EXHIBIT 10.4

                                 LOAN AGREEMENT


         THIS LOAN  AGREEMENT  ("Agreement"),  dated  this 11th day of  November
1996, by and between Bisbro  Investments  Company Ltd.,  with an address of P.O.
Box 3216, Safat 13033,  Kuwait City,  Kuwait,  and maintains  offices in care of
T.R. Winston & Company  Incorporated,  1999 Avenue of the Stars, Suite 1950, Los
Angeles, CA 90067 ("Bisbro" or "Lender") and Preferred Telecom, Inc., a publicly
owned  Delaware   corporation  with  principal   offices  at  12655  N.  Central
Expressway,  Suite 800, Dallas, Texas 75243 ("Preferred" or "Borrower").  Lender
and  Preferred  are  sometimes  hereinafter  collectively  referred  to  as  the
"Parties."

                                                    WITNESSETH:

         WHEREAS,  Borrower desires to borrow up to $150,000 from Leader for the
business  purposes  hereinafter set forth and in anticipation of a fully defined
business plan which it is  formulating  with the  cooperation  and assistance of
First Capital Financial Services Corporation; and

         WHEREAS,  Lender is willing to lend up to  $150,000  to Borrower on the
terms and subject to the conditions hereinafter set forth.

         NOW, THEREFORE,  in consideration of the  representations,  warranties,
covenants and agreements herein continued, the receipt and adequacy of which are
hereby jointly and severally  acknowledged  and accepted by Lender and Borrower,
the parties hereby agree as follows:

         1.       GENERAL DEFINITIONS.  When used herein, the following have the
following meanings:

         (a)  "Affiliates"  shall mean any  Person (as that term is  hereinafter
defined)  directly or  indirectly  controlled  by or under  common  control with
Borrower.  For the purpose of this  definition,  "control" means the possession,
directly  or  indirectly,  of the  power to direct  or cause  the  direction  of
management and policies of the Person,  whether  through the ownership of voting
securities, by contract or otherwise.

         (b)  "Business  Day" shall mean a day other than a Saturday,  Sunday or
legal holiday on which banking institutions are authorized or required by law to
close.

         (c)  "Closing"  shall mean the date,  time and place where Lender shall
advance the Loan  proceeds to Borrower in exchange for the Note (as that term is
hereinafter defined).

         (d)      "Default" shall mean the occurrence or existence of any one or
more of the events described in Section 7.1 of this Agreement.

         (e) "Governmental Authority" shall mean any federal, provincial, state,
local,  foreign  or other  court,  administrative  agency or  commission,  other
governmental authority or regulatory body.

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         (f) "Lien" shall mean any lien,  mortgage,  pledge,  security interest,
right of first refusal or other limitation on transfer or other encumbrance.

         (g)  "Person"   shall  mean  any   individual,   sole   proprietorship,
partnership,  joint venture, trust,  unincorporated  organization,  association,
corporation,  entity,  party,  or,  government  (whether  national,  provincial,
federal,  state,  county,  city,  municipal  or  otherwise,  including,  without
limitation,  any instrumentality,  division, agency, body or department thereof)
or any quasi governmental  entity formed pursuant to any authorization by any of
the above entities.

         (h)  "Subsidiary"  shall  mean  with  respect  to any  Person  (a)  any
corporation of which the  outstanding  stock having at least a majority of votes
entitled to be cast in the election of directors  under  ordinary  circumstances
shall at the time be owned,  directly or  indirectly,  by such Person or by such
Person and its  Subsidiaries or (b) any entity other than a corporation of which
at least a  majority  of voting or policy  directing  interest,  under  ordinary
circumstances,  is at the time,  directly or indirectly,  owned or controlled by
such Person or by such Person and its Subsidiaries.

         2.       TERMS OF THE LOAN.

         2.1 The Loan.  Lender hereby  covenants and agrees to lend to Borrower,
and  Borrower  hereby  accepts  from  Lender,  such sums up to a maximum  of One
Hundred  Fifty  Thousand  ($150,000)  United States  Dollars.  The Loan shall be
evidenced by a $150,000,  12% Secured Promissory Note in the form annexed hereto
as  Exhibit  "A" (the  text of  which  is  hereby  incorporated  herein  by this
reference)  duly  executed by Borrower,  and  delivered to Lender at the Closing
(the  "Note"),  and secured by a Collateral  Assignment  of Media Credits in the
form annexed hereto as Exhibit "B" (hereby  incorporated  by reference) and duly
executed  by  Borrower.  Upon  execution  of  this  Agreement,   Borrower  shall
immediately  be  funded  by  Lender  by  wire  transfer  to  Borrower's  banking
institution  to  benefit  Preferred/Telecom,  Inc.)  with One  Hundred  Thousand
Dollars  ($100,000).  Lender  further  agrees to make  available  to Borrower an
additional Fifty Thousand Dollars ($50,000) on December 1, 1996 by the same wire
transfer  method,  unless (a)  Borrower is affected by  unforseen  circumstances
which  materially  affect its  requirement  for this portion of the Loan; or (b)
Borrower's  business is  materially  affected by unforseen  circumstances  which
affect its  ability to repay the Loan;  or (c)  Borrower  defaults  pursuant  to
Section 7.1 of this  Agreement.  If Borrower draws down  additional sums against
the Loan  subject to the terms of this  Agreement,  Borrower  shall  execute and
deliver additional notes to Lender in form and substance exactly the same as the
Note, but for the amount and the date of execution (the "Additional  Notes), the
maturity date and other terms and  conditions  remaining  the same.  Any and all
Additional  Notes shall be annexed to this  Agreement  and the same, if and when
annexed,  are  hereby  incorporated  herein  by  reference.  The  Note  and  the
Additional Notes are hereinafter collectively referred to as the "Notes".

