Date: 15 July 1999


                          Saturn Communications Limited

                                    Borrower

                           Kiwi Cable Company Limited

                                    Guarantor


                       SaskTel Holding (New Zealand) Inc.
                       Saturn (NZ) Holding Company Pty Ltd

                                each a Mortgagor


                       Toronto Dominion Australia Limited

                                       TDA

                                     Paribas

                                     Paribas

        Each Financial Institution specified as a New Bank in Schedule 1

                                 each a New Bank

                            The Toronto-Dominion Bank

                                  Acceding Bank

                       Toronto Dominion Australia Limited

                                      Agent



<PAGE>


                                TABLE OF CONTENTS

Clause                                                                      Page


1.     DEFINITIONS AND INTERPRETATION                                         2


2.     CONDITIONS PRECEDENT                                                   3


3.     VARIATIONS TO FACILITY AGREEMENT                                       4


4.     REPRESENTATIONS AND WARRANTIES                                         4


5.     GENERAL CONFIRMATIONS, RATIFICATIONS AND ACKNOWLEDGEMENTS              5


6.     LEGAL COSTS, DUTIES ETC.                                               6


7.     COMMITMENTS                                                            6


8.     ADVANCES                                                               6


9.     BANK ACCESSION                                                         7


10.    EFFECT ON TRANSACTION DOCUMENTS                                        7


11.    NO EFFECT ON ACCRUED RIGHTS AND OBLIGATIONS                            8


12.    LIQUEFYING BILLS                                                       8


13.    PAYMENTS                                                               8


14.    INDEPENDENT ASSESSMENT                                                 8


15.    ACKNOWLEDGEMENTS                                                       8


16.    MISCELLANEOUS                                                          9


<PAGE>

SUPPLEMENTAL DEED made on 15 July 1999

BETWEEN        SATURN  COMMUNICATIONS  LIMITED,  NZ Co. No.  WN/435672 of 75 The
               Esplanade, Petone, Wellington, New Zealand ("Borrower")

AND            KIWI  CABLE  COMPANY  LIMITED,  NZ Co.  No.  WN/647464  of 75 The
               Esplanade, Petone, Wellington, New Zealand ("Guarantor")

AND            SATURN  (NZ)  HOLDING  COMPANY  PTY  LTD,  ACN 088 052 000 of 259
               George Street,  Sydney,  New South Wales and SASKTEL HOLDING (NEW
               ZEALAND) INC., (a Saskatchewan corporation) (each a "Mortgagor")

AND            TORONTO DOMINION AUSTRALIA LIMITED,  ACN 004 858 020 of Level 36,
               385 Bourke Street, Melbourne,  Victoria in its capacity as a Bank
               ("TDA")

AND            PARIBAS,  Taipei  Branch  (Offshore  Banking  Unit) of 205 TunHua
               North Road, 11th Floor, Taipei,  Taiwan in its capacity as a Bank
               ("Paribas")

AND            EACH FINANCIAL  INSTITUTION SPECIFIED AS A NEW BANK in Schedule 1
               (each a "New Bank")

AND            THE  TORONTO-DOMINION  BANK,  ARBN 082 818 175 of Level  36,  385
               Bourke Street, Melbourne, Victoria ("Acceding Bank")

AND            TORONTO DOMINION AUSTRALIA LIMITED,  ACN 004 858 020 of Level 36,
               385 Bourke Street,  Melbourne,  Victoria in its capacity as agent
               for the Banks ("Agent")


RECITALS

A.   Under the Facility Agreement, the Existing Banks have made available to the
     Borrower a syndicated senior secured debt facility.

B.   Under the Facility Agreement, the Guarantor has guaranteed to the Banks the
     due and punctual performance by the Borrower of the Obligations.

C.   Under the Share  Mortgages,  the  Mortgagors  have given  security  for the
     payment  in full to the Agent of all the  Secured  Money as  defined in the
     Share Mortgages.

D.   The Borrower and the Guarantor  have  requested the Existing  Banks to vary
     the  terms of the  Facility  and the  Existing  Banks  have  agreed to this
     request on the terms contained in this deed.

E.   Each Mortgagor  acknowledges  and consents to the variation of the Facility
     Agreement contained in this deed.

F.   The Existing Banks presently have Commitments under the Facility Agreement.

<PAGE>


G.   The New Banks wish to assume some of the Existing  Banks'  Commitments  and
     participate in the outstanding  Advances under the Facility Agreement.  The
     New  Banks  and  the  Existing  Banks  also  wish  to  increase  the  Total
     Commitments.

H.   From the  Substitution  Date the Existing Banks and the New Banks will have
     the  Commitments  specified  in Schedule 1 of the  Facility  Agreement  (as
     varied by this deed).

I.   From the  Accession  Date,  the Acceding Bank will be party to the Facility
     Agreement as a Bank  pursuant to clause 29.5 of the  Facility  Agreement so
     that it can become a Swap Counterparty and enter into Hedging Agreements.


IT IS AGREED:

1.        DEFINITIONS AND INTERPRETATION

1.1       Definitions

          (a)  In this deed and in the Recitals:

               "Accession  Date"  means the date of this deed or such other date
               as the  Borrower,  the Agent and the  Acceding  Bank may agree in
               writing.

               "Banks" means the Acceding  Bank,  the Existing Banks and the New
               Banks. "Existing Banks" means TDA and Paribas.

               "Facility  Agreement"  means the  Syndicated  Senior Secured Debt
               Facility  Agreement dated 5 November 1998 between the Agent,  the
               Borrower, the Guarantor and each of the other parties referred to
               as a "Bank" therein.

               "Substitution  Date" means,  subject to the  satisfaction  of the
               conditions  precedent  set out in clause 2, 20 July 1999, or such
               later date as the Borrower, the Agent and the New Banks may agree
               in writing.

                                       2
<PAGE>


               "Variation Date" means the date on which the conditions precedent
               in clause 2 are  satisfied,  or such  earlier date as notified to
               the Borrower by the Agent.

          (b)  Subject to clause 1.1(a), unless the context indicates a contrary
               intention, all terms defined in the Facility Agreement (as varied
               by this deed) shall have the same meaning in this deed.

1.2       Interpretation

          The  provisions  of  clause  1.2   (Interpretation)  of  the  Facility
          Agreement  (as varied by this deed)  shall be  incorporated  into this
          deed as if set out herein.

1.3       Collateral and Supplemental Agreement

          This deed is collateral and supplemental to the Facility Agreement.

1.4       Transaction Document

          This deed is a Transaction  Document under and for the purposes of the
          Facility Agreement and the Securities.

2.        CONDITIONS PRECEDENT

          The amendments to the Facility Agreement effected by this document and
          the acknowledgements and discharges in clause 5.5 of this document are
          subject to the  conditions  precedent  that all of the  following  are
          received by the Agent in form and substance  satisfactory to the Agent
          and to its legal advisers:

          (a)  (Executed  document):  this  document duly executed by the Banks,
               the Borrower, the Mortgagors and the Guarantor;

          (b)  (Directors  certificate):  a certificate signed by 2 directors or
               one  director  and the Chief  Financial  Officer of the  Borrower
               stating  that  SaskTel NZ and  S(NZ)HC  have  contributed  to the
               Borrower, in aggregate,  not less than $15,000,000 in the form of
               equity  or   subordinated   debt  (in   accordance   with  clause
               17.4(c)(iv) of the Facility Agreement) since 1 February 1999;

          (c)  (Subordination): a certified copy of a subordination agreement in
               respect of the subordinated debt referred to in paragraph (b), on
               terms acceptable to the Agent;

          (d)  (Requisitions):  searches and replies to all  requisitions of the
               Agent  and its  solicitors  in  relation  to this  document,  the
               Borrower, the Guarantor and the Mortgagors;

                                       3
<PAGE>

          (e)  (Powers of attorney): certified copies of the powers of attorney,
               if any,  under  which  any  party  (other  than the Banks and the
               Agent) execute this deed;

          (f)  (Legal  opinion):  a  legal  opinion  from  Bell  Gully,  SaskTel
               in-house  counsel and Clayton Utz in a form  satisfactory  to the
               Agent; and

          (g)  (Corporate authorisations):

               (i)  (Australian companies): a certified copy of:

                    (A)  the Constitution of S(NZ)HC; and

                    (B)  an extract of a resolution  of the directors of S(NZ)HC
                         approving  the terms of this deed and  authorising  the
                         execution of this deed by S(NZ)HC; and

               (ii) (New Zealand companies): in the case of each of the Borrower
                    and the Guarantor:

                    (A)  a certified copy of its Constitution;

                    (B)  a certified  copy of a resolution  or resolution of its
                         directors  approving  this  deed  and  authorising  its
                         execution of this deed; and

                    (C)  a  director's  certificate  in  the  form  set  out  in
                         Schedule  9  to  the  Facility   Agreement  (with  such
                         modifications  thereto as may be  required or agreed by
                         the Agent) from one of its  directors in respect of its
                         authorisation, execution and performance of this deed.

3.        VARIATIONS TO FACILITY AGREEMENT

          Subject  to  clause  7, as  from  the  Variation  Date,  the  Facility
          Agreement shall be varied so that it is in the form of Annexure "A".

4.        REPRESENTATIONS AND WARRANTIES

4.1       Borrower and Guarantor

          (a)  The Borrower and the Guarantor  hereby confirm and repeat each of
               the  representations  and  warranties  made by it in clause  16.1
               (except for paragraph 16.1(e)),  16.2 (except for paragraphs (c),
               (d), (e) and (f)) and 16.3 of the Facility  Agreement  (as varied
               by this  deed)  with  reference  to the facts  and  circumstances
               subsisting as at the date of this deed.

          (b)  The Borrower and the  Guarantor  hereby  represent and warrant in
               respect of itself only to each of the Agent and the Banks that no
               event has  occurred  which  constitutes  an Event of Default or a
               Potential  Event of Default  other than those  events  which have
               already been  disclosed to the Agent in writing prior to the date
               of this deed.

                                       4
<PAGE>


4.2       Mortgagors

          Each Mortgagor hereby confirms and repeats each of the representations
          and warranties made by it in clauses 3.1 and 3.2 of the Share Mortgage
          to which it is a party with  reference to the facts and  circumstances
          subsisting  as at the date of this deed and as if  references in those
          clauses to "this Mortgage" include this deed.

5.        GENERAL CONFIRMATIONS, RATIFICATIONS AND ACKNOWLEDGEMENTS

5.1       The Borrower

          The Borrower hereby unconditionally and irrevocably:

          (a)  ratifies  and  confirms to the Banks its  continuing  obligations
               under the  Facility  Agreement  (as  varied by this deed) and the
               Securities to which it is a party; and

          (b)  acknowledges  and  agrees  that  except  to  the  extent  of  the
               variations effected by the provisions of this deed the provisions
               of the Facility  Agreement  and the  Securities  to which it is a
               party shall in all respects apply.

5.2       The Guarantor

          The Guarantor hereby unconditionally and irrevocably  acknowledges and
          agrees that the guarantees and  indemnities  contained in the Facility
          Agreement  (as  varied by this deed)  apply  mutatis  mutandis  to all
          obligations  of  the  Borrower  to the  Banks  thereunder  and  hereby
          ratifies  and  confirms to the Banks its  continuing  liability to the
          Banks pursuant to the Facility  Agreement (as varied by this deed) and
          the Securities to which the Guarantor is a party.

5.3       The Mortgagors

          Each  Mortgagor   hereby  ratifies  and  confirms  to  the  Banks  its
          continuing  liability  to the Agent (as agent for the  Banks)  and the
          Banks pursuant to and subject to the recourse  limitation in the Share
          Mortgage to which it is a party.

5.4       Consent to Variation

          Each  of  the  Borrower,  the  Guarantor  and  the  Mortgagors  hereby
          irrevocably  and  unconditionally  consents to the  provisions of this
          deed  and to  the  variation  of  the  Facility  Agreement  as  herein
          provided.

5.5       Acknowledgements

          Each of the parties to this deed  acknowledges  and agrees that,  upon
          receipt  by the  Borrower  of not less than  $15,000,000  of equity or
          subordinated  debt referred to in clause 2(b), the  obligations of all
          parties under:

                                       5
<PAGE>


          (a)  the Shareholder  Contribution  Deed dated 5 November 1998 between
               the Borrower, UIHNZ, UAP, SaskTel NZ and STHC; and

          (b)  the  Tripartite  Deed dated 5 November 1998 between the Borrower,
               UIHNZ, UAP, SaskTel NZ and STHC and the Agent,

          were or will be discharged in full.

6.        LEGAL COSTS, DUTIES ETC.

          The Borrower  shall pay or reimburse the Agent for all stamp duty paid
          or payable in relation to this deed and for all  reasonable  costs and
          reasonable  expenses  (including legal costs as between  solicitor and
          client)  incurred by the Banks in  drawing,  settling,  executing  and
          stamping this deed.

7.        COMMITMENTS

7.1       Existing Banks

          The Commitment of each Existing Bank is reduced to the amount shown in
          Schedule  1 of the  Facility  Agreement  (as varied by this deed) with
          effect  on and from  the  Substitution  Date.  Each  Existing  Bank is
          released from its  obligations in relation to the Commitment  which it
          no longer  has with  effect on and from the  Substitution  Date.  Each
          Existing  Bank shall,  however,  remain bound by its  obligations  and
          responsibilities under the Transaction Documents which accrue prior to
          the Substitution Date.

7.2       New Banks

          Each New Bank  undertakes  to each  Existing  Bank,  the Agent and the
          Borrower  that it shall be bound by the  Facility  Agreement as a Bank
          with the Commitment shown in Schedule 1 of the Facility  Agreement (as
          varied by this deed) with effect on and from the Substitution Date.

7.3       Increased Total Commitments

          The parties  acknowledge  that the Total  Commitments are increased by
          this deed.

8.        ADVANCES

          (a)  As of the date of this deed, the Existing Banks have provided the
               following contributions to the Advances:

               TDA:                                 $39,000,000

               Paribas:                             $39,000,000
                                                    -----------

               TOTAL:                               $78,000,000

                                       6
<PAGE>


          (b)  As of the  Substitution  Date, the Banks (other than the Acceding
               Bank)  will be  taken to have  provided  and be  entitled  to the
               following participations in the Advances:

               TDA:                                 $20,280,000

               Paribas:                             $20,280,000

               Export Development Corporation:      $12,480,000

               Credit Lyonnais S.A.,
               Singapore Branch:                    $12,480,000

               The Development Bank of
               Singapore Ltd:                       $ 6,240,000

               The National Bank of
               New Zealand Limited:                 $ 6,240,000
                                                    -----------

               TOTAL:                               $78,000,000

9.        BANK ACCESSION

          (a)  The  Acceding  Bank agrees with each other party or person who is
               to become party to the Facility Agreement, to become, with effect
               from the  Accession  Date, a Bank under the  Facility  Agreement,
               agrees to be bound in that capacity with effect from such date by
               the terms of the Facility Agreement and undertakes accordingly to
               perform its obligations as a Bank thereunder.

          (b)  Each party agrees with the Acceding  Bank that,  with effect from
               the  Accession  Date,  the Acceding Bank will become a Bank under
               the  Facility  Agreement,  and have the  benefit of the  Facility
               Agreement and the Securities, as if it were a party originally to
               the Facility Agreement.

10.       EFFECT ON TRANSACTION DOCUMENTS

10.1      New Banks

          The parties agree that with effect on and from the Substitution Date:

          (a)  each  New  Bank,  each  Existing  Bank  and  each  party  to each
               Transaction Document will assume obligations and responsibilities
               towards each other, and will have rights,  remedies and powers in
               relation  to  each  other,  determined  on  the  basis  that  the
               respective  Commitment  of each New Bank and each  Existing  Bank
               will be that shown in Schedule 1 of the  Facility  Agreement  (as
               varied by this deed); and

          (b)  each New Bank will be deemed a party to each Transaction Document
               to which each Existing Bank is a party as a Bank.


                                       7
<PAGE>


10.2      Acceding Bank

          The parties agree that with effect on and from the Accession  Date the
          Acceding Bank will be deemed a party to each  Transaction  Document to
          which the Existing Banks are a party as a Bank.

11.       NO EFFECT ON ACCRUED RIGHTS AND OBLIGATIONS

          Save as  expressly  provided  herein,  this deed  shall not affect the
          Existing Banks' rights,  remedies and powers arising,  and obligations
          and responsibilities accrued, prior to the Substitution Date.

12.       LIQUEFYING BILLS

          Nothing contained in this deed releases, relieves or otherwise affects
          the  obligations  and  responsibilities  and the rights,  remedies and
          powers, of the Existing Banks in respect of Bills drawn under clause 9
          of  the  Facility  Agreement.  The  New  Banks  will  not  assume  any
          obligations or  responsibilities,  or acquire any rights,  remedies or
          powers, in respect of such Bills.

13.       PAYMENTS

13.1      Consideration

          The Banks  (other  than the  Acceding  Bank)  shall  agree  separately
          between themselves the amounts payable between them in relation to the
          substitutions  effected  by this  deed in  respect  of  principal  and
          accrued interest and fees.

13.2      Agent

          On and from the  Substitution  Date the Agent  will make all  payments
          received by it in respect of the amounts referred to in paragraph 8(b)
          to the Banks (other than the Acceding  Bank) in accordance  with their
          respective entitlements.

14.       INDEPENDENT ASSESSMENT

          The  Acceding  Bank and each New Bank  agrees that the  provisions  of
          clause 24.13 of the Facility  Agreement  binds it as if the  reference
          therein to this  "Agreement"  included  this deed and  (subject to any
          agreement to the contrary between the Banks) the reference  therein to
          the "Agent" included the Existing Banks.

15.       ACKNOWLEDGEMENTS

          (a)  The  Acceding  Bank and each  New Bank  acknowledges  that it has
               received a complete and current copy of each Transaction Document
               together  with such other  documents  and  information  as it has
               required in connection therewith.


                                       8
<PAGE>


          (b)  Each party  acknowledges  that the  substitutions  and  accession
               effected by this deed are effective under clause 29.4 and 29.5 of
               the Facility  Agreement,  respectively,  notwithstanding  that no
               Substitution  Certificates  or Bank Accession  Certificate in the
               forms set out in the  Schedules  to the Facility  Agreement  were
               entered into.

          (c)  Each party  acknowledges  that,  as of the  Accession  Date,  the
               Acceding  Bank  is  party  to the  Facility  Agreement  as a Bank
               pursuant to clause 29.5 of the Facility Agreement notwithstanding
               that it may only be a Swap Counterparty and has no Commitment and
               the provisions of the Facility  Agreement are to be construed and
               applied accordingly.

16.       MISCELLANEOUS

16.1      Governing law

          This deed is to be construed in  accordance  with the laws applying in
          New  Zealand  and  each  of  the   parties   hereto   submits  to  the
          non-exclusive  jurisdiction of the courts and appellate  courts of New
          Zealand.

16.2      Facility Agreement in full force

          (a)  Except as varied and supplemented  hereby, the Facility Agreement
               is declared to be in full force and effect.

          (b)  The  variation  of the terms of the Facility  Agreement  effected
               hereby  is  without  prejudice  to  any  other  deed,  agreement,
               instrument,  document or  arrangement  presently  in existence as
               between  the  Banks  and  the  Borrower,  the  Guarantor  and the
               Mortgagors,  or any of them  (including  but not  limited  to the
               Securities),  and the rights,  powers,  remedies and  discretions
               available  to the  Banks  thereunder  remain  in full  force  and
               effect.

16.3      Further assurances

          The Borrower, the Guarantor and each Mortgagor shall, on demand by the
          Agent, make,  execute,  do, perform and provide all such further acts,
          agreements,   assurances,  contracts,  deeds,  documents,  guarantees,
          indemnities,  instruments,  matters  and  things  as the  Agent  shall
          reasonably require to give full effect to this deed and the rights and
          obligations of the parties under it.

16.4      Counterparts

          This deed may be executed in any number of counterparts,  all of which
          taken together will be deemed to constitute one and the same document.

                                       9
<PAGE>

          SCHEDULE 1

                                    NEW BANKS

Name                                                    Address

Export Development Corporation                          151 O'Connor Street
                                                        Ottawa
                                                        Ontario K1A 1K3


Credit Lyonnais S.A., Singapore Branch                   3 Temasek Avenue
                                                         #11-01 Centennial Tower
                                                         Singapore   039190


The Development Bank of Singapore Ltd                    6 Shenton Way
                                                         DBS Building
                                                         Tower One
                                                         Singapore 068809

The National Bank of New Zealand Limited                 6th Floor, NBNZ House
                                                         1 Victoria Street
                                                         Wellington, New Zealand

                                       10

<PAGE>
<TABLE>
<CAPTION>

                               EXECUTED as a deed.

