DATED 29 March 2000


                                PLACING AGREEMENT
          EUROTELECOM COMMUNICATIONS INC.             (1)

          BEESON GREGORY LIMITED                      (2)

          THE DIRECTORS                               (3)

<PAGE>

         DATE


 29 March 2000

PARTIES

(1)      EUROTELECOM COMMUNICATIONS. INC. a company incorporated on 1 June 1987
         in the State of Delaware in the United Slates, whose registered office
         is at Corporation Trust Center, 1209 Orange Street, City of Wilmington,
         County of New Castle, State of Delaware 19801 ("the Company");

(2)      BEESON GREGORY LIMITED (number 2316630) a company incorporated on 14
         November 1988 in England and Wales whose registered office is at The
         Registry, Royal Mint Court, London EC3N 4L8 ("BC");

(3)      THE PERSONS LISTED IN THE FIRST SCHEDULE (`the Directors').

INTRODUCTION

(A)      The Company has at the date of this Agreement an authorised share
         capital of US$1,100,000 divided into 50,000.000 shares of common stock
         of US$0.01 each (`Common Stock') of which ~> 17946,222 are in issue
         fully paid up and 50,000000 shares of Class `A' common stock of US$0.01
         each and US$100,000 of Preferred Stock.

(B)      The Company has at the date of this Agreement an issued share capital
         comprising 17,946,222 Shares of Common Stock only.

(C)      The Company proposes to raise (pound)17,250,000 (prior to expenses) by
         means of the placing up to 11,500,000 shares of Class "A" common stock
         ("the New Shares") for the purposes described in the Prospectus.

(D)      On the terms and subject to the conditions of this Agreement, BG has
         agreed, as agent for the Company, to use its reasonable endeavours to
         procure Placees for the New Shares at the Issue Price on the terms set
         out below.

(E)      The Company proposes to apply for the admission of the New Shares to
         trading on the Alternative Investment Market.

         OPERATIVE PROVISIONS

1      DEFINITIONS

1.1      In this Agreement all words and expressions defined in the Prospectus
         shall bear the same meanings and in addition the following words and
         expressions shall, unless the context otherwise requires, have the
         following meanings:
<PAGE>

Accounts                   the audited consolidated balance sheets of the
                           Company and its Subsidiaries as at the Accounts Date
                           and the audited consolidated profit and loss accounts
                           and the cash flow statements for the Company and its
                           Subsidiaries for the accounting period ended on the
                           Accounts Date (including the notes thereto) (as
                           revised)

Accounts                   Date 30 June 1999

Act                        the Delaware General Corporation Law

Admission                  the admission of the New Shares to trading on AIM

AIM                        the Alternative Investment Market of the London Stock
                           Exchange

Posting                    Date 29 March 2000

Pre-placed                 Shares those 7,966,667 shares of class "A" common
                           stock of US $0.01 each which shall be placed by BG
                           with certain private individuals

Press Announcement         a press announcement, in the agreed form, to be
                           released by BG on behalf of the Company giving
                           details of the Proposals

Proposals                  the Placing and Admission

Prospectus                 the circular in the agreed form, constituting a
                           prospectus for the purposes of and in accordance with
                           the POS Regulations and the AIM Rules, to be issued
                           by the Company

"(pound)" and "p"          pounds and pence, the lawful currency of the United
                           Kingdom the register of members of the Company

the Register               the register of the members of the Company

the Registrars             Lloyds TSB Registrars, The Causeway, Worthing, West
                           Sussex, BN99 6DA

the Registrars Agreement   the agreement between the Registrars and the Company
                           for the provision of share registration services in
                           the agreed form

Relevant Person            shall have the meaning set out in Clause 11.1 the
                           Securities Act of 1933 of the United States
<PAGE>

Securities Act             the Securities Act of 1933 of the United States

Share Option Scheme        the EuroTelecom Communications, Inc. Employee Share
                           Option Scheme adopted on 28 March 2000

Shares                     the Existing Shares and the New Shares

Subsidiary                 a subsidiary (as defined by Sections 736 and 736A of
                           the Companies Act 1985) for the time being of the
                           Company

VAT                        United Kingdom Value Added Tax

Verification Notes         verification notes, in the agreed form, the questions
                           to which have been prepared by the Company's legal
                           advisers in connection with the Proposals for the
                           purpose of substantiating the contents of the
                           Prospectus

Warranties                 the representations and warranties contained in
                           Schedule 2 made and given pursuant to the relevant
                           provisions of Clause 10

1.2      References to the Parties, the Introduction, the Schedules and Clauses
         are to the Parties, the Introduction and the Schedules to and Clauses
         of this Agreement.

1.3      Any document stated to be `in the agreed form" shall be in such form as
         shall be agreed by the Parties on or before the date of the Prospectus
         and signed on behalf of the Company and BG and by one of the Directors
         on behalf of all the Directors for the purposes of identification in
         each case with such amendments as may be agreed by or on behalf of the
         Company and BG.

1.4      References to statutory provisions shall be construed as references to
         those provisions as modified or re-enacted or extended from time to
         time (whether before or after the date of this Agreement) and to any
         subordinate legislation made under such provision and shall include
         references to any repealed statutory provision (whether with or without
         modification but so as not to increase the liability of any Party
         hereunder).

