<PAGE>

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




                             REIMBURSEMENT AGREEMENT


                                 by and between

                                IWC CHINA LIMITED

                                       and

                        VANGUARD CELLULAR FINANCIAL CORP.





                               September 18, 1997




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



<PAGE>





                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                    Page
                                                                                                    ----
<S>              <C>                                                                                <C>    
ARTICLE I DEFINITIONS...............................................................................1

ARTICLE II ISSUANCES OF IWC GUARANTY AND RELATED MATTERS............................................8
         2.1     IWC Guaranty.......................................................................8
         2.2     Guaranty Fee.......................................................................9
         2.3     Additional Guaranty Fee...........................................................11
         2.4     Reimbursement of Payments by Vanguard.............................................13
         2.5     Payments..........................................................................15
         2.6     Vanguard's Representations and Warranties.........................................15

ARTICLE III REPRESENTATIONS AND WARRANTIES.........................................................16
         3.1     Organization and Qualification....................................................16
         3.2     Corporate Power, Etc..............................................................16
         3.3     Certain Other Representations.....................................................17
         3.4     No Conflict.......................................................................17
         3.5     Approvals, Etc....................................................................17
         3.6     No Material Adverse Effect........................................................17
         3.7     Litigation, Etc...................................................................17
         3.8     No Violation, Etc.................................................................17
         3.9     Margin Stock......................................................................18
         3.10    Investment Company Act and Public Utility Holding Company Act.....................18
         3.11    Taxes.............................................................................18
         3.12    Environmental Laws................................................................18
         3.13    Conditions Precedent..............................................................18
         3.14    Credit Analysis; Other Information................................................18
         3.15    Security Interest; Pledged Shares, Etc............................................18
         3.16    Designated Securities, Etc........................................................19
         3.17    Ownership of IWCH.................................................................19

ARTICLE IV COVENANTS...............................................................................19
         4.1     Affirmative Covenants.............................................................19
         4.2     Negative Covenants................................................................22

MISCELLANEOUS......................................................................................23
         5.1     Modifications, Amendments or Waivers..............................................23
         5.2     Successors and Assigns in General.................................................23
         5.3     No Implied Waivers; Cumulative Remedies; Writing Required.........................23
         5.4     Reimbursement of Expenses; Taxes..................................................24
         5.5     Holidays..........................................................................24


                                       i
<PAGE>
<S>              <C>                                                                               <C>
         5.6     Notices...........................................................................24
         5.7     Survival..........................................................................25
         5.8     Governing Law; Waivers and Jurisdiction...........................................26
         5.9     Herein, etc.......................................................................26
         5.10    Severability......................................................................27
         5.11    Headings..........................................................................27
         5.12    Counterparts......................................................................27
         5.13    Indemnification...................................................................27
         5.14    Payment Set Aside.................................................................28
         5.15    Complete Agreement................................................................28
         5.16    No Strict Construction............................................................29
         5.17    Termination.......................................................................29

</TABLE>


                                      ii
<PAGE>



                                LIST OF EXHIBITS



Exhibit A    --    Form of Pledge Agreement

Exhibit B    --    Form of Vanguard Warrant

Exhibit C    --    Form of Assignment and Assumption Agreement




                                     iii

<PAGE>

                             REIMBURSEMENT AGREEMENT



                  THIS REIMBURSEMENT AGREEMENT, dated as of September 18, 
1997 (as amended or modified from time to time, the "Agreement"), is made by 
and between IWC CHINA LIMITED a company organized under the laws of Mauritius 
("IWC China"), and VANGUARD CELLULAR FINANCIAL CORP., a North Carolina 
corporation ("Vanguard").

                  Star Digitel Limited, a company organized under the laws of 
Hong Kong ("SDL"), and Toronto-Dominion Bank ("Toronto-Dominion") entered 
into that certain Bridge Loan Agreement, dated as of May 16, 1997 (as amended 
or modified from time to time, the "Bridge Loan Agreement"), providing for 
Advances (as defined below) by Toronto-Dominion to SDL in an aggregate 
principal amount not to exceed $8,000,000 (the "Original Loan"). SDL and 
Toronto-Dominion are proposing to amend the Bridge Loan Agreement to increase 
the amount of Advances available thereunder by an additional $10,000,000 and 
soon thereafter by another $10,000,000 (such amendments to the Bridge Loan 
Agreement, the "Bridge Loan Agreement Amendment" and such additional Advances 
of up to $20,000,000, the "Additional Loans"), and in connection therewith, 
Toronto-Dominion has requested guaranties of such Additional Loans under the 
Bridge Loan Agreement from each of SDL's shareholders (or certain of their 
parent entities) in proportion to its equity ownership in SDL. IWC China 
currently owns forty percent (40%) of the issued and outstanding ordinary 
shares of SDL ("SDL Shares"), and has been requested by SDL to guarantee (a) 
the repayment of the Additional Loans by Toronto-Dominion under the Bridge 
Loan Agreement in an aggregate principal amount not to exceed forty percent 
(40%) of the aggregate principal amount of such Additional Loans and (b) 
forty percent (40%) of all Obligations (as defined below) of SDL (other than 
Advances under the Bridge Loan Agreement) relating to the Additional Loans 
now or hereafter existing under the Bridge Loan Documents (as defined below), 
whether for interest, fees, expenses or otherwise (such guaranty, the "IWC 
Guaranty" and the sum of clauses (a) and (b), the "IWC Guaranteed Amount"). 
IWC China has requested that Vanguard issue to Toronto-Dominion on IWC 
China's behalf the IWC Guaranty as described in greater detail in this 
Agreement.

                  NOW, THEREFORE, the parties hereto, in consideration of 
their mutual covenants and agreements set forth herein and intending to be 
legally bound hereby, covenant and agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  In addition to any other terms defined elsewhere in this 
Agreement, the following terms will have the respective meanings set forth 
below:

                  "ADDITIONAL LOANS" has the meaning set form in the second 
paragraph of this Agreement.


<PAGE>

                  "ADVANCES" has the meaning set forth in the Bridge Loan 
Agreement.

                  "AFFILIATE" of any Person means any other Person directly 
or indirectly controlling, controlled by or under common control with such 
first Person. For purposes of this definition, "control" will include the 
direct or indirect ownership of, and/or right to vote or control the vote 
with respect to, Equity Securities representing 20% or more of the aggregate 
voting power of such first Person's voting Equity Securities (either based on 
the quantity of such first Person's voting Equity Securities which are 
actually outstanding or on a fully diluted basis).

                  "Agreement" has the meaning set forth in the first 
paragraph of this Agreement

                  "AGGREGATE OUTSTANDING AMOUNT" at any time, means the 
amount calculated in accordance with the following formula:

                  A = B - C, where

                  A = Aggregate Outstanding Amount;

                  B = the unpaid aggregate principal amount of all loans and 
Advances outstanding under the Bridge Loan Agreement at such time;

                  C = $8,000,000, less the aggregate amount of all repayments 
made by SDL as of such time to Toronto-Dominion up to $8,000,000 in principal 
amount of loans or Advances under the Bridge Loan Agreement.

                  "APPLICABLE RATE" at any time means a rate equal to the 
following:

<TABLE>
<CAPTION>
                                                                          RATE
                                                                          ----
<S>                                                                       <C>
On and after the date of this Agreement and prior to March 18, 1998         6.75%
On and after March 18, 1998 and prior to                                    7.75%
       June 18, 1998
On and after June 18, 1998 and prior to                                     9.75%
       September 18, 1998
On and after September 18, 1998 and prior to                               11.75%
       October 18, 1998
On and after October 18, 1998 and prior to                                 13.75%
       November 18, 1998
On and after November 18, 1998 and prior to                                15.75%
       December 18, 1998
On and after December 18, 1998                                             17.75%
</TABLE>

                  "AVERAGE AGGREGATE OUTSTANDING AMOUNT." for any period, 
means a quotient, (a) the numerator of which is the sum of the Aggregate 
Outstanding Amount on each day during such period, (b) the denominator of 
which is the total number of days in such period.

                                      2

<PAGE>

                   "BRIDGE  LOAN  AGREEMENT"  has the  meaning  set forth in 
the second paragraph of this Agreement.

                  "BRIDGE LOAN AGREEMENT AMENDMENT" has the meaning set forth 
in he second paragraph of this Agreement.

                  "BRIDGE LOAN DOCUMENTS" means the IWC Guaranty and the Loan 
Documents, all as amended or modified from time to time.

                  "BUSINESS DAY" means any day other than a Saturday, a 
Sunday, a public holiday under the laws of the State of North Carolina or the 
State of California or a day on which banking institutions are authorized or 
obligated to close in North Carolina or San Francisco, California.

                  "DEBT" has the meaning set forth in the Bridge Loan 
Agreement.

                  "DESIGNATED AFFILIATE" has the meaning set forth in Section 
2.1.

                  "DESIGNATED COMPANY" means (a) International Wireless 
Communications, Inc., a Delaware corporation, PT Rajasa Hazanah Perkasa, an 
Indonesia company, PT Mobile Selular Indonesia, an Indonesia company, 
Pakistan Wireless Holdings Limited, International Wireless Communications 
Pakistan Limited, a Mauritius company, Pakistan Mobile Communications (Pvt) 
Limited, a Pakistan company, International Wireless Communications Asia 
Holdings N.V., a Netherlands Antilles company, International Wireless 
Communications Limited, a Mauritius company, IWC China Limited, a Mauritius 
company, Star Digitel Limited, a Hong Kong company, Syarkat Telefon Wireless 
(M) Sdn Bhd, a Malaysia company, International Wireless Communications Latin 
America Holdings Ltd., a Bermuda company, Via Movel 1 Comunicacoes S.A., a 
Brazil company, and Servicos de Radio Comunicacoes Ltda., a Brazil company, 
(b) any of IWCH's Subsidiaries or any Investee which is not named in clause 
(a) above if (i) as of the date on which the term "Designated Company" is 
applied, IWCH and its Subsidiaries have made aggregate Investments of not 
less than $15,000,000 in such Subsidiary or Investee, or (ii) such Subsidiary 
or Investee has a direct or indirect ownership interest in any Subsidiary or 
Investee described in clause (b)(i) above, or (c) any other of IWCH's 
Subsidiaries or any other Investee which IWCH has designated a Designated 
Company by written notice to Vanguard to that effect.

                  "DESIGNATED IWC ENTITIES" means SDL, IWC China and each 
IWCH Entity of which IWC China is a direct or indirect Subsidiary.

                  "DESIGNATED SECURITIES" has the meaning set forth in 
Section 2.6.

                  "DISTRIBUTION" means any dividend or other distribution or 
payment by a Person (other than a natural person) with respect to its Equity 
Securities, or any redemption, acquisition, purchase or other retirement of 
any Equity Security of such Person, any of its Subsidiaries, or any Person of 
which such Person is a Subsidiary or an Investee, in each case whether in 
cash, securities or other property.


                                      3

<PAGE>

                  "ENVIRONMENTAL ACTION" means any action, suit, demand, 
demand letter, claim, notice of noncompliance or violation, notice of 
liability or potential liability, investigation, proceeding, consent order or 
consent agreement relating in any way to any Environmental Law, Environmental 
Permit or Hazardous Materials or arising from alleged injury or threat of 
injury to health, safety or the environment, including, without limitation, 
(a) by any governmental or regulatory authority for enforcement, cleanup, 
removal, response, remedial or other actions or damages and (b) by any 
governmental or regulatory authority or any third party for damages, 
contribution, indemnification, cost recovery, compensation or injunctive 
relief.

                  "ENVIRONMENTAL LAWS" means any federal, state, local or 
foreign statute, law, ordinance, rule, regulation, code, order, judgment, 
decree or judicial or agency interpretation, policy or guidance relating to 
pollution or protection of the environment, health, safety or natural 
resources, including, without limitation, those relating to the use, 
handling, transportation, treatment, storage, disposal, release or discharge 
of Hazardous Materials.

                  "ENVIRONMENTAL PERMIT" means any permit, approval, 
identification number, license or other authorization required under any 
Environmental Law.

                  "EQUITY SECURITY" of any Person means any capital stock, 
partnership interest, membership interest or other ownership or equity 
interest or security of or in such Person, any phantom equity, profit 
participation, appreciation or similar right with respect to such Person, or 
any security or other right which directly or indirectly is convertible into 
or exercisable or exchangeable for any other Equity Security of such Person.

                  "ERISA" means the Employee Retirement Income Security Act 
of 1974, as amended, and the rules and regulations of any governmental agency 
or authority promulgated thereunder.

                  "EXCESS PROCEEDS" means the net proceeds received by the 
issuer of Equity Securities or the seller of assets, as the case may be, in 
connection with a Triggering Event in excess of the Requisite Amount up to 
the IWC Guaranteed Amount.

                  "FINAL PAYMENT DATE" has the meaning set forth in Section 
2.3.

                  "FIRST PAYMENT DATE" has the meaning set forth in Section 
2.3.

                  "GAAP" means generally accepted accounting principles as 
promulgated by the Financial Accounting Standards Board, as in effect from 
time to time.

                  "GUARANTEED OBLIGATIONS" has the meaning set forth in the 
Bridge Loan Agreement.

                  "HAZARDOUS MATERIALS" means all or any of the following: 
(i) substances that are defined or listed in, or otherwise classified 
pursuant to, any applicable Environmental Laws as "hazardous substances," 
"hazardous materials," "hazardous wastes," "toxic substances" or any 
formulation intended to define, list or classify substances by reason of 
deleterious properties such

                                      4

<PAGE>

as ignitability, corrosivity, reactivity, carcinogenicity, reproductive 
toxicity, "TLCP" toxicity or "EP" toxicity; (ii) oil, petroleum or petroleum 
derived substances, natural gas, natural gas liquids or synthetic gas and 
drilling fluids, produced waters and other wastes associated with the 
exploration, development or production of crude oil, natural gas or 
geothermal resources; (iii) any flammable substances or explosives or any 
radioactive materials; and (iv) asbestos in any friable form or electrical 
equipment which contains any oil or dielectric fluid containing levels of 
polychlorinated biphenyls in excess of fifty parts per million.

                  "INDEMNIFIED LIABILITIES" has the meaning set forth in 
Section 5.13

                  "INDEMNITEES" has the meaning set forth in Section 5.13

                  "INDENTURE" means the Indenture dated as of August 15, 1996 
between IWCH and Marine Midland Bank, as the initial trustee, as in effect on 
the date of this Agreement.

                  "INVESTEE" means any Person (other than a Subsidiary of 
IWCH) in which IWCH, any of its Subsidiaries or any other Investee has any 
direct or indirect Investment (either itself or through one or more of its 
direct or indirect Subsidiaries or Investees), including any Subsidiary of 
any other Investee.

                  "INVESTMENT" means any amount paid for liabilities or 
assets of, or loaned, advanced or contributed to, or acquisition for 
consideration of any Equity Security or Debt of, any other Person, or any 
other item that is or would be classified as an investment on a balance sheet 
prepared in accordance with GAAP. The term "Investment" will include the 
acquisition of a company, business or product line.

                  "IPO EVENT" means the consummation by IWCH or any other 
Designated IWC Entity of an initial public offering of its Equity Securities 
(including a firm commitment underwritten public offering pursuant to an 
effective registration statement filed under the 1933 Act and/or a listing on 
a major stock exchange).

                  "IWC CHINA" has the meaning set forth in the first 
paragraph of this Agreement.

                  "IWC GUARANTEED AMOUNT" has the meaning set forth in the 
second paragraph of this Agreement.

                  "IWC GUARANTY" has the meaning set forth in the second 
paragraph of this Agreement.

                  "IWCH" means International Wireless Communications 
Holdings, Inc., a Delaware corporation.

                  "IWCH ENTITIES" means IWCH, IWC China and all other 
Designated Companies.

                  "IWCH SHARES" means shares of IWCH Class 1 Common Stock, 
$0.01 par value.

                                       5

<PAGE>


                  "LAW" will be construed broadly to include any foreign, 
national, federal, state, provincial, local or other law, rule, regulation, 
statute, ordinance, judgment, decree, order, policy, guideline, directive, 
common law, pronouncement, treaty, accord or similar item of any legislative, 
executive, judicial or other governmental entity or authority.

                  "LIEN" means any security interest, pledge, bailment (in 
the nature of a pledge or for purposes of security), mortgage, deed of trust, 
the grant of a power to confess judgment, conditional sales and title 
retention agreement (including any lease in the nature thereof), charge, 
encumbrance, restrictions or other similar arrangement or interest in real or 
personal property.

                  "LOAN DOCUMENTS" has the meaning set forth in the Bridge 
Loan Agreement.

                  "LOAN PARTIES" has the meaning set forth in the Bridge Loan 
Agreement.

                  "MATERIAL ADVERSE EFFECT" means a material adverse effect 
on (a) the business, properties, assets, liabilities, conditions (financial 
or otherwise) or prospects of IWCH (taking into account IWCH's direct and 
indirect ownership interests in its Subsidiaries and the Investees) or IWC 
China (b) the ability of IWC China to perform any of its obligations under 
the Transaction Documents, (c) the ability of Vanguard to exercise any right 
and remedy with respect to, or otherwise to realize upon, any of the security 
for the obligations secured by the Pledge Agreement or (d) any other right or 
remedy of Vanguard under any Transaction Document, if, in each case, the same 
would, either individually or in the aggregate, materially impair the 
benefits to Vanguard of this Agreement or any other Transaction Document and 
the transactions contemplated thereby.