<S>                                                         <C>
SIGNED for and on behalf of SATURN COMMUNICATIONS       )
LIMITED, by                                             )   /s/ Vicki Lynne Potts
Vicki Lynn Potts                                        )   .........................................
in the presence of:                                     )   (Signature)

/s/ Mark Rigotti
 .....................................................
(Signature of Witness)

Mark Rigotti
 .....................................................
(Name of Witness in Full)

Martin Place, Sydney
 .....................................................
(Address of Witness)

Solicitor
 .....................................................
(Occupation of Witness)



SIGNED for and on behalf of KIWI CABLE COMPANY          )
LIMITED, by                                             )   /s/ Vicki Lynne Potts
Vicki Lynn Potts                                        )   .........................................
in the presence of:                                     )   (Signature)

/s/ Mark Rigotti
 .....................................................
(Signature of Witness)

Mark Rigotti
 .....................................................
(Name of Witness in Full)

Martin Place, Sydney
 .....................................................
(Address of Witness)

Solicitor
 .....................................................
(Occupation of Witness)


                                       11
<PAGE>

SIGNED for and on behalf of SATURN (NZ) HOLDING         )
COMPANY PTY LTD, ACN 088 052 000, by                    )
Anne Marks                                              )   /s/ Anne Marks
in the presence of:                                     )   .........................................
                                                        )   (Signature)


/s/ Mark Rigotti
 .....................................................
(Signature of Witness)

Mark Rigotti
 .....................................................
(Name of Witness in Full)

Martin Place, Sydney
 .....................................................
(Address of Witness)

Solicitor
 .....................................................
(Occupation of Witness)




SIGNED for and on behalf of SASKTEL HOLDING (NEW        )
ZEALAND) INC., by                                       )   /s/ D. B.
                                                        )   .........................................
in the presence of:                                     )   (Signature)
                                                            /s/ R. Stephanson
                                                            .........................................
 .....................................................
(Signature of Witness)


 .....................................................
(Name of Witness in Full)

 .....................................................
(Address of Witness)

 .....................................................
(Occupation of Witness)




                                       12
<PAGE>


SIGNED for and on behalf of TORONTO DOMINION            )
AUSTRALIA LIMITED by                                    )      /s/ Patrick St. John
Patrick St. John                                        )      .........................................
in the presence of:                                     )      (Signature)


/s/ Stuart Marks
 .....................................................
(Signature of Witness)

Stuart Marks
 .....................................................
(Name of Witness in Full)

O'Connell St., Sydney
 .....................................................
(Address of Witness)

Solicitor
 .....................................................
(Occupation of Witness)



SIGNED for and on behalf of PARIBAS by                  )
Patrick St. John                                        )      /s/ Patrick St. John
in the presence of:                                     )      .........................................
                                                        )      (Signature)

/s/ Stuart Marks
 .....................................................
(Signature of Witness)

Stuart Marks
 .....................................................
(Name of Witness in Full)

O'Connell St., Sydney
 .....................................................
(Address of Witness)

Solicitor
 .....................................................
(Occupation of Witness)



                                       13
<PAGE>


SIGNED  for  and  on  behalf  of  EXPORT  DEVELOPMENT   )
CORPORATION by                                          )      /s/ Michael J. Fortner
                                                        )      .........................................
in the presence of:                                     )      (Signature)
                                                               Michael J. Fortner
/s/ Howard Clysdale                                            Telecom Team
 .....................................................
(Signature of Witness)

Howard Clysdale
 .....................................................
(Name of Witness in Full)

151 O'Conner, Ottawa, Canada
 .....................................................
(Address of Witness)

Financial Services Manager
 .....................................................
(Occupation of Witness)



SIGNED for and on behalf of CREDIT LYONNAIS S.A.,       )      /s/ Patrick St. John
SINGAPORE BRANCH by                                     )      .........................................
Patrick St. John                                        )      (Signature)
                                                        )
in the presence of:                                     )

/s/Stuart Marks
 .....................................................
(Signature of Witness)

Stuart Marks
 .....................................................
(Name of Witness in Full)

O'Connell St., Sydney
 .....................................................
(Address of Witness)

Solicitor
 .....................................................
(Occupation of Witness)


                                       14
<PAGE>

SIGNED for and on behalf of THE DEVELOPMENT BANK OF     )
SINGAPORE LTD by                                        )      /s/ Patrick St. John
Patrick St. John                                        )      .........................................
in the presence of:                                     )      (Signature)
                                                        )

/s/ Stuart Marks
 .....................................................
(Signature of Witness)

Stuart Marks
 .....................................................
(Name of Witness in Full)

O'Connell St., Sydney
 .....................................................
(Address of Witness)

Solicitor
 .....................................................
(Occupation of Witness)




SIGNED for and on behalf of THE NATIONAL BANK OF        )
NEW ZEALAND LIMITED by                                  )      /s/ Patrick St. John
Patrick St. John                                        )      .........................................
and                                                     )      (Signature)
Andrew Tramair                                          )      /s/ Andrew Tramair
in the presence of:                                     )      .........................................
                                                        )      (Signature)

/s/ Stuart Marks
 .....................................................
(Signature of Witness)

Stuart Marks
 .....................................................
(Name of Witness in Full)

O'Connell St., Sydney
 .....................................................
(Address of Witness)

Solicitor
 .....................................................
(Occupation of Witness)

                                       15

<PAGE>


SIGNED for and on behalf of THE TORONTO-DOMINION        )      /s/ Patrick St. John
BANK by                                                 )      .........................................
Patrick St. John                                        )      (Signature)
in the presence of:                                     )

/s/ Stuart Marks
 .....................................................
(Signature of Witness)

Stuart Marks
 .....................................................
(Name of Witness in Full)

O'Connell St., Sydney
 .....................................................
(Address of Witness)

Solicitor
 .....................................................
(Occupation of Witness)
</TABLE>


                                       16
<PAGE>

               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I, Vicki Lynne Potts  (name) Chief  Financial  Officer  (occupation),  of 75 The
Esplanade, Wellington (address) New Zealand (country), certify that:

1.   by deed dated 14 July 1999, Kiwi Cable Company  Limited,  (the  "grantor"),
     appointed  me its attorney on the terms and subject to the  conditions  set
     out in the said deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Vicki Lynne Potts
 .............................
Attorney

<PAGE>

               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I, Vicki Lynne Potts  (name) Chief  Financial  Officer  (occupation),  of 75 The
Esplanade, Wellington (address) New Zealand (country), certify that:

1.   by deed dated 14 July 1999, Saturn Communications Limited, (the "grantor"),
     appointed  me its attorney on the terms and subject to the  conditions  set
     out in the said deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Vicki Lynne Potts
 .............................
Attorney

<PAGE>


               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I,  Anne  Marks  (name)  Lawyer  (occupation),  of Level 29 AAP  Centre,  Sydney
(address) Australia (country), certify that:

1.   by deed dated 12 July 1999,  Saturn (NZ)  Holding  Company  Pty Ltd.,  (the
     "grantor"),  appointed  me its  attorney  on the terms and  subject  to the
     conditions set out in the said deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Anne Marks
 .............................
Attorney

<PAGE>


               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I, Patrick St. John (name)  Solicitor  (occupation),  of 1 O'Connell St., Sydney
(address) Australia (country), certify that:

1.   by  deed  dated 8 July  1999,  Toronto  Dominion  Australia  Limited,  (the
     "grantor"),  appointed  me its  attorney  on the terms and  subject  to the
     conditions set out in the said deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Patrick St. John
 .............................
Attorney

<PAGE>



               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I, Patrick St. John (name)  Solicitor  (occupation),  of 1 O'Connell St., Sydney
(address) Australia (country), certify that:

1.   by deed dated 12 July 1999,  Paribas,  (the  "grantor"),  appointed  me its
     attorney  on the terms and  subject to the  conditions  set out in the said
     deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Patrick St. John
 .............................
Attorney

<PAGE>


               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I, Patrick St. John (name)  Solicitor  (occupation),  of 1 O'Connell St., Sydney
(address) Australia (country), certify that:

1.   by deed dated 8 July 1999,  The  Toronto-Dominion  Bank,  (the  "grantor"),
     appointed  me its attorney on the terms and subject to the  conditions  set
     out in the said deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Patrick St. John
 .............................
Attorney

<PAGE>


               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I, Patrick St. John (name)  Solicitor  (occupation),  of 1 O'Connell St., Sydney
(address) Australia (country), certify that:

1.   by deed dated 12 July 1999, The National Bank of New Zealand Limited,  (the
     "grantor"),  appointed  me its  attorney  on the terms and  subject  to the
     conditions set out in the said deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Patrick St. John
 .............................
Attorney

<PAGE>


               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I, Andrew  Tramair (name)  Solicitor  (occupation),  of 1 O'Connell St.,  Sydney
(address) Australia (country), certify that:

1.   by deed dated 12 July 1999, The National Bank of New Zealand Limited,  (the
     "grantor"),  appointed  me its  attorney  on the terms and  subject  to the
     conditions set out in the said deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Andrew Tramair
 .............................
Attorney

<PAGE>


               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I, Patrick St. John (name)  Solicitor  (occupation),  of 1 O'Connell St., Sydney
(address) Australia (country), certify that:

1.   by deed dated 13 July 1999, The Development Bank of Singapore Limited, (the
     "grantor"),  appointed  me its  attorney  on the terms and  subject  to the
     conditions set out in the said deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Patrick St. John
 .............................
Attorney

<PAGE>


               CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY

I, Patrick St. John (name)  Solicitor  (occupation),  of 1 O'Connell St., Sydney
(address) Australia (country), certify that:

1.   by deed dated 7 July 1999, Credit Lyonnais S.A., (the "grantor"), appointed
     me its attorney on the terms and subject to the  conditions  set out in the
     said deed;

2.   at the  date  of  this  certificate  I have  not  received  any  notice  or
     information of the revocation of that  appointment by the  commencement  of
     the  liquidation  of the  grantor,  the  removal  of the  grantor  from the
     register or otherwise; and

3.   I have  executed  the  attached  document  on behalf of the  grantor  in my
     capacity as its attorney under the powers conferred by the said deed.


SIGNED at Sydney this 15th day of July 1999.



/s/ Patrick St. John
 .............................
Attorney
<PAGE>


THIS IS THE  ANNEXURE "A" REFERRED TO IN THE  SUPPLEMENTAL  DEED BETWEEN  SATURN
COMMUNICATIONS  LIMITED, KIWI CABLE COMPANY LIMITED, SATURN (NZ) HOLDING COMPANY
PTY LTD, SASKTEL HOLDING (NEW ZEALAND) INC., PARIBAS, TORONTO DOMINION AUSTRALIA
LIMITED,  THE  TORONTO-DOMINION  BANK AND EACH PARTY  SPECIFIED AS A NEW BANK IN
SCHEDULE 1 THERETO DATED: 15 JULY 1999



                     Syndicated Senior Secured Debt Facility

                                    Agreement











                         First executed: 5 November 1998
                       Amended and restated: 15 July 1999



                          Saturn Communications Limited

                                    Borrower

                           Kiwi Cable Company Limited

                                    Guarantor


          Each Financial Institution specified as a Bank in Schedule 1

                                      Bank


                       Toronto Dominion Australia Limited

                                      Agent




<PAGE>


                                TABLE OF CONTENTS

Clause                                                                     Page


1.           DEFINITIONS AND INTERPRETATION                                  1


2.           THE FACILITY                                                   16


3.           CONDITIONS PRECEDENT                                           17


4.           UTILISATIONS                                                   19


5.           COMMITMENTS                                                    21


6.           REPAYMENT AND PREPAYMENTS                                      22


7.           INTEREST                                                       25


8.           INTEREST ON OVERDUE AMOUNTS                                    26


9.           BILL RELIQUIFICATION                                           26


10.          FEES                                                           27


11.          PAYMENTS                                                       28


12.          TAXES                                                          31


13.          ILLEGALITY                                                     33


14.          INCREASED COST                                                 33


15.          MITIGATION                                                     34


16.          REPRESENTATIONS AND WARRANTIES                                 35


17.          UNDERTAKINGS                                                   39


18.          FINANCIAL AND OPERATING RATIOS                                 52


19.          DEFAULT AND TERMINATION                                        54


20.          GUARANTEE AND INDEMNITY                                        57


21.          ADDITIONAL GUARANTORS AND SECURITY                             63


22.          RELEASE OF GUARANTORS AND SECURITY                             65


23.          INDEMNITY                                                      66


24.          AGENT                                                          66


25.          HEDGING ARRANGEMENTS                                           72


26.          SET-OFF                                                        73

<PAGE>

Clause                                                                     Page


27.          PRO RATA SHARING                                               73


28.          EXPENSES AND STAMP DUTIES                                      74


29.          ASSIGNMENTS AND CONFIDENTIALITY                                75


30.          GOVERNING LAW AND JURISDICTION                                 78


31.          MISCELLANEOUS                                                  79


32.          NO REPRESENTATION BY OR RELIANCE ON THE BANK OR AGENT          82

<PAGE>
FACILITY AGREEMENT made at Sydney on 5 November 1998

BETWEEN             SATURN  COMMUNICATIONS  LIMITED,  NZ Co. No. WN/435672 of 75
                    The  Esplanade,   Petone,   Wellington,   New  Zealand  (the
                    "Borrower")

AND                 KIWI CABLE COMPANY  LIMITED,  NZ Co. No. WN/647464 of 75 The
                    Esplanade,  Petone,  Wellington,  New Zealand (the "Original
                    Guarantor")

AND                 EACH FINANCIAL INSTITUTION SPECIFIED AS A BANK in Schedule 1
                    (each a "Bank")

AND                 TORONTO DOMINION AUSTRALIA LIMITED, ACN 004 858 020 of Level
                    36, 385 Bourke Street, Melbourne,  Victoria as agent for the
                    Banks (in this capacity the "Agent")

RECITALS

At the request of the Borrower  the Banks have  agreed,  subject to the terms of
this Agreement, to provide the facility described herein to the Borrower.

THE PARTIES AGREE:

1.        DEFINITIONS AND INTERPRETATION

1.1       Definitions

          In this Agreement:

          "Accession Agreement" means an agreement  substantially in the form of
          Schedule 5 made pursuant to clause 21.1.

          "Accounts" means from time to time:

          (a)  the latest audited  consolidated  annual accounts of the Borrower
               and each Guarantor;

          (b)  the  latest  unaudited  consolidated  Quarterly  accounts  of the
               Borrower and each Guarantor;

          (c)  the latest unaudited  consolidated monthly management accounts of
               the Group; and

          (d)  any other  audited or unaudited  consolidated  or  unconsolidated
               accounts (if any) of the Group or any member thereof,

          delivered or required to be  delivered  to the Agent  pursuant to this
          Agreement, or such of those accounts as the context requires.

          "Additional  Guarantor"  means any entity which becomes a party hereto
          as a Guarantor pursuant to an Accession Agreement.
<PAGE>

          "Advance"  means the  principal  amount of each  borrowing  under this
          Agreement or the principal  amount of such borrowing  outstanding from
          time to time, as the context requires.

          "Adverse  Title  Retention  Arrangement"  means  any  title  retention
          arrangement  entered  into  with any  person  in  connection  with the
          acquisition  of goods in the  course  of  business  on terms  that the
          vendor's  title is or may be  retained  in respect of any goods  which
          have been paid for in full.

          "Amortisation  Schedule"  means the  schedule  of dates  and  payments
          calculated by the Agent in accordance with clause 6.1.

          "Annualised  EBITDA" on any date  means the  EBITDA  for the  previous
          Quarter multiplied by 4.

          "Approved  Issuer  Levy"  means in relation to any payment of interest
          (as  defined in section  86F of the Stamp and Cheque  Duties Act 1971)
          under  or in  respect  of this  Agreement,  the  levy  payable  by the
          Borrower in accordance with section 86J of the Stamp and Cheque Duties
          Act 1971 to enable the  payment of such  interest  to be made to a New
          Zealand Non-Resident for tax purposes with a deduction for New Zealand
          non resident withholding tax (as defined in Section 0B1) of the Income
          Tax Act 1994 at the rate of zero per cent,  pursuant to Section NG2(1)
          of the Income Tax Act 1994.

          "AUC" means AUSTAR United Communications Limited, ACN 087 695 707.

          "Authorisation"  includes any kind of authorisation,  permit, consent,
          approval,  resolution,  licence,  exemption,  permission,   recording,
          filing or registration required by any Government Agency or any law or
          regulation.

          "Availability Period" means the period from the date of this Agreement
          to close of business in  Wellington  on 31 December 2000 or such later
          date as all the  Banks  may  agree in  writing  on or  after  the date
          hereof.

          "Bank" means each of the following:

          (a)  each bank or other financial institution whose name is set out in
               Schedule 1;

          (b)  each bank or other  financial  institution to which rights and/or
               obligations  under this  Agreement  are  assigned or  transferred
               pursuant to clause 29;

          (c)  each bank or other  financial  institution  which executes a Bank
               Accession Certificate;

          (d)  each bank or other financial  institution  which the Borrower and
               the Agent  (acting on the  instructions  of the Banks) agree is a
               Bank for the purposes of this Agreement; and

          (e)  any successor or successors in title to any of the foregoing,

                                       2
<PAGE>

          provided that upon (i)  termination in full of all the  Commitments of
          any Bank,  and (ii)  irrevocable  payment in full of all amounts which
          may be or become payable to such Bank under the Transaction Documents,
          such Bank shall not be  regarded  as being a Bank for the  purposes of
          determining whether any provision of any of the Transaction  Documents
          requiring   consultation  with  or  the  consent  or  approval  of  or
          instructions  from the Banks or the Majority  Banks has been  complied
          with (together the "Banks").

          "Bank Accession Certificate" means a certificate  substantially in the
          form of Schedule 10  completed  and entered  into in  accordance  with
          clause 29.5.

          "Banking Day" means a day on which trading banks are open for business
          generally in Sydney, Melbourne, Wellington, New York and Singapore.

          "Bill"  means a bill of  exchange  within  the  meaning  given  to the
          expression "bill of exchange" in the Bills of Exchange Act 1908 of New
          Zealand,  but does not  include a cheque  or  payment  order,  and any
          reference to the drawing, acceptance,  indorsement or other dealing of
          or with a Bill refers to a drawing,  acceptance,  indorsement or other
          dealing within the meaning of that Act.

          "Bill  Rate"  in  relation  to each  Interest  Period  means  the rate
          (expressed as a percentage  per annum) which is the average of the bid
          rates shown at  approximately  11.00 am Wellington time on page "BKBM"
          on the Reuters Screen (or its successor page) on the first day of that
          Interest Period for a term approximately equal to the duration of that
          Interest  Period (or if that  Interest  Period is subject to  marginal
          adjustment,  for a term equal to the duration of the  Interest  Period
          prior to such  adjustment)  provided  that if such  rate is no  longer
          available   or,  in  the  opinion  of  the  Agent  such  rate  becomes
          inappropriate, unfair or incapable of application, the Bill Rate shall
          mean the rate reasonably determined by the Agent to be the appropriate
          equivalent rate having regard to prevailing market conditions.

          "Business"  means the investment in and provision of voice,  video and
          data  services  over  the  Cable  Network  and  includes  any  related
          activities.

          "Business  Plan" means the  financial  model  prepared by the Borrower
          dated  October  1998 and  entitled  "Saturn  Communications  Limited -
          CATV/Telephony  Business  Plan", or any revised version of such model,
          agreed by the Agent acting on instructions  from the Majority Banks to
          be the Business Plan for the purposes of the Facility.

          "Cable   Network"   means  the  Borrower's   full-service,   broadband
          communications   network  in  the   greater   metropolitan   areas  of
          Wellington.

          "Commitment"  in  relation  to a Bank means the amount  appearing  and
          designated  as such  against  that Bank's name in Schedule 1 or in the
          Substitution Certificate, Bank Accession Certificate or other document
          by which it became a party to or acquired  rights under this Agreement
          as reduced or increased by substitution or transfer pursuant to clause
          29 and any Substitution  Certificates to which such Bank is party, and
          to  the  extent  not  cancelled,  reduced  or  terminated  under  this
          Agreement   (collectively   the  "Total   Commitments").

                                       3
<PAGE>


          "Compliance Certificate" means a certificate in the form of Schedule 8
          signed by two directors of the Borrower or one director and an Officer
          of the Borrower and, when given at the end of the financial year, will
          be based on audited Accounts.

          "Computer  System"  means  any date  sensitive  computer  hardware  or
          software on any date sensitive equipment operated by electronic means.

          "Dollar"  or "$" means the lawful  currency  for the time being of New
          Zealand.

          "DSC" means DSC Finance Corporation,  a company incorporated in Texas,
          United States of America.

          "EBITDA" for any period means on a consolidated basis net profit after
          tax:

          (a)  plus   depreciation,    amortisation    (including    programming
               amortisation),  other  non-cash  charges and income taxes accrued
               for such period;

          (b)  plus Interest Expense less interest revenue; and

          (c)  minus (net)  extraordinary  abnormal and non recurring gains, and
               gains or losses  from the sale of assets to the extent such items
               are included in operating expenses.

          For the  avoidance  of doubt,  any  amounts  paid under the  Technical
          Assistance Agreements shall be treated as an expense.

          "Encumbrance" means any mortgage,  charge, pledge, lien,  encumbrance,
          security interest, title retention, preferential right, security trust
          arrangement,  contractual  right  of  set-off  or any  other  security
          agreement or arrangement in favour of any person.

          "Environmental Law" means any law relating to the environment, land or
          water  use,  noise,  smell,  pollution  or  contamination,   toxic  or
          hazardous  substances,  waste  disposal  or  conservation  (including,
          without  limitation),  the  Resource  Management  Act  1991,  and  any
          consent, audit or notice under any such law.

          "Equivalent  Billing  Units" for any period  means the amount of total
          Recurring Revenue divided by the greater of:

          (a)  the average Recurring Revenue per residential Subscriber; and

          (b)  $30.00 per calendar month,

          in that period.

          "Event of  Default"  means any of the events set out or referred to in
          clause 19 as an Event of Default.

                                       4
<PAGE>

          "Event of Insolvency" means:

          (a)  a receiver, manager, trustee, administrator or similar officer is
               appointed in respect of an Obligor or any asset of an Obligor;

          (b)  a liquidator or provisional liquidator is appointed in respect of
               any Obligor;

          (c)  any application (not being an application  withdrawn or dismissed
               within  7 days  or an  application  which  the  Agent  agrees  is
               frivolous or vexatious  and will be dismissed) is made to a court
               for an order, or an order is made, or a meeting is convened, or a
               resolution is passed, for the purpose of:

               (i)   appointing a person referred to in  paragraphs  (a) or (b);

              (ii)   winding up or dissolving an Obligor; or

             (iii)   proposing  or  implementing  a  scheme  of  arrangement  in
                     respect of an Obligor;

          (d)  a moratorium of any debts of an Obligor or an official assignment
               or a composition or an  arrangement  (formal or informal) with an
               Obligor's  creditors or any similar  proceeding or arrangement by
               which the assets of an Obligor  are  subjected  conditionally  or
               unconditionally  to the  control  of an  Obligor's  creditors  is
               ordered,  declared  or  agreed  to,  or is  applied  for  and the
               application is not withdrawn or dismissed within 7 days;

          (e)  an  Obligor  becomes,  or  admits  in  writing  that it is, or is
               declared  to  be,  is  deemed  under  any  applicable  law to be,
               insolvent or unable to pay its debts;

          (f)  any writ of  execution,  garnishee  order,  mareva  injunction or
               similar order,  attachment,  distress or other similar process is
               made,  levied or issued against or in relation to any asset of an
               Obligor in respect of a claim greater than $100,000;

          (g)  a  statutory   manager  is  appointed   under  the   Corporations
               (Investigation and Management) Act 1989 in respect of an Obligor,
               or any associated person (as that term is defined in that Act) or
               an Obligor is declared at risk pursuant to the provisions of that
               Act.

          "Excess Cash Flow" for any period  means all cash inflows  during that
          period of the Group from whatever  source (not including cash proceeds
          from new equity and  Subordinated  Debt issues) less all cash outflows
          during that period of the Group (including changes in working capital,
          capital  expenditure  and debt  amortisation  in  accordance  with the
          Amortisation  Schedule but  excluding  any payments  made  pursuant to
          clause 6.4 and 17.6),  determined on a consolidated basis and based on
          Quarterly accounts.

          "Excluded  Taxes" means any Taxes imposed by any  jurisdiction  on the
          overall net income of a Bank but not Taxes:

          (a)  which are  calculated  on or by  reference to the gross amount of
               any payments  (without the  allowance of any  deduction)  derived
               under this  Agreement  or any  Transaction  Document or any other
               document referred to in this Agreement or a Transaction  Document
               by the Bank;  or

                                       5
<PAGE>

          (b)  which are  imposed  as a result of the Bank  being  considered  a
               resident of or organised or doing  business in that  jurisdiction
               solely  as a result  of it being a party to this  Agreement  or a
               Transaction  Document  or any  transaction  contemplated  by this
               Agreement or a Transaction Document.

          "Facility"  means the  amortising  term loan  facility  referred to in
          clause 2.1.

          "Financial  Liability"  means present or future,  actual or contingent
          indebtedness in respect of financial accommodation,  credit or hedging
          arrangements,  finance  leases or hire  purchase  arrangements  or any
          guarantee or other assurance in respect of any such indebtedness.

          "financial year" means a calendar year ending on 31 December.

          "Foreign  Currency"  means  the  currency  for the  time  being of any
          country other than New Zealand.

          "Freehold Mortgage" means the registrable mortgage of the whole of the
          estate in fee simple described in Certificate of Title No. 53B-414.

          "Government  Agency"  means  any  government  (or  minister  thereof),
          semi-government  authority or department and any agency,  authority or
          central bank.

          "Group" means the Borrower, and each Subsidiary of the Borrower.

          "Guarantor" means the Original Guarantor and each Additional Guarantor
          (together the "Guarantors").