1.5      All obligations of the Directors hereunder shall be several
         obligations.

         (b)      the Company shall, where such termination arises under
                  paragraphs (b) or (c) of Clause 16, forthwith pay the amount
                  specified in Clause 9.1(b) (together with any VAT thereon);

         (c)      the Company shall forthwith pay to BC such of the expenses,
                  charges, and disbursements referred to in Clause 9.3 as have
                  been incurred (together with any VAT thereon)

         (d)      the provisions of clauses 9.4, 9.5,11 and 12 shall remain in
                  full force and effect.
<PAGE>

2.4      BG may, in its absolute discretion, agree to extend the time for
         satisfaction of any of the conditions in Clause 2.1 to not later than
         the Longstop Date (in which case, references to such conditions in this
         Agreement shall be to conditions so varied and corresponding
         adjustments will be made to the other dates specified in this Agreement
         and to the commissions payable pursuant to Clause 9) or to waive the
         satisfaction of any of the conditions in Clause 2.1.

2.5      Subject as otherwise provided herein, the Company and the Directors
         shall use all reasonable endeavours to procure that:

         (a)      the London Stock Exchange shall consent to Admission (subject
                  to it becoming effective in accordance with paragraph 16.6 of
                  the AIM Rules) not later than the Closing Date (or such later
                  date as BG and the Company may agree, being not later than the
                  Longstop Date);

         (b)      Admission shall become effective in accordance with paragraph
                  16.6 of the AIM Rules not later than the Closing Date (or such
                  later date as the Company and BC may agree, being not later
                  than the Longstop Date); and

         (c)      the Company and the Directors severally undertake to BC to use
                  all reasonable endeavours, insofar as they are able, to
                  procure that the conditions set forth in sub-clause 2.1 shall
                  be satisfied on or before the relevant time.

3       DELIVERY OF DOCUMENTS

3.1      The Company shall, prior to the despatch of the Prospectus, procure to
         be delivered to BG

         (a)      one copy of the Press Announcement;

         (b)      one certified copy of the Prospectus as signed by or on behalf
                  of each of the Directors and one copy of the Application
                  signed as aforesaid;

         (c)      one certified copy of the responsibility letters and powers of
                  attorney, In the agreed form, signed by each of the Directors;

         (d)      one certified copy of the written consents, in the agreed
                  form, of each of those persons who have consented, in
                  accordance with the provisions of the POS Regulations, to the
                  inclusion in the Prospectus of the references to their names
                  in the form and context in which they are included;

         (e)      one certified copy of the Verification Notes signed by, or on
                  behalf of, all those persons responsible for any replies
                  thereto whereby such persons agree to take responsibility for
                  the answers to those questions for which they are expressly
                  stated to be responsible, together with copies of such
                  annexures thereto or material referred to therein as BG may
                  require;
<PAGE>

         (f)      two certified copies of the minutes of a meeting of the board
                  of Directors, or a duly authorised committee thereof, in the
                  agreed form, approving and authorising the Placing and
                  Admission and the issue of the Prospectus; and shall advise as
                  to the extent to which cleared funds have been received from
                  the Placees of Pre-placed Shares pursuant to the Placing.

4.7      BG shall not have any liability in respect of any omission of
         information in the Placing Documents or any information or statement of
         fact or opinion contained therein being untrue, incorrect or
         misleading, for which the Company and the Directors are solely
         responsible.

4.8      BG shall be entitled to terminate its appointment as nominated adviser
         under sub-clause 4.1 prior to the expiry of the term provided for
         therein forthwith at any time by notice to the Company in the event
         that there is a material breach of any of the provisions of this
         Agreement or the Engagement Letter by the Company or by any of the
         Directors (and, if capable of remedy, shall not have been duly remedied
         by the defaulting Party within 14 days of the breach having come, or
         being drawn, to his or its attention in writing).

5        ADMISSION

5.1      The Company hereby undertakes to BG to supply or procure the supply of
         all such information, to give or procure the giving of all such
         undertakings and to execute or procure the execution of all such
         documents and to do or procure to be done all such things within its
         power as may be required by the London Stock Exchange in connection
         with the application by (or on behalf of) the Company for Admission.

5.2      The Company undertakes to BG to use its reasonable endeavours to
         procure Admission on the next Business Day following the satisfaction
         of the condition set out in paragraph (c) of Clause 2.1.

5.3      To the extent required by applicable law and/or the London Stock
         Exchange, if any significant new matter or significant inaccuracy in
         the Prospectus capable of affecting assessment of the New Shares arises
         or is noted between publication of the Prospectus and Admission, the
         Company and the Directors will promptly prepare a supplement to the
         Prospectus in a form satisfactory to BC containing details of any such
         significant new mailer or significant inaccuracy and ensure that such
         supplement is delivered to the Registrar of Companies in London and to
         the London Stock Exchange in the same manner in which the Prospectus
         was delivered to such persons in compliance with the P05 Regulations
         and the AIM Rules.