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

                  "OBLIGATIONS" has the meaning set forth in the Bridge Loan 
Agreement.

                  "ORGANIZATIONAL DOCUMENTS" with respect to any Person, 
means the articles or certificate of incorporation, bylaws and similar 
organizational or constitutional documents of such Person, including any such 
items which may come into existence after the date of this Agreement, and in 
each case as in effect from time to time.

                  "ORIGINAL LOAN" has the meaning set forth in the second 
paragraph of this Agreement.

                  "PAYMENT DATE" has the meaning set forth in Section 2.3.

                  "PERSON" means any individual, corporation, partnership, 
limited liability company, trust or other entity, including any governmental 
entity or agency.

                  "PLEDGE AGREEMENT" means the Pledge Agreement, a form of 
which is attached hereto as Exhibit A.

                  "PLEDGED SHARES" means all of the SDL Shares pledged by IWC 
China pursuant to the Pledge Agreement.


                                       6

<PAGE>

                  "QUARTERLY PAYMENT DATE" means the 18th day of each 
December, March, June and September, beginning with December 18, 1997.

                  "REIMBURSEMENT OBLIGATION" means any and all Obligations of 
IWC China under this Agreement and the other Transaction Documents.

                  "REQUISITE AMOUNT" means sum of (l) the aggregate amount, 
if any, required to be paid by Pakistan Wireless Holdings Limited and/or 
IWCH, as the case may be, under the Loan Agreement, dated as of August 18, 
1997, between Pakistan Wireless Holdings Limited and the lenders who are 
parties thereto and the Loan Agreement, dated as of August 18, 1997, between 
IWCH and the lenders who are parties thereto, in each case, directly as a 
result of any Triggering Event and (2) $10,000,000.

                  "RETAINED SDL SHARES" means 100 SDL Shares which, in 
addition to all other Pledged Shares, shall be pledged to Vanguard pursuant 
to the Pledge Agreement but the beneficial ownership of which shall be 
retained by IWC China.

                  "SDL" has the meaning set forth in the second paragraph of 
this Agreement.

                  "SDL SUBSCRIPTION AGREEMENT" means the Subscription 
Agreement, dated as of September 23, 1996, among SDL, Star Telecom Holding 
Limited, International Wireless Communications, Inc., as amended or modified 
from time to time.

                  "SDL SHAREHOLDERS' AGREEMENT" means the Amended and 
Restated Shareholders Agreement, dated as of April 4, 1997, among SDL, Star 
Telecom Holding Limited, International Wireless Communications, Inc. and 
Vanguard China, Inc., as amended or modified from time to time.

                  "SDL SHARES" has the meaning set forth in the second 
paragraph of this Agreement.

                  "SECOND IWC SHARES" has the meaning set forth in the SDL 
Subscription Agreement.

                  "SUBSIDIARY" means, with respect to any Person, any 
corporation, partnership, limited liability company, trust, association or 
other business entity of which (i) if a corporation, a majority of the total 
voting power of shares of stock entitled (without regard to the occurrence of 
any contingency) to vote in the election of directors, managers or trustees 
thereof is at the time owned or controlled, directly or indirectly, by that 
Person or one or more direct or indirect Subsidiaries of that Person or a 
combination thereof, or (ii) if a partnership, limited liability company, 
association or other business entity, a majority of the partnership or other 
voting or economic ownership interest thereof is at the time owned or 
controlled, directly or indirectly, by any Person or one or more direct or 
indirect Subsidiaries of that Person or a combination thereof, in each case 
including control by agreement. A Person or Persons will be deemed to have a 
majority ownership interest in a partnership, limited liability company, 
association or other business entity if such Person or Persons is allocated a 
majority of partnership, limited liability

                                      7

<PAGE>

company, association or other business entity gains or losses or is or 
controls a managing director, managing member, manager, trustee, general 
partner or similar official or Person with respect to such partnership, 
limited liability company, association or other business entity.

                  "TORONTO-DOMINION" has the meaning set forth in the second 
paragraph of this Agreement.

                  "TRANSACTION DOCUMENTS" means this Agreement, the Pledge 
Agreement and the Vanguard Warrant.

                  "TRANSFER" has the meaning set forth in the SDL 
Shareholders' Agreement.

                  "TRANSFER DATE" has the meaning in Section 2.3.

                  "TRIGGERING EVENT" means the occurrence of either of the 
following: (a) any direct or indirect private issuance or sale or series of 
related issuances or sales of Equity Securities of IWCH or any other 
Designated IWC Entity (other than SDL), which results in net cash proceeds to 
the issuer of not less than the Requisite Amount, or (b) any direct or 
indirect sale or other disposition of any assets of IWCH or any other 
Designated IWC Entity (other than SDL) which results in net cash proceeds to 
such seller of not less than the Requisite Amount.

                  "UCC" means the Uniform Commercial Code as in effect in any 
applicable jurisdiction.

                  "VANGUARD" has the meaning set forth in the first paragraph 
of this Agreement.

                  "VANGUARD WARRANT" means a warrant (whether or not 
represented by a certificate issued or reissued on a later date), in the form 
of the attached EXHIBIT B, issued pursuant to this Agreement, and any warrant 
in such form issued in whole or in part in replacement thereof or 
substitution therefor.

                  "WARRANT SHARES" means shares of common stock of IWCH 
issuable upon exercise of the Vanguard Warrant.

                                   ARTICLE II

                  ISSUANCE OF IWC GUARANTY AND RELATED MATTERS

                  2.1  IWC GUARANTY.

                       (a) ISSUANCE OF IWC GUARANTY. In connection with the 
Bridge Loan Agreement Amendment, Vanguard shall issue to Toronto-Dominion on 
behalf of IWC China the IWC Guaranty. The IWC Guaranty issued by Vanguard may 
be a part of one guaranty instrument which incorporates the guaranty by 
Vanguard on its own behalf of the repayment of (x) the Additional Loans made 
by Toronto-Dominion under the Bridge Loan Agreement in an aggregate principal 
amount not to exceed seven percent (7%) of the aggregate principal amount

                                      8

<PAGE>

of all Additional Loans and seven percent (7%) of all Obligations of SDL 
(other than Advances under the Bridge Loan Agreement) relating to the 
Additional Loans now or hereafter existing under the Bridge Loan Documents, 
whether for interest, fees, expenses or otherwise and (y) the Original Loan 
made by Toronto-Dominion under the Bridge Loan Agreement in an aggregate 
principal amount not to exceed $3,760,000 and forty-seven percent (47%) of 
all Obligations of SDL (other than Advances under the Bridge Loan Agreement) 
relating to the Original Loans now or hereafter existing under the Bridge 
Loan Documents, whether for interest, fees, expenses or otherwise. For 
purposes of this Agreement, each repayment by SDL to Toronto-Dominion of 
principal amount of any loan or Advances under the Bridge Loan Agreement 
shall be deemed to be a repayment of (1) first, principal amounts outstanding 
under the Original Loan until the Original Loan shall be deemed to have been 
paid in full and (2) thereafter, principal amounts outstanding under the 
Additional Loans.

                       (b) INITIAL FEE. In consideration of entering into 
this Agreement, IWC China shall pay Vanguard an initial fee of $240,000 cash 
simultaneously with the execution of this Agreement.

                       (c) WARRANTS. In further consideration of entering 
into this Agreement and issuing the IWC Guaranty, IWC China shall issue to 
Vanguard or any of its Affiliates designated by Vanguard ("Designated 
Affiliate") the Vanguard Warrant in the form attached hereto as EXHIBIT A 
simultaneously with the execution of this Agreement.

                       (d) PLEDGE AGREEMENT. All of IWC China's Obligations 
under this Agreement shall be secured by a pledge by IWC China of the Pledged 
Shares pursuant to the Pledge Agreement. Simultaneously with the execution of 
this Agreement, IWC China shall execute and deliver the Pledge Agreement and 
all other documents required to be delivered thereunder.

                       (e) CLOSING DOCUMENTS. Simultaneously with the 
execution of this Agreement, IWC China shall deliver or cause to be delivered 
the following documents:

                           (i)  Opinions of counsel reasonably requested by 
Vanguard in form and substance reasonably satisfactory to it; and

                           (ii) Signed copies of officers' certificates 
reasonably requested by Vanguard in form and substance reasonably 
satisfactory to it, together with copies of all documents evidencing 
corporate action taken with respect to the Transaction Documents and its 
Organizational Documents.

                  2.2  GUARANTY FEE. So long as this Agreement remains in 
effect, as compensation for Vanguard's issuance of the IWC Guaranty, IWC 
China shall cause to be paid to Vanguard (or its Designated Affiliate) a 
guaranty fee consisting of IWCH Shares in accordance with the following 
provisions:

                                     9

<PAGE>

                       (a) On each Quarterly Payment Date (other than 
December 18, 1998), Vanguard (or its Designated Affiliate) shall be paid a 
guaranty fee consisting of the number of IWCH Shares determined in accordance 
with the following formula:

                  M = (N x O x P)/$12.48

                  M = the number of IWCH Shares to be transferred to Vanguard 
(or its Designated Affiliate) as guaranty fee under this Section 2.2(a).

                  N = the Average Aggregate Outstanding Amount during the 
period between the date on which the last guaranty fee payment became due and 
payable pursuant to this Section 2.2 (or the date of this Agreement in the 
case of the first guaranty fee under this Section 2.2) and such Quarterly 
Payment Date.

                  O = the Applicable Rate for the period immediately 
preceding such Quarterly Payment Date.

                  P = a quotient, the numerator of which is the actual number 
of days elapsed during the period between the date on which the last guaranty 
fee payment became due and payable pursuant to this Section 2.2 (or the date 
of this Agreement in the case of the first guaranty fee under this Section 
2.2) and such Quarterly Payment Date and the denominator of which is 365 or 
366 (depending on the number of days during the year in question).

                       (b) On December 18, 1998, Vanguard (or its Designated 
Affiliate) shall be paid a guaranty fee consisting of the number of IWCH 
Shares determined in accordance with the following formula:

                  Q = (R x S x T)/$12.48 + (R x S x T)/$12.48 +(R x S 
                       (1) (1) (1)          (2) (2) (2)         (3) (3)
x T)/$12.48
  (1)
                  Q = the number of IWCH Shares to be transferred to Vanguard 
(or its Designated Affiliate) as guaranty fee under this Section 2.2(b).

                  R = the Average Aggregate Outstanding Amount during the 
                  (1)
period between September 18, 1998 (inclusive of such date) and October 17, 
1998 (inclusive of such date).

                  S = the Applicable Rate on and after September 18, 1998 
                  (1)
and prior to October 18, 1998.

                  T = 30/365.
                  (1)

                  R = the Average Aggregate Outstanding Amount during the 
                  (2)
period between October 18, 1998 (inclusive of such date) and November 17, 
1998 (inclusive of such date).

                  S = the Applicable Rate on and after October 18, 1998 and 
                  (2)
prior to November 18, 1998.

                  T = 31/365.
                  (2)

                                      10

<PAGE>

                  R = the Average Aggregate Outstanding Amount during the 
                  (3)
period between November 18, 1998 (inclusive of such date) and December 17, 
1998 (inclusive of such date).

                  S = the Applicable Rate on and after November 18, 1998 and 
                  (3)
prior to December 18, 1998.

                       (c) On the date on which this Agreement terminates (if 
such date does not coincide with a Quarterly Payment Date), Vanguard (or its 
Designated Affiliate) shall be paid a guaranty fee consisting of the number 
of IWCH Shares determined in accordance with Section 2.2(a) or (b) above, as 
the case may be, based upon the number of days elapsed between the date on 
which the last guaranty fee payment became due and payable (or the date of 
this Agreement, if no guaranty fee shall have become due and payable) 
pursuant to this Section 2.2 and the date on which this Agreement is 
terminated.

                       (d) IWC China shall take all steps to cause all right, 
title and interest in and to all IWCH Shares required to be transferred to 
Vanguard (or its Designated Affiliate) under this Section 2.2 to be vested in 
Vanguard (or its Designated Affiliate), free and clear of any and all Liens, 
and pay all costs and expenses incurred in connection with such transfer, 
including fees and expenses of counsel, if any, relating to such transfer.

                  2.3  ADDITIONAL GUARANTY FEE.

                       (a) Upon any payment by Vanguard under the IWC 
Guaranty, IWC China shall pay to Vanguard (or its Designated Affiliate) as 
compensation for such payment by Vanguard an additional guarantee fee 
consisting of SDL Shares in accordance with the following provisions:

                           (i)   in the case of the first payment by Vanguard 
under the IWC Guaranty, as soon as practicable but no later than ten (10) 
Business Days after the date of first such payment (the "First Payment Date") 
by Vanguard under the IWC Guaranty, IWC China shall pay Vanguard (or its 
Designated Affiliate) an additional guarantee fee consisting of the following 
number of SDL Shares:

                  D = 0.00205 x E x F, where

                  D = the number of SDL Shares to be transferred to Vanguard 
(or its Designated Affiliate) as additional guaranty fee under this Section 
2.3(a)(i).

                  E = the aggregate number of issued and outstanding SDL 
Shares detennined as of the First Payment Date.

                  F = the total number of days between the date of this 
Agreement and the First Payment Date, divided by 365, multiplied by 12.

                           (ii)  in the case of any subsequent payment by 
Vanguard under the IWC Guaranty after the First Payment Date, as soon as 
practicable but no later than ten (10)

                                     11

<PAGE>

Business Days after the date of such payment (each such date, a "Payment 
Date") by Vanguard under the IWC Guaranty, IWC China shall pay Vanguard (or 
its Designated Affiliate) an additional guarantee fee consisting of the 
following number of SDL Shares:

                  G = 0.0041 x H x I, where

                  G = the number of SDL Shares to be transferred to Vanguard 
(or its Designated Affiliate) as additional guaranty fee under this Section 
2.3(a)(ii).

                  H = the aggregate number of issued and outstanding SDL 
Shares determined as of such Payment Date on which Vanguard makes such 
payment under the IWC Guaranty.

                  F = the total number of days between the most recent 
Payment Date (or the First Payment Date, if applicable) and such Payment 
Date, divided by 365, multiplied by 12.

                           (iii) simultaneously with the payment or 
satisfaction in full of IWC China's Reimbursement Obligations hereunder (the 
date on which such payment or satisfaction occurs, the "Final Payment Date"), 
IWC China shall pay Vanguard (or its Designated Affiliate) an additional 
guarantee fee consisting of the following number of SDL Shares:

                  J = 0.0041 x K x L, where

                  J = the number of SDL Shares to be transferred to Vanguard (or
its Designated Affiliate) as additional guaranty fee under this Section
2.3(a)(iii).

                  K = the aggregate number of issued and outstanding SDL 
Shares determined as of the Final Payment Date.

                  L = the total number of days between the most recent 
Payment Date (or the First Payment Date, if applicable) and the Final Payment 
Date, divided by 365, multiplied by 12.

                       (b) If within thirty (30) days after the occurrence of 
(x) an IPO Event, the IWC Guaranty is not fully and forever terminated and 
Vanguard is not permanently and indefeasibly released and discharged from its 
Obligations under the IWC Guaranty or (y) a Triggering Event, the IWC 
Guaranteed Amount is not permanently reduced by the amount of the Excess 
Proceeds from such Triggering Event and Vanguard's Obligations under the IWC 
Guaranty is not permanently and indefeasibly released and discharged by the 
amount of such Excess Proceeds, then IWC China shall pay to Vanguard (or its 
Designated Affiliate) on the 31 st day after the occurrence of such IPO Event 
or Triggering Event (the "Transfer Date") as compensation an additional 
guarantee fee consisting of four percent (4%) of the aggregate number of 
issued and outstanding SDL Shares as of such Transfer Date.

                       (c) IWC China shall take all steps to cause all right, 
title and interest in and to all SDL Shares required to be transferred to 
Vanguard (or its Designated Affiliate) under this Section 2.3 to be vested in 
Vanguard (or its Designated Affiliate), free and clear of any and all Liens, 
including the execution and delivery of all necessary duly stamped bought and 
sold

                                      12

<PAGE>

notes and instruments of transfer and all other documents and instruments 
required in connection with such transfer. IWC China shall pay all costs and 
expenses incurred in connection with such transfer, including all applicable 
stamp duties and fees and expenses of counsel relating to such transfer.

                       (d) IWC China and Vanguard hereby agree and 
acknowledge that all of the fees contemplated by this Article II are fair and 
reasonable in light of the transactions contemplated by this Agreement and 
the Bridge Loan Documents and are commensurate with the rinks taken by 
Vanguard and the benefits received by IWC China in connection with such 
transactions.

                  2.4  REIMBURSEMENT OF PAYMENTS BY VANGUARD.

                       (a) IWC China hereby unconditionally and irrevocably 
agrees to reimburse Vanguard immediately for any and all payments made by 
Vanguard under the IWC Guaranty, and in addition agrees to pay any and all 
expenses (including reasonable counsel fees and expenses) incurred by 
Vanguard in enforcing any rights under this Agreement.