         2.2      Interest Rate.  Borrower hereby agrees to pay to Lender and 
Lender hereby accepts as interest on the Loan an amount equal to twelve (12%) 
percent per annum, payable upon

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maturity of the Loan as set forth below under Section 2.4 Term.  Interest  shall
be computed on the basis of a year of 360 days and actual days elapsed. From and
after the occurrence of a Default under this Agreement,  and for so long, as the
Default is continuing,  the Loan shall bear interest at a rate equal to eighteen
(18%) per annum computed as provided above and payable on demand. All sums paid,
or agreed to be paid by  Borrower  which  either are or may be  construed  to be
compensation  for the  making of the Loan  shall,  to the  extent  permitted  by
applicable law, be amortized, prorated, spread and allocated throughout the full
term of this Agreement or until the Loan is paid in full.

         2.3 Options.  As further  consideration  for the Loan,  Borrower hereby
grants  Lender or its  assignee  the option to purchase up to 300,000  shares of
Borrower's  common stock, at $1.00 per share post-split (based on an anticipated
2:1  reverse  split),  for a period  of three  (3)  years  from the date of this
Agreement, as set forth on the attached Option Agreement, marked Exhibit "C" and
incorporated herein by this reference.

         2.4 Term. This Agreement shall remain in effect until the Loan is fully
repaid. The Loan shall mature and be repaid upon, the earlier of: a) ninety (90)
days from the Closing  date  hereof or b) the date of the funding of  Borrower's
anticipated  private  placement or otherwise is  reasonably  deemed  financially
capable of repaying the Loan.  Borrower  shall have the right to terminate  this
Agreement  at any time by  prepaying  the Loan  without  penalty,  however,  any
interest or other  incentives such as the Options paid to the date of prepayment
shall not be affected (i.e., they shall not be refunded).

         Upon full  repayment  of the Loan,  Lender  shall  return to  Borrower,
within ten (10) business days, all material documents including the Media Credit
as  described  in the  Collateral  Assignment  of Media  Credit and the  Prepaid
Purchase Order.

         At the option of Lender,  all rights of Borrower  under this  Agreement
may be  terminated  by Lender  upon the  occurrence  of a Default as provided in
Section 7.1 of this  Agreement.  If this Agreement is terminated by Lender based
upon such a default,  then upon the effective  date of  termination,  the entire
unpaid  principal  amount of the Loan shall become  immediately  due and payable
without further notice or demand. Notwithstanding any termination, and until all
sums due  hereunder  shall  have been  paid and  satisfied,  Borrower  shall pay
accrued  interest to Lender  beginning on the lst of the month  following the 90
day maturity date, and continue such payments on or before the lst of each month
thereafter,  and  Lender  shall  continue  to have all of the other  rights  and
remedies set forth by law and in this Agreement.

         2.5 Exercise of Prepayment  Option.  Borrower  shall have the exclusive
right and  option at any time and from time to time prior to the end of the Term
to prepay,  without  penalty,  all or any  portion of the Loan (the  "Prepayment
Option"),  as set forth in Section 2.4 above.  The  Prepayment  Option  shall be
exercisable by Borrower giving Lender twenty (20) days advance written notice of
its intent to exercise the  Prepayment  Option (the  "Prepayment  Notice").  The
Prepayment  Notice shall  specify a closing  date,  time and place not less than
twenty  (20) days  thereafter  where the Loan shall be repaid and the  Agreement
terminated (the "Prepayment Closing"). At the Prepayment Closing, Borrower shall
deliver to Lender a certified, cashier's or

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bank check  payable  to the order of Lender in the  amount of the entire  unpaid
principal  and accrued  interest due under the Notes and  representing  the Loan
against  satisfaction  documents including a form of general release to Borrower
duly executed by Lender.

         2.6  Transfer  of the  Notes.  The Notes  shall not be sold,  assigned,
pledged or hypothecated by Lender without the prior written consent of Borrower,
which consent shall not be unreasonably withheld.

         3.       UTILIZATION OF THE LOAN PROCEEDS

         3.1 Borrower  hereby  agrees,  acknowledges  and accepts that  Borrower
shall use the proceeds from the Loan:  (i) to meet  Borrower's  general  minimum
operating  obligations  and expenses in accordance  with the Application of Loan
Proceeds  annexed hereto as Exhibit "D" and hereby  incorporated  herein by this
reference.  Any deviation from said use shall require the prior written approval
of First  Capital  Financial  Services  Corporation,  which  approval  shall not
unreasonably be withheld.

         4.       COLLATERAL.

         4.1 Security  Interest  First Lien.  To secure the payment to Lender of
the interest and  principal on the Loan,  Borrower  hereby  grants to Lender and
Lender  hereby  accepts,  the  media  credit  as  described  in  the  Collateral
Assignment of Media Credit and the Prepaid  Purchase  Order,  attached  together
hereto as Exhibit "B" and incorporated herein by this reference.