6        APPOINTMENT OF REGISTRARS

         The Company hereby confirms to BG that:


         (a)      it has appointed the Registrars to act as registrars (upon the
                  terms of the Registrars Agreement) to the Placing;
<PAGE>

         (b)      it will provide the Registrars with all authorisations and
                  information as will enable the Registrars to perform their
                  duties in accordance with the terms of this Agreement and the
                  Placing Letter, and that the authorities and discretions
                  granted to BG and contained in Clause 4 shall operate to
                  authorise BC to give any reasonable instructions to the
                  Registrars as BC considers appropriate; and

         (c)      it has appointed Lloyds TSB Registrars of The Causeway,
                  Worthing, West Sussex BN99 GDA to act as receiving agents to
                  the Placing.

7        OBLIGATIONS OF THE COMPANY

7.1      The Company shall procure:

         (a)      the publication of the Prospectus in accordance with paragraph
                  16.11 of the AIM Rules;

         (b)      delivery of the copies of the Prospectus to the Registrar of
                  Companies in England and Wales in accordance with the P05
                  Regulations on the date hereof;

         (c)      executed by the Company in the names of the allottees and for
                  the relevant numbers of New Shares shall be despatched to such
                  persons on the day of Admission (or as soon as practicable
                  thereafter).

8.4      Subject to the fulfilment in all respects of the conditions set out in
         sub-clause 2.1 and to this Agreement not being terminated prior to
         Admission, as soon as practicable following Admission and, in any
         event, by midday on the second Business Day following the day of
         Admission, BC shall from the proceeds of the New Shares, In the
         following order of priority:-

         (a)      as agent for the Company pay to BC the fees and expenses
                  (including BC's legal expenses and disbursements) to which BC
                  is entitled pursuant to Clauses 9.1, 9.2 and 9.3:

         (b)      retain such fees, commissions and expenses to which BC is
                  entitled pursuant to Clause 9.4 and to the terms of its
                  appointment; and

         (c)      pay to the Company the balance of the monies received from
                  Placees in respect of the New Shares such payment to be made
                  to the Company's UK Bank account details of which the Company
                  shall inform BG in writing: 21 The Square, Retford, Notts,
                  DN22 6DL, account numbergl2SOlSQ, Sort: 80-17-28, Eurotelecom
                  Corporation Ltd.

8.5      The payment of the monies mentioned in sub-clause 8.4(c) shall
         constitute a complete discharge of BG's obligations.
<PAGE>

8.6      If this Agreement does not become unconditional by the Closing Date (or
         such later date as the Company and BG may agree, being not later than
         the Longstop Date) BG shall immediately thereafter, or immediately upon
         earlier termination, return without interest all monies received by it
         in respect of the New Shares in accordance with the provisions of this
         Agreement, to the first named Placee in the relevant acceptance form by
         crossed cheque drawn by BG in favour of such Placee and shall send each
         such cheque to such Placee through the post.

9        FEES, COMMISSIONS AND EXPENSES

9.1      In consideration of the agreement of BG to procure placees to take up
         the Placing Shares and their services under this Agreement in
         connection with the Placing and Admission and subject to this Agreement
         becoming unconditional in all respects the Company shall pay to BG:

         (a)      a commission of 2% (two per cent.) of the aggregate Issue
                  Price in respect of the Placing Shares; and

         (b)      a corporate advisory fee of (pound)250,000 of which
                  (pound)75,000 is to be satisfied by the issue, credited as
                  fully paid, to BG of 50,000 New Shares.

         together, in each case, with any value added tax chargeable on such
         amount against provision of a VAT invoice.

9.2      The commissions and fee referred to in Clause 9.1 (together with any
         VAT thereon) shall be paid in cleared funds not later than the third
         Business Day after the Closing Date (or, if earlier, on the date on
         which BG's obligations under this Agreement cease and determine
         pursuant to Clause 2.3 or are terminated pursuant to Clause 16). The
         Company hereby authorises BG, at its option, to deduct some or all of
         the commissions and expenses (including in relation to VAT, if any)
         payable to them pursuant to this Clause 9 from the proceeds of the
         Placing.

9.3      The Company shall pay all other fees, expenses, charges, duties and
         disbursements incidental to the Placing and Admission and the
         arrangements referred to herein or contemplated hereby (together with
         any VAT thereon) including (without limitation) the fees and expenses
         payable in connection with Admission, and (whether or not BG's
         obligations hereunder become unconditional or terminate) the
         accountancy, legal and other professional fees and expenses of the
         Company,

10.7     Any release, waiver or compromise or any other arrangement of any kind
         whatsoever which BG or any other Relevant Person may agree to or effect
         in connection with the Warranties and the Indemnity shall not affect
         the rights of BG or any other Relevant Person as regards any other
         person liable thereunder.

10.8     Where any of the Warranties is qualified by reference to the awareness,
         knowledge or belief of any Director (or similar expression) such
         qualification shall only operate if the Directors have made due and
         careful enquiries of the Company's senior or management employees,
         agents and professional advisers and anyone else who might reasonably
         be expected to have better knowledge than the Directors of a particular
         matter.
<PAGE>

10.9     The maximum aggregate liability of the Directors shall be limited in
         time to a period of 18 months following Admission and in amount to the
         sum of (pound)5,000,000. Any claim for breach of Warranty may be
         satisfied (to the extent possible) by the Directors by the sale of
         their Shares through BG.