          "Hedging  Agreements"  means any  interest  rate or  currency  hedging
          agreement entered into between the Borrower and a Bank.

          "Hedging Liabilities" means all present and future liabilities (actual
          or  contingent)   payable  or  owing  by  the  Borrower  to  the  Swap
          Counterparties  or any of them under or in connection with the Hedging
          Agreements,  whether or not  matured  and  whether or not  liquidated,
          together in each case with:

          (a)  any novation,  deferral or extension of any of those  liabilities
               permitted by the terms of this Agreement;

          (b)  any claim for damages or restitution arising out of, by reference
               to or in connection with any of the Hedging Agreements;

          (c)  any claim flowing from any recovery by the Borrower or a receiver
               or  liquidator  thereof  or any  other  person  of a  payment  or
               discharge in respect of any of those  liabilities  on the grounds
               of any Insolvency Provision or otherwise; and

          (d)  any amounts  (such as  post-insolvency  interest)  which would be
               included   in  any  of  the   above   but  for   any   discharge,
               non-provability, unenforceability or non-allowability of the same
               as a result  of any  Insolvency  Provision.

                                       6
<PAGE>


          "Homes  Serviceable"  means  homes and  businesses  which are  located
          sufficiently  close to  built  and  activated  segments  of the  Cable
          Network  and  which  require  only a  standard  installation  for  the
          provision of cable and telephony  services (in circumstances  where it
          would  be   economically   viable  for  the   Borrower  to  make  such
          installations).

          "Information  Memorandum"  means the  memorandum to be prepared by the
          Agent on the basis of  information  supplied by the Obligors to assist
          the Agent in  obtaining  persons  to provide  financial  accommodation
          pursuant to the Facility and  containing  information,  financial  and
          otherwise, regarding Obligors.

          "Insolvency   Provision"   means  any  law  relating  to   insolvency,
          sequestration,  liquidation or bankruptcy  (including any law relating
          to  the  avoidance  of   conveyances  in  fraud  of  creditors  or  of
          preferences  and any  law  under  which a  liquidator  or  trustee  in
          bankruptcy may set aside or avoid  transactions)  and any provision of
          any agreement,  arrangement or scheme, formal or informal, relating to
          the administration of any of the assets of any person.

          "Insurable  Property" means any part of the Security Property which is
          of an insurable  nature  excluding  the Cable  Network  outside of any
          buildings housing the technical operations facilities of the Borrower.

          "Insurances"  means  the  insurances  required  to  be  taken  out  or
          maintained  by the  Borrower  and the  Guarantors  to comply  with the
          provisions of this Agreement.

          "Intended  Obligations"  means any  payment or other act the making or
          doing of which  would have formed  part of the  Obligations  but for a
          circumstance referred to in clause 20.7(c).

          "Interconnection  Agreement"  means the  agreement  so called  between
          Telecom New Zealand Limited and the Borrower dated 20 June 1997.

          "Interest Expense" means all Senior Debt interest and financing costs,
          whether  paid  as  cash  or  accrued  as a  liability  on all  direct,
          contingent  (including  imputed  interest on capital  equipment  lease
          obligations),   and  other   permitted   indebtedness  of  the  Group,
          determined on a consolidated basis.

          "Interest  Period" means each period  determined  in  accordance  with
          clause 7.1.

          "Licence"  means each licence,  certificate,  document,  registration,
          permission, privilege, permit, authority or consent which is issued or
          held in connection  with or which is necessary in connection  with the
          business or premises of an Obligor including,  without limitation, any
          variation or renewal of any of the foregoing.

          "Majority Banks" means at any time:

          (a)  whilst no Advance is  outstanding,  a Bank or Banks the aggregate
               of whose Commitments at the relevant time represent by value more
               than 66.6% of the Total Commitments at such time; or

                                       7
<PAGE>

          (b)  if an Advance is then outstanding,  a Bank or Banks the aggregate
               of whose  participation in the Advances  outstanding at such time
               represent  by value more than 66.6% of the  aggregate  of all the
               Advances.

          "Material  Adverse Effect" means any effect which is, or is reasonably
          likely:

          (a)  to be materially adverse to:

               (i)  the   ability  of  an  Obligor  to  perform   its   material
                    obligations under any of the Transaction  Documents to which
                    it is a party; or

               (ii) the business, assets, financial condition of the Borrower, a
                    Guarantor or the Group taken as a whole; and/or

          (b)  (where the context so admits) to result in any of the Transaction
               Documents not being legal,  valid and binding on, and enforceable
               in  accordance  with its terms  against,  any party (other than a
               Bank or the Agent) to that  Transaction  Document  and/or (in the
               case of any of the  Securities)  not  providing  to the Agent for
               itself  and  on  behalf  of  the  Banks,  perfected,  enforceable
               security over the assets to be covered by that Security.

          "Material Contract" means

          (a)  Pole and Cabling Duct Agreement  between the Borrower and Capital
               Power Limited dated 22 September 1995;

          (b)  Pole and Cabling Duct  Agreement  between the Borrower and Energy
               Direct Corporation Limited dated 28 July 1995;

          (c)  Pay-Per-View Term Sheet between the Borrower and Warner Bros.;

          (d)  Pay-Per-View License Agreement between the Borrower and Universal
               Studios International B.V. dated 8 April 1997;

          (e)  Construction  Contract  between the  Borrower,  Australian  Power
               Industries  Pty.  Limited and Australian  Power  Industries  (NZ)
               Limited dated 12 June 1998;

          (f)  Subscription and Investment  Agreement  between SaskTel NZ, STHC,
               UIHNZ, UAP and the Borrower dated 21 July 1997;

          (g)  Shareholders Agreement between UIHNZ, SaskTel NZ and the Borrower
               dated 23 July 1997;

          (h)  each Technical Assistance Agreement;

          (i)  Interconnection Agreement;

          (j)  Register  Agreement  between  Telecom New Zealand Limited and the
               Borrower dated 20 June 1997;

                                       8
<PAGE>

          (k)  Agreement for the Provision of Number Portability between Telecom
               New Zealand Limited and the Borrower dated 27 March 1998;

          (l)  Operations Centre Lease; and

          (m)  each other  contract  entered into by a member of the Group after
               the date of this Agreement which is of similar  importance to the
               net cash flow or  operation  of the  business of the Group as the
               contracts  listed in paragraphs (a) to (l) of this definition and
               which the  Agent  (acting  on the  instructions  of the  Majority
               Banks)  designates  to be a  Material  Contract  by notice to the
               Borrower.

          "Maximum  Monthly  Utilisation"  means the maximum amount the Borrower
          may utilise in any calendar  month during the period  listed in clause
          4.2(b).

          "Maximum Utilisation Amount" means the maximum amount the Borrower may
          utilise as determined in accordance with clause 4.2.

          "Net  Proceeds"  means the  consideration  received  by any  member or
          members of the Group in respect of the disposal to a person not in the
          Group  of any  member  of the  Group  or of  all  or any  part  of the
          business,  undertaking or assets of any member of the Group (including
          the amount of any  intercompany  debt repaid to continuing  members of
          the Group as a consequence of such  disposal),  after deduction of all
          Taxes  applicable on, or to any gain resulting  from, the disposal and
          of all reasonable costs, fees, expenses and the like properly incurred
          by continuing  members of the Group in arranging  and  effecting  that
          disposal.

          "New Zealand  Non-Resident"  means any person (as that term is defined
          in section  OB1 of the Income  Tax Act 1994) who is not  resident  (as
          that term is  defined  in  section  OE1 and OE2 of the  Income Tax Act
          1994) in New  Zealand  and/or not  engaged in  business in New Zealand
          through a fixed establishment of New Zealand.

          "Nortel" means Nortel New Zealand Limited,  a company  incorporated in
          Wellington.

          "Nortel/DSC Debt" means:

          (a)  the loan made by Nortel to the  Borrower  pursuant  to a facility
               agreement dated 29 April 1998; and

          (b)  the loan by DSC to the Borrower pursuant to a facility  agreement
               dated 6 March 1998.

          "Nortel/DSC Security" means:

          (a)  the fixed charge over equipment granted by the Borrower in favour
               of Nortel pursuant to an instrument dated 29 April 1998;

          (b)  the fixed charge over equipment granted by the Borrower in favour
               of DSC pursuant to an instrument dated 13 July 1997; and

                                       9
<PAGE>


          (c)  any  other  security  granted  in  favour of Nortel or DSC by the
               Borrower.

          "Obligations"  means  all  the  liabilities  of  the  Borrower  or any
          Guarantor  to the  Agent  and the  Banks  under  or by  reason  of any
          Transaction  Document  and,  without  limiting the  generality  of the
          foregoing, includes any liabilities which:

          (a)  are liquidated or unliquidated;

          (b)  are present, prospective or contingent;

          (c)  are in existenced before or come into existence upon or after the
               date of this document;

          (d)  relate to the payment of money or the  performance or omission of
               any act;

          (e)  sound in damages only; or

          (f)  accrue as a result of an Event of Default,

          and irrespective of:

              (i)   whether the  Borrower  or any  other  Obligor  is liable or
                    obligated  solely,  or jointly and  severally  with  another
                    person;
              (ii)  the  circumstances  in which the Banks  come to be owed each
                    liability  or  obligation  and in which  each  liability  or
                    obligation  came to be secured by this document,  including,
                    without  limitation  any  assignment  of  any  liability  or
                    obligation or of this document; or
             (iii)  the capacity in which the  Borrower,  any other  Obligor and
                    the  Banks  come  to owe or to be  owed  such  liability  or
                    obligation.

          "Obligor" means a several  reference to the Borrower,  each Guarantor,
          any other  member of the Group  which has been  required to enter into
          (whether  or not it has yet  entered  into)  any  Accession  Agreement
          and/or  Security  and,  when used in clause 20,  also means any person
          from whom a Guarantor, but for any provision of this Agreement,  would
          be entitled to seek  contribution  in respect of money paid or payable
          by virtue of the guarantee contained herein (together the "Obligors").

          "Officer" means chief  executive  officer,  chief  financial  officer,
          company secretary or general legal counsel.

          "Operating  Expense"  means  expenses  of the  Group  incurred  in the
          operation of the business of the Group,  determined in accordance with
          generally accepted accounting principles.

          "Original Securities" means:

          (a)  Deed of Fixed and Floating Charge in favour of the Agent over the
               whole of the  assets and  undertakings  of the  Borrower  and the
               Original  Guarantor,   dated  on  or  around  the  date  of  this
               Agreement;

                                       10
<PAGE>


          (b)  the Freehold Mortgage; and

          (c)  the Share Mortgage.

          "Potential Event of Default" means any event which, with the giving of
          notice,   lapse  of  time,   satisfaction   of  a  condition   or  any
          determination would be likely to constitute an Event of Default.

          "Prescribed  Rate" for each Interest Period means the aggregate of the
          Bill Rate in relation thereto and the Utilisation Margin.

          "Proportion" means the amount of a Bank's  participation in an Advance
          in the  proportion  (applied to the  requested  amount of the Advance)
          which its Commitment bears to the amount of the Total Commitments.

          "Quarter"  means the period  commencing on the date of this  Agreement
          and ending on 30 September 1998,  each  succeeding  period of 3 months
          ending 31 December,  31 March, 30 June and 30 September and the broken
          period  ending  on the  date  when  this  Agreement  terminates  which
          commenced on the day immediately  following the last preceding Quarter
          day.

          "Ratios"  means the financial and operating  ratios listed in Schedule
          2.

          "Recurring  Revenue"  means all  Revenue  other  than  connection  and
          installation fees.

          "Related  Company"  has  the  meaning  given  in  section  2(3) of the
          Companies Act 1993.

          "Repayment Date" means each repayment date specified in clause 6.1.

          "Revenue"  means all revenue of the  Borrower  other than  abnormal or
          extraordinary revenue.

          "SaskTel NZ" means SaskTel  Holding (New Zealand) Inc., a Saskatchewan
          corporation.

          "Securities"  means the Original  Securities  together  with any other
          security  held by the  Agent as agent of the Banks at any time for the
          due  performance,  observance and fulfilment of the  Obligations,  and
          "Security" means each or any one of them as the context requires.

          "Security Property" means any property subject to a Security.

          "Senior Debt" means all direct and  contingent  borrowings  (excluding
          non-financial  corporate  guarantees)  of  the  Group  which  are  not
          subordinated.

          "Share Mortgage" means:

          (a)  the non recourse  Deed of Mortgage in favour of the Agent dated 5
               November  1998  granted  by  SaskTel  NZ in  respect of its share
               capital in the  Borrower  and any loans made by SaskTel NZ to any
               member of the Group; and

                                       11
<PAGE>

          (b)  the non recourse Deed of Mortgage in favour of the Agent dated 11
               June 1999  granted by S(NZ)HC in respect of its share  capital in
               the  Borrower  and any loans made by S(NZ)HC to any member of the
               Group.

          "Share Transfer Date" means the date on which SaskTel NZ transfers its
          shareholding in the Borrower to AUC with the consent of the Agent.

          "S(NZ)HC" means Saturn (NZ) Holding Company Pty Ltd, ACN 088 052 000.

          "Specified Rate" means the aggregate of the Prescribed Rate and 2% per
          annum.

          "STHC" means Saskatchewan  Telecommunications  Holding Corporation,  a
          statutory corporation formed under the laws of Saskatchewan.

          "Subordinated  Debt"  means any  indebtedness  the payment of which is
          subordinated to the Senior Debt.

          "Subscriber"  means a customer  connected to the Cable  Network  whose
          account is current and who has either:

          (a)  a telephone line rental; or

          (b)  a cable rental,

          and  where a  customer  has both (a) and (b),  such  customer  will be
          treated as 2 Subscribers.

          "Subsidiary" in relation to any person, means:

          (a)  a subsidiary,  as defined in section 5 of the Companies Act 1993;
               or

          (b)  an  "in-substance  subsidiary",  in accordance  with any approved
               financial reporting standard,

          of that person.

          "Substitution  Certificate"  means a certificate  substantially in the
          form of  Schedule 6  completed  and entered  into in  accordance  with
          clause 29.4,  and  references to  "substitutes"  shall be construed as
          references to persons  becoming  party to this  Agreement  pursuant to
          Substitution Certificates.

          "Swap  Counterparty"  means  any  Bank  who is a  party  to a  Hedging
          Agreement.

          "Tax" and  "Taxes"  mean all income tax,  stamp duty and other  taxes,
          levies,  imposts,  deductions,  charges and withholdings plus interest
          thereon and penalties, if any, and charges, fees or other amounts made
          on  or  in  respect   thereof  and   "Taxation"   shall  be  construed
          accordingly.

                                       12

<PAGE>

          "Technical Assistance Agreement" means:

          (a)  the Technical  Assistance  Agreement between the Borrower and UAP
               (as  successor  in  interest  to  UIHI)  dated  8 July  1994  (as
               amended);

          (b)  the  Technical  Assistance  Agreement  between the  Borrower  and
               SaskTel NZ dated 23 July 1997; or

          (c)  any  agreement  entered  into  in  replacement  of  any  document
               referred to in paragraphs (a) or (b).

          together the "Technical Assistance Agreements".

          "Termination Date" means the earlier of:

          (a)  30  September  2006,  or such  other date as is agreed in writing
               between the Agent (acting on the  instructions  of all Banks) and
               the Borrower; and

          (b)  such  earlier  date  on  which  the  Facility  is  terminated  or
               cancelled in accordance with this Agreement.

          "Total  Debt"  means  the  sum of all  financial  indebtedness  of the
          Borrower (other than subordinated loans approved by the Banks).

          "Total Debt/EBITDA" on any date means the amount of Total Debt divided
          by the Annualised EBITDA for the last Quarter.

          "Transaction Document" means:

          (a)  this  Agreement  (together with each  Accession  Agreement,  Bank
               Accession Certificate and Substitution Certificate);

          (b)  each Hedging Agreement;

          (c)  each Security; and

          (d)  each other  document  to which any  Obligor (on the one hand) and
               the Agent or a Bank (on the other  hand) are  parties at any time
               that:

               (i)  relates to any money that is declared by that document to be
                    part of the Obligations; or
              (ii)  is  expressed to be, or is agreed by the said parties to be,
                    a Transaction Document for the purposes hereof; and

          (e)  any  other  document  which  is,  or  which is  expressed  to be,
               collateral or  supplemental  to any other document that is then a
               Transaction Document.

          "UAP"  means  UIH   Asia/Pacific   Communications   Inc.,  a  Delaware
          corporation.

          "UIHI"  means   United   International   Holdings   Inc.,  a  Delaware
          corporation.

                                       13
<PAGE>


          "UIHNZ" means UIH New Zealand Holdings, Inc., a Colorado corporation.

          "Underwriters" means Toronto Dominion Australia Limited and Paribas.

          "Underwriting Letter" means the letter agreement dated on or about the
          date  of  this  Agreement   between  the  Borrower  and  each  of  the
          Underwriters  in relation  to,  among other  things,  the fees payable
          under clauses 10.2 and 10.3 and the Commitments.

          "Utilisation"   means  a  utilisation  under  this  Agreement  of  the
          Facility.

          "Utilisation  Date"  means  the date on which an  Advance  is made or,
          where the context requires, is proposed to be made.

          "Utilisation  Margin"  means the  percentage  per annum  determined in
          accordance with clause 10.4.

          "Utilisation Notice" means a notice given under clause 4 in respect of
          an Advance.

          "Warner   Bros."   means   Warner   Bros.   International   Television
          Distribution, a division of Time Warner Entertainment Company, L.P.

          "Year 2000 Compliant" means, in relation to any Computer System,  that
          any  reference to or use of electronic  date data which  specifies the
          year but does not specify the century,  for dates before,  on or after
          31 December 1999, in the operation of that Computer System,  will not,
          in the  Borrower's  reasonable  assessment,  have a  material  adverse
          effect on the use of that Computer System.

1.2       Interpretation

          In this Agreement unless the context indicates a contrary intention:

          (a)  the expression "person" includes an individual,  the estate of an
               individual,  a body  politic,  a  corporation  and a statutory or
               other authority or association (incorporated or unincorporated);

          (b)  a  reference  to  any  party  includes  that  party's  executors,
               administrators,  successors,  substitutes and assigns,  including
               any person taking by way of novation and in the case of the Agent
               includes any substituted or additional agent or trustee;

          (c)  a reference to any Transaction  Document however  described or to
               any other  document  includes the  Transaction  Document or other
               document as amended,  novated,  supplemented,  varied or replaced
               from time to time;

          (d)  a reference  to any  legislation  or to any section or  provision
               thereof  includes any statutory  modification  or re-enactment or
               any statutory provision  substituted therefor and all ordinances,
               by-laws,  regulations  and  other  statutory  instruments  issued
               thereunder;

                                       14
<PAGE>

          (e)  words importing the singular  include the plural (and vice versa)
               and words denoting a given gender include all other genders;

          (f)  headings   are   for   convenience   only   and  do  not   affect
               interpretation;

          (g)  a reference to a clause or schedule is a reference to a clause or
               schedule of this Agreement;

          (h)  where any word or phrase  is given a  defined  meaning  any other
               part of speech or other  grammatical form in respect of such word
               or phrase has a corresponding meaning;

          (i)  where  the day on or by  which  any sum is  payable  or any  act,
               matter or thing is to be done is a day other than a Banking  Day,
               that sum will be paid and such act,  matter or thing will be done
               on the immediately preceding Banking Day;

          (j)  all  accounting  terms used have the meaning given to those terms
               under accounting  principles and practices  generally accepted in
               New Zealand from time to time;

          (k)  representations,    warranties,   covenants,   undertakings   and
               agreements made or given in favour of the Agent in their capacity
               as Agent enure for the benefit of and, subject to the Transaction
               Documents,  be  capable of  enforcement  by the Banks and each of
               them; and

          (l)  a reference to a law includes a New Zealand or applicable foreign
               law,  regulation,  rule, directive or policy of any government or
               regulatory authority whether or not having the force of law.

1.3       Joint and several liability

          The obligations of the Guarantors  under this Agreement will bind each
          of them  severally  and every 2 or more of them jointly and unless the
          context indicates a contrary  intention,  the expression  "Guarantors"
          will be deemed to include  any person  who has  guaranteed,  or in the
          future  guarantees to the Agent and the Banks the due  performance  of
          the whole or any part of Obligations.

1.4       Guarantor at date of Agreement

          The parties  acknowledge that there is one Guarantor (being Kiwi Cable
          Company Limited) at the date of this Agreement.

1.5       Voting

          Any Bank, by written notice to the Agent, may notionally divide any or
          all of its  Commitment  and/or  participation  in  the  Advances  into
          separate  amounts to  reflect  any  sub-participation  and may vote or
          abstain from voting,  with respect to any such separate amount, on any
          matter  separately and  differently  from its vote or abstention  with
          respect  to any  other  such  separate  amount  on  such  matter.

                                       15
<PAGE>

 1.6      Inconsistency

          In the event of any inconsistency between:

          (a)  the terms of the Freehold Mortgage  (including but not limited to
               the Memorandum No. 1995/4004); and

          (b)  the terms of any  Transaction  Document  (excluding  the Freehold
               Mortgage),

          the  terms  of  the  Transaction  Documents  (excluding  the  Freehold
          Mortgage) will prevail over the terms of the Freehold Mortgage and the
          Freehold  Mortgage  will be read and  construed as amended,  varied or
          supplemented  by the  Transaction  Documents  (excluding  the Freehold
          Mortgage) to the extent of any such inconsistency.

2.        THE FACILITY

2.1       Facility

          Subject  to the  terms  of this  Agreement  and in  reliance  upon the
          representations  and  warranties set out in clause 16, the Banks grant
          to the Borrower a term loan facility whereby the Banks, when requested
          by  the  Borrower  pursuant  to  a  Utilisation  Notice,   during  the
          Availability  Period,  will make Advances in an aggregate amount which
          will not exceed the Commitments.

2.2       Banks' Commitments

          Notwithstanding  the Maximum  Utilisation  Amount and Maximum  Monthly
          Utilisation  amounts set out in clause  4.2(b),  no Bank is obliged to
          participate  in the making of an  Advance if to do so would  cause the
          aggregate  of its  participation  in Advances  outstanding  under this
          Agreement to exceed its Commitment.

2.3       Several obligations

          The obligations of each Bank under this Agreement and each Transaction
          Document are several. The failure of a Bank to perform its obligations
          under this  Agreement or a Transaction  Document shall not relieve any
          other  Bank,  the  Agent  or an  Obligor  of  any  of  its  respective
          obligations   or   responsibilities   under  this   Agreement  or  the
          Transaction  Documents.  The Agent  shall not be  responsible  for the
          obligations of any Bank (except for its own obligations,  if any, as a
          Bank),  nor shall any Bank be responsible  for the  obligations of any
          other Bank.

2.4       Several interests

          The interests of the Agent and each Bank under this Agreement and each
          Transaction  Document are several. The amounts due to the Agent on its
          own account  and to each Bank under this  Agreement  or a  Transaction
          Document constitutes a separate and independent debt.


                                       16
<PAGE>

2.5       Purpose

          (a)  The Facility will be used to assist in the funding of:

                (i)  capital expenditure for the building of the Cable Network;
               (ii)  the establishment and operating costs of the Business; and
              (iii)  the repayment of the Nortel/DSC Debt.

          (b)  The  Facility  will not be used for any other  purpose  than that
               described in clause 2.5(a).