                       (b) The Obligations of IWC China under this Agreement 
are independent of any Obligations of any other Loan Party under the Bridge 
Loan Documents, and a separate action or actions may be brought and 
prosecuted against IWC China to enforce this Agreement, irrespective of 
whether any action is brought against SDL or any other Loan Party or whether 
SDL or any other Loan Party is joined in any such action or actions. The 
liability of IWC China under this Agreement shall be irrevocable, absolute 
and unconditional irrespective of, and IWC China hereby irrevocable waives 
any defenses it may now or hereafter have in any way relating to, any or all 
of the following: (1) any lack of validity or enforceability of any Bridge 
Loan Document or Transaction Document or any agreement or instrument relating 
thereto; (2) any change in the time, manner or place of payment of, or in any 
other term of, all or any of the Guaranteed Obligations or any other 
Obligations of any other Loan Party under the Bridge Loan Documents, or any 
other amendment or waiver of or any consent to departure from any Bridge Loan 
Document; (3) any taking, exchange, release or non-perfection of any 
collateral, or any taking, release or amendment or waiver of or consent to 
departure from any other guaranty, for all or any of the Guaranteed 
Obligations or Reimbursement Obligations; (4) any change, restructuring or 
termination of the corporate structure or existence of SDL or any of its 
Subsidiaries; (5) any failure of Toronto-Dominion or Vanguard to disclose to 
any Loan Party or IWC China any information relating to the financial 
condition, operations, properties or prospects of any other Loan Party now or 
in the future known to Toronto-Dominion or Vanguard; (6) any existence of or 
reliance on any representation by any party or any other circumstance 
(including, without limitation, any statute of limitations) that might 
otherwise constitute a defense available to, or a discharge of, any Loan 
Party, IWC China or any other guarantor or surety; (7) any default by any 
party under the Bridge Loan Agreement or insolvency of any party to the 
Bridge Loan Documents or IWC China; or (8) any act or omission on the part of 
Vanguard or its Designated Affiliates. IWC China expressly (x) agrees that it 
shall not at any time insist upon, plead, or in any manner whatsoever claim 
or take the benefit or advantage of any law wherever enacted, now or 
hereafter in force, that may affect the agreements or the

                                      13

<PAGE>

performance of this Agreement or any other Transaction Documents, (y) waives 
all benefits or advantage of any such law and (z) agrees that it shall not 
resort to any such law, hinder, delay or impede the execution of any power 
herein granted to Vanguard but shall suffer and permit the execution of every 
such power as though no such law has been enacted. This Agreement shall 
continue to be effective or be reinstated, as the case may be, if at any time 
any payment by IWC China is rescinded or must otherwise be returned by 
Vanguard or any other Person upon the insolvency, bankruptcy or 
reorganization of any party or otherwise, all as though such payment had not 
been made.

                       (c) IWC China hereby waives promptness, diligence, 
notice of acceptance and any other notice with respect to any of the 
Reimbursement Obligations, this Agreement or any other Transaction Documents 
and any requirement that Vanguard protect, secure, perfect or insure any Lien 
or any property subject thereto or exhaust any right or take any action 
against any Loan Party or any other Person or any collateral. IWC China 
hereby waives any right to revoke this Agreement or any other Transaction 
Documents or its obligations hereunder or thereunder, and acknowledges that 
this Agreement is continuing in nature and applies to all Reimbursement 
Obligations, whether existing now or in the future. IWC China acknowledges 
that it will receive substantial direct and indirect benefits from the 
financing arrangements contemplated by the Bridge Loan Documents and the 
Transaction Documents and that the waivers set forth in this Section 2.4(c) 
are knowingly made in contemplation of such benefits.

                       (d) IWC China will not exercise any rights that it may 
now or hereafter acquire against SDL or any other insider guarantor that 
arise from the existence, payment, performance or enforcement of the 
Reimbursement Obligations under this Agreement or any other Bridge Loan 
Document or Transaction Document, including, without limitation, any right of 
subrogation, reimbursement, exoneration, contribution or indemnification and 
any right to participate in any claim or remedy of Vanguard or any other Loan 
Party against SDL or any other insider guarantor or any collateral, whether 
or not such claim, remedy or right arises in equity or under contract, 
statute or common law, including, without limitation, the right to take or 
receive from SDL or any other insider guarantor, directly or indirectly, in 
cash or other property or by set-off or in any other manner, payment or 
security on account of such claim, remedy or right, unless and until all of 
the Reimbursement Obligations and all other amounts payable under this 
Agreement shall have been paid in full in cash. If any amount shall be paid 
to IWC China in violation of the preceding sentence at any time prior to the 
payment in full in cash of the Reimbursement Obligations and all other 
amounts payable under this Agreement, such amount shall be held in trust for 
the benefit of Vanguard and shall forthwith be paid to Vanguard to be 
credited and applied to the Reimbursement Obligations and all other amounts 
payable under this Agreement, whether matured or unmatured, in accordance 
with the terms of this Agreement, or to be held as collateral for any 
Reimbursement Obligations or other amounts payable under this Agreement 
thereafter arising. If (1) IWC China shall make payment to Vanguard of all or 
any part of the Reimbursement Obligations and (2) all of the Reimbursement 
Obligations and all other amounts payable under this Agreement shall be paid 
in full in cash, Vanguard will, at IWC China's request and expense, execute 
and deliver to IWC China appropriate documents, with recourse and without 
representation or warranty, necessary to

                                      14

<PAGE>

evidence the transfer by subrogation to IWC China of an interest in the 
Guaranteed Obligations resulting from such payment by IWC China.

                       (e) IWC China hereby agrees that if any Pledged Shares 
are transferred to Vanguard pursuant to the Pledge Agreement, then, subject 
to Star Telecom Holding Limited's consent pursuant to the SDL Subscription 
Agreement, Vanguard shall have the right (but not the obligation), at any 
time, to cause Vanguard China, Inc. or any other Designated Affiliate to 
assume IWC China's right to subscribe for the Second IWC Shares pursuant to 
Section 1 of the SDL Subscription Agreement by notifying IWC China of 
Vanguard's request to assume such right. Upon such notification, IWC China 
shall use its best efforts to obtain Star Telecom Holding Limited's consent 
to assign IWC China's right to subscribe for the Second IWC Shares to 
Vanguard China, Inc. or any other Designated Affiliate, and upon receipt of 
such consent, shall execute and deliver an assignment and assumption 
agreement in the form attached hereto as EXHIBIT C.

                  2.5  PAYMENTS. All payments by IWC China hereunder to 
Vanguard (including payments under Sections 2.1(b), 2.4 and 5.4) will be made 
in lawful money of the United States of America, by wire transfer of 
immediately available funds for the account of Vanguard to an account 
specified by Vanguard without setoff, offset, deduction or counterclaim, free 
and clear of all taxes, levies, imports, duties, fees and charges, and 
without any withholding, restriction or conditions imposed by any 
governmental authority. If IWC China is required by any law to deduct, setoff 
or withhold any amount from or in respect of any payment to Vanguard under 
this Agreement, then (a) the amount so payable to Vanguard will be increased 
as may be necessary so that, after making all required deductions, setoffs 
and withholdings, Vanguard will receive an amount equal to the sum it would 
have received had no such deductions, setoffs or withholding been made, (b) 
IWC China shall make such deductions and (c) IWC China shall pay the full 
amount deducted to the relevant taxation authority or other authority in 
accordance with applicable law.

                  2.6  VANGUARD'S REPRESENTATIONS AND WARRANTIES. Vanguard 
makes the following representations and warranties (which representations and 
warranties IWC China is relying upon in entering into this Agreement), with 
respect to itself:

                       (a) The Vanguard Warrant, SDL Shares and shares of 
IWCH's common stock (collectively, the "Designated Securities") which 
Vanguard or its Designated Affiliate acquires pursuant to this Agreement will 
be acquired for its own account, not as nominee or agent, and not with a view 
to the resale or distribution of any part thereof in violation of any 
applicable federal or state securities laws, and Vanguard (or its Designated 
Affiliate, as the case may be) has no present intention of selling, granting 
a participation in or otherwise distributing any of the Designated 
Securities. Vanguard (or its Designated Affiliate, as the case may be) has no 
contract, undertaking, agreement or arrangement with any Person to sell, 
transfer or grant participations to any other Person with respect to any of 
the Designated Securities.

                       (b) Vanguard (or its Designated Affiliate, as the case 
may be) believes that it has received all of the information which it 
considers necessary or appropriate for deciding

                                      15

<PAGE>

to acquire the Designated Securities pursuant to this Agreement. Vanguard (or 
its Designated Affiliate, as the case may be) has had an opportunity to ask 
questions and receive answers from IWC China regarding the business, 
properties, prospects and financial conditions of IWCH and SDL. The foregoing 
representation will not limit or modify any representation or warranty of IWC 
China or any other Person made in any Transaction Document.

                       (c) Vanguard (or its Designated Affiliate, as the case 
may be) acknowledges that it is able to fend for itself, can bear the 
economic risk of its investment in the Designated Securities and has such 
knowledge and experience in financial or business matters that it is capable 
of evaluating the merits and risks of the investment in the Designated 
Securities. Vanguard was not organized for the purpose of acquiring the 
Designated Securities.

                       (d) Vanguard (or its Designated Affiliate, as the case 
may be) understands that the Designated Securities is characterized as a 
"restricted security" under the federal securities laws, inasmuch as they are 
being acquired in a transaction not involving a public offering and that 
under such laws and applicable regulations such securities may be resold 
under the 1993 Act only under certain circumstances. In this connection, 
Vanguard represents that it (or its Designated Affiliate, as the case may be) 
is familiar with Rule 144 promulgated under the 1933 Act, as presently in 
effect, and understands the resale limitations imposed thereby and by the 
1933 Act.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

                  As a material inducement to Vanguard to enter into this 
Agreement and the transactions contemplated by the Transaction Documents, IWC 
China hereby makes the following representations and warranties (which 
representations and warranties will survive the execution and delivery of 
this Agreement) that:

                  3.1  ORGANIZATION AND QUALIFICATION. Each of the Designated 
IWC Entities (a) is duly organized, validly existing and in good standing 
under the laws of the jurisdiction of its organization, (b) is duly 
authorized to do business in each jurisdiction in which such authorization is 
required by law or in which the failure to be so authorized would not have 
Material Adverse Effect, and (c) has all requisite power and authority (1) to 
own or hold under lease and to operate all its property and assets and (2) to 
execute, deliver and perform all its obligations under each Transaction 
Document to which it is a party.

                  3.2  CORPORATE POWER, ETC. Each of IWCH and IWC China has 
full corporate power and authority to enter into, deliver and perfonn its 
obligations under each Transaction Document to which it is a party and to 
consummate each of the transactions contemplated hereby and thereby, and has 
taken all necessary corporate action to authorize the execution, delivery and 
performance by it of each Transaction Document to which it is a party. Each 
Transaction Document to which IWC China is a party constitutes the legal, 
valid and binding obligation of IWC China, enforceable against it in 
accordance with its terms. The Vanguard Warrant

                                      16

<PAGE>

constitutes the legal, valid and binding obligation of IWCH, enforceable 
against it in accordance with its terms.

                  3.3  CERTAIN OTHER REPRESENTATIONS. The representations and 
warranties in each Transaction Document made by all of the parties thereto 
(other than Vanguard) are true and correct and are incorporated herein by 
reference.

                  3.4  NO CONFLICT. Neither the execution and delivery of 
each Transaction Document by all of the parties thereto (other than Vanguard) 
nor the performance by each such party of its obligations thereunder, nor the 
consummation of the transactions contemplated thereby, will (a) conflict with 
the Organizational Documents of such party, or (b) conflict with or result in 
a breach of, or constitute a default under, or result in the creation or 
imposition of any Lien (other than pursuant to the Pledge Agreement) upon any 
of the property or assets of any IWCH Entity under, any applicable laws 
(including, without limitation, Regulation X issued by the Board of Governors 
of the Federal Reserve System) or any indenture, mortgage, deed of trust or 
other instrument or agreement to which any IWCH Entity may be or become a 
party or by which it may be or become bound or to which any of the property 
or assets of such IWCH Entity may be subject. Without limiting the foregoing, 
the transactions contemplated by the Transaction Documents are permitted 
under the Indenture, and IWC China is an "Unrestricted Subsidiary" as such 
terms is defined and used in the Indenture.

                  3.5  APPROVALS, ETC. No order, license, consent, 
authorization or approval of, or exemption by, or notice to or registration 
with, any government authority or regulatory body, and no filing, recording, 
publication or registration in any public office or any other place is 
required in connection with the execution, delivery and performance by any 
party (other than Vanguard) to any Transaction Document, or for the legality, 
validity, binding effect or enforceability thereof.                   

                  3.6  NO MATERIAL ADVERSE EFFECT. Since June 30, 1997, there 
has been no, nor to the best of IWC China's knowledge, has there been any 
event that could reasonably be expected to have a Material Adverse Effect 
(other than any Material Adverse Effect resulting solely from SDL's business 
or financial condition).

                  3.7  LITIGATION, ETC. There is no pending or, to the best 
of IWC China's knowledge, threatened, litigation, investigation, action or 
proceeding of or before any court, arbitrator or governmental agency 
(including any Environmental Action) binding upon or affecting any of the 
Designated IWC Entities or their respective properties and assets that (a) 
could reasonably be expected to cause a Material Adverse Effect to occur or 
(b) purports to affect the legality, validity or enforceability of any 
Transaction Document.

                  3.8  NO VIOLATION, ETC. None of the Designated IWC Entities 
is in violation of (a) any term of its Organizational Documents, or (b) any 
term of any other agreement or instrument to which it is a party or by which 
it is bound in any respect, which, in each case, has or could be reasonably 
expected to have a Material Adverse Effect.

                                      17

<PAGE>

                  3.9  MARGIN STOCK. IWC China is not engaged in the business 
of extending credit for the purpose of purchasing or carrying margin stock 
within the meaning of Regulations G, T and X issued by the Board of Governors 
of the Federal Reserve System.

                  3.10 INVESTMENT COMPANY ACT AND PUBLIC UTILITY HOLDING 
COMPANY ACT. None of the IWCH Entities is, and is not directly or indirectly 
controlled by any Person which is, required to register as an "investment 
company" within the meaning of the U.S. Investment Company Act of 1940, as 
amended. None of the IWCH Entities is a "holding company" or a "subsidiary" 
or an "affiliate" of a "holding company" or a "public utility" within the 
cleaning of the U.S. Public Utility Holding Company Act of 1935, as amended.

                  3.11 TAXES. Each of the Designated IWC Entities has filed 
all tax returns required to be filed by it and has paid all taxes, 
assessments, fees and other charges (including interest and penalties) due 
with respect to the years covered by such returns, except for any such 
failures to file or to pay such amounts which, in the aggregate, would not 
have a Material Adverse Effect or which are being contested in good faith by 
appropriate proceedings.

                  3.12 ENVIRONMENTAL LAWS. The operations and properties of 
the Designated IWC Entities comply in all material respects with all 
applicable Environmental Laws, except where the failure to so comply could 
not be reasonably expected to have a Material Adverse Effect, and all 
necessary Environmental Permits have been obtained and are in effect for the 
operations and properties of the Designated IWC Entities, except for such 
Environmental Permits where the failure to obtain the same could not be 
reasonably expected to have a Material Adverse Effect.

                  3.13 CONDITIONS PRECEDENT. Upon execution hereof and the 
other Transaction Documents by all of the parties thereto, there are no 
conditions precedent to the effectiveness of this Agreement and the 
Transaction Documents that have not been satisfied or waived.

                  3.14 CREDIT ANALYSIS; OTHER INFORMATION. IWC China has, 
independently and without reliance upon Vanguard and based on such documents 
and information as it has deemed appropriate, made its own credit analysis 
and decision to enter into this Agreement and the other Transaction 
Documents, and have established adequate means of obtaining from SDL on a 
continuing basis information pertaining to, and is now and on a continuing 
basis will be completely familiar with, the financial condition, operations, 
properties and prospects of SDL.

                  3.15 SECURITY INTEREST; PLEDGED SHARES, ETC.

                       (a) IWC China is the lawful owner, of record and 
beneficially, of the entire right, title and interest in and to the Pledged 
Shares, free and clear of all Liens or adverse claims. The security interest 
granted by IWC China under the Pledge Agreement and the delivery of the 
Pledged Shares to Vanguard pursuant to the Pledge Agreement comply with all 
applicable laws and create a valid and perfected first priority security 
interest in the Pledged Shares, free of any adverse claim and subject to no 
equal or prior security interest of any other Person, securing the payment 
and performance of the Reimbursement Obligations of IWC China under this 
Agreement. No registration, recording or filing with any governmental body or

                                      18

<PAGE>

agency is required for the perfection of such security interest. There is no 
currently effective financing statement or other instrument similar in effect 
that is on file in any recording office covering any part of IWC China's 
interest in the Pledged Shares. Upon transfer of any of the Pledged Shares by 
IWC China to Vanguard pursuant to Section 2.3 of this Agreement, good and 
marketable title to such Pledged Shares and all right, title and interest 
therein and thereto will be vested in Vanguard, free and clear of all Liens 
or adverse claims.

                       (b) The Pledged Shares have been duly authorized and 
validly issued and are fully paid and nonassessable. Except as set forth in 
the SDL Shareholders' Agreement, there are no outstanding warrants, options, 
subscriptions or other contractual arrangements for the purchase of the 
Pledged Shares, and there are no outstanding agreements relating to the 
issuance, purchase, repurchase, redemption, transfer, voting or preemptive 
rights with respect to the Pledged Shares.

                       (c) IWC China has the right to subscribe for the 
Second IWC Shares pursuant to the SDL Subscription Agreement according to the 
terms set forth therein. The SDL Subscription Agreement has not been amended 
or modified since June 18, 1997.

                  3.16 DESIGNATED SECURITIES, ETC. Each of the Designated 
Securities has been duly authorized, issued and delivered (if applicable) by 
the issuer thereof The Warrant Shares have been duly authorized by the issuer 
thereof, and, when issued and delivered upon exercise of the Vanguard 
Warrant, will be validly issued, fully paid, nonassessable and free of 
preemptive rights. The Vanguard Warrant is exercisable into the Warrant 
Shares in accordance with its terms. There will at all times be available, 
(1) such number of Warrant Shares issuable upon exercise of the Vanguard 
Warrant, free from all preemptive rights with respect thereto, which will be 
sufficient to permit the exercise of the Vanguard Warrant for the full number 
of Warrant Shares specified in the Vanguard Warrant and (2) such number of 
IWCH Shares that may be issued pursuant to Section 2.2, free from all 
preemptive rights with respect thereto.

                  3.17 OWNERSHIP OF IWCH. Schedule 3.17 sets form the record 
and beneficial ownership of the outstanding Equity Securities of IWCH and the 
authorized Equity Securities of IWCH. Other than as set forth in IWCH's 
Organizational Documents, IWCH is not under any obligation (contingent or 
otherwise) to redeem or otherwise acquire any Equity Securities of IWCH or 
any other Person or to effect any Distribution.

                                   ARTICLE IV

                                    COVENANTS

                  4.1  AFFIRMATIVE COVENANTS. IWC China covenants that, until 
the termination of this Agreement and each of the other Transaction 
Documents, it will, and will cause each of its Subsidiaries to:

                       (a) CORPORATE EXISTENCE, ETC. Preserve and maintain in 
full force and effect its corporate existence, rights (charter and 
statutory), franchises, and privileges and qualify

                                      19

<PAGE>

and remain qualified, as a corporation in good standing in each jurisdiction 
in which such qualification is from time to time necessary, except for such 
jurisdictions where the failure to so qualify would not have a Material 
Adverse Effect; PROVIDED, HOWEVER, that IWC China shall not be required to 
preserve any right, privilege or franchise if the board of directors thereof 
shall determine in good faith that such right, privilege or franchise is no 
longer useful in the conduct of its business, and the loss thereof could not 
reasonably be expected to have a Material Adverse Effect.

                       (b) COMPLIANCE WITH LAWS. Comply in all material 
respects with all applicable laws, rules, regulations and orders, such 
compliance to include, without limitation, compliance with ERISA, except 
where the failure to so comply would not have a Material Adverse Effect.

                       (c) INSURANCE. Maintain insurance with financially 
sound and reputable insurers in such amounts and against such risks, as are 
usually and customarily insured by companies engaged in a similar business 
with respect to properties of a similar character.

                       (d) KEEPING OF BOOKS. Keep proper books of record and 
accounts, in which full and correct entries shall be made of all financial 
transactions and the assets and business of IWC China in accordance with 
generally accepted accounting principles in effect from time to time or as 
otherwise required by applicable rules and regulations of any governmental 
agency or regulatory authority having jurisdiction over IWC China.

                       (e) ACCESS TO RECORDS. Provide Vanguard and its 
authorized advisors and representatives reasonable access to all books, 
records, offices and other facilities and properties of IWC China upon 
reasonable notice, and allow Vanguard or its authorized advisors or 
representatives (as the case may be) to make such examinations thereof and 
copies of and abstracts from such books and records as Vanguard or its 
authorized advisors or representatives (as the case may be) may reasonably 
request.

                       (f) PAYMENT OF TAXES, ETC. Pay and discharge before 
the same shall become delinquent (a) all taxes, assessments and governmental 
charges or levies imposed upon it or upon its property and (b) all lawful 
claims that, if unpaid, might become a Lien upon its property; PROVIDED, 
HOWEVER, that IWC China shall not be required to pay or discharge any such 
tax, assessment, charge or claim that is being contested in good faith and by 
proper proceedings and as to which appropriate reserves are being maintained, 
unless and until any Lien resulting therefrom attaches to its property and 
becomes enforceable against its other creditors.

                       (g) REPORTING. Furnish to Vanguard, upon request, 
without cost to Vanguard, copies of all documents and certificates delivered 
by any of the Designated IWC Entities to its lenders or holders of debt 
promptly after delivery thereof to such lender or holders of debt.

                       (h) CERTAIN NOTICES. Promptly upon any officer of IWC 
China obtaining knowledge thereof, give notice to Vanguard of any 
development, including, without limitation, any litigation, investigation or 
proceeding affecting IWC China, which has a Material

                                      20

<PAGE>

Adverse Effect, could reasonably be expected to have a Material Adverse 
Effect or, in the case of any litigation, investigation or other proceedings, 
which could, if adversely decided, reasonably be expected to have a Material 
Adverse Effect.

                       (i) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply with 
all Environmental Laws and Environmental Permits applicable to its operations 
and properties, noncompliance with which could have a Material Adverse 
Effect; obtain and renew all Environmental Permits necessary for its 
operations and properties; and conduct any investigation, study, sampling and 
testing, and undertake any cleanup, removal, remedial or other action 
necessary to remove and clean up Hazardous Materials from any of its 
properties, in accordance with the requirements of all applicable 
Environmental Laws; PROVIDED, HOWEVER, that IWC China shall not be required 
to undertake any such cleanup, removal, remedial or other action to the 
extent that its obligation to do so is being contested in good faith and by 
proper proceedings and appropriate reserves are being maintained with respect 
to such circumstances.

                       (j) PARI PASSU. Ensure that all payment obligations 
under this Agreement shall rank pari passu with all present and future senior 
unsecured obligations of IWC China.

                       (k) PERFORMANCE OF OBLIGATIONS; PLEDGES.

                           (i)  Cause all of the parties (other than 
Vanguard) to each Transaction Document to keep, observe, comply and perform 
in full each of their obligations under each such Transaction Document.

                           (ii) At their own expense, take all actions 
(including filing, registering and recording all necessary documents and 
paying all fees taxes, levies, imposts and expenses in connection therewith) 
reasonably requested by Vanguard or are reasonably necessary to establish, 
create, maintain, protect, perfect and continue the perfection of a valid and 
perfected first priority security interest in the Pledged Shares, and prior 
to taking any such action, furnish to Vanguard timely notices of the 
necessity of such action, together with such instruments, in execution form, 
and such other information as may be required or requested by Vanguard to 
enable Vanguard to effect such action and cause to be delivered to Vanguard 
such opinions of counsel and other related documents as may reasonably be 
requested by Vanguard to assure compliance with this clause (ii).

                       (l) RETAINED SHARES. In the case of IWC China, upon 
any transfer of any SDL Shares pursuant to this Agreement or any other 
Transaction Documents, hold at all times, and not Transfer, the Retained 
Shares and exercise its rights under the SDL Shareholders' Agreement to 
nominate to SDL's board five individuals designated by Vanguard (it being 
understood and agreed that Vanguard will indemnify and hold harmless IWC 
China from and against all losses, liabilities, damages, costs, expenses and 
charges suffered or incurred by IWC China directly as a result of holding the 
Retained Shares and exercising its rights under the SDL Shareholders' 
Agreement, except for such losses, liabilities, damages, costs, expenses and 
charges arising from IWC China's gross negligence or willful misconduct or 
violation of any law by any IWCH Entities).

                                      21

<PAGE>


                       (m) RELEASE OF IWC GUARANTY. Use its best commercially 
reasonable efforts to cause as soon as practicable (1) the IWC Guaranty to be 
permanently reduced and terminated and (2) Vanguard's Obligations under the 
IWC Guaranty to be permanently and indefeasibly released and discharged.

                  4.2  NEGATIVE COVENANTS. IWC China covenants, that, until 
the termination of this Agreement and each of the other Transaction 
Documents, it will not, and will cause each of its Subsidiary not to:

                       (a) DEBT. In the case of IWC China and its 
Subsidiaries (other than SDL), create, incur, assume, guarantee or be or 
remain liable for, contingently or otherwise, or suffer to exist, or any 
Debt, except for (1) Debt under this Agreement or any other Transaction 
Documents, (2) IWC China's Guaranty, dated July 10, 1997, in favor of PT. 
Bank Indonesia Raya, as amended or modified from time to time and (3) that 
certain Letter of Guarantee, dated July 24, 1997, issued by IWC China in 
favor of Mitsui & Co. Ltd. in connection with that certain Microwave 
Equipment Supply Contract, dated July 24, 1997, among SDL, Mitsui & Co. Ltd. 
and Harris Corporation.

                       (b) MERGERS, ETC. Merge or consolidate with, or sell, 
assign, lease; transfer or otherwise dispose of (whether in one transaction 
or in a series of transactions) all or substantially all of its assets 
(whether now owned or hereafter acquired) to, any Person or Persons.

                       (c) DIVIDENDS AND STOCK PURCHASES. Directly or 
indirectly, or through any Subsidiary or Investee, declare, make or pay, or 
incur any liability to declare, make or pay, any Distribution, other than, in 
the case of its Subsidiaries or any Investee, pro rata Distributions made in 
accordance with its Organizational Documents.

                       (d) INVESTMENTS. In the case of IWC China and its 
Subsidiaries (other than SDL), make any Investment.

                       (e) RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. In the 
case of IWC China and its Subsidiaries (other than SDL), create or otherwise 
cause or suffer to exist or become effective any encumbrance or restriction 
of any kind on the ability of any of its Subsidiaries or any Investee to (i) 
pay any Distribution in respect of any of such Subsidiary's or Investee's 
capital stock or other Equity Securities owned by IWC China or any of its 
Subsidiaries or any Investee, (ii) pay any Debt owed to IWC China or any of 
its Subsidiaries or any Investee, (iii) make loans or advances to IWC China 
or any of its Subsidiaries or any Investee or (iv) transfer any of its 
property or assets to IWC China or any of its Subsidiaries or any Investee.

                       (f) CHANGE OF BUSINESS. In the case of IWC China, 
conduct or enter into any business other than the ownership and management of 
its Investment in SDL.

                       (g) LIMITATION ON CREATION OF SUBSIDIARIES. In the 
case of IWC China, establish, create or acquire any Subsidiary (other than 
SDL).

                                      22

<PAGE>

                       (h) OPERATE OTHER THAN IN ORDINARY COURSE. Operate its 
business, other than in the usual and ordinary course and other than that 
which is consistent with the past practice established by IWC China.

                       (i) NEGATIVE PLEDGE; LIENS. Except pursuant to the 
Pledge Agreement: (i) create, assume, incur or suffer to be created, assumed, 
incurred or to exist any Lien upon any of its properties or assets 
(including, without limitation, the Pledged Shares, or the income or profits 
therefrom) other than in favor of Vanguard; (ii) covenant in favor of any 
party (other than Vanguard) that it will not create, assume, incur or suffer 
to be created, assumed, incurred or to exist any Lien upon any of the Pledged 
Shares, or the income or profits herefrom; (iii) permit or acquiesce in the 
perfection of any security interest held by any party (other than Vanguard) 
against any of its properties or assets (including, without limitation, the 
Pledged Shares, or the income or profits therefrom); (iv) Transfer any of its 
properties or assets (including, without limitation, the Pledged Shares or 
the income or profits therefrom) for any reason, including, without 
limitation, for the purpose of subjecting the same to the payment of Debt or 
performance of any other obligation; or (v) execute or authorize to file in 
any public office any financing statement (or similar statement or instrument 
or registration under any law) or statements relating to its properties or 
assets (including, without limitation, the Pledged Shares), other than for 
the benefit of Vanguard.

                       (j) SECOND IWC SHARES. In the case of IWC China, 
assign or grant any right or interest to any Person to subscribe for the 
Second IWC Shares pursuant to the SDL Subscription Agreement, without the 
prior written consent of Vanguard.

                       (k) AMENDMENTS OR WAIVERS. Amend, modify or change in 
any manner, or waive any of its rights pursuant to, its Organizational 
Documents, which, in the reasonable judgment of Vanguard, would adversely 
affect Vanguard's rights and benefits under the Transaction Documents and the 
documents delivered pursuant thereto.

                                   ARTICLE IV

                                  MISCELLANEOUS

                  5.1  MODIFICATIONS, AMENDMENTS OR WAIVERS. The provisions 
of this Agreement and the other Transaction Documents may be modified, 
amended or waived, but only by a written instrument signed by IWC China and 
Vanguard.

                  5.2  SUCCESSORS AND ASSIGNS IN GENERAL. This Agreement will 
be binding upon and inure to the benefit of the parties hereto and their 
respective successors and assigns, except that IWC China may not assign or 
transfer its rights under this Agreement or any interest under this Agreement 
or delegate its liabilities, obligations or duties, without the prior written 
consent Vanguard.

                  5.3  NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING 
REQUIRED. No delay or failure of Vanguard in exercising any right, power or 
remedy under this Agreement or any

                                      23

<PAGE>

other Transaction Document will affect or operate as a waiver thereof, nor 
will any single or partial exercise thereof or any abandonment or 
discontinuance of steps to enforce such a right, power or remedy preclude any 
further exercise thereof, or of any other right, power or remedy. The rights 
and remedies of Vanguard under this Agreement and each other Transaction 
Document are cumulative and not exclusive of any rights or remedies which it 
would otherwise have. Any waiver, permit, consent or approval of any kind or 
character on the part of Vanguard of any breach or default or any such waiver 
of any provision or condition of this Agreement or; any other Transaction 
Document must be in writing and will be effective only to the extent in such 
writing specifically set forth.

                  5.4  REIMBURSEMENT OF EXPENSES; TAXES. IWC China will upon 
demand pay or reimburse Vanguard for all reasonable out-of-pocket expenses, 
including fees and expenses of its counsel, from time to time (i) arising in 
connection with the preparation and execution of this Agreement and the other 
Transaction Documents (ii) relating to any amendments, waivers or consents 
pursuant to the provisions hereof or thereof, or (iii) arising in connection 
with the enforcement of the provisions of this Agreement or any other 
Transaction Document. IWC China will pay and save Vanguard harmless from all 
liability for any stamp or other similar taxes which may be payable in 
connection with this Agreement and the other Transaction Documents or the 
performance of any transactions contemplated hereby or thereby (but excluding 
any franchise tax, income tax, gross receipts tax or other similar tax).

                  5.5  HOLIDAYS. Whenever any payment or action to be made or 
taken under this Agreement or any other Transaction Document is stated to be 
due or required to be taken on a day which is not a Business Day, such 
payment or action will be made or taken on the next following Business Day, 
and such extension of time will be included in computing interest or fees, if 
any, in connection with such payment or action (it being understood that to 
the extent applicable, the Applicable Rate in effect during such extension of 
time will be used in computing such fees).

                  5.6  NOTICES. All notices and other communications given to 
or made upon any party hereto in connection with this Agreement or any other 
Transaction Document will, except as otherwise expressly provided herein or 
therein, be in writing and mailed, telecopied or delivered by hand or by 
reputable overnight courier service to the respective parties, as follows:

                  To IWC China:

                         c/o International Wireless Communications, Inc.
                         400 S. E1 Camino Real
                         Suite 1275
                         San Mateo, CA 94402
                         Attention:      Douglas S. Sinclair
                                         Aarti C. Gurnani
                         Telecopy: (650) 548-1842

                                     24

<PAGE>

                  with a copy (which will not constitute notice) to:

                         Brooks Stough, Esq.
                         Gunderson Dettmer Stough Villeneuve
                         Franklin & Hachigan, LLP
                         155 Constitution Drive
                         Menlo Park, CA 94025
                         Telecopy: (650) 321-2800

                  To Vanguard:

                         Vanguard Cellular Financial Corp.
                         2002 Pisgah Church Road
                         Suite 300
                         Greensboro, NC 27455
                         Attention: Haynes Griffin
                         Telecopy: (910) 545-2233
                         Attention: Rich Rowlenson
                         Telecopy: (910) 545-2219

                  with a copy to (which will not constitute notice) to:

                         Hyun Park, Esq.
                         Latham & Watkins
                         885 Third Avenue
                         New York, NY 10022
                         Telecopy: (212) 751-4864

or in accordance with any subsequent written direction from the recipient 
party to the sending party made in accordance with this Section 5.6. All such 
notices and other communications will, except as otherwise expressly provided 
in this Agreement or any other Transaction Document, be effective upon (a) 
delivery if delivered by hand; (b) on the Business Day after deposited with a 
reputable overnight courier service, delivery charges prepaid; (c) on the 
third Business Day after deposited in the mail, postage prepaid; or (d) in 
the case of telecopy, when received.

                  5.7  SURVIVAL. All representations, warranties, covenants 
and agreements of the IWCH Entities contained in this Agreement or any other 
Transaction Document or made in writing in connection herewith or therewith 
will survive the execution and delivery of this Agreement and the issuance of 
the Vanguard Warrant. The provisions of this Article V will survive thy 
fulfillment of all payment and securities transfer obligations under this 
Agreement and the other Transaction Documents and the termination of this 
Agreement and the other Transaction Documents.

                                      25

<PAGE>

                  5.8  GOVERNING LAW; WAIVERS AND JURISDICTION.

                       (a) GOVERNING LAW. This Agreement will in all respects 
be governed by, and construed and enforced in accordance with, the laws of 
the State of New York, without giving effect to any choice of law or conflict 
of law rules or provisions (whether of the State of New York or any other 
jurisdiction) that would cause the application of the laws of any 
jurisdiction other than the State of New York, except that the filing, 
perfection, effect of perfection and enforcement of security interests and 
Liens under the Pledge Agreement in other jurisdictions will be governed by 
the laws of the applicable jurisdictions in accordance with the UCC as in 
effect in the State of California.

                       (b) WAIVERS. To the extent permitted by law, each 
party hereto hereby waives personal service of any and all process upon it in 
connection with this Agreement or any other Transaction Document and agrees 
that all such service of process may be made as provided in Section 5.6, and 
service so made will be deemed to be completed as provided in Section 5.6. In 
addition, IWC China and Vanguard each hereby waives trial by jury.

                       (c) EXCLUSIVE JURISDICTION. Except as provided in 
Section 5.8(d), all disputes among or between Vanguard and IWC China arising 
out of, connected with, related to or incidental to the transactions 
contemplated by or the relationship established between them in connection 
with this Agreement or the other Transaction Documents, and whether arising 
in contract, tort, equity or otherwise, will be resolved only by state or 
federal courts located in New York County, New York, and Vanguard and IWC 
China hereby consent and submit to the jurisdiction of any state or federal 
court located within such county and state. Vanguard and IWC China 
acknowledge, however, that any appeals from those courts may be required to 
be heard by a court located outside of New York County, New York. Vanguard 
and IWC China waive in all disputes any objection that it may have to the 
location of the court considering the dispute. Nothing in this Section 5.8 
will affect the right of Vanguard and IWC China to serve legal process in any 
manner permitted by law or affect the right of Vanguard to bring any action 
or proceeding against IWC China or its property in the courts of any other 
jurisdiction.

                       (d) OTHER JURISDICTIONS. Vanguard and IWC China agree 
that either party will have the right to proceed against the other party in a 
court in any location to enable such party to enforce a judgment or other 
court order obtained in any proceeding brought in accordance with Section 
5.8(c) and entered in favor of such party. Each party waives any objection 
that it may have to the location of the court in which any party has 
commenced a proceeding described in this Section 5.8(d).

                  5.9  HEREIN, ETC. Words such as "herein," "hereunder," 
"hereof" and the like will be deemed to refer to this Agreement as a whole 
and not to any particular document or Article, Section or other portion of a 
document. Section, clause, Exhibit and Schedule references contained in this 
Agreement are references to Sections, clauses, Exhibits and Schedules in or 
attached to this Agreement, unless otherwise specified. Each defined term 
used in this Agreement has a comparable meaning when used in its plural or 
singular form. Each gender-specific term used in this Agreement has a 
comparable meaning whether used in a

                                      26

<PAGE>

masculine, feminine or gender-neutral form. As used in this Agreement, the 
terms "knowledge" or "aware" will include the actual knowledge and awareness 
of the Person in question, and the knowledge and awareness that such Person 
would have obtained after making reasonable inquiry and exercising reasonable 
diligence with respect to the matter in question. Whenever the term 
"including" is used in this Agreement (whether or not that term is followed 
by the phrase "but not limited to" or "without limitation" or words of 
similar effect) in connection with a listing of items within a particular 
classification, that listing will be interpreted to be illustrative only and 
will not be interpreted as a limitation on, or an exclusive listing of, the 
items within that classification. Each reference in this Agreement to any law 
will be deemed to include such law as it hereafter may be amended, 
supplemented or modified from time to time and any successor thereto. Each 
reference to "dollars" or "$" shall mean the lawful currency of the United 
States.

                  5.10 SEVERABILITY. Whenever possible, each provision of 
this Agreement and each other Transaction Document will be interpreted in 
such manner as to be effective and valid under applicable law, but if any 
provision of this Agreement or any other Transaction Document is held to be 
prohibited by or invalid under applicable law in any jurisdiction, such 
provision will be ineffective only to the extent of such prohibition or 
invalidity, without invalidating any other provision of this Agreement or any 
other Transaction Document.

                  5.11 HEADINGS. Section and subsection headings in this 
Agreement and each other Transaction Document are included for convenience of 
reference only and will not constitute a part of this Agreement or any other 
Transaction Document for any other purpose.

                  5.12 COUNTERPARTS. This Agreement and each other 
Transaction Document may be executed in multiple counterparts and by any 
party hereto or thereto on separate counterparts, each of which, when so 
executed and delivered, will be an original, but all such counterparts will 
together constitute one and the same instrument.

                  5.13 INDEMNIFICATION.

                       (a) GENERALLY. In consideration of Vanguard's 
execution and delivery of this Agreement and the issuance of the IWC Guaranty 
hereunder, and in addition to all other obligations of IWC China under this 
Agreement and the other Transaction Documents, IWC China will defend, 
protect, indemnify and hold harmless Vanguard, and all of its respective 
officers, directors, employees and agents (including those retained in 
connection with the transactions contemplated by this Agreement and the other 
Transaction Documents) (collectively, the "Indemnitees") from and against any 
and all actions, causes of action, suits, claims, losses, costs, penalties, 
fees, liabilities and damages and expenses in connection therewith 
(irrespective of whether any such Indemnitee is a party to the action for 
which indemnification hereunder is sought), and including reasonable 
attorneys' fees and disbursements, but excluding claims and losses arising 
from such Indemnitee's breach hereof or thereof or such Indemnitee's gross 
negligence or willful misconduct (the "Indemnified Liabilities"), incurred by 
the Indemnitees or any of them as a result of, or arising out of, or relating 
to the execution, delivery, performance or enforcement of this Agreement, the 
other Transaction Documents or any of the Bridge Loan Documents and any 
instrument, document or

                                      27

<PAGE>

agreement executed pursuant hereto or thereto by any of the Indemnitees. To 
the extent that the foregoing undertaking by IWC China may be unenforceable 
for any reason, IWC China will make the maximum contribution to the payment 
and satisfaction of each of the Indemnified Liabilities which is permissible 
under applicable law.

                       (b) ENVIRONMENTAL LIABILITIES. Without limiting the 
generality of the indemnity set out in Section 5.13(a), IWC China hereby 
further agrees to defend, protect, indemnify and hold harmless each 
Indemnitee from and against any and all actions, causes of action, suits, 
losses, liabilities, damages, injuries, penalties, fees, costs, expenses and 
claims of any and every kind whatsoever paid, incurred or suffered by, or 
asserted against, any Indemnitee for, with respect to, or as a direct or 
indirect result of, the past, present or future environmental condition of 
any property owned, operated or used by the IWCH Entities or their respective 
predecessors or successors or of any offsite treatment, storage or disposal 
location associated therewith, including the presence on or under, or the 
escape, seepage, leakage, spillage, discharge, emission, release, or 
threatened release into, onto or from, any such property or location of any 
Hazardous Material (including any losses, liabilities, damages, injuries, 
penalties, fees, costs, expenses or claims asserted or arising under the 
Comprehensive Environmental Response, Compensation and Liability Act, any 
so-called "Superfund" or "Superlien" law, or any other Environmental Law or 
other), regardless of whether caused by, or within the control of, the IWCH 
Entities but excluding any such actions, causes of action, suits, losses, 
liabilities, damages, injuries, penalties, fees, costs, expenses and claims 
arising as a direct result of the willful misconduct or gross negligence of 
such Indemnitee.

                       (c) CONTRIBUTION. To the extent that the undertaking 
to indemnify, pay and hold harmless by IWC China under this Section 5.13 may 
be unenforceable because it violates any law or public policy, IWC China will 
contribute the maximum portion that it is permitted to pay and satisfy under 
applicable law or public policy to the payment and satisfaction of all 
Indemnified Liabilities incurred by the Indemnitees or any of them.

                  5.14 PAYMENT SET ASIDE. To the extent that IWC China makes 
a payment or payments to Vanguard hereunder or any other Transaction Document 
or Vanguard enforces its security interests or rights or exercises its right 
hereunder or thereunder, and such payment or payments or the proceeds of such 
enforcement or any part thereof are subsequently invalidated, declared to be 
fraudulent or preferential, set aside, recovered from, disgorged by or are 
required to be refunded, repaid or otherwise restored to IWC China, a 
trustee, receiver or any other Person under any law (including any bankruptcy 
law, state or federal law, common law or equitable cause of action), then to 
the extent of any such restoration the obligation or part thereof originally 
intended to be satisfied and all Liens created under the Transaction 
Documents will be revived and continued in full force and effect as if such 
payment had not been made or such enforcement or setoff had not occurred.

                  5.15 COMPLETE AGREEMENT. Except as otherwise expressly set 
forth herein, this Agreement and the other Transaction Documents embody the 
complete agreement and understanding of the parties hereto and thereto and 
supersede and preempt any prior understandings, agreements or representations 
by or among the parties, whether written or oral,

                                      28

<PAGE>

which may have related to the subject matter hereof in any way, and such 
agreements may not be contradicted or varied by evidence of prior, 
contemporaneous or subsequent oral discussions or understandings of the 
parties. The parties hereto acknowledge and agree there are no oral 
understandings or agreements between them with respect to the subject matter 
hereof or thereof.

                  5.16 NO STRICT CONSTRUCTION. The language used in this 
Agreement and the other Transaction Documents will be deemed to be the 
language chosen by the parties to express or their mutual intent. In the 
event an ambiguity or question of intent or interpretation arises, this 
Agreement and the other Transaction Documents will be construed as if drafted 
jointly by the parties, and no presumption or burden of proof will arise 
favoring or disfavoring any Person by virtue of the authorship of any of the 
provisions of this Agreement or any other Transaction Document.

                  5.17 TERMINATION. This Agreement shall remain in full force 
and effect until the earlier of (a) the payment in full of all Reimbursement 
Obligations under this Agreement and the complete satisfaction and discharge 
of all Obligations of all Loan Parties under the Bridge Loan Agreement and 
all other Bridge Loan Documents and (b) the complete satisfaction and 
discharge of all Obligations of SDL under the Bridge Loan Agreement and all 
other Bridge Loan Documents by SDL without any payment by any Loan Party 
(other than SDL) under the Bridge Loan Documents and the termination of the 
Bridge Loan Agreement, the IWC Guaranty and all other Bridge Loan Documents.

                                   * * * * *



                                      29

<PAGE>



                  IN WITNESS WHEREOF, the parties hereto, by their officers 
thereunto duly authorized, have executed this Agreement as of the day and 
year first above written.

                                       IWC CHINA LIMITED


                                       By:
                                          -------------------------------------

                                       Its:
                                          -------------------------------------


                                       VANGUARD CELLULAR FINANCIAL CORP.


                                       By:
                                          -------------------------------------

                                       Its:
                                          -------------------------------------

<PAGE>



                                    EXHIBIT A

                           [FORM OF PLEDGE AGREEMENT]






                                     E-1

<PAGE>



                                PLEDGE AGREEMENT



                  PLEDGE AGREEMENT dated as of September 18, 1997 between IWC 
CHINA LIMITED., a corporation organized under the laws of Mauritius (the 
"Pledgor"), and VANGUARD CELLULAR FINANCIAL CORP., a North Carolina 
corporation (the "Secured Party").

                                    RECITALS

                  WHEREAS, Star Digitel Limited, a company organized under 
the laws of Hong Kong ("SDL"), and Toronto-Dominion Bank (the "Bank") entered 
into that certain Bridge Loan Agreement, dated as of May 16, 1997 (as amended 
and modified from time to time, the "Bridge Loan Agreement"), providing for 
Advances, as deemed in the Bridge Loan Agreement, by the Bank to SDL in an 
aggregate principal amount not to exceed $8,000,000. SDL and the Bank are 
proposing to amend the Bridge Loan Agreement to increase the amount of 
Advances available thereunder by an additional $10,000,000 and soon 
thereafter by another $10,000,000 (such additional Advances of up to 
$20,000,000, the "Additional Loans");

                  WHEREAS, the Bank is willing to extend the Additional 
Loans, provided that, among other things, certain parent entities of SDL's 
shareholders, guaranty SDL's obligations with respect to the Additional Loans;

                  WHEREAS, the Pledgor has requested that the Secured Party, 
in its stead, guaranty forty percent (40%) of the Additional Loans pursuant 
to the Guaranty, dated as of the date hereof, by the Secured Party in favor 
of the Bank (the "IWC Guaranty");

                  WHEREAS, the Secured Party is willing to enter into the IWC 
Guaranty, on the condition that, among other things, (i) the Pledgor enters 
into the Reimbursement Agreement, dated as of the date hereof, between the 
Secured Party and the Pledgor (the "Reimbursement Agreement"), and that the 
Pledgor agrees thereunder, among other things, to reimburse the Secured Party 
for payments made under the IWC Guaranty, and that the Pledgor secures its 
payment and all other obligations under the Reimbursement Agreement by 
pledging the Pledgor's right, title and interest in the equity securities of 
SDL that it now owns and hereafter acquires (the "SDL Securities") and (ii) 
the Pledgor agrees to compensate the Secured Party for entering into the IWC 
Guaranty by, among other things, transferring a portion of the SDL Securities 
to the Secured Party in accordance with the terms of the Reimbursement 
Agreement and securing such transfer obligation with a pledge of the 
Pledgor's right, title and interest in the SDL Securities; and

                  WHEREAS, the Pledgor is willing to enter into the 
Reimbursement Agreement and to secure its obligations thereunder with the 
pledge of the SDL Securities.

                  Accordingly, the Pledgor and the Secured Party hereby agree 
as follows:


<PAGE>

                  Section 1.  DEFINITIONS. As used in this Agreement, the 
following terms shall have the following definitions:

                  "EVENT OF DEFAULT": the Pledgor's failure to make any 
payment due to the Secured Party under the Reimbursement Agreement or this 
Agreement within thirty (30) days of the date that the Pledgor receives 
written demand therefor from the Secured Party.

                  "LOAN AGREEMENTS": the Bridge Loan Agreement, as amended, 
supplemented or modified from time to time, and the Bridge Loan Agreement, 
dated July 10, 1997, between SDL and PT. Bank Indonesia Raya, as amended, 
supplemental or modified from time to time.

                  "SDL SHAREHOLDERS AGREEMENT": the Amended and Restated 
Shareholders' Agreement, dated as of April 4, 1997, by and among SDL, Star 
Telecom Holding Limited, International Wireless Communications, Inc. and 
Vanguard China, Inc.

                  "TRANSFER": has the meaning set forth in the SDL 
Shareholders Agreement.

Capitalized terms used herein within definition shall have the meanings given 
to such terms in the Reimbursement Agreement.

                  Section 2.  PLEDGE. As security for the timely payment and 
performance in full of the Reimbursement Obligations of the Pledgor under 
this Agreement and the Reimbursement Agreement (the "Obligations"), the 
Pledgor hereby transfers, hypothecates, pledges, sets over and delivers unto 
the Secured Party, and grants to the Secured Party a security interest in, 
all right, title and interest the Pledgor now has or hereafter acquires in 
(a) the SDL Securities described on the attached Schedule 1 and all the SDL 
Securities obtained in the future by the Pledgor and the certificates 
representing or evidencing all such securities (the "Pledged Stock"); (b) all 
other property which may be delivered to and held by the Secured Party 
pursuant to the terms hereof; (c) all payments of principal or interest, 
dividends, cash, instruments and other property or any Distribution from time 
to time received, receivable or otherwise distributed in respect of, in 
exchange for or upon the conversion of the securities and other property 
referred to in clause (a) or clause (b) above; (c) except as provided in 
Section 6, all rights and privileges of the Pledgor with respect to the 
securities and other property referred to in clauses (a), (b) and (c) above; 
and (e) all proceeds of any of the foregoing (the items referred to in 
clauses (a) through (e) being collectively called the "Collateral"). Upon 
delivery to the Secured Party, (i) any share certificates, notes or other 
securities or instruments now or hereafter included in the Collateral (the 
"Pledged Securities") will be duly endorsed to the Secured Party or 
accompanied by stock powers duly executed in blank or other instruments of 
transfer (including bought and sold notes and instruments of transfer duly 
executed in blank and resignations of the Pledgor's nominee directors on the 
board of directors of SDL duly signed in blank) satisfactory to the Secured 
Party and by such other instruments and documents as the Secured Party may 
reasonably request, and (ii) all other property comprising part of the 
Collateral will be accompanied by proper instruments of assignment duly 
executed by the Pledgor and such other instruments or documents as the 
Secured Party may reasonably request. Each delivery of Pledged Securities 
will be accompanied by a schedule describing the securities theretofore and 
then being pledged

                                     2

<PAGE>

hereunder, which schedule will be attached to this Agreement and made a part 
hereof. Each schedule no delivered will supersede any prior schedules so 
delivered.

                  Section 3.  DELIVERY OF THE COLLATERAL. The Pledgor agrees 
to promptly deliver or cause to be delivered to the Secured Party any and all 
Pledged Securities, and any and all certificates or other instruments or 
documents representing the Collateral.

                  Section 4.  REPRESENTATIONS, WARRANTIES AND COVENANTS. The 
Pledgor hereby represents, warrants and covenants to and with the Secured 
Party that:

                              (a) the Pledgor (i) is and will at all times 
continue to be the direct owner, beneficially and of record, of the Pledged 
Stock, subject only to the security interest granted hereunder, (ii) holds 
the same free and clear of all Liens, subject only to the security interest 
granted hereunder and any Lien created by the SDL Shareholders Agreement, 
(iii) will make no assignment, pledge, hypothecation or transfer of, or 
create or permit to exist any security interest or other Lien (other than any 
Lien created by the SDL Shareholders Agreement) with respect to, the 
Collateral, (iv) will cause all securities included within the Collateral to 
be certificated securities, and (v) will cause any and all certificates, 
instruments or other documents representing or evidencing Collateral to be 
forthwith deposited with the Secured Party and pledged or assigned hereunder;

                              (b) by virtue of the execution and delivery by 
Pledgor of this Agreement, when the Pledged Securities are delivered to the 
Secured Party in accordance with this Agreement, the Secured Party will 
obtain a valid, legal and perfected first priority Lien upon and security 
interest in such Pledged Securities as security for the repayment of the 
Obligations, free and clear of all Liens (other than any Lien created by the 
SDL Shareholders Agreement);

                              (c) the pledge effected hereby is effective to 
vest in the Secured Party the rights of the Secured Party in the Collateral 
as set forth herein; and

                              (d) the Pledgor will cause SDL not to issue to 
the Pledgor or any of its Affiliates any equity securities unless such 
securities are concurrently pledged and delivered to the Secured Party 
hereunder.

                  Section 5.  REGION IN NOMINEE NAME: DENOMINATIONS. The 
Secured Party will have the right (in its sole and absolute discretion), to 
the extent permitted under the SDL Shareholders Agreement, to hold the 
Pledged Securities in its own name, the name of its nominee or the name of 
the Pledgor, endorsed or assigned in blank or in favor of the Secured Party. 
The Pledgor will promptly give to the Secured Party copies of any notices or 
other communications received by it with respect to Pledged Securities 
registered in the name of the Pledgor. The Pledgor will take all actions as 
may be necessary so that the Secured Party will at all times have the right 
to exchange the certificates representing Pledged Securities for certificates 
of smaller or larger denominations for any purposes consistent with this 
Pledge Agreement. If, and to the extent that, the Pledged Securities of SDL 
are held in the name of the Secured Party or its nominee, the Secured Party 
agrees that, notwithstanding such registration arrangement, so long as no 
Event of Default is continuing, Pledgor will be entitled to exercise all 

                                      3

<PAGE>

rights granted to Pledgor under the SDL Shareholders Agreement, including 
purchasing SDL shares owned by other SDL shareholders in accordance with the 
terms of the SDL Shareholders Agreement.

                  Section 6.  VOTING RIGHTS; DIVIDENDS AND INTEREST: ETC.

                              (a) Except as provided in paragraphs (b) and 
(c) of this section:

                                  (i)   The Pledgor will be entitled to 
exercise any and all voting rights accruing to it as the owner of Pledged 
Securities for any purpose consistent with the terms of this Agreement and 
the Reimbursement Agreement, so long as such exercise of rights could not 
reasonably be expected to adversely affect the rights and remedies of the 
Secured Party under this Agreement or the Reimbursement Agreement or the 
ability of the Secured Party to exercise the same.

                                  (ii)  The Secured Party will execute and 
deliver to the Pledgor, or cause to be executed and delivered to the Pledgor, 
all such proxies, powers of attorney, and other instruments as the Pledgor 
may reasonably request for the purpose of enabling the Pledgor to exercise 
the voting rights which it is entitled to exercise pursuant to subparagraph 
(i) above.

                                  (iii) The Pledgor will be entitled to 
receive and retain any and all cash Distributions paid in respect of the 
Pledged Securities to the extent and only to the extent that the proceeds of 
such cash Distributions are paid and applied in accordance with the terms and 
conditions of the Loan Agreements and applicable laws. All other payments, 
dividends and Distributions made on or in respect of Pledged Securities, 
whether paid or payable in cash, securities or other property, and whether 
resulting from a subdivision, combination or reclassification of the 
outstanding securities of SDL or received in exchange for or in redemption of 
Pledged Securities or any part thereof, or as a result of any merger, 
consolidation, acquisition or other exchange of assets to which SDL may be a 
party or otherwise, will be and become part of the Collateral and, if 
received by the Pledgor, will not be commingled by the Pledgor with any of 
its other funds or property but will be held separate and apart therefrom in 
trust for the benefit of the Secured Party and will be delivered to the 
Secured Party in the same form as so received (with any necessary endorsement 
and/or instruments of transfer, as the Secured Party may request).

                              (b) Upon the occurrence and during the 
continuance of an Event of Default or upon any payment by Vanguard under the 
IWC Guaranty, all rights of the Pledgor to Distributions which the Pledgor is 
authorized to receive pursuant to subparagraph (a)(iii) of this section will 
cease, and all such rights will thereupon become vested in the Secured Party, 
which will have the sole and exclusive right and authority to receive and 
retain such Distributions, which the Secured Party will apply to the 
Obligations as provided in Section 9. All Distributions which are received by 
the Pledgor contrary to the provisions of this paragraph (b) will be received 
in trust for the benefit of the Secured Party, will be segregated from other 
property or funds of the Pledgor and will be immediately delivered to the 
Secured Party in the same form as so received (with any necessary endorsement 
and/or instruments of transfer, as the Secured Party may request). Any and 
all money and other property paid over to or received by the Secured

                                      4

<PAGE>

Party pursuant to the provisions of this paragraph (b) will be deposited by 
the Secured Party in an account to be established by the Secured Party for 
the benefit of the Secured Party upon receipt of such money or other property 
and will be applied in accordance with the provisions of Section 9.

                  Upon written notice to that effect by the Secured Party to 
the Pledgor after the occurrence and during the continuance of an Event of 
Default or any payment by Vanguard under the IWC Guaranty, all rights of the 
Pledgor to exercise the voting rights which it is entitled to exercise 
pursuant to subparagraph (a)(i) of this section will cease, and all such 
rights will thereupon become vested in the Secured Party, which will have the 
sole and exclusive right (but not the obligation) and authority to exercise 
such voting rights. The Pledgor will execute and deliver to the Secured 
Party, all such proxies, powers of attorney, and other instruments as the 
Secured Party will request for the purpose of enabling the Secured Party to 
exercise the voting rights which it is entitled to exercise pursuant to this 
paragraph (c) during the continuance of any Event of Default or after any 
payment by Vanguard under the IWC Guaranty.

                  Section 7.  RIGHT OF FIRST OFFER. The Secured Party 
acknowledges that if Pledgor fails to exercise its right of first offer under 
the SDL Shareholders Agreement to acquire additional securities of SDL, and 
other SDL shareholders or parties acquire such declined securities of SDL, 
such securities shall not be deemed for any purpose hereof or the 
Reimbursement Agreement to be Pledged Securities or Collateral.

                  Section 8.  REMEDIES UPON DEFAULT. Upon the occurrence and 
during the continuance of an Event of Default in addition to its rights under 
the Reimbursement Agreement:

                              (a) The Secured Party will have the right to 
declare all of the Obligations due and payable;

                              (b) The Secured Party will have all of the 
rights and remedies with respect to the Collateral of a secured party under 
the UCC (whether or not the UCC is in effect in the jurisdiction where the 
rights and remedies are asserted) and such additional rights and remedies to 
which a secured party is entitled under any applicable law in effect in any 
jurisdiction where any rights and remedies hereunder may be asserted, 
including the right, to the maximum extent permitted by applicable law, to 
exercise all voting, consensual and other powers of ownership pertaining to 
the Collateral as if the Secured Party were the sole and absolute owner 
thereof (and the Pledgor agrees to take all such action as may be appropriate 
to give effect to such right); 

                              (c) The Secured Party in its discretion may, in 
its name or in the name of the Pledgor or otherwise, demand, sue for, collect 
or receive any money or property at any time payable or receivable on account 
of or in exchange for any of the Collateral, but will be under no obligation 
to do so; and

                              (d) The Secured Party may, upon not fewer than 
ten (10) days' prior written notice to the Pledgor and subject to the terms 
of the final paragraph of this paragraph (d), with respect to the Collateral 
or any part thereof which is then or may thereafter come into the

                                      5

<PAGE>

possession, custody or control of the Secured Party or any of its agents, 
sell, lease, assign or otherwise dispose of all or part of such Collateral, 
at such place or places as the Secured Party deems appropriate, and for cash 
or for credit or for future delivery (without thereby assuming any credit 
risk), at public or private sale, without demand of performance or notice of 
intention to effect any such disposition or of the time or place thereof 
(except such notice as is required above or by applicable statute and cannot 
be waived), and the Secured Party or anyone else may be the purchaser, 
lessee, assignee or recipient of any or all of the Collateral so disposed of 
at any public sale (or, to the extent permitted by law, at any private sale) 
and thereafter hold the same absolutely, free from any claim or right of 
whatsoever kind, including any right or equity of redemption (statutory or 
otherwise) of the Pledgor, any such demand, notice and right or equity being 
hereby expressly waived and released. The Secured Party may, without notice 
or publication, adjourn any public or private sale or cause the same to be 
adjourned from time to time by announcement at the time and place fixed for 
the sale, and such sale may be made at any time or place to which the sale 
may be so adjourned.

                  The Pledgor recognizes that, by reason of certain 
prohibitions contained in the Securities Act of 1933, as amended, and 
applicable state or other securities laws, the Secured Party may be compelled 
or deem it advisable, with respect to any sale of all or any part of the 
Collateral, to limit purchasers to those who will agree, among other things, 
to acquire the Collateral for their own account, for investment and not with 
a view to the distribution or resale thereof, or who will agree to other 
restrictions which the Secured Party may deem to be appropriate. The Pledgor 
acknowledges that any such private sales may be at prices and on terms less 
favorable to the Secured Party than those obtainable through a public sale 
without such restrictions, and, notwithstanding such circumstances, agrees 
that any such private sale will be deemed to have been made in a commercially 
reasonable manner and that the Secured Party will have no obligation to 
engage in public sales and no obligation to delay the sale of any Collateral 
for the period of time necessary to permit registration such Collateral for 
public sale.

                  The Secured Party acknowledges that the Pledged Securities 
are subject to the SDL Shareholders Agreement and that any exercise of the 
Secured Party's rights and remedies with respect to the Pledged Securities 
must be in accordance with the terms and conditions set forth in the SDL 
Shareholders Agreement regarding disposition of the Pledged Securities, 
including, but not limited to, (i) the right of first refusal to acquire the 
Pledged Securities in the event of a proposed Transfer, including a Transfer 
pursuant to the Secured Party's exercise of its rights and remedies as a 
secured creditor with respect to the Pledged Securities, (ii) the right of 
co-sale granted to the other SDL shareholders with respect to any Transfer of 
the Pledged Securities, including a Transfer pursuant to the Secured Party's 
exercise of its rights and remedies as a secured creditor with respect to the 
Pledged Securities, (iii) the right of other SDL shareholders holding a 
specified percentage of the SDL equity securities to bar a Transfer of 
Pledged Securities to a Person who is engaged in a business directly 
competing with that of SDL, including a Transfer pursuant to the Secured 
Party's exercise of its rights and remedies as a secured creditor with 
respect to the Pledged Securities, and (iv) the obligation of any transferee 
of the Pledged Securities through the exercise of the Secured Party's rights 
and remedies to become a party to the SDL Shareholders Agreement by executing 
and delivering a Deed of Adherence, as defined in the SDL Shareholders 
Agreement, in accordance with the terms of the

                                       6

<PAGE>

SDL Shareholders Agreement. The Secured Party further agrees that any 
purchaser of the Pledged Securities through the exercise of the Secured 
Party's rights and remedies hereunder (including the Secured Party) shall 
take the Pledged Securities subject to the terms and conditions of the SDL 
Shareholdas Agreement. The Pledgor acknowledges that the Secured Party's 
disposition of the Pledged Securities of SDL in accordance with the terms of 
the SDL Shareholders Agreement and this paragraph may be at prices and on 
terms less favorable than those that would be obtained in connection with 
dispositions not made in accordance with the SDL Shareholders Agreement, and 
this paragraph and, notwithstanding the foregoing, agrees that such 
dispositions so limited by the terms of the SDL Shareholders Agreement, and 
this paragraph will be deemed to have been made in a commercially reasonable 
manner.

                  Section 9.  APPLICATION OF PROCEEDS OF SALE. The proceeds 
of any sale of Collateral pursuant to Section 8, as well as any Collateral 
consisting of cash, will be applied by the Secured Party as follows:

                  FIRST, to the payment of all costs and expenses incurred by 
the Secured Party in connection with such sale or otherwise in connection 
with this Agreement or any of the Obligations, including all court costs and 
the reasonable fees and expenses of its agents and legal counsel, the 
repayment of all advances made by the Secured Party hereunder on behalf of 
the Pledgor and any other costs or expenses incurred in connection with the 
exercise of any right or remedy hereunder;

                  SECOND, to the payment in full of all Obligations of the 
Pledgor under Article II and Section 5.4 of the Reimbursement Agreement;

                  THIRD, to the payment in full of the Obligations (other 
than those referred to above); and

                  FOURTH, to the Pledgor, its successors or assigns, or as a 
court of competent jurisdiction may otherwise direct.

                  Section 10. SECURED PARK APPOINTED ATTORNEY-IN-FACT. Except 
as otherwise provided herein, the Pledgor hereby appoints the Secured Party 
the attorney-in-fact of the Pledgor for the purposes of carrying out the 
provisions of this Agreement or taking any action or executing any instrument 
which the Secured Party may deem necessary or advisable to accomplish the 
purposes hereof, which appointment is irrevocable and coupled with an 
interest. Without limiting the generality of the foregoing, the Secured Party 
will have the right, upon the occurrence and during the continuance of an 
Event of Default, with full power of substitution either in the Secured 
Party's name or in the name of the Pledgor, to ask for, demand, sue for, 
collect, receive and give acquittance for any and all monies due or to become 
due under or by virtue of any Collateral, to endorse checks, drafts, orders 
and other instruments for the payment of money payable to the Pledgor 
constituting Collateral or any part thereof or on account thereof and to give 
full discharge for the same, to settle, compromise, prosecute or defend any 
action, claim or proceeding with respect thereto, and to sell, assign, 
endorse, pledge, transfer and make any agreement respecting, or otherwise 
deal with, the same; PROVIDED, HOWEVER, that nothing herein contained will be 
construed as requiring or obligating the Secured Party to make any

                                       7

<PAGE>

commitment or to make any inquiry as to the nature or sufficiency of any 
payment received by the Secured Party, or to present or file any claim or 
notice, or to take any action with respect to the Collateral or any part 
thereof or the monies due or to become due in respect thereof or any property 
covered thereby, and no action taken by the Secured Party or omitted to be 
taken with respect to the Collateral or any part thereof will give rise to 
any defense, counterclaim or offset in favor of any Pledgor or to any claim 
or action against the Secured Party. The Secured Party acknowledges that the 
power of attorney granted to it under this section will not give it the 
right, except during the continuance of an Event of Default, to exercise any 
of the rights granted to the Pledgor under the SDL Shareholders Agreement.

                  Section 11. NO WAIVER. No failure on the part of the 
Secured Party to exercise, and no delay in exercising, any right, power or 
remedy hereunder will operate as a waiver thereof, nor will any single or 
partial exercise of any such right, power or remedy by the Secured Party 
preclude any other or further exercise thereof or the exercise of any other 
right, power or remedy. All remedies hereunder are cumulative and are not 
exclusive of any other remedies provided by law or agreement (it being 
understood and agreed that this Agreement shall not in any manner affect or 
limit, or be affected or limited by, the Secured Party's right to seek 
reimbursement from SDL pursuant to any reimbursement agreement or otherwise). 
The Secured Party will not be deemed to have waived any rights hereunder or 
under any other agreement or instrument unless such waiver is in writing and 
signed by the Secured Party.

                  Section 12. SECURITY INTEREST ABSOLUTE. All rights of the 
Secured Party hereunder, the grant of a security interest in the Collateral 
and all obligations of the Pledgor hereunder will be absolute and 
unconditional irrespective of (a) any lack of validity or enforceability of 
the Reimbursement Agreement, any agreement with respect to any of the 
Obligations or any other agreement or instrument relating to any of the 
foregoing, (b) any change in the time, manner or place of payment of, or in 
any other term of, all or any of the Obligations, or any other amendment or 
waiver of or any consent to any departure from the Reimbursement Agreement, 
the Bridge Loan Documents, the Loan Agreements, the IWC Guaranty or any other 
agreement or instrument, (c) any exchange, release, amendment or waiver of, 
or consent to or departure from, any guaranty for all or any of the 
Obligations or any of the obligations guaranteed under the Bridge Loan 
Documents or the IWC Guaranty or (d) any other circumstance which might 
otherwise constitute a defense available to, or a discharge of, the Pledgor 
in respect of the Obligations or in respect of this Agreement or the 
Reimbursement Agreement.