11       INDEMNITY

11.1     No claim shall be made against BG, or any subsidiary or holding company
         of BG or any subsidiary company of such holding company, or any of its
         or their directors, officers, employees, or advisers (each a "Relevant
         Person") by the Company to recover any damage which the Company or any
         person may suffer by reason of, arising out of or otherwise in
         connection with, the allotment and issue of the New Shares, the issue
         and distribution of the Placing Documents and any other document in
         connection with the Placing or otherwise in connection with the
         carrying out by BG of their obligations (or exercise of their rights)
         under this Agreement, provided in any such case that such damage does
         not arise as a result of breach of any provisions of this Agreement by,
         or the negligence or wilful default of BG or any other Relevant Person
         or the breach by BG of their duties and/or obligations under this
         Agreement (including under clause 4.4 or under the, law or any
         applicable regulatory system.

11.2     The Company hereby undertakes with BG (for itself and as agent for each
         and every Relevant Person) to indemnify it and each other Relevant
         Person and hold it and them harmless from and against:

         (a)      all and any costs, claims, demands, actions, proceedings,
                  liabilities or judgements ("claims') brought or established
                  against BG or any other Relevant Person (whether or not
                  successful, compromised, settled or reversed) by any
                  subscriber, allottee or sub-underwriter of any of the New
                  Shares or any subsequent purchaser or transferee thereof or by
                  any other person, government agency or regulatory body
                  whatsoever;

         (b)      all taxes (including stamp duty and stamp duty reserve tax and
                  VAT) which BG or the Relevant Person may suffer or incur as a
                  result of any such claims; and

         (c)      all out of pocket costs, charges and expenses which BG or any
                  other Relevant Person may pay or incur (including without
                  limitation those properly or reasonably paid or incurred by BG
                  or the Relevant Person in seeking advice as to and in
                  defending or disputing any claims, whether or not such claims
                  are defended or disputed successfully);

         which in any case arise out of or in connection with or by reason of:

         (a)      the issue or the despatch of the Placing Documents, or the
                  making of the Placing or the allotment or issue of the New
                  Shares; or

         (b)      any breach by the Company of any of its obligations or
                  undertakings under this Agreement; or
<PAGE>

         (c)      any breach of any of the Warranties; or

         (c)      where the payment or reimbursement is in respect of costs or
                  expenses incurred by BG as agent for the Company, such amount
                  as equals the amount included in the costs or expenses in
                  respect of VAT provided that BG has procured that the person
                  supplying the goods or services has issued it with a VAT
                  invoice or BG shall have issued the Company with an
                  appropriate VAT invoice.

13       SELLING RESTRICTIONS

13.1     BG and the Company acknowledge to and with each other that, as part of
         the distribution of New Shares at any time, none of the New Shares has
         been or will be registered with the United States securities and
         Exchange Commission under the Securities Act of 1933 of the United
         States as amended ("the Securities Act") and no New Shares may be
         offered, sold, taken up or delivered directly or indirectly into or
         within the United States or to a U.S. person except in certain
         transactions specified only in Regulation S or pursuant to an exemption
         from or in a transaction not subject to the registration requirements
         of the Securities Act.

13.2     BG undertakes to the Company that, prior to the expiration of the
         one-year distribution compliance period relevant to the New Shares as
         set out at Rule SOS(S) of the Securities Act;

         (a)      neither it, its affiliates nor any person acting on its or
                  their behalf has offered or sold, or will offer or sell, any
                  of the Placing shares except in accordance with the provisions
                  of Rules 903 or 904 in an off-shore transaction outside the
                  United States;

         (b)      it, its affiliates and each person acting on its or their
                  behalf shall procure, in so far as it is within its or their
                  capacity to do so, that any certificate in respect of any New
                  shares will bear a legend to the following effect (unless the
                  Company determines otherwise in compliance with applicable
                  law):

                  "THE SHARES OF CLASS A COMMON STOCK REPRESENTED BY THIS
                  CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE US SECURITIES
                  ACT OF 1933, AS AMENDED (THE "SECURITIES ACT') AND MAY NOT BE
                  OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN
                  AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
                  OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2)
                  PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
                  SECURITIES ACT, OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM
                  THE REGISTRATION REQUIREMENTS OF THE SECURITIES LAWS. HEDGING
                  TRANSACTIONS INVOLVING THE COMMON STOCK OR THE CLASS A COMMON
                  STOCK OF THE COMPANY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
                  WITH THE SECURITIES ACT.'
<PAGE>

         (c)      neither it, its affiliates nor any person acting on its or
                  their behalf has engaged or will engage in any directed
                  selling efforts with respect to the New Shares;

         (d)      neither it, its affiliates nor any person acting on its or
                  their behalf has engaged or will engage in any hedging
                  transactions with respect to the New Shares except in
                  compliance with the Securities Act;

         (e)      any Placee shall be required by BG to confirm in writing to BG
                  in respect of the Placing shares that it is not a U.S. person
                  and is not acquiring the Placing shares for the account or
                  benefit of a U.S. person (or otherwise that it is a U.S.
                  person who purchased the Placing Shares in a transaction that
                  did not require registration under the Securities Act);

         (f)      any Placee shall be notified by BG in writing that, in the
                  case of a resale of the Placing shares pursuant to Rule 904 by
                  a dealer (as defined in Section 2(a) (12) of the Securities
                  Act) or a person receiving a selling concession, it shall be
                  required to obtain confirmation

         (g)      it will not sell or deliver any New Letter or New Shares; and

         (h)      it will rot distribute or publish any offering Prospectus,
                  prospectus, advertisement or other offering material in
                  relation to the Placing Letter or New Shares,

         in each case either directly or indirectly in Australia or to any
         person whom it knows to have a registered address in Australia and
         further undertakes to the Company that any sub-underwriter procured by
         it will agree that the restrictions set out in this sub-clause will
         apply to it.