2.6       Termination

          The Facility terminates on the Termination Date.

2.7       Nature of Borrower's rights and obligations hereunder

          (a)  (Borrower as Agent):  Each Obligor  (other than the  Borrower) by
               its  execution  of  this  Agreement  or  an  Accession  Agreement
               irrevocably  authorises  the  Borrower  on its behalf to give all
               notices and  instructions  under the  Transaction  Documents,  to
               execute on its behalf any  Accession  Agreement  and to make such
               agreements capable of being given or made by any Obligor relating
               to the Transaction Documents notwithstanding that they may affect
               such Obligor, without further reference to or the consent of such
               Obligor.

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

3.        CONDITIONS PRECEDENT

3.1       Conditions precedent to the first Utilisation

          The  obligations  of each Bank under this Agreement are subject to the
          conditions precedent that:

          (a)  (Transaction  Documents):  the Agent has received original copies
               of this  Agreement  and the  Transaction  Documents  (other  than
               Hedging  Agreements),  duly executed together with an undertaking
               by the  Borrower  (which  it hereby  gives)  that it will pay all
               applicable levies and stamp duty when, and if, required;

          (b)  (Documents):  the Agent has received all of the documents  listed
               in Schedule 3 in form and substance satisfactory to it;


                                       17
<PAGE>

          (c)  (Fees):  all fees  referred  to in clauses  10.2 and 10.3 and all
               other  fees and  expenses  owing to the  Banks  and  their  legal
               consultants have been paid or confirmation that the Borrower will
               pay  simultaneously  with the first  Utilisation  those  fees and
               expenses;

          (d)  (Shareholder  contribution):  the Agent has received  evidence in
               the form of a statement  from 2 directors or one director and the
               Chief  Financial  Officer of the  Borrower,  that  SaskTel NZ and
               UIHNZ have contributed,  in aggregate, not less than $105,000,000
               of equity to the Borrower;

          (e)  (Subscribers):  the Agent has received  evidence in the form of a
               statement  from two  directors  or one director and an Officer of
               the Borrower, that as at 1 September 1998, the Group has achieved
               and maintains a minimum of 6,000 Subscribers;

          (f)  (Indenture): the Agent has received a notice substantially in the
               form of Schedule 7 from UAP;

          (g)  (Rollout):  the  Agent  has  received  evidence  in the form of a
               statement  from 2 directors or one director and an Officer of the
               Borrower that as at 1 September 1998 the Cable Network extends to
               a minimum of 20,000 Homes Serviceable;

          (h)  (Hedging  policy):  the  Borrower  has a hedging  policy in place
               satisfactory  to the  Underwriters to cover its interest rate and
               currency exposures under the Transaction Documents;

          (i)  (Nortel/DSC Debt): the Nortel/DSC Debt has been repaid in full or
               confirmation  that the  Borrower  will  repay  such  debt in full
               simultaneously with the first Utilisation;

          (j)  (Nortel/DSC Security): the Nortel/DSC Security will be discharged
               simultaneously with the first Utilisation; and

          (k)  (Approved  Issuer Levy):  the Borrower has been granted  approved
               issuer status.

3.2       Conditions precedent to all Utilisations

          The  obligations  of the  Agent  and  each  Bank  in  respect  of each
          Utilisation  are  subject  to the Agent  being  satisfied  that at the
          Utilisation Date:

          (a)  (Representations  and warranties true): the  representations  and
               warranties listed in clause 16 (except for clauses 16.2(c),  (d),
               (e) and (f)) are true and correct and will be correct immediately
               after the making of the Advance;

          (b)  (No Event of Default):  no Event of Default or Potential Event of
               Default  is  subsisting  or will  result  from the  making of the
               Advance;

                                       18
<PAGE>

          (c)  (No Material Adverse  Effect):  no event has occurred which would
               have a Material Adverse Effect;

          (d)  (No Change in Law): no change has occurred in applicable  laws or
               regulations which would have a Material Adverse Effect;

          (e)  (Further Guarantees and Security):  all Accession  Agreements and
               Securities  required by the terms of this Agreement to be entered
               into on or before such Utilisation Date have been or will on such
               Utilisation  Date be duly  executed  and  delivered  to the Agent
               together with all other documents required to be delivered to the
               Agent in relation thereto; and

          (f)  (Compliance with Ratios):  it has received evidence  satisfactory
               to it that:

               (i)  up to and  including  31 December  1999,  the Ratios for the
                    previous month have been met; and
              (ii)  from 1 January  2000,  the Ratios for the  previous  Quarter
                    have been met.

3.3       Waiver

          The conditions  precedent  listed in clauses 3.1 and 3.2 may be waived
          by the Agent acting on behalf of:

          (a)  all Banks, in relation to clause 3.1 and 3.2(e); and

          (b)  the Majority  Banks,  in relation to clause 3.2 other than clause
               3.2(e).

3.4       Agent not liable

          The Agent shall be deemed to be satisfied  with the form and substance
          of a document under clause 3.1(b) if to the Agent the document appears
          on its face to conform with its description and the Agent shall not be
          liable for any cost,  loss  damage or expense  suffered or incurred by
          any person as a result of its being so satisfied.

3.5       Agent satisfied

          The Agent will be deemed to be satisfied that the conditions precedent
          to  Utilisations  referred to in clause 3.2 have been met if, prior to
          each Utilisation  Date, the Agent receives from the Borrower a written
          notice certifying that the relevant conditions precedent have been met
          and information in support of that  certification  and the information
          appears, on its face, to support the certification made.

4.        UTILISATIONS

4.1       Notice

          The Borrower may request a Utilisation under the Facility on a Banking
          Day by giving written notice of its intention to do so to the Agent.


                                       19
<PAGE>

4.2       Maximum Utilisation Amount

          (a)  The Borrower may not issue a Utilisation  Notice if the making of
               the  Advance   specified   therein   would   exceed  the  Maximum
               Utilisation  Amount or the Maximum Monthly  Utilisation Amount to
               which the Borrower is entitled in accordance  with clauses 4.2(b)
               below.

          (b)  Subject to clause 2.2, the Maximum Utilisation Amount and Maximum
               Monthly  Utilisation  during the periods set out below will be as
               follows:
                                                     Maximum        Maximum
                        Period                     Utilisation      Monthly
                                                   Amounts ($)   Utilisation ($)

               Prior to 1 January 1999             40,000,000     40,000,000

               1 January to 31 March 1999          50,000,000      8,000,000

               1 April to 31 May 1999              70,000,000     10,000,000

               1 June to 30 June 1999              78,000,000      8,000,000

               1 July to 30 September 1999        101,000,000     10,000,000

               1 October to 31 December 1999      109,000,000      4,000,000

               1 January to 31 March 2000         115,000,000      6,000,000

               1 April to 31 December 2000        125,000,000      5,000,000

4.3       Contents of Utilisation Notice

          Each  Utilisation  Notice  for an  Advance  shall  be in the  form  of
          Schedule 4 and shall specify:

          (a)  the  amount  of the  Utilisation  (which  shall  not be less than
               $1,000,000 and which must be an integral multiple of $500,000);

          (b)  the proposed  Utilisation  Date which must be a Banking Day prior
               to expiration of the Availability Period;

          (c)  the proposed  duration of its Interest  Period  (which must be of
               either 1, 2, 3 or 6 months duration);

          (d)  the proposed purpose to which the Utilisation will be applied:

          (e)  payment instructions; and

          (f)  such  other  particulars  as the  Agent  may  from  time  to time
               require.

4.4       Requirements of Utilisation Notice

          Each Utilisation Notice shall:


                                       20
<PAGE>

          (a)  be received by the Agent 4 clear Banking Days before the proposed
               Utilisation Date;

          (b)  be signed by a person duly authorised by the Borrower to do so;

          (c)  be irrevocable; and

          (d)  not be given unless the  conditions  precedent  to a  Utilisation
               will be satisfied or waived on or before the proposed Utilisation
               Date.

4.5       Agent Notify Banks

          Within 1 Banking  Day after its  receipt of a  Utilisation  Notice the
          Agent shall notify each Bank.

4.6       Making of Advances

          Subject  to the  terms of this  Agreement,  each  Bank  shall,  on the
          Utilisation  Date,  make  available  to the  Agent its  Proportion  in
          Dollars for the account of the  Borrower.  All such  amounts  shall be
          made  available  to  the  Agent  in  accordance  with  clause  11  for
          disbursement to or to the order of the Borrower in accordance with the
          provisions of this Agreement.

4.7       Disbursement

          Amounts  received by the Agent under clause 4.6 shall be applied by it
          in accordance with the payment instructions  specified in the relevant
          Utilisation Notice.

4.8       Agent's right to vary

          Without  limitation  to the rights and powers  vested in it under this
          Agreement, the Agent may vary any of the times at or by which any act,
          matter or thing is to be done  under  this  clause 4 if it  determines
          that  such a  variation  is  necessary  or  desirable  to  ensure  the
          effective  operation  of the  Facility.  Any such  variation  shall be
          binding on all parties to this Agreement.

5.        COMMITMENTS

5.1       Cancellation of Commitments

          Any part of the  Commitments not borrowed  hereunder  before expiry of
          the Availability  Period shall be cancelled  automatically at close of
          business in Wellington on the date of such expiry.

5.2       Voluntary Cancellation

          The  Borrower  may,  on giving  not less than 30 days'  prior  written
          notice to the Agent (which shall  promptly  give notice of the same to
          the Banks), cancel or reduce the Total Commitments in whole or in part
          specified by the Borrower without incurring any penalty or other cost,
          provided that such  cancellation  or reduction may only be effected to


                                       21
<PAGE>


          the extent of the amount of the Total Commitments undrawn on that date
          and the applicable  Commitments of each Bank must be reduced pro rata.
          Any such notice by the Borrower shall be irrevocable and shall specify
          the date upon  which the  reduction  is to  become  effective  and the
          amount of the reduction. No fee, penalty or other amount is payable in
          connection with any cancellation hereunder.

5.3       Reduction consequent on Repayment or Prepayment

          (a)  The Total  Commitments  shall be reduced  (such  reduction  being
               applied pro rata as between all the Commitments) by the amount of
               any  repayment  or  prepayment  of any Advance  made  pursuant to
               clauses 6.1, 6.2 and 6.4.

          (b)  An individual Bank's Commitment shall be reduced by the amount of
               any prepayment of that Bank's  participation  in any Advance made
               pursuant to any other provision of this Agreement.

5.4       Limitations

          Save as  expressly  provided,  any  amount  of the  Total  Commitments
          cancelled or otherwise  extinguished  under this  Agreement may not be
          reinstated.  Save as expressly  provided neither the Total Commitments
          nor any  constituent  part thereof may be reduced or  cancelled  under
          this Agreement.

6.        REPAYMENT AND PREPAYMENTS

6.1       Repayment of Advances

          (a)  (Calculation  of  repayments):  At the  end  of the  Availability
               Period,  the Agent will calculate the repayment  instalments  for
               each  Repayment  Date  specified   below  having  regard  to  the
               outstanding Advances at that time ("Total Principal Amount"). The
               amount to be repaid on each  Repayment Date will be calculated by
               multiplying the Total Principal  Amount by the percentage set out
               opposite the relevant date.

                Repayment Date                   Repayment %
               ----------------                 -------------

               31 December 2001                       1.0

               31 March 2002                          2.0

               30 June 2002                           2.0

               30 September 2002                      2.0

               31 December 2002                       2.0

               31 March 2003                          3.6

               30 June 2003                           3.6

               30 September 2003                      3.6

               31 December 2003                       3.6

                                       22
<PAGE>


                Repayment Date                   Repayment %
               ----------------                 -------------

               31 March 2004                          5.0

               30 June 2004                           5.0

               30 September 2004                      5.0

               31 December 2004                       5.0

               31 March 2005                          7.0

               30 June 2005                           7.0

               30 September 2005                      7.0

               31 December 2005                       7.0

               31 March 2006                          8.0

               30 June 2006                          10.3

               30 September 2006                     10.3

          (b)  (Amortisation Schedule): Promptly upon expiry of the Availability
               Period (or following any  prepayment),  the Agent will produce an
               Amortisation  Schedule  in  accordance  with  paragraph  (a) (and
               taking  into  account any  prepayment  where  relevant)  and will
               provide such Amortisation  Schedule to the Banks and the Borrower
               promptly thereafter.

          (c)  (Repayment):   The  Borrower  will  repay  the  Advances  on  the
               Repayment  Dates in  accordance  with the  Amortisation  Schedule
               until the Advances outstanding are repaid in full.

6.2       Voluntary Prepayment

          (a)  The  Borrower  may prepay an Advance or part  thereof on the last
               day of its  current  Interest  Period on giving  not less than 10
               Banking Days' prior written notice to the Agent.

          (b)  Any notice of prepayment given by the Borrower is irrevocable and
               the Borrower is thereby  bound to prepay in  accordance  with the
               notice.

          (c)  Interest accrued on any amount prepaid under this Agreement shall
               be paid at the time of prepayment.

          (d)  Any  prepayment is permanent,  and the Facility will be cancelled
               to the extent of the prepayment.

          (e)  Any  prepayment  under this  clause 6.2 will be applied  pro rata
               against  the  remaining  instalments  listed in the  Amortisation
               Schedule.  No fee,  penalty other amount is payable in connection
               with any prepayment hereunder.

                                       23
<PAGE>

6.3       Agent to notify Banks

          Promptly  after its receipt of a notice of prepayment  the Agent shall
          notify each Bank of the  voluntary  prepayment,  the date on which the
          voluntary prepayment is to be made and its pro rata share thereof.

6.4       Mandatory Prepayment

          (a)  (Excess Cash Flow): After 1 January 2001, the Borrower will apply
               on a Quarterly  basis towards the repayment of the Facility,  50%
               of the Excess Cash Flow for the preceding Quarter, with the first
               such  Quarter  ending on 31 March 2001.  The amount to be prepaid
               will be  calculated  by the Agent and  notified  to the  Borrower
               after receipt of the Quarterly Accounts.

          (b)  (Disposal):  If any  member  of the  Group or any of the  assets,
               business or  undertaking  of any member of the Group are disposed
               of, the  Borrower,  unless the  Majority  Banks  shall  otherwise
               consent in writing,  shall  apply,  or shall  procure  that there
               shall be applied,  forthwith  an amount equal to the Net Proceeds
               arising  from  the  disposal,  in or  towards  prepayment  of the
               Utilisations  in  accordance  with clause 6.5,  provided that the
               foregoing shall not apply to Net Proceeds arising from:

              (i)   a  disposal  of  trading  stock in the  ordinary  course  of
                    trading; or
             (ii)   a disposal of assets not  constituting  trading  stock which
                    are to be replaced by other  assets  being  acquired for use
                    for like purposes and are so replaced within 3 months of the
                    date of such  disposal  (save to the extent the Net Proceeds
                    exceed the acquisition cost of those other assets); or
            (iii)   any  disposal  the   consideration  for  which,  when  taken
                    together with the consideration for any related disposals or
                    recoveries,  does not  exceed  $500,000  unless or until the
                    aggregate thereof exceeds $5,000,000 in any 12 month period.

          (c)  (Insurance  proceeds):  At  any  time  during  the  term  of  the
               Facility,  the Borrower  must apply in prepayment of any Advances
               outstanding  at the  time  all  of the  proceeds  (in  excess  of
               replacement costs) of any property or casualty insurance received
               by it, other than business interruption insurance.

6.5       Application of Mandatory Prepayment

          The amounts  required to be applied in  prepayment  pursuant to clause
          6.4 shall be applied against the remaining  instalments  listed in the
          Amortisation Schedule in their inverse order of maturity.

6.6       Date for Prepayment

          If the Borrower becomes obliged to prepay or procure the prepayment of
          any amount under clause 6.4, the prepayment  shall be made on the last
          day of the next Interest Period to expire.


                                       24
<PAGE>

6.7       No Redrawings

          Amounts  repaid and prepaid under any provision of this  Agreement may
          not be reborrowed hereunder.

7.        INTEREST

7.1       Interest Periods

          (a)  Not later than 4 Banking  Days  before the  commencement  of each
               Interest  Period in  respect of an  Advance,  the  Borrower  will
               notify the Agent whether the Interest  Period for that Advance is
               to be of 1, 2, 3 or 6 months'  duration  (or such other period as
               the Agent may agree to facilitate compliance with clause 7.2(a)).

          (b)  The first Interest Period in relation to an Advance is the period
               commencing on the Utilisation Date for that Advance.

          (c)  If the Borrower fails to select an Interest Period for an Advance
               in accordance with clause 7.1(a),  the Interest Period shall be 3
               months.

          (d)  The term of each  Interest  Period is  subject  to such  marginal
               adjustment as the Agent in its discretion  determines so that the
               first and last days of it are Banking Days and the final Interest
               Period terminates on the Termination Date.

7.2       Restrictions on Selection

          (a)  The Borrower  shall,  in relation to Advances drawn by it, select
               the duration of Interest  Periods pursuant to clause 7.1 so as to
               ensure that:

              (i)   no more than 5 different Interest Periods are current at any
                    one time;
             (ii)   each date for repayment of part of the Facility will also be
                    the last day of an Interest  Period in relation to an amount
                    at least  equal to the  amount  due to be paid on such date;
                    and
            (iii)   that no  Advance  shall  have an  Interest  Period  expiring
                    after the Termination Date.

          (b)  If it appears to the Agent in good faith that the requirements of
               paragraph  (a)  above  will not be met by either  the  Borrower's
               selection  of any  Interest  Period  or the  operation  of clause
               7.1(c),  the Agent, on behalf of and after  consultation with the
               Borrower,  shall select a different  duration  for such  Interest
               Period.

7.3       Calculation of Interest

          (a)  Interest on each Advance accrues daily and is to be computed on a
               daily basis on a year of 365 days.  Interest is to be  calculated
               from and  including  the  first  day of an  Interest  Period  but
               excluding the last day of the Interest Period.

                                       25
<PAGE>

          (b)  The rate of interest for each Advance for each Interest Period is
               the Prescribed Rate in relation thereto.

          (c)  The  Agent's  certificate  as to  the  Prescribed  Rate  and  the
               Specified  Rate at any time will be conclusive and binding on the
               Borrower and the  Guarantors in the absence of manifest  error on
               the face of the certificate.

7.4       Payment of Interest

          (a)  The  Borrower  will pay to the Agent for the account of the Banks
               the accrued  interest  in relation to that  Advance at the end of
               each Interest Period.

          (b)  The Agent will promptly  distribute  the interest  received by it
               from the  Borrower  among  the  Banks in  accordance  with  their
               Proportions with respect to that Advance.

8.        INTEREST ON OVERDUE AMOUNTS

8.1       Payment of Interest

          (a)  The  Borrower  and the  Guarantors  will pay to the Agent for the
               account of the Banks  interest  on all amounts due and payable by
               them under or in respect of this  Agreement or the Securities and
               unpaid, including any interest payable under this clause.

          (b)  The Agent will  distribute  the interest  received by it from the
               Borrower  among the Banks in  accordance  with their  Proportions
               with respect to that Advance.

8.2       Accrual of Interest

          Interest  will accrue on all  amounts due and payable  from day to day
          from the due date up to the date of actual  payment,  before and (as a
          separate and  independent  obligation but without  duplication)  after
          judgment,  at the Specified Rate for successive 3 month periods (as if
          the same  were 3 month  Interest  Periods)  commencing  on the date of
          default  and,  if not paid when due,  shall  itself  bear  interest in
          accordance with this clause.

9.        BILL RELIQUIFICATION

9.1       Drawing of Bills

          The  Borrower  agrees (at the  relevant  Bank's cost) to draw Bills in
          connection  with any Advance made to it in the manner  required by any
          Bank whenever requested by a Bank to do so except that:

          (a)  the  discounted  value of those Bills when added to the aggregate
               discounted  value of all other  Bills drawn under this clause for
               the relevant Bank and which are  outstanding  at any time may not
               exceed  that  Bank's  participation  in all  Advances  which  are
               outstanding;


                                       26
<PAGE>

          (b)  the  obligations  of the  Borrower as drawer or  otherwise  under
               those Bills are non-recourse; and

          (c)  Bills are not to be drawn if to do so would  cause  the  Approved
               Issuer Levy  registration of the Borrower (as an approved issuer)
               or  the  Advances  or  Bills  (as  registered  securities)  to be
               cancelled.

9.2       Attorney

          The  Borrower  irrevocably  appoints  each  Bank  (severally)  as  its
          attorney to draw Bills in its name or on its behalf  under  clause 9.1
          and  agrees to ratify  all  action  taken by any Bank as its  attorney
          under this clause.

9.3       Appointment Revoked

          The  requirement  to draw Bills under  clause 9.1 and the  appointment
          under  clause  9.2 will  cease and be revoked  without  necessity  for
          notice  when all  Advances  are  repaid.  Nothing in clause 9.1 or 9.2
          requires  the  Borrower or  authorises  any Bank as attorney to draw a
          Bill which matures after the Termination Date.

9.4       Indemnity

          Each Bank  (severally)  indemnifies the Borrower  against loss,  cost,
          expense or  liability on any Bill drawn by the Borrower at the request
          of that Bank under  clause 9.1 or drawn by that Bank under clause 9.2.
          Each Bank agrees to pay the costs of preparation of and all stamp duty
          on each Bill drawn at its request under this clause 9. Each  indemnity
          in this clause 9.4 is a continuing obligation of each Bank (severally)
          and survives the termination of this Agreement or the repayment of any
          Bill drawn under this clause 9.

9.5       Notice

          On request  from the  Borrower  through the Agent (not more often than
          once each  Quarter)  the Banks will  notify the  Borrower  through the
          Agent of the total face value of Bills  outstanding at that time under
          this clause.

10.       FEES

10.1      Commitment Fee

          (a)  The  Borrower  will pay in Dollars to the Agent for  distribution
               among  the  Banks  pro rata to their  respective  Commitments,  a
               commitment  fee  ("Commitment  Fee") of 1% per annum on the daily
               undrawn  balance of the  Commitments,  during the period from and
               including  the date of this  Agreement  until  the  expiry of the
               Availability Period.

          (b)  The accrued  Commitment Fee shall be payable quarterly in arrears
               from the date of this Agreement and also on any date on which the
               Total Commitments shall be terminated.


                                       27
<PAGE>

          (c)  The Commitment Fee shall accrue from day to day and be calculated
               on the basis of a year of 365 days and for the  actual  number of
               days elapsed.

10.2      Underwriting Fee

          The Borrower must pay to the  Underwriters an underwriting  fee as and
          when specified in the Underwriting Letter.

10.3      Agency Fees

          The Borrower must pay to the Agent an agency fee as and when specified
          in the Underwriting Letter.

10.4      Margin

          (a)  From the date of this Agreement  until and including 30 September
               1999,  the  Utilisation  Margin  will be 3% per  annum.  From and
               including  1 October  1999  until the  Borrower  achieves a Total
               Debt/EBITDA for the most recent financial Quarter of 6.5 or less,
               the Utilisation  Margin will be 2.75% per annum and thereafter it
               shall be determined in accordance  with the following  provisions
               of this clause.

