<PAGE>   1
                                                                EXHIBIT 4.21


                                                      [COMPOSITE CONFORMED COPY]




                                PLD TELEKOM INC.


================================================================================





     $12,400,000 12% Series A Senior Secured Revolving Credit Notes due 1998
         $3,100,000 12% Series B Senior Revolving Credit Notes due 1998
                    Warrants for the Purchase of Common Stock









                   REVOLVING CREDIT NOTE AND WARRANT AGREEMENT





                          Dated as of November 26, 1997




================================================================================


<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                   Page
-------                                                                                   ----

<S>   <C>                                                                                 <C>
1.    THE REVOLVING CREDIT NOTES AND THE WARRANTS..........................................  1
      1.1.     Authorization and Description of Notes and Warrants.........................  1
      1.2.     Subsidiary Guaranty; Security for Notes.....................................  4

2.    ISSUANCE OF NOTES AND WARRANTS; LOAN COMMITMENTS.....................................  5

3.    CLOSING; EFFECTIVENESS OF LOAN COMMITMENTS...........................................  5

4.    CONDITIONS TO CLOSING................................................................  6
      4.1.     Proceedings and Documents...................................................  6
      4.2.     Representations and Warranties..............................................  7
      4.3.     Performance; No Default.....................................................  7
      4.4.     Compliance and Secretary's Certificates.....................................  7
      4.5.     Opinions of Counsel.........................................................  8
      4.6.     Absence of Certain Events...................................................  8
      4.7.     Approvals...................................................................  8
      4.8.     Acquisition of Technocom Shares.............................................  9
      4.9.     Warrant Agreement; Deposit of Additional Warrant Certificates;
               Reservation of Common Stock.................................................  9
      4.10.    Registration Agreement...................................................... 10
      4.11.    Subsidiary Guaranty......................................................... 10
      4.12.    Trust Agreement............................................................. 10
      4.13.    Pledge Agreement; Share Mortgage and Share Transfer Form.................... 10
      4.14.    Security Agreement.......................................................... 11
      4.15.    Delivery of Pledged Shares and Registration in Share Registry;
               Recordation; Taxes, etc..................................................... 11
      4.16.    Placement Fee............................................................... 11
      4.17.    Notice of Borrowing......................................................... 11
      4.18.    Existing Senior Note Indenture; Existing Convertible Note Indenture......... 12
      4.19.    Technocom Organizational Documents, etc..................................... 12
      4.20.    Issuance of Other Notes and Warrants........................................ 12
      4.21.    Payment of Special Counsel Fees............................................. 13
      4.22.    Private Placement Number.................................................... 13

5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................ 13
      5.1.     Organization; Power and Authority........................................... 13
      5.2.     Authorization, etc.......................................................... 13
      5.3.     Disclosure.................................................................. 14
</TABLE>


                                       -i-
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<TABLE>
<S>   <C>                                                                                 <C>
      5.4.     Organization and Ownership of Shares of Subsidiaries; Affiliates............ 14
      5.5.     Capital Stock............................................................... 15
      5.6.     Share Purchase Agreements................................................... 16
      5.7.     Consummation of Acquisition................................................. 16
      5.8.     Financial Statements........................................................ 16
      5.9.     Compliance with Laws, Other Instruments, etc................................ 17
      5.10.    Governmental Authorizations, etc............................................ 17
      5.11.    Litigation; Observance of Agreements, Statutes and Orders................... 17
      5.12.    Taxes....................................................................... 18
      5.13.    Title to Property; Leases................................................... 18
      5.14.    Licenses, Permits, etc...................................................... 18
      5.15.    Compliance with ERISA....................................................... 19
      5.16.    Private Offering by the Company............................................. 20
      5.17.    Use of Proceeds; Margin Regulations......................................... 20
      5.18.    Existing Indebtedness; Future Liens......................................... 21
      5.19.    Foreign Assets Control Regulations, etc..................................... 21
      5.20.    Status under Certain Statutes............................................... 21
      5.21.    Existing Senior Note Indenture and Existing Convertible Note Indenture...... 21
      5.22.    Technocom Organizational Documents, etc..................................... 22
      5.23.    Chief Executive Office...................................................... 22

6.    REPRESENTATIONS OF THE LENDER........................................................ 22
      6.1.     Purchase for Investment..................................................... 22
      6.2.     Source of Funds............................................................. 23

7.    INFORMATION AS TO COMPANY............................................................ 23
      7.1.     Financial and Business Information.......................................... 23
      7.2.     Officer's Certificate....................................................... 26
      7.3.     Inspection.................................................................. 26

8.    SERIES A AND SERIES B REVOLVING CREDIT FACILITIES.................................... 27
      8.1.     Revolving Credit Commitments and Making of Revolving Credit Loans........... 27
      8.2.     Optional Repayments......................................................... 29
      8.3.     Optional and Mandatory Reduction and Termination of Commitments............. 29
      8.4.     Mandatory Repayments........................................................ 31
      8.5.     Notice of Repayments or Termination......................................... 32
      8.6.     Allocation of Reductions in Commitments and Repayments and
               Repayments.................................................................. 32
      8.7.     Maturity; Surrender, etc.................................................... 32
      8.8.     Purchase of Notes........................................................... 33
      8.9.     Commitment Fees............................................................. 33
      8.10.    Books and Records........................................................... 33
      8.11.    Illegality.................................................................. 33
</TABLE>


                                      -ii-
<PAGE>   4
<TABLE>
<S>   <C>                                                                                 <C>
9.    COVENANTS............................................................................ 34
      9.1.     Compliance with Law......................................................... 34
      9.2.     Books and Records........................................................... 34
      9.3.     Payment of Notes............................................................ 34
      9.4.     Maintenance of Office....................................................... 34
      9.5.     Corporate Existence......................................................... 35
      9.6.     Maintenance of Property..................................................... 35
      9.7.     Payment of Taxes and Other Claims........................................... 35
      9.8.     Commitment Termination and Repayment at the Option of Holders upon a
               Change of Control........................................................... 36
      9.9.     Limitation on Asset Sales................................................... 36
      9.10.    Limitation on Indebtedness.................................................. 39
      9.11.    Limitation on Issuances of Guarantees by Restricted Subsidiaries............ 41
      9.12.    Limitation on Liens......................................................... 41
      9.13.    Limitation on Sale and Leaseback Transactions............................... 42
      9.14.    Restricted Payments......................................................... 42
      9.15.    Limitation on Dividends and Other Payment Restrictions Affecting
               Restricted Subsidiaries..................................................... 45
      9.16.    Limitation on Issuance and Sale of Preferred Stock of Restricted
               Subsidiaries................................................................ 46
      9.17.    Transactions with Affiliates................................................ 46
      9.18.    Restricted and Unrestricted Subsidiaries.................................... 47
      9.19.    Limitations on Line of Business............................................. 48
      9.20.    Limitation on Sales of Telecommunications Asset Leases or Qualified
               Investments................................................................. 48
      9.21.    Payment of Additional Amounts............................................... 49
      9.22.    Leasing Companies and NWE Cyprus............................................ 51
      9.23.    Technocom................................................................... 51
      9.24.    Collateral Agents........................................................... 52
      9.25.    WTC......................................................................... 52
      9.26.    Release of Additional Warrant Certificates from Escrow...................... 52
      9.27.    Default Warrants............................................................ 53
      9.28.    Application of Notes Upon Exercise of Warrants.............................. 53
      9.29.    Agreement to Effect Certain Amendments...................................... 54
      9.30.    Future Subsidiaries to Become Guarantors.................................... 54
      9.31.    Restriction on Certain Payments by the Company.............................. 54

10.   CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER................................. 55
      10.1.    Merger, Consolidation, Sale of Assets, Etc.................................. 55
      10.2.    Successor Corporation Substituted........................................... 56

11.   EVENTS OF DEFAULT.................................................................... 57
</TABLE>


                                            -iii-
<PAGE>   5
<TABLE>
<S>   <C>                                                                                 <C>
12.   REMEDIES ON DEFAULT, ETC............................................................. 59
      12.1.    Acceleration................................................................ 59
      12.2.    Other Remedies.............................................................. 60
      12.3.    Rescission.................................................................. 60
      12.4.    No Waivers or Election of Remedies, Expenses, etc........................... 60

13.   DEFINITIONS AND CONSTRUCTION......................................................... 61
      13.1.    Defined Terms............................................................... 61

14.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES........................................ 89
      14.1.    Registration of Notes....................................................... 89
      14.2.    Transfer and Exchange of Notes.............................................. 89
      14.3.    Replacement of Notes........................................................ 90

15.   PAYMENTS ON NOTES.................................................................... 90
      15.1.    Place of Payment............................................................ 90
      15.2.    Home Office Payment......................................................... 91

16.   EXPENSES, ETC........................................................................ 91
      16.1.    Transaction Expenses........................................................ 91
      16.2.    Survival.................................................................... 92

17.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
      AGREEMENT............................................................................ 92

18.   AMENDMENT AND WAIVER................................................................. 92
      18.1.    Requirements................................................................ 92
      18.2.    Solicitation of Holders of Notes............................................ 93
      18.3.    Binding Effect, etc......................................................... 93
      18.4.    Notes held by Company, etc.................................................. 93

19.   NOTICES.............................................................................. 94

20.   REPRODUCTION OF DOCUMENTS............................................................ 94

21.   SUBSTITUTION OF LENDER............................................................... 95

22.   MISCELLANEOUS........................................................................ 95
      22.1.    Successors and Assigns...................................................... 95
      22.2.    Payments Due on Non-Business Days........................................... 95
      22.3.    Severability................................................................ 95
      22.4.    Construction................................................................ 96
      22.5.    Counterparts................................................................ 96
</TABLE>


                                      -iv-
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<TABLE>
<S>   <C>                                                                                 <C>
      22.6.    Governing Law............................................................... 96
</TABLE>


SCHEDULE I           --   Information Relating To Lenders

SCHEDULE II          --   Subsidiaries of the Company and
                            Ownership of Subsidiary Stock

SCHEDULE III         --   Schedule of Financial Statements and other Information
                          delivered to Lenders

SCHEDULE IV          --   Existing Indebtedness and Liens


EXHIBIT A-1          --   Form of Series A Revolving Credit Notes

EXHIBIT A-2          --   Form of Series B Revolving Credit Notes

EXHIBIT B            --   Form of Warrant Agreement

EXHIBIT C            --   Form of Subsidiary Guaranty

EXHIBIT D            --   Form of Trust Agreement

EXHIBIT E-1          --   Form of Pledge Agreement

EXHIBIT E-2          --   Form of Share Mortgage

EXHIBIT F            --   Form of Security Agreement

EXHIBIT G            --   Form of Registration Agreement

EXHIBIT H-1          --   Subject Matter of Opinion of Special Counsel and Irish
                            Counsel for the Company

EXHIBIT H-2          --   Subject Matter of Opinion of Counsel to the Trustee

EXHIBIT I            --   Form of Borrowing Notice


                                       -v-
<PAGE>   7
                                PLD TELEKOM INC.
                          680 FIFTH AVENUE, 24TH FLOOR
                            NEW YORK, NEW YORK 10019


     $12,400,000 12% Series A Senior Secured Revolving Credit Notes due 1998
         $3,100,000 12% Series B Senior Revolving Credit Notes due 1998
                    Warrants for the Purchase of Common Stock



                                                         as of November 26, 1997

TO EACH OF THE LENDERS NAMED ON THE
      SIGNATURE PAGE OF THIS AGREEMENT:


Ladies and Gentlemen:

            PLD TELEKOM INC., a Delaware corporation (the "COMPANY"), agrees
with you as follows:

1.    THE REVOLVING CREDIT NOTES AND THE WARRANTS.

1.1.  AUTHORIZATION AND DESCRIPTION OF NOTES AND WARRANTS.

            The Company has authorized the issue and delivery on the Closing
Date of:

            (a)   $12,400,000 aggregate principal amount of its 12% Series A
      Senior Secured Revolving Credit Notes due 1998 (the "SERIES A NOTES", such
      term to include any such notes issued in substitution therefor pursuant to
      SECTION 14), which Series A Notes shall evidence the obligation of the
      Company to repay Series A Revolving Credit Loans made to the Company from
      time to time pursuant to this Agreement, and each of which shall (i) be
      dated the date of issue, (ii) bear interest on the principal amount
      outstanding thereunder from time to time at the rate of 12% per annum
      (computed on the basis of the actual number of days elapsed in a year of
      360 days, and which rate is subject to adjustment as provided in the final
      paragraph of this SECTION 1.1), payable monthly on the last day of each
      month (commencing with November 30, 1997) and at maturity and bear
      interest on any overdue principal (including any overdue required or
      optional repayment of principal) and (to the extent legally enforceable)
      on any overdue installment of interest at the applicable Default Rate
      after the date due (whether by acceleration or otherwise) until paid, such
      overdue interest to be payable monthly as aforesaid or, at the option of
      the registered holder of such Note, on demand, (iii) mature and be payable
      in full on December 31, 1998, and (iv) be substantially in the form set


<PAGE>   8
      forth in EXHIBIT A-1, with such changes therefrom, if any, as may be
      approved by you and the Company;

            (b)   $3,100,000 aggregate principal amount of its 12% Series B
      Senior Revolving Credit Notes due 1998 (the "SERIES B NOTES", such term to
      include any such notes issued in substitution therefor pursuant to SECTION
      14), which Series B Notes shall evidence the obligation of the Company to
      repay Series B Revolving Credit Loans made to the Company from time to
      time pursuant to this Agreement, and each of which shall (i) be dated the
      date of issue, (ii) bear interest on the principal amount outstanding
      thereunder from time to time at the rate of 12% per annum (computed on the
      basis of the actual number of days elapsed in a year of 360 days, and
      which rate is subject to adjustment as provided in the final paragraph of
      this SECTION 1.1), payable monthly on the last day of each month
      (commencing with November 30, 1997) and at maturity and bear interest on
      any overdue principal (including any overdue required or optional
      repayment of principal) and (to the extent legally enforceable) on any
      overdue installment of interest at the applicable Default Rate after the
      date due (whether by acceleration or otherwise) until paid, such overdue
      interest to be payable monthly as aforesaid or, at the option of the
      registered holder of such Note, on demand, (iii) mature and be payable in
      full on September 30, 1998, and (iv) be substantially in the form set
      forth in EXHIBIT A-2, with such changes therefrom, if any, as may be
      approved by you and the Company;

            (c)   its common stock purchase warrants (together with all warrants
      issued in substitution therefor in accordance with the terms of the
      Warrant Agreement hereinafter referred to, the "SERIES A WARRANTS"), for
      the purchase of an aggregate of 315,000 shares of the Company's Common
      Stock, at an initial purchase price (subject to adjustment as provided in
      the Warrant Agreement hereinafter referred to) of $8.625 per share, at any
      time or from time to time prior to 5:00 P.M., New York City time, on
      December 31, 2008, such Series A Warrants to be issuable pursuant to a
      Warrant Agreement, substantially in the form of EXHIBIT B (the "WARRANT
      AGREEMENT"), to be entered into by the Company and The Bank of New York,
      as Warrant Agent (the "WARRANT AGENT"), and to be evidenced by one or more
      warrant certificates (each, a "SERIES A WARRANT CERTIFICATE"), each of
      which shall be substantially in the form set forth in Exhibit A to the
      Warrant Agreement;

            (d)   its common stock purchase warrants (together with all warrants
      issued in substitution therefor in accordance with the terms of the
      Warrant Agreement, the "SERIES B WARRANTS"), for the purchase of an
      aggregate of 108,000 shares of the Company's Common Stock, at an initial
      purchase price (subject to adjustment as provided in the Warrant
      Agreement) of $8.625 per share, at any time or from time to time prior to
      5:00 P.M., New York City time, on December 31, 2008, such Series B
      Warrants to be issuable pursuant to the Warrant Agreement


                                       2
<PAGE>   9
      and to be evidenced by one or more warrant certificates (each, a "SERIES B
      WARRANT CERTIFICATE"), each of which shall be substantially in the form
      set forth in Exhibit B to the Warrant Agreement; and;

            (e)   its common stock purchase warrants (together with all warrants
      issued in substitution therefor in accordance with the terms of the
      Warrant Agreement, the "ADDITIONAL WARRANTS"), for the purchase of an
      aggregate of 182,000 shares of the Company's Common Stock, at an initial
      purchase price (subject to adjustment as provided in the Warrant
      Agreement) of $8.625 per share, at any time or from time to time prior to
      5:00 P.M., New York City time, on December 31, 2008, such Additional
      Warrants to be issuable pursuant to the Warrant Agreement and to be
      evidenced by one or more warrant certificates (each, an "ADDITIONAL
      WARRANT CERTIFICATE"), each of which shall be substantially in the form
      set forth in Exhibit A or Exhibit B to the Warrant Agreement, as
      applicable.

In addition, the Company has authorized the issuance and delivery, under the
circumstances set forth in Section 2(c) of the Warrant Agreement, of (x) on
September 30, 1998 and on the last day of each calendar month thereafter until
the Series B Notes are paid in full, its common stock purchase warrants for the
purchase of 32,000 shares of the Company's Common Stock and (y) on December 31,
1998 and on the last day of each calendar month thereafter until the Series A
Notes are paid in full, its common stock purchase warrants for the purchase of
70,000 shares of the Company's Common Stock (such warrants described in
subclauses (x) and (y) issued on the respective dates specified in such
subclauses, together with all warrants issued in substitution therefor in
accordance with the terms of the Warrant Agreement, the "DEFAULT WARRANTS"), in
any such case at an initial purchase price of $0.01 per share, at any time or
from time to time prior to 5:00 P.M., New York City time on that date which
occurs ten (10) years from the date of issuance thereof, such Default Warrants
to be issuable pursuant to the Warrant Agreement and to be evidenced by one or
more warrant certificates (each, a "DEFAULT WARRANT CERTIFICATE"), each of which
shall be substantially in the form set forth in Exhibit C to the Warrant
Agreement.

            The Series A Notes and the Series B Notes are herein referred to
collectively as the "NOTES" and each of the Series A Notes and the Series B
Notes are herein referred to separately as a "SERIES" of Notes. The Series A
Warrants and the Series B Warrants are herein collectively referred to as the
"INITIAL WARRANTS", and each of the Series A Warrants and the Series B Warrants
are herein referred to separately as a "SERIES" of Initial Warrants. The Initial
Warrants, the Additional Warrants and the Default Warrants are herein referred
to collectively as the "WARRANTS", and the Series A Warrant Certificates, the
Series B Warrant Certificates, the Additional Warrant Certificates and the
Default Warrant Certificates are herein referred to collectively as the "WARRANT
CERTIFICATES". Certain capitalized terms used in this Agreement are defined in
SECTION 13.1; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.


                                       3
<PAGE>   10
            Notwithstanding the provisions of subclause (ii) of each of clauses
(a) and (b) of the first paragraph of this SECTION 1.1 setting forth the
interest rate to be borne by the principal amount outstanding from time to time
under the Series A Notes and the Series B Notes, respectively, in the event that
the Company shall not have (x) received on or prior to May 31, 1998, net cash
proceeds aggregating at least $20,000,000 from an Equity Issuance and (y)
delivered to each holder of Notes an Officers' Certificate certifying to such
effect, the interest rate borne by the principal amount outstanding from time to
time under the Series A Notes and the Series B Notes shall be increased from 12%
to 15% per annum for the period commencing June 1, 1998 until maturity, such
interest to be computed and payable as otherwise provided in each of such
subclauses (ii), as applicable.

1.2.  SUBSIDIARY GUARANTY; SECURITY FOR NOTES.

            (a)   The Notes shall be entitled to the benefit of the Guaranty
Agreement, substantially in the form of EXHIBIT C (the "SUBSIDIARY GUARANTY"),
to be entered into by the Subsidiary Guarantors and dated as of the date hereof,
providing for the guaranty of the obligations of the Company under this
Agreement, the Trust Agreement, the Security Documents and the Notes by the
Subsidiary Guarantors party thereto.

            (b)   The Series A Notes shall be entitled to the benefits of
certain security to be held by The Bank of New York or its successor at the time
acting not in its individual capacity but solely as trustee (the "TRUSTEE")
under the Trust Agreement, substantially in the form of EXHIBIT D (the "TRUST
AGREEMENT"), to be entered into by the Company with the Trustee and dated as of
the date hereof, and consisting of the Property granted as collateral under, and
all rights of the Trustee under or in respect of, (i) the Pledge Agreement,
substantially in the form of EXHIBIT E-1 (the "PLEDGE AGREEMENT"), to be entered
into by the Company and the Trustee and dated as of the date hereof, and (ii)
the Agreement Accompanying Legal Mortgage of Shares, substantially in the form
of EXHIBIT E-2 (the "SHARE MORTGAGE"), to be dated as of the date hereof and
entered into by the Company and Anglo Irish Bank Corporation PLC, in its
capacity as collateral agent for the Trustee (in such capacity, the "COLLATERAL
AGENT") under an Agency Agreement, dated as of the date hereof (the "AGENCY
AGREEMENT"), among the Trustee, the Collateral Agent and the Company, and the
Series A Notes and the Series B Notes shall be entitled to the benefits of
certain security to be held by the Trustee under the Trust Agreement consisting
of the Property granted as collateral under, and all rights of the Trustee under
or in respect of, the Security Agreement (Inventory and Receivables),
substantially in the form of EXHIBIT F (the "SECURITY AGREEMENT"), to be entered
into by the Company and the Trustee and dated as of the date hereof. The Trust
Agreement, the Pledge Agreement, the Share Mortgage, the Share Transfer Form (as
hereinafter defined) and the Security Agreement are hereinafter referred to
collectively as the "SECURITY DOCUMENTS".


                                       4
<PAGE>   11
2.    ISSUANCE OF NOTES AND WARRANTS; LOAN COMMITMENTS.

            Subject to the terms and conditions of this Agreement, in reliance
on the representations and warranties of the Company contained herein and in the
Security Documents and otherwise made in writing by or behalf of the Company,
and against issuance and delivery to you by the Company of (i) Notes of the
Series and in the principal amount set forth opposite your name on SCHEDULE I,
and (ii) Initial Warrants of the Series and for the purchase of the number of
shares of Common Stock shown opposite your name on SCHEDULE I, you agree to
make, from time to time during the Series A Availability Period, Series A
Revolving Credit Loans to the Company in an aggregate principal amount at any
one time outstanding not to exceed your Commitment Percentage of the Total
Series A Commitment, and from time to time during the Series B Availability
Period, Series B Revolving Credit Loans to the Company in an aggregate principal
amount at any one time outstanding not to exceed your Commitment Percentage of
the Total Series B Commitment. Contemporaneously with the execution and delivery
to you by the Company of a counterpart of this Agreement, the Company is
executing and delivering a counterpart hereof to each of the other institutional
investors named in SCHEDULE I (the "OTHER LENDERS"), providing for the issuance
and delivery to each of the Other Lenders of (i) Notes of the Series and in the
principal amount set forth opposite its name in SCHEDULE I and (ii) Initial
Warrants of the Series and for the purchase of the number of shares of Common
Stock set forth opposite its name on SCHEDULE I and the commitment of each Other
Lender to make Revolving Credit Loans in accordance with the provisions of this
Agreement. The respective commitments of you and the Other Lenders (you and the
Other Lenders being hereinafter sometimes referred to collectively as the
"LENDERS") to make Revolving Credit Loans are to be separate agreements made by
the Company and the Lenders. The obligations of the Lenders hereunder shall be
several and not joint, and this Agreement shall for all purposes be construed
and deemed to be a separate agreement between the Company, on the one hand, and
each of the Lenders, on the other, the Lenders acting severally and not jointly,
with the same effect as though a separate agreement with each such Lender to the
effect herein provided were hereby entered into between the Company and each
such Lender.

3.    CLOSING; EFFECTIVENESS OF LOAN COMMITMENTS.

            The commitment of you and each Other Lender to make Revolving Credit
Loans shall become effective and available for borrowings by the Company, and
the Notes evidencing any Revolving Credit Loans disbursed to the Company
hereunder on the date of such effectiveness, together with the Initial Warrants
and the Additional Warrants to be issued by the Company in connection therewith,
shall be issued and delivered by the Company, at a closing (the "CLOSING") to
occur at the offices of Coudert Brothers, The Grace Building, 1114 Avenue of the
Americas, New York, New York 10036, at 10:00 A.M., New York City time on
November 26, 1997 or on such subsequent date as may be agreed upon by the
Company and you and the Other Lenders (the "CLOSING DATE"). At the Closing the
Company will deliver to you:


                                       5
<PAGE>   12
            (i)   one Series A Note in the principal amount of your Series A
      Commitment and one or more Warrant Certificates evidencing the Series A
      Warrants to be issued to you (as you may request), each dated the Closing
      Date and registered in your name (or in the name of your nominee), against
      disbursement of the Series A Revolving Credit Loans to be disbursed by you
      on the Closing Date, provided that the Company shall have specified the
      aggregate principal amount of such Series A Revolving Credit Loans by
      written notice delivered to you at least two Business Days prior to the
      date of the Closing; and

            (ii)  one Series B Note in the principal amount of your Series B
      Commitment and one or more Warrant Certificates evidencing the Series B
      Warrants to be issued to you (as you may request), each dated the Closing
      Date and registered in your name (or in the name of your nominee), against
      disbursement of the Series B Revolving Credit Loans to be disbursed by you
      on the Closing Date, provided that the Company shall have specified the
      aggregate principal amount of such Series B Revolving Credit Loans by
      written notice delivered to you at least two Business Days prior to the
      date of the Closing.

Each Revolving Credit Loan shall be disbursed to the Company or to its order by
wire transfer of immediately available funds in the amount thereof, for the
account of the Company to account number 40730577 at Citibank, N.A., New York,
New York, ABA No. 021000089 or as may be otherwise specified by the Company to
the Lenders in the Notice of Borrowing substantially in the form of EXHIBIT I
delivered in respect of such Revolving Credit Loan pursuant to SECTION 8.1. If
at the Closing the Company shall fail to tender such Notes or Initial Warrants
to you as provided above in this SECTION 3, or any of the conditions specified
in SECTION 4 shall not have been fulfilled to your satisfaction or waived by
you, you shall, at your election, be relieved of all further obligations under
this Agreement, without thereby waiving any rights you may have by reason of
such failure or such nonfulfillment.

4.    CONDITIONS TO CLOSING.

            Your obligation to make the initial Revolving Credit Loans to be
made by you hereunder on the Closing Date, and the effectiveness on and after
the Closing Date of your obligation to make Revolving Credit Loans to the
Company from time to time after the Closing Date, is subject to the fulfillment
to your satisfaction or the waiver by you, prior to or at the Closing, of the
following conditions:

4.1.  PROCEEDINGS AND DOCUMENTS.

            All corporate and other proceedings in connection with the
transactions contemplated by this Agreement, the Warrant Agreement, the
Registration Agreement, the Security Documents and the Subsidiary Guaranty and
all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you


                                       6
<PAGE>   13
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.

4.2.  REPRESENTATIONS AND WARRANTIES.

            All representations and warranties of the Company contained in this
Agreement, the Warrant Agreement, the Registration Agreement or any Security
Document or otherwise made by or on behalf of the Company in writing in
connection with the transactions contemplated hereby shall be true and correct
when made and as of the time of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing Date.

4.3.  PERFORMANCE; NO DEFAULT.

            The Company shall have performed and complied with all agreements
and conditions contained in this Agreement, the Warrant Agreement, the
Registration Agreement or any Security Document, and each Subsidiary Guarantor
shall have performed and complied with all agreements and conditions contained
in the Subsidiary Guaranty, required to be performed or complied with by it
prior to or at the Closing (including, without limitation, the delivery by the
Company to the Trustee or its designee of certificates evidencing the Pledged
Shares), and after giving effect to the issue and delivery of the Notes (and the
application of the proceeds of the initial Revolving Credit Loans as
contemplated by SECTION 5.17), no Default or Event of Default shall have
occurred and be continuing.

4.4.  COMPLIANCE AND SECRETARY'S CERTIFICATES.

            (a)   Officer's Certificate. The Company shall have delivered to you
an Officer's Certificate, dated the Closing Date, certifying that the conditions
specified in SECTIONS 4.2 AND 4.3 have been fulfilled.

            (b)   Company Secretary's Certificate. The Company shall have
delivered to you a certificate of its Secretary or Assistant Secretary, dated
the Closing Date, certifying as to the copies attached thereto of (x) its
certificate of incorporation and bylaws, (y) the resolutions of its Board of
Directors authorizing the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Security Documents, the Notes, the Warrant Agreement and the Warrants, and (z)
the incumbency of the Person or Persons authorized to execute and deliver this
Agreement, the Security Documents, the Notes, the Warrant Agreement, the Warrant
Certificates and the Registration Agreement on behalf of the Company.

            (c)   Subsidiary Guarantors' Secretary's Certificate. Each
Subsidiary Guarantor shall have delivered to you a certificate of its secretary
(in the case of WTC) or acting general director (in the case of BCL), dated the
Closing Date, certifying as to the


                                       7
<PAGE>   14
copies attached thereto of (x) the articles of incorporation and bylaws of such
Subsidiary Guarantor, (y) the resolutions of its board of directors authorizing
the execution and delivery by such Subsidiary Guarantor of, and the performance
by such Subsidiary Guarantor of its obligations under, the Subsidiary Guaranty,
and (z) the incumbency of the Person or Persons authorized to execute and
deliver the Subsidiary Guaranty on behalf of such Subsidiary Guarantor.

4.5.  OPINIONS OF COUNSEL.

            You shall have received opinions in form and substance satisfactory
to you, dated the Closing Date (a) from (i) Morgan, Lewis & Bockius LLP, special
counsel for the Company, (ii) in-house counsel to the Company and (iii) A & L
Goodbody, special Irish counsel for the Company, together covering the matters
set forth in EXHIBIT H-1 and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably request
(and the Company hereby instructs such counsel to deliver such opinion to you),
(b) from Emmet, Marvin & Martin, special counsel to the Trustee, covering the
matters set forth in EXHIBIT H-2 and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably request,
and (c) from Coudert Brothers, your special counsel in connection with such
transactions, covering such matters incident to such transactions as you may
reasonably request.

4.6.  ABSENCE OF CERTAIN EVENTS.

            There shall not have occurred any Material Adverse Change in the
Business or Condition of the Company and its Restricted Subsidiaries taken as a
whole from that reflected in the most recent audited financial statements of the
Company and its Subsidiaries referred to in item 4 of SCHEDULE III. Since the
date of the most recent audited financial statements of the Company and its
Subsidiaries, neither the Company nor any Restricted Subsidiary shall have
consolidated or merged with or into, or participated in a share exchange with,
any Person, or sold, leased or otherwise disposed of any Property other than in
the ordinary course of business and other than sales or other dispositions of
Property which shall not have had a Material Adverse Effect.

4.7.  APPROVALS.

            All actions, approvals, consents, waivers, exemptions, orders,
authorizations, registrations, declarations, filings and recordings
(collectively, "APPROVALS"), if any, which are required to be taken, given,
obtained, filed or recorded, as the case may be, by or from or with (a) any
Governmental Authority, (b) any trustee or holder of any indebtedness,
obligation or securities of the Company or any of its Subsidiaries (including,
without limitation, the Existing Senior Notes and the Existing Convertible
Notes) or (c) any other Person, in connection with the legal and valid execution
and delivery by the Company of this Agreement, the Warrant Agreement, the
Registration Agreement and the Security Documents and by the Subsidiary
Guarantors of the Subsidiary Guaranty and the


                                       8
<PAGE>   15
consummation of the transactions contemplated hereby and thereby and the
issuance and delivery by the Company of the Notes and the Warrants and the
making by the Company of the borrowings contemplated hereby, shall have been
duly taken, given, obtained, filed or recorded, as the case may be, and all such
Approvals shall be final, subsisting and in full force and effect on the Closing
Date, and shall not be subject to any further proceedings or appeals or any
conditions subsequent not approved by you. Certified copies or other appropriate
evidence of all such Approvals, in form, scope and substance satisfactory to you
and your special counsel, shall have been delivered or made available to you and
your special counsel at your request.