13.8     BG further acknowledges to the Company that the New Shares may not be
         offered or sold directly or indirectly in Canada or to persons in
         Canada and that the Placing Letter may not be renounced in Canada or in
         favour of a resident of Canada and undertakes to the Company that, in
         the event that it subscribes for New Shares, it would not be acquiring
         any of the New Shares for resale into Canada, will not renounce any
         Placing Letter in favour of a person whom it knows to be a resident of
         Canada, and that any sub-underwriter procured by it will agree that the
         restrictions set out in this sub-clause will apply to it.

13.9     Nothing in this clause shall preclude a sale on the London Stock
         Exchange not knowingly made to a North American Person or a person with
         a registered address in Australia, Japan or the Republic of Ireland.
<PAGE>

14       RESTRICTIONS ON DISPOSAL OF SHARES

14.1     The Directors hereby severally undertake to the Company and BG that,
         except in accordance with Clause 14.2, he will not during the period
         from Admission until the earlier of (i) publication of the preliminary
         announcement of the Company's unaudited annual results for the year
         ending 30 June 2001 or (ii) 30 September 2001 (`the First Period")
         dispose or agree to dispose of any of the Shares held by him or any
         interest in them or charge or agree to charge or otherwise encumber any
         of such Shares otherwise than with the prior written consent of BG,
         save in the event of an intervening court order, a takeover offer
         relating to the Company's shares becoming or being declared
         unconditional or the death of the Director. Each of the Directors
         undertakes to BG that, where applicable, he will abide by the
         restrictions on dealings relevant to him contained in the US Securities
         Exchange Act of 1934.

14.2     Notwithstanding the other provisions of this clause 14, a Director may
         at any time transfer all or part of his Shares to the trustee(s) of a
         Family Trust provided that such trustee shall be required to enter into
         a Deed of Adherence in a form reasonably satisfactory to BG in terms
         that the trustee and any beneficiary or potential beneficiary under the
         trusts will be bound by this clause 14 as if such person(s) were the
         Director concerned.

14.3     In the event of the Company consolidating or sub-dividing its shares
         within the period specified in Clause 14.1 above, then the undertakings
         herein given shall extend to the consolidated or subdivided shares in
         the Company derived from the Shares. This undertaking shall also apply
         to any shares or other securities otherwise acquired by a Director in
         respect of his Shares, including by way of a bonus, capitalisation or
         rights issue or open offer.

14.4     If a Director wishes to sell any of his Shares after the First Period,
         then in order to maintain an orderly market, any such sale shall be
         notified to BG.

14.5     The Directors severally covenant and undertake to BG to comply and act
         in accordance with `The Model Code for AIM Companies" set out in
         Appendix 12 of the Rules of the London Stock Exchange.

14.6     For the purposes of this clause 14:

         (a)      "Family Trust" shall mean a trust (whether arising under a
                  settlement, declaration of trust or other instrument by
                  whomsoever or wheresoever made or under a testamentary

         fees referred to in Clause 9 and the Company shall remain liable to pay
         and, if appropriate, to reimburse to BG the amount of any expenses
         referred to in Clause 9.3 (together in all cases with any applicable
         VAT thereon).

<PAGE>

17       UNDERTAKINGS

17.1     Each of the Directors and the Company severally undertakes with BG that
         none of them will, and shall (insofar as it is reasonably within their
         power to do so) procure that no other member of the Group will, at any
         time during the period up to and including Admission, unless and to the
         extent required to do so by any applicable law or the AIM Rules or
         other applicable regulation make public any information which will, or
         may, affect the market price of the Company's securities without the
         prior written consent of BG.

17.2     The Company hereby undertakes with SO that it will, and each of the
         Directors (so long as they remain directors of the Company) severally
         undertakes to procure. (insofar as he is reasonably able so to do) that
         the Company will, at all times whilst BG remains as nominated adviser
         to the Company pursuant to sub-clause 4.1:

         (a)      notify BG in advance of any public announcement relating to,
                  and discuss with BG, any matter which it may be necessary to
                  be made known to the investing public in order to enable the
                  investing public to appraise the position of the Company or
                  which could lead to a substantial movement in the price of the
                  Shares;

         (b)      forward to BG for comment proofs of all documents to be sent
                  to holders of the Company's securities;

         (c)      notify BG in advance of, and discuss with BG any announcement
                  of profits or losses or dividends in respect of the financial
                  periods of the Company and any other announcement proposed to
                  be made to the public;

         (d)      discuss with BG any proposed transaction, acquisition,
                  disposal, or other arrangement or course of conduct proposed
                  to be undertaken or adopted otherwise than in the ordinary
                  course of business which is or may be material in the context
                  of the Group as a whole or which will or may require any
                  announcement to be made pursuant to the foregoing provisions
                  of this sub-clause 17.2 prior to such transaction,
                  acquisition, disposal or other arrangement having or taking
                  legal effect;

