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                      CERTIFICATE OF DESIGNATION OF THE POWERS,
                       PREFERENCES AND RELATIVE, PARTICIPATING,
                   OPTIONAL AND OTHER SPECIAL RIGHTS OF 14% SENIOR
                     EXCHANGEABLE REDEEMABLE PREFERRED SHARES AND
                 QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF


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                        Pursuant to Section 23B.06.020 of the
                 Business Corporation Act of the State of Washington
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    NEXTLINK Communications Merger, Inc. (the "Corporation"), a corporation
organized and existing under the Business Corporation Act of the State of
Washington, does hereby certify that, pursuant to authority conferred upon the
board of directors of the Corporation (the "Board of Directors") by its Articles
of Incorporation, as amended (hereinafter referred to as the "Articles of
Incorporation"), and pursuant to the provisions of Section 23B.06.020 of the
Business Corporation Act of the State of Washington, said Board of Directors, at
a meeting thereof on January 27, 1997, duly approved and adopted the following
resolution (the "Resolution"):

         RESOLVED, that, pursuant to the authority vested in the Board of
    Directors by its Articles of Incorporation, the Board of Directors does
    hereby create, authorize and provide for the issuance of 14% Senior
    Exchangeable Redeemable Preferred Shares, par value $.01 per share, with a
    stated value of $50 per share, in an amount not to exceed 11,700,000
    shares, having the designations, preferences, relative, participating,
    optional and other special rights and the qualifications, limitations and
    restrictions thereof that are set forth in the Articles of Incorporation
    and in this Resolution as follows:

         (a)  DESIGNATION.

              There is hereby created out of the authorized and unissued
         Preferred Shares of the Corporation a class of Preferred Shares
         designated as the "14% Senior Exchangeable Redeemable Preferred
         Shares."  The number of shares constituting such class shall not
         exceed 11,700,000 and are referred to as the "Senior Exchangeable
         Redeemable Preferred Shares."  The liquidation preference of the
         Senior Exchangeable Redeemable Preferred Shares shall be $50 per
         share.  The Senior Exchangeable Redeemable Preferred Shares shall
         consist of the Original Shares and the Exchange Shares.

         (b)  RANKING.

              The Senior Exchangeable Redeemable Preferred Shares shall, with
         respect to dividends and distributions upon liquidation, winding-up
         and dissolution of the Corporation, rank (i) senior to each class of
         Capital Stock of the Corporation (including, without limitation, the
         Corporation's Class A Common Stock, par value $.01 per share 


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         and the Class B Common Stock, par value $.01 per share) outstanding or
         hereafter created the terms of which do not expressly provide that it
         ranks senior to, or on a parity with, the Senior Exchangeable
         Redeemable Preferred Shares as to dividends and distributions upon
         liquidation, winding-up and dissolution of the Corporation
         (collectively referred to as "Junior Shares"); (ii) on a parity with
         any class of Capital Stock of the Corporation or series of Preferred
         Shares of the Corporation hereafter created the terms of which
         expressly provide that such class or series will rank on a parity with
         the Senior Exchangeable Redeemable Preferred Shares as to dividends
         and distributions upon liquidation, winding-up and dissolution
         (collectively referred to as "Parity Shares"); PROVIDED that any such
         Parity Shares that were not issued in compliance with paragraph
         (f)(ii)(A) hereof shall be deemed to be Junior Shares and not Parity
         Shares; and (iii) junior to each class of Capital Stock of the
         Corporation or series of Preferred Shares of the Corporation hereafter
         created that has been issued in compliance with paragraph (f)(ii)(B)
         hereof and the terms of which expressly provide that such class or
         series will rank senior to the Senior Exchangeable Redeemable
         Preferred Shares as to dividends and distributions upon liquidation,
         winding-up and dissolution of the Corporation (collectively referred
         to as "Senior Shares").

         (c)  DIVIDENDS.

                   (i)  (A) Beginning on the Issue Date, the Holders of the
              outstanding  Senior Exchangeable Redeemable Preferred Shares
              shall be entitled to receive, when, as and if declared by the
              Board of Directors, out of funds legally available therefor,
              distributions in the form of dividends on each Senior
              Exchangeable Redeemable Preferred Shares, at a rate PER ANNUM
              equal to 14% of the liquidation preference per share of the
              Senior Exchangeable Redeemable Preferred Shares, payable
              quarterly.  No interest shall be payable in respect to any
              dividends that may be in arrears.  All dividends shall be
              cumulative, whether or not earned or declared, on a daily basis
              from their date of issuance and shall be payable quarterly in
              arrears on each Dividend Payment Date, commencing on the first
              Dividend Payment Date after the Issue Date.  Dividends may be
              paid at the Corporation's option on any Dividend Payment Date
              occurring on or before February 1, 2002 either in cash or by
              issuing additional fully paid and nonassessable Senior
              Exchangeable Redeemable Preferred Shares with an aggregate
              liquidation preference equal to the amount of such dividends. 
              After February 1, 2002, dividends shall be paid only in cash. 
              Each dividend shall be payable to the Senior Exchangeable
              Redeemable Preferred Shares held by Holders of record as they
              appear on the share books of the Corporation on the Dividend
              Record Date immediately preceding the related Dividend Payment
              Date.  Dividends shall cease to accumulate in respect of the
              Senior Exchangeable Redeemable Preferred Shares on the Exchange
              Date or on the date of their earlier redemption unless the
              Corporation shall have failed to issue the appropriate aggregate
              principal amount of Exchange Notes in respect of the Senior
              Exchangeable Redeemable Preferred Shares on such Exchange Date or
              shall have failed to pay the relevant redemption price on the
              date fixed for redemption.

                   (B)  In the event that (1) the Corporation has not filed the
              registration statement relating to the Exchange Offer (or, if
              applicable, the registration statement relating to 


                                         -2-
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              the shelf registration of the Senior Exchangeable Redeemable
              Preferred Shares for resale by holders contemplated by the
              Registration Rights Agreement (the "Resale Registration")) on or
              before the 45th day after the Issue Date, (2) such registration
              statement (or, if applicable, the Resale Registration) has not
              become effective on or before the 120th day after the Issue Date,
              (3) the Exchange Offer has not been consummated within
              30 Business Days following the initial effective date of the
              registration statement relating to the Exchange Offer or (4) any
              registration statement required by the Registration Rights
              Agreement is filed and declared effective but shall thereafter
              cease to be effective (except as specifically permitted therein)
              without being succeeded immediately by an additional registration
              statement filed and declared effective (any such event referred
              to in clauses (1) through (4), a "Registration Default"), then
              additional dividends will accrue (in addition to the stated
              dividends on the Senior Exchangeable Redeemable Preferred Shares)
              at the rate of 0.25% PER ANNUM on the liquidation preference of
              the Senior Exchangeable Redeemable Preferred Shares for the
              period from and including the occurrence of the Registration
              Default until such time as no Registration Default is in effect. 
              Such additional dividends (the "Special Dividends") will be
              payable quarterly in arrears on each regular Dividend Payment
              Date in accordance with the provisions of this paragraph (c). 
              For each 90-day period that the Registration Default continues,
              the PER ANNUM rate of such Special Dividends will increase by an
              additional 0.25%; PROVIDED that such rate shall in no event
              exceed 1.0% PER ANNUM in the aggregate.  At such time as the
              Registration Default is no longer in effect, the dividend rate on
              the Senior Exchangeable Redeemable Preferred Shares shall be the
              rate stated in paragraph (c)(i)(A) hereof and no further Special
              Dividends will accrue unless and until another Registration
              Default shall occur.

                   (ii)    All dividends paid with respect to the Senior
              Exchangeable Redeemable Preferred Shares pursuant to paragraph
              (c)(i) shall be paid PRO RATA to the Holders entitled thereto.

                   (iii)   Nothing herein contained shall in any way or under
              any circumstances be construed or deemed to require the Board of
              Directors to declare, or the Corporation to pay or set apart for
              payment, any dividends on the Senior Exchangeable Redeemable
              Preferred Shares at any time.

                   (iv)    Dividends on account of arrears for any past
              Dividend Period and dividends in connection with any mandatory
              redemption pursuant to paragraph (e)(ii) may be declared and paid
              at any time, without reference to any regular Dividend Payment
              Date, to Holders of record on such date, not more than forty-five
              (45) days prior to the payment thereof, as may be fixed by the
              Board of Directors of the Corporation.

                   (v)     No full dividends shall be declared by the Board of
              Directors or paid or set apart for payment by the Corporation on
              any Parity Shares for any period unless full cumulative dividends
              have been or contemporaneously are declared and paid in full, or
              declared and, if payable in cash, a sum in cash set apart
              sufficient for such payment, on the Senior Exchangeable
              Redeemable Preferred Shares for all Dividend Periods terminating
              on 

                                         -3-

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              or prior to the date of payment of such full dividends on such
              Parity Shares.  If full dividends are not so paid, all dividends
              declared upon the Senior Exchangeable Redeemable Preferred Shares
              and any other Parity Shares shall be declared PRO RATA so that
              the amount of dividends declared per share on the Senior
              Exchangeable Redeemable Preferred Shares and such Parity Shares
              shall in all cases bear to each other the same ratio that accrued
              dividends per share on the Senior Exchangeable Redeemable
              Preferred Shares and such Parity Shares bear to each other.

                   (vi)    (A)    Holders of the Senior Exchangeable Redeemable
              Preferred Shares shall be entitled to receive the dividends
              provided for in paragraph (c)(i) hereof in preference to and in
              priority over any dividends upon any of the Junior Shares.

                   (B)     No dividends may be paid or set apart for such
              payment on Junior Shares (except dividends on Junior Shares
              payable in additional Junior Shares) if full cumulative dividends
              have not been paid in full on the Senior Exchangeable Redeemable
              Preferred Shares.  So long as any Senior Exchangeable Redeemable
              Preferred Shares are outstanding, the Corporation shall not make
              any payment on account of, or set apart for payment money for a
              sinking or other similar fund for, the purchase, redemption or
              other retirement of, any Parity Shares or Junior Shares, or any
              warrants, rights, calls or options to purchase any Parity Shares
              or Junior Shares, whether in cash, obligations or shares of the
              Corporation or other property, and shall not permit any
              corporation or other entity directly or indirectly controlled by
              the Corporation to purchase or redeem any Parity Shares or Junior
              Shares or any such warrants, rights, calls or options unless full
              cumulative dividends determined in accordance herewith on the
              Senior Exchangeable Redeemable Preferred Shares have been paid in
              full.

                   (vii)   Dividends payable on the Senior Exchangeable
              Redeemable Preferred Shares for any period shorter than a
              quarterly dividend period shall be computed on the basis of a
              360-day year of twelve 30-day months and the actual number of
              days elapsed in the period for which payable.

              (d)  LIQUIDATION PREFERENCE

                   (i)     In the event of any voluntary or involuntary
              liquidation, dissolution or winding-up of affairs of the
              Corporation, the Holders of Senior Exchangeable Redeemable
              Preferred Shares then outstanding shall be entitled to be paid,
              out of the assets of the Corporation available for distribution
              to its shareholders, an amount in cash equal to the liquidation
              preference of $50 per Senior Exchangeable Redeemable Preferred
              Share, plus, without duplication, an amount in cash equal to
              accumulated and unpaid dividends thereon to the date fixed for
              liquidation, dissolution or winding-up (including an amount equal
              to a prorated dividend for the period from the last Dividend
              Payment Date to the date fixed for liquidation, dissolution or
              winding-up) before any payment shall be made or any assets
              distributed to the holders of any of the Junior Shares including,
              without limitation, common stock of the Corporation.  Except as
              provided in the preceding sentence, Holders of Senior
              Exchangeable Redeemable Preferred Shares shall not be entitled to
              any 

                                         -4-

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              distribution in the event of any liquidation, dissolution or
              winding-up of the affairs of the Corporation.  If the assets of
              the Corporation are not sufficient to pay in full the liquidation
              payments payable to the Holders of outstanding Senior
              Exchangeable Redeemable Preferred Shares and all Parity Shares,
              then the holders of all such shares shall share equally and
              ratably in such distribution of assets in proportion to the full
              liquidation preference, including, without duplication, all
              accrued and unpaid dividends, to which each is entitled.

                   (ii)    For the purposes of this paragraph (d), neither the
              sale, conveyance, exchange or transfer (for cash, shares of
              stock, securities or other consideration) of all or substantially
              all of the property or assets of the Corporation nor the
              consolidation or merger of the Corporation with or into one or
              more entities shall be deemed to be a liquidation, dissolution or
              winding-up of the affairs of the Corporation.

              (e)  REDEMPTION.

                   (i)     SPECIAL MANDATORY REDEMPTION.  If the merger of the
              Corporation and NEXTLINK Communications, L.L.C. pursuant to the
              Agreement and Plan of Merger dated January 23, 1997, between the
              Corporation and NEXTLINK Communications, L.L.C. has not been
              consummated on or prior to February 28, 1997, the Corporation
              shall redeem promptly from any source of funds legally available
              therefor, in the manner provided for in paragraph (e)(iii)
              hereof, all of the Senior Exchangeable Redeemable Preferred
              Shares, at a price equal to 100% of the liquidation preference
              thereof plus, without duplication, an amount in cash equal to all
              accumulated and unpaid dividends per share through and including
              the Redemption Date (the "Special Mandatory Redemption Price").

                   (ii)    MANDATORY REDEMPTION.  On February 1, 2009, the
              Corporation shall redeem, to the extent of funds legally
              available therefor, in the manner provided for in paragraph
              (e)(iii) hereof, all of the Senior Exchangeable Redeemable
              Preferred Shares then outstanding at a redemption price equal to
              100% of the  liquidation preference per share, plus, without
              duplication, an amount in cash equal to all accumulated and
              unpaid dividends per share (including an amount equal to a
              prorated dividend for the period from the Dividend Payment Date
              immediately prior to the Redemption Date to the Redemption Date)
              (the "Mandatory Redemption Price").

                   (iii)   PROCEDURES FOR REDEMPTION.  (A)  At least (x) five
              (5) days and not more than seven (7) days prior to the date fixed
              for any redemption of the Senior Exchangeable Preferred Shares
              pursuant to paragraph (e)(i) and (y) thirty (30) days and not
              more than sixty (60) days prior to the date fixed for any
              redemption of the Senior Exchangeable Redeemable Preferred Shares
              pursuant to paragraph (e)(ii) hereof, written notice (each, a
              "Redemption Notice") shall be given by first class mail, postage
              prepaid, to each Holder of record on the record date fixed for
              such redemption of the Senior Exchangeable Redeemable Preferred
              Shares at such Holder's address as it appears on the stock books
              of the Corporation, PROVIDED that no failure to give such notice
              nor any deficiency therein shall affect the validity of the
              procedure 

                                         -5-

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              for the redemption of any Senior Exchangeable Redeemable
              Preferred Shares to be redeemed except as to the Holder or
              Holders to whom the Corporation has failed to give said notice or
              except as to the Holder or Holders whose notice was defective. 
              The Redemption Notice shall state:

                   (1)  whether the redemption is pursuant to paragraph (e)(i)
              or (e)(ii) hereof;

                   (2)  the Special Mandatory Redemption Price or the Mandatory
              Redemption Price, as the case may be;

                   (3)  the Redemption Date;

                   (4)  that the Holder is to surrender to the Corporation, in
              the manner, at the place or places and at the price designated,
              his certificate or certificates representing the Senior
              Exchangeable Redeemable Preferred Shares to be redeemed; and

                   (5)  that dividends on the Senior Exchangeable Redeemable
              Preferred Shares to be redeemed shall cease to accumulate on such
              Redemption Date unless the Corporation defaults in the payment of
              the Special Mandatory Redemption Price or  the Mandatory
              Redemption Price, as the case may be.

                   (B)     Each Holder of Senior Exchangeable Redeemable
              Preferred Shares shall surrender the certificate or certificates
              representing such Senior Exchangeable Redeemable Preferred Shares
              to the Corporation, duly endorsed (or otherwise in proper form
              for transfer, as determined by the Corporation), in the manner
              and at the place designated in the Redemption Notice, and on the
              Redemption Date the full Special Mandatory Redemption Price or
              Mandatory Redemption Price, as the case may be, for such shares
              shall be payable in cash to the Person whose name appears on such
              certificate or certificates as the owner thereof, and each
              surrendered certificate shall be canceled and retired.

                   (C)     On and after the Redemption Date, unless the
              Corporation defaults in the payment in full of the applicable
              redemption price, dividends on the Senior Exchangeable Redeemable
              Preferred Shares called for redemption shall cease to accumulate
              on the Redemption Date, and all rights of the Holders of redeemed
              shares shall terminate with respect thereto on the Redemption
              Date, other than the right to receive the Special Mandatory
              Redemption Price or the Mandatory Redemption Price, as the case
              may be, without interest; PROVIDED, HOWEVER, that if a notice of
              redemption shall have been given as provided in paragraph
              (iii)(A) above and the funds necessary for redemption (including
              an amount in respect of all dividends that will accrue to the
              Redemption Date) shall have been irrevocably deposited in trust
              for the equal and ratable benefit for the Holders of the shares
              called for redemption, then, at the close of business on the day
              on which such funds are segregated and set apart, the Holders of
              the shares to be redeemed shall cease to be shareholders of the
              Corporation and shall be entitled only to receive the Special
              Redemption Price or the Mandatory Redemption Price, as the case
              may be, without interest.


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         (f)  VOTING RIGHTS.

              (i)  The Holders of Senior Exchangeable Redeemable Preferred
         Shares, except as otherwise required under Washington law or as set
         forth in paragraphs (ii), (iii) and (iv) below, shall not be entitled
         or permitted to vote on any matter required or permitted to be voted
         upon by the shareholders of the Corporation.

                   (ii)  (A)  So long as any Senior Exchangeable Redeemable
              Preferred Shares are outstanding, the Corporation shall not
              authorize or issue any Parity Shares (other than additional
              Senior Exchangeable Redeemable Preferred Shares issued as
              dividends on the Senior Exchangeable Redeemable Preferred Shares
              in accordance with the terms hereof and Exchange Shares) without
              the affirmative vote or consent of Holders of at least a majority
              of the then outstanding Senior Exchangeable Redeemable Preferred
              Shares, voting or consenting, as the case may be, as a separate
              class, given in person or by proxy, either in writing or by
              resolution adopted at an annual or special meeting, if after
              giving effect to the issuance of such Parity Shares, the
              aggregate liquidation preference of the outstanding Parity Shares
              (other than (i) the Senior Exchangeable Redeemable Preferred
              Shares originally issued on the Issue Date, (ii) additional
              Senior Exchangeable Redeemable Preferred Shares issued as
              dividends in accordance with the terms hereof on the Senior
              Exchangeable Redeemable Preferred Shares originally issued on the
              Issue Date and additional Senior Exchangeable Redeemable
              Preferred Shares issued as dividends on the Senior Exchangeable
              Redeemable Preferred Shares in accordance with the terms hereof
              and (iii) any Exchange Shares) would exceed the sum of (x) $50
              million and (y) the aggregate amount of gross proceeds received
              after the Issue Date and on or prior to the date of issuance of
              such Parity Shares from the issuance of Qualified Junior Shares.

                   (B)  So long as any Senior Exchangeable Redeemable Preferred
              Shares are outstanding, the Corporation shall not authorize any
              class of Senior Shares without the affirmative vote or consent of
              Holders of at least two-thirds of the outstanding Senior
              Exchangeable Redeemable Preferred Shares, voting or consenting,
              as the case may, as a separate class, given in person or by
              proxy, either in writing or by resolution adopted at an annual or
              special meeting.

                   (C)  So long as any Senior Exchangeable Redeemable Preferred
              Shares are outstanding, the Corporation shall not amend, alter or
              repeal any of the provisions of the Corporation's Articles of
              Incorporation (including this Certificate of Designations) or the
              by-laws of the Corporation so as to affect adversely the
              specified rights, powers, preferences, privileges or voting
              rights of the holders of Senior Exchangeable Redeemable Preferred
              Shares or reduce the time for any notice which the holders of the
              Senior Exchangeable Redeemable Preferred Shares may be entitled
              without the affirmative vote or consent of Holders of at least
              two-thirds of the issued and outstanding Senior Exchangeable
              Redeemable Preferred Shares, voting or consenting, as the case
              may be, as one class, given in person or by proxy, either in
              writing or by resolution adopted at an annual or special meeting.


                                         -7-

<PAGE>

                   (D)  Notwithstanding the foregoing, modifications and
              amendments of the terms of this Certificate of Designations
              contained in paragraphs (h) and (l) below may be made by the
              Corporation with the consent of the Holders of a majority of the
              outstanding Senior Exchangeable Redeemable Preferred Shares;
              PROVIDED, HOWEVER, that no such modification or amendment may,
              without the consent of the Holder of each outstanding Senior
              Exchangeable Redeemable Preferred Share affected thereby
              following the mailing of any Offer to Purchase and until the
              Expiration Date of that Offer to Purchase, modify any Offer to
              Purchase for the Senior Exchangeable Redeemable Preferred Shares
              required by paragraph (h) hereof in a manner materially adverse
              to the holders of outstanding Senior Exchangeable Redeemable
              Preferred Shares.  In addition, the holders of a majority of the
              outstanding Senior Exchangeable Redeemable Preferred Shares, on
              behalf of all holders of Senior Exchangeable Redeemable Preferred
              Shares, may waive compliance by the Corporation with the
              covenants described below in paragraphs (h) and (l) and may waive
              any past default under the Certificate of Designations, except a
              default arising from failure to purchase any Senior Exchangeable
              Redeemable Preferred Shares tendered pursuant to an Offer to
              Purchase.

                   (E)  Prior to the exchange of Senior Exchangeable Redeemable
              Preferred Shares for Exchange Notes, the Corporation shall not
              amend or modify the form of the Indenture for the Exchange Notes
              as it exists on the Issue Date (the "Indenture") (except as
              expressly provided therein in respect of amendments that may be
              made without the consent of Holders of Exchange Notes) without
              the affirmative vote or consent of Holders of at least a majority
              of the Senior Exchangeable Redeemable Preferred Shares then
              outstanding, voting or consenting, as the case may be, as one
              class, given in person or by proxy, either in writing or by
              resolution adopted at an annual or special meeting.

                   (F)  Except as set forth in paragraphs (f)(ii)(A),(f)(ii)(B)
              and (f)(ii)(C) above, (x) the creation, authorization or issuance
              of any shares of any Junior Shares, Parity Shares or Senior
              Shares or (y) the increase or decrease in the amount of
              authorized Capital Stock of any class, including Senior Shares or
              Parity Shares, shall not require the consent of Holders of Senior
              Exchangeable Redeemable Preferred Shares and shall not be deemed
              to affect adversely the rights, preferences, privileges or voting
              rights of Holders of Senior Exchangeable Redeemable Preferred
              Shares.

                   (G)  Notwithstanding the foregoing, at any time following a
              Covenant Amendment, the Corporation may, at its election and
              without the consent of any Holder of Senior Exchangeable
              Redeemable Preferred Shares, amend the Corporation's Articles of
              Incorporation (including this Certificate of Designations) to add
              provisions making the Senior Exchangeable Redeemable Preferred
              Shares redeemable at the option of the Corporation (subject to
              contractual and other restrictions with respect thereto and the
              legal availability of funds therefor) as follows:

                   (x)  at any time on or after February 1, 2002, in whole or
              in part, at the option of the Corporation, at the redemption
              prices (expressed in percentages of the liquidation 

                                         -8-

<PAGE>

              preference thereof) set forth below, plus, without duplication,
              an amount in cash equal to all accumulated and unpaid dividends
              to the Redemption Date (including an amount in cash equal to a
              prorated dividend for the period from the Dividend Payment Date
              immediately prior to the Redemption Date), if redeemed during the
              12-month period beginning February 1 of each of the years set
              forth below:

              YEAR                               PERCENTAGE
              ----                               ----------
              2002                               107.00%
              2003                               105.25
              2004                               103.50
              2005                               101.75
              2006 and thereafter                100.00

              In the event of redemption of only a portion of the then
              outstanding Senior Exchangeable Redeemable Preferred Shares, the
              Corporation shall effect such redemption on a PRO RATA basis.

                   (y)  prior to February 1, 2000, in part, in an amount not to
              exceed 35% of the initial aggregate liquidation preference of the
              Senior Exchangeable Redeemable Preferred Shares originally issued
              out of the net cash proceeds of one or more Qualifying Events
              (other than any Qualifying Event that results in a Change of
              Control) at a redemption price of 114.0% of the liquidation
              preference thereof plus, without duplication, an amount in cash
              equal to all accumulated and unpaid dividends to the redemption
              date (including an amount in cash equal to a prorated dividend
              for the period from the Dividend Payment Date immediately prior
              to the Redemption Date); PROVIDED, HOWEVER, that after any such
              redemption, the aggregate liquidation preference of the Senior
              Exchangeable Redeemable Preferred Shares outstanding must equal
              at least 65% of the Senior Exchangeable Redeemable Preferred
              Shares issued on the Issue Date.  Any such redemption shall occur
              on or prior to 60 days after the receipt by the Corporation of
              the proceeds of such Qualifying Event.

                   (iii)  Without the affirmative vote or consent of Holders of
              a majority of the issued and outstanding Senior Exchangeable
              Redeemable Preferred Shares, voting or consenting, as the case
              may be, as a separate class, given in person or by proxy, either
              in writing or by resolution adopted at an annual or special
              meeting, the Corporation shall not, in a single transaction or
              series of related transactions, consolidate with or merge with or
              into, or sell, assign, transfer, lease, convey or otherwise
              dispose of all or substantially all of its assets to, another
              Person or adopt a plan of liquidation unless:  (A) either (1) the
              Corporation is the surviving or continuing Person or (2) the
              Person (if other than the Corporation) formed by such
              consolidation or into which the Corporation is merged or the
              Person that acquires by conveyance, transfer or lease the
              properties and assets of the Corporation substantially as an
              entirety or in the case of a plan of liquidation, the Person to
              which assets of the Corporation have been transferred, shall be a
              corporation, limited liability Corporation, partnership or trust
              organized and existing under the laws of the United States or any
              State thereof or the District of Columbia; (B) the Senior
              Exchangeable Redeemable Preferred Shares shall be converted into
              or exchanged for and shall become 

                                         -9-

<PAGE>

              shares of Capital Stock of such successor, transferee or
              resulting Person, having in respect of such successor, transferee
              or resulting Person, having the same powers, preferences and
              relative, participating, optional or other special rights and the
              qualifications, limitations or restrictions thereon, that the
              Senior Exchangeable Redeemable Preferred Shares had immediately
              prior to such transaction; (C) immediately after giving pro forma
              effect to such transaction, no Voting Rights Triggering Event
              shall have occurred or be continuing; and (D) the Corporation has
              delivered to the Transfer Agent prior to the consummation of the
              proposed transaction an Officers' Certificate and an Opinion of
              Counsel, each stating that such consolidation, merger or transfer
              complies with the terms hereof and that all conditions precedent
              herein relating to such transaction have been satisfied.

                   For purposes of the foregoing, the transfer (by lease,
              assignment, sale or otherwise, in a single transaction or series
              of related transactions) of all or substantially all of the
              properties or assets of one or more Subsidiaries of the
              Corporation, the Capital Stock of which constitutes all or
              substantially all of the properties and assets of the
              Corporation, shall be deemed to be the transfer of all or
              substantially all of the properties and assets of the
              Corporation.

                           (iv)  (A)  If (1) dividends on the Senior
                   Exchangeable Redeemable Preferred Shares are in arrears and
                   unpaid (and, if after February 1, 2002, such dividends are
                   not paid in cash) for six or more Dividend Periods (whether
                   or not consecutive) (a "Dividend Default"); (2) the
                   Corporation fails to redeem all of the then outstanding
                   Senior Exchangeable Redeemable Preferred Shares on February
                   1, 2009 or fails otherwise to discharge any redemption
                   obligation with respect to the Senior Exchangeable
                   Redeemable Preferred Shares; (3) the Corporation fails to
                   make an Offer to Purchase (whether pursuant to the terms of
                   paragraph (h)(i) or otherwise) following a Change of Control
                   if such Offer to Purchase is required by paragraph (h)
                   hereof or fails to purchase Senior Exchangeable Redeemable
                   Preferred Shares from Holders who elect to have such shares
                   purchased pursuant to the Offer to Purchase; (4) the
                   Corporation breaches or violates one of the provisions set
                   forth in any paragraphs (f)(iii) or (1) hereof and the
                   breach or violation continues for a period of 30 days or
                   more after the Corporation receives notice thereof
                   specifying the default from the Holders of at least 25% of
                   the Senior Exchangeable Redeemable Preferred Shares then
                   outstanding, or (5) the Corporation fails to pay at the
                   final stated maturity (giving effect to any extensions
                   thereof) the principal amount of any Debt of the Corporation
                   or any Subsidiary of the Corporation, or the final stated
                   maturity of any such Debt is accelerated, if the aggregate
                   principal amount of such Debt, together with the aggregate
                   principal amount of any other such Debt in default for
                   failure to pay principal at the final stated maturity
                   (giving effect to any extensions thereof) or that has been
                   accelerated, aggregates $15,000,000 or more at any time, in
                   each case, after a 10-day period during which such default
                   shall not have been cured or such acceleration rescinded,
                   then in the case of any of clauses (1)-(5) the number of
                   directors constituting the Board of Directors shall be
                   adjusted by the number, if any, necessary to permit the
                   Holders of the Senior Exchangeable Redeemable Preferred
                   Shares, voting together with any outstanding Parity Shares
                   separately as a single class, to elect the lesser of two
                   directors and that number of directors constituting 25% of

                                         -10-

<PAGE>

                   the members of the Board of Directors.  Each such event
                   described in clauses (1), (2), (3), (4) and (5) is a "Voting
                   Rights Triggering Event."  Holders of a majority of the
                   issued and outstanding Senior Exchangeable Redeemable
                   Preferred Shares, voting together with any outstanding
                   Parity Shares separately as a single class, shall have the
                   exclusive right to elect the lesser of two directors and
                   that number of directors constituting 25% of the members of
                   the Board of Directors at a meeting therefor called upon
                   occurrence of such Voting Rights Triggering Event, and at
                   every subsequent meeting at which the terms of office of the
                   directors so elected (other than as described in (f)(iv)(B)
                   below).  The voting rights provided herein shall be the
                   exclusive remedy at law or in equity of the holders of the
                   Senior Exchangeable Redeemable Preferred Shares for any
                   Voting Rights Triggering Event.

                           (B)    The right of the Holders of Senior
                   Exchangeable Redeemable Preferred Shares to elect members of
                   the Board of Directors as set forth in subparagraph
                   (f)(iv)(A) above shall continue until such time as (x) in
                   the event such right arises due to a Dividend Default, all
                   accumulated dividends that are in arrears on the Senior
                   Exchangeable Redeemable Preferred Shares are paid in full
                   (and, in the case of dividends payable after February 1,
                   2002, paid in cash) and (y) in all other cases, the failure,
                   breach or default giving rise to such Voting Rights
                   Triggering Event is remedied or waived by the holders of at
                   least a majority of the Senior Exchangeable Redeemable
                   Preferred Shares then outstanding, at which time (1) the
                   special right of the Holders of Senior Exchangeable
                   Redeemable Preferred Shares so to vote for the election of
                   directors and (2) the term of office of the directors
                   elected by the Holders of the Senior Exchangeable Redeemable
                   Preferred Shares shall each terminate and the directors
                   elected by the holders of Voting Stock other than the Senior
                   Exchangeable Redeemable Preferred Shares shall constitute
                   the entire Board of Directors.  At any time after voting
                   power to elect directors shall have become vested and be
                   continuing in the Holders of Senior Exchangeable Redeemable
                   Preferred Shares pursuant to paragraph (f)(iv)(A) hereof, or
                   if vacancies shall exist in the offices of directors elected
                   by the Holders of Senior Exchangeable Redeemable Preferred
                   Shares, a proper officer of the Corporation may, and upon
                   the written request of the Holders of record of at least
                   twenty-five percent (25%) of the Senior Exchangeable
                   Redeemable Preferred Shares then outstanding addressed to
                   the Secretary of the Corporation shall, call a special
                   meeting of the Holders of Senior Exchangeable Redeemable
                   Preferred Shares, for the purpose of electing the directors
                   which such Holders are entitled to elect.  If such meeting
                   shall not be called by a proper officer of the Corporation
                   within twenty (20) days after personal service of said
                   written request upon the Secretary of the Corporation, or
                   within twenty (20) days after mailing the same within the
                   United States by certified mail, addressed to the Secretary
                   of the Corporation at its principal executive offices, then
                   the Holders of record of at least twenty-five percent (25%)
                   of the outstanding Senior Exchangeable Redeemable Preferred
                   Shares may designate in writing one of their number to call
                   such meeting at the expense of the Corporation, and such
                   meeting may be called by the Person so designated upon the
                   notice required for the annual meetings of shareholders of
                   the Corporation and shall be held at the place for holding
                   the annual meetings of shareholders.  Any Holder of Senior

                                         -11-

<PAGE>

                   Exchangeable Redeemable Preferred Shares so designated shall
                   have, and the Corporation shall provide, access to the lists
                   of shareholders to be called pursuant to the provisions
                   hereof.

                           (C)    At any meeting held for the purpose of
                   electing directors at which the Holders of Senior
                   Exchangeable Redeemable Preferred Shares voting together
                   with any outstanding shares of Parity Shares as a separate
                   class shall have the right as described herein to elect
                   directors, the presence in person or by proxy of the Holders
                   of at least a majority of the then outstanding Senior
                   Exchangeable Redeemable Preferred Shares and Parity Shares
                   shall be required to constitute a quorum of such Senior
                   Exchangeable Redeemable Preferred Shares and Parity Shares.

                           (D)    Any vacancy occurring in the office of a
                   director elected by the Holders of Senior Exchangeable
                   Redeemable Preferred Shares and Parity Shares may be filled
                   by the remaining directors elected by the Holders of Senior
                   Exchangeable Redeemable Preferred Shares and Parity Shares
                   unless and until such vacancy shall be filled by the Holders
                   of Senior Exchangeable Redeemable Preferred Shares and
                   Parity Shares.

                           (v)    In any case in which the Holders of Senior
                   Exchangeable Redeemable Preferred Shares shall be entitled
                   to vote pursuant to this paragraph (f) or pursuant to
                   Washington law, each Holder of Senior Exchangeable
                   Redeemable Preferred Shares entitled to vote with respect to
                   such matter shall be entitled to one vote for each share of
                   Senior Exchangeable Redeemable Preferred Shares held.

         (g)  EXCHANGE.

              (i)  REQUIREMENTS.  The outstanding Senior Exchangeable
         Redeemable Preferred Shares are exchangeable as a whole but not in
         part, at the option of the Corporation at any time on any Dividend
         Payment Date for the Corporation's 14% Senior Subordinated Notes due
         2009 (the "Exchange Notes") to be substantially in the form set forth
         in the Indenture, a copy of which is on file with the secretary of the
         Corporation and the Transfer Agent, PROVIDED that any such exchange
         may only be made if on or prior to the date of such exchange (A) the
         Corporation has paid all accumulated dividends on the Senior
         Exchangeable Redeemable Preferred Shares (including the dividends
         payable on the date of exchange) and there shall be no contractual
         impediment to such exchange and (B) immediately after giving effect to
         such exchange, no Default or Event of Default (as defined in the
         Indenture) would exist under the Indenture and no default or event of
         default would exist under the Existing Indenture.  The exchange rate
         shall be $1.00 principal amount of Exchange Notes for each $1.00 of
         the aggregate liquidation preference of Senior Exchangeable Redeemable
         Preferred Shares, including, to the extent necessary, Exchange Notes
         in principal amounts less than $1,000.

                   (ii)  PROCEDURE FOR EXCHANGE.  (A)  At least thirty (30)
              days and not more than sixty (60) days prior to the date fixed
              for exchange, written notice (the "Exchange Notice") shall be
              given by first class mail, postage prepaid, to each Holder of
              record on the record date fixed for such exchange of the Senior
              Exchangeable Redeemable 

                                         -12-

<PAGE>

         Preferred Shares at such Holder's address as the same appears on the
         share books of the Corporation, PROVIDED that no failure to give such
         notice nor any deficiency therein shall affect the validity of the
         procedure for the exchange of any Senior Exchangeable Redeemable
         Preferred Shares to be exchanged except as to the Holder or Holders to
         whom the Corporation has failed to give said notice or except as to
         the Holder or Holders whose notice was defective.  The Exchange Notice
         shall state:

              (1)  the Exchange Date;

              (2)  that the Holder is to surrender to the Corporation, in the
         manner and at the place or places designated, his certificate or
         certificates representing the Senior Exchangeable Redeemable Preferred
         Shares to be exchanged;

              (3)  that dividends on the Senior Exchangeable Redeemable
         Preferred Shares to be exchanged shall cease to accrue on such
         Exchange Date whether or not certificates for Senior Exchangeable
         Redeemable Preferred Shares are surrendered for exchange on such
         Exchange Date unless the Corporation shall default in the delivery of
         Exchange Notes; and

              (4)  that interest on the Exchange Notes shall accrue from the
         Exchange Date whether or not certificates for Senior Exchangeable
         Redeemable Preferred Shares are surrendered for exchange on such
         Exchange Date.

              (B)  On or before the Exchange Date, each Holder of Senior
         Exchangeable Redeemable Preferred Shares shall surrender the
         certificate or certificates representing such Senior Exchangeable
         Redeemable Preferred Shares, in the manner and at the place designated
         in the Exchange Notice.  The Corporation shall cause the Exchange
         Notes to be executed on the Exchange Date and, upon surrender in
         accordance with the Exchange Notice of the certificates for any Senior
         Exchangeable Redeemable Preferred Shares so exchanged, duly endorsed
         (or otherwise in proper form for transfer, as determined by the
         Corporation), such shares shall be exchanged by the Corporation into
         Exchange Notes.  The Corporation shall pay interest on the Exchange
         Notes at the rate and on the dates specified therein from the Exchange
         Date.

              (C)  If notice has been mailed as aforesaid, and if before the
         Exchange Date specified in such notice (1) the Indenture shall have
         been duly executed and delivered by the Corporation and the trustee
         thereunder and (2) all Exchange Notes necessary for such exchange
         shall have been duly executed by the Corporation and delivered to the
         trustee under the Indenture with irrevocable instructions to
         authenticate the Exchange Notes necessary for such exchange, then the
         rights of the Holders of Senior Exchangeable Redeemable Preferred
         Shares so exchanged as shareholders of the Corporation shall cease
         (except the right to receive Exchange Notes, an amount in cash equal
         to the amount of accrued and unpaid dividends to the Exchange Date),
         and the Person or Persons entitled to receive the Exchange Notes
         issuable upon exchange shall be treated for all purposes as the
         registered Holder or Holders of such Exchange Notes as of the Exchange
         Date.


                                         -13-

<PAGE>

              (iii)  NO EXCHANGE IN CERTAIN CASES.  Notwithstanding the
         foregoing provisions of this paragraph (g), the Corporation shall not
         be entitled to exchange the Senior Exchangeable Redeemable Preferred
         Shares for Exchange Notes if such exchange, or any term or provision
         of the Indenture or the Exchange Notes, or the performance of the
         Corporation's obligations under the Indenture or the Exchange Notes,
         shall materially violate or conflict with any applicable law or if, at
         the time of such exchange, the Corporation is insolvent or if it would
         be rendered insolvent by such exchange.

         (h)  CHANGE OF CONTROL.

              (i)  Within 30 days following a Change of Control (the date of
         such occurrence being the "Change of Control Date"), the Corporation
         shall notify the Holders of the Senior Exchangeable Redeemable
         Preferred Shares in writing of such occurrence and shall make an Offer
         to Purchase all of the then outstanding Senior Exchangeable Redeemable
         Preferred Shares at a purchase price of 101% of the  liquidation
         preference thereof plus, without duplication, an amount in cash equal
         to all accumulated and unpaid dividends per share (including an amount
         in cash equal to a prorated dividend for the period from the Dividend
         Payment Date immediately prior to the Payment Date to the Payment
         Date).

              (ii)  The Corporation will comply with any securities laws and
         regulations, to the extent such laws and regulations are applicable to
         the repurchase of the Senior Exchangeable Redeemable Preferred Shares
         in connection with an Offer to Purchase.

              (iii)  On the Payment Date the Corporation shall (A) accept for
         payment the Senior Exchangeable Redeemable Preferred Shares validly
         tendered pursuant to the Offer to Purchase, (B) pay to the Holders of
         shares so accepted the purchase price therefor in cash and (C) cancel
         and retire each surrendered certificate.  Unless the Corporation
         defaults in the payment for the Senior Exchangeable Redeemable
         Preferred Shares tendered pursuant to the Offer to Purchase, dividends
         will cease to accrue with respect to the Senior Exchangeable
         Redeemable Preferred Shares tendered and all rights of Holders of such
         tendered shares will terminate, except for the right to receive
         payment therefor, on the Payment Date.

              (v)  Notwithstanding the foregoing, the Corporation will not
         repurchase or redeem any Senior Exchangeable Redeemable Preferred
         Shares pursuant to the provisions of this paragraph prior to the
         Corporation's repurchase of such Senior Notes as are required to be
         repurchased pursuant to the Existing Indenture.

         (i)  CONVERSION OR EXCHANGE.

              The Holders of Senior Exchangeable Redeemable Preferred Shares
         shall not have any rights hereunder to convert such shares into or
         exchange such shares for shares of any other class or classes or of
         any other series of any class or classes of Capital Stock of the
         Corporation.

                                         -14-

<PAGE>

         (j)  REISSUANCE OF SENIOR EXCHANGEABLE REDEEMABLE PREFERRED SHARES.

              Senior Exchangeable Redeemable Preferred Shares that have been
         issued and reacquired in any manner, including shares purchased or
         redeemed or exchanged, shall (upon compliance with any applicable
         provisions of the laws of Washington) have the status of authorized
         and unissued shares of Preferred Shares undesignated as to series and
         may be redesignated and reissued as part of any series of Preferred
         Shares, other than Senior Exchangeable Redeemable Preferred Shares.

         (k)  BUSINESS DAY.

              If any payment, redemption or exchange shall be required by the
         terms hereof to be made on a day that is not a Business Day, such
         payment, redemption or exchange shall be made on the immediately
         succeeding Business Day.

         (l)  CERTAIN ADDITIONAL PROVISIONS.

              (i)  LIMITATION ON CONSOLIDATED DEBT.  The Corporation may not,
         and may not permit any Restricted Subsidiary of the Corporation to,
         Incur any Debt unless either (a) the ratio of (i) the aggregate
         consolidated principal amount of Debt of the Corporation outstanding
         as of the most recent available quarterly or annual balance sheet,
         after giving pro forma effect to the Incurrence of such Debt and any
         other Debt Incurred since such balance sheet date and the receipt and
         application of the proceeds thereof to (ii) Consolidated Cash Flow
         Available for Fixed Charges for the four full fiscal quarters next
         preceding the Incurrence of such Debt for which consolidated financial
         statements are available, determined on a pro forma basis as if any
         such Debt had been Incurred and the proceeds thereof had been applied
         at the beginning of such four fiscal quarters, would be less than 5.5
         to 1 for such four-quarter periods ending on or prior to December 31,
         1999 and 5.0 to 1 for such periods ending thereafter, or (b) the
         Corporation's Consolidated Capital Ratio as of the most recent
         available quarterly or annual balance sheet, after giving pro forma
         effect to the Incurrence of such Debt and any other Debt Incurred
         since such balance sheet date and the receipt and application of the
         proceeds thereof, is less than 2.0 to 1.

              Notwithstanding the foregoing limitation, the Corporation and any
         Restricted Subsidiary may Incur the following:

              (A)  Debt under any one or more Bank Credit Agreements or Vendor
         Financing Facilities in an aggregate principal amount at any one time
         not to exceed $125 million, and any renewal, extension, refinancing or
         refunding thereof in an amount which, together with any principal
         amount remaining outstanding or available under all Bank Credit
         Agreements and Vendor Financing Facilities of the Corporation and its
         Restricted Subsidiaries, plus the amount of any premium required to be
         paid in connection with such refinancing pursuant to the terms of any
         Bank Credit Agreement so refinanced plus the amount of expenses
         incurred in connection with such refinancing, does not exceed the
         aggregate principal amount outstanding or available 

                                         -15-

<PAGE>

         under all such Bank Credit Agreements and Vendor Financing Facilities
         of the Corporation and its Restricted Subsidiaries immediately prior
         to such renewal, extension, refinancing or refunding; 

              (B)  Purchase Money Debt Incurred to finance the construction,
         acquisition or improvement of Telecommunications Assets, PROVIDED that
         the net proceeds of such Purchase Money Debt do not exceed 80% of the
         cost of construction, acquisition or improvement price of the
         applicable Telecommunications Assets;

              (C)  Debt owed by the Corporation to any Wholly-Owned Restricted
         Subsidiary of the Corporation or Debt owed by a Restricted Subsidiary
         of the Corporation to the Corporation or another Wholly-Owned
         Restricted Subsidiary of the Corporation; PROVIDED, HOWEVER, that upon
         either (x) the transfer or other disposition by such Wholly-Owned
         Restricted Subsidiary or the Corporation of any Debt so permitted to a
         Person other than the Corporation or another Wholly-Owned Restricted
         Subsidiary of the Corporation or (y) the issuance (other than
         directors' qualifying shares), sale, lease, transfer or other
         disposition of shares of Capital Stock (including by consolidation or
         merger) of such Wholly-Owned Restricted Subsidiary to a Person other
         than the Corporation or another such Wholly-Owned Restricted
         Subsidiary, the provisions of this clause (C) shall no longer be
         applicable to such Debt and such Debt shall be deemed to have been
         Incurred at the time of such transfer or other disposition;

              (D)  Debt Incurred to renew, extend, refinance or refund (each, a
         "refinancing") Debt (1) referred to in clause (F) below or (2)
         Incurred pursuant to the preceding paragraph or clause (B) of this
         paragraph in an aggregate principal amount not to exceed the aggregate
         principal amount of and accrued interest on the Debt so refinanced
         plus the amount of any premium required to be paid in connection with
         such refinancing pursuant to the terms of the Debt so refinanced or
         the amount of any premium reasonably determined by the Corporation as
         necessary to accomplish such refinancing by means of a tender offer or
         privately negotiated repurchase, plus the amount of expenses of the
         Corporation incurred in connection with such refinancing; PROVIDED,
         HOWEVER, that, the refinancing Debt by its terms, or by the terms of
         any agreement or instrument pursuant to which such Debt is issued, (x)
         does not provide for payments of principal of such Debt at the stated
         maturity thereof or by way of a sinking fund applicable thereto or by
         way of any mandatory redemption, defeasance, retirement or repurchase
         thereof by the Corporation (including any redemption, retirement or
         repurchase which is contingent upon events or circumstances, but
         excluding any retirement required by virtue of acceleration of such
         Debt upon any event of default thereunder), in each case prior to the
         time the same are required by the terms of the Debt being refinanced
         and (y) does not permit redemption or other retirement (including
         pursuant to an offer to purchase made by the Corporation) of such Debt
         at the option of the holder thereof prior to the final stated maturity
         of the Debt being refinanced, other than a redemption or other
         retirement at the option of the holder of such Debt (including
         pursuant to an offer to purchase made by the Corporation) which is
         conditioned upon a change substantially similar to the provisions of
         paragraph (h) above or which is pursuant to provisions substantially

                                         -16-

<PAGE>

         similar to the provisions of Section 1013 of the Existing Indenture as
         in effect on the Issue Date (whether or not the Existing Notes are
         outstanding or the Existing Indenture is in effect);

              (E)  Debt consisting of Permitted Interest Rate and Currency
         Protection Agreements; 

              (F)  Debt outstanding at the Issue Date; 

              (G)  Subordinated Debt invested by (a) a group of employees of
         the Corporation, which includes the Chief Executive Officer of the
         Corporation, who own, directly or indirectly, through an employee
         stock ownership plan or arrangement, shares of the Corporation's
         Capital Stock or (b) any other Person that controls the Corporation
         (i) on the Issue Date or (ii) after a Change of Control, PROVIDED that
         the Corporation is not in default with respect to its obligations
         under paragraph (h) above; 

              (H)  Debt consisting of performance and other similar bonds and
         reimbursement obligations Incurred in the ordinary course of business
         securing the performance of contractual, franchise or license
         obligations of the Corporation or a Restricted Subsidiary, or in
         respect of a letter of credit obtained to secure such performance; and

              (I)  Debt not otherwise permitted to be Incurred pursuant to
         clauses (A) through (H) above, which, together with any other
         outstanding Debt Incurred pursuant to this clause (I), has an
         aggregate principal amount (or, in the case of Debt issued at a
         discount, an accreted amount (determined in accordance with generally
         accepted accounting principles) at the time of Incurrence) not in
         excess of $10 million at any time outstanding. 

              For purposes of determining compliance with this paragraph
    (l)(i), in the event that an item of Debt meets the criteria of more than
    one of the types of Debt the Corporation is permitted to Incur pursuant to
    the foregoing clauses (A) through (I), the Corporation shall have the
    right, in its sole discretion, to classify such item of Debt and shall only
    be required to include the amount and type of such Debt under the clause
    permitting the Debt as so classified.  For purposes of determining any
    particular amount of Debt under this covenant, Guarantees or Liens with
    respect to letters of credit supporting Debt otherwise included in the
    determination of a particular amount shall not be included.

              (ii)  REPORTS.  So long as any Senior Exchangeable Redeemable
    Preferred Shares are outstanding, the Corporation will provide to the
    holders of Senior Exchangeable Redeemable Preferred Shares, within 15 days
    after it files them with the Securities and Exchange Commission (or any
    successor agency performing similar functions), copies of the annual
    reports and of the information, documents and other reports (or copies of
    such portions of any of the foregoing as the Commission may by rules and
    regulation prescribe) which the Corporation files with the Commission
    pursuant to Section 13 or 15(d) of the Exchange Act.  In the event that the
    Corporation is no longer required to furnish such reports to its
    securityholders pursuant to the Exchange Act, the Corporation will cause
    its 

                                         -17-

<PAGE>

    consolidated financial statements, comparable to those which would have
    been required to appear in annual or quarterly reports, to be delivered to
    the Holders of Senior Exchangeable Redeemable Preferred Shares.

    (m)  DEFINITIONS.

         As used in this Certificate of Designations, the following terms shall
    have the following meanings (with terms defined in the singular having
    comparable meanings when used in the plural and VICE VERSA), unless the
    context otherwise requires.  Any reference in any of the following terms to
    any term in or provision of the Existing Indenture shall refer to such term
    or provision as in effect on the Issue Date and as may be amended in
    accordance with the terms of the Existing Indenture (whether or not the
    Existing Notes are outstanding or the Existing Indenture is in effect):

         "Acquired Debt" means, with respect to any specified Person, (i) Debt
    of any other Person existing at the time such Person merges with or into or
    consolidates with or becomes a Restricted Subsidiary of such specified
    Person and (ii) Debt secured by a Lien encumbering any asset acquired by
    such specified Person, which Debt was not Incurred in anticipation of, and
    was outstanding prior to, such merger, consolidation or acquisition.

         "Affiliate" of any specified Person means any other Person directly or
    indirectly controlling or controlled by or under direct or indirect common
    control with such specified Person. For the purposes of this definition,
    "control" when used with respect to any specified Person means the power to
    direct the management and policies of such Person, directly or indirectly,
    whether through the ownership of voting securities, by contract or
    otherwise; and the terms "controlling" and "controlled" have meanings
    correlative to the foregoing.

         "Asset Disposition" by any Person means any transfer, conveyance,
    sale, lease or other disposition by such Person or any of its Restricted
    Subsidiaries (including a consolidation or merger or other sale of any such
    Restricted Subsidiary with, into or to another Person in a transaction in
    which such Restricted Subsidiary ceases to be a Restricted Subsidiary of
    the specified Person, but excluding a disposition by a Restricted
    Subsidiary of such Person to such Person or a Wholly-Owned Restricted
    Subsidiary of such Person or by such Person to a Wholly-Owned Restricted
    Subsidiary of such Person) of (i) shares of Capital Stock or other
    ownership interests of a Restricted Subsidiary of such Person (other than
    as permitted by the provisions of Section 1008 of the Existing Indenture or
    pursuant to a transaction in compliance with Section 801 of the Existing
    Indenture), (ii) substantially all of the assets of such Person or any of
    its Restricted Subsidiaries representing a division or line of business
    (other than as part of a Permitted Investment (as defined in the Existing
    Indenture)) or (iii) other assets or rights of such Person or any of its
    Restricted Subsidiaries other than (A) in the ordinary course of business
    or (B) that constitutes a Restricted Payment (as defined in the Existing
    Indenture) which is permitted by the provisions of Section 1009 of the
    Existing Indenture; PROVIDED that a transaction described in clause (i),
    (ii) and (iii) shall constitute an Asset Disposition 

                                         -18-

<PAGE>

    only if the aggregate consideration for such transfer, conveyance, sale,
    lease or other disposition is equal to $5 million or more in any 12-month
    period.

         "Bank Credit Agreement" means any one or more credit agreements (which
    may include or consist of revolving credits) between the Corporation or any
    Restricted Subsidiary of the Corporation and one or more banks or other
    financial institutions providing financing for the business of the
    Corporation and its Restricted Subsidiaries.

         "Board of Directors" shall have the meaning ascribed to it in the
    first paragraph of this Resolution.

         "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
    Friday which is not a day on which banking institutions in The Borough of
    Manhattan, The City of New York, New York are authorized or obligated by
    law or executive order to close.

         "Capital Lease Obligation" of any Person means the obligation to pay
    rent or other payment amounts under a lease of (or other Debt arrangements
    conveying the right to use) real  or personal property of such Person which
    is required to be classified and accounted for as a capital lease or a
    liability on the face of a balance sheet of such Person in accordance with
    generally accepted accounting principles (a "Capital Lease"). The stated
    maturity of such obligation shall be the date of the last payment of rent
    or any other amount due under such lease prior to the first date upon which
    such lease may be terminated by the lessee without payment of a penalty.
    The principal amount of such obligation shall be the capitalized amount
    thereof that would appear on the face of a balance sheet of such Person in
    accordance with generally accepted accounting principles.

         "Capital Stock" of any Person means any and all shares, interests,
    participations or other equivalents (however designated) of corporate stock
    or other equity participations, including partnership interests, whether
    general or limited, of such Person.

         "Change of Control" will be deemed to have occurred at such time as
    either (a) any Person or any Persons acting together that would constitute
    a "group" (a "Group") for purposes of Section 13(d) of the Exchange Act, or
    any successor provision thereto (other than Eagle River, Mr. Craig O. McCaw
    and their respective Affiliates or an underwriter engaged in a firm
    commitment underwriting on behalf of the Corporation), shall beneficially
    own (within the meaning of Rule 13d-3 under the Exchange Act, or any
    successor provision thereto) more than 50% of the aggregate voting power of
    all classes of Voting Stock of the Corporation; (b) neither Mr. Craig O.
    McCaw nor any person designated by him to the Corporation as acting on his
    behalf shall be a director of the Corporation; or (c) during any period of
    two consecutive years, individuals who at the beginning of such period
    constituted the Board of Directors (together with any new directors whose
    election by the Board of Directors or whose nomination for election by the
    shareholders of the Corporation was proposed by a vote of a majority of the
    directors of the Corporation then still in office who were either directors
    at the beginning of such period or whose election or nomination for
    election was previously so approved) cease for any reason to constitute a
    majority of the Board of Directors then in office.


                                         -19-

<PAGE>

         "Change of Control Date" shall have the meaning ascribed to it in
    paragraph (h)(i) hereof.

         "Consolidated Capital Ratio" of any Person as of any date means the
    ratio of (i) the aggregate consolidated principal amount of Debt of such
    Person then outstanding to (ii) the aggregate consolidated Capital Stock
    (other than Disqualified Stock) and paid-in capital (other than in respect
    of Disqualified Stock) of such Person as of such date.

         "Consolidated Cash Flow Available for Fixed Charges" for any period
    means the Consolidated Net Income of the Corporation and its Restricted
    Subsidiaries for such period increased by the sum of (i) Consolidated
    Interest Expense of the Corporation and its Restricted Subsidiaries for
    such period, plus (ii) Consolidated Income Tax Expense of the Corporation
    and its Restricted Subsidiaries for such period, plus (iii) the
    consolidated depreciation and amortization expense included in the income
    statement of the Corporation and its Restricted Subsidiaries for such
    period, plus (iv) any non-cash expense related to the issuance to employees
    of the Corporation or any Restricted Subsidiary of the Corporation of
    options to purchase Capital Stock of the Corporation or such Restricted
    Subsidiary, plus (v) any charge related to any premium or penalty paid in
    connection with redeeming or retiring any Debt prior to its stated
    maturity; PROVIDED, HOWEVER, that there shall be excluded therefrom the
    Consolidated Cash Flow Available for Fixed Charges (if positive) of any
    Restricted Subsidiary of the Corporation (calculated separately for such
    Restricted Subsidiary in the same manner as provided above for the
    Corporation) that is subject to a restriction which prevents the payment of
    dividends or the making of distributions to the Corporation or another
    Restricted Subsidiary of the Corporation to the extent of such restriction.

         "Consolidated Income Tax Expense" for any period means the
    consolidated provision for income taxes of the Corporation and its
    Restricted Subsidiaries for such period calculated on a consolidated basis
    in accordance with generally accepted accounting principles.

         "Consolidated Interest Expense" means for any period the consolidated
    interest expense included in a consolidated income statement (excluding
    interest income) of the Corporation and its Restricted Subsidiaries for
    such period calculated on a consolidated basis in accordance with generally
    accepted accounting principles, including without limitation or duplication
    (or, to the extent not so included, with the addition of), (i) the
    amortization of Debt discounts; (ii) any payments or fees with respect to
    letters of credit, bankers' acceptances or similar facilities; (iii) fees
    with respect to interest rate swap or similar agreements or foreign
    currency hedge, exchange or similar agreements; (iv) Preferred Stock
    dividends of the Corporation and its Restricted Subsidiaries (other than
    dividends paid in shares of Preferred Stock that is not Disqualified Stock)
    declared and paid or payable; (v) accrued Disqualified Stock dividends of
    the Corporation and its Restricted Subsidiaries, whether or not declared or
    paid; (vi) interest on Debt guaranteed by the Corporation and its
    Restricted Subsidiaries; and (vii) the portion of any Capital Lease
    Obligation paid during such period that is allocable to interest expense. 


                                         -20-

<PAGE>
 
         "Consolidated Net Income" for any period means the consolidated net
    income (or loss) of the Corporation and its Restricted Subsidiaries for
    such period determined on a consolidated basis in accordance with generally
    accepted accounting principles; PROVIDED that there shall be excluded
    therefrom (i) the net income (or loss) of any Person acquired by the
    Corporation or a Restricted Subsidiary of the Corporation in a
    pooling-of-interests transaction for any period prior to the date of such
    transaction, (ii) the net income (or loss) of any Person that is not a
    Restricted Subsidiary of the Corporation except to the extent of the amount
    of dividends or other distributions actually paid to the Corporation or a
    Restricted Subsidiary of the Corporation by such Person during such period,
    (iii)  gains or losses on Asset Dispositions by the Corporation or its
    Restricted Subsidiaries, (iv) all extraordinary gains and extraordinary
    losses, (v) the cumulative effect of changes in accounting principles, (vi)
    non-cash gains or losses resulting from fluctuations in currency exchange
    rates, (vii) any non-cash gain or loss realized on the termination of any
    employee pension benefit plan and (viii) the tax effect of any of the items
    described in clauses (i) through (vii) above.

         "corporation" means a corporation, association, company, limited
    liability company, joint-stock company or business trust.

         "Covenant Amendment" means either (i) the defeasance, extinguishment
    or amendment of certain covenants of the Existing Indenture that would
    cause the Senior Exchangeable Redeemable Preferred Shares to be deemed
    Disqualified Stock (under the Existing Indenture) if the provisions of
    paragraph (f)(G)(x) and (y) were a part of this Certificate of
    Designations, and include, but are not limited to, the definition of
    Disqualified Stock (under the Existing Indenture) or (ii) defeasance or
    extinguishment of the Existing Indenture in its entirety.

         "Debt" means (without duplication), with respect to any Person,
    whether recourse is to all or a portion of the assets of such Person and
    whether or not contingent, (i) every obligation of such Person for money
    borrowed, (ii) every obligation of such Person evidenced by bonds,
    debentures, notes or other similar instruments, including any such
    obligations Incurred in connection with the acquisition of property, assets
    or businesses, (iii) every reimbursement obligation of such Person with
    respect to letters of credit, bankers' acceptances or similar facilities
    issued for the account of such Person, (iv) every obligation of such Person
    issued or assumed as the deferred purchase price of property or services
    (including securities repurchase agreements but excluding trade accounts
    payable or accrued liabilities arising in the ordinary course of business
    which are not overdue or which are being contested in good faith), (v)
    every Capital Lease Obligation of such Person, (vi) all Receivables Sales
    of such Person, together with any obligation of such Person to pay any
    discount, interest, fees, indemnities, penalties, recourse, expenses or
    other amounts in connection therewith, (vii) all obligations to redeem
    Disqualified Stock issued by such Person, (viii) every obligation under
    Interest Rate and Currency Protection Agreements of such Person and (ix)
    every obligation of the type referred to in clauses (i) through (viii) of
    another Person and all dividends of another Person the payment of which, in
    either case, such Person has Guaranteed. The "amount" or "principal amount"
    of Debt at any time of determination as used herein represented by (a) any
    Debt issued at a price 

                                         -21-

<PAGE>

    that is less than the principal amount at maturity thereof, shall be the
    amount of the liability in respect thereof determined in accordance with
    generally accepted accounting principles, (b) any Receivables Sale, shall
    be the amount of the unrecovered capital or principal investment of the
    purchaser (other than the Corporation or a Wholly-Owned Restricted
    Subsidiary of the Corporation) thereof, excluding amounts representative of
    yield or interest earned on such investment, (c) any Disqualified Stock,
    shall be the maximum fixed redemption or repurchase price in respect
    thereof, (d) any Capital Lease Obligation, shall be determined in
    accordance with the definition thereof, or (e) any Permitted Interest Rate
    or Currency Protection Agreement, shall be zero.  In no event shall Debt
    include any liability for taxes.

         "Disqualified Stock" of any Person means any Capital Stock of such
    Person which, by its terms (or by the terms of any security into which it
    is convertible or for which it is exchangeable), or upon the happening of
    any event, matures or is mandatorily redeemable, pursuant to a sinking fund
    obligation or otherwise, or is redeemable at the option of the holder
    thereof, in whole or in part, on or prior to February 1, 2009; PROVIDED,
    HOWEVER, that any Preferred Stock which would not constitute Disqualified
    Stock but for provisions thereof giving holders thereof the right to
    require the Corporation to repurchase or redeem such Preferred Stock upon
    the occurrence of a Change of Control occurring prior to February 1, 2009
    shall not constitute Disqualified Stock if the change of control provisions
    applicable to such Preferred Stock are no more favorable to the holders of
    such Preferred Stock than the provisions contained in paragraph (h) hereof
    and such Preferred Stock specifically provides that the Corporation will
    not repurchase or redeem any such stock pursuant to such provisions prior
    to the Corporation's repurchase of such Senior Exchangeable Redeemable
    Preferred Shares as are required to be purchased pursuant to paragraph (h)
    hereof.

         "Dividend Payment Date" means February 1, May 1, August 1 and November
    1, of each year.

         "Dividend Period" means the Initial Dividend Period and, thereafter,
    each Quarterly Dividend Period.

         "Dividend Record Date" means January 15, April 15, July 15 and October
    15 of each year.

         "Eagle River" means Eagle River Investments, L.L.C., a limited
    liability company formed under the laws of the State of Washington.

         "Exchange Act" means the Securities Exchange Act of 1934, and the
    rules and regulations promulgated thereunder.

         "Exchange Date" means the date on which Senior Exchangeable Redeemable
    Preferred Shares are exchanged by the Corporation for Exchange Notes.

         "Exchange Notes" shall have the meaning ascribed to it in paragraph
    (g)(i) hereof.


                                         -22-

<PAGE>

         "Exchange Notice" shall have the meaning ascribed to it in paragraph
    (g)(ii) hereof.

         "Exchange Offer" means the exchange offer contemplated by the
    Registration Rights Agreement.

         "Exchange Shares" means any Senior Exchangeable Redeemable Preferred
    Shares issued in exchange for an Original Share or Original Shares pursuant
    to the Exchange Offer or otherwise registered under the Securities Act and
    any Senior Exchangeable Redeemable Preferred Shares with respect to which
    the next preceding Predecessor Shares of such Senior Exchangeable
    Redeemable Preferred Shares was an Exchange Share, and their Successor
    Shares.

         "Existing Notes" means the Corporation's $350,000,000 aggregate
    principal amount of 12 1/2% Senior Notes due April 15, 2006, as the same
    may be modified or amended from time to time.

         "Existing Indenture" means the Indenture governing the Existing Notes
    as such Indenture may be amended or supplemented from time to time in
    accordance with the terms thereof.

         "Guarantee" by any Person means any obligation, contingent or
    otherwise, of such Person guaranteeing, or having the economic effect of
    guaranteeing, any Debt of any other Person (the "primary obligor") in any
    manner, whether directly or indirectly, and including, without limitation,
    any obligation of such Person, (i) to purchase or pay (or advance or supply
    funds for the purchase or payment of) such Debt or to purchase (or to
    advance or supply funds for the purchase of) any security for the payment
    of such Debt, (ii) to purchase property, securities or services for the
    purpose of assuring the holder of such Debt of the payment of such Debt, or
    (iii) to maintain working capital, equity capital or other financial
    statement condition or liquidity of the primary obligor so as to enable the
    primary obligor to pay such Debt (and "Guaranteed", "Guaranteeing" and
    "Guarantor" shall have meanings correlative to the foregoing); PROVIDED,
    HOWEVER, that the Guarantee by any Person shall not include endorsements by
    such Person for collection or deposit, in either case, in the ordinary
    course of business; and PROVIDED, FURTHER, that the incurrence by a
    Restricted Subsidiary of the Corporation of a lien permitted under clause
    (iv) of the second paragraph of Section 1011 of the Existing Indenture
    shall not be deemed to constitute a Guarantee by such Restricted Subsidiary
    of any Purchase Money Debt of the Corporation secured thereby.

         "Holder" means a holder of Senior Exchangeable Redeemable Preferred
    Shares as reflected in the share books of the Corporation.

         "Incur" means, with respect to any Debt or other obligation of any
    Person, to create, issue, incur (by conversion, exchange or otherwise),
    assume, Guarantee or otherwise become liable in respect of such Debt or
    other obligation including by acquisition of Subsidiaries or the recording,
    as required pursuant to generally accepted 

                                         -24-

<PAGE>

    accounting principles or otherwise, of any such Debt or other obligation on
    the balance sheet of such Person (and "Incurrence", "Incurred",
    "Incurrable" and "Incurring" shall have meanings correlative to the
    foregoing); PROVIDED, HOWEVER, that a change in generally accepted
    accounting principles that results in an obligation of such Person that
    exists at such time becoming Debt shall not be deemed an Incurrence of such
    Debt and that neither the accrual of interest nor the accretion of original
    issue discount shall be deemed an Incurrence of Debt; PROVIDED, FURTHER,
    HOWEVER, that the Corporation may elect to treat all or any portion of
    revolving credit debt of the Corporation or a Subsidiary as being incurred
    from and after any date beginning the date the revolving credit commitment
    is extended to the Corporation or a Subsidiary, by furnishing notice
    thereof to the Transfer Agent, and any borrowings or reborrowings by the
    Corporation or a Subsidiary under such commitment up to the amount of such
    commitment designated by the Corporation as Incurred shall not be deemed to
    be new Incurrences of Debt by the Corporation or such Subsidiary.

         "Initial Dividend Period" means the dividend period commencing on the
    Issue Date and ending on the first Dividend Payment Date to occur
    thereafter.

         "Initial Purchaser" means Merrill Lynch, Pierce, Fenner & Smith
    Incorporated or Toronto Dominion Securities (USA) Inc.

         "Interest Rate or Currency Protection Agreement" of any Person means
    any forward contract, futures contract, swap, option or other financial
    agreement or arrangement (including, without limitation, caps, floors,
    collars and similar agreements) relating to, or the value of which is
    dependent upon, interest rates or currency exchange rates or indices.

         "Investment" by any Person means any direct or indirect loan, advance
    or other extension of credit or capital contribution (by means of transfers
    of cash or other property to others or payments for property or services
    for the account or use of others, or otherwise) to, or purchase or
    acquisition of Capital Stock, bonds, notes, debentures or other securities
    or evidence of Debt issued by, any other Person, including any payment on a
    Guarantee of any obligation of such other Person, but excluding any loan,
    advance or extension of credit to an employee of the Corporation or any of
    its Restricted Subsidiaries in the ordinary course of business, accounts
    receivable and other commercially reasonable extensions of trade credit.

         "Issue Date" means the date of original issuance of the Senior
    Exchangeable Redeemable Preferred Shares.

         "Joint Venture" means a corporation, partnership or other entity
    engaged in one or more Telecommunications Businesses as to which the
    Corporation (directly or through one or more Restricted Subsidiaries)
    exercises managerial control and in which the Corporation owns (i) a 50% or
    greater interest, or (ii) a 40% or greater interest, together with options
    or other contractual rights, exercisable not more than seven years after
    the 

                                         -25-

<PAGE>

    Corporation's initial Investment in such Joint Venture, to increase its
    interest to not less than 50%.

         "Junior Shares" shall have the meaning ascribed to it in paragraph (b)
    hereof.

         "Lien" means, with respect to any property or assets, any mortgage or
    deed of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
    arrangement, security interest, lien, charge, easement (other than any
    easement not materially impairing usefulness or marketability),
    encumbrance, preference, priority or other security agreement or
    preferential arrangement of any kind or nature whatsoever on or with
    respect to such property or assets (including, without limitation, any
    conditional sale or other title retention agreement having substantially
    the same economic effect as any of the foregoing).

         "Mandatory Redemption Price" shall have the meaning ascribed to it in
    paragraph (e)(ii) hereof.

         "Offer to Purchase" means a written offer (the "Offer") sent by the
    Corporation by first class mail, postage prepaid, to each Holder at his
    address appearing in the records of the Corporation on the date of the
    Offer offering to purchase any and all of the Senior Exchangeable
    Redeemable Preferred Shares at the purchase price specified in such Offer
    (as determined pursuant to this Certificate of Designations). Unless
    otherwise required by applicable law, the Offer shall specify an expiration
    date (the "Expiration Date") of the Offer to Purchase which shall be,
    subject to any contrary requirements of applicable law, not less than 30
    days or more than 60 days after the date of such Offer and a settlement
    date (the "Payment Date") for purchase of Senior Exchangeable Redeemable
    Preferred Shares within five Business Days after the Expiration Date.  The
    Corporation shall notify the Transfer Agent at least 15 Business Days (or
    such shorter period as is acceptable to the Transfer Agent) prior to the
    mailing of the Offer of the Corporation's obligation to make an Offer to
    Purchase, and the Offer shall be mailed by the Corporation or, at the
    Corporation's request, by the Transfer Agent in the name and at the expense
    of the Corporation. The Offer shall contain information concerning the
    business of the Corporation and its Subsidiaries which the Corporation in
    good faith believes will enable such Holders to make an informed decision
    with respect to the Offer to Purchase (which at a minimum will include (i)
    the most recent annual and quarterly financial statements and "Management's
    Discussion and Analysis of Financial Condition and Results of Operations"
    contained in the documents required to be filed with the Securities and
    Exchange Commission or provided to the Transfer Agent pursuant to this
    Certificate of Designations (which requirements may be satisfied by
    delivery of such documents together with the Offer), (ii) a description of
    material developments in the Corporation's business subsequent to the date
    of the latest of such financial statements referred to in clause (i)
    (including a description of the events requiring the Corporation to make
    the Offer to Purchase), (iii) if applicable, appropriate pro forma
    financial information concerning the Offer to Purchase and the events
    requiring the Corporation to make the Offer to Purchase and (iv) any other
    information required by applicable law to be included therein). The Offer
    shall contain all instructions and materials necessary to enable such
    Holders to 

                                         -26-

<PAGE>

    tender Senior Exchangeable Redeemable Preferred Shares pursuant to the
    Offer to Purchase. The Offer shall also state:

              (a)  the paragraph of this Certificate of Designations pursuant
         to which the Offer to Purchase is being made;

              (b)  the Expiration Date and the Payment Date;

              (c)  the purchase price to be paid by the Corporation for each
         Senior Exchangeable Redeemable Preferred Shares accepted for payment
         (as specified pursuant to this Certificate of Designations) (the
         "Purchase Price");

              (d)  that the Holder may tender all or any portion of the Senior
         Exchangeable Redeemable Preferred Shares registered in the name of
         such Holder;

              (e)  the place or places where Senior Exchangeable Redeemable
         Preferred Shares are to be surrendered for tender pursuant to the
         Offer to Purchase;

              (f)  that dividends on any Senior Exchangeable Redeemable
         Preferred Share not tendered or tendered but not purchased by the
         Corporation pursuant to the Offer to Purchase will continue to accrue;

              (g)  that on the Payment Date the Purchase Price will become due
         and payable upon each Senior Exchangeable Redeemable Preferred Share
         being accepted for payment pursuant to the Offer to Purchase and that
         dividends thereon shall cease to accrue on and after the Purchase
         Date;

              (h)  that each Holder electing to tender a Senior Exchangeable
         Redeemable Preferred Share pursuant to the Offer to Purchase will be
         required to surrender such Senior Exchangeable Redeemable Preferred
         Share at the place or places specified in the Offer prior to the close
         of business on the Expiration Date (such Senior Exchangeable
         Redeemable Preferred Share being, if the Corporation or the Transfer
         Agent so requires, duly endorsed by, or accompanied by a written
         instrument of transfer in form satisfactory to the Corporation and the
         Transfer Agent duly executed by, the Holder thereof or his attorney
         duly authorized in writing);

              (i)  that Holders will be entitled to withdraw all or any portion
         of Senior Exchangeable Redeemable Preferred Shares tendered if the
         Corporation (or its paying agent) receives not later than the close of
         business on the Expiration Date, a telegram, telex, facsimile
         transmission or letter setting forth the name of the Holder, the
         number of the Senior Exchangeable Redeemable Preferred Shares the
         Holder tendered, the certificate number(s) of the Senior Exchangeable
         Redeemable Preferred Shares the Holder tendered and a statement that
         such Holder is withdrawing all or a portion of his tender;

              (j)  that the Corporation shall purchase all Senior Exchangeable
         Redeemable Preferred Shares tendered;


                                         -27-

<PAGE>

              (k)  that in the case of any Holder whose Senior Exchangeable
         Redeemable Preferred Share is purchased only in part, the Corporation
         shall issue and deliver to the Holder of such Senior Exchangeable
         Redeemable Preferred Share without service charge, a new Senior
         Exchangeable Redeemable Preferred Share or Senior Exchangeable
         Redeemable Preferred Shares as requested by such Holder; and

              (l)  the CUSIP number or numbers of the Senior Exchangeable
         Redeemable Preferred Shares offered to be purchased by the Corporation
         pursuant to the Offer to Purchase.

    Any Offer to Purchase shall be governed by and effected in accordance with
    the Offer for such Offer to Purchase.

         "Officers' Certificate" means a certificate signed by (i) the Chief
    Executive Officer, President, an Executive Vice President or a Vice
    President, and (ii) the Treasurer, Assistant Treasurer, Secretary or an
    Assistant Secretary, of the Corporation and delivered to the Transfer Agent
    and containing the following:

              (a)  a statement that each individual signing such certificate
         has read such covenant or condition and the definitions herein
         relating thereto; 

              (b)  a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

              (c)  a statement that, in the opinion of each such individual, he
         has made such examination or investigation as is necessary to enable
         him to express an informed opinion as to whether or not such covenant
         or condition has been complied with; and

              (d)  a statement as to whether, in the opinion of each such
         individual, such condition or covenant has been complied with.

    "Opinion of Counsel" means a written opinion of legal counsel, who may be
    counsel for the Corporation and containing the following statements:

              (a)  a statement that such counsel has read such covenant or
         condition and the definitions herein relating thereto; 

              (b)  a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

              (c)  a statement that, in the opinion of each such individual, he
         has made such examination or investigation as is necessary to enable
         him to express an informed opinion as to whether or not such covenant
         or condition has been complied with; and


                                         -28-

<PAGE>

              (d)  a statement as to whether, in the opinion of each such
         individual, such condition or covenant has been complied with.

         "Original Shares" means Senior Exchangeable Redeemable Preferred
    Shares that are not Exchange Shares.

         "Parity Shares" shall have the meaning ascribed to it in paragraph (b)
    hereof.

         "Payment Date" shall have the meaning ascribed to it in the definition
    of Offer to Purchase.

         "Permitted Interest Rate or Currency Protection Agreement" of any
    Person means any Interest Rate or Currency Protection Agreement entered
    into with one or more financial institutions in the ordinary course of
    business that is designed to protect such Person against fluctuations in
    interest rates or currency exchange rates with respect to Debt Incurred and
    which shall have a notional amount no greater than the payments due with
    respect to the Debt being hedged thereby and not for purposes of
    speculation.

         "Person" means any individual, corporation, partnership, limited
    liability company, joint venture, association, joint stock company, trust,
    unincorporated organization, government or agency or political subdivision
    thereof or any other entity.

         "Predecessor Share" of any particular Senior Exchangeable Redeemable
    Preferred Share means every previous Senior Exchangeable Redeemable
    Preferred Share issued before, and evidencing all or a portion of the same
    interest as that evidenced by, such particular Senior Exchangeable
    Redeemable Preferred Share; and, for the purposes of this definition, any
    Senior Exchangeable Redeemable Preferred Share issued and delivered in
    exchange for or in lieu of a mutilated, destroyed, lost or stolen Senior
    Exchangeable Redeemable Preferred Share shall be deemed to evidence the
    same interest as the mutilated, destroyed, lost or stolen Senior
    Exchangeable Redeemable Preferred Share.

         "Preferred Stock" of any Person means Capital Stock of such Person of
    any class or classes (however designated) that ranks prior, as to the
    payment of dividends or as to the distribution of assets upon any voluntary
    or involuntary liquidation, dissolution or winding up of such Person, to
    shares of Capital Stock of any other class of such Person.

         "Public Equity Offering" means a underwritten public offering of
    common stock, par value $.01 per share, of the Corporation pursuant to an
    effective registration statement filed with the Securities and Exchange
    Commission in accordance with the Securities Act.

         "Purchase Money Debt" means (i) Acquired Debt Incurred in connection
    with the acquisition of Telecommunications Assets and (ii) Debt of the
    Corporation or of any Restricted Subsidiary of the Corporation (including,
    without limitation, Debt represented by Capital Lease Obligations, Vendor
    Financing Facilities, mortgage financings and purchase money obligations)
    Incurred for the purpose of financing all or any part of the cost of
    construction, acquisition or improvement by the Corporation or any
    Restricted Subsidiary of the Corporation or any Joint Venture of any
    Telecommunications Assets of 

                                         -29-

<PAGE>

    the Corporation, any Restricted Subsidiary of the Corporation or any Joint
    Venture, and including any related notes, Guarantees, collateral documents,
    instruments and agreements executed in connection therewith, as the same
    may be amended, supplemented, modified or restated from time to time.

         "Qualified Junior Shares" shall mean Junior Shares that do not
    constitute Disqualified Stock.

         "Qualifying Event" means a Public Equity Offering or one or more
    Strategic Equity Investments which in either case results in aggregate net
    proceeds to the Corporation of not less than $75 million.

         "Quarterly Dividend Period" shall mean the quarterly period commencing
    on each February 1, May 1, August 1 and  November 1 and ending on the next
    succeeding Dividend Payment Date, respectively.

         "Receivables" means receivables, chattel paper, instruments, documents
    or intangibles evidencing or relating to the right to payment of money in
    respect of the sale of goods or services.

         "Receivables Sale" of any Person means any sale of Receivables of such
    Person (pursuant to a purchase facility or otherwise), other than in
    connection with a disposition of the business operations of such Person
    relating thereto or a disposition of defaulted Receivables for purpose of
    collection and not as a financing arrangement.

         "Redemption Date", with respect to any Senior Exchangeable Redeemable
    Preferred Shares, means the date on which such Senior Exchangeable
    Redeemable Preferred Shares are redeemed by the Corporation.

         "Redemption Notice" shall have the meaning ascribed to it in paragraph
    (e) hereof.

         "Restricted Subsidiary" of the Corporation means any Subsidiary,
    whether existing on or after the date of this Certificate of Designations,
    unless such Subsidiary is an Unrestricted Subsidiary.

         "Registration Rights Agreement" means that certain Preferred Exchange
    and Registration Rights Agreement, dated as of January 31, 1997, by and
    between the Corporation and Merrill Lynch, Pierce, Fenner & Smith
    Incorporated and Toronto Dominion Securities (USA) Inc.

         "Senior Exchangeable Redeemable Preferred Shares" shall have the
    meaning ascribed to it in paragraph (a) hereof.

         "Special Mandatory Redemption Price" shall have the meaning ascribed
    to it in paragraph (e)(i) hereof.


                                         -30-

<PAGE>

         "Securities Act" means the Securities Act of 1933, as amended, and the
    rules and regulations promulgated thereunder.

         "Senior Shares" shall have the meaning ascribed to it in paragraph (b)
    hereof.

         "Strategic Equity Investment" means an investment in Qualified Junior
    Shares made by a Strategic Investor in an aggregate amount of not less than
    $25 million.

         "Strategic Investor" means a Person engaged in one or more
    Telecommunications Businesses (which need not be such Person's primary
    business) that has, or 80% or more of the Voting Stock of which is owned,
    directly or indirectly, by a Person that has, an equity market
    capitalization or net worth, at the time of its initial investment in the
    Corporation, in excess of $2.0 billion.

         "Subordinated Debt" means Debt of the Corporation as to which the
    payment of principal of (and premium, if any) and interest and other
    payment obligations in respect of such Debt shall be subordinate to the
    prior payment in full of the Exchange Notes, or the Existing Notes if the
    Exchange Notes have not yet been issued, to at least the following extent: 
    (i) no payments of principal of (or premium, if any) or interest on or
    otherwise due in respect of such Debt may be permitted for so long as any
    default in the payment of principal (or premium, if any) or interest on the
    Exchange Notes or Existing Notes, as applicable, exists; (ii) in the event
    that any other default that with the passing of time or the giving of
    notice, or both, would constitute an Event of Default exists with respect
    to the Exchange Notes or the Existing Notes, as applicable, upon notice by
    25% or more in principal amount of the Exchange Notes or the Existing
    Notes, as applicable, to the relevant trustee, the relevant trustee shall
    have the right to give notice to the Corporation and the holders of such
    Debt (or trustees or agents therefor) of a payment blockage, and thereafter
    no payments of principal of (or premium, if any) or interest on or
    otherwise due in respect of such Debt may be made for a period of 179 days
    from the date of such notice or for the period until such default has been
    cured or waived or ceased to exist and any acceleration of the Exchange
    Notes or the Existing Notes, as applicable, has been rescinded or annulled,
    whichever period is shorter (which Debt may provide (A) no new period of
    payment blockage may be commenced by a payment blockage notice unless and
    until 360 days have elapsed since the effectiveness of the immediately
    prior notice, (B) no nonpayment default that existed or was continuing on
    the date of delivery of any payment blockage notice to such holders (or
    such agents or trustees) shall be, or be made, the basis for a subsequent
    payment blockage notice and (C) failure of the Corporation to make payment
    on such Debt when due or within any applicable grace period, whether or not
    on account of such payment blockage provisions, shall constitute an event
    of default thereunder); and (iii) such Debt may not (x) provide for
    payments of principal of such Debt at the stated maturity thereof or by way
    of a sinking fund applicable thereto or by way of any mandatory redemption,
    defeasance, retirement or repurchase thereof by the Corporation (including
    any redemption, retirement or repurchase which is contingent upon events or
    circumstances, but excluding any retirement required by virtue of
    acceleration of such Debt upon an event of default thereunder), in each
    case prior to the final Stated Maturity (as defined in the Existing
    Indenture) of the Exchange Notes or the Existing 

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<PAGE>

    Notes, as applicable, or (y) permit redemption or other retirement
    (including pursuant to an offer to purchase made by the Corporation) of
    such other Debt at the option of the holder thereof prior to the final
    Stated Maturity (as defined in the Existing Indenture) of the Exchange
    Notes or the Existing Notes, as applicable, other than a redemption or
    other retirement at the option of the holder of such Debt (including
    pursuant to an offer to purchase made by the Corporation) which is
    conditioned upon a change of control of the Corporation pursuant to
    provisions substantially similar to those contained in paragraph (h) hereof
    (and which shall provide that such Debt will not be repurchased pursuant to
    such provisions prior to the Corporation's repurchase of the Exchange Notes
    or the Existing Notes, as applicable, required to be repurchased by the
    Corporation pursuant to the provisions of Section 1016 of the Existing
    Indenture or Section 1016 of the Indenture, as applicable.

         "Subsidiary" of any Person means (i) a corporation more than 50% of
    the combined voting power of the outstanding Voting Stock of which is
    owned, directly or indirectly, by such Person or by one or more other
    Subsidiaries of such Person or by such Person and one or more Subsidiaries
    thereof or (ii) any other Person (other than a corporation) in which such
    Person, or one or more other Subsidiaries of such Person or such Person and
    one or more other Subsidiaries thereof, directly or indirectly, has at
    least a majority ownership and power to direct the policies, management and
    affairs thereof.

         "Successor Share" of any particular Senior Exchangeable Redeemable
    Preferred Share means every Senior Exchangeable Redeemable Preferred Share
    issued after, and evidencing all or a portion of the same interest as that
    evidenced by, such particular Senior Exchangeable Redeemable Preferred
    Share; and, for the purposes of this definition, any Senior Exchangeable
    Redeemable Preferred Share issued and delivered in exchange for or in lieu
    of a mutilated, destroyed, lost or stolen Senior Exchangeable Redeemable
    Preferred Share shall be deemed to evidence the same interest as the
    mutilated, destroyed, lost or stolen Senior Exchangeable Redeemable
    Preferred Share.

         "Telecommunications Assets" means all assets, rights (contractual or
    otherwise) and properties, whether tangible or intangible, used or intended
    for use in connection with a Telecommunications Business.

         "Telecommunications Business" means the business of (i) transmitting,
    or providing services relating to the transmission of, voice, video or data
    through owned or leased transmission facilities, (ii) creating, developing
    or marketing communications related network equipment, software and other
    devices for use in a Telecommunication Business or (iii) evaluating,
    participating or pursuing any other activity or opportunity that is
    primarily related to those identified in (i) or (ii) above and shall, in
    any event, include all businesses in which the Corporation or any of its
    Subsidiaries are engaged on the Issue Date; PROVIDED that the determination
    of what constitutes a Telecommunications Business shall be made in good
    faith by the Board of Directors of the Corporation, which determination
    shall be conclusive.


                                         -32-

<PAGE>

         "Transfer Agent" means the transfer agent for the Senior Exchangeable
    Redeemable Preferred Shares designated by the Corporation from time to
    time.

         "Unrestricted Subsidiary" means (1) any Subsidiary of the Corporation
    designated as such by the Board of Directors as set forth below where (a)
    neither the Corporation nor any of its other Subsidiaries (other than
    another Unrestricted Subsidiary) (i) provides credit support for, or
    Guarantee of, any Debt of such Subsidiary or any Subsidiary of such
    Subsidiary (including any undertaking, agreement or instrument evidencing
    such Debt) or (ii) is directly or indirectly liable for any Debt of such
    Subsidiary or any Subsidiary of such Subsidiary, and (b) no default with
    respect to any Debt of such Subsidiary or any Subsidiary of such Subsidiary
    (including any right which the holders thereof may have to take enforcement
    action against such Subsidiary) would permit (upon notice, lapse of time or
    both) any holder of any other Debt of the Corporation and its Restricted
    Subsidiaries to declare a default on such other Debt or cause the payment
    thereof to be accelerated or payable prior to its final scheduled maturity
    and (2) any Subsidiary of an Unrestricted Subsidiary.  The Board of
    Directors may designate any Subsidiary to be an Unrestricted Subsidiary
    unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien
    on any property of, any other Subsidiary of the Corporation which is not a
    Subsidiary of the Subsidiary to be so designated or otherwise an
    Unrestricted Subsidiary, PROVIDED that either (x) the Subsidiary to be so
    designated has total assets of $1,000 or less or (y) immediately after
    giving effect to such designation, the Corporation could incur at least
    $1.00 of additional Debt pursuant to paragraph (l)(i) hereof.  The Board of
    Directors may designate any Unrestricted Subsidiary to be a Restricted
    Subsidiary, PROVIDED that, immediately after giving effect to such
    designation, the Corporation could incur at least $1.00 of additional Debt
    pursuant to the paragraph (l)(i) hereof.

         "Vendor Financing Facility" means any agreements between the
    Corporation or a Restricted Subsidiary of the Corporation and one or more
    vendors or lessors of equipment to the Corporation or any of its Restricted
    Subsidiaries (or any affiliate of any such vendor or lessor) providing
    financing for the acquisition by the Corporation or any such Restricted
    Subsidiary of equipment from any such vendor or lessor.

         "Vice President", when used with respect to the Corporation means any
    vice president, whether or not designated by a number or a word or words
    added before or after the title "vice president".

         "Voting Stock" of any Person means Capital Stock of such Person which
    ordinarily has voting power for the election of directors (or persons
    performing similar functions) of such Person, whether at all times or only
    so long as no senior class of securities has such voting power by reason of
    any contingency.

         "Voting Rights Triggering Event" shall have the meaning ascribed to it
    in paragraph f(iv) hereof.

         "Wholly-Owned Restricted Subsidiary" of any Person means a Restricted
    Subsidiary of such Person 99% or more of the outstanding Capital Stock or
    other 

                                         -33-

<PAGE>

    ownership interests of which (other than directors' qualifying shares)
    shall at the time be owned by such Person or by one or more Wholly-Owned
    Restricted Subsidiaries of such Person or by such Person and one or more
    Wholly-Owned Restricted Subsidiaries of such Person.

         (n)  RESTRICTIONS ON TRANSFER

         (i)  Each Original Share shall contain a legend substantially to the
    following effect until the Resale Restriction Termination Date (as defined
    below) unless the Corporation determines otherwise:

    THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
    AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.  NEITHER
    THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
    SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF
    IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
    FROM, OR NOT SUBJECT TO, REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER
    APPLICABLE LAWS.  THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
    AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
    DATE WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
    AND THE LAST DATE ON WHICH THE CORPORATION OR ANY AFFILIATE OF THE
    CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
    SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE"), ONLY (A) TO THE
    CORPORATION; (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
    DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THESE
    SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
    SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
    "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
    ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
    WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
    RULE 144A, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
    SECURITIES ACT PROVIDED BY RULE 144, (E) PURSUANT TO OFFERS AND SALES TO
    NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
    REGULATION S UNDER THE SECURITIES ACT OR (F) IN THE CASE OF EITHER ANY
    INITIAL INVESTOR THAT IS A QUALIFIED INSTITUTIONAL BUYER OR ANY SUBSEQUENT
    INVESTOR, TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
    SUBPARAGRAPH (a)(1), (2), (3) or (7) OF RULE 501 UNDER THE SECURITIES ACT
    PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF
    AVAILABLE), AND OTHERWISE IN COMPLIANCE WITH OTHER APPLICABLE LAWS, SUBJECT

                                         -34-

<PAGE>

    TO THE CORPORATION'S AND THE TRANSFER AGENT AND REGISTRAR'S RIGHT PRIOR TO
    ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C), (D), (E) OR (F) TO
    REQUIRE THE DELIVERY OF A TRANSFER CERTIFICATE AND IN THE CASE OF CLAUSE
    (F) AN OPINION OF COUNSEL /OR OTHER INFORMATION SATISFACTORY TO EACH OF
    THEM.  THE LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
    RESALE RESTRICTION TERMINATION DATE.

         (ii)  If prior to the Resale Restriction Termination Date (or such
    shorter period as may be prescribed by Rule 144(k) under the Securities Act
    (or any successor thereto)) a Holder of Original Shares that acquired
    Senior Exchangeable Redeemable Preferred Shares from an Initial Purchaser
    in a sale that was not made in reliance upon Rule 144A under the Securities
    Act wishes to transfer such Original Shares, such transfer may be effected
    only upon receipt by the Corporation or the Transfer Agent of a certificate
    substantially in the form of Exhibit A hereto duly executed by such Holder
    or his attorney duly authorized in writing.

                        [Balance of page intentionally blank.]
                                           
                                         -35-

<PAGE>

    IN WITNESS WHEREOF, said NEXTLINK Communications Merger, Inc., has caused
this Certificate to be signed by R. Bruce Easter, Jr., its Vice President, this
30th day of January 1997.

                                  NEXTLINK COMMUNICATIONS MERGER, INC.


                                  By:  /s/ R. Bruce Easter, Jr.
                                      ----------------------------
                                       Name:  R. Bruce Easter, Jr.
                                       Title:  Vice President


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