4.8.  ACQUISITION OF TECHNOCOM SHARES.

            (a)   The Company and each of the Selling Shareholders shall have
duly authorized, executed and delivered an agreement (each, a "SHARE PURCHASE
AGREEMENT" and together the "SHARE PURCHASE AGREEMENTS") providing for the sale
by the Selling Shareholders to the Company of an aggregate of 59 of the issued
and outstanding ordinary shares of Technocom (the "TECHNOCOM SHARES"), and you
and your special counsel shall have received a complete and correct copy of each
thereof, and the terms and provisions of each thereof shall be satisfactory to
you.

            (b)   Concurrently with the Closing, the acquisition by the Company
of the Technocom Shares pursuant to the Share Purchase Agreements (the
"ACQUISITION") shall have been duly consummated in accordance with the
respective terms thereof; and such documents and other evidence as you shall
require to evidence such Acquisition shall have been delivered to you. The
Company shall have good and marketable title to the Technocom Shares, free and
clear of all Liens other than (i) with respect to the Pledged Shares, the Lien
of the Pledge Agreement, and (ii) with respect to the Technocom Shares other
than the Pledged Shares, the Liens of the Existing Senior Note Indenture and the
Existing Senior Note Collateral Documents and the Existing Convertible Note
Indenture and the Existing Convertible Note Collateral Documents. The
Acquisition shall have been accomplished in compliance with all applicable laws
and governmental rules and regulations and all agreements or instruments to
which the Company or Technocom is a party, and such certificates, documents and
other evidence as you shall reasonably request concerning such compliance and
complete and correct copies of all documents delivered at the closing of the
Acquisition shall have been delivered to you and your special counsel.

4.9.  WARRANT AGREEMENT; DEPOSIT OF ADDITIONAL WARRANT CERTIFICATES; RESERVATION
      OF COMMON STOCK.

            (a)   The Warrant Agreement shall have been duly authorized,
executed and delivered by the Company and the Warrant Agent and shall be in full
force and effect and the Warrant Agent, you and your special counsel shall have
each received an original fully executed counterpart thereof.


                                       9
<PAGE>   16
            (b)   The Company shall have deposited Warrant Certificates
evidencing the Additional Warrants with the Trustee as contemplated by Section 5
of the Trust Agreement.

            (c)   The number of shares of Common Stock initially issuable upon
the exercise of the Initial Warrants and the Additional Warrants and reserved
for issuance upon the exercise of the Default Warrants shall have been duly
authorized and reserved for issuance upon such exercise.

4.10. REGISTRATION AGREEMENT.

            The Company shall have duly authorized, executed and delivered the
Registration Rights Agreement, dated as of the date hereof and substantially in
the form of EXHIBIT G (the "REGISTRATION AGREEMENT"), the Registration Agreement
shall be in full force and effect and you and your special counsel shall have
received an original fully executed counterpart thereof.

4.11. SUBSIDIARY GUARANTY.

            Each Subsidiary Guarantor shall have duly authorized, executed and
delivered the Subsidiary Guaranty, the Subsidiary Guaranty shall be in full
force and effect, and you and your special counsel shall have each received an
original fully executed counterpart thereof.

4.12. TRUST AGREEMENT.

            The Company and the Trustee shall have duly authorized, executed and
delivered the Trust Agreement, the Trust Agreement shall be in full force and
effect, and the Trustee, you and your special counsel shall have received an
original fully executed counterpart thereof.

4.13. PLEDGE AGREEMENT; SHARE MORTGAGE AND SHARE TRANSFER FORM.

            (a)   The Company shall have duly authorized, executed and delivered
the Pledge Agreement, the Pledge Agreement shall be in full force and effect,
you and the Trustee shall have received a fully executed counterpart thereof,
and no term or condition thereof shall have been amended, modified or waived
except with your prior written consent.

            (b)   The Agency Agreement, dated as of the date hereof and
substantially in the form of Exhibit A to the Trust Agreement (the "AGENCY
AGREEMENT") shall have been duly authorized, executed and delivered by the
Trustee, the Company and the Collateral Agent and shall be in full force and
effect. The Company and the Collateral Agent shall have duly authorized,
executed and delivered the Share Mortgage, the Share


                                       10
<PAGE>   17
Mortgage shall be in full force and effect, you, the Trustee and the Collateral
Agent shall have received a fully executed counterpart thereof, and no term or
condition thereof shall have been amended, modified or waived except in
accordance with the provisions thereof. The Company shall have duly executed and
delivered a Share Transfer Form (the "SHARE TRANSFER FORM") in respect of the
transfer of 28 ordinary shares of IR pound sterling 1 each in the capital of
Technocom to the Collateral Agent, the Share Transfer Form shall be in full
force and effect and the Collateral Agent, the Trustee and you and your special
counsel shall have received an original (or, in the case of all such Persons
other than the Collateral Agent, a copy of an original) fully executed
counterpart thereof.

4.14. SECURITY AGREEMENT.

            The Company and the Trustee shall have duly authorized, executed and
delivered the Security Agreement, the Security Agreement shall be in full force
and effect, and the Trustee, you and your special counsel shall have received an
original fully executed counterpart thereof.

4.15. DELIVERY OF PLEDGED SHARES AND REGISTRATION IN SHARE REGISTRY;
      RECORDATION; TAXES, ETC.

            The Company shall have delivered to the Trustee or its designee
stock certificates representing the Pledged Shares, registered in the name of
the Company, accompanied by undated stock powers duly executed in blank, and the
Collateral Agent shall have been registered in the Share Register of Technocom
as the registered owner of 28 ordinary shares of IR pound sterling1 each in the
capital of Technocom. The Pledge Agreement and the Security Agreement and/or
prior notices, statements or other instruments in respect thereof, including,
without limitation, financing statements on Form UCC-1, shall have been duly
recorded, published, registered and filed in such manner and in such places as
are required by law to establish, perfect and preserve and protect the security
interests of the Trustee in the rights and Property covered by the Pledge
Agreement and the Security Agreement; and all taxes, fees, and other charges in
connection with the execution, delivery, recording, publishing, registration and
filing of such instruments and the offer, issue and delivery of the Notes and
the Warrants (and the Warrant Certificates evidencing the Warrants) and the
making by the Lenders of the Revolving Credit Loans shall have been paid in
full.

4.16. PLACEMENT FEE.

            The Company shall have paid to you and each Other Lender your and
such Other Lender's pro rata share (based on your respective Commitment
Percentages) of the aggregate placement fee in the amount of $290,625 payable on
the Closing Date.

4.17. NOTICE OF BORROWING.


                                       11
<PAGE>   18
            On or prior to the second Business Day prior to the Closing Date,
the Company shall have delivered to each Lender a borrowing notice in the form
of EXHIBIT I specifying the aggregate amount of and the respective Series of
Revolving Credit Loans to be made on the Closing Date and the portion of each
such Series of Revolving Credit Loans to be made by such Lender.

4.18. EXISTING SENIOR NOTE INDENTURE; EXISTING CONVERTIBLE NOTE INDENTURE.

            You and your special counsel shall each have received a complete and
correct copy of the Existing Senior Note Indenture and the Existing Convertible
Note Indenture and all respective amendments thereto.

4.19. TECHNOCOM ORGANIZATIONAL DOCUMENTS, ETC.

            You and your special counsel shall each have received complete and
correct copies of:

            (i)   the Memorandum of Association and Articles of Association and
      other constitutive documents of Technocom, together with a certified copy
      of a written resolution of the shareholders of Technocom amending Articles
      11 and 32 of such Articles of Association and approving the transfer of
      the Pledged Shares pursuant to the Share Mortgage and further transfers
      thereof by the Collateral Agent upon a foreclosure under the Share
      Mortgage;

            (ii)  all agreements with respect to the Technocom Capital Stock,
      including the Technocom Shareholder Agreement and the Technocom Put
      Agreements and all respective amendments thereto; and

            (iii) a waiver executed by each of the Selling Shareholders waiving
      any and all preemptive rights, rights of first refusal, requirements of
      consent and other similar rights that such Selling Shareholder may have
      with respect to the transfer of the Pledged Shares from the Company to the
      Collateral Agent pursuant to the Share Mortgage and any further transfer
      by the Collateral Agent upon a foreclosure under the Share Mortgage.

All of the documents and agreements delivered pursuant to this SECTION 4.18
shall be satisfactory to you in substance.

4.20. ISSUANCE OF OTHER NOTES AND WARRANTS.

            Contemporaneously with the Closing, the Company shall issue and
deliver to the Other Lenders the Notes and the Initial Warrants to be issued and
delivered to them as specified in SCHEDULE I and each Other Lender shall have
made a Series A Revolving Credit Loan and a Series B Revolving Credit Loan to
the Company in the amount of such


                                       12
<PAGE>   19
Other Lender's Commitment Percentage of Series A Revolving Credit Loans and
Series B Revolving Credit Loans being made to the Company on the Closing Date.

4.21. PAYMENT OF SPECIAL COUNSEL FEES.

            Without limiting the provisions of SECTION 16.1, the Company shall
have paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in SECTION 4.5 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.

4.22. PRIVATE PLACEMENT NUMBER.

            A Private Placement number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Notes
and the Warrants.

5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

            The Company represents and warrants to you that:

5.1.  ORGANIZATION; POWER AND AUTHORITY.

            The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the Property it purports to own or hold under lease, to transact the
business it transacts and currently proposes to transact, to execute and deliver
this Agreement, the Warrant Agreement, the Registration Agreement, the Security
Documents, the Notes and the Warrants and to perform the provisions hereof and
thereof.

5.2.  AUTHORIZATION, ETC.

            This Agreement, the Warrant Agreement, the Registration Agreement,
the Security Documents, the Notes and the Warrants have been duly authorized by
all necessary corporate action on the part of the Company, and assuming due
authorization, execution, delivery and performance by each other party thereto,
each of this Agreement, the Warrant Agreement, the Registration Agreement and
each Security Document constitutes, and upon execution and delivery thereof each
Note and each Warrant will constitute, a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or other similar laws from time to time


                                       13
<PAGE>   20
in effect affecting creditors' rights generally or by principles governing the
availability of equitable remedies.

5.3.  DISCLOSURE.

            The Company has delivered to you and each Other Lender the financial
information and other materials described on SCHEDULE III. The materials
described in item 12 on SCHEDULE III fairly describe, in all material respects,
the general nature of the business and principal Property of the Company and its
Subsidiaries. This Agreement, the documents listed on SCHEDULE III and the
certificates delivered to you by or on behalf of the Company pursuant to this
Agreement, taken as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading in light of the circumstances under which they were made, it
being understood that, for purposes of this SECTION 5.3, any statement contained
in such documents shall be deemed modified or superseded to the extent that a
later statement contained in any such documents modifies or replaces such
statement, whether or not such later statement so states. Since the date of most
recent audited financial statements of the Company referred to in SCHEDULE III,
there has been no change in the financial condition, operations, business,
Property or prospects of the Company or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. Other than matters generally affecting the economy,
there is no fact known to the Company that could reasonably be expected to have
a Material Adverse Effect that has not been set forth herein or in the documents
listed on SCHEDULE III or the certificates delivered to you by or on behalf of
the Company pursuant to this Agreement.

5.4.  ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.

            (a)   SCHEDULE II contains complete and correct lists of (i) the
Company's Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, and the percentage of shares of
each class of its Capital Stock or similar equity interests outstanding owned by
the Company and each other Subsidiary, (ii) the Company's Affiliates, other than
Subsidiaries, and (iii) the Company's directors and senior officers.

            (b)   All of the outstanding shares of Capital Stock or similar
equity interests of each Subsidiary shown in SCHEDULE II as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien, except as specified in SCHEDULE II.

            (c)   Each Subsidiary identified in SCHEDULE II is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal


                                       14
<PAGE>   21
entity and is in good standing in each jurisdiction in which such qualification
is required by law, other than those jurisdictions as to which the failure to be
so qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each such Subsidiary
has the corporate or other power and authority to own or hold under lease the
Property it purports to own or hold under lease and to transact the business it
transacts and currently proposes to transact.

            (d)   Except as set forth in the "Risk Factors" section of the
Company's 10-K for the period ended December 31, 1996, no Subsidiary is a party
to, or otherwise subject to, any legal restriction or any agreement (other than
this Agreement and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of Capital Stock or similar equity
interests of such Subsidiary.

5.5.  CAPITAL STOCK.

            At the time of the Closing and after giving effect to the
transactions contemplated by this Agreement and the Warrant Agreement, the
authorized Capital Stock of the Company will consist of : (a) 100,000,000 shares
of Common Stock, of which 32,008,050 shares will be issued and outstanding
2,775,334 shares will be reserved by the Company for issuance upon the exercise
of options or warrants outstanding on the date hereof or option or similar
rights granted subsequent to the date hereof pursuant to the Company's Equity
Compensation Plan in effect on the date hereof, 423,000 shares will be reserved
by the Company for issuance by the Company upon exercise of the Initial
Warrants, 182,000 shares will be reserved by the Company for issuance by the
Company upon exercise of the Additional Warrants, 1,000,000 shares will be
reserved by the Company for issuance by the Company upon exercise of the Default
Warrants, 4,682,000 shares will be reserved by the Company for issuance by the
Company upon exercise of the Existing Warrants, and 3,840,580 shares will be
reserved by the Company for issuance upon conversion of the Existing Convertible
Notes; and (b) 100,000,000 shares of Preferred Stock, par value $.01 per share,
of which 446,884 shares will be issued and outstanding. All such authorized
Capital Stock has been duly and validly authorized, and all such outstanding
shares are, and all such shares to be issued will be, duly and validly issued
and outstanding, and are, or upon issuance will be, fully paid and
non-assessable. Neither the Company nor any of its Subsidiaries (x) has
outstanding any stock or securities convertible into or exchangeable for any
shares of its Capital Stock, or any rights (preemptive or otherwise) or warrants
to subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, any of its Capital
Stock, other than, with respect to the Company, the Existing Warrants, the
Existing Convertible Notes and options and warrants outstanding on the date
hereof or options or similar rights granted subsequent to the date hereof
pursuant to the Company's stock option plans in effect as the date hereof, or
(y) is subject to any obligation (contingent or


                                       15
<PAGE>   22
otherwise) to repurchase or otherwise acquire any shares of its Capital Stock or
any convertible securities, rights or warrants, or options of the type described
in the foregoing subclause (x), other than, with respect to Technocom, the
Technocom Put Agreements. The Company is not a party to, and after due inquiry,
has no knowledge of, any agreement restricting the transfer of any shares of its
Capital Stock.

5.6.  SHARE PURCHASE AGREEMENTS.

            The Company has furnished you and your special counsel with complete
and correct copies of the Share Purchase Agreements (including the Exhibits and
Schedules thereto). The Company has the requisite legal right, power and
authority to enter into the Share Purchase Agreements and to carry out the
transactions contemplated thereby. The Company has, by all necessary corporate
action (all action of shareholders, if any, being required therefor having been
duly taken), duly authorized the execution and delivery of the Share Purchase
Agreements and the performance of its obligations thereunder. The Company shall
have, on or prior to the Closing Date, duly performed and complied with all
material agreements and conditions contained in the Share Purchase Agreements
which are required to be performed and complied with by it thereunder other than
payment of the purchase price for the Technocom Shares. Each Share Purchase
Agreement constitutes the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms. Each Share
Purchase Agreement is in full force and effect without any known default
existing thereunder, and neither Share Purchase Agreement has been amended or
modified, and no material term or provision thereof has been waived, except in
accordance with the terms thereof. To the best knowledge of Holdings and the
Company, each of the Selling Shareholders has duly performed and complied with
all material agreements and conditions contained in the Share Purchase Agreement
to which it is a party required to be performed or complied with by it
thereunder on or prior to the date hereof.

5.7.  CONSUMMATION OF ACQUISITION.

            Concurrently with the Closing on the Closing Date, the Acquisition
will be duly consummated in accordance with the terms of the Share Purchase
Agreements and in compliance in all material respects with all applicable laws,
ordinances, rules and regulations of any Governmental Authority, and the Company
will become the owner, beneficially and of record, of the Technocom Shares, free
and clear of any Lien other than, with respect to the Pledged Shares, the Lien
of the Pledge Agreement and the Share Mortgage, and with respect to the other
Technocom Shares, the Lien of the Existing Senior Note Indenture and the
Existing Senior Note Collateral Documents.

5.8.  FINANCIAL STATEMENTS.

            The Company has delivered to each Lender copies of the financial
statements of the Company and its Subsidiaries as items nos. 1 through 7 listed
on SCHEDULE


                                       16
<PAGE>   23
III. All of said financial statements (including in each case the related
schedules and notes) are true, complete and correct in all material respects and
fairly present in all material respects the consolidated financial position of
the Company and its Subsidiaries as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with
Canadian GAAP or GAAP, as applicable, consistently applied throughout the
periods involved except as set forth in the notes thereto (except for, in the
case of any interim financial statements, to normal year-end adjustments and the
absence of footnotes).

5.9.  COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.

            The execution, delivery and performance by the Company of the Share
Purchase Agreements, this Agreement, the Warrant Agreement, the Registration
Agreement, the Security Documents, the Notes and the Warrants will not (i)
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien (other than Liens in favor of the Trustee pursuant to
the Pledge Agreement and the Security Agreement) in respect of any Property of
the Company or any Subsidiary under the corporate charter or bylaws of the
Company or any Subsidiary or any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, or other agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any of their respective Property is bound or affected, (ii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any Subsidiary or (iii)
violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.

5.10. GOVERNMENTAL AUTHORIZATIONS, ETC.

            No Approval by, from or with any Governmental Authority is required
in connection with the execution, delivery or performance by the Company of the
Share Purchase Agreement, this Agreement, the Warrant Agreement, the
Registration Agreement, the Security Documents, the Notes or the Warrants, other
than filings required in connection with the establishment and perfection of the
security interests intended to be created pursuant to the Security Documents.

5.11. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.

            (a)   There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any Property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.


                                       17
<PAGE>   24
            (b)   Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

5.12. TAXES.

            The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their Property, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
except for any taxes and assessments (i) the amount of which is not individually
or in the aggregate Material or (ii) the amount, applicability or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which the Company or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Company knows of no
basis for any other tax or assessment that could reasonably be expected to have
a Material Adverse Effect. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of federal, state or other taxes for
all fiscal periods are adequate.

5.13. TITLE TO PROPERTY; LEASES.

            The Company and its Subsidiaries have good and sufficient title to
their respective Property that individually or in the aggregate are Material,
including all such Property reflected in the most recent audited balance sheet
referred to in SECTION 5.8 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
SECTION 9.12 of this Agreement. All leases that individually or in the aggregate
are Material are valid and subsisting and are in full force and effect in all
material respects.

5.14. LICENSES, PERMITS, ETC.

            (a)   The Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others.

            (b)   To the best knowledge of the Company, no product of the
Company or its Subsidiaries infringes in any material respect any license,
permit, franchise, authorization, patent, copyright, service mark, trademark,
trade name or other right owned by any other Person.


                                       18
<PAGE>   25
            (c)   To the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Subsidiaries
with respect to any patent, copyright, service mark, trademark, trade name or
other right owned or used by the Company or any of its Subsidiaries.

5.15. COMPLIANCE WITH ERISA.

            (a)   Except to the extent that any such event or events, considered
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:

            (i)   No Termination Event has occurred, and no event or condition
      has occurred or exists as a result of which any Termination Event could
      reasonably be expected to occur, with respect to any Plan. No accumulated
      funding deficiency (as defined in Section 302 of ERISA and Section 412 of
      the Code), whether or not waived, has occurred with respect to any Plan.
      The present value of all accrued benefits under each Plan (based on those
      assumptions used to fund such Plan, which assumptions are reasonable) did
      not, as of the most recent valuation date, which for any such Plan was not
      earlier than twelve months prior to the date as of which this
      representation is made, exceed the then current value of the assets of
      such Plan allocable to such benefits.

            (ii)  No Company Group Member has incurred, or is reasonably
      expected to incur, any withdrawal liability to any Multiemployer Plan. No
      Company Group Member has received any notification that any Multiemployer
      Plan is in reorganization (as defined in Section 4241 of ERISA), is
      insolvent (as defined in Section 4245 of ERISA) or has been terminated,
      within the meaning of Title IV of ERISA, and no Multiemployer Plan is
      reasonably expected to be in reorganization or insolvent or to be
      terminated.

            (iii) No prohibited transaction (within the meaning of Section 406
      of ERISA or Section 4975 of the Code) or breach of fiduciary
      responsibility has occurred which has subjected or could subject any
      Company Group Member to any liability under Section 406, 409, 502(i) or
      502(l) of ERISA or Section 4975 of the Code, or under any agreement or
      other instrument pursuant to which such Company Group Member has agreed or
      is required to indemnify any Person against any such liability. No Company
      Group Member has incurred, or is reasonably expected to incur, any
      liability to the PBGC (other than for insurance premiums, which have been
      paid when due).

            (iv)  No Company Group Member has failed to make full payment on or
      before the due date thereof of any amount which such Company Group Member
      is or was required under the terms of any Plan to have paid as
      contributions to such Plan as of the date hereof.


                                       19
<PAGE>   26
            (v)   No Lien imposed under the Code or ERISA on the assets of any
      Company Group Member exists or is reasonably likely to arise on account of
      any Plan.

            (vi)  No welfare plan (as defined in Section 3(1) of ERISA and
      subject thereto) maintained by any Company Group Member provides medical
      or death benefits with respect to current or former employees beyond their
      termination of employment (other than coverage mandated by law). No such
      plan to which Sections 601-609 of ERISA and Section 4980B of the Code
      apply has been administered other than in compliance with such sections.

            (b)   Neither the execution and delivery of this Agreement nor the
issuance of the Notes as herein contemplated will involve any transaction which
is subject to the prohibitions of Section 406 of ERISA or in connection with
which a tax could be imposed pursuant to Section 4975 of the Code. The
representation by the Company in the preceding sentence is made in reliance upon
and subject to the accuracy of your representation in SECTION 6.2.

            (c)   Each pension plan maintained by the Company or any Subsidiary
which is not subject to ERISA complies in all material respects with all
statutes and governmental rules and regulations applicable to it, and the
Company and each Subsidiary has satisfied their respective funding obligations
as required by applicable law for all such plans, except to the extent any
non-compliance therewith or non satisfaction thereof could not, considered
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

5.16. PRIVATE OFFERING BY THE COMPANY.

            Neither the Company nor anyone acting on its behalf has offered the
Notes or the Warrants or any similar securities for sale to, or solicited any
offer to buy any of the same from, or otherwise approached or negotiated in
respect thereof with, any Person other than you, the Other Lenders and not more
than 10 other Institutional Investors, each of which has been offered the Notes
and the Warrants at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or delivery of the Notes or the Warrants to the
registration requirements of Section 5 of the Securities Act.

5.17. USE OF PROCEEDS; MARGIN REGULATIONS.

            The Company will apply the proceeds of the Series A Revolving Credit
Loans made on the Closing Date to the purchase of 28 of the ordinary shares of
Technocom and will apply the proceeds of the Series B Revolving Credit Loans
made on the Closing Date for its general corporate purposes, provided that in no
event shall the Company apply all or any portion of the proceeds of the Series B
Revolving Credit Loans


                                       20
<PAGE>   27
to the purchase of the Technocom Shares. No part of the proceeds from the
Revolving Credit Loans made hereunder will be used, directly or indirectly, for
the purpose of buying or carrying any margin stock within the meaning of
Regulation G of the Board of Governors of the Federal Reserve System (12 CFR
207), or for the purpose of buying or carrying or trading in any securities
under such circumstances as to involve the Company in a violation of Regulation
X of said Board (12 CFR 224) or to involve any broker or dealer in a violation
of Regulation T of said Board (12 CFR 220). Margin stock does not constitute
more than 5% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 5% of the value of such assets. As used in this
Section, the terms "MARGIN STOCK" and "PURPOSE OF BUYING OR CARRYING" shall have
the meanings assigned to them in said Regulation G.

5.18. EXISTING INDEBTEDNESS; FUTURE LIENS.

            (a)   SCHEDULE IV sets forth a complete and correct list of all
outstanding indebtedness for money borrowed and guarantees of the Company and
its Subsidiaries as of the date hereof and as of the Closing Date, identifying
the obligor and setting forth the amount, interest rate, maturity date and a
brief description of any security therefor. Neither the Company nor any
Subsidiary is in default and no waiver of default is currently in effect in the
payment of any principal or interest on any such indebtedness for money borrowed
or guarantee, and except where the existence of such event or condition could
not reasonably be expected to have a Material Adverse Effect, no event or
condition exists with respect to any such indebtedness for money borrowed or
guarantees that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such indebtedness for money borrowed
or guarantees to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.

            (b)   Neither the Company nor any Subsidiary has agreed or consented
to cause or permit in the future (upon the happening of a contingency or
otherwise) any of its Property, whether now owned or hereafter acquired, to be
subject to a Lien not permitted by SECTION 9.12.

5.19. FOREIGN ASSETS CONTROL REGULATIONS, ETC.

            Neither the issuance of the Notes by the Company hereunder nor its
use of the proceeds of the Revolving Credit Loans will violate the Trading with
the Enemy Act, as amended, or any of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto.


                                       21
<PAGE>   28
5.20. STATUS UNDER CERTAIN STATUTES.

            Neither the Company nor any Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.

5.21. EXISTING SENIOR NOTE INDENTURE AND EXISTING CONVERTIBLE NOTE INDENTURE.

            The Company has delivered to you and your special counsel true and
correct copies of the Existing Senior Note Indenture and the Existing
Convertible Note Indenture and all amendments to each thereof, respectively.
There exist no events of default and no material defaults under the Existing
Senior Note Indenture or the Existing Convertible Note Indenture nor any basis
under the Existing Senior Note Indenture or the Existing Convertible Note
Indenture for the exercise by any holders of the Existing Senior Notes or the
Existing Convertible Notes of any rights of acceleration, cancellation or
rescission.

5.22. TECHNOCOM ORGANIZATIONAL DOCUMENTS, ETC.

            The Company has delivered to you and your special counsel true and
correct copies of (i) the Memorandum of Association and Articles of Association
and other constitutive documents of Technocom and (ii) all agreements with
respect to the Technocom Capital Stock, including the Technocom Shareholder
Agreement and all amendments thereto and the Technocom Put Agreements and all
amendments thereto. The pledge of the Pledged Shares pursuant to the Pledge
Agreement and the pledge and transfer of the Pledged Share pursuant to the Share
Mortgage and the Share Transfer Form, and any transfer by the Trustee or the
Collateral Agent of the Pledged Shares in connection with the exercise of
remedies under the Pledge Agreement or the Share Mortgage, will not contravene,
result in any breach of, or constitute a default under, the Memorandum of
Association and Articles of Association or other constitutive documents of
Technocom or any other agreement to which Technocom is a party or by which
Technocom or any of its Capital Stock may be bound.

5.23. CHIEF EXECUTIVE OFFICE.

            The Company's chief executive office on the date hereof is located
at the address set forth at the beginning of this Agreement.

6.    REPRESENTATIONS OF THE LENDER.

6.1.  PURCHASE FOR INVESTMENT.

            You represent that you are acquiring the Notes and the Warrants
being acquired by you for your own account or for one or more separate accounts
maintained by


                                       22
<PAGE>   29
you or for the account of any of your affiliates or of one or more pension or
trust funds for investment and not with a view to the distribution thereof,
provided that the disposition of your or their Property shall at all times be
within your or their control. You understand that the Notes and the Warrants and
the Warrant Shares have not been registered under the Securities Act or any
state securities laws and may be resold only if registered pursuant to the
provisions of the Securities Act and such state securities laws or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to and will not register the Notes or the Warrants or,
except as contemplated by the Registration Agreement, the Warrant Shares.

6.2.  SOURCE OF FUNDS.

            (a)   You represent to the Company that (i) the funds to be used by
you to make the Revolving Credit Loans to be made by you on the Closing Date
constitute assets of your insurance company general account (as defined in
Section V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60) and (ii)
no employee benefit plan or employee benefit plans maintained by a single
employer (including an "affiliate" thereof, as defined in Section V(a) of PTCE
95-60) or employee organization hold an interest or interests either as
contractholders or as the beneficial owners of contracts in such general
account, the reserves and liabilities for which exceed 10% of the sum of all
reserves and liabilities of such general account plus the surplus of such
Lender, such reserves and liabilities and such surplus in each case being
calculated in accordance with the applicable provisions of PTCE 95-60.

            (b)   As used in this Section, the term "employee benefit plan"
shall have the meaning assigned to such term in Section 3 of ERISA.