         (e)      prepare and send to BG within three weeks of the end of each
                  calendar month, a financial statement and management accounts
                  for the Group made up to and as at the end of that calendar
                  month, incorporating a breakdown of turnover and profits by
                  trading activities and identifying variances in sales,
                  revenues, costs and other material items from the Company's
                  financial projections and annual budgets in respect of that
                  month;

         (f)      comply with the continuing obligations imposed by the AIM
                  Rules following Admission

         (g)      hold meetings of the Board which a representative of BG shall
                  be entitled to attend at the expense of the Company at least
                  once in every calendar quarter of which not less than ten
                  Business Days prior notice shall be given to BG and supply to
                  BG, at the same time as the giving of such notice, the agenda
                  for such meeting and copies of all papers relevant for such
                  meeting;

         (h)      not make any material amendments to the covenants and
                  undertakings set out in the service contracts of the Directors
                  other than in prior consultation with BG (such approval not to
                  be unreasonably withheld or delayed);
<PAGE>

         (i)      within 3 months of Admission, appoint a further non-executive
                  director of the Company, such appointment to be approved in
                  advance by BG; and

18.3     This Agreement and/or the rights and/or obligations of the Parties or
         any of them shall not be capable of assignment or charging or
         encumbering in any way by any of the Parties without the prior
         agreement in writing of all the Parties.

18.4     This Agreement may be amended, superseded or cancelled or any of its
         terms varied or waived only by written agreement of the Parties or, in
         the case of a waiver, by the Party or Parties effecting the waiver.

18.5     The failure, omission or delay by any Party on any occasion to insist
         upon the performance of any term, provision or condition of this
         Agreement or to exercise any right, power, privilege or remedy
         conferred by this Agreement shall not thereby be treated as a waiver of
         any related breach or an acceptance of any consequential variation nor
         shall it impair any such right, power, privilege or remedy nor shall
         any single or partial exercise or waiver of any right, power, privilege
         or remedy preclude its further exercise or the exercise of any other
         right or remedy. The rights, powers, privileges and remedies of the
         Parties provided in this Agreement are cumulative and not exclusive of
         any rights or remedies provided by law.

18.6     Time shall be of the essence as regards any date or period mentioned in
         this Agreement and any date or period substituted for the same by
         agreement between the Parties as provided for herein.

18.7     All provisions of this Agreement shall (so far as they are capable of
         being performed or observed) continue in full force and effect
         notwithstanding Admission except in respect of those matters then
         already performed.

18.8     The illegality of any part of this Agreement or of any agreement or
         arrangement of which it forms part shall not affect the legality or
         validity of the remainder of the same.

18.9     The various Clauses, sub-clauses, paragraphs and sub-paragraphs of this
         Agreement are severable and if any of the same or an identifiable part
         thereof is held to be invalid or unenforceable in any court of
         competent jurisdiction then such invalidity or unenforceability shall
         not affect the validity or enforceability of the remaining provisions
         or identifiable parts thereof in this Agreement.

18.10    If any provision of this Agreement proves to be void, illegal or
         unenforceable, such provision shall be deemed to be deleted from this
         Agreement and the remaining provisions of this Agreement shall continue
         in full force and effect. Notwithstanding the foregoing, the parties to
         this Agreement shall thereupon negotiate in good faith in order to
         agree the terms of a mutually satisfactory provision to be substituted
         for the provision so found to be void, illegal or unenforceable.

18.11    Nothing in this Agreement shall constitute or be deemed to constitute a
         partnership between any of the Parties.
<PAGE>

18.12    The rights and obligations of the Parties or any of them shall enure
         for the benefit of, be enforceable against and shall be binding on
         their respective personal representatives, successors, estates and
         assigns.

18.13    The Company agrees that all monies payable to it under the Placing or
         hereunder, shall not be treated as client money subject to any
         regulations made under or pursuant to the Financial Services Act 1986.

19       LAW AND JURISDICTION

         This Agreement shall be governed by and construed and interpreted in
         accordance with English law and the Parties agree to submit to the
         exclusive jurisdiction of the High Court of Justice in England and
         Wales in relation to any claim, dispute or difference which may arise
         hereunder.

20.2     Any notice may be given (a) by facsimile transmission and such notice
         shall take effect at the expiration of three hours after transmission
         (b) by hand delivery and such notice shall take effect at the time of
         such delivery or (c) by first class prepaid post and such notice shall
         take effect 48 hours after such notice is introduced into the postal
         system.

IN WITNESS whereof this Agreement has been executed as a deed by the Directors
and the Company and under hand by BG and shall be deemed to be duly delivered
when dated.

<PAGE>

                                   SCHEDULE 2

                                   WARRANTIES
                                   ----------

         The recitals to this Agreement are true or (as the case may be) will be
         true by the time that they fall to be performed.

2        Save as set out in the Prospectus, there are not in force any options
         or other agreements which call for the issue of, or accord to any
         person the right to call for the issue of any shares in the capital or
         other securities of the Company.

