<PAGE>
Portions of this Exhibit 10.16 have been omitted pursuant to a confidential
treatment request. The omitted material has been filed separately with the
Securities and Exchange Commission.

                                                                   EXHIBIT 10.16

                                                                  EXECUTION COPY


             SEVENTH AMENDMENT AND LIMITED TERM WAIVER AGREEMENT


SEVENTH AMENDMENT AND LIMITED TERM WAIVER AGREEMENT (this "Agreement") dated as
of February 17, 2003 among SR TELECOM INC., a corporation duly organized and
validly existing under the laws of Canada ("SRT"), COMUNICACION Y TELEFONIA
RURAL S.A., a sociedad anonima duly organized and validly existing under the
laws of Chile (the "Borrower"), EXPORT DEVELOPMENT CANADA (formerly Export
Development Corporation), a corporation established by an Act of the Parliament
of Canada ("EDC"), and INTER-AMERICAN DEVELOPMENT BANK, an international
organization established by the Articles of Agreement among its member countries
("IDB", together with EDC, the "Senior lenders").

WHEREAS, the Borrower and the Senior Lenders are parties to a Common Agreement
dated as of December 22, 1999 (as amended, modified and supplemented from time
to time, the "Common Agreement"),

WHEREAS, the Borrower and EDC are parties to an Amended and Restated Loan
Agreement dated as of December 22, 1999 (as amended, modified and supplemented
from time to time, the "EDC Loan Agreement);

WHEREAS, the Borrower and IDB are parties to a Loan Agreement dated as of
December 22, 1999 (as amended, modified and supplemented from time to time, the
"IDB Loan Agreement");

WHEREAS, SRT, the Borrower and the Senior Lenders are parties to (i) an amended
and restated Project Funds Agreement dated as of December 22, 1999 (as amended,
modified and supplemented from time to time, the "Project Funds Agreement") and
(ii) an amended and restated Direct Agreement dated as of December 22, 1999 (as
amended, modified and supplemented from time to time, the "Direct Agreement");

WHEREAS, SRT and the Senior Lenders are parties to an amended and restated
Performance Undertaking Agreement dated as of December 22, 1999 (as amended,
modified and supplemented from time to time, the "Performance Undertaking
Agreement, and, together with the Common Agreement, the EDC Loan Agreement, the
IDB Loan Agreement, the Project Funds Agreement and the Direct Agreement, the
"Relevant Agreements"); and

WHEREAS, SRT and the Borrower requested that the Senior Lenders temporarily
waive certain existing and anticipated Defaults and Events of Default and to
amend certain provisions of the Relevant Agreements, and the Senior Lenders
granted such waivers and amendments in accordance with the terms and conditions
set forth in the Sixth Amendment and Limited Term Waiver Agreement dated as of
February 20, 2002 among SRT, the Borrower and the Senior Lenders (the "Sixth
Amendment and Limited Term Waiver Agreement").

WHEREAS, SRT and the Borrower have provided the Senior Lenders with duly
executed copies of (i) the Master and Share Exchange Agreement dated as of July
15, 2001 among the Borrower, Chilean Holdco, BVI Holdco, Rural
Telecommunications Chile S.A., a sociedad anonima duly


<PAGE>
                                       2


organized and validly existing under the laws of Chile ("RTC"), Gilat-to-Home
Latin America (Holland), N.V., a corporation duly incorporated and validly
existing under the laws of the Netherlands and Gilat-to-Home Chile S.A.,
sociedad anonima duly organized and validly existing under the laws of Chile
("GTH Chile")(as such agreement may be amended from time to time, the "Master
and Share Exchange Agreement"), (ii) the Settlement and Indemnification
Agreement dated as of January 29, 2002 among the Borrower, Chilean Holdco, BVI
Holdco, RTC GTH Chile, Gila-to-Home Latin America (Holland), N.V., a corporation
duly incorporated and validly existing under the laws of the Netherlands and
Gilat Satellite Networks Ltd., a company duly incorporated and validly existing
under the laws of the State of Israel (as such agreement may be amended from
time to time the "Settlement Agreement") and (iii) the Contribution Agreement
dated as of June 30, 2001 among RTC, GTH Chile and Gilat-to-Home Latin America
(Holland) N.V., a corporation duly incorporated and validly existing under the
laws of the Netherlands (as such agreement may be amended from time to time, the
"Contribution Agreement" and, together with the Master and Share Agreement and
the Settlement Agreement, the "Gilat Transaction Documents") and the Senior
Lenders have reviewed the Gilat Transaction Documents.

WHEREAS, SRT and the Borrower have requested that the Senior Lenders further
temporarily waive certain existing and anticipated Defaults and Events of
Default and amend certain provisions of the Relevant Agreements, and the Senior
Lenders are willing to grant such waivers and amendments on the terms and
conditions set forth below.

NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS. Except as otherwise defined in this Agreement, terms
defined in the Common Agreement are used herein (including the recitals hereto)
as defined therein.

SECTION 2. SEVENTH AMENDMENT SPECIFIED DEFAULTS. As used herein, "Seventh
Amendment Specified Defaults" shall mean the following continuing Defaults and
Events of Default:

(a)      the Defaults and the Events of Default which have resulted from the
         Borrower's failure to;

         (i)      prepay the Senior Loans on January 31, 2003 in accordance with
                  and to the extent provided for in Section 2.06(d) of the
                  Common Agreement; and

         (ii)     demonstrate by January 31, 2003 that Financial Completion
                  occurred no later than December 31, 2002 as required by
                  Section 8.20 of the Common Agreement;

(b)      the Defaults and the Events of Default caused by SRT's failure to
         permit the Borrower to pay on January 31, 2003 an amount equal to that
         portion of the aggregate outstanding Obligations which the Borrower
         would be required to pay in order to permit the Borrower to comply with
         the requirements of Section 8.20(f) of the Common Agreement as required
         by Section 2.01(a)(v) of the Project Funds Agreement;

(c)      the Default and the Event of Default caused by the transfer on July 19,
         2001 from Antonio Ortuzar Vicuna to the Borrower of 4,999 shares in
         RTC and the transfer on July 20, 2001 from Rodrigo Marre Grez to the
         Borrower of 5,000 shares in RTC and the

<PAGE>
                                       3


         holding by the Borrower of 9,999 shares in RTC until the transfer of
         such shares to Antonio Ortuzar Vicuna on August 22, 2001, in breach of
         the covenant set forth in Section 8.14 of the Common Agreement;

(d)      the Defaults and Events of Default caused by the Borrower entering into
         transactions with RTC between July 15, 2001 and the Effectiveness Date
         which were not (a) in the ordinary course of business and (b) upon
         terms no less favorable to the Borrower than it would have obtained in
         a comparable arm's-length transaction with a Person which is not an
         Affiliate, in breach of the covenant set forth in Section 8.19 of the
         Common Agreement;

(e)      the Defaults and Events of Default caused by the Borrower entering into
         the Master and Share Exchange Agreement and becoming obligated by
         Section 3.3(i) of the Master and Share Exchange Agreement (as such
         obligation was subsequently modified by Section 2.10 of the Settlement
         Agreement) in breach of the covenant set forth in Section 8.08 of the
         Common Agreement;

(f)      the Specified Defaults (as such term is defined in the Sixth Amendment
         and Limited Term Waiver Agreement);

(g)      the Borrower's anticipated continuing non-compliance with, or breach
         of, the covenants and requirements listed in clause (a) and (f) above
         for additional relevant measuring periods occurring during the Waiver
         Period (as defined in Section 3 below); and

(h)      SRT's anticipated continuing non-compliance with, or breach of, the
         covenants and requirements listed in clause (b) and (f) above for
         additional relevant measuring periods during the Waiver Period (as
         defined in Section 3 below).

SECTION 3. TEMPORARY WAIVER. The Senior Lenders agree, on the terms and subject
to the conditions hereof, temporarily to waive during the period (the "Waiver
Period") from and after the date the conditions specified in Section 5 have been
satisfied (the "Effective Date") until (but excluding) the Waiver Termination
Date (as defined in Section 6 below) the Seventh Amendment Specified Defaults.
Notwithstanding such temporary waiver, it is understood by the Borrower and SRT
that the Senior Lenders have not waived, other than the Seventh Amendment
Specified Defaults, any Default or Event of Default or any rights or remedies in
respect thereof under the Transaction Documents or otherwise. During the Waiver
Period (and thereafter), the Senior Lenders shall be permitted to exercise all
of their rights and remedies under the Transaction Documents (other than with
respect to the Seventh Amendment Specified Defaults), except as may be expressly
limited or provided otherwise in this Agreement.

SECTION 4. RELEVANT AGREEMENT AMENDMENTS. The Senior Lenders agree, subject to
the satisfaction of the conditions precedent specified in Section 5 below, to
amend certain provisions of the Relevant Agreements as follows:

(a)      the Common Agreement shall be amended as follows:

<PAGE>
                                       4


(i)      Section 1.01 of the Common Agreement shall be amended by inserting the
         following definitions in alphabetical order therein:

         ""RTC shall mean Rural Telecommunications Chile S.A,, a sociedad
         anonima duly organized and validly existing under the laws of Chile."

         ""Seventh Amendment and Limited Term Waiver Agreement" shall mean the
         Seventh Amendment and Limited Term Waiver Agreement dated as of
         February 17, 2003 among the Borrower, SRT and the Senior Lenders.";

(ii)     the definition of "CIBC Facility" shall be amended by replacing the
         words "February 8, 2002" with the words "February 10, 2003".

(iii)    the definition of "Deferred Amount" in Section 1.01 of the Common
         Agreement shall be amended by deleting the definition in its entirety
         and replacing it with the following:

         ""Deferred Amount" shall mean, on any date of determination, the sum of
         (a) $5,250,000, being the amount of principal which would have been
         payable under the Senior Loan Agreements (as amended by the Sixth
         Amendment and Limited Term Waiver Agreement) on the Principal Payment
         Date occurring on May 15, 2003 in the event that the Senior Loan
         Agreements had not been amended by the Seventh Amendment and Limited
         Term Waiver Agreement plus (b) $3,250,000, being the amount of
         principal which would have been payable under the Senior Loan
         Agreements on the Principal Payment Date occurring on November 15, 2003
         in the event that the Senior Loan Agreements had not been amended by
         the Seventh Amendment and Limited Term Waiver Agreement less (c)
         $2,000,000 being the amount of principal payable on February 18, 2003
         in accordance with the Senior Loan Agreements (as amended by the
         Seventh Amendment and Limited Term Waiver Agreement), if such payment
         is made, less (d) $1,000,000 being the amount of principal payable on
         May 15, 2003 in accordance with the Senior Loan Agreements (as amended
         by the Seventh Amendment and Limited Term Waiver Agreement), if such
         payment is made, less (c) $3,000,000 being the amount of principal
         payable on November 15, 2003 in accordance with the Senior Loan
         Agreements (as amended by the Seventh Amendment and Limited Term Waiver
         Agreement), if such payment is made, less (f) (without duplication) the
         amounts of principal paid by the Borrower to the Senior Lenders on or
         after January 31, 2003 and on or prior to such date of determination by
         transfer from the Accrual Accounts in accordance with the provisions of
         Sections 4.04(b) and 4.05(b).";

(iv)     The definition of "SRT Budget" shall be amended by (1) replacing the
         word "the three-year" with the word "a draft or final copy, as the case
         may be, of a one-year", (2) deleting the words "approved by SRT's board
         of directors" and (3) replacing the words "on December 21, 2001" with
         the words "in accordance with Section 5.1 (a)(v)(D) of the Direct
         Agreement."

<PAGE>

                                       5


         (v)      The first sentence of Section 8.01 of the Common Agreement
                  shall be amended by deleting the words "and to PWC" where they
                  appear after the words "The Borrower shall deliver to the
                  Senior Lenders";

         (vi)     Section 8.01(a) of the Common Agreement shall be amended by
                  (1) deleting the word ", and" where it appears in the fourth
                  line after the words "related balance sheet of the Borrower as
                  at the end of such fiscal year" and (2) inserting the words
                  "together with separate statements of income, retained
                  earnings and cash flows of RTC for such fiscal year, the
                  related balance sheet of RTC as at the end of such fiscal year
                  and consolidated statements of income, retained earnings, cash
                  flows and the related balance sheet for both CTR and RTC. Such
                  financial statements shall be" after the words "related
                  balance sheet of the Borrower as at the end of such financial
                  year," appearing in the fourth line of Section 8.01(a);

         (vii)    Section 8.0l(b) of the Common Agreement shall be amended by
                  (1) deleting "," where it appears in the fifth line after the
                  words "related balance sheet of the Borrower as at the end of
                  such period" and (2) inserting the words ", together with
                  separate unaudited interim statements of income, retained
                  earnings and cash flows of RTC for such period and for the
                  period from the beginning of the respective fiscal year to the
                  end of such period, the related balance sheet of RTC as at the
                  and of such period and consolidated statements of income,
                  retained earnings, cash flows and the related balance sheet
                  for both CTR and RTC. Such financial statements shall be"
                  after the words "and the related balance sheet of the Borrower
                  as at the end of such period" appearing on the fourth and
                  fifth lines of Section 8.01(b);

         (viii)   Section 8.01 (c) of the Common Agreement shall be amended by
                  (1) replacing the words "eight Business Days" where they
                  appear after the words "in any event" in the first line
                  thereof with the words "fifteen Business Days" and (2)
                  replacing the words "attached to the Fifth Amendment as
                  Exhibit A, together with (i) a variance analysis between the
                  information provided in such monthly report and the Base Case
                  and (ii) a report prepared by the management of the Borrower
                  explaining any material variances" with the following text:

                  "attached to the Seventh Amendment and Limited Term Waiver
                  Agreement as Exhibit A, including (i) a monthly comparison of
                  the information contained in the monthly report with the
                  information provided in the monthly forecasts delivered to the
                  Senior Lenders in accordance with Section 8.01(g) and (ii) an
                  annual comparison the information provided in the monthly
                  report against the forecasts for the relevant year set out in
                  the business plan delivered to the Senior Lenders in
                  accordance with Section 8.01(h);";

         (ix)     Section 8.01(g) of the Common Agreement shall be amended by
                  (1) replacing the words "no later than ten Business Days"
                  where they appear at the beginning of the clause with the
                  words "no later than fifteen Business Days", (2) deleting the


<PAGE>
                                       6


                  words "and PWCS" where they appear after the words "the
                  Borrower shall deliver to the Senior Lenders and" and (3)
                  replacing the word "weekly" where it appears at the end of the
                  sub-section after the words "three-month forecasts for the
                  Borrower shown on a" with the word "monthly";

         (x)      Section 8.10(g) of the Common Agreement shall be amended by
                  replacing the words "$450,000 in any fiscal quarter" with the
                  words "$1,250,000 in any fiscal year"; and

         (xi)     Section 8.10(h) of the Common Agreement shall be deleted in
                  its entirety and replaced with the following text:

                           "(h) Capital Expenditures. The Borrower shall not
                  incur nor pay Capital Expenditures in excess of $1,200,000
                  during the 2003 calendar year. In calendar years subsequent to
                  2003 the Borrower shall not incur nor pay any Capital
                  Expenditures without the prior written consent of the Senior
                  Lenders.";

         (xii)    Section 8.19 of the Common Agreement shall be amended by (1)
                  replacing the word "Enter" with the words "the Borrower shall
                  not enter" at the beginning of the Section and (2) adding the
                  words "other than transactions with RTC in connection with
                  which the Borrower renders operational services to RTC
                  provided that the receivables generated by such transactions
                  shall at no time exceed $350,000" at the end of the Section.

(b)      the EDC Loan Agreement shall be amended as follows:

         (i)      Section 3.01 of the EDC Loan Agreement shall be amended by
                  deleting the second-last sentence thereof and replacing it
                  with the following:

                           "Notwithstanding the foregoing, the Lender agrees
                  that the payment of the portion of the Deferred Amount due and
                  payable to the Lender shall be deferred as specified in this
                  paragraph, and the Borrower shall pay the Lender (a) the
                  amount of $1,090,908 on February 18, 2003, less any amounts
                  that have been transferred from the EDC Accrual Account in
                  accordance with the proviso in Section 4.04(b) of the Common
                  Agreement between January 31, 2003 and February 18, 2003, (b)
                  the amount of $538,462 on May 15, 2003, together with all
                  amounts of interest due and payable to the Lender, less any
                  amounts that have been transferred from the EDC Accrual
                  Account in accordance with the proviso in Section 4.04(b) of
                  the Common Agreement between February 18, 2003 and May 15,
                  2003, (c) the amount of $1,615,385 on November 15, 2003,
                  together with interest thereon, less any amounts that have
                  been transferred from the EDC Accrual Account in accordance
                  with the proviso in Section 4.04(b) of the Common Agreement
                  between May 16, 2003 and November 15, 2003 and (d) the amount
                  of $1,346,153 on May 15, 2004, together with interest thereon,
                  less any amounts that have been transferred from the EDC
                  Accrual Account in accordance


<PAGE>
                                       7


                  with the proviso in Section 4.04(b) of the Common Agreement
                  between November 16, 2003 and May 15, 2004.";

(c)      the IDB Loan Agreement shall be amended as follows:

         (i)      Section 3.01 of the IDB Loan Agreement shall be amended by
                  inserting the following prior to the last sentence thereof:

                           "Notwithstanding the foregoing, the Lender agrees
                  that the payment of the portion of the Deferred Amount due and
                  payable to the Lender shall be deferred as specified in this
                  paragraph, and the Borrower shall pay the Lender (a) the
                  amount of $909,092 on February 18, 2003, less any amounts that
                  have been transferred from the IDB Accrual Account in
                  accordance with the proviso in Section 4.04(b) of the Common
                  Agreement between January 31, 2003 and February 18, 2003, (b)
                  the amount of $461,538 on May 15, 2003, together with all
                  amounts of interest then due and payable to the Lender, less
                  any amounts that have been transferred from the IDB Accrual
                  Account in accordance with the proviso in Section 4.04(b) of
                  the Common Agreement between February 18, 2003 and May 15,
                  2003, (c) the amount of $1,384,615 on November 15, 2003,
                  together with interest thereon, less any amounts that have
                  been transferred from the IDB Accrual Account in accordance
                  with the proviso in Section 4.04(b) of the Common Agreement
                  between May 16, 2003 and November 15, 2003 and (d) the amount
                  of $1,153,847 on May 15, 2004, together with interest thereon,
                  less any amounts that have been transferred from the IDB
                  Accrual Account in accordance with the proviso in Section
                  4.04(b) of the Common Agreement between November 16, 2003 and
                  May 15, 2004.";

(d)      The Direct Agreement shall be amended as follows:

         (i)      Section 5.1(a)(v) of the Direct Agreement shall be amended by
                  (1) replacing the phrase "10 Business Days" where it appears
                  at the beginning of Section 5.1(a)(v)(B) and Section
                  5.1(a)(v)(C) with the phrase "fifteen Business Days", (2)
                  adding the words "and a monthly cashflow statement" after the
                  words "monthly income statements and balance sheets" where
                  they appear in the second line of Section 5.1(a)(v)(B) and (3)
                  replacing the existing Section 5.l(a)(v)(D) with the following
                  text: "by no later than November 15 each year, a draft of the
                  SRT Budget for the subsequent year and by no later than
                  December 1 in each year, a copy of the SRT Budget for the
                  subsequent year, as approved by SRT's board of directors,";
                  and

         (ii)     The word "and" appearing at the end of Section 5.1(a)(vi)
                  shall be deleted and inserted after the end of Section
                  5.1(a)(vii) and the following text shall be added as a new
                  Section 5.l(a)(viii) after the end of Section 5.l(a)(vii):

                           "(viii) by no later than fifteen Business Days after
                  each Quarterly Date, (1) quarterly cash forecasts for the
                  subsequent quarter and quarter-end cash


<PAGE>
                                       8


                  balance information for the preceding quarter together with an
                  analysis of the variance between the actual quarter-end cash
                  balance and the projected quarter-end cash balance as provided
                  to the Senior Lenders in accordance with Section 5.1(a)(v)(D)
                  and (2) quarterly information regarding SRT's acquisitions
                  since January 1, 2000, including information regarding revenue
                  contribution, cost of goods sold and research and
                  development.".

SECTION 5. EFFECTIVENESS. This Agreement shall become effective on the date on
which each of the following items has been satisfied (or waived by the Senior
Lenders) in form and substance satisfactory to the Senior Lenders:

(a)      each Senior Lender shall have received (i) an executed counterpart of
         this Agreement from each other Senior Lender, the Borrower and SRT and
         (ii) an executed version of amendments of the Project Accounts
         Agreement necessary in order to reflect the amendments to Section 4 of
         the Common Agreement set out in the Sixth Amendment and Limited Term
         Waiver Agreement;

(b)      SRT shall have provided evidence satisfactory to the Senior Lenders of
         the payment in full of all outstanding and invoiced fees and expenses
         of the Senior Lenders (including, without limitation, fees and expenses
         which have been invoiced by consultants and attorneys retained to
         assist the Senior Lenders);

(d)      SRT shall have paid a forbearance fee in the amount of [    ]* to each
         of the Senior Lenders;

(e)      SRT shall have provided the Senior Lenders with (i) written
         confirmation, in form and substance satisfactory to the Senior Lenders,
         from Canadian Imperial Bank of Commerce that Canadian Imperial Bank of
         Commerce has agreed to increase the $5,000,000 annual cap on
         inter-company loans from SRT to the Borrower set out in Section 17 of
         the CIBC Facility to $6,000,000 and (ii) a copy of the most recent
         version of documentation relating to the CIBC Facility reflecting such
         agreement including any annexes containing definitions which are
         attached thereto;

(f)      SRT shall have provided the Senior Lenders with any and all
         documentation related to (i) the legal formation, shareholding and
         current operation and management of RTC, (ii) the actual or proposed
         acquisition of shares of RTC by the Borrower or any other SRT Party (as
         such term is defined in the Transfer Restrictions Agreement) and (iii)
         any agreement or other document concerning or documenting the actual or
         proposed issuance of shares of the Borrower in connection with the
         acquisition of any shares of RTC; and

(g)      the Senior Lenders shall have received the following legal opinions,
         each in form and substance satisfactory to the Senior Lenders: (a) the
         corporate and no-breach opinion of Fasken Martineau DuMoulin LLP,
         Canadian counsel to SRT, (b) the opinion of Pillsbury Winthrop, New
         York counsel to SRT and the Borrower and (c) the opinion of Baker &
         McKenzie, Chilean counsel to the Borrower.

* Material omitted pursuant to a request for confidential treatment. The
omitted material has been filed separately with the Securities and Exchange
Commission.

<PAGE>
                                       9


SECTION 6. TERMINATION. The temporary waiver provided in Section 3 shall
terminate and be of no further force or effect at 10:00 a.m. (New York City
time) on the date (the "WAIVER TERMINATION DATE") which is the earliest of;

(a)      February 13, 2004;

(b)      the date of the occurrence of any of the events listed in Sections
         9(h), 9(i), and 9(j) of the Common Agreement with respect to SRT;

(c)      the date of the occurrence of any of the events listed in Sections
         9(h), 9(i), and 9(j) of the Common Agreement with respect to the
         Borrower;

(d)      the date of the occurrence of any one or more of the following events:

         (i)      a breach by the Borrower or SRT of any of the representations,
                  warranties, covenants, or other provisions contained in
                  Sections 9, 10(a) or 10(b) of this Agreement;

         (ii)     a breach by the Borrower or SRT of any of the representations,
                  warranties, covenants, or other provisions contained in this
                  Agreement (excluding the representations, warranties,
                  covenants, or other provisions referred to in Section 6(d)(i)
                  above) which breach shall continue for five (5) Business Days
                  after the Borrower or SRT has knowledge thereof; or

         (iii)    any Event of Default or Default (without regard to the giving
                  of any notice or the lapse of time), other than a Seventh
                  Amendment Specified Default, shall occur and be continuing;

(e)      the date of the occurrence of any of the events listed in Section 5.1
         of the Trust Indenture;

(f)      the date of the breach of any of the covenants listed in Section 13 or
         Section 14 (or any other section of the CIBC Facility as it may be
         amended from time to time that imposes covenants upon SRT) of the CIBC
         Facility;

(g)      the date that the Borrower or SRT takes any action to challenge
         (including, without limitation, to assert in writing any challenge to)
         the validity, perfection or enforceability of this Agreement, any
         Transaction Document or any provision of any such agreement or
         document, or the security interests and Liens provided thereunder;

(h)      the date that any secured creditor of the Borrower or SRT initiates
         steps to, or notifies the Borrower or SRT of its intent to, foreclose
         on any assets of the Borrower or SRT, with respect to which such
         creditor holds a Lien; and

(i)      the date of the occurrence of any one or more of the following events:

         (i)      the Borrower issues any shares in its capital stock without
                  the prior written consent of the Senior Lenders;

<PAGE>
                                       10


         (ii)     SRT consents to any action taken by any SRT Party that would
                  permit, allow or authorize the issuance of any shares in the
                  capital stock of the Borrower without the prior written
                  consent of the Senior Lenders;

         (iii)    the Borrower acquires, takes title to or consummates a legal
                  right to acquire any shares of capital stock in RTC without
                  the prior written consent of the Senior Lenders.

From and after the Waiver Termination Date, the temporary waivers set forth
herein shall terminate and be of no further force or effect, and the Senior
Lenders shall be entitled to immediately exercise and enforce any and all rights
and remedies available to the Senior Lenders as a consequence of any (inter
alia) Seventh Amendment Specified Defaults that have occurred prior to, during
or after the Waiver Period. Except as otherwise provided herein, all other
provisions of this Agreement shall survive the Waiver Termination Date and shall
continue to be binding upon the parties hereto.

SECTION 7. AMENDMENTS; EXTENSIONS. Except as expressly provided herein, the
terms of this Agreement may be modified, amended or waived only by an instrument
in writing executed by the Borrower, SRT and the Senior Lenders. It is
understood and agreed that the Senior Lenders are not and shall not be under any
obligation, express or implied, to consent to any modification or amendment
hereof or to any extension of the Waiver Period.

SECTION 8. CONTINUING EFFECT. Except as expressly provided herein, the Relevant
Agreements and all other Transaction Documents shall remain unchanged and in
full force and effect, and all rights, powers and remedies of the Senior Lenders
are hereby expressly reserved. Without in any way limiting the generality of the
foregoing, the Borrower and SRT shall be liable in accordance with the
Transaction Documents for any and all sums and charges due pursuant thereto and
shall timely pay, during the Waiver Period, all obligations coming due and
payable under the Transaction Documents (including to the extent modified
herein). Except to the extent expressly waived herein, SRT and the Borrower
remain obligated by the representations, warranties, covenants, and other
provisions set forth in the Transaction Documents.

SECTION 9. REPRESENTATIONS AND WARRANTIES. Each of the Borrower and SRT
represents and warrants to the Senior Lenders that:

(a)      each of the Borrower and SRT has the full authority and legal right and
         power to execute and deliver this Agreement and to perform the terms
         hereof and the transactions contemplated hereby;

(b)      each of the Borrower and SRT has taken all necessary corporate or other
         action on the part of such party to be required to be taken in
         connection with the execution, delivery and performance of this
         Agreement and the transactions contemplated hereby;

(c)      the execution, delivery and performance by such party does not
         constitute a violation or breach of such party's articles of
         incorporation, by-laws, or material agreements or any law by which such
         party is bound;

(d)      the Borrower has no Indebtedness other than Permitted Indebtedness;


<PAGE>
                                       11


(e)      SRT has provided to the Senior Lenders all documents and agreements
         relating to (i) Indebtedness of SRT in excess of $5,000,000 and (ii)
         any pledge of, or security interest in, any asset of the Borrower and
         SRT; and listed on Schedule 1 hereto are all payments of principal of
         Indebtedness of SRT in excess of $5,000,000 scheduled to become due at
         any time from January 31, 2003 to January 31, 2004;

(f)      as of the date hereof (i) RTC is not a Subsidiary of the Borrower, (ii)
         RTC is not an Affiliate of the Borrower (other than by means of its
         contractual obligations regarding the operation of RTC in accordance
         with the provisions of Section 6.1 of the Master and Share Exchange
         Agreement) and (iii) the Borrower does not hold any shares of capital
         stock in RTC;

(g)      as of the date hereof, the representation set forth in Section 3.03 of
         the Transfer Restrictions Agreement is true and correct;

(h)      SRT and the Borrower have provided the Senior Lenders with all material
         documents and factual information relating to (i) the acquisition by
         the Borrower of shares in the capital stock of RTC in accordance with
         the provisions of the Master and Share Exchange Agreement or otherwise,
         (ii) the issuance of stock in the Borrower in accordance with
         provisions of the Master and Share Exchange Agreement or otherwise,
         (iii) any existing or proposed transaction with GTH Chile or any
         Affiliate thereof, (iv) the terms upon which shares of capital stock in
         RTC are held by Antonio Ortuzar Vicuna and any instruction or direction
         to Antonio Ortuzar Vicuna regarding the disposition of such shares and
         (v) any other proposed or actual transaction to which the Borrower is
         or would be a party and that would have an adverse effect on the rights
         of the Senior Lenders under this Agreement or any other Financing
         Document;

(i)      the Borrower and RTC (to the knowledge of the Borrower), as the case
         may be, are in compliance with its or their respective obligations
         under (i) the Master and Share Exchange Agreement (other than the
         obligation set forth in Section 3.3(i) of the Master and Share Exchange
         Agreement as modified by Section 2.10 of the Settlement Agreement (ii)
         the Settlement Agreement and (iii) the Contribution Agreement;

(j)      as of the date hereof no legal or arbitral proceedings, or any
         proceedings by or before any governmental or regulatory authority or
         agency, are now pending or (to the knowledge of the Borrower, Chilean
         Holdco or BVI Holdco) are threatened against the Borrower, Chilean
         Holdco, BVI Holdco or RTC arising out of or in connection with the
         Master and Share Exchange Agreement, the Settlement Agreement or the
         Contribution Agreement;

(k)      as of the date hereof, the aggregate outstanding principal amount of
         the Operating Loans Facility (as such term is defined in the CIBC
         Facility) is $5,000,000 Canadian;

(l)      there are no Defaults other than the Seventh Amendment Specified
         Defaults.

SECTION 10. COVENANTS.

(a)      SRT covenants and agrees that, until the indefeasible payment in full
         of the Obligations:

<PAGE>
                                       12


         (i)      it shall pay a deferral fee pro rata to each of the Senior
                  Lenders on each of November 15, February 15, May 15 and August
                  15 in each year commencing August 15, 2003 and ending on the
                  next such date after the date on which the Deferred Amount is
                  paid in full. The deferral fee shall be calculated on the
                  basis of the daily average outstanding portion of the Deferred
                  Amount which was due to such Senior Lender in accordance with
                  the terms of the Senior Loan Agreements during the previous
                  quarter at a rate per annum equal to [    ]*;

         (ii)     it shall pay from time to time, but no later than 10 days
                  after request and submission of detailed invoices therefor
                  (provided that such invoices shall not be required to reveal
                  privileged information), all reasonable fees, expenses and
                  disbursements of the Senior Lenders (including, but not
                  limited to, the fees, expenses and costs of legal counsel and
                  financial advisors to the Senior Lenders);

         (iii)    it shall provide the Senior Lenders with the proposed terms of
                  any amendment or renewal of the CIBC Facility or the Trust
                  Indenture within five (5) Business Days of the receipt of
                  proposal by SRT thereof;

         (iv)     during the Waiver Period, it shall not (A) incur additional
                  indebtedness other than indebtedness permitted by the terms of
                  Section 4.2.1 of the Trust Indenture and Section 14(e) of the
                  CIBC Facility (or any other section of the CIBC Facility as it
                  may be amended from time to time that permits the incurrence
                  by SRT of additional indebtedness), (B) exercise any rights
                  under Section 12.0(b) of the CIBC Facility, (C) cause or
                  permit any change to the terms of Section 4.2.1 of the Trust
                  Indenture or Section 14(e) of the CIBC Facility (or any other
                  section of the CIBC Facility as it may be amended from time to
                  time that permits the incurrence by SRT of additional
                  indebtedness), or (D) cause or permit any change to the Trust
                  Indenture or the CIBC Facility which would have the effect of
                  (x) shortening the maturity thereof, (y) granting security
                  over assets of SRT in favor of Indebtedness incurred under the
                  terms of the Trust Indenture or the CIBC Facility, even if
                  such grant of security would be permitted by Section 5.2(c) of
                  the Direct Agreement or (z) otherwise adversely affecting the
                  position of the Senior Lenders;

         (v)      during the Waiver Period, it will not make any voluntary
                  prepayment including, without limitation, a redemption or
                  partial redemption of debentures or the purchase of debentures
                  for cancellation in accordance with Article 3 of the Trust
                  Indenture with respect to any Indebtedness. Notwithstanding
                  the foregoing, nothing in this Section 10(a)(v) shall preclude
                  the fulfillment by SRT of any payment obligation imposed by
                  this Agreement or any of the Financing Documents; and

         (vi)     in the event that the provisions of this Agreement or any of
                  the Financing Documents require SRT to make intercompany loans
                  to the Borrower during the Waiver Period in excess of the
                  annual $6,000,000 cap imposed by Section 17 of the CIBC
                  Facility, SRT will use its best efforts to obtain a waiver or
                  amendment

* Material omitted pursuant to a request for confidential treatment. The
omitted material has been filed separately with the Securities and Exchange
Commission.

<PAGE>
                                       13


                  of Section 17 of the CIBC Facility and take such other steps
                  as may be necessary in order to allow it to make such
                  intercompany loans.

(b)      the Borrower or SRT, as the case may be, shall give prompt (but in no
         event later than two (2) Business Days after the occurrence thereof)
         notice by facsimile to the Senior Lenders of any event or condition
         described in Section 6 (other than Section 6(a));

(c)      the Borrower or SRT, as the case may be, shall provide the Senior
         Lenders with any additional information that either of the Senior
         Lenders shall reasonably request promptly upon receipt of such
         request;

(d)      the Borrower or SRT, as the case may be, shall provide the Senior
         Lenders with either (i) a duly executed copy of any promissory note
         evidencing Subordinated Debt (as defined in the Intercompany Loans
         Subordination Agreement dated as of May 15, 2002 among SRT, the
         Borrower and the Senior Lenders (the "SUBORDINATION AGREEMENT")) or
         (ii) in the event that any payment obligations under the Financing
         Documents payable by the Borrower are satisfied by means of a direct
         payment from SRT, a duly executed copy of a letter of instruction from
         the Borrower to SRT instructing SRT to apply the proceeds of
         Subordinated Debt (as defined in the Subordination Agreement) to
         payment of the Senior Obligations (as defined in the Subordination
         Agreement);

(e)      the Borrower covenants and agrees that it shall take all actions under
         applicable laws and regulations before the Central Bank of Chile in
         order to duly report the amendments set out in Section 4 within ten
         days of the date hereof;

(f)      the Borrower shall not enter into any amendment or modification of
         either the Master and Share Exchange Agreement or the Settlement
         Agreement without the prior written consent of the Senior Lenders;

(g)      SRT and the Borrower shall provide the Senior Lenders with all material
         documents and factual information, promptly upon such information
         becoming available to them at any time after the Effective Date,
         relating to (i) the acquisition by the Borrower of shares in the
         capital stock of RTC in accordance with the provisions of the Master
         and Share Exchange Agreement or otherwise, (ii) the issuance of stock
         in the Borrower of in accordance with provisions of the Master and
         Share Exchange Agreement or otherwise, (iii) any existing or proposed
         transaction with GTH Chile or any Affiliate thereof (iv) any other
         proposed or actual transaction to which the Borrower is or would be a
         party and that would have an adverse effect on the rights of the Senior
         Lenders under this Agreement or any other Financing Document;

(h)      SRT shall submit to the Senior Lenders a monthly summary of
         developments and negotiations regarding Closing (as such term is
         defined in the Master and Share Exchange Agreement). Such summary shall
         be signed by an Authorized Officer of SRT and shall be delivered to the
         Senior Lenders contemporaneously with the monthly report required to be
         delivered to the Senior Lenders in accordance with Section 8.01 (c) of
         the Common Agreement. Such summary shall be accompanied by (i) a
         certificate signed by an Authorized Officer of SRT confirming the truth
         and correctness of the representations


<PAGE>
                                       14


         and warranties contained in Sections 9(f), (g), (h) and (j) as of the
         date of delivery of such certificate and (ii) a certificate signed by
         an Authorized Officer of CTR confirming the truth and correctness of
         the representations and warranties contained in Sections 9(i) and (1)
         as of the date of delivery of such certificate;

(i)      neither the Borrower nor any officer or Authorized Officer of the
         Borrower shall, in its or their capacity as operator of RTC or
         otherwise, permit or allow RTC to take any one or more of the following
         actions:


         (i)      create, incur or suffer to exist any additional Indebtedness
                  other than Indebtedness issued in the ordinary course of
                  business and in an aggregate amount not exceeding $400,000;

         (ii)     make or permit to remain outstanding any Investments except
                  (A) investments outstanding on the date hereof, (B) operating
                  deposit accounts with banks, (C) Hedging Agreements entered
                  into in the ordinary course of RTC's financial planning and
                  not for speculative purposes and (D) investments consisting of
                  security deposits with utilities and other like Persons made
                  in the ordinary course of business;

         (iii)    create, incur, assume or suffer to exist any Lien upon any of
                  its Property, whether now owned or hereafter acquired, except
                  Liens of the type set forth in sub-paragraphs (iii), (iv),
                  (v), (vi), (vii) and (viii) of Section 8.06(a) of the Common
                  Agreement;

         (iv)     declare or make any Restricted Payment;

         (v)      grant any pledge, lien, mortgage, charge, security interest or
                  encumbrance of any kind over any shares of capital stock in
                  RTC;

         (vi)     represent that it acts on behalf of the Borrower or hold
                  itself out to be a Subsidiary or other Affiliate (other than
                  by means of the Borrower's contractual obligations regarding
                  the operation of RTC in accordance with the provisions of
                  Section 6.1 of the Master and Share Exchange Agreement) of the
                  Borrower;

         (vii)    enter into any transaction with the Borrower in connection
                  with which RTC would be entitled to cash consideration or in
                  connection with which RTC would generate a receivable.

SECTION 11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.

SECTION 12. BENEFIT OF AGREEMENT. This Agreement is solely for the benefit of
the signatories hereto (and their respective successors and assigns), and no
other Person (including without limitation any other creditor of or claimant
against SRT or the Borrower or any shareholder of SRT or the Borrower) shall
have any rights under, or because of the existence of, this Agreement,


<PAGE>
                                       15


SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 14. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER
TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

SECTION 15. NO COMMITMENT OR WAIVER. Neither this Agreement nor any action or
inaction on the part of the Senior Lenders shall be construed to constitute or
represent (i) a commitment by the Senior Lenders, either in their capacities
under the Transaction Documents or in any other capacity, to restructure any
Indebtedness of the Borrower, or (ii) an intention by the Senior Lenders, except
as expressly provided in Section 2 above, to waive, modify or forbear from
exercising any of their rights, powers, privileges or remedies under the
Transaction Documents or under any other document or agreement, at law, in
equity or otherwise (including with respect to any Default or Event of Default
(other than with respect to the Seventh Amendment Specified Defaults to the
extent provided herein)), and SRT and the Borrower each acknowledge, agree and
confirm, except as expressly provided in Section 2 above, that no such
commitment, waiver, modification or forbearance has been offered, granted,
extended or agreed to by the Senior Lenders, either in their capacities under
the Transaction Documents or in any other capacity (including with respect to
any Default or Event of Default (other than with respect to the Seventh
Amendment Specified Defaults to the extent provided herein)). Nothing set forth
in this Agreement shall be construed so as to require the Senior Lenders, either
in their capacities under the Transaction Documents or in any other capacity, to
agree to the terms of any modification proposed by the Borrower or SRT to the
Transaction Documents or any other document or agreement to which either of the
Senior Lenders is a party.

SECTION 16. REMEDIES. No failure on the part of the Senior Lenders to exercise,
and no course of dealing with respect to, and no delay in exercising, any right,
power or remedy hereunder or under the Transaction Documents shall operate as a
waiver thereof; nor shall any single or partial exercise by the Senior Lenders
of any right, power or remedy hereunder, under Transaction Documents preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy.

SECTION 17. VOLUNTARY AGREEMENT. Each of the Borrower and SRT represents and
warrants that it is represented by legal counsel of its choice, is fully aware
of the terms contained in this Agreement and has voluntarily and without
coercion or duress of any kind entered into this Agreement, and the documents
and agreements executed and to be executed in connection with this Agreement. No
provision hereof shall be interpreted or construed for or against any party
because such party prepared or requested, or may have prepared or requested,
such provision, any other provision or this Agreement as a whole.

SECTION 18. TRANSACTION DOCUMENTS IN FULL FORCE. Each of SRT and the Borrower
covenants and agrees that the Transaction Documents and the provisions thereof
are and remain legal, valid and binding obligations of each of SRT and the
Borrower enforceable in accordance with their


<PAGE>
                                       16


terms, and remain in full force and effect except as amended or modified hereby,
and each of SRT and the Borrower hereby reaffirm, reconfirm and restate, all
such obligations, as so modified, to the Senior Lenders. Each of SRT and the
Borrower acknowledge that none of the provisions contained in this Agreement,
including without limitation the Borrower's obligation to deliver to the Senior
Lenders certain information regarding (a) RTC, (b) the issuance of shares in the
Borrower or (c) the acquisition by the Borrower or any other SRT Party (as such
term is defined in the Transfer Restrictions Agreement) of any shares in any
other entity, shall constitute consent by the Senior Lenders to any transaction
that would be prohibited by the terms of the Financing Documents. Neither SRT
nor the Borrower has, and, in any event, hereby waives and releases, any claim,
counterclaim, demand (other than notices required under the Transaction
Documents), action, defense (other than that SRT or the Borrower in fact has
performed or complied with such obligation) or offset against any of its
Indebtedness, Obligations and other obligations (and the enforcement thereof)
under the Transaction Documents against the Senior Lenders or their respective
employees, agents and representatives, by reason of any matter, cause or thing
whatsoever occurring on or before the date hereof which relates to or arises out
of the Transaction Documents or any obligations or responsibilities of the
Senior Lenders under or in respect of the Transaction Documents. In addition,
each of SRT and the Borrower agrees not to commence, join in, assist, cooperate,
prosecute or participate in (other than as a defendant) any suit or other
proceeding in a position that is materially adverse to the Senior Lenders
concerning matters within the scope of the waiver contained above. Each of SRT
and the Borrower hereby expressly acknowledges and agrees that nothing in this
Agreement or in any document or instrument executed in connection with or
pursuant to this Agreement shall constitute a satisfaction as to all or any
portion of the Obligations.

SECTION 19. CERTAIN ACKNOWLEDGMENTS. Each of SRT and the Borrower hereby:

(a)      expressly acknowledges and agrees that as of the date hereof, the
         aggregate outstanding principal amount of the EDC Loans is
         $20,090,908.00;

(b)      expressly acknowledges and agrees that as of the date hereof, the
         aggregate outstanding principal amount of the IDB Loans is
         $20,909,092.02;

(c)      expressly acknowledges and agrees that each of the Seventh Amendment
         Specified Defaults has occurred and continues to exist (or, in the case
         of the Seventh Amendment Specified Defaults listed in Sections 2(c) and
         2(d), will occur and continue to exist during the Waiver Period) as of
         the date of this Agreement and represents and warrants that, except for
         the Seventh Amendment Specified Defaults, as of such date no other
         Event of Default has occurred and continues to exist;

(d)      expressly acknowledges and agrees that funds extended by SRT to the
         Borrower during the period commencing on June 30, 2001 through and
         including the Waiver Termination Date shall not constitute funds to be
         applied to the capped amount of $12 million referred to in Section
         2.01(2)(iii) of the Project Funds Agreement;

(e)      expressly acknowledges and agrees that it will not take any action with
         respect to any sale or disposition of the Borrower or its assets in
         connection with the acquisition of assets of RTC or for any other
         reason without the prior written consent of the Senior


<PAGE>
                                       17


         Lenders, and that such consent will be subject to, without limitation,
         the compliance by the Borrower and SRT with the terms of the Transfer
         Restrictions Agreement and the Common Agreement with respect to a sale
         or disposition of the Borrower or its assets; and

(d)      ratifies and reaffirms the validity, perfection and enforceability of
         all of the Liens and security interests heretofore granted pursuant to
         the Transaction Documents to the Senior Lenders as collateral security
         for the Obligations and acknowledges that all of such Liens and
         security interests, and all collateral heretofore pledged as security
         for the Obligations, continues to be and remains collateral for the
         Obligations from and after the date hereof

SECTION 20. MOST FAVORED CREDITOR CLAUSE. Each of SRT and the Borrower hereby
agrees that it shall not enter into any standstill, forbearance or restructuring
agreement (of any type or nature) with any creditor or creditors without the
prior written consent of the Senior Lenders. If during the Waiver Period, SRT or
the Borrower enters into any such other standstill, forbearance or restructuring
agreement that contains any terms, provisions or treatment that are more
favorable to such creditor or creditors, in the opinion of the Senior Lenders,
than the terms, provisions, or treatment of the Senior Lenders set forth herein,
then the Senior Lenders shall be entitled to be accorded the benefits of any
such terms, provisions or treatment, as reasonably determined by the Senior
Lenders, and SRT or the Borrower, as the case may be, shall be required
immediately to take any and all actions necessary to accord the Senior Lenders
the benefits of such terms, provisions or treatment. Notwithstanding the
foregoing, this clause shall not apply to extend the stated term of this
Agreement. Neither SRT's nor the Borrower's obligations hereunder shall be
exhausted by any one exercise of this clause, but shall survive for the term of
this Agreement

SECTION 21. COMMON AGREEMENT EVENT OF DEFAULT. Any breach by SRT or the Borrower
of any of the terms of this Agreement and the occurrence of any of the events or
actions referred to in Section 10(i) will constitute an Event of Default under
the Common Agreement.

SECTION 22. FURTHER ASSURANCES. Each of the Borrower and SRT shall execute all
additional documents and do all acts not specifically referred to herein which
are reasonably necessary to effectuate the intent of this Agreement.


<PAGE>


         IN WITNESS WHEREOF, the parties hereto, by their officers duly
authorized, have caused this Agreement to be duly executed and delivered as of
the date first above written.

                                    SR TELECOM INC.

                                    By: /s/ DAVID ADAMS
                                       -----------------------------------------
                                    Name:  DAVID ADAMS
                                    Title: VP FINANCE & CHIEF FINANCIAL OFFICER



                                    By: /s/ M.J. MORRIS
                                       -----------------------------------------
                                    Name:  M.J. MORRIS
                                    Title: SENIOR V.P. STRATEGIC DEVELOPMENT



                                    COMUNICACION Y TELEFONIA RURAL S.A.

                                    By: /s/ GERALD C. LACROIX
                                       -----------------------------------------
                                    Name:  GERALD C. LACROIX
                                    Title: General Manager


<PAGE>


                                    EXPORT DEVELOPMENT CANADA

                                    By: /s/ SEAN MITCHELL
                                       -----------------------------------------
                                    Name: Sean Mitchell
                                    Title: Special Risk Manager



                                    By: /s/ SVEN LIST
                                       -----------------------------------------
                                    Name:  Sven List
                                    Title: Financial Services Manager


<PAGE>


                                    INTER-AMERICAN DEVELOPMENT BANK



                                    By: /s/ HIROSHI TOYODA
                                       -----------------------------------------
                                    Name:  HIROSHI TOYODA
                                    Title: PRI/MGR



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