-------------------------------------------------
                               Dated 30 March 2000





                             Shareholders Agreement



                           Telstra Corporation Limited
                                     ("TCL")

                          Telstra Holdings Pty Limited
                                     ("THPL)

                      Austar United Communications Limited
                                    ("AUCL")

                           Saturn (NZ) Holding Company
                                     Pty Ltd
                                  ("Saturn NZ")

                          Saturn Communications Limited
                                   ("Company")










                            Mallesons Stephen Jaques
                                   Solicitors

                             Governor Phillip Tower
                                 1 Farrer Place
                                 Sydney NSW 2000
                                 Tel: 9296 2000
                                 Fax: 9296 3999
                                 DX: 113 Sydney
                                  Ref: RAG:NBC





<PAGE>

Contents    Shareholders Agreement
--------------------------------------------------------------------------------

            1 Interpretation                                                   3

            2 Scope and business of Company                                   10

            3 Conditions Precedent                                            11

            4 Constitution of Company                                         12

            5 Restrictions on transfers and mortgages of Shares               12

            6 Board of Directors                                              15

            7 Responsibilities of the Board                                   17

            8 Management and operations                                       19

            9 Special Majority                                                20

            10 Deadlock                                                       22

            11 Capital and Funding                                            24

            12 Supply of Products and Services                                28

            13 Exclusivity                                                    30

            14 Procuring Performance                                          32

            15 Warranties                                                     33

            16 Termination                                                    33

            17 Fair Market Valuation                                          35

            18 Requirements on a Sale of Shares                               37

            19 Confidentiality, Publicity and Audit                           37

            20 Notices                                                        39

            21 Miscellaneous                                                  40

            22 Governing law, jurisdiction and service of process             41

            Schedule 1 [ Not Used ]                                           43

            Schedule 2 CEO Delegation Resolution                              44

            Schedule 3 Management and Reporting Responsibilities Schedule     47

            Schedule 4 Incentive Compensation Plan - Key terms                50

            Schedule 5 Accession Deed                                         53

            1 Accession                                                       54

            2 Notices                                                         54

            3 Miscellaneous                                                   55



<PAGE>




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

                             Shareholders Agreement

Date:               30 March 2000

Parties:
                    TELSTRA  CORPORATION  LIMITED  (ACN  051  775  556)  of  231
                    Elizabeth Street, Sydney NSW ("TCL")

                    TELSTRA  HOLDINGS  PTY  LIMITED  (ACN  057  808  938) of 231
                    Elizabeth Street, Sydney NSW ("THPL")

                    AUSTAR  UNITED  COMMUNICATIONS  LIMITED (ACN 087 695 707) of
                    Level 29, 259 George Street, Sydney, NSW 2000 ("AUCL")

                    SATURN  (NZ)  HOLDING  COMPANY  PTY LTD (ACN 088 052 000) of
                    Level 29, 259 George Street, Sydney NSW ("Saturn NZ")

                    SATURN COMMUNICATIONS  LIMITED of 75 The Esplanade,  Petone,
                    Wellington, New Zealand ("Company")

Recitals:
               A.   AUCL  is a  subsidiary  of UGC  and is a  listed  Australian
                    company.

               B.   Saturn NZ and the Company are wholly owned  subsidiaries  of
                    AUCL.

               C.   TCL is a listed Australian company.

               D.   THPL and TNZ are wholly owned subsidiaries of TCL.

               E.   The Company and TNZ carry on business in New Zealand.

               F.   AUCL and TCL have agreed:

                    (a)  to merge the businesses of the Company and TNZ pursuant
                         to the Merger Agreement; and

                    (b)  to  operate  the  Company  as  an  incorporated   joint
                         venture.

               G.   This  agreement  sets out the  terms  on which  TCL and AUCL
                    shall conduct the joint venture.

               H.   On completion of the transaction  contemplated by the Merger
                    Agreement:

                    (a)  THPL will hold 50% of the Shares in the Company,  fully
                         paid; and

                    (b)  AUCL and  Saturn NZ will  between  them hold 50% of the
                         Shares in the Company, fully paid.


<PAGE>
                                                                               3

Operative provisions:

1    Interpretation
--------------------------------------------------------------------------------

Definitions

     1.1  The following  words have these meanings in this agreement  unless the
          contrary intention appears:

         Affiliate  of any  specified  person  means  any  other  person  which,
         directly or indirectly,  controls,  is controlled by or in under direct
         or  indirect  common  control  with,  such  specified  person.  For the
         purposes of this  definition,  "control"  when used with respect to any
         person means:

          (a)  the power to direct the  management  and policies of such person,
               directly or indirectly,  whether  through the ownership of voting
               shares, by contract or otherwise; or

          (b)  the  holding of not less than 40% of the  shares in such  person,

          and the term "controlled" has a meaning correlative to the foregoing.

          ASX means the Australian Stock Exchange Limited.

          AUCL Services  Agreement means the agreement by that name between AUCL
          and the Company to be executed before Completion.

          Board means all or some of the Directors acting as a board.

          Budget means a budget for the business of the Company, containing:

          (a)  a budget for the  Company  for the period of the  Business  Plan,
               including,  without limitation, a breakdown of revenue, operating
               expenditure,  capital  expenditure and other items normally found
               in the budget for a substantial telecommunications business; and

          (b)  an annual detailed operating budget containing  projections as at
               the end of each  month  during  the  year  of  income,  expenses,
               cashflow  and  balance  sheet for the first year of the  Business
               Plan, including:

               (i)  an  annual  operating  budget  for the  Company,  containing
                    projections  as at the end of each month during that year of
                    consolidated income, expenses, cashflow and balance sheet;

              (ii)  a  forecast  of  the  annual  operating  expenditure  and  a
                    projection of whether and when any additional  funds will be
                    required; and

             (iii)  a forecast of annual  capital  expenditure  and a projection
                    of whether and when any additional funds will be required.



<PAGE>
                                                                               4

          Business  Day means a day from  Monday to  Friday,  not being a public
          holiday in Wellington, Auckland or Sydney.

          Business Plan means,  for a period of five Financial Years, a plan for
          the business of the Company,  taking into account the Financial  Model
          and containing:

          (a)  a description  of the overall  objectives  and  strategies of the
               Company for the period of the Business Plan,  including,  without
               limitation, the Company's profit and Shareholder value objectives
               for the period;

          (b)  a report which compares the performance of the Company during the
               then current Financial Year with the Business Plan of the Company
               for the then current Financial Year;

          (c)  a description of the products and services which the Company will
               offer during at least the first 18 months of the Business Plan;

          (d)  a marketing plan for the Company for at least the first 18 months
               of the Business Plan, including,  without limitation, the pricing
               policy of the Company for that period;

          (e)  a  detailed  description  of the human  resources  policy for the
               Company,  including the forecast number of the full time and part
               time employees, and number and source of Shareholder secondees to
               the Company, for the period of the Business Plan;

          (f)  a  cashflow  forecast  for  the  Company  for the  period  of the
               Business Plan;

          (g)  a funding plan for the equity,  debt,  operating and  expenditure
               and  capital  expenditure  requirements  of the  Company  for the
               period of the Business Plan;

          (h)  a description of proposed material commitments or liabilities not
               in the ordinary course of the Company's business;

          (i)  any  proposed  acquisition  or  disposal of any asset or business
               which would require Board approval;

          (j)  any proposed profit sharing arrangements with third parties;

          (k)  any  proposed  Security  Interests  to be given over any material
               assets;

          (l)  any proposed loans,  guarantees or Security  Interests to be made
               or given.

          CEO means the chief executive officer of the Company.



<PAGE>
                                                                               5

          CEO Delegation  Resolution means a resolution of the Board setting out
          the powers and duties of the CEO.

          Chairman  means  the  Director  who is  chairman  of the  Board and of
          meetings of the members of the Company.

          Commencement Date means the day on which Completion occurs.

          Company  Bank  Facility  means  the  Syndicated  Senior  Secured  Debt
          facility  provided by Toronto Dominion  Australia Limited (and others)
          to the  Company  and each  Transaction  Document  as  defined  in that
          facility.

          Completion has the meaning set out in the Merger Agreement.

          Confidential Information means:

          (a)  the  provisions  of  this  agreement  and of  each  Establishment
               Agreement; and

          (b)  any  information,  data,  practices  and  techniques  supplied or
               disclosed  under  or in  connection  with  this  agreement  or an
               Establishment  Agreement by a party ("supplier") to another party
               ("recipient")  other  than  information,   data,   practices  and
               techniques:

               (i)  in the  possession  of a recipient  prior to the date of its
                    disclosure by the supplier;

              (ii)  in the public domain prior to the date of its  disclosure by
                    the supplier;

             (iii)  which have entered the public  domain other than as a result
                    of breach of confidence by the recipient; or

              (iv)  supplied to a recipient without restriction by a third party
                    who is under no  obligation  to a supplier to maintain  that
                    information   in   confidence.

          Constitution means the constitution of the Company.

          Consultancy Agreement means the agreement between TCL and the Company,
          to be executed before Completion.

          Deed of Accession means a deed,  substantially  in the form set out in
          schedule 5, under which a new Shareholder agrees to be bound by all of
          the provisions of this agreement.

          Director means a director of the Company.

          Establishment Agreements means:

          (a)  the Merger Agreement;

          (b)  the Offer to Acquire Shares;



<PAGE>
                                                                               6


          (c)  the Consultancy Agreement;

          (d)  the Jack Matthews Deed;

          (e)  the TCL Services Agreement;

          (f)  the AUCL Services Agreement;

          (g)  the Warranty Agreement;

          (h)  the TCL/Company IP Licence Agreement; and

          (i)  the  TCL/TNZ  IP Licence  Agreement.

          Financial  Model means the Financial  Model  developed by TCL and AUCL
          and initialled by  representatives of TCL and AUCL on the date of this
          agreement for the purposes of identification.

          Financial  Year means a period of 12  consecutive  months ending on 30
          June,  provided  that the first  financial  year of the Company  after
          Completion  shall  start on the  Commencement  Date and end on 30 June
          2000.

          Indentures means:

          (a)  the  Indenture  between UIH  Australia/Pacific,  Inc and American
               Bank National  Association for $US443,000,000 14% Senior Discount
               Notes dated 14 May 1996 (as amended);

          (b)  the Indenture  between UGC and Firstar Bank of Minnesota N.A. for
               Initial  Issuance  of  $US1,375,000,000  10 3/4%  Senior  Secured
               Discount Notes Due 2008 dated 5 February 1998; and

          (c)  the Indenture  between UGC and Firstar Bank of Minnesota N.A. for
               Initial Issuance of $US355,000,000 Senior Discount Notes Due 2009
               dated 29 April 1999, as amended from time to time.

          Initial  Business  Plan  means the  Business  Plan  annexed to the MOU
          between TCL and AUCL dated 24 February 2000.

          Insolvency means:

          (a)  where a party  goes into  liquidation  (other  than for a solvent
               restructuring  which has been  previously  approved in writing by
               the  other  parties,   such  approval  not  to  be   unreasonably
               withheld);

          (b)  where  a  party  is  wound  up or  dissolved  or  removed  from a
               companies register (except in the event of an amalgamation of the
               Company and TNZ);


<PAGE>
                                                                               7


          (c)  where a party  enters  into a  scheme  of  arrangement  with  its
               creditors or any class thereof;

          (d)  where a party  incorporated  in  Australia  has an  administrator
               appointed;

          (e)  where a party has a receiver or manager  appointed  in respect of
               that party or a material part of its assets;

          (f)  where a party is unable to pay its  debts as they  become  due in
               the normal course of business; or

          (g)  where any event  analogous  in nature to any event  described  in
               paragraphs  (a) to (f) has  occurred  in respect of a party under
               the laws of any relevant  jurisdiction.

          Jack  Matthews  Deed means the deed by that name between Jack Matthews
          and the Company, to be executed before Completion.

          Merger  Agreement  means the  agreement by that name between TCL, AUCL
          and the Company, dated on or about the date of this agreement.

          Offer to Acquire  Shares means the  agreement by that name between the
          Company and THPL, dated on or about the date of this agreement.

          Security Interest means:

          (a)  a mortgage,  pledge,  lien,  charge,  assignment,  hypothecation,
               security  interest or any interest or power otherwise  arising in
               or over any  interest in any  security  (as defined in  paragraph
               1.2(k)) or reserved in or over an asset,  or any other right of a
               creditor to have a claim  satisfied prior to other creditors from
               the proceeds of any asset; or

          (b)  an agreement to create or give any security or right  referred to
               in subparagraph (a) of this definition. Services Agreements means
               the AUCL Services Agreement and TCL Services Agreement.

          Shareholder means a person who holds the legal interest in any Shares,
          and at the Commencement Date means THPL, AUCL and Saturn NZ.