         4.2 Deposit of the  Collateral.  Borrower shall deposit with Lender the
Prepaid Purchase Order for Media Credit upon the closing of this Agreement,  the
title to which shall be  transferred  to Lender upon default of the terms of the
Notes in accordance with the Collateral Assignment of Media Credits as set forth
above.

         4.3 Security  Documents.  At Lender's  request,  Borrower shall execute
and/or deliver to Lender, at any time or times hereafter, all security documents
including  but not  limited  to  UCC-1  financing  statements  that  Lender  may
reasonably  request,  in form and  substance  acceptable  to Lender to  evidence
Lender's security  interest in the Collateral,  and Borrower shall pay the costs
of any recording or filing of the same. Borrower will cooperate with and deliver
any security  documents to such persons as Lender,  in its sole  discretion  may
deem appropriate.  Borrower hereby  specifically agrees and consents that a copy
of this  Agreement  or of a financing  statement  is  sufficient  as a financing
statement  as may be filed with any  governmental  clerk as evidence of Lender's
security interest in the Collateral.

         5.       REPRESENTATIONS AND WARRANTIES OF BORROWER

         Borrower hereby represents and warrants to Lender as follows:

         (a)      Authorization, Validity and Enforceability of this Agreement.
         Borrower has the power and authority (corporate and otherwise) to 
         execute, deliver and perform this Agreement.

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Borrower has takes all necessary  corporate  action to authorize its  execution,
delivery and performance of this  Agreement.  The Board of Directors of Borrower
(the "Board") has approved this  Agreement,  and the  transactions  contemplated
hereby and herein.  This  Agreement  has been duly  executed  and  delivered  by
Borrower and constitutes the legal, valid and binding obligation of Borrower, in
accordance with its terms,  subject to bankruptcy,  insolvency and other similar
laws  affecting  the  enforcement  of  creditors'   rights   generally  and  the
availability  of  injunctive  relief and other  equitable  remedies.  Borrower's
execution,  delivery and  performance  of this Agreement does not conflict with,
constitute a violation or breach of,  constitute a default,  or give rise to any
right of  termination  or  acceleration  of any right or  obligation of Borrower
under any other  outstanding  loans or agreements,  or result in the creation or
imposition of any Lien accept for the First Lien and security  interest  granted
to Lender with respect to the Collateral described herein.

         (b)  Organization  and  Qualification.  Borrower is duly  incorporated,
validly  existing and in good  standing  under the laws of its  jurisdiction  of
incorporation  and is qualified to do business and is in good  standing in every
jurisdiction  where the failure to be so qualified  and in good  standing  would
have a material adverse effect on its business.

         (c)  Consents  and  Approvals.  No  consent,  approval,  authorization,
license or order of registration or filing with, or notice to, any  Governmental
Authority  or other  third  party  (such  consents,  approvals,  authorizations,
licenses,   orders,   registrations,   filings  or  notices  being  referred  to
collectively  as  "Consents")  is  necessary  to be  obtained,  made or given by
Borrower in connection with the execution,  delivery and performance by Borrower
of  this  Agreement  or  the   consummation  by  Borrower  of  the  transactions
contemplated hereunder.

         (d)  Title to Media  Credit.  On the  date and to the  extent  Borrower
delivers  the Media  Credit  comprising  the  Collateral  to the  Escrow  Agent,
Borrower  will own the same  free and  clear  of any and all  liens,  claims  or
encumbrance of any nature or description. Delivery of the Prepaid Purchase Order
representing  the  Collateral  pursuant to the Escrow  Agreement  will convey to
Lender and to the Escrow  Agent good and valid  title to such  Credit,  free and
clear of any  Liens,  and will  entitle  Lender to all the rights of a holder of
such Credit,  subject in each case to the restrictions and obligations set forth
in the Media Purchase  Agreement  between  Borrower and Proxhill  Marketing Ltd.
dated June 3, 1996.

         (e) Brokers. No broker, finder, investment banker or other intermediary
has been retained by or is  authorized to act on behalf of Borrower  which might
be entitled to any brokerage, finder's or other fee or commission from Lender or
any of its affiliates in connection with the  transactions  contemplated by this
Agreement.

         (f) Disclosure of Actual and Contingent Liabilities. No other actual or
contingent  liabilities  exist or other legal  actions of any kind or nature are
pending or anticipated,  with the exception of those contingent  liabilities and
pending actions set forth on Exhibit E, attached and incorporated herein by this
reference.

         6.       REPRESENTATIONS AND WARRANTIES OF LENDER


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         6.1  Consents.   No  consents  of  governmental  and  other  regulatory
agencies,  foreign or domestic,  or of other parties are required to be received
by or on the part of  Lender  to  enable  it to enter  into and  carry  out this
Agreement in all material respects.

         6.2 Binding  Nature of  Agreement.  The  execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly reviewed and approved by Lender Board of Directors and no other proceedings
on the part of Lender are  necessary to authorize  the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein.

         6.3 Litigation  Compliance  with Law. Lender hereby warrants that it is
not aware of any  litigation,  pending  or other,  that would  prohibit  it from
entering  into  this  Agreement  making  the  Loan or  implementing  the same as
provided herein.

         6.4 Brokers.  With the  exception of First Capital  Investments,  Inc.,
neither  Lender  nor  any  of  its  affiliates  have  engaged,  consented  to or
authorized any broker, finder,  investment banker or other third party to act on
his behalf, directly or indirectly, as a broker or finder in connection with the
transactions contemplated by this Agreement.

         6.5  Available  Information.   By  virtue  of  its  execution  of  this
Agreement,  Lender hereby  acknowledges  and accepts that it has been  furnished
with any and all information  concerning the business and financial condition of
Borrower and each entity with regard to the Collateral,  its corporate status as
well as all other related matters,  which Lender's  management deemed reasonable
and/or necessary to its decision to proceed with the Loan.

         7.       DEFAULT:  RIGHTS AND REMEDIES ON DEFAULT.

         7.1      Default.  The occurrence of any one or more of the following 
events shall constitute a Default;

         (a)      Borrower's failure to repay the Loan in accordance with the 
terms and condition of the Notes; or

         (b) Borrower's failure or neglect to perform, keep or observe any other
term,  provision,  condition or covenant  contained in this  Agreement  which is
required to be performed, kept or observed by Borrower and the same is not cured
to Lender's satisfaction within ten (10) days after Lender gives Borrower notice
identifying such event; or

         (c) An event shall  occur,  and any  applicable  cure period shall have
expired, under any agreement, document or instrument, other than this Agreement,
now or  hereafter  existing,  to which  Borrower is a party,  such that the same
shall  constitute  a  default  or  breach  under  such  agreement,  document  or
instrument,  but only if that  default or breach has a material  adverse  effect
upon Borrower's ability to repay the Loan; or


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         (d) The  Collateral  or any of  Borrower's  other assets are  attached,
seized,  levied upon or subjected to a writ or distress warrant,  or come within
the possession of any receiver,  trustee,  custodian or assignee for the benefit
of creditors  and the same is not cured within thirty (30) days  thereafter,  an
application  is made by any  individual,  firm or entity other than Borrower for
the appointment of a receiver,  trustee,  or custodian for the Collateral or any
of Borrower's other assets and the same is not dismissed within thirty (30) days
after the application therefor; or

         (e) A petition in bankruptcy is filed against Borrower or any guarantor
of its liabilities; Borrower or any guarantor makes an authorized assignment for
the  benefit of its  creditors;  a  receiver,  receiver-manager  or trustee  for
Borrower is appointed;  any case or  proceeding is filed by or against  Borrower
for its dissolution,  liquidation or termination; Borrower ceases to conduct its
business as now conducted or is enjoined,  restrained or in any way prevented by
court order from conducting all or any material part of its business affairs; or

         (f) A notice  of lien,  levy or  assessment  is  filed of  record  with
respect to all or any  substantial  portion of  Borrower's  assets by the United
States,  or by any  state,  county,  municipal,  provincial,  federal  or  other
government  agency, or any taxes or debts owing to any of the foregoing become a
lien or  encumbrance  upon the  Collateral or any of Borrower's  assets and such
lien or encumbrance is not released  within thirty (30) days after its creation;
or

         (g)  Judgment is rendered  against  Borrower on an  uninsured  claim of
$50,000.00 or more and Borrower fails either to commence appropriate proceedings
to appeal such  judgement  within the  applicable  appeal  period or, after such
appeal is filed,  Borrower  fails to  diligently  prosecute  such appeal or such
appeal is denied.

         7.2 Acceleration of the Liabilities. Upon and after the occurrence of a
Default,  all of the monies due and payable under the Loan may, at the option of
Lender and  without  demand,  notice of legal  process  of any kind  (including,
without  limitation,  notice of acceleration,  notice of intent to acceleration,
notice of intent to accelerate or notice of intent to demand), be declared,  and
immediately  shall  become due and  payable;  provided,  however,  that upon the
occurrence  of a Default  under  Sections 7.1 hereof,  all of the monies due any
payable  under the Loan  shall  automatically  and  immediately  become  due and
payable without demand, notice or legal process of any kind.

         7.3      Remedies.  Upon and after the occurrence of a Default, Lender 
shall have the following rights and remedies:

         (a) All of the rights and remedies of a secured party under the Uniform
Commercial Code, or other applicable law, all of which rights and remedies shall
be cumulative,  and none exclusive,  to the extent permitted by law, in addition
to any other rights and remedies contained in the Agreement;

         (b) The right to sell,  use, or to otherwise  dispose of the Collateral
as set forth in the  Collateral  Assignment of Media Credits  (Exhibit "B"). The
proceeds  realized from the sale of any Collateral shall be applied first to the
reasonable costs and expenses attendant upon such sale;

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second to interest due upon the Loan; and third to the principal of the Loan. If
any deficiency shall arise, Borrower shall remain liable to Lender therefor.

         (c) An additional 20% administrative  transaction fee in order to cover
Lender's  costs of disposition  of the  Collateral  upon Default,  which fee the
Parties agree is a reasonable administrative disposition cost.

         7.4 Notice. Any notice required to be given by Lender of a sale, lease,
other  disposition  of the  Collateral or any other  intended  action by Lender,
which is deposited in the United States mail, postage prepaid and duly addressed
to Borrower, at the address set forth in this Agreement,  twenty (20) days prior
to such proposed  action,  shall  constitute  commercially  reasonable  and fair
notice thereof to Borrower.

         8.       CONDITIONS TO CLOSING

         8.1 Mutual Conditions to Closing.  The obligation of Lender to make the
Loan to  Borrower at the  Closing  and the  obligation  of Borrower to issue and
deliver the Notes and related  document and give the Assignment of Collateral to
Lender at the Closing,  and the obligations of the parties to otherwise  perform
their respective  obligations  hereunder shall be subject to the satisfaction of
the following mutual conditions on or prior to the Closing:

         (a) No order, decree,  judgment or injunction shall have been issued by
any  Governmental  Authority  of competent  jurisdiction  and shall be in effect
which restrains or prohibits the consummation of the Loan and/or the issuance of
the first Lien; and

         (b) No material litigation shall have commenced against Borrower in any
court of competent  jurisdiction  which,  in the reasonable  opinion of Lender's
litigation  counsel shall  jeopardize  the  consummation  of the Loan and/or the
issuance of the Assignment.

         8.2 Additional  Conditions to the Obligations of Lender. The obligation
of Lender to make the Loan shall be subject to the satisfaction of the following
conditions  which  Borrower  hereby  covenants  to perform (in addition to those
specified in Section 8.1) on or prior to the Closing:

         (a)      The execution and delivery to Lender of the Notes in the 
initial amount of $100,000;

         (b)      The execution and delivery to Lender of the Notes in the 
subsequent amount of $50,000;

         (c)      The execution and delivery of the Assignment, and related 
exhibits and documents;

         8.3      Transaction Fee.  A transaction fee payable to First Capital 
Investments, Inc. in the amount of ten percent (10%) of the total sum conferred 
to Borrower shall be deferred until the Closing of the anticipated subsequent 
financing as set forth in Section 2.4 Term.

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         9.       TERMINATION

         9.1      Termination.  This Agreement may be terminated at any time 
prior to the Closing
                  -----------
Date:

         (a)      by mutual agreement in writing of Borrower and Lender; and

         (b) by either  Borrower or Lender by written  notice to the other party
(i) if the  Closing  shall not have  occurred by November  11,  1996,  provided,
however, that the right to terminate this Agreement pursuant to clause (i) shall
not be  available to any party whose  failure to fulfill any of its  obligations
under this Agreement resulted in the Closing not occurring by such date; or (ii)
if any  Governmental  Authority of competent  jurisdiction  shall have issued an
injunction,  decree or order or taken any other  action  permanently  enjoining,
restraining or otherwise prohibiting the Closing and such injunction,  decree or
order, or other action shall have become final and nonappealable.

         9.2  Effect of  Termination.  In the event of the  termination  of this
Agreement  pursuant to Section 9.1, this Agreement shall thereafter  become void
and have no effect,  and no party hereto  shall have any  liability to the other
party hereto in respect  thereof,  except that  nothing  herein will relieve any
party from  liability for any breach of any of its  representation,  warranties,
covenants or agreements contained in this Agreement prior to such termination.

         10.      MISCELLANEOUS

         10.1   Representations   and   Warranties  to  Survive   Closing.   All
representations   and  warranties   contained  herein  or  in  any  schedule  or
certificate  delivered  pursuant  hereto or any writing signed by the parties on
the date hereof she survive consummation of the transactions  contemplated under
this Agreement, except that each representation and warranty shall expire on the
earlier  of (i) one year from the date that the  party  for whose  benefit  such
representation or warranty is made his actual knowledge of the inaccuracy of any
representation  or the breach of any warranty and (ii) the first  anniversary of
the Closing Date.

         10.2 Entire Agreement; Severability. This Agreement contains the entire
understanding  of the  parties  with  respect to the subject  matter  hereof and
thereof and supersedes all prior agreements and understandings,  oral or written
with respect to such  matters and any writing  signed by the parties on the date
hereof.  There are no representations  and warranties other than those set forth
herein.  This Agreement  shall be binding upon the respective  successors of the
parties, but the restrictions contained herein applicable to Lender shall not be
binding on any  transferee of the  Conversion  Shares unless such  transferee is
required  by the  terms  hereof to  execute  and  deliver  a written  instrument
agreeing to be so bound. In the event that any provision of this Agreement shall
be declared unenforceable by a court of competent jurisdiction,  such provision,
to the extent  declared  unenforceable,  shall be stricken and the  remainder of
this Agreement shall remain binding on the parties hereto. However, in the event
any such provision shall be declared  unenforceable due to its scope, breadth or
duration, then it shall be modified to

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the scope, breadth or duration permitted by law and shall continue to be fully 
enforceable as so modified.

         10.3 Amendments; Waivers. This Agreement may not be modified or amended
except by a written  instrument  signed by  authorized  representatives  of each
party hereto and referring  specifically to this Agreement.  Any term, provision
or condition of this Agreement may be waived in writing at any time by the party
which is entitled to the benefit thereof.

         10.4  Notification of Certain  Matters.  Each party (the "First Party")
shall  give  prompt  notice  to  the  other  party  of  (i)  the  occurrence  or
nonoccurrence  of any event,  the occurrence of  nonoccurrence of which would be
likely to cause any  representation  or warranty of the First Party contained in
this Agreement to be untrue or inaccurate in any material respect at or prior to
the Closing and (ii) any  material  failure of the First Party to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder;  provided,  however,  that the delivery of any notice  pursuant to
Section  10.6  shall  not  limit or  otherwise  affect  the  remedies  available
hereunder to the other party.

         10.5 Public  Announcements.  Each party hereto  agrees that it will not
disseminate any press release or public announcement  concerning the transaction
contemplated  hereby to any  party,  without  the other  party's  prior  written
consent which shall not be unreasonably  withheld;  except that Borrower will in
any event have the right to issue any such reports,  statements or releases upon
advice of its counsel that such issuance is required in order to comply with the
requirements  of  the  federal  laws  or  the  requirements  of  any  applicable
regulatory  agency.  Each  party  agrees to cause any of its  advisors,  whether
financial,  accounting,  legal  or  otherwise,  not to  disseminate  any of such
information  to any other party  without the other  party's  prior written which
shall not be unreasonably withheld.

         10.6 Notices.  Unless otherwise  specifically provided for elsewhere in
this  Agreement,  any  notices  and other  communications  required  to be given
pursuant  to this  Agreement  shall be in writing  and shall be  effective  upon
delivery by hand or upon receipt if sent by mail  (registered or certified mail,
postage prepaid, return receipt requested) or upon transmission if sent by telex
or facsimile (with request for confirmation of receipt in a manner customary for
communications  of such respective  type),  except that if notice is received by
telex or facsimile  after 5:00 P.M. local time on a business day at the place of
receipt, it shall be effective as of the following business day.

         10.7  Counterparts.  This  Agreement  may be  executed  in two or  more
counterparts  by facsimile  which  together shall be considered one and the same
Agreement and each of which shall be deemed an original.

         10.8     Governing Law; Consent to Jurisdiction.

         (a)      This Agreement shall be governed by and construed in 
                    accordance with the laws of the State of Colorado.


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                                                        10

<PAGE>



         (b) Any action or  proceeding  seeking to enforce any  provision of, or
based on any arising out of this  Agreement  must be brought  against any of the
parties in the United  States  District  Court for the  applicable  District  in
Colorado, and each of the parties hereby irrevocably submits to the jurisdiction
of such court in any such action or proceeding and waives any objection to venue
laid therein. Furthermore, Borrower and Lender hereby irrevocably consent to the
service of any and all process in any such  action,  suit or  proceeding  by the
mailing of copies of such  process to them in the  manner  specified  in Section
10.6 for the giving of notices.  Nothing in this section  shall affect the right
of Borrower or Lender to serve legal  process in any other  manner  permitted by
law.

         10.9     Specific Performance.  This Agreement is for the benefit of 
the parties hereto and is not intended to confer upon any other Person any 
rights or remedies hereunder.

         10.10 Specific Performance.  Each of the parties hereto agrees that any
breach by it of any provision of this  Agreement  would  irreparably  injure the
other  party and that money  damages  would be an  inadequate  remedy  therefor.
Accordingly,  each of the parties hereto agrees that the other shall be entitled
to one or more  injunctions  enjoining  any such  breach or  requiring  specific
performance  of this  Agreement  and consents to the entry thereof this being in
addition to any other remedy to which the non-breaching party is entitled at law
or equity.  The prevailing party in any action to enforce the terms herein shall
be entitled to in related costs and attorney fees.

         10.11    Captions.  The captions herein are included for convenience of
reference and shall be ignored in the construction or interpretation hereof.

         10.12 Access and  Information.  Each party hereto shall afford to other
party's accountants,  counsel and other duly authorized  representatives access,
during normal business hours and on reasonable advance notice, during the period
after  execution of this  Agreement and prior to the Closing,  the right to make
copies of all properties,  books, contracts,  commitments and records (including
but not limited to tax returns). In addition,  each party shall furnish promptly
to the other party:  a copy of each report,  schedule  and other  document  file
received by it pursuant to the requirements of Canadian,  provincial, federal or
state securities  laws; a copy of any summons,  complaint,  petition,  notice of
hearing or notice of the  commencement  of any  governmental  or  administrative
investigation; and all other information concerning its business, properties and
personnel  as  may  reasonably  be  requested;   provided,   however,   that  no
investigation  pursuant to this  section  shall  affect any  representations  or
warranties or the  conditions to the  obligations of the parties to consummate a
transaction referenced herein.

         10.13   Expenses.   Regardless  of  whether  or  not  the   transaction
contemplated  herein is  consummated,  each party shall  promptly pay,  shall be
responsible  for, and account for on its  respective  financial  statements  all
costs and expenses incurred by it in connection with this Agreement.



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                                                        11

<PAGE>


         IN WITNESS WHEREOF,  each of the authorized  parties have executed this
Agreement on the date first written above.

                                        Preferred Telecom, Inc., Borrower


                                     By:
                                        G. Ray Miller, Chairman, CEO


                                     By:
                                        Dennis L. Gundy, President

                                                     ATTEST:


                                     By:
                                        Mary G. Merritt, Secretary

                                        Bisbro Investments Company, Ltd., Lender


                                     By:
                                        Bader Al-Rezaiban

                                                     ATTEST:


                                     By:
                                           , Secretary



CORPDAL:58186.1  26287-00001
                                                        12

<PAGE>


                             SECURED PROMISSORY NOTE


$100,000.00                                                       Dallas, Texas

         FOR VALUE RECEIVED,  Preferred  Telecom,  Inc., a  publicly-held  owned
Delaware  corporation  with offices at 12655 N. Central  Expressway,  Suite 800,
Dallas, Texas 75243 (hereinafter  referred to as the "Maker") promises to pay to
the order of Bisbro Investments  Company Ltd., with an address of P.O. Box 3216,
Safat 13033,  Kuwait City, Kuwait, and maintains offices in care of T.R. Winston
& Company  Incorporated,  1999 Avenue of the Stars, Suite 1950, Los Angeles,  CA
90067 (hereinafter  referred to as the "Holder"),  in lawful money of the United
States,  the principal sum of One Hundred Thousand and 00/100 ($100,000) Dollars
with interest at the rate of twelve  percent (12%) per annum and payable  ninety
(90) days  following the execution and delivery of the loan proceeds from Lender
to Borrower,  unless sooner repaid as provided in a Loan  Agreement of even date
herewith  between  the Maker and the Holder to which this Note is attached as an
exhibit, the text of which is hereby incorporated herein by reference (the "Loan
Agreement").  The full principal amount of this Note shall be due and payable at
the offices of the Holder  within ninety (90) days of the execufion and delivery
of this Note (the "Due Date").

         1. DEFINITION OF SECURITY USED AS COLLATERAL.  Maker  acknowledges this
Note as a general  corporate  obligation  secured by the Collateral.  As used in
this  Note,  the  term  "Collateral"  shall  mean  the  Prepaid  Purchase  Order
representing  the media credit owned by Maker as shall be conveyed  upon default
of this  Note by the  Collateral  Assignment  of Media  Credit  as set  forth on
Exhibit  "B" annexed to the Loan  Agreement  and hereby  incorporated  herein by
reference. The Collateral shall either be registered in of the name of the Maker
or have been duly  assigned to the Maker,  and owned by the Maker free and clear
of any and all claims or encumbrances of any nature or description.

         2. WAIVER OF  PRESENTMENT,  ETC.  The Maker  ofthisnote  hereby  waives
presentment for payment, demand, notice of nonpayment and dishonor,  protest and
notice of protest;  and waives trial by jury in any action or proceeding arising
on, out of,  under or by reason of this Note.  The  rights and  remedies  of the
Holder under this Note shall be deemed cumulative,  and exercise of any right or
remedy  shall not be  regarded  as barring  any other  remedy or  remedies.  The
institution  of any  action to  recover or the  recovery  of any  portion of the
indebtedness  evidenced  by this Note  shall not be deemed a waiver of any other
right of the Holder hereof. If applicable,  in the event that any installment of
the principal and accrued  interest shall not be paid when due, and shall remain
unpaid for a period of twenty (20) days or more,  then a late charge of two (2%)
percent of the amount then due shall also be due and owing for each month or any
portion  thereof  that such  payment  shall  remain  unpaid.  The  Maker  hereby
irrevocably authorizes and empowers any attorney or attorneys, to appear for the
Maker in any court in any  appropriate  action  there  brought  or to be brought
against the Maker by the Holder on this Note, with or without  declaration filed
as of any term or time, and then and there to confess judgment against

SECURED PROMISSORY NOTE - Page 1

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<PAGE>



the Maker for all sums due herein,  together  with costs of suit and  attorneys'
fee for collection as aforesaid.
         3.       STATUS OF REGISTERED HOLDER.  The Maker may treat the holder 
of this  Note as the  absolute  owner of this  Note for the  purpose  of  making
payments of interest  and/or  principal and for all other purposes and shall not
be affected by any notice co the contrary.

         4.       DEFAULT.  If Maker Defaults (as that term is defined in the 
Loan  Agreement)  under any of the terms  set forth in the Loan  Agreement,  the
Holder of this Note may declare the entire principal and unpaid accrued interest
hereon immediately due and payable, by notice in writing to the Maker.

                  a. The rights and  remedies  of the holder  Hereof  under this
Note shall be deemed  cumulative  and the  exercise of any right or remedy shall
not be regarded as barring any other remedy or remedies.  The institution of any
action to recover or recovery of any portion of the  indebtedness  evidenced  by
this Note shall not be deemed a waiver of and other right of the Holder hereto.

                  b. The  acceptance  of any  installments  or  payments  by the
Holder hereof after the due date herein,  or the waiver of any other  subsequent
default shall not prevent the Holder hereof from immediately pursuing any or all
of its remedies afforded under the law or the Loan Agreement.

         5.       PREPAYMENT.  The Maker shall have the right to prepay the 
entire Loan without penalty,  in accordance with the terms and conditions of the
Prepayment Option (as that term is defined in the Loan Agreement).

         6.       NOTICES OF RECORD DATE, ETC. IN THE EVENT OF CERTAIN EVENTS.  
The Maker shall furnish the Holder with 30 days advance written notice of any of
the following action:

                  a.       Any capital reorganization of the Maker, any 
reclassification  or  recapitalization  of the capital stock of the Maker or any
transfer of or substantially  all of the assets of the Maker to any other person
or any consolidation or merger involving the Maker; or

                  b. Any voluntary or  involuntary  dissolution,  liquidation or
winding-up  of the Maker.  In such  event,  the Maker will mail to the Holder at
least 30 days prior to the earliest date  specified in the legal  document filed
with a court of competent jurisdiction and/or any government authority, a notice
specifying:

                           (i)  The date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount and 
character of such dividend, distribution or right; and


SECURED PROMISSORY NOTE - Page 2

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<PAGE>



                           (ii)  The date on which any such reorganization, 
reclassification, transfer, consolidation,  merger,  dissolution,  liquidation  
or winding-up is expected to become  effective and the record date for 
determining  stockholders  entitled to
vote thereon; or

                  c. Any  taking by the Maker of a record of the  holders of any
class of  securities  of the Maker for the  purpose of  determining  the holders
thereof who are  entitled to receive any  dividend  (other than a cash  dividend
payable  out of  earned  surplus  at the same rate as that of the last such cash
dividend theretofore paid) or other distribution, or any right to subscribe for,
purchase  or  otherwise  acquire  any  shares of stock of any class or any other
securities or property, or to receive any other right.

         7. ASSIGNMENT AND BINDING  EFFECT.  This Note is binding upon and shall
inure  to  the  benefit  of the  parties  hereto  and  their  respective  heirs,
executors,  administrators,   representatives  and/or  successors  and  assigns.
Notwithstanding the foregoing,  neither the Maker nor the Holder shall assign or
transfer any rights or  obligations  hereunder,  except that:  (a) the Maker may
assign  or  transfer  this  Note to a  successor  corporation  in the event of a
merger,  consolidation  or transfer or sale of all or  substantially  all of the
assets of the Maker,  provided  (i) that no such  assignment  shall  relieve the
Maker from  liability for the  obligations  assumed by it hereunder and (ii) the
assignee  or  transferee  shall  specifically  assume  in  writing  all  of  the
obligations  of the Maker set forth in this  Note;  and (b) on ten days  advance
written  notice to the  Maker,  the  Holder  may  assign  this Note to an entity
controlled  by or under common  control of the Holder or any parent or affiliate
thereof.

         8. NO  STOCKHOLDER  RIGHTS.  Nothing  contained  in this Note  shall be
construed as conferring upon the Holder or any other person the right to vote or
to consent or to  receive  notice as a  stockholder  in respect of  meetings  of
stockholders  for the election of directors of the Maker or any other matters or
any rights  whatsoever  as a  stockholder  of the  Maker;  and no  dividends  or
interest  shall be payable  or  accrued in respect of this Note or the  interest
represented hereby.

         9. LOSS,  THEFT,  DESTRUCTION  OR  MUTILATION.  In case this Note shall
become  mutilated or defaced or be  destroyed,  lost or stolen,  the Maker shall
execute  and  deliver  a new  Note  in  exchange  for  and  upon  surrender  and
cancellation of such mutilated or defaced Note or in lieu of and in substitution
for such Note so  destroyed,  lost or stolen upon the Holder of such Note filing
with the Maker evidence reasonably  satisfactory to the Maker that such Note has
been so  mutilated,  defaced,  destroyed,  lost or stolen  and of the  ownership
thereof by the Holder as may be  necessary,  provided,  however,  that the Maker
shall be  entitled,  as a condition  to the  execution  and delivery of such new
Note, to demand indemnity  satisfactory to it and payment of reasonable expenses
and charges incurred in connection with the delivery of such new Note.

         10. GOVERNING LAW; CONSENT TO JURISDICTION. This Note shall be governed
by and construed in accordance  with the laws of the State of Colorado,  without
giving  effect to the  principles  of conflicts  of law  thereof.  Any action or
proceeding  seeking to enforce any  provision  of, or based on any right arising
out of this Note must be brought against any of the parties in the United States
District Court for the District of Colorado, and each of the parties hereby

SECURED PROMISSORY NOTE - Page 3

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<PAGE>



irrevocably  submits to the  jurisdiction  of such  court in any such  action or
proceeding  and waives any  objection to venue laid  therein.  Furthermore,  the
Maker and the Holder  hereby  irrevocably  consent to the service of any and all
process in any such action,  suit or proceeding by the mailing of such copies of
such process to them in the manner specified in the section concerning giving of
notice.  Nothing in this section  shall affect the right of Maker and the Holder
to serve legal process in any other manner permitted by law.

         11.      CAPTIONS.  The captions herein are included for convenience of
reference and shall be ignored in the construction or interpretation hereof.

         12.      NOTICES.  Any notices and other communications required to be 
given  pursuant  to this Note shall be in writing  and shall be  effective  upon
delivery by hand or upon receipt if sent by mail  (registered or certified mail,
postage prepaid,  return receipt requested),  overnight package delivery service
or  upon   transmission  if  sent  by  telex  or  facsimile  (with  request  for
confirmation  of  receipt  in a  manner  customary  for  communications  of such
respective type),  except that if notice is received by telex or facsimile after
5:00 P.M.  local time on a  business  day at the place of  receipt,  it shall be
effective  as of the  following  business  day.  Notices are to be  addressed as
follows:
              If to the Maker:          Preferred Telecom
                                        12655 N. Central Expressway, Suite 800
                                        Dallas, Texas  75243

              If to the Holder:         Bisbro Investments Company Ltd.
                                        c/o T. R. Winston & Company Incorporated
                                        1999 Avenue of the Stars, Suite 1950
                                        Los Angeles, CA   90067

or to such other  respective  addresses  as either the Maker or the Holder shall
designate to the other by notice in writing  provided that notice of a change of
address shall be effective only upon receipt.

         IN  WITNESS  WHEREOF,  the Maker by its duly  authorized  officer,  has
executed this Note on this 12th day of November, 1996.

                                                     Preferred Telecom, Inc.



                                       By:
                                           G. Ray Miller, Chairman, CEO


                                       By:
                                           Dennis Gundy, President

SECURED PROMISSORY NOTE - Page 4

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