7.    INFORMATION AS TO COMPANY.

7.1.  FINANCIAL AND BUSINESS INFORMATION.

            The Company shall deliver to each holder of Notes that is an
Institutional Investor:

            (a)   Quarterly Statements -- within 45 days after the end of each
      quarterly fiscal period in each fiscal year of the Company (other than the
      last quarterly fiscal period of each such fiscal year), duplicate copies
      of

                  (i)   a consolidated balance sheet of the Company and its
            Subsidiaries as at the end of such quarter, and

                  (ii)  consolidated statements of operations, shareholders'
            equity and changes in financial position of the Company and its
            Subsidiaries for


                                       23
<PAGE>   30
            such quarter and (in the case of the second and third quarters) for
            the portion of the fiscal year ending with such quarter,

      setting forth in comparative form the figures for the corresponding
      periods in the previous fiscal year, prepared in accordance with GAAP
      applicable to quarterly financial statements generally, and certified by a
      Senior Financial Officer as fairly presenting, in all material respects,
      the financial position of the companies being reported on and their
      results of operations and cash flows, except for the absence of footnotes
      and changes resulting from year-end adjustments, provided that delivery
      within the time period specified above of the Company's Quarterly Report
      on Form 10-Q prepared in compliance with the requirements therefor and
      filed with the Commission shall be deemed to satisfy the requirements of
      this SECTION 7.1(a);

            (b)   Annual Statements -- within 90 days after the end of each
      fiscal year of the Company, duplicate copies of

                  (i)   a consolidated balance sheet of the Company and its
            Subsidiaries as at the end of such year, and

                  (ii)  consolidated statements of operations, shareholders'
            equity and changes in financial position of the Company and its
            Subsidiaries for such year,

      setting forth in each case in comparative form the figures for the
      previous fiscal year, prepared in accordance with GAAP, and accompanied

                  (A)   by an opinion thereon of independent certified public
            accountants of recognized national standing, which opinion shall
            state that such financial statements present fairly, in all material
            respects, the financial position of the companies being reported
            upon and their results of operations and cash flows and have been
            prepared in conformity with GAAP, and that the examination of such
            accountants in connection with such financial statements has been
            made in accordance with generally accepted auditing standards, and
            that such audit provides a reasonable basis for such opinion in the
            circumstances, and

                  (B)   a certificate of such accountants stating that in making
            the examination necessary for certification of such financial
            statements pursuant to the preceding subclause (A) nothing has come
            to their attention which would lead them to believe that the Company
            or any of its Restricted Subsidiaries has violated any provisions of
            SECTIONS 9.3, 9.7, 9.8, 9.9, 9.10 OR 9.15, 10.1 OR 10.2 of this
            Agreement or, if any such violation has occurred, specifying the
            nature and period of existence thereof, it being understood that
            such accountants shall not be liable directly or indirectly to


                                       24
<PAGE>   31
            any Person for any failure to obtain knowledge of any such
            violation, and it being further understood that such statement may
            not be provided to the extent contrary to the then current
            recommendations of the accountants' governing body;

      provided that the delivery within the time period specified above of the
      Company's Annual Report on Form 10-K for such fiscal year (together with
      the Company's annual report to shareholders, if any, prepared pursuant to
      Rule 14a-3 under the Exchange Act) prepared in accordance with the
      requirements therefor and filed with the Commission, together with the
      accountant's certificate described in subclause (B) above, shall be deemed
      to satisfy the requirements of this SECTION 7.1(b);

            (c)   Audit Reports, etc. -- promptly (and in any event within five
      Business Days) after receipt thereof, copies of all management letters and
      reports submitted to the Company or any of its Subsidiaries by independent
      certified public accountants in connection with any annual, interim or
      special audit of the Company or any Subsidiary made by such accountants;

            (d)   SEC and Other Reports -- promptly upon their becoming
      available, one copy of (i) each financial statement, report, notice or
      proxy statement sent by the Company or any Subsidiary to public securities
      holders generally, and (ii) each regular or periodic report, each
      registration statement (without exhibits except as expressly requested by
      such holder), and each prospectus and all amendments thereto filed by the
      Company or any Subsidiary with the Commission and of all press releases
      and other statements made available generally by the Company or any
      Subsidiary to the public concerning developments that are Material;

            (e)   Notice of Default or Event of Default -- immediately (and in
      any event within 2 Business Days) after a Responsible Officer becoming
      aware of the existence of any Default or Event of Default or that any
      Person has given any notice or taken any action with respect to a claimed
      Default hereunder or that any Person has given any notice or taken any
      action with respect to a claimed default of the type referred to in
      SECTION 11(f), a written notice specifying the nature and period of
      existence thereof and what action the Company is taking or proposes to
      take with respect thereto;

            (f)   ERISA Matters -- promptly, and in any event within five
      Business Days after a Responsible Officer becoming aware of any of the
      following, a written notice setting forth the nature thereof and the
      action, if any, that the Company or any Company Group Member proposes to
      take with respect thereto:

                  (i)   the occurrence of any Termination Event; or


                                       25
<PAGE>   32
                  (ii)  receipt with respect to any Multiemployer Plan of notice
            as prescribed in ERISA of any withdrawal liability assessed against
            any Company Group Member or of a determination that any
            Multiemployer Plan is in reorganization or insolvent (both within
            the meaning of Title IV of ERISA); or

                  (iii) the occurrence of a prohibited transaction (within the
            meaning of Section 406 of ERISA or Section 4975 of the Code) for
            which a statutory or administrative exemption is not available or a
            breach of fiduciary responsibility in connection with which any
            Company Group Member could reasonably be subject to any material
            liability under Section 406, 409, 502(i) or 502(l) of ERISA or
            Section 4975 of the Code, or under any agreement or other instrument
            pursuant to which such Company Group Member has agreed or is
            required to indemnify any Person against any such liability; or

                  (iv)  a material adverse change in the funding status of any
            Plan;

            (g)   Notices with respect to Existing Senior Note Indenture and
      Existing Convertible Note Indenture -- promptly upon the delivery thereof
      to the holders of the Existing Senior Notes and the Existing Convertible
      Notes, respectively, copies of all notices delivered by the Company to
      such holders; and promptly upon the execution and delivery thereof, true,
      complete and correct copies of all amendments and modifications to and
      waivers under the Existing Senior Note Indenture and the Existing
      Convertible Note Indenture, respectively;

            (h)   Notices from Governmental Authority -- promptly, and in any
      event within 30 days of receipt thereof, copies of any notice to the
      Company or any Subsidiary from any federal, state or foreign Governmental
      Authority relating to any order, ruling, statute or other law or
      regulation that could reasonably be expected to have a Material Adverse
      Effect; and

            (i)   Requested Information -- with reasonable promptness, such
      other data and information relating to the business, operations, affairs,
      financial condition, assets or Property of the Company or any of its
      Subsidiaries or relating to the ability of the Company to perform its
      obligations hereunder and under the Notes as from time to time may be
      reasonably requested by any such holder of Notes.

7.2.  OFFICER'S CERTIFICATE.

            Each set of financial statements delivered to a holder of Notes
pursuant to SECTION 7.1(a) or SECTION 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer containing a statement that such
officer has reviewed the relevant terms


                                       26
<PAGE>   33
hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and its Restricted
Subsidiaries from the beginning of the quarterly or annual period covered by the
statements then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists, specifying the nature and period of
existence thereof and what action the Company shall have taken or proposes to
take with respect thereto.

7.3.  INSPECTION.

            The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:

            (a)   No Default -- if no Default or Event of Default then exists,
      at the expense of such holder and upon reasonable prior notice to the
      Company, to visit the principal executive office of the Company, to
      discuss the affairs, finances and accounts of the Company and its
      Wholly-Owned Restricted Subsidiaries and, subject to the terms of any
      agreements with other shareholders thereof, its other Restricted
      Subsidiaries, with the Company's officers, and its independent public
      accountants, and to visit the other offices and Property of the Company
      and each Restricted Subsidiary, all at such reasonable times during normal
      business hours and as often as may be reasonably requested in writing; and

            (b)   Default -- if a Default or Event of Default then exists, at
      the expense of the Company, to visit and inspect any of the offices or
      Property of the Company or any Restricted Subsidiary, to examine all their
      respective books of account, records, reports and other papers, to make
      copies and extracts therefrom, and to discuss their respective affairs,
      finances and accounts with their respective officers and independent
      public accountants (and by this provision the Company authorizes said
      accountants to discuss the affairs, finances and accounts of the Company
      and its Restricted Subsidiaries), all at such times and as often as may be
      requested.

8.    SERIES A AND SERIES B REVOLVING CREDIT FACILITIES.

8.1.  REVOLVING CREDIT COMMITMENTS AND MAKING OF REVOLVING CREDIT LOANS.

            (a)   Subject to the terms and conditions hereof, you and the Other
      Lenders hereby establish for the benefit of the Company a revolving credit
      facility pursuant to which, during the Series A Availability Period, the
      Company may borrow (and repay and reborrow) an aggregate principal amount
      at any one time outstanding not in excess of the Total Series A Commitment
      as in effect from time to time. At any time and from time to time during
      the Series A Availability Period, subject to the terms, provisions and
      limitations hereof, the Company may borrow (and repay and reborrow) from
      each holder


                                       27
<PAGE>   34
      of Series A Notes an aggregate principal amount at any one time
      outstanding not in excess of such holder's Commitment Percentage of the
      Total Series A Commitment (each such holder's obligation to lend such
      amount being hereinafter referred to as such holder's "SERIES A
      COMMITMENT" and such obligations of all such holders being hereinafter
      collectively referred to as the "SERIES A COMMITMENTS"). All amounts
      outstanding under the revolving credit facility established under this
      SECTION 8.1(a) shall become due and payable, and the Series A Commitment
      of each holder of Series A Notes shall automatically and permanently
      terminate, on the Series A Maturity Date. The obligations of each holder
      of Series A Notes under this SECTION 8.1(a) are joint, and not several.
      Each such borrowing by the Company under this SECTION 8.1(a) (each, a
      "SERIES A REVOLVING CREDIT LOAN" and collectively the "SERIES A REVOLVING
      CREDIT LOANS") shall be made pro rata from the holders of the Series A
      Notes in accordance with their respective Commitment Percentages of the
      Total Series A Commitment. The Series A Revolving Credit Loans made by
      each Lender shall be evidenced by a Series A Note, duly executed by the
      Company, dated the Closing Date, and registered in the name of such Lender
      or its nominee in a principal amount equal to such Lender's Series A
      Commitment, and shall bear interest in accordance with the terms
      applicable to such Series A Note as set forth therein and in clause (a) of
      SECTION 1.1.

            (b)   Subject to the terms and conditions hereof, you and the Other
Lenders hereby establish for the benefit of the Company a revolving credit
facility pursuant to which, during the Series B Availability Period, the Company
may borrow (and repay and reborrow) an aggregate principal amount at any one
time outstanding not in excess of the Total Series B Commitment as in effect
from time to time. At any time and from time to time during the Series B
Availability Period, subject to the terms, provisions and limitations hereof,
the Company may borrow (and repay and reborrow) from each holder of Series B
Notes an aggregate principal amount at any one time outstanding not in excess of
such holder's Commitment Percentage of the Total Series B Commitment (each such
holder's obligation to lend such amount being hereinafter referred to as such
holder's "SERIES B COMMITMENT" and such obligations of all such holders being
hereinafter collectively referred to as the "SERIES B COMMITMENTS"). All amounts
outstanding under the revolving credit facility established under this SECTION
8.1(b) shall become due and payable, and the Series B Commitment of each holder
of Series B Notes shall automatically and permanently terminate, on the Series B
Maturity Date. The obligations of each holder of Series B Notes under this
SECTION 8.1(b) are joint, and not several. Each such borrowing by the Company
under this SECTION 8.1(b) (each, a "SERIES B REVOLVING CREDIT LOAN" and
collectively the "SERIES B REVOLVING CREDIT LOANS") shall be made pro rata from
the holders of the Series B Notes in accordance with their respective Commitment
Percentages of the Total Series B Commitment. The Series B Revolving Credit
Loans made by each Lender shall be evidenced by a Series B Note, duly executed
by the Company, dated the Closing Date, and registered in the name of such
Lender or its nominee in a principal amount equal to such Lender's Series B
Commitment, and shall bear interest in accordance with the terms applicable to
such Series B Note as set forth therein and in clause (b) of SECTION 1.1.


                                       28
<PAGE>   35
            (c)   Each Series of Revolving Credit Loans shall be made in such
amount (in an integral amount of $100,000 and a minimum of $300,000 or such
lesser amount as may be equal to the remaining amount available under the Total
Series A Commitment or the Total Series B Commitment, as applicable) and on such
date as the Company shall specify in a notice substantially in the form of the
Officer's Certificate set forth in EXHIBIT I delivered to each holder of Notes
in accordance with the provisions of SECTION 19 not less than two (2) nor more
than ten (10) Business Days prior to the date so specified; provided however
that, notwithstanding any provision of this Agreement to the contrary, you shall
be under no obligation to make any Revolving Credit Loan of either Series on any
day:

      (i)   to the extent that after giving effect to such Revolving Credit Loan
            of such Series and the other Revolving Credit Loans of such Series
            requested concurrently therewith, outstanding Revolving Credit Loans
            of such Series shall exceed the Total Commitment of such Series on
            such day;

      (ii)  if, at the time thereof or after giving effect to such Revolving
            Credit Loan and the other Revolving Credit Loans requested
            concurrently therewith, there shall exist a Default or Event of
            Default or there shall have occurred any event or circumstance
            having a Material Adverse Effect; or

      (iii) if in the calendar month in which such Revolving Credit Loan is to
            be made, you shall have previously made two Revolving Credit Loans.

Each such notice shall be irrevocable and binding on the Company.

            (d)   The Revolving Credit Loans shall be made by transfer of
immediately available funds to the Company's account specified in SECTION 3.

8.2.    OPTIONAL REPAYMENTS.

            At any time or from time to time after the Closing Date, the Company
may, at its option, upon notice as set forth in SECTION 8.5, repay without
premium all or any part (in any integral multiple of $100,000 and a minimum of
$300,000 or such lesser amount as shall then be outstanding) of the Revolving
Credit Loans then outstanding, provided that, until the Series B Revolving
Credit Loans have been paid in full (and the Series B Commitments of all holders
of Series B Notes have been terminated), all optional repayments of Revolving
Credit Loans shall be applied, first, to the repayment of outstanding Series B
Revolving Credit Loans, and second, after all Series B Revolving Credit Loans
have been paid in full, to the repayment of outstanding Series A Revolving
Credit Loans.

8.3.  OPTIONAL AND MANDATORY REDUCTION AND TERMINATION OF COMMITMENTS.


                                       29
<PAGE>   36
            (a)   The Series A Commitments shall automatically terminate on the
last day of the Series A Availability Period. The Series B Commitments shall
automatically terminate on the last day of the Series B Availability Period.

            (b)   On July 31, 1998 and on the last day of each month thereafter,
the Commitments shall be permanently reduced by $1,000,000, provided that until
the Series B Commitments of all holders of Series B Notes shall have been
reduced to zero and terminated (and all Series B Revolving Credit Loans shall
have been paid in full), any such mandatory reduction of Commitments shall be
allocated, first, to the reduction of Series B Commitments, and second, after
the Series B Commitments of all holders of Series B Notes shall have been
reduced to zero and terminated (and all Series B Revolving Credit Loans have
been paid in full), to the reduction of Series A Commitments.

            (c)   Subject to the final sentence of this SECTION 8.3(c), upon at
least three Business Days' prior notice (which shall be irrevocable) to the
holders of the Notes, the Company may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments of
either Series of Revolving Credit Loans ratably among the holders of the Notes
of such Series. Each such partial reduction of the Commitments of either Series
of Revolving Credit Loans shall be in integral multiples of $100,000 and a
minimum of $300,000 or such lesser amount as shall then be outstanding. Until
the Series B Commitments of all holders of Series B Notes shall have been
reduced to zero and terminated (and all Series B Revolving Credit Loans shall
have been paid in full), any optional reduction of Commitments made pursuant to
this SECTION 8.3(c) shall be allocated, first, to the reduction of Series B
Commitments, and second, after the Series B Commitments of all holders of Series
B Notes shall have been reduced to zero and terminated (and all Series B
Revolving Credit Loans have been paid in full), to the reduction of Series A
Commitments.

            (d)   The Company shall, within 15 days after the consummation of an
Asset Sale the subject of which is assets which do not constitute Existing
Senior Notes Collateral, Telecommunication Assets subject to a Telecommunication
Asset Lease or Existing Convertible Note Collateral, give notice of such Asset
Sale to the holders of the Notes, identifying the Net Cash Proceeds from such
Asset Sale. On the thirtieth (30th) day following the consummation of such Asset
Sale, the Commitments shall be permanently reduced in an amount equal to the Net
Cash Proceeds from such Asset Sale, such reduction of Commitments to be
allocated, first, to the reduction of Series B Commitments, and second, after
the Series B Commitments of all holders of Series B Notes shall have been
reduced to zero and terminated (and all Series B Revolving Credit Loans have
been paid in full), to the reduction of Series A Commitments. If the amount of
such required reduction in the Commitments of either Series exceeds the unused
portion of such Commitments at such time, such excess shall be paid by the
Company in repayment of Revolving Credit Loans of such Series in accordance with
SECTION 8.4.

            (e)   In the event that the Company shall not have received, on or
prior to May 31, 1998, net cash proceeds aggregating at least $20,000,000 from
an Equity


                                       30
<PAGE>   37
Issuance, then on the fifteenth day after the end of each month, commencing with
the month ending July 31, 1998, (i) the Company shall deliver to the holders of
the Notes an Officers' Certificate setting forth (x) a statement of the amount
of cash on hand of the Company as of the end of such month, after deducting
therefrom the Required Reserves (as defined below) applicable to such month (the
"AVAILABLE CASH") together with (y) a reasonably detailed calculation of the
amount of such Available Cash that either has been applied by the Company since
the end of such month or which the Company reasonably anticipates will be
required to be applied by it during the remaining portion of the then-current
month to the payment of operating expenses, taxes (or required reserves
therefor) or interest or required principal payments in respect of the
Indebtedness for borrowed money of the Company, provided such Indebtedness for
borrowed money constitutes the Existing Indebtness (the aggregate amount so
applied or required to be applied during the then-current month being referred
to herein as the "REQUIRED DEDUCTIONS"), and (ii) the Commitments shall be
permanently reduced in an amount equal to the excess of the Available Cash set
forth in such Officers' Certificate over the Required Deductions set forth in
such Officers' Certificate, such reduction of Commitments to be allocated,
first, to the reduction of Series B Commitments, and second, after the Series B
Commitments of all holders of Series B Notes shall have been reduced to zero and
terminated (and all Series B Revolving Credit Loans have been paid in full), to
the reduction of Series A Commitments. If the amount of such required reduction
in the Commitments of either Series exceeds the unused portion of such
Commitments at such time, such excess shall be paid by the Company in repayment
of Revolving Credit Loans of such Series in accordance with SECTION 8.4. The
"REQUIRED RESERVES" applicable to any month shall mean (i) with respect to the
month ending July 31, 1998, $11,000,000, and (ii) with respect to each month
thereafter, the Required Reserves for the immediately preceding month minus
$1,000,000.

            (f)   The Company shall give the holders of the Notes at least 3
Business Days' prior written notice of the receipt by the Company of net cash
proceeds from an Equity Issuance. On the date of receipt by the Company of net
cash proceeds from an Equity Issuance, the Commitments shall be permanently
reduced by an amount equal to the amount of such net cash proceeds. If the
amount of such required reduction in the Commitments of either Series exceeds
the unused portion of such Commitments at such time, such excess shall be paid
by the Company in repayment of Revolving Credit Loans of such Series in
accordance with SECTION 8.4, such reduction of Commitments to be allocated,
first, to the reduction of Series B Commitments, and second, after the Series B
Commitments of all holders of Series B Notes shall have been reduced to zero and
terminated (and all Series B Revolving Credit Loans have been paid in full), to
the reduction of Series A Commitments. If the amount of such required reduction
in the Commitments of either Series exceeds the unused portion of such
Commitments at such time, such excess shall be paid by the Company in prepayment
of the Revolving Credit Loans of such Series in accordance with SECTION 8.4.


                                       31
<PAGE>   38
            (g)   In the event that any holder of Notes shall have delivered a
Commitment Termination Election Notice to the Company in accordance with SECTION
9.8, then, on the Commitment Termination Date, such holder's Commitments shall
be permanently reduced to zero and terminated, and such holder's Revolving
Credit Loans shall be paid in full as provided in SECTION 9.8 and in accordance
with SECTION 8.4.

            (h)   In connection with any reduction or termination of any
Commitments of either Series pursuant to this SECTION 8.3, the Total Commitment
shall be reduced or terminated to the same extent and the Company shall pay to
each holder of Notes the Commitment Fees, if any, on the amount of the Total
Commitment so reduced or terminated which are accrued and unpaid to the date of
such reduction or termination, such payment to be made in accordance with the
provisions of SECTION 8.9.

8.4.  MANDATORY REPAYMENTS.

            On the date of any termination or reduction of the Commitments of
either Series pursuant to SECTION 8.3, the Company shall repay so much of the
outstanding Revolving Credit Loans of such Series as shall be necessary in order
to cause the aggregate principal amount of outstanding Revolving Credit Loans of
such Series not to exceed the Commitments of such Series after giving effect to
such termination or reduction.

8.5.  NOTICE OF REPAYMENTS OR TERMINATION.

            The Company will give each holder of Notes written notice of each
repayment under SECTION 8.2 and each optional termination or reduction of
Commitments under SECTION 8.3(c) not less than 3 Business Days nor more than 10
Business Days prior to the date fixed for such repayment or reduction or
termination. Each such notice shall specify (a) the date fixed for repayment or
reduction or termination, as applicable, and (b) in the case of any repayment,
(i) the aggregate principal amount of the Revolving Credit Loans being repaid on
such date and the principal amount of Revolving Credit Loans made by such holder
to be so repaid, (ii) the aggregate amount of the accrued interest to be paid on
the repayment date with respect to such principal amount being repaid and (iii)
the amount of such accrued interest to be paid to such holder in connection
therewith.

8.6.  ALLOCATION OF REDUCTIONS IN COMMITMENTS AND REPAYMENTS AND REPAYMENTS.

            In the case of each reduction in the Commitments of either Series
(other than pursuant to SECTION 8.3(g)) and the repayment of Revolving Credit
Loans of either Series, the principal amount of such reduction or repayment
shall be allocated among all the Notes of such Series at the time outstanding
based on the Commitment Percentage of each holder of Notes of such Series. No
reduction of Commitments or repayment of Revolving Credit Loans shall affect the
mandatory Commitment reductions required pursuant to SECTION 8.3(b), provided,
however that the Company may allocate any reduction of Commitments


                                       32
<PAGE>   39
(and repayment of Revolving Credit Loans) pursuant to SECTION 8.3(c), (f) OR (g)
toward the Commitment reduction required by SECTION 8.3(b).

8.7.  MATURITY; SURRENDER, ETC.

            In the case of each repayment of Revolving Credit Loans pursuant to
this SECTION 8, the principal amount to be repaid shall mature and become due
and payable on the date fixed for such repayment, together with interest on such
principal amount accrued to such date and Additional Amounts, if any, payable
with respect thereto. From and after such date, unless the Company shall fail to
pay such principal amount when so due and payable, together with the interest,
as aforesaid, interest on such principal amount shall cease to accrue. If the
Revolving Credit Loans of either Series made by any holder of Notes shall have
been repaid in full and the Commitment of such holder to make Revolving Credit
Loans of such Series shall have terminated, the Note evidencing such Revolving
Credit Loans shall be surrendered to the Company and canceled and shall not be
reissued, and no Note shall be issued in lieu of any principal amount of such
Note or of any Note evidencing Revolving Credit Loans which shall have been
subject to permanent reduction.

8.8.  PURCHASE OF NOTES.

            The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or repayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, repayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.

8.9.  COMMITMENT FEES.

            The Company agrees to pay each Lender, on the last day of each month
commencing with November 30, 1997, a commitment fee on the average daily unused
amount of such Lender's Commitment Percentage of the Total Commitment, during
the month ending on (and including) such date, equal to 4.00% per annum. The
"unused amount" of a Lender's Commitment Percentage of the Total Commitment on
any date means the amount of such Lender's Commitment Percentage of the Total
Commitment on such date, minus the sum of the aggregate principal amount of such
Lender's outstanding Revolving Credit Loans on such date.

8.10. BOOKS AND RECORDS.

            The holders of the Notes are hereby irrevocably authorized by the
Company to maintain records evidencing the dates and the amounts of the
Revolving Credit Loans and of each payment and repayment made by the Company
with respect thereto (whether


                                       33
<PAGE>   40
in respect of the principal thereof and/or the interest or fees accrued thereon)
and the applicable rate or rates and amounts of interest accrued thereon and of
all other related transactions. In the absence of manifest error, such records
shall constitute final, binding and conclusive evidence of the same. No failure
on the part of any holder of the Notes to maintain any such records shall in any
way affect any Revolving Credit Loan made by such holder or the rights or
obligations of such holder or of the Company with respect thereto. Each holder
of the Notes shall, upon request (but not more frequently than once during any
calendar month), furnish to the Company a statement of the amounts and dates of
each Revolving Credit Loan made by such holder, the amount of and date on which
each payment and repayment was made in respect thereof and the amount (and the
applicable rate or rates) of interest accrued thereon. In the absence of
manifest error, such statement shall be deemed final, binding and conclusive
upon the Company of its contents unless the Company shall notify such holder in
writing of its objection to any portion of such statement within 45 days of the
date on which such statement was furnished to the Company.

8.11. ILLEGALITY.

            Notwithstanding any other provision of this Agreement, if because of
the adoption of or any change in any law or regulation of any jurisdiction to
which you are subject, you shall no longer be permitted to make Revolving Credit
Loans hereunder or the making of such Revolving Credit Loans shall subject you
to any tax, penalty or liability to which you were not subject on the Closing
Date, your obligation to make Revolving Credit Loans hereunder shall, upon
notice to the Company, be suspended until such time as the circumstances causing
such suspension no longer exist.

9.    COVENANTS.

            The Company covenants that, so long as any of the Notes are
outstanding or your commitment to make Revolving Credit Loans shall not have
terminated:

9.1.  COMPLIANCE WITH LAW.

            The Company will and will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to which each of
them is subject, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective Property or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

9.2.  BOOKS AND RECORDS.


                                       34
<PAGE>   41
            The Company will keep proper books of record and account in which
entries that are true and correct in all material respects will be made of all
its material business dealings and transactions in accordance with GAAP applied
on a consistent basis, and maintain a system of accounting established and
administered in accordance with GAAP, and set aside on its books from its
earnings for each fiscal year all proper reserves, accruals and provisions
which, in accordance with GAAP, should be set aside from such earnings in
connection with its business.

9.3.  PAYMENT OF NOTES.

            The Company shall promptly pay the principal of, interest (including
Additional Amounts, if any) on, Commitment Fees and any other amounts in respect
of, the Notes on the dates and in the manner provided in the Notes and in this
Agreement.

9.4.  MAINTENANCE OF OFFICE.

            The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the Notes and
this Agreement may be served. The Company shall give prompt written notice to
the holders of the Notes and the Trustee of the location, and any change in the
location, of such office or agency. Such office shall first be maintained at the
address set forth at the head of this Agreement.

9.5.  CORPORATE EXISTENCE.

            Subject to the provisions of SECTION 10 hereof, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect the corporate existence, rights (charter and statutory) and franchises of
the Company and each of its Restricted Subsidiaries; provided that the Company
and any such Restricted Subsidiary other than Technocom, a Leasing Company or
NWE Cyprus shall not be required to preserve the corporate existence of any such
Restricted Subsidiary other than Technocom, a Leasing Company or NWE Cyprus or
any such right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the holders of the Notes.

9.6.  MAINTENANCE OF PROPERTY.

            The Company shall cause all Property used in the conduct of its
business or the business of any of its Restricted Subsidiaries to be maintained
and kept in good condition, repair and working order (reasonable wear and tear
excepted) and supplied with all necessary equipment and shall cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as, in the judgment of the


                                       35
<PAGE>   42
Company, may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided
that nothing in this SECTION 9.6 shall prevent the Company from discontinuing
the operation or maintenance of any of such Property if such discontinuance is,
in the judgment of the Company, desirable in the conduct of its business or the
business of any of its Restricted Subsidiaries and not disadvantageous in any
material respect to the holders of the Notes.

9.7.  PAYMENT OF TAXES AND OTHER CLAIMS.

            The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any of its
Restricted Subsidiaries or upon the income, profits or Property of the Company
or any of its Restricted Subsidiaries and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a Lien upon the
Property of the Company or any of its Restricted Subsidiaries; provided that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings upon
stay of execution or the enforcement thereof and for which adequate reserves in
accordance with GAAP or other appropriate provision has been made.

9.8.  COMMITMENT TERMINATION AND REPAYMENT AT THE OPTION OF HOLDERS UPON A
      CHANGE OF CONTROL.

            (a)   Upon the occurrence of a Change of Control, each holder of
Notes shall have the right to terminate its Commitments and require the Company
to prepay all outstanding Revolving Credit Loans made by such holder in full,
pursuant to an irrevocable and unconditional offer made by the Company described
in SECTION 9.8(b) hereof (the "COMMITMENT TERMINATION OFFER"), any such
repayment to be made in cash at a repayment amount (the "COMMITMENT TERMINATION
REPAYMENT AMOUNT") equal to 100% of the aggregate principal amount outstanding
of such Revolving Credit Loans on the Commitment Termination Date plus accrued
and unpaid interest, if any, and Additional Amounts, if any, and accrued and
unpaid Commitment Fees owing to such holder, if any, to the Commitment
Termination Date.

            (b)   Within 30 calendar days of the date of any Change of Control,
the Company shall send to each holder of Notes by first class mail, postage
prepaid, a notice prepared by the Company:

            (i)   stating that a Change of Control has occurred and a Commitment
      Termination Offer is being made pursuant to this SECTION 9.8, and that,
      with respect to each holder of Notes from whom the Company receives a
      Commitment Termination Election Notice delivered pursuant to, and as such
      term is defined in, SECTION 9.8(c) below, the Commitments of such holder
      will be terminated, and the


                                       36
<PAGE>   43
      outstanding Revolving Credit Loans made by such holder will be prepaid, on
      the Commitment Termination Date; and

            (ii)  setting forth the Commitment Termination Repayment Amount, and
      the date on which the Commitments are to be terminated (and outstanding
      Revolving Credit Loans are to be prepaid) pursuant to the Commitment
      Termination Offer (the "COMMITMENT TERMINATION DATE"), which date shall be
      a date occurring no earlier than 30 calendar days nor later than 40
      calendar days subsequent to the date such notice is mailed.

            (c)   Within 20 calendar days following the receipt by any holder of
Notes of a Commitment Termination Offer, each such holder shall have the right
at its option, exercisable by the giving of notice to the Company (a "COMMITMENT
TERMINATION ELECTION NOTICE"), to elect to accept the Commitment Termination
Offer. On the Commitment Termination Date, the Commitments of each holder of
Notes from which the Company has received a Commitment Termination Election
Notice will be automatically terminated, and the Company will prepay all
outstanding Revolving Credit Loans made by such holder, such repayment to be
made at the Commitment Termination Repayment Amount.

9.9.  LIMITATION ON ASSET SALES.

            (a)   The Company shall not, and shall not permit any of its
Restricted Subsidiaries, directly or indirectly to, consummate any Asset Sale,
unless:

            (i)   no Event of Default shall have occurred and be continuing or
      shall occur as a consequence thereof;

            (ii)  the Company or such Restricted Subsidiary, as the case may be,
      receives net consideration at the time of such Asset Sale at least equal
      to the Fair Market Value (as evidenced by a Board Resolution delivered to
      the holders of the Notes) of the Property or assets sold or otherwise
      disposed of;

            (iii) at least 75 percent of the consideration received in respect
      of such Asset Sale by the Company or such Restricted Subsidiary, as the
      case may be, for such Property or assets consists of Cash Proceeds; and

            (iv)  the Company or such Restricted Subsidiary, as the case may be,
      uses the Net Cash Proceeds from such Asset Sale in the manner set forth in
      SECTION 9.9(b) hereof.

            To the extent that the assets which are the subject of any Asset
Sale constitute Existing Senior Note Collateral, all proceeds thereof shall, to
the extent permitted by law, be subject to a perfected Lien in favor of the
Existing Senior Note


                                       37
<PAGE>   44
Trustee or a collateral agent for the benefit of the Existing Senior Note
Trustee and the equal and ratable benefit of the holders of the Existing Senior
Notes and for the benefit of the Existing Convertible Note Trustee and the equal
and ratable benefit of the holders of the Existing Convertible Notes, which Lien
shall have the same priority as the Lien on the Existing Senior Note Collateral
which was the subject of such Asset Sale, and all Net Cash Proceeds from such an
Asset Sale shall be deposited in the Company Existing Senior Note Escrow Account
or a Leasing Company Escrow Account, if applicable. To the extent that assets
which are the subject of any Asset Sale constitute Telecommunications Assets
subject to a Telecommunications Assets Lease which is Existing Senior Note
Collateral, all proceeds thereof shall, to the extent permitted by applicable
law, be subject to a perfected Lien in favor of the Existing Senior Note Trustee
or a collateral agent for the benefit of the Existing Senior Note Trustee and
for the equal and ratable benefit of the holders of the Existing Senior Notes
and for the benefit of the Existing Convertible Note Trustee and the equal and
ratable benefit of the holders of the Existing Convertible Notes, which Lien
shall have the same priority as the Lien on such Telecommunications Asset Leases
governing the Telecommunications Assets which were the subject of such Asset
Sale, and all Net Cash Proceeds from such an Asset Sale of Telecommunications
Assets must be deposited in the applicable Leasing Company Escrow Account. To
the extent that assets which are the subject of any Asset Sale constitute
Existing Convertible Note Collateral, all proceeds thereof shall, to the extent
permitted by applicable law, be subject to a perfected Lien in favor of the
Existing Convertible Note Trustee or a collateral agent for the benefit of the
Existing Convertible Note Trustee and the equal and ratable benefit of the
holders of Existing Convertible Notes and for the benefit of the Existing Senior
Note Trustee and the equal and ratable benefit of the holders of Existing Senior
Notes, which Lien shall have the same priority as the Lien on the Existing
Convertible Note Collateral which was the subject of such Asset Sale, and all
Net Cash Proceeds from such an Asset Sale of Existing Convertible Note
Collateral must be deposited in the Company Existing Convertible Note Escrow
Account, unless the Existing Convertible Notes are no longer outstanding and the
Existing Convertible Note Indenture has been satisfied and discharged, in which
case such Net Cash Proceeds shall be deposited in the Company Existing Senior
Note Escrow Account.

               (b) To the extent that assets subject to an Asset Sale consist of
Collateral other than a Telecommunications Asset Lease or Telecommunications
Assets subject to a Telecommunications Asset Lease, the Company shall have the
option, within 365 days of such Asset Sale, to reinvest the Net Cash Proceeds
(or any portion thereof) from such Asset Sale in another asset or business in
the same or similar lines of business as the Company and its Restricted
Subsidiaries (the "REPLACEMENT ASSETS") (or enter into a binding agreement to
reinvest such Net Cash Proceeds (or any portion thereof) prior to the end of
such 365-day period, provided that such reinvestment is completed within 90 days
after the end of such 365-day period); provided that such Replacement Assets are
subject to a Lien in favor of the Existing Senior Note Trustee or a collateral
agent for the benefit of the Existing Senior Note Trustee and for the equal and
ratable benefit of the holders of the Existing Senior Notes and for the benefit
of the Existing Convertible Note Trustee and


                                       38
<PAGE>   45
the equal and ratable benefit of holders of Existing Convertible Notes, which
Lien has the same priority as had the Lien on such Existing Senior Note
Collateral, which was the subject of such Asset Sale.

            (i)   To the extent that assets subject to an Asset Sale consist of
      Existing Convertible Note Collateral, the Company shall have the option,
      within 365 days of such Asset Sale, to reinvest the Net Cash Proceeds (or
      any portion thereof) from such Asset Sale in Replacement Assets (or enter
      into a binding agreement to reinvest such Net Cash Proceeds (or any
      portion thereof) prior to the end of such 365-day period, provided that
      such reinvestment is completed within 90 days after the end of such
      365-day period); provided that such Replacement Assets are subject to a
      Lien in favor of the Existing Convertible Note Trustee or a collateral
      agent for the benefit of the Existing Convertible Note Trustee and for the
      equal and ratable benefit of the Holders of Existing Convertible Notes and
      for the benefit of the Existing Senior Note Trustee and the equal and
      ratable benefit of holders of the Existing Senior Notes, which Lien has
      the same priority as had the Lien on such Existing Convertible Note
      Collateral, which was the subject of such Asset Sale.

            (ii)  To the extent that assets subject to an Asset Sale constitute
      Telecommunications Assets subject to a Telecommunications Asset Lease, the
      Company shall have the option, within 365 days of such Asset Sale, to
      cause the applicable Leasing Company to reinvest the Net Cash Proceeds
      from such Asset Sale (or any portion thereof) in Telecommunications Assets
      to be leased pursuant to a new Telecommunications Asset Lease
      ("REPLACEMENT TELECOMMUNICATION ASSETS") (or enter into, or cause the
      applicable Leasing Company to enter into, a binding agreement to reinvest
      such Net Cash Proceeds (or any portion thereof) prior to the end of such
      365-day period, provided that such reinvestment is completed within 90
      days after the end of such 365-day period), and with respect to any
      proceeds of insurance paid on account of the loss of or damage to any such
      Telecommunications Assets, or compensation or other proceeds for any such
      Telecommunications Assets taken by condemnation, eminent domain or similar
      proceedings, such Net Cash Proceeds are applied as provided above or
      applied to reimburse the applicable Leasing Company for expenditures made,
      and costs incurred, to repair, rebuild, replace or restore the
      Telecommunications Assets subject to such loss, damage or taking.

            (iii) To the extent that assets subject to an Asset Sale do not
      constitute Existing Senior Note Collateral, Telecommunications Assets
      subject to a Telecommunications Asset Lease or Existing Convertible Note
      Collateral, the Company shall within 30 days of such Asset Sale
      permanently reduce the Commitments by an amount equal to such Net Cash
      Proceeds (or remaining Net Cash Proceeds) pursuant to SECTION 8.3(d).


                                       39
<PAGE>   46
9.10. LIMITATION ON INDEBTEDNESS.

            (a)   The Company will not, and will not permit its Restricted
Subsidiaries to, directly or indirectly, incur any Indebtedness (including
Acquired Indebtedness) and the Company will not issue any Disqualified Stock or
permit any of its Restricted Subsidiaries to issue any Disqualified Stock;
provided that the Company and its Restricted Subsidiaries other than the Leasing
Companies or NWE Cyprus may incur Indebtedness or issue Disqualified Stock if,
after giving effect to such issuance or incurrence on a pro forma basis, the
Indebtedness to Operating Cash Flow Ratio of the Company does not exceed 5.0 to
1.0.

            (b)   The provisions of SECTION 9.10(a) will not apply to:

            (i)   the incurrence by the Company and its Restricted Subsidiaries
      other than the Leasing Companies or NWE Cyprus of Indebtedness under the
      Revolving Credit Facilities (including this Agreement), provided that the
      aggregate principal amount of Indebtedness at any time outstanding under
      or in respect of such Revolving Credit Facilities (including without
      limitation, the Revolving Credit Loans), together with any Indebtedness
      then outstanding which was permitted to be incurred pursuant to clause (x)
      below, shall not exceed $25,000,000;

            (ii)  the incurrence of the Existing Indebtedness;

            (iii) the incurrence by the Company or any of its Restricted
      Subsidiaries of intercompany Indebtedness owing to any of its Restricted
      Subsidiaries, provided that any such Indebtedness is junior and
      subordinate to the Notes and the Guarantees, if applicable, and such
      Indebtedness is held at all times by the Company or a Restricted
      Subsidiary of the Company;

            (iv)  Indebtedness of any Restricted Subsidiary to the Company or a
      Wholly-Owned Restricted Subsidiary of the Company, provided that such
      intercompany Indebtedness is evidenced by an Intercompany Note or by a
      Telecommunications Asset Lease;

            (v)   Indebtedness of a Restricted Subsidiary constituting a
      sublease by the lessee of Telecommunications Assets subject to a
      Telecommunications Asset Lease to a Restricted Subsidiary of such lessee;

            (vi)  the incurrence by the Company or any of its Restricted
      Subsidiaries other than the Leasing Companies or NWE Cyprus of Interest
      Hedging Obligations with respect to any floating rate Indebtedness that is
      permitted by the covenant described in this SECTION 9.10(b);


                                       40
<PAGE>   47
            (vii) the incurrence by the Company of any Exchange Rate
      Obligations, provided that such Exchange Rate Obligations were entered
      into in connection with transactions in the ordinary course of business or
      the incurrence of Indebtedness that is permitted by this SECTION 9.10(b);

            (viii) [intentionally not used]

            (ix)  Indebtedness in respect of performance, surety or appeal bonds
      provided by the Company in the ordinary course of business;

            (x)   Indebtedness of Restricted Subsidiaries other than the Leasing
      Companies or NWE Cyprus in an aggregate principal amount not to exceed
      $15,000,000 at any one time outstanding, provided that the aggregate
      principal amount of all such Indebtedness at any time outstanding,
      together with Indebtedness of Restricted Subsidiaries then outstanding
      which was permitted to be incurred pursuant to clause (i) above, shall not
      exceed $25,000,000;

            (xi)  International Vendor Indebtedness not to exceed an aggregate
      principal amount of $40,000,000 at any one time outstanding, provided that
      the Leasing Companies and NWE Cyprus may not incur any International
      Vendor Indebtedness; and

            (xii) the incurrence by the Company or any of its Restricted
      Subsidiaries of Refinancing Indebtedness issued in exchange for, or the
      proceeds of which are used to refinance, repurchase, replace, refund or
      defease ("Refinance" and correlatively, "Refinanced" and "Refinancing")
      Indebtedness permitted pursuant to clause (ii) of this SECTION 9.10(b),
      provided that (A) the amount of such Refinancing Indebtedness shall not
      exceed the principal amount of, premium, if any, and accrued interest (and
      Additional Amounts and Special Interest (as such terms are defined in the
      Existing Senior Note Indenture) on the Existing Senior Notes) on the
      Indebtedness so Refinanced (or if such Indebtedness was issued with
      original issue discount, the original issue price plus amortization of the
      original issue discount at the time of the repayment of such Indebtedness)
      plus the fees, expenses and costs of such Refinancing and reasonable
      repayment premiums, if any, in connection therewith, (B) such Refinancing
      Indebtedness shall have a Stated Maturity no earlier than the Indebtedness
      being Refinanced, (C) such Refinancing Indebtedness shall have an Average
      Life equal to or greater than the Average Life of the Indebtedness being
      Refinanced, (D) if the Indebtedness being Refinanced is subordinated in
      right of payment to the Notes or the Guarantees, as applicable, such
      Refinancing Indebtedness shall be subordinated in right of payment to the
      Notes or the Guarantees, as applicable, on terms at least as favorable to
      the holders of Notes as those contained in the documentation governing the
      Indebtedness being so Refinanced, and (E) no Restricted Subsidiary shall
      incur Refinancing Indebtedness to Refinance


                                       41
<PAGE>   48
      Indebtedness of the Company or another Restricted Subsidiary.

9.11. LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES.

            (a)   The Company will not permit any Restricted Subsidiary which is
not a Subsidiary Guarantor on the Closing Date to guarantee, directly or
indirectly, any Indebtedness of the Company ("GUARANTEED INDEBTEDNESS") unless
(i) such Restricted Subsidiary simultaneously executes and delivers a Joinder
Agreement pursuant to which such Restricted Subsidiary becomes a party to the
Subsidiary Guaranty and (ii) such Restricted Subsidiary waives and will not in
any manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Guarantee. If the Guaranteed Indebtedness is pari passu
with the Notes or its Guarantee, then the guarantee of such Guaranteed
Indebtedness shall be pari passu with or subordinated to such Guarantee; and if
the Guaranteed Indebtedness is subordinated to the Notes or its Guarantee, then
the guarantee of such Guaranteed Indebtedness shall be subordinated to such
Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Notes or such Guarantee.

            (b)   Notwithstanding the provisions of SECTION 9.11(a) hereof, any
Guarantee by a Restricted Subsidiary other than WTC, BCL or a future
Wholly-Owned Restricted Subsidiary of the Company shall provide by its terms
that it shall be automatically and unconditionally released and discharged upon
the release or discharge of the guarantee which resulted in the creation of such
Restricted Subsidiary's Guarantee, except a discharge or release by, or as a
result of, payment under such guarantee.

9.12. LIMITATION ON LIENS.

            The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, create, incur, assume or
suffer to exist any Liens of any kind other than Permitted Liens on or with
respect to any of its Property or assets now owned or hereafter acquired, or any
interest therein or any income or profits therefrom, without effectively
providing that the Notes and/or the Guarantees, as applicable, shall be secured
equally and ratably with (and provided that the Notes and/or the Guarantees, as
applicable, shall be secured prior to any secured obligation that is
subordinated in right of payment to the Notes and/or the Guarantees, as
applicable) the obligations so secured for so long as such obligations are so
secured.

9.13. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.

            The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, assume, guarantee or
otherwise become liable with respect to any Sale and Leaseback Transaction,
unless (i) the Company or such Restricted


                                       42
<PAGE>   49
Subsidiary, as the case may be, receives consideration at the time of such Sale
and Leaseback Transaction at least equal to the Fair Market Value (as evidenced
by a Board Resolution delivered to the holders of the Notes) of the Property or
assets subject to such transaction; (ii) the Attributable Indebtedness of the
Company or such Restricted Subsidiary with respect thereto is included as
Indebtedness and would be permitted by SECTION 9.10 hereof, and any Liens
granted thereby would be permitted by SECTION 9.12 hereof; and (iii) the Net
Cash Proceeds from such transaction are applied in accordance with SECTION 9.9
as if such proceeds resulted from an Asset Sale.

9.14. RESTRICTED PAYMENTS.

            (a)   The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment
unless, at the time of and after giving effect to such proposed Restricted
Payment (i) no Default or Event of Default shall have occurred and be continuing
or shall occur as a consequence thereof; (ii) after giving effect, on a pro
forma basis, to such Restricted Payment and the incurrence of any Indebtedness
the net proceeds of which are used to finance such Restricted Payment, the
Company could incur at least $1.00 of additional Indebtedness pursuant to
SECTION 9.10(a) hereof; and (iii) after giving effect to such Restricted Payment
on a pro forma basis, the aggregate amount expended or declared for all
Restricted Payments after the Issue Date does not exceed the sum of (A) 50% of
the Consolidated Net Income of the Company (or, if Consolidated Net Income shall
be deficit, minus 100% of such deficit) for the period (taken as one accounting
period) beginning on the last day of the fiscal quarter immediately preceding
the Issue Date and ending on the last day of the fiscal quarter immediately
preceding the date of such Restricted Payment, plus (B) 100% of the aggregate
Net Cash Proceeds received by the Company subsequent to the Issue Date from the
issuance or sale (other than to a Subsidiary) of shares of its Qualified Stock,
including Qualified Stock issued upon the exercise of options, warrants or
rights to purchase Qualified Stock, plus (C) 100% of the amount of any
Indebtedness of the Company or any of its Restricted Subsidiaries (as expressed
on the face of a balance sheet in accordance with GAAP), or the carrying value
of any Disqualified Stock, which has been converted into, exchanged for or
satisfied by the issuance of shares of Qualified Stock of the Company subsequent
to the Issue Date, less the amount of any cash, or the value of any other
Property distributed by the Company or its Restricted Subsidiaries upon such
conversion, exchange or satisfaction, plus (D) 100% of the net reduction in
Investments, subsequent to the Issue Date, in any Person, resulting from
payments of interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of Property (but only to the extent such interest,
dividends, repayments or other transfers of Property are not included in the
calculation of Consolidated Net Income), in each case to the Company or any
Restricted Subsidiary from any Person (including, without limitation, from
Unrestricted Subsidiaries) or from redesignations of Unrestricted Subsidiaries
as Restricted Subsidiaries (valued in each case as provided in the definition of
"Investments" set forth in SECTION 13.1 hereof), not to exceed in the case of
any Person the amount of Investments previously made by the Company or any
Restricted Subsidiary in such Person


                                       43
<PAGE>   50
and in each such case which was treated as a Restricted Payment, minus (E) 100%
of the amount of Investments made or dividends paid pursuant to clauses (v),
(vi) and (vii) of SECTION 9.14(b) below subsequent to the Issue Date.

            (b)   The provisions of SECTION 9.14(a) shall not prevent the
Company from

            (i)   paying a dividend on its Capital Stock at any time within 60
      days after the declaration thereof if, on the declaration date, the
      Company could have paid such dividend in compliance with the provisions of
      SECTION 9.14(a) hereof;

            (ii)  retiring (A) any Capital Stock of the Company or any
      Restricted Subsidiary of the Company or (B) Indebtedness of the Company
      that is subordinate to the Notes or (C) Indebtedness of a Restricted
      Subsidiary of the Company, in exchange for, or out of the proceeds of the
      substantially concurrent sale of, Qualified Stock of the Company;

            (iii) so long as no Default or Event of Default shall have occurred
      and be continuing or shall occur as a consequence thereof, retiring any
      Indebtedness of the Company subordinated in right of payment to the Notes
      in exchange for, or out of the proceeds of, the substantially concurrent
      incurrence of Indebtedness of the Company (other than Indebtedness to a
      Subsidiary of the Company), provided that such new Indebtedness (A) is
      subordinated in right of payment to the Notes at least to the same extent
      as, (B) has an Average Life at least as long as, and (C) has no scheduled
      principal payments due in any amount earlier than, any equivalent amount
      of principal under the Indebtedness so retired;

            (iv)  so long as no Default or Event of Default shall have occurred
      and be continuing or shall occur as a consequence thereof, retiring any
      Indebtedness of a Restricted Subsidiary of the Company in exchange for, or
      out of the proceeds of, the substantially concurrent incurrence of
      Indebtedness of the Company or any Restricted Subsidiary that is permitted
      under SECTION 9.10 hereof and that (A) is not secured by any assets of the
      Company or any Restricted Subsidiary to a greater extent than the retired
      Indebtedness was so secured, (B) has an Average Life at least as long as
      the retired Indebtedness and (C) is subordinated in right of payment to
      the Notes or the Guarantees, as applicable, at least to the same extent as
      the retired Indebtedness;

            (v)   so long as no Default or Event of Default shall have occurred
      and be continuing or shall occur as a consequence thereof, making loans to
      members of management of the Company as required pursuant to employment
      agreements with such members, in an aggregate principal amount not to
      exceed $500,000, provided that any repayment of such loans (but only to
      the extent such payments


                                       44
<PAGE>   51
      are not included in the calculation of Consolidated Net Income of the
      Company) shall reduce the amount of such Investments;

            (vi)  so long as no Default or Event of Default shall have occurred
      and be continuing or shall occur as a consequence thereof, making
      Investments in Qualified Joint Ventures in an aggregate amount not to
      exceed $5,000,000, provided that any repayment of loans or advances,
      return of capital or other transfer of Property (but only to the extent
      such distributions are not included in the calculation of Consolidated Net
      Income of the Company) shall reduce the amount of such Investments;

            (vii) paying dividends to minority stockholders or partners of a
      Restricted Subsidiary (other than to a Person who is otherwise an
      Affiliate), provided that the Company or the Restricted Subsidiary that is
      the stockholder or partner of such non-Wholly Owned Restricted Subsidiary
      shall receive pro rata dividends at the same time and in the same form and
      composition of consideration as the dividends paid to the minority
      stockholders or partners; and

            (viii) so long as no Default or Event of Default has occurred, (x)
      the Company may redeem Existing Senior Notes pursuant to the terms of the
      Existing Senior Note Indenture or repurchase Existing Senior Notes
      pursuant to a "Change in Control Offer" (as defined in the Existing Senior
      Note Indenture) or a "Asset Sale Offer" (as defined in the Existing Senior
      Note Indenture) and (y) the Company may redeem Existing Convertible Notes
      pursuant to the terms of the Existing Convertible Note Indenture or
      repurchase Existing Convertible Notes pursuant to a "Change of Control
      Offer" (as defined in the Existing Convertible Note Indenture), a
      "Convertible Note Asset Sale Offer" (as defined in the Existing
      Convertible Note Indenture) or a repurchase offer pursuant to Section 4.14
      of the Existing Convertible Note Indenture.

            (c)   Not later than the date of making any Restricted Payment, any
Investment made pursuant to clause (vi) of SECTION 9.14(b), any dividend made
pursuant to clause (vii) of SECTION 9.14(b) and any redemption or repurchase
made pursuant to clause (viii) of SECTION 9.14(b), the Company shall deliver to
the holders of the Notes an Officers' Certificate stating that such Restricted
Payment, dividend, Investment or redemption is permitted and setting forth the
basis upon which any required calculations were computed, which calculations may
be based upon the Company's or applicable Restricted Subsidiary's latest
available financial statements.

9.15. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
      RESTRICTED SUBSIDIARIES.

            The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, cause or suffer to exist or become effective or
enter into an


                                       45
<PAGE>   52
encumbrance or restriction (other than pursuant to law or regulation) on the
ability of any Restricted Subsidiary (i) to pay dividends or make any other
distributions in respect of its Capital Stock or pay any Indebtedness or other
obligation owed to the Company or any Restricted Subsidiary of the Company; (ii)
to make loans or advances to the Company or any Restricted Subsidiary of the
Company; or (iii) to transfer any of its Property or assets to the Company or
any other Restricted Subsidiary of the Company, except:

            (a)   any encumbrance or restriction existing as of the Issue Date
pursuant to this Agreement, the Existing Senior Note Indenture, the Existing
Senior Note Collateral Documents, the Existing Convertible Note Indenture or the
Existing Convertible Note Collateral Documents, the Telecommunications Asset
Leases, the Intercompany Notes and the related collateral documents, an
agreement relating to the Revolving Credit Facilities or the Existing
Indebtedness or any existing agreement listed on SCHEDULE V attached hereto;

            (b)   any encumbrance or restriction pursuant to an agreement
relating to an acquisition of assets or Property, so long as the encumbrances or
restrictions in any such agreement related solely to the assets or Property so
acquired (and are not or were not created in anticipation of or in connection
with the acquisition thereof);

            (c)   any encumbrances or restrictions relating to any Indebtedness
of any Restricted Subsidiary existing on the date on which such Restricted
Subsidiary is acquired by the Company or any Restricted Subsidiary (other than
Indebtedness incurred by such Restricted Subsidiary in connection with or in
anticipation of its acquisition), provided that the EBITDA of such Restricted
Subsidiary is not taken into account in determining whether such acquisition is
permitted by the terms of this Agreement;

            (d)   any encumbrance or restriction pursuant to an agreement
effecting a permitted Refinancing of Indebtedness issued pursuant to an
agreement referred to in the foregoing clauses (a) through (c), so long as the
encumbrances and restrictions contained in any such Refinancing agreement are
not materially more restrictive than the encumbrances and restriction contained
in such agreements;

            (e)   customary provisions restricting subletting or assignment of
any lease of the Company or any Restricted Subsidiary or customary provisions in
certain agreements that restrict the assignment of such agreement or any rights
thereunder;

            (f)   any temporary encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock of, or
Property and assets of, such Restricted Subsidiary; and


                                       46
<PAGE>   53
            (g)   any restriction on the sale or other disposition of assets or
Property securing Indebtedness as a result of a Permitted Lien on such assets or
Property permitted pursuant to SECTION 9.12 hereof.

9.16. LIMITATION ON ISSUANCE AND SALE OF PREFERRED STOCK OF RESTRICTED
      SUBSIDIARIES.

            The Company (i) shall not permit any Restricted Subsidiary to issue
any Preferred Stock other than to the Company or a Restricted Subsidiary
(provided that the Leasing Companies and NWE Cyprus may not issue Preferred
Stock to a Restricted Subsidiary) and (ii) shall not permit any Person other
than the Company or a Restricted Subsidiary to own any Preferred Stock of any
Restricted Subsidiary, except for (a) a sale of 100% of the Capital Stock of a
Restricted Subsidiary sold in a transaction not prohibited by SECTION 9.9
hereof, (b) Preferred Stock of a Restricted Subsidiary issued and outstanding on
the Issue Date and held by Persons other than the Company or any Restricted
Subsidiary, (c) Capital Stock of a Restricted Subsidiary issued and outstanding
prior to the time that such Person becomes a Restricted Subsidiary so long as
such Capital Stock was not issued in contemplation of such Person's becoming a
Restricted Subsidiary or otherwise being acquired by the Company and (d) any
Disqualified Stock permitted to be issued under SECTION 9.10 hereof.

9.17. TRANSACTIONS WITH AFFILIATES.

            The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, sell, lease, transfer, or otherwise
dispose of, any of its Property or assets to, or purchase any Property or assets
from, or enter into any contract, agreement, understanding, loan, advance or
guarantee with or for the benefit of, any Affiliate (each of the foregoing, an
"AFFILIATE TRANSACTION"), unless (a) such Affiliate Transaction complies with
the other covenants of this Agreement, (b) such Affiliate Transaction is on
terms that are no less favorable to the Company or such Restricted Subsidiary
than those that would have been obtained in a comparable arm's-length
transaction by the Company or such Restricted Subsidiary with a Person that is
not an Affiliate and (c) the Company delivers to the holders of the Notes (i)
with respect to any Affiliate Transaction involving aggregate payments in excess
of $5,000,000, a Board Resolution certifying that such Affiliate Transaction
complies with clause (a) above and that such Affiliate Transaction has been
approved by a majority of the disinterested directors who have determined that
such Affiliate Transaction is in the best interests of the Company or such
Restricted Subsidiary and (ii) with respect to any Affiliate Transaction
involving aggregate payments in excess of $25,000,000, an opinion as to the
fairness from a financial point of view to the Company or such Restricted
Subsidiary issued by an investment banking firm of national standing, or in the
case of a transaction involving a sale or transfer of assets subject to
valuation such as real estate, an appraisal prepared by a nationally recognized
appraisal firm, together with an Officers' Certificate to the effect that such
opinion complies with this clause (ii); provided that the following shall not be
deemed Affiliate Transactions:


                                       47
<PAGE>   54
            (i)   any employment agreement entered into by the Company or any of
      its Restricted Subsidiaries in the ordinary course of business and
      consistent with industry practice;

            (ii)  any agreement or arrangement with respect to the compensation
      of a director of the Company or any Restricted Subsidiary approved by the
      Board of Directors and consistent with industry practice;

            (iii) transactions between or among the Company, its Wholly-Owned
      Restricted Subsidiaries or its majority-owned Restricted Subsidiaries (so
      long as no minority interest is owned by a Person which is otherwise an
      Affiliate, provided that the indirect beneficial ownership interest of
      Cable & Wireless in PeterStar will not be deemed to be such a minority
      interest so long as Cable & Wireless does not directly or indirectly own
      beneficially more than 11% of PeterStar);

            (iv)  transactions constituting Restricted Payments permitted by
      SECTION 9.14 hereof; and

            (v)   transactions pursuant to contracts existing on the Issue Date
      and listed on SCHEDULE VI attached hereto; and

            (vi)  loans and advances to employees and officers of the Company or
      a Restricted Subsidiary in the ordinary course of business and consistent
      with the past practice of the Company or such Restricted Subsidiary,
      provided that the aggregate principal amount of all such loans and
      advances shall not exceed $500,000 at any one time outstanding.

9.18. RESTRICTED AND UNRESTRICTED SUBSIDIARIES.

            (a)   The Company may designate a Subsidiary (including a newly
formed or newly acquired Subsidiary) of the Company or any of its Restricted
Subsidiaries, other than the Leasing Companies, NWE Cyprus, WTC and Technocom,
as an Unrestricted Subsidiary, provided that (i) no portion of the Indebtedness
or any other obligation (contingent or otherwise) of such Subsidiary (x) is
guaranteed by the Company or any Restricted Subsidiary, (y) is recourse to or
obligates the Company or any Restricted Subsidiary in any way or (z) subjects
any Property or assets of the Company or any Restricted Subsidiary, directly or
indirectly, contingent or otherwise, to the satisfaction thereof, (ii) such
Subsidiary does not have any obligations which, if in default, would result in a
cross default on Indebtedness of the Company or a Restricted Subsidiary (other
than Indebtedness to the Company or a Restricted Subsidiary) and (iii) such
Subsidiary has total assets of $50,000 or less or such designation is effective
immediately upon such Person's becoming a Subsidiary. Notwithstanding the
foregoing, no Subsidiary may be designated an Unrestricted Subsidiary if such
Subsidiary, directly or indirectly, held Capital Stock of a Restricted
Subsidiary. Unless so designated as an Unrestricted


                                       48
<PAGE>   55
Subsidiary, any Person that becomes a Subsidiary of the Company or any of its
Restricted Subsidiaries shall be classified as a Restricted Subsidiary thereof.
Except for Restricted Subsidiaries having total assets of $50,000 or less, no
Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary.

            (b)   The Company will not, and will not permit any of its
Restricted Subsidiaries to, take any action or enter into any transaction or
series of transactions that would result in a Person (other than a newly formed
Subsidiary having no outstanding Indebtedness (other than Indebtedness to the
Company or a Restricted Subsidiary) at the date of determination) becoming a
Restricted Subsidiary (whether through an acquisition, the redesignation of an
Unrestricted Subsidiary or otherwise) unless, after giving effect to such
action, transaction or series of transactions on a pro forma basis, (i) the
Company could incur at least $1.00 of additional Indebtedness pursuant to
SECTION 9.10(a) hereof and (ii) no Default or Event of Default would occur.

            (c)   Subject to SECTION 9.18(b) hereof, an Unrestricted Subsidiary
may be redesignated as a Restricted Subsidiary. The designation of a Subsidiary
as an Unrestricted Subsidiary or the designation of an Unrestricted Subsidiary
as a Restricted Subsidiary in compliance with SECTION 9.18(b) hereof shall be
made by the Board of Directors pursuant to a Board Resolution delivered to the
Trustee and shall be effective as of the date specified in such Board
Resolution, which shall not be prior to the date such Board Resolution is
delivered to the holders of the Notes.

9.19. LIMITATIONS ON LINE OF BUSINESS.

            Neither the Company nor any of its Restricted Subsidiaries will
directly or indirectly engage to any substantial extent in any lines or lines of
business activity other than the Telecommunications Business.

9.20. LIMITATION ON SALES OF TELECOMMUNICATIONS ASSET LEASES OR QUALIFIED
      INVESTMENTS.

            The Leasing Companies will not directly or indirectly transfer,
convey, sell, lease or make any other disposition (including, without
limitation, dispositions pursuant to any consolidation or merger) of a
Telecommunications Asset Lease or any Qualified Investments.

9.21. PAYMENT OF ADDITIONAL AMOUNTS.

            (a)   Except to the extent required by law, any and all payments of,
or in respect of, any Note and any issuance of Warrants shall be made free and
clear of and without deduction for or on account of any and all present or
future taxes, levies, imposts, deductions, charges or withholdings and all
liabilities with respect thereto imposed by the United States with respect to
payments made by the Company or imposed by Russia or the


                                       49
<PAGE>   56
British Virgin Islands with respect to payments made by a Subsidiary Guarantor
or imposed by any jurisdiction from or through which payments under the Notes
are or are caused to be made ("TAXES"). If the Company or any Subsidiary
Guarantor shall be required by law to withhold or deduct any Taxes from or in
respect of any sum payable under a Note or pursuant to a Guarantee or in respect
of any issuance of Warrants, the sum payable by the Company or such Subsidiary
Guarantor, as the case may be, thereunder shall be increased by the amount
("ADDITIONAL AMOUNTS") necessary so that after making all required withholdings
and deductions, the holder shall receive an amount equal to the sum that it
would have received had no such withholdings and deductions been made; provided
that any such sum shall not be paid in respect of any Taxes (i) resulting from
the holder or beneficial owner of a Note carrying on business or being deemed to
carry on business in or through the relevant taxing jurisdiction or any
political subdivision thereof or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing authority
therein other than the mere holding or owning of such Note, being a beneficiary
of the Guarantees, the receipt of any income or payments in respect of such Note
or the Guarantees or the enforcement of such Note or the Guarantees, or (ii)
that would not have been imposed but for the presentation (where presentation is
required) of a Note for payment more than 180 days after the date such payment
became due and payable or was duly provided for, whichever occurs later, or
(iii) that would not have been imposed but for a failure by the holder of a Note
to comply with any applicable certification, information, documentation or other
reporting requirements if such compliance is required by applicable law and
requested in writing by the Company or a Subsidiary Guarantor as a precondition
to relief or exemption from such Tax ("EXCLUDED TAXES"). The Company or the
Subsidiary Guarantors, as applicable, will also (i) make such withholding or
deduction and (ii) remit the full amount deducted or withheld to the relevant
authority in accordance with applicable law, and, in any such case, the Company
will furnish to each holder of a Note on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Taxes (other than
Excluded Taxes) is due pursuant to applicable law, certified copies of tax
receipts (or other satisfactory documentation) evidencing such payment by the
Company or the Subsidiary Guarantors, as applicable. The Company will, upon
written request of each holder of Notes, reimburse each such holder for the
amount of (i) any Taxes (other than Excluded Taxes) so levied or imposed and
paid by such holder as a result of payments or issuances of Warrants made under
or with respect to any Notes, and (ii) any Taxes (other than Excluded Taxes) so
levied or imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such holder after such reimbursement will
not be less than the full amount which such holder would have received if Taxes
(other than Excluded Taxes) on such reimbursement had not been imposed. If a
holder of a Note shall become aware that it is entitled to receive a refund or
other tax credit or benefit in respect of any Taxes (other than Excluded Taxes),
it shall promptly notify the Company thereof and, in the case of a refund, shall
within 30 days after receipt of a request by the Company, apply for such refund
at the Company's expense. If a holder of a Note receives a refund or other Tax
credit or benefit in respect of any Taxes (other than Excluded Taxes) for which
such holder has received payment from the Company


                                       50
<PAGE>   57
hereunder, it shall promptly notify the Company thereof and shall promptly repay
such refund to the Company or, in the case of a Tax credit or other benefit
shall repay the amount of the Tax credit or benefit received promptly following
the date on which such Tax credit or the benefit is offset against such party's
tax liability, in each case to the Company. All determinations as to the amount
and timing of the receipt or realization of any Tax refund or Tax benefit shall
be made by the relevant holder in its sole good faith discretion, it being
understood and agreed that (x) the Company shall have no right to inspect or
examine any Tax returns of such holder or any records or documents relating
thereto and (y) such holder shall have no obligation to disclose to the Company
or any other person the basis of calculation of any such Tax refund or Tax
benefit. Any Taxes that are imposed on a holder as a result of a disallowance or
reduction (including through the expiration of any Tax credit carryovers of such
holder that would not otherwise have expired) of any Tax benefit as to which
such holder has made a payment to the Company hereunder shall be treated as a
Tax for which the Company is obligated to indemnify such Tax Indemnitee on
demand and on an after-Tax basis without any exclusions or defenses, provided
that such repayment shall not exceed the amount previously paid to the Company.
Notwithstanding the foregoing, no payment shall be required to be made to the
Company at any time while an Event of Default shall have occurred and be
continuing or prior to the time when the Company shall have made all payments
and indemnities theretofore required and then due and payable hereunder or under
any Note.

            (b)   The Company or the Subsidiary Guarantors will pay any stamp,
issue, registration, documentary or other similar taxes and duties, including
interest and penalties, in respect of the creation, issue and offering of the
Notes or the issuance of the Warrants or the exercise thereof. The Company and
the Subsidiary Guarantors will also pay and indemnify the holders of the Notes
and the Trustee from and against all court fees and taxes or other taxes and
duties, including interest and penalties, paid by any of them in any
jurisdiction in connection with any action permitted to be taken by the Trustee
or the Collateral Agent or the holders of the Notes to create the Liens on the
Collateral and to enforce the obligations of the Company or the Subsidiary
Guarantors under the Notes, this Agreement, the Guarantees or the Security
Documents.

            (c)   Each holder that is organized under the laws of a jurisdiction
other than the United States, any State thereof or the District of Columbia (a
"NON-U.S. HOLDER") shall, if legally able to do so, deliver to the Company two
copies of either U.S. Internal Revenue Service Form 1001 (claiming entitlement
to a complete exception from or a reduced rate of U.S. federal withholding tax)
or Form 4224, or, in the case of a Non-U.S. Holder claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest," a Form W-8, and any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Holder delivered a Form
W-8, a certificate representing that such Non-U.S. Holder is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Company and is not a controlled foreign corporation related to the Company
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such


                                       51
<PAGE>   58
Non-U.S. Holder claiming complete exemption from U.S. withholding tax on
payments by the Company under this Agreement. Such forms shall be delivered by
each Non-U.S. Holder on or before the date it becomes a party to this Agreement.
In addition, each Non-U.S. Holder shall, if legally able to do so, deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Holder and each Non-U.S. Holder shall, if legally
able to do so, deliver such other forms as may be required in order to confirm
or establish the entitlement of such Holder to a continued complete exemption
from a reduced rate of U.S. federal withholding tax with respect to payments
under this Agreement.

            (d)   The Company shall not be required to indemnify any Non-U.S.
Holder or to pay any additional amounts to any Non-U.S. Holder to the extent
that (i) the obligation to withhold amounts existed on the date such Non-U.S.
Holder became a party to this Agreement or (ii) the obligation to withhold
amounts would not have been imposed but for a failure by such Non-U.S. Holder to
comply with the provisions of paragraph (c) above.

9.22. LEASING COMPANIES AND NWE CYPRUS.

            (a)   Each Leasing Company shall at all times remain a special
purpose Cypriot corporation which is a Guarantor and a Wholly-Owned Restricted
Subsidiary with corporate organizational documents containing the provisions set
forth on SCHEDULE VII attached hereto.

            (b)   NWE Cyprus shall at all times remain a Cypriot corporation and
a Wholly-Owned Subsidiary.

9.23. TECHNOCOM.

            Technocom may not, in any transaction or series of related
transactions, consolidate with, or merge with or into, any other Person or
otherwise change its domicile into any other jurisdiction (through a sale of
assets or otherwise) unless Technocom or such Person, as the case may be,
continues to be owned in an identical proportion and manner as Technocom is now
owned immediately prior to such consolidation or merger or change of domicile,
the preferential $20,000,000 dividend and liquidation, dissolution or winding-up
rights of the Technocom Preferred Stock are not changed, there is no class of
Capital Stock authorized having rights superior to the Technocom Preferred Stock
after giving effect to such transaction or transactions, and such consolidation,
merger, or other change of domicile does not adversely affect the perfection or
priority of (i) the Lien in favor of the Trustee on the Pledged Shares created
by the Pledge Agreement or (ii) the Liens in the Technocom Preferred Stock.

9.24. COLLATERAL AGENTS.


                                       52
<PAGE>   59
            In the event that any collateral agent appointed on or before the
Closing Date or thereafter in respect of one or more jurisdictions resigns or is
terminated without the contemporaneous appointment of a new collateral agent in
such jurisdiction or jurisdictions, the Company shall procure or cause to be
procured, within 45 days after the Trustee has given notice to the Company of
such resignation or termination, a recognized financial institution, with
capital of not less than $10,000,000, in such jurisdiction or jurisdictions,
which the Trustee may lawfully appoint as a collateral agent in respect of
Collateral.

9.25. WTC.

            Provided no Default or Event of Default has occurred and is
continuing or would occur as a result of the following transaction, WTC may
consolidate with or merge with NWE Cyprus or transfer all or substantially all
of its assets to NWE Cyprus in connection with a winding-up or liquidation of
WTC.

9.26. RELEASE OF ADDITIONAL WARRANT CERTIFICATES FROM ESCROW.

            The Warrant Certificates evidencing the Additional Warrants (the
"ADDITIONAL WARRANT CERTIFICATES") issued and delivered to the Trustee, and
provisionally registered in the name of the Trustee for retention by the Trustee
in the Additional Warrant Escrow referred to in Section 5 of the Trust
Agreement, shall be subject to release from the Additional Warrant Escrow and
delivery by the Trustee to the Trustee for registration of transfer and issuance
to the holders of the Series A Notes and the Series B Notes in accordance with
the following provisions and the provisions of said Section 5 of the Trust
Agreement. On the Escrow Release Date (as defined in the Trust Agreement) next
following each date (a "COMMITMENT REDUCTION DATE") specified in the Commitment
Reduction Schedule set forth below, unless on or prior to such Commitment
Reduction Date the Company shall have (i) permanently reduced the Commitments
(exclusive of mandatory reductions of the Commitments made in compliance with
SECTION 8.3(b)) by an amount at least equal to the amount set forth opposite
such date in such Commitment Reduction Schedule (such amount being referred to
as the "TARGETED REDUCTION AMOUNT" applicable to such Commitment Reduction Date)
and made all repayments, if any, of outstanding Revolving Credit Loans required
in connection with such reduction under SECTION 8.4 and (ii) furnished to the
Trustee (with a copy to each holder of a Note) an Officers' Certificate
confirming that the Company has permanently reduced the Commitments by such
Targeted Reduction Amount and made all repayments, if any, of outstanding
Revolving Credit Loans required in connection with such reduction under SECTION
8.4 and otherwise conforming to the requirements with respect to such Officers'
Certificate set forth in Section 5(c) of the Trust Agreement, there shall be
released from the Additional Warrant Escrow and delivered by the Trustee (x) to
the holders of the Series A Notes outstanding on such Escrow Release Date,
Additional Warrant Certificates evidencing Additional Warrants for 30,000 shares
of the Company's Common Stock and (y) in the case of the Escrow Release Dates
following the Commitment Reduction Dates


                                       53
<PAGE>   60
of July 31, 1998 and August 31, 1998 only, to the holders of the Series B Notes
outstanding on such Escrow Release Date, Additional Warrant Certificates
evidencing Additional Warrants for 16,000 shares of the Company's Common Stock:

                          Commitment Reduction Schedule
                          -----------------------------
<TABLE>
<CAPTION>
                Commitment Reduction Date      Targeted Reduction Amount
                -------------------------      -------------------------
<S>             <C>                            <C>

                      July 31, 1998                 $   500,000
                      August 31, 1998                   500,000
                      September 30, 1998              1,000,000
                      October 31, 1998                1,500,000
                      November 30, 1998               1,500,000
</TABLE>

Any permanent reductions of the Commitments made by the Company other than
mandatory reductions of the Commitments required pursuant to SECTION 8.3(b) may
be credited (without duplication) against the Targeted Reduction Amount
applicable to any one or more Commitment Reduction Dates in such manner as the
Company shall request by written notice delivered to the holders of the Notes
and the Trustee (and any such reduction so credited shall be treated for
purposes of clause (i) of the preceding sentence as if made on such Commitment
Reduction Date).

9.27. DEFAULT WARRANTS.

            (a)   If the outstanding Series B Revolving Credit Loans, and all
accrued and unpaid interest, Additional Amounts, if any, and fees thereon are
not paid in full on or prior to September 30, 1998, then commencing on September
30, 1998 and on the last day of each calendar month thereafter until such time
as the outstanding Series B Revolving Credit Loans shall have been so paid in
full, the Company will deliver or cause to be delivered to the holders of the
Series B Notes Warrant Certificates evidencing Default Warrants for 32,000
shares of the Company's Common Stock.

            (b)   If the outstanding Series A Revolving Credit Loans, and all
accrued and unpaid interest, Additional Amounts, if any, and fees thereon are
not paid in full on or prior to December 31, 1998, then commencing on December
31, 1998 and on the last day of each calendar month thereafter until such time
as the outstanding Series A Revolving Credit Loans shall been so paid in full,
the Company will deliver or cause to be delivered to the holders of the Series A
Notes Warrant Certificates evidencing Default Warrants for 70,000 shares of the
Company's Common Stock.

9.28. APPLICATION OF NOTES UPON EXERCISE OF WARRANTS.

            So long as any Person shall be the holder of a Note and a Warrant
Certificate, the Company agrees that, as contemplated by Section 8 of the
Warrant


                                       54
<PAGE>   61
Agreement, upon exercise of the Warrant evidenced by such Warrant Certificate,
such Person may at its option surrender such Note to the Company at the
principal office of the Warrant Agent, together with written instructions to
apply all or any part of the outstanding Revolving Credit Loans evidenced by
such Note, together with all accrued and unpaid interest on the amount to be so
applied through and including the date of such application, against the exercise
price payable pursuant to such Warrant Certificate. Upon receipt by the Company
of written instructions specifying that less than the entire unpaid principal
amount of the Revolving Credit Loans evidenced by any Note is to be so applied,
the principal amount so specified shall be credited, as of the date of such
exercise, against the repayments of principal required pursuant to SECTION 8.4
to be made in respect of the outstanding Revolving Credit Loans evidenced by
such Note in connection with the mandatory reductions of the Commitments
required to be made pursuant to SECTION 8.3(b) in the inverse order of the dates
of such mandatory reductions. Upon any such partial application of any
outstanding Revolving Credit Loans, together with all accrued and unpaid
interest on the amount so applied through and including the date of application,
the Company shall return such Note to such holder.

9.29. AGREEMENT TO EFFECT CERTAIN AMENDMENTS.

            If the Company shall amend the Existing Senior Note Indenture as in
effect on the date hereof pursuant to amendments substantially similar to those
contemplated by Sections 2, 3 and 4 of the 10/3/97 draft of the First
Supplemental Indenture, Amendment Agreement, Consent and Waiver (the "DRAFT
AMENDMENT"), and shall provide the holders of the Notes with an executed copy of
the final form of such amendment to the Existing Senior Note Indenture (the
"FINAL AMENDMENT"), which Final Amendment shall not reflect any substantive
changes or additions to the amendments that would be effected by the Draft
Amendment and that are not acceptable to the holders of the Notes, then those
covenants contained in SECTION 9 of this Agreement (and the related definitions
of terms used therein) that correspond to the Existing Senior Note Indenture
covenants (and related definitions) and that are amended by the Final Amendment
shall be deemed amended, mutatis mutandis, such amendments to this Agreement to
be effective as of the effective date of the amendments effected by the Final
Amendment.

9.30. FUTURE SUBSIDIARIES TO BECOME GUARANTORS.

            Promptly upon any Person becoming a Wholly-Owned Restricted
Subsidiary of the Company after the date hereof, the Company will cause such
Person to become a party to the Subsidiary Guaranty by executing and delivering
a Joinder Agreement in the form attached thereto as Exhibit A.

9.31. RESTRICTION ON CERTAIN PAYMENTS BY THE COMPANY.


                                       55
<PAGE>   62
            In the event that the Company shall not have received, on or prior
to May 31, 1998, net cash proceeds aggregating at least $20,000,000 from an
Equity Issuance, the Company shall not, at any time on or after May 31, 1998:

            (i)   make any unscheduled payment in respect of principal or
      interest on or other amounts owing in respect of outstanding Indebtedness
      for borrowed money of the Company other than the Revolving Credit Loans;

            (ii)  make any Restricted Payment; or

            (iii) other than with funds subject to the Liens of the Existing
      Senior Note Collateral Documents, make any payment in respect of capital
      expenditures or make any payment to any Subsidiary, by way or contribution
      or otherwise, the proceeds of which are applied by such Subsidiary to the
      making of capital or similar expenditures.

10.   CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER.

10.1. MERGER, CONSOLIDATION, SALE OF ASSETS, ETC.

            (a)   The Company shall not, in any transaction or series of related
transactions, consolidate with, or merge with or into, any other Person or
permit any other Person to merge with or into the Company (other than a merger
of a Restricted Subsidiary of the Company into the Company in which the Company
is the continuing corporation), or sell, convey, assign, transfer, lease or
otherwise dispose of all or substantially all of the Property and assets of the
Company and its Restricted Subsidiaries taken as a whole to any other Person,
unless:

            (b)   either (i) the Company shall be the continuing corporation or
(ii) the corporation (if other than the Company) formed by such consolidation or
into which the Company is merged, or the Person which acquires, by sale,
assignment, conveyance, transfer, lease or disposition, all or substantially all
of the Property and assets of the Company and its Restricted Subsidiaries taken
as a whole (any such corporation or Person being the "SURVIVING ENTITY") shall
be a corporation organized and validly existing under the laws of the United
States of America, any political subdivision thereof, any state thereof or the
District of Columbia, or the United Kingdom or Bermuda and shall expressly
assume, pursuant to a written agreement satisfactory in form, scope and
substance to each holder of Notes, the due and punctual payment of the principal
of (and premium, if any) and interest and Additional Amounts, if any, and
Commitment Fees, if any, on all the Notes and the performance of every covenant
and obligation in this Agreement, the Warrant Agreement and the Security
Documents on the part of the Company to be performed or observed;


                                       56
<PAGE>   63
            (c)   immediately after giving effect to such transaction or series
of related transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of related transactions), no Default or
Event of Default shall have occurred and be continuing or would result
therefrom;

            (d)   immediately after giving effect to such transaction or series
of related transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), the Company (or the
Surviving Entity, if the Company is not continuing) would be permitted to incur
$1.00 of additional Indebtedness under SECTION 9.10(a) hereof;

            (e)   immediately after giving effect to such transaction or series
of transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), the Company (or the
Surviving Entity, if the Company is not continuing) shall have a Consolidated
Net Worth equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction; and

            (f)   the Company (or the Surviving Entity, if the Company is not
continuing) would not be subject to any materially adverse tax effect as a
result of such transaction or series of transactions.

            In connection with any consolidation, merger, conveyance, lease or
other disposition contemplated by this SECTION 10.1, the Company shall deliver,
or cause to be delivered, to the Trustee, in form reasonably satisfactory to
each holder of Notes, an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance, lease or disposition and
any assumption agreement in respect thereto comply with this SECTION 10.1 and
that all conditions precedent herein provided for relating to such transaction
have been complied with, and covering such other matters relating thereto, to
the Surviving Entity, such assumption and such agreement as such holder may
reasonably request.

10.2. SUCCESSOR CORPORATION SUBSTITUTED.

            Upon any consolidation with, or merger by the Company with or into,
any other corporation, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the Property and assets of the
Company and its Restricted Subsidiaries taken as a whole in accordance with
SECTION 10.1 hereof, the successor corporation formed by such consolidation or
into which the Company is merged, or the Person to which such sale, conveyance,
assignment, transfer, lease, conveyance or other disposition is made, shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Agreement with the same effect as if such successor
Person has been named as the Company herein; and thereafter except in the case
of a lease


                                       57
<PAGE>   64
the predecessor corporation shall be relieved of all obligations and covenants
under this Agreement and the Notes, except for the obligation to pay the
principal of (and premium, if any) and interest (including Additional Amounts,
if any, and Commitment Fees, if any) on the Notes.

            In case of any such consolidation, merger, sale, transfer,
conveyance or other disposal, such changes in phraseology and form (but not in
substance) may be made in the Notes thereafter to be issued or the Guarantees to
be endorsed thereon as may be appropriate.

            For all purposes of this Agreement and the Notes, Subsidiaries of
any Surviving Entity will, upon such transaction or series of transactions,
become Restricted Subsidiaries or Unrestricted Subsidiaries as provided pursuant
to this Agreement and all Indebtedness, and all Liens on Property or assets, of
the Surviving Entity and its Restricted Subsidiaries immediately prior to such
transaction or series of transactions shall be deemed to have been incurred upon
such transaction or series of transactions.

11.   EVENTS OF DEFAULT.

            An "EVENT OF DEFAULT" shall exist if any of the following conditions
or events shall occur and be continuing (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or come about or be
effected by operation of law or judicial or governmental or administrative
action or otherwise):

            (a)   the Company defaults in the payment of any principal of any
      Revolving Credit Loan when the same becomes due and payable, whether at
      maturity or at a date fixed for repayment or by declaration or otherwise;
      or

            (b)   the Company defaults in the payment of any interest (or
      Additional Amounts or Commitment Fees, if any) on any Revolving Credit
      Loan for more than five (5) Business Days after the same becomes due and
      payable; or

            (c)   the Company defaults in the performance of or compliance with
      any term contained in SECTIONS 9.8, 9.9, 9.10, 9.13, 9.14, 9.24, 10.1 OR
      10.2; or

            (d)   the Company defaults in the performance of or compliance with
      any term contained herein (other than those referred to in paragraphs (a),
      (b) and (c) of this SECTION 11) or in the Warrant Agreement, the
      Registration Agreement or any Security Document and such default is not
      remedied within 45 days after the Company received written notice of such
      default from the holder or holders of Notes having Commitment Percentages
      aggregating at least 25%; or

            (e)   any representation or warranty made in writing by or on behalf
      of the Company or by any officer of the Company in this Agreement or in
      any Security


                                       58
<PAGE>   65
      Document or in any writing furnished in connection with the transactions
      contemplated hereby or pursuant hereto proves to have been false or
      incorrect in any material respect on the date as of which made; or

            (f)   (i) the Company or any Restricted Subsidiary is in default (as
      principal or as guarantor or other surety) in the payment of any principal
      of or premium or make-whole amount or interest on any Indebtedness having
      an aggregate principal amount outstanding exceeding $10,000,000 beyond any
      period of grace provided with respect thereto, or (ii) the Company or any
      Restricted Subsidiary is in default in the performance of or compliance
      with any term of any evidence of any Indebtedness having an aggregate
      principal amount outstanding exceeding $10,000,000 or of any mortgage,
      indenture or other agreement relating thereto or any other condition
      exists, if the effect of any such default or condition is to cause or to
      permit such Indebtedness to become due and payable before its stated
      maturity or before its regularly scheduled dates of payment, or (iii) as a
      consequence of the occurrence or continuation of any event or condition
      (other than the passage of time or the right of the holder of Indebtedness
      to convert such Indebtedness into equity interests), (x) the Company or
      any Restricted Subsidiary has become obligated to purchase or repay
      Indebtedness before its regular maturity or before its regularly scheduled
      dates of payment having an aggregate principal amount outstanding
      exceeding $10,000,000, or (y) one or more Persons have the right to
      require the Company or any Restricted Subsidiary so to purchase or repay
      such Indebtedness; or

            (g)   the Company or any Restricted Subsidiary (i) admits in writing
      its inability to pay, its debts as they become due, (ii) files, or
      consents by answer or otherwise to the filing against it of, a petition
      for relief or reorganization or arrangement or any other petition in
      bankruptcy, for liquidation or to take advantage of any bankruptcy,
      insolvency, reorganization, moratorium or other similar law of any
      jurisdiction, (iii) makes an assignment for the benefit of its creditors,
      (iv) consents to the appointment of a custodian, receiver, trustee or
      other officer with similar powers with respect to it or with respect to
      any substantial part of its Property, (v) is adjudicated as insolvent or
      to be liquidated, or (vi) takes corporate action for the purpose of any of
      the foregoing; or

            (h)   a court or governmental authority of competent jurisdiction
      enters an order appointing, without consent by the Company or any of its
      Restricted Subsidiaries, a custodian, receiver, trustee or other officer
      with similar powers with respect to it or with respect to any substantial
      part of its Property, or constituting an order for relief or approving a
      petition for relief or reorganization or any other petition in bankruptcy
      or for liquidation or to take advantage of any bankruptcy or insolvency
      law of any jurisdiction, or ordering the dissolution, winding-up or
      liquidation of the Company or any of its Restricted Subsidiaries, or any
      such petition


                                       59
<PAGE>   66
      shall be filed against the Company or any of its Restricted Subsidiaries
      and such petition shall not be dismissed within 60 days; or

            (i)   any of the Security Documents or the Warrant Agreement or the
      Registration Agreement, at any time and for any reason, shall not be or
      shall cease to be valid, binding and enforceable against the Company or a
      permitted Surviving Entity, or the Company shall contest or deny the
      validity or enforceability of any of the Security Documents or the Warrant
      Agreement or the Registration Agreement or shall disaffirm or repudiate
      any of its obligations thereunder, or the Notes (or any of them) shall
      fail to be secured by perfected security interests in the Collateral; or

            (j)   a final judgment or judgments for the payment of money
      aggregating in excess of $5,000,000 are rendered against one or more of
      the Company or any Restricted Subsidiaries and which judgments are not (i)
      fully covered by insurance and with respect to which the carriers thereof
      have not declined coverage or (ii) within 60 days after entry thereof,
      bonded, discharged or stayed pending appeal, or are not discharged within
      60 days after the expiration of such stay; or

            (k)   any assets of the Company or any of its Restricted
      Subsidiaries shall be nationalized, expropriated, declared forfeit or
      otherwise permanently taken by governmental action (the "SEIZED ASSETS"),
      and the book value of such Seized Assets (less the book value of the
      expropriation proceeds) shall constitute more than 15% of the book value,
      on a consolidated basis, of all of the Company's assets minus current
      assets as they are reported on the Company's most recent quarterly
      consolidated balance sheet.

12.   REMEDIES ON DEFAULT, ETC.

12.1. ACCELERATION.

            (a)   If an Event of Default with respect to the Company described
in paragraph (g) or (h) of SECTION 11 (other than an Event of Default described
in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause (vi) encompasses such clause (i)) has
occurred, the Revolving Credit Commitments shall terminate and all the Notes
then outstanding shall automatically become immediately due and payable.

            (b)   If any other Event of Default has occurred and is continuing,
any holder or holders of Notes having Commitment Percentages of more than 50%
may at any time at its or their option, by written notice or notices to the
Company, terminate the Revolving Credit Commitments and declare all the
Revolving Credit Loans then outstanding to be immediately due and payable.


                                       60
<PAGE>   67
            (c)   If any Event of Default described in paragraph (a) or (b) of
SECTION 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by written notice or notices to the Company, terminate its or
their Revolving Credit Commitments and declare all the Revolving Credit Loans
then outstanding made by it or them to be immediately due and payable.

            Upon any Revolving Credit Loans becoming due and payable under this
SECTION 12.1, whether automatically or by declaration, such Revolving Credit
Loans will forthwith mature and the entire unpaid principal amount of such
Revolving Credit Loans, plus all accrued and unpaid interest thereon, plus
Additional Amounts, if any, and all unpaid Commitment Fees with respect thereto,
if any, shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.

12.2. OTHER REMEDIES.

            If any Default or Event of Default has occurred and is continuing,
and irrespective of whether any Revolving Credit Loans have become or have been
declared immediately due and payable under SECTION 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.

12.3. RESCISSION.

            At any time after any Revolving Credit Loans have been declared due
and payable pursuant to clause (b) of SECTION 12.1, the holders of Notes having
Commitment Percentages of not less than 66 2/3% by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Revolving Credit Loans, all
principal of and Additional Amounts, if any, and all unpaid Commitment Fees with
respect thereto, if any, on any Revolving Credit Loans that are due and payable
and are unpaid other than by reason of such declaration, and all interest on
such overdue principal and (to the extent permitted by applicable law) any
overdue interest in respect of the Revolving Credit Loans, at the applicable
Default Rate, (b) all Events of Default and Defaults, other than non-payment of
amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to SECTION 18, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this SECTION 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.


                                       61
<PAGE>   68
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.

            No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under SECTION 16, the
Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all reasonable costs and expenses of such holder
incurred in any enforcement or collection under this SECTION 12, including,
without limitation, reasonable attorneys' fees, expenses and disbursements.

13.   DEFINITIONS AND CONSTRUCTION.

13.1. DEFINED TERMS.

            As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:

            "ACQUIRED INDEBTEDNESS" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person,
but excluding Indebtedness which is extinguished, retired or repaid in
connection with such other Person merging with or into or becoming a Subsidiary
of such specified Person.

            "ACQUISITION" has the meaning set forth in SECTION 4.8(b).

            "ADDITIONAL AMOUNTS" has the meaning set forth in SECTION 9.21
hereof.

            "ADDITIONAL WARRANT CERTIFICATE" has the meaning set forth in
SECTION 1.1(d).

            "ADDITIONAL WARRANT ESCROW" has the meaning set forth in Section 5
of the Trust Agreement.

            "ADDITIONAL WARRANTS" has the meaning set forth in SECTION 1.1(e).

            "AFFILIATE" means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person; provided that each Unrestricted Subsidiary shall be deemed to be an
Affiliate of the Company and of each other Subsidiary of the Company; provided
that, except for purposes


                                       62
<PAGE>   69
of SECTIONS 8.8 OR 18.4 hereof, neither the Company nor any of its Wholly-Owned
Restricted Subsidiaries shall be deemed to be Affiliates of each other. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "under common control with," and "controlled by"), and
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of Voting Stock, by
agreement or otherwise; provided, further, that beneficial ownership of 10% or
more of the Voting Stock of a Person (on a fully diluted basis) shall be deemed
to be control.

            "AFFILIATE TRANSACTION" has the meaning set forth in SECTION 9.17.

            "AGENCY AGREEMENT" has the meaning set forth in SECTION 1.2(b).

            "APPROVALS" has the meaning set forth in SECTION 4.7.

            "ASSET SALE" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (including, without limitation,
dispositions pursuant to any consolidation, amalgamation or merger) by such
Person or any of its Restricted Subsidiaries to any Person other than to such
Person or a Restricted Subsidiary of such Person, in one transaction, or a
series of related transactions (each hereinafter referred to as a
"DISPOSITION"), of (a) Capital Stock of or other equity interests in any
Restricted Subsidiary (other than directors' qualifying shares), (b) all or
substantially all of the assets of any division or line of business of such
Person or of any of the Restricted Subsidiaries or (c) Property or assets of
such Person or any of its Restricted Subsidiaries, the Fair Market Value of
which exceeds $1,000,000, other than (i) a Disposition of Property in the
ordinary course of business consistent with industry practice, (ii) a
Disposition of Eligible Cash Equivalents, (iii) a Disposition that constitutes a
Restricted Payment permitted under SECTION 9.14 hereof, (iv) a Disposition by
Technocom of all of its assets and liabilities to a newly-formed corporation
organized in a jurisdiction other than Ireland formed to acquire such assets and
owned in a substantially identical proportion and manner (and the preferential
$20,000,000 dividend and liquidation, dissolution or winding-up rights of the
Technocom Preferred Stock are not changed) as Technocom is owned immediately
prior to such Disposition and such Disposition does not adversely affect the
perfection or priority of (x) the Lien in the Pledged Shares pursuant to the
Pledge Agreement or (y) the Liens in the Technocom Preferred Stock, (v) a
Disposition by WTC of its interest in BECET to NWE Cyprus, in connection with a
winding-up or liquidation of WTC, and (vi) a Disposition by the Company in
connection with a transaction permitted pursuant to SECTION 10.

            "ATTRIBUTABLE INDEBTEDNESS" means, with respect to any Sale and
Leaseback Transaction of any Person, as at the time of determination, the
greater of (i) the capitalized amount in respect of such transaction that would
appear on the balance sheet of such Person in accordance with GAAP and (ii) the
present value (discounted at a rate


                                       63
<PAGE>   70
consistent with accounting guidelines, as determined in good faith by such
Person) of the payments during the remaining term of the lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended) or until the earliest date on which the lessee may
terminate such lease without penalty or upon payment of a penalty (in which case
the rental payments shall include such penalty) .

            "AVAILABLE CASH" has the meaning set forth in SECTION 8.3(e).

            "AVERAGE LIFE" means, as of any date, with respect to any debt
security or Disqualified Stock, the quotient obtained by dividing (i) the sum of
the products of (x) the number of years from such date to the dates of each
scheduled principal payment or redemption payment (including any sinking fund or
mandatory redemption payment requirements) of such debt security or Disqualified
Stock multiplied in each case by (y) the amount of such principal or redemption
payment, by (ii) the sum of all such principal or redemption payments.

            "BCL" means Baltic Communication Limited, a Russian joint stock
company of the closed type.

            "BECET" means BECET International, a Kazak joint stock company of
the closed type.

            "BOARD OF DIRECTORS" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.

            "BOARD RESOLUTION" means a duly adopted resolution of the Board of
Directors in full force and effect at the time of determination and certified as
such.

            "BUSINESS OR CONDITION" of any Person, means the business,
operations, assets, Property, earnings, condition (financial or other), or
reasonably foreseeable prospects of such Person, provided that such term, when
used without reference to any particular Person, shall mean the Business and
Condition of the Company and its Restricted Subsidiaries taken as a whole.

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

            "CABLE & WIRELESS" means Cable and Wireless plc, an English
corporation.

            "CANADIAN GAAP" means generally accepted accounting principles in
Canada from time to time approved by the Canadian Institute of Chartered
Accountants, or any successor institute, applicable on the date on which the
applicable determination is being made.


                                       64
<PAGE>   71
            "CAPITAL LEASE OBLIGATION" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Indebtedness
arrangement 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 GAAP
and the stated maturity thereof shall be the date of the last payment of rent or
any 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.

            "CAPITAL STOCK" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than Indebtedness convertible into an
equity interest), warrants or options to acquire an equity interest in such
Person.

            "CASH PROCEEDS" means, with respect to any Asset Sale or issuance or
sale of Capital Stock by any Person, the aggregate consideration received in
respect of such sale or issuance by such Person in the form of cash or Eligible
Cash Equivalents; provided that with regard to an Asset Sale, any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent balance
sheet or in the notes thereto) of the Company or any Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Existing
Senior Notes, the Existing Senior Guarantees, the Existing Convertible Notes and
the guarantees under the Existing Convertible Note Indenture) which are assumed
by the transferee of any such assets and from which the Company and such
Restricted Subsidiary are completely released shall be deemed Cash Proceeds.