          (b)  Subject to paragraph (c) below,  the  Utilisation  Margin will be
               set in accordance with the Total  Debt/EBITDA for the most recent
               financial Quarter as follows:

               Total Debt/EBITDA               Utilisation Margin

               Above 6.50*                          2.75% pa
               6.50 - 6.00                          2.50% pa
               5.99 - 5.00                          2.25% pa
               4.99 - 400                           2.00% pa
               Less than 4.00                       1.75% pa

               * applicable only for the period up to 31 December 2000

          (c)  The Total  Debt/EBITDA will be calculated  quarterly by the Agent
               upon receipt of the relevant  Accounts showing the results of the
               latest financial  Quarter.  If the Total Debt/EBITDA for the last
               Quarter results in a change of Utilisation  Margin the Agent will
               notify the Borrower and the Banks and the change will take effect
               from the date of delivery of the relevant Accounts to the Agent.

11.       PAYMENTS

11.1      Payment to Agent

          All payments to be made by any Obligor under any Transaction Document,
          or by  any  Bank  under  this  Agreement  (unless  expressly  provided
          otherwise  in  writing),  are to be made to the  Agent in  Dollars  in
          immediately available funds not later than 11.00 am Wellington time on
          the due date to such  accounts  as the  Agent  may  from  time to time
          designate.

                                       28
<PAGE>


11.2      Merger

          If the  liability  of any  Obligor  to pay any  money the  payment  or
          repayment of which forms part of the Obligations becomes merged in any
          judgment or order,  as an independent  obligation the Obligor will pay
          to the Agent on behalf of the Banks  interest at the rate which is the
          higher of that  payable  under  this  Agreement  and that  fixed by or
          payable under such judgment or order.

11.3      Conversion of Foreign Currency receipts to Dollars

          (a)  Notwithstanding  the  Obligor's  obligation  under clause 11.1 to
               make all  payments in Dollars,  if any payment is tendered to the
               Agent or a Bank  under  any  Transaction  Document  in a  Foreign
               Currency,  the Agent or Bank, as the case may be, at its absolute
               discretion  may  accept  payment  in  the  Foreign   Currency  as
               tendered.

          (b)  If any payment in a Foreign  Currency is tendered to and accepted
               by the Agent or Bank,  or if any funds are recovered by the Agent
               or Bank under any Transaction Document in a Foreign Currency, the
               Agent or Bank as the case may be at its absolute  discretion  may
               actually or  notionally  convert such payment or funds to Dollars
               at such time or times as it sees fit and at such rate or rates as
               it is, or  considers it would be, able to obtain in the market at
               the time of such  conversion.  The amount of Dollars  actually or
               notionally  received  after  such  conversion  will be applied in
               reduction of the Obligations.

11.4      Costs of Conversion

          The  Borrower  will pay to the  Agent or a Bank  all  commissions  and
          expenses involved in actually or notionally  converting any payment or
          receipt in a Foreign Currency into Dollars.

11.5      Application

          Each payment  received by the Agent for the account of another  person
          pursuant to clause 4.6 or 11.1 shall:

          (a)  in  the  case  of a  payment  received  for  the  account  of the
               Borrower,  be made  available  by the  Agent to the  Borrower  by
               application, on the date of receipt:

               (i)  first,  in or towards  payment of any  amounts  then due and
                    payable (and unpaid) by the Borrower  under this  Agreement;
                    and
              (ii)  second,  in payment to such  account as the  Borrower  shall
                    have  properly  designated  for the purpose in the  relevant
                    Utilisation Notice or otherwise in writing; and

                                       29
<PAGE>


          (b)  in the case of any other payment,  be made available by the Agent
               to the person for whose  account the payment was  received on the
               date of  receipt to such  account  of the  person as that  person
               shall have  previously  notified to the Agent for the purposes of
               this Agreement.

          The Agent shall promptly  distribute payments received for the account
          of the Banks among the Banks pro rata to their respective entitlements
          provided  that the Agent may  deduct  therefrom  any  amount due to it
          pursuant to clause 11.8, 24.14 or 27.

11.6      Foreign Currency indemnity

          If Foreign  Currency is received by the Agent or a Bank as a result of
          a court or tribunal  order or as a result of a  distribution  under an
          Insolvency  Provision,  then as a separate,  additional and continuing
          liability  (notwithstanding  such order or distribution)  the Borrower
          will pay to the Agent or Bank any  deficiency in the amount of Dollars
          actually  received by the Agent or Bank  resulting  from any variation
          between:

          (a)  the rate of exchange at which the amount of Foreign  Currency was
               calculated for the purposes of the court or tribunal order or the
               distribution; and

          (b)  the  rate of  exchange  at  which  the  Agent  or Bank is able to
               purchase  Dollars  with the amount of Foreign  Currency  actually
               received by the Agent or Bank.

11.7      Insufficient payment

          If an amount  required to be paid to the Agent under this Agreement is
          not paid in full when due, the Agent may apportion such amount between
          principal,  interest,  commission,  fees,  charges  and other  amounts
          payable  under this  Agreement in such manner as it may  determine and
          any such determination shall be binding on each party hereto.

11.8      Anticipatory payments

          The  Agent  will  not be  obliged  to  make a  payment  to a Bank or a
          Borrower  out of any sum  which it is  expecting  to  receive  for the
          account  of the  Bank  or the  Borrower  until  it has  been  able  to
          establish  that it has  received  the sum. The Agent may elect to make
          such  payment,  whereupon  to the extent such  payment is made but the
          Agent does not receive the sum when due in whole or in part:

          (a)  each person to which such  payment was made shall,  on request by
               the Agent, immediately refund it to the Agent;

          (b)  if the  person  who has  failed  to pay the  sum  when  due is an
               Obligor, interest payable by the Obligor on the amount of the sum
               not paid when due and not refunded  under clause  11.8(a)  shall,
               notwithstanding any other provision of this Agreement,  belong to
               the Agent absolutely; and

          (c)  if the person  who has failed to pay the sum is a Bank,  the Bank
               will pay  interest on the amount of the sum not paid when due and
               not refunded  under clause  11.8(a) at a rate  determined  by the
               Agent to be equal to its cost of funds.


                                       30
<PAGE>


          The  provisions  of this  clause are without  prejudice  to any rights
          which any person may have against the party who fails to pay any sum.

11.9      Rounding

          In  making  any  payment  under  this  Agreement,  the Agent may round
          amounts to the nearest dollar.

12.       TAXES

12.1      No deduction for Taxes and no set-off or counterclaim

          All payments by the Obligors under any Transaction  Document,  whether
          of principal, interest or other amounts due thereunder, shall be:

          (a)  free of any set-off or counterclaim; and

          (b)  without  deduction or withholding for any present or future Taxes
               unless the Obligor is  compelled by law to deduct or withhold the
               same.

12.2      Payment net of Taxes

          If:

          (a)  an  Obligor  is  legally  compelled  to  make  any  deduction  or
               withholding on account of Taxes (other than Excluded Taxes);

          (b)  the  Agent  is  legally   compelled  to  make  any  deduction  or
               withholding on account of Taxes (other than Excluded  Taxes) from
               any payment to a Bank;

          (c)  a Bank does not receive a payment to which it is  entitled  under
               this Agreement or a Transaction  Document free and clear of Taxes
               (other than Excluded Taxes);

          (d)  a Bank or the Agent is  obliged  to pay any Taxes in respect of a
               payment made or to be made by an Obligor under this  Agreement or
               a Transaction Document (other than Excluded Taxes); or

          (e)  a  Bank  is  obliged,  in  respect  of  financial   accommodation
               ("Funding") raised or proposed to be raised by the Bank to permit
               or facilitate its participation in an Advance:

               (i)  to make any additional payments as a result of any deduction
                    or withholding  from any payment or repayment which the Bank
                    is obliged to make in respect of the Funding  (other than in
                    respect of Excluded Taxes); or


                                       31
<PAGE>


               (ii) to pay any Taxes (other than Excluded  Taxes) as a result of
                    or  in  connection  with  the  Funding  or  any  payment  or
                    repayment to be made by it in connection with the Funding,

          then:

          (f)  where clause 12.2(a), (b), (c) or (d) apply, the Obligor shall on
               demand by the Agent pay to the Agent such additional  amounts, by
               way of  additional  interest,  as may be necessary to ensure that
               the Agent or Bank affected  receives when due a net amount (after
               payment of any Taxes,  other than  Excluded  Taxes)  equal to the
               full  amount  which it would have been  entitled  to receive  and
               retain had the deduction or withholding  not been made or had the
               payment been free and clear of Taxes or had the Agent or Bank not
               been obliged to pay any Taxes in respect of the payment; and

          (g)  where clause 12.2(e)  applies in relation to a Bank, the relevant
               Obligor  shall on demand by the Agent pay to the Agent on account
               of the Bank an amount equal to the amount required to be paid, or
               paid,  in  respect  of  or  as  a  result  of  any  deduction  or
               withholding  or payment of Taxes to which the paragraph  applies;
               and

          (h)  in  addition  to clause  12.2(f),  where any  Obligor  is legally
               compelled  to make any  deduction  or  withholding  on account of
               Taxes the relevant Obligor, shall:

               (i)  pay to the appropriate  governmental authority or department
                    any amount deducted or withheld in respect of Taxes; and
              (ii)  within  20  Banking  Days  after  making  the  deduction  or
                    withholding provide to the Agent evidence satisfactory to it
                    of that payment having been made.

12.3      Funding

          (a)  The Banks will use their reasonable  efforts to raise all Funding
               (as  defined in clause  12.2(e))  free and clear of Taxes  (other
               than Taxes  which may be reduced or  eliminated  by the  Borrower
               obtaining approved issuer status).  If a Bank is entitled to make
               a claim under clause 12.2,  the parties agree to consider in good
               faith  funding  arrangements  which would  mitigate the Obligor's
               costs under  clause 12.2 as and when the need arises  (including,
               but not limited to, the use of a fronting  bank in order to avoid
               making  any  deduction  or  withholding  or  paying  any Taxes as
               referred to in clause 12.2 as and when the need arises).

          (b)  If a Bank is obliged to make any deduction or  withholding or pay
               any  Taxes as  referred  to in  clause  12.2(e),  the  Bank  will
               promptly notify the Agent and the Borrower of that obligation and
               its amount.


                                       32
<PAGE>


12.4      Termination

          If any Obligor  fails to comply with the  provisions of clause 12.2 in
          relation to a Bank, the Bank may by notice to the Borrower through the
          Agent  terminate its  obligations  under this  Agreement.  Upon such a
          notice being given, the Borrower will within 5 Banking Days prepay the
          relevant Bank's  participation in all affected  Utilisations  together
          with accrued  interest  thereon and all other money payable under this
          Agreement to the Bank. Any such prepayment  shall be permanent and the
          Facility shall be cancelled to the extent of the prepayment.

13.       ILLEGALITY

          If any  change in  applicable  law,  regulation,  treaty  or  official
          directive or in the  interpretation or  administration  thereof by any
          governmental  authority charged with the administration  thereof makes
          it unlawful or impossible for a Bank to give effect to its obligations
          under this Agreement:

          (a)  the Bank's  obligations  under this  Agreement  will be suspended
               immediately for the duration of such illegality or impossibility;

          (b)  the  Bank  may  by  notice  to the  Borrower  through  the  Agent
               terminate its obligations under this Agreement;

          (c)  if  required  by or as a result of the  applicable  event,  or if
               necessary  to prevent  or remedy a breach of, or to comply  with,
               any applicable law, regulation, treaty or official directive, the
               Borrower will prepay an amount equal to the Bank's  participation
               in all  Utilisations  together with all interest and fees accrued
               thereon  and such other  amounts as are payable to the Bank under
               this  Agreement in full  immediately,  or if delay in  prepayment
               does not compound such breach or affect such  compliance,  at the
               end of the current  Interest Period (or such lesser period if the
               applicable  law,   regulation,   treaty  or  official   directive
               requires); and

          (d)  the  Borrower  will   indemnify  the  Bank  and   notwithstanding
               termination  of its  obligations  under  this  Agreement  keep it
               indemnified  against any cost, loss,  damage or expense suffered,
               incurred or payable by it as a result of the  operation of clause
               13(a),  (b) and (c) and shall pay to the Agent for the account of
               the Bank prior to  termination  of the Bank's  obligations  under
               this Agreement such amount as the Bank estimates in good faith to
               be, then or in the future,  payable to it by the  Borrower  under
               this indemnity.

14.       INCREASED COST

          (a)  If by reason of any  change  in law or in its  interpretation  or
               administration  or by reason of compliance  with any request from
               or requirement of any fiscal, monetary or other authority:

              (i)   a Bank incurs a cost as a result of its having  entered into
                    or  performed  its  obligations  under the  Facility or as a
                    result of any Advance being outstanding hereunder;
              (ii)  there is any  increase  in the cost to a Bank of  funding or
                    maintaining any Utilisation made or to be made hereunder;


                                       33
<PAGE>

             (iii)  the amount of  principal,  interest or other amount  payable
                    to a  Bank  or  the  effective  return  to  a  Bank  on  the
                    Utilisations under this Agreement or the anticipated rate of
                    return at the date of this  Agreement on the Bank's  overall
                    capital is reduced; or
              (iv)  a Bank  becomes  liable  to make any  payment  (not  being a
                    payment of Tax on its overall  net income) on or  calculated
                    by reference to the amount of Utilisations made hereunder or
                    Bills outstanding hereunder,

               then from time to time on  notification  by the Bank  through the
               Agent the Borrower  shall pay to the Agent on account of the Bank
               amounts  sufficient  to  indemnify  the Bank  against  such cost,
               increased cost, reduction or liability.

          (b)  The notification referred to in paragraph (a) above shall set out
               in reasonable  detail  (excluding  confidential  information) the
               basis for the notification.

          (c)  If a Bank has acted in good faith it is no defence  that any such
               cost,  increased  cost,  reduction or  liability  could have been
               avoided.

          (d)  A Bank's  certificate as to the amount of, and basis for arriving
               at, any such cost,  increased  cost,  reduction  or  liability is
               conclusive  and binding on the Borrower and the Guarantors in the
               absence of manifest error on the face of the certificate.

15.       MITIGATION

15.1      Mitigation

          If circumstances arise in respect of any Bank which would, or upon the
          giving of notice would, result in the operation of clause 12, 13 or 14
          to the detriment of an Obligor:

          (a)  such Bank shall use best  endeavours to promptly notify the Agent
               and the Borrower  and,  upon the request of the  Borrower,  shall
               enter  into   discussions  with  the  Borrower  with  a  view  to
               determining  what mitigating  action might be taken by such Bank,
               including  discussion  of  the  possibility  of a  change  in its
               lending office,  a change in the method of funding  Advances or a
               transfer of its participation in the Facility and its Commitments
               to another bank or financial institution; and

          (b)  at the  request  of the  Borrower,  the  Agent  will  enter  into
               discussions  with the Borrower  with a view to  determining  what
               mitigating action might be taken by the Agent with respect to the
               administration of this Agreement by the Agent,

          PROVIDED  THAT  nothing in this  clause  shall  oblige any Bank or the
          Agent to incur any costs or  expenses or to take any action or refrain
          from taking any action.


                                       34
<PAGE>


15.2      Replacement of Bank

          (a)  If such  circumstances  as are  referred  to in clause 15.1 shall
               arise,  the Agent,  at the request of the Borrower,  will consult
               with the  Borrower  with a view to  identifying  and  approaching
               bank(s) and financial  institution(s)  acceptable to the Borrower
               who may be willing to become  party to this  Agreement as Bank(s)
               in replacement for the relevant Bank(s).

          (b)  If:

               (i)  such  circumstances  as are  referred to in clauses  12.2 or
                    14(a) arise in respect of a Bank (the "Relevant Bank"); and
              (ii)  the  Borrower  finds a bank or  financial  institution  (the
                    "Replacement Bank") who is willing to become a party to this
                    Agreement in replacement of the Relevant Bank,

               the Relevant  Bank must  promptly  transfer all of its rights and
               obligations  under the  Transaction  Documents in accordance with
               clause 29.

15.3      Costs and Expenses

          Any  reasonable  costs and expenses  incurred by any Bank or the Agent
          pursuant to this clause shall be paid by the Borrower within 5 Banking
          Days after receipt of a demand specifying the same.

16.       REPRESENTATIONS AND WARRANTIES

16.1      General representations and warranties

          The  Borrower and each  Guarantor  hereby  represents  and warrants in
          respect of itself only to the Agent and each Bank that:

          (a)  (Legally  binding  obligation):  each  Transaction  Document  and
               Material  Contract to which it is a party constitutes a valid and
               legally  binding  obligation of it in  accordance  with its terms
               subject  to  principles  of equity and laws  generally  affecting
               creditor's rights;

          (b)  (Execution,  delivery and performance):  the execution,  delivery
               and  performance  of each  Transaction  Document to which it is a
               party does not  violate any  existing  law or  regulation  or any
               document or  agreement to which it is a party or which is binding
               upon it or any of its assets;

          (c)  (Authorisation):    all   consents,   licences,   approvals   and
               authorisations of every government or local government  authority
               required under any legislation  (including,  without  limitation,
               the  Resource  Management  Act  1991)  to  be  obtained  by it in
               connection  with the execution,  delivery and performance of each
               Transaction  Document to which it is a party and the business (if
               any)  carried  on by it have  been  obtained  and are  valid  and
               subsisting;

          (d)  (No  litigation):   no  litigation,   arbitration,   criminal  or
               administrative  proceedings  are  current,  pending  or,  to  the
               knowledge of the Borrower or Guarantor, threatened in which there
               is a reasonable likelihood of an adverse determination;


                                       35
<PAGE>


          (e)  (No Event of Default): no event has occurred which constitutes an
               Event of Default or a Potential Event of Default;

          (f)  (Laws):  it  has  complied  with  all  statutes  and  regulations
               relative to it and the  businesses  (if any) carried on by it the
               non-compliance with which would have a Material Adverse Effect;

          (g)  (Financial Liabilities):  save as disclosed to the Agent prior to
               the  date  of  this   Agreement   or  any  date  on  which   this
               representation and warranty is repeated,  it is not in default in
               the  payment  of  any  sum  greater  than  $100,000,  or  in  the
               performance  observance  of  any  obligation  in  respect  of any
               Financial  Liability  greater  than  $500,000,  and no event  has
               occurred which with the giving of notice,  lapse of time or other
               condition  could  constitute  such a default  in  respect  of any
               Financial Liability greater than $500,000;

          (h)  (No trusts): it is not the trustee of any trust and does not hold
               any property subject to or impressed by any trust;

          (i)  (Title):  it is  the  sole  legal  and  beneficial  owner  of the
               Security  Property  subject to the Security free and clear of all
               Encumbrances  other than those of the type  referred to in clause
               17.3(a) and, in the period from the date of this Agreement to the
               first Utilisation Date, the Nortel/DSC Security;

          (j)  (Intellectual Property Rights):

               (i)  it owns or has licensed to it all the intellectual  property
                    rights which are material in the context of its business and
                    which  are  required  by it in order  for it to carry on its
                    business  as it is  being  conducted  and it  does  not,  in
                    carrying on its business  and to the best of its  knowledge,
                    infringe any intellectual property rights of any third party
                    in any material respect;
               (ii) none of the intellectual  property rights which are material
                    in the context of its business is, to its  knowledge,  being
                    infringed  nor, to its  knowledge,  is there any  threatened
                    infringement of those  intellectual  property rights, by any
                    third party;

          (k)  (Tax liabilities): no material claims are being or are reasonably
               likely to be asserted against it with respect to Taxes. It is not
               materially  overdue in the filing of any Tax returns  required to
               be filed by it and it has paid all Taxes  shown to be due on such
               returns or on any assessments made against it ;

          (l)  (Material Contracts): save as disclosed to the Agent prior to the
               date of this  Agreement or any date on which this  representation
               and warranty is repeated, each of the Material Contracts to which
               it is a party is in full force and effect and it is not in breach
               of any material  term of any  Material  Contract to which it is a
               party nor, is any other party to any Material  Contract in breach
               of any such term; and


                                       36
<PAGE>

          (m)  (Year 2000 Compliant):  it believes (having undertaken a detailed
               review and  assessment)  that all  Computer  Systems  used by any
               member of the Group will be Year 2000  Compliant  by 30 September
               1999.

16.2      Information representations and warranties

          The Borrower and each Guarantor hereby  represents and warrants to the
          Agent and each Bank in respect of itself only that:

          (a)  (Information): all information relating to an Obligor provided to
               the Banks by an Obligor or at their  direction in connection with
               the Facility and each Transaction  Document and Material Contract
               is true in all  material  respects  and is not,  by  omission  or
               otherwise, misleading in any material respect;

          (b)  (Accounts): the Accounts provided to the Agent:

               (i)  have been prepared in accordance with accounting  principles
                    and practices generally accepted in New Zealand; and
               (ii) give a true and fair view of the financial  condition of the
                    relevant entity as at the date to which such accounts relate
                    and the  results of  operations  for the  accounting  period
                    ending on that date and  since  that date  there has been no
                    material  adverse  change in the financial  condition of the
                    Borrower,  the  Guarantors  or the  Group  as  shown in such
                    accounts which would have a Material Adverse Effect;

          (c)  (Documents): the documents delivered to the Agent by or on behalf
               of any Obligor  pursuant to clause 3.1(b) and any other provision
               of the Transaction Documents were genuine and in the case of copy
               documents,  were true, complete and accurate copies, of originals
               which have not been amended,  varied,  supplemented or superseded
               in any way;

          (d)  (Information  Memorandum):  save as  disclosed  in writing to the
               Agent all material written factual  information  contained in the
               Information  Memorandum  is true in all material  respects at the
               date (if any) ascribed thereto in the Information Memorandum, all
               expressions  of  opinion  or  intention  and  all  forecasts  and
               projections contained in the Information  Memorandum were arrived
               at  after  careful  consideration  and were  based on  reasonable
               grounds, and so far as it is aware the Information  Memorandum as
               of its date was not misleading in any material  respect and as at
               its date did not omit to disclose any matter  failure to disclose
               which  would   result  in  any   information   contained  in  the
               Information  Memorandum  being misleading in any material respect
               in the context of this Agreement;

          (e)  (Business  Plan):  save as  disclosed in writing to the Agent all
               material  factual  information  contained in the Business Plan is
               true in all  material  respects  at the date  (if  any)  ascribed
               thereto  in the  Business  Plan or (if  none)  at the date of the
               relevant  Business Plan, all  expressions of opinion or intention
               and all forecasts and projections  contained in the Business Plan
               were  arrived  at  after  careful  consideration,  were  based on
               reasonable grounds,  and the Business Plan as of its date was not

                                       37
<PAGE>

               misleading  in any  material  respect  and as at its date did not
               omit to  disclose  any matter  failure to  disclose  which  would
               result in any  information  contained in the Business  Plan being
               misleading  in any  material  respect  in  the  context  of  this
               Agreement; and

          (f)  (Recent  Events):  save as disclosed in writing to the Agent,  so
               far as it is aware,  reasonable  enquiry having been made,  since
               the date of the material contained in the Information  Memorandum
               and the Business Plan respectively, nothing has occurred of which
               it is aware and which is not in the public  domain  which,  as at
               the  date  of  this  Agreement,   renders  any  of  the  material
               information,  expressions of opinion or intention, projections or
               conclusions  referred to in (d) or (e) above and contained in the
               Information   Memorandum  or  the  Business  Plan  inaccurate  or
               misleading (or in the case of expressions of opinion, conclusions
               or  projections,  other than fair and reasonable) in any material
               respect  in  the  context  of  the  Group  and  the   transaction
               contemplated by this Agreement.