          Shareholder   Group  means  the  UGC  Shareholder  Group  or  the  TCL
          Shareholder Group.

          Shares means ordinary  voting shares in the capital of the Company and
          Shareholding means a holding of Shares.

          TCL/Company  IP Licence  Agreement  means the  agreement  by that name
          between TCL and the Company, to be executed before Completion.

          TCL Services  Agreement  means the  agreement by that name between TCL
          and the Company, to be executed before Completion.



<PAGE>

                                                                               8

         TCL  Shareholder  Group means TCL and each entity  controlled by it but
         (only for the  purposes of clause 13) shall not at any time include any
         of the  following  entities  or  any  entity  controlled  by any of the
         following entities:

          (a)  the Foxtel Partnership and the Foxtel Television Partnership;

          (b)  Solution 6 Holdings Limited;

          (c)  Sausage Software Limited;

          (d)  Computershare Limited; or

          (e)  PlesTel  Pty Ltd and the  PlesTel  Operating  Trust.

          TCL/TNZ IP Licence  Agreement means the agreement by that name between
          TCL and TNZ, to be executed before Completion.

          Telstra  Saturn  Incentive   Compensation   Plan  means  an  incentive
          compensation   plan  for  the   employees   of  the  Company  and  its
          subsidiaries, the key terms of which are set out in Schedule 4.

          TNZ means  Telstra New Zealand  Limited of Level 9, 191 Queen  Street,
          Auckland.

          TNZ Group means TNZ and each of its subsidiaries.

          UGC means UnitedGlobalCom, Inc.

          UGC Shareholder Group means UGC and each entity controlled by it.

          Warranty  Agreement  means the  agreement by that name between TCL and
          AUCL, dated on or about the date of this agreement.

Interpretation

     1.2  In this agreement, unless the context otherwise requires:

          (a)  a  reference  to a clause,  schedule,  annexure  or appendix is a
               reference  to a clause of or  schedule,  annexure  or appendix to
               this  agreement  and  references  to this  agreement  include any
               recital, schedule, annexure or appendix;

          (b)  a reference to this agreement or another instrument  includes any
               variation or replacement of either of them;

          (c)  a reference to a statute,  ordinance,  code or other law includes
               regulations and other  instruments  under it and  consolidations,
               amendments, re-enactments or replacements of any of them;

          (d)  the singular includes the plural and vice versa;

          (e)  where a word or phrase is  defined,  other  grammatical  forms of
               that word or phrase have the appropriate corresponding meaning;



<PAGE>
                                                                               9


          (f)  the  word  "person"  includes  a  firm,  a  body  corporate,   an
               unincorporated association, a partnership or an authority;

          (g)  a reference  to a "person"  includes a reference  to the person's
               executors,  administrators,  successors,  substitutes (including,
               but not limited to, persons taking by novation) and assigns;

          (h)  all references to  "subsidiary"  or "related body corporate" bear
               the  meaning  as  set  out  in  Division  6 of  Part  1.2  of the
               Corporations Law;

          (i)  all references to "holding company" and "wholly owned subsidiary"
               bear the meaning as set out in section 9 of the Corporations Law;

          (j)  "control"  and  "controlled"  are  defined by the test set out in
               paragraph 9 of Australian Accounting Standard AASB 1024;

          (k)  all  references  to  "security"  bear the  meaning  as set out in
               section 92(3) of the Corporations Law;

          (l)  all  references to  "including"  mean  "including but not limited
               to";

          (m)  an agreement, representation or warranty in favour of two or more
               persons is for the benefit of them jointly and severally;

          (n)  an  agreement,  representation  or warranty on the part of two or
               more persons binds them jointly and severally;

          (o)  if a period of time is  specified  and dates  from a given day or
               the day of an act or event,  it is to be calculated  exclusive of
               that day;

          (p)  a reference to a time is that time in Wellington, New Zealand;

          (q)  a reference to a day is to be  interpreted  as the period of time
               commencing at midnight and ending 24 hours later;

          (r)  a reference to a month is a reference to a calendar month;

          (s)  if an  event  must  occur  on a  stipulated  day  which  is not a
               Business Day then the stipulated day will be taken to be the next
               Business Day;

          (t)  all  currency  references  are  to  the  lawful  currency  of New
               Zealand; and

          (u)  where  a  right  under  this   agreement  is   exercisable  by  a
               Shareholder Group, it is exercisable:

               (i)  with respect to the UGC Shareholder Group - by AUCL; and



<PAGE>

                                                                              10

              (ii)  with respect to the TCL Shareholder Group - by TCL;

          (v)  "dispose"  means any dealing with a security,  including  but not
               limited to a sale,  transfer,  assignment,  trust, option or swap
               and any alienation of all or any part of the rights  attaching to
               a  security,  or any  interest in a security or giving a Security
               Interest over any  security,  and includes any attempt to so deal
               or give or the taking of any steps for the purposes of so dealing
               or giving.

Headings

     1.3  Headings  are  inserted  for   convenience   and  do  not  affect  the
          interpretation of this agreement.

2    Scope and business of Company
--------------------------------------------------------------------------------

Scope of business of the Company
     2.1  The Company  shall carry on business as a  communications  carrier and
          service  provider,  including,  without  limitation,  in the telephony
          (voice,  data and image),  internet,  broadcasting  and  narrowcasting
          industries (including pay TV and content provision).

     2.2  The Company  shall not carry on business  outside New Zealand  without
          the prior written consent of all Shareholders  whose Shareholder Group
          holds in aggregate 20% or more of the number of issued Shares. For the
          avoidance of doubt, the provision of internet and other services which
          by their nature have incidental  reach outside of New Zealand will not
          breach this clause 2.2.  Where such  services  have  incidental  reach
          outside of New Zealand,  the Company  must not promote  such  services
          outside of New Zealand.

     2.3  The prohibition in clause 2.2 shall not apply to the Company arranging
          to deliver goods or services to a person  outside of New Zealand where
          the Company is required to do so by virtue of  obligations  undertaken
          by the  Company in New  Zealand,  and the Company  supplies  goods and
          services to that person or an Affiliate of that person in New Zealand.

Brand
     2.4  Within 30 days after  Completion  the Company shall change its name to
          "Telstra Saturn Limited".

     2.5  If the TCL Shareholder Group ceases to be a Shareholder of the Company
          for any reason, the Company must cease using the word "Telstra" in its
          name  within 6 months  after the date that the TCL  Shareholder  Group
          ceases to be a Shareholder of the Company.

     2.6  If the TCL/Company IP Licence  Agreement is terminated for any reason,
          the Company must within three  months  after that  termination  do all
          things and execute all documents  necessary to ensure the cancellation
          of registration of the name "Telstra Saturn Limited".



<PAGE>
                                                                              11

     2.7  Brands for the Company's  products and services shall be determined by
          the Board. Policies of the venture

     2.8  Each Shareholder must vote its rights as a Shareholder and procure the
          Directors  nominated  by it to act and vote so as to  ensure  that the
          Company  acts  in  conformity  with  this  agreement,   and  that  all
          information  about the Company and its  business is  available  to all
          Directors.

     2.9  The Shareholders shall procure that the Company  distributes by way of
          dividend or interim dividend in respect of each Financial Year such of
          its  profits as are  legally  available  for  distribution  and are in
          excess  of  its  anticipated  capital  expenditure,  working  capital,
          reserve and other requirements as determined by the Board.

     2.10 In  accordance  with section  131(4) of the  Companies  Act 1993 (NZ),
          Directors may when exercising powers or performing duties as Directors
          of the  Company,  act in a manner which they believe to be in the best
          interests  of their  appointor,  even though such action may not be in
          the best interests of the Company.

     2.11 This agreement  sets out the  obligations of the parties to each other
          and no  obligations  of good  faith  nor  fiduciary  duties  shall  be
          implied.

3    Conditions Precedent
--------------------------------------------------------------------------------

     3.1  This agreement shall not take effect until Completion.

     3.2  On this agreement taking effect the  Shareholders  must procure that a
          meeting of the Board is held at which:

          (a)  the Initial Business Plan is adopted by the Company;


          (b)  the CEO  Delegation  Resolution  set out in Schedule 2 is passed;
               and

          (c)  the management and reporting responsibilities schedule set out in
               Schedule 3 is adopted by the Company;

          (d)  the Board  notes that TCL and AUCL have  nominated  Ernst & Young
               and Arthur  Andersen  as joint  auditors of the Company and makes
               that appointment;

          (e)  the Financial Year of the Company is agreed; and

          (f)  the Board  approves  the Telstra  Saturn  Incentive  Compensation
               Plan.

<PAGE>

                                                                              12

4    Constitution of Company
--------------------------------------------------------------------------------

     4.1  The Shareholders intend that if an inconsistency arises between:

          (a)  the Constitution; and

          (b)  this agreement,

     this agreement  shall prevail to the extent of the  inconsistency  and each
     Shareholder  agrees to take any steps  which for the time  being are within
     its power and are  necessary to procure that the  Constitution  is promptly
     altered to eliminate the inconsistency.

5    Restrictions on transfers and mortgages of Shares
--------------------------------------------------------------------------------
Transfers and assignments

     5.1  A  Shareholder  must not  dispose  of any  Shares or create a Security
          Interest over any Shares,  except in accordance with the express terms
          of  this   agreement  or  with  the  prior  written   consent  of  all
          Shareholders.  This  clause 5.1 does apply to any  Security  Interests
          granted  prior  to the date of this  agreement  by AUCL or  Saturn  NZ
          pursuant to the Company Bank Facility.

     5.2  Subject to clause 5.5, the UGC Shareholder Group may sell all (but not
          some) of its  Shares at any time  after the third  anniversary  of the
          Commencement Date, provided:

          (a)  it first  offers  to sell  those  Shares by notice to TCL at fair
               market  value agreed by AUCL and TCL within 30 days of receipt of
               that  notice,  failing  which a  valuation  notice will be deemed
               given  requiring  the fair market  value to be  determined  under
               clause 17;

          (b)  TCL may, at any time  within 14 days after the fair market  value
               is agreed or  determined  under  clause 17,  give  notice to AUCL
               requiring  AUCL and Saturn NZ to sell all of their  Shares to TCL
               or its  nominee at that fair  market  value.  If such a notice is
               given,  AUCL  and  Saturn  NZ  must on  such  Business  Day as is
               nominated  in such  notice  (being no less than three and no more
               than 20 Business  Days after the date of the notice)  sell all of
               their Shares to TCL or its nominee at that fair market value; and

          (c)  if TCL  fails  to give a  notice  to AUCL  and  Saturn  NZ  under
               subparagraph (b), AUCL and Saturn NZ may sell all of their Shares
               to any person for net  consideration  which is no less favourable
               to them than the fair market value agreed or  determined,  at any
               time  within  90  days  after  the  expiry  of the 14 day  period
               referred to in subparagraph (b).

5.3  Subject  to clause  5.5,  THPL may sell all (but not some) of its Shares at
     any time after the third anniversary of the Commencement Date, provided:


<PAGE>

                                                                              13

          (a)  it first offers to sell those Shares by notice to AUCL at a price
               nominated by THPL ("nominated price");

          (b)  AUCL may at any time  within 30 days after  receiving  the notice
               under  subparagraph  (a), give notice to THPL  requiring  THPL to
               sell all of its Shares to AUCL or its  nominee  at the  nominated
               price. If such a notice is given,  THPL must on such Business Day
               as is nominated  in such notice  (being no less than three and no
               more than 20 Business Days after the date of the notice) sell all
               of its Shares to AUCL or its nominee at the nominated price; and

          (c)  if AUCL  fails to give a notice to THPL under  subparagraph  (b),
               THPL  may  sell  all  of  its   Shares  to  any  person  for  net
               consideration  which  is no  less  favourable  to THPL  than  the
               nominated  price,  at any time within 90 days after the expiry of
               the 30 day period referred to in subparagraph (b).

     5.4  A Shareholder Group may pledge its Shares as security for the purposes
          of it or any related body corporate  raising funds,  provided that the
          holder of the pledge  ("lender")  undertakes to the other  Shareholder
          Group that:

          (a)  in the event of exercising  its rights under that pledge it shall
               give immediate notice to the other  Shareholder  Group ("exercise
               notice")  in which case a member of the other  Shareholder  Group
               nominated  in  writing  shall  have the right to  purchase  those
               Shares at fair market value agreed with the lender within 30 days
               of receipt of the  exercise  notice,  failing  which a  valuation
               notice will be deemed given requiring the fair market value to be
               determined  under clause 17. The nominated member may at any time
               within 30 days  after the fair  market  value is agreed  with the
               lender,  or determined under clause 17, give notice to the lender
               requiring it to sell all of its Shares to the nominated member at
               that fair market value. If such notice is given,  the lender must
               on such  Business Day as is  nominated  in such notice  (being no
               less than three and no more than 20 Business  Days after the date
               of the notice) sell all of its Shares to the nominated  member at
               that fair market value; and

          (b)  whilst  it holds any  Shares,  the  lender  shall be bound by the
               terms of this  agreement as a  Shareholder.

          This clause 5.4 does not apply to any pledge granted prior to the date
          of this  agreement  by AUCL or Saturn NZ pursuant to the Company  Bank
          Facility.

     5.5

          (a)  Any  Shareholder may transfer all (but not some) of its Shares at
               any time to:

               (i)  a wholly owned subsidiary;

<PAGE>

                                                                              14

              (ii)  in the  case of  Saturn  NZ - AUCL or in the  case of THPL -
                    TCL; or

             (iii)  an Affiliate which is not a wholly owned subsidiary.

               For the  avoidance  of doubt a  transfer  of Shares  pursuant  to
               subparagraphs   (ii)  and  (iii)  may  be   effected  by  way  of
               amalgamation, merger or liquidation.

          (b)  Subject to paragraph  (c) the  transferor  must  promptly  take a
               retransfer of those Shares if at any time the  transferee  ceases
               to be a wholly owned subsidiary or Affiliate (as the case may be)
               of the transferor;

          (c)  Paragraph (b) shall not apply where the transferee ceases to be a
               wholly  owned  subsidiary  of  the  transferor  due  to a  public
               offering of securities in the transferee, provided the transferee
               remains a subsidiary of the  transferor  after that offer closes.
               The  transferor  must promptly take a retransfer of the Shares if
               at any time  that  transferee  ceases to be a  subsidiary  of the
               transferor.

          (d)  If either Saturn NZ or THPL ceases to exist for any reason,  AUCL
               or TCL  respectively  automatically  assumes all  obligations  of
               Saturn NZ or TCL under this agreement.

     5.6  A Shareholder must not assign its rights under this agreement without:

          (a)  the prior written consent of all other Shareholders; or

          (b)  unless such  assignment is in  conjunction  with a sale of Shares
               permitted by this agreement.

     5.7  Prior to any person who is not  currently a  Shareholder  acquiring or
          being issued any Shares,  it must enter into an Accession  Deed as set
          out in schedule 5 agreeing to be bound by the terms of this agreement.

     5.8  If a  Shareholder  ("seller") is seeking to sell its Shares to a third
          party under clauses 5.2(c) or 5.3(c) (as the case may be):

          (a)  the other Shareholders must not do anything which would frustrate
               the  ability of the  seller to sell its Shares to a third  party,
               subject always to the  obligations of the other  Shareholders  at
               law or under stock  exchange  listing  rules.  This clause 5.8(a)
               shall  not  compel  the  other   Shareholders   to  provide   any
               information to the third party about the Company or its business;
               and

          (b)  the  seller  may   disclose  to  the  third  party   confidential
               information  about the Company  and its  business,  provided  the
               seller  has  first   provided   to  the  other   Shareholders   a
               confidentiality  deed  executed  by  the  third  party  on  terms
               reasonably  acceptable  to and in  favour of the  seller  and the
               other Shareholders.

<PAGE>

                                                                              15

     5.9  AUCL must procure that:

          (a)  any subsidiaries of AUCL which directly hold any Shares; and

          (b)  any subsidiaries of AUCL which indirectly hold any Shares,

          are and remain wholly owned subsidiaries of AUCL.

          This clause 5.9 shall not apply to any public  offering of  securities
          in any entity described in paragraph (b), provided that entity remains
          a subsidiary of AUCL upon completion of that public offer, after which
          time AUCL must procure that the entity remains a subsidiary of AUCL.

     5.10 TCL must procure that:

          (a)  any subsidiaries of TCL which directly hold any Shares; and

          (b)  any subsidiaries of TCL which indirectly hold any Shares,

          are and remain wholly owned subsidiaries of TCL.

          This clause 5.10 shall not apply to any public  offering of securities
          in any entity described in paragraph (b), provided that entity remains
          a subsidiary of TCL upon completion of that public offer,  after which
          time TCL must procure that the entity remains a subsidiary of TCL.

Entry of Third Party

     5.11 The entry of a third party as a  Shareholder  to the Company  requires
          the prior written consent of all existing Shareholders.

     5.12 Any  Shareholder  may  propose  the  entry  of  a  third  party  as  a
          Shareholder to the Company.  If a Shareholder  proposes the entry of a
          third  party  with  a   Shareholding   of  at  least  20%,  the  other
          Shareholders  must  consider  that  proposal  in  good  faith  and use
          commercially  reasonable  endeavours to conclude an agreement with all
          Shareholders and the third party.

     5.13 Where the entry of a third party as a  Shareholder  to the Company has
          been agreed under clause 5.11, the UGC Shareholder  Group's  aggregate
          Shareholding  shall be diluted in favour of the third  party.  However
          the  UGC  Shareholder   Group's  aggregate   Shareholding   percentage
          (following  the entry of that third party as a Shareholder  and taking
          account of any related sale of Shares by the UGC Shareholder  Group to
          the TCL  Shareholder  Group)  must not be less  than that of the third
          party.

6    Board of Directors
--------------------------------------------------------------------------------
Appointment of Directors

     6.1  Each Shareholder  Group is entitled to appoint Directors in accordance
          with  clause  6.2,  to remove  any  Director  appointed  by it, and to

<PAGE>

                                                                              16

          replace a  Director  appointed  by it who dies,  resigns or is removed
          from or otherwise vacates office.

     6.2  Initially, the Board will comprise:


          (a)  three Directors appointed by the TCL Shareholder Group; and

          (b)  three  Directors   appointed  by  the  UGC   Shareholder   Group.

          Thereafter,  if there is any change in the percentage Shareholdings of
          the TCL Shareholder Group or the UGC Shareholder Group:

          (c)  the number of Directors which each Shareholder Group may nominate
               is determined from the following table:

               Percentage of issued             No. of Directors who may be
               Shares held by the                    appointed by the
               Shareholder Group                     Shareholder Group

               Less than 10%                               Nil
               10% to less than 20%                         1
               20% to less than 50%                         2
               50%                                          3
               More than 50%                                4

          (d)  the existing  Shareholders  must,  where necessary as a result of
               the change in percentage Shareholding,  procure resignations from
               the relevant number of their nominated Directors.

Chairman
     6.3  The Chairman must be a Director appointed alternately by THPL and AUCL
          (in that order) for periods of 12 months from the  Commencement  Date.
          THPL must appoint the first Chairman.  The non-appointing  Shareholder
          has the right to veto one nomination by the appointing  Shareholder at
          the time of every appointment.

     6.4  The  Chairman  will be  entitled to preside as chairman at meetings of
          members of the Company and the Board.  The Chairman is not entitled to
          a casting  vote at any meeting of members of the Company or the Board.

Alternates
     6.5  A  Shareholder  may  appoint  an  alternate  director  for each of its
          appointed Directors,  and Directors may appoint proxies, in accordance
          with the Constitution.

<PAGE>

                                                                              17

Meetings of the Board
     6.6  The quorum for a meeting of  Directors  will be the  attendance  of at
          least one  Director (in person,  by  alternate or proxy)  nominated by
          each  of the  Shareholder  Groups.  If  two  consecutive  meetings  of
          Directors are  postponed  due to a lack of quorum,  the quorum for the
          resulting subsequent meeting shall be any two Directors (in person, by
          alternate or proxy).  Notwithstanding  clause 6.9, the period  between
          each postponed meeting must be not less than 5 Business Days.

     6.7  Subject to clause 9,  decisions  of the Board are to be made by simple
          majority of the total number of votes represented at the meeting.

     6.8  At any  meeting  of the Board  each  Director  present in person or by
          alternate or proxy (and where a Shareholder  has  appointed  more than
          one Director,  those Directors  collectively,  whether or not they are
          all  present)  is  entitled to exercise a number of votes equal to the
          total number of issued Shares held by the Shareholder Group appointing
          that Director.

     6.9  Subject  to clause  6.6,  a meeting  of the Board may be called by any
          Director on not less than 10 Business Days' notice.

     6.10 There must be no less than four Board meetings per Financial Year, the
          majority of which must be held in New Zealand.

     6.11 Board meetings may be held by telephone or audio-visual means provided
          each participant can hear each other participant.

     6.12 A  resolution  of  the  Board  may be  passed  by  identical  circular
          resolutions signed by all Directors.

     6.13 A matter cannot be voted upon at a Board meeting  unless it is set out
          in reasonable detail in the agenda sent with the notice of meeting, or
          all Directors  present at the meeting  agree to vote on the matter.

7    Responsibilities of the Board
--------------------------------------------------------------------------------

Business and affairs of the Company

     7.1  Subject to this agreement, the Board is to be responsible for:

          (a)  directing  the  business  and affairs of the Company  (except for
               those matters  delegated to the CEO, which,  for the avoidance of
               doubt,  shall not include any of the matters  described in clause
               9);

          (b)  establishing   the   general   policies  of  the   Company;

          (c)  establishing  the  strategic  priorities  and  objectives  of the
               Company;

<PAGE>

                                                                              18

          (d)  establishing the financial  objectives and accounting policies of
               the Company;

          (e)  approving and amending the Initial  Business  Plan,  the Business
               Plan or the Budget;

          (f)  approving a CEO Delegation Resolution for all matters not set out
               in this clause 7.1;

          (g)  approving   and   amending   the    management    and   reporting
               responsibilities  schedule  (the initial  version of which is set
               out in schedule 3);

          (h)  approving the  remuneration  of senior  executives of the Company
               referred to in clause 8.7;

          (i)  approving the audited accounts of the Company; and

          (j)  determining  the payment of dividends in  accordance  with clause
               2.9.

     7.2  Each Shareholder  agrees to take any reasonable steps within its power
          and are necessary to procure that:

          (a)  as soon as is practicable  after the date of this agreement,  the
               Board:

               (i)  develops the  operations of the Company in  conformity  with
                    this agreement and the Establishment Agreements;

              (ii)  implements the Initial  Business Plan, the Business Plan and
                    the Budget; and

          (b)  there is a quorum  present for all duly convened  meetings of the
               Board.

     7.3  Subject to their  obligations  at law,  Directors  may disclose to and
          discuss  with their  appointing  Shareholder  information  obtained by
          those Directors in the course of performing their duties as Directors.
          TCL and AUCL must  procure  that their  Shareholder  Groups do not use
          that information to the detriment of the Company.

     7.4  If at any time the Board fails to approve a Business Plan for the next
          Financial Year ("relevant  year") within 60 days after  submission for
          approval by the CEO in accordance with the CEO Delegation  Resolution,
          then with respect to the relevant year,  the Initial  Business Plan or
          the Business Plan last approved by the Board shall apply.

     7.5  If at any  time  the  Board  fails to  approve  a Budget  for the next
          Financial Year ("Relevant  Year") within 60 days after  submission for
          approval by the CEO in accordance with the CEO Delegation  Resolution,
          then with respect to the Relevant  Year, the  expenditure  and revenue

<PAGE>

                                                                              19

          levels in the  operating  budget  (referred to in paragraph (a) of the
          definition  of "Budget" in clause 1.1) which was last  approved by the
          Board for the  Financial  Year  immediately  before the relevant  year
          shall apply for the relevant year,  each increased by 10%. This clause
          7.5(b) shall not apply to capital expenditure.

     7.6  For the  avoidance  of doubt,  clauses  7.4 and 7.5 do not  affect the
          operation of clause 10.1(b).

8    Management and operations
--------------------------------------------------------------------------------

Appointment of the CEO
     8.1  Subject to clauses 8.3 to 8.5,  TCL may  nominate (by at least 30 days
          notice to AUCL) and  appoint  from time to time the CEO,  the first of
          whom  shall  be  employed  by  TCL  and  provided  to the  Company  in
          accordance with the Consultancy Agreement.  If any subsequent nominees
          are employees of TCL or AUCL, TCL or AUCL (as the case may be) and the
          Company must in good faith  negotiate a consultancy  agreement for the
          provision of the nominee's services to the Company as CEO.

First CEO
     8.2  TCL and AUCL  agree  that the  first CEO of the  Company  will be Jack
          Matthews.

Veto of appointment and removal of CEO
     8.3  If the UGC  Shareholder  Group holds in  aggregate no less than 20% of
          issued  Shares,  AUCL may by  notice to TCL and the  Company  veto the
          nomination  of a  second  or  subsequent  CEO  within  21  days  after
          receiving the notice of nomination. A second or subsequent CEO may not
          be appointed until the earlier of:

          (a)  AUCL consenting to the appointment of the CEO; or

          (b)  the period during which AUCL may veto the  nomination  under this
               clause 8.3 has lapsed.

     8.4  If the UGC  Shareholder  Group holds in aggregate less than 50% but no
          less than 20% of issued Shares,  and has  reasonable  cause to believe
          that removal of the CEO is in the best interests of the Company,  AUCL
          may by notice to TCL and the Company require the immediate  removal of
          the CEO. AUCL must set out a statement of reasons in such notice.  The
          Company or TCL (if either of those parties is the employer of the CEO)
          must remove the CEO from his position  immediately  upon receiving any
          such notice.

     8.5  If the UGC  Shareholder  Group holds in aggregate not less than 50% of
          issued Shares,  AUCL may by notice to TCL and the Company  require the
          immediate  removal  of the CEO at any  time.  The  Company  or TCL (if
          either of those  parties is the  employer  of the CEO) must remove the
          CEO from his position  immediately upon receiving any such notice.

<PAGE>

                                                                              20

     8.6  TCL may at any time upon  notice to the  Company  and AUCL  remove the
          CEO.  The Company or AUCL (if either of those  parties is the employer
          of the CEO) must  remove the CEO from his  position  immediately  upon
          receiving  any such notice.

Senior  executives  and  employees
     8.7  A Shareholder may nominate any person for the CEO's  consideration for
          appointment to a senior executive position (other than the position of
          CEO).

     8.8  At the  request of the  Board,  each  Shareholder  must  second  their
          employees to the Company on a commercial basis,  however the number of
          employees  seconded by a Shareholder to the Company must not exceed 5%
          of the number of full-time employees of the Company.

Telstra Saturn Incentive Plan
     8.9  TCL (with respect to all relevant employees of the TNZ Group) and AUCL
          and  the  Company  (with  respect  to all  relevant  employees  of the
          Company)  must  use  all  reasonable   endeavours  to  procure  prompt
          acceptance  of and  participation  in  the  Telstra  Saturn  Incentive
          Compensation Plan.

9    Special Majority
--------------------------------------------------------------------------------

     9.1  Notwithstanding   any  contrary  provision  in  this  agreement,   the
          following  matters may only be decided by the Board and such decisions
          require  an  affirmative  vote of at least 80% of the total  number of
          votes represented at a Board meeting:

          (a)  approving or materially  amending the Initial  Business Plan, the
               Business  Plan  or  the  Budget  including,  without  limitation,
               approving  any   investment,   operating   expenditure,   capital
               expenditure,  capital  raising,  borrowing  or disposal  during a
               Financial  Year which is in excess of 15% more than the  budgeted
               annual amount for that  category set out in the Initial  Business
               Plan, the Business Plan or the Budget for that Financial Year;

          (b)  any public listing or public issue of securities of the Company;

          (c)  any  incurrence  of  an   indebtedness  by  the  Company  or  its
               subsidiaries of an amount which is in excess of $1,000,000 (other
               than in accordance with the Initial Business Plan or the Business
               Plan);

          (d)  the  acquisition  or  disposal  of all or part of a business  for
               consideration exceeding 5% of the book value of the assets of the
               Company at the Commencement Date (in the event the decision is to
               be made in the first  Financial  Year of the  Company) or (in all
               other cases) at the end of the previous Financial Year;

<PAGE>

                                                                              21


          (e)  commencing  on such  date as AUCL  is no  longer  subject  to the
               Indentures,  any  reduction  or return of capital of the Company;

          (f)  any  decision to place the  Company  into  Insolvency  within the
               meaning of  paragraphs  (a),  (b),  (c),  (d),  (e) or (g) of the
               definition of that term in clause 1.1;

          (g)  the  Company  or a  subsidiary  of  the  Company  entering  into,
               extending,   renewing,  terminating  or  materially  amending  an
               agreement with a member of a Shareholder  Group, where the amount
               to be spent or received by the  Company or the  subsidiary  under
               that agreement  exceeds 5% of the book value of the assets of the
               Company and its  subsidiaries  at the  Commencement  Date (in the
               event  the  decision  is to be made in the first  Financial  Year
               after the  Commencement  Date) or (in all other cases) at the end
               of the previous Financial Year;

          (h)  any merger or  amalgamation of the Company or a subsidiary of the
               Company;

          (i)  the appointment or dismissal of the auditors of the Company;

          (j)  lending or providing other financial accommodation (other than in
               the ordinary course of business);

          (k)  providing a guarantee or similar  support of an obligation of any
               other person (other than a wholly owned subsidiary of the Company
               or in accordance  with the Initial  Business Plan or the Business
               Plan);

          (l)  providing  a Security  Interest  over any assets of the  Company,
               other  than for  borrowings  which are made by the  Company  or a
               subsidiary  of  the  Company  or  are  in  accordance  with  this
               agreement and the Initial Business Plan or the Business Plan;

          (m)  the creation of any  committee of the Board or the  delegation of
               any power of the Board to any committee or other person;

          (n)  any  decision  to  commence,   defend  settle  or  terminate  any
               litigation, counterclaim or other similar proceedings involving a
               claim exceeding  $20,000,000.  This paragraph (n) shall not apply
               to any litigation or proceedings as described in clause 9.2.

          (o)  approving the audited accounts of the Company;

          (p)  any  acquisition  or disposal of any  security or any interest in
               any person;

          (q)  subject to clause  5.11,  the  issuing of any  securities  in the
               Company  or in any  subsidiary  of the  Company  (other  than  in
               accordance with the Initial Business Plan or the Business Plan );

<PAGE>

                                                                              22

          (r)  the appointment of each person who in accordance with the current
               management  and  reporting  responsibilities  schedule,  directly
               reports to the CEO; and

          (s)  revoking,  replacing  or  materially  amending  a CEO  Delegation
               Resolution  or  the  management  and  reporting  responsibilities
               schedule (schedule 3).

     9.2  Directors  nominated  by a  Shareholder  Group  are not  entitled  (in
          person,  by  alternate  or  proxy)  to  vote on any  Board  resolution
          concerning  any decision as to whether the Company or a subsidiary  of
          the  Company  should  commence,   defend,   settle  or  terminate  any
          litigation, counterclaim or other similar proceedings arising from:

          (a)  an  agreement  described  in clause  9.1(g)  (including,  without
               limitation, any of the Establishment Agreements) with a member of
               that Shareholder Group; or

          (b)  the rights or  obligations  of the Company or a subsidiary of the
               Company at law with  respect  to any  member of that  Shareholder
               Group.

10   Deadlock
--------------------------------------------------------------------------------

     10.1 Subject to clause 10.2, there is a deadlock if:

          (a)  there  is a  dispute  between  the  Shareholder  Groups  or their
               nominee  Directors,  at any  time  about a Board  proposal  which
               involves:

          (i)  a significant  change to the activities of the Company  (compared
               to the activities  contemplated  by the Initial  Business Plan or
               the then current  Business Plan) within ASX Listing Rule 11 which
               is:

               (A)  within the scope of the  business  of the Company as set out
                    in clause 2.1; or

               (B)  within  the  scope  of  the  business  of  any  member  of a
                    Shareholder  Group  or any  comparable  carrier  or  service
                    provider in any place; or

         (ii)  an acquisition  or disposal by the Company of an asset,  business
               or securities with a value in excess of the greater of:

               (A)  30% of the book  value of the net  assets of the  Company in
                    the latest  monthly  management  accounts  submitted  to the
                    Board; and

<PAGE>

                                                                              23

               (B)  30% of the fair market  value of the business of the Company
                    as at the date of the valuation notice referred to in clause
                    10.5;  or

          (b)  there  is a  dispute  between  the  Shareholder  Groups  or their
               nominee Directors as described in clauses 9.1(a),  (b) or (p) (in
               the case of clause 9.1(p), insofar as the acquisition or disposal
               is for an amount exceeding $20 million) at any time while the UGC
               Shareholder   Group  holds  fewer  issued  Shares  than  the  TCL
               Shareholder Group.

          If within 14 days after the second Board Meeting referred to in clause
          10.4 TCL and AUCL  cannot  agree  upon  the fair  market  value of the
          business of the Company,  the fair market value of the business of the
          Company shall be determined under clause 17.

     10.2 There is no deadlock if the proposal involves:

          (a)  an agreement, arrangement or understanding between the Company on
               the one hand and a Shareholder  or a related body  corporate of a
               Shareholder on the other hand; or

          (b)  the entry of a third party as a shareholder in the Company.

     10.3 Each  Shareholder  must act in good faith in relation to any  proposal
          the subject of a deadlock and use its best  endeavours  to resolve the
          deadlock as quickly as  practical.  It is the intention of the parties
          that this clause 10 cannot be used as a mechanism to arbitrarily cause
          or bring about the exit of a Shareholder  and that this clause 10 will
          only apply to  situations  where there is a bona fide and  fundamental
          difference  in views between the  Shareholders  over the best means to
          enable the Company  vigorously to compete and grow its business in New
          Zealand:

          (a)  within  the scope of the  business  of the  Company as defined in
               clause 2.1; or

          (b)  within the scope of the  business of any member of a  Shareholder
               Group or any comparable carrier or service provider in any place.

          In recognition of its obligations under this clause 10.3, in the event
          there is a  deadlock  about a  proposal  by THPL  which  leads to THPL
          acquiring  Shares in the Company under clause 10.6, THPL shall use all
          reasonable commercial endeavours to implement that proposal.

     10.4 In the event of any dispute  between the  Shareholder  Groups or their
          nominee  directors  relating to the business of the Company  which has
          been  considered at two Board meetings and has resulted in the failure
          of the Board to pass a resolution,  any Shareholder may give a dispute
          notice  to the  other  Shareholders  commencing  a 60  day  escalation
          procedure which must include escalation to the Group Managing Director
          of the relevant TCL business unit and to the Chairman of AUCL.

<PAGE>
                                                                              24

    10.5  If after the 60 day period  referred to in clause 10.4  (provided  the
          Group Managing Director and Chairman have met (whether in person or by
          telephone  or audio  visual  means)  at least  twice  to  discuss  the
          dispute)  there is no  resolution of a dispute which is a deadlock (as
          defined in clause 10.1),  TCL may issue a valuation  notice to AUCL in
          which case the fair  market  value of all of the AUCL and Saturn  NZ's
          Shares shall be determined under clause 17 ("AUCL Share Valuation").

    10.6  TCL may at any time  within 30 days  after  receiving  the AUCL  Share
          Valuation  give notice to AUCL and Saturn NZ requiring AUCL and Saturn
          NZ to sell to TCL or its nominee all of their Shares at the AUCL Share
          Valuation.  AUCL  and  Saturn  NZ  must  on  such  Business  Day as in
          nominated in such notice (being no less than three and no more than 20
          Business  Days after the date of the notice)  sell all of their Shares
          to TCL or its nominee at the AUCL Share Valuation.

    10.7  If TCL does not give a notice  under  clause  10.6,  the  proposal the
          subject of the deadlock shall be regarded as defeated.

    10.8  Upon the  resolution  of a  deadlock  in  favour of the  proposal  the
          subject of a deadlock,  the Shareholders  shall use best endeavours to
          implement the proposal.

    10.9  A valuation notice cannot be given by TCL under clause 10.5 before the
          third anniversary of the Commencement Date.

    10.10 In the event and for so long as the TCL Shareholder  Group holds fewer
          Shares than the UGC Shareholder Group, this clause 10 will be reversed
          so that  references to TCL will be read as references to AUCL and vice
          versa and references to Saturn NZ shall be deleted. Clause 10.10 shall
          not apply to the extent that the reason why the TCL Shareholder  Group
          holds fewer Shares than the UGC  Shareholder  Group is because the UGC
          Shareholder  Group has  acquired  Shares  in  accordance  with  clause
          11.3(b),  provided (and from the date that) the TCL Shareholder  Group
          has given  notice in  accordance  with clause  11.3(d) with respect to
          those Shares and duly complies with its obligations under that clause.

11   Capital and Funding
--------------------------------------------------------------------------------

     11.1 The Company shall be funded from third party debt in  accordance  with
          the Initial  Business Plan or the Business Plan up to a debt to equity
          ratio of up to 1:1. Any greater debt to equity ratio shall be a matter
          for determination by the Board.

     11.2 Each Shareholder must contribute  further funding,  in the sums and at
          the times set out in the  Initial  Business  Plan or the then  current
          Business  Plan by way of debt or equity as  determined  by the Initial
          Business Plan or the then current  Business Plan, in proportion to its
          Shareholding  percentage  in the  Company.  For  the  purposes  of the
          Initial Business Plan and any Business Plan:

<PAGE>

                                                                              25

          (a)  the amount shown in the  cashflow  statement as "New Debt Issued"
               must be funded by third party debt,  unless the Board  determines
               otherwise  or, if such third party debt funding is not  available
               for any reason,  it must be  contributed by the  Shareholders  as
               equity funding in proportion to their Shareholding percentages in
               the Company; and

          (b)  the amount shown in the cashflow statement as "New Equity Issued"
               must be  contributed  by the  Shareholders  as equity  funding in
               proportion  to their  Shareholding  percentages  in the  Company.
               Unless the Board determines  otherwise,  such equity funding must
               be contributed  to the Company in  one-twelfth  portions no later
               than the 30th day of each month in the relevant Financial Year.

 11.3

          (a)  If one Shareholder Group fails to contribute equity funding which
               is  required  by the  Initial  Business  Plan or a Business  Plan
               within 30 days after the due date set out in the Initial Business
               Plan or the Business Plan, the other Shareholder Group may within
               14 days of becoming aware of that failure  contribute those funds
               and  acquire  the  Shares  which  would  have been  issued to the
               defaulting  Shareholder  Group  had it not  so  failed  (relevant
               Shares).  In the case of such  additional  funding  by the  other
               Shareholder  Group a nominated member of that  Shareholder  Group
               that is a wholly owned subsidiary of TCL or AUCL (as appropriate)
               shall be entitled to acquire:

               (i)  the relevant Shares; and

              (ii)  10% of the number of relevant Shares ("extra Shares") for no
                    additional payment.

          (b)  The defaulting Shareholder Group may at any time within 12 months
               after the acquisition date under paragraph (a) give notice to the
               other  Shareholder  Group that it is  considering  requiring  the
               other  Shareholder Group to sell the relevant Shares and one-half
               of the extra Shares to the defaulting  Shareholder Group (so that
               insofar  as  possible,  the  Shareholder  Groups  return  to  the
               percentage  Shareholding levels which prevailed immediately prior
               to the provision of equity funding by the other Shareholder Group
               under clause 11.2) at a price 10% more than the greater of:

               (i)  the  price  paid  by the  other  Shareholder  Group  for the
                    relevant Shares; and

              (ii)  the fair market value of the relevant Shares and one-half of
                    the extra Shares;

<PAGE>

                                                                              26

          (c)  If  within  14 days  after  the date of any  notice  given  under
               paragraph  (b) TCL and AUCL  cannot  agree  upon the fair  market
               value  referred  to in  sub-paragraph  (b)(ii),  that fair market
               value shall be determined under clause 17.

          (d)  The defaulting  Shareholder  Group may at any time within 30 days
               after the fair market value referred to in sub-paragraph  (b)(ii)
               is agreed by TCL and AUCL or  determined  under  clause 17,  give
               notice to the other Shareholder Group requiring it to sell all of
               the relevant  Shares and one-half of the extra Shares to a member
               of the defaulting  Shareholder  Group nominated in that notice at
               the price  agreed or  determined.  If such  notice is given,  the
               other Shareholder Group must on such Business Day as is nominated
               in such  notice  (being  no less  than  three and no more than 20
               Business  Days  after  the  date of the  notice)  sell all of the
               relevant  Shares  and  one-half  of  the  extra  Shares  to  that
               nominated member at that price.

     11.4 If both  Shareholder  Groups  decline  to  provide  funding  which  is
          required by the Initial Business Plan or a Business Plan, TCL and AUCL
          must  cooperate  in all  commercially  reasonable  ways to enable  the
          Company to satisfy  its  funding  requirements  on the best  available
          terms from third parties.

     11.5 Nothing shall restrict the freedom of the Company to borrow funds from
          its Shareholders or a third party on commercially  reasonable terms as
          the Shareholder or a third party may agree with the Company.

     11.6 Except as expressly  provided in this  agreement,  no  Shareholder  is
          obliged to  provide  any  financial  accommodation  to the  Company or
          guarantees or Security  Interest in support of any  obligations of the
          Company.

 Company Bank Facility
     11.7 The Company must use best  endeavours to refinance its debt facilities
          represented by the Company Bank Facility (including  obtaining,  where
          appropriate,  the  release  of  any  property  subject  to a  Security
          Interest under the Company Bank  Facility) as soon as practical  after
          the Commencement  Date, and in any event within three months after the
          Commencement Date, in accordance with clauses 11.8 to 11.10.

     11.8 The Company  must use its  reasonable  endeavours  to procure that the
          Company's  refinancing  referred  to in clause 11.7 and any other bank
          debt shall:

          (a)  be without recourses to Shareholders;

          (b)  be for a term  appropriate  to fully  fund the  Initial  Business
               Plan;

          (c)  comply with the principles and guidelines as agreed and/or varied
               from time to time by the finance committee  referred to in clause
               11.10 or by the Board; and

<PAGE>

                                                                              27

          (d)  reflect  current bank market  conditions,  have regard to current
               market fees and interest  rate  margins and the current  state of
               the  bank  syndication  markets,  and  shall  contain  terms  and
               conditions  usual  and  customary  for a  financing  of the  type
               outlined in the Initial  Business  Plan and terms and  conditions
               usual and  customary for a borrower with the same risk profile as
               the Company.

    11.9  The terms and conditions of any and all bank debt,  including the debt
          referred to in clause 11.8, must be approved by the Board.

    11.10 The  Company  must  establish a finance  committee  for the purpose of
          carrying out its obligations  under clauses 11.7 and 11.8. The finance
          committee shall comprise at least one representative  from each of TCL
          and AUCL and the chief financial officer of the Company.  Any material
          dispute  between  members of the  finance  committee  which  cannot be
          resolved  within 5  Business  Days must be  referred  to the Board for
          resolution.  This committee  shall remain in place and its composition
          and guiding principles may be varied from time to time by the Board.

    11.11 Each of TCL and AUCL agree to do  everything  reasonably  necessary to
          give effect to the Company's  obligations  under clauses 11.7 to 11.10
          including,  but not limited to, the  execution of documents and to use
          all  reasonable  endeavours  to cause  relevant  third  parties  to do
          likewise.

    11.12 The Company shall  reimburse  each of TCL and AUCL for any  reasonable
          costs incurred in complying with their obligations under clause 11.11.

Indentures
    11.13 AUCL  must  use all  reasonable  endeavours  to  obtain  promptly  any
          consent,  waiver  or  fairness  opinion  required  under  any  of  the
          Indentures with respect to any proposed activity of the Company.

    11.14 AUCL must use best  endeavours to procure that the  Indentures are not
          amended in any manner as to increase  the degree to which they affect,
          directly or indirectly, the activities of the Company.

Initial Public Offering
    11.15 TCL and AUCL  will  review  and  consider  taking  the  Company  to an
          initial  public   offering   after  the  second   anniversary  of  the
          Commencement Date, depending upon the prevailing market conditions and
          financial condition of the Company at that time.

    11.16 It is the  intention  of the parties to this  agreement  that after an
          initial public offering, the TCL Shareholder Group will have the right
          to hold more than 50% of the issued Shares.

<PAGE>

                                                                              28
12   Supply of Products and Services
--------------------------------------------------------------------------------

Supply to the Company
     12.1 Each  Shareholder  and  the  Company  agree  that  they  will  use all
          reasonable commercial endeavours to procure that:

          (a)  subject to law, the Company  will adopt a policy,  in relation to
               its  acquisition  of products  and  services in New  Zealand,  of
               giving  preference to the  Shareholders  and their related bodies
               corporate as suppliers; and

          (b)  each  of  the   Shareholders   and  the  Company   shall  explore
               opportunities  to  develop  synergistic  benefits  in supply  and
               service   arrangements,   including   possible  exclusive  supply
               arrangements,  to  be  agreed  in  separate  supply  and  service
               agreements.

     12.2 The appointment of a supplier under the policies referred to in clause
          12.1 is conditional on:

          (a)  the  supplier  being  willing  and able to  provide  products  or
               services  on usual  commercial  terms  which are and will  remain
               competitive with other suppliers and distributors; and

          (b)  the Company and the supplier negotiating terms and conditions for
               supply insofar as practical  consistent with those set out in the
               Services Agreements.

     12.3 If products or  services  become  available  from other  suppliers  or
          distributors on more  favourable  terms than are then available from a
          supplier referred to in clause 12.1 ("related supplier"),  the Company
          may obtain those products or services from those alternative suppliers
          provided the Company  does not breach any  contractual  obligation  to
          that related supplier, and first gives the related supplier:

          (a)  prior notice of details of the more favourable quotations; and

          (b)  the  opportunity  to  meet  the  terms  of  the  more  favourable
               quotations.

     12.4

          (a)  TCL and AUCL shall use all  reasonable  commercial  endeavours to
               enable  the   Company  to  obtain   favourable   prices  for  the
               acquisition  of  products  and  services  from their  Shareholder
               Groups or from third parties,  as if the Company were a member of
               the TCL or AUCL Shareholder Group (as the case may be).

          (b)  In particular AUCL shall use all reasonable commercial endeavours
               to procure that the Company  obtains terms for the acquisition of
               pay TV content  and set top units  which are the most  favourable
               available to members of the UGC Shareholder Group.

<PAGE>

                                                                              29

     12.5 This clause 12 shall not apply to the AUCL  Services  Agreement or the
          TCL Services Agreement.

     12.6

          (a)  TCL and AUCL  acknowledge  and agree with effect from  Completion
               that the supply of any  products or services by any member of the
               TCL Shareholder Group to TNZ or any of its subsidiaries or by any
               member  of the UGC  Shareholder  Group  to the  Company  in place
               immediately  prior to Completion shall continue on the same terms
               and conditions for up to 6 months after Completion.  The supplier
               and the  Company  shall  as soon as  practical  and in any  event
               within  six months  after  Completion  renegotiate  the terms and
               conditions  upon which those products or services are supplied so
               that the  terms are usual  commercial  terms and are  competitive
               with other suppliers and distributors.  Those terms shall insofar
               as  practical  be  consistent  with those set out in the Services
               Agreements. There shall be no obligation on any party to continue
               the supply or  acquisition  of those  products or services at the
               end of that 6 month  period  unless the parties have agreed those
               terms and conditions.

          (b)  Clause 12.3 shall apply to supply  arrangements  as  described in
               paragraph (a).

          (c)  TCL and AUCL  acknowledge  and agree with effect from  Completion
               that the supply of any  products or services by TNZ or any of its
               subsidiaries to any member of the TCL Shareholder  Group in place
               immediately  prior to Completion shall continue on the same terms
               and conditions for up to 6 months after Completion.  The acquirer
               and the Company shall as soon as  practical,  and in any event no
               longer than 6 months after Completion,  renegotiate the terms and
               conditions upon which those products and services are supplied so
               that the  terms are usual  commercial  terms and are  competitive
               with other suppliers and distributors.  Those terms shall insofar
               as  practical  shall  be  consistent  with  those  set out in the
               Services Agreements. There shall be no obligation on any party to
               continue the supply or  acquisition of those products or services
               at the end of that 6 month period  unless the parties have agreed
               those terms and conditions.

          (d)  This  clause  12.6 shall not apply with  respect to any  services
               which are supplied  under a Services  Agreement.

<PAGE>

                                                                              30

13   Exclusivity
--------------------------------------------------------------------------------

     13.1 AUCL and TCL must procure that,  except with the prior written consent
          of TCL or AUCL  respectively,  no  member of their  Shareholder  Group
          carries on directly or indirectly in New Zealand any activity which is
          in the Core Business , except with respect to:

          (a)  the  continued  supply of goods and services in  accordance  with
               contracts or arrangements which were in place at Completion. Each
               of AUCL and TCL  warrants  to the  other  that it has  used  best
               endeavours  to  specifically   disclose  and  identify  any  such
               contracts or  arrangements in writing to the other of them before
               the date of this agreement;

          (b)  the  provision of goods and services to the New Zealand  branches
               of  multi-national  corporations  headquartered  outside  of  New
               Zealand  where  goods and  services  are also  supplied  to those
               corporations  outside of New Zealand.  The relevant member of the
               Shareholder  Group must  promote the Company to the  customer and
               must  appoint  the  Company  as the  local  service  provider  or
               supplier  of those goods and  services in New Zealand  unless the
               customer  refuses  to  acquire  the goods and  services  from the
               Company in New  Zealand  and  insists on  provision  of goods and
               services  from a third party  (which may not be any member of the
               Shareholder  Group) in New  Zealand,  in which case the  relevant
               member may permit  those goods or services to be supplied to that
               Customer  through  subcontract  with  that  third  party  in  New
               Zealand.  The relevant member must account to the Company for any
               profit it makes with respect to the  provision of those goods and
               services to that customer in New Zealand;

          (c)  the  provision by Advantra of  facilities  management  (including
               network   management),   systems   integration   and  application
               management   activities  (but  not  including  the  provision  of
               carriage services);

          (d)  the  carrying  on of a business  by any  member of a  Shareholder
               Group in New Zealand,  the  acquisition  of which was part of the
               acquisition of a business elsewhere, provided the member disposes
               of that New Zealand  business  within 6 months of acquisition and
               gives  the  Company  a right of first  refusal  to  acquire  that
               business;

          (e)  the provision of  international  services on a wholesale basis to
               New Zealand carriers or service providers;

          (f)  any member of the TCL  Shareholder  Group acting as a distributor
               of Concert  services or as a supplier in connection  with Concert
               services, if the Company:

<PAGE>

                                                                              31

               (i)  has  been  offered  appointment  as  such a  distributor  or
                    supplier but does not accept that  appointment with 60 days;
                    or

              (ii)  is so  appointed  but that  appointment  is  terminated  for
                    breach; and

          (g)  the supply of goods or  services  in New Zealand by a member of a
               Shareholder   Group  either  as  a  reseller  or  distributor  of
               international  communications  services  (such as  Global  One or
               World  Partners) or as a supplier of wholesale  services (such as
               telehousing  or half  circuits) in connection  with the supply of
               such  international   communications   services,   provided  that
               Shareholder  Group uses its best  endeavours  to have the Company
               appointed  as the  supplier  of those  goods and  services in New
               Zealand.

     13.2

          (a)  If a member of a Shareholder  Group wishes to pursue any activity
               in New Zealand which is a New Business,  AUCL or TCL (as the case
               may be) must  procure  that the  Company  has the first  right to
               participate in the  opportunity  associated with that activity on
               the  terms  and  conditions  available  to  that  member  of  the
               Shareholder  Group  in all  material  respects.  If the  Company,
               acting in good faith and within a reasonable period having regard
               to the risk of losing the  opportunity  if not pursued  promptly,
               does  not  give  notice  to TCL or  AUCL  (as  the  case  may be)
               accepting  the offer to  participate  and agreeing to pursue that
               opportunity,   the  member  of  the  relevant  Shareholder  Group
               (Member) is,  subject to paragraph (b), free to accept and pursue
               that opportunity and engage in that activity.

          (b)  The Member must before permitting or licensing any third party to
               participate  in pursuing  that  opportunity  or in providing  any
               services in connection  with that  opportunity  offer the Company
               the right to  participate  in that  opportunity on the same terms
               and conditions offered by or to the third party, in which case if
               that offer is not  accepted  within a  reasonable  period  having
               regard  to the risk of  losing  the  opportunity  if not  pursued
               promptly,  the Member is free to deal with the third party on the
               basis of that offer.

     13.3 Clause  13.1 shall bind AUCL and TCL for the period that any member of
          its  Shareholder  Group holds any Shares.  For the avoidance of doubt,
          clause  13.1 does not apply to any  activity  of a person who is not a
          member of a Shareholder Group.

     13.4 Subject to the  exceptions  set out in clause 13.1,  AUCL and TCL must
          procure that for the period of their Shareholder Group Shareholding no
          member of its  Shareholder  Group  directly or  indirectly  acquires a

<PAGE>

                                                                              32

          material  interest in a company  ("investee")  which at that time is a
          direct material  competitor of the Core Business of the Company.  This
          clause  13.4 shall not apply if the  activities  of the  Company  with
          which the investee  competes account for no more than 5% of the annual
          revenue  of the  Company  in its  last  completed  Financial  Year.  A
          material  interest  means holding 25% or more of the shares (voting or
          otherwise) or appointing 25% or more of the directors of the investee.
          For the  avoidance  of doubt,  this  clause  13.4 does not apply to an
          acquisition  by any person who is not a member of a Shareholder  Group
          or who is an entity  which is listed in the proviso to the  definition
          of TCL  Shareholder  Group in clause 1.1

     13.5 In this clause 13:

          Core Business means:

          (a)  any of the following activities in New Zealand:

               (i)  broadband cable network owner and operator,  offering retail
                    and wholesale services:

              (ii)  voice, data and mobile telecommunications products, services
                    and solutions;

             (iii)  pay TV operator,  including  cable  access TV  subscription,
                    pay-for-view, cable advertising and internet TV;

              (iv)  Internet  Service  Provider;

               Target market are corporate, large, SME, and residential; and

          (b)  if the  Shareholders  agree a variation  to the Initial  Business
               Plan or the Business Plan which involves the Company  engaging in
               a substantial new business activity in New Zealand outside of the
               then current Core Business of the Company - that activity .

          New  Business  means an activity  described in clause 2.1 which is not
          within the Core Business.

          Internet Service Provider means a provider of internet access services
          and,  for the  avoidance of doubt does not include  internet  portals,
          internet content aggregators,  content creators or application service
          providers.

14   Procuring Performance
--------------------------------------------------------------------------------

     14.1 TCL must procure that:

          (a)  THPL  complies  with  all of its  obligations  under  the  Merger
               Agreement; and

<PAGE>

                                                                              33

          (b)  each of its  subsidiaries as are a Shareholder  complies with its
               obligations under this agreement.

     14.2 AUCL must procure that:

          (a)  the Company complies with all of its obligations under the Merger
               Agreement; and

          (b)  each of its  subsidiaries as are a Shareholder  complies with its
               obligations under this agreement.

15   Warranties
--------------------------------------------------------------------------------

     15.1 Each of the  parties  represents  and  warrants  to each of the  other
          parties  that  as at  the  date  of  this  agreement  and  as  at  the
          Commencement Date:

          (a)  it has the power to enter into and perform this agreement and has
               obtained all necessary consents to enable it to do so; and

          (b)  the entry into and  performance  of this agreement by it does not
               constitute a breach of any obligation by which it is bound.

16   Termination
--------------------------------------------------------------------------------
Termination

     16.1 This agreement  commences on the  Commencement  Date and terminates on
          the first to occur of:

          (a)  the date upon which only one Shareholder holds Shares;

          (b)  the date upon  which the  Company is  dissolved;  or

          (c)  the date specified by written agreement between each party.

     16.2 The  termination of this agreement  shall be without  prejudice to any
          rights or  obligations  of a party with  respect to any breach of this
          agreement before that termination.

     16.3 Upon the transfer of a  Shareholder's  Shares in  accordance  with the
          terms  of this  agreement,  the  transferor  will  cease  to have  any
          obligations under this agreement except:

          (a)  under clause 5.5, 14 or 19;

          (b)  with  respect  to  any  breach  of  this  agreement  before  that
               transfer.

     16.4 In the event:

          (a)  AUCL is in material  breach of this agreement and does not remedy
               that breach within 90 days' notice from TCL; or

<PAGE>

                                                                              34

          (b)  AUCL or Saturn NZ becomes Insolvent;

          (c)  UGC  ceases to  control  AUCL,  except  due to a sale or issue of
               shares to the public; or

          (d)  any member of the UGC  Shareholder  Group transfers its Shares in
               accordance with clause 5.5(a)(iii),

          TCL may:

          (e)  within 30 days of becoming aware of such an event issue to AUCL a
               valuation  notice  requiring a  valuation  of all of the AUCL and
               Saturn NZ Shares at fair market value in  accordance  with clause
               17 ("AUCL Share Valuation"); and

          (f)  at any time  within 30 days  after the AUCL Share  Valuation  has
               been provided to TCL, give AUCL a call notice in which event AUCL
               must procure on such  Business Day as is nominated in such notice
               (being no less than three and no more than 20 Business Days after
               the date of the notice) that the UGC Shareholder  Group sells all
               of  their  Shares  to TCL  or  its  nominee  at  the  AUCL  Share
               Valuation,  except that, in the case of  paragraphs  (a) and (b),
               the price  payable shall be discounted by 10%, and in the case of
               paragraph  (d) the price shall be discounted by 50%.

     16.5 For the purposes of clause 16.4,  "UGC" means UGC or any  successor in
          title to UGC or its business,  such as on a merger,  consolidation  or
          contribution of UGC or its business with another entity,  irrespective
          of whether UGC is the surviving entity.

     16.6 In the event:

          (a)  TCL is in material  breach of this  agreement and does not remedy
               that breach within 90 days' notice from AUCL;

          (b)  TCL or THPL becomes Insolvent; or

          (c)  any member of the TCL  Shareholder  Group transfers its Shares in
               accordance with clause 5.5(a)(iii),

          AUCL may:

          (d)  within 30 days of becoming aware of such an event issue to THPL a
               valuation notice requiring a valuation of all of THPL's Shares at
               fair market value in  accordance  with clause 17 ("Telstra  Share
               Valuation"); and

          (e)  at any time within 30 days after the Telstra Share  Valuation has
               been provided to AUCL,  give TCL a call notice in which event TCL
               must procure on such  Business Day as is nominated in such notice
               (being no less than three and no more than 20 Business Days after

<PAGE>

                                                                              35

               the date of the notice) that the TCL Shareholder  Group sells all
               of its  Shares  to  AUCL  or its  nominee  at the  Telstra  Share
               Valuation,  except that the price  payable shall be discounted by
               10%, and in the case of paragraph  (c) the price payable shall be
               discounted by 50%.

17   Fair Market Valuation
--------------------------------------------------------------------------------

     17.1

          (a)  If a  valuation  notice  is  issued in  accordance  with  clauses
               5.2(a),  5.4(a),  10.5, 16.4(e) or 16.6(d),  each of TCL and AUCL
               must within  three  Business  Days after that notice  appoint one
               duly  qualified  valuer to determine the fair market value of the
               relevant Shareholders' Shareholding in the Company.

          (b)  If a determination  of fair market value of Shares is required to
               be made in accordance  with clause  11.3(b)(ii),  each of TCL and
               AUCL must within three  Business  Days after the expiry of the 14
               date  period  referred  to in  clause  11.3(c)  appoint  one duly
               qualified  valuer to  determine  the fair  market  value of those
               Shares.

          (c)  If a  determination  of the fair market  value of the business of
               the  Company is  required  to be made in  accordance  with clause
               10.1(a)(ii)(B),  each of TCL and AUCL must within 3 Business Days
               after the expiry of the 14 day period  referred to in clause 10.1
               appoint one duly  qualified  valuer to value both the fair market
               value of the business of the Company and (if  necessary) the fair
               market value of the relevant  Shareholders'  Shareholding  in the
               Company.

     17.2 In determining  the fair market value of a  Shareholding  under clause
          17.1(a):

          (a)  if  the  aggregate   Shareholding  of  the  prospective   selling
               Shareholder  Group  is not  less  than  the  Shareholding  of the
               prospective  purchasing  Shareholder  Group,  such valuation must
               include  a  control  premium  which  is  appropriate  in all  the
               circumstances;

          (b)  if  the  valuation  notice  was  given  under  clause  10.5,  the
               valuation  shall be made  without  reference to the impact of the
               deadlocked proposal on fair market value;

          (c)  the valuation shall be made on the basis of an ongoing  business;
               and

          (d)  the  valuation  shall be made on the  basis  that  all  contracts
               between the Company and all members of a Shareholder  Group shall
               remain in force in accordance with their terms.

<PAGE>

                                                                              36

    17.3  In determining the fair market value of Shares under clause 17.1(b):

          (a)  the valuation shall be made on the basis of an ongoing  business;
               and

          (b)  the  valuation  shall be made on the  basis  that  all  contracts
               between the Company and all members of a Shareholder  Group shall
               remain in force in accordance with their terms.

    17.4  In  determining  the fair market  value of the business of the Company
          under clause 17.1(c):

          (a)  the  valuation  shall be made without  reference to the impact of
               the deadlocked proposal on fair market value;

          (b)  the valuation shall be made on the basis of an ongoing  business;
               and

          (c)  the  valuation  shall be made on the  basis  that  all  contracts
               between the Company and all members of a Shareholder  Group shall
               remain in force in accordance with their terms.

    17.5  Each  qualified  valuer must within 15  Business  Days of  appointment
          simultaneously  provide its  valuation and  supporting  reasons to the
          each of the Shareholders.

    17.6  If the higher of the two  valuations  provided under clause 17.5 is no
          more than 10% higher  than the lower such  valuation,  the fair market
          value of the Shares shall be the average of the two valuations.

    17.7  If the higher of the two valuations provided under clause 17.5 is more
          than 10% higher than the lower such valuation,  the Shareholders  must
          within a further three Business Days appoint an independent third duly
          qualified  valuer  to  determine  the fair  market  value.  If no such
          appointment  is made  during  that  period,  the  President  of the NZ
          Institute of Chartered  Accountants shall make that appointment within
          a further  three  Business  Days.  The third  valuer shall be bound by
          clauses  17.2 to 17.4 and shall  take  into  account  the two  initial
          valuations. The third valuation must be provided simultaneously to TCL
          and AUCL  with  supporting  reasons  within  10  Business  Days of the
          appointment  of the third  valuer.  Any delay in the  provision of the
          third valuation shall not affect the validity of the third valuation.

    17.8  If only one valuation is delivered  under clause 17.5,  that valuation
          shall prevail as the fair market value.

    17.9  The parties must provide all reasonable  assistance and cooperation to
          any valuer appointed under this clause 17.

    17.10 TCL and  AUCL  shall  each pay one  half of the  costs  of any  valuer
          appointed under clause 17.7.

<PAGE>

                                                                              37

    17.11 A determination  of fair market value made under this clause 17 shall,
          in the  absence  of  manifest  error,  be final and  binding  upon the
          parties.

18   Requirements on a Sale of Shares
--------------------------------------------------------------------------------

     18.1 Upon completion of any sale of Shares under this agreement:

          (a)  the seller shall deliver to the buyer or its solicitors:

               (i)  an executed  transfer in favour of the buyer  together  with
                    the share certificates for those Shares (if any); and

              (ii)  signed  resignations from the Board by the nominee Directors
                    of the seller;

          (b)  the Shares are to be transferred free from any Security  Interest
               and with all rights,  including  dividend  rights,  attaching  or
               accruing to them; and

          (c)  the buyer shall  deliver to the seller or its  solicitors  a bank
               cheque  payable to the seller  for the total  purchase  price for
               those Shares agreed or determined under this agreement.

19   Confidentiality, Publicity and Audit
--------------------------------------------------------------------------------

     19.1 All Confidential  Information  disclosed by any party  ("supplier") to
          any other party ("recipient") or to any of their respective employees,
          directors,  officers,  auditors or agents, is so disclosed on terms of
          strict  confidence,  prohibiting  any  further  disclosure  or use not
          authorised under this agreement.

     19.2 To protect and preserve the confidential  nature and continued secrecy
          of all Confidential Information, each recipient must:

          (a)  use the same degree of care (not less than a reasonable degree of
               care) that it would use with respect to its own  information of a
               like nature;

          (b)  take  all   practicable   steps  to  procure  that   Confidential
               Information  is not disclosed to, or obtained from it or from its
               employees,  directors,  officers,  auditors or agents by,  anyone
               other than persons employed by it or acting on its behalf who are
               required to have access to the relevant Confidential  Information
               in order to enable this agreement or an  Establishment  Agreement
               to be carried into effect; and

          (c)  not permit  unauthorised  persons to have access to places  where
               Confidential  Information  is reproduced or stored.


<PAGE>

                                                                              38

     19.3 A party must not at any time make or assist  any other  person to make
          any unauthorised disclosure or use of any Confidential Information.

     19.4 The  rights  and   obligations   of  the  parties   with   respect  to
          confidentiality   survive   termination  of  this  agreement  and  any
          Establishment Agreements.

     19.5 Nothing in this clause 19 prohibits  the  disclosure  of  Confidential
          Information:

          (a)  to a professional adviser to the extent necessary to enable it to
               protect or advise  upon the rights of a party in relation to this
               agreement or an Establishment Agreement;

          (b)  to the  extent  necessary  and in a manner or to a person to whom
               disclosure is permitted or  contemplated  under this agreement or
               by an Establishment Agreement;

          (c)  to the extent required by law, or the rules of a recognised stock
               exchange applicable to that party;

          (d)  by operation of law; or

          (e)  by the recipient  with the prior  written  consent of each of the
               parties to this agreement.

Publicity
     19.6 A party to this  agreement or to an  Establishment  Agreement  may not
          make  press  or  other  announcements  or  releases  relating  to this
          agreement or an  Establishment  Agreement  without the approval of the
          other parties to this agreement or that Establishment Agreement of the
          form  or  manner  of  the   announcement   or  release,   unless  that
          announcement  or release is required to be made by law or the rules of
          recognised stock exchange  applicable to that party, in which case the
          party must use all  reasonable  endeavours  to consult  with the other
          parties before making that announcement or release.

Access to Records by Shareholders
     19.7 The Company  must at all times keep and maintain at its head office up
          to date complete and accurate books and business records including but
          not limited to books of account,  documents,  customer lists, supplier
          lists,  records of  contracts  and leases and  records of  receivables
          ("business  records").  Each of the Directors shall have access at any
          time during normal business hours to the business records.

Audit
     19.8 Each  Shareholder  holding 10% or more of the number of issued  Shares
          may  through  its  representatives  at  reasonable  times  audit  on a
          confidential  basis  all  business  records  but may  use  information
          obtained  from the audit only for proper  purposes  and not to compete
          with the Company.

<PAGE>

                                                                              39
20   Notices
--------------------------------------------------------------------------------

     20.1 A notice, approval, consent, or other communication in connection with
          this agreement:

          (a)  must be in writing;

          (b)  must be marked for the attention of the person set out below; and

          (c)  must be left at the address of the addressee or sent by facsimile
               or email  to the  facsimile  number  or  email  address  which is
               specified  in this clause or if the  addressee  notifies  another
               address,  facsimile number or email address then to that address,
               facsimile number or email address.


               THPL, TCL or the TCL Shareholder Group
               Address:         Telstra Corporation Limited
                                231 Elizabeth Street
                                SYDNEY  NSW  2000
               Attention:       Group Managing Director, Telstra Business
                                Solutions
               Fax:             (61 2) 9396 9530

               Copy:            Counsel, Telstra Business Solutions
                                231 Elizabeth Street
                                SYDNEY  NSW  2000
               Fax:             (61 2) 9261 4762
               Email:           david.waldie@team.telstra.com


               AUCL, Saturn NZ or the UGC Shareholder Group
               Address:         Austar United Communications Limited
                                Level 29
                                259 George Street
                                SYDNEY   NSW   2000
               Attention:       Corporate Counsel
               Facsimile:        (61 2) 9394 9850
               Email:           awilde@austar.com.au


               Company
               Address:         Telstra Saturn Limited
                                75 The Esplanade
                                PETONE  NZ
               Attention:       CEO
               Facsimile:       (64 4) 939 5100
               Email:           jackm@saturn.co.nz

<PAGE>
                                                                              40


     20.2 A notice,  approval,  consent or other communication takes effect from
          the time it is received unless a later time is specified in it.

     20.3 A facsimile  is taken to be received  on entry in a  transmission  log
          kept by the machine from which the facsimile was sent which  indicates
          that the facsimile  was sent in its entirety to a facsimile  number of
          the recipient.

21   Miscellaneous
--------------------------------------------------------------------------------

Assignment
     21.1 A party may not assign its rights or obligations  under this agreement
          except  with the prior  written  consent of the other  parties to this
          agreement, or in transferring its Shares in a manner permitted by this
          agreement.

Costs
     21.2 Each party  agrees to bear its own legal and other costs and  expenses
          in connection with the preparation and execution of this agreement and
          the Establishment Agreements and of other related documentation.

Exercise of rights
     21.3 A party may exercise a right,  power or remedy at its discretion,  and
          separately or  concurrently  with another  right,  power or remedy.  A
          single or partial exercise of a right, power or remedy by a party does
          not prevent a further exercise of that or of any other right, power or
          remedy. Failure by a party to exercise or delay in exercising a right,
          power or remedy does not prevent its exercise.

Waiver and variation
     21.4 A provision of or a right created under this agreement may not be:

          (a)  waived except in writing signed by the party granting the waiver;
               or

          (b)  varied except in writing signed by the parties.

Approvals and consents
     21.5 A party may give  conditionally  or  unconditionally  or withhold  its
          approval or consent in its absolute  discretion  unless this agreement
          expressly provides otherwise.

Remedies cumulative
     21.6 The  rights,  powers  and  remedies  provided  in this  agreement  are
          cumulative  with and not  exclusive of the rights,  powers or remedies
          provided by law independently of this agreement.

<PAGE>

                                                                              41

Survival of warranties and indemnities
    21.7  Each  warranty  and  indemnity  in  this  agreement  is  a  continuing
          obligation, separate and independent from the other obligations of the
          parties and survives termination of this agreement.

Enforcement of warranties and indemnities
    21.8  It is not  necessary  for a party to  incur  expense  or make  payment
          before  enforcing a right of warranty or  indemnity  conferred by this
          agreement.

Further assurances
    21.9  Each  party  agrees,  at its own  expense,  on the  request of another
          party,  to do everything  reasonably  necessary to give effect to this
          agreement and the transactions  contemplated by it, including, but not
          limited to, the  execution  of  documents,  and to use all  reasonable
          endeavours to cause relevant third parties to do likewise.

Entire Agreement
    21.10

          (a)  This agreement  constitutes  the entire  agreement of the parties
               with reference to its subject matter and any previous agreements,
               understandings,  negotiations,  representations  or warranties on
               that subject matter cease to have any effect.

          (b)  The  Memorandum  of  Understanding  between TCL and AUCL dated 24
               February  2000 is  terminated  by  this  agreement  (except  with
               respect  to any  rights  arising  due to a breach  of  clause  31
               thereof).

No partnership
    21.11 Subject  to  any  provision  of  this  agreement  specifically  to the
          contrary, nothing contained or implied in this agreement constitutes a
          party the partner,  agent or legal  representative of another party or
          of the Company for any purpose or creates any  partnership,  agency or
          trust,  and no party has any  authority to bind  another  party or the
          Company in any way.

22   Governing law, jurisdiction and service of process
--------------------------------------------------------------------------------

     22.1 This agreement and the transactions contemplated by this agreement are
          governed by the law in force in New South Wales.

     22.2 Each  party  irrevocably  and  unconditionally  submits  and agrees to
          submit to the  non-exclusive  jurisdiction  of the courts of New South
          Wales,  courts exercising Federal  jurisdiction in New South Wales and
          courts of appeal from them for determining any dispute concerning this
          agreement or the  transactions  contemplated by this  agreement.  Each
          party waives any right they have to object to an action being  brought
          in those  courts  including,  but not  limited to,  claiming  that the
          action has been brought in an inconvenient  forum or that those courts
          do not have  jurisdiction.

<PAGE>

                                                                              42

     22.3 Without  preventing  any other mode of  service,  any  document  in an
          action  (including,  but not  limited to, any writ of summons or other
          originating  process or any third or other party notice) may be served
          on any  party by  being  delivered  to or left  for that  party at its
          address  for  service  of notices  under  clause  20.

     EXECUTED as an agreement

<PAGE>
<TABLE>
<CAPTION>
                                                                              43

Execution page
--------------------------------------------------------------------------------

<S>                                                           <C>

SIGNED by                                          )
as authorised representative for TELSTRA           )
CORPORATIONB LIMITED (ACN 051 775 556)             )
in the presence of:                                )
                                                   )
/s/ David Waldie                                   )
 ................................................   )
Signature of witness                               )
                                                   )
David Waldie                                       )
 ................................................   )
Name of witness (block letters)                    )
                                                   )
1/138 Hastings PDE, Bondi                          )          /s/ Lindsay Yelland
 ................................................   )          ...............................................
Address of witness                                 )          By executing this agreement the signatory
                                                   )          warrants that the signatory is duly authorised
Lawyer                                             )          to execute this agreement on behalf of TELSTRA
 ................................................   )          CORPORATION LIMITED.
Occupation of witness                              )
                                                   )


SIGNED by                                          )
as authorised representative for TELSTRA           )
HOLDINGS PTY LIMITED (ACN 057 808 938) in the      )
presence of:                                       )
                                                   )
/s/ David Waldie                                   )
 ................................................   )
Signature of witness                               )
                                                   )
David Waldie                                       )
 ................................................   )
Name of witness (block letters)                    )          /s/ Lindsay Yelland
                                                   )          ...............................................
1/138 Hastings PDE, Bondi                          )          By executing this agreement the signatory
 ................................................   )          warrants that the signatory is duly authorised
Address of witness                                 )          to execute this agreement on behalf of TELSTRA
                                                   )          HOLDINGS PTY LIMITED.
Lawyer                                             )
 ................................................   )
Occupation of witness                              )



<PAGE>

                                                                              44

SIGNED by                                          )
as authorised representative for SATURN            )
NZ) HOLDING COMPANY PTY LTD (ACN 088 052 000)      )
in the presence of:                                )
                                                   )
/s/ Sean Michael Wynne                             )
 ................................................   )
Signature of witness                               )
                                                   )
Sean Michael Wynne                                 )
 ................................................   )
Name of witness (block letters)                    )
                                                   )
40 Falkirk Ave., Seatown, Wellington               )          /s/ John C. Porter
 ................................................   )          ...............................................
Address of witness                                 )          By executing this agreement the signatory
                                                   )          warrants that the signatory is duly authorised
Tel Co Manager                                     )          to execute this agreement on behalf of SATURN
 ................................................   )          (NZ) HOLDING COMPANY PTY LTD.
Occupation of witness                              )
                                                   )


SIGNED by                                          )
as authorised representative for AUSTAR UNITED     )
COMMUNICATIONS LIMITED (ACN 087 695 707) in the    )
presence of:                                       )
                                                   )
/s/ Sean Michael Wynne                             )
 ................................................   )
Signature of witness                               )
                                                   )
Sean Michael Wynne                                 )
 ................................................   )
Name of witness (block letters)                    )          /s/ John C. Porter
                                                   )          ...............................................
40 Falkirk Ave., Seatown, Wellington               )          By executing this agreement the signatory
 ................................................   )          warrants that the signatory is duly authorised
Address of witness                                 )          to execute this agreement on behalf of AUSTAR
                                                   )          UNITED COMMUNICATIONS LIMITED.
Tel Co Manager                                     )
 ................................................   )
Occupation of witness                              )

SIGNED by                                          )
as authorised representative for SATURN            )
COMMUNICATIONS LIMITED in the presence of:         )
                                                   )
/s/ Sean Michael Wynne                             )
 ................................................   )
Signature of witness                               )
                                                   )
Sean Michael Wynne                                 )
 ................................................   )
Name of witness (block letters)                    )
                                                   )          /s/ Jack Matthews
40 Falkirk Ave., Seatown, Wellington               )          ...............................................
 ................................................   )          By executing this agreement the signatory
Address of witness                                 )          warrants that the signatory is duly authorised
                                                   )          to execute this agreement on behalf of SATURN
Tel Co Manager                                     )          COMMUNICATIONS LIMITED.
 ................................................   )
Occupation of witness                              )
                                                   )

</TABLE>

<PAGE>

                                                                              45


Schedule 1                        [ Not Used ]
--------------------------------------------------------------------------------




<PAGE>

                                                                              46

Schedule 2                        CEO Delegation Resolution
--------------------------------------------------------------------------------

1    Subject to paragraph 3:

     (a)  the  CEO is  responsible  to  the  Board  for  the  management  of the
          Company's  affairs and for coordinating and supervising the day-to-day
          business and operations of the Company in accordance  with the Initial
          Business  Plan the  Business  Plan,  and the  Budget,  subject to this
          agreement;

     (b)  the CEO is permitted to authorise expenditure and incur liabilities on
          behalf, or in the name, of the Company within the following limits:

          (i)  capital  expenditure  items up to $20 million,  provided that for
               capital  expenditure not authorised by the Initial  Business Plan
               or the Budget, the ceiling shall be $1 million;

         (ii)  operating expenditure items up to $20 million,  provided that for
               operating expenditure not authorised by the Initial Business Plan
               or the Budget, the ceiling shall be $1 million;

        (iii)  sales or purchases  of goods and services up to a total  contract
               value of $20 million  (provided  that for sales or  purchases  of
               goods and services not authorised by the Initial Business Plan or
               the  Budget,  the  ceiling  shall  be $1  million)  provided  the
               contract period (including  options  exercisable by any party) is
               for no more than 5 years.;

     (c)  the CEO is permitted to acquire or dispose of assets for consideration
          of up to $20 million, provided that for an acquisition or disposal not
          authorised  by the Initial  Business  Plan,  the Business  Plan or the
          Budget, the ceiling shall be $1 million;

     (d)  by no later than 15 April of each Financial  Year, the CEO must submit
          to the  Board  for its  approval  a draft  Business  Plan  and a draft
          Budget,  in the format and  containing  the content  specified  by the
          Board  from  time to time,  commencing  at the  beginning  of the next
          Financial  Year. The Initial  Business Plan forms the basic  framework
          and reflects the  principles for the  development  of each  subsequent
          Business Plan;

     (e)  the CEO must prepare and submit to the Board monthly reports about the
          business of the Company  (including  management  accounts) in the form
          and content determined by the Board from time to time; and

<PAGE>

                                                                              47

     (f)  for so long as any  member  of the TCL  Shareholder  Group  or the UGC
          Shareholder  Group  is  a  Shareholder,  the  CEO  must  provide  such
          information to TCL or AUCL (with copies to the other  Shareholders) as
          TCL or AUCL  reasonably  requires  to meet its  continuous  disclosure
          obligations to the Australian Stock Exchange, in such manner as TCL or
          AUCL requires from time to time.

2    Subject to clause 9.1(r) of the Shareholders  Agreement and to paragraph 3,
     the CEO will  appoint and may remove and replace all  employees  (including
     senior executives) of the Company.

3.   The  powers,  authorities  and  discretions  described  below  shall not be
     exercisable by the CEO and may only be exercised with the specific approval
     of the Board:

     (a)  borrow or  otherwise  raise  money  excluding  draw downs on  existing
          facilities in accordance  with policies  issued by the board from time
          to time;

     (b)  secure any borrowings or other raising of money;

     (c)  lend  money  or  provide  credit  otherwise  than  in  relation  to  a
          transaction   that  is  in  the  ordinary  course  of  the  day-to-day
          operations of the Company;

     (d)  hedging the financial risks  associated with the Company's  activities
          including (without limitation):

          (i)  interest rate swaps and futures contracts;

         (ii)  spot and forward FX contracts;

        (iii)  currency and interest rate options

     (e)  carry on or engage in any business  other than the business  described
          in clause 2.1 of the Shareholders Agreement;

     (f)  undertake a significant new business activity;

     (g)  determine  policy  or  major  regulatory,  competition  law  or  human
          resources initiatives.

     (h)  form, or participate in the formation of, a company;

     (i)  establish a partnership,  trust, unincorporated joint venture or other
          arrangement for the sharing of profits;

     (j)  acquire or dispose of all or part of a shareholding in a company;

     (k)  acquire or dispose of all or part of a business;

     (l)  make a change in the nature of the Company's business; and

     (m)  make a change in the nature or extent of the Company's  interests in a
          company,  partnership,  trust,  unincorporated  joint venture or other
          arrangement for the sharing of profits.
<PAGE>

                                                                              48

Schedule 3   Management and Reporting Responsibilities Schedule
--------------------------------------------------------------------------------

Rob Ellis:        Director Telstra Business Solutions

TBS will consist  generally of all sales,  marketing,  customer  management  and
installation  functions  for the  business  market.  Netlink  will also be fully
integrated into this division.

Sean Wynne:       Director Saturn Residential

Saturn will encompass the same responsibilities for the residential market

Lee Kil:          Director Capital Projects

Lee will be responsible for the overall  construction of the national  broadband
network.

Deanne Weir:      Director Corporate Development

Deanne will be responsible  for all legal and  regulatory  activities as well as
some additional public affairs and carrier relations duties.

Vicki Potts:

Vicki  will  move  to a  more  specific  set  of  responsibilities  focusing  on
completing  the bank  financing  program  already  well  underway  at Saturn (in
conjunction with representatives from Telstra Corp and Austar).



<PAGE>
<TABLE>
<CAPTION>
                                                                                                                                  49

------------------------------------------------------------------------------------------------------------------------------------
                                                         Jack Matthews
                                                             CEO



<S>                   <C>                <C>               <C>           <C>         <C>             <C>                 <C>
Director - Telstra    Director-Saturn    Director-Corp     Director-        CFO      Director-NTG    Director-Capital    Director-HR
    Business            Residential        Services        Strategy/Bus    Vacant       Vacant          Projects           Vacant
    Solutions            S Wayne            D Weir         Development
    R Ellis                                                  Vacant


    Business/            Business/         Legal &                         Billing        GM                               Training
     Process              Process         Regulatory                     Operations   Network Ops
   Improvement          Involvement


      GM                    GM            Wholesale                          GM       GM Planning                            HR
   Marketing             Marketing                                        Treasury    & Engineer


      GM                    GM            Industry/                       Business         GM
   Marketing              Service          Carrier                       Planning &    Convergence
                                          Relations                      Performance


      GM                    GM              PA/PR                        Building &
   Marketing             Commerce/                                       Facilities
                          Finance


      GM                   CATV                                          Financial
    Managed                                                               Control
    Services


      GM                   Sales
     Sales                                                            Project Costing
                                                                        & Tracking

     SME                   SOHO                                                                                     TELSTRA SATURN
                                                                                                                       PROPOSED
                                                                                                                       STRUCTURE
    CORP                   RES                                                                                         APRIL 2000


</TABLE>
<PAGE>
                                                                              50



Schedule 4     Incentive Compensation Plan - Key terms
--------------------------------------------------------------------------------

New Telstra Saturn Incentive Plan
Suggested Plan Design
Grants

o    Board discretion

o    % of Residual Equity Value ("Equity Interest")

Vesting

o    25% of award vests on anniversary of award

o    Balance vests monthly at 25% per annum

o    board discretion to make a grant with different vesting schedule

Exercise

o    50% of the first 12 months vesting is  exercisable on first  anniversary of
     grant

o    All vested grants become exercisable 2 years after grant

Life of Equity Interest

o    10 years after which it expires

Termination

o    Death and  disability -  exercisable  interest  may be exercised  within 12
     months

o    For cause - no interest is exercisable

o    Other terminations

     -    If within 12 months of grant no interest is exercisable

     -    Thereafter exercisable interest may be exercised within 3 months

Settlement of exercise

o    Cash or shares (if Telstra Saturn is listed)

Value

o    Vested portion of Residual Equity Value multiplied by equity interest

Residual Equity Value equals

     Less:  Fair market  Value at time of grant plus  compounded  return on this
     value of 10% per annum from the Settlement Date

     Less:  Total  shareholder  contributions  after Settlement Date (equity and
     loans) to Telstra Saturn plus compounded  return on these  contributions of
     10% per annum from the date of each contribution.

In summary this approach rewards participants for the growth in value of Telstra
Saturn in excess of an expected return on capital of 10%.

The  method  of  calculating  Fair  Market  Value  will  be  based  on the  same
methodology used in calculating the initial Fair Market Value (ie at the time of
settlement),  the details of which will be  attached to the Plan Rules.  On each
anniversary  date a new valuation  will be conducted  using the  methodology  as
outline.

For an  employee  who  leaves  between  valuation  dates,  the  payout  of their
incentive  interest  will be  based  on the  last  valuation  conducted  plus an
interest factor as determined by the Board.

<PAGE>

                                                                              51

Change of Control or Re-Organisations:

Current plan intent should be preserved with  appropriate  amendments to reflect
the issues that have arisen from the current transaction.

Listing

On listing the entitlements may be rolled over into an equity plan.

Quantum of Award

The key decision to be made is to determine  what payment  should be made at the
end of the plan period. The attached financial model will allow Austar to assess
the  equity  interests  that  should  be given to Saturn  employees  in order to
provide  them with a  particular  payment for a  particular  targeted  return on
capital.

Capping

The current plan does not have capping. Providing the targeted return on capital
is  appropriately  set then over  achievement  will continue to add value to the
Telstra Saturn  shareholders.  As a result it seems fair and reasonable that the
Telstra Saturn  employees  continue to from the increasing  values,  in much the
same way as employees under an option plan.






<PAGE>
                                                                              52

Schedule 5                        Accession Deed
--------------------------------------------------------------------------------


                                  Deed of Accession

Date:

Parties:            [                   ] of [                  ] ("Transferee")

Recitals:

               A.   Telstra  Corporation  Limited  (ACN  051 775  556)  ("TCL"),
                    Telstra  Holdings  Pty Limited  (ACN 057 808 938)  ("THPL"),
                    Austar  United  Communications  Limited  (ACN  087 695  707)
                    ("AUCL"),  Saturn (NZ) Holding  Company Pty Ltd (ACN 088 052
                    000) and Saturn  Communications  Limited ("the Company") are
                    parties   to  an   agreement   dated   [  ]   ("Shareholders
                    Agreement").

               B.   The Shareholders  Agreement  contemplates that shares in the
                    Company may be  transferred  to a third  party.  Pursuant to
                    clause 5.7 of the Shareholders Agreement,  before any person
                    can acquire  shares in the Company it must become a party to
                    the Shareholders  Agreement by executing a deed of accession
                    on the terms of this deed.

               C.   The  Transferee  is to  acquire  or be issued  shares in the
                    Company  and  enter  into  this  Deed  as  required  by  the
                    Shareholders Agreement.

Operative provisions:

1    Accession
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     1.1  The  Transferee  agrees to be bound by the  terms of the  Shareholders
          Agreement with effect from the date it acquires  Shares in the Company
          and expressly  undertakes to observe and perform all provisions of the
          Shareholders Agreement from that date as if named as an original party
          to that  agreement in the capacity of a  Shareholder  (as that term is
          defined in the Shareholders Agreement).

     1.2  If the  Transferee  is  acquiring  existing  Shares  (as that  term is
          defined in the Shareholders  Agreement) it shall succeed to all of the
          rights and  obligations  of the  transferor  of those Shares under the
          Shareholders  Agreement  (except for any rights (but not  obligations)
          under clause 10).

2    Notices
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     For the purpose of clause 19.5 of the Shareholders Agreement,  the address,
     facsimile and email details of the Transferee are:

     Address:        [                          ]

     Attention:      [                          ]

     Fax:                     [                          ]

     Email:                   [                           ]

3    Miscellaneous
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         This deed is governed by the law in force in New South Wales.


EXECUTED as a deed