            "CHANGE OF CONTROL" shall be deemed to occur if (i) the sale,
conveyance, transfer or lease, whether direct or indirect, of all or
substantially all of the assets of the Company or the Company and the Restricted
Subsidiaries taken as a whole to any "Person" or "group" (within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to
either of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(i) under the Exchange Act) (other than any Wholly-Owned Restricted
Subsidiary of the Company) shall have occurred; (ii) any "Person" or "group"
(within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(i) under the Exchange Act), other than any Permitted Holder,
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 50% of the total voting power of all classes of the Voting Stock of
the Company and/or warrants or options to acquire such Voting Stock, calculated
on a fully diluted basis, and such voting power percentage is greater than or
equal to the total voting power percentage then beneficially owned by the
Permitted Holders in the aggregate; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election or appointment by such board or whose nomination for election by the
shareholders of the Company was approved by a vote of a


                                       65
<PAGE>   72
majority of the directors 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 of the Company then in office.

            "CLOSING" has the meaning set forth in SECTION 3.

            "CLOSING DATE" has the meaning set forth in SECTION 3.

            "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.

            "COLLATERAL" means all "Collateral" referred to in the Security
Documents and all other Property or assets that become subject to a Lien in
favor of the Trustee or a collateral agent for the benefit of the Trustee.

            "COLLATERAL AGENT" has the meaning set forth in SECTION 1.2(b).

            "COMMISSION" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
and any other similar or successor agency of the federal government
administering the Securities Act and the Exchange Act.

            "COMMITMENT" means, with respect to each holder of Notes, the Series
A Commitment and the Series B Commitment of such holder.

            "COMMITMENT FEES" means the fees payable pursuant to SECTION 8.9.

            "COMMITMENT PERCENTAGE" of any holder of Notes means the percentage
specified as such opposite such holder's name on SCHEDULE I.

            "COMMITMENT REDUCTION DATE"has the meaning set forth in SECTION
9.26.

            "COMMITMENT REDUCTION SCHEDULE" has the meaning set forth in SECTION
9.26.

            "COMMITMENTS" means, collectively, the Series A Commitments and the
Series B Commitments of all holders of Notes.

            "COMMITMENT TERMINATION DATE" has the meaning set forth in SECTION
9.8(b)(ii) hereof.

            "COMMITMENT TERMINATION ELECTION NOTICE" has the meaning set forth
in SECTION 9.8(c) hereof.


                                       66
<PAGE>   73
            "COMMITMENT TERMINATION OFFER" has the meaning set forth in SECTION
9.8(a) hereof.

            "COMMITMENT TERMINATION REPAYMENT AMOUNT" has the meaning set forth
in SECTION 9.8(a) hereof.

            "COMMON STOCK" means, with respect to any Person, Capital Stock of
such Person that does not rank 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.

            "COMPANY" means the party named as such in the opening paragraph of
this Agreement unless and until a successor replaces it pursuant to the
applicable provisions hereof and, thereafter, means such successor.

            "COMPANY EXISTING SENIOR NOTE ESCROW ACCOUNT AGREEMENT" means the
Company Senior Note Escrow Account Agreement among the Company, the Trustee, the
Existing Convertible Note Trustee, the Existing Convertible Note Trustee and the
escrow agent named therein.

            "COMPANY EXISTING SENIOR NOTE ESCROW ACCOUNT" means the escrow
account established under the Company Existing Senior Note Escrow Account
Agreement.

            "COMPANY EXISTING SENIOR NOTE SECURITY AGREEMENT" means the Company
Senior Note Security and Pledge Agreement among the Company, the Trustee and the
collateral agent named therein.

            "COMPANY GROUP MEMBER" means the Company, each Subsidiary of the
Company, if any, and each of their respective predecessors and (a) each
corporation that is or was at any time a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code) as the Company
or any Subsidiary of the Company, if any, or any of their respective
predecessors, (b) each trade or business, whether or not incorporated, that is
or was at any time under common control (within the meaning of Section 414(c) of
the Code) with the Company or any Subsidiary of the Company, if any, or any of
their respective predecessors, and (c) each trade or business, whether or not
incorporated, that is or was at any time a member of the same affiliated service
group (within the meaning of Section 414(m) and (o) of the Code) as the Company
or any Subsidiary of the Company, if any, or any of their respective
predecessors.

            "CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person
for any period, without duplication (A) the sum of (i) the aggregate amount of
cash and non-cash interest expense (including capitalized interest) of such
Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP in respect of Indebtedness
(including, without limitation, (v) any amortization of


                                       67
<PAGE>   74
debt discount, (w) net costs associated with Interest Hedging Obligations
(including any amortization of discounts), (x) the interest portion of any
deferred payment obligation calculated in accordance with the effective interest
method, (y) all accrued interest and (z) all commissions, discounts and other
fees and charges owed with respect to letters of credit, bankers' acceptances or
similar facilities) paid or accrued, or scheduled to be paid or accrued, during
such period; (ii) dividends or distributions with respect to Preferred Stock or
Disqualified Stock of such Person (and of its Restricted Subsidiaries if paid to
a Person other than such Person or its Restricted Subsidiaries) declared and
payable in cash; (iii) the portion of any rental obligation of such Person or
its Restricted Subsidiaries in respect of any Capital Lease Obligation allocable
to interest expense in accordance with GAAP; (iv) the portion of any rental
obligation of such Person or its Restricted Subsidiaries in respect of any Sale
and Leaseback Transaction allocable to interest expense (determined as if such
were treated as a Capital Lease Obligation); and (v) to the extent any
Indebtedness of any other Person is guaranteed by such Person or any of its
Restricted Subsidiaries, the aggregate amount of interest paid, accrued or
scheduled to be paid or accrued by such other Person during such period
attributable to any such Indebtedness, less (B) to the extent included in (A)
above, amortization or write-off of deferred financing costs of such Person and
its Restricted Subsidiaries during such period and any charge related to any
premium or penalty paid in connection with redeeming or retiring any
Indebtedness of such Person and its Restricted Subsidiaries prior to its stated
maturity; in the case of both (A) and (B) above, after elimination of
intercompany accounts among such Person and its Restricted Subsidiaries and as
determined in accordance with GAAP. For purposes of clause (ii) above, dividend
requirements attributable to any Preferred Stock or Disqualified Stock shall be
deemed to be an amount equal to the amount of dividend requirements on such
Preferred Stock or Disqualified Stock times a fraction, the numerator of which
is the amount of such dividend requirements, and the denominator of which is one
minus the applicable combined federal, state, local and foreign income tax rate
of the Company and its Restricted Subsidiaries (expressed as a decimal), on a
consolidated basis, for the fiscal year immediately preceding the date of the
transaction giving rise to the need to calculate Consolidated Interest Expense.

            "CONSOLIDATED NET INCOME" of any Person means, for any period, the
aggregate net income (or net loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis determined in accordance
with GAAP; provided that there shall be excluded therefrom, without duplication,
(i) all items classified as extraordinary, unusual or nonrecurring, (ii) for any
Person (the "Other Person") in which the Person in question or any of its
Restricted Subsidiaries has less than a 100% interest which interest does not
cause the net income of such Other Person to be consolidated into the net income
of the Person in question in accordance with GAAP) any net income of such Other
Person, except to the extent of the amount of dividends or other distributions
actually paid to such Person or its Restricted Subsidiaries by such Other Person
during such period, (iii) the net income of any Person acquired by such Person
or any of its Restricted Subsidiaries in a pooling-of-interests transaction for
any period prior to the date of the related acquisition, (iv) any gain or loss,
net of taxes, realized on the termination of any employee pension


                                       68
<PAGE>   75
benefit plan, (v) net gains (but not net losses) in respect of Asset Sales by
such Person or its Restricted Subsidiaries, (vi) the net income (but not net
loss) of any Restricted Subsidiary of such Person to the extent that the payment
of dividends or other distributions to such Person is restricted by the terms of
its charter or any agreement, instrument, contract, judgment, order, decree,
statute, rule, governmental regulation or otherwise, except for any dividends or
distributions actually paid by such Restricted Subsidiary to such Person, and
(vii) with regard to a non-Wholly-Owned Restricted Subsidiary, any aggregate net
income (or loss) in excess of such Person's or such Restricted Subsidiary's pro
rata share of such non-Wholly-Owned Restricted Subsidiary's net income (or
loss).

            "CONSOLIDATED NET WORTH" of any Person means the consolidated
stockholders' equity of such Person and its Restricted Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, less amounts
attributable to Disqualified Stock of such Person.

            "CORPORATE TRUST OFFICE" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
principally administered, which office is, at the date of execution of this
Agreement, located at 101 Barclay Street, Floor 21W, New York, New York 10286,
Attention: Corporate Trust Department.

            "DEFAULT" means any event, act or condition, the occurrence of which
is, or after notice or the passage of time or both would be, an Event of
Default.

            "DEFAULT RATE" with respect to any Note for any period of
determination means the interest rate borne by such Note during such period plus
2%.

            "DEFAULT WARRANT CERTIFICATE" has the meaning set forth in SECTION
1.1.

            "DEFAULT WARRANTS" has the meaning set forth in SECTION 1.1(f).

            "DISPOSITION" has the meaning set forth in the definition of "ASSET
SALE" in this SECTION 13.1.

            "DISQUALIFIED STOCK" means any Capital Stock 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, or otherwise, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the date on which
the Notes mature.

            "DOMINION RESOURCES" means Dominion Resources Inc.

            "DRAFT AMENDMENT" has the meaning set forth in SECTION 9.29.


                                       69
<PAGE>   76
            "EBITDA" means, with respect to any Person for any period, the sum
for such Person for such period of Consolidated Net Income plus, to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense of such Person and its consolidated
Subsidiaries, (iii) depreciation expense, (iv) amortization expense, (v) any
non-cash expense related to the issuance to employees of such Person of options
to purchase Capital Stock of such Person and (vi) any charge related to any
premium or penalty paid in connection with redeeming or retiring any
Indebtedness prior to its Stated Maturity and minus, to the extent reflected in
such income statement, any non-cash credits that had the effect of increasing
Consolidated Net Income of such Person for such period.

            "ELIGIBLE CASH EQUIVALENTS" means (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits,
certificates of deposit, or Eurodollar deposits of any commercial bank organized
in the United States having capital and surplus in excess of $500,000,000 or a
commercial bank organized under the laws of any other country that is a member
of the Organization for Economic Cooperation and Development ("OECD") and has
total assets in excess of $500,000,000 with a maturity date not more than one
year from the date of acquisition, (iii) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (ii) above, (iv) direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing, or subject to tender at the option of the
holder thereof, within ninety days after the date of acquisition thereof and, at
the time of acquisition having a rating of A or better from Standard & Poor's or
A-2 or better from Moody's, (v) commercial paper issued by the parent
corporation of any commercial bank organized in the United States having capital
and surplus in excess of $500,000,000 or a commercial bank organized under the
laws of any other country that is a member of the OECD and has total assets in
excess of $500,000,000 and commercial paper issued by non-bank issuers rated A-1
by Standard & Poor's or P-1 by Moody's and in each case maturing within 270 days
after the date of acquisition, (vi) overnight bank deposits and bankers'
acceptances at any commercial bank organized in the United States having capital
and surplus in excess of $500,000,000 or a commercial bank organized under the
laws of any other country that is a member of the OECD and has total assets in
excess of $500,000,000, (vii) deposits available for withdrawal on demand with a
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 or a commercial bank organized under the laws of any
other country that is a member of the OECD and has total assets in excess of
$500,000,000, (viii) investments in money market funds substantially all of
whose assets comprise securities of the types described in clauses (i) through
(vi), and (ix) with respect to a Restricted Subsidiary conducting operations in
the Russian Federation or Kazakstan, demand deposits, certificates of deposit
and bank promissory notes denominated in Russian Roubles or Kazak Tenge, as the
case may be,


                                       70
<PAGE>   77
and used for ordinary course of business operations by such Restricted
Subsidiary solely in the jurisdiction where such Restricted Subsidiary does
business.

            "ENVIRONMENTAL LAWS" means any and all federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

            "EQUITY ISSUANCE" means the issuance by the Company after the
Closing Date of any of its Capital Stock.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.

            "EVENT OF DEFAULT" has the meaning set forth in SECTION 11.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

            "EXCHANGE RATE OBLIGATION" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or combination thereof, designed to provide
protection against fluctuations in currency exchange rates.

            "EXCLUDED TAXES" has the meaning set forth in SECTION 9.21.

            "EXISTING CONVERTIBLE NOTE COLLATERAL" means all "collateral"
referred to in the Existing Convertible Note Collateral Documents and all other
Property or assets that become subject to a Lien in favor of the Existing
Convertible Note Trustee or a collateral agent for the benefit of the Existing
Convertible Note Trustee and the holders of the Existing Convertible Notes and,
if the Existing Senior Notes are outstanding and the Existing Senior Note
Indenture so requires, for the benefit of the Existing Senior Note Trustee and
the holders of the Existing Senior Notes, but Existing Convertible Note
Collateral shall not include the Existing Senior Note Collateral.

            "EXISTING CONVERTIBLE NOTE COLLATERAL DOCUMENTS" means the Company
Existing Convertible Note Security and Pledge Agreement among the Company, the
Existing Convertible Note Trustee, the Trustee and the collateral agent named
therein, the Company Existing Convertible Note Escrow Account Agreement among
the Company, the Existing Convertible Note Trustee, the Trustee and the escrow
agent named therein, and/or


                                       71
<PAGE>   78
any other document creating a Lien that secures the Existing Convertible Notes
other than the Existing Senior Note Collateral Documents, all as such documents
are defined in or otherwise described in the Existing Convertible Note
Indenture.

            "EXISTING CONVERTIBLE NOTE GUARANTORS" means NWE Cyprus, PLD
Leasing, PLD Capital, WTC and BCL.

            "EXISTING CONVERTIBLE NOTE INDENTURE" means the Indenture, dated the
date hereof, among the Company, the Existing Convertible Note Guarantors and The
Bank of New York, as trustee thereunder, relating to the Existing Convertible
Notes, as amended and supplemented from time to time.

            "EXISTING CONVERTIBLE NOTE TRUSTEE" means The Bank of New York, as
trustee under the Existing Convertible Note Indenture and any successor
appointed in accordance with the terms thereof.

            "EXISTING CONVERTIBLE NOTES" means the 9% Convertible Subordinated
Notes due 2006 of the Company issued pursuant to the Existing Convertible Note
Indenture.

            "EXISTING INDEBTEDNESS" means Indebtedness outstanding on the
Closing Date and disclosed in SCHEDULE IV attached hereto.

            "EXISTING SENIOR NOTE COLLATERAL" means all "collateral" referred to
in the Existing Senior Note Collateral Documents and all other Property or
assets that become subject to a Lien in favor of the Existing Senior Note
Trustee or a collateral agent for the benefit of the Existing Senior Note
Trustee and the holders of the Existing Senior Notes and, if the Existing
Convertible Notes are outstanding and the Existing Convertible Note Indenture so
requires, for the benefit of the Existing Convertible Note Trustee and the
holders of the Existing Convertible Notes, but Existing Senior Note Collateral
shall not include Existing Convertible Note Collateral.

            "EXISTING SENIOR NOTE COLLATERAL DOCUMENTS" means the Company Senior
Note Security Agreement, the Company Senior Note Escrow Account Agreement, the
Leasing Company Security Agreements, the Leasing Company Escrow Account
Agreements, the NWE Cyprus Senior Notes Security Agreement and/or any other
document creating a Lien that secures the Existing Senior Notes other than the
Existing Convertible Note Collateral Documents.

            "EXISTING SENIOR NOTE GUARANTEES" means the guaranties of the
Existing Senior Note Guarantors pursuant to Article X of the Existing Senior
Note Indenture.

            "EXISTING SENIOR NOTE GUARANTORS" means NWE Cyprus, PLD Leasing, PLD
Capital, WTC and BCL, any other Leasing Company, any Person that becomes a


                                       72
<PAGE>   79
Wholly-Owned Subsidiary of the Company after the Issue Date and any other
Subsidiaries that guarantee any Indebtedness of the Company or any Existing
Senior Note Guarantor.

            "EXISTING SENIOR NOTE INDENTURE" means the Indenture, dated as of
May 31, 1996, among the Company, the Existing Senior Note Guarantors and The
Bank of New York, as trustee thereunder, relating to the Existing Senior Notes,
as amended and supplemented from time to time.

            "EXISTING SENIOR NOTE TRUSTEE" means The Bank of New York, as
trustee under the Existing Senior Note Indenture and any successor appointed in
accordance with the terms thereof.

            "EXISTING SENIOR NOTES" means the 14% Senior Discount Notes due 2004
of the Company issued pursuant to the Existing Senior Note Indenture.

            "EXISTING WARRANTS" means the warrants for the purchase of shares of
Common Stock of the Company issued by the Company pursuant to the warrant
agreement, dated as of May 31, 1996, between the Company and the warrant agent
named therein. .

            "FAIR MARKET VALUE" means, with respect to any asset or Property,
the net sale value that would be obtained in an arm's-length transaction between
an informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy, as determined in good faith by the
Board of Directors of the Company or a Restricted Subsidiary, as applicable.

            "FINAL AMENDMENT" has the meaning set forth in SECTION 9.29.

            "GAAP" means United States generally accepted accounting principles,
consistently applied, as set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, that are applicable to the circumstances as of the date of
determination; provided that, except as otherwise specifically provided, all
calculations made for purposes of determining compliance with the terms of the
provisions of this Agreement shall utilize GAAP as in effect on the Issue Date.

            "GOVERNMENTAL AUTHORITY" means (a) the government of the United
States of America or any State or other political subdivision thereof, or any
jurisdiction in which the Company or any Subsidiary conducts all or any part of
its business, or which asserts jurisdiction over any Property of the Company or
any Subsidiary, or (b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.


                                       73
<PAGE>   80
            "GUARANTEE" means any direct or indirect obligation, contingent or
otherwise, of a Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner (and
"guaranteed", "guaranteeing" and "guarantor" shall have meanings correlative to
the foregoing).

            "GUARANTEED INDEBTEDNESS" has the meaning set forth in SECTION 9.11
hereof.

            "GUARANTEE" means a guarantee of a Subsidiary Guarantor pursuant to
the Subsidiary Guaranty.

            "HOLDER" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
SECTION 14.1.

            "INCUR" means, with respect to any Indebtedness 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 Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or obligation on the balance sheet of such Person (and
"incurrence", "incurred", "incurrable" and "incurring" shall have meanings
correlative to the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an incurrence of such Indebtedness. Indebtedness otherwise
incurred by a Person before it becomes a Restricted Subsidiary of the Company
shall be deemed to have been incurred at the time at which it becomes a
Restricted Subsidiary.

            "INDEBTEDNESS" means at any time (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) any obligation of such Person for
money borrowed, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, guarantees or other similar instruments, including, without
limitation, any such obligations incurred in connection with the acquisition of
Property, assets or businesses, excluding trade accounts payable made in the
ordinary course of business, (iii) any reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) any obligation of such Person issued
or assumed as the deferred purchase price of Property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business, which in either case are not more than 60 days overdue or which are
being contested in good faith), (v) any Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Disqualified Stock of
such Person and, to the extent held by other Persons, the maximum fixed
redemption or repurchase price of Disqualified Stock of such Person's Restricted
Subsidiaries, at the time of determination, (vii) the notional amount of any
Interest Hedging Obligations or Exchange Rate Obligations of such Person at the
time of determination, (viii) any Attributable Indebtedness with respect to any
Sale and Leaseback


                                       74
<PAGE>   81
Transaction to which such Person is a party and (ix) any obligation of the type
referred to in clauses (i) through (viii) of this definition of another Person
and all dividends and distributions of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise. For purposes of the preceding
sentence, the maximum fixed repurchase price of any Disqualified Stock that does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Stock as if such Disqualified Stock were repurchased
on any date on which Indebtedness shall be required to be determined pursuant
hereto; provided that if such Disqualified Stock is not then permitted to be
repurchased, the repurchase price shall be the book value of such Disqualified
Stock. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability of any guarantees at such date; provided that
for purposes of calculating the amount of the Existing Senior Notes outstanding
at any date, such amount shall be the Accreted Value thereof (as defined in the
Existing Senior Note Indenture) as of such date unless cash interest has
commenced to accrue pursuant to the terms of the Existing Senior Notes, in which
case the amount of the Existing Senior Notes outstanding will be determined
pursuant to the terms of the Existing Senior Notes and will not include any
accrued and unpaid cash interest which would otherwise be included in Accreted
Value because of clause (iii) of the definition thereof.

            "INDEBTEDNESS TO OPERATING CASH FLOW RATIO" means, as at any date of
determination, the ratio of (i) the aggregate amount of Indebtedness of the
Company and its Restricted Subsidiaries on a consolidated basis as of the date
of determination to (ii) the aggregate amount of EBITDA of the Company and its
Restricted Subsidiaries for the four preceding fiscal quarters for which
financial information is available immediately prior to the date of
determination; provided that any Indebtedness incurred or retired by the Company
or any of its Restricted Subsidiaries during the fiscal quarter in which the
date of determination occurs shall be calculated as if such Indebtedness was so
incurred or retired on the first day of the fiscal quarter in which the date of
determination occurs; and provided, further, that (x) if the transaction giving
rise to the need to calculate the Indebtedness to Operating Cash Flow Ratio
would have the effect of increasing or decreasing Indebtedness or EBITDA in the
future, Indebtedness or EBITDA shall be calculated on a pro forma basis as if
such transaction had occurred on the first day of such four fiscal quarter
period preceding the date of determination, and (y) if during such four fiscal
quarter period, the Company or any of its Restricted Subsidiaries shall have
engaged in any Asset Sale, EBITDA for such period shall be reduced by an amount
equal to the EBITDA (if positive), or increased by an amount equal to the EBITDA
(if negative), directly attributable to the assets which are the subject of such
Asset Sale and any related retirement of Indebtedness as if such Asset Sale and
related retirement of Indebtedness had occurred on the first day of such four
fiscal quarter period or (z) if during such four fiscal quarter period the
Company or any of its Restricted Subsidiaries shall have acquired any material
assets outside the ordinary course of business, EBITDA shall be calculated on a


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<PAGE>   82
pro forma basis as if such asset acquisition and related financing had occurred
on the first day of such four fiscal quarter period.

            "INITIAL WARRANTS" has the meaning set forth in SECTION 1.1.

            "INSTITUTIONAL INVESTOR" means (a) any original Lender hereunder,
(b) any holder of a Note having a Commitment Percentage in excess of 5%, and (c)
any bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form.

            "INTERCOMPANY NOTES" means a promissory note representing
Indebtedness of a Restricted Subsidiary owing to the Company or a Restricted
Subsidiary, which, if representing a loan of net proceeds of the Existing Senior
Notes to a Leasing Company, shall have substantially the same Maturity as the
Existing Senior Notes and substantially the same interest payment dates, the
same interest rate and substantially the same covenants as are contained in the
Existing Senior Note Indenture and the Existing Senior Note Collateral Documents
and shall be secured by the applicable Telecommunications Asset Leases and by
the applicable Qualified Investments.

            "INTEREST HEDGING OBLIGATION" means, with respect to any Person, an
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its Restricted
Subsidiaries' exposure to fluctuations in interest rates.

            "INTERNATIONAL VENDOR INDEBTEDNESS" means Indebtedness of the
Company or any Restricted Subsidiary other than the Leasing Companies or NWE
Cyprus incurred or assumed in connection with the purchase within 180 days of
such incurrence or assumption of Property or assets to be used in the business
of such Person or any of its Restricted Subsidiaries in the Russian Federation
or Kazakstan; provided that the net cash proceeds from the issuance of such
Indebtedness do not exceed 100% of the lesser of the cost or Fair Market Value
of the Property or assets constructed or acquired.

            "INVENTORY" means, with respect to any Person, all present or future
inventory in which a Person has any interest, including goods, wares and
merchandise held for sale or lease or leased or furnished or to be leased or
furnished under a contract of service and all of a Person's present and future
raw materials, work in process, finished goods, parts, components, assemblies,
and packing and shipping materials, wherever located, and documents of title
representing any of the above.

            "INVESTMENT" in any Person means any direct, indirect or contingent
(i) advance or loan to, guarantee of any Indebtedness of, or extension of credit
or capital contribution to, such Person, (ii) the acquisition of any shares of
Capital Stock, bonds,


                                       76
<PAGE>   83
notes, debentures or other securities of such Person, or (iii) the acquisition,
by purchase or otherwise, of all or substantially all of the business, assets or
stock or other evidence of beneficial ownership of such Person; provided that
Investments shall exclude accounts receivable and other extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices. The amount of an Investment shall be the original cost of such
Investment, plus the cost of all additions thereto and minus the amount of any
portion of such Investment repaid to such Person in cash as a repayment of
principal or a return of capital, as the case may be, but without any other
adjustments for increases or decrease in value, or write-ups, write-downs or
write-offs with respect to such Investment. In determining the amount of any
Investment involving a transfer of any Property other than cash, such Property
shall be valued at its Fair Market Value at the time of such transfer.

            "ISSUE DATE" means the date on which the Existing Senior Notes were
first authenticated and delivered under the Existing Senior Note Indenture,
being June 12, 1996.

            "JOINDER AGREEMENT" means a joinder agreement in the form attached
as Exhibit A to the Subsidiary Guaranty.

            "JOINT VENTURE" means a Telecommunications Company of which less
than 50 percent of the Voting Stock is held by the Company, provided that the
Telecommunications Business of such Person is principally conducted in the
Russian Federation and/or Kazakstan.

            "LEASING COMPANY" means a special purpose Cypriot corporation which
is an Existing Senior Note Guarantor and a Wholly-Owned Restricted Subsidiary
organized for the limited purpose of acquiring Telecommunications Assets and
leasing such Telecommunications Assets to Restricted Subsidiaries pursuant to
Telecommunications Asset Leases and/or making Qualified Investments permitted by
this Agreement. Each Leasing Company will have corporate organizational
documents containing the provisions set forth on SCHEDULE VII attached hereto.
Each Leasing Company must execute a Leasing Company Security Agreement and a
Leasing Company Escrow Account Agreement.

            "LEASING COMPANY ESCROW ACCOUNT" means an escrow account established
pursuant to a Leasing Company Escrow Account Agreement.

            "LEASING COMPANY ESCROW ACCOUNT AGREEMENT" means a Leasing Company
Escrow Account Agreement among the Leasing Company party thereto, the Trustee
and the escrow agent named therein in the form attached as Exhibit H to the
Existing Senior Note Indenture.

            "LEASING COMPANY SECURITY AGREEMENT" means a Leasing Company
Security and Pledge Agreement among the Leasing Company party thereto, the
Trustee,


                                       77
<PAGE>   84
the Existing Convertible Note Trustee and the collateral agent named therein, in
the form attached as Exhibit I to the Existing Senior Note Indenture.

            "LENDERS" has the meaning set forth in SECTION 2.

            "LIEN" means, with respect to any Property or other asset, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien (statutory or other), charge, easement,
encumbrance, preference, priority or other security or similar agreement or
preferential arrangement of any nature whatsoever on or with respect to such
Property or other asset (including, without limitation, any conditional sale or
title retention agreement having substantially the same economic effect as any
of the foregoing).

            "MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, Property, or prospects of the Company and
its Subsidiaries taken as a whole; "MATERIALLY" shall have a correlative
meaning.

            "MATURITY" means, when used with respect to an Existing Senior Note,
the date on which the principal of such Existing Senior Note becomes due and
payable as provided therein or in the Existing Senior Note Indenture, whether at
Stated Maturity, on the Change of Control Payment Date or purchase date
established pursuant to the terms of the Existing Senior Note Indenture with
regard to a Existing Senior Note Change of Control Offer or an Existing Senior
Note Asset Sale Offer, as applicable, or by declaration of acceleration, call
for redemption or otherwise.

            "MATERIAL ADVERSE CHANGE; MATERIAL ADVERSE EFFECT; MATERIALLY
ADVERSE" in, on or to, as appropriate, any Person, means a material adverse
change in such Person's Business or Condition, a material adverse effect on such
Person's Business or Condition or an event which is materially adverse to such
Person's Business or Condition; provided that (a) any such term, when used
without reference to a particular Person, shall mean such change in, effect on
or event materially adverse to the Company and (b) any material impairment of
the ability of the Company to pay the principal of or interest on the Notes in
accordance with the terms thereof and hereof, any material impairment of the
ability of the Company to perform its other obligations under the Notes, this
Agreement, the Warrant Agreement or the Security Documents, or any circumstance
or occurrence which would impair the enforceability as against the Company of
this Agreement, the Warrant Agreement, the Security Documents or the Notes, or
which would materially and adversely affect the value of the Collateral, or
which could materially and adversely affect the enforceability and priority of
any Security Document, shall in any case be deemed to have resulted in a
material adverse change in, to have a material adverse effect on, and to be
materially adverse to, the Company's Business or Condition.

            "MOODY'S" means Moody's Investors Service, Inc., or, if Moody's
Investors Service, Inc. shall cease rating the specified debt securities and
such ratings


                                       78
<PAGE>   85
business with respect thereto shall have been transferred to a successor Person,
such successor Person; provided that if Moody's Investors Service, Inc. ceases
rating the specified debt securities and its ratings business with respect
thereto shall not have been transferred to any successor Person or such
successor Person is Standard & Poor's, then "Moody's" shall mean any other
nationally recognized rating agency (other than Standard & Poor's) that rates
the specified debt securities selected by the Trustee.

            "MULTIEMPLOYER PLAN" means a plan defined as such in Section 3 (37)
of ERISA and subject thereto to which any Company Group Member is making or
incurring an obligation to make, or has made or incurred an obligation to make,
contributions.

            "MULTIPLE EMPLOYER PLAN" means a Plan to which any Company Group
Member, and at least one employer other than a Company Group Member, is making
or incurring an obligation to make contributions or has made or incurred an
obligation to make contributions.

            "NAVONA" means Navona Communications Corporation, Ltd., a
wholly-owned indirect Subsidiary of Cable & Wireless.

            "NET CASH PROCEEDS" means, with respect to the sale of any Property
or assets by any Person or any of its Restricted Subsidiaries, Cash Proceeds
(other than any liabilities assumed by the transferee constituting Cash Proceeds
referred to in the proviso contained in the definition of "Cash Proceeds" set
forth in this SECTION 13.1) received, net of (i) all reasonable out-of-pocket
expenses of such Person or such Restricted Subsidiary incurred in connection
with such sale, including, without limitation, all legal, title and recording
tax expenses, commissions and other fees and expenses incurred (but excluding
any finder's fee or broker's fee payable to any Affiliate of such Person) and
all federal, state, foreign and local taxes arising in connection with such sale
that are paid or required to be accrued as a liability under GAAP by such Person
or its Restricted Subsidiaries, (ii) all payments made or required to be made by
such Person or its Restricted Subsidiaries on any Indebtedness which is secured
by such Property or other assets in accordance with the terms of any Lien upon
or with respect to such Property or other assets or which must, by the terms of
such Lien, or in order to obtain a necessary consent to such transaction or by
applicable law, be repaid in connection with such sale and (iii) all
contractually required distributions and other payments made to minority
interest holders (but excluding distributions and payments to Affiliates of such
Person) in Restricted Subsidiaries of such Person as a result of such
transaction; provided that, in the event that any consideration for a
transaction (which would otherwise constitute Net Cash Proceeds) is required to
be held in escrow pending determination of whether a purchase price adjustment
will be made, such consideration (or any portion thereof) shall become Net Cash
Proceeds only at such time as it is released to such Person or its Restricted
Subsidiaries from escrow; provided, further, that any non-cash consideration
received in connection with any transaction, which is subsequently converted to
cash, shall be deemed to be Net Cash Proceeds at such time, and shall thereafter
be applied in accordance with this Agreement.


                                       79
<PAGE>   86
            "NON-U.S. HOLDER" has the meaning set forth in SECTION 9.21.

            "NOTES" has the meaning set forth in SECTION 1.1.

            "NWE CYPRUS EXISTING SENIOR NOTE SECURITY AGREEMENT" means the NWE
Cyprus Senior Note Security and Pledge Agreement among NWE Cyprus, the Trustee,
the Existing Convertible Note Trustee and the collateral agent named therein,
relating to the pledge of the Capital Stock of WTC, in the form attached as
Exhibit J to the Existing Senior Note Indenture.

            "NWE CYPRUS" means NWE Capital (Cyprus) Limited, a Cypriot
corporation and Wholly-Owned Subsidiary of the Company.

            "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
Chief Operating Officer, the President or a Vice President, and by the Chief
Financial Officer, the Chief Accounting Officer, the Secretary or an Assistant
Secretary of the Company, a Subsidiary Guarantor or a Restricted Subsidiary, as
applicable, and delivered to the holders of the Notes (and, if applicable, the
Trustee), which shall comply with this Agreement.

            "OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company (including inside counsel of the Company), and who shall
be acceptable to the holders of the Notes.

            "OTHER LENDERS" has the meaning set forth in SECTION 2.

            "PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.

            "PERMITTED HOLDERS" means Cable & Wireless, Navona and Dominion
Resources and their respective Affiliates (other than the Company and the
Restricted Subsidiaries).

            "PERMITTED INVESTMENTS" means (i) Eligible Cash Equivalents; (ii)
Investments in Property used in the ordinary course of business; (iii)
Investments in any Wholly-Owned Restricted Subsidiary or any Person as a result
of which such Person becomes a Wholly-Owned Restricted Subsidiary, provided that
the aggregate amount of Investments in non-Existing Senior Note Guarantor
Wholly-Owned Subsidiaries shall be $1,000,000, reduced by any repayments of
loans or advances, return of capital or other distributions of Property but only
to the extent that such repayments, returns or distributions are not included in
the calculation of Consolidated Net Income of the Company); (iv) Investments
pursuant to certain agreements or obligations of the Company or a Restricted
Subsidiary, in effect on the Issue Date, to make such Investments, and disclosed
on Schedule 1.1(c) attached to the Existing Senior Note Indenture; (v)


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<PAGE>   87
Investments in the Leasing Companies of funds constituting the net proceeds of
the Existing Senior Notes; (vi) Investments in Restricted Subsidiaries and
Qualified Joint Ventures by the Leasing Companies; provided that such
Investments shall be made as Telecommunications Asset Leases; (vii) Qualified
Investments, if (a) such Qualified Investments are made with no more than
$9,000,000 of net proceeds of the Notes contained in the Company Existing Senior
Note Escrow Account or in Leasing Company Escrow Accounts, and are otherwise
made in compliance with the applicable conditions contained in Section 11.4 of
the Existing Senior Note Indenture, (b) such Qualified Investments are made with
funds in the Leasing Company Escrow Accounts or, if applicable, the Company
Existing Senior Note Escrow Account not representing net proceeds of the Notes
in compliance with the applicable conditions contained in Section 11.4 of the
Existing Senior Note Indenture, provided that the aggregate amount of Qualified
Investments constituting Capital Stock or other equity pursuant to this clause
(b) shall be $9,000,000 reduced by any return of capital or other distributions
of Property but only to the extent that such returns or distributions are not
included in the calculation of Consolidated Net Income of the Company, (c) such
Qualified Investments are made directly by the Company with the proceeds of
distributions, dividends or payments by Technocom to the Company or loans by
Technocom to the Company, or are utilized by the Company to make an intercompany
loan to a Leasing Company evidenced by an Intercompany Note (which Leasing
Company thereupon shall make such Qualified Investments with the proceeds of
such Investment by the Company so long as such Qualified Investments are made in
compliance with the terms of the Existing Convertible Note Indenture, provided,
that the aggregate amount of Qualified Investments constituting Capital Stock or
other equity that pursuant to this clause (c) shall be $5,000,000 reduced by any
return of capital or other distribution of Property but only to the extent that
such returns or distributions are not included in the calculation of
Consolidated Net Income of the Company, (d) such Qualified Investment is Capital
Stock of a Restricted Subsidiary, which Investment has the effect of increasing
the percentage of ownership interest of the Company or a Restricted Subsidiary
in Capital Stock of such Restricted Subsidiary, or (e) such Qualified Investment
is in a Person that as a result of such Qualified Investment becomes a
Restricted Subsidiary of the Company; (viii) Investments by Restricted
Subsidiaries which are lessees under Telecommunications Asset Leases, provided
that such Investments shall be made as a sublease of the Telecommunications
Assets subject to the Telecommunications Asset Leases to which such Restricted
Subsidiary is a party as lessee; (ix) Investments in Restricted Subsidiaries,
provided that such Investments in excess of an aggregate principal amount of
$5,000,000 shall be made as loans evidenced by Intercompany Notes or such
Investments are Technocom Preferred Stock and are made with funds constituting
proceeds of the Existing Senior Notes; (x) Investments in prepaid expenses,
negotiable instruments held for collection and lease, utility and workers'
compensation, performance and other similar deposits; (xi) Interest Hedging
Obligations with respect to any floating rate Indebtedness that is permitted by
the terms of this Agreement to be outstanding, (xii) Exchange Rate Obligations,
provided that such Exchange Rate Obligations were entered into in connection
with transactions in the ordinary course of business or the incurrence of
Indebtedness that is permitted by the terms


                                       81
<PAGE>   88
of this Agreement to be outstanding; (xiii) bonds, notes, debentures or other
debt securities received as a result of Asset Sales permitted under SECTION 9.9
hereof, and (xiv) Investments in existence on the Issue Date.

            "PERMITTED LIENS" means (i) Liens created by the Security Documents
or that otherwise secure the payment of the Notes, the Guarantees and other
obligations under this Agreement and the Security Documents; (ii) Liens on
Property or assets of a Person existing at the time such Person is merged into
or consolidated with the Company or any Restricted Subsidiary of the Company or
becomes a Restricted Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not
secure any Property or assets of the Company or any of its Restricted
Subsidiaries other than the Property or assets subject to the Liens prior to
such merger or consolidation; (iii) Liens on Property or assets existing at the
time of acquisition thereof by the Company or any Restricted Subsidiary,
provided that such Liens were not given in contemplation of such acquisition;
(iv) Liens to secure the payment of all or a part of the purchase price or
construction cost of Property or assets acquired or constructed in the ordinary
course of business after the Issue Date, provided that the Indebtedness secured
by such Liens shall not exceed the lesser of 80% of the cost or Fair Market
Value of the Property or assets acquired or constructed and such Liens shall not
extend to any other Property or assets; (v) Liens incurred or deposits made to
secure the performance of tenders, bids, leases not constituting Capitalized
Lease Obligations, statutory or regulatory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the ordinary
course of business consistent with industry practice; (vi) Liens existing as of
the Closing Date and disclosed in SCHEDULE IV attached hereto and any additional
Liens under the Existing Senior Note Indenture and the Existing Senior Note
Collateral Documents or under the Existing Convertible Note Indenture and the
Existing Convertible Note Collateral Documents which may arise after the Closing
Date; (vii) Liens on Receivables and Inventory of the Company and its Restricted
Subsidiaries to secure Indebtedness permitted to be incurred under clause (i) of
SECTION 9.10(b) hereof; (viii) any Lien on Property of the Company in favor of
the United States of America or any state thereof, or any instrumentality of
either, to secure certain payments pursuant to any contract or statute; (ix) any
Lien for taxes or assessments or other governmental charges or levies not then
due and payable (or which, if due and payable, are being contested in good faith
and for which adequate reserves are being maintained, to the extent required by
GAAP); (x) easements, rights-of-way, licenses and other similar restrictions on
the use of Property or minor imperfections of title that, in the aggregate, are
not material in amount and do not in any case materially detract from the
Property subject thereto or interfere with the ordinary conduct of the business
of the Company or its Restricted Subsidiaries; (xi) any Lien to secure
obligations under workmen's compensation laws or similar legislation, including
any Lien with respect to judgments which are not currently dischargeable; (xii)
any statutory warehousemen's, materialmen's or other similar Liens for sums not
then due and payable (or which, if due and payable, are being contested in good
faith and with respect to which adequate reserves are being maintained, to the
extent required by GAAP); (xiii) Liens to secure any International Vendor
Indebtedness, provided that such Liens do


                                       82
<PAGE>   89
not extend to any Property or assets other than the Property or assets the
acquisition of which was financed by such Indebtedness; (xiv) Liens in favor of
the Company or any Wholly-Owned Restricted Subsidiary, including Liens securing
the Intercompany Notes and the Telecommunications Asset Leases; (xv) Liens in
favor of Technocom securing any leases by Technocom of Telecommunications Assets
to its Restricted Subsidiaries; (xvi) Liens in favor of a Restricted Subsidiary
which is a lessee under a Telecommunications Asset Lease securing a sublease of
such Telecommunications Assets to its Restricted Subsidiary, (xvii) Liens
securing reimbursement obligations with respect to letters of credit that
encumber documents and other Property relating to such letters of credit and the
products and proceeds thereof; and (xviii) Liens to secure any permitted
extension, renewal, refinancing or refunding (or successive extensions,
renewals, refinancings or refundings), in whole or in part, of any Indebtedness
secured by Liens referred to in the foregoing clauses (ii) and (iii), provided
that such Liens do not extend to any other Property or assets and the principal
amount of the Indebtedness secured by such Liens is not increased.

            "PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.

            "PETERSTAR" means PeterStar Company Limited, a Russian joint stock
company of the closed typed organized under the laws of the Russian Federation
and a Restricted Subsidiary.

            "PLAN" means any employee pension benefit plan (as defined in
Section 3(2) of ERISA and subject thereto) maintained or contributed to at any
time by any Company Group Member.

            "PLD CAPITAL" means PLD Capital Limited, a Cypriot corporation.

            "PLD LEASING" means PLD Asset leasing Limited, a Cypriot
corporation.

            "PLEDGE AGREEMENT" has the meaning set forth in SECTION 1.2(b).

            "PLEDGED SHARES" means the up to 28 ordinary shares of Technocom
that are to be purchased with the proceeds of the Series A Revolving Credit
Loans made on the Closing Date and upon such purchase become subject to the Lien
of the Pledge Agreement, and any and all dividends, distributions, payments and
proceeds thereof, as more particularly defined in the Pledge Agreement.

            "PREFERRED STOCK" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.


                                       83
<PAGE>   90
            "PROPERTY" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, excluding Capital Stock in any other Person.

            "QUALIFIED INVESTMENT" means an Investment in a Telecommunications
Company primarily engaged or proposing to engage in the Telecommunications
Business in the Russian Federation or Kazakstan.

            "QUALIFIED JOINT VENTURE" means a Joint Venture in which the Company
owns directly or indirectly Voting Stock thereof on the Issue Date, which Joint
Ventures are disclosed in Schedule 1.1(e) attached to the Existing Senior Note
Indenture, and any future Joint Venture in which the Company owns 20% or more of
the Voting Stock thereof.

            "QUALIFIED STOCK" of any Person means a class of Capital Stock other
than Disqualified Stock.

            "RECEIVABLES" means, with respect to any Person, all of the
following Property and interests in Property of such Person, whether now
existing or existing in the future or hereafter acquired or arising: (i)
accounts, (ii) accounts receivable, including, without limitation, all rights to
payment created by or arising from sales of goods, leases of goods or the
rendition of services no matter how evidenced, whether or not earned by
performance, (iii) all unpaid seller's or lessor's rights including, without
limitation, rescission, replevin, reclamation and stoppage in transit, relating
to any of the foregoing or arising therefrom, (iv) all rights to any goods or
merchandise represented by any of the foregoing after creation of the foregoing,
including, without limitation, returned or repossessed goods, (v) all reserves
and credit balances with respect to any such accounts receivable or account
debtors, (vi) all letters of credit, security or guarantees for any of the
foregoing, (vii) all insurance policies or reports relating to any of the
foregoing, (viii) all collection or deposit accounts relating to any of the
foregoing, (ix) all proceeds of any of the foregoing, and (x) all books and
records relating to any of the foregoing.

            "REFINANCE" has the meaning set forth in SECTION 9.10(b)(xii)
hereof. The terms "Refinanced" and "Refinancing" shall have correlative
meanings.

            "REFINANCING INDEBTEDNESS" means any Indebtedness incurred in
connection with the Refinancing of other Indebtedness.

            "REGISTRATION AGREEMENT" has the meaning set forth in SECTION 4.10
hereof.

            "REPLACEMENT ASSETS" has the meaning set forth in SECTION 9.9(b)
hereof.

            "REPLACEMENT TELECOMMUNICATION ASSETS" has the meaning set forth in
SECTION 9.9(b)(ii) hereof.


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            "REPORTABLE EVENT" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder.

            "REQUIRED DEDUCTIONS" has the meaning set forth in SECTION 8.3(e)
hereof.

            "REQUIRED HOLDERS" means, at any time, the holders of Notes having
Commitment Percentages aggregating more than 50% (without regard to Series),
exclusive of Notes then owned by the Company or any of its Affiliates.

            "REQUIRED RESERVES" has the meaning set forth in SECTION 8.3(e)
hereof.

            "RESPONSIBLE OFFICER" means the President, any Vice-President, the
General Counsel, any Senior Financial Officer and any other officer of the
Company with responsibility for the administration of the relevant portion of
this Agreement.

            "RESTRICTED PAYMENT" means (i) a dividend or other distribution
declared or paid on the Capital Stock of the Company or to the Company's
stockholders (in their capacity as such), or declared or paid to any Person
other than to the Company or any Restricted Subsidiary of the Company on the
Capital Stock of any Restricted Subsidiary of the Company, in each case, other
than dividends, distributions or payments made solely in Qualified Stock of the
Company or such Restricted Subsidiary, (ii) a payment made by the Company or any
of its Restricted Subsidiaries (other than to the Company or any Restricted
Subsidiary of the Company) to purchase, redeem, acquire or retire any Capital
Stock of the Company or of a Restricted Subsidiary of the Company, (iii) a
payment made by the Company or any of its Restricted Subsidiaries (other than a
payment made solely in Qualified Stock of the Company) to redeem, repurchase,
defease (including an in-substance or legal defeasance) or otherwise acquire or
retire for value (including pursuant to mandatory repurchase covenants), prior
to any scheduled maturity, scheduled sinking fund or mandatory redemption
payment, Indebtedness of the Company or such Restricted Subsidiary which is
subordinate (whether pursuant to its terms or by operation of law) in right of
payment to the Notes, or the Guarantees, as applicable) or which was scheduled
to mature on or after the maturity of the Existing Senior Notes or (iv) an
Investment in any Person, including an Unrestricted Subsidiary or the
designation of a Subsidiary as an Unrestricted Subsidiary, other than a
Permitted Investment.

            "RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that has
not been classified as an "Unrestricted Subsidiary."

            "REVOLVING CREDIT FACILITIES" means revolving credit agreements to
which the Company and the Restricted Subsidiaries are or become parties, and all
related amendments, notes, collateral documents, guarantees, instruments and
other agreements executed in connection therewith, as the same may be amended,
modified, supplemented, restated, renewed, extended, refinanced, substituted or
replaced from time to time.


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<PAGE>   92
            "REVOLVING CREDIT LOANS" means, collectively, the Series A Revolving
Credit Loans and the Series B Revolving Credit Loans; each of the Series A
Revolving Credit Loans and the Series B Revolving Credit Loans are sometimes
herein referred to separately as a "SERIES" of Revolving Credit Loans.

            "SALE AND LEASEBACK TRANSACTION" means, with respect to any Person,
any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a Restricted Subsidiary of such Person and is
thereafter leased back from the purchaser or transferee thereof by such Person
or one of its Restricted Subsidiaries.

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

            "SECURITY AGREEMENT" has the meaning set forth in SECTION 1.2(b).

            "SECURITY DOCUMENTS" has the meaning set forth in SECTION 1.2(b).

            "SELLING SHAREHOLDERS" means Plicom Limited, an Irish company, and
Elite International Limited, an Irish company.

            "SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.

            "SERIES A AVAILABILITY PERIOD" means the period from and including
the Closing Date to but excluding the earlier of (a) the date five Business Days
prior to the Series A Maturity Date and (b) the termination of the Series A
Commitments of the Lenders in accordance with the terms hereof.

            "SERIES A COMMITMENT" of each holder of Series A Notes has the
meaning set forth in SECTION 8.1(a).

            "SERIES A MATURITY DATE" means December 31, 1998.

            "SERIES A NOTES" has the meaning set forth in SECTION 1.1(a).

            "SERIES A REVOLVING CREDIT LOAN" and "SERIES A REVOLVING CREDIT
LOANS" have the respective meanings set forth in SECTION 8.1(a).

            "SERIES A WARRANT CERTIFICATE" has the meaning set forth in SECTION
1.1(c).

            "SERIES A WARRANTS" has the meaning set forth in SECTION 1.1(c).

            "SERIES B AVAILABILITY PERIOD" means the period from and including
the Closing Date to but including the earlier of (a) the date five Business Days
prior to the


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<PAGE>   93
Series B Maturity Date and (b) the termination of the Series B Commitments of
the Lenders in accordance with the terms hereof.

            "SERIES B COMMITMENT" of each holder of Series B Notes has the
meaning set forth in SECTION 8.1(b).

            "SERIES B MATURITY DATE" means September 30, 1998.

            "SERIES B NOTES" has the meaning set forth in SECTION 1.1(b).

            "SERIES B REVOLVING CREDIT LOAN" and "SERIES B REVOLVING CREDIT
LOANS" has the meaning set forth in SECTION 8.1(b).

            "SERIES B WARRANT CERTIFICATE" has the meaning set forth in SECTION
1.1(d).

            "SERIES B WARRANTS" has the meaning set forth in SECTION 1.1(d).

            "SHARE MORTGAGE" has the meaning set forth in SECTION 1.2(b).

            "SHARE PURCHASE AGREEMENT" and "SHARE PURCHASE AGREEMENTS" have the
respective meanings set forth in SECTION 4.8.

            "SHARE TRANSFER FORM" has the meaning set forth in SECTION 4.13(b).

            "SIGNIFICANT RESTRICTED SUBSIDIARY" means a Restricted Subsidiary
that is a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
under the Securities Act and the Exchange Act.

            "STANDARD & POOR'S" means Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc., or if Standard & Poor's Ratings Group shall cease
rating the specified debt securities and such ratings ceases with respect
thereto shall have been transferred to a successor Person, such successor
Person, provided that if Standard & Poor's Ratings Group ceases rating the
specified debt securities and its ratings business with respect thereto shall
not have been transferred to any successor Person or such successor Person is
Moody's, then "Standard & Poor's" shall mean any other materially recognized
rating agency selected by the Trustee.

            "STATED MATURITY" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred), and, when used with respect
to any installment of interest on such security, the fixed date on which such
installment of interest is due and payable.


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            "SUBSIDIARY" means, with respect to any Person, (i) any corporation
more than 50% of the outstanding shares of 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 other Subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity, more than
50% of the outstanding partnership or similar interests of which are 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 other Subsidiaries of such
Person, or (iii) any limited partnership of which such Person or any Subsidiary
of such Person is a general partner, and BECET, provided that the Company owns
directly or indirectly 50% of the then outstanding shares of Voting Stock of
BECET.

            "SUBSIDIARY GUARANTY" has the meaning set forth in SECTION 1.2(a).

            "SUBSIDIARY GUARANTORS" means WTC, BCL and any Person that becomes a
Wholly-Owned Restricted Subsidiary of the Company after the Closing Date and any
other Subsidiary (other than any Leasing Company and NWE Cyprus) that guarantees
any Indebtedness of the Company or any Subsidiary Guarantor.

            "SURVIVING ENTITY" has the meaning set forth in SECTION 10.1.

            "TAXES" has the meaning set forth in SECTION 9.21.

            "TECHNOCOM" means Technocom Limited, an Irish corporation and a
Restricted Subsidiary, including any transferee in a Disposition contemplated in
clause (iv) of the definition of "Asset Sale" set forth in this SECTION 13.1.

            "TECHNOCOM PREFERRED STOCK" means all Preferred Stock of Technocom
owned directly or indirectly by the Company.

            "TECHNOCOM PUT AGREEMENTS" means [TO COME].

            "TECHNOCOM SHARES" has the meaning specified in SECTION 4.8.

            "TECHNOCOM SHAREHOLDER AGREEMENT" means the Subscription and
Shareholder Agreement relating to Technocom Limited dated December 28, 1994
among the Company, Plicom Limited, Elite International Limited, Technocom, Mark
Klabin and Boris Antoniuk, as amended.

            "TELECOMMUNICATIONS ASSET LEASE" means a lease by a Leasing Company
of Telecommunications Assets to Restricted Subsidiaries and Qualified Joint
Ventures in the Russian Federation and Kazakstan, which leases will be Existing
Senior Note Collateral.


                                       88
<PAGE>   95
            "TELECOMMUNICATIONS ASSETS" means, with respect to any Person,
assets (including, without limitation, rights of way, trademarks and licenses to
use copyrighted material), that are utilized by such Person, directly or
indirectly, in a Telecommunications Business. For purposes of determining a
Telecommunications Company but not for purposes of determining whether Property
or assets may be subject to a Telecommunications Asset Lease, Telecommunications
Assets shall also include stock, joint venture or partnership interests in
another Person, provided that substantially all of the assets of such other
Person consist of Telecommunications Assets, and provided, further, that if such
stock, joint venture or partnership interests are held by the Company or a
Restricted Subsidiary, such other Person either is, or immediately following the
relevant transaction shall become, a Restricted Subsidiary of the Company
pursuant to this Agreement. The determination of what constitutes
Telecommunication Assets shall be made by the Board of Directors of the Company
and evidenced by a Board Resolution delivered to the Trustee.

            "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 (i) above or (iii) evaluating, participating or
pursuing any other activity or opportunity that is related to those specified in
(i) or (ii) above and includes, without limitation, any business which the
Company and its Restricted Subsidiaries were currently engaged on the Issue
Date.

            "TELECOMMUNICATIONS COMPANY" means any Person substantially all of
the assets of which consist of Telecommunications Assets.

            "TERMINATION EVENT" means (a) with respect to any Plan, the
occurrence of a Reportable Event or an event described in Section 4062(e) of
ERISA, or (b) the withdrawal of any Company Group Member from a Multiple
Employer Plan during a plan year in which it was a substantial employer (as such
term has the meaning set forth in Section 4001(a)(2) of ERISA), or the
termination of a Multiple Employer Plan, or (c) the distribution of a notice of
intent to terminate a Plan or Multiemployer Plan pursuant to Section 4041(a)(2)
or 4041A of ERISA or the treatment of a Plan amendment as a termination under
Section 4041 or 4041A of ERISA, or (d) the institution of proceedings to
terminate a Plan or Multiemployer Plan by the PBGC under Section 4042 of ERISA,
or (e) any other event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan or Multiemployer Plan or (f) the complete or partial
withdrawal of any Company Group Member from a Multiemployer Plan.

            "THIS AGREEMENT" has the meaning set forth in SECTION 18.3.

            "TOTAL SERIES A COMMITMENT" means $12,400,000, as such amount may be
reduced from time to time as provided in this Agreement.


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            "TOTAL SERIES B COMMITMENT" means $3,100,000, as such amount may be
reduced from time to time as provided in this Agreement.

            "TOTAL COMMITMENT" means, at any date of determination, the sum of
the Total Series A Commitment plus the Total Series B Commitment.

            "TRUST AGREEMENT" has the meaning set forth in SECTION 1.2(b).

            "TRUSTEE" has the meaning set forth in SECTION 1.2(b).

            "UNFUNDED CURRENT LIABILITY" of any Plan subject to the provisions
of Title IV of ERISA or Sections 302 of ERISA or 412 of the Code means the
amount, if any, by which the present value of the accrued benefits under such
Plan (based on those assumptions used to fund such Plan) as of the close of its
most recent plan year exceeds the then current value of the assets of such Plan
allocable to such benefits.

            "UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that
the Company has classified as an "Unrestricted Subsidiary," and that has not
been reclassified as a Restricted Subsidiary, pursuant to the terms of this
Agreement.

            "VOTING STOCK" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such Person.

            "WARRANT" has the meaning set forth in SECTION 1.1.

            "WARRANT AGENT" has the meaning set forth in SECTION 1.1(c).

            "WARRANT AGREEMENT" has the meaning set forth in SECTION 1.1(c).

            "WARRANT CERTIFICATES" has the meaning set forth in SECTION 1.1.

            "WARRANT SHARES" means the shares of Common Stock of the Company
issuable upon exercise of the Warrants.

            "WHOLLY-OWNED RESTRICTED SUBSIDIARY" means any Restricted
Subsidiary, all of the outstanding Capital Stock (other than directors'
qualifying shares) of which are owned, directly or indirectly, by the Company.

            "WTC" means Wireless Technology Corporations Limited, a British
Virgin Islands corporation.


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14.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

14.1. REGISTRATION OF NOTES.

            The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name and
address of each holder of one or more Notes, each transfer thereof and the name
and address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner
and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.

14.2. TRANSFER AND EXCHANGE OF NOTES.

            Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, within 5 Business Days, at the Company's expense (except as
provided below), one or more new Notes (as requested by the holder thereof) in
exchange therefor, of the same Series and in an aggregate principal amount equal
to the unpaid principal amount of the surrendered Note. Each such new Note shall
be payable to such Person as such holder may request and shall be substantially
in the form of the Note of such Series set forth in EXHIBIT A-1 OR A-2, as
applicable. Each such new Note shall be dated and bear interest from the date to
which interest shall have been paid on the surrendered Note or dated the date of
the surrendered Note if no interest shall have been paid thereon. The Company
may require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $1,000,000, provided that, if
necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $1,000,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be bound by all agreements of the Lenders contained in this
Agreement (including, without limitation, the agreement to make Revolving Credit
Loans from time to time in accordance with SECTION 8) and shall be deemed to
have made the representations set forth in SECTIONS 6.1 AND 6.2 or shall provide
a representation reasonably acceptable to the Company to the effect that the
purchase by or assignment to such transferee of such Note does not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of the Code.


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14.3. REPLACEMENT OF NOTES.

            Upon receipt by the Company of evidence reasonably satisfactory to
it of the ownership of and the loss, theft, destruction or mutilation of any
Note (which evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and

            (a)   in the case of loss, theft or destruction, of indemnity
      reasonably satisfactory to the Company (provided that if the holder of
      such Note is, or is a nominee for, an original Lender or another holder of
      a Note with a minimum net worth of at least $50,000,000, such Person's own
      unsecured agreement of indemnity shall be deemed to be satisfactory), or

            (b)   in the case of mutilation, upon surrender and cancellation
      thereof,

the Company at its own expense shall execute and deliver, within 5 Business
Days, in lieu thereof, a new Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen, destroyed or mutilated
Note or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.

15.   PAYMENTS ON NOTES.

15.1. PLACE OF PAYMENT.

            Subject to SECTION 15.2, payments of principal, interest, Additional
Amounts, if any, and Commitment Fees, if any, becoming due and payable in
respect of the Notes shall be made in New York, New York at the principal office
of The Chase Manhattan Bank, N.A. in such jurisdiction. The Company may at any
time, by notice to each holder of a Note, change the place of payments in
respect of the Notes so long as such place of payment shall be either the
principal office of the Company in such jurisdiction or the principal office of
a bank or trust company in such jurisdiction.

15.2. HOME OFFICE PAYMENT.

            So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in SECTION 15.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
interest, Additional Amounts (if any) and Commitment Fees (if any) by the method
and at the address specified for such purpose below your name in SCHEDULE I, or
by such other method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or repayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company


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<PAGE>   99
at its principal executive office or at the place of payment most recently
designated by the Company pursuant to SECTION 15.1. Prior to any sale or other
disposition of any Note held by you or your nominee you will, at your election,
either endorse thereon the amount of principal paid thereon and the last date to
which interest has been paid thereon or surrender such Note to the Company in
exchange for a new Note or Notes pursuant to SECTION 14.2. The Company will
afford the benefits of this SECTION 15.2 to any Institutional Investor that is
the direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you have
made in this SECTION 15.2.

16.   EXPENSES, ETC.

16.1. TRANSACTION EXPENSES.

            Whether or not the transactions contemplated hereby are consummated,
the Company will pay all reasonable costs and expenses (including reasonable
attorneys' fees of one special counsel and local Irish counsel) incurred by you
and each Other Lender or holder of a Note in connection with the preparation of,
and in connection with any amendments, waivers or consents under or in respect
of, this Agreement, the Warrant Agreement, the Registration Agreement, the
Warrants, the Security Documents or the Notes (whether or not such amendment,
waiver or consent becomes effective), including, without limitation: (a) the
reasonable costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement, the
Warrant Agreement, the Registration Agreement, the Warrants, the Security
Documents or the Notes or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement, the
Warrant Agreement, the Registration Agreement, the Warrants, the Security
Documents or the Notes, or by reason of being a holder of any Note or Warrant,
and (b) the costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy or restructuring of the Company or
any Restricted Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note or Warrant harmless from, all
claims in respect of any fees, costs or expenses if any, of brokers and finders
(other than fees, costs or expenses to which you become subject with respect to
any Person retained by you or on the basis of any act or statement made by you
or any Person retained by you).

16.2. SURVIVAL.

               The obligations of the Company under this SECTION 16 will survive
the payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.


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17.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

            All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the Notes, the making by you of any Revolving
Credit Loan or the transfer by you of any Note or portion thereof or interest
therein and the payment of any Note, and may be relied upon by any subsequent
holder of a Note, regardless of any investigation made at any time by or on
behalf of you or any other holder of a Note. Subject to the preceding sentence,
this Agreement, the Warrant Agreement, the Registration Agreement, the Warrants,
the Security Documents and the Notes embody the entire agreement and
understanding between you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.

18.   AMENDMENT AND WAIVER.

18.1. REQUIREMENTS.

            This Agreement and the Notes may be amended, and the observance of
any term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of SECTION 1, 2, 3, 4, 5, 6, 21 or 22 hereof, or any defined term (as
it is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to
the provisions of SECTION 12 relating to acceleration or rescission, change the
amount or time of any repayment or payment of principal of, or change the rate
or change the time of payment or method of computation of interest on the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of SECTIONS 8, 11(a), 11(b), 12 or 18.

18.2. SOLICITATION OF HOLDERS OF NOTES.

               (a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this SECTION 18 to each holder of outstanding Notes promptly


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<PAGE>   101
following the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Notes.

            (b)   Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.

18.3. BINDING EFFECT, ETC.

            Any amendment or waiver consented to as provided in this SECTION 18
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of the Company or of any holder of such Note. As used
herein, the term "THIS AGREEMENT" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.

18.4. NOTES HELD BY COMPANY, ETC.

            Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.

19.   NOTICES.

            All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:


                                       95
<PAGE>   102
            (i)   if to you or your nominee, to you or it at the address
      specified for such communications in SCHEDULE I, or at such other address
      as you or it shall have specified to the Company in writing,

            (ii)  if to any other holder of any Note, to such holder at such
      address as such other holder shall have specified to the Company in
      writing, or

            (iii) if to the Company, to the Company at its address set forth at
      the beginning hereof to the attention of Chief Financial Officer (with a
      copy to Morgan, Lewis & Bockius LLP, at 101 Park Avenue, New York, New
      York 10178, Attention: H. Franklin Bloomer, Jr.), or at such other address
      as the Company shall have specified to the holder of each Note in writing.

Notices under this SECTION 19 will be deemed given only when actually received.

20.     REPRODUCTION OF DOCUMENTS.

            This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by you at the Closing (except the Notes and
the Warrant Certificate themselves), and (c) financial statements, certificates
and other information previously or hereafter furnished to you, may be
reproduced by you by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This SECTION 20 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.

21.   SUBSTITUTION OF LENDER.

            You shall have the right to substitute any one of your Affiliates as
the lender of the Revolving Credit Loans you have agreed to provide hereunder,
by written notice to the Company, which notice shall be signed by both you and
such Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in SECTION 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this SECTION 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate,


                                       96
<PAGE>   103
upon receipt by the Company of notice of such transfer, wherever the word "you"
is used in this Agreement (other than in this SECTION 21), such word shall no
longer be deemed to refer to such Affiliate, but shall refer to you, and you
shall have all the rights of an original holder of the Notes under this
Agreement.

22.   MISCELLANEOUS.

22.1. SUCCESSORS AND ASSIGNS.

            All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.

22.2. PAYMENTS DUE ON NON-BUSINESS DAYS.

            Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or interest on or Additional
Amounts (if any) or Commitment Fees (if any) in respect of any Note that is due
on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.

22.3. SEVERABILITY.

            Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

22.4. CONSTRUCTION.

            Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.


                                       97
<PAGE>   104
22.5. COUNTERPARTS.

            This Agreement may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.

22.6. GOVERNING LAW.

            This Agreement shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.


                                       98
<PAGE>   105
            If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.

                                       Very truly yours,

                                       PLD TELEKOM INC.


                                       By  /s/ E. Clive Anderson
                                           -------------------------------------
                                           Name:  E. Clive Anderson
                                           Title: Senior Vice President

The foregoing is hereby
agreed to as of the
date thereof.


THE TRAVELERS INSURANCE COMPANY


By  /s/ Craig H. Farnsworth
    -------------------------------------
    Name:  Craig H. Farnsworth
    Title: Second Vice President


THE TRAVELERS INDEMNITY COMPANY


By  /s/ Craig H. Farnsworth
    -------------------------------------
    Name:  Craig H. Farnsworth
    Title: Second Vice President


                                       99
<PAGE>   106
                         INFORMATION RELATING TO LENDERS


<TABLE>
<CAPTION>
====================================================================================================================================
                                                             Principal Amount of       Principal Amount of
                                                             Series A Notes and         Series B Notes and
                                                             Series A Revolving         Series B Revolving
                                                             Credit Commitment;         Credit Commitment;
                                                             Number of Shares of       Number of Shares of
                                                                Common Stock               Common Stock
                                                            Initially Purchasable     Initially Purchasable
                                                              Upon Exercise of           Upon Exercise of             Commitment
                  Name and Address of Lender                  Series A Warrants         Series B Warrants             Percentage
                  --------------------------                  -----------------         -----------------             ----------
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                       <C>                             <C>
       THE TRAVELERS INSURANCE COMPANY                           $7,560,000;                $1,890,000                   61%
                                                               192,150 shares             65,880 shares
------------------------------------------------------------------------------------------------------------------------------------
       Notes to be registered in the name of "TRAL & CO."
------------------------------------------------------------------------------------------------------------------------------------
(1)    All payments on account of the Notes shall be made in immediately
       available funds at the opening of business on the due date by
       Federal funds wire transfer to:

       The Chase Manhattan Bank, N.A.
       One Chase Manhattan Plaza
       New York, MY 10081
       ABA No. 021000021
       For credit to:  The Travelers Insurance Company --
                    Consolidated Private Placement
                       Account No. 910-2-587434

       with sufficient information to identify the source and
       application of such funds
</TABLE>










                                  SCHEDULE I

<PAGE>   107
<TABLE>
<CAPTION>
====================================================================================================================================
                                                             Principal Amount of       Principal Amount of
                                                             Series A Notes and         Series B Notes and
                                                             Series A Revolving         Series B Revolving
                                                             Credit Commitment;         Credit Commitment;
                                                             Number of Shares of       Number of Shares of
                                                                Common Stock               Common Stock
                                                            Initially Purchasable     Initially Purchasable
                                                              Upon Exercise of           Upon Exercise of             Commitment
                  Name and Address of Lender                  Series A Warrants         Series B Warrants             Percentage
                  --------------------------                  -----------------         -----------------             ----------
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                       <C>                             <C>
(2)    All notices with respect to such payments should be
       directed to:

       The Travelers Insurance Company
       One Tower Square
       Hartford, CT 06183-2030
       Attention:  Securities Department --Cashier
       Fax:  (860) 277-2299

------------------------------------------------------------------------------------------------------------------------------------
(3)    All other communications should be directed to:

       The Travelers Insurance Company
       One Tower Square
       Hartford, CT 06183-2030
       Attention:  Securities Department -- Private
                        Placements
       Fax:  (860) 954-5243

       Tax I.D. No. 06-0566090
</TABLE>


                                             2
<PAGE>   108
<TABLE>
<CAPTION>
====================================================================================================================================
                                                             Principal Amount of       Principal Amount of
                                                             Series A Notes and         Series B Notes and
                                                             Series A Revolving         Series B Revolving
                                                             Credit Commitment;         Credit Commitment;
                                                             Number of Shares of       Number of Shares of
                                                                Common Stock               Common Stock
                                                            Initially Purchasable     Initially Purchasable
                                                              Upon Exercise of           Upon Exercise of             Commitment
                  Name and Address of Lender                  Series A Warrants         Series B Warrants             Percentage
                  --------------------------                  -----------------         -----------------             ----------
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                       <C>                             <C>
------------------------------------------------------------------------------------------------------------------------------------
       THE TRAVELERS INDEMNITY COMPANY                           $4,840,000;               $1,210,000;                   39%
                                                               122,850 shares             42,120 shares
------------------------------------------------------------------------------------------------------------------------------------
       Notes to be registered in the name of "TRAL & CO."
------------------------------------------------------------------------------------------------------------------------------------
(1)    All payments on account of the Notes shall be made in
       immediately available funds at the opening of business
       on the due date by Federal funds wire transfer to:

       The Chase Manhattan Bank, N.A.
       One Chase Manhattan Plaza
       New York, MY 10081
       ABA No. 021000021
       For credit to:  The Travelers Insurance Company --
                    Consolidated Private Placement
                       Account No. 910-2-587434

       with sufficient information to identify the source and
       application of such funds
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                             3
<PAGE>   109
<TABLE>
<CAPTION>
====================================================================================================================================
                                                             Principal Amount of       Principal Amount of
                                                             Series A Notes and         Series B Notes and
                                                             Series A Revolving         Series B Revolving
                                                             Credit Commitment;         Credit Commitment;
                                                             Number of Shares of       Number of Shares of
                                                                Common Stock               Common Stock
                                                            Initially Purchasable     Initially Purchasable
                                                              Upon Exercise of           Upon Exercise of             Commitment
                  Name and Address of Lender                  Series A Warrants         Series B Warrants             Percentage
                  --------------------------                  -----------------         -----------------             ----------
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                       <C>                             <C>
------------------------------------------------------------------------------------------------------------------------------------
(2)    All notices with respect to such payments should be directed to:

       The Travelers Insurance Company
       One Tower Square
       Hartford, CT 06183-2030
       Attention:  Securities Department --Cashier
       Fax:  (860) 277-2299

(3)    All other communications should be directed to:

       The Travelers Insurance Company
       One Tower Square
       Hartford, CT 06183-2030
       Attention:  Securities Department -- Private
                        Placements
       Fax:  (860) 954-5243

       Tax I.D. No. 06-0566050
</TABLE>


                                        4
<PAGE>   110
                                                                     EXHIBIT A-1

                    [FORM OF SERIES A REVOLVING CREDIT NOTE]
                                PLD TELEKOM INC.

           12% SERIES A SENIOR SECURED REVOLVING CREDIT NOTE DUE 1998

No. [_____]                                                               [Date]
$[_______]                                      Private Placement No. 69340T A*1

            FOR VALUE RECEIVED, the undersigned, PLD TELEKOM INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to [ ], or registered assigns, on December
31, 1998 the principal sum of [ ] DOLLARS, or, if less, the aggregate principal
amount outstanding of Series A Revolving Credit Loans (as defined in the
Revolving Credit Agreement referred to below) made by the holder hereof to the
Company pursuant to the Revolving Credit Agreement referred to below, with
interest (computed on the basis of the actual number of days elapsed over a
360-day year) (a) on the unpaid balance thereof at the rate of 12% per annum,
payable monthly on the last day of each month after the date hereof, until the
principal hereof shall have become due and payable; provided, however that in
the event that the Company shall not have satisfied certain conditions relating
to an Equity Issuance (as defined in the Revolving Credit Agreement referred to
below) as more fully described in the final paragraph of SECTION 1.1 of the
Revolving Credit Agreement referred to below, the interest rate borne by this
Note shall be increased from 12% to 15% per annum for the period commencing June
1, 1998 until maturity, such interest to be computed and payable as otherwise
heretofore provided, and (b) to the extent permitted by law, on any overdue
payment (including any overdue repayment) of principal, any overdue payment of
interest and any overdue payment of any Additional Amounts or Commitment Fees
(as such terms are defined in the Revolving Credit Agreement referred to below)
at a rate equal to 2% over the applicable interest rate determined as provided
in the preceding subclause (a), payable monthly as aforesaid or, at the option
of the registered holder hereof, on demand.

            Payments of principal of, interest on and any Additional Amounts and
Commitment Fees with respect to this Note are to be made in lawful money of the
United States of America at the principal office in New York, New York of The
Chase Manhattan Bank, N.A. or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the
Revolving Credit Agreement referred to below.

            This Note is one of the duly authorized 12% Series A Senior Secured
Revolving Credit Notes due 1998 (herein called the "Notes") issued pursuant to
the Revolving Credit and Warrant Agreement, dated as of November 26, 1997 (as
from time to time amended, the "Revolving Credit Agreement"), between the
Company and the respective Lenders named therein and is entitled to the benefits
thereof. All of the terms, conditions and covenants of the Revolving Credit
Agreement are expressly made a part of this Note by reference in the same manner
and with the same effect as if set forth herein.

<PAGE>   111
            This Note is a registered Note and, as provided in the Revolving
Credit Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary. Any transferee of this Note, by its acceptance hereof, agrees to
be bound by all the terms, conditions and covenants of the Revolving Credit
Agreement applicable to a holder of a Note or a Series A Note (as defined in the
Revolving Credit Agreement), as applicable.

            The Notes are guaranteed by the Subsidiary Guarantors (as defined in
the Revolving Credit Agreement) pursuant to a Guaranty Agreement, dated as of
November 26, 1997 by the Subsidiary Guarantors for the benefit of the holders
from time to time of the Notes, and are also entitled to the benefits of certain
security held by The Bank of New York or its successor at the time acting as
trustee (the "TRUSTEE") under a Trust Agreement, dated as of November 26, 1997
(the "TRUST AGREEMENT"), between the Company and the Trustee, such security
consisting of the Collateral referred to therein granted by the Company to the
Trustee pursuant to the Security Documents referred to therein, pursuant to
which the Company has granted to the Trustee security interests in such
Collateral. Reference is made to such Trust Agreement and such Security
Documents for a description of the nature and extent of the security afforded
thereby and the rights of the Trustee and the holders of the Notes in respect
thereof. The registered holder of this Note may inspect such Trust Agreement and
such Security Documents at the principal office of the Trustee upon request.

            As provided in the Revolving Credit Agreement, the Series A
Revolving Credit Loans evidenced by this Note are subject to optional repayments
and mandatory repayments, in whole and in part, all as specified in the
Revolving Credit Agreement.

            If an Event of Default, as defined in the Revolving Credit
Agreement, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price and with the
effect provided in the Revolving Credit Agreement.

            This Note shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New
York, excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.

                                       PLD TELEKOM INC.


                                       By_________________________
                                         [TITLE]

                                       -2-
<PAGE>   112
                                                                     EXHIBIT A-2


                    [FORM OF SERIES B REVOLVING CREDIT NOTE]
                                PLD TELEKOM INC.

               12% SERIES B SENIOR REVOLVING CREDIT NOTE DUE 1998

No. [_____]                                                               [Date]
$[_______]                                      Private Placement No. 69340T A@9

            FOR VALUE RECEIVED, the undersigned, PLD TELEKOM INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to [ ], or registered assigns, on September
30, 1998 the principal sum of [ ] DOLLARS, or, if less, the aggregate principal
amount outstanding of Series B Revolving Credit Loans (as defined in the
Revolving Credit Agreement referred to below) made by the holder hereof to the
Company pursuant to the Revolving Credit Agreement referred to below, with
interest (computed on the basis of the actual number of days elapsed over a
360-day year) (a) on the unpaid balance thereof at the rate of 12% per annum,
payable monthly on the last day of each month after the date hereof, until the
principal hereof shall have become due and payable; provided, however that in
the event that the Company shall not have satisfied certain conditions relating
to an Equity Issuance (as defined in the Revolving Credit Agreement referred to
below) as more fully described in the final paragraph of SECTION 1.1 of the
Revolving Credit Agreement referred to below, the interest rate borne by this
Note shall be increased from 12% to 15% per annum for the period commencing June
1, 1998 until maturity, such interest to be computed and payable as otherwise
heretofore provided, and (b) to the extent permitted by law, on any overdue
payment (including any overdue repayment) of principal, any overdue payment of
interest and any overdue payment of Additional Amounts or Commitment Fees (as
such terms are defined in the Revolving Credit Agreement referred to below) at a
rate equal to 2% over the applicable interest rate determined as provided in the
preceding subclause (a), payable monthly as aforesaid or, at the option of the
registered holder hereof, on demand.

            Payments of principal of, interest on and any Additional Amounts and
Commitment Fees with respect to this Note are to be made in lawful money of the
United States of America at the principal office in New York, New York of The
Chase Manhattan Bank, N.A. or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the
Revolving Credit Agreement referred to below.

            This Note is one of the duly authorized 12% Series B Senior
Revolving Credit Notes due 1998 (herein called the "Notes") issued pursuant to
the Revolving Credit and Warrant Agreement, dated as of November 26, 1997 (as
from time to time amended, the "Revolving Credit Agreement"), between the
Company and the respective Lenders named therein and is entitled to the benefits
thereof. All of the terms, conditions and covenants of the Revolving Credit
Agreement are expressly made a part of this Note by reference in the same manner
and with the same effect as if set forth herein


<PAGE>   113
            This Note is a registered Note and, as provided in the Revolving
Credit Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary. Any transferee of this Note, by its acceptance hereof, agrees to
be bound by all the terms, conditions and covenants of the Revolving Credit
Agreement applicable to a holder of a Note or a Series B Note (as defined in the
Revolving Credit Agreement), as applicable.

            The Notes are guaranteed by the Subsidiary Guarantors (as defined in
the Revolving Credit Agreement) pursuant to a Guaranty Agreement, dated as of
November 26, 1997 by the Subsidiary Guarantors for the benefit of the holders
from time to time of the Notes, and are also entitled to the benefits of certain
security held by The Bank of New York or its successor at the time acting as
trustee (the "TRUSTEE") under a Trust Agreement, dated as of November 26, 1997
(the "TRUST AGREEMENT"), between the Company and the Trustee, such security
consisting of the Collateral referred to therein granted by the Company to the
Trustee pursuant to the Security Documents referred to therein, pursuant to
which the Company has granted to the Trustee security interests in such
Collateral. Reference is made to such Trust Agreement and such Security
Documents for a description of the nature and extent of the security afforded
thereby and the rights of the Trustee and the holders of the Notes in respect
thereof. The registered holder of this Note may inspect such Trust Agreement and
such Security Documents at the principal office of the Trustee upon request.

            As provided in the Revolving Credit Agreement, the Series B
Revolving Credit Loans evidenced by this Note are subject to optional repayments
and mandatory repayments, in whole and in part, all as specified in the
Revolving Credit Agreement.

            If an Event of Default, as defined in the Revolving Credit
Agreement, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price and with the
effect provided in the Revolving Credit Agreement.

            This Note shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New
York, excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.

                                       PLD TELEKOM INC.


                                       By_________________________
                                         [Title]


                                       -2-
<PAGE>   114
                                                             EXHIBIT H-1
                                                                  to
                                                      Revolving Credit Agreement



      Description of Closing Opinion to be delivered by Company's Special and
      Irish Counsel


            The closing opinions of (i) Morgan, Lewis & Bockius, LLP, special
counsel to the Company, to be delivered pursuant to Section 4.5(a) of the
Revolving Credit Agreement, (ii) in-house counsel to the Company and (iii) A & L
Goodbody, special Irish counsel to the Company, to be delivered pursuant to
Section 4.5(b) of the Revolving Credit Agreement, shall be dated the Closing
Date and addressed to the Lenders and the Trustee, shall be satisfactory in form
and substance to the Lenders, and together shall be to the effects that:

                  1.    The Company is a corporation duly incorporated, validly
      existing and in good standing and has a legal corporate existence under
      the laws of the State of Delaware and is duly qualified as a foreign
      corporation and is in good standing in each jurisdiction in which such
      qualification is required by law, other than those jurisdictions as to
      which the failure to be so qualified or in good standing could not,
      individually or in the aggregate, reasonably be expected to have a
      Material Adverse Effect.

                  2.    The Company has all requisite power and authority to own
      or hold under lease the Property it purports to own or hold under lease,
      to carry on its business as now conducted and as proposed to be conducted,
      to enter into the Revolving Credit Agreement, the Notes, the Trust
      Agreement, the Pledge Agreement, the Share Pledge, the Security Agreement,
      the Warrant Agreement, the Warrants and the Registration Agreement (all
      such documents being referred to herein as the "Company Documents") and to
      consummate the transactions contemplated by, and perform its obligations
      under, the Company Documents, including the issuance and delivery of the
      Notes and the Warrants and the issuance of the Common Stock of the Company
      issuable upon exercise of the Warrants.

                  3.    The execution and delivery by the Company of the Company
      Documents, and the performance by the Company of the transactions
      contemplated thereby, have been duly authorized by all necessary corporate
      action on the part of the Company (all action on the part of its
      shareholders in connection therewith having been duly taken).


<PAGE>   115
                  4.    Each of the Company Documents has been duly executed and
      delivered on behalf of the Company by a duly authorized officer of the
      Company and constitutes the legal, valid and binding obligation of the
      Company, enforceable against the Company in accordance with its terms,
      except as such enforceability may be limited by (a) applicable bankruptcy,
      insolvency, reorganization, moratorium or similar laws from time to time
      in effect affecting the enforcement of creditors' rights generally, (b)
      the application of general equitable principles (regardless of whether
      such enforceability is considered in a proceeding in equity or at law),
      and (c) applicable state laws which may affect the availability of certain
      of the remedies provided for in the Security Documents, which laws do not
      in the opinion of such counsel, make the remedies provided for therein
      inadequate for the ultimate practical realization of the benefits and
      security intended to be afforded thereby. The Notes are entitled to the
      benefits and security of the Trust Agreement, the Security Agreement, the
      Pledge Agreement and the Share Mortgage.

                  5.    Neither the execution or delivery by the Company of the
      Company Documents, nor the performance by the Company of its obligations
      thereunder nor the consummation by the Company of the transactions
      contemplated thereby, will result in any breach of or be in conflict with
      or constitute a default (or an event which with notice or lapse of time or
      both would become a default) under, or give to others any right of
      termination, amendment, acceleration or cancellation of, or result in a
      loss of any benefit to which the Company is entitled under, or result in
      (or require) the creation of any lien (other than the liens in favor or
      for the benefit of the Trustee under the Security Documents) in respect of
      any property of the Company under (a) the Company's articles of
      incorporation or by-laws or (b) any existing statute, law, rule or
      regulation, (c) the Existing Senior Note Indenture or the Existing
      Convertible Note Indenture or any other credit or loan agreement,
      indenture, mortgage, or other document or instrument evidencing or
      governing the terms of indebtedness of the Company for borrowed money, (d)
      any other agreement, instrument or license known to such counsel to which
      the Company is a party or by which it or any of its properties is bound,
      or (e) any order, judgment or decree known to such counsel of any court or
      arbitrator or Governmental Body which is binding on the Company or any of
      its Properties.

                  6.    No order, consent, approval or authorization of, or
      registration, filing or declaration with, or the taking of any other
      action in respect of, any regulatory commission, board or other
      administrative or governmental agency or arbitration body is required, (a)
      for or in connection with the valid execution and delivery by the Company
      of or the performance by the Company of its obligations under the Company
      Documents or the consummation by the Company of the transactions
      contemplated thereby or (b) as a condition to the legality, validity or
      enforceability as against the Company of the Company Documents.

                  7.    To the best knowledge of such counsel, there is no suit,
      proceeding or investigation pending or threatened in any court or by or
      before any regulatory


                                            -2-

<PAGE>   116
      commission, board or other administrative or governmental agency or
      arbitration body against the Company which questions the validity of the
      Company Documents or which, if adversely determined, would have a Material
      Adverse Effect.

                  8.    It is not necessary in connection with the offer,
      issuance and delivery of the Notes, the Initial Warrants and the
      Additional Warrants on the date hereof under the circumstances
      contemplated by the Revolving Credit Agreement to register such Notes,
      Initial Warrants or Additional Warrants under the Securities Act or to
      qualify an indenture in respect of the Notes under the Trust Indenture Act
      of 1939, as amended.

                  9.    The authorization, issuance and delivery of the Notes
      and the Warrants and the borrowing of the Revolving Credit Loans evidenced
      by the Notes on the Closing Date, in the manner contemplated by the
      Revolving Credit Agreement, will not involve any violation of Regulation
      G, T, U or X of the Board of Governors of the Federal Reserve System.

                  10.   The Company is not an "investment company" or a person
      directly or indirectly "controlled" by or "acting on behalf of" an
      "investment company", within the meaning of the Investment Company Act of
      1940, as amended. The Company is not a "public-utility company" or a
      "holding company" or a "subsidiary company" of a "holding company", within
      the meaning of the Public Utility Holding Company Act of 1935, as amended.

                  11.   The Security Agreement creates in favor of the Trustee a
      valid security interest in the right, title and interest of the Company in
      all personal property that is included in the "Collateral" (as defined in
      the Security Agreement) and in respect of which a security interest may be
      created under the Uniform Commercial Code as currently in effect in the
      State of New York (the "New York UCC") (the "Security Agreement
      Collateral").

                  12.   Under Article 9 of the New York UCC ("Article 9 of the
      New York UCC"), a security interest in the Security Agreement Collateral,
      to the extent that a security interest may be created therein under
      Article 9 of the New York UCC (the "UCC Collateral"), other than (a) UCC
      Collateral in the form of instruments and money (perfection of which must
      be accomplished by possession) and (b) UCC Collateral comprising
      investment securities, in which a security interest can be perfected only
      by possession or other action taken pursuant to Article 8 of the Uniform
      Commercial Code of the State of New York is perfected by the filing of
      financing statements under Article 9 of the New York UCC.

                  13.   The financing statements executed by the Company and
      naming the Company as debtor and the Trustee as secured party, as filed on
      ______________, 1997 in the offices of the Secretary of State of the State
      of New York and the City Registrar in


                                       -3-
<PAGE>   117
      New York County, New York, as more specifically described in Annex I to
      such opinion (the "Financing Statements"), comply in all respects with
      applicable provisions of Article 9 of the New York UCC and are in
      appropriate form for filing under Article 9 of the New York UCC, and the
      descriptions therein of the UCC Collateral covered by the Security
      Agreement are sufficient to perfect the security interest created by the
      Security Agreement in such UCC Collateral to the extent such security
      interest may be perfected by filing a financing statement under Article 9
      of the New York UCC. All filings in the State of New York necessary under
      Article 9 of the New York UCC to perfect such security interests in the
      UCC Collateral have been made and no other recording or filing of any
      document or instrument is necessary under Article 9 of the New York UCC in
      order to establish, preserve, perfect and protect the Trustee's security
      interests in the UCC Collateral, except that continuation statements with
      respect to the Financing Statements must be filed prior to each successive
      fifth anniversary of the date of original filing thereof.

                  14.   The security interest of the Trustee in that portion of
      the UCC Collateral consisting of instruments and money located in the
      State of New York (the "Possessory Collateral") shall be a perfected
      security interest under Article 9 of the New York UCC upon delivery
      thereof to the Trustee.

                  15.   Except for the payment of filing fees in connection with
      the filing of the Financing Statements, there are no recording,
      documentary stamp, or other taxes or fees that must be paid in connection
      with the execution, delivery, recordation or filing of any of the Company
      Documents, the Financing Statements or any other document contemplated by
      the Company Documents.

                  16.   At the time of the Closing and after giving effect to
      the transactions contemplated by this Agreement and the Warrant Agreement,
      the authorized Capital Stock of the Company will consist of : (a)
      100,000,000 shares of Common Stock, of which [__________] shares will be
      issued and outstanding (plus shares issued upon the exercise of options or
      warrants outstanding on the date hereof or options or similar rights
      granted subsequent to the date hereof pursuant to the Company's Equity
      Compensation Plan in effect on the date hereof), 423,000 shares will be
      reserved by the Company for issuance by the Company upon exercise of the
      Initial Warrants, 182,000 shares will be reserved by the Company for
      issuance by the Company upon exercise of the Additional Warrants, [_____]
      shares will be reserved by the Company for issuance by the Company upon
      exercise of the Default Warrants, [_________] shares will be reserved by
      the Company for issuance by the Company upon exercise of the Existing
      Warrants, and [_________] shares will be reserved by the Company for
      issuance upon conversion of the Existing Convertible Notes; and (b)
      100,000,000 shares of Preferred Stock, par value $.01 per share, of which
      [_______] shares will be issued and outstanding. All such authorized
      Capital Stock has been duly and validly authorized, and all such
      outstanding shares are, and all such shares to be issued will be, duly and
      validly issued and outstanding, and are, or upon issuance will be, fully
      paid and non-assessable. The Company (x) does not have outstanding any


                                       -4-
<PAGE>   118
      stock or securities convertible into or exchangeable for any shares of its
      Capital Stock, or any rights (preemptive or otherwise) or warrants to
      subscribe for or to purchase, or any options for the purchase of, or any
      agreements providing for the issuance (contingent or otherwise) of, or any
      calls, commitments or claims of any character relating to, any of its
      Capital Stock, other than the Existing Warrants, the Existing Convertible
      Notes and options and warrants outstanding on the date hereof or options
      or similar rights granted subsequent to the date hereof pursuant to the
      Company's stock option plans in effect on the date hereof, and (y) is not
      subject to any obligation (contingent or otherwise) to repurchase or
      otherwise acquire any shares of its Capital Stock or any convertible
      securities, rights or warrants, or options of the type described in the
      foregoing subclause (x). The Company is not a party to any agreement
      restricting the transfer of any shares of its Capital Stock. The Company
      has filed, pursuant to Section 12 of the Exchange Act, a registration
      statement relating to the Common Stock. The Company is not required to
      file, nor has it filed, pursuant to Section 12 of such Act, a registration
      statement relating to any other class of debt of equity securities.

                  17.   The Pledge Agreement creates in favor of the Trustee a
      valid security interest in the right, title and interest of the Company in
      the Pledged Shares under the New York UCC. Upon the Trustee taking
      possession of the certificates representing the Pledged Shares, the
      security interest created by the Pledge Agreement will be perfected to the
      extent a security interest therein may be perfected under the New York UCC
      and, subject to the terms of the Pledge Agreement, such security interest
      will remain perfected thereafter for so long as possession of such
      certificates is retained by the Trustee.

                  18.   Technocom is a company duly incorporated and validly
      existing under the laws of Ireland.

                  19.   The Share Mortgage creates a legal, valid and binding
      obligation in a form capable of enforcement against the Company under the
      laws of Ireland in the Courts of Ireland in accordance with its terms.

                  20.   The Share Transfer Form and the Share Mortgage create in
      favor of the Collateral Agent a first priority interest in the Pledged
      Shares.

                  21.   It is not necessary or advisable under the laws of
      Ireland in order to ensure validity and enforceability and priority of the
      obligations and rights of the Company under the Share Mortgage that it be
      filed, registered, recorded or notarized in any public office or elsewhere
      or that any other instrument relating thereto be signed, delivered, filed,
      registered, or recorded other than the requirement for the Company to file
      a Form 8E with the Irish Registrar of Companies within 21 days of
      execution of the Share Mortgage.

                  22.   The submission by the parties to the Legal Mortgage to
      the exclusive jurisdiction of the Irish Courts will be upheld by the Irish
      Courts.


                                       -5-
<PAGE>   119
                  23.   No consent, approval, authorization or order of any
      court, regulatory body, administrative agency, governmental body,
      arbitration tribunal, board of directors of Technocom or shareholder of
      Technocom is required for the Share Mortgage [save that on the exercise of
      the power of sale upon foreclosure the approval of the board of directors
      of Technocom must be obtained to the transfer of the ordinary shares to a
      third party]. However, pursuant to the Written Resolution the board of
      directors of Technocom have no right to refuse to register any transfer
      executed pursuant to the Share Mortgage.

                  24.   The holders of the remaining ordinary shares of
      Technocom, which together with the Shares constitute the entire issued
      ordinary share capital of Technocom, have waived their rights of
      preemption they have in respect of the transfer of the Share to the
      Collateral Agent pursuant to the Share Mortgage.

                  25.   The Company is the registered owner of 160 ordinary
      shares of IR pound sterling 1 each in the capital of Technocom
      representing ____% of the issued ordinary share capital of Technocom.


                                       -6-
<PAGE>   120
                                                             EXHIBIT I
                                                                 to
                                                      Revolving Credit Agreement


                               NOTICE OF BORROWING



To Each Person Named on
  Attached Schedule


            The undersigned, PLD Telekom Inc. (the "Company"), refers to the
Revolving Credit Agreement, dated as of November 26, 1997 (as amended from time
to time, the "Revolving Credit Agreement", the terms defined therein being used
herein as therein defined), between the Company and you, and hereby gives you
notice, irrevocably, pursuant to Section 8.1(c) of the Revolving Credit
Agreement, that the undersigned hereby requests that you make Revolving Credit
Loans under the Revolving Credit Agreement, and in that connection sets forth
below the information relating to such Revolving Credit Loans (the "Proposed
Borrowing"):

            (i)   The Business Day of the Proposed Borrowing is __________,
      19__;1

            (ii)  The aggregate principal amount of the Proposed Borrowing of
      Series A Revolving Credit Loans is $____________.

            (iii) The aggregate principal amount of the Proposed Borrowing of
      Series B Revolving Credit Loans is $_____________.

            The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:

            (A)   the representations and warranties contained in the Revolving
      Credit Agreement are and will be true and correct in all material
      respects, both before and after giving effect to the Proposed Borrowing
      and to the application of the proceeds thereof, as though made on such
      date (it being understood and agreed that any representation or warranty
      which by its terms is made as of a specified date shall be required to be
      true and correct in all material respects only as of such specified date);

--------
1     Shall be a Business Day at least two Business Days after the date hereof.


                                       -1-
<PAGE>   121
            (B)   after giving effect to the Proposed Borrowing, outstanding
      Series A Revolving Credit Loans shall not exceed the Available Series A
      Revolving Commitment and outstanding Series of Revolving Credit Loans
      shall not exceed the Available Series B Revolving Commitment; and

            (C)   no Default or Event of Default, and no event or condition
      having a Material Adverse Effect, has occurred and is continuing, or would
      result from such Proposed Borrowing or from the application of the
      proceeds thereof.

                                       Very truly yours,

                                       PLD TELEKOM INC.

                                       By_________________________________
                                       Name:
                                       Title:


                                       -2-
<PAGE>   122
                             SCHEDULE OF ADDRESSEES


The Travelers Insurance Company
The Travelers Indemnity Company
One Tower Square
Hartford, Connecticut 06183-2030
Attention:  Securities Department -- Private Placements

Fax:  (860) 954-5243


                                       -3-