3        The Company has power under its Certificate of Incorporation and
         Certificate of Designations, Powers, Preferences and Rights to create,
         allot and issue the New Shares, to effect the Proposals in the manner
         proposed and to enter into and perform this Agreement and no further
         consents or sanctions are required for the allotment and issue of the
         New Shares.

4        The creation, allotment and issue of the New Shares in the manner
         contemplated in the Prospectus will comply with the laws of the US
         which are capable of applying to their lawful creation, allotment and
         issue, the Financial Services Act 1986 (to the extent applicable), the
         AIM Rules, the POS Regulations and all other relevant laws and
         regulations of the United Kingdom and US, will not breach any
         regulation binding on the Company nor infringe any restrictions imposed
         on or the terms of any contractor commitment whatsoever of the Company
         or give rise to any obligation under any such contractor commitment.

5        No member of the Group has entered into or assumed or incurred any
         contract, commitment, borrowings, indebtedness in the nature of
         borrowing, guarantee, liability (including contingent liability) or
         other obligation which, in any such case, has not been discharged at
         the date of this Agreement or will not be discharged prior to Admission
         and the disclosure of which to a potential subscriber for New Shares is
         required in order to prevent the Prospectus from being inaccurate or
         misleading in any material respect.

6        The Shares are freely transferable in accordance with the Company's
         Charter and By-laws save in respect of the restrictions set out at
         Clauses 13 and 14 hereof and in the Prospectus.

7        The Company has sufficient arrangements in place to ensure that,
         following Admission, transfers of New Shares will be registered within
         14 days of receipt.

8        The cashflow and working capital projections which form the basis of
         the report dated 29 March 2000 (the Working Capital Report'), have been
         properly and carefully compiled by the Directors on the basis of the
         assumptions set out in the projections (and no other material
         assumptions) and, in the opinion of the Directors, such assumptions are
         fair and reasonable and there are no facts known or which on reasonable
         enquiry could have been known to the Company or the Directors which
         have not been taken into account in the preparation of such projections
         and which could reasonably be expected to have a material effect
         thereon.

<PAGE>

9        The information contained in the Press Announcement, the Prospectus and
         the Placing Agreement is true and accurate in all material respects and
         is not misleading in any material respect and all expressions of
         opinion, intention and expectation expressed in it are honestly held,
         made fairly and on reasonable grounds after due consideration and there
         are no other facts known (or which on reasonable enquiry could be
         known) to the Company or the Directors the omission of which would make
         any statement in the Press Announcement or the Prospectus or the
         Placing Letter misleading or which, in the circumstances of the Placing
         and Admission, would be material for disclosure to a prospective
         allottee of New Shares including 80.

10       All statements contained in any other press announcement or any
         supplementary prospectus made or published on or after the date hereof
         by the Company before the commencement of dealings in the New Shares
         were true and accurate in all material respects and not misleading in
         any material properly discussed with BDO and/or BG and which would
         reasonably be expected to have an effect on it.

19       The Accountants Reports in Parts land Ill of the Prospectus have been
         prepared with all due care and attention and approved by the Directors,
         all statements of fact in them are true and accurate in all material
         respects, all expressions of opinion, intention or expectation in them
         are honestly held, made fairly on reasonable grounds and there are no
         facts or matters known (or which could on reasonable enquiry have been
         known) to the Company or the Directors which have not been taken into
         account in the preparation of the Accountants Reports and which would
         reasonably be expected to have an effect on it.

20       Since the Accounts Date and except as disclosed in the Accounts and the
         Prospectus (i) the businesses of the Group have been carried on in the
         ordinary and usual course, (ii) there has been no adverse change in the
         financial or trading position of the Group and (iii) other than as
         disclosed in the Prospectus, no contracts or commitments have been
         entered into by any member of the Group which are of an onerous or
         unusual nature and of material importance in the context of the issue
         of the New Shares or the obligations of BG under this Agreement.

21       Since the Accounts Date, so far as the Directors are aware, no member
         of the Group has to their knowledge carried out any transaction
         otherwise than in conformity with its constitutional documents or
         infringed to any material extent any law, contract or instrument to
         which it or any of its assets is subject.

22       The Verification Notes have been prepared or approved by persons having
         the appropriate knowledge and responsibility to enable them properly to
         provide such replies and all such replies given by the Directors have
         been given in good faith and the Company has no reason to believe that
         such replies or any information contained or referred to therein are
         not true and accurate in all material respects and that any material
         fact has been omitted.

23       No member of the Group is engaged in any legal or arbitration
         proceedings which may have, or have had during the twelve months
         immediately preceding the date of this Agreement, a significant effect
         on the financial position or prospects of the Group or which,
         individually or collectively, are or may be of material importance in
         relation to the issue of the New Shams and, so far as the Directors are
         aware, no such proceedings are pending, nor are there any circumstances
         known to the Company or the Directors (having made all reasonable
         enquiries) which are likely to give rise to any such proceedings.

<PAGE>

24       No member of the Group has taken any action nor have any steps been
         taken or legal proceedings started against any member of the Group for
         their winding up or dissolution or for any member of the Group to enter
         into any arrangement or composition for the benefit of creditors or for
         the appointment of a receiver, trustee, administrator, examiner or
         similar officer of any member of the Group or any of their properties,
         revenues or assets.