                  Section 13. FURTHER ASSURANCES. The Pledgor agrees to do 
such further acts and things, and to execute and deliver such additional 
conveyances, assignments, agreements and instruments, as the Secured Party 
may at any time request to create, perfect, ensure the priority of, protect 
or enforce the Secured Party's security interest in the Collateral or in 
connection with the administration and enforcement of this Agreement, with 
respect to the Collateral or any part thereof or in order better to assure 
and confirm unto the Secured Party its rights and remedies hereunder.

                                     8

<PAGE>

                  Section 14. FEES AND EXPENSES. The Pledgor agrees to pay 
upon demand to the Secured Party the amount of any and all expenses, 
including the fees and expenses of its counsel and of any experts or agents, 
and any other amount in respect of the Pledged Stock or other Collateral, 
which the Secured Party may incur or pay in connection with the 
administration of this Agreement, the custody or preservation of, or the sale 
of, collection from, or other realization upon, any of the Collateral, the 
exercise or enforcement of any of the rights of the Secured Party hereunder, 
the failure by the Pledgor to perform or observe any of the provisions 
hereof, or in protecting or enforcing the Secured Party's claims and security 
interest in the Collateral in any bankruptcy or insolvency proceedings, or 
otherwise, including any contribution of capital to any other Person which in 
the Secured Party's sole discretion may be required or reasonably necessary 
to preserve any right with respect to, or the value of, any Collateral 
(including any contribution to the capital of SDL or any loan to SDL which in 
the Secured Party's sole discretion may be required of the Pledgor or 
reasonably necessary pursuant to the SDL Shareholders Agreement, the SDL 
Subscription Agreement or otherwise), any which contribution the Secured 
Party is authorized, but will not be required, to make on the Pledgor's 
behalf. Any such amounts payable as provided hereunder or thereunder will be 
additional Obligations secured by this Agreement and shall be due and payable 
upon demand therefore by the Secured Party.

                  Section 15. BINDING AGREEMENT; ASSIGNMENTS. This Agreement, 
and the terms, covenants and conditions hereof, will be binding upon and 
inure to the benefit of the parties hereto and their respective successors 
and permitted assigns, except that the Pledgor will not be permitted to 
assign this Agreement or any interest herein or in the Collateral or any part 
thereof, or otherwise pledge, encumber or grant any option with respect to 
the Collateral or any part thereof, or any cash or property held by or 
required to be delivered to the Secured Party as Collateral under this 
Agreement, except with the prior written consent of the Secured Party.

                  Section 16. HOLIDAYS. Whenever any payment or action to be 
made or taken under this Agreement is stated to be due or required to be 
taken on a day which is not a Business Day, such payment or action will be 
made or taken on the next following Business Day, and such extension of time 
will be included in computing interest or fees, if any, in connection with 
such payment or action.

                  Section 17. NOTICES. All notices and other communications 
given to or made upon any party hereto in connection with this Agreement 
will, except as otherwise expressly provided herein, be in writing and 
mailed, telecopied or delivered by hand or by reputable overnight courier 
service to the respective parties, as follows:

                                      9

<PAGE>

                  Pledgor:

                         c/o International Wireless Communications, Inc.
                         400 S. E1 Camino Real
                         Suite 1275
                         San Mateo, CA 94402
                         Attention: John D. Lockton
                         Telecopy: (415) 548-1842

                  with a copy (which will not constitute notice) to:

                         Brooks Stough, Esq.
                         Gunderson Dettmer Stough Villeneuve
                         Franklin & Hachigan, LLP
                         155 Constitution Drive
                         Menlo Park, CA 94025
                         Telecopy: (415) 343-7502

                  Secured Party:

                         Vanguard Cellular Financial Corp.
                         2002 Pisgah Church Road, Suite 300
                         Greensboro, NC 27455
                         Attention: Haynes Griffin
                         Telecopy: (910) 545-2233
                         Attention: General Counsel
                         Telecopy: (910) 545-2219

                  WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:

                         Hyun Park, Esq.
                         Latham & Watkins
                         885 Third Avenue
                         New York, NY 10022
                         Telecopy: (212) 751-4864

or in accordance with any subsequent written direction from the recipient 
party to the sending party made in accordance with this section. All such 
notices and other communications will, except as otherwise expressly provided 
in this Agreement, be effective upon (a) delivery if delivered by hand; (b) 
on the Business Day after deposited with a reputable overnight courier 
service, delivery charges prepaid; (c) on the third Business Day after 
deposited in the mail, postage prepaid; or (d) in the case of telecopy, when 
received.

                  Section 18. SURVIVAL. All representations, warranties, 
covenants and agreements of the Pledgor contained in this Agreement or made 
in writing in connection herewith will

                                      10

<PAGE>

survive the execution and delivery of this Agreement, the IWC Guaranty and 
the Reimbursement Agreement. The provisions of Sections 11 through 28 will 
survive repayment of the Obligations and the other amounts payable to the 
Secured Party under this Agreement and the Reimbursement Agreement and the 
termination of this Agreement and the Reimbursement Agreement.

                  Section 19. GOVERNING LAW; WAIVERS AND JURISDICTION.

                              (a) GOVERNING LAW. This Agreement will in all 
respects be governed by, and construed and enforced in accordance with, the 
laws of the State of California, without giving effect to any choice of law 
or conflict of law rules or provisions (whether of the State of California or 
any other jurisdiction) that would cause the application of the laws of any 
jurisdiction other than the State of California, except that the filing, 
perfection, effect of perfection and enforcement of security interests and 
Liens under this Agreement in other jurisdictions will be governed by the 
laws of the applicable jurisdictions in accordance with the UCC as in effect 
in the State of California.

                              (b) WAIVERS. To the extent permitted by law, 
each party hereto hereby waives personal service of any and all process upon 
it in connection with this Agreement and agrees that all such service of 
process may be made as provided in Section 17, and service so made will be 
deemed to be completed as provided in Section 17. In addition, the Pledgor 
and the Secured Party each hereby waives trial by jury, any objections based 
on FORUM NON CONVENIENS and any objections to venue of any action arising out 
of, connected with, related to or incidental to the transactions contemplated 
by or the relationships established in connection with this Agreement.

                              (c) EXCLUSIVE JURISDICTION. Except as provided 
in Section l9(d), all disputes between the Pledgor and the Secured Party 
arising out of, connected with, related to or incidental to the transactions 
contemplated by or the relationship established between them in connection 
with this Agreement, and whether arising in contract, tort, equity or 
otherwise, will be resolved only by state or federal courts located in New 
York County, New York, and the Pledgor and the Secured Party hereby consent 
and submit to the jurisdiction of any state or federal court located within 
such county and state. The Pledgor and the Secured Party acknowledge, 
however, that any appeals from those courts may be required to be heard by a 
court located outside of New York County, New York. The Pledgor and the 
Secured Party waive in all disputes any objection that they may have to the 
location of the court considering the dispute. Nothing in this section will 
affect the right of the Pledgor or the Secured Party to serve legal process 
in any other manner permitted by law or affect the right of the Secured Party 
to bring any action or proceeding against the Pledgor or its property in the 
courts of any other jurisdiction.

                              (d) OTHER JURISDICTIONS. The Pledgor and the 
Secured Party agree that the other of them will have the right to proceed 
against it in a court in any location to enable the proceeding Person to 
enforce a judgment or other court order obtained in any proceeding brought in 
accordance with Section 19(c) and entered in favor of the proceeding Person. 
The Pledgor and

                                      11

<PAGE>

the Secured Party waive any objection that they may have to the location of 
the court in which the other of them has commenced a proceeding described in 
this paragraph (d).

                  Section 20. HEREIN, ETC. Words such as "herein," 
"hereunder," "hereof" and the like will be deemed to refer to this Agreement 
as a whole and not to any particular document or Article, Section or other 
portion of a document. Section, clause, Exhibit and Schedule references 
contained in this Agreement are references to Sections, clauses, Exhibits and 
Schedules in or attached to this Agreement, unless otherwise specified. Each 
defined term used in this Agreement has a comparable meaning when used in its 
plural or singular form. Each gender-specific term used in this Agreement has 
a comparable meaning whether used in a masculine, feminine or gender-neutral 
form. As used in this Agreement, the terms "knowledge" or "aware" will 
include the actual knowledge and awareness of the Person in question, and the 
knowledge and awareness that such Person would have obtained after making 
reasonable inquiry and exercising reasonable diligence with respect to the 
matter in question. Whenever the term "including" is used in this Agreement 
(whether or not that term is followed by the phrase "but not limited to" or 
"without limitation" or words of similar effect) in connection with a listing 
of items within a particular classification, that listing will be interpreted 
to be illustrative only and will not be interpreted as a limitation on, or an 
exclusive listing of, the items within that classification. Each reference in 
this Agreement to any law will be deemed to include such law as it hereafter 
may be amended, supplemented or modified from time to time and any successor 
thereto.

                  Section 21. SEVERABILITY. Whenever possible, each provision 
of this Agreement will be interpreted in such manner as to be effective and 
valid under applicable law, but if any provision of this Agreement is held to 
be prohibited by or invalid under applicable law in any jurisdiction, such 
provision will be ineffective only to the extent of such prohibition or 
invalidity, without invalidating any other provision of this Agreement or the 
Reimbursement Agreement.

                  Section 22. HEADINGS. Section and subsection headings in 
this Agreement are included for convenience of reference only and will not 
constitute a part of this Agreement for any other purpose.

                  Section 23. COUNTERPARTS. This Agreement may be executed in 
multiple counterparts and by any party hereto or thereto on separate 
counterparts, each of which, when so executed and delivered, will be an 
original, but all such counterparts will together constitute one and the same 
instrument.

                  Section 24. INDEMNIFICATION. In consideration of the 
Secured Party's execution and delivery of this Agreement, the Reimbursement 
Agreement and the IWC Guaranty, and in addition to all other obligations of 
the Pledgor under this Agreement and the Reimbursement Agreement, the Pledgor 
will defend, protect, indemnify and hold harmless the Secured Party and all 
of its officers, directors, employees and agents (including those retained in 
connection with the transactions contemplated by this Agreement and the 
Reimbursement Agreement) (collectively, the "Indemnitees") from and against 
any and all actions, causes of action, suits, claims, losses, costs, 
penalties, fees, liabilities and damages and expenses in connection

                                      12

<PAGE>

therewith (irrespective of whether any such Indemnitee is a party to the 
action for which indemnification hereunder is sought), and including 
reasonable attorneys' fees and disbursements, but excluding claims and losses 
arising from such Indemnitee's breach hereof or thereof or such Indemnitee's 
gross negligence or willful misconduct (the "Indemnified Liabilities"), 
incurred by the Indemnitees or any of them as a result of, or arising out of, 
or relating to (i) any transaction financed or to be financed in whole or in 
part, directly or indirectly, with the proceeds of any advances under the 
Bridge Loan Documents, (ii) the execution, delivery, performance or 
enforcement of this Agreement, the Bridge Loan Documents, the IWC Guaranty or 
the Reimbursement Agreement and any instrument, document or agreement 
executed pursuant hereto by any of the Indemnitees or (iii) the Secured 
Party's status as a creditor hereunder or the Reimbursement Agreement. To the 
extent that the foregoing undertaking by the Pledgor may be unenforceable for 
any reason, the Pledgor will make the maximum contribution to the payment and 
satisfaction of each of the Indemnified Liabilities which is permissible 
under applicable law. To the extent that the undertaking to indemnify, pay 
and hold harmless by the Pledgor under this section may be unenforceable 
because it violates any law or public policy, the Pledgor will contribute the 
maximum portion that it is permitted to pay and satisfy under applicable law 
or public policy to the payment and satisfaction of all Indemnified 
Liabilities incurred by the Indemnitees or any of them.

                  Section 25. PAYMENT SET ASIDE. To the extent the Pledgor 
makes a payment or payments to the Secured Party hereunder or under the 
Reimbursement Agreement or the Secured Party enforces its security interests 
or rights or exercises its right or setoff hereunder or thereunder, and such 
payment or payments or the proceeds of such enforcement or setoff or any part 
thereof are subsequently invalidated, declared to be fraudulent or 
preferential, set aside, recovered from, disgorged by or are required to be 
refunded, repaid or otherwise restored to the Pledgor, a trustee, receiver or 
any other Person under any law (including any bankruptcy law, state or 
federal law, common law or equitable cause of action), then to the extent of 
any such restoration the obligation or part thereof originally intended to be 
satisfied and all Liens created under this Agreement will be revived and 
continued in full force and effect as if such payment had not been made or 
such enforcement or setoff had not occurred.

                  Section 26. COMPLEX AGREEMENT. Except as otherwise 
expressly set forth herein or in the Reimbursement Agreement, this Agreement 
and the Reimbursement Agreement embody the complete agreement and 
understanding of the parties hereto and thereto and supersede and preempt any 
prior understandings, agreements or representations by or among the parties, 
whether written or oral, which may have related to the subject matter hereof 
in any way, and such agreements may not be contradicted or varied by evidence 
of prior, contemporaneous or subsequent oral discussions or understandings of 
the parties. The parties hereto acknowledge and agree there are no oral 
understandings or agreements between them with respect to the subject matter 
hereof or thereof.

                  Section 27. NO STRICT CONSTRUCTION. The language used in 
this Agreement and the Reimbursement Agreement will be deemed to be the 
language chosen by the parties to express their mutual intent. In the event 
an ambiguity or question of intent or interpretation arises, this Agreement 
and the Reimbursement Agreement will be construed as if drafted jointly

                                       13

<PAGE>

by the parties, and no presumption or burden of proof will arise favoring or 
disfavoring any Person by virtue of the authorship of any of the provisions 
of this Agreement or the Reimbursement Agreement.

                  Section 28. TERMINATION.

                              (a) This Agreement and the pledges and security 
interests granted hereby will terminate when all the Obligations have been 
indefeasibly paid in full and the Reimbursement Agreement and the IWC 
Guaranty have terminated, at which time the Secured Party will execute and 
deliver to the Pledgor all Uniform Commercial Code termination statements and 
similar documents prepared by the Pledgor which the Pledgor may reasonably 
request to evidence such termination.

                              (b) Notwithstanding anything to the contrary 
contained in this Agreement, this Agreement will remain in full force and 
effect and continue to be effective should any petition be filed by or 
against the Pledgor for liquidation or reorganization, should the Pledgor 
become insolvent or make an assignment for any benefit of creditors or should 
a receiver or trustee be appointed for all or any significant part of the 
Pledgor's assets, and will continue to be effective or be reinstated, as the 
case may be, if at any time payment and performance of the Obligations, or 
any part thereof, is, pursuant to applicable law, rescinded or reduced in 
amount, or must otherwise be restored or returned by any obligee of the 
Obligations, whether as a "voidable preference," "fraudulent conveyance" or 
otherwise, all as though such payment, or any part thereof, is rescinded, 
reduced, restored or returned.

                                 * * * * *


                                     14

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have duly executed 
this Agreement, or caused this Agreement to be duly executed, as of the day 
and year first above written.

                                       IWC CHINA LIMITED

                                       By:
                                          ------------------------------------
                                       Its:
                                           -----------------------------------


                                       VANGUARD CELLULAR FINANCIAL CORP.


                                       By:
                                          ------------------------------------
                                       Its:
                                           -----------------------------------

<PAGE>


                                   SCHEDULE I


<TABLE>
<CAPTION>


ISSUER                                  CERTIFICATE NO.                     QUANTITY
------                                  ---------------                     --------
<S>                                     <C>                                <C>
Star Digitel Limited                          --                           231,900,000

</TABLE>

                                             S-1

<PAGE>


                                    EXHIBIT B

                            FORM OF VANGUARD WARRANT






                                       2

<PAGE>










        THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
        HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
        REGISTRATION STATEMENT UNDER THE ACT, PURSUANT TO RULE 144 UNDER THE
        ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
        THE ACT.


No. IWC-SDL                                   Void after September 18, 2007.



              INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
                        WARRANT TO PURCHASE COMMON STOCK



        This Warrant, dated September 18, 1997, is issued to Vanguard 
Cellular Financial Corp., a North Carolina corporation (the "Holder"), by 
International Wireless Communications Holdings, Inc., a Delaware corporation 
(the "Company"), pursuant to the Reimbursement Agreement dated as of 
September 18, 1997 by and between IWC China Limited and the Holder (the 
"Reimbursement Agreement").

                                       3

<PAGE>


1. PURCHASE OF SHARES. Subject to the terms and conditions hereinafter set
forth, the Holder is entitled, upon surrender of this Warrant at the principal
office of the Company (or at such other place as the Company shall notify the
Holder hereof in writing), to purchase a number of shares of the Company's Class
1 Common Stock, par value $0.01 per share (the "Equity Securities"), at a per
share purchase price of No Dollars and One Cent ($0.01) per share, which is
equal to (a) the Total Number of Issuable Warrant Shares (as defined below) at
such time, REDUCED BY (b) the number of Warrant Shares as to which this Warrant
has theretofore been exercised or canceled (as adjusted pursuant to Section 8,
the "PREVIOUSLY ISSUED WARRANT SHARES"). The shares of Equity Securities
issuable at any time as described in clauses (a) and (b) above are referred to
as the "WARRANT SHARES". The purchase price of the Warrant Shares as provided in
this Section 1 (the "Exercise Price") shall be subject to adjustment pursuant to
Section 8 hereof. 

2. MATTERS RELATING TO WARRANTS.

          2.1  DEFINITION. At any time, the "TOTAL NUMBER OF ISSUABLE 
WARRANT SHARES" will equal "x", where

               x = EW% (OS + x)

and   EW% =    the Earned Warrant Percentage at such time 
               determined as provided in Section 2(b), and

      OS =     the number of shares of IWCH Common Stock outstanding 
               on a fully-diluted basis on the date of this Agreement (as 
               such number may be proportionately adjusted to reflect any 
               stock dividend, stock split, reverse stock split or other 
               subdivision or combination of the Equity Securities  
               effected prior to such time but after the date of this 
               Warrant), without regard to the issuance of Series G-1, G-2, 
               H-1 or H-2 Preferred Stock, par value $0.01 per share, by 
               the Company upon the exchange of notes pursuant to the 
               Exchange Agreement dated August 18, 1997 among the Company 
               and the persons named on EXHIBIT A thereto (the "Exchange 
               Agreement"), or the exercise of this Warrant.                

The Total Number of Issuable Warrant Shares shall be calculated after giving 
effect to the issuance of all Equity Securities or warrants to purchase 
Equity Securities, if any, that the Company may be required to issue as a 
result of this Warrant pursuant to any applicable pre-emptive rights, rights 
of first refusal or other similar rights.

          2.2  INITIAL EARNED WARRANT PERCENTAGE. On the date of this 
Warrant, the "Earned Warrant Percentage" is 0.276%. After the date of this 
Warrant, the Earned Warrant Percentage shall be increased from time to time, 
as provided in Section 2(c) and Section 11.

          2.3  ADDITIONAL EARNED WARRANT PERCENTAGE. Subject to the 
provisions set forth in Section 11, on each date set forth below, unless the 
Guarantee Termination Date (as defined below) has heretofore occurred, the 
Earned Warrant Percentage will increase by the corresponding percentage set 
forth below, multiplied by the Commitment Percentage (as defined below) on 
such date (it being understood that the increases described below are stated 
in absolute terms, not in terms of the percentage increase from the Earned 
Warrant Percentage previously in effect):

                                      4

<PAGE>

<TABLE>
<CAPTION>

                            DATE                              PERCENTAGE
               -------------------------------           ----------------------
               <S>                                       <C>
               December 18, 1997                                0.207%
               March 18, 1998                                   0.207%
               June 18, 1998                                    0.207%
               September 18, 1998                               0.345%
               December 18, 1998                                0.553%
               March 18, 1999                                   0.691%
               The 18th of each June,                           0.691%
               September, December and March
               thereafter
</TABLE>

The "Commitment Percentage" at any time means a fraction (A) the numerator of 
which is forty percent (40%) of the aggregate principal amount of Additional 
Loans (as defined in the Reimbursement Agreement) at such time less the 
Discharged Amount (as defined below), if any, as of such time and (B) the 
denominator of which is $8,000,000. The "Guarantee Termination Date" means 
the date on which the IWC Guaranty is fully and forever terminated. 
"Discharged Amount" means, as of any time, the aggregate amount of all 
permanent reductions in the IWC Guaranteed Amount (as defined in the 
Reimbursement Agreement) under the IWC Guaranty and with respect to which 
aggregate amount and by which aggregate amount Vanguard's Obligations under 
the IWC Guaranty has been permanently and indefeasibly released and 
discharged as of such time.

3. EXERCISE PERIOD. This Warrant is exercisable at any time on any business 
day but only until and including the close of business on September 18, 2007. 

4. METHOD OF EXERCISE. While this Warrant remains outstanding and exercisable 
in accordance with Section 3 above, the Holder may exercise, from time to 
time, the purchase rights evidenced hereby. Such exercise shall be effected 
by:

          4.1  the surrender of this Warrant, together with a duly executed 
copy of the form of subscription attached hereto, to the Secretary of the 
Company at its principal offices; and

          4.2  the payment to the Company of an amount equal to the aggregate 
Exercise Price for the number of Warrant Shares being purchased.

5. NET ISSUE EXERCISE.

          5.1  In lieu of exercising this Warrant as to any number of Warrant 
Shares, the Holder may elect to receive shares equal to the value of this 
Warrant with respect to such Warrant Shares (whereupon the purchase rights 
under this Warrant as to such Warrant Shares will be canceled) by surrender 
of this Warrant at the principal office of the Company together with notice 
of such election in which event the Company shall issue to the Holder a 
number of shares of Equity Securities computed using the following formula:

                                  X = (Y)(A-B)
                                  ------------
                                       A

         Where   X -    The number of shares of Equity Securities
                        to be issued to Holder.


                                      5

<PAGE>

                 Y -    The number of shares of Warrant Shares as
                        to which such cancellation is to be
                        effected.

                 A -    The fair market value of one share of the
                        Equity Securities to be issued upon such
                        cancellation.

                 B -    Exercise Price (as adjusted to the date of such
                        calculations).

          5.2  For purposes of this Section, the Board of Directors of the 
Company shall determine the fair market value in its good faith.

6. RETURN OF WARRANT AND CERTIFICATES FOR WARRANT SHARES. Upon the exercise 
or cancellation of the purchase rights evidenced by this Warrant, one or more 
certificates for the number of Warrant Shares to be issued shall be issued as 
soon as practicable thereafter, and in any event within thirty (30) days of 
the delivery of the subscription notice. Together with such share 
certificate(s), the Company will return to the Holder (or to such other 
Person as the Holder may designate, so long as the Holder has complied with 
the applicable provisions of Section 10 as to the transfer of this Warrant to 
such other Person) this Warrant, after recording on the attached 
Exercise/Cancellation Schedule the date of such exercise or cancellation and 
the number of Warrant Shares as to which this Warrant is being exercised or 
canceled. 

7. RESERVATION OF WARRANT SHARES. The Company covenants that it will at all 
times keep available such number of authorized shares of its Equity 
Securities issuable upon exercise of this Warrant, free from all preemptive 
rights with respect thereto, which will be sufficient to permit the exercise 
or cancellation of the purchase rights under this Warrant for the full number 
of Warrant Shares specified herein. The Company further covenants that such 
Warrant Shares, when issued pursuant to the exercise of this Warrant, will be 
duly and validly issued, fully paid and nonassessable and free from all 
taxes, liens, and charges with respect to the issuance thereof. 

8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF PREVIOUSLY ISSUED WARRANT 
SHARES. The number of Previously Issued Warrant Shares, the kind of 
securities purchasable upon exercise or cancellation of rights under this 
Warrant and the Exercise Price shall be subject to adjustment from time to 
time as follows:

                  8.1 SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES. If the 
Company shall at any time prior to the expiration of this Warrant subdivide 
its Equity Securities by split-up or otherwise, or combine its capital stock, 
or issue additional securities as a dividend with respect to any shares of 
its Equity Securities, the number of Previously Issued Warrant Shares shall 
forthwith be proportionately increased in the case of a subdivision or stock 
dividend, or proportionately decreased in the case of a combination. 
Inversely proportional adjustments shall also be made to the Exercise Price 
payable per share, but the aggregate purchase price payable for the total 
number of Warrant Shares purchasable under this Warrant (as adjusted) shall 
remain the same. Any adjustment under this Section 7(a) shall become 
effective at the close of business on the date the subdivision or combination 
becomes effective, or as of the record date of such dividend, or in the event 
that no record date is fixed, upon the making of such dividend.

                  8.2 RECLASSIFICATION, REORGANIZATION, AND CONSOLIDATION. In 
case of any reclassification, capital reorganization, or change in the 
capital stock of the Company (other than as a result of a subdivision, 
combination, or stock dividend provided for in Section 8(a) above), then, as 
a condition of such reclassification, reorganization, or change, lawful 
provision shall be

                                      6

<PAGE>

made, and duly executed documents evidencing the same from the Company or its 
successor shall be delivered to the Holder, so that the Holder shall have the 
right at any time prior to the expiration of this Warrant to purchase, at a 
total price equal to that payable upon the exercise of this Warrant, the kind 
and amount of shares of stock and other securities and property receivable in 
connection with such reclassification, reorganization, or change by a holder 
of the same number of shares of capital stock as were purchasable by the 
Holder immediately prior to such reclassification, reorganization, or change. 
In any such case appropriate provisions shall be made with respect to the 
rights and interest of the Holder so that the provisions hereof shall 
thereafter be applicable with respect to any shares of stock or other 
securities and property deliverable upon exercise hereof, and appropriate 
adjustments shall be made to the Exercise Price per share payable hereunder, 
provided the aggregate purchase price shall remain the same.

          8.3 NOTICE OF ADJUSTMENT. When any adjustment is required to be 
made in the Previously Issued Warrant Shares, in the number or kind of shares 
purchasable upon exercise of this Warrant, or in the Exercise Price, the 
Company shall promptly notify the Holder of such event and the adjusted 
number of Previously Issued Warrant Shares, the adjusted Exercise Price and 
the number of shares and/or the type of securities or property thereafter 
purchasable upon exercise of or cancellation of rights under this Warrant.

9. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip representing 
fractional shares shall be issued upon the exercise or cancellation of rights 
under this Warrant, but in lieu of such fractional shares the Company shall 
make a cash payment therefor on the basis of the fair market value (as 
determined in good faith by the Company's Board of Directors) of one Warrant 
Share of the type in question.

10. NO STOCKHOLDER RIGHTS. Prior to exercise of this Warrant, the Holder 
shall not be entitled to any rights of a stockholder with respect to the 
Warrant Shares, including (without limitation) the right to vote such Warrant 
Shares, receive dividends or other distributions thereon, exercise preemptive 
rights or be notified of stockholder meetings, and such Holder shall not be 
entitled to any notice or other communication concerning the business or 
affairs of the Company. Notwithstanding the foregoing, the Company will give 
written notice to the Holders hereof at least 20 days prior to the date on 
which the Company closes its books or takes a record (i) with respect to any 
Distribution (as defined in the Reimbursement Agreement) upon the Equity 
Securities, (ii) with respect to any pro rata subscription offer to holders 
of the Equity Securities or (iii) for determining rights to vote with respect 
to any Liquidity Event (as defined below), Change of Control (as defined 
below), dissolution or liquidation. The Company will also give written notice 
to the Holders hereof at least 20 days prior to the date on which any 
Liquidity Event or Change of Control takes place. The terms "Liquidity Event" 
and "Change of Control" shall have the respective meanings given to them in 
the Loan Agreement dated August 18, 1997 among the Company and the lenders 
named on EXHIBIT A thereto. 

11. REGISTRATION RIGHTS; RELATED MATTERS. Within forty-five (45) days after 
the date hereof, the Company shall cause the Sixth Amended and Restated 
Investor Rights Agreement dated as of August 18, 1997 (the "IRA") to be 
amended so that (i) the Warrant Shares are "Registrable Securities" within 
the meaning of Section 1.1(f) of the IRA and (ii) the Holder shall have all 
of the rights of a holder of Registrable Securities under the IRA (provided 
that the Holder agrees to assume the obligations of a holder of Registrable 
Securities under the IRA). If the Company fails to so amend the IRA within 
such forty-five (45)-day period, the increase in the Earned Warrant 
Percentage on the date of this Warrant and each subsequent date shall be 
50.0% higher

                                       7

<PAGE>

than the amount set forth in Section 2(b) above (with respect to the Earned 
Warrant Percentage on the date of this Warrant) and 2(c) above (with respect 
to the Earned Warrant Percentage on each subsequent date).

12. SUCCESSORS AND ASSIGNS. The terms and provisions of this Warrant shall 
inure to the benefit of, and be binding upon, the Company and the Holders 
hereof and their respective successors and assigns.

          A Holder may transfer in whole or in part the purchase rights 
evidenced hereby to any third party to whom such rights may be transferred 
without registration or qualification under federal or state securities laws, 
provided: (a) the transferee or assignee receives a Warrant to purchase at 
least five percent (5%) of the Warrant Shares; (b) the Company is, within a 
reasonable time after such transfer or assignment, furnished with written 
notice of the name and address of such transferee or assignee; (c) such 
transferee or assignee agrees in writing to be bound by and subject to the 
terms and conditions of this Warrant; and (d) the transferor shall have 
delivered to the Company, if reasonably requested by counsel to the Company, 
an opinion of counsel substantially to the effect that the transfer or 
assignment can be effected without registration or qualification under 
applicable federal or state securities laws (or, at the Holders' option, a 
certification by the Holder to that effect in which the Holder agrees to 
indemnify and hold harmless the Company in respect of any violation of such 
securities laws in connection with such transfer). Upon surrender of this 
Warrant to the Secretary of the Company at its principal offices after any 
such transfer, the Company will issue one or more new Warrants of like tenor 
(in the name(s) of the Holder and/or the transferee(s), as appropriate) 
representing in the aggregate the purchase rights represented by this Warrant.

13. AMENDMENTS AND WAIVERS. Any term of this Warrant may be amended and the 
observance of any term of this Warrant may be waived (either generally or in 
a particular instance and either retroactively or prospectively), with the 
written consent of the Company and the holders of the Warrants representing a 
majority of the securities as to which all outstanding Warrants are then 
exercisable. Any waiver or amendment effected in accordance with this section 
shall be binding upon each holder of any Warrant Shares thereafter purchased 
under this Warrant, each future holder of all such Warrant Shares, and the 
Company.

14. EFFECT OF AMENDMENT OR WAIVER. The Holder acknowledges that by the 
operation of paragraph 13 hereof, the holders of the Warrants representing a 
majority of the securities as to which all outstanding Warrants are then 
exercisable will have the right and power to diminish or eliminate all rights 
of the Holder under this Warrant.

15. GOVERNING LAW. This Warrant shall be governed by the laws of the State of 
Delaware as applied to agreements among Delaware residents made and to be 
performed entirely within the State of Delaware.

                                           INTERNATIONAL WIRELESS
                                           COMMUNICATIONS HOLDINGS, INC.


                                           By:
                                              --------------------------------
                                           Name:
                                                ------------------------------
                                           Title:
                                                 -----------------------------

                                      8
<PAGE>

                                  SUBSCRIPTION



International Wireless Communications Holdings, Inc.
Attention:  Corporate Secretary



                  1. The undersigned hereby elects to purchase, pursuant to the
provisions of the Warrant to Purchase _______________ shares of _______________
_________________ stock of International Wireless Communications Holdings, Inc.
and held by the undersigned, ____________ shares of ________ stock of
International Wireless Communications Holdings, Inc. Payment of the exercise
price per share required under such Warrant accompanies this Subscription.

                  1. The undersigned hereby elects to receive shares equal to
the value of this Warrant as to _________ Warrant Shares in the manner specified
in Section 5 of the Warrant.


                  [Strike paragraph above that does not apply.]




                                           Date:
                                                ----------------------------
                                           Signature:
                                                     -----------------------
                                           Address:
                                                   -------------------------



Name in which shares should be registered:


------------------------------------


<PAGE>




                         EXERCISE/CANCELLATION SCHEDULE

Date                                    Number of Warrant Shares as to which 
                                        Warrant Exercised or Canceled





                                      2
<PAGE>



                                    EXHIBIT C

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT



                  ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of [_______]
(the "Agreement"), between IWC CHINA LIMITED, a Mauritius corporation (the
"Assignor"), and VANGUARD [CHINA, INC., a Delaware] corporation (the
"Assignee").

                  The Assignor wishes to assign its rights under Section 
1.2(c) of the Subscription Agreement, dated as of September 23, 1996, among 
Star Digitel Limited (the "Company"), Star Telecom Holding Limited ("STHL") 
and International Wireless Communications, Inc. ("IWC"), as amended by the 
Amendment to Subscription Agreement and Waiver, dated as of June 18, 1997, 
among the Company, STHL, IWC and Assignor (as amended, the "Subscription 
Agreement"), to the Assignee, and the Assignee wishes to assume all rights 
and obligations of the Assignor relating to the subscription of the Second 
IWC Shares (as defined in the Subscription Agreement).

                  NOW, THEREFORE, in consideration of the foregoing premises 
and other good and valuable consideration, the Assignor and the Assignee 
agree as follows:

                  1. ASSIGNMENT AND ASSUMPTION. The Assignor hereby assigns, 
transfers and conveys to the Assignee, and the Assignee hereby accepts and 
assumes, all rights and obligations of the Assignor under Section 1.2(c) of 
the Subscription Agreement relating to the subscription of the Second IWC 
Shares.

                  2. GOVERNING  LAW. This  Agreement  shall be governed by 
and  construed in accordance  with the laws of England and Wales.

                  3. COUNTERPARTS.  This  Agreement  may be  executed  in one 
or more  counterparts,  each of which shall be deemed an original, but all of 
which together shall constitute one and the same instrument.

                                      3
<PAGE>

                  IN WITNESS  WHEREOF,  the  undersigned  have executed  this 
 Agreement as of the date first above written.


ASSIGNOR:                                        ASSIGNEE:

IWC CHINA LIMITED                                VANGUARD [CHINA, INC.]


By:                                              By:
   ------------------------------------             --------------------------
        Name:                                           Name:
        Title:                                          Title:


Consented to pursuant to Section 1.1
of the Subscription Agreement by:

STAR TELECOM HOLDING LIMITED


By:
   -----------------------------------
        Name:
        Title: