<PAGE>   1
                                                                    EXHIBIT 10.1

                                                                  CONFORMED COPY



                               DATED 14 JULY 2000

                                Original Borrower
                     GLOBAL TELESYSTEMS EUROPE HOLDINGS B.V.
                                  Guaranteed by
               GLOBAL TELESYSTEMS EUROPE B.V., GLOBAL TELESYSTEMS
                  EUROPE HOLDINGS B.V. AND CERTAIN SUBSIDIARIES
                   OF GLOBAL TELESYSTEMS EUROPE HOLDINGS B.V.
                                    Arrangers
                      BANK OF AMERICA INTERNATIONAL LIMITED
                             DEUTSCHE BANK AG LONDON
                         DRESDNER BANK AG LONDON BRANCH
                                      Agent
                             DEUTSCHE BANK AG LONDON
                                Security Trustee
                             DEUTSCHE BANK AG LONDON
                              Working Capital Bank
                             DEUTSCHE BANK AG LONDON


                                   ----------

                                 LOAN AGREEMENT
                                       FOR
                           $550,000,000 MULTI-CURRENCY
                                CREDIT FACILITIES

                                   ----------



<PAGE>   2



                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                                                     PAGE
<S>    <C>                                                                                                 <C>
1      Purpose and definitions................................................................................1

2      The Facilities........................................................................................18

3      Conditions............................................................................................18

4      Utilisations..........................................................................................20

5      The Working Capital Facility..........................................................................22

6      Interest and Bank Guarantee Commission................................................................26

7      Repayment, cancellation and prepayment................................................................29

8      Fees and expenses.....................................................................................31

9      Payments and Taxes; accounts and calculations.........................................................32

10     Guarantee.............................................................................................37

11     Representations and warranties........................................................................42

12     Undertakings..........................................................................................46

13     Financial covenants...................................................................................56

14     Events of Default.....................................................................................58

15     Indemnities...........................................................................................62

16     Unlawfulness and increased costs; mitigation..........................................................63

17     Set-off and pro rata payments.........................................................................66

18     Assignment, transfer and funding offices..............................................................67

19     Arrangers, Agent, Security Trustee, Reference Banks and Original Borrower.............................70

20     Notices and other matters.............................................................................76

21     Governing law and jurisdiction........................................................................78

Schedules excluded

</TABLE>


<PAGE>   3


THIS AGREEMENT is dated 14 July, 2000 and made BETWEEN:

(1)    GLOBAL TELESYSTEMS EUROPE HOLDINGS B.V. as Original Borrower;

(2)    GLOBAL TELESYSTEMS EUROPE B.V. as the Immediate Shareholder;

(3)    THE ENTITIES whose respective names and registered offices are set out in
       part A of Schedule 1 as Original Guarantors;

(4)    GLOBAL TELESYSTEMS INC. as the Ultimate Shareholder;

(5)    DEUTSCHE BANK AG LONDON, BANK OF AMERICA INTERNATIONAL LIMITED and
       DRESDNER BANK AG LONDON BRANCH as Arrangers;

(6)    THE BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are set
       out in part C of schedule 1 as Banks;

(7)    DEUTSCHE BANK AG LONDON as Agent;

(8)    DEUTSCHE BANK AG LONDON as Security Trustee; and

(9)    DEUTSCHE BANK AG LONDON as Working Capital Bank.

IT IS AGREED as follows:

1      PURPOSE AND DEFINITIONS

1.1    PURPOSE

       This Agreement sets out the terms and conditions upon and subject to
       which (A) the Banks agree, according to their several obligations, to
       make available to the Borrowers a revolving credit facility of up to
       $525,000,000 (or its equivalent in Optional Currencies) such facility to
       be used for the purposes of (i) in the case of the Original Borrower,
       making loans to any of its wholly-owned Subsidiaries to be used by such
       Subsidiary for any purpose not restricted, and to the maximum amount
       permitted, by this Agreement, (ii) financing the Restricted Group's
       working capital and capital expenditure requirements, (iii) financing
       expenses incurred in connection with the Facilities, (iv) making any
       payments of interest under the High Yield Securities (other than the July
       2000 and August 2000 interest payments on the High Yield Securities to
       the extent that the Immediate Shareholder has retained, as set out in
       paragraph (w)(iii) of schedule 3, sufficient cash to make such payments)
       and any other high yield securities agreed between the Original Borrower
       and the Agent (acting on the instruction of the Majority Banks) and/or
       (v) financing acquisitions permitted under clause 4.1.3, each of (i) to
       (v) inclusive, to be incurred in connection with the Group Business of
       the Group and (B) the Working Capital Bank agrees to make available to
       the Borrowers a working capital facility of up to $25,000,000 (or its
       equivalent in Optional Currencies), such facility to be used in
       connection with the Group Business.

1.2    DEFINITIONS

       In this Agreement, unless the context otherwise requires:

       "ACCEDING BORROWERS" means those entities which are to, or have become a
       party to this Agreement as Borrowers pursuant to clause 3.5;

       "ACCEDING GUARANTORS" means those entities which are to, or have become a
       party to this Agreement as Guarantors pursuant to clause 10.18;

       "ACCOUNTANTS REPORT" means a report substantially in the form set out in
       part B of Schedule 6 to be issued by the auditors of the Immediate
       Shareholder Group pursuant to clause 12.1.9(b);


                                       1
<PAGE>   4


       "ADDITIONAL COST" means in relation to any period a percentage calculated
       for such period at an annual rate determined in accordance with schedule
       4;

       "ADVANCE" means an RC Advance or a WC Advance;

       "AGENT" means Deutsche Bank AG London of Winchester House, 1 Great
       Winchester Street, London, EC2N 2DB or such other person as may be
       appointed Agent for the Banks pursuant to clause 19.13;

       "ANNUAL BUDGET" means a budget in respect of each of the Group and the
       Restricted Group for each financial year containing information of a
       substantially similar type and to a substantially similar level of detail
       as the agreed form delivered pursuant to paragraph (i) of schedule 3 or
       containing such additional information or additional level of detail as
       the Original Borrower reasonably deems necessary, or, omitting such
       information or to such lesser level of detail, as has at the relevant
       time, been approved in writing by the Agent;

       "ANNUALISED CONSOLIDATED NET OPERATING CASH FLOW" means twice the
       aggregate of the Consolidated Net Operating Cash Flow of the Restricted
       Group in respect of the relevant Six Month Period;

       "ARRANGERS" means Deutsche Bank AG London of Winchester House, 1 Great
       Winchester Street, London, EC2N 2DB, Bank of America International
       Limited of Bank of America House, 1 Alie Street, London, E1 8DE and
       Dresdner Bank AG London Branch of Riverbank House, 2 Swan Lane, London,
       EC4R 3UX;

       "ASSIGNMENT OF INSURANCES" means the assignment over Insurances entered
       into or to be entered into by the Immediate Shareholder in the agreed
       form;

       "ASSIGNMENT OF SHAREHOLDER LOANS" means, in the case of shareholder loans
       made by the Immediate Shareholder, the Dutch Pledge of Intercompany
       Receivables and, in any other case, any assignment of shareholder loans
       to be entered into between any other Relevant Person and the Security
       Trustee pursuant to the terms of this Agreement in such form as may be
       agreed by the Security Trustee having regard to the applicable laws
       relating to the assignment or pledging of receivables in the jurisdiction
       in which the relevant loan is payable;

       "ASSOCIATED COMPANY" of a person means (a) any other person which is
       directly or indirectly controlled by, under common control with or
       controlling such person or (b) any other person owning beneficially
       and/or legally directly or indirectly 10 per cent. or more of the equity
       interest in such person or 10 per cent. of whose equity interest is owned
       beneficially and/or legally directly or indirectly by such person, where
       "control" means possession, directly or indirectly, of the power to
       direct or cause the direction of the management and policies of a person
       whether through the ownership of interests or voting securities, by
       contract or otherwise;

       "AUTHORISED OFFICER" means any director, employee or officer of the
       Original Borrower or any other Obligor authorised to sign Compliance
       Certificates, Utilisation Notices and other notices, requests or
       confirmations referred to in this Agreement or relating to the
       Facilities;

       "AVAILABILITY PERIOD" means the period from the date of this Agreement
       and ending on whichever is the earlier of (a) the Termination Date or (b)
       the date on which (i) the Original Borrower cancels the whole of the
       undrawn Commitments under clause 7.4 or (ii) the Total Commitments are
       reduced to zero pursuant to any relevant provision of this Agreement;

       "BANK GUARANTEE" means any of a guarantee, bond, indemnity, letter of
       credit, or any other instrument of suretyship or payment, issued,
       undertaken or made or, as the case may be, proposed to be issued,
       undertaken or made by the Working Capital Bank at the request of a
       Borrower under the Working Capital Facility, in each case in a form
       agreed between the Working Capital Bank and the relevant Borrower and as
       the same may be varied from time to time;


                                       2
<PAGE>   5

       "BANKING DAY" means:

       (a)    for interest rate fixing and payments purposes in relation to euro
              and national currency units, a Target Day;

       (b)    for all other purposes (including, but not limited to, rate fixing
              and payments in relation to Dollars and Optional Currencies other
              than euro and national currency units and receiving notices), a
              day other than Saturday or Sunday on which banks are open for
              business in New York and London and (in the case of rate fixing
              and payments in relation to Optional Currencies other than
              Sterling, euros and national currency units) the principal
              financial centre in the jurisdiction of the Optional Currency
              concerned;

       "BANKS" means the banks and financial institutions listed in part C of
       schedule 1 and includes their successors in title and Transferees;

       "BELGIAN DEEDS OF GUARANTOR ACCESSION" means the Deed of Guarantor
       Accession entered into, or to be entered into, by each of GTS Network
       Services (Belgium) B.V.B.A. and GTS Support Services (Belgium) B.V.B.A.
       and "BELGIAN DEED OF GUARANTOR ACCESSION" means any one of them;

       "BELGIAN GUARANTORS" means GTS Network Services (Belgium) B.V.B.A. and,
       until the merger described in paragraph 4 of Schedule 11, GTS Support
       Services (Belgium) B.V.B.A.;

       "BELGIAN SHARE SECURITIES" means (i) the pledge over the shares of GTS
       Network Services (Belgium) B.V.B.A. entered into, or to be entered into,
       by GTS Network in the agreed form and (ii) the pledge over the shares of
       GTS Support Services (Belgium) B.V.B.A. entered into, or to be entered
       into, by the Original Borrower in the agreed form and "BELGIAN SHARE
       SECURITY" means any one of them;

       "BORROWED MONEY" means, without duplication, Indebtedness in respect of
       (a) money borrowed or raised and debit balances at banks, (b) any bond,
       note, loan stock, debenture or similar debt instrument, (c) acceptance or
       documentary credit facilities, (d) receivables sold or discounted
       (otherwise than on a non-recourse basis), (e) deferred payments for
       assets acquired or services supplied other than in the ordinary course of
       business and where payment is deferred for no more than 120 days (which,
       for the avoidance of doubt, shall not include payments originally due
       less than 120 days after the relevant asset was acquired or service
       supplied where payment is being contested in good faith), (f) finance
       leases and hire purchase contracts, (g) any other transaction (including
       without limitation forward sale or purchase agreements) having the
       commercial effect of a borrowing or raising of money or of any of (a) to
       (f) above and (h) guarantees in respect of Indebtedness of any person
       falling within any of (a) to (g) above;

       "BORROWERS" means the Original Borrower together with, after its
       accession pursuant to clause 3.5, any Acceding Borrowers and "BORROWER"
       means any or a specific one of them;

       "BUSINESS PLAN" means the management base case financial and operational
       projections of the Restricted Group produced or to be produced by, or on
       behalf of, the Original Borrower pursuant to paragraph (aa) of schedule
       3;

       "CAPITAL LEASES" means any leases which are treated as capital leases in
       accordance with GAAP and entered into by a member of the Restricted Group
       as lessee;

       "CHARGED ACCOUNTS" means the accounts of certain members of the Group
       into which any intercompany receivables (including, without limitation,
       all dividends payable by any Obligor to its shareholders (irrespective of
       whether such shareholder is an Obligor)) and/or third party receivables
       are to be paid and which are subject to the terms of any Irish Debenture
       or any Pledge over Group Accounts;

       "COLLATERAL INSTRUMENTS" means notes, bills of exchange, certificates of
       deposit and other negotiable and non-negotiable instruments, guarantees
       and any other documents or instruments which contain or evidence an
       obligation (with or without security) to pay, discharge



                                       3
<PAGE>   6


       or be responsible directly or indirectly for, any Indebtedness or
       liabilities under this Agreement and includes Encumbrances;

       "COMMITMENT" means (i) in relation to a Bank and the Revolving Credit
       Facility the amount set opposite its name in part C of schedule 1 and/or,
       in the case of a Transferee, the amount transferred as specified in the
       relevant Transfer Certificate and (ii) in relation to the Working Capital
       Bank and the Working Capital Facility, the amount set opposite its name
       in part D of Schedule 1, as varied, in each case, by any relevant term of
       this Agreement and so that, if at such time the Total Commitments have
       been reduced to zero, references to a Bank's or the Working Capital
       Bank's (as the case may be) Commitment shall be construed as a reference
       to that Bank's or the Working Capital Bank's (as the case may be)
       Commitment immediately prior to such reduction to zero;

       "COMPLIANCE CERTIFICATE" means a certificate substantially in the form
       set out in part A of schedule 6 in relation to the compliance (or
       otherwise) with the undertakings in clause 12.1 issued by the Authorised
       Officer of the Original Borrower in relation to Quarterly Management
       Accounts pursuant to clause 12.1.9(b);

       "CONSOLIDATED NET OPERATING CASH FLOW" means, in respect of a person and
       a period, the consolidated Net Operating Cash Flow of that person and its
       Subsidiaries for such period;

       "CONTRIBUTION" means (i) in relation to a Bank and in respect of the
       Revolving Credit Facility at any relevant time, the principal amount of
       the RC Advances owing to such Bank at such time and (ii) in relation to
       the Working Capital Bank and in respect of the Working Capital Facility
       the aggregate of the principal amount of the WC Advances owing to the
       Working Capital Bank and the Undrawn Face Amount of all Bank Guarantees
       then outstanding together with any amount paid by the Working Capital
       Bank under any Bank Guarantee in respect of which it has not been
       reimbursed by an Obligor pursuant to this Agreement;

       "CUSTOMER CONTRACT AGREEMENT" means the agreement for the assignment of
       customer contracts dated 30 September 1997 made between (1) Hermes Europe
       Railtel B.V. (now known as Global TeleSystems Europe Holdings B.V.) and
       (2) Hermes Europe Railtel (Ireland) Limited (now known as GTS Carrier
       Services (Ireland) Limited);

       "DANISH SHARE SECURITIES" means (i) the pledge over the shares of Ebone
       A/S entered into or to be entered into by the Original Borrower in the
       agreed form; and (ii) the pledge over the shares of Global TeleSystems
       (Denmark) A/S entered into or to be entered into by Ebone A/S in the
       agreed form and "DANISH SHARE SECURITY" means any one of them;

       "DEED OF BORROWER ACCESSION" means a deed to be executed and delivered by
       an Acceding Borrower, substantially in the form set out in part B of
       schedule 8;

       "DEED OF GUARANTOR ACCESSION" means a deed to be executed and delivered
       by an Acceding Guarantor, substantially in the form set out in part A of
       schedule 8;

       "DEFAULT" means any Event of Default or any event or circumstance which
       would, upon the giving of a notice by the Agent and/or the expiry of the
       relevant period and/or the fulfilment of any other condition (in each
       case as specified in clause 14.1), constitute an Event of Default;

       "DERIVATIVES CONTRACT" means a contract, agreement or transaction which
       is:

       (a)    a rate swap, basis swap, commodity swap, forward rate transaction,
              commodity option, equity (or equity or other index) swap or
              option, bond option, interest rate option, foreign exchange
              transaction, collar or floor, currency swap, currency option or
              any other similar transaction; and/or

       (b)    any combination of such transactions,

       in each case, whether on-exchange or otherwise;


                                       4
<PAGE>   7


       "DOLLAR AMOUNT" means (i)(a) in relation to an Advance made or to be made
       in Dollars, the principal amount of such Advance and (b) in relation to
       an Advance made or to be made in an Optional Currency, the amount in
       Dollars which would be required to purchase the principal amount of such
       Advance as determined in accordance with clause 4.6 or clause 5.15 (as
       the case may be) and (ii)(a) in relation to a Bank Guarantee issued or to
       be issued in Dollars, the Undrawn Face Amount of such Guarantee and (b)
       in relation to a Bank Guarantee issued or to be issued in an Optional
       Currency, the equivalent in Dollars of the Undrawn Face Amount of such
       Bank Guarantee on its Utilisation Date or, if later, the most recent
       Quarter Day, in each case as reduced by any repayment, prepayment or
       payment under this Agreement;

       "DOLLARS" and "US$" and "$" mean the lawful currency for the time being
       of the United States of America;

       "DUTCH PLEDGE OF ACCOUNTS" means the pledge of bank accounts agreement
       entered into, or to be entered into, by the Original Borrower in the
       agreed form;

       "DUTCH PLEDGE OF INTERCOMPANY RECEIVABLES" means the disclosed pledge of
       present and future claims in respect of intercompany receivables entered
       into, or to be entered into, by the Original Borrower and the Immediate
       Shareholder in the agreed form;

       "DUTCH SHARE SECURITY" means the pledge over the shares of the Original
       Borrower entered into, or to be entered into, by the Immediate
       Shareholder and the Original Borrower in the agreed form;

       "EMU" means Economic and Monetary Union as contemplated in the Treaty;

       "EMU LEGISLATION" means legislative measures of the European Council for
       the introduction of, changeover to, or operation of, a single or unified
       European currency;

       "ENCUMBRANCE" means any lien, mortgage, charge (whether fixed or
       floating), security interest, hypothecation, assignment for security,
       trust arrangement for the purpose of providing security or encumbrance or
       preferential arrangement of any kind (including any conditional sale or
       capital lease or other title retention agreement, any lease in the nature
       thereof, any deposits of money with the primary intention of affording a
       right of set off and any agreement to give any security interest);

       "ENVIRONMENTAL CLAIM" means any claim, notice of violation, prosecution,
       demand, action, official warning, abatement or other order (conditional
       or otherwise) relating to Environmental Matters or any notification or
       order requiring compliance with the terms of any Environmental Licence or
       Environmental Law;

       "ENVIRONMENTAL LAW" includes all or any laws, statutes, regulations,
       treaties, by-laws, codes of practice, orders, notices, demands, decisions
       of the courts or of any governmental authority or agency or any
       regulatory body in any jurisdiction relating to Environmental Matters;

       "ENVIRONMENTAL LICENCE" includes any permit, licence, authorisation,
       consent or other approval required at any time by any Environmental Law;

       "ENVIRONMENTAL MATTERS" includes (a) nuisance, noise, defective premises,
       health and safety at work or elsewhere and (b) the pollution,
       conservation or protection of the environment (both natural and built) or
       of man or any living organisms supported by the environment or any other
       matter whatsoever affecting the environment or any part of it;

       "EURIBOR" means in relation to any amount in euros and any period, the
       offered rate for deposits for such amount and for such period which is:

       (a)   the rate of interest for such period which appears on the
             "Euribor01" page of the Reuters screen (or such other page on the
             Reuters screen as may customarily be used from time to time to
             display EURIBOR rates) at or about 11 a.m. (Brussels Time) on the
             Quotation Date for such period; or


                                       5
<PAGE>   8


       (b)   if the relevant page is not displayed on the Reuters screen or the
             Reuters screen is not operating at the relevant time or if no such
             offered rate appears on the Reuters screen for that period, the
             rate of interest for such period which appears on page 248 of the
             Dow Jones Telerate screen (or such other page on the Dow Jones
             Telerate screen as may customarily be used from time to time to
             display EURIBOR rates) at or about 11 a.m. (Brussels Time) on the
             Quotation Date for such period; or

       (c)   if the relevant rate of EURIBOR cannot be determined in accordance
             with paragraphs (a) and (b) above, the rate determined by the Agent
             to be the arithmetic mean (rounded upwards if necessary to the
             nearest one sixteenth of one per cent.) of the rates respectively
             quoted to the Agent by each of the Euro Reference Banks (provided
             always that at least two Euro Reference Banks shall have given such
             quotation) at the request of the Agent as such Euro Reference
             Bank's offered rate for deposits in an amount approximately equal
             to the amount in relation to which EURIBOR is to be determined for
             a period equivalent to such period to leading banks in the Euro
             Zone Interbank Market at or about 11 a.m. (London time) on the
             Quotation Date for such period;

       "EURO", "EUROS" and "o" mean the single currency of Participating Member
       States introduced in accordance with the provisions of Article 109(1)4 of
       the Treaty and in respect of all payments to be made under this Agreement
       in Dollars means immediately available, freely transferable funds;

       "EURO REFERENCE BANKS" means the principal London offices of Deutsche
       Bank AG, Bank of America and Dresdner Bank AG and/or any other Banks
       appointed as such pursuant to clause 19.14;

       "EURO UNIT" means the currency unit of the euro;

       "EVENT OF DEFAULT" means any of the events or circumstances described in
       clause 14.1;

       "FACILITIES" means the Revolving Credit Facility and the Working Capital
       Facility;

       "FINANCE DOCUMENTS" means this Agreement, the Security Documents, any
       Transfer Certificates, any Deeds of Borrower Accession and any Deeds of
       Guarantor Accession and "FINANCE DOCUMENT" means any or a specific one of
       them;

       "FINANCE PARTIES" means the Agent, the Arrangers, the Security Trustee,
       the Working Capital Bank and the Banks and "FINANCE PARTY" means any or a
       specific one of them;

       "GAAP" means generally accepted accounting principles and practices in
       The United States of America;

       "GRACE PERIOD" has the meaning given to it in clause 7.8;

       "GROUP" means the Original Borrower and its Subsidiaries from time to
       time;

       "GROUP BUSINESS" means the business of (i) transmitting, or providing
       services relating to the transmission of, voice, video or data through
       owned or leased transmission facilities, (ii) constructing, creating,
       developing or marketing communications related network equipment,
       products, software, services and other devices for use in a
       communications business, and (iii) evaluating, participating in or
       pursuing any other activity or opportunity that is reasonably related,
       ancillary or complementary to the activities identified in clause (i) or
       (ii) above;

       "GTS CREDITOR" means any Relevant Person who has, at any relevant time,
       entered into an Assignment of Shareholder Loans and the Security Trust
       Deed or a Security Provider's Deed of Accession and, unless such Relevant
       Person is the Immediate Shareholder, a Subordination Deed;

       "GTS IRELAND" means GTS Carrier Services (Ireland) Limited whose
       registered no. is 276431 and whose registered office is at 2 Custom House
       Plaza, Harbourmaster Place, Dublin 1;


                                       6
<PAGE>   9


       "GTS NETWORK" means GTS Network (Ireland) Limited whose registered no. is
       275582 and whose registered office is at 2 Custom House Plaza,
       Harbourmaster Place, Dublin 1;

       "GTS TRANSATLANTIC" means GTS Transatlantic Limited whose registered no.
       is 287207 and whose registered office is at 2 Harbourmaster Place, Custom
       House Dock, Dublin 1;

       "GUARANTEE" means the guarantee of the Guarantors contained in clause 10
       and includes each separate or independent stipulation or agreement by the
       Guarantors contained in clause 10;

       "GUARANTEED LIABILITIES" means all moneys, obligations and liabilities
       expressed to be guaranteed by the Guarantors in clause 10.1;

       "GUARANTORS" means the Original Guarantors and the Belgian Guarantors
       together with (i) until the last day of the Restriction Period, the
       Immediate Shareholder and (ii), after its accession pursuant to clause
       10.18, any Acceding Guarantor, and "GUARANTOR" means any or a specific
       one of them;

       "HIGH YIELD SECURITIES" means (i) the o225,000,000 10 1/2% senior notes
       due 2006 and 10 1/2% senior notes due 2006, series B; (ii) the
       $200,000,000 10 3/8% senior notes due 2009 and the 10 3/8% senior notes
       due 2009, series B; (iii) the $265,000,000 11 1/2% senior notes due 2007
       and the 11 1/2% senior notes due 2007, series B, (iv) the o275,000,000
       11% senior notes due 2009 and 11% senior notes due 2009, series B, and
       (v) the o85,000,000 10 3/8% senior notes due 2006 and the 10 3/8% senior
       notes due 2006, series B in each case, issued by the Immediate
       Shareholder;

       "HOLDING COMPANY" in relation to a person, means an entity of which that
       person is a Subsidiary;

       "IMMEDIATE SHAREHOLDER" means Global TeleSystems Europe B.V. a limited
       liability company incorporated under the laws of the Netherlands with its
       business office at Terhulpsesteenweg 6A, 1560 Hoeilaart, Belgium;

       "IMMEDIATE SHAREHOLDER GROUP" means the Immediate Shareholder and its
       Subsidiaries from time to time;

       "IMMEDIATE SHAREHOLDER PLEDGED ACCOUNT" means the account of the
       Immediate Shareholder with the Agent which is subject to the terms of the
       IS Charge over Account;

       "INCAPACITY" means, in relation to a person, the insolvency, liquidation,
       dissolution, winding-up, administration, receivership or other incapacity
       of that person whatsoever (and in the case of a partnership, includes the
       termination or change in composition of the partnership);

       "INDEBTEDNESS" means any obligation for the payment or repayment of
       money, whether as principal or as surety and whether present or future,
       actual or contingent;

       "INFORMATION MEMORANDUM" means the Information Memorandum to be approved
       by the Original Borrower and distributed by the Arrangers at the request
       of the Original Borrower in connection with the Facilities;

       "INTELLECTUAL PROPERTY RIGHTS" means any patent, trademark, service mark,
       registered design, trade name or copyright;

       "INTERCOMPANY LOAN AGREEMENT" means the agreement between the Immediate
       Shareholder, the Original Borrower and the Security Trustee in the agreed
       form;

       "IRISH DEBENTURES" means (i) the first ranking Irish Debenture entered
       into or to be entered into by GTS Ireland (ii) the first ranking Irish
       Debenture entered into by GTS Network and (iii) the first ranking Irish
       Debenture entered into by GTS Transatlantic in each case in the agreed
       form and "IRISH DEBENTURE" means any one of them;


                                       7
<PAGE>   10

       "IRISH SHARE SECURITIES" means (i) the charge over the shares of GTS
       Ireland entered into or to be entered into by GTS Network in the agreed
       form; (ii) the charge over the shares of GTS Network entered into or to
       be entered into by GTS Transatlantic in the agreed form and (iii) the
       charge over the shares of GTS Transatlantic entered into or to be entered
       into by the Original Borrower in the agreed form and "IRISH SHARE
       SECURITY" means any one of them;

       "IS CHARGE OVER ACCOUNT" means the charge over the Immediate
       Shareholder's account with the Security Trustee entered into or to be
       entered into by the Immediate Shareholder in the agreed form;

       "LIBOR" means, in relation to a particular period:

       (a)    the rate per annum of the offered quotation for deposits in the
              relevant currency for a period equal or comparable to such period
              which appears on Telerate page 3750 or Telerate page 3740 (as
              appropriate) at or about 11 a.m. London time on the Quotation Date
              for such period (or such other page as may replace such page on
              such service for the purpose of displaying London interbank
              offered rates for deposits in such currency); or

       (b)    if no such offered quotation appears, the arithmetic mean (rounded
              upwards, if necessary, to four decimal places) of the London
              interbank offered rates for deposits of the currency in question
              for a period equal to such period at or about 11 a.m. London time
              on the Quotation Date for such period as displayed on the relevant
              page of the Reuter Monitor Money Rates Service (or such other page
              as may replace such page on such service for the purpose of
              displaying London interbank offered rates of leading banks for
              deposits of that currency); or

       (c)    if on such date no such offered rates are so displayed, the
              arithmetic mean (rounded upwards, if necessary, to four decimal
              places) of such rates for deposits of that currency respectively
              quoted to the Agent by each of the LIBOR Reference Banks at the
              request of the Agent provided that if any of the LIBOR Reference
              Banks shall be unable or otherwise fail to supply such a quoted
              rate, "LIBOR" for the relevant Interest Period shall be determined
              on the basis of the quoted rate or rates supplied by the remaining
              LIBOR Reference Banks or LIBOR Reference Bank, as the case may be;

       "LIBOR REFERENCE BANKS" means the principal London offices of Deutsche
       Bank AG, Bank of America and Dresdner Bank AG London Branch and/or any
       other Banks appointed as such pursuant to clause 19.14;

       "LICENCE SECURITIES" means, after the transfer of licences pursuant to
       clause 3.6, each pledge over Licences entered into, or to be entered
       into, from time to time pursuant to clause 12.1.17(c);

       "LICENCES" means those licences or registrations the details of which are
       set out in schedule 7 and, if applicable, any other national or regional
       licences of a similar type or registrations of a similar type required
       under any Telecommunications and Cable Laws by any member of the Group in
       respect of all or any part of the Group Business then conducted by the
       Group which generates 5 per cent. (or more) of the revenues of the Group
       determined by reference to the most recent Quarterly Management Accounts
       delivered to the Agent under this Agreement, in each case as from time to
       time amended, varied, restated or replaced or any successor national or
       regional licence or registration of a similar type to the foregoing
       granted pursuant to any Telecommunications and Cable Laws, in each case
       in accordance with clause 12.1.17;

       "MAJORITY BANKS" means at any relevant time such of the Banks and the
       Working Capital Bank (a) the aggregate of the Dollar Amount of whose
       Contributions equals at least 66 2/3 per cent. of the Dollar Amount of
       the Total Outstandings or (b) (if no Advances or Bank Guarantees are
       outstanding) the aggregate of whose Commitments equals at least 66 2/3
       per cent. of the Total Commitments;

       "MARGIN" means the rate per annum calculated in accordance with clause
       6.2;


                                       8
<PAGE>   11


       "MATERIAL ADVERSE EFFECT" means a material adverse effect on the ability
       of the members of the Restricted Group (taken as a whole) to perform all
       or any of their material obligations under the Finance Documents;

       "MATERIAL SUBSIDIARY" means any Subsidiary of the Original Borrower which
       is a member of the Restricted Group and (i) which holds any Licences, is
       a party to any Principal Agreement or holds any share capital of any
       other Material Subsidiary or (ii) whose assets or revenues or Net
       Operating Cash Flow is at least five per cent. of the Restricted Group's
       consolidated assets or consolidated revenues or Consolidated Net
       Operating Cash Flow, determined by reference to the most recent Quarterly
       Management Accounts delivered to the Agent under this Agreement;

       "MATURITY DATE" means, in relation to an Advance, the last day of the
       Term of such Advance, in each case being a date falling on or before the
       Termination Date and specified as the Maturity Date in the Utilisation
       Notice relating to such Advance;

       "MONTH" or "MONTHS" means a period beginning in one calendar month and
       ending in the relevant later calendar month on the day numerically
       corresponding to the day of the calendar month in which it started,
       provided that (a) if the period started on the last Banking Day in a
       calendar month or if there is no such numerically corresponding day, it
       shall end on the last Banking Day in such later calendar month and (b) if
       such numerically corresponding day is not a Banking Day, the period shall
       end on the next following Banking Day in such later calendar month but if
       there is no such Banking Day it shall end on the preceding Banking Day
       and "monthly" shall be construed accordingly;

       "NATIONAL CURRENCY UNIT" means the currency unit (other than a euro unit)
       of a Participating Member State;

       "NECESSARY AUTHORISATIONS" means all approvals, authorisations and
       licences (other than the Licences) from, all rights granted by and all
       filings, registrations and agreements with any government, regulatory or
       other authority necessary in order to enable the Group to carry on the
       Group Business then conducted by the Group;

       "NET INCOME" means, in respect of any period, the net income or loss of
       the relevant person for such period as determined in accordance with
       GAAP;

       "NET OPERATING CASH FLOW" means, in respect of any period or person, the
       total of (i) the Net Income of that person for that period plus (ii) any
       depreciation and amortisation, other non-cash expenses and taxes
       attributable to that period plus (iii) interest or other charges in
       respect of Borrowed Money for that period and less (iv) any interest
       income of such person for such period excluding (x) any extraordinary or
       exceptional gains or losses of the relevant person for such period and
       (y) foreign currency gains or losses for such period provided that such
       gains or losses are calculated on the same basis as was used to prepare
       the consolidated audited financial statements of the Immediate
       Shareholder Group in respect of the financial year ended 31 December
       1999;

       "OBLIGORS" means each Borrower and each Guarantor;

       "OPTIONAL CURRENCY" means any currency previously approved in writing by
       the Agent, which is freely transferable, freely convertible into Dollars
       and dealt in on the London Interbank Market;

       "ORIGINAL BORROWER" means Global TeleSystems Holdings Europe B.V. a
       limited liability company incorporated under the laws of the Netherlands
       with its business office at Terhulpsesteenweg 6A, 1560 Hoeilaart,
       Belgium;

       "ORIGINAL GUARANTORS" means the Original Borrower and the Subsidiaries of
       the Original Borrower whose names, registered addresses and registered
       numbers are set out in part A of schedule 1;

       "PARTICIPATING MEMBER STATE" means a member state of the European Union
       that adopted a single currency in accordance with the Treaty;


                                       9
<PAGE>   12


       "PERMITTED BORROWING" means:

       (a)    any Shareholder Loans;

       (b)    any Capital Leases;

       (c)    Borrowed Money incurred under the Finance Documents or with the
              prior written consent of the Agent acting on the instructions of
              the Majority Banks;

       (d)    Borrowed Money owing to the Original Borrower by any of its wholly
              owned Subsidiaries in respect of the on-lending of Advances under
              the Revolving Credit Facility and to the extent that such loan is
              permitted under clause 12.2.9(iii);

       (e)    Borrowed Money under the Rabobank Facilities up to a maximum
              aggregate amount of o35,000,000;

       (f)    Borrowed Money constituted by the guarantee by any member of the
              Group of the Indebtedness of the Immediate Shareholder or any
              other member of the Group, provided that such guarantee
              constitutes a Permitted Guarantee;

       (g)    Borrowed Money constituted by the issuance of a letter of credit
              or guarantee on behalf of a member of the Group by a financial
              institution or the counter-indemnity of such financial institution
              by the relevant member of the Group in respect of payments under
              such letter of credit or guarantee, provided that either (i) the
              maximum liability under such letter of credit or guarantee does
              not exceed $500,000; (ii) the issue of such letter of credit or
              guarantee under the Working Capital Facility would cause the
              aggregate of the Dollar Amount of the Undrawn Face Amount of all
              Bank Guarantees and the Dollar Amount of all outstanding WC
              Advances to exceed $25,000,000 or (iii) such letter of credit is
              cash collateralised by the relevant member of the Group; and

       (h)    Borrowed Money not falling within paragraphs (a) to (g) incurred
              up to an aggregate principal amount not exceeding $60,000,000 (or
              its equivalent in any relevant currencies);

       "PERMITTED DISPOSALS" means, subject to the terms of the Security
       Documents:

       (a)    disposals agreed in writing by the Agent acting on the
              instructions of the Majority Banks;

       (b)    disposals on bona fide arms length commercial terms in the
              ordinary course of trading and the liquidation of those
              Subsidiaries set out in paragraph one of schedule 11;

       (c)    disposals of property or equipment that has become worn out,
              obsolete or damaged or otherwise unsuitable for use in connection
              with the Group Business;

       (d)    disposals of assets in exchange for other assets comparable or
              superior as to type, value and quality;

       (e)    disposals of assets by a member of the Group to another member of
              the Group or to the Immediate Shareholder and the transfer of
              those Subsidiaries set out in paragraphs two, five, six and seven
              of schedule 11; and

       (f)    disposals of the backhaul assets to Flag Atlantic Limited (or any
              of its Subsidiaries) on bona fide arms length commercial terms for
              a cash consideration not less than the original cost to the Group;

       "PERMITTED ENCUMBRANCES" means:

       (a)    Encumbrances arising by operation of law in the ordinary course of
              trading;

       (b)    Encumbrances arising out of title retention provisions in a
              supplier's standard conditions of supply of goods acquired by the
              relevant person in the ordinary course of its trading;


                                       10
<PAGE>   13


       (c)    Encumbrances in cash of up to o35,000,000 created in respect of
              the Rabobank Facilities envisaged at the date hereof;

       (d)    any lien arising by operation of law in favour of any taxation
              authority in respect of any Taxes which are being contested in
              good faith and not yet payable and for which adequate reserves
              have been set aside in the books of the Group in accordance with
              GAAP;

       (e)    Encumbrances arising out of Capital Leases;

       (f)    cash collateral securing solely the counter-indemnity liability of
              the relevant member of the Group in respect of any guarantee or
              letter of credit referred to in paragraph (g) of the definition of
              Permitted Borrowings;

       (g)    any other Encumbrances created or outstanding with the prior
              written consent of the Agent acting on the instructions of the
              Majority Banks; and

       (h)    any rights of set-off arising by virtue of any member of the Group
              being provided with clearing or overdraft facilities provided that
              the aggregate gross debit balance of the Group shall not exceed
              $20,000,000;

       "PERMITTED GUARANTEES" means:

       (a)    guarantees or indemnities arising under the Finance Documents;

       (b)    guarantees or indemnities agreed in writing by the Agent acting on
              the instructions of the Majority Banks; and

       (c)    unsecured guarantees given by the Guarantors ranking pari passu
              with the Guarantee and guaranteeing Borrowed Money falling within
              paragraph (h) of the definition of "PERMITTED BORROWINGS";

       (d)    guarantees in existence as at the date of this Agreement in
              respect of the Rabobank Facilities (subject to the limit referred
              to in paragraph (e) of the definition of "PERMITTED BORROWINGS");

       (e)    guarantees in respect of Indebtedness incurred by a member of the
              Group in respect of the obligations of another member of the
              Group; and

       (f)    guarantees by members of the Group in respect of the Indebtedness
              of the Immediate Shareholder in respect of the senior notes
              referred to in paragraph (iii) of the definition of "HIGH YIELD
              SECURITIES";

       "PERMITTED PAYMENTS" means any payment or transfer of assets, subject to
       the terms of the Security Documents and the Intercompany Loan Agreement,
       by a member of the Group to the Immediate Shareholder provided that in
       the case of a payment of cash such payment is made by crediting the same
       to the Immediate Shareholder Pledged Account;

       "PLEDGE OVER GROUP ACCOUNTS" means the Dutch Pledge of Accounts and such
       other pledge over Charged Accounts (including the charge pursuant to each
       Irish Debenture) entered into, or to be entered into, by any member of
       the Group from time to time pursuant to clause 12.1.22;

       "PLEDGE OF INTERCOMPANY RECEIVABLES" means the Dutch Pledge of
       Intercompany Receivables and such other pledges or assignments of present
       and future claims in respect of intercompany receivables (including the
       charge pursuant to each Irish Debenture) entered into, or to be entered
       into, by any member of the Group from time to time pursuant to clause
       12.1.22;

       "PLEDGE OF THIRD PARTY RECEIVABLES" means any pledge of third party
       receivables (including the charge pursuant to each Irish Debenture)
       entered into, or to be entered by any Obligor from time to time pursuant
       to clause 12.1.22;


                                       11
<PAGE>   14


       "PPE SECURITIES" means each Irish Debenture and such other
       pledges/charges over plant, property and equipment (other than fibre
       leases), owned by any Obligors as may be executed in favour of the
       Security Trustee from time to time pursuant to clause 12.1.22;

       "PRINCIPAL AGREEMENTS" means (i) any fibre lease agreement or capacity
       contract, in either case, accounted for as a capital lease in accordance
       with GAAP (each a "FIBRE/CAPACITY AGREEMENT") entered into by any member
       of the Restricted Group or, to the extent it relates to the Group
       Business, the Immediate Shareholder that had a net book value of 2 1/2%
       or more of the net book value of tHE Fibre/Capacity Agreements of the
       Restricted Group as of the last day of each Quarterly Period in respect
       of which Quarterly Management Accounts have been delivered to the Agent
       under this Agreement and (ii) each Fibre/Capacity Agreement entered into
       by any member of the Restricted Group and a lessor or, to the extent that
       it relates to the Group Business, the Immediate Shareholder and the same
       lessor, where the net book value of the fibre lease or capacity which is
       the subject of such Fibre/Capacity Agreement when aggregated with the net
       book value of any fibre lease or capacity which is the subject of any
       other Fibre/Capacity Agreement between any member of the Restricted Group
       and that same lessor or the Immediate Shareholder and that same lessor
       had a net book value of 5% or more of the net book value of the
       Fibre/Capacity Agreements of the Restricted Group as of the last day of
       the most recently ended Quarterly Period in respect of which Quarterly
       Management Accounts have been delivered to the Agent under this
       Agreement;

       "PRO-FORMA SENIOR DEBT SERVICE" means the aggregate of (i) the total
       amount of interest and any other commission, fees and charges (other than
       expenses and any one-off fees paid otherwise than in lieu of interest or
       discount) paid in respect of the Senior Debt (excluding any change in
       deferred revenues) in respect of the Twelve Month Period ending on the
       date on which the relevant calculation under this Agreement falls to be
       made and (ii) the principal amount of any scheduled repayment of Senior
       Debt (including any payments required as a result of scheduled reductions
       in availability of any revolving credit facilities) to be made during the
       Twelve Month Period immediately following the date on which the relevant
       calculation under this Agreement falls to be made;

       "QUALIFYING BANK" means a person, being a bank or financial institution
       (whether incorporated in the United Kingdom or elsewhere), which is
       eligible to have payments made to it by any Borrower under this Agreement
       without any deduction or withholding in respect of Taxes either (a) by
       virtue of a double taxation treaty (assuming for this purpose only that a
       direction or consent such as is referred to in clause 9.8 has been given)
       or (b) by virtue of the fact that no such deduction or withholding is
       imposed in the jurisdiction to which the relevant Borrower is subject;

       "QUARTER DAY" means 31 March, 30 June, 30 September and 31 December in
       any year;

       "QUARTERLY MANAGEMENT ACCOUNTS" means the quarterly management accounts
       of each of the Immediate Shareholder Group, the Group and the Restricted
       Group to be delivered (or which may be delivered) to the Agent pursuant
       to clause 12.1.7 substantially in the form set out in schedule 10 or
       containing information of the same type as is required by such form;

       "QUARTERLY PERIOD" means each period comprising three calendar months
       commencing on the day after a Quarter Day and ending on the next
       following Quarter Day;

       "QUOTATION DATE" means, in relation to a Term or other period for which
       EURIBOR or LIBOR is to be determined, in the case of a determination of
       EURIBOR, the second Banking Day before the first day of such period and,
       in the case of a determination of LIBOR, the date on which quotations
       would customarily be provided by leading banks in the London Interbank
       Market for deposits in the relevant currency for delivery on the first
       day of that Term or other period;

       "RABOBANK FACILITIES" means the credit facilities made or to be made
       available by Rabobank International to GTS Network and other members of
       the Group of up to ?35,000,000 pursuant to an agreement dated or to be
       dated on or about the date hereof;

       "RC ADVANCE" means an advance made under the Revolving Credit Facility;


                                       12
<PAGE>   15


       "REDUCTION DATE" means the first and last days of the Reduction Period
       and each day during the Reduction Period falling three calendar months
       after the first day of the Reduction Period;

       "REDUCTION PERIOD" means the period starting three calendar months after
       the date falling four years after the date of this Agreement and ending
       on the Termination Date;

       "REFERENCE BANKS" means the LIBOR Reference Banks and/or the EURO
       Reference Banks, as the context may require;

       "RELEVANT JURISDICTION" means each jurisdiction in which a member of the
       Group is incorporated or formed or in which such member of the Group has
       its principal place of business or owns any material assets;

       "RELEVANT PERSON" means the Ultimate Shareholder, the Immediate
       Shareholder and any company (not being a Subsidiary of the Original
       Borrower) which is a Subsidiary of, or an Associated Company of the
       Ultimate Shareholder or the Immediate Shareholder or any Holding Company
       of the Ultimate Shareholder or the Immediate Shareholder or any
       Associated Company of any such Holding Company;

       "RESTRICTED ACQUISITION" means each acquisition by a member of the Group
       described in clause 12.2.8;

       "RESTRICTED GROUP" means the Original Borrower, the Subsidiaries of the
       Original Borrower whose names, registered addresses and registered
       numbers are set out in part B of Schedule 1, together with such other
       members of the Group who are designated members of the Restricted Group
       by the Original Borrower by notice in writing to the Agent in accordance
       with clause 3.7;

       "RESTRICTED PAYMENT" means (a) any direct or indirect distribution,
       dividend or other payment (whether in cash, property, securities or
       otherwise) by any member of the Group (including, without limitation, any
       payment on account of the share capital of such member of the Group or
       capital stock or other securities of such member of the Group) or any
       interest thereon, (b) any transfer of assets by any member of the Group
       and (c) any payment (whether in cash, property, securities or otherwise)
       of principal of, or interest on, or redemption of Shareholder Loans, in
       each case to any Relevant Person;

       "RESTRICTION PERIOD" means the period starting from the date hereof and
       ending on the day that all the conditions set out in clause 3.6 are
       fulfilled to the satisfaction of the Agent;

       "REVOLVING CREDIT FACILITY" means the revolving credit facility of up to
       $525,000,000 granted to the Borrowers by the Banks pursuant to clause
       2.1;

       "SECURITY DOCUMENTS" means the Intercompany Loan Agreement, the IS Charge
       over Account, each Subordination Deed, the Share Securities, each Pledge
       of Intercompany Receivables, each Pledge of Third Party Receivables, each
       Pledge over Group Accounts, the PPE Securities, the Licence Securities,
       the Assignment of Insurances, the Security Trust Deed, any Security
       Provider's Deed of Accession, each Assignment of Shareholder Loans and
       all other mortgages, charges, pledges, guarantees, indemnities and other
       instruments from time to time entered into in favour of any Finance Party
       by way of guarantee or other assurance of and/or security for amounts
       owed to any of the Finance Parties under or in connection with the
       Finance Documents;

       "SECURITY PROVIDER'S DEED OF ACCESSION" has the meaning ascribed thereto
       in the Security Trust Deed;

       "SECURITY TRUST DEED" means the security trust deed entered into, or to
       be entered into by the Finance Parties, each GTS Creditor and each
       Obligor in the agreed form;

       "SECURITY TRUSTEE" means Deutsche Bank AG London of Winchester House, 1
       Great Winchester Street, London, EC2N 2DB;


                                       13
<PAGE>   16


       "SENIOR DEBT" means the principal amount of all Borrowed Money of the
       Group (excluding Shareholder Loans) plus the long term portion of all
       deferred revenues of the Group (as determined in accordance with GAAP)
       minus all cash balances of the Group and excluding any guarantees or
       letters of credit constituting Permitted Borrowing to the extent that the
       same are cash collateralised;

       "SENIOR DEBT INTEREST CHARGES" means, in relation to any period, the
       total amount of all interest, fees and commissions accruing in respect of
       the Senior Debt (excluding any guarantees or letters of credit
       constituting Permitted Borrowing to the extent the same are cash
       collateralised) during such period (having taken into account the effect
       of any relevant hedging arrangements) and including, for the avoidance of
       doubt, the interest element of any payments under Capital Leases;

       "SERVED CITIES" means Amsterdam, Antwerp, Barcelona, Berlin, Bordeaux,
       Brussels, Copenhagen, Dresden, Dusseldorf, Frankfurt, Geneva, Hamburg,
       Hanover, London, Lyon, Madrid, Marseilles, Milan, Munich, Paris,
       Rotterdam, Stuttgart, Vienna and Zurich;

       "SIX MONTH PERIOD" means each period of two consecutive Quarterly Periods
       ending on a Quarter Day;

       "SHAREHOLDER CONTRIBUTIONS" means the aggregate principal amount of (a)
       all Shareholder Loans and (b) the equity share capital (including share
       premium) of the Original Borrower which has been paid up in cash by the
       Immediate Shareholder;

       "SHAREHOLDER LOANS" means any Borrowed Money owed by the Original
       Borrower to any GTS Creditor provided that, if such GTS Creditor is the
       Immediate Shareholder, such Borrowed Money is subject to the terms of the
       Intercompany Loan Agreement;

       "SHAREHOLDERS" means the Immediate Shareholder and the Ultimate
       Shareholder;

       "SHARE SECURITIES" means the Dutch Share Security, the Belgian Share
       Securities, the Danish Share Securities, the Irish Share Securities and
       such other pledges/charges over shares of any of the Obligors as may be
       executed in favour of the Security Trustee from time to time pursuant to
       clause 10.18;

       "STERLING" and "(L.)" mean the lawful currency for the time being of
       the United Kingdom and in respect of all payments to be made under this
       Agreement in Sterling means immediately available, freely transferable
       cleared funds;

       "SUBORDINATION DEED" means a deed of subordination to be entered into
       between any Relevant Person and the Security Trustee pursuant to the
       terms of this Agreement substantially in such form as may be agreed by
       the Security Trustee having regard to the applicable laws relating to the
       subordination of debt in the jurisdiction in which the relevant loan is
       payable;

       "SUBSIDIARY" of a person means any company or entity directly or
       indirectly controlled by such person, for which purpose "control" means
       either ownership of more than 50 per cent. of the voting share capital
       (or equivalent right of ownership) of such company or entity or power to
       direct its policies and management whether by contract or otherwise or
       the right to receive more than 50 per cent. of any distribution (of
       whatever nature) made in respect of the share capital or other ownership
       interests of such company or entity;

       "TARGET DAY" means a day on which the Trans-European Automated Realtime
       Gross Settlement Express Transfer System (TARGET) is operating;

       "TAX ON OVERALL NET INCOME" of a person shall be construed as a reference
       to Tax (other than Tax deducted or withheld from any payment) imposed on
       that person by any jurisdiction on:

       (i)    the net income profits or gains of that person worldwide; or


                                       14
<PAGE>   17


       (ii)   such of its income, profits or gains as arise in or relate to the
              jurisdiction in which it is resident or in which its principal
              office is located;

       "TAXES" includes all present and future taxes, levies, imposts, duties,
       fees or charges of whatever nature together with interest thereon and
       penalties in respect thereof and "Taxation" shall be construed
       accordingly;

       "TELECOMMUNICATIONS AND CABLE LAWS" means all laws, statutes, regulations
       and judgments relating to the business of transmitting or providing
       services related to the transmission of, voice, video or data through
       owned or leased transmission facilities applicable to any member of the
       Group and/or the business of transmitting or providing services related
       to the transmission of, voice, video or data through owned or leased
       transmission facilities carried on by any member of the Group in any
       Relevant Jurisdiction;

       "TERM" means, in relation to an Advance, the period for which that
       Advance is, or is to be, outstanding, as specified in the Utilisation
       Notice for such an Advance in accordance with clause 4.3;

       "TERMINATION DATE" means the date ending eight years from the date of
       this Agreement;

       "TOTAL COMMITMENTS" means at any relevant time the total of the
       Commitments of all the Banks and the Working Capital Bank at such time;

       "TOTAL DEBT" means the principal amount of all Borrowed Money of the
       Immediate Shareholder Group plus the long term portion of all deferred
       revenues of the Immediate Shareholder Group (as determined in accordance
       with GAAP) minus all cash balances of the Immediate Shareholder Group and
       excluding, without duplication, any guarantees or letters of credit
       constituting Permitted Borrowings to the extent that the same are cash
       collateralised;

       "TOTAL DEBT INTEREST CHARGES" means, in relation to any period, the total
       amount of all interest, fees and commissions accruing in respect of Total
       Debt (excluding, without duplication, any guarantees or letters of credit
       constituting Permitted Borrowings to the extent that the same are cash
       collateralised) during such period (having taken into account the effect
       of any relevant interest rate hedging arrangements) and including, for
       the avoidance of doubt, the interest element of any payments under
       Capital Leases;

       "TOTAL OUTSTANDINGS" means the aggregate principal amount of all
       Utilisations;

       "TRANSFER CERTIFICATE" means a certificate substantially in the terms of
       schedule 5;

       "TRANSFER AGREEMENTS" means (i) the agreement for the transfer of
       equipment, lease of transmission capacity and assignment of fibre lease
       obligations in all Relevant Jurisdictions other than France dated 30
       September 1997 made between (1) Hermes Europe Railtel B.V. (now known as
       Global TeleSystems Europe B.V.) and (2) Hermes Europe Railtel (Network)
       Limited (now known as GTS Network (Ireland) Limited) and (ii) the
       agreement for the transfer of equipment, lease of transmission capacity
       and assignment of future lease obligations in France dated 30 September
       1997 made between (1) Hermes Europe Railtel B.V. (now known as Global
       TeleSystems Europe B.V.) and (2) Hermes Europe Railtel (Network) Limited
       (now known as GTS Network (Ireland) Limited);

       "TRANSFEREE" has the meaning given to it in clause 18.3;

       "TREATY" means the Treaty establishing the European Economic Community
       being the Treaty of Rome of 25 March 1957 as amended by the Single
       European Act 1986 and the Maastricht Treaty (which was signed on 7
       February 1992 and came into force on 1 November 1993) as amended, varied
       or supplemented from time to time;

       "TWELVE MONTH PERIOD" means each period of 12 months ending on a Quarter
       Day;


                                       15
<PAGE>   18


       "ULTIMATE SHAREHOLDER" means Global TeleSystems Inc., a Delaware
       corporation with its principal office at 4121 Wilson Boulevard,
       Arlington, Virginia 22203, U.S.A.;

       "UNDRAWN FACE AMOUNT" means, in relation to a Bank Guarantee, at any
       time, the maximum principal amount that may be or become payable to the
       beneficiaries thereunder at that time;

       "UNRESTRICTED GROUP" means all the Subsidiaries of the Original Borrower
       which are not members of the Restricted Group;

       "UNRESTRICTED GROUP BUSINESS" means the business of (i) providing
       telecommunications services to customers, including multimedia services,
       Internet services, toll free services, calling card services and switched
       data services, (ii) constructing, creating, developing and marketing
       intracity fibre networks ("City Enterprise Networks"), telehouses,
       Internet protocol exchange points, data and Web-hosting centres and
       similar facilities and (iii) evaluating, participating in or pursuing any
       other activity or opportunity that is reasonably related, ancillary or
       complementary to the activities identified in clauses (i) or (ii) above,
       provided that no more than 25% of the annual revenues of the Unrestricted
       Group may be derived from the provision of long-haul, international
       managed bandwidth telecommunications services to telecommunications
       carriers, internet service providers and other bandwidth intensive
       customers;

       "UTILISATION" means a borrowing by any Borrower of an Advance or the
       issuing of a Bank Guarantee by the Working Capital Bank;

       "UTILISATION DATE" means:

       (a)   in the case of a Utilisation by means of an Advance, the date on
             which the relevant Advance is, or is to be, made; and

       (b)   in the case of a Utilisation by means of a Bank Guarantee the date
             on which the relevant Bank Guarantee is, or is to be, issued,

       in each case being a Banking Day falling within the Availability Period;

       "UTILISATION NOTICE" means (a) in the case of a Utilisation by means of a
       RC Advance, a notice in the form or substantially in the form of part A
       of schedule 2, (b) in the case of a Utilisation by means of a Bank
       Guarantee, a notice in the form or substantially in the form of part B of
       schedule 2, and (c) in the case of a Utilisation by means of a WC Advance
       a notice in the form or substantially in the form of part C of schedule
       2;

       "WC ADVANCE" means an advance made under the Working Capital Facility;

       "WORKING CAPITAL BANK" means Deutsche Bank AG London of Winchester House,
       1 Great Winchester Street, London EC2N 2DB as issuer of Bank Guarantees
       and lender of WC Advances under the Working Capital Facility; and

       "WORKING CAPITAL FACILITY" means the working capital facility of up to a
       maximum principal amount of $25,000,000 (or its equivalent in Optional
       Currencies) made available to the Borrowers by the Working Capital Bank
       pursuant to clause 2.1.

1.3    HEADINGS

       Clause headings and the table of contents are inserted for convenience of
       reference only and shall be ignored in the interpretation of this
       Agreement.


                                       16
<PAGE>   19


1.4    CONSTRUCTION OF CERTAIN TERMS

       In this Agreement, unless the context otherwise requires:

       (a)    references to clauses and schedules are to be construed as
              references to the clauses of, and schedules to, this Agreement and
              references to this Agreement include its schedules and references
              in any schedule to paragraphs are to paragraphs of that schedule;

       (b)    references to (or to any specified provision of) this Agreement or
              any other document shall be construed as references to this
              Agreement, that provision or that document as in force for the
              time being and as from time to time amended in accordance with its
              terms, or, as the case may be, with the agreement of the relevant
              parties and (where such consent is, by the terms of this Agreement
              or the relevant document, required to be obtained as a condition
              to such amendment being permitted) the prior written consent of
              the Agent, all of the Banks or the Majority Banks (as the case may
              be);

       (c)    references to a "REGULATION" include any present or future
              regulation, rule, directive, requirement, request or guideline
              (whether or not having the force of law) of any agency, authority,
              central bank or government department or any self-regulatory or
              other national or supra-national authority;

       (d)    words importing the plural shall include the singular and vice
              versa;

       (e)    references to a time of day are to London time;

       (f)    references to a "PERSON" shall be construed as including
              references to an individual, firm, company, corporation,
              unincorporated body of persons or any State or any agency thereof
              and that person's successors in title;

       (g)    references to "ASSETS" include all or part of any business,
              undertaking, real property, personal property, uncalled capital
              and any rights (whether actual or contingent, present or future)
              to receive, or require delivery of, any of the foregoing;

       (h)    references to a "GUARANTEE" include references to an indemnity or
              other assurance against financial loss including, without
              limitation, an obligation to purchase assets or services as a
              consequence of a default by any other person to pay any
              Indebtedness and "GUARANTEED" shall be construed accordingly;

       (i)    references to the "EQUIVALENT" of an amount specified in a
              particular currency (the "SPECIFIED CURRENCY AMOUNT") shall be
              construed as a reference to the amount of the other relevant
              currency which would be required to purchase the specified
              currency amount in the London foreign exchange market at the
              Agent's spot rate of exchange at or about 11 a.m. on the second
              Banking Day before the day on which the calculation falls to be
              made;

       (j)    references to the "AGREED FORM" means, in relation to any
              document, the form of such document as shall be agreed between the
              Original Borrower and the Agent (or the Security Trustee, as the
              case may be for and on behalf of all of the Banks); and

       (k)    references to any enactment shall be deemed to include references
              to such enactment as re-enacted, amended or extended.

1.5    MAJORITY BANKS

       Where this Agreement provides for any matter to be determined by
       reference to the opinion of the Majority Banks or to be subject to the
       consent or request of the Majority Banks or for any action to be taken on
       the instructions of the Majority Banks, such opinion, consent, request or
       instructions shall (as between the Banks) only be regarded as having been
       validly given or issued by the Majority Banks if all the Banks shall have
       been given prior notice of the matter on which such opinion, consent,
       request or instructions are required to be obtained and the relevant
       majority of Banks shall have given or issued such opinion, consent,
       request or instructions but so that (as between the Obligors and the
       Banks), once informed by the Agent that such opinion, consent, request or
       instructions have been given, the Obligors shall be entitled (and bound)
       to assume that such notice shall have been duly received by each Bank


                                       17
<PAGE>   20


       and that the relevant majority shall have been obtained to constitute
       Majority Banks whether or not this is in fact the case.

2      THE FACILITIES

2.1    AMOUNTS

       Upon and subject to the terms of this Agreement and in reliance on each
       of the representations and warranties in clause 11, for the purposes set
       out in clause 1.1:

       (a)    the Banks agree to make available to the Borrowers a revolving
              credit facility in the principal sum of up to $525,000,000 (or its
              equivalent in Optional Currencies) or, during the Restriction
              Period, $275,000,000 (or its equivalent in Optional Currencies);
              and

       (b)    the Working Capital Bank agrees to make available to the Borrowers
              a working capital facility in the principal sum of up to
              $25,000,000 (or its equivalent in Optional Currencies).

       The obligation of each Bank under this Agreement shall be to contribute
       to that proportion of each Advance which, as at the Utilisation Date of
       such Advance, its Commitment in relation to the Revolving Credit Facility
       bears to the aggregate of the Commitments in relation to the Revolving
       Credit Facility of all the Banks. The obligation of the Working Capital
       Bank to issue Bank Guarantees and to lend WC Advances is as set out in
       clause 5.

2.2    OBLIGATIONS SEVERAL

       The obligations of each Bank and the Working Capital Bank under this
       Agreement are several; the failure of any Bank or the Working Capital
       Bank to perform such obligations shall not relieve any other Finance
       Party of any of their respective obligations or liabilities under this
       Agreement nor shall the Agent, the Security Trustee or the Arrangers be
       responsible for the obligations of any Bank or the Working Capital Bank
       (except for its own obligations, if any, as a Bank or the Working Capital
       Bank) nor shall any Bank or the Working Capital Bank (as the case may be)
       be responsible for the obligations of any other Bank or the Working
       Capital Bank (as the case may be) under this Agreement.

2.3    INTERESTS SEVERAL

       Notwithstanding any other term of this Agreement (but without prejudice
       to the provisions of this Agreement relating to or requiring action by
       the Majority Banks) the interests of the Finance Parties are several and
       the amount due to the Agent (for its own account), to each Arranger, the
       Security Trustee, the Working Capital Bank and to each Bank is a separate
       and independent debt. Each Finance Party shall have the right to protect
       and enforce its rights arising out of this Agreement and it shall not be
       necessary for any other Finance Party to be joined as an additional party
       in any proceedings for this purpose.

3      CONDITIONS

3.1    DOCUMENTS AND EVIDENCE

       The obligation of each Bank to make its Commitment available under the
       Revolving Credit Facility or for the Working Capital Bank to make its
       Commitment available under the Working Capital Facility shall be subject
       to the condition that the Agent, or its duly authorised representative,
       shall have received, not later than the Banking Day on which the
       Utilisation Notice in respect of the first Utilisation is given, the
       documents and evidence specified in part A of Schedule 3 in form and
       substance satisfactory to the Agent.

3.2    GENERAL CONDITIONS PRECEDENT

       The obligation of each Bank to contribute to or participate in any RC
       Advance and of the Working Capital Bank to lend any WC Advance or to
       issue or extend the maturity of any Bank


                                       18
<PAGE>   21


       Guarantee is subject to the further conditions that at the date of the
       relevant Utilisation Notice or request and on the relevant Utilisation
       Date or date of extension (as applicable) no guarantee referred to in
       paragraph (f) of the definition of Permitted Guarantees has been entered
       into and:

       (a)    the representations and warranties set out in clause 11.1
              (adjusted in accordance with clause 11.3) are true and correct on
              and as of each such date as if each were made with respect to the
              facts and circumstances existing at such date;

       (b)    no Default shall have occurred and be continuing or would result
              from such Utilisation.

       However in the case of an RC Advance which would not, if drawn, cause the
       aggregate Dollar Amount of Advances to exceed the aggregate Dollar Amount
       of RC Advances outstanding immediately prior to the making of that RC
       Advance (after taking account of any RC Advance due to be made or repaid
       on the Utilisation Date of such RC Advance) clause 3.2 shall not apply.

       Nothing in this clause 3.2 shall be construed as constituting a waiver of
       any right of the Banks and/or the Working Capital Bank (including,
       without limitation, their rights under clause 14.2) arising from any
       Event of Default which shall have occurred and be outstanding at the time
       of the relevant Utilisation.

3.3    WAIVER OF CONDITIONS PRECEDENT

       The conditions specified in this clause 3 are inserted solely for the
       benefit of the Banks and the Working Capital Bank and may be waived on
       their behalf in whole or in part and with or without conditions by the
       Agent acting on the instructions of all of the Banks and the Working
       Capital Bank in respect of the first Utilisation and on the instructions
       of the Majority Banks with respect to any other Utilisation without
       prejudicing the right of the Agent acting on such instructions to require
       fulfilment of such conditions in whole or in part in respect of any other
       Utilisation.

3.4    NOTIFICATION

       The Agent shall notify the Banks and the Working Capital Bank and the
       Original Borrower promptly after receipt by it of the documents and
       evidence referred to in clause 3.1 in form and substance satisfactory to
       the Agent.

3.5    ACCEDING BORROWERS

3.5.1  The Original Borrower may request that any of its direct wholly owned
       Material Subsidiaries who is a member of the Restricted Group becomes an
       Acceding Borrower, by delivering to the Agent a Deed of Borrower
       Accession duly executed by the Original Borrower and such Subsidiary,
       together with the documents and evidence listed in part B of schedule 3
       applicable to such Subsidiary and the Original Borrower.

3.5.2  Delivery of a Deed of Borrower Accession, duly executed by the Original
       Borrower and the Acceding Borrower, constitutes confirmation by that
       Acceding Borrower and the Original Borrower that the representations and
       warranties set out in clause 11.1 and to be made by them on the date of
       the Deed of Borrower Accession in accordance with clause 11.4 are
       correct, as if made with reference to the facts and circumstances then
       existing.

3.5.3  A Subsidiary of the Original Borrower shall become an Acceding Borrower
       and assume all the rights, benefits and obligations of a Borrower on the
       date on which the Agent notifies the Original Borrower that:

       (a)    the Majority Banks have accepted the Original Borrower's request
              in respect of such Subsidiary;

       (b)    it has received a Deed of Borrower Accession duly executed by the
              Original Borrower and the Acceding Borrower, together with
              documents and evidence listed in part B of


                                       19
<PAGE>   22


              schedule 3 applicable to such Acceding Borrower and the Original
              Borrower in form and substance satisfactory to the Agent; and

       (c)    such Subsidiary is a Guarantor or has become a Guarantor in
              accordance with clause 10.18.

3.5.4  Each Finance Party irrevocably authorises the Agent to countersign each
       Deed of Borrower Accession on its behalf without any further consent of,
       or consultation with, any of the Finance Parties.

3.6    CONDITIONS SUBSEQUENT

3.6.1  The Original Borrower will procure that all Licences granted to or which
       are in the name of the Immediate Shareholder are transferred to and/or
       replacements are issued to the Original Borrower or any other member of
       the Restricted Group which is an Obligor on terms that are not materially
       less beneficial to the Group no later than the date falling 6 months or,
       in the case of any such Licences in the United Kingdom or France, 9
       months, after the date of this Agreement.

3.6.2  The Original Borrower will use all reasonable endeavours to procure that
       all material Necessary Authorisations granted to or which are in the name
       of the Immediate Shareholder are transferred to and/or replacements are
       issued to the Original Borrower or any other member of the Restricted
       Group which is an Obligor on terms that are not materially less
       beneficial to the Group and in any event shall procure that in relation
       to the Served Cities at least two entry or exit network routes, or, if as
       at the date of this Agreement the Immediate Shareholder Group has only
       one such entry or exit network route, one entry or exit route, are
       transferred to and/or replacements are issued to the Original Borrower or
       any other member of the Restricted Group which is an Obligor on terms
       that are not materially less beneficial to the Group no later than the
       date falling 6 months or, in the case of any such Necessary
       Authorisations in the United Kingdom or France, 9 months, after the date
       of this Agreement; provided, however, that subject to the requirement as
       to a minimum number of entry and exit routes in Served Cities, in the
       case of any Necessary Authorisations which are not currently used by the
       Group such un-used Necessary Authorisations shall be transferred to, and
       or replacements issued to an Obligor on terms that are not materially
       less beneficial to the Group, by the later of (i) 3 months after they
       first become used or (ii) 6 months, or in France or the United Kingdom, 9
       months after the date of this Agreement and provided further that this
       clause 3.6.2 shall not apply to the Necessary Authorisations referred to
       in schedule 12.

3.7    NEW MEMBERS OF THE RESTRICTED GROUP

       The Original Borrower may by notice in writing to the Agent designate
       that any of its Subsidiaries becomes a member of the Restricted Group
       with effect from the next Quarter Day, provided that, taking into account
       the Consolidated Net Operating Cash Flow of such Subsidiary and its
       Subsidiaries for the Six Month Period ending on such Quarter Day the
       Original Borrower is in compliance with the undertakings set out in
       clause 13.1 on such Quarter Day.

4      UTILISATIONS

4.1    MAXIMUM OUTSTANDINGS

4.1.1  No Utilisations shall be made if, on the date of such Utilisation, the
       aggregate Dollar Amount of the Total Outstandings would exceed
       $550,000,000 or, at any time during the Restriction Period, $275,000,000
       or either of the limits set out in clause 2.1 would be breached (in any
       such case, as such limit in respect of the amount available under the
       Facilities is from time to time reduced in accordance with clause 7.2 or
       clause 7.4).

4.1.2  No Utilisations shall be made if the Utilisation Date falls within the
       period set out in column (1) below and the ratio of Senior Debt on such
       day (including the Dollar Amount of any proposed Utilisation to be made
       on such day) to Annualised Consolidated Net Operating Cash Flow
       (determined by reference to the most recently ended Six Month Period in
       respect of which Quarterly Management Accounts have been delivered to the
       Agent under this Agreement)


                                       20
<PAGE>   23


       exceeds the ratio set out against the period in column (2) below in which
       the relevant Utilisation Date falls:

<TABLE>
<CAPTION>
                                    (1)                                                             (2)
                                QUARTER DAY                                                        RATIO
                                -----------                                                 -------------------
<S>                                                                                         <C>
        from the date of this Agreement to (and including) 30 June 2002                            6.0:1
        from (and including) 1 July 2002 to (and including) 30 June 2003                           5.0:1
        from (and including) 1 July 2003 to (and including) 30 June 2004                           4.0:1
        from (and including) 1 July 2004 and thereafter                                            3.0:1
</TABLE>


4.1.3  Notwithstanding clause 4.1.2, no Utilisation may be made in relation to
       any Restricted Acquisition unless (including such Utilisation) such
       Restricted Acquisition is permitted by clause 12.2.8.

4.2    RC ADVANCES

       Subject to the terms and conditions of this Agreement, an RC Advance
       shall be made following receipt by the Agent from a Borrower of a duly
       completed Utilisation Notice not later than 10 a.m. on the third Banking
       Day before the proposed Utilisation Date. A Utilisation Notice in respect
       of an RC Advance shall be effective on actual receipt by the Agent and,
       once given, shall, subject as provided in clause 6.6.1, be irrevocable.
       No Utilisation Notice in respect of a RC Advance may be given in respect
       of an amount which is the subject of a notice of cancellation under
       clause 7.4.

4.3    AMOUNT AND TERM OF RC ADVANCES

4.3.1  Each RC Advance shall be of a Dollar Amount which is a minimum of
       $5,000,000 and, in the case of RC Advances denominated in Dollars, an
       integral multiple of $1,000,000 or the balance of the Commitments of the
       Banks in respect of the Revolving Credit Facility.

4.3.2  Each RC Advance shall be denominated in one currency only.

4.3.3  Each RC Advance shall have a Term of one, two, three or six months (or,
       with the prior agreement of all of the Banks, such other period as the
       relevant Borrower may request) ending on or before the Termination Date.

4.3.4  Not more than 15 RC Advances may be outstanding at any one time.

4.4    SELECTION OF CURRENCIES IN RESPECT OF RC ADVANCES

       Subject to the provisions of clause 4.5, each RC Advance shall be made in
       Dollars or an Optional Currency as requested by the relevant Borrower in
       the relevant Utilisation Notice.

4.5    LIMIT ON CURRENCIES; NON-AVAILABILITY

       An RC Advance may not be made in or remain outstanding in an Optional
       Currency (other than Sterling or Dollars) if (a) any Bank determines that
       deposits of such Optional Currency are not readily available to such Bank
       in an amount comparable with such Bank's participation in the relevant RC
       Advance and so notifies the Agent not later than 3 p.m. on the third
       Banking Day before the proposed Utilisation Date or (b) the Agent
       determines after consultation with the relevant Reference Banks (which
       determination shall be conclusive) at any time prior to 10 a.m. (local
       time in the place of payment) on the Utilisation Date that by reason of
       any change in currency availability, currency exchange rates or exchange
       controls it is or will be impracticable for the relevant RC Advance to be
       made in that Optional Currency. Accordingly, in the event the



                                       21
<PAGE>   24

       circumstances set out in (a) or (b) above arise, the Agent shall notify
       the relevant Borrower that an RC Advance shall be made in Dollars.

4.6    CURRENCY AMOUNTS IN RESPECT OF RC ADVANCES

       If an RC Advance is to be made in an Optional Currency, the Banks shall,
       subject to clause 3, advance to the relevant Borrower on the relevant
       Utilisation Date, the amount of such Optional Currency specified in the
       relevant Utilisation Notice. The Dollar Amount of such RC Advance shall
       be the amount in Dollars (as determined by the Agent) which would be
       required to purchase the amount of such Optional Currency in the London
       Foreign Exchange Market at the Agent's spot rate of exchange for the
       purchase of such Optional Currency with Dollars at or about 11 a.m. on
       the second Banking Day before the relevant Utilisation Date. If an RC
       Advance is to be made in Dollars, the Banks shall, subject to clause 3.2,
       advance to the Borrower on the relevant Utilisation Date the Dollar
       Amount of such RC Advance.

4.7    NOTIFICATION TO BANKS

       As soon as practicable after receipt of a Utilisation Notice in respect
       of a RC Advance complying with the terms of this Agreement, the Agent
       shall notify each Bank and, subject to clause 3, each of the Banks shall
       on the Utilisation Date, make available to the Agent its portion of the
       principal amount of the relevant RC Advance in accordance with clause
       9.2.

4.8    APPLICATION OF PROCEEDS

       Without prejudice to the Obligors' obligations under clause 12.1.3, none
       of the Finance Parties shall have any responsibility for the application
       of the proceeds of or the purpose of any Utilisation by any Borrower.

5      THE WORKING CAPITAL FACILITY

5.1    RECEIPT OF UTILISATION NOTICES

       Subject to the terms and conditions of this Agreement, a Bank Guarantee
       shall be issued following receipt by the Agent from a Borrower of a duly
       completed Utilisation Notice not later than 10 a.m. on the third Banking
       Day before the proposed Utilisation Date. A Utilisation Notice in respect
       of a Bank Guarantee or a WC Advance made shall be effective on actual
       receipt by the Agent and, once given, shall, subject as provided in
       clause 6.6.1 be irrevocable. No Utilisation Notice in respect of a Bank
       Guarantee or a WC Advance made may be given in respect of an amount which
       is the subject of a cancellation notice under clause 7.4.

5.2    COMPLETION OF UTILISATION NOTICES

       A Utilisation Notice in respect of a Bank Guarantee will not be regarded
       as having been duly completed unless:

5.2.1  the Utilisation Date is a Banking Day falling in the Availability Period;

5.2.2  the form and substance of the relevant Bank Guarantee is in a form
       previously approved by the Working Capital Bank;

5.2.3  the Bank Guarantee is denominated in one currency only.

5.2.4  subject to clause 7.2, the proposed tenor of the Bank Guarantee has an
       expiry date ending at least 10 Banking Days before the Termination Date;

5.2.5  the Utilisation Notice is accompanied by a copy of the form of the
       documentation or other instrument evidencing the obligation of the
       relevant Borrower which will be the subject of the Bank Guarantee and
       such documentation or other instrument is acceptable to the Working
       Capital Bank;



                                       22
<PAGE>   25


5.2.6  there is a maximum amount to the stated liability of the Working Capital
       Bank under the Bank Guarantee; and

5.2.7  the Dollar Amount of the Bank Guarantee is a minimum of $500,000 or the
       balance of the unutilised Commitment of the Working Capital Bank in
       respect of the Working Capital Facility or such other amount as the Agent
       (acting on the instructions of the Working Capital Bank) may agree.

       Each Utilisation Notice must specify one kind of Bank Guarantee only, but
       the Borrowers may, subject to the other terms of this Agreement, deliver
       more than one Utilisation Notice on any one day. Unless otherwise agreed
       by the Agent, no more than twenty five Bank Guarantees may be outstanding
       at any time.

5.3    NOTIFICATION TO WORKING CAPITAL BANK

       As soon as practicable after receipt of a Utilisation Notice in respect
       of a Bank Guarantee complying with the terms of this Agreement, the Agent
       shall notify the Working Capital Bank and, subject to clause 3, the
       Working Capital Bank shall issue the Bank Guarantee on the Utilisation
       Date.

5.4    NOTIFICATION OF THE BORROWERS

       The Working Capital Bank shall promptly notify the relevant Borrower
       through the Agent if any demand or drawing is made under a Bank Guarantee
       (as the case may be) and provide the relevant Borrower with copies of all
       demands and other supporting documents submitted pursuant to the terms of
       the relevant Bank Guarantee but any failure to notify the relevant
       Borrower promptly shall not affect such Borrower's obligations under the
       counter-indemnity set out in clause 5.6.

5.5    EXTENSION OR RENEWAL OF BANK GUARANTEES

       Subject to the terms of this Agreement, if any Borrower so requests
       (through the Agent), the Working Capital Bank will extend the maturity of
       any Bank Guarantee or will issue a new Bank Guarantee in substitution for
       an existing Bank Guarantee on any Banking Day provided that the Working
       Capital Bank shall not be so obliged unless:

5.5.1  the relevant conditions set out in clause 3 have been satisfied;

5.5.2  such Borrower has given the Agent at least two Banking Days (or such
       shorter period as the Agent may agree) prior written notice of the
       request;

5.5.3  such Borrower has given details of the reason for such extension or
       substitution to the Agent and such reasons are acceptable to the Working
       Capital Bank;

5.5.4  (in the case of a new Bank Guarantee), the Dollar Amount of the new Bank
       Guarantee is equal to or less than the Dollar Amount of the existing Bank
       Guarantee which it is to replace and the existing Bank Guarantee is
       cancelled and returned to the Agent prior to or contemporaneously with
       the issuing of the new Bank Guarantee; and

5.5.5  the provisions of clauses 5.2.1 to 5.2.7 (inclusive) are satisfied.

5.6    COUNTER INDEMNITY

5.6.1  Each Borrower irrevocably:

       (a)    authorises and directs the Working Capital Bank to pay any demand
              that appears on its face to be validly made under and in
              accordance with the terms of each Bank Guarantee without requiring
              proof of the agreement of the relevant Borrower or any other
              person that the amounts so demanded or paid are or were due and
              notwithstanding that the relevant Borrower may dispute the
              validity of any such request, demand or payment;


                                       23
<PAGE>   26


       (b)    confirms that the Working Capital Bank deals in documents only and
              shall not be concerned with the legality of the claim or any other
              underlying transaction or any set-off, counterclaim or defence as
              between the relevant Borrower and the beneficiary of the Bank
              Guarantee unless expressly required to be so by the terms of the
              relevant Bank Guarantee; and

       (c)    agrees that the Working Capital Bank need not have regard to:

              (i)    the sufficiency, accuracy or genuineness of any such demand
                     or any certificate or statement in connection therewith; or

              (ii)   any Incapacity of or limitation upon the powers of any
                     person signing or issuing such demand, certificate or
                     statement which appears on its face to be in order; and

              agrees that the Working Capital Bank shall not be obliged to
              enquire as to any such matters and may assume that any such
              demand, certificate or statement which appears on its face to be
              in order is correct and properly made.

5.6.2  Each relevant Borrower agrees to reimburse the Working Capital Bank
       forthwith on demand all moneys whatsoever paid by the Working Capital
       Bank in accordance with clause 5.6.1 together with interest from (and
       including) the time of such payment by the Working Capital Bank to (but
       excluding) the date of reimbursement at the rate specified in clause 6.3.

5.6.3  In addition to each Borrower's obligations pursuant to clause 5.6.2 and
       only to the extent not included in amounts due under clause 5.6.2, each
       Borrower will indemnify and keep the Working Capital Bank indemnified
       from and against all liabilities, losses, damages, claims, costs, demands
       and actions which the Working Capital Bank may suffer or incur directly
       or indirectly from any third parties by reason of or as a result of the
       issue, amendment or extension of each Bank Guarantee issued at its
       request or its performance of the obligations expressed to be assumed by
       it under this Agreement in relation to the issue of such Bank Guarantees.

5.7    RIGHTS OF CONTRIBUTION AND SUBROGATION OF THE BORROWERS

5.7.1  No Borrower shall, by virtue of any payment made by it under or in
       connection with or referable to this clause 5 or otherwise, be entitled
       to make any claim in the name of a Finance Party against a beneficiary or
       be subrogated to any rights, security or moneys held or received by a
       Finance Party or be entitled at any time to exercise, claim or have the
       benefit of any right of contribution or subrogation or similar right
       against a Finance Party. All rights of contribution or similar rights
       arising in respect of any amount due under or in connection with the
       Finance Documents are hereby waived by the Obligors.

5.8    WAIVER OF DEFENCE OF THE BORROWERS

5.8.1  Each Borrower agrees that its obligations under this clause 5 shall not
       be affected by any act, omission, matter or thing which but for this
       provision might operate to release or otherwise exonerate it from its
       obligations hereunder in whole or in part including, without limitation,
       and whether or not known to it:

       (a)    any time or waiver granted to or composition with a Finance Party,
              any beneficiary of any Bank Guarantee or any other person;

       (b)    any taking, variation, compromise, renewal or release of, or
              refusal or neglect to perfect or enforce, any rights, remedies or
              securities available to any Finance Party or other person or
              arising under a Bank Guarantee; and

       (c)    any variation or extension of or increase in liabilities under a
              Bank Guarantee so that references in this Agreement to a Bank
              Guarantee shall include each such increase, extension and
              variation


                                       24
<PAGE>   27

              provided that no Borrower shall be liable for any amounts arising
              by reason of any variations or extension of or increase in
              liabilities under a Bank Guarantee issued at its request unless
              made at the request of or with the prior consent of such Borrower.

5.9    CONTINUING INDEMNITY OF THE BORROWERS

       The obligations of the Borrowers under this clause 5 shall extend to the
       ultimate balance of the obligations and liabilities of the Borrowers
       under this clause 5 and shall continue in force notwithstanding any
       intermediate payment in part of such obligations or liabilities.

5.10   ADDITIONAL SECURITY

       The obligations of the Borrowers under this clause 5 shall be in addition
       to and shall not be in any way prejudiced by any Collateral Instrument
       now or hereafter held by any Finance Party or to which that Finance Party
       may be entitled.

5.11   PRESERVATION OF RIGHTS

       No invalidity or unenforceability of all or any part of this clause 5
       shall affect any rights of indemnity or otherwise which any Finance Party
       would or may have in the absence of or in addition to this clause 5.

5.12   AMOUNT AND TERM OF WC ADVANCES

5.12.1 Each WC Advance shall be of a Dollar Amount which is a minimum of
       $1,000,000 and, in the case of WC Advances denominated in Dollars, an
       integral multiple of $1,000,000 or the balance of the Commitments of the
       Working Capital Bank in respect of the Working Capital Facility.

5.12.2 Each WC Advance shall be denominated in one currency only.

5.12.3 Each WC Advance shall have a Term of one, two, three or six months (or,
       with the prior agreement of the Working Capital Bank, such other period
       as the relevant Borrower may request) ending on or before the Termination
       Date.

5.12.4 Not more than 5 WC Advances may be outstanding at any one time.

5.13   SELECTION OF CURRENCIES IN RESPECT OF WC ADVANCES

       Subject to the provisions of clause 5.13, each WC Advance shall be made
       in Dollars or an Optional Currency as requested by the relevant Borrower
       in the relevant Utilisation Notice.

5.14   LIMIT ON CURRENCIES; NON-AVAILABILITY IN RESPECT OF WC ADVANCES

       A WC Advance may not be made in or remain outstanding in an Optional
       Currency (other than Sterling or Dollars) if (a) the Working Capital Bank
       determines that deposits of such Optional Currency are not readily
       available to it in an amount comparable with the amount of the relevant
       WC Advance and so notifies the Agent not later than 3 p.m. on the third
       Banking Day before the proposed Utilisation Date or (b) the Agent
       determines after consultation with the relevant Reference Banks (which
       determination shall be conclusive) at any time prior to 10 a.m. (local
       time in the place of payment) on the Utilisation Date that by reason of
       any change in currency availability, currency exchange rates or exchange
       controls it is or will be impracticable for the relevant WC Advance to be
       made in that Optional Currency. Accordingly, in the event the
       circumstances set out in (a) or (b) above arise, the Agent shall notify
       the relevant Borrower that a WC Advance shall be made in Dollars.

5.15   CURRENCY AMOUNTS IN RESPECT OF WC ADVANCES

       If a WC Advance is to be made in an Optional Currency, the Working
       Capital Bank shall, subject to clause 3, advance to the relevant Borrower
       on the relevant Utilisation Date, the amount of such Optional Currency
       specified in the relevant Utilisation Notice. The Dollar Amount of such


                                       25
<PAGE>   28


       WC Advance shall be the amount in Dollars (as determined by the Agent)
       which would be required to purchase the amount of such Optional Currency
       in the London Foreign Exchange Market at the Agent's spot rate of
       exchange for the purchase of such Optional Currency with Dollars at or
       about 11 a.m. on the second Banking Day before the relevant Utilisation
       Date. If a WC Advance is to be made in Dollars, the Working Capital Bank
       shall, subject to clause 3.2, advance to the Borrower on the relevant
       Utilisation Date the Dollar Amount of such WC Advance.

5.16   NOTIFICATION TO BANK

       As soon as practicable after receipt of a Utilisation Notice in respect
       of a WC Advance complying with the terms of this Agreement, the Agent
       shall notify the Working Capital Bank and, subject to clause 3, the
       Working Capital Bank shall on the Utilisation Date, make available to the
       Agent the principal amount of the relevant WC Advance in accordance with
       clause 9.2.

6      INTEREST AND BANK GUARANTEE COMMISSION

6.1    NORMAL INTEREST RATE

       The Borrowers shall pay interest on each Advance on the last day of its
       Term or, in relation to a Term longer than 6 months on the date falling 6
       months after the first day of such Term and on the last day of such Term,
       at the rate per annum determined by the Agent to be the aggregate of
       either:

6.1.1  other than in the case of Advances denominated in euro, (a) the
       applicable Margin and (b) the Additional Cost (if any) and (c) LIBOR; or

6.1.2  in the case of Advances denominated in euro, (a) the applicable Margin,
       (b) the Additional Cost (if any) and (c) EURIBOR.

6.2    APPLICABLE MARGIN

       The Margin in relation to any Advance, any unpaid sum due under this
       Agreement and for the purposes of clauses 6.7 and 8.1.3 shall (subject to
       the proviso below), be the rate set out in column (1) below against the
       ratio set out in column (2) below of Senior Debt (taking into account,
       for the purposes of such calculation, the amount of any Utilisation to be
       made, repaid or discharged on the day on which the calculation falls to
       be made) to Annualised Consolidated Net Operating Cash Flow (determined
       by reference to the then most recently ended Six Month Period in respect
       of which Quarterly Management Accounts have been delivered to the Agent
       under this Agreement):

<TABLE>
<CAPTION>
                    (1)                                  (2)
         Rate (per cent. per annum)       Ratio of Senior Debt to Annualised
                                         Consolidated Net Operating Cash Flow
<S>                                      <C>
                      1.75                  5:1 or more but less than 6:1
                     1.375                  4:1 or more but less than 5:1
                      1.00                  3:1 or more but less than 4:1
                      0.75                          less than 3.1
</TABLE>

       For the purposes of clauses 6.7 and 8.1.3 the Margin shall be determined
       on a daily basis and in relation to an Advance or unpaid sum the Margin
       shall be determined on the first day of the relevant Term or period and
       be in effect for the entire Term or period. Provided that (a) from the
       date of this Agreement until the date falling one year after the date of
       this Agreement (the "First Anniversary"), the Margin in relation to any
       Advance, any unpaid sum due under this Agreement and for the purposes of
       clause 8.1.3 shall be the greater of (i) 1.25 per cent. per annum and
       (ii) the applicable rate at such time set out in the table in this clause
       6.2, (b) from the


                                       26
<PAGE>   29


       date of the First Anniversary until the date falling two years after the
       date of this Agreement, the Margin in relation to any Advance, any unpaid
       sum due under this Agreement and for the purposes of clause 8.1.3 shall
       be the greater of (i) 1.15 per cent. per annum and (ii) the applicable
       rate set out in the table in this clause 6.2, (c) during any Grace Period
       until the relevant conditions have been satisfied, the Margin shall be
       1.75 per cent. per annum and (d) if the Original Borrower has failed to
       deliver any Quarterly Management Accounts and/or a Compliance Certificate
       relating thereto when due under this Agreement, the Margin in relation to
       any Advance and any unpaid sum due under this Agreement, for that part of
       each Term or relevant period commencing after the date such Quarterly
       Management Accounts and/or Compliance Certificate relating thereto is due
       but ending on the day when such Quarterly Management Accounts and/or
       Compliance Certificate relating thereto are in fact delivered, shall be
       1.75 per cent. per annum.

6.3    INTEREST FOR LATE PAYMENT

       If any Obligor fails to pay any sum (including, without limitation, any
       sum payable pursuant to this clause 6.3) on its due date for payment
       under this Agreement such Obligor shall pay interest on such sum from the
       due date up to the date of actual payment (as well after as before
       judgment) at a rate determined by the Agent pursuant to this clause 6.3.
       The period beginning on such due date and ending on such date of payment
       shall be divided into successive periods of not more than three months as
       selected by the Agent (after consultation with the Banks so far as
       reasonably practicable in the circumstances) each of which (other than
       the first, which shall commence on such due date) shall commence on the
       last day of the preceding such period. The rate of interest applicable to
       each such period shall be the aggregate (as determined by the Agent) of
       (a) one per cent. per annum, (b) the applicable Margin, (c) the
       Additional Cost (if any) and (d) EURIBOR (in the case of amounts in
       euros) or LIBOR (in the case of amounts in currencies other than euros),
       unless such unpaid sum is an amount of principal which shall have become
       due and payable, by reason of a declaration by the Agent under clause
       14.2.2 or a prepayment pursuant to clause 7.8 or 16.1, prior to the end
       of the Term relating thereto, in which case the first such period
       selected by the Agent shall end on the last day of such Term and interest
       shall be payable on such unpaid sum during such period at a rate one per
       cent. above the rate applicable thereto immediately before it shall have
       become so due and payable. Interest under this clause 6.3 shall be due
       and payable on the last day of each period determined by the Agent
       pursuant to this clause 6.3 or, if earlier, on the date on which the sum
       in respect of which such interest is accruing shall actually be paid. If,
       for the reasons specified in clause 6.6.1(a) or 6.6.1(b), the Agent is
       unable to determine a rate in accordance with the foregoing provisions of
       this clause 6.3, each Bank and/or the Working Capital Bank (as the case
       may be) shall promptly notify the Agent of the cost of funds to such Bank
       or the Working Capital Bank (as the case may be) and interest on any sum
       not paid on its due date for payment shall be calculated for each Bank
       and/or the Working Capital Bank (as the case may be) at a rate determined
       by the Agent to be one per cent. per annum above the aggregate of the
       Margin and the cost of funds (including any Additional Cost) to such Bank
       or the Working Capital Bank (as the case may be).

6.4    NOTIFICATION OF INTEREST RATE

       The Agent shall notify the Original Borrower and the Banks and/or the
       Working Capital Bank (as the case may be) promptly of each rate of
       interest determined by it under this clause 6.

6.5    REFERENCE BANK QUOTATIONS

       If any Reference Bank is unable or otherwise fails to furnish a quotation
       for the purpose of calculating LIBOR or EURIBOR (as appropriate) where
       such quotation is required having regard to the definitions of "LIBOR"
       and "EURIBOR" in clause 1.2, the interest rate for the relevant Term or
       other period shall be determined, subject to clause 6.6, on the basis of
       the quotations furnished by the remaining EURIBOR Reference Bank or LIBOR
       Reference Banks (as the case may be).


                                       27
<PAGE>   30


6.6    MARKET DISRUPTION; NON-AVAILABILITY

6.6.1  If and whenever, at any time prior to the making of an Advance:

       (a)    (at any time when Reference Bank quotations are required having
              regard to the definition of "LIBOR" and "EURIBOR" in clause 1.2)
              the Agent shall have determined by reason of circumstances
              affecting the London or Euro-Zone Interbank market, after
              consultation with the relevant Reference Banks (which
              determination shall, in the absence of manifest error, be
              conclusive), that adequate and fair means do not exist for
              ascertaining LIBOR or EURIBOR (as appropriate) for the relevant
              Term or if none of the relevant Reference Banks supplies the Agent
              with a quotation for the purpose of calculating LIBOR or EURIBOR
              (as appropriate); or

       (b)    the Agent shall have received notification from either (i) in
              the case of a WC Advance, the Working Capital Bank or (ii) in the
              case of an RC Advance, Banks with Contributions in respect of the
              Revolving Credit Facility aggregating not less than one-third of
              the Total Outstandings in respect of the Revolving Credit Facility
              (or, prior to the first Utilisation Date, Commitments in respect
              of the Revolving Credit Facility aggregating not less than
              one-third of the Total Commitments), that matching deposits in the
              relevant currency are not available on the relevant rate fixing
              date to the Working Capital Bank or such Banks (as the case may
              be) in the London Interbank Market or euro-zone Interbank Market
              (as the case may be) in the ordinary course of business in
              sufficient amounts to fund the amount which they have or are to
              subscribe in relation to such Advance or that LIBOR or EURIBOR (as
              appropriate) does not accurately reflect the cost to the Working
              Capital Bank or such Banks (as the case may be) of obtaining such
              deposits,

       the Agent shall forthwith give notice (a "DETERMINATION NOTICE") to the
       Original Borrower and to each of the Banks or the Working Capital Bank
       (as the case may be) and such Advance shall not be made. A Determination
       Notice shall contain particulars of the relevant circumstances giving
       rise to its issue.

6.6.2  After the giving of any Determination Notice the undrawn amount of the
       Total Commitments in respect of the Revolving Credit Facility or the
       Working Capital Facility (other than by way of Bank Guarantees) shall not
       be drawn until the circumstances giving rise to the issue of the
       Determination Notice have ceased.

       During the period of 10 Banking Days after any Determination Notice has
       been given by the Agent under clause 6.6.1, the Original Borrower and
       each of the Banks or the Working Capital Bank (as the case may be) may
       enter into negotiations with a view to agreeing an alternative basis (the
       "SUBSTITUTE BASIS") for each Bank or the Working Capital Bank (as the
       case may be) making available or, as the case may be, maintaining its
       contribution to the Advance. The Substitute Basis may (without
       limitation) include alternative interest periods, alternative currencies
       or alternative rates of interest but shall include a margin above the
       cost of funds including Additional Cost, if any, to each Bank equivalent
       to the Margin. Each Substitute Basis so agreed shall be binding upon the
       Borrowers and shall take effect in accordance with its terms from the
       date specified in the Determination Notice until such time as none of the
       circumstances specified in clause 6.6.1 continues to exist whereupon the
       normal interest rate fixing provisions of this Agreement shall apply.

6.7    BANK GUARANTEE COMMISSION

       The Borrowers shall pay to the Agent for the account of the Working
       Capital Bank commission in respect of all Bank Guarantees calculated on
       the aggregate of the Dollar Amount of the Undrawn Face Amount of all Bank
       Guarantees, at the rate determined by the Agent to be equivalent to the
       applicable Margin from day to day. Commission determined as aforesaid
       shall be calculated on the aggregate daily of the Dollar Amount of the
       Undrawn Face Amount of all Bank Guarantees during the period from the
       Utilisation Date for the first Bank Guarantee until the date the last
       Bank Guarantee expires or is fully drawn and shall be payable in arrears
       on each Quarter Date and on the date the last Bank Guarantee expires.


                                       28
<PAGE>   31


7      REPAYMENT, CANCELLATION AND PREPAYMENT

7.1    REPAYMENT OF ADVANCES

       The Borrowers shall repay each Advance on its Maturity Date in the
       currency in which it is denominated.

7.2    REDUCTION OF TOTAL COMMITMENTS

       (a)    on the first eight Reduction Dates during the Reduction Period
              the Total Commitments shall be automatically reduced by an amount
              equal to five per cent. of the amount of the Total Commitments as
              at the beginning of the Reduction Period; and

       (b)    on the second eight Reduction Dates during the Reduction Period
              the Total Commitments shall be automatically reduced by an amount
              equal to seven and a half per cent. of the amount of the Total
              Commitments as at the beginning of the Reduction Period,

       and the Commitment of each Bank and the Working Capital Bank shall be
       reduced accordingly.

       Such reduction shall be applied first against that part of the Total
       Commitments which relates to the Revolving Credit Facility and, only when
       that part of the Total Commitments which relates to the Revolving Credit
       Facility has been reduced to zero, secondly against that part of the
       Total Commitments which relates to the Working Capital Facility.

       The Borrowers shall prepay or repay the Advances and/or procure the
       irrevocable discharge and return to the Working Capital Bank of the Bank
       Guarantees on each Reduction Date accordingly so that the Total
       Outstandings shall not thereafter exceed the aggregate of the Total
       Commitments as reduced on such Reduction Date.

7.3    CURRENCY ROLLOVERS

       If an Advance under the Revolving Credit Facility or the Working Capital
       Facility (the "NEW ADVANCE") is to be made on a day on which another
       Advance under the same Facility to the same Borrower (the "MATURING
       ADVANCE") denominated in the same currency as the new Advance is due to
       be repaid then, subject to the terms of this Agreement and so long as the
       conditions referred to in clause 3.2 (to the extent applicable) shall
       have been satisfied in relation to the new Advance, (a) the maturing
       Advance shall be deemed to have been repaid on its Maturity Date either
       in whole (if the new Advance is equal to or greater than the maturing
       Advance) or in part (if the new Advance is less than the maturing
       Advance) and (b) to the extent that the maturing Advance is so deemed to
       have been repaid, the principal amount of the new Advance to be made on
       such date shall be deemed to have been credited to the account of the
       relevant Borrower by the Agent on behalf of the Banks or the Working
       Capital Bank (as the case may be) in accordance with the terms of this
       Agreement and the Banks or the Working Capital Bank (as the case may be)
       shall only be obliged to make available to the relevant Borrower pursuant
       to clause 4.7 or clause 5.15 (as the case may be) a principal amount
       equal to the amount by which the new Advance exceeds the maturing
       Advance.

7.4    CANCELLATION OF COMMITMENTS

       The Original Borrowers may at any time during the Availability Period by
       notice to the Agent (effective only on actual receipt) cancel with effect
       from a date not less than 5 Banking Days after the receipt by the Agent
       of such notice:

       (a)    the whole or any part (being $10,000,000 or any larger sum which
              is an integral multiple of $1,000,000) of the Commitments in
              respect of the Revolving Credit Facility;

       (b)    the whole or any part (being $5,000,000 or any larger sum which is
              an integral multiple of $1,000,000) of the Commitments in respect
              of the Working Capital Facility;


                                       29
<PAGE>   32


       any such notice of cancellation, once given, shall be irrevocable and
       upon such cancellation taking effect the Commitment of each Bank in
       respect of the Revolving Credit Facility shall be reduced proportionately
       and/or the Commitment of the Working Capital Bank in respect of the
       Working Capital Facility shall be reduced accordingly. Any amounts so
       cancelled shall not be available for redrawing.

7.5    VOLUNTARY PREPAYMENT

       The Borrowers may prepay any Advance in the currency in which it is
       denominated (in whole or in part provided that, in the case of part, the
       Dollar Amount of such part is a minimum of $5,000,000 and, in the case of
       Advances made in Dollars, an integral multiple of $1,000,000 or if such
       Dollar Amount or Advance made in Dollars is less than $5,000,000, in the
       case of an RC Advance, or $1,000,000, in the case of a WC Advance or not
       an integral multiple of $1,000,000 respectively, then the full remaining
       amount) at any time without premium or penalty, but subject to clause
       15.1.

7.6    ADDITIONAL VOLUNTARY PREPAYMENT

       Any Borrower may also prepay (in whole but not in part only), without
       premium or penalty, but without prejudice to its obligations under
       clauses 5.3, 9.5 and 15.2, the Contribution in respect of the Revolving
       Credit Facility of any Bank to which such Borrower shall have become
       obliged to pay additional amounts under clause 5.3, 9.5, or 15.2. Upon
       any notice of such prepayment being given, the Commitment in respect of
       the Revolving Credit Facility of the relevant Bank shall be reduced to
       zero and the amount of the Total Commitments in respect of the Revolving
       Credit Facility shall be reduced accordingly.

7.7    AMOUNTS PAYABLE ON PREPAYMENT

       Any prepayment under this clause 7 shall be made together with (a)
       accrued interest to the date of prepayment, (b) any additional amount
       payable under clauses 6.6, 9.5 or 16.2 and (c) all other sums payable by
       the relevant Borrower under this Agreement including, without limitation,
       any accrued commitment commission payable under clause 8.1.3 and any
       amounts payable under clause 15.1.

7.8    MANDATORY PREPAYMENT AND CANCELLATION

7.8.1  In the event that either or both of the conditions set out in clause 3.6
       are not satisfied in accordance with such clause (i) the Borrowers shall
       within a period of 3 months (the "GRACE PERIOD") from the expiry of the
       six month or nine month period (as applicable) either ensure that the
       relevant outstanding conditions are satisfied or prepay or repay all
       outstanding Advances and procure the irrevocable discharge and return to
       the Working Capital Bank of any Bank Guarantees and (ii) on the expiry of
       the Grace Period, unless the relevant outstanding conditions have been
       satisfied, the Total Commitments shall be reduced to zero and pending
       such satisfaction (a) no further Bank Guarantees may be issued hereunder
       and (b) no Advances may be drawn hereunder under the Revolving Credit
       Facility or the Working Capital Facility (as the case may be) if
       following the making of any such Advance under such Facility the
       aggregate Dollar Amount of Advances would exceed the aggregate Dollar
       Amount of Advances outstanding under such Facility prior to the making of
       such Advance (after taking account of any Advance due under the relevant
       Facility to be made or repaid on the Utilisation Date of such Advance).

7.8.2  In the event that any person acquires or persons acting in concert
       acquire control of the Ultimate Shareholder, unless such person is a
       recognised and experienced international telecommunications operator the
       credit rating of whose long term debt is rated at least "A3" by Moody's
       and "A-" by Standard and Poor's, the Borrowers shall immediately prepay
       or repay all outstanding Advances and procure the irrevocable discharge
       and return to the Working Capital Bank of any Bank Guarantee and the
       Total Commitments shall be reduced to zero. For the purposes of this
       clause 7.8.2 "acting in concert" shall have the meaning given to such
       expression in the City Code on Takeovers and Mergers and "control" means
       (i) the beneficial ownership, directly or indirectly, of shares of
       corporate stock or other equity participations with


                                       30
<PAGE>   33


       voting power under ordinary circumstances to elect the Board of Directors
       ("voting equity interests") representing 50% or more of the total voting
       power of the voting equity interests of the Ultimate Shareholder or (ii)
       the possession of the power, directly or indirectly, to elect a majority
       of the Board of Directors of the Ultimate Shareholder.

7.9    NOTICE OF PREPAYMENT

       No prepayment may be effected under this clause 7 unless the relevant
       Borrower shall have given the Agent at least 3 Banking Days' notice of
       its intention to make such prepayment. Every notice of prepayment shall
       be effective only on actual receipt by the Agent, shall be irrevocable
       and shall oblige the relevant Borrower to make such prepayment on the
       date specified.

7.10   NO OTHER PREPAYMENT

       The Borrowers may not prepay any Advance or any part thereof save as
       expressly provided in this Agreement.

8      FEES AND EXPENSES

8.1    FEES

       The Original Borrower shall pay to the Agent whether or not any part of
       the Commitments is ever drawn:

8.1.1  for the account of the Arrangers, an arrangement fee of an amount and on
       the dates agreed between the Original Borrower and the Arrangers in a
       letter dated 30 June 2000;

8.1.2  on the earlier of (i) the date of the first Utilisation and (ii) the date
       falling five Banking Days after the date of this Agreement and on each
       anniversary of the date of this Agreement until all moneys owing under
       this Agreement have been paid in full, for the account of the Agent or
       the Security Trustee (as the case may be), an agency fee and security
       trustee fee of an amount agreed between the Original Borrower and the
       Agent and the Security Trustee respectively in a letter dated the date of
       this Agreement; and

8.1.3  in arrears on each Quarter Day after the date of this Agreement and on
       the last day of the Availability Period, for the account of each Bank and
       the Working Capital Bank, commitment commission on the daily undrawn and
       uncancelled amount of such Bank's or the Working Capital Bank's (as the
       case may be) Commitment computed from the date of this Agreement at the
       rate of (i) from the date of signing this Agreement until the date
       falling twelve calendar months thereafter, 0.60 per cent. per annum and
       (ii) thereafter the lesser of 0.50 per cent. per annum and 50 per cent.
       of the Margin applicable on each day during the relevant period. If a
       Utilisation is outstanding in an Optional Currency, the daily amount of
       the Commitments treated as drawn for the purpose of calculating
       commitment commission shall be the Dollar Amount of such Utilisation.
       During the Restriction Period the rate of commitment commission on that
       part of the Total Commitments which is not available for drawing by
       virtue of clauses 2.1 and 4.1.1 shall be 0.25 per cent. per annum.

8.2    EXPENSES

       The Original Borrower shall pay to the Agent on demand:

8.2.1  all reasonable expenses (including legal, printing, travel and
       out-of-pocket expenses, but subject to any limitations agreed in writing
       prior to the date of this Agreement in relation thereto) incurred by the
       Finance Parties in connection with the negotiation, preparation and
       execution of the Finance Documents, the syndication of the Facilities and
       the preparation and distribution of the Information Memorandum and
       advertising in connection with this Agreement and of any amendment or
       extension of, or the granting of any waiver or consent under, the Finance
       Documents together with interest at the rate referred to in clause 6.3
       from the date of demand for payment of such expenses to the date of
       payment (as well after as before judgment); and


                                       31
<PAGE>   34


8.2.2  all expenses (including legal, travel and out-of-pocket expenses)
       incurred by the Finance Parties or any of them in contemplation of, or
       otherwise in connection with, the enforcement or attempted enforcement
       of, or preservation or attempted preservation of any rights under, the
       Finance Documents including, without limitation after the occurrence of a
       Default or if otherwise agreed with the Original Borrower, the fees and
       expenses of accountants or other experts incurred in relation to any
       investigation into the affairs of the Original Borrower or any other
       member of the Group or otherwise in respect of the moneys owing under the
       Finance Documents together with interest at the rate refereed to in
       clause 6.3 from the date of demand for payment of such expenses to the
       date of payment (as well after as before judgment).

8.3    VALUE ADDED TAX

       All amounts payable pursuant to this Agreement shall be paid together
       with an amount equal to any value added tax payable in respect thereof.

8.4    STAMP AND OTHER DUTIES

       The Original Borrower shall pay all stamp, documentary, registration or
       other similar duties or Taxes (including any such duties or Taxes payable
       by, or assessed on, the Finance Parties or any of them) imposed on or in
       connection with the Finance Documents or the Facilities.

8.5    INDEMNITY

       The Original Borrower shall indemnify the Finance Parties against any
       liability arising by reason of any delay or omission by the Original
       Borrower to pay such duties or Taxes.

9      PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS

9.1    NO SET-OFF OR COUNTERCLAIM; DISTRIBUTION TO THE BANKS

       All payments to be made by the Obligors under this Agreement shall be
       made in full, without any set-off or counterclaim whatsoever and, subject
       as provided in clause 9.5, free and clear of any deductions or
       withholdings (except to the extent required by law) in Dollars or the
       relevant Optional Currency (except for costs, charges or expenses which
       shall be payable in the currency in which they are incurred) on the due
       date to the account of the Agent at such bank in the principal financial
       centre of the currency concerned or, in the case of euros, Brussels, as
       the Agent may from time to time specify for this purpose. Save where this
       Agreement provides for a payment to be made for the account of the Agent
       (for its own account), the Arrangers, the Security Trustee, the Working
       Capital Bank or a particular Bank, in which case the Agent shall
       distribute the relevant payment to the Agent, the Arrangers, the Working
       Capital Bank, the Bank concerned or the Security Trustee (as the case may
       be), payments to be made by any Obligor under this Agreement shall be for
       the account of all the Banks and the Agent shall forthwith distribute
       such payments in like funds as are received by the Agent to the Banks
       rateably in accordance with their Commitments or Contributions, as the
       case may be.

9.2    PAYMENTS BY THE BANKS OR THE WORKING CAPITAL BANK

       All sums to be paid by the Banks or the Working Capital Bank to the
       Borrowers under this Agreement shall be remitted in the relevant currency
       on the relevant Utilisation Date to the account of the Agent at such bank
       as the Agent may have notified to the Banks or the Working Capital Bank
       (as the case may be) and shall be paid by the Agent on such date in like
       funds as are received by the Agent to the account of the relevant
       Borrower specified in the relevant Utilisation Notice.

9.3    NON-BANKING DAYS

       When any payment under this Agreement would otherwise be due or any
       reduction in the Total Commitments pursuant to clause 7.2 would otherwise
       be effected on a day which is not a Banking Day, the due date for payment
       or the date of such reduction shall be postponed to the next following
       Banking Day unless such Banking Day falls in the next calendar month in
       which


                                       32
<PAGE>   35


       case payment shall be made on the immediately preceding Banking Day. If
       any date or day specifically referred to in this Agreement is not a
       Banking Day all references thereto shall be deemed to be to the
       immediately preceding Banking Day.

9.4    AGENT MAY ASSUME RECEIPT

       Where any sum is to be paid under this Agreement to the Agent for the
       account of another person, the Agent may assume that the payment will be
       made when due and may (but shall not be obliged to) make such sum
       available to the person so entitled. If it proves to be the case that
       such payment was not made to the Agent, then the person to whom such sum
       was so made available shall on request refund such sum to the Agent
       together with interest thereon sufficient to compensate the Agent for the
       cost of making available such sum up to the date of such repayment and
       the person by whom such sum was payable shall indemnify the Agent for any
       and all loss or reasonable expense which the Agent may sustain or incur
       as a consequence of such sum not having been paid on its due date.

9.5    GROSSING-UP FOR TAXES

       Subject to clauses 9.6 and 9.7, at any time any Obligor is required to
       make any deduction or withholding in respect of Taxes (other than any Tax
       on the Overall Net Income of any Finance Party) from any payment due
       under any of the Finance Documents for the account of any Finance Party
       (or if the Agent or Security Trustee is required to make any such
       deduction or withholding from a payment to an any other Finance Party),
       the sum due from the relevant Obligor in respect of such payment shall,
       subject to the Finance Party's compliance with clause 9.8.2, be increased
       to the extent necessary to ensure that, after the making of such
       deduction or withholding, each Finance Party receives on the due date for
       such payment (and retains, free from any liability in respect of such
       deduction or withholding) a net sum equal to the sum which it would have
       received had no such deduction or withholding been required to be made
       and the relevant Obligor shall indemnify each Finance Party against any
       losses or costs incurred by any of them by reason of any failure of such
       Obligor to make any such deduction or withholding or by reason of any
       increased payment not being made on the due date for such payment. The
       relevant Obligor shall promptly deliver to the Agent any receipts,
       certificates or other proof evidencing the amounts (if any) paid or
       payable in respect of any such deduction or withholding.

9.6    QUALIFYING BANKS

       If any Finance Party is not or ceases to be a Qualifying Bank then it
       shall promptly notify the Original Borrower upon becoming aware of the
       same and the relevant Obligor shall not be obliged to pay such Finance
       Party under clause 9.5 any amount in excess of the amount it would have
       been obliged to pay if such Finance Party was or had not ceased to be a
       Qualifying Bank provided that this clause 9.6 shall not apply (and the
       relevant Obligor shall be obliged to comply with its obligations under
       clause 9.5) if after the date of this Agreement (or, in the case of a
       Finance Party which became a party to this Agreement after the date of
       this Agreement, the date on which it became a party) there shall have
       been any change in, or in the interpretation or application of, any
       relevant law, directive, treaty (including, without limitation any
       applicable double taxation treaty) or regulation or practice of any
       applicable taxation authority and as a result thereof the relevant
       Finance Party ceases to be a Qualifying Bank or the relevant Obligor will
       be required to make a deduction or withholding on account of tax
       irrespective of whether the recipient of the relevant payment is or is
       not a Qualifying Bank.

9.7    CLAW-BACK OF TAX BENEFIT

       If following any such deduction or withholding as is referred to in
       clause 9.5 any Finance Party shall receive or be granted a credit against
       or remission for any Taxes payable by it, such Finance Party shall,
       subject to the relevant Obligor having made any increased payment in
       accordance with clause 9.5 and to the extent that such Finance Party can
       in its absolute discretion acting in good faith do so without prejudicing
       the retention of the amount of such credit or remission and without
       prejudice to the right of such Finance Party to obtain any other relief
       or allowance which may be available to it, reimburse the relevant Obligor
       with such amount as such Finance Party shall in its absolute discretion
       acting in good faith certify to be


                                       33
<PAGE>   36


       the proportion of such credit or remission as will leave such Finance
       Party (after such reimbursement) in no worse position than it would have
       been in had there been no such deduction or withholding from the payment
       by the relevant Obligor as aforesaid. Such reimbursement shall be made
       forthwith upon such Finance Party certifying that the amount of such
       credit or remission has been received by it. Nothing contained in this
       Agreement shall oblige any Finance Party to rearrange its tax affairs or
       to disclose any information regarding its tax affairs and computations.
       Without prejudice to the generality of the foregoing, the Obligors shall
       not, by virtue of this clause 9.7, be entitled to enquire about any
       Finance Party's tax affairs.

9.8    CERTIFICATION TO SECURE A TAX BENEFIT

       If, in order to make any payment due under this Agreement to any Finance
       Party without deduction or withholding for or on account of Tax or to
       secure the benefit of any reduced rate of such deduction or withholding,
       any Obligor requires a direction from, or the consent, of a government or
       taxing authority:

9.8.1  the Obligors agree to use their reasonable endeavours to complete
       (accurately and in a manner reasonably satisfactory to such Finance
       Party), execute, arrange for any required certification of, and deliver
       to such Finance Party or such government or taxing authority as such
       Finance Party reasonably directs, any form or document reasonably
       required of it, and to provide such information that such Finance Party
       or such government or taxing authority may reasonably require or request
       in order to assist or enable such Finance Party to secure that such a
       direction or consent is given to the relevant Obligor in respect of any
       payment. Each Obligor shall perform its obligations under this clause
       9.8.1 promptly upon the earlier of:

       (a)   being notified that the form, document or information is required
             or requested; and

       (b)   demand being made by such Finance Party or the relevant government
             or taxing authority, as the case may be; and

9.8.2  each Finance Party agrees to use its reasonable endeavours to complete,
       execute, arrange for any required certification of, and deliver to the
       relevant Obligor, or such government or taxing authority as the Original
       Borrower may reasonably direct, any form or document reasonably required
       of it, and to provide such information that the Original Borrower or such
       government or taxing authority may reasonably require or request in order
       to assist or enable the Original Borrower to secure that such a direction
       or consent is given to the relevant Obligor in respect of any payment.

9.9    BANK ACCOUNTS

       Each Bank and the Working Capital Bank shall maintain, in accordance with
       its usual practices, an account or accounts evidencing the amounts from
       time to time advanced by, owing to and paid to it under this Agreement.
       The Agent shall maintain a control account showing each Utilisation and
       other sums owing by each Obligor under this Agreement and all payments in
       respect thereof made by the Obligors from time to time. The control
       account shall, in the absence of manifest or proven error, be conclusive
       as to the amount from time to time owing by each Obligor under this
       Agreement.

9.10   PARTIAL PAYMENTS

       If, on any date on which a payment is due to be made by any Obligor under
       this Agreement, the amount received by the Agent from the relevant
       Obligor falls short of the total amount of the payment due to be made by
       the relevant Obligor on such date then, without prejudice to any rights
       or remedies available to the Finance Parties under this Agreement, the
       Agent shall apply the amount actually received from the relevant Obligor
       in or towards discharge of the obligations of the Obligors under this
       Agreement in the following order, notwithstanding any appropriation made,
       or purported to be made, by the relevant Obligor:


                                       34
<PAGE>   37


9.10.1 firstly, in or towards payment, on a pro rata basis, of any unpaid fees,
       costs and expenses of the Agent under this Agreement together with any
       portion of the agency fee payable under clause 8.1.2 which remains
       unpaid;

9.10.2 secondly, in or towards payment to the Arrangers of any portion of
       the arrangement fee payable under clause 8.1.1 which remains unpaid;

9.10.3 thirdly, in or towards payment to the Banks and the Working Capital Bank,
       on a pro rata basis, of any accrued commitment commission payable under
       clause 8.1.3 which shall have become due but remains unpaid;

9.10.4 fourthly, in or towards payment to the Banks and the Working Capital
       Bank, on a pro rata basis, of any accrued interest and guarantee
       commission under this Agreement which shall have become due but remains
       unpaid;

9.10.5 fifthly, in or towards payment to the Banks and the Working Capital Bank,
       on a pro rata basis, of any principal under this Agreement which shall
       have become due but remains unpaid; and

9.10.6 sixthly, in or towards payment of any other sum which shall have become
       due under this Agreement but remains unpaid (and, if more than one such
       sum so remains unpaid, on a pro rata basis).

       The order of application set out in this clause 9.10.3 - 9.10.6 shall be
       varied by the Agent if all the Banks and the Working Capital Bank so
       direct, without any reference to, or consent or approval from, any of the
       Obligors.

9.11   CALCULATIONS

       All interest, commission and other payments of an annual nature under
       this Agreement shall accrue from day to day and be calculated on the
       basis of actual days elapsed and (in the case of Dollars or euros) a 360
       day year or (in the case of any Optional Currency) in accordance with
       standard London Interbank Market practice in respect of calculating the
       numbers of days comprising a year. In calculating the actual number of
       days elapsed in a period which is one of a series of consecutive periods
       with no interval between them or a period on the last day of which any
       payment falls to be made in respect of such period, the first day of such
       period shall be included but the last day excluded.

9.12   CERTIFICATES CONCLUSIVE

       Any certificate or determination of any Finance Party as to any rate of
       interest or commission or any amount payable under this Agreement shall
       be prima facie evidence of such amount and binding on the Obligors and
       (in the case of a certificate or determination by the Agent) on the other
       Finance Parties.

9.13   EFFECT OF MONETARY UNION

       The provisions of this clause 9.13 apply in relation to any amount
       payable in the currency of a Participating Member State provided that, if
       and to the extent that any provision relates to any state (or the
       currency of such state) which was not a Participating Member State on 1
       January 1999, such provision shall come into effect in relation to such
       state (and the currency of such state) on and with effect from the date
       on which such state becomes a Participating Member State.

9.13.1 REDENOMINATION AND ALTERNATIVE CURRENCIES

       Each obligation under this Agreement of a party to this Agreement which
       has been denominated in the national currency unit of a Participating
       Member State shall be redenominated into the euro unit in accordance with
       EMU Legislation, provided that, if and to the extent that any EMU
       Legislation provides that following 1 January 1999 an amount denominated
       either in the euro or in the national currency unit of a Participating
       Member State


                                       35
<PAGE>   38


       and payable within that Participating Member State by crediting an
       account of the creditor can be paid by the debtor either in the euro unit
       or in that national currency unit, each party to this Agreement shall be
       entitled to pay or repay any such amount either in the euro unit or in
       such national currency unit.

9.13.2 ADVANCES

       Any Advance in the currency of a Participating Member State shall be made
       in the euro unit.

9.13.3 PAYMENTS TO THE AGENT

       Clauses 9.1 and 9.2 shall be construed so that, in relation to the
       payment of any sum denominated in the euro or in a national currency
       unit, such sum shall be made available to the Agent by payment in the
       euro unit or, as the case may be, such national currency unit and in
       immediately available, freely transferable, cleared funds to the accounts
       notified by it under clauses 9.1 and 9.2.

9.13.4 PAYMENTS BY THE AGENT TO THE FINANCE PARTIES

       Any amount payable by the Agent to any other Finance Party under this
       Agreement in the currency of a Participating Member State shall be paid
       in the euro unit.

9.13.5 PAYMENTS BY THE AGENT

       The Agent shall not be liable to the Borrowers or any of the other
       Finance Parties in any way whatsoever for any delay, or the consequences
       of any delay, in the crediting to any account of any amount required by
       this Agreement to be paid by the Agent if the Agent shall have taken all
       relevant steps to achieve, on the date required by this Agreement, the
       payment of such amount in immediately available, freely transferable,
       cleared funds (in the euro unit or, as the case may be, in a national
       currency unit) to the account with the bank in the principal financial
       centre in the Participating Member State which the relevant Borrower or,
       as the case may be, Finance Party shall have specified for such purpose.
       In this clause 9.13.5 "ALL RELEVANT STEPS" means all such steps as may be
       prescribed from time to time by the regulations or operating procedures
       of such clearing or settlement system as the Agent may from time to time
       after consultation with the Borrowers and the other Finance Parties
       determine for the purpose of clearing or settling payments of the euro.

9.13.6 ROUNDING AND OTHER CONSEQUENTIAL CHANGES

       Without prejudice and in addition to any method of conversion or rounding
       prescribed by any EMU Legislation and without prejudice to the respective
       liabilities for Indebtedness of the Borrowers to the Finance Parties and
       the Finance Parties to the Borrowers under or pursuant to this Agreement
       (and after consultation with the Borrowers and the Finance Parties):

       (a)    each reference in this Agreement to a minimum amount (or an
              integral multiple thereof) in a national currency unit to be paid
              to or by the Agent shall be replaced by a reference to such
              reasonably comparable and convenient amount (or an integral
              multiple thereof) in the euro unit as the Agent may from time to
              time specify; and

       (b)    save as expressly provided in this clause 9.13.6 each provision of
              this Agreement shall be subject to such reasonable changes of
              construction as the Agent may from time to time specify after
              consultation with the Original Borrower to be necessary or
              appropriate to reflect the changeover to the euro in Participating
              Member States.

9.13.7 AMENDMENTS

       After consultation with the Original Borrower, the Banks, and the Working
       Capital Bank for such period as the Agent shall in good faith determine
       is necessary and reasonable in all the circumstances and notwithstanding
       clause 19.11, the Agent shall be entitled to make from time to time such
       amendments to this Agreement as it may determine to be necessary to take


                                       36
<PAGE>   39

       account of monetary union and any consequent changes in market practices
       (whether as to the settlement or rounding of obligations, the calculation
       of interest, place of payment or otherwise howsoever). Any amendment so
       made to this Agreement by the Agent shall be promptly notified to the
       other Finance Parties and the Original Borrower by the Agent and shall be
       binding on all other Finance Parties and the Obligors.

10     GUARANTEE

10.1   LIMITS OF GUARANTEE

       Notwithstanding the provisions of clause 10.2 to 10.18 inclusive, the
       following limitations shall apply to the relevant Guarantors:

       Denmark

       Notwithstanding anything to the contrary herein or in any other Finance
       Document, the maximum amount that can be recovered from any Guarantor
       incorporated in Denmark (the "Danish Guarantor") under the Guarantee
       shall in no event exceed the higher of (i) the amounts borrowed by and
       utilised by or recovered by way of intercompany loan by the relevant
       Danish Guarantor (provided that such amount has not been on lent or
       disposed of to any parent of the Danish Guarantor which is not
       incorporated in Denmark); and (ii) the aggregate at such time of the net
       equity of such Danish Guarantor.

       The limitation referred to in clause 10.1(i) shall apply only as long as
       Danish company legislation (presently section 115) prevents the Danish
       Guarantors from guaranteeing the obligations of their non-Danish parent
       companies. The Danish Guarantors and the Original Borrower undertake to
       execute such addenda to this Agreement as may thereafter be required by
       the Agent to reflect the inapplicability of such legislation.

10.2   COVENANT TO PAY

       In consideration of the Banks and the Working Capital Bank making or
       continuing to make Utilisations to the Borrowers pursuant to this
       Agreement each Guarantor hereby irrevocably and unconditionally but
       subject always to the provisions of clause 10.1:

10.2.1 jointly and severally guarantee to each Finance Party, the due
       performance by any members of the Group of all their respective
       obligations under or pursuant to the Finance Documents; and

10.2.2 jointly and severally guarantee to each Finance Party the payment of all
       moneys now or hereafter due, owing or incurred by any member of the Group
       under or pursuant to the Finance Documents when the same become due
       whether by acceleration or otherwise.

10.3   GUARANTORS AS PRINCIPAL DEBTORS; INDEMNITY

       As a separate and independent stipulation, the Guarantors jointly and
       severally agree that if any purported obligation or liability of any
       member of the Group which would have been the subject of this Guarantee
       had it been valid and enforceable is not or ceases to be valid or
       enforceable against such member of the Group on any ground whatsoever
       whether or not known to the Finance Parties or any of them (including,
       without limitation, any irregular exercise or absence of any corporate
       power or lack of authority of, or breach of duty by, any person
       purporting to act on behalf of such member of the Group or any legal or
       other limitation, or any disability or Incapacity or any change in the
       constitution of any relevant member of the Group) the Guarantors shall
       nevertheless be jointly and severally liable in respect of that purported
       obligation or liability as if the same were fully valid and enforceable
       and such Guarantor was the principal debtor in respect thereof. The
       Guarantors hereby irrevocably and unconditionally jointly and severally
       agree to indemnify and keep indemnified each Finance Party for the
       benefit of the Finance Parties against any loss or liability arising from
       any failure of any member of the Group to perform or discharge any such
       purported obligation or liability or from any invalidity or
       unenforceability of any of the same against any member of the Group,
       subject to the provisions of clause 10.1.


                                       37
<PAGE>   40


10.4   NO SECURITY TAKEN BY GUARANTORS

       The Guarantors hereby jointly and severally warrant that they have not
       taken or received, and undertake that until all the Guaranteed
       Liabilities have been paid or discharged in full, they will not take or
       receive, the benefit of any security from any other Obligor or any other
       person in respect of their obligations under this Guarantee.

10.5   INTEREST

       Each Guarantor agrees to pay interest on each amount demanded of it under
       this Guarantee from the date of such demand until payment (as well after
       as before judgment) at the rate specified in clause 6.3, except that no
       interest shall be recoverable under this clause 10.5 if and to the extent
       that interest has been paid on the underlying amount pursuant to clause
       5.4 or otherwise. Such interest shall be compounded at the end of each
       period determined for this purpose by the Agent in the event of it not
       being paid when demanded but without prejudice to each Finance Party's
       right to require payment of such interest.

10.6   CONTINUING SECURITY AND OTHER MATTERS

       This Guarantee shall:

10.6.1 extend to the ultimate balance from time to time owing to the Finance
       Parties by the members of the Group and shall be a continuing guarantee,
       notwithstanding any settlement of account or other matter whatsoever;

10.6.2 be in addition to any present or future Collateral Instrument,
       right or remedy held by or available to the Finance Parties or any of
       them; and

10.6.3 not be in any way prejudiced or affected by the existence of any such
       Collateral Instrument, rights or remedies or by the same becoming wholly
       or in part void, voidable or unenforceable on any ground whatsoever or by
       the Finance Parties or any of them dealing with, exchanging, varying or
       failing to perfect or enforce any of the same or giving time for payment
       or indulgence or compounding with any other person liable.

10.7   NEW ACCOUNTS

       If this Guarantee ceases to be continuing for any reason whatsoever each
       Finance Party may nevertheless continue any account of any member of the
       Group or open one or more new accounts and the liability of each
       Guarantor under this Guarantee shall not in any manner be reduced or
       affected by any subsequent transactions or receipts or payments into or
       out of any such account.

10.8   LIABILITY UNCONDITIONAL

       The liability of each Guarantor shall not be affected nor shall this
       Guarantee be discharged or reduced by reason of:

10.8.1 the Incapacity or any change in the name, style or constitution of
       any Obligor or any other person liable; or

10.8.2 any of the Finance Parties granting any time, indulgence or concession
       to, or compounding with, discharging, releasing or varying the liability
       of any other Obligor or any other person liable or renewing, determining,
       varying or increasing any accommodation, Facilities or transaction or
       otherwise dealing with the same in any manner whatsoever or concurring
       in, accepting or varying any compromise, arrangement or settlement or
       omitting to claim or enforce payment from any Obligor or any other person
       liable; or

10.8.3 any act or omission which would not have discharged or affected the
       liability of such Guarantor had it been a principal debtor instead of a
       Guarantor or by anything done or omitted which but for this provision
       might operate to exonerate such Guarantor.


                                       38
<PAGE>   41


10.9     COLLATERAL INSTRUMENTS

         None of the Finance Parties shall be obliged to make any claim or
         demand on any member of the Group or to resort to any Collateral
         Instrument or other means of payment now or hereafter held by or
         available to them or it before enforcing this Guarantee and no action
         taken or omitted by any of the Finance Parties in connection with any
         such Collateral Instrument or other means of payment shall discharge,
         reduce, prejudice or affect the liability of any Guarantor under this
         Guarantee nor shall any of the Finance Parties be obliged to apply any
         money or other property received or recovered in consequence of any
         enforcement or realisation of any such Collateral Instrument or other
         means of payment in reduction of the Guaranteed Liabilities.

10.10    WAIVER OF GUARANTOR'S RIGHTS

         Until all the Guaranteed Liabilities have been paid, discharged or
         satisfied in full (and notwithstanding payment of a dividend in any
         liquidation or under any compromise or arrangement) each Guarantor
         agrees that, without the prior written consent of the Agent, it will
         not:

10.10.1  exercise its rights of subrogation, reimbursement and indemnity against
         any other Obligor or any other person liable; or

10.10.2  demand or accept any security to be executed in respect of any of its
         obligations under this Guarantee or any other Indebtedness now or
         hereafter due to such Obligor from any other member of the Group or
         from any other person liable; or

10.10.3  take any step or enforce any right against any other Obligor or any
         other person liable in respect of any Guaranteed Liabilities; or

10.10.4  exercise any right of set-off or counterclaim against any other Obligor
         or any other person liable or claim or prove or vote as a creditor in
         competition with any of the Finance Parties in the liquidation,
         administration or other insolvency proceeding of any other Obligor or
         any other person liable or have the benefit of, or share in, any
         payment from or composition with, any other Obligor or any other person
         liable or any other Collateral Instrument now or hereafter held by any
         of the Finance Parties for any Guaranteed Liabilities or for the
         obligations or liabilities of any other person liable but so that, if
         so directed by the Agent, it will prove for the whole or any part of
         its claim in the liquidation of any other Obligor on terms that the
         benefit of such proof and of all money received by it in respect
         thereof shall be held on trust for the Finance Parties and applied in
         or towards discharge of the Guaranteed Liabilities in such manner as
         the Agent shall deem appropriate.

10.11    SUSPENSE ACCOUNTS

         Any money received in connection with this Guarantee (whether before or
         after any Incapacity of any Obligor) may be placed to the credit of a
         suspense account with a view to preserving the rights of the Finance
         Parties to prove for the whole of their respective claims against any
         Obligor or any other person liable or may be applied in or towards
         satisfaction of the Guaranteed Liabilities as the Agent may from time
         to time conclusively determine in its absolute discretion.

10.12    SETTLEMENTS CONDITIONAL

         Any release, discharge or settlement between any Obligor and any of the
         Finance Parties shall be conditional upon no security, disposition or
         payment to any of the Finance Parties by any Obligor or any other
         person liable being void, set aside or ordered to be refunded pursuant
         to any enactment or law relating to bankruptcy, liquidation,
         administration or insolvency or for any other legal reason whatsoever
         and if such condition shall not be fulfilled the Finance Parties shall
         be entitled to enforce this Guarantee subsequently as if such release,
         discharge or settlement had not occurred and any such payment had not
         been made.


                                       39
<PAGE>   42


10.13    GUARANTORS TO DELIVER UP CERTAIN PROPERTY

         If, contrary to clauses 10.4 or 10.10, any Guarantor takes or receives
         the benefit of any security or receives or recovers any money or other
         property, such security, money or other property shall be held on trust
         for the Finance Parties and shall be delivered to the Agent on demand.

10.14    RETENTION OF THIS GUARANTEE

         The Finance Parties shall be entitled to retain this Guarantee after as
         well as before the payment or discharge of all the Guaranteed
         Liabilities for such period as the Agent may reasonably determine but
         the Finance Parties shall deliver this Guarantee to each Guarantor in
         any event upon the Guaranteed Liabilities being paid or discharged in
         full and the Finance Parties being satisfied that no such avoidance,
         setting aside or order such as is referred to in clause 10.11 is likely
         to occur or be made.

10.15    CHANGES IN CONSTITUTION OR REORGANISATIONS OF THE FINANCE PARTIES

         For the avoidance of doubt and without prejudice to the provisions of
         clause 18, this Guarantee shall remain binding on each Guarantor
         notwithstanding any change in the constitution of the Finance Parties
         or any of them or their or its absorption in, or amalgamation with, or
         the acquisition of all or part of their or its undertaking or assets
         by, any other person, or any reconstruction or reorganisation of any
         kind, to the intent that this Guarantee shall remain valid and
         effective in all respects in favour of any successor in title of the
         Finance Parties, any Transferee and any successor Agent appointed
         pursuant to clause 19.13 or any successor Security Trustee appointed
         pursuant to the terms of the Security Trust Deed in the same manner as
         if such successor in title, Transferee or successor Agent or successor
         Security Trustee had been named in this guarantee as a party instead
         of, or in addition to, the relevant Finance Party.

10.16    OTHER GUARANTORS

         Each Guarantor agrees to be bound by this Guarantee notwithstanding
         that any other person intended to execute or to be bound by any other
         guarantee or assurance under or pursuant to this Agreement may not do
         so or may not be effectually bound and notwithstanding that such other
         guarantee or assurance may be determined or be or become invalid or
         unenforceable against any other person, whether or not the deficiency
         is known to the Finance Parties or any of them.

10.17    DANISH GUARANTORS

         The Original Borrower shall establish and maintain records for the
         purpose of recording the total actual or contingent liability of each
         of the Danish Guarantors. Each member of the Group, the Security
         Trustee, its advisers and the Danish Guarantors shall have the right at
         any time to upon giving reasonable notice to the Original Borrower to
         inspect the books and records of the Original Borrower in order to
         monitor the Original Borrower's adherence to its obligations hereunder.

10.18    ACCEDING GUARANTORS

10.18.1  The Original Borrower shall procure that each Material Subsidiary of
         the Original Borrower (other than the Original Guarantors) becomes an
         Acceding Guarantor either:

         (a)  in the case of a person which is a member of the Group on the date
              of this Agreement within 15 days of it becoming a Material
              Subsidiary; or

         (b)  in the case of a person which becomes a Subsidiary of the Original
              Borrower after the date of this Agreement in the event that such
              Subsidiary is a Material Subsidiary within 15 days of that person
              becoming a Subsidiary of the Original Borrower,


                                       40
<PAGE>   43


         in each case by delivering to the Agent a Deed of Guarantor Accession,
         duly executed by such Subsidiary and the Original Borrower.

10.18.2  The Original Borrower shall procure that within 45 days of each Quarter
         Day, each member of the Group which is not a Guarantor and which has
         received cash (or its equivalent) and/or property, plant and equipment
         from any other member of the Group and/or in respect of whose
         liabilities another member of the Group has issued a guarantee and in
         respect of which at any time during the Quarterly Period ending on such
         Quarter Day the aggregate of (i) the principal amount of such cash (or
         its equivalent) which has not been repaid, (ii) the book value of such
         property plant and equipment and (iii) the maximum amount so guaranteed
         is in excess of $10,000,000, shall become an Acceding Guarantor by
         delivering to the Agent a Deed of Guarantor Accession, duly executed by
         such Subsidiary and the Original Borrower.

10.18.3  The Original Borrower shall procure that within 45 days of each Quarter
         Day, in the event that the Unrestricted Group (taken as a whole, but
         excluding any member of the Unrestricted Group which is a Guarantor)
         has received cash (or its equivalent) and/or property, plant and
         equipment from the Restricted Group (taken as a whole) and/or in
         respect of whose liabilities the Restricted Group (taken as a whole)
         has issued guarantees and at any time during the Quarterly Period
         ending on such Quarter Day the aggregate of (i) the principal amount of
         such cash (or its equivalent) which has not been repaid, (ii) the book
         value of such property plant and equipment and (iii) the maximum amount
         so guaranteed, is in excess of $50,000,000, one or more Subsidiaries of
         the Original Borrower which are members of the Unrestricted Group (and
         which are not already Guarantors) and which have received all or part
         of the cash (or its equivalent) and/or property, plant and equipment
         and/or benefit of a guarantee referred to herein, shall to the extent
         necessary to ensure that the aggregate of (i) the principal amount of
         such cash (or its equivalent) which has not been repaid, (ii) the book
         value of such property plant and equipment and (iii) the maximum amount
         so guaranteed is in respect of members of the Unrestricted Group which
         are not Guarantors does not exceed $50,000,000, become an Acceding
         Guarantor immediately by delivering to the Agent a Deed of Guarantor
         Accession, duly executed by such Subsidiary or Subsidiaries and the
         Original Borrower.

10.18.4  The Original Borrower shall procure that, at the same time as a Deed of
         Guarantor Accession is delivered to the Agent, there is delivered to
         the Agent all the applicable documents and evidence listed in part B of
         schedule 3, in respect of the relevant Subsidiary and the Original
         Borrower, in each case in form and substance satisfactory to the Agent,
         acting reasonably.

10.18.5  Delivery of a Deed of Guarantor Accession duly executed by an Acceding
         Guarantor and the Original Borrower constitutes confirmation by the
         relevant Acceding Guarantor and the Original Borrower that the
         representations and warranties set out in clause 11.1 and to be made by
         them on the date of the Deed of Guarantor Accession in accordance with
         clause 11.4 are correct, as if made by it with reference to the facts
         and circumstances then existing.

10.18.6  Each Acceding Guarantor, before entering into a Deed of Guarantor
         Accession, shall comply with all relevant legislation in its Relevant
         Jurisdiction(s), to the satisfaction of the Security Trustee, to ensure
         that its giving of, and performance under, the Guarantee is in
         compliance with all relevant provisions of such legislation and to
         ensure that its giving of, and performance under, the Guarantee is
         legal, valid and binding on such Acceding Guarantor subject to any
         general principles of law limiting its obligations which are
         specifically referred to in clause 10.1 hereof and in any legal opinion
         delivered pursuant to part A of schedule 3 in relation to the
         Guarantee.

10.18.7  Each Finance Party irrevocably authorises the Security Trustee to
         countersign each Deed of Guarantor Accession on its behalf without any
         further consent of, or consultation with, any of the Finance Parties.

10.18.8  On receipt by the Security Trustee of a Deed of Guarantor Accession
         duly executed by the Original Borrower and the Acceding Guarantor,
         together with the documents and evidence listed in part B of schedule 3
         applicable to such Acceding Guarantor and the Original Borrower in form
         and substance satisfactory to the Agent, such Acceding Guarantor shall
         become a


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<PAGE>   44


       Guarantor and, in the case of a Material Subsidiary which becomes an
       Acceding Guarantor pursuant to clause 10.18.1, a member of the Restricted
       Group under this Agreement.

11     REPRESENTATIONS AND WARRANTIES

11.1   REPEATED REPRESENTATIONS AND WARRANTIES

       Each Obligor (other than the Immediate Shareholder) in respect of itself
       and its Subsidiaries, the Immediate Shareholder (in respect of itself
       only) and, as the case may be, the Ultimate Shareholder (in respect of
       itself only) represents and warrants to each of the Finance Parties that:

11.1.1 DUE INCORPORATION

       the Ultimate Shareholder, all the Obligors and the members of the
       Restricted Group are duly incorporated or formed and validly existing
       under the laws of their respective places of incorporation or formation
       and have power to carry on their respective businesses as they are now
       being conducted and to own their respective property and other assets;

11.1.2 CORPORATE POWER

       it has power to execute, deliver and perform its obligations under the
       Finance Documents to which it is party and, in the case of the Borrowers,
       to borrow under this Agreement; all necessary corporate, shareholder and
       other action has been, or in the case of clause 3.6 will be, taken to
       authorise the execution, delivery and performance of the same and no
       limitation on its powers to borrow or on its powers to give guarantees
       will be exceeded as a result of utilisation of the Facilities or as a
       result of the giving of the Guarantee;

11.1.3 BINDING OBLIGATIONS

       the Finance Documents to which it is a party, when executed and delivered
       by the relevant Obligor, will, subject to any general principles of law
       limiting its obligations which are specifically referred to in clause
       10.1 hereof and in any legal opinion delivered pursuant to part A of
       schedule 3 in relation to the relevant Finance Document, with the
       exception of the Licence Securities, constitute valid and legally binding
       obligations of such Obligor enforceable in accordance with their
       respective terms;

11.1.4 NO CONFLICT WITH OTHER OBLIGATIONS

       the execution and delivery of, the performance of its obligations under,
       and compliance with the provisions of, the Finance Documents to which it
       is party will not (i) contravene in any material respect any existing
       applicable law, statute, rule or regulation generally applicable to
       transactions of this type or any judgment, decree or permit to which such
       Obligor is subject and aware of, (ii) conflict with in any material
       respect, or result in any material breach of any of the terms of, or
       constitute a material default under, any material agreement or other
       instrument to which such Obligor is a party or is subject or by which it
       or any of its property is bound, (iii) contravene or conflict with any
       provision of such Obligor's constitutive documents (iv) breach in any
       respect any term of the Licences, (iv) breach in any material respect any
       term of the Necessary Authorisations or (v) save for the Encumbrances
       granted to the Security Trustee pursuant to the Security Documents,
       result in the creation or imposition of or oblige any member of the Group
       to create any Encumbrance (other than a Permitted Encumbrance) on any
       member of the Group's undertakings, assets, rights or revenues;

11.1.5 NO FILINGS REQUIRED

       it is not necessary to ensure the legality, validity, enforceability or
       admissibility in evidence of any Finance Document, that it or any other
       instrument be notarised, filed, recorded, registered or enrolled in any
       court, public office or elsewhere in any Relevant Jurisdiction or that
       any stamp, registration or similar tax or charge be paid in any Relevant
       Jurisdiction on or in relation to any of the Finance Documents (or, if it
       is necessary to take such actions or make such


                                       42
<PAGE>   45


         payment, it has been done or will be done within the applicable time
         period for such action or payment or, if no such time period is
         specified, as soon as is practical) and the Finance Documents are in
         proper form for their enforcement in the courts of any Relevant
         Jurisdiction;

11.1.6   NO LITIGATION

         save as disclosed in schedule 10 and in the Immediate Shareholder's
         10-K for the year ending 31st December 1999 or in writing to Agent, no
         litigation, arbitration or administrative proceeding is to the
         knowledge of such Obligor taking place, pending or threatened against
         any member of the Group which would reasonably be likely to have a
         Material Adverse Effect;

11.1.7   FINANCIAL STATEMENTS CORRECT AND COMPLETE

         (a)   the audited consolidated financial statements of the Immediate
               Shareholder Group, in respect of the financial year ended on 31
               December 1999 as delivered to the Agent have been prepared in
               accordance with GAAP which principles have been consistently
               applied and present fairly and accurately the financial position
               of each of the Immediate Shareholder Group as at such date and
               the consolidated results of the operations of each of the
               Immediate Shareholder Group for the financial year ended on such
               date and, as at such date, no member of the Immediate Shareholder
               Group had any material liabilities (contingent or otherwise) or
               any losses which are not disclosed by, or reserved against or
               provided for in, such financial statements; and

         (b)   the unaudited Quarterly Management Accounts for each of the
               Immediate Shareholder Group, the Group and the Restricted Group
               in respect of the Quarterly Period ended 31 March 2000 as
               delivered to the Agent have been prepared in accordance with GAAP
               whose principles have been consistently applied and present
               fairly and accurately the results of operations of each of the
               Immediate Shareholder Group, the Group and the Restricted Group
               for such Quarterly Period as at such date;

11.1.8   NO MATERIAL ADVERSE CHANGE

         there has been no material adverse change in the consolidated financial
         position of the Immediate Shareholder Group, from that set forth in the
         financial statements referred to in clause 11.1.7(a);

11.1.9   TITLE TO ASSETS

         each member of the Group is the legal and/or beneficial owner of and
         has valid title to or valid leases or licences of all its material
         assets free and clear of any Encumbrance (other than Permitted
         Encumbrances) in respect of the interest of such member of the Group in
         such assets;

11.1.10  INTELLECTUAL PROPERTY RIGHTS

         (a)   the material Intellectual Property Rights owned by or licensed to
               each member of the Group are free from (i) any Encumbrance (save
               for Permitted Encumbrances) and (ii) any other rights or
               interests in favour of third parties which, in either case,
               relate to the interest of such member of the Group in such
               Intellectual Property Rights;

         (b)   the Intellectual Property Rights owned by or licensed to each
               member of the Group are all the Intellectual Property Rights
               required by them in order to carry on, maintain and operate in
               all material respects their respective businesses, properties and
               assets and no member of the Group in carrying on its business
               infringes any Intellectual Property Rights of any third party in
               any material respect; and

         (c)   no Intellectual Property Rights owned by any member of the Group
               are being infringed, nor is there any threatened infringement of
               any such Intellectual Property Rights which, in either case,
               would reasonably be likely to have a Material Adverse Effect;


                                       43
<PAGE>   46


11.1.11  PARI PASSU

         the obligations of the Obligors under this Agreement rank at least pari
         passu with all other present and future unsecured and unsubordinated
         Indebtedness of the Obligors other than any obligations which are
         mandatorily preferred by law and not by contract;

11.1.12  GUARANTOR COMPANIES

             (i)   each Subsidiary of the Original Borrower that on the most
                   recent Quarter Day, was a Material Subsidiary, is a
                   Guarantor; and

             (ii)  each member of the Group which has received cash (or its
                   equivalent) and/or property, plant and equipment from any
                   other member of the Group and/or in respect of whose
                   liabilities another member of the Group has issued a
                   guarantee and which the Original Borrower is obliged to
                   procure becomes a Guarantor pursuant to clause 10.18 has
                   become a Guarantor.

11.2     FURTHER REPRESENTATIONS AND WARRANTIES

         Each Obligor (other than the Immediate Shareholder) in respect of
         itself and its Subsidiaries, the Immediate Shareholder (in respect of
         itself only) and, as the case may be, the Ultimate Shareholder (in
         respect of itself only) further represents and warrants to each of the
         Finance Parties that:

11.2.1   PRINCIPAL AGREEMENTS

         the Principal Agreements which have been entered into on or prior to
         the date of this Agreement are in full force and effect and there is no
         existing, pending or to the knowledge of such Obligor or threatened
         termination, suspension, revocation or cancellation thereof;

11.2.2   CONSENTS OBTAINED

         every consent, authorisation, licence or approval of, or registration
         with or declaration to, governmental or public bodies or authorities of
         courts (other than the Licences and the Necessary Authorisations and
         the consents referred to in clause 3.6 and except in the case of any
         such matters required in relation to the Security Documents which will
         be effected within the applicable time period for so doing) required by
         the Ultimate Shareholder or such Obligor (as the case may be) to
         authorise, or required by the Ultimate Shareholder or such Obligor (as
         the case may be) in connection with, the execution, delivery, validity,
         enforceability or admissibility in evidence of the Finance Documents or
         the performance by the Ultimate Shareholder or such Obligor (as the
         case may be) of its obligations under the Finance Documents has been
         obtained or made and is in full force and effect and there has been no
         material default in the observance of the conditions or restrictions
         (if any) imposed in, or in connection with, any of the same except any
         such consent, authorisation, licence, approval, registration or
         declaration in connection with the exercise of remedies and rights
         under the Security Documents which seek to take security over the
         Necessary Authorisations and Licences;

11.2.3   NO DEFAULT

         no Default has occurred which is continuing;

11.2.4   NO WITHHOLDING TAXES

         no Taxes are imposed by withholding or otherwise on any payment to be
         made to any Finance Party by any Obligor under any of the Finance
         Documents, or are imposed on or by virtue of the execution or delivery
         by any Obligor of this any of the Finance Documents or any document or
         instrument to be executed or delivered under any of the Finance
         Documents;


                                       44
<PAGE>   47

11.2.5   LICENCES

         save as set out in schedule 10, the Licences are in full force and
         effect and each member of the Group is in compliance in all material
         respects with all provisions thereof. To the best of its knowledge and
         belief, none of the Licences are the subject of any actual, pending or
         threatened attack or revocation save as set out in schedule 10;

11.2.6   NECESSARY AUTHORISATIONS

         subject to the provisions of clause 3.6, each member of the Group has
         obtained all material Necessary Authorisations, all such Necessary
         Authorisations are in full force and effect and each member of the
         Group is in compliance in all material respects with all provisions
         thereof. To the best of its knowledge and belief, none of the Necessary
         Authorisations are the subject of any actual, pending or threatened
         attack or revocation that would reasonably be likely to have a Material
         Adverse Effect;

11.2.7   TELECOMMUNICATIONS AND CABLE LAWS

         each member of the Group is in compliance in all material respects with
         all Telecommunications and Cable Laws;

11.2.8   SHARES

         all shares issued by each member of the Group have been validly issued;

11.2.9   ENVIRONMENTAL MATTERS

         (a)   each member of the Group is in compliance, in all respects, with
               all requirements of Environmental Laws except where failure to do
               so would not reasonably be likely to have a Material Adverse
               Effect;

         (b)   no Environmental Claim is, to the knowledge of any member of the
               Group, pending, threatened or existing, as at the date of this
               Agreement, which would reasonably be likely to have a Material
               Adverse Effect; and

         (c)   each member of the Group has obtained and maintains in full force
               and effect all Environmental Licences, and there are no facts and
               circumstances entitling any such Environmental Licences to be
               revoked, suspended, amended, varied, withdrawn or not renewed
               where such revocation, suspension, amendment, variation,
               withdrawal or non-renewal, would reasonably be likely to have a
               Material Adverse Effect; and

11.2.10  COPYRIGHT MATTERS

         no Obligor has any knowledge, nor is aware of any claim, that any
         member of the Group is or may be liable to any person for any copyright
         infringement of any nature whatsoever as a result of the operation of
         its business which liability would reasonably be likely to have a
         Material Adverse Effect.

11.2.11  CHOICE OF LAW

         the choice by the Obligors of English law to govern this Agreement and
         the submission by the Obligors to the non-exclusive jurisdiction of the
         High Court of Justice in England are valid and binding subject to any
         general principles regarding choice of law which are specifically
         referred to in any legal opinion delivered pursuant to part A of
         schedule 3 in relation to this Agreement;

11.2.12  TRANSFER AGREEMENTS AND CUSTOMER CONTRACT AGREEMENT

         (a)   all notice, consents and novation requirements required in order
               to validly assign or novate to (i) GTS Network all contracts
               referred to in the Transfer Agreements and (ii) to


                                       45
<PAGE>   48


               GTS Ireland all contracts in existence at the date hereof which
               were referred to in the Customer Contract Assignment, have been
               obtained and fulfilled; and

         (b)   the Immediate Shareholder's interest in all assets referred to in
               the Transfer Agreements has been validly leased or otherwise
               transferred to GTS Network; and

11.2.13  SECURITY DOCUMENTS

         (a)   each Obligor (other than the Immediate Shareholder) which is
               entitled to receive third party receivables (including without
               limitation, payments from customers), equal to or in excess of
               $5,000,000 has entered into, or will prior to the first
               Utilisation in accordance with the requirements of clause 3.1,
               enter into an Irish Debenture or a Pledge over Group Accounts and
               a Pledge over Third Party Receivables;

         (b)   each Obligor (other than the Immediate Shareholder) which has
               made any intercompany loan to any member of the Group has entered
               into, or will prior to the first Utilisation in accordance with
               the requirements of clause 3.1, enter into an Irish Debenture or
               a Pledge over Group Accounts and a Pledge over Intercompany
               Receivables; and

         (c)   (i) each Obligor (other than the Immediate Shareholder) which
               owns any property, plant and equipment which has a net book value
               equal to or in excess of $7,500,000 has entered into, or will
               prior to the first Utilisation in accordance with the
               requirements of clause 3.1, enter into a PPE Security and (ii)
               each Obligor which owns property, plant and equipment in
               aggregate equal to or in excess of $25,000,000 has entered into a
               PPE Security in respect of each individual item of plant,
               property and equipment which has a net book value equal to or in
               excess of $2,500,000.

11.3     REPETITION

         The representations and warranties in clause 11.1, (so that (a) the
         representation and warranty in clause 11.1.7(a) shall for this purpose
         refer to the then latest audited consolidated financial statements of
         the Immediate Shareholder Group and, commencing with the financial year
         ending 31 December 2000, the Group, delivered to the Agent under clause
         12.1, (b) the representation and warranty in clause 11.1.7(b) shall for
         this purpose refer to the then latest Quarterly Management Accounts of
         the Immediate Shareholder Group, the Group and the Restricted Group
         delivered to the Agent under clause 12.1, and (c) the representation
         and warranty in clause 11.1.8 shall for this purpose refer to the
         latest audited financial statements of the Immediate Shareholder Group
         and, commencing with the financial year ending 31 December 2000, the
         Group, delivered to the Agent under clause 12.1) shall be deemed to be
         repeated by the Obligors and the Ultimate Shareholder on and as of each
         Utilisation Date as if made with reference to the facts and
         circumstances existing on each such day.

11.4     ACCEDING GUARANTORS AND ACCEDING BORROWERS

         In the case of a Subsidiary of the Original Borrower which becomes a
         party to this Agreement after the date of this Agreement, the
         representations and warranties in clauses 11.1.1 to 11.1.5 (inclusive),
         11.1.9, 11.1.10, 11.1.11, 11.2.2, 11.2.3, 11.2.4 and 11.2.14 shall be
         deemed to be repeated by the Original Borrower and that Obligor on the
         date that such Obligor executes a Deed of Guarantor Accession, a
         Belgian Deed of Guarantor Accession or a Deed of Borrower Accession (as
         the case may be) as if made with reference to the facts and
         circumstances existing on such date.

12       UNDERTAKINGS

12.1     POSITIVE COVENANTS

         Each Obligor, in respect of itself and its Subsidiaries, undertakes
         with each of the Finance Parties that, from the date of this Agreement
         and so long as any moneys are owing under this Agreement (actually or
         contingently) or remain available for utilisation by the Borrowers, it
         will:


                                       46
<PAGE>   49


12.1.1   NOTICE OF DEFAULT, AND OTHER EVENTS

         procure that the Agent is promptly informed of (in the case of (a) to
         (e) inclusive) or provided with a copy of (in the case of (f) to (i)
         inclusive):

         (a)  any Default forthwith upon becoming aware thereof and will from
              time to time, if so requested by the Agent, confirm to the Agent
              in writing that, save as otherwise stated in such confirmation, no
              Default has occurred and is continuing;

         (b)  any lapse, suspension or termination of, or refusal by any person
              to renew or extend, any Licence or any material breach of any
              Licence;

         (c)  (to the extent known to any member of the Group) the commencement
              of all proceedings and investigations by or before any
              governmental body and all actions and proceedings in any court or
              before any arbitrator where any such proceedings, investigations
              or actions would be reasonably likely to have a Material Adverse
              Effect;

         (d)  any material breach of any Telecommunications and Cable Laws by
              any member of the Group;

         (e)  any material litigation, arbitration or administrative proceedings
              being commenced (or threatened) against any member of the Group;

         (f)  any material breach, or threatened breach or repudiation, of any
              Principal Agreement by any party thereto;

         (g)  each agreement entered into by way of replacement of a Principal
              Agreement after the date of this Agreement;

         (h)  any material report, notice or other communication relating to the
              Principal Agreements or the Licences (other than any such report,
              notice or communication the disclosure of which would breach a
              confidentiality undertaking or lead to loss of attorney client
              privilege);

         (i)  copies of such financial and other reports and documents relating
              to any member of the Group and their respective affairs as the
              Agent or any Bank (acting through the Agent) may from time to time
              reasonably require (other than any such report, notice or
              communication the disclosure of which would breach a
              confidentiality undertaking or lead to loss of attorney client
              privilege);

12.1.2   CONSENTS AND LICENCES

         without prejudice to clauses 3 and 11.1, obtain or cause to be
         obtained, maintain in full force and effect and comply in all material
         respects with the conditions and restrictions (if any) imposed in, or
         in connection with, every consent, authorisation, licence or approval
         of governmental or public bodies or authorities or courts (other than
         Licences, Necessary Authorisations and the consents referred to in
         clause 3.6) required by any Obligor and/or the Immediate Shareholder to
         execute and deliver the Finance Documents and do, or cause to be done,
         all other acts and things which may from time to time be necessary or
         desirable under applicable law for the continued due performance of all
         the obligations of the Obligors and the Immediate Shareholder under the
         Finance Documents;

12.1.3   USE OF PROCEEDS

         use the proceeds of Utilisations exclusively for the purposes specified
         in clause 1.1;

12.1.4   PARI PASSU

         ensure that its obligations under this Agreement shall, without
         prejudice to the provisions of clause 12.2 or the security intended to
         be created pursuant to the Security Documents, at all


                                       47
<PAGE>   50


         times rank at least pari passu with all its other present and future
         unsecured and unsubordinated Indebtedness with the exception of any
         obligations which are mandatorily preferred by law and not by contract;

12.1.5   GROUP BUSINESS

         (i)  (in the case of each member of the Group which is not a member of
              the Restricted Group) engage in Unrestricted Group Business and in
              no other activities; and

         (ii) (in the case of each member of the Restricted Group) engage in the
              Group Business and in no other activities;

12.1.6   FINANCIAL STATEMENTS

         (in the case of the Original Borrower) procure the preparation of
         annual audited:

         (a)  consolidated financial statements of the Immediate Shareholder
              Group; and

         (b)  commencing with the financial year ending 31 December 2000,
              consolidated financial statements of the Group;

         each in accordance with GAAP and cause such financial statements to be
         reported on by its auditors and deliver to the Agent sufficient copies
         of the same for distribution to all of the Banks as soon as practicable
         but not later than 120 days after the end of the financial year to
         which they relate; and

12.1.7   QUARTERLY MANAGEMENT ACCOUNTS

         (in the case of the Original Borrower) procure in respect of each
         Quarterly Period commencing with the Quarterly Period ending 30 June
         2000, the preparation of unaudited Quarterly Management Accounts for
         each of the Immediate Shareholder Group, the Group and the Restricted
         Group and deliver sufficient copies of the same to the Agent for
         distribution to all of the Banks as soon as practicable but not later
         than (i) for each Quarterly Period (other than the Quarterly Period
         ending on 31 December 2000) during the year 2000, 75 days after the end
         of the Quarterly Period to which may relate, (ii) for each Quarterly
         Period ending on 31 December in any year, 120 days after the end of the
         Quarterly Period to which they relate and (iii) for each other
         Quarterly Period, 60 days after the Quarterly Period to which they
         relate;

12.1.8   CHANGE IN BASIS OF ACCOUNTS

         (in the case of the Original Borrower) ensure that all annual
         statements delivered under clause 12.1.6 are prepared in accordance
         with the accounting principles and practices used in the preparation of
         the financial statements referred to in clause 11.1.7(a) (the "ORIGINAL
         BASIS") consistently applied in respect of each financial year unless
         to do so would be inconsistent with the then current GAAP (the "NEW
         BASIS"). If the preparation of annual financial statements on the
         Original Basis is contrary to the New Basis then the Original Borrower
         shall promptly notify the Agent in writing of the relevant change and
         prepare and deliver to the Agent audited annual financial statements on
         the New Basis, in the opinion of the Agent, acting reasonably, such
         adjustments would affect the calculation of any amount used to
         determine compliance or otherwise with the covenants contained in
         clause 13.1 and/or the margin pursuant to clause 6.2 then, at its
         option, the Original Borrower shall either (i) deliver to the Agent
         with the relevant audited financial statements an unaudited
         reconciliation statement prepared by the Original Borrower (a
         "RECONCILIATION STATEMENT") showing those adjustments necessary in
         order to reconcile the financial statements produced on the New Basis
         to the Original Basis or (ii) request the Agent to enter into good
         faith negotiations for such amendments (if any) as are necessary to the
         covenants contained in clause 13.1 and/or the provisions of clauses 4.1
         and 6.2 and any other provisions of this Agreement affected by such
         change, in which event the Agent will enter into such negotiations for
         a period of not more than 28 days. If agreement is reached between the
         Original Borrower and the Agent (acting on the instructions of the
         Majority Banks) within such period as to the amendment of any such
         covenants or provisions, then the


                                       48
<PAGE>   51


         parties hereto will enter into such documentation and take such other
         steps as are required to put such amendments into effect following
         which the Original Borrower shall then be obliged to procure the
         preparation and delivery to the Agent of audited financial statements
         on the New Basis only. If no such agreement is reached then the
         Original Borrower shall be obliged to procure the preparation and
         delivery to the Agent of audited financial statements on the New Basis
         accompanied by, if required, a Reconciliation Statement.

         The Original Borrower shall ensure that Quarterly Management Accounts
         are prepared on the basis of the same accounting principles and
         practices as used in the audited consolidated financial statements,
         save as contemplated in the agreed forms of Quarterly Management
         Accounts. Accordingly, where the Original Borrower is under an
         obligation to deliver financial statements under clause 12.1.6 on the
         New Basis but accompanied, if applicable, by a Reconciliation
         Statement, Quarterly Management Accounts shall also be delivered on the
         New Basis but accompanied, if applicable, by a Reconciliation
         Statement.

         All annual financial statements, Quarterly Management Accounts and
         Reconciliation Statements delivered pursuant to this clause 12.1.8
         shall be delivered within the relevant time period set out in clause
         12.1.6 or 12.1.7.

         If any financial information is produced on the New Basis, but
         accompanied by a Reconciliation Statement for the purposes of this
         Agreement all calculations made under this Agreement by reference to
         such financial information shall be determined on the New Basis as
         amended by the Reconciliation Statement;

12.1.9   DELIVERY OF REPORTS

         deliver to the Agent sufficient copies for distribution to all of the
         Banks of each of the following documents, in each case promptly
         following issue thereof or (in the case of the Compliance Certificates
         and Accountants Reports referred to in (b) below) 10 Banking Days after
         the Quarterly Management Accounts or annual audited financial
         statements in respect of the financial period to which such Compliance
         Certificate or Accountants Report (as the case may be) relates are
         required to be delivered under clause 12.1.6 or clause 12.1.7
         respectively:

         (a)  every material document issued by the Original Borrower to its
              Shareholders or issued by any member of the Group to its creditors
              generally;

         (b)  (in the case of the Original Borrower only) an Accountants Report
              from the auditors of the Immediate Shareholder Group in respect of
              each financial year and a Compliance Certificate from an
              Authorised Officer of the Original Borrower in respect of each
              Quarterly Period from and including the Quarterly Period ending on
              30 September 2000; and

         (c)  an Annual Budget for each financial year for each of the Group and
              the Restricted Group no later than the last day of February in
              such financial year;

12.1.10  FINANCIAL YEAR END

         maintain a financial year end of 31 December for each member of the
         Immediate Shareholder Group save with the prior written consent of the
         Majority Banks;

12.1.11  AUTHORISED OFFICERS

         ensure that any new or replacement Authorised Officer has provided the
         Agent with evidence satisfactory to it of his authority and a specimen
         of his or her signature(s) prior to his signing any Compliance
         Certificates, Utilisation Notices, or any other notices, requests or
         confirmations referred to in this Agreement or relating to the
         Facilities;


                                       49
<PAGE>   52


12.1.12  AUDITORS

         ensure that, at all times, Ernst & Young is appointed as auditor of
         each member of the Immediate Shareholder Group and not change such
         appointment without appointing a major accounting firm of recognised
         international standing and repute;

12.1.13  INSURANCE

         (i) insure and keep insured, and will procure that each of its
         Subsidiaries insures and keeps insured, all its properties and assets,
         (ii) maintain, and procure that each of its Subsidiaries maintains,
         business interruption insurance and (iii) maintain, and procure that
         each of its Subsidiaries maintains, third party liability insurance, in
         each case with underwriters or insurance companies of repute to such
         extent and against such risks as prudent companies, engaged in
         businesses similar to those of the Group, normally insure and produce
         to the Agent on request copies of all insurance policies from time to
         time effected by it and each of its Subsidiaries together with evidence
         of the payment of all premiums then due under such policies;

12.1.14  INSPECTION

         if required by the Agent (acting on the instructions of the Majority
         Banks), at any time whilst a Default is continuing, permit, to the
         extent it is able to do so, representatives of the Agent upon
         reasonable prior written notice to (i) visit and inspect the properties
         of any member of the Group during normal business hours (ii) inspect
         and make extracts from and copies of its books and records other than
         records which the relevant member of the Group is prohibited by law
         from disclosing to the Agent and/or any relevant Bank and (iii) discuss
         with its principal officers and auditors its business, assets,
         liabilities, financial position, results of operations and business
         prospects;

12.1.15  COMPLIANCE WITH LAWS AND REGULATIONS

         (i) comply and procure that its Subsidiaries comply in all material
         respects with the terms and conditions of all Licences and
         Telecommunications and Cable Laws applicable to it or any of its
         Subsidiaries, (ii) comply and procure that its Subsidiaries comply in
         all respects with all other laws, regulations agreements, licences and
         concessions (including the Necessary Authorisations, the Environmental
         Licences and Environmental Laws) applicable to it or any of its
         Subsidiaries except where non-compliance would not reasonably be likely
         to have a Material Adverse Effect;

12.1.16  TAXES

         file or cause to be filed all tax returns required to be filed in all
         jurisdictions in which it or any of its Subsidiaries is situated or
         carries on business or is otherwise subject to Taxation and will pay or
         cause to be paid all Taxes shown to be due and payable on such returns
         or any assessments made against it or any of its Subsidiaries within
         the period stipulated for such payment save for those being contested
         in good faith by appropriate proceedings in circumstances where the
         relevant member of the Group can lawfully withhold payment and as to
         which adequate reserves are being maintained by the Group;

12.1.17  LICENCES

         (a)  obtain or cause to be obtained in the name of any Obligor other
              than the Immediate Shareholder, every Licence for which
              application is made after the date of this Agreement;

         (b)  (i) ensure that none of the Licences are revoked, cancelled,
              suspended, withdrawn, terminated or expire and are not renewed or
              otherwise cease to be in full force and effect without a new one
              being put in place with an Obligor on substantially identical
              terms or on terms that are not materially less beneficial to the
              Group unless such Licence is no longer required under all
              applicable laws; and (ii) ensure that none of the Licences are
              modified


                                       50
<PAGE>   53


              in any material respect (other than modification to the same on
              terms that are not materially less beneficial to the Group or
              required by the relevant governmental or public body or authority
              or court in the relevant jurisdiction) and that no member of the
              Group commits any material default in the observance of the
              conditions or restrictions (if any) imposed in, or in connection
              with, any of the same unless such default is in respect of a
              matter which the relevant member of the Group is disputing in good
              faith by appropriate proceedings and as to which adequate reserves
              are being maintained by the Group and pending resolution of such
              dispute the Group can continue to operate under the relevant
              Licence;

         (c)  (in the case of the Original Borrower), procure that following the
              transfer of a Licence to an Obligor other than GTS Network or GTS
              Ireland pursuant to clause 3.6.1, or the issue of a new Licence to
              an Obligor other than GTS Network or GTS Ireland, such Obligor
              which has obtained a Licence in its name, shall to the fullest
              extent permitted by applicable law enter into a Licence Security
              in form and substance satisfactory to the Agent, acting reasonably
              and provide the Agent with such other documents as it may
              reasonably require as to the power and authority of the Obligor to
              enter into such Licence Security;

12.1.18  NECESSARY AUTHORISATIONS

         (a)  obtain or cause to be obtained in the name of any Obligor other
              than the Immediate Shareholder, every Necessary Authorisation for
              which application is made after the date of this Agreement
              provided that, pending the transfer of the related Licence to an
              Obligor pursuant to clause 3.6.1, no such Necessary Authorisation
              need be applied for in the name of such Obligor to the extent
              that, under applicable law, custom or practice in the relevant
              jurisdiction, such Necessary Authorisation may be held only by the
              holder of the related Licence in such relevant jurisdiction;

         (b)  (i) ensure that none of the Necessary Authorisations are revoked,
              cancelled, suspended, withdrawn, terminated or expire and are not
              renewed or otherwise cease to be in full force and effect without
              a new one being put in place with an Obligor on substantially
              identical terms or on terms that are not materially less
              beneficial to the Group unless such Necessary Authorisations is no
              longer required under all applicable laws and (ii) ensure that
              none of the Necessary Authorisations are modified in any respect
              (other than modification to the same on terms that are not
              materially less beneficial to the Group or required by the
              relevant governmental or public body or authority or court in the
              relevant jurisdiction) and that no member of the Group commits any
              default in the observance of the conditions or restrictions (if
              any imposed) in, or in connection with, any of the same if, in the
              case of any of the matters set out in paragraphs (i) and (ii)
              above such matter would be reasonably likely to have a Material
              Adverse Effect;

12.1.19  SUBORDINATION OF SHAREHOLDER FUNDING

         (in the case of the Original Borrower) procure that prior to any
         Relevant Person (other than the Immediate Shareholder) making any
         Borrowed Money available to any member of the Group, such Relevant
         Person shall enter into a Subordination Deed, an Assignment of
         Shareholder Loans and a Security Provider's Deed of Accession and
         provide the Agent with such documents and evidence as it may reasonably
         require as to the power and authority of the Relevant Person to enter
         into such Subordination Deed, Assignment of Shareholder Loans and
         Security Provider's Deed of Accession and that the same constitute
         valid and legally binding obligations of such Relevant Person
         enforceable in accordance with its terms subject to any qualifications
         set out in the legal opinions referred to in part A of schedule 3 which
         are applicable to the relevant Security Document;

12.1.20  OBLIGOR GROUP

         ensure that at all times each of the total assets, revenues and Net
         Operating Cash Flow of the Obligors which are members of the Restricted
         Group (taken together) is not less than 90 per cent. of the
         consolidated total assets, consolidated revenues and Consolidated Net
         Operating


                                       51
<PAGE>   54


         Cash Flow respectively of the Restricted Group. For the purposes of
         this clause 12.1.20 the revenues and Net Operating Cash Flow of the
         Restricted Group or any Obligor shall be determined by reference to the
         Twelve Month Period in respect of which Quarterly Management Accounts
         have been delivered to the Agent under this Agreement and total assets
         of the Restricted Group or any Obligor shall be determined as at such
         Quarter Day by reference to such Quarterly Management Accounts. In
         determining compliance with the undertaking contained in this clause
         12.1.20 following any acquisition by a member of the Restricted Group
         the consolidated revenues and Consolidated Net Operating Cash Flow of
         the Restricted Group shall be adjusted to take account of the revenues
         and Net Operating Cash Flow attributable to the acquisition in respect
         of the Twelve Month Period ending on such Quarter Day and the
         consolidated total assets of the Restricted Group shall be adjusted to
         take account of the total assets attributable to such acquisition as at
         such Quarter Day;

12.1.21  PRINCIPAL AGREEMENTS

         procure that all Principal Agreements entered into after the date of
         this Agreement are entered into by an Obligor;

12.1.22  SECURITY

         (a)  each Obligor who has entered into a Security Document shall at its
              own expense take all such action as the Security Trustee may
              reasonably require (to the extent legally possible and
              commercially practicable) for the purpose of perfecting or
              protecting the Security Trustee's rights under and preserving the
              security interests intended to be created or evidenced by any of
              the Security Documents and following the making of any declaration
              pursuant to clause 14.2 for facilitating the realisation of any
              such security or any part thereof.

         (b)  (in the case of the Original Borrower) procure within 30 days of
              each Quarter Day:

              (i)   any Obligor which was entitled to receive third party
                    receivables equal to or in excess of $5,000,000 at any time
                    during the Quarterly Period ending on such Quarter Day
                    (determined as at such Quarter Day by reference to the
                    relevant Quarterly Management Accounts), shall enter into a
                    Pledge over Group Accounts and a Pledge of Third Party
                    Receivables;

              (ii)  (A) any Obligor which acquires any property, plant and
                    equipment with an individual net book asset value equal to
                    or in excess of $7,500,000 at any time during the Quarterly
                    Period ending on such Quarter Day (determined as at such
                    Quarter Day by reference to the relevant Quarterly
                    Management Accounts) shall enter into a PPE Security and (B)
                    any Obligor which has property, plant and equipment which
                    has an aggregate net book value equal to or in excess of
                    $25,000,000 at any time during the Quarterly Period ending
                    on such Quarter Day (determined as at such Quarter Day by
                    reference to the relevant Quarterly Management Accounts),
                    shall enter into a PPE Security in respect of each
                    individual item of property, plant and equipment which has a
                    net book value in excess of $2,500,000;

              (iii) any member of the Group (other than the Original Borrower
                    and GTS Ireland) which makes any intercompany loans shall
                    enter into a Pledge over Group Accounts and a Pledge over
                    Intercompany Receivables;

         (in the case of (b) above) the Original Borrower shall procure that
         each Obligor shall also enter into a Security Providers Deed of
         Accession and provide the Agent with such documents and evidence as it
         may reasonably require as to the power and authority of such Obligor to
         enter into the relevant Security Documents and a Security Provider's
         Deed of Accession and that the same constitutes valid and legally
         binding obligations of such Obligor enforceable in accordance with its
         terms subject to any qualifications set out in the legal opinions
         referred to in part A of schedule 3 which are applicable to the
         relevant Security Document;


                                       52
<PAGE>   55


12.1.23  TRANSFERS FROM THE RESTRICTED GROUP TO THE UNRESTRICTED GROUP

         ensure that the aggregate of (i) the principal amount of all cash (or
         its equivalent) which has not been repaid and (ii) all property, plant
         and equipment, transferred by the Restricted Group (taken as a whole)
         to the Unrestricted Group (taken as a whole) since 1 January 2000 does
         not exceed $200,000,000 plus an amount equal to the aggregate of (A)
         any funds lent by the Immediate Shareholder in cash to the Original
         Borrower as Shareholder Loans or contributed to the Original Borrower
         in cash as equity to the extent that (a) such cash is not applied in
         curing a financial ratio breach pursuant to clause 13.3 and (b) such
         cash represents the net proceeds of any new Borrowed Money or equity
         raised by the Immediate Shareholder after the date of this Agreement
         and (B) up to a maximum aggregate amount of $100,000,000, the fair
         market value of any property, plant and equipment (as determined by an
         independent expert reasonably acceptable to the Agent (acting on the
         instructions of the Majority Banks)) of any member of the Unrestricted
         Group which becomes a member of the Restricted Group after the date of
         this Agreement on the date it becomes a member of the Restricted Group
         to the extent that the acquisition of such property, plant and
         equipment was funded by cash received from the Restricted Group or
         transferred to the relevant company by a member of the Restricted Group
         in accordance with this clause 12.1.23; and

12.1.24  IMMOVEABLE ASSETS SUBJECT TO THE TRANSFER AGREEMENT

         in the event that any of the assets referred to in the Transfer
         Agreement are stated to have been leased (rather than transferred) take
         all reasonable steps required to transfer title to such assets to GTS
         Network within 3 months of the date of this Agreement.

12.2     NEGATIVE COVENANTS

         Each Obligor (other than the Immediate Shareholder in respect of
         clauses 12.2.2, 12.2.4, 12.2.5, 12.2.6, 12.2.7, 12.2.8, 12.2.9,
         12.2.10, 12.2.11 and 12.2.12) in respect of itself and its Subsidiaries
         undertakes with each of the Finance Parties that, from the date of this
         Agreement and so long as any moneys are owing under this Agreement
         (actually or contingently) or remain available for utilisation by the
         Borrowers, without the prior written consent of the Agent acting on the
         instructions of the Majority Banks:

12.2.1   NEGATIVE PLEDGE

         it will not permit any Encumbrance (other than the Permitted
         Encumbrances) by any member of the Group to subsist, arise or be
         created or extended over all or any part of their respective present or
         future undertakings, assets, rights or revenues to secure or prefer any
         present or future Indebtedness of any member of the Group or any other
         person;

12.2.2   NO MERGER

         it will not merge or consolidate with any other company or person and
         it will procure that no member of the Group merges or consolidates with
         any other company or person save for (i) any merger or consolidation
         undertaken in accordance with the conditions set out in clause 12.2.8,
         and/or (ii) mergers between any member of the Group with any or all of
         the other members of the Group ("ORIGINAL ENTITIES") into one or more
         entities (each a "MERGED ENTITY") provided that in each case:

         (a)  reasonable details of the proposed merger in order to demonstrate
              satisfaction with clauses (b) to (d) below are provided to the
              Agent at least 10 days before the merger is to be consummated;

         (b)  such Merged Entity is a member of the Group and is liable for the
              obligations of the relevant Original Entities (including the
              obligations under the Finance Documents) which remains unaffected
              thereby and entitled to the benefit of all the rights of such
              Original Entities;


                                       53
<PAGE>   56


         (c)  such Merged Entity has entered into Security Documents which
              provided security over the same assets of at least an equivalent
              nature and ranking to the security provided by the relevant
              Original Entities pursuant to any Security Documents entered into
              by them and any possibility of the Security Documents referred to
              in this clause 12.2.2(c) or clause 12.2.2(d) below being
              challenged or set aside is not greater than any such possibility
              in relation to the Security Documents entered into by or in
              respect of the share capital of any relevant Original Entity;

         (d)  (if all or any part of the share capital of the relevant Original
              Entities was charged pursuant to a Security Document) the
              equivalent part of the share capital of such Merged Entity is
              charged pursuant to a Security Document on terms of at least an
              equivalent nature and equivalent ranking as any Security Document
              relating to the shares in each relevant Original Entity;

         (e)  that all the property and other assets of the relevant Original
              Entities are vested in the Merged Entity and that the Merged
              Entity has assumed all the rights and obligations of the relevant
              Original Entities under the Principal Agreements, the Licences and
              all Necessary Authorisations and/or replacements have been entered
              into by or issued in favour of the Merged Entity;

12.2.3   DISPOSALS

         save for Permitted Disposals and, in the case of the Immediate
         Shareholder, the transfers contemplated by clause 3.6 and any other
         transfer of assets from the Immediate Shareholder to the Group, it will
         not and will procure that no other member of the Group will sell,
         transfer, lend or otherwise dispose of or cease to exercise direct
         control over any part of its present or future undertaking, assets,
         rights or revenues whether by one or a series of transactions related
         or not, including by way of de-merger;

12.2.4   INTRA-GROUP ACCOUNTS

         it will not subordinate, assign, postpone, defer or otherwise dispose
         of any Indebtedness owing to it by any member of the Group and will
         procure that no member of the Group will subordinate, assign, postpone
         or defer or otherwise dispose of, any Indebtedness owing to it by any
         other member of the Group save as required pursuant to this Agreement

12.2.5   BORROWED MONEY

         it will not and will procure that no member of the Group will create,
         assume, incur or otherwise permit to be outstanding any Borrowed Money
         (other than Permitted Borrowings);

12.2.6   GUARANTEES

         it will not and will procure that no member of the Group will incur any
         obligations or assume any liability under any guarantee other than
         Permitted Guarantees;

12.2.7   REDUCTION OF SHARE CAPITAL/ISSUE OF SHARES

         (a)  other than (subject to the terms of the Security Documents) any
              such reduction, purchase or redemption resulting in any dividend
              or distribution either (i) to any member of the Group, (ii) to the
              Immediate Shareholder, it will not and will procure that no member
              of the Group will reduce its capital or purchase or redeem any
              class of its shares; and

         (b)  it will not issue, and will procure that no member of the Group
              issues, any shares of any class other than in accordance with
              clause 12.2.2 provided that any member of the Group may issue
              shares to any other member of the Group and the Original Borrower
              may issue shares to the Immediate Shareholder so long as (if any
              of the existing shares in the relevant member of the Group are
              charged or pledged pursuant to any Security Document) such shares
              are contemporaneously with the issue thereof charged or pledged
              pursuant to the terms of a Security Document and there are
              delivered at the


                                       54
<PAGE>   57
             same time to the Security Trustee the relevant share certificates
             and blank stock transfer forms (or equivalent documents) in respect
             thereof together with such other documents and evidence and legal
             opinions as the Agent may reasonably require as to the power and
             authority of the relevant chargor to enter into such Security
             Document and that the same constitutes valid and legally binding
             obligations of such chargor enforceable in accordance with its
             terms subject (to the extent applicable) to the qualifications in
             the legal opinions referred to in part A of schedule 3;

12.2.8   ACQUISITIONS

         it will not and will procure that no member of the Group will enter
         into any joint venture or partnership arrangements, makes any
         acquisition of shares of or other ownership interests in any person or
         acquires all or a substantial part of the assets, property or business
         of any other person or any other person or any assets that constitute a
         division or operating unit of the business of any other person (other
         than an acquisition of assets in the ordinary course of business from a
         supplier or a subsidiary of a supplier for the purposes of the Group
         Business) unless (i) on the date of such Restricted Acquisition the
         ratio of Senior Debt (adjusted to include any relevant Borrowed Money
         attributable to such Restricted Acquisition) to Annualised Consolidated
         Net Operating Cash Flow (determined by reference to the most recently
         ended Six Month Period in respect of which Quarterly Management
         Accounts have been delivered to the Agent under this Agreement, but
         adjusted to take account of the Net Operating Cash Flow, whether
         positive or negative, attributable to such Restricted Acquisition for
         the Six Month Period in respect of which Consolidated Annualised Net
         Operating Cash Flow is determined) is less than 4.0:1, and (ii) such
         Restricted Acquisition is for the purpose of the Group Business. The
         Original Borrower shall provide the Agent with such evidence as it may
         reasonably request to verify such calculation;

12.2.9   LOANS

         it will not and will procure that no other member of the Group will
         make any loan or advance to, or enter into any transaction having the
         effect of lending money with, any person (including the acquisition of
         any document evidencing Borrowed Money, loan stock or other debt
         securities) other than (i) loans from members of the Group to the
         Immediate Shareholder to the extent that the same constitute Permitted
         Payments, (ii) normal trade credit in the ordinary course of day to day
         trading, (iii) loans from a member of the Group to another member of
         the Group provided that (taken as a whole) to the extent that any such
         loans (in aggregate) to any member of the Unrestricted Group exceed
         $10,000,000 the proceeds of such loans are paid to an account which is
         the subject of a valid and legally binding Encumbrance under a Security
         Document, or to satisfy an obligation of the relevant member of the
         Group incurred in the ordinary course of the Group Business or the
         Unrestricted Group Business (as applicable) which has fallen due or
         will fall due shortly thereafter and (iv) loans and advances to
         employees in the ordinary course of business not to exceed $3,000,000
         in the aggregate at any time outstanding;

12.2.10  CAPITAL EXPENDITURE

         it will not and will procure that no other member of the Group will
         incur any capital expenditure other than in relation to the Group
         Business or the Unrestricted Group Business (as applicable);

12.2.11  DERIVATIVES CONTRACTS

         it will not and will procure that no other member of the Group will
         enter into any interest rate or currency swaps or other hedging
         arrangement for speculative purposes or otherwise other than (i)
         interest rate hedging directly relating to liabilities incurred in
         relation to the Group Business or the Unrestricted Group Business (as
         the case may be); (ii) interest rate hedging directly relating to the
         risk management of any Borrowed Money of the Group (other than the
         Shareholder Loans); and (iii) currency hedging of foreign exchange
         liabilities or assets of the Group on a transactional basis (which, for
         the avoidance of doubt, shall not include any hedging of the High Yield
         Securities or any intercompany loans from the Ultimate Shareholder or
         the Immediate Shareholder to any member of the Group).


                                       55
<PAGE>   58

12.2.12  RESTRICTED PAYMENTS

         it will not and will procure that no other member of the Group will
         make any Restricted Payments other than Permitted Payments; and

12.3     CHANGE TO NEGATIVE COVENANTS

         On the later of (i) the date when the ratio of Senior Debt to
         Annualised Consolidated Net Operating Cash Flow (calculated by
         reference to the most recently ended Six Month Period in respect of
         which Quarterly Management Accounts have been delivered to the Agent
         under this Agreement) is less than 3.0:1 and (ii) the day falling
         twenty four calendar months after the date of this Agreement, clause
         12.2.12 shall cease to apply.

13       FINANCIAL COVENANTS

13.1     FINANCIAL COVENANTS

         The Original Borrower undertakes with each of the Finance Parties, from
         the date of this Agreement and so long as any moneys are owing under
         this Agreement (actually or contingently) or remain available for
         utilisation by the Borrowers:

13.1.1   SENIOR DEBT TO ANNUALISED CONSOLIDATED NET OPERATING CASH FLOW

         to ensure that on each Quarter Day falling within the period set out in
         column (1) below the ratio of Senior Debt to Annualised Consolidated
         Net Operating Cash Flow (calculated on each such Quarter Day by
         reference to the Six Month Period ending on such day) shall not exceed
         the ratio set out against such period in column (2) below:

<TABLE>
<CAPTION>
                                                (1)                                                 (2)
                                               PERIOD                                              RATIO
                                               ------                                         -----------------
<S>                                                                                           <C>
         from the date of this Agreement to (and including) 30 June 2002                            6.0:1
                                                                                               -----------------
         from (and including) 1 July 2002 to (and including) 30 June 2003                           5.0:1
                                                                                               -----------------
         from (and including) 1 July 2003 to (and including) 30 June 2004                           4.0:1
                                                                                               -----------------
         from (and including) 1 July 2004 and thereafter                                            3.0:1
                                                                                               =================
</TABLE>

13.1.2   SENIOR DEBT INTEREST COVER

         to ensure that on each Quarter Day falling within the period set out in
         column (1) below, the ratio of Annualised Consolidated Net Operating
         Cash Flow (calculated on each such Quarter Day by reference to the Six
         Month Period ending on such day) to the amount of Senior Debt Interest
         Charges incurred during the Twelve Month Period ending on such Quarter
         Day shall be greater than the number set out against such period in
         column (2) below:

<TABLE>
<CAPTION>
                                                 (1)                                                 (2)
                                                PERIOD                                              RATIO
                                                ------                                         -----------------
<S>                                                                                           <C>
         from the date of this Agreement to (and including) 30 June 2002                            2.0:1
                                                                                               -----------------
         from (and including) 1 July 2002 to (and including) 30 June 2003                           2.5:1
                                                                                               -----------------
         from (and including) 1 July 2003 and thereafter                                            3.0:1
                                                                                               =================
</TABLE>


                                       56
<PAGE>   59


13.1.3   TOTAL DEBT INTEREST COVER

         to ensure that on each Quarter Day falling within the period set out in
         column (1) below the ratio of Annualised Consolidated Net Operating
         Cash Flow (calculated on each such Quarter Day by reference to the Six
         Month Period ending on such day) to the amount of Total Debt Interest
         Charges incurred during the Twelve Month Period ending on such Quarter
         Day shall not be less than the number set out against such period in
         column (2) below:

<TABLE>
<CAPTION>
                                                (1)                                                 (2)
                                                 YEAR                                               RATIO
                                                ------                                         -----------------
<S>                                                                                           <C>

         from the date of this Agreement to (and including) 31 December 2001                         1.0:1
                                                                                               -----------------
         from (and including) 1 January 2002 to (and including) 31 December 2002                    1.25:1
                                                                                               -----------------
         from (and including) 1 January 2003 to  (and including) 31 December 2003                   1.50:1
                                                                                               -----------------
         from (and including) 1 January 2004 to (and including) 31 December 2004                    1.75:1
                                                                                               -----------------
         from (and including) 1 January 2005 thereafter                                             2.00:1
                                                                                               =================
</TABLE>

13.1.4   PRO FORMA DEBT SERVICE COVER

         to ensure that on each Quarter Day from (and including) 30 June 2003
         the ratio of Annualised Consolidated Net Operating Cash Flow
         (calculated on each Quarter Day by reference to the Six Month Period
         ending on such day) to Pro Forma Senior Debt Service calculated by
         reference to such Quarter Day shall not be less than 1.25:1.

13.2     AUDITORS' CERTIFICATE

         If at any time the Majority Banks do not consider that any figure set
         out in any Compliance Certificate issued by any Authorised Officer is
         correct, they shall be entitled within 30 days of the date of the
         delivery of such Compliance Certificate to the Agent pursuant to clause
         12.1 to call for a certificate from the Original Borrower's auditors as
         to such figure. For such purposes the Original Borrower's auditors
         shall act as independent experts and not as arbitrators and every such
         certificate shall be addressed to the Agent (on behalf of the Banks)
         and be at the expense of the Original Borrower (unless the certificate
         so provided by the Original Borrower's conditions shows the figures set
         out in the Compliance Certificate are in fact correct in which case the
         such certificate shall be at the expenses of the Banks). The Majority
         Banks may only call for one such certificate in any four consecutive
         Quarterly Periods unless the relevant figure set out in any Compliance
         Certificates provided by an Authorised Officer in respect of any
         Quarterly Period in such four consecutive Quarterly Periods is
         incorrect in which case such limitation shall not apply. If the
         Majority Banks call for such a certificate all calculations under this
         Agreement by reference to the relevant figure shall (a) until the
         Original Borrower's auditors deliver the relevant certificate under
         this clause 13.2 be made by reference to the figure set out in the
         relevant Compliance Certificate delivered to the Agent under this
         Agreement and (b) following the delivery by the Original Borrower's
         auditors of a certificate under this clause 13.2 be made by reference
         to such certificate and the Original Borrower undertakes forthwith to
         take all action including, without limited, the repayment of all or
         part of the Facilities so as to procure that all action taken on the
         basis of the relevant Compliance Certificate which on the basis of such
         auditors' certificate would not have been permitted is reversed.
         Accordingly, where relevant, the Margin shall be adjusted appropriately
         with retrospective effect and any additional amounts which would
         already have fallen due and payable shall be payable by the Original
         Borrower within 5 Banking Days of demand by the Agent.

13.3     CURE PROVISIONS

13.3.1   The Finance Parties agree that the Original Borrower may, within 30
         days of the delivery of a Compliance Certificate identifying a breach
         of the financial ratios set out in clauses 13.1.1, 13.1.2, 13.1.3 or
         13.1.4, cure such breach in accordance with this clause 13.3 so that
         the Event


                                       57
<PAGE>   60


         of Default which would otherwise have arisen from any such breach is
         deemed not to have arisen.

13.3.2   Subject to clause 13.3.2, a breach of clauses 13.1.1, 13.1.2, 13.1.3 or
         13.1.4 may be cured by the making of a sufficient amount of Shareholder
         Contributions such that when such amount is added to the amount of the
         Consolidated Net Operating Cash Flow of the Restricted Group used in
         the calculation of the relevant financial covenant, the Annualised
         Consolidated Net Operating Cash Flow or Consolidated Net Operating Cash
         Flow of the Restricted Group as so adjusted would be increased to such
         an amount that the Original Borrower would comply with the financial
         covenants set out in those clauses which were breached as if such
         financial covenants were tested against the ratio that was breached on
         the date of the receipt by the Original Borrower of such Shareholder
         Contributions. For the avoidance of doubt, such amount shall be
         available for the Original Borrower to use for its general corporate
         purposes and/or to prepay the Total Outstandings in accordance with
         this Agreement and shall be added to the amount of Consolidated Net
         Operating Cash Flow for the purposes of determining compliance with the
         financial covenants with respect to each date for testing such
         financial covenants in respect of which Annualised Consolidated Net
         Operating Cash Flow is calculated using Consolidated Net Operating Cash
         Flow of the Group for the Quarterly Period in respect of which the
         amount of the relevant shareholder contribution is added.

13.3.3   The financial covenants contained in clauses 13.1.1, 13.1.2, 13.1.3 or
         13.1.4 may not be cured in accordance with this clause 13.3 in respect
         of separate breaches of all or any of such clauses on more than two
         consecutive Quarter Days.

13.3.4   The amount of any Shareholder Contributions made pursuant to this
         clause 13.3 shall not be included in the calculation of Annualised
         Consolidated Net Operating Cash Flow for the purposes of clauses 4, 6.2
         or 12.2.8.

14       EVENTS OF DEFAULT

14.1     EVENTS OF DEFAULT

         Each of the events and circumstances set out below is an Event of
         Default (whether or not caused by any reason outside the control of an
         Obligor):

14.1.1   NON-PAYMENT:

         any Borrower fails to pay (i) any principal amount (including any
         amount payable under clause 5.6) due and payable under this Agreement
         on the due date or (ii) any interest or any other sum hereunder after 5
         days when the same shall become due and payable and, in each such case,
         in the currency and in the manner stipulated in this Agreement; or

14.1.2   BREACH OF CERTAIN OBLIGATIONS

         any Obligor commits any breach of or omits to observe any of the
         obligations or undertakings expressed to be assumed by it under clauses
         10.18.2, 10.18.3, 12.1.6, 12.1.7, 12.1.8, 12.1.9(c), 12.1.16 and 12.2
         or, subject to being cured in accordance with clause 13.3, clause 13.1;
         or

14.1.3   BREACH OF OTHER OBLIGATIONS

         any Obligor or any GTS Creditor commits any breach of or omits to
         observe any of the obligations or undertakings expressed to be assumed
         by it under any Finance Document to which it is a party (other than
         failure to pay any sum when due or any breach of the undertakings
         referred to in clause 14.1.2) and, in respect of any such breach or
         omission which is capable of remedy, such action as the Agent may
         reasonably require shall not have been taken within 30 days of the
         Agent notifying the relevant Obligor or the relevant GTS Creditor (as
         the case may be) of such default and of such required action; or


                                       58
<PAGE>   61


14.1.4   MISREPRESENTATION

         any representation or warranty made or deemed to be made or repeated by
         or in respect of any Obligor or any GTS Creditor or any other member of
         the Group in or pursuant to any Finance Document or in any notice,
         certificate or statement referred to in or delivered under any Finance
         Document is or proves to have been incorrect or misleading in any
         material respect; or

14.1.5   SECURITY DOCUMENTS

         any Security Document is not or ceases to be effective in any material
         respect or any GTS Creditor or any member of the Group (or any
         liquidator, administrator, administrative or other receiver or similar
         officer) shall bring proceedings to challenge, the prior status of the
         charges created by (in the case of a Subordination Deed, the
         subordination effected by) the Security Documents or the validity or
         enforceability of the Security Documents (other than, in each case, any
         Licence Security); or

14.1.6   CROSS-DEFAULT

         (i) any Borrowed Money of any member of the Immediate Shareholder Group
         is not paid when due or (ii) any Borrowed Money of any member of the
         Immediate Shareholder Group becomes (whether by declaration validly
         made or automatically in accordance with the relevant agreement or
         instrument constituting the same) due and payable prior to the date
         when it would otherwise have become due or (iii) any creditor of any
         member of the Immediate Shareholder Group becomes entitled to declare
         any Borrowed Money of any member of the Immediate Shareholder Group so
         due and payable or to require cash collateralisation or security for
         any such Borrowed Money or (iv) any facilities or commitment available
         to any member of the Immediate Shareholder Group relating to Borrowed
         Money is withdrawn, suspended or cancelled, and the amount, or
         aggregate amount at any one time, of all Borrowed Money in relation to
         which any of the foregoing events shall have occurred and be continuing
         is equal to or greater than $25,000,000 or its equivalent in the
         currency in which the same is denominated and payable; or

14.1.7   LEGAL PROCESS

         any judgment or order for an amount of at least $10,000,000 (or its
         equivalent) is made against any member of the Group and is not stayed,
         complied with or discharged within 14 days or a creditor attaches or
         takes possession of, or any distress, execution, attachment,
         sequestration or other process arising out of any claim by any third
         party is levied or enforced upon, or sued out against, all or any
         material part of the undertakings, assets, rights or revenues of any
         member of the Group and is not discharged within 14 days; or

14.1.8   INSOLVENCY

         any Obligor is, or is deemed for the purpose of any law applicable to
         it to be, unable to pay its debts generally as they fall due or to be
         insolvent or admits its inability generally to pay its debts as they
         fall due or suspends making payments on all or any class of its debts
         or announces an intention to do so or declares a moratorium in respect
         of its Indebtedness generally and, more particularly: (i) with respect
         to any Obligor incorporated in Belgium, any such Obligor is declared
         bankrupt under the Bankruptcy Act of 8 August 1997 of Belgium (or any
         replacement enactment therefor which is enacted after the date of this
         Agreement) or is otherwise subject to the proceeding provided in
         Section 8 of that Bankruptcy Act or takes any step to or otherwise
         enters into composition proceedings under the Composition Act of 17
         July 1997 of Belgium (or any replacement enactment therefor which is
         enacted after the date of this Agreement); or (ii) with respect to any
         Obligor incorporated in the Netherlands, and such Obligor is declared
         bankrupt (in staat van faillissement verklaard) or enters into a
         primary or definitive moratorium (in voorlopige of definitieve
         surseance van betaling gaan) pursuant to the Dutch Bankruptcy Act
         (Faillisementswet); or


                                       59
<PAGE>   62

14.1.9   WINDING UP

         any petition is presented and is not discharged within 14 days or other
         step is taken by any Obligor for the purpose of the winding up of such
         company (not being a petition or step which can be demonstrated to the
         satisfaction of the Agent by providing an opinion of leading lawyers in
         the relevant jurisdiction is frivolous, vexatious or an abuse of the
         process of the court) or an order is made or resolution passed for the
         winding up of any Obligor or a notice is issued convening a meeting for
         the purpose of passing any such resolution other than for the purposes
         of a voluntary amalgamation or reconstruction previously approved in
         writing by the Agent acting on the instructions of the Majority Banks
         (acting reasonably); or

14.1.10  ADMINISTRATION/EXAMINATION

         any petition is presented or resolution passed for the appointment of
         an administrator or an examiner of or to any Obligor and, in the case
         of an administrator only, any such petition is not withdrawn or shown
         to be frivolous and vexatious to the reasonable satisfaction of the
         Agent not less than two Banking Days before the first date fixed for
         hearing of such petition or an administration order, or an order to
         appoint an examiner is made in relation to any Obligor; or

14.1.11  APPOINTMENT OF RECEIVERS AND MANAGERS

         any administrative or other receiver is appointed of any Obligor or any
         material part of their respective assets and/or undertakings or any
         other steps are taken to enforce any Encumbrance over all or any
         material part of the assets of any Obligor and is not discharged within
         14 days; or

14.1.12  COMPOSITIONS

         any steps are taken, by any Obligor with a view to proposing any kind
         of composition, compromise or arrangement involving such company and
         its creditors generally; or

14.1.13  ANALOGOUS PROCEEDINGS

         there occurs, in relation to any Obligor, in any country or territory
         in which any of them carries on business or to the jurisdiction of
         whose courts any part of their respective assets is subject, any event
         which corresponds with, or have an effect equivalent or similar to, any
         of those mentioned in clauses 14.1.7 to 14.1.12 (inclusive), or any
         Obligor otherwise becomes the subject, in any such country or
         territory, of insolvency, bankruptcy or liquidation proceedings or any
         such proceedings are commenced against any Obligor and not discharged
         within the equivalent periods mentioned in clauses 14.1.7 to 14.1.12;
         or

14.1.14  CESSATION OF GROUP BUSINESS

         the Group suspends or ceases to carry on in any material respect the
         Group Business; or

14.1.15  SEIZURE

         all or a material part of the undertakings, assets, rights or revenues
         of, or shares or other ownership interests in, any member of the Group
         are seized, nationalised, expropriated or compulsorily acquired by or
         under the authority of any government; or

14.1.16  PRINCIPAL AGREEMENTS

         any Principal Agreement is terminated, suspended, revoked or cancelled
         or otherwise ceases to be in full force and effect unless such
         Principal Agreement is replaced by a fibre lease agreement or
         agreements or capacity contract or contracts (which are accounted for
         as capital leases in accordance with GAAP) or alternative arrangements
         (including providing own build network or wireless transmission), in
         each case, providing sufficient alternative capacity on terms that are
         not materially less beneficial to the Restricted Group or (as the case
         may be) the Immediate Shareholder than the predecessor Principal
         Agreement, within 60 days of such


                                       60
<PAGE>   63


         Principal Agreement being so terminated, suspended, revoked, cancelled
         or ceasing to be in full force and effect, or the Original Borrower has
         failed to demonstrate to the reasonable satisfaction of the Majority
         Banks that such event would not materially adversely affect the
         operations of the Restricted Group; or

14.1.17  UNLAWFULNESS

         it becomes unlawful at any time for any Obligor or any GTS Creditor to
         perform any of its material obligations under any Finance Document to
         which it is a party or any of the material obligations of any Obligor
         or any GTS Creditor under any of the Finance Documents to which it is a
         party becomes unenforceable in any way or there ceases to be security
         over any material relevant property or assets of the relevant Obligor
         (or, in the case of a Subordination Deed, any payment due from a member
         of the Group to a GTS Creditor, is not or ceases to be subordinated to
         the amounts owing under this Agreement) as intended to be created by
         the Security Documents; or

14.1.18  TELECOMMUNICATIONS AND CABLE LAWS

         any member of the Group fails to comply with any term or condition of
         Telecommunications and Cable Law where such non-compliance would
         reasonably be likely to have a Material Adverse Effect or a material
         adverse effect on the Group Business or financial condition of the
         Group taken as a whole; or

14.1.19  REPUDIATION

         any Obligor or any GTS Creditor repudiates any Finance Document to
         which it is a party or threatens in writing to repudiate any Finance
         Document to which it is a party; or

14.1.20  MATERIAL EVENTS

         any guarantee is issued pursuant to paragraph (f) of the definition of
         Permitted Guarantees and the Majority Banks consider that an Obligor
         may not be able to perform all or any of its obligations under the
         Finance Documents or any other event occurs or circumstances arise
         which in the opinion of the Majority Banks (acting reasonably) would
         reasonably be likely to have a Material Adverse Effect; or

14.1.21  CHANGE OF CONTROL

         the Immediate Shareholder ceases directly to own or the Ultimate
         Shareholder ceases indirectly to own that part of the issued share
         capital of the Original Borrower representing more than 50 percent of
         the voting and economic interest in the Original Borrower; for the
         purposes of this clause 14.1.21, the Ultimate Shareholder's indirect
         interest in the Original Borrower shall be calculated by multiplying
         the percentage ownership interest in each company through which it owns
         its interest in the Original Borrower by the percentage ownership
         interest of the Immediate Shareholder in the Original Borrower; or

14.1.22  REGULATORY COMPLIANCE

         (i) any Licence is terminated, cancelled or revoked (before a new one
         is put in place with an Obligor (other than the Immediate Shareholder)
         on substantially identical terms or on terms that are not materially
         less beneficial to the Group unless such Licence is no longer required
         under all applicable laws) or (ii) the relevant authorities notify the
         member of the Group in writing that any Licence will be terminated,
         cancelled or revoked unless the relevant member of the Group is
         disputing such notice in good faith by all appropriate proceedings and
         demonstrates to the reasonable satisfaction of the Majority Banks that
         it has a good case and pending resolution of such dispute the Group can
         continue to operate under such Licence, provided that if any such
         notification to terminate, cancel or revoke any Licence is made subject
         to the relevant member of the Group's compliance with any conditions it
         shall be an Event of Default only if the Majority Banks determine that
         the relevant member of the Group will not be able to satisfy such
         conditions within any applicable time periods; or


                                       61
<PAGE>   64


14.2     ACCELERATION

         The Agent may with the consent of the Majority Banks and if so
         requested by the Majority Banks shall, without prejudice to any other
         rights of the Banks, at any time after the happening of an Event of
         Default and so long as the same is continuing, unremedied or unwaived
         by notice to the Original Borrower declare that:

14.2.1   the obligation of each Bank to make its Commitment available shall be
         terminated, whereupon the Total Commitments shall be reduced to zero
         forthwith; and/or

14.2.2   all or any outstanding Advances and all or any interest and commitment
         commission accrued and all or any other sums payable under this
         Agreement have become immediately due and payable or have become due
         and payable on demand, whereupon the same shall, immediately or in
         accordance with the terms of such notice, become so due and payable;
         and/or

14.2.3   the Security Documents (or any of them) have become enforceable
         whereupon the same shall become enforceable; and/or

14.2.4   demand cash cover in Dollars (and/or any relevant Optional Currencies)
         from the Original Borrower equal to the Undrawn Face Amount (plus any
         interest or costs for which the Working Capital Bank is liable) of all
         Bank Guarantees; and/or

14.2.5   negotiate (having regard to the interests of the Borrowers but without
         prejudice to its liability) with any beneficiary any compromise,
         release, reduction or retirement of the liability of the Working
         Capital Bank in respect of the Undrawn Face Amount (plus any interest
         or costs for which the Working Capital Bank is liable) of any Bank
         Guarantee and any payment made by the Working Capital Bank pursuant to
         the same shall be treated as payment made pursuant to a claim under the
         Bank Guarantee for the purposes of the counter-indemnity contained in
         clause 5.

         On or at any time after the making of any such declaration, the Agent
         shall be entitled, to the exclusion of the Original Borrower (and
         without prejudice to clause 6.3), to select the duration of each period
         for the calculation of interest in relation to any outstanding Advances
         or other sums payable under this Agreement.

14.3     DEMAND BASIS

         If, pursuant to clause 14.2.2, the Agent declares the outstanding
         principal amount of all or any of the Advances to be due and payable on
         demand then the Agent may (and, if so instructed by the Majority Banks,
         shall) at any time by written notice to the Original Borrower (a) call
         for repayment of the outstanding principal amount of all or any of the
         Advances on such date as may be specified in such notice whereupon the
         Advances shall become due and payable on the date so specified together
         with all interest and commitment commission accrued and all other sums
         payable under this Agreement or (b) withdraw such declaration with
         effect from the date specified in such notice.

15       INDEMNITIES

15.1     MISCELLANEOUS INDEMNITIES

         The Original Borrower shall on demand indemnify each Finance Party,
         without prejudice to any of their other rights under the Finance
         Documents, against any loss (including loss of Margin) or expense which
         such Finance Party shall certify in such demand as sustained or
         incurred by it as a consequence of:

15.1.1   any default in payment by any Obligor or any GTS Creditor of any sum
         under any Finance Document when due;

15.1.2   the occurrence of any other Event of Default;


                                       62
<PAGE>   65


15.1.3   any repayment of all or part of any Advance being made otherwise than
         on its Maturity Date; or

15.1.4   any Utilisation not being made or issued for any reason (excluding any
         default by any Finance Party) after a Utilisation Notice has been
         given,

         including, in any such case, but not limited to, any loss or expense
         sustained or incurred by such Finance Party in maintaining or funding
         all or any part of its Contribution or in liquidating or re-employing
         deposits from third parties acquired or contracted for to fund all or
         any part of its Contribution or any other amount owing to such Finance
         Party.

15.2     CURRENCY OF ACCOUNT; CURRENCY INDEMNITY

         No payment by any Obligor under this Agreement which is made in a
         currency other than the currency ("Contractual Currency") in which such
         payment is required to be made pursuant to this Agreement shall
         discharge the obligation in respect of which it is made except to the
         extent of the net proceeds in the Contractual Currency received by the
         Agent upon the sale of the currency so received, after taking into
         account any costs of exchange in connection with such sale. For the
         avoidance of doubt, Finance Parties shall not be obliged to accept any
         such payment in a currency other than the Contractual Currency nor
         shall the Finance Parties be liable to any Obligor for any loss or
         alleged loss arising from fluctuations in exchange rates between the
         date on which such payment is so received by the Agent and the date on
         which the Agent effects such sale, as to which the Agent shall (as
         against the relevant Obligor) have an absolute discretion. If any sum
         due from any Obligor under this Agreement or any order or judgment
         given or made in relation to this Agreement is required to be converted
         from the Contractual Currency or the currency in which the same is
         payable under such order or judgment (the "first currency") into
         another currency (the "second currency") for the purpose of (a) making
         or filing a claim or proof against the relevant Obligor, (b) obtaining
         an order or judgment in any court or other tribunal or (c) enforcing
         any order or judgement given or made in relation to this Agreement, the
         relevant Obligor shall indemnify and hold harmless the Finance Parties
         from and against any loss suffered as a result of any difference
         between (i) the rate of exchange used for such purpose to convert the
         sum in question from the first currency into the second currency and
         (ii) the rate or rates of exchange at which the relevant Finance Party
         may in the ordinary course of business purchase the first currency with
         the second currency upon receipt of a sum paid to it in satisfaction,
         in whole or in part, of any such order, judgment, claim or proof. Any
         amount due from any Obligor under the indemnity contained in this
         clause 15.2 shall be due as a separate debt and shall not be affected
         by judgment being obtained for any other sums due under or in respect
         of this Agreement and the term "rate of exchange" includes any costs of
         exchange payable in connection with the purchase of the first currency
         with the second currency.

15.3     ESCB RESERVE REQUIREMENTS

         The Original Borrower agrees to indemnify on demand each Bank and the
         Working Capital Bank against any cost or loss suffered by it as a
         result of complying with the reserve requirements of the European
         System of Central Banks to the extent such requirements relate to its
         participation in the Facilities and are not recoverable by such Bank
         under clause 16.2.

16       UNLAWFULNESS AND INCREASED COSTS; MITIGATION

16.1     UNLAWFULNESS

         If it becomes contrary to any law or regulation for any Bank or the
         Working Capital Bank to maintain its Commitment or fund its
         Contribution or to maintain its obligations under any Bank Guarantee
         such Bank or the Working Capital Bank (as the case may be) shall
         promptly, through the Agent, notify the Original Borrower whereupon (a)
         such Bank's or the Working Capital Bank (as the case may be) Commitment
         shall be reduced to zero and (b) the Borrowers shall be obliged to
         repay to such Bank's or the Working Capital Bank (as the case may be)
         Contribution (including, in the case of the Working Capital Bank by
         procuring the irrevocable discharge of and the return to the Working
         Capital Bank of the Bank Guarantees) either (i) forthwith or (ii) on a
         future specified date not being earlier than the latest date permitted
         by the relevant law or


                                       63
<PAGE>   66


         regulation. Any prepayment pursuant to this clause 16.1 shall be made
         together with all accrued interest, any additional amount payable under
         clauses 9.5 or 16.2 and all other amounts payable to the relevant Bank
         or the Working Capital Bank (as the case may be) under this Agreement,
         including accrued commitment commission payable under clause 8.1.3 and
         any amounts payable under clauses 6.3 and 15.1.

16.2     INCREASED COSTS

         If the result of any change in, or in the interpretation or application
         of, or the introduction of, any law or any regulation, request or
         requirement following the date of this Agreement (whether or not having
         the force of law, but, if not having the force of law, with which the
         relevant Bank or the Working Capital Bank or, as the case may be, its
         holding company habitually complies), including (without limitation)
         those relating to Taxation, capital adequacy, liquidity, reserve
         assets, cash ratio deposits and special deposits, is to:

16.2.1   subject any Bank or the Working Capital Bank to Taxes or change the
         basis of Taxation of any Bank or the Working Capital Bank with respect
         to any payment under this Agreement (other than Tax on Overall Net
         Income, of such Bank or the Working Capital Bank imposed by the
         jurisdiction in which such Bank's or Working Capital Bank's principal
         or lending office under this Agreement is located); and/or

16.2.2   increase the cost to, or impose an additional cost on, any Bank or the
         Working Capital Bank or its holding company in making or keeping
         available all or part of such Bank's Commitment or maintaining or
         funding all or part of such Bank's Contribution; and/or

16.2.3   reduce the amount payable or the effective return to any Bank or the
         Working Capital Bank under this Agreement; and/or

16.2.4   reduce any Bank's or the Working Capital Bank's or its holding
         company's rate of return on its overall capital by reason of a change
         in the manner in which it is required to allocate capital resources to
         such Bank's or the Working Capital Bank's obligations under this
         Agreement; and/or

16.2.5   require any Bank or the Working Capital Bank or its holding company to
         make a payment or forgo a return calculated by reference to or on any
         amount received or receivable by such Bank or the Working Capital Bank
         (as the case may be) under this Agreement; and/or

16.2.6   require any Bank or the Working Capital Bank or its holding company to
         incur or sustain a loss (including a loss of future potential profits)
         by reason of being obliged to deduct all or part of such Bank's or the
         Working Capital Bank's (as the case may be) Commitment or Contribution
         from its capital for regulatory purposes,

         then and in each such case (but subject to clause 16.3):

         (a)  such Bank or the Working Capital Bank (as the case may be) shall
              notify the Original Borrower through the Agent in writing of such
              event promptly upon its becoming aware of the same; and

         (b)  the Original Borrower shall on demand, (whether or not such Bank's
              Contribution or the Working Capital Bank's (as the case may be)
              has been repaid), pay to the Agent for the account of such Bank or
              the Working Capital Bank (as the case may be) the amount which
              such Bank or the Working Capital Bank (as the case may be)
              specifies (in a certificate signed by a duly authorised officer of
              the Bank or the Working Capital Bank (as the case may be) setting
              forth the basis of the computation of such amount but not
              including any matters which such Bank or the Working Capital Bank
              (as the case may be) or its holding company reasonably regards as
              confidential) is required to compensate such Bank or the Working
              Capital Bank (as the case may be) and/or its holding company for
              such liability to Taxes, increased or additional cost, reduction,
              payment, forgone return or loss.


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         For the purposes of this clause 16.2 and clauses 16.3 and 16.4 "holding
         company" means, in relation to a Bank or the Working Capital Bank, the
         company or entity (if any) within the consolidated supervision of which
         such Bank or the Working Capital Bank (as the case may be) is included.

16.3     EXCEPTIONS

         Nothing in clause 16.2 shall entitle any Bank or the Working Capital
         Bank to receive any amount in respect of compensation for any such
         liability to Taxes, increased or additional cost, reduction, payment,
         forgone return or loss to the extent that the same:

16.3.1   is taken into account in calculating the Additional Cost; or

16.3.2   is the subject of an additional payment under clause 9.5 (or would have
         been the subject of an additional payment under such clause but for one
         or more of the reasons contained in clause 9.6); or

16.3.3   arises as a consequence of (or of any law or regulation implementing)
         (i) the proposals for international convergence of capital measurement
         and capital standards published by the Basle Committee on Banking
         Regulations and Supervisory Practices in June 1999 and/or (ii) any
         applicable directive of the European Union (in each case) unless it
         results from any change in, or in the interpretation or application of,
         such proposals or any such applicable directive (or any law or
         regulation implementing the same) occurring after the date of this
         Agreement; or

16.3.4   arises as a result of a breach by such Bank or the Working Capital Bank
         (as the case may be) of any regulation, request or requirement (which
         either (i) is in existence at the date of this Agreement or (ii) which
         comes into effect after the date of this Agreement and with which such
         Bank or the Working Capital Bank (as the case may be) would have
         complied if such regulation, request or requirement was in effect on
         the date of this Agreement) of any applicable central bank or other
         fiscal, monetary or other authority (whether or not having the force of
         law).

         For the purposes of clause 16.3.3 the term "applicable directive" means
         (exclusively) each of the Own Funds Directive (89/299/EEC of 17th April
         1989) and the Solvency Ratio Directive (89/647/EEC of 18th December
         1989).

16.4     MITIGATION

         If circumstances arise which would, or would upon the giving of notice,
         result in:

16.4.1   the application of clause 6.6. in relation to any Bank or the Working
         Capital Bank;

16.4.2   any Obligor being required to make an increased payment to any Bank or
         the Working Capital Bank pursuant to clause 9.5;

16.4.3   the reduction of any Bank's or the Working Capital Bank (as the case
         may be) Commitment to zero or the Borrowers being required to repay any
         Bank's or the Working Capital Bank's (as the case may be) Contribution
         pursuant to clause 16.1; or

16.4.4   any Borrower being required to make a payment to any Bank or the
         Working Capital Bank to compensate such Bank or the Working Capital
         Bank or its holding company for a liability to Taxes, increased or
         additional cost, reduction, payment, forgone return or loss pursuant to
         clause 16.2;

         then, without in any way limiting, reducing or otherwise qualifying the
         obligations of the Obligors under clause 9 and this clause 16, such
         Bank or the Working Capital Bank (as the case may be) shall, in
         consultation with the Agent, endeavour to take such reasonable steps
         (and/or, in the case of clause 16.2.2 and where the increased or
         additional cost, reduction, payment, forgone return or loss is that of
         its holding company, endeavour to procure that its holding company
         takes such reasonable steps) as are open to it (or, as the case may be,
         its holding company) to mitigate or remove such circumstances
         (including (in the case of such Bank or the Working


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         Capital Bank) the transfer of its rights and obligations under this
         Agreement to another bank or financial institution acceptable to the
         Original Borrower) unless the taking of such steps might (in the
         reasonable opinion of such Bank or the Working Capital Bank (as the
         case may be), be prejudicial to such Bank (or the Working Capital Bank
         (as the case may be), or, as the case may be, its holding company) or
         be in conflict with such Bank's or the Working Capital Bank's (or, as
         the case may be, its holding company's) general banking policies or
         involve such Bank or the Working Capital Bank (or, as the case may be,
         its holding company) in any material expense or any material increased
         administrative burden.

16.5     REPLACEMENT OF BANKS

         If at any time, any Bank becomes a Non-Funding Bank then the Original
         Borrower may, on 10 Banking Days' prior written notice to the Agent and
         such Bank, replace such Bank by causing such Bank to (and such Bank
         shall) assign and transfer all of its rights and obligations under this
         Agreement to a Bank or other entity selected by the Original Borrower
         and acceptable to the Agent for a purchase price equal to such Bank's
         Contribution and all accrued interest, fees and other amounts payable
         to it under this Agreement provided that:

         (a)  the Original Borrower shall have no right to replace the Agent or,
              save in accordance with clause 18.10, the Working Capital Bank;

         (b)  neither the Agent nor any Bank shall have any obligation to the
              Original Borrower to find a replacement Bank or other such entity;

         (c)  in no event shall the Bank hereby replaced be required to pay or
              surrender to such replacement Bank or other entity any of the fees
              received by such Bank hereby replaced pursuant to this Agreement;
              and

         (d)  the Original Borrower's right to replace a Non-Funding Bank is,
              and shall be, in addition to and not in lieu of all other rights
              and remedies available to the Borrowers against such Non-Funding
              Bank under this Agreement, at law, in equity or by statute.

         For the purposes of this clause 16.5:

         "NON-FUNDING BANK" means any Bank:

         (a)  to whom the Original Borrower is obliged to pay any sum pursuant
              to clause 16.2 or 9.5;

         (b)  in respect of which it becomes contrary to any law or regulation
              for it to contribute to Advances or to maintain its Commitment or
              fund its Contribution pursuant to clause 16.1.

17       SET-OFF AND PRO RATA PAYMENTS

17.1     SET-OFF

         Following an Event of Default which is continuing, each Obligor
         authorises each Finance Party to apply any credit balance to which such
         Obligor is then entitled on any account of such Obligor with such
         Finance Party at any of its branches in or towards satisfaction of any
         sum then due and payable from such Obligor to such Finance Party under
         this Agreement. For this purpose each Finance Party is authorised to
         purchase with the moneys standing to the credit of such account such
         other currencies as may be necessary to effect such application. No
         Finance Party shall be obliged to exercise any right given to it by
         this clause 17.1. Each Finance Party shall notify the Agent and the
         relevant Obligor (giving full details) forthwith upon the exercise or
         purported exercise of any right of set-off and the Agent shall inform
         the other Finance Parties.

17.2     PRO RATA PAYMENTS

17.2.1   If at any time any Finance Party (the "RECOVERING BANK") receives or
         recovers any amount owing to it by any Obligor under this Agreement by
         direct payment, set-off or in any manner


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<PAGE>   69


         other than by payment through the Agent pursuant to clause 9.1 or 9.10
         (not being a payment received from a Transferee in such Bank's
         Contribution or any other payment of an amount due to the Recovering
         Bank for its sole account pursuant to clauses 8, 9.5, 15.1, 15.2, 16.1
         or 16.2), the Recovering Bank shall, within two Banking Days of such
         receipt or recovery (a "RELEVANT RECEIPT") notify the Agent of the
         amount of the Relevant Receipt. If the Relevant Receipt exceeds the
         amount which the Recovering Bank would have received if the Relevant
         Receipt had been received by the Agent and distributed pursuant to
         clause 9.1 or 9.10 (as the case may be) then:

         (a)  within two Banking Days of demand by the Agent, the Recovering
              Bank shall pay to the Agent an amount equal (or equivalent) to the
              excess;

         (b)  the Agent shall treat the excess amount so paid by the Recovering
              Bank as if it were a payment made by the relevant Obligor and
              shall distribute the same to the Finance Parties (other than the
              Recovering Bank) in accordance with clause 9.10; and

         (c)  as between the relevant Obligor and the Recovering Bank the excess
              amount so re-distributed shall be treated as not having been paid
              but the obligations of the relevant Obligor to the other Finance
              Parties shall, to the extent of the amount so re-distributed to
              them, be treated as discharged.

17.2.2   If any part of the Relevant Receipt subsequently has to be wholly or
         partly refunded by the Recovering Bank (whether to a liquidator or
         otherwise) each Finance Party to which any part of such Relevant
         Receipt was so re-distributed shall on request from the Recovering Bank
         repay to the Recovering Bank such Finance Party's pro rata share of the
         amount which has to be refunded by the Recovering Bank.

17.2.3   Each Finance Party shall on request supply to the Agent such
         information as the Agent may from time to time request for the purpose
         of this clause 17.2.

17.2.4   Notwithstanding the foregoing provisions of this clause 17.2 no
         Recovering Bank shall be obliged to share any Relevant Receipt which it
         receives or recovers pursuant to legal proceedings taken by it to
         recover any sums owing to it under this Agreement with any other party
         which has a legal right to, but does not, either join in such
         proceedings or commence and diligently pursue separate proceedings to
         enforce its rights in the same or another court (unless the proceedings
         instituted by the Recovering Bank are instituted by it without prior
         notice having been given to such party through the Agent).

17.3     NO RELEASE

         For the avoidance of doubt it is hereby declared that failure by any
         Recovering Bank to comply with the provisions of clause 17.2 shall not
         release any other Recovering Bank from any of its obligations or
         liabilities under clause 17.2.

17.4     NO CHARGE

         The provisions of this clause 17 shall not, and shall not be construed
         so as to, constitute a charge by a Finance Party over all or any part
         of a sum received or recovered by it in the circumstances mentioned in
         clause 17.2.

18       ASSIGNMENT, TRANSFER AND FUNDING OFFICES

18.1     BENEFIT AND BURDEN This Agreement shall be binding upon, and enure for
         the benefit of, the Finance Parties and the Obligors and their
         respective successors and permitted assigns.


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<PAGE>   70


18.2     NO ASSIGNMENT BY OBLIGORS

         None of the Obligors or the Ultimate Shareholder may assign or
         otherwise transfer any of their respective rights or obligations under
         this Agreement.

18.3     TRANSFER

         Each Bank (an "EXISTING BANK") may transfer all or any part (being at
         least $10,000,000 and an integral multiple of $5,000,000) of its
         rights, benefits and/or obligations under this Agreement and the other
         Finance Documents to a Qualifying Bank (a "Transferee") with the prior
         consent in writing of the Original Borrower (acting on behalf of
         itself, each Obligor (provided that the Original Borrower has given
         notice of the transfer to each Obligor incorporated in Ireland and
         Denmark) and each GTS Creditor) such consent not to be unreasonably
         withheld or delayed and to be deemed to have been given if the Original
         Borrower does not reply to any request for consent within 5 Banking
         Days of receipt of such request in accordance with clause 20.1. Any
         such transfer shall be effected upon not less than 5 Banking Days'
         prior notice by delivery to the Agent of a duly completed Transfer
         Certificate duly executed by the Existing Bank and the Transferee which
         the Agent shall then counter-sign (for itself and the other parties to
         this Agreement and the Security Trust Deed). On the Effective Date (as
         specified and defined in a Transfer Certificate so executed and
         delivered):

18.3.1   to the extent that in such Transfer Certificate the Existing Bank seeks
         to transfer such obligations and rights hereunder the existing parties
         to this Agreement and the Security Trust Deed and the Existing Bank
         shall be released from their respective obligations towards one another
         under this Agreement and the Security Trust Deed, other than the
         obligations thereunder which remain outstanding from the Obligors to
         the Existing Bank ("DISCHARGED OBLIGATIONS") and their respective
         rights against one another under this Agreement and the Security Trust
         Deed other than the outstanding rights thereunder of the Existing Bank
         against the Obligors ("DISCHARGED RIGHTS") shall be cancelled and the
         rights of the Existing Bank against the Obligors shall be assigned to
         the Transferee party to the relevant Transfer Certificate (the
         "ASSIGNED RIGHTS");

18.3.2   the Transferee party to the relevant Transfer Certificate and the
         existing parties to this Agreement and the Security Trust Deed (other
         than such Existing Bank) shall assume obligations towards each other
         which differ from the discharged obligations only insofar as they are
         owed to or assumed by such Transferee instead of to or by such Existing
         Bank as a result of such transfer; and

18.3.3   the Transferee party to the relevant Transfer Certificate and the
         existing parties to this Agreement and the Security Trust Deed (other
         than such Existing Bank) shall acquire rights against each other which
         differ from the discharged rights and the assigned rights only insofar
         as they are exercisable by or against such Transferee instead of by or
         against such Existing Bank as a result of such transfer

         and, on such Effective Date, the Transferee shall pay to the Agent for
         its own account a fee of $1,500. The Agent shall promptly notify the
         Original Borrower of the receipt by it of any Transfer Certificate and
         shall promptly deliver a copy of such Transfer Certificate to the
         Original Borrower.

18.4     RELIANCE ON TRANSFER CERTIFICATE

         The Finance Parties, the Obligors, the Ultimate Shareholder and each
         GTS Creditor shall be fully entitled to rely on any Transfer
         Certificate delivered to the Agent in accordance with the foregoing
         provisions of this clause 18 which is complete and regular on its face
         as regards its contents and purportedly signed on behalf of the
         relevant Existing Bank and the Transferee and none of the Finance
         Parties or the Obligors or the Ultimate Shareholder or the GTS
         Creditors shall have any liability or responsibility to any party as a
         consequence of placing reliance on and acting in accordance with any
         such Transfer Certificate if it proves to be the case that the same was
         not authentic or duly authorised.


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18.5     AUTHORISATION OF AGENT

         Each party to this Agreement irrevocably authorises the Agent to
         counter-sign each Transfer Certificate on its behalf for the purposes
         of clause 18.3 without any further consent of, or consultation with,
         any such party except, in the case of the Original Borrower, the
         consent required pursuant to clause 18.3 and, in the case of any
         Obligor incorporated in Ireland or Denmark, the notice required
         pursuant to clause 18.3.

18.6     CONSTRUCTION OF CERTAIN REFERENCES

         If any Bank transfers all or any part of its rights, benefits and
         obligations as provided in clause 18.3 all relevant references in this
         Agreement to such Bank shall thereafter be construed as a reference to
         such Bank and/or its Transferee to the extent of their respective
         interests.

18.7     LENDING OFFICES

         Each Bank shall lend through its office at the address specified in
         part B of schedule 1 or, as the case may be, in any relevant Transfer
         Certificate or through any other office of such Bank selected from time
         to time by such Bank through which such Bank wishes to lend. The
         Working Capital Bank shall issue Bank Guarantees through its offices at
         the address specified in part C of schedule 1 or through any other
         office of the Working Capital Bank selected from time to time by the
         Working Capital Bank through which the Working Capital Bank wishes to
         issue Bank Guarantees. If the office through which a Bank lending or
         the Working Capital Bank is issuing is changed pursuant to this clause
         18.7, such Bank or the Working Capital Bank (as the case may be) shall
         notify the Agent and the Original Borrower promptly of such change.

18.8     DISCLOSURE OF INFORMATION

         No Finance Party shall disclose any Confidential Information to any
         person without the consent of the Original Borrower, other than (a) to
         such Finance Party's associate companies and their officers, directors,
         employees, agents and advisors provided that such Person shall have
         agreed in writing to maintain confidentiality on the equivalent terms
         as set forth herein, (b) to an actual or prospective Transferee or
         transferee in respect of the Working Capital Facility provided that
         such Transferee or transferee in respect of the Working Capital
         Facility shall have agreed in writing to maintain confidentiality on
         the equivalent terms as set forth herein or (c) as required by any law,
         rule or regulation or order of any court or order or request of any
         governmental agency with whose instructions the recipient habitually
         complies. For the purposes of this clause 18.8 "Confidential
         Information" means information that any member of the Group furnishes
         to any Finance Party on a confidential basis, but does not include any
         such information that is already known to the recipient, is or becomes
         generally available to the public other than as a result of a breach by
         any Finance Party of its obligations hereunder or that is or becomes
         available to such Finance Party from a source other than the Group.

18.9     RESTRICTIONS ON TRANSFERS

         Where a Bank transfers part of its rights, benefits and obligations
         pursuant to clause 18.3, that Bank must transfer equal fractions of its
         Commitment in respect of the Revolving Credit Facility and Contribution
         in respect of the Revolving Credit Facility (if any) and, if at the
         time when such transfer takes effect there is more than one RC Advance
         outstanding, the transfer of its Contribution in respect of the
         Revolving Credit Facility shall take effect in respect of the same
         fraction of each RC Advance. The Transfer Certificate relating to any
         such transfer shall be completed accordingly.

18.10    TRANSFERS BY THE WORKING CAPITAL BANK

         The Working Capital Bank may, transfer all or part of its Commitment in
         respect of the Working Capital Facility and/or Contribution in respect
         of the Working Capital Facility to any person which has a long term
         debt rating of at least "A" by Moody's and Standard and Poor's unless
         otherwise agreed between the Working Capital Bank and the Original
         Borrower (such consent not to be unreasonably withheld), by entering
         into such transfer documents as the Agent and


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<PAGE>   72


         the Original Borrower may reasonably require. In such circumstances the
         Borrowers shall use all reasonable endeavours to assist the Working
         Capital Bank to procure the irrevocable discharge and return to the
         Working Capital Bank of the Bank Guarantees.

19       ARRANGERS, AGENT, SECURITY TRUSTEE, REFERENCE BANKS AND ORIGINAL
         BORROWER

19.1     APPOINTMENT OF AGENT

         Each Bank and the Working Capital Bank irrevocably appoints the Agent
         as its Agent for the purposes of this Agreement and the other Finance
         Documents and irrevocably authorises the Agent in such capacity:

19.1.1   to execute all documents as may be approved by the Majority Banks for
         execution by the Agent; and

19.1.2   (whether or not by or through employees or agents) to take such action
         on such Bank's behalf and to exercise such rights, remedies, powers and
         discretions as are specifically delegated to the Agent by this
         Agreement or any other Finance Document, together with such powers and
         discretions as are reasonably incidental thereto (but subject to any
         restrictions or limitations specified in this Agreement or any other
         Finance Document). None of the Agent, or the Arrangers or the Security
         Trustee shall, however, have any duties, obligations or liabilities
         (whether fiduciary or otherwise) to the Banks or the Working Capital
         Bank beyond those expressly stated in this Agreement or any other
         Finance Document.

         Notwithstanding that the Agent and the Security Trustee may from time
         to time be the same entity, the Agent and Security Trustee have entered
         into this Agreement in their separate capacities as agent for the Banks
         under and pursuant to this Agreement and as security trustee for the
         Beneficiaries (as defined in the Security Trust Deed) to hold the
         security created or to be created by the Security Documents on the
         terms set out in the Security Trust Deed. However, where this Agreement
         provides for the Agent to communicate with or provide instructions to
         the Security Trustee, while the Agent and the Security Trustee are the
         same entity, it will not be necessary for there to be any such formal
         communications or instructions notwithstanding that this Agreement
         provides in certain cases for the same to be in writing.

19.2     AGENT'S ACTIONS

         Any action taken by the Agent under or in relation to this Agreement
         with requisite authority, or on the basis of appropriate instructions,
         received from the Majority Banks (or as otherwise duly authorised)
         shall be binding on all the Banks and the Working Capital Bank.

19.3     AGENT'S DUTIES

         The Agent shall:

19.3.1   promptly notify each Bank and the Working Capital Bank of the contents
         of each notice, certificate or other document received by the Agent
         from any Obligor or GTS Creditor under or pursuant to this Agreement or
         any other Finance Document;

19.3.2   consult with the Banks and the Working Capital Bank as to whether and,
         if so, how a discretion vested in the Agent is, either in any
         particular instance or generally, to be exercised but so that this
         shall not prevent the Agent in exceptional circumstances where time
         does not permit such consultation and urgent action is required, from
         exercising its rights and powers, or from instructing the Security
         Trustee to exercise its rights and powers, to preserve the security
         constituted by the Security Documents so long as the Agent promptly
         notifies the Banks and the Working Capital Bank subsequently of such
         exercise; and


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19.3.3   (subject to the other provisions of this clause 19) take such action
         or, as the case may be, refrain from taking such action with respect to
         the exercise of any of its rights, remedies, powers and discretions as
         Agent or Security Trustee as the Majority Banks may reasonably direct.

19.4     AGENT'S RIGHTS

         The Agent may:

19.4.1   in the exercise of any right, remedy, power or discretion in relation
         to any matter, or in any context, not expressly provided for by this
         Agreement, act or, as the case may be, refrain from acting in
         accordance with the instructions of the Majority Banks, and shall be
         fully protected in so doing;

19.4.2   unless and until it shall have received directions from the Majority
         Banks, take such action, or refrain from taking such action in respect
         of a Default of which the Agent has actual knowledge as it shall deem
         advisable in the best interests of the Banks and the Working Capital
         Bank (but shall not be obliged to do so);

19.4.3   refrain from acting in accordance with any instructions of the Majority
         Banks to institute, or to instruct the Security Trustee to institute
         any legal proceedings arising out of or in connection with this
         Agreement or any other Finance Document until it has been indemnified
         and/or secured to its satisfaction against any and all costs, expenses
         or liabilities (including legal fees) which it and/or the Security
         Trustee would or might incur as a result;

19.4.4   deem and treat (i) each Bank and the Working Capital Bank as the person
         entitled to the benefit of the Contribution of such Bank or the Working
         Capital Bank (as the case may be) for all purposes of this Agreement
         and the Security Documents unless and until a Transfer Certificate
         shall have been filed with the Agent and shall have become effective or
         a transfer has become effective in accordance with clause 18.10 (as the
         case may be), and (ii) the office set opposite the name of each Bank in
         part C of schedule 1 or, as the case may be, in any relevant Transfer
         Certificate as such Bank's funding office and the office set opposite
         the name of the Working Capital Bank in part D of schedule 1 as the
         Working Capital Bank's issuing and funding office unless and until a
         written notice of change of funding or issuing (as the case may be)
         office shall have been received by the Agent; and the Agent may act
         upon any such notice unless and until the same is superseded by a
         further such notice;

19.4.5   rely as to matters of fact which might reasonably be expected to be
         within the knowledge of any Obligor or GTS Creditor upon a certificate
         signed by any director of the relevant Obligor or GTS Creditor on
         behalf of such Obligor or GTS Creditor; and

19.4.6   refrain from doing anything which would, or might in its opinion, be
         contrary to any law or regulation of any jurisdiction and may do
         anything which is in its opinion necessary or desirable to comply with
         any such law or regulation.

19.5     RIGHTS OF THE SECURITY TRUSTEE

         In addition to all rights of the Security Trustee set out in the
         Security Trust Deed, each Bank and the Working Capital Bank hereby
         grants a power of attorney to the Security Trustee, with the right of
         substitution to enter into the Security Documents on its behalf.

19.6     NO LIABILITY OF ARRANGERS, AGENT, SECURITY TRUSTEE

         None of the Arrangers, the Security Trustee, the Agent or any of their
         respective employees and agents shall:

19.6.1   be obliged to request any certificate or opinion under clause 12.1 or
         any other provision of any Finance Document or to make any enquiry as
         to the use of the proceeds of the Facilities unless (in the case of the
         Agent) so required in writing by any Bank or the Working Capital Bank,
         in which case the Agent shall promptly make the appropriate request of
         the relevant Obligor or GTS Creditor; or


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19.6.2   be obliged to make any enquiry as to any breach or default by any
         Obligor or GTS Creditor in the performance or observance of any of the
         provisions of any Finance Document or as to the existence of a Default
         unless (in the case of the Agent) the Agent has actual knowledge
         thereof or has been notified in writing thereof by a Bank or the
         Working Capital Bank, in which case the Agent shall promptly notify the
         Banks and the Working Capital Bank of the relevant event or
         circumstance; or

19.6.3   be obliged to enquire whether or not any representation or warranty
         made by any Obligor or GTS Creditor pursuant to any Finance Document is
         true; or

19.6.4   be obliged to do anything (including, without limitation, disclosing
         any document or information) which would, or might in its opinion, be
         contrary to any law or regulation or be a breach of any duty of
         confidentiality or otherwise be actionable or render it liable to any
         person; or

19.6.5   be obliged to account to any Bank or the Working Capital Bank for any
         sum or the profit element of any sum received by it for its own
         account; or

19.6.6   be obliged to institute any legal proceedings arising out of or in
         connection with, or otherwise take steps to enforce, any Finance
         Document other than on the instructions of the Majority Banks; or

19.6.7   be liable to any Bank or the Working Capital Bank for any action taken
         or omitted under or in connection with any Finance Document or the
         Total Outstandings unless caused by its gross negligence or wilful
         misconduct.

         For the purposes of this clause 19 neither the Agent, the Arrangers or
         the Security Trustee shall be treated as having actual knowledge of any
         matter of which the corporate finance or any other division outside the
         agency or loan administration department of the person for the time
         being acting as the Agent or the Security Trustee, as the case may be,
         may become aware in the context of corporate finance, advisory or
         funding activities from time to time undertaken by the Agent or the
         Security Trustee, as the case may be, for the Ultimate Shareholder or
         any of its Subsidiaries or Associated Companies or any other person
         which may be a trade competitor of any of the Obligors or GTS Creditors
         or may otherwise have commercial interests similar to those of any of
         the Obligors or GTS Creditors.

19.7     NON-RELIANCE ON ARRANGERS, AGENT OR SECURITY TRUSTEE

         Each Bank and the Working Capital Bank acknowledges, by virtue of its
         execution of this Agreement or, as the case may be, a Transfer
         Certificate, that it has not relied on any statement, opinion, forecast
         or other representation made by the Arrangers, the Agent or the
         Security Trustee to induce it to enter into this Agreement and that it
         has made and will continue to make, without reliance on the Agent, the
         Arrangers or the Security Trustee and based on such documents as it
         considers appropriate, its own appraisal of the creditworthiness of the
         Immediate Shareholder and its Subsidiaries and its own independent
         investigation of the financial condition, prospects and affairs of the
         Immediate Shareholder and its Subsidiaries in connection with the
         making and continuation of the Total Outstandings under this Agreement.
         None of the Arrangers, the Agent or the Security Trustee shall have any
         duty or responsibility, either initially or on a continuing basis, to
         provide any Bank or the Working Capital Bank with any credit or other
         information with respect to the Obligors or GTS Creditors whether
         coming into its possession before the making of any Advance or the
         issue of any Bank Guarantee or at any time or times thereafter, other
         than (in the case of the Agent) as provided in clause 19.3.1.

19.8     NO RESPONSIBILITY ON ARRANGERS, AGENT OR SECURITY TRUSTEE FOR ANY
         OBLIGOR'S OR GTS CREDITORS PERFORMANCE

         None of the Arrangers, the Agent or the Security Trustee shall have any
         responsibility or liability to any Bank or the Working Capital Bank:

19.8.1   on account of the failure of any Obligor or GTS Creditor to perform its
         obligations under any Finance Document to which it is party; or


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19.8.2   for the financial condition of any Obligor or GTS Creditor; or

19.8.3   for the completeness or accuracy of any statements, representations or
         warranties in any of the Finance Documents or the Information
         Memorandum or any document delivered under any of the Finance
         Documents; or

19.8.4   for the execution, effectiveness, adequacy, genuineness, validity,
         enforceability or admissibility in evidence of any of the Finance
         Documents or of any certificate, report or other document executed or
         delivered under any of the Finance Documents; or

19.8.5   (save as otherwise provided in this clause 19) for taking or omitting
         to take any other action under or in relation to the Finance Documents
         or any aspect thereof; or

19.8.6   in the case of the Arrangers, on account of the failure of the Agent or
         the Security Trustee to perform or discharge any of their respective
         duties or obligations under the Finance Documents; or

19.8.7   otherwise in connection with the Facilities or its negotiation or for
         acting (or, as the case may be, refraining from acting) in accordance
         with the instructions of the Majority Banks.

19.9     RELIANCE ON DOCUMENTS AND PROFESSIONAL ADVICE

         The Arrangers, the Agent and the Security Trustee shall be entitled to
         rely on any communication, instrument or document believed by it to be
         genuine and correct and to have been signed or sent by the proper
         person and shall be entitled to rely as to legal or other professional
         matters on opinions and statements of any legal or other professional
         advisers selected or approved by it (including those in the Agent's,
         any Arranger's or the Security Trustee's, as the case may be
         employment).

19.10    OTHER DEALINGS

         The Arrangers, the Agent and the Security Trustee may, without any
         liability to account to the Banks or the Working Capital Bank, accept
         deposits from, lend money to, and generally engage in any kind of
         banking or other business with, and provide advisory or other services
         to, the Ultimate Shareholder, the Immediate Shareholder or any of their
         respective Subsidiaries or Associated Companies or any Relevant Person
         or any of the Banks or the Working Capital Bank as if it were not an
         Arranger, the Agent or the Security Trustee, as the case may be.

19.11    RIGHTS OF AGENT AND SECURITY TRUSTEE AS BANK; NO PARTNERSHIP

         With respect to its own Commitment and Contribution (if any) the Agent
         and the Security Trustee shall have the same rights and powers under
         this Agreement and the Security Documents as any other Bank or the
         Working Capital Bank (as the case may be) and may exercise the same as
         though it were not performing the duties and functions delegated to it
         under this Agreement and/or the Security Documents and the terms
         "Banks" and "Working Capital Bank" shall, unless the context clearly
         otherwise indicates, include the Agent and/or the Security Trustee in
         its individual capacity as a Bank or the Working Capital Bank (as the
         case may be). This Agreement shall not and shall not be construed so as
         to constitute a partnership between the parties or any of them.

19.12    AMENDMENTS; WAIVERS

19.12.1  Subject to clause 19.12.2, the Agent may, with the consent of the
         Majority Banks (or if and to the extent expressly authorised by the
         other provisions of this Agreement) and, if so instructed by the
         Majority Banks, shall (i) agree amendments or modifications to any
         Finance Document with the Obligors, the Ultimate Shareholder or any GTS
         Creditor and/or (ii) vary or waive breaches of, or defaults under, or
         otherwise excuse performance of, any provision any Finance Document by
         any Obligor, the Ultimate Shareholder or any GTS Creditor. Any such
         action so authorised and effected by the Agent shall be documented in
         such manner as the Agent shall (with the approval of the Majority
         Banks) determine, shall be promptly notified to the Banks and


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<PAGE>   76


         the Working Capital Bank by the Agent and (without prejudice to the
         generality of clause 19.2) shall be binding on all the Banks and the
         Working Capital Bank.

19.12.2  Except with the prior written consent of all the Banks and the Working
         Capital Bank, the Agent shall not have authority on behalf of the Banks
         (A) to agree with any Obligor, the Ultimate Shareholder or any GTS
         Creditor any amendment or modification to any Finance Document or to
         grant waivers in respect of breaches or defaults or to vary or excuse
         performance of or under any Finance Document by any Obligor, the
         Ultimate Shareholder or any GTS Creditor, if the effect of such
         amendment, modification, waiver, variation or excuse would be to (i)
         reduce the Margin, (ii) postpone the due date or reduce the amount of
         any reduction in availability, any payment of principal, interest,
         commitment commission or other amount payable by any Obligor or GTS
         Creditor under any Finance Document, (iii) change the currency in which
         any amount is payable by any Obligor or GTS Creditor under any Finance
         Document, (iv) increase any Bank's or the Working Capital Bank's
         Commitment, (v) extend the Availability Period or (vi) change the
         definition of "Majority Banks" in clause 4.2, (vii) unless in
         accordance with clause 12.3, change any provision of any Finance
         Document which requires the approval or consent of all the Banks and
         the Working Capital Banks such that the relevant approval or consent
         may be given otherwise than with the sanction of all the Banks and the
         Working Capital Bank, (viii) change the order of distribution under
         clause 9.10, (ix) change clause 17.2, (x) change clause 6.2 or (xi)
         change this clause 19.11 or (B) to release any Guarantor from its
         obligations under the Guarantee or (C) release any asset of whatever
         nature that is subject to a Security Document unless such release is to
         permit the disposal or other dealing with such asset in accordance with
         the terms of this Agreement and the relevant Security Document.

19.12.3  For the purposes of this clause 19.12 it is expressly agreed and
         acknowledged that the execution of a Deed of Guarantor Accession or a
         Deed of Borrower Accession or any deed or instrument pursuant to a
         further assurance provision in the Security Documents shall not
         constitute an amendment or modification to, or variation of, this
         Agreement or any of the Security Documents shall not constitute an
         amendment or modification to, or variation of, this Agreement.

19.13    REIMBURSEMENT AND INDEMNITY BY BANKS AND THE WORKING CAPITAL BANK

         Each Bank and the Working Capital Bank shall reimburse the Security
         Trustee, the Arrangers and the Agent (rateably in accordance with such
         Bank's and the Working Capital Bank's Commitment or Contribution), to
         the extent that the Security Trustee, the Arrangers or the Agent are
         not reimbursed by the Obligors, for the costs, charges and expenses
         incurred by the Security Trustee, the Arrangers and the Agent
         contemplation of, or otherwise in connection with, the enforcement or
         attempted enforcement of, or the preservation or attempted preservation
         of any rights under, or in carrying out its duties under, the Finance
         Documents including (in each case) the fees and expenses of legal or
         other professional advisers. Each Bank and the Working Capital Bank
         shall on demand indemnify the Agent and the Security Trustee (rateably
         in accordance with its Commitment or Contribution) against all
         liabilities, damages, costs and claims whatsoever incurred by the Agent
         or the Security Trustee (as the case may be) in connection with the
         Finance Documents or the performance of its duties under the Finance
         Documents or any action taken or omitted by the Agent or the Security
         Trustee (as the case may be) under any of the Finance Documents, unless
         such liabilities, damages, costs or claims arise from the Agent's or
         the Security Trustee's (as the case may be) own gross negligence or
         wilful misconduct.

19.14    RETIREMENT OF AGENT

19.14.1  The Agent may retire from its appointment as Agent under this Agreement
         having given to the Original Borrower, each of the Banks and the
         Working Capital Bank not less than 30 days' notice of its intention to
         do so and provided that no such retirement shall take effect unless
         there has been appointed by the Banks and the Working Capital Bank as a
         successor Agent:

         (a)  a Bank nominated by the Majority Banks with the consent of the
              Original Borrower (not to be unreasonably withheld or delayed) or,
              failing such a nomination,


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<PAGE>   77


         (b)  any reputable and experienced bank or financial institution with
              offices in London nominated by the Agent with the consent of the
              Original Borrower (not to be unreasonably withheld or delayed).

         Any corporation into which the Agent may be merged or converted or any
         corporation with which the Agent may be consolidated or any corporation
         resulting from any merger, conversion, amalgamation, consolidation or
         other reorganisation to which the Agent shall be a party shall, to the
         extent permitted by applicable law, be the successor Agent under this
         Agreement without the execution or filing of any document or any
         further act on the part of any of the parties to this Agreement, save
         that notice of any such merger, conversion, amalgamation, consolidation
         or other reorganisation shall forthwith be given to the Original
         Borrower, the Banks and the Working Capital Bank.

19.14.2  Upon any such successor as aforesaid being appointed, the retiring
         Agent shall be discharged from any further obligation under this
         Agreement (but shall continue to have the benefit of this clause 19 in
         respect of any action it has taken or refrained from taking prior to
         such discharge) and its successor and each of the other parties to this
         Agreement shall have the same rights and obligations among themselves
         as they would have had if such successor had been a party to this
         Agreement in place of the retiring Agent. The retiring Agent shall (at
         the expense of the Original Borrower) provide its successor with copies
         of such of its records as its successor reasonably requires to carry
         out its functions under the Finance Documents.

19.15    CHANGE OF REFERENCE BANKS

         If (a) the whole of the Contribution (if any) of any Reference Bank is
         prepaid, (b) the Commitment (if any) of any Reference Bank is reduced
         to zero in accordance with clause 16.1, (c) a Reference Bank transfers
         the whole of its rights and obligations (if any) as a Bank under this
         Agreement or (d) any Reference Bank generally ceases to provide
         quotations to the Agent for the purposes of determining LIBOR or
         EURIBOR (as the case may be), the Agent may, acting on the instructions
         of the Majority Banks, terminate the appointment of such Reference Bank
         and with the approval of the Borrowers (such approval not to be
         unreasonably withheld or delayed) appoint another Bank to replace such
         Reference Bank.

19.16    PROMPT DISTRIBUTION OF PROCEEDS

         Moneys received by the Security Trustee (whether from a Receiver or
         otherwise) pursuant to the exercise of (or otherwise by virtue of the
         existence of) any rights and powers under or pursuant to any of the
         Security Documents shall be paid to the Agent for distribution in
         accordance with the terms of the Security Trust Deed shall be
         distributed by the Agent as soon as is practicable after the relevant
         moneys are received by, or otherwise become available to, the Agent
         save that (without prejudice to any other provision contained in any of
         the Security Documents) the Agent (acting on the instructions of the
         Majority Banks) may credit any moneys received by it to a suspense
         account for so long and in such manner as the Agent may from time to
         time determine with a view to preserving the rights of the Finance
         Parties or any of them to prove for the whole of their respective
         claims against any Obligor, GTS Creditor or any other person liable.

19.17    ORIGINAL BORROWER

19.17.1  Each Obligor (other than the Original Borrower) and the Ultimate
         Shareholder by its execution of this Agreement or a Deed of Borrower
         Accession or a Deed of Guarantor Accession irrevocably appoints the
         Original Borrower to act on its behalf as its agent in relation to the
         Finance Documents and irrevocably authorises (i) the Original Borrower
         on its behalf to supply all information concerning itself contemplated
         by this Agreement and to give all notices and instructions (including,
         in the case of a Borrower, Utilisation Notices) to execute on its
         behalf any Deed of Borrower Accession or Deed of Guarantor Accession
         and to make such agreements capable of being given or made by any
         Obligor notwithstanding that they may affect such Obligor or the
         Ultimate Shareholder (as the case may be), without further reference to
         or consent of such Obligor or the Ultimate Shareholder (as the case may
         be) and (ii) each Finance Party to give any notice, demand or other
         communication to such Obligor or the Ultimate


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<PAGE>   78


         Shareholder (as the case may be) pursuant to the Finance Documents to
         the Original Borrower on its behalf, and in each case such Obligor or
         the Ultimate Shareholder (as the case may be) shall be bound thereby as
         though such Obligor itself had given such notices and instructions
         (including, without limitation, any Utilisation Notices) or executed or
         made such agreements or receive any such notice, demand or other
         communication.

19.17.2  Every act, omission, agreement, undertaking, settlement, waiver, notice
         or other communication given or made by the Original Borrower or given
         to the Original Borrower under this Agreement, or in connection with
         this Agreement (whether or not known to any other Obligor or the
         Ultimate Shareholder (as the case may be) and whether occurring before
         or after such other Obligor or the Ultimate Shareholder (as the case
         may be) became a party to this Agreement) shall be binding for all
         purposes on the Ultimate Shareholder and all other Obligors as if the
         Ultimate Shareholder and the other Obligors had expressly made, given
         or concurred with the same. In the event of any conflict between any
         notices or other communications of the Original Borrower and any other
         Obligor or the Ultimate Shareholder (as the case may be), those of the
         Original Borrower shall prevail.

19.18    ACKNOWLEDGEMENT BY THE ULTIMATE SHAREHOLDER

         The Ultimate Shareholder acknowledges for the benefit of the Finance
         Parties the terms and conditions of this Agreement including, without
         limitation, the representations and warranties and undertakings given
         by its Subsidiaries provided, however, that nothing in this Agreement
         shall create any liability of the Ultimate Shareholder to the Finance
         Parties or the Finance Parties to the Ultimate Shareholder.

20       NOTICES AND OTHER MATTERS

20.1     NOTICES

         Every notice, request, demand or other communication under this
         Agreement shall:

20.1.1   be in writing delivered personally or by priority registered letter
         (airmail if available) or telefax;

20.1.2   be deemed to have been received, subject as otherwise provided in this
         Agreement in the case of a letter when delivered and, in the case of a
         telefax, when a complete and legible copy is received by the addressee
         (unless the date of despatch is not a business day in the country of
         the addressee or the time of despatch of any telefax is after the close
         of business in the country of the addressee in which case it shall be
         deemed to have been received at the opening of business on the next
         such business day); and

20.1.3   be sent:

         (a)  to the Ultimate Shareholder and each Obligor at:

              c/o Global TeleSystems, Inc.
              4121 Wilson Boulevard
              8th Floor
              Arlington
              Virginia 22203
              USA

              Telefax: +1 (703) 236 3619
              Attention: Corporate Treasurer

              Telefax: +1 (703) 236 3605
              Attention: General Counsel


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<PAGE>   79


              with a copy to:

              Global TeleSystems (UK) Ltd
              151 Shaftesbury Avenue
              3rd Floor
              London WC2H 8AL
              England

              Telefax: +44 (0) (20) 7769 8052
              Attention: European Treasurer

              and to

              Global TeleSystems Europe Holdings B.V.

              Terhulpsesteenweg 6A,
              1560 Hoeilaart,
              Belgium

              Telefax: +32 2 658 5102
              Attention: Treasury Services

         (b)  to the Agent and the Security Trustee at:

              Deutsche Bank AG London
              Winchester House
              1 Great Winchester Street
              London
              EC2N 2DB

              Telefax:     +44 20 7547 5703/6419
              Attention:   Richard Peters/Ronald Lane Smith

         (c)  to the Arrangers at:

              Deutsche Bank AG London
              Winchester House
              1 Great Winchester Street
              London
              EC2N 2DB

              Telefax:     + 44 207 545 7130
              Attention:   Project and Export Finance Group

              Bank of America International Limited.
              Bank of America House
              1 Alie Street
              London E1 8DE


              Telefax:     +44 207 809 5287
              Attention:   Richard Woods

              Dresdner Bank AG London Branch
              Riverbank House
              2 Swan Lane
              London EC4R 3UX

              Telefax:     +44 207 623 4118
              Attention:   Julie Cowap


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<PAGE>   80


         (d)  to each Bank and to the Working Capital Bank

              at its address or telefax number
              specified (in the case of a Bank) in part C of schedule 1 or in
              any relevant Transfer Certificate or (in the case of the Working
              Capital Bank) part D of schedule 1

         or to such other address or telefax number as is notified by the
         relevant party to the other parties to this Agreement.

20.2     NOTICES THROUGH THE AGENT

         Every notice, request, demand or other communication under this
         Agreement to be given by any Obligor to any other party shall be given
         to the Agent for onward transmission as appropriate and to be given to
         the Ultimate Shareholder or the Obligors (or any of them) shall (except
         as otherwise provided in this Agreement) be given by the Agent.

20.3     NO IMPLIED WAIVERS, REMEDIES CUMULATIVE

         No failure or delay on the part of the Finance Parties or any of them
         to exercise any power, right or remedy under this Agreement shall
         operate as a waiver thereof, nor shall any single or partial exercise
         by the Finance Parties or any of them of any power, right or remedy
         preclude any other or further exercise thereof or the exercise of any
         other power, right or remedy. The remedies provided in this Agreement
         are cumulative and are not exclusive of any remedies provided by law.

20.4     ENGLISH TRANSLATIONS

         All certificates, instruments and other documents to be delivered under
         this Agreement shall be in the English language or shall be accompanied
         by a certified English translation upon which the Finance Parties shall
         be entitled to rely.

20.5     COUNTERPARTS

         This Agreement may be executed in any number of counterparts and by the
         different parties on separate counterparts, each of which when so
         executed and delivered shall be an original, but all counterparts shall
         together constitute one and the same instrument.

20.6     CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

         No term of this Agreement is enforceable under the Contracts (Rights of
         Third Parties) Act 1999 by a person who is not party to this Agreement.

21       GOVERNING LAW AND JURISDICTION

21.1     LAW

         This Agreement shall be governed by English law.

21.2     SUBMISSION TO JURISDICTION

         The parties to this Agreement agree for the benefit of the Finance
         Parties that:

21.2.1   if any party has any claim against any other arising out of or in
         connection with this Agreement such claim shall (subject to clause
         21.2.3) be referred to the High Court of Justice in England, to the
         jurisdiction of which each of the parties irrevocably submits;


                                       78
<PAGE>   81


21.2.2   the jurisdiction of the High Court of Justice in England over any such
         claim against the Finance Parties shall be an exclusive jurisdiction
         and no courts outside England shall have jurisdiction to hear or
         determine any such claim; and

21.2.3   nothing in this clause 21.2 shall limit the right of any Finance Party
         to refer any such claim against any other party to any other court of
         competent jurisdiction outside England, to the jurisdiction of which
         such party hereby irrevocably agrees to submit, nor shall the taking of
         proceedings by any Finance Party before the courts in one or more
         jurisdictions preclude the taking of proceedings in any other
         jurisdiction whether concurrently or not.

21.3     AGENT FOR SERVICE OF PROCESS

21.3.1   Each Obligor irrevocably designates, appoints and empowers GTS Carrier
         Services (UK) Limited at present of 151 Shaftesbury Avenue, London WC2H
         8AL to receive for it and on its behalf service of process issued out
         of the High Court of Justice in England in relation to any claim
         arising out of or in connection with this Agreement.

21.3.2   For the benefit of the Finance Parties and for the purpose of this
         Agreement and any claims arising out of or in connection with this
         Agreement, each Obligor which is a legal entity organised and existing
         under the laws of The Netherlands hereby irrevocably elects domicile
         (within the meaning of Section 1.15 of The Netherlands Civil Code) at
         the address from time to time of GTS Carrier Services (UK) Limited.

IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.



                                       79
<PAGE>   82


THE ORIGINAL BORROWER AND AN ORIGINAL GUARANTOR

SIGNED for and on behalf of                        )
GLOBAL TELESYSTEMS EUROPE HOLDINGS B.V.            )       JIM REYNOLDS
by:                                                )


THE IMMEDIATE SHAREHOLDER AND GUARANTOR

SIGNED for and on behalf of                        )
GLOBAL TELESYSTEMS EUROPE B.V.                     )       JIM REYNOLDS
by:                                                )


THE ORIGINAL GUARANTORS

SIGNED for and on behalf of                        )
EBONE A/S                                          )       JIM REYNOLDS
by:                                                )


SIGNED for and on behalf of                        )
GLOBAL TELESYSTEMS (DENMARK) A/S                   )       ERNST WESSEL
by:                                                )


SIGNED for and on behalf of                        )
GTS TRANSATLANTIC LIMITED                          )       STEVEN ANDREWS
by:                                                )


SIGNED for and on behalf of                        )
GTS CARRIER SERVICES (IRELAND) LIMITED             )       MAURICE WOOLF
by:                                                )


SIGNED for and on behalf of                        )
GTS NETWORK (IRELAND) LIMITED                      )       JIM REYNOLDS
by:                                                )


THE ULTIMATE SHAREHOLDER

SIGNED for and on behalf of                        )       JEFF VON DEYLEN
GLOBAL TELESYSTEMS INC.                            )


THE ARRANGERS

SIGNED for and on behalf of                        )
DEUTSCHE BANK AG LONDON                            )       MARTIN FLAHERTY/
by:                                                )       ALISON HOWE



SIGNED for and on behalf of                        )
BANK OF AMERICA INTERNATIONAL LIMITED              )       RICHARD WOODS
by:                                                )



<PAGE>   83


SIGNED for and on behalf of                        )
DRESDNER BANK AG LONDON BRANCH                     )       ALASTAIR MCDONALD/
by:                                                )       EDMOND ROBINSON


THE BANKS

SIGNED for and on behalf of                        )
BANK OF AMERICA, N.A.                              )       RICHARD WOODS
by:                                                )


SIGNED for and on behalf of                        )
DEUTSCHE BANK AG LONDON                            )       MARTIN FLAHERTY/
by:                                                )       ALISON HOWE


SIGNED for and on behalf of                        )
DRESDNER BANK AG LONDON BRANCH                     )       ALASTAIR MCDONALD/
by:                                                )       EDMOND ROBINSON


THE AGENT

SIGNED for and on behalf of                        )
DEUTSCHE BANK AG LONDON                            )       MARTIN FLAHERTY/
by:                                                )       ALISON HOWE

THE SECURITY TRUSTEE


SIGNED for and on behalf of                        )
DEUTSCHE BANK AG LONDON                            )       MARTIN FLAHERTY/
by:                                                )       ALISON HOWE


THE WORKING CAPITAL BANK

SIGNED for and on behalf of                        )
DEUTSCHE BANK AG LONDON                            )       MARTIN FLAHERTY/
by:                                                )       ALISON HOWE