25       So far as the Directors are aware and save as clearly disclosed in the
         Long Form Reports, no circumstances have arisen such that any
         indebtedness in respect of borrowed money of any member of the Group is
         or will, or would with the giving of notice, lapse of time, or the
         satisfaction of any other condition, become repayable before its stated
         maturity and no person to whom any indebtedness in respect of borrowed
         money is owed by any member of the Group which is repayable on demand
         has demanded or threatened to demand repayment.

26       No member of the Group is or will be under any material liability in
         respect of any Taxation in relation to or in consequence of any actual
         or deemed income, profits or gains earned, accrued or received on or
         before the date of this Agreement or in relation to or in consequence
         of any event occurring on or before the date of this Agreement but
         after the Accounts Date other than corporation tax payable in respect
         of normal trading profits earned by it or VAT which has been collected
         from customers for on similar businesses for such amounts as would in
         the circumstances be prudent for such other companies, the Directors
         consider that such insurances provide satisfactory cover against the
         risks of the respective businesses of each member of the Group no
         member of the Group has done or omitted to do or suffered anything to
         be done or not to be done which has or might render any policies of
         insurance effected by it void or voidable.

36       There are in force no options or other agreements which call for the
         issue of or accord to any person the right to call for the issue of any
         shares or other securities in the capital of the Company or any of its
         subsidiaries now or at any time hereafter and no shareholder of the
         Company has any rights, in its capacity as such, in relation to the
         Group other than as are set out in the Articles of Association of the
         Company.

37       No material contracts (other than those disclosed in the Prospectus)
         will be entered into nor will the terms of any such subsisting material
         contracts (other than as aforesaid) be varied prior to the commencement
         of fully paid dealings in the Shares.

38       There are no agreements or arrangements in existence to which any
         member of the Group is a party which are subject to the provisions of
         the Restrictive Trade Practices Acts 1976 and 1977 nor is any course of
         conduct being pursued by any such company which contravenes Articles 81
         or 82 of the Treaty of Rome or will, when in force, contravene the
         Competition Act 1998 or any other anti-trust, anti-monopoly, or
         anti-cartel or competition statute, order, regulation or law of any
         territory in which any member of the Group carries on business.

<PAGE>

39       There have been no proceedings, actions or claims pending or threatened
         or capable of being threatened in respect of the title, validity or
         enforceability of any intellectual property owned or used by the Group
         or claiming any right or interest in any of the foregoing and there are
         no unusual terms in relation to any licence or other agreement granted
         by any third party to any such company in respect of Intellectual
         property used in connection with the business of the relevant company.

40       There has been disclosed to BG or its advisers details of all
         properties occupied by any member of the Group or in respect of which
         the Company or any member of the Group has any material liability
         (contingent or otherwise).

41       Save as described in the Prospectus, no event has occurred or is
         subsisting or is about to occur which constitutes or results in or
         would, with the giving of notice and/or lapse of time, constitute or
         result in a default or the acceleration or breach of any obligation
         under any agreement, instrument or arrangement to which any member of
         the Group is a party or by which any of its properties. revenues or
         assets are bound and which would, in any such case, have, or be likely
         to have, a material and adverse effect on the business, assets or
         prospects (save in respect of matters in the public domain) of the
         Group taken as a whole.

42       No member of the Group has incurred any liability for taxation which
         has arisen otherwise than in the ordinary course of normal trading.

43       The Prospectus contains all information concerning actual or potential
         conflicts of interest between the Company, or other member of the
         Group, and any Director or persons connected with him (within the
         meaning of Section 346 of the Companies Act).

44       The Prospectus contains details of the relationship between the Company
         and advisers and any promoter of the Company and details of any payment
         or other benefit paid or given, or to be paid or given, to any
         promoter.

45       Each of the Directors severally warrants to BG that the Prospectus
         contains all the directorships and partnerships of that Director held
         at any time in the five years preceding the date of this Agreement, any
         unspent convictions of that Director, details of any bankruptcies or
         individual voluntary arrangements of that Director and details of any
         receiverships administrations, voluntary

<PAGE>

ATTESTATIONS

Signed as a Deed by

Beeson Gregory Limited
acting by:

                                    Director

                                    Director/Secretary



Signed as a Deed by

EuroTelecom Communications, Inc.
Acting by

                                    Director


                                    Director/Secretary



Signed as a Deed by
JOHN SPACKMAN
in the presence of:

Witness' Signature

Witness' Name:

Witness' Address:


Witness' Occupation:




Signed as a Deed by
PHILIP DERPY
in the presence of:


Witness' Signature:

Witness' Name:

Witness' Address:


Witness' Occupation:

<PAGE>

Signed as a Deed by
DAVID ANTHONY WALTON
in the presence of:


Witness' Signature:

Witness' Name:

Witness' Address:


Witness' Occupation:




Signed as a Deed by
DAVID MICHAEL LINELL
in the presence of:


Witness' Signature:

Witness' Name:

Witness' Address:


Witness' Occupation:

<PAGE>

Signed as a Deed by
GRAHAM EVAN FORD
in the presence of:


Witness' Signature:

Witness' Name:

Witness' Address:


Witness' Occupation:




Signed as a Deed by
ANDREW KRAWCHU
in the presence of:


Witness' Signature:

Witness' Name:

Witness' Address:


Witness' Occupation: