated in Schedule 7.16, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidated balance sheet of IMPSAT and its Subsidiaries as of December 31,
1998, 1999 and 2000 and March 31, 2001 and the related consolidated statements
of income or operations, retained earnings and changes in financial position (or
of cash flow, as the case may be) of each of the Borrower and IMPSAT for the
fiscal year or period then ended, with (except for the balance sheet and related
statements as of March 31, 2001) the opinion thereon of the Independent Auditor,
are correct and fairly present the financial condition of the Borrower or IMPSAT
and their respective Subsidiaries, as the case may be; and results of operations
for the period covered thereby. The financial statements to be delivered
pursuant to Section 8.1 hereof shall be correct and shall fairly present in all
such cases the financial condition of the Borrower or IMPSAT, as the case may
be, as of the dates thereof and the results of its operations for the periods
ended on said dates, and all are or shall be prepared in accordance with U.S.
GAAP.

        (b)     NO LIABILITIES. Neither the Borrower nor IMPSAT had or will have
on the dates of the financial statements referred to in Section 7.7(a) any
material contingent liabilities, liabilities for taxes, or material losses from
any commitments, except as specifically referred to, or reflected, or provided
for, in said financial statements as at said dates.




                                     - 49 -
<PAGE>   51

SECTION 7.8     THE PROJECT.

        (a)     BUSINESS PLANS. The Business Plans accurately state in all
material respects all costs and expenses incurred and to be incurred in order to
construct and finance the construction of the Network and the carrying out of
the Project in the manner contemplated by the Project Agreements. All
projections and budgets furnished or to be furnished to the Lenders by or on
behalf of the Borrower and IMPSAT and the summaries of significant assumptions
related thereto, including (without limitation) all information in the Business
Plans: (1) have been and will be prepared with due care; (2) fairly present, and
will fairly present, in all material respects, the expectations of the Borrower
and IMPSAT as to the matters covered thereby, (3) are based on, and will be
based on, reasonable assumptions as to all factual and legal matters relative to
the estimates therein; and (4) are and will be in all material respects
consistent with the provisions of the Project Agreements and the Business Plans.

        (b)     MATERIAL INFORMATION. There are no statements or conclusions in
any of the projections or budgets which are based upon or include information
known to the Borrower or IMPSAT to be misleading or which fail to take into
account material information regarding the matters reported therein. Attached to
this Agreement as Exhibit F is a true and complete list of the Project
Agreements executed on or before June 11, 2001 and involving a consideration of
one million Dollars (US$1,000,000) or more and, to the best knowledge of each of
the Borrower and IMPSAT, no default has occurred thereunder.

        (c)     PROJECT AGREEMENTS. Each Project Agreement (except for those
purchase orders and other agreements which have been completed or terminated in
accordance with their terms) is in full force and effect, none of the Borrower
or any of its Affiliates is in default under any thereof and, to the best
knowledge of the Borrower, no other party to any Project Agreement is in default
under any thereof.


SECTION 7.9     ENVIRONMENTAL MATTERS.

        Each of the Borrower, its Subsidiaries and IMPSAT has duly complied
with, and its business, operations, assets, equipment, property, leaseholds, and
other facilities are in compliance with, all applicable Environmental Laws. None
of the Borrower, its Subsidiaries or IMPSAT has, nor to the knowledge of the
Borrower or IMPSAT after reasonable inquiry, has any other Person, released,
discharged, generated, manufactured, produced, stored, or disposed of in, on,
under, or about any sites of the Borrower, or transported thereto or therefrom,
any hazardous material or Hazardous Substance that could reasonably be expected
to subject the Lenders to any liability or the Borrower, its Subsidiaries or
IMPSAT to any liability that could have a Material Adverse Effect. There is no
proceeding pending against the Borrower, its Subsidiaries or IMPSAT, and to the
best knowledge of the Borrower or IMPSAT after reasonable inquiry, no
investigation or inquiry by any Governmental Authority is threatened or
contemplated, with respect to the presence or release of hazardous materials or
Hazardous Substances in, on, from, or to the sites of the Borrower.




                                     - 50 -
<PAGE>   52

SECTION 7.10    TRANSACTIONS WITH AFFILIATES.

        Except as disclosed in Schedule 7.10, none of the Borrower, IMPSAT or
any of their respective Subsidiaries are parties to any contract, agreement or
arrangement (whether or not in the ordinary course of business) with the
Borrower, IMPSAT or another Subsidiary of the Borrower or IMPSAT that is not on
an arms-length basis.


SECTION 7.11    INDEBTEDNESS.

        As of March 31, 2001, none of the Borrower, IMPSAT or their respective
Subsidiaries is a party to or bound by any note or agreement with respect to
Indebtedness other than the Indebtedness arising under this Agreement and the
Indebtedness set forth in Schedule 7.11, which is a complete and accurate list
of all Indebtedness of the Borrower, IMPSAT and their respective Subsidiaries,
showing as of such date the outstanding (or potential) principal amount thereof,
and there has been no material change in the amount or status of such
Indebtedness as of such date.


SECTION 7.12    PROPERTIES.

        (a)     TITLE. The Borrower or a Subsidiary of the Borrower (1) has good
record and marketable title in fee simple (or the Argentine equivalent thereof)
or valid leasehold interests in or rights of use with respect to, all real
property used in the ordinary conduct of the Telecommunications Business, except
for such defects in title as could not, individually or in the aggregate,
reasonably be expected to interfere with the Borrower's ability to conduct such
business as currently or expected or projected to be conducted or to utilize
such properties for their intended purposes; and (2) is, or will be upon its
acquisition thereof in accordance with the Nortel Contracts, the sole owner of
the Collateral. The property of the Borrower, its Subsidiaries and IMPSAT is not
subject to any Liens other than Permitted Liens (including those described on
Schedule 7.12). The Borrower and the Subsidiaries have not created and are not
contractually obligated to create any Lien, other than Permitted Liens or Liens
to be created or permitted to be created under the Financing Documents to which
they are a party, on or with respect to any of their assets, rights or revenues.

        (b)     CONDITION. All assets material to the Telecommunications
Business are in good repair, working order and condition (ordinary wear and tear
excepted).

        (c)     BANK ACCOUNTS. Each of IMPSAT, the Borrower and its Subsidiaries
has full right and title to each of its bank accounts, and each such bank
account is not subject to any Lien other than (1) banker's liens, rights of
setoff or similar rights as to such deposit accounts or other funds maintained
with such creditor depository institution or (2) Permitted Liens.




                                     - 51 -
<PAGE>   53

SECTION 7.13    INTELLECTUAL PROPERTY.

        The Borrower or IMPSAT owns all of the patents, trademarks, permits,
service marks, trade names, copyrights, franchises and formulas, or rights with
respect to the foregoing, used in the marketing of any of the Borrower's and its
Subsidiaries' services (a list of which is attached as Schedule 7.13, as updated
from time to time by notice to the Administrative Agent) and the Borrower owns
or has obtained assignments of all such and other rights of whatever nature
necessary for the present conduct of the Telecommunications Business, without
any known conflict with the rights of others other than as set forth in Schedule
7.13 and except as could not reasonably be expected to have a Material Adverse
Effect.


SECTION 7.14    BOOKS AND RECORDS.

        Each of IMPSAT, the Borrower and its Subsidiaries maintains its books
and records (including appropriate copies, backups and archives of such books
and records) in accordance with standard industry practice, Applicable Law and
U.S. GAAP or Argentine GAAP, as applicable.


SECTION 7.15    THE LICENSES.

        Schedule 7.15 contains a true and complete list of all Licenses owned by
or granted to the Borrower or its Subsidiaries. Each License is legally valid,
in full force and effect, duly registered, not subject to any administrative
review or appeal, or subject to any proceeding the outcome of which could result
in the revocation, in whole or in part, for any reason not within the control of
the Borrower or IMPSAT. The Borrower has paid when due all amounts required to
be paid and otherwise has complied with all conditions the compliance with which
is required in order to preserve its rights under the Licenses. No Licenses
other than those listed in Schedule 7.15 are required in order for the Borrower
and its Subsidiaries to install, exploit and operate the Network and to engage
in the Telecommunications Business as it is currently conducted by them, and as
contemplated by the Borrower Business Plan.


SECTION 7.16    NO MATERIAL ADVERSE CHANGE.

        Except as indicated in Schedule 7.16, there has been no Material Adverse
Change since December 31, 2000.


SECTION 7.17    INSURANCE.

        The insurance policies and coverage required by Section 8.1(d) are in
full force and effect, all premiums and other payments required thereunder have
been timely paid and such policies and coverage are otherwise not subject to
cancellation by the insurer during the respective terms thereof, except for
nonpayment of premiums, in which case at least fifteen (15) days prior written
notice of termination must be given to the Administrative Agent.




                                     - 52 -
<PAGE>   54

SECTION 7.18    COLLATERAL.

        As of each Disbursement Date, all actions necessary for the
establishment and perfection of the Collateral Agent's Lien on the Collateral
that has been acquired by the Borrower prior to such date, including any
required consents, acknowledgments, filings, registration, notarization or
recordation thereof, and the payment of all related fees, taxes and expenses
shall have been completed, and the Collateral Agent (on behalf of the Secured
Parties) shall have an effective, valid, legally binding and enforceable Lien on
the Collateral, which Lien is superior and prior to the Liens of all third
parties (other than the Permitted Liens).


SECTION 7.19    INVESTMENT COMPANY ACT.

        None of the Borrower, IMPSAT or any of their respective Subsidiaries is
an investment company within the meaning of the Investment Company Act of 1940,
as amended, or, directly or indirectly, controlled by or acting on behalf of any
Person that is an investment company, within the meaning of said Act.


SECTION 7.20    IMMUNITY.

        The execution, delivery, and performance of the Financing Documents and
the other Project Agreements constitute private and commercial acts rather than
governmental or public acts. Under Applicable Law, neither the Borrower, IMPSAT,
nor any of their respective Subsidiaries nor any of their respective revenues or
properties has any right of immunity from suit, court jurisdiction, attachment
prior to judgment, attachment in aid of execution of a judgment, execution of a
judgment or from set-off, Liens, counterclaim or any other legal process or
remedy with respect to its obligations under the Financing Documents or the
other Project Agreements.


SECTION 7.21    TRUE AND COMPLETE DISCLOSURE.

        All information heretofore or hereafter furnished by or on behalf of the
Borrower or IMPSAT or any of their respective Subsidiaries to the Agents or the
Lenders, and all representations and warranties made herein, are true and
correct in all material respects, and do not contain any material misstatement
of fact or omit to state a material fact necessary to make the statements
contained therein not misleading at such time.


                              SECTION 8. COVENANTS.


SECTION 8.1     AFFIRMATIVE COVENANTS.

        Until payment in full of the Obligations and so long as this Agreement
remains in effect, the Borrower shall, and shall cause its Subsidiaries to,
comply with each of the following covenants and agreements:



                                     - 53 -
<PAGE>   55

        (a)     ANNUAL AND QUARTERLY REPORTING REQUIREMENTS. The Borrower shall
deliver to the Administrative Agent:

                (1)     as to the Borrower:

                        (i)     within ninety (90) days of the close of each
fiscal year of the Borrower, a copy of the consolidated annual financial
statements of the Borrower and its Subsidiaries (including its consolidated
balance sheet as at the close of such calendar year, consolidated statements of
income, retained earnings and changes in financial position or of cash flow, as
the case may be, for such fiscal year with related notes specifying significant
accounting practices and their impact on such financial statements and with
related schedules), and accompanied by an opinion thereon of the Independent
Auditor that is satisfactory to the Administrative Agent, which opinion shall
state, subject to no qualifications, that said financial statements fairly
present the financial condition and results of operations of the Borrower and
its Subsidiaries, as at the end of, and for, such fiscal year and that said
financial statements have been prepared in accordance with Argentine GAAP or
U.S. GAAP. Such annual financial statements (A) shall be in the English
language; (B) in the case that such financial statements have been prepared in
accordance with Argentine GAAP, shall be accompanied by a reconciliation to U.S.
GAAP of the Borrower's net income and shareholders' equity and convenience
translations to Dollars; and (C) shall be accompanied by a statement, for each
of the calendar quarters of the fiscal year, of each new entry of Deferred
Revenues and the current sum of all Deferred Revenues for the past four
consecutive calendar quarters. From time to time, at the request of the
Administrative Agent, the Borrower shall deliver to the Administrative Agent
such additional financial information as the Administrative Agent may request;
and

                        (ii)    as soon as practicable, and in any event within
forty-five (45) days after the end of each of the first three (3) quarters of
each fiscal year of the Borrower, the unaudited consolidated financial
statements of the Borrower and its Subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of such
quarterly period and the related balance sheets at the end of such period,
setting forth in each case in comparative form the corresponding figures for the
corresponding period in the preceding fiscal year accompanied by a certificate
of the Chief Financial Officer of the Borrower, which certificate shall state
that such financial statements fairly present the financial condition and
results of operations, as the case may be, of the Borrower in accordance with
Argentine GAAP or U.S. GAAP, as at the end of, and for, such period (subject to
normal year end audit adjustments), and, in the case that such financial
statements have been prepared in accordance with Argentine GAAP, by a
reconciliation to U.S. GAAP of the Borrower's net income and shareholders'
equity and convenience translations to Dollars. Such quarterly financial
statements shall be accompanied by a statement, for each of the past four
consecutive calendar quarters, of each new entry of Deferred Revenues and the
current sum of all Deferred Revenues for the past four consecutive calendar
quarters.



                                     - 54 -
<PAGE>   56

                (2)     as to IMPSAT:

                        (i)     within ninety (90) days of the close of each
fiscal year of IMPSAT, a copy of the annual consolidated financial statements of
IMPSAT and its Subsidiaries (including its balance consolidated sheet as at the
close of such calendar year, consolidated statements of income, retained
earnings and changes in financial position or of cash flow, as the case may be,
for such fiscal year with related notes specifying significant accounting
practices and their impact on such financial statements and with related
schedules), and accompanied by an opinion thereon of the Independent Auditor
that is satisfactory to the Administrative Agent, which opinion shall state,
subject to no qualifications, that said financial statements fairly present the
financial condition and results of operations of IMPSAT and its Subsidiaries, as
at the end of, and for, such fiscal year and that said financial statements have
been prepared in accordance with U.S. GAAP. Such annual financial statements
shall be in the English language. From time to time, at the request of the
Administrative Agent, IMPSAT shall deliver to the Administrative Agent such
additional financial information as the Administrative Agent may request; and

                        (ii)    as soon as practicable, and in any event within
forty-five (45) days after the end of each of the first three (3) quarters of
each fiscal year of IMPSAT, the consolidated unaudited financial statements of
IMPSAT and its Subsidiaries for such period and for the period from the
beginning of the respective fiscal year to the end of such quarterly period and
the related balance sheets at the end of such period, setting forth in each case
in comparative form the corresponding figures for the corresponding period in
the preceding fiscal year accompanied by a certificate of the Chief Financial
Officer of IMPSAT which certificate shall state that such financial statements
fairly present the financial condition and results of operations, as the case
may be, of IMPSAT and its Subsidiaries in accordance with U.S. GAAP, as at the
end of, and for, such period (subject to normal year end audit adjustments).

        (b)     ADDITIONAL REPORTING REQUIREMENTS.

                (1)     Without prejudice to the requirement to have such
documents approved by the Administrative Agent, promptly upon the execution and
delivery thereof, the Borrower shall provide the Administrative Agent with
copies of all Project Agreements (including any amendments, additions or
replacements).

                (2)     Promptly upon the completion thereof and in no event
later than thirty (30) days thereafter, the Borrower shall provide the
Administrative Agent with a copy of any material amendment, addition or revised
version of each of the Business Plans.

                (3)     Promptly upon the execution and delivery thereof, the
Borrower shall provide the Administrative Agent with copies of all agreements
regarding leases and similar transactions contemplated by Section 8.2(n);
provided that the Administrative Agent shall maintain the confidentiality of the
parties, terms and conditions of such agreements subject to the exceptions
contained in the first paragraph of Section 16.11.



                                     - 55 -
<PAGE>   57

                (4)     From time to time, the Borrower shall deliver to the
Administrative Agent such other information regarding the business of the
Borrower, its Subsidiaries, IMPSAT, the Project, the Network and the
Telecommunications Business as the Administrative Agent may reasonably request.

        (c)     NOTICES. The Borrower shall promptly, but in no event later than
three (3) Business Days after (unless otherwise indicated below) the Borrower
obtains knowledge of the occurrence of the following events, give notice to the
Administrative Agent of the occurrence of any of the following:

                (1)     a Default or an Event of Default;

                (2)     a default by the Borrower, IMPSAT or any of their
Affiliates under any Project Agreement;

                (3)     except as disclosed in Schedule 7.5 or which could not
reasonably be expected to have a Material Adverse Effect, any (i) (A)
commencement or Material Adverse Change in respect of any litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority; or (B) any material litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority which, to the knowledge of the
Borrower is threatened by or against the Borrower, IMPSAT, any of their
respective Subsidiaries, or against any of their properties or revenues which:
(x) purport to affect or pertain to this Agreement or any of the other Project
Agreements or any of the transactions contemplated hereby or thereby, or (y) if
determined adversely, could reasonably be expected to have a Material Adverse
Effect; (ii) issuance by any Governmental Authority of an injunction, writ,
temporary restraining order or any order of any nature purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Project Agreements, or directing that the transactions contemplated hereunder or
thereunder not be consummated as herein or therein provided; or (iii) issuance
by any Governmental Authority of any injunction, order, decision or other
restraint purporting to enjoin, restrain, prohibit (or which would have the
effect of prohibiting) the making of the Loans, or invalidate (or which would
have the effect of invalidating) any provision of this Agreement or any of the
other Project Agreements, including provisions regarding the granting of Liens
on the Collateral or the priority of such Liens;

                (4)     during the Commitment Period, any Material Adverse
Change as determined by the Borrower in its reasonable judgment;

                (5)     thirty (30) days prior to the movement of any Equipment
or any other Collateral outside of Argentina having, in the aggregate, at any
time, a replacement value in excess of five million Dollars (US$5,000,000); and

                (6)     thirty (30) days prior thereto in writing, the movement
of the principal place of business of the Borrower or IMPSAT to any location
other than as set forth in the Security Documents;



                                     - 56 -
<PAGE>   58

                (7)     ten (10) days prior thereto in writing, of any intention
on the part of the Borrower or its Subsidiaries to incur additional Indebtedness
for money borrowed (other than Indebtedness to IMPSAT) in one or more
transactions in an aggregate principal amount exceeding thirty million Dollars
(US$30,000,000) in any given fiscal year.

        The Administrative Agent and the Collateral Agent shall have the right
to request, with respect to any such notice, a statement of an Authorized
Officer of the Borrower setting forth reasonable details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto.

        (d)     INSURANCE. The Borrower shall:

                (1)     maintain or cause to be maintained in full force and
effect to the satisfaction of the Administrative Agent in its sole discretion,
at all times on and after the date hereof and continuing until the Maturity
Date, with responsible insurance companies having a Best Insurance Reports
rating of A or better and a financial size category of "10" or higher (or other
companies reasonably acceptable to the Administrative Agent and in an amount not
less than the amount of all the Loans, and in any event, not less than the full
replacement cost of all Collateral):

                        (i)     "all risk" property insurance, including
earthquake, windstorm and flood, with a limit of loss per occurrence acceptable
to the Administrative Agent in its sole discretion from time to time;

                        (ii)    equipment and machinery breakdown insurance
covering breakdown and resulting damage including rotating equipment such as
generators and electrical equipment (including transformers, switch gear and
electrical apparatus) for their full replacement value;

                        (iii)   business interruption insurance covering risk of
loss as a result of the cessation or material interruption of the
Telecommunications Business resulting from an insured loss under the Borrower's
property policy for an indemnity period of six (6) months or any part thereof,
the initial amount of such insurance to provide for the payment during the six
(6) months commencing from the date hereof of not less than the gross revenues
to be earned by the Borrower for such six (6) month period, calculated based on
the Business Plans and to be adjusted by the Borrower semiannually from the date
hereof thereafter, less any non-continuing costs and expenses during the
relevant indemnity period; and

                        (iv)    third party liability insurance, including
bodily injury and property damage, with a limit of no less than two million
Dollars (US$2,000,000) per occurrence.

                (2)     within sixty (60) days after receipt by the Borrower of
a written request from the Administrative Agent, accompanied by a pro forma
political risk insurance policy which contains terms and conditions commercially
reasonable under then current market conditions, and the obtention of which will
not increase the "all-in" financing cost of the Facility



                                     - 57 -
<PAGE>   59

to the Borrower, obtain such a policy and maintain such political risk insurance
in full force and effect until the Maturity Date.

                (3)     file with the Administrative Agent not more than seven
(7) days after each policy anniversary, certificates of all insurance then in
effect, stating the names of the insurance companies, the amounts of the
insurance, the dates of the expiration thereof and the properties and risks
covered thereby and specifically listing the special provisions enumerated for
such insurance required by this Section 8.1(d).

        The certificates of insurance referred to in clause (3) hereof shall be
executed by an authorized representative of each insurer, and certify that all
premiums and other payments required in respect of such insurance have been
timely paid and that such insurance is otherwise not subject to cancellation by
the insurer during its term, except for nonpayment of premiums, in which case at
least fifteen (15) days prior written notice of termination must be given to the
Administrative Agent. Upon request, the Borrower will promptly furnish the
Agents with evidence of such insurance relating to the Collateral and all
information relating to the replacement cost and location of the same.

        In each case, the insurance policies shall designate the Administrative
Agent as additional insured in respect of the liability insurance related to the
Equipment and the sole loss payee in respect of the property insurance related
to the Equipment. All amounts payable to the Administrative Agent according to
the foregoing under property insurance policies shall be paid to an account of
the Administrative Agent (i) upon the occurrence of an Event of Default; or (ii)
if the insured loss materially impairs the Borrower's ongoing operations. In
such event, funds received by the Administrative Agent under such property
insurance policies shall be made available to the Borrower for application to
the costs of repairing, restoring, rebuilding or replacing the portion of the
Collateral with respect to which such proceeds were obtained; provided that,
subject to the provisions of Sections 3.2 and 9.1 hereof, such repaired,
restored, rebuilt or replaced asset shall be or become a part of the Collateral.
The Administrative Agent shall at the request of the Required Lenders pay any
insurance premiums directly, on Borrower's behalf, and Borrower shall reimburse
Lenders through the Administrative Agent promptly for any such payment made by
Lenders.

        (e)     COMPLIANCE WITH APPLICABLE LAW. The Borrower shall, and shall
cause its Subsidiaries to comply in all material respects with the requirements
of all Applicable Law, including obtaining and maintaining all Governmental
Approvals.

        (f)     CONSTRUCTION OF THE NETWORK. The Borrower shall (1) cause the
construction and development of the Network to be completed in accordance with
the Business Plans and otherwise with due diligence and continuity (except for
interruptions due to Force Majeure), in a good and workmanlike manner and in
accordance with the Licenses, the Applicable Permits, Applicable Law, and the
Project Agreements, and (2) operate and maintain the Network, and retain and
maintain the staff sufficient to operate and maintain the Network, in accordance
with the Project Agreements and the Business Plans, and otherwise comply in all
material respects with, and satisfy the requirements of, all Licenses, the
Project Agreements and Applicable Laws.



                                     - 58 -
<PAGE>   60

Not later than ten (10) days after the first day of each calendar quarter, the
Borrower shall submit to the Administrative Agent, upon the Administrative
Agent's request, a progress report on the Project. Such report shall identify,
and provide the details of, any delays or variances from the Business Plans and
shall contain such other information in connection therewith as the
Administrative Agent may reasonably request.

        (g)     TAXES, ETC. The Borrower shall pay, or arrange for payment,
prior to the date when due of all (1) taxes imposed on the Borrower and its
Subsidiaries, and (2) present and future claims, levies, or liabilities
(including, without limitation, claims for labor, service, materials and
supplies) for sums which have become due and payable and which, if unpaid, might
by law become a Lien or otherwise have a Material Adverse Effect, except for any
such tax, claim, levy or liability the payment of which is being contested in
good faith by proper proceedings for which adequate reserves determined in
accordance with Argentine GAAP have been established and are being maintained,
(and as to which it or its property is not yet subject to foreclosure, seizure,
arrest, sale, collection, levy or loss on account thereof). The Borrower shall
make timely filings of all tax returns and material governmental reports
required to be filed or submitted under any Applicable Laws.

        (h)     MAINTENANCE OF BOOKS AND RECORDS; ACCESS. The Borrower shall,
and shall cause each of its Subsidiaries to, keep adequate books and records of
account, in which complete entries will be made in accordance with Argentine
GAAP, reflecting the financial condition of the Borrower and its Subsidiaries
and shall permit the Administrative Agent and the Lenders, at all reasonable
times and with prior notice to the Borrower, at the expense of the Lenders prior
to an Event of Default but at the Borrower's expense thereafter, to inspect and
have access to the books and records of such Person and make copies thereof, and
to discuss such books and records with the representatives, employees and
accountants of such Person and with the Independent Auditor.

        The Borrower shall promptly supply to the Administrative Agent copies of
any reports on its or its Subsidiaries' business and activities which are
publicly distributed as well as any other reports thereon and reports made to
any Governmental Authority as the Administrative Agent may from time to time
reasonably request.

        The Borrower shall maintain an adequate billing, software and accounting
system, including books, accounts and records, and shall prepare all financial
statements required hereunder in accordance with Argentine GAAP, consistently
applied, and in compliance with all Applicable Laws.

        (i)     RANK OF DEBT. The Borrower shall take any and all action
necessary to ensure that the Loans at all times continue to be the direct and
unconditional obligation of the Borrower and rank at least pari passu (in
respect of priority of payment, security or otherwise) to all other secured or
unsecured Indebtedness of the Borrower, except that such ranking shall not apply
to the rights of secured Indebtedness over collateral subject to Permitted
Liens.



                                     - 59 -
<PAGE>   61

        (j)     PAYMENT OF OBLIGATIONS. The Borrower shall pay, and shall cause
each of its Subsidiaries to pay its obligations that, if not paid, could result
in a Material Adverse Effect, before the same shall become delinquent or in
default, except where: (1) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (2) adequate reserves have been
established with respect thereto in accordance with Argentine GAAP, and (3) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.

        (k)     ENVIRONMENTAL MATTERS. The Borrower shall promptly give to the
Administrative Agent notice in writing if the Borrower or any Subsidiary thereof
(1) receives any complaint, order, citation or other written communication from
any Person with respect to, or (2) otherwise acquires actual knowledge of (i)
the existence or alleged existence of any Environmental Liability or any actual
or alleged violation of any applicable Environmental Law arising at, upon,
under, within or in connection with any property now or previously owned,
leased, operated or used by the Borrower, IMPSAT or any of their respective past
or present Subsidiaries, or any part thereof, or due to the operations or
activities of any such Person, on or in connection with such property or any
part thereof (including receipt by the Borrower or its Affiliates of any notice
of the happening of any event involving the release of a reportable quantity of
any Hazardous Substance under any applicable Environmental Law or cleanup of any
Hazardous Substance), (ii) any release of any Hazardous Substance on such
property or any part thereof in a quantity that is reportable under any
applicable Environmental Law, (iii) the commencement of any cleanup pursuant to
or in accordance with any applicable Environmental Law of any Hazardous
Substances on or about such property or any part thereof, and (iv) any pending
or threatened proceeding for the termination, suspension or non-renewal of any
permit required under any applicable Environmental Law.

        (l)     LICENSES. The Borrower shall, and shall cause its Subsidiaries
(1) to maintain the Licenses in full force and effect, at all times on and after
the date hereof; and (2) upon receipt of any notification from any Governmental
Authority that the Borrower is in breach of any License: (i) promptly notify the
Administrative Agent thereof, providing copies of all relevant documents and
other information; and (ii) take prompt and adequate remedial action to remedy
such breach, which action shall be taken within the cure period, if any, set out
in such notification.

        (m)     REGULATORY FILINGS. The Borrower shall, and shall cause its
Subsidiaries to, deliver to the Administrative Agent, promptly after the sending
or filing thereof, copies of all non-confidential reports filed by the Borrower,
any of its Subsidiaries or IMPSAT with the SC, the United States Securities and
Exchange Commission, the Central Bank, the Argentine National Securities
Commission (Comision Nacional de Valores) or the Buenos Aires Stock Exchange and
all non-confidential reports filed with any other Governmental Authority,
except, in all such cases, reports the failure of which to be filed could not
reasonably be expected to have a Material Adverse Effect.

        (n)     CONTINUANCE OF BUSINESS. The Borrower shall, and shall cause its
Subsidiaries to, do or cause to be done all things necessary to maintain, renew
and keep in full force and effect



                                     - 60 -
<PAGE>   62

(i) the Licenses and relevant Governmental Approvals, (ii) their respective
corporate existence and (iii) all other rights and privileges and franchises
related to Telecommunications Business, except in the case of clauses (ii) and
(iii) to the extent that the failure to do so would not have a Material Adverse
Effect.

        (o)     MU EXPENSES. The Borrower shall invoice and collect from
Affiliates of the Borrower not less than 50% of all MU Expenses incurred during
each calendar quarter, such amounts to be collected not later than 30 days after
the end of such calendar quarter, provided, however, that if for any calendar
quarter the Borrower invoices and collects less than the entire required amount
of MU Expenses, it shall not be in breach of this covenant if, within the same
30-day period, IMPSAT makes a contribution to the Borrower's Paid In Capital, in
cash or by means of the capitalization of Indebtedness, in an amount equal to
the amount of the deficiency.

        (p)     MAINTENANCE OF ASSETS. The Borrower shall, and shall cause its
Subsidiaries to, do or cause to be done all things necessary to maintain all of
its assets material to the Telecommunication Business in good repair, working
order and condition (ordinary wear and tear excepted).

        (q)     SECURITY REINFORCEMENTS; REGISTRATION. Within 15 days after the
clearance through customs of any and all pieces of Equipment, the Borrower shall
(i) in the event such pieces of Equipment do not have identification numbers,
assign and affix identification numbers so as to make such Equipment
identifiable, (ii) prepare a security reinforcement request (refuerzo de
garantia) so as to incorporate such Equipment into the Equipment Pledge
Agreement (a "SECURITY REINFORCEMENT") in form and substance acceptable to the
Administrative Agent, (iii) execute such Security Reinforcement and present it
to the Collateral Agent (or its designee) for its signature, and (iv) as soon as
practicable, but in no event later than 5 days from its execution, submit such
executed Security Reinforcement to the corresponding registry office (Registro
Nacional de Creditos Prendarios) for filing; provided that it shall not be
deemed a breach by the Borrower of this Section 8.1(q) if the foregoing is not
accomplished as a result of the actions or omissions of another Person.


SECTION 8.2     NEGATIVE COVENANTS.

        Until the Maturity Date, and so long as this Agreement remains in
effect, the Borrower shall comply in all respects with each of the following
covenants and agreements:

        (a)     FUNDAMENTAL CHANGES. The Borrower shall not, and shall not
permit its Subsidiaries to, dissolve, liquidate, merge with another Person or,
except as permitted by Section 8.2(k), create any new Subsidiary without the
prior written consent of the Administrative Agent on behalf of the Required
Lenders.

        (b)     LIENS. The Borrower shall not, and shall not permit its
Subsidiaries to, create, incur, assume or suffer to exist, any Lien upon or with
respect to such Person's accounts receivable, the Collateral, any rights under
the Licenses, any Governmental Approvals or in or to the Network or the Project
Agreements other than any Permitted Lien.



                                     - 61 -
<PAGE>   63

        (c)     RESTRICTED PAYMENTS. The Borrower agrees, effective as of the
date that such agreement will not cause IMPSAT to violate its obligations under
the IMPSAT Indentures, not to, and to cause its Subsidiaries not to:

                (1)     reduce or increase such Person's capital, except to the
extent that any such action is required for the Borrower to comply with the
covenants contained in Section 8.3; or

                (2)     declare or pay any dividends or make any distributions
or other payments or delivery of property or cash in respect of:

                        (i)     the interest of such Person's shareholders or
other equity owners; or

                        (ii)    any Indebtedness which is by its terms
subordinate or junior in right of payment to the Loans.

Notwithstanding any provision herein to the contrary, the Borrower shall not,
and shall not permit its Subsidiaries to, make any distributions or other
payments or delivery of property or cash in respect of any Pledged Shareholder
Note other than as expressly permitted therein.

        (d)     GUARANTEES. The Borrower shall not, and shall not permit its
Subsidiaries to, enter into or become bound by any agreements guaranteeing the
Indebtedness of another Person, except as permitted by clauses (d), (e), (f) and
(j)of the definition of "Permitted Indebtedness."

        (e)     DOCUMENT AMENDMENTS. The Borrower shall not, and shall not
permit its Subsidiaries to, agree to any modification, amendment, waiver,
supplement, rescission or termination (collectively, "AMENDMENT") of any (i)
License, (ii) Governmental Approval (other than Licenses) or (iii) Project
Agreement, without, in each case, the prior written approval of the
Administrative Agent on behalf of the Required Lenders, except to the extent
that such Amendment could not reasonably be expected to have a Material Adverse
Effect; provided, however, that in the case of clause (i), the Borrower shall
give the Administrative Agent no less than five (5) Business Days' prior
written notice of such Person's proposed Amendment during which period the
Administrative Agent shall have the exclusive right (which it shall not exercise
unreasonably) to reject such Amendment.

        (f)     TRANSACTIONS WITH AFFILIATES. Except as expressly permitted by
this Agreement, the Borrower shall not, and shall not permit its Subsidiaries
to, directly or indirectly, enter into any transaction with an Affiliate, except
in the ordinary course of and pursuant to the reasonable requirements of the
business of the Borrower and upon commercially reasonable terms no less
favorable to the Borrower than those that could be obtained on an arm's length
basis from a Person which is not an Affiliate.

        (g)     INDEBTEDNESS. The Borrower shall not, and shall not permit its
Subsidiaries to, incur, create, assume or suffer to exist, or permit to incur,
create, assume or suffer to exist, or become or remain liable, for or on account
of any Indebtedness except (1) Indebtedness



                                     - 62 -
<PAGE>   64

hereunder, and (2) Permitted Indebtedness in an amount such that the Borrower
remains in compliance with the covenants set forth in Section 8.3(a) and Section
8.3(b).

        (h)     NON-RELATED ACTIVITIES. The Borrower shall not, and shall not
permit its Subsidiaries to, engage, directly or indirectly, in any activity,
unless such activity is, directly or indirectly, related to the
Telecommunications Business without the prior written consent of the
Administrative Agent on behalf of the Required Lenders.

       (i)     CORPORATE ACTIONS. The Borrower shall not, and shall not permit
its Subsidiaries to, (i) change or otherwise alter the end of such Person's
fiscal year or such Person's corporate purpose, or (ii) otherwise amend such
Person's Charter Documents in any manner without the prior written consent of
the Administrative Agent on behalf of the Required Lenders; except in the case
of clause (ii) as could not reasonably be expected to have a Material Adverse
Effect.

        (j)     DISPOSALS. Except in respect of the Global Crossing IRU and
Permitted IRUs, the Borrower shall not, and shall not permit its Subsidiaries to
(whether by a single transaction or a number of related or unrelated
transactions and whether at one time or over a period of time) (A) grant an IRU
in respect of any of such Person's property or assets or (B) Dispose of (1)
the Collateral, (2) any rights under the Licenses or in and to the Network, (3)
such Person's accounts receivable, (4) any of the Equipment (whether or not
it is part of the Collateral) or (5) all or a substantial part of such Person's
assets without, in the case of each of (A) and (B), the prior written consent of
the Administrative Agent on behalf of the Required Lenders. Clause (5) of this
Section 8.2(j) shall not apply to (i) any Disposal on normal commercial terms in
the ordinary course of business of property or of obsolete property or (ii) the
return of Equipment in accordance with the Nortel Contracts.

        (k)     INVESTMENTS. The Borrower shall not, and shall not permit any of
its Subsidiaries to make any Investment other than (i) Permitted Investments or
(ii) Investments in one or more Persons which will, upon the making of such
Investment, become a Subsidiary or be merged or consolidated with or into or
transfer or convey all or substantially all its assets to, the Borrower or a
Subsidiary thereof; provided that (1) such Person's primary business is related,
ancillary or complementary to the Telecommunications Business, (2) immediately
before and immediately after the date of such Investment, the Borrower is in
compliance with the covenants contained in Section 8.3 as determined on a pro
forma basis, and (3) such Person (except where such Person is merged into the
Borrower or a Subsidiary thereof) agrees in writing to be bound by the terms of
the Financing Documents; and provided further that an Investment will not be
permitted under this clause (ii) if the sum of the consideration to be paid in
respect of such Investment plus the consideration paid in respect of all
previous Investments made under this clause (ii) exceeds forty percent (40%) of
the Borrower's net worth immediately preceding such Investment.

        (l)     CHANGE IN ACCOUNTING POLICIES. The Borrower shall not, and shall
not permit any of its Subsidiaries to, make any change in accounting policies or
reporting practices (including changing its fiscal year) which, individually or
in the aggregate, materially affects any determination as to the Borrower's
compliance with its Obligations, including any financial covenants, without the
prior written consent of the Administrative Agent on behalf of the



                                     - 63 -
<PAGE>   65

Required Lenders; provided, that if such change is required by Argentine GAAP,
the Borrower shall, prior to making such change, only be required to notify the
Administrative Agent of such change and the effect thereof.

        (m)     CAPITAL MARKETS TRANSACTIONS. The Borrower shall not, and shall
not permit any of its Subsidiaries to issue, or offer to issue any debt or
equity securities of Borrower or any Subsidiary thereof in a public offering,
private placement or other capital markets transaction prior to January 1, 2000.

        (n)     LEASES. The Borrower shall not, and shall not permit any of its
Subsidiaries to, without the prior written consent of the Administrative Agent
on behalf of the Required Lenders, enter into any lease (including a Long Term
Lease) or similar transaction with any Person for the use of any part of the
Network except leases or similar transactions in respect of which the lessee
acknowledges in writing, after the Lien on the property to be leased has been
perfected under the applicable Security Document, the existence of such Lien and
the right of the Collateral Agent, upon the occurrence of certain events, to
assume the rights of the Borrower under the lease, including the right to
receive payment thereunder.


SECTION 8.3     FINANCIAL COVENANTS.

        (a)     BORROWER'S NET DEBT TO PAID IN CAPITAL. The Borrower shall not
at any time permit the ratio of (i) the Borrower's Net Debt outstanding on the
last day of any calendar quarter set forth below to (ii) the Borrower's Paid in
Capital on such date, to exceed the ratio set forth opposite such date:


<TABLE>
<CAPTION>
-------------------------------------------------------- -------------
                   CALENDAR QUARTER                         RATIO
-------------------------------------------------------- -------------
<S>                                                      <C>
The first calendar quarter of 2000 and each calendar        2.0:1
quarter thereafter through the second calendar quarter
of 2003.
-------------------------------------------------------- -------------
</TABLE>


        (b)     BORROWER'S NET DEBT TO TOTAL EQUITY. The Borrower shall not at
any time permit the ratio of (i) the Borrower's Net Debt outstanding on the last
day of any calendar quarter set forth below to (ii) the Borrower's Total Equity
on such date, to exceed the ratio set forth opposite such date:




                                     - 64 -
<PAGE>   66
<TABLE>
<CAPTION>
-------------------------------------------------------- -------------
                   CALENDAR QUARTER                         RATIO
-------------------------------------------------------- -------------
<S>                                                      <C>
The third calendar quarter of 2003 and each calendar        2.0:1
quarter thereafter through the fourth quarter of 2004.
-------------------------------------------------------- -------------

The first calendar quarter of 2005 and each calendar        1.5:1
quarter thereafter.
-------------------------------------------------------- -------------
</TABLE>


        (c)     DEBT SERVICE COVERAGE RATIO. The Borrower shall not at any time
permit the ratio of (i) the Borrower's Adjusted EBITDA for the period ending on
the date set forth below to (ii) the Borrower's Debt Service for such four (4)
consecutive calendar quarter period, to be less than the ratio set forth
opposite such date:



<TABLE>
<CAPTION>
-------------------------------------------------------- -------------
                         DATE                               RATIO
-------------------------------------------------------- -------------
<S>                                                      <C>
December 31, 1999 and the last day of each calendar         0.50:1
quarter of 2000.
-------------------------------------------------------- -------------

The last day of each calendar quarter of 2001.              1.00:1
-------------------------------------------------------- -------------

The last day of each calendar quarter of 2002 through       1.30:1
2006.
-------------------------------------------------------- -------------
</TABLE>


        (d)     INTEREST SERVICE COVERAGE RATIO. The Borrower shall not at any
time permit the ratio of (i) the Borrower's Adjusted EBITDA for the period
ending on the date set forth below to (ii) the Borrower's Interest Expense for
such four (4) consecutive calendar quarter period, to be less than the ratio set
forth opposite such date:



<TABLE>
<CAPTION>
-------------------------------------------------------- -------------
                         DATE                               RATIO
-------------------------------------------------------- -------------
<S>                                                      <C>
December 31, 1999 and the last day of the first,            0.75:1
second and third calendar quarters of 2000.
-------------------------------------------------------- -------------

The last day of the fourth calendar quarter of 2000         1.00:1
and the last day of each calendar quarter of 2001.
-------------------------------------------------------- -------------

The last day of each calendar quarter of 2002.              1.55:1
-------------------------------------------------------- -------------
</TABLE>



                                     - 65 -
<PAGE>   67

<TABLE>
-------------------------------------------------------- -------------
<S>                                                      <C>
The last day of each calendar quarter of 2003.              2.50:1
-------------------------------------------------------- -------------

The last day of each calendar quarter of 2004, 2005         3.50:1
and 2006.
-------------------------------------------------------- -------------
</TABLE>


        (e)     NET DEBT COVERAGE RATIO. The Borrower shall not at any time
permit the ratio of (i) the Borrower's Net Debt outstanding on the last day of
any calendar quarter set forth below to (ii) the Borrower's Adjusted EBITDA for
the period ending on such date, to exceed the ratio set forth opposite such
date:



<TABLE>
<CAPTION>
-------------------------------------------------------- -------------
                   CALENDAR QUARTER                         RATIO
-------------------------------------------------------- -------------
<S>                                                      <C>
Each calendar quarter of 2000.                              9.00:1
-------------------------------------------------------- -------------

The first and second calendar quarters of 2001.             8.00:1
-------------------------------------------------------- -------------

The third and fourth calendar quarters of 2001.             6.00:1
-------------------------------------------------------- -------------

The first and second calendar quarters of 2002.             6.00:1
-------------------------------------------------------- -------------

The third and fourth calendar quarters of 2002.             5.00:1
-------------------------------------------------------- -------------

The first and second calendar quarters of 2003.             5.00:1
-------------------------------------------------------- -------------

The third and fourth calendar quarters of 2003.             3.00:1
-------------------------------------------------------- -------------

Each calendar quarter of 2004, 2005 and 2006.               2.50:1
-------------------------------------------------------- -------------
</TABLE>

provided, however, that the Borrower will not be considered to be in default of
its obligations under any of subsections (c), (d) and (e) of this Section 8.3
with respect to any period if (i) the Borrower would be in compliance with such
obligations but for the taking into account of the MU Expenses for such period
in the calculation of the Borrower's EBITDA for such period; and (ii) the
Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent and within the three (3) Business Days following the
expiration of each 30-day period contemplated in Section 8.1(o), a certificate
of an Authorized Officer of the Borrower certifying that, within such 30-day
period, IMPSAT has made a contribution to the Borrower's Paid In Capital, in
cash or by means of the capitalization of Indebtedness, in the amount
contemplated in Section 8.1(o), such certificate to be accompanied by reasonably
satisfactory evidence of such capital contribution; and provided further, that
(x) the amount of capital contributions made at any time by IMPSAT under Section
8.1(o) plus (y) the amount of any additional capital contributions in respect of
MU Expenses made by IMPSAT in cash or by



                                     - 66 -
<PAGE>   68

means of the capitalization of Indebtedness prior to June 30, 2001 will be
considered as positive EBITDA for purposes of determining the Borrower's
compliance with the covenants contained in subsections (c), (d) and (e) of this
Section 8.3.

        (f)     MAXIMUM ANNUAL CAPITAL EXPENDITURES. The Borrower shall not at
any time permit the Borrower's Capital Expenditures (excluding Capital
Expenditures funded by contributions to Paid in Capital other than contributions
required to maintain the Borrower's compliance with the covenants contained in
Sections 8.3(a) and 8.3(b)) for the calendar years set forth below, to exceed
the amount set forth opposite such year:

<TABLE>
<CAPTION>
--------------------- ------------------------------------
   CALENDAR YEAR         MAXIMUM CAPITAL EXPENDITURES
--------------------- ------------------------------------
<S>                   <C>
        1999                  US$115,000,000
--------------------- ------------------------------------
        2000                  US$147,000,000
--------------------- ------------------------------------
        2001                  US$100,000,000
--------------------- ------------------------------------
        2002                   US$33,000,000
--------------------- ------------------------------------
        2003                   US$45,000,000
--------------------- ------------------------------------
        2004                   US$46,000,000
--------------------- ------------------------------------
        2005                   US$47,000,000
--------------------- ------------------------------------
        2006                   US$47,000,000
--------------------- ------------------------------------
</TABLE>


provided, however, that Capital Expenditures permitted in any period which are
not used in such period may be carried forward to, and expended in, the next
period.


SECTION 8.4     OPERATIONAL COVENANT.

        The Borrower shall not at any time permit Revenues for any calendar year
set forth below to be less than the amount set forth opposite such date below:

<TABLE>
<CAPTION>
--------------------- ------------------------------------
   CALENDAR YEAR               MINIMUM REVENUES
--------------------- ------------------------------------
<S>                   <C>
        1999                   US$90,000,000
--------------------- ------------------------------------
        2000                  US$120,000,000
--------------------- ------------------------------------
        2001                  US$143,000,000
--------------------- ------------------------------------
        2002                  US$200,000,000
--------------------- ------------------------------------
</TABLE>


                                     - 67 -
<PAGE>   69
<TABLE>
<S>                   <C>
--------------------- ------------------------------------
        2003                  US$295,000,000
--------------------- ------------------------------------
        2004                  US$400,000,000
--------------------- ------------------------------------
        2005                  US$530,000,000
--------------------- ------------------------------------
        2006                  US$623,000,000
--------------------- ------------------------------------
</TABLE>



                               SECTION 9. SECURITY


SECTION 9.1     GRANT OF SECURITY INTEREST.

        To secure the prompt payment of the Obligations, and to secure the
performance of and compliance with all the agreements, covenants and provisions
of the Financing Documents, the Borrower shall and shall cause its Subsidiaries,
pursuant to the Security Documents, to grant, assign, pledge and convey to the
Collateral Agent for the benefit of each Secured Party a first-priority security
interest, subject only to Permitted Liens, in all Equipment, real property and
other tangible and intangible property and rights to be acquired by the Borrower
and its Subsidiaries pursuant to the Nortel Contracts with the proceeds of the
Loans (all such property and rights, together with all proceeds of any thereof
and any cash and cash equivalents held from time to time in the Net Proceeds
Account, collectively, the "COLLATERAL"). Each of the Equipment Pledge
Agreements and Mortgage Deeds shall state as the maximum secured obligation such
amount as shall be designated by the Administrative Agent in its sole
discretion; provided, however, that the aggregate maximum secured amount stated
in all such Security Documents shall not at any time exceed one hundred fifteen
percent (115%) of the sum of the Loans outstanding plus the Commitment Amount
(as reduced, if applicable, in accordance with Section 2.5) plus the loans
outstanding and commitment amounts under the Lucent Argentina Financing
Agreements. The Borrower hereby confirms to the Secured Parties that it shall,
and shall cause each of its Subsidiaries to, take all actions required by the
Security Documents or otherwise deemed reasonably necessary or reasonably
desirable by the Collateral Agent in order to create, perfect and maintain the
perfection of the Secured Parties' first-priority Lien in the Collateral,
subject only to Permitted Liens.


SECTION 9.2     ESCROW ACCOUNTS.

        To secure the prompt payment of principal of and interest on the Loans,
the Borrower shall grant to the Collateral Agent for the benefit of the Secured
Parties a first-priority security interest in the Net Proceeds Account and each
other escrow account, if any, and in all funds deposited therein.




                                     - 68 -
<PAGE>   70

SECTION 9.3     RELEASE OF COLLATERAL.

        (a)     SECURITY INTEREST. The Borrower hereby further agrees and
confirms that, except for any Collateral released pursuant to Section 9.3(b),
the Secured Parties' security interest in the Collateral shall not be released
by the Collateral Agent until and unless (1) the Borrower shall have paid in
full all amounts due and payable under this Agreement and under any Security
Document and shall have performed all of its Obligations and the Commitment
shall have terminated or (2) the Required Lenders shall have consented to such
release, in their sole discretion.

        (b)     RELEASE INSTRUMENTS. In connection with any Disposal of
Collateral permitted by the terms hereof, the Borrower may request a release of
such Collateral (the "RELEASED COLLATERAL") by delivering to the Collateral
Agent a notice (each, a "RELEASE NOTICE"), which shall refer to this Section,
describe in reasonable detail the proposed Released Collateral and be
accompanied by (1) an officer's certificate of the Borrower certifying that no
Event of Default has occurred and is continuing and that the officers of the
Borrower executing any and all documents in connection with the release were
duly authorized to do so and (2) the proposed instrument of release (the
"RELEASE") executed by all necessary parties thereto other than the Collateral
Agent (collectively, the "RELEASE INSTRUMENTS").

        (c)     COUNTERPARTS. The Collateral Agent shall execute, acknowledge,
if applicable, and deliver to the Borrower counterparts of the documents
described in Sections 9.3(b)(1) and 9.3(b)(2) within five (5) Business Days of
receipt by the Collateral Agent of a Release provided that the conditions set
forth in the Release Instruments and herein with respect to dispositions of
Collateral have been satisfied. The Borrower at its own expense shall execute,
deliver, obtain and record such instruments as the Collateral Agent may
reasonably require, including, without limitation, amendments to the Security
Documents or this Agreement necessary to reflect such release. The Borrower
shall reimburse the Collateral Agent upon demand for all reasonable costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Collateral Agent in connection with any actions taken by it pursuant to this
Section.

        (d)     CONFLICTS WITH INTERCREDITOR AGREEMENT. Notwithstanding anything
contained in this Section 9.3 to the contrary, if any conflicts arise between
this Section 9.3 and the Intercreditor Agreement, the Intercreditor Agreement
shall control.


                          SECTION 10. EVENTS OF DEFAULT


SECTION 10.1    EVENTS OF DEFAULT.

Each of the following events shall constitute an "EVENT OF DEFAULT" hereunder:

        (a)     NON-PAYMENT. The Borrower shall fail to pay:



                                     - 69 -
<PAGE>   71

                (1)     any installment of the principal amount of any Loan as
and when the same becomes due and payable hereunder (whether at stated maturity,
by acceleration, mandatory prepayment or otherwise); or

                (2)     any interest on any Loan or any other amount payable
hereunder or under any Note, when and as the same shall become due and payable
(whether at stated maturity, by acceleration, mandatory prepayment or otherwise)
and such failure shall continue unremedied for three (3) Business Days.

        (b)     REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certification or statement made by or on behalf of the Borrower, any Subsidiary
thereof or IMPSAT in any Financing Document or any amendment thereof or in any
certificate, report, or opinion delivered pursuant to or otherwise in connection
with any Financing Document shall prove to have been false, incorrect, or
misleading in any material respect as of the time made, delivered or deemed made
or delivered.

        (c)     COVENANTS. The Borrower, any Subsidiary thereof or IMPSAT shall
fail to perform or observe in any material respect any term, covenant, condition
or agreement:

                (1)     contained in this Agreement (other than the covenants
contained in Section 8.1 or paragraphs (f), (g) and (h) of Section 8.2) or any
other Financing Document and such default shall continue beyond any cure or
grace period specifically applicable thereto pursuant to the terms of such
Financing Document; or

                (2)     contained in Section 8.1 or paragraphs (f), (g) and (h)
of Section 8.2) hereof and such default shall continue unremedied for a period
of ten (10) Business Days after the earlier of (i) the date on which the
Borrower obtains knowledge of such default or (ii) the date on which notice
thereof shall have been received by the Borrower from the Administrative Agent
(which notice will be given at the request of any Lender).

        (d)     IMPSAT INDENTURES. IMPSAT or any of its Subsidiaries shall
default in:

                (1)     any payment of any Indebtedness under the IMPSAT
Indentures; or

                (2)     the observance or performance of any agreement, covenant
or condition under the IMPSAT Indentures or any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the Trustee (under any IMPSAT Indenture), to cause any such
Indebtedness to become due or subject to mandatory repurchase or repayment prior
to its stated maturity.

        (e)     BRAZIL AGREEMENTS. An event of default shall have occurred under
the Nortel Brazil Financing Agreement or any other of the Brazil Agreements.



                                     - 70 -
<PAGE>   72

        (f)     DEFAULT UNDER OTHER INDEBTEDNESS. The Borrower, any Subsidiary
thereof or IMPSAT shall default in:

                (1)     any payment of any Indebtedness (other than the Loans
under this Agreement or the loans under the Nortel Brazil Financing Agreement)
aggregating in excess of five million Dollars (US$5,000,000); or

                (2)     the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Financing Documents or
the IMPSAT Indentures) aggregating in excess of five million Dollars
(US$5,000,000), or contained in any instrument or agreement evidencing,
securing, or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder of such Indebtedness (or a trustee or agent on behalf of
such holder) to cause any such Indebtedness to become due or subject to
mandatory repurchase or repayment prior to its stated maturity.

        (g)     BANKRUPTCY. The Borrower, any Subsidiary thereof or IMPSAT shall
commence a voluntary case concerning itself under any bankruptcy law of
Argentina (including, without limitation, Argentine Law No. 24.522) or any other
jurisdiction or Title 11 of the United States Code entitled "Bankruptcy," as now
or hereafter in effect, or any successor thereto (the "BANKRUPTCY CODE"); or an
involuntary case is commenced against the Borrower, any Subsidiary thereof or
IMPSAT under any such laws, and the petition is not contested within 10 days, or
is not dismissed within 30 days, after commencement of the case; or a custodian
(as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of the Borrower, any Subsidiary thereof or
IMPSAT or the Borrower, any Subsidiary thereof or IMPSAT commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower, any
Subsidiary thereof or IMPSAT, or there is commenced against the Borrower, any
Subsidiary thereof or IMPSAT any such proceeding which remains undismissed for a
period of thirty (30) days; or the Borrower, any Subsidiary thereof or IMPSAT is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrower, any
Subsidiary thereof or IMPSAT suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue undischarged or
unstayed for a period of thirty (30) days; or the Borrower, any Subsidiary
thereof or IMPSAT makes a general assignment for the benefit of creditors; or
the Borrower, any Subsidiary thereof or IMPSAT shall generally not pay its debts
as they become due or there shall otherwise occur a cesacion de pagos (within
the meaning of Argentine law); or any corporate action is taken by the Borrower,
any Subsidiary thereof or IMPSAT for the purpose of effecting any of the
foregoing.

        (h)     FINANCING DOCUMENTS. Any Financing Document shall cease to be in
full force and effect, or shall cease to give the Lenders the Liens and the
material rights, powers and privileges purported to be created thereby
(including, without limitation, a perfected security interest in, and Lien on,
all of the Collateral described therein in favor of the Lenders, superior to and
prior to the rights of all third Persons, and subject to Permitted Liens only).



                                     - 71 -
<PAGE>   73

        (i)     NORTEL CONTRACTS. The Borrower shall breach or otherwise fail to
perform any material obligation under any of the Nortel Contracts or the Lucent
Supply Agreements or any of the Nortel Contracts or the Lucent Supply Agreements
shall cease to be in full force and effect for any reason imputable to the
Borrower or an Affiliate thereof except at the stated termination date thereof
or shall be assigned or otherwise transferred, terminated, or rescinded without
the approval of Nortel, provided, that it shall not be an Event of Default if
the Borrower and its Affiliates party thereto terminate the Supply Agreement or
the Lucent Supply Agreements in accordance with the terms thereof and without
being in default thereunder.

        (j)     OTHER PROJECT AGREEMENTS. The Borrower or any Project Party
(other than Nortel) shall breach or otherwise fail to perform any material
obligation under the Project Agreements (other than the Nortel Contracts or the
Lucent Supply Agreements) or such other Project Agreements shall cease for any
reason (other than for a reason attributable to Nortel) to be in full force and
effect except at the stated termination date thereof, or shall be assigned or
otherwise transferred, terminated, or rescinded by any Project Party thereto;
provided that it shall not be an Event of Default if, not later than one hundred
twenty (120) days of any breach or failure by such other Project Party, or the
effective date of any termination or rescission in respect of such other Project
Agreement (other than a termination or rescission based on a breach or failure
by the Borrower), such breach or failure is cured or a substitute vendor enters
into a new written agreement with the Borrower to continue to provide the
equipment, systems and services contemplated under such other Project Agreement
on terms that conform to and will not result in a deviation from the then
current Business Plans.

        (k)     LICENSES. Any License necessary for the Project shall cease to
be in full force and effect. A License shall be deemed to cease to be in full
force and effect (1) when an order revoking or terminating said License shall be
issued and such order is no longer subject to further administrative and
judicial review, or (2) when any Governmental Authority having jurisdiction over
any such License shall, prior to the termination thereof, decide not to renew
such License and such decision shall not be subject to further administrative or
judicial review.

        (l)     GOVERNMENTAL ACTIONS.

                (1)     Any Governmental Authority shall have (A) condemned,
nationalized, seized, compulsorily acquired, or otherwise expropriated all or
any material part of the property or other assets of the Borrower or any of its
Subsidiaries or of any capital stock of the Borrower or any of its Subsidiaries,
or (B) assumed custody or control either of such property or other assets or of
the business or operations of the Borrower or any of its Subsidiaries or of
their capital stock, or shall have taken any action for the dissolution of the
Borrower or any of its Subsidiaries or any other action that would prevent the
Borrower or any of its Subsidiaries or their respective officers from carrying
on the business or operations of the Borrower or any such Subsidiary in all
material respects; provided, however, that this paragraph shall not apply to any
Subsidiary of the Borrower (i) the property or assets of which do not comprise
part of the Network or the Collateral, (ii) which is not a party to any of the
Project Agreements and (iii) the



                                     - 72 -
<PAGE>   74

total Equity of which is less than one hundred thousand Dollars (US$100,000),
unless the Governmental Action in question is reasonably likely to have a
Material Adverse Effect.


                (2)     Any Governmental Approvals material for the
construction, operation or maintenance of the Project or the Network shall cease
to be in full force and effect. A Governmental Approval shall be deemed to cease
to be in full force and effect (x) when an order revoking or terminating said
Governmental Approval shall be issued and such order is no longer subject to
further administrative and judicial review, or (y) when any Governmental
Authority having jurisdiction over any such Governmental Approval shall, prior
to the termination thereof, decide not to renew such Governmental Approval and
such decision shall not be subject to further administrative or judicial review.

        (m)     JUDGMENTS. A final judgment, award, decree, fine or penalty for
the payment of money in excess of five million Dollars (US$5,000,000)
individually or in the aggregate shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against the
Borrower or IMPSAT or any of their respective Subsidiaries and the same shall
not be discharged (or provision satisfactory to the Administrative Agent shall
not be made for such discharge), or a stay of execution thereof shall not be
procured, within thirty (30) days from the date of entry thereof, and the
Borrower, within such thirty (30) day period or such longer period during which
the execution of such judgment or judgments shall have been stayed, shall not
have appealed therefrom and caused the execution thereof to be stayed during
such appeal.

        (n)     CURRENCY RESTRICTIONS. Argentina or any Governmental Authority
thereof shall impose restrictions on the free transferability of Dollars to or
from Argentina or Dollars shall, in the reasonable judgment of the Required
Lenders, be unavailable within Argentina at a commercially reasonable rate of
exchange, and the Borrower shall not, within ten (10) Business Days after notice
from the Administrative Agent, have demonstrated to the satisfaction of the
Administrative Agent that such restrictions will not have a Material Adverse
Effect on the ability of the Borrower to perform its Obligations or on the
availability of Dollars for purposes of paying any amounts required to be paid
pursuant to this Agreement or the other Financing Documents.

        (o)     IMPSAT GUARANTEE. IMPSAT shall breach any covenant or agreement
in the IMPSAT Guarantee.

        (p)     CHANGE IN CONTROL. A Change in Control shall have occurred.

        (q)     LEGAL EXISTENCE; TAXES. The Borrower or IMPSAT shall have failed
to maintain its legal existence or the Borrower, any Subsidiary thereof or
IMPSAT shall have failed to pay taxes as they come due.

        (r)     IMPAIRMENT OF COLLATERAL. The Collateral Agent shall fail at any
time to have a valid and perfected Lien on, subject to no prior or equal Liens
other than Permitted Liens, or any



                                     - 73 -
<PAGE>   75

Security Document shall fail to be provided in respect of, or shall fail to
grant the interests required by Section 9 in any material portion of the
Collateral.

        (s)     MATERIAL ADVERSE CHANGE. A Material Adverse Change shall have
occurred.

        (t)     CAPITALIZATION. (1) The Borrower shall make any distribution or
payment or transfer any property to IMPSAT or any other Person, directly or
indirectly, in respect of the IMPSAT Capital Contribution or (2) the resolution
of a duly-convened shareholders meeting of the Borrower, in form and content
satisfactory to the Administrative Agent, authorizing the Borrower Capital
Increase shall not have been duly adopted on or before December 31, 1999, or (3)
the Administrative Agent shall not have received the officer's certificate
referred to in the final paragraph of Section 8.3(e) within the time period
established therein.

        (u)     CAPITAL MARKET TRANSACTIONS. IMPSAT shall commence an IMPSAT
Capital Markets Transaction, or the Borrower shall commence a Borrower Capital
Markets Transaction, in either case on or before December 31, 2002, in an
aggregate principal amount of less than two hundred fifty million Dollars
(US$250,000,000) without the prior written approval of the Administrative Agent,
on behalf of the Required Lenders.


SECTION 10.2.   REMEDIES UPON EVENT OF DEFAULT.

        (a)     RIGHTS AND REMEDIES. If any Event of Default (other than the
Event of Default referred to in Section 10.1(g)) has occurred and is continuing,
the Administrative Agent shall, at the request of, or may, with the consent of
the Required Lenders (1) terminate the Commitment, whereupon the obligation of
the Lenders to make Loans hereunder shall immediately be terminated and/or (2)
declare all of the Loans to be due and payable, whereupon the Loans, together
with interest accrued thereon and all other amounts due under this Agreement and
the Notes, shall immediately mature and become due and payable, without
presentment, demand, diligence, protest, notice of acceleration, or other notice
of any kind, all of which the Borrower hereby expressly waives; and/or (3)
exercise on behalf of itself and the Lenders all other rights and remedies
available to it and the Lenders under this Agreement and the other Financing
Documents. Upon the occurrence of any Event of Default, the Lenders and the
Agents shall have, in addition to any other rights and remedies contained in
this Agreement and the other Financing Documents, all of the rights and remedies
of a secured party under the laws of Argentina or other Applicable Laws, all of
which rights and remedies shall be cumulative and non-exclusive, to the extent
permitted by Applicable Law.

        (b)     BANKRUPTCY. Upon the occurrence of an Event of Default referred
to in Section 10.1(g) of this Agreement:

                (1)     the Commitment shall automatically be terminated and the
obligation of the Lenders shall immediately terminate;



                                     - 74 -
<PAGE>   76

                (2)     the Loans, together with all interest accrued thereon
and all other amounts due under this Agreement and the Notes, shall immediately
mature and become due and payable, without any other presentment, demand,
diligence, protest, notice of acceleration, or other notice of any kind, all of
which each of the Borrower hereby expressly waives; and

                (3)     the Administrative Agent may, or at the request of the
Required Lenders shall, exercise (or shall direct the Collateral Agent to
exercise) on behalf of itself and the Lenders all other rights and remedies
available to it and the Lenders under this Agreement and the other Financing
Documents.

        (c)     OTHER REMEDIES. In addition to such remedies as are provided for
in this Agreement and the other Financing Documents, the Lenders' remedies upon
the occurrence and during the continuance of an Event of Default shall include,
to the extent permitted by Applicable Law, (1) a right to apply or require the
Borrower to apply, for the benefit of the Lenders or a third party selected by
the Lenders, for any necessary orders, permits or licenses in connection with
the operation or abandonment of the Network, the Telecommunications Business or
any part thereof; and (2) a right to have a receiver appointed by a court of
competent jurisdiction in order to manage, protect and preserve the Network, the
Telecommunications Business and the Collateral and to continue the operation of
the Telecommunications Business, and to collect the revenues and profits thereof
and apply the same to the payment of all expenses and other charges of such
receivership until the sale or other final disposition of the Collateral.

        (d)     ACTIONS. In connection with the foregoing remedies, the Borrower
shall take such further actions and execute all such instruments as the
Administrative Agent or the Collateral Agent deems necessary. The Borrower
agrees that the Administrative Agent or the Collateral Agent may enforce any
obligation of the Borrower as set forth in this Agreement by an action for
specific performance.

        (e)     ADVANCES. The Lenders may (but shall not be obligated to) make
advances from their own funds to preserve, protect or obtain any of the
Collateral, including amounts to pay Taxes, insurance and the like, and all such
advances shall become part of the Obligations and shall be repayable to the
Lenders with interest thereon from the date of such advances until paid at the
Default Interest Rate.


SECTION 10.3    CUMULATIVE RIGHTS.

        No failure or delay on the part of the Lenders, the Administrative Agent
or the Collateral Agent in exercising any right, power, or remedy accruing to
them hereunder shall impair any such right, power, or remedy, nor shall such
failure or delay in exercising any right, power, or remedy with respect to any
particular occurrence of an Event of Default be construed as a waiver of any
such right, power, or remedy for any other or future occurrence of an Event of
Default, nor shall any single or partial exercise of any such right or power
preclude any other or further exercise thereof or the exercise of any other
right or power hereunder. To the fullest extent



                                     - 75 -
<PAGE>   77

permitted by Applicable Law, all remedies, either under this Agreement or by
Applicable Law otherwise afforded the Lenders, shall be cumulative and not
alternative.


                    SECTION 11. EXPENSES AND INDEMNIFICATION


SECTION 11.1    EXPENSES.

        The Borrower agrees to pay on demand (a) all reasonable costs and
expenses of the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment, protocolization
and registration of the Financing Documents, including the reasonable fees and
expenses of counsel for the Agents with respect thereto, with respect to
advising the Agents as to their rights and responsibilities or the perfection,
protection or preservation of their and the Lenders' rights or interests under
the Financing Documents, with respect to negotiations with the Borrower, IMPSAT
or with other creditors of the Borrower or IMPSAT arising out of any Default or
any events or circumstances that may give rise to an Event of Default, and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors' rights
generally and any proceeding ancillary thereto, and (b) all reasonable costs and
expenses of the Agents and the Lenders in connection with the enforcement of the
Financing Documents, including in any action, suit or litigation, any
bankruptcy, insolvency or other similar proceeding affecting creditors' rights
(including, without limitation, the reasonable fees and expenses of counsel for
each Agent and the Lenders with respect thereto).


SECTION 11.2    INDEMNIFICATION.

        Without regard to whether the Borrower or any other Person has disclosed
any fact to Nortel, the Administrative Agent, the Collateral Agent or any
Lender, the Borrower hereby agrees to indemnify and hold harmless each of the
Agents and Lenders and each of their respective officers, directors, employees,
consultants and advisors (collectively, the "INDEMNITEES") from and against any
and all actions, suits, claims, damages, demands, judgments, losses,
liabilities, costs or expenses whatsoever, including reasonable attorneys' fees,
which any Indemnitee may sustain or incur (or which may be claimed against any
Indemnitee by any Person whatsoever) to the extent arising by reason of or in
connection with:

        (a)     the Loans or the proposed use of the proceeds thereof;

        (b)     the payment or failure to pay the Obligations;

        (c)     the occurrence of an Event of Default;

        (d)     the pursuit by either Agent or any Lender of any legal remedy in
connection with an Event of Default;



                                     - 76 -
<PAGE>   78

        (e)     the entering into any Financing Document by either Agent or any
Lender, or enforcing their remedies hereunder or thereunder; or

        (f)     any Environmental Law as a result of the past, present or future
operations of the Borrower any of its Subsidiaries or IMPSAT (or any predecessor
in interest to any such Persons);

provided, however, that, the Borrower shall not be required to indemnify any
Indemnitee for any actions, suits, claims, damages, demands, judgments, losses,
liabilities, costs or expenses to the extent caused by such Indemnitee's willful
misconduct or gross negligence.


                    SECTION 12. ASSIGNMENT AND PARTICIPATION


SECTION 12.1    ASSIGNMENT.

        (a)     REQUIREMENTS. Each Lender may assign to one or more Eligible
Assignees all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the Loans
owing to it and the Note or Notes held by it); provided, however, that (1) each
such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of this Agreement, provided, that a
Lender may assign all or a portion of its rights and obligations under one
Tranche without being required to assign any portion of its rights and
obligations, if any, under any other Tranche; (2) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement, the amount of any Commitment proposed to be assigned (determined as
of the date of the Assignment and Assumption Agreement with respect to such
assignment) shall in no event be less than one million Dollars (US$1,000,000),
and (3) the parties to each such assignment shall execute and deliver an
Assignment and Assumption Agreement.

        (b)     NOTICE. Promptly following an assignment described in (a) above,
the parties to such assignment shall deliver the executed Assignment and
Assumption Agreement entered into between the assignor Lender and the assignee
to the Administrative Agent for its acknowledgment and recording in the Register
together with a non-refundable processing and recordation fee of three thousand
five hundred Dollars (US$3,500). The assigning Lender shall also deliver a
notice to the Borrower in respect of such assignment (unless such notice has
already been given) and the assignee shall furnish the Administrative Agent with
a completed administrative details questionnaire.

        (c)     RECORDING. Upon its receipt of an Assignment and Assumption
Agreement executed by the assignor Lender and the assignee, the Administrative
Agent shall promptly acknowledge such Assignment and Assumption Agreement and
record the information contained therein in the Register in accordance with the
provisions of Section 2.3(d) and give notice of such acknowledgment and
recordation to the Lenders and the Borrower. Any assignment of any



                                     - 77 -
<PAGE>   79

Loan or Note hereunder shall become effective on the day when the relevant
Assignment and Assumption Agreement is recorded by the Administrative Agent in
the Register.

        (d)     EXCHANGE OF NOTES. Concurrently with the delivery of an
Assignment and Assumption Agreement to the Administrative Agent pursuant to (c)
above, or as soon thereafter as practicable, the assignor Lender shall surrender
the Note evidencing the Loan being assigned thereunder for cancellation against
delivery to the assignor Lender and/or the assignee of one or more new Notes
executed by the Borrower in the same aggregate principal amount.

        (e)     RELEASE. From and after the date on which an Assignment and
Assumption Agreement is effective and solely to the extent of such assignment,
the assignor Lender shall be released of its commitments and obligations under
this Agreement and the assignee shall thereupon become a Party and shall have
the same rights and interest and assume the same obligations and liabilities as
having been assigned to it by the assignor Lender.


SECTION 12.2    PARTICIPATION.

        Any Lender may sell participations to any Person in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Loans owing to it and the
Note or Notes held by it), provided, however, that (a) such Lender's obligations
under this Agreement (including, without limitation, its Commitment) shall
remain unchanged, (b) such Lender shall remain solely responsible to the other
Parties for the performance of such obligations, (c) such Lender shall remain
the holder of any such Note for all purposes of this Agreement, and (d) the
Borrower, the Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.


                     SECTION 13. OPTION TO REVISE STRUCTURE.


SECTION 13.1    OPTION TO REVISE.

        Subject to Applicable Law, at any time after January 1, 2000 (but
excluding the six (6) month period ending on July 31, 2003) the Administrative
Agent on behalf of the Required Lenders shall have the right, upon giving not
less than sixty (60) days' prior written notice to the Borrower, to cause the
structure of the Commitment Amount and the Loans to be revised to facilitate
access to all financial markets, including banks, insurance companies,
investment companies, other financial institutions or governmental agencies, to
sell or refinance the Commitment Amount and/or Loans, including by requiring all
or a portion of the Loans and Commitment Amount to be replaced by a public
offering or private placement of debt securities of IMPSAT ("REPLACEMENT NOTES")
in an aggregate principal amount of not less than two hundred fifty million
Dollars (US$250,000,000) for the purpose of the Prepayment of outstanding Loans
and the reduction of the Commitment Amount, concurrently with the prepayment of
loans and reduction of commitments under the Nortel Brazil Financing



                                     - 78 -
<PAGE>   80

Agreement and the Lucent Financing Agreements (all such financing agreements and
this Agreement, collectively, the "FINANCING AGREEMENTS"); provided, that any
such revisions and/or replacement shall neither decrease the economic benefit or
the term of the Loans or the Commitment to IMPSAT and the Borrower nor have an
"all-in" financing cost to IMPSAT in excess of thirteen and three quarters
percent (13.75%) per annum. The Lenders and the Borrower shall cooperate with
respect to the determination of the optimal timing for such revisions or
replacement, including for issuance of the Replacement Notes and any other
issuance of debt securities by the Borrower or IMPSAT. Upon receipt of such
notice from the Administrative Agent, the Borrower shall cooperate with the
Placement Agent and Nortel as set forth in Section 16.12 and otherwise provide,
on a best efforts basis, such assistance as is customarily and reasonably
required or desirable to be provided by an issuer to enable the successful
placement of Replacement Notes, under the terms and subject to the conditions
set forth in Sections 13.2 and 13.3 and such other terms and conditions as may
be agreed upon between the Borrower and the Lenders from time to time.


SECTION 13.2    TRANSACTION COSTS.

        All costs and expenses incurred in connection with the issuance of
Replacement Notes, including underwriting fees, commissions and the Borrower's
and IMPSAT's out-of-pocket costs associated with the issuance of the Replacement
Notes (including, without limitation, the reasonable fees and expenses of its
auditors and counsel) (collectively, "TRANSACTION COSTS"), shall be borne by the
lenders under the Financing Agreements, pro rata according to the proportion
which the sum of the respective lender's loans prepaid and/or commitments
reduced pursuant to Section 13.4 bears to the aggregate amount of all loans
prepaid and commitments reduced under the Financing Agreements, provided,
however, that if the Net Proceeds of the Replacement Notes exceed the aggregate
total of all loans outstanding and commitment amounts under the Financing
Agreements, the Borrower and IMPSAT, jointly and severally, shall bear a
percentage of the Transaction Costs equal to the percentage which the amount of
the excess bears to the total amount of such Net Proceeds; and provided further,
that the Parties shall seek to structure the transaction to minimize tax costs.
Notwithstanding any other provision herein to the contrary, if a transaction
under this Section 13 is cancelled by IMPSAT, the Borrower and IMPSAT jointly
and severally shall be responsible for any fee payable to any underwriter or
other financial intermediary as a result of such cancellation.


SECTION 13.3    TERMS OF REPLACEMENT NOTES.

        The Replacement Notes shall be on terms approved by Nortel and
consistent with market practice in the relevant debt securities market. To the
extent political risk insurance is required by and consistent with relevant
market practice, all costs of such insurance shall be borne by the Borrower. To
the extent the rate of withholding tax applicable to Replacement Notes is
consistent with relevant market practice, the full rate of withholding tax shall
be borne by the Borrower.




                                     - 79 -
<PAGE>   81

SECTION 13.4    APPLICATION OF PROCEEDS.

        (a)     An amount equal to 37.5% of the Net Proceeds of the Replacement
Notes shall be applied as follows:

                (1)     first, to the Prepayment of the Loans outstanding as of
the date of IMPSAT's receipt of such Net Proceeds and the prepayment of the
loans outstanding as of such date under the Nortel Brazil Financing Agreement,
pro rata according to the proportion which each such loan bears to the aggregate
total of loans outstanding as of such date under this Agreement and the Nortel
Brazil Financing Agreement;

                (2)     the remaining balance, if any, to the reduction of the
Commitment Amount as of the date of IMPSAT's receipt of such Net Proceeds and
the reduction of the commitment amount as of such date under the Nortel Brazil
Financing Agreement, pro rata according to the proportion which the commitment
amount as of such date under each agreement bears to the total commitment
amounts as of such date under this Agreement and the Nortel Brazil Financing
Agreement;

        (b)     The remaining balance of such Net Proceeds shall be applied as
follows:

                (1)     first, to the prepayment of the loans outstanding under
the Financing Agreements as of the date of IMPSAT's receipt of such Net
Proceeds, pro rata according to the proportion which the sum of the outstanding
loans and commitment amount under each agreement as of such date bears to the
aggregate total of all loans outstanding and commitment amounts under the
Financing Agreements as of such date;

                (2)     the remaining balance, if any, to the reduction of the
commitment amounts under the Financing Agreements as of the date of IMPSAT's
receipt of such Net Proceeds, pro rata according to the proportion which the sum
of the outstanding loans and commitment amount under each agreement as of such
date bears to the aggregate total of all loans and commitment amounts under the
Financing Agreements as of such date.


SECTION 13.5    TERMINATION OF OPTION.

        The right of the Administrative Agent provided in Section 13.1 shall
terminate upon the completion of the issuance of Replacement Notes and the
application of the Net Proceeds thereof in accordance with Section 13.4.




                                     - 80 -
<PAGE>   82

                   SECTION 14. GOVERNING LAW AND JURISDICTION


SECTION 14.1    GOVERNING LAW.

        This Agreement and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York (not including such state's
conflict of laws provisions).


SECTION 14.2    WAIVER OF JURY TRIAL.

        Each of the Lenders, the Agents and the Borrower hereby knowingly,
voluntarily, and intentionally waives any right it may have to a trial by jury
of any claim, demand, or cause of action under, or in connection with, this
Agreement, the Notes or any other financing document. This provision is a
material inducement for the Lenders to enter into this Agreement and the other
financing documents.


SECTION 14.3    JURISDICTION; VENUE FOR SUIT.

        Each of the Borrower, the Lenders and the Agents hereby expressly and
irrevocably (a) waives all right to object to jurisdiction or execution in any
legal action or proceeding relating to this Agreement, the Notes, or any other
Financing Document which such Person may now or hereafter have by reason of such
Person's domicile or by reason of any subsequent or other domicile and hereby
irrevocably consents that any legal action, suit, or proceeding arising out of,
or relating to, any of the Financing Documents and any other document or
instrument required to be executed in relation thereto may be instituted in or
removed to the United States District Court of the Southern District of New York
and the courts of the State of New York sitting in New York, Borough of
Manhattan; (b) submits to and accepts and consents with regard to any such
action or proceeding for itself and in respect of its properties and assets,
generally and unconditionally, the non-exclusive jurisdiction of any such court;
and (c) waives any objection it may now or hereafter have to the laying of the
venue of any such action, suit, or proceeding, and further waives any claim that
any such action, suit, or proceeding brought in any of the aforesaid courts has
been brought in any inconvenient forum.


SECTION 14.4    WAIVER OF IMMUNITY.

        To the extent that the Borrower or any of its Subsidiaries or any of
their respective assets has, or hereafter may acquire, any right to immunity
from suit, set-off, legal proceedings generally, attachment prior to judgment,
attachment in aid of execution, or other attachment or execution of judgment on
the grounds of sovereignty or otherwise, the Borrower for itself, and its
Subsidiaries hereby irrevocably waives such rights to immunity in respect of
Obligations. In addition, the Borrower hereby irrevocably waives, to the fullest
extent it may effectively do so, the right to demand that either Agent or any
Lender post a performance bond or guarantee (excepcion de arraigo) in any action
or proceeding against the Borrower or its property in Argentina.




                                     - 81 -
<PAGE>   83

SECTION 14.5    PROCESS AGENT.

        The Borrower has appointed CT Corporation System with offices at 111
Eighth Avenue, New York, New York 10011 and its successors as the Borrower's
designee, appointee, and agent to receive, accept and acknowledge, for and on
behalf of the Borrower, service of any and all legal process, summons, notices
and documents which may be served in such action, suit or proceeding relating to
this Agreement or the Notes or any other Financing Document in the case of the
courts of the United States District Court of the Southern District of New York
or of the courts of the State of New York sitting in New York, Borough of
Manhattan, which service may be made on any such designee, appointee, and agent
in accordance with legal procedures prescribed for such courts. So long as the
Borrower has any Obligations, the Borrower agrees to take any and all action
necessary to continue such designation in full force and effect and should such
designee, appointee, and agent become unavailable for this purpose for any
reason not attributable to the Borrower, the Borrower shall forthwith grant a
similar special irrevocable power of attorney to a new designee, appointee, and
agent with offices in New York, New York, which shall irrevocably agree to act
as such, with the powers and for purposes specified in this Section 14.5. The
Borrower further irrevocably consents and agrees to service of any and all legal
process, summons, notices, and documents out of any of the aforesaid courts in
any such action, suit or proceeding relating to this Agreement, the Notes, or
any other Financing Document delivered to the Borrower in accordance with this
Section 14.5 or to its then designee, appointee, or agent for service. If
service is made upon such designee, appointee, and agent, a copy of such
process, summons, notice or document shall also be provided to the Borrower, by
registered or certified mail, or overnight express air courier, provided that
failure to provide such copy to the Borrower shall not impair or affect in any
way the validity of such service or any judgment rendered in such action or
proceedings. The Borrower agrees that service upon the Borrower or any such
designee, appointee, and agent as provided for in this Section 14.5 shall
constitute valid and effective personal service upon the Borrower with respect
to matters contemplated in this Section 14.5 and that the failure of any such
designee, appointee, and agent to give any notice of such service to the
Borrower shall not impair or affect in any way the validity of such service or
any judgment rendered in any action or proceeding based thereon. Nothing herein
shall limit or be construed to limit the rights of the Lenders to commence
proceedings against the Borrower in any other venue where assets of the Borrower
may be found.


SECTION 14.6    LEGAL PROCESS IN OTHER JURISDICTIONS.

        Nothing in Section 14.3 or in Section 14.5 shall affect the right of any
Lender or Agent to serve legal process in any other manner permitted by law or
affect the right of any Lender or the Administrative Agent to bring any action
or proceeding against the Borrower or its property in the courts of other
competent jurisdictions, including, without limitation, the courts sitting in
the City of Buenos Aires, Argentina.




                                     - 82 -
<PAGE>   84

                             SECTION 15. THE AGENTS


SECTION 15.1.   AUTHORIZATION AND ACTION.

        The Lenders hereby appoint and authorize the Administrative Agent and
the Collateral Agent to exercise such powers and discretion under this Agreement
and the other Financing Documents, as are delegated to them, respectively, by
the terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for in
the Financing Documents (including, without limitation, enforcement or
collection of the Notes), neither Agent shall be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders; provided, however, that neither
Agent shall be required to take any action that exposes it to personal liability
or that is contrary to this Agreement or Applicable Law. Each Agent hereunder
agrees to give to the Lenders prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.


SECTION 15.2    AGENT'S RELIANCE.

        Neither Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Financing Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Agents: (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Assumption
Agreement entered into by the payee of such Note, as assignor, and an assignee;
(b) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) make no
warranty or representation to the Lenders and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (d) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part of the Borrower or
to inspect the property (including the books and records) of the Borrower; (e)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any Lien created or purported to be created under or
in connection with, this Agreement or any other instrument or document furnished
pursuant thereto; and (f) shall incur no liability under or in respect of this
Agreement by acting upon any notice, consent, certificate or other instrument or
writing (which may be by facsimile, electronic mail or telex) believed by it to
be genuine and signed or sent by the proper party or parties.




                                     - 83 -
<PAGE>   85

SECTION 15.3    LENDER CREDIT DECISION.

        Each Lender acknowledges that it has, independently and without reliance
upon either Agent and based on the financial statements referred to in Section
7.7 of this Agreement and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon any Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement.


SECTION 15.4    LENDER INDEMNIFICATION.

        The Lenders agree to indemnify each Agent ratably according to the
respective principal amount of the Notes then held by the Lenders (or if no
Notes are at the time outstanding or if any Notes are held by Persons that are
not the Lenders, ratably according to the respective amounts of the Commitment)
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by such Agent under this Agreement (to the extent
not promptly reimbursed by the Borrower); provided, however, that the Lenders
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, the Lenders agree to reimburse each Agent promptly
upon demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Sections
11.1 and 11.2, to the extent that such Agent is not promptly reimbursed for such
costs and expenses by the Borrower.


SECTION 15.5    SUCCESSOR AGENTS.

        Either Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrower and may be removed at any time with or without
cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent's giving of notice
of resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United States or of
any State thereof and having a combined capital and surplus of at least one
hundred million Dollars (US$100,000,000). Upon the acceptance of any appointment
as an Agent hereunder by a successor Agent and, in the case of a successor
Collateral Agent, upon the execution and filing or recording of such instruments
or notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the security interests granted
or purported to be granted under the Security



                                     - 84 -
<PAGE>   86

Documents, such successor Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as an
Agent, the provisions of this Section 15 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent under this
Agreement.


                         SECTION 16. GENERAL PROVISIONS


SECTION 16.1    NOTICES.

        All communications and notices provided for hereunder shall be in
writing and shall be personally delivered, mailed by postage prepaid registered
mail (airmail if international), return receipt requested, or telefaxed (with a
confirmation copy by postage prepaid registered mail, return receipt requested):

<TABLE>
<S>                                 <C>
        If to the Borrower:         IMPSAT S.A.
                                    Alferez Pareja 256
                                    (1107) Buenos Aires, Argentina
                                    Attention: President
                                    Fax No.:   54 11 4307 1525

        If to IMPSAT:               IMPSAT Fiber Networks, Inc.
                                    c/o IMPSAT USA, Inc.
                                    2040 North Dixie Highway
                                    Wilton Manors, Florida  33305
                                    Attention: President
                                    Fax No.:   (954) 779-3766

        If to the Lenders:          Nortel  Networks Limited
                                    c/o Nortel (CALA) Inc.
                                    1500 Concord Terrace
                                    Sunrise, FL 33323-2815
                                    Attention: Vice President and General Counsel
                                    Fax No.    (954) 851-8900

        With a copy to:             Baker & McKenzie
                                    805 Third Avenue
                                    New York, NY 10022
                                    Attention:     Thomas W. Studwell, Esq.
                                    Fax No.:   (212) 891-3521

                                    Sirti Argentina S.A.
                                    Hipolito Yrigoyen 4848 - Florida - P.B.A. (1602)
                                    Florida, Pcia. de Buenos Aires
</TABLE>


                                     - 85 -
<PAGE>   87
<TABLE>
<S>                                 <C>
                                    Argentina
                                    Attention: President
                                    Fax No.:   5411 4730-8817

        If to the Administrative    Nortel Networks Limited
             Agent:                 c/o Nortel (CALA) Inc.
                                    1500 Concord Terrace
                                    Sunrise, FL 33323-2815
                                    Attention: Vice President and General Counsel
                                    Fax No.    (954) 851-8900

        If to the Collateral        Bankers Trust Company
             Agent:                 Four Albany Street
                                    New York, NY  10006
                                    Attention: Corporate Trust and Agency Services
                                    Fax No.    (212) 669-0772
</TABLE>

Except as otherwise specified herein, all notices shall be deemed duly given on
the date of actual receipt.


SECTION 16.2    SEVERABILITY OF PROVISIONS.

        If any one or more of the provisions contained in this Agreement or any
documents executed in connection herewith shall be invalid, illegal, or
unenforceable in any respect, the validity, legality, and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired.


SECTION 16.3    BINDING EFFECT; SUCCESSORS AND ASSIGNS.

        This Agreement shall be binding upon and shall inure to the benefit of
each Party and its respective successors and assigns, provided that the Borrower
shall not assign or transfer any of its rights or Obligations hereunder except
with the prior written consent of the Administrative Agent and each Lender.


SECTION 16.4    AMENDMENT; WAIVER.


        (a)     GENERAL. Neither this Agreement nor any Financing Document may
be amended, waived, discharged, or terminated unless such change, waiver,
discharge, or termination is in writing signed by the Required Lenders, the
Administrative Agent or the Collateral Agent, as applicable, and the Borrower,
provided, however, that no such change, waiver, discharge or termination shall,
without the consent of each Lender affected thereby, (a) extend the final
maturity of any Loan or Note, or reduce the rate or extend the time of payment
of interest or fees thereon, or reduce the principal amount hereof, or increase
the Commitment of any Lender over



                                     - 86 -
<PAGE>   88

the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default other than a payment default shall not constitute a
change in the terms of any Commitment of any Lender), (b) release any of the
Collateral except as shall otherwise be provided in any of the Financing
Documents, (c) amend, modify or waive any provision of this Section 16.4 or
Sections 3, 4, 5, 11, 12, 15.4 and 16.6, (d) reduce the percentages specified in
the definition of Required Lenders, or (e) consent to the assignment of any of
the rights and Obligations of the Borrower under this Agreement or any
Collateral Agreements. The failure of any party to enforce at any time any
provision hereof or under any of the Notes or Security Documents shall not be
construed to be a waiver of such provisions or of the right of such party
thereafter to enforce any such provision or any other provision hereof or
thereof.


        (b)     DIRECTED CHANGES. In the event that, under the Turnkey Contract,
the Aggregate Price is increased as a result of Directed Changes (as those terms
are defined in the Turnkey Contract), the Parties shall negotiate in good faith
an amendment to this Agreement to increase the Commitment Amount accordingly.


SECTION 16.5    ENTIRE AGREEMENT.

        This Agreement and the other Financing Documents constitute the entire
agreement and understanding of the Parties with respect to the subject matter
hereof, and supersede all prior agreements, discussions, and understandings
between the Lenders and the Borrower with respect to the subject matter hereof.


SECTION 16.6    RIGHT OF SET-OFF.

        The Borrower's Obligations shall be paid in full in accordance with
their respective terms, and may not be offset against any obligations that
Nortel, any Lender, or any of their respective Affiliates may owe to the
Borrower under any other agreement, including (without limitation) any of the
Nortel Contracts. Each of the Lenders shall, to the fullest extent permitted by
Applicable Law, have the right to apply any and all amounts on deposit or on
account (general or special, time or demand, matured or unmatured, in whatever
currency) with it or with any of its branches, Subsidiaries, or Affiliates in
reduction of past due Obligations (whether such Obligations became due at
scheduled maturity, by acceleration or otherwise) of the Borrower hereunder.


SECTION 16.7    FURTHER ASSURANCES.

        The Borrower agrees upon the reasonable request of any Agent or Lender
promptly to take such actions as are necessary to carry out the intent of this
Agreement and the other Financing Documents.




                                     - 87 -
<PAGE>   89

SECTION 16.8    TERM OF AGREEMENT; SURVIVAL.

        Each agreement, representation, warranty, and covenant contained in this
Agreement shall survive any investigation made at any time by or on behalf of
the Lenders, and shall survive the Commitment Termination Date. This Agreement
shall continue to be in full force and effect and binding upon the Parties until
all of the Borrower's Obligations have been fully and indefeasibly paid and
performed, whereupon this Agreement shall terminate. Notwithstanding the
foregoing, all the indemnification provisions in this Agreement shall survive
and all other provisions which by their terms survive termination shall so
survive.


SECTION 16.9    HEADINGS.

        The various headings in this Agreement are intended for convenience
only, and shall not affect the meaning or interpretation of this Agreement.


SECTION 16.10   COUNTERPARTS.

        This Agreement may be executed in any number of counterparts (including
facsimile transmissions thereof), each of which when so executed shall be an
original but all of which together shall constitute one instrument.


SECTION 16.11   CONFIDENTIALITY.

        Each of the Parties hereby agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its Affiliates, directors, officers, employees and professional advisors,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of and will
agree to be bound by this confidentiality provision), (b) to the extent
requested by any regulatory authority, (c) to the extent required by Applicable
Law including in connection with a public offering of equity or debt securities
of the Borrower or IMPSAT or by any subpoena or similar legal process, (d) to
any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to the execution and
delivery of an agreement containing provisions substantially the same as those
of this Section 16.11, to any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the other Parties, or (h) to the extent such
Information (1) becomes publicly available other than as a result of a breach of
this Section 16.11 or (2) becomes available to such party on a non-confidential
basis from a source other than the other Parties.

        For the purposes of this Section 16.11, "INFORMATION" means all
information received from any of the Parties relating to any of the Lenders,
Lucent Argentina or their respective businesses, other than any such information
that is available to the Parties on a non-confidential



                                     - 88 -
<PAGE>   90

basis prior to disclosure by any Party. Any Person required to maintain the
confidentiality of Information as provided in this Section 16.11 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential Information.


SECTION 16.12   COOPERATION.

        The Borrower will cooperate (i) with Nortel, the Administrative Agent,
if applicable, and the lead agents for syndication (such lead agents and the
Administrative Agent being referred to collectively as the "SYNDICATION AGENTS")
in the syndication of the Loans and Commitments undertaken by the Syndication
Agents, and (ii) with Nortel and any underwriter or placement agent for the
placement or distribution of the Replacement Notes ("PLACEMENT AGENT") by: (a)
upon reasonable notice making senior officers of the Borrower available for a
meeting with prospective assignees and the Syndication Agents, the Placement
Agent and their respective consultants; and (b) providing such other assistance
as may be reasonably requested by the Syndication Agents and the Placement
Agent, such as responding to questions from prospective assignees with respect
to the operations, business plans, results and other matters relating to the
Borrower, its Affiliates and IMPSAT.



IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the date first written above.



BORROWER:

IMPSAT S.A.

By:     ___________________________

Name:   ___________________________

Its:    ___________________________





                                     - 89 -
<PAGE>   91

LENDERS:

NORTEL NETWORKS LIMITED

By:     ___________________________

Name:   ___________________________

Its:    ___________________________



SIRTI ARGENTINA, S.A.

By:     ___________________________

Name:   ___________________________

Its:    ___________________________



ADMINISTRATIVE AGENT:

NORTEL NETWORKS LIMITED

By:     ___________________________

Name:   ___________________________

Its:    ___________________________



COLLATERAL AGENT:

BANKERS TRUST COMPANY
Not in its individual capacity but solely as Collateral Agent

By:     ___________________________

Name:   ___________________________

Its:    ___________________________




                                     - 90 -
<PAGE>   92

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                         ----

<S>                                                                                     <C>
SECTION 1. DEFINITIONS.......................................................................2
-----------------------

    SECTION 1.1    DEFINED TERMS.............................................................2
    -----------    --------------
    SECTION 1.2    OTHER DEFINITIONS........................................................24
    -----------    ------------------
    SECTION 1.3    INTERPRETATION...........................................................25
    -----------    ---------------
    SECTION 1.4    ACCOUNTING PRINCIPLES AND TERMS..........................................26
    -----------    --------------------------------

SECTION 2.  THE CREDIT FACILITY.............................................................26
-------------------------------

    SECTION 2.1    LOANS....................................................................26
    -----------    ------
    SECTION 2.2    USE OF PROCEEDS..........................................................27
    -----------    ----------------
    SECTION 2.3    PROCEDURE FOR BORROWING; DISBURSEMENTS...................................27
    -----------    ---------------------------------------
    SECTION 2.4    NOTES....................................................................29
    ------------   ------
    SECTION 2.5    VOLUNTARY TERMINATION OR REDUCTION OF THE COMMITMENT AMOUNT..............30
    -----------    ------------------------------------------------------------
    SECTION 2.6    LOANS MADE AT REQUEST OF LENDERS.........................................30
    -----------    ---------------------------------

SECTION 3.  PAYMENT OF PRINCIPAL, INTEREST AND FEES.........................................31
----------------------------------------------------

    SECTION 3.1    REPAYMENT OF PRINCIPAL...................................................31
    ------------   -----------------------
    SECTION 3.2    PREPAYMENTS..............................................................31
    -----------    ------------
    SECTION 3.3    INTEREST.................................................................34
    -----------    ---------
    SECTION 3.4    FEES.....................................................................35
    -----------    -----
    SECTION 3.5    NATURE OF PAYMENTS.......................................................36
    ------------   -------------------
    SECTION 3.6    PAYMENT PROCEDURES.......................................................36
    ------------   -------------------
    SECTION 3.7    ADMINISTRATIVE AGENT'S DETERMINATION.....................................36
    -----------    -------------------------------------
    SECTION 3.8    PAYMENTS PRO RATA........................................................36
    -----------    ------------------

SECTION 4.  PAYMENT IN DOLLARS; EVENT OF SOVEREIGN RISK.....................................37
-------------------------------------------------------

    SECTION 4.1    OBLIGATION TO PAY IN DOLLARS; JUDGMENT CURRENCY..........................37
    -----------    ------------------------------------------------
    SECTION 4.2    EVENT OF SOVEREIGN RISK..................................................38
    -----------    ------------------------

SECTION 5.  FUNDING AND YIELD PROTECTION....................................................39
----------------------------------------

    SECTION 5.1    TAXES....................................................................39
    -----------    ------
    SECTION 5.2    FUNDING BREAKAGE COSTS...................................................41
    -----------    -----------------------
    SECTION 5.3    ILLEGALITY...............................................................41
    -----------    -----------
    SECTION 5.4    INCREASED COSTS AND YIELD PROTECTION.....................................42
    -----------    -------------------------------------

SECTION 6.  DELIVERIES; CONDITIONS PRECEDENT................................................43
--------------------------------------------

    SECTION 6.1    CONCURRENT DELIVERIES....................................................43
    -----------    ----------------------
    SECTION 6.2    CONDITIONS PRECEDENT TO INITIAL DISBURSEMENT; CLOSING....................43
    -----------    ------------------------------------------------------
    SECTION 6.3    CONDITIONS PRECEDENT TO ALL DISBURSEMENTS................................45
    -----------    ------------------------------------------
    SECTION 6.4    ENGLISH TRANSLATIONS.....................................................46
    -----------    ---------------------
    SECTION 6.5    TERMINATION BY THE LENDERS...............................................46
    -----------    ---------------------------
</TABLE>


<PAGE>   93
                                TABLE OF CONTENTS

                                    (CONT'D)

<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                         ----
<S>                                                                                     <C>
SECTION 7.  REPRESENTATIONS AND WARRANTIES..................................................47
-------------------------------------------

    SECTION 7.1    CORPORATE STATUS.........................................................47
    -----------    -----------------
    SECTION 7.2    CORPORATE POWER..........................................................47
    -----------    ----------------
    SECTION 7.3    GOVERNMENTAL APPROVALS...................................................48
    -----------    -----------------------
    SECTION 7.4    NO VIOLATION.............................................................48
    -----------    -------------
    SECTION 7.5    PROCEEDINGS..............................................................49
    -----------    ------------
    SECTION 7.6    TAXES....................................................................49
    -----------    ------
    SECTION 7.7    FINANCIAL STATEMENTS.....................................................49
    -----------    ---------------------
    SECTION 7.8    THE PROJECT..............................................................50
    -----------    ------------
    SECTION 7.9    ENVIRONMENTAL MATTERS....................................................50
    -----------    ----------------------
    SECTION 7.10   TRANSACTIONS WITH AFFILIATES.............................................51
    ------------   -----------------------------
    SECTION 7.11   INDEBTEDNESS.............................................................51
    ------------   -------------
    SECTION 7.12   PROPERTIES...............................................................51
    ------------   -----------
    SECTION 7.13   INTELLECTUAL PROPERTY....................................................52
    ------------   ----------------------
    SECTION 7.14   BOOKS AND RECORDS........................................................52
    ------------   ------------------
    SECTION 7.15   THE LICENSES.............................................................52
    ------------   -------------
    SECTION 7.16   NO MATERIAL ADVERSE CHANGE...............................................52
    ------------   ---------------------------
    SECTION 7.17   INSURANCE................................................................52
    ------------   ----------
    SECTION 7.18   COLLATERAL...............................................................53
    ------------   -----------
    SECTION 7.19   INVESTMENT COMPANY ACT...................................................53
    ------------   -----------------------
    SECTION 7.20   IMMUNITY.................................................................53
    ------------   ---------
    SECTION 7.21   TRUE AND COMPLETE DISCLOSURE.............................................53
    ------------   -----------------------------

SECTION 8.  COVENANTS.......................................................................53
----------------------

    SECTION 8.1    AFFIRMATIVE COVENANTS....................................................53
    -----------    ----------------------
    SECTION 8.2    NEGATIVE COVENANTS.......................................................61
    -----------    -------------------
    SECTION 8.3    FINANCIAL COVENANTS......................................................64
    -----------    --------------------
    SECTION 8.4    OPERATIONAL COVENANT.....................................................67
    -----------    ---------------------

SECTION 9.  SECURITY........................................................................68
--------------------

    SECTION 9.1    GRANT OF SECURITY INTEREST...............................................68
    -----------    ---------------------------
    SECTION 9.2    ESCROW ACCOUNTS..........................................................68
    -----------    ----------------
    SECTION 9.3    RELEASE OF COLLATERAL....................................................69
    -----------    ----------------------

SECTION 10.  EVENTS OF DEFAULT..............................................................69
------------------------------

    SECTION 10.1   EVENTS OF DEFAULT........................................................69
    ------------   ------------------
    SECTION 10.2.  REMEDIES UPON EVENT OF DEFAULT...........................................74
    -------------  -------------------------------
    SECTION 10.3   CUMULATIVE RIGHTS........................................................75
    ------------   ------------------

SECTION 11.  EXPENSES AND INDEMNIFICATION...................................................76
-----------------------------------------
</TABLE>

                                     - ii -
<PAGE>   94
                                TABLE OF CONTENTS

                                    (CONT'D)

<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                         ----
<S>                                                                                     <C>
    SECTION 11.1   EXPENSES.................................................................76
    ------------   ---------
    SECTION 11.2   INDEMNIFICATION..........................................................76
    ------------   ----------------

SECTION 12.  ASSIGNMENT AND PARTICIPATION...................................................77
-----------------------------------------

    SECTION 12.1   ASSIGNMENT...............................................................77
    ------------   -----------
    SECTION 12.2   PARTICIPATION............................................................78
    ------------   --------------

SECTION 13.  OPTION TO REVISE STRUCTURE.....................................................78
----------------------------------------

    SECTION 13.1   OPTION TO REVISE.........................................................78
    ------------   -----------------
    SECTION 13.2   TRANSACTION COSTS........................................................79
    ------------   ------------------
    SECTION 13.3   TERMS OF REPLACEMENT NOTES...............................................79
    ------------   ---------------------------
    SECTION 13.4   APPLICATION OF PROCEEDS..................................................80
    ------------   ------------------------
    SECTION 13.5   TERMINATION OF OPTION....................................................80
    ------------   ----------------------

SECTION 14.  GOVERNING LAW AND JURISDICTION.................................................81
-------------------------------------------

    SECTION 14.1   GOVERNING LAW............................................................81
    ------------   --------------
    SECTION 14.2   WAIVER OF JURY TRIAL.....................................................81
    ------------   ---------------------
    SECTION 14.3   JURISDICTION; VENUE FOR SUIT.............................................81
    ------------   -----------------------------
    SECTION 14.4   WAIVER OF IMMUNITY.......................................................81
    ------------   -------------------
    SECTION 14.5   PROCESS AGENT............................................................82
    ------------   --------------
    SECTION 14.6   LEGAL PROCESS IN OTHER JURISDICTIONS.....................................82
    ------------   -------------------------------------

SECTION 15.  THE AGENTS.....................................................................83
-----------------------

    SECTION 15.1.  AUTHORIZATION AND ACTION.................................................83
    ----------------------------------------
    SECTION 15.2   AGENT'S RELIANCE.........................................................83
    ------------   -----------------
    SECTION 15.3   LENDER CREDIT DECISION...................................................84
    ------------   -----------------------
    SECTION 15.4   LENDER INDEMNIFICATION...................................................84
    ------------   -----------------------
    SECTION 15.5   SUCCESSOR AGENTS.........................................................84
    ------------   -----------------

SECTION 16.  GENERAL PROVISIONS.............................................................85
-------------------------------

    SECTION 16.1   NOTICES..................................................................85
    ------------   --------
    SECTION 16.2   SEVERABILITY OF PROVISIONS...............................................86
    ------------   ---------------------------
    SECTION 16.3   BINDING EFFECT; SUCCESSORS AND ASSIGNS...................................86
    ------------   ---------------------------------------
    SECTION 16.4   AMENDMENT; WAIVER........................................................86
    ------------   ------------------
    SECTION 16.5   ENTIRE AGREEMENT.........................................................87
    ------------   -----------------
    SECTION 16.6   RIGHT OF SET-OFF.........................................................87
    ------------   -----------------
    SECTION 16.7   FURTHER ASSURANCES.......................................................87
    ------------   -------------------
    SECTION 16.8   TERM OF AGREEMENT; SURVIVAL..............................................88
    ------------   ----------------------------
    SECTION 16.9   HEADINGS.................................................................88
    ------------   ---------
    SECTION 16.10  COUNTERPARTS.............................................................88
    -------------  -------------
</TABLE>

                                     - iii -
<PAGE>   95
                                TABLE OF CONTENTS

                                    (CONT'D)

<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                         ----
<S>                                                                                     <C>
    SECTION 16.11  CONFIDENTIALITY..........................................................88
    -------------  ----------------
    SECTION 16.12  COOPERATION..............................................................89
    -------------  ------------
</TABLE>



                                     - iv -
<PAGE>   96


                                TABLE OF CONTENTS

                                    (CONT'D)

SCHEDULES
---------

7.1            SUBSIDIARIES
7.5            PROCEEDINGS
7.10           TRANSACTIONS WITH AFFILIATES
7.11           INDEBTEDNESS
7.12           EXISTING LIENS
7.13           INTELLECTUAL PROPERTY
7.15           LICENSES
7.16           MATERIAL ADVERSE CHANGE

EXHIBITS
--------

A              FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
B              FORM OF DISBURSEMENT REQUEST
C              IMPSAT GUARANTEE
D              FORM OF NOTE
E              FORM OF NOTICE OF CONSOLIDATION
F              LIST OF PROJECT AGREEMENTS