16.3      Corporate representations and warranties

          The Borrower and each Guarantor hereby  represents and warrants to the
          Agent and each Bank in respect of itself only that:

          (a)  (Due  incorporation):   it  is  duly  incorporated  and  has  the
               corporate  power to own its own  property and to carry on its own
               business as is now being conducted;

          (b)  (Constitution):  the execution,  delivery and performance of each
               Transaction  Document to which it is a party does not violate its
               constitution;

          (c)  (Corporate  power): it has the power, and has taken all corporate
               and other action required, to enter into any Transaction Document
               to  which  it is a  party  and to  authorise  the  execution  and
               delivery   thereof  and  the   performance  of  its   obligations
               thereunder; and

          (d)  (Filings):  it has filed all  corporate  notices and effected all
               registrations  with the Registrar of Companies or similar  office
               in  its   jurisdiction   of   incorporation   and  in  any  other
               jurisdiction  as  required  by law,  and  all  such  filings  and
               registrations are current,  complete and accurate in all material
               respects.

16.4      Representations and warranties repeated

          Each  representation  and  warranty  contained  in clause  16.1,  16.2
          (except  for  paragraphs  (c),  (d),  (e) and (f))  and 16.3  shall be
          repeated  on the date of each  Advance  and on each  date an  interest
          payment  is due under the  Facility  with  reference  to the facts and
          circumstances  then  subsisting,  as if made on each such day and each
          Quarter the  Borrower  will deliver a  Compliance  Certificate  to the
          Agent in respect of the same.


                                       38
<PAGE>

17.       UNDERTAKINGS

17.1      Duration and Benefit

          The  undertakings  in this  Agreement are given for the benefit of the
          Agent and each Bank and shall  remain in force from and after the date
          of this  Agreement and so long as any amount is or may be  outstanding
          under this Agreement or any Commitment is in force.  The Agent (acting
          at the direction of the Majority Banks) may waive  compliance with any
          undertaking  contained in this clause 17 either for a specific purpose
          or  generally  by  providing  the  Borrower  with a letter in  writing
          specifying the waiver being granted.

17.2      Information

          (a)  (Financial  information):  The Borrower and each  Guarantor  will
               ensure that there is delivered to the Agent:

               (i)  as soon as  practicable  and in any event not later than 120
                    days after the close of each of its financial  years, a copy
                    of the  consolidated  balance  sheet  and  profit  and  loss
                    statement for the Group for that financial year certified as
                    correct  by an  auditor  approved  by  the  Agent  it  being
                    acknowledged that Arthur Anderson is acceptable;
              (ii)  as soon as  practicable  and in any event not later  than 90
                    days after each half of each of its financial  years, a copy
                    of the consolidated  unaudited  balance sheet and profit and
                    loss statement for and the Group for that half-year;
             (iii)  as soon as  practicable  and in any event not later  than 10
                    Banking  Days  after the  beginning  of each month up to and
                    including  June  2000 and  thereafter  within 30 days of the
                    beginning of each Quarter, a copy of the management accounts
                    of the Group for the preceding month or Quarter (as the case
                    may be) and a statement of the  Subscribers  (which includes
                    reasonable  details of new  installations  and monthly churn
                    rate) at the end of the  preceding  month or Quarter (as the
                    case  may  be)  together  with a  statement  setting  out in
                    sufficient detail any variance from the Business Plan and an
                    explanation of the reasons for any such variance;
              (iv)  as soon as  practicable  and in any event not later  than 90
                    days after the commencement of its financial year, a copy of
                    the Group's annual budget and an updated Business Plan; and
               (v)  promptly  such further  information  regarding its financial
                    condition and business  operations as the Agent from time to
                    time reasonably requires.

          (b)  (Compliance  with  accounting  standards):  The Borrower and each
               Guarantor  will ensure that the Accounts  (except for  management
               accounts  of the  Group  given  under  clause  17.2(a)(iii))  are
               prepared  in   accordance   with  the   relevant   constitutional
               documents,  the Companies Act 1993,  the Financial  Reporting Act
               1993,  any applicable  statute and all accounting  principles and
               practices generally accepted in New Zealand consistently applied,
               or if not  consistently  applied,  accompanied  by details of the
               inconsistencies,  and  shall  give a true  and  fair  view of its
               financial  condition  and the result of its  operations as at the
               date,  and for the  period  ending  on the date,  to which  those
               Accounts are prepared.


                                       39
<PAGE>

          (c)  (Projections):  The Borrower shall ensure that there is delivered
               to the Agent in sufficient copies for each of the Banks not later
               than  the  commencement  of  each  financial  year,  a  projected
               consolidated  balance sheet,  profit and loss account,  cash flow
               statement and rolling  monthly cash forecast of the Group for (or
               in the case of a balance sheet, as at the end of) the forthcoming
               annual  financial  year,  together  with details of the principal
               assumptions  underlying such projections and a description of the
               proposed activities of the Group during such period.

          (d)  (Provision  of  further  information):   The  Borrower  and  each
               Guarantor will:

               (i)  (Special resolutions):  deliver to the Agent before the date
                    of the  relevant  meeting,  a copy of any notice  calling an
                    extraordinary  general  meeting of any Obligor or  proposing
                    any special or extraordinary resolution thereof;
              (ii)  (Reports to members etc.): deliver to the Agent, upon issue,
                    a copy  of  all  material  reports,  accounts,  notices  and
                    circulars issued by any Obligor (in order to comply with any
                    applicable  legislative  requirement or its constitution) to
                    any of its members;
             (iii)  (Certificate  of  default):  as  and  when  required  by the
                    Agent,  furnish  the  Agent  with  a  statement  made  by  2
                    directors or 1 director and the Chief  Financial  Officer of
                    the Borrower stating whether or not an Event of Default or a
                    Potential  Event of Default  has  occurred  and,  if it has,
                    setting out details  thereof and the steps (if any) taken or
                    proposed to be taken to remedy or cure the same;
              (iv)  (Evidence of compliance): as and when required by the Agent,
                    furnish to the Agent proof to the  satisfaction of the Agent
                    that the Obligations of the Borrower and each Guarantor have
                    been and continue to be performed and observed;
              (v)   (Business  Plan):  provide  a revised  Business  Plan to the
                    Agent  whenever  there is any  change  to the  timing of the
                    payments, budgets or assumptions contained therein;
              (vi)  (Authorisations):  deliver to the Agent, Quarterly a copy of
                    all material Authorisations issued in relation to a Business
                    in the preceding quarter; and
             (vii)  (Government  Agency): a copy of all material  correspondence
                    with Government Agencies.

          (e)  (Notification of certain events): The Borrower and each Guarantor
               will  promptly  notify the Agent in writing as soon as it becomes
               aware of the occurrence of:

               (i)  (Event of Default):  any Event of Default or Potential Event
                    of Default;
              (ii)  (Litigation):  any  litigation,   arbitration,  criminal  or
                    administrative proceedings or labour disputes:


                                       40
<PAGE>


                    (A)  commenced by an Obligor; or
                    (B)  against an Obligor or any Obligor's property, assets or
                         revenues  that, if decided  adversely to the Obligor is
                         reasonably  likely to incur a  liability  greater  than
                         $500,000,
                    and   provide   periodic   reports  on  the  status  of  the
                    litigation;
             (iii)  (Shutdown):  any actual threatened shutdown or suspension of
                    the cable television  service or telephone  service operated
                    by the Group  (including  as a result of any shutdown of the
                    Telecom  New Zealand  Limited  network or any  inability  to
                    interconnect   with  that   network)   except   shutdown  or
                    suspension  in  the  ordinary   course  of  business;
              (iv)  (Material Adverse Effect):  any event which would reasonably
                    be expected to have a Material Adverse Effect;
               (v)  (Authorised  persons):  any change in the persons authorised
                    by  it  to  sign  Bills,  notices,   certificates  or  other
                    documents in connection  with the Facility,  giving specimen
                    signatures of any new person so authorised and giving to the
                    satisfaction of the Agent  evidence,  where requested by the
                    Agent, of the authority of that person; or
              (vi)  (Trustee):  if  any  Obligor  becomes  or is  appointed  the
                    trustee of any trust or comes to hold any  property  subject
                    to or impressed by any trust.

          (f)  (Security  Property):   The  Borrower  and  each  Guarantor  will
               maintain  and protect all of its  Security  Property and will not
               take any  action  that is  reasonably  likely  to  result  in the
               business of the Group not  remaining  capable of  operating  in a
               manner that will enable the Borrower to meet its obligations.

17.3      Security Value

          (a)  (Restriction  on  Encumbrances):  No Borrower or  Guarantor  will
               create, permit or suffer to exist any Encumbrance over all or any
               of its assets (including the Security Property) except for:

               (i)  until the first Utilisation Date, the Nortel/DSC Security;
              (ii)  the Securities;
             (iii)  liens arising by operation of law in the ordinary  course of
                    day-to-day trading and securing obligations not more than 90
                    days overdue;
              (iv)  a banker's lien or right of set-off or  combination  arising
                    by  operation  of law or  practice  over  property  or money
                    deposited  with a  banker  in  the  ordinary  course  of the
                    Obligor's ordinary business;
               (v)  contractual  set off  rights in  respect  of the  Borrower's
                    transactional banking facilities and arrangements;
              (vi)  arrangements  constituted  by retention of title (other than
                    an Adverse Title  Retention  Arrangement) in connection with
                    the  acquisition of goods provided the goods are acquired in
                    the ordinary course of the Obligor's business;


                                       41
<PAGE>


             (vii)  Encumbrances  arising by operation of law in connection with
                    rights  arising  in the  ordinary  and  usual  course of its
                    business in favour of an unpaid seller,  the  obligations of
                    the purchaser not being more than 90 days overdue; or
            (viii)  Encumbrances  created by statute in favour of governmental
                    or semi-governmental authorities or departments securing the
                    payment of rates or Taxes  except as created  because of the
                    failure to duly pay Taxes; or
              (ix)  Encumbrances  existing as at the date of this  Agreement  in
                    favour of parties to the Pole and  Cabling  Duct  Agreements
                    referred to in paragraphs  (a) and (b) of the  definition of
                    Material Contracts.

          (b)  (Transactions  similar to  security):  No Borrower  or  Guarantor
               will:

               (i)  sell or  otherwise  dispose  of any of its  assets  on terms
                    whereby such asset is or may be leased to or  re-acquired or
                    acquired by any member of the Group; or
              (ii)  sell or otherwise dispose of any of its receivables; or
             (iii)  except  for  assets  acquired  in  the  ordinary  course  of
                    business  on the  normal  commercial  terms  of the  vendor,
                    purchase  any asset on terms  providing  for a retention  of
                    title by the vendor or on conditional sale terms or on terms
                    having a like  substantive  effect to any of the  foregoing,
                    except  where such assets are fixed  assets,  the  aggregate
                    capital  value  of the item or items  acquired  or  supplied
                    under  the  same  contract  (or  under a series  of  related
                    contracts)  will be less than  $100,000 or such other amount
                    as agreed.

          (c)  (Adverse  Title  Retention  Arrangements):  The Borrower and each
               Guarantor will not enter into or allow to exist any Adverse Title
               Retention Arrangement in respect of any assets delivered to it in
               the course of its business.

          (d)  (Disposals):  No Borrower or Guarantor  will,  either in a single
               transaction or in a series of transactions whether related or not
               and whether voluntarily or involuntarily, sell, transfer, assign,
               lease or otherwise part with possession of or dispose of:

               (i)  any shares in any member of the Group;
              (ii)  all  or  any  other  part  of  its   respective   assets  or
                    undertaking, other than:
                    (A)  disposals  in the  ordinary  course of  business of the
                         Group;
                    (B)  disposals of surplus,  obsolete or redundant  plant and
                         equipment,  not required for the efficient operation of
                         its business, at fair market value;
                    (C)  the  expenditure  of  cash in  payment  for  assets  or
                         services  acquired at market value in the course of its
                         business;
                    (D)  disposals  of assets in exchange for other  assets,  in
                         the  reasonable  opinion  of the person  effecting  the
                         disposal,  comparable or superior as to type,  value or
                         quality;


                                       42
<PAGE>

                    (E)  disposals of assets to any member of the Group;
                    (F)  disposals of assets for the purposes of  replacement of
                         those assets; or
                    (G)  disposals of assets with the prior  written  consent of
                         the Agent.

          (e)  (Pari passu ranking):  The Borrower and each Guarantor undertakes
               that its  obligations  under this  Agreement rank and will at all
               times rank at least pari passu in right and  priority  of payment
               and in point of security  (save by reason of and to the extent of
               its security  afforded  thereto by the  Securities  or, until the
               first  Utilisation  Date, the  Nortel/DSC  Security) with all its
               other present and future unsecured and unsubordinated obligations
               (including, without limitation, obligations arising under hedging
               arrangements),  other than  obligations  applicable  generally to
               companies incorporated in its jurisdiction of incorporation which
               have priority by operation of law (including,  without  prejudice
               to the  generality  of the  foregoing,  in respect of  employees'
               remuneration, Taxes and like obligations).

17.4      Liabilities

          (a)  (Restriction  on  guarantees):  No  Borrower or  Guarantor  will,
               without the prior consent in writing of the Agent, enter into any
               bond,   guarantee  or  indemnity  in  respect  of  any  Financial
               Liabilities in favour of any person other than:

               (i)  pursuant to the Transaction Documents;
              (ii)  a guarantee  given to a bank to facilitate  the operation of
                    bank accounts of members of the Group  maintained  with such
                    Bank on a net balance basis; or
             (iii)  in  respect of any  Financial  Liabilities  permitted  under
                    clause 17.4(c).

          (b)  (Further  restriction  on  guarantees):  No Borrower or Guarantor
               will,  without the prior  consent in writing of the Agent,  enter
               into  any  bond,   guarantee  or  indemnity  in  respect  of  any
               obligation  except Financial  Liabilities in favour of any person
               other than in respect of a member of the Group. For the avoidance
               of  doubt,  it is  agreed  that  take or pay or  minimum  payment
               obligations  incurred by a Borrower or a Guarantor are not bonds,
               guarantees or indemnities to which this clause 17.4(b) applies.

          (c)  (Financial  Liabilities):  No Borrower or Guarantor  will create,
               incur or be liable for any Financial  Liabilities of itself other
               than:

               (i)  under the Transaction Documents;
              (ii)  indebtedness  under  transactional  banking  facilities  and
                    arrangements;
             (iii)  trade  or  other  similar   indebtedness   incurred  in  the
                    ordinary course of business;
              (iv)  subordinated  loans  from  its  shareholders  or any  person
                    approved by the Agent provided that:


                                       43
<PAGE>


                    (A)  such loans are on terms and conditions  approved by the
                         Agent; and
                    (B)  the Agent has been granted a limited recourse  mortgage
                         over such loans;
               (v)  cash backed  performance  bond facilities up to an aggregate
                    of  $1,000,000  or such larger amount agreed to by the Agent
                    acting on directions from the Majority Banks;
              (vi)  under finance leases and trade related  letters of credit up
                    to  an  aggregate  of  $2,500,000,  but  so  that  Financial
                    Liabilities  under finance leases do not exceed  $500,000 at
                    any time; or
              (vii) any Financial Liability approved by the Agent,

               and ensure that no  indebtedness  referred to in  paragraph  (iv)
               above is repaid or repurchased  without the prior written consent
               of the Agent or until the Facility has been repaid and  cancelled
               in full.

          (d)  (Options):  No  Borrower  or  Guarantor  will,  without the prior
               consent  of the  Agent,  enter  into or  permit  to  subsist  any
               arrangement whereby any person:

               (i)  has  the  right  (whether  or  not  exercisable  only  on  a
                    contingency)  to require any member of the Group to purchase
                    or  otherwise  acquire  any  property  or  any  interest  in
                    property; or
              (ii)  has  the  right  (whether  or  not  exercisable  only  on  a
                    contingency)  to require  any member of the Group to sell or
                    otherwise dispose of any property or interest in property,

               other than in the ordinary course of business.

          (e)  (Treasury Transactions): No Borrower or Guarantor will enter into
               any  interest  rate swap,  cap,  ceiling,  collar or floor or any
               currency swap, futures, foreign exchange or commodity contract or
               option  (whether  over the  counter  or  exchange  traded) or any
               similar  treasury  transaction,  other  than in  accordance  with
               clause 17.12(h),  spot foreign exchange contracts entered into in
               the ordinary course of business and transactions entered into for
               the  hedging  of actual or  projected  exposures  arising  in the
               ordinary course of ordinary trading activities of the Group or to
               meet its obligations under this Agreement.

17.5      Use of Funds

          (a)  (Repayment of shareholders' loans): No Borrower or Guarantor will
               repay,  and the Borrower and each  Guarantor will procure that no
               amount of shareholders' loans to any Obligor will be repaid prior
               to the Termination  Date without the prior written consent of the
               Agent except where the shareholder receiving the repayment is the
               Borrower or a Guarantor or where permitted under clause 17.6;

          (b)  (Loans out):  No Borrower or Guarantor  will make any loan to any
               person save for:


                                       44
<PAGE>


               (i)  loans made by one  member of the Group to another  member of
                    the Group where the recipient of the loan is the Borrower or
                    a Guarantor;
              (ii)  deposits made with banks in the ordinary  course of business
                    as  part  of  its  transactional   banking   facilities  and
                    arrangements; and
             (iii)  the  advance  of  $1,000,000   made  to   Australian   Power
                    Industries   (NZ)   Limited   under   clause   4.13  of  the
                    Construction  Contract  referred  to in  clause  (e)  of the
                    definition of Material Contracts.

17.6      Dividends and Share Capital

          (a)  (Restriction on Dividends): Up to and including 31 December 2001,
               the Borrower and each Guarantor undertake not to:

               (i)  declare,  make or pay any  dividend,  charge,  fee or  other
                    distribution  (whether  in cash or in kind) on or in respect
                    of its share capital; or
              (ii)  make any  payment  of  interest  or any  similar  payment in
                    respect of any shareholder loans; or
             (iii)  pay any fees under any  management  agreements  or technical
                    assistance  agreements  with any Related Company (other than
                    reimbursement  of  operating  expenses  under the  Technical
                    Assistance Agreement).

          (b)  (Payment of Dividends): From 1 January 2002, if in respect of any
               Quarter Total  Debt/EBITDA is 4.75 or less, the Borrower may make
               payments of the sort  described in paragraph (a) above during the
               next Quarter or at any time thereafter provided that:

               (i)  at the time such payments are to be made no Event of Default
                    or monetary  Potential  Event of Default has occurred and is
                    subsisting; and
              (ii)  the  payments by the Borrower in aggregate do not exceed 50%
                    of the Excess  Cash Flow for the Quarter in respect of which
                    the payment is permitted.

          (c)  (Share Capital): No Borrower or Guarantor will, without the prior
               written consent of the Agent:

               (i)  redeem,  repurchase,  defease,  retire  or repay  any of its
                    share capital, or resolve to do so; or
              (ii)  issue any share  capital  to any  person  unless  such share
                    capital will form part of the Security Property.

17.7      Intellectual Property Rights

          (a)  (Registrations):  The Borrower and each  Guarantor will make such
               registrations and pay such fees,  registration  Taxes and similar
               amounts  as are  necessary  to keep its  registered  intellectual
               property  rights  which are material to its business in force and
               to record its interest in the intellectual property rights.


                                       45
<PAGE>


          (b)  (Protection of Rights): The Borrower and each Guarantor will take
               such  steps  as  are   necessary  and   commercially   reasonable
               (including,   without   limitation,   the  institution  of  legal
               proceedings)   to  prevent   third   parties   infringing   those
               intellectual  property  rights referred to in paragraph (a) above
               and (without  prejudice  to paragraph  (a) above) take such other
               steps as are reasonably  practicable to maintain and preserve its
               interests in those rights.

          (c)  (No  Abandonment):  No  Borrower  or  Guarantor  will  permit any
               registration  of any of the  intellectual  property  rights to be
               abandoned,  cancelled  or  lapsed or to be liable to any claim of
               abandonment   for  non-use  or   otherwise   except   where  such
               abandonment,  cancellation  or  lapse  would  not  reasonably  be
               expected to have a Material Adverse Effect.

17.8      Insurances

          (a)  (Insure):  The  Borrower and each  Guarantor,  to the extent that
               insurance is  generally  available in  commercial  markets,  will
               insure all Insurable Property against:

               (i)  loss, theft, damage or destruction; and
              (ii)  any  liability  from  time  to  time  of the  Borrower,  the
                    Guarantors or the Agent in respect of the ownership,  use or
                    occupation of the Insurable Property.

          (b)  (Terms): All Insurances will:

               (i)  be taken out with a reputable insurer;
              (ii)  have the name of the Agent noted as loss payee;
             (iii)  insure  the  Borrower's,  the  Guarantors'  and the  Agent's
                    respective insurable interests;
              (iv)  be for such  amounts and cover such risks and  contain  such
                    terms and conditions as the Agent reasonably requires; and
               (v)  not be varied or cancelled without the prior written consent
                    of  the  Agent   except  if  replaced   with   substantially
                    equivalent insurance;

          (c)  (Full  replacement  value):  All Insurances  against loss, theft,
               damage or destruction  of the Insurable  Property will be for the
               full replacement value thereof from time to time unless the Agent
               otherwise agrees in writing.

          (d)  (Policies):  All documents relating to the Insurances,  including
               without  limiting the  generality of the  foregoing,  a certified
               copy of each  proposal  form  under  which  the  application  for
               insurance   was  made,   the  relevant   policies,   all  renewal
               certificates, certificates of currency and endorsement slips, are
               to be delivered  by the Borrower and each  Guarantor to the Agent
               immediately upon receipt.


                                       46
<PAGE>

          (e)  (Maintenance of Insurance and production of policy): The Borrower
               and each Guarantor will:

               (i)  maintain all Insurances;
              (ii)  duly and punctually pay or cause to be paid all premiums and
                    other money payable under,  and perform,  observe and fulfil
                    the terms of, all Insurances;
             (iii)  produce  to the  Agent  the  policy  of  Insurance  and  the
                    receipts for the payment of each premium and all other money
                    payable  in respect of each  policy  (or other  evidence  of
                    payment  satisfactory  to the Agent) at least 14 days before
                    the due date for renewal thereof; and
              (iv)  to the extent it is able to do so,  ensure that every policy
                    of Insurance:
                    (A)  contains   an   agreement   by   the   insurer    that,
                         notwithstanding  the  lapse of any  policy  (except  by
                         reason of expiration  in accordance  with its terms) or
                         any  right  of  cancellation  of  the  insurer  or  any
                         cancellation  by the  Borrower or a Guarantor  (whether
                         voluntary or involuntary), that policy will continue in
                         force for the benefit of the Agent for at least 30 days
                         after written notice of  cancellation  has been sent by
                         certified  mail to the Agent and that no  reduction  in
                         limits or coverage in that policy in whole or part will
                         be effected; and
                    (B)  insures  the  Agent's  interest up to the limits of the
                         policy  regardless  of any breach or  violation  by the
                         Borrower   or  the   Guarantor   of   any   warranties,
                         declarations or conditions contained in that policy.

          (f)  (Full disclosure):  The Borrower and each Guarantor will disclose
               to the proposed  insurer all facts material to the insurer's risk
               before entering into the Insurances.

          (g)  (No  liability):  The Agent will not incur any  liability  to the
               Borrower or a  Guarantor  arising out of any failure by the Agent
               to effect or renew any  Insurance,  nor will the Agent  incur any
               liability  arising  out of any  failure  by the  insurer  for any
               reason to meet any claim under any Insurance.

          (h)  (Option as to payments): If any part of the Insurable Property is
               lost,  stolen,  damaged or destroyed,  the sum received under any
               Insurance will be applied:

               (i)  towards  the   replacement   or  repair  of  such  Insurable
                    Property; or
              (ii)  in or towards repayment or reduction of the Obligations,

               and  where  such  loss,  theft,  damage  or  destruction  of  the
               Insurable  Property  would have a Material  Adverse  Effect,  the
               application  of such sum will be  applied,  at the  option of the
               Agent, as specified in (i) or (ii) above.


                                       47
<PAGE>


     (i)  (Money  paid  under  Insurances):  If  any  money  payable  under  the
          Insurances  comes into the hands of the  Borrower or a  Guarantor,  it
          will be paid in  accordance  with  clause  17.8(h)(i)  or to the Agent
          immediately.

     (j)  (Not prejudice  Insurances):  The Borrower and each Guarantor will not
          cause or permit  (to the  extent it is within  its  control  to do so)
          anything to be done which may:

          (i)  render any part of the  Insurances  void,  voidable or  otherwise
               unenforceable;
         (ii)  hinder  or  prevent  recovery  of any  money  in  respect  of the
               Insurances; or
        (iii)  cause the premiums  and other money  payable to any insurer to be
               increased.

17.9      Licences

          The  Borrower  and each  Guarantor  will,  and will  ensure  that each
          Obligor will:

          (a)  (Renew):  on or before the time and in the manner  prescribed  by
               the relevant statute for each Licence,  apply for and procure the
               renewal of the  Licence  and pay or cause to be paid the  renewal
               fees and other sums  required  in  respect of the  Licence or the
               renewal of the Licence  within the time allowed and in the manner
               prescribed  by the statute  unless the non renewal of the Licence
               would,  having regard to all of the circumstances  (including the
               non renewal of other  Licences at any prior time) and taking into
               account the  cumulative  effect of all such  previous  events and
               circumstances,  not be  reasonably  likely  to  have  a  Material
               Adverse Effect;

          (b)  (Production of the Licence):  upon request,  produce to the Agent
               each  Licence and all  receipts  for payments in relation to each
               Licence  unless  already  delivered  to the  Agent  under  clause
               17.11(f);

          (c)  (No  cancellation):  not do,  allow or suffer any act,  matter or
               thing as a result of which any Licence is or may be  surrendered,
               forfeited,  withdrawn,  cancelled,  refused or rendered  void, or
               whereby the holder of any Licence is disqualified  permanently or
               temporarily from receiving or continuing to hold a Licence except
               on  surrender  and  renewals of Licences  unless such  surrender,
               forfeiture, withdrawal,  cancellation, refusal, rendering void or
               disqualification would, having regard to all of the circumstances
               (including  but  not  limited  to,  the  surrender,   forfeiture,
               withdrawal,    cancellation,    refusal,    rendering   void   or
               disqualification  of other Licences at any prior time) and taking
               into account the  cumulative  effect of all such previous  events
               and  circumstances,  not be reasonably  likely to have a Material
               Adverse Effect;

          (d)  (No  transfer):  not  surrender  or concur in the transfer of any
               Licence  to any person  other  than to an Obligor  where to do so
               would have a Material Adverse Effect;


                                       48
<PAGE>


          (e)  (Comply with  statutes):  comply with all statutes and all lawful
               requirements  of  every  Government  Agency  in  relation  to the
               Licences  if failure to comply  would  reasonably  be expected to
               result  in  a  forfeiture,   termination,   cancellation,   fine,
               non-renewal or suspension of such Licences; and

          (f)  (Notice):  promptly  notify the Agent if any  relevant  authority
               issues any material notice in respect of any Licence or threatens
               to suspend or cancel any of the  Licences or if it becomes  aware
               of any enquiry by any relevant  authority  which could affect any
               of the Licences.

17.10     Material Contracts

          (a)  (No Changes):  The Borrower and each  Guarantor  will not without
               the prior written consent of the Agent (acting on instructions of
               the  Majority  Banks)  which  consent  will not  unreasonably  be
               withheld:

               (i)  make (whether formally or by conduct) any material amendment
                    or  modification  to any of the Material  Contracts or waive
                    compliance  with  any  material  provision  of  any  of  the
                    Material Contracts;
              (ii)  terminate,   repudiate,   rescind  or  revoke  any  Material
                    Contract;
             (iii)  except where the  Material  Contract  may be  terminated  by
                    another party to it at any time without cause, in which case
                    this clause  17.10(a)(iii)  shall not apply, take or fail to
                    take any action which could result in the termination of any
                    of the Material Contracts; or
              (iv)  assign  or  novate  its  interest  in any  of  the  Material
                    Contracts  or  consent  or  permit  (where  its  consent  or
                    permission is required) any other party to do the same.

          (b)  (Protection): The Borrower and each Guarantor will:

               (i)  comply with the material  terms of the  Material  Contracts;
              (ii)  take all action reasonably  available to them to ensure that
                    the Material Contracts remain in full force and effect; and
             (iii)  provide  the  Agent  with  copies  of all  material  notices
                    served or received under any of the Material Contracts.

17.11     Security Property

          (a)  (Good repair):  The Borrower and each Guarantor will maintain and
               protect  the  Security  Property  and keep the same in a good and
               tenantable  state  of  repair  and  in  good  working  order  and
               condition,  and  will on  being  required  so to do by the  Agent
               promptly   rectify  every  material  defect  in  the  repair  and
               condition thereof.

          (b)  (Outgoings):  The  Borrower  and  each  Guarantor  will  duly and
               punctually  pay when due all outgoings  including  rent and Taxes
               payable by it in respect of the Security Property.



                                       49
<PAGE>


          (c)  (Not to  prejudice):  The Borrower and each Guarantor will not do
               or (to the extent it is able)  permit any act,  omission or thing
               whereby  any part of the  Security  Property  becomes or could be
               liable  to  surrender,  forfeiture  or  cancellation  or  becomes
               prejudiced  in any  manner  or the  value  of any  Security  as a
               security to the Banks becomes or could be lessened.

          (d)  (Permit Inspection):  The Borrower and each Guarantor will permit
               the Agent and any employee,  agent or professional adviser of the
               Agent,  to enter any land or  buildings  owned or occupied by the
               Borrower  or  the  Guarantor  at  all   reasonable   times  after
               reasonable  notice,  to  inspect  its  condition  and to  monitor
               compliance with the Transaction Documents.

          (e)  (Protection  of  Security   Property):   The  Borrower  and  each
               Guarantor  will at the  request  of the Agent  take or defend all
               legal proceedings that the Agent considers necessary or desirable
               for the  preservation,  protection  or recovery  of the  Security
               Property.

          (f)  (Documents of title and other securities):  The Borrower and each
               Guarantor  will lodge with the Agent promptly upon request by the
               Agent:

               (i)  all  certificates,  scrip  and  other  indicia  of  title or
                    interest in any shares or securities;
              (ii)  all negotiable instruments other than cheques;
             (iii)  all certificates of title to land and all original  property
                    leases;
              (iv)  all Licences unless delivered under clause 17.9(b);
               (v)  all  other  documents  of  title  to the  Security  Property
                    immediately on request of the same from the Agent.

17.12     General undertakings

          (a)  (Perform  Obligations):  The  Borrower  and each  Guarantor  will
               perform, fulfil and observe its Obligations.

          (b)  (Maintain  Authorisations):  The Borrower and each Guarantor will
               obtain,  renew,  maintain and comply with all  Authorisations and
               all  consents,  licences,  approvals and  authorisation  of every
               local  government   authority   required  under  any  legislation
               (including, without limitation, the Resource Management Act 1991)
               necessary in connection  with the business (if any) carried on by
               it,  for  the  validity  and  enforceability  of the  Transaction
               Documents and the  performance of its  obligations  hereunder and
               thereunder and the  effectiveness  of each Security as a security
               with the stated  priority  and it will  promptly  provide  copies
               thereof to the Agent when these are obtained or renewed.

          (c)  (Change of business):  None of the Borrower or any Guarantor will
               make  or  threaten  to  make  any  change  in the  nature  of its
               respective business as conducted at the date of this Agreement or
               take any action which would result in the business not  remaining
               capable of operating.


                                       50
<PAGE>


          (d)  (Any action): No Guarantor will take any action that would result
               in the  Borrower not  remaining  capable of operating in a manner
               that would enable the Borrower to meet all of its Obligations.

          (e)  (Mergers):  None of the Borrower or any Guarantor will enter into
               any merger or  consolidation or make any acquisition of any other
               person or business except in respect of the assets or shares of a
               member of the Group by the Borrower or a Guarantor.

          (f)  (Administration   and  liquidation  orders  etc.):  None  of  the
               Borrower  or any  Guarantor  will  make  or join  in  making  any
               application  to any  court  for an  administration,  liquidation,
               receivership,  dissolution  or other  similar order to be made in
               relation to any member of the Group.

          (g)  (Arm's-length  terms):  No Borrower or Guarantor  will enter into
               any  transaction  with any  person  otherwise  than on (or better
               than)  arm's-length terms and for full market value, and save for
               intercompany loans permitted pursuant to clause 17.5(b).

          (h)  (Hedging):  The Borrower must promptly  establish,  implement and
               (unless  the Agent  acting on the  instructions  of the  Majority
               Banks  otherwise  consents)  maintain until the  Obligations  are
               satisfied in full, an interest rate hedging  program in line with
               prudent  business  practice to manage and protect the Group on an
               ongoing basis against  increases or  fluctuations in the interest
               or discount rates payable by the Borrower  under this  Agreement,
               whereby the Borrower's Interest Expense of at least 50 percent of
               the  Senior  Debt  from time to time  will be fixed  pursuant  to
               Hedging  Agreements  in accordance  with the notional  amortising
               principal amounts specified by the Agent from time to time. At no
               time  will  the  Borrower  hedge  more  than  100% of its  actual
               exposures in any market.

          (i)  (Constitutional  Documents):  No Borrower or Guarantor will, save
               as  required by law,  amend or agree to amend its  constitutional
               documents  or by-laws of any member of the Group in any way which
               has a Material Adverse Effect.

          (j)  (Related  Entity  Transactions):  No Borrower or  Guarantor  will
               knowingly enter into any transaction  with any shareholder of the
               Borrower  or  any  Related  Company  of  any  shareholder  of the
               Borrower  without  the prior  written  consent of the Agent (such
               consent not to be unreasonably  withheld) unless such transaction
               is entered  into on  ordinary  commercial  terms in the  ordinary
               course of that company's business.

          (k)  (Bank  Accounts):  No Borrower or Guarantor will open or maintain
               any  account  with any  branch  of any  bank or  other  financial
               institution  providing  like  services  (other  than  an  account
               maintained  pursuant  to  the  requirements  of  the  Transaction
               Documents) unless the opening and maintenance of such account has
               been approved by the Agent except for accounts for  transactional
               banking  facilities and  arrangements  in the ordinary  course of
               business,  including without limitation its transactional banking
               facilities  with Bank of New  Zealand  Limited in place as at the
               date of this Agreement and which the Agent hereby approves.



                                       51
<PAGE>


          (l)  (Compliance  with laws):  The  Borrower and each  Guarantor  will
               comply in all material  respects with all applicable laws, rules,
               regulations,  orders and by-laws of any governmental authority or
               local government, whether domestic or foreign having jurisdiction
               over it or any of its assets.

          (m)  (Taxes): The Borrower and each Guarantor will pay all Taxes other
               than  those   contested   in  good  faith   (including,   without
               limitation, the Approved Issuer Levy) due and payable by it.

          (n)  (Access):  Upon notice being given by the Agent, the Borrower and
               each Guarantor will procure that any one or more  representatives
               of the Agent be allowed (at the Agent's risk and expense) to have
               access  during  normal  business  hours to its assets,  books and
               records  and  to  inspect   the  same   without   disruption   or
               interference to the operation of those assets, books and records.

          (o)  (Environmental Laws): The Borrower and each Guarantor will:

               (i)  comply with all  Environmental  Laws  affecting its business
                    where  non-compliance  with such laws  would have a Material
                    Adverse Effect;
              (ii)  inform the Agent of any material breach of any Environmental
                    Law,  or any  notice  or  order  received  by it  under  any
                    Environmental  Law,  which  would  have a  Material  Adverse
                    Effect; and
             (iii)  provide the Agent upon request,  but at the sole cost of the
                    Borrower  or the  Guarantor  (as  the  case  may  be),  with
                    environmental   audits  and   reports  in  respect  of  that
                    company's   assets,  in  a  form  and  from  an  independent
                    consultant  reasonably  acceptable  to the  Agent  where the
                    Agent, on reasonable grounds,  believes that the Borrower or
                    a  Guarantor  (as  the  case  may  be) is in  breach  of any
                    Environmental  Law, the  consequences of which are likely to
                    have a Material Adverse Effect.

18.       FINANCIAL AND OPERATING RATIOS

18.1      Operating Ratios

          The Borrower and each Guarantor will ensure that:

          (a)  (Total  Debt/Homes  Serviceable):  as at the  end of  each  month
               listed  in Part 1 of  Schedule  2,  Total  Debt  as at that  date
               divided by the number of Homes  Serviceable  as at that date does
               not exceed the amount listed in Part 1 of Schedule 2;


                                       52
<PAGE>


          (b)  (Subscribers or Equivalent  Billing Units): as at the end of each
               month  listed  in Part 1 of  Schedule  2,  either  the  number of
               Subscribers  as at that date or  Equivalent  Billing  Units as at
               that date is greater than the relevant amount listed in Part 1 of
               Schedule 2.

18.2      Financial Ratios

          The Borrower and each Guarantor will ensure that:

          (a)  (EBITDA):  until 30  September  2000 in  respect  of each 3 month
               period  ending  on the date  specified  in Part 2 of  Schedule  2
               EBITDA  will not be less  than  the  amount  listed  in Part 2 of
               Schedule 2;

          (b)  (Revenue):  until 30 September  2000 in respect of each  calender
               month  ending  on the  date  specified  in Part 2 of  Schedule  2
               Revenue  will not be less  than the  amount  listed  in Part 2 of
               Schedule 2;

          (c)  (Total  Debt/Annualised  EBITDA):  commencing  from  the 3  month
               period ending 31 December 2000, in respect of each 3 month period
               ending on a date specified in Part 3 of Schedule 2, Total Debt as
               at that date  divided by  Annualised  EBITDA  will not exceed the
               amount  listed in Part 3 of  Schedule 2 and  thereafter  will not
               exceed 3.50;

          (d)  (EBITDA/Interest  Expense):  commencing  from the 3 month  period
               ending 31 March 2001, in respect of each 3 month period ending on
               a date  specific  in Part 3 of  Schedule  2,  EBITDA  divided  by
               Interest  Expense less interest revenue will not be less than the
               amount listed in Part 3 of Schedule 2 and thereafter  will not be
               less than 5.00.

18.3      Compliance Certificate

          (a)  The Borrower will deliver a Compliance  Certificate  to the Agent
               within 10 days after:

               (i)  until 30 June 2000, the end of each month; and
              (ii)  from 1 July 2000, the end of each Quarter,

               (except  for  Compliance  Certificates  given  at the  end of the
               financial  year which must be given promptly but in any event not
               later  than 120 days from the end of the  financial  year) and at
               each Utilisation Date for a new Advance.

          (b)  At the end of each 6 month period from and  including the 6 month
               period ending on 30 June 1999,  the Borrower will ensure that the
               Borrower's auditor reviews one Compliance  Certificate  delivered
               to the Agent at the end of that 6 month  period  and will  ensure
               that the Borrower's auditor provides a review report to the Agent
               within  30  days  of the  end  of the  relevant  6  month  period
               detailing whether any items have come to the auditor's  attention
               through the course of the  auditor's  review which would  suggest
               that the ratios in clauses 18.1 or 18.2 were materially misstated
               in that Compliance Certificate.


                                       53
<PAGE>

19.       DEFAULT AND TERMINATION

19.1      Events of Default

          Each of the  following  events is an Event of Default,  whether or not
          the cause is beyond the control of the Borrower, the Guarantors or any
          other person:

          (a)  (Failure to pay): the Borrower or a Guarantor does not pay and in
               the  specified  manner,  any  amount  payable  by  it  under  any
               Transaction  Document  (except  in the case of a  failure  in the
               banking  system in which case the Borrower or Guarantor  must pay
               within 2  Banking  Days of being  notified  by the  Agent of such
               system failure);

          (b)  (Failure to comply):  the Borrower or Guarantor defaults in fully
               performing,   observing  and  fulfilling  any  provision  of  any
               Transaction Document other than a provision requiring the payment
               of money as contemplated by clause 19.1(a),  provided that in the
               case of a default  capable of remedy,  that  default has not been
               remedied  within 7 days of the  occurrence (or such longer period
               agreed by the Agent acting on instructions from Majority Banks);

          (c)  (Untrue  warranty):  any  representation,  warranty or  statement
               made,   repeated  or  deemed  to  be  made  or  repeated  in  any
               Transaction  Document or in connection with the Facility or under
               this  Agreement  is proved to be untrue in any  material  respect
               when made,  repeated or deemed to be made,  repeated or furnished
               (as the case may be);

          (d)  (Breach  of  undertaking):   any  Obligor  breaches  any  written
               undertaking  given at any time to the Banks or the Agent or fails
               to comply with any condition imposed by the Banks or the Agent in
               agreeing to any matter (including any waiver);

          (e)  (Default under other transactions):

               (i)  any Financial Liability greater than $500,000 of any Obligor
                    becomes,  or becomes capable of being declared,  prematurely
                    due and  payable  as a result  of a  default  or an event of
                    default howsoever described thereunder;
              (ii)  any Financial Liability greater than $500,000 of any Obligor
                    or any sum  payable in respect  thereof is not paid when due
                    and payable;
             (iii)  any  Encumbrance  securing more than $500,000 over any asset
                    of an Obligor  becomes capable of being enforced as a result
                    of a  default  or an event of  default  howsoever  described
                    thereunder;
              (iv)  any Obligor  defaults  in fully  performing,  observing  and
                    fulfilling any of the terms, covenants and conditions of any
                    Encumbrance  securing more than $250,000  relating to any of
                    its assets or any  Encumbrance  relating to any asset of any
                    Obligor otherwise becomes enforceable;


                                       54
<PAGE>


               (v)  any  Encumbrance  securing  more  than  $500,000  which is a
                    floating security over any asset of any Obligor crystallises
                    into, or otherwise becomes, a fixed or specific security; or
              (vi)  any  Encumbrance  securing more than $500,000  relating to a
                    Security  Property  is  varied  without  the  prior  written
                    consent of the Agent or comes to secure an aggregate debt or
                    liability   (present  or  future,   actual,   contingent  or
                    prospective and on any account  whatsoever) that exceeds the
                    amount previously agreed to by the Agent in writing;

          (f)  (Event of Insolvency):  any Event of Insolvency occurs in respect
               of any Obligor;

          (g)  (Cessation  of  business):  an Obligor  ceases,  or  threatens to
               cease,  to carry on all or a substantial  part of its business or
               all or a material  part of the  Obligor's  business is destroyed,
               confiscated,  appropriated  or resumed or suffers  loss or damage
               unless insured to the satisfaction of the Agent;

          (h)  (Void or voidable):  any Transaction Document is or becomes or is
               claimed by any Obligor to be void,  voidable or  unenforceable in
               whole or in part;

          (i)  (Illegality):  at any  time  it is  unlawful  for an  Obligor  to
               perform any of its  material  obligations  under any  Transaction
               Document;

          (j)  (Failure  to comply with  laws):  any  Obligor  fails to duly and
               punctually  comply with all statutes,  regulations and other laws
               binding on it where such failure has a Material Adverse Effect;

          (k)  (Change in ownership):  without the prior written  consent of the
               Agent,  acting on  instructions  from Majority Banks, a Change in
               Ownership occurs.  For the purpose of this sub-clause  "Change in
               Ownership" means:

               (i)  if the Share Transfer Date does not occur:

                    (A)  the combined indirect  shareholdings in the Borrower of
                         UIHI and STHC is less than 51%; and/or

                    (B)  the  indirect  shareholding  in the  Borrower of either
                         UIHI  or  STHC  falls  below  51%  of  its   respective
                         shareholding at the date of this Agreement; and

               (ii) with effect on and from the Share Transfer Date:

                    (A)  the indirect  shareholding  of UIHI in AUC is less than
                         51%; and/or
                    (B)  the direct  shareholding of AUC in S(NZ)HC is less than
                         100%; and/or
                    (C)  the direct  shareholding  of S(NZ)HC in the Borrower is
                         less than 65%; and/or
                    (D)  the direct  shareholding of AUC in the Borrower is less
                         than 35%.


                                       55
<PAGE>

          (l)  (Hedging):  the  Borrower  hedges more than 100% of its  physical
               exposures;

          (m)  (Reduction in capital):  without the prior written consent of the
               Agent (acting on instructions  from Majority  Banks),  an Obligor
               takes action to reduce its share capital;

          (n)  (Reserve  liability):  without the prior  written  consent of the
               Agent, a resolution is passed by the board of the Obligor for the
               amalgamation of that Obligor with another company;

          (o)  (Material  Contracts):  without the prior written  consent of the
               Agent (acting on  instructions  from Majority  Banks) an event of
               default  howsoever  described  occurs and is continuing under any
               Material  Contract  or any  Obligor  fails  to  comply  with  any
               material term of a Material  Contract or any Material Contract is
               prematurely  terminated  and  (other  than  in  the  case  of the
               Interconnection  Agreement) is not replaced with another contract
               or set of arrangements  reasonably acceptable to the Agent within
               30 days  or it  becomes  unlawful  for any  party  to a  Material
               Contract to perform its obligations and which event of default or
               failure to comply or termination  without acceptable  replacement
               or  illegality  remains  unremedied  7 days  after  the Agent has
               requested the Borrower to procure that it be remedied;

          (p)  (Loss of consents):

               (i)  any Authorisation,  approval,  consent,  licence (other than
                    the Licences),  exemption,  filing or  registration or other
                    requirement necessary:
                    (A)  to  enable  any  Obligor  to  comply  with  any  of its
                         material  obligations  under  any  of  the  Transaction
                         Documents or any of the Material Contracts; or
                    (B)  for the conduct of its business,
                    is  revoked  or refused or does not remain in full force and
                    effect in accordance with its terms once granted,  or is not
                    renewed  prior to its expiry or is  adversely  modified  and
                    that event has a Material Adverse Effect;
              (ii)  the  authority of any Obligor in the conduct of its business
                    is wholly  or  substantially  curtailed  by any  seizure  or
                    intervention by or on behalf of any authority or the ability
                    of the Group to conduct  its  business or to  determine  the
                    amount  it  will   charge  for  its   services  is  limited,
                    restricted or constrained by any Government Authority taking
                    any  action  or  such  Government  Authority  announces  its
                    intention  to take such  action in relation to any member of
                    the Group or any of its  assets to an  extent  greater  than
                    existing at the date of this Agreement and such action has a
                    Material Adverse Effect;


                                       56
<PAGE>

          (q)  (Licences):  a  breach  of any of the  Licences  occurs  and such
               breach is not remedied within 30 days or such other period as may
               be  specified  in any  notice  of breach  issued by the  relevant
               authority and the breach has a Material Adverse Effect; and

          (r)  (Material change):  any event or series of events whether related
               or not occurs which has a Material Adverse Effect.

19.2      Agent's rights upon Event of Default

          If any Event of  Default  occurs,  at any time  thereafter  while such
          event  continues,  the Agent may at its option if so authorised by the
          Majority  Banks and shall upon the direction of the Majority  Banks by
          written notice to the Borrower:

          (a)  declare that an Event of Default has occurred; and/or

          (b)  declare that the Total  Commitments and any other  obligations of
               the Banks or the  Agent to the  Obligors  under  the  Transaction
               Documents shall be cancelled forthwith,  whereupon the same shall
               be so  cancelled  and all fees  payable in  relation to the Total
               Commitments shall become immediately due and payable; and/or

          (c)  declare  that the  Advances to the  Borrower,  together  with all
               interest  accrued on those  Advances and all other  amounts which
               form part of the  Obligations (as specified in such notice) shall
               thenceforth  be  repayable on demand being made by the Agent (and
               in the event of any such demand those Advances, such interest and
               such other amounts shall be immediately due and payable); and/or

          (d)  declare the Advances to the Borrower immediately due and payable,
               whereupon they shall become  immediately due and payable together
               with all interest accrued on those Advances and all other amounts
               which form part of the Obligations.

20.       GUARANTEE AND INDEMNITY

20.1      Guarantee

          Each Guarantor hereby  irrevocably and  unconditionally  guarantees to
          the  Agent  and  each  Bank  (or any of  them)  the  due and  punctual
          performance in full of the Obligations.

20.2      Indemnity

          Each Guarantor as a separate,  additional and primary liability hereby
          irrevocably and unconditionally agrees to indemnify the Agent and each
          Bank and at all  times  hereafter  to keep  the  Agent  and each  Bank
          indemnified against any failure by the Borrower to duly and punctually
          perform its Obligations and Intended Obligations.


                                       57

<PAGE>


20.3      Performance of Obligations

          If the Borrower or a Guarantor or any other person bound to perform or
          pay after the expiration of any applicable grace period any Obligation
          or  Intended  Obligation  fails  to do so in  full  on  the  due  date
          therefor,  each Guarantor shall immediately on demand by either of the
          Agent or a Bank perform or pay that Obligation or Intended Obligation.

20.4      Liability as Guarantor and indemnifier

          Any reference  herein to the obligations or liabilities of a Guarantor
          shall be construed as a reference to its  obligations  or  liabilities
          whether as a Guarantor  or  indemnifier  hereunder  and the use of the
          expression  "Guarantor"  herein in  relation  to a party  shall not be
          construed  as  diminishing  that party's  obligations  hereunder as an
          indemnifier. The provisions of this clause 20 preserving the liability
          of a  party  hereto  as a  Guarantor  apply  mutatis  mutandis  to any
          liability that arises  whether in regard to that party's  guarantee or
          indemnity hereunder.

20.5      Principal obligation

          Each obligation of each Guarantor  hereunder  constitutes a principal,
          and not a  secondary  or  ancillary  obligation,  to the intent  that,
          without  limiting  in any  way  the  operation  of  any  of the  other
          provisions  of this clause 20, any  limitation  on the  liability of a
          Guarantor  which  would  otherwise  arise by reason of its status as a
          Guarantor,  co-Guarantor,  indemnifier  or  co-indemnifier  is  hereby
          negatived.

20.6      Absolute liability

          The  liability  of each  Guarantor  hereunder  is absolute  and is not
          subject to the execution of the Transaction Documents (other than this
          Agreement)  or  of  any  other  document  by  any  person  or  to  the
          performance  of any  condition  precedent  or  subsequent,  including,
          without  limiting  the  generality  of the  foregoing,  as between any
          Obligor  and the Agent,  the Banks or any of them or amongst  any 2 or
          more Obligors but is subject to non-payment or the  non-performance of
          an Obligation or Intended Obligation by the principal Obligor.

20.7      Unconditional liability

          The liability of each Guarantor hereunder shall not be affected by any
          act, omission,  matter or thing that would otherwise operate in law or
          in  equity  to  reduce  or  release  a  Guarantor  from its  liability
          including,  without  limiting the generality of the foregoing,  any of
          the following:

          (a)  (Event of Default): the occurrence of any Event of Default;

          (b)  (Distributions):  the  receipt  by the  Agent  or any Bank of any
               payment,  dividend or distribution under any Insolvency Provision
               in relation to the Borrower or any Guarantor;

          (c)  (Invalidity  etc.):  any  Transaction  Document or any payment or
               other  act the  making  or doing of which  would  otherwise  have
               formed part of the  Obligations,  or any  transaction or document
               which would  otherwise have given rise to such a payment or other
               act being or becoming or being  conceded to be illegal,  invalid,


                                       58
<PAGE>


               void,  voidable,  unenforceable  or  irrecoverable in whole or in
               part for any reason whether past,  present or future,  including,
               without limiting the generality of the foregoing:

               (i)  any statute, other law or principle of equity;
              (ii)  any act or omission by any person;
             (iii)  any  legal  limitation,  disability  or  incapacity  of  the
                    Borrower or any Guarantor;
              (iv)  any improper exercise of a power or authority in relation to
                    the Borrower or any Guarantor;
               (v)  any right of the Agent or a Bank to enforce or recover  such
                    document,  payment or other act or to exercise any remedy or
                    right  it has  for  the  enforcement  or  recovery  of  such
                    document,  payment or other act being suspended or postponed
                    by order of any court or otherwise; or
              (vi)  any Insolvency Provision;

          (d)  (New guarantors):  the Agent, Banks or any of them accepting from
               any person any guarantee, indemnity or contract of suretyship for
               the performance of the whole or any part of the Obligations;

          (e)  (Time or  indulgence):  the Agent,  Banks or any of them agreeing
               with the Borrower or any Guarantor to grant time, waiver or other
               indulgence  or  concession  to,  or to make  any  composition  or
               compromise with the Borrower or any Guarantor;

          (f)  (Forbearance):  the  Agent,  Banks or any of them  forbearing  or
               neglecting  to  exercise  any remedy or right they have or it has
               for the  enforcement  of any  Transaction  Document  or any other
               obligation or liability forming part of the Obligations;

          (g)  (Laches etc.):  any laches,  acquiescence or other act,  neglect,
               default, omission or mistake by the Agent, Banks or any of them;

          (h)  (Repudiation):  the  determination,  rescission,  repudiation  or
               termination,  or the acceptance of any of the  foregoing,  by the
               Agent, Banks, the Borrower or any Guarantor or any of them of any
               Transaction Document or any other obligation or liability forming
               part of the Obligations;

          (i)  (Variation):   any  variation   (whether  by  way  of  insertion,
               deletion, modification, novation or otherwise) to any Transaction
               Document or any other obligation or liability forming part of the
               Obligations,  whether or not such  variation  is  substantial  or
               material or imposes an additional liability upon or is onerous on
               the Borrower or any  Guarantor,  including  without  limiting the
               generality  of  the  foregoing,  any  increase  in the  limit  or
               extension of the term for, or the  imposition of any condition or
               variation  in the rate of  interest  in  respect of  advances  or
               financial accommodation to the Borrower;


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          (j)  (Release):  the full, partial or conditional release or discharge
               (whether  before  or  after  any  demand  has  been  made  on the
               Guarantor  hereunder)  by the  Agent,  Banks or any of them or by
               operation of law, of the  Borrower or any  Guarantor or any other
               person from any Transaction  Document or any other  obligation or
               liability  forming part of the Obligations (but without affecting
               the  validity  of any  release and  discharge  of a Guarantor  in
               accordance with this Agreement);

          (k)  (Security  Property):  the  release  of  any  property  from  any
               Security  or the  substitution  of any  property  in place of any
               other property now or hereafter the subject of a Security;

          (l)  (Securities):   the  Agent,   Banks  or  any  of  them   wasting,
               destroying,    abandoning,   prejudicing   or   not   perfecting,
               maintaining, preserving, enforcing or realising or negligently or
               not bona fide enforcing or realising any Security;

          (m)  (Loss of  Securities):  the failure to obtain any Security or the
               loss  or  impairment  of  any  Security  by  operation  of law or
               otherwise,  whether or not the same is in breach of an express or
               implied  condition  to obtain or  preserve  such  Security  or in
               breach of any  equitable  duty which  might  otherwise  have been
               imposed upon the Agent, Banks or any of them;

          (n)  (Priority  of  Securities):  the  Agent,  Banks  or any  of  them
               agreeing to any order of priorities  with respect to any Security
               or to any  variation  of any  then  previously  agreed  order  of
               priority;

          (o)  (Accounts):  the opening or operation of any new account with the
               Agent, Banks or any of them by the Borrower or any Guarantor;

          (p)  (Change of  constitution):  any change in membership  (whether by
               death or  retirement  of an existing  member,  admission of a new
               member or otherwise),  in the place of business or in the name of
               any partnership, firm or association in which the Borrower or any
               Guarantor is a member;

          (q)  (Transfer):  the  transfer  or  assignment  of the benefit of any
               Transaction  Document  or of any other  obligation  or  liability
               forming part of the Obligations;

          (r)  (Disclosure):  any failure by the Agent,  Banks or any of them to
               disclose  to  the   Guarantor   any  material  or  unusual  fact,
               circumstance,  event or thing  whatsoever  known  to, or ought to
               have  been  known  by,  the  Agent  or any  Bank  relating  to or
               affecting  the Borrower or any  Guarantor at any time prior to or
               during  the  currency  of  any  Transaction   Document,   whether
               prejudicial or not to the rights and liabilities of the Guarantor
               and  whether  or not the  Agent or any Bank was under any duty to
               disclose such fact, circumstance, event or thing to the Guarantor
               or the Borrower; or

          (s)  (Covenant  not to take  action):  the Agent or any Bank  entering
               into a covenant  with the Borrower or any Guarantor not to do all
               or any of the following,  namely,  sue,  issue  process,  sign or
               execute   judgment,   commence   proceedings  for  bankruptcy  or
               liquidation,  participate in any official  management,  scheme of
               arrangement  or  reconstruction,   prove  in  any  bankruptcy  or


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<PAGE>


               liquidation  or do any other  act,  matter or thing in respect of
               the  liability  of the  Borrower or that  Guarantor  (but without
               affecting  the  validity of any waiver given in  accordance  with
               clause 31.11 of this Agreement).

20.8      No obligation to gain consent

          Nothing herein shall be construed as a requirement  that any Guarantor
          consent to or be made aware of any event  referred to in clause  20.7,
          any  transaction  between  the  Agent,  Banks  or any of them  and the
          Borrower or any one or more Guarantors or any  particulars  concerning
          any obligation or liability that forms part of the Obligations.

20.9      No marshalling

          The  Agent  and the  Banks  are  under no  obligation  to  marshal  or
          appropriate in favour of any Guarantor or to exercise, apply, transfer
          or recover in favour of any  Guarantor  any  Security  or any funds or
          assets  that they or any of them hold or are  entitled  to  receive or
          have a claim upon.

20.10     Void or voidable transactions

          If  there  is  upheld,  conceded  or  compromised  any  claim  that  a
          transaction in any way affecting or relating to the Obligations or the
          Securities  is void,  voidable,  unenforceable  or  irrecoverable  the
          following provisions apply:

          (a)  (Restoration of Obligations):  if as a result of or in connection
               with  entering into the  transaction  the  Obligations  have been
               reduced in any way, then upon such claim being  upheld,  conceded
               or compromised,  the Agent and each Bank will be entitled against
               each  Guarantor  to all such  rights as it would  have had if the
               transaction  or so much thereof as is held or conceded to be void
               or voidable or is foregone on compromise had not taken place;

          (b)  (Restoration  of  Security):  if as a result of or in  connection
               with  entering  into the  transaction,  or if as a result  of the
               transaction being held or conceded to be void or unenforceable, a
               Bank's rights under any Security have been surrendered, cancelled
               or  reduced  in any way,  then  upon  such  claim  being  upheld,
               conceded or  compromised,  each Guarantor will take all steps and
               sign all such  documents  as may be necessary  or  convenient  to
               restore those rights or equivalent rights to the Bank; and

          (c)  (Costs and expenses):  the  Guarantors  will pay to the Agent and
               each Bank all  costs  and  expenses  (including  legal  costs and
               expenses as between  solicitor  and own  client)  incurred by the
               Agent and each Bank in or in connection with any  negotiations or
               proceedings relating to any such claims.

20.11     Insolvency

          No Guarantor  will lodge any proof of debt or similar  claim under any
          Insolvency  Provision in relation to the Borrower or any  Guarantor in


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          competition  with the Agent or any Bank.  Each  Guarantor  irrevocably
          authorises  the Agent to prove as its  attorney for all money which it
          may be entitled to from the  Borrower or any  Guarantor  and to retain
          and to carry to a suspense  account and  appropriate at the discretion
          of the Agent (but for the benefit of the Banks) any amount so received
          until  with the aid  thereof  each Bank has been paid 100 cents in the
          dollar  in  respect  of the  indebtedness  of  the  Borrower  or  each
          Guarantor as the case may be.

20.12     No set-off, counterclaim, etc.

          No  Guarantor  will  seek to reduce  or avoid  its  liability  under a
          Transaction  Document by raising any defence,  set-off or counterclaim
          available to the Agent or the Borrower or any other Guarantor.

20.13     Restriction on Guarantor's dealings

          No Guarantor  will,  without the Agent's prior written  consent (which
          the Agent may withhold in its discretion):

          (a)  (No  proceedings):  institute any  proceedings  against any other
               Obligor;

          (b)  (No demand):  make any demand for, or accept any money in part or
               complete  satisfaction  of, any  liability  on any account of any
               other Obligor other than as permitted under this Agreement or for
               a liability  arising  out of the supply of goods and  services by
               the  Guarantor  to that  Obligor in the  ordinary  course of that
               Guarantor's  ordinary  business  at  a  rate  and  on  terms  not
               exceeding  and not more onerous than usually found for the supply
               of such goods and services by parties dealing at arm's length;

          (c)  (No  enforcement of  Securities):  enforce any Encumbrance now or
               hereafter  held by it (either alone or with others) in respect of
               any such liability as aforesaid; or

          (d)  (No set-off):  set-off any money owing by the  Guarantor  against
               any  liability  owing to the  Guarantor  by any other  Obligor or
               permit  any  Obligor  to set off any money  owing by the  Obligor
               against any liability owing to that Obligor by the Guarantor.

20.14     Release of Obligor

          Notwithstanding  any  presumption or principle of law to the contrary,
          the Agent may in relation to any Obligor  enter into a covenant not to
          sue, issue process,  sign judgment and execute or commence proceedings
          for the bankruptcy or liquidation of any one or more of such resultant
          judgment debtors,  participate in any official  management,  scheme of
          arrangement or reconstruction,  prove in any bankruptcy or liquidation
          and do any other act,  matter or thing in  respect  of that  Obligor's
          liability  without  thereby  in any  way  impairing  or  reducing  the
          liability of any Guarantor or other  Guarantor (as the case may be) to
          the Agent, the Banks or any of them under this Agreement.


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<PAGE>

20.15     Conditions precedent

          The Agent may waive,  dispense  with or accept such evidence as in its
          absolute discretion it sees fit in relation to the satisfaction of any
          condition precedent contained in any Transaction Document or otherwise
          for the grant of any advances or financial accommodation to or for the
          account of the Borrower, and the Guarantors' liability hereunder shall
          not be affected or in any way impaired by any exercise by the Agent of
          that discretion.

20.16     Claim on the Guarantors

          (a)  The  Agent or a Bank  shall  not make  any  demand  or claim on a
               Guarantor under this clause 20 unless the Borrower or a Guarantor
               has  failed  in  the  due  and  punctual  payment  of  any of its
               Obligations.

          (b)  Neither  the Agent nor a Bank shall be required to make any claim
               or demand on the Borrower or on any other Obligor,  or to enforce
               any  Transaction  Document  or any other  right,  power or remedy
               against any Obligor,  before  making any demand or claim upon any
               Guarantor.

20.17     Subrogation

          No Guarantor  will seek the  transfer to it of any  Security  which is
          subject to an agreed  order of  priority  in the Agent's or any Bank's
          hands under any right of subrogation,  unless and until it has entered
          into a deed  under  which it  undertakes  to be bound by the  priority
          affecting such Security with the other parties to such agreed order of
          priority.

20.18     General waiver by Guarantors

          The  Guarantors  expressly  waive  all  rights  inconsistent  with the
          provisions of this Agreement, including all rights as to contribution,
          indemnity  or  subrogation  which they might  otherwise be entitled to
          claim and enforce until the Obligations have been paid in full.

20.19     Judgment

          Any judgment  obtained  against the Borrower is  conclusive as against
          each Guarantor.

21.       ADDITIONAL GUARANTORS AND SECURITY

21.1      Additional Guarantors

          (a)  The Borrower  and each  Guarantor  shall  procure that any wholly
               owned member of the Group which is not a Guarantor  shall become,
               promptly after being required by the Agent on the instructions of
               the Majority Banks to become, an Additional Guarantor by entering
               into an  Accession  Agreement,  subject to any  provision  of law
               (including but not limited to laws concerning major transactions,
               financial  assistance or related party transactions)  prohibiting
               that person from becoming an Additional Guarantor.

          (b)  Where any such  prohibition  as is referred to above exists,  the
               Borrower  and  each  Guarantor  shall  use  its  best  endeavours
               lawfully  to  overcome  the  prohibition,  and the Agent may (but


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<PAGE>


               shall not be  obliged  to) agree  with the  potential  Additional
               Guarantor concerned limitations on its liability as an Additional
               Guarantor  under this  Agreement and other  amendments  (applying
               only in relation to that Additional  Guarantor) to this Agreement
               or to the relevant Accession Agreement.

          (c)  On each date that an  Accession  Agreement  is  entered  into the
               Borrower  shall  procure  that  each of the  documents  listed in
               paragraphs 1, 3, 4, 5, 8 and 9 of Schedule 3 (as appropriate) are
               delivered  in  respect  of  the  Additional   Guarantor  and  the
               Accession  Agreement in form and  substance  satisfactory  to the
               Agent.

21.2      Security

          (a)  The Borrower and each Guarantor  shall execute and deliver to the
               Agent such further or  additional  Securities in such form and in
               relation  to such  of its  assets  as the  Majority  Banks  shall
               require subject to any provision of law  prohibiting  such person
               from entering into such Security.

          (b)  Where any such  prohibition  as is referred to above exists,  the
               Borrower  and each  Guarantor  shall  use their  best  endeavours
               lawfully  to  overcome  the  prohibition,  and the Agent may (but
               shall  not  be  obliged  to)  agree  with  the  relevant  Obligor
               limitations on the extent of the security granted by it.

          (c)  The Obligors  shall at their own expense  execute and do all such
               assurances,  acts and things as the Agent or the  Majority  Banks
               may require for perfecting or protecting the security intended to
               be afforded by the Securities or for facilitating the realisation
               in  accordance  with  the  Securities  of all or any  part of the
               assets  which are subject to the  Securities  and the exercise of
               all powers, authorities and discretions vested in the Agent under
               the  Securities  or in any  receiver  of all or any part of those
               assets  and  in   particular   shall   execute   all   transfers,
               conveyances, assignments and releases of that property whether to
               the Agent or to its  nominees  and give all  notices,  orders and
               directions which the Agent may think expedient for the purpose of
               this clause 21.2(c).

          (d)  The  Obligors  shall  procure that in relation to each further or
               additional  Security the relevant  Borrower or Guarantor shall do
               all things  necessary duly to perfect in the  jurisdiction of its
               incorporation  and in the  jurisdiction  wherein the assets which
               are the  subject of the  further  or  additional  Securities  are
               located,  the  security  intended to be afforded to the Agent and
               the Banks under such further or additional  Securities  and shall
               deliver to the Agent such directors and shareholders resolutions,
               legal  opinions,  notices,  certificates or documents of title or
               other items as the Agent shall require.

21.3      Additional Security

          Notwithstanding clause 21.2(a), the Borrower and each Guarantor shall:


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          (a)  procure that any person who becomes a member of the Group and who
               is a wholly  owned  subsidiary  of an Obligor  shall  execute and
               deliver  and  do  all  things  necessary  to  be  joined  to  the
               Securities; and

          (b)  ensure that any  Security  Property  relating  to the  Securities
               referred  to in  clause  21.3(a)  shall be free and  clear of any
               Encumbrances  other  than  Encumbrances  permitted  under  clause
               17.3(a) or the Securities.

22.       RELEASE OF GUARANTORS AND SECURITY

22.1      Guarantors

          Subject to clause 22.3, at the time of completion of any sale or other
          disposal  to a person  or  persons  outside  (and  which  will  remain
          outside)  the  Group  of all  of the  shares  in  the  capital  of any
          Guarantor  (or of all of the  shares in any other  member of the Group
          such that any Guarantor  ceases as a result  thereof to be a member of
          the Group) and in such other  circumstances  (if any) as all the Banks
          may  from  time to time  agree in  writing,  such  Guarantor  shall be
          released from all past,  present and future  liabilities  (both actual
          and  contingent)  hereunder and under the  Securities to which it is a
          party, and the security  provided over its assets under the Securities
          will be released.

22.2      Assets

          Subject to clause 22.3, at the time of completion of any sale or other
          disposal  to a person  or  persons  outside  (and  which  will  remain
          outside)  the  Group of any  assets  owned by an  Obligor  over  which
          security has been created by the  Securities  to which that Obligor is
          party, those assets shall be released from such security.

22.3      Conditions for Release

          The release of the guarantees and security  referred to in clause 22.1
          and 22.2 above shall only occur if:

          (a)  either:

               (i)  such disposal will not result  directly or indirectly in any
                    breach of any of the terms of this Agreement; or
              (ii)  such  disposal  is  being  effected  at the  request  of the
                    Majority  Banks in  circumstances  where any of the security
                    created by the Securities has become enforceable; or
             (iii)  such  disposal  is  being  effected  by  enforcement  of the
                    Securities; or
              (iv)  all Banks agree to the release; and

          (b)  the Net  Proceeds  arising out of such  disposal  will be applied
               strictly in accordance  with the  requirements of this Agreement;
               and

          (c)  any assets to be transferred to other members of the Group before
               completion of such disposal  shall have been so  transferred  and
               (if so required by the Majority  Banks) security over such assets
               shall have been granted to the Agent to its satisfaction; and


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<PAGE>

          (d)  the Agent  shall have  executed  such  documents  effecting  such
               release as shall be  reasonably  required to achieve such release
               as aforesaid  (and the Agent shall execute such  documents at the
               expense of the relevant  Obligor promptly upon (and only upon) it
               being satisfied that the conditions in (a), (b) and (c) above are
               satisfied or have been waived by all of the Banks).

22.4      Release of Group Members

          If any person  which is a member of the Group shall cease to be such a
          member in consequence  of the  enforcement of any of the Securities or
          in  consequence  of a disposal of the shares  therein  effected at the
          request  of the  Majority  Banks  in  circumstances  where  any of the
          security created by the Securities has become  enforceable,  any claim
          which  any  Obligor  may  have  against  such  person  or  any  of its
          Subsidiaries  in or  arising  out  of  this  Agreement  or  any of the
          Securities  (including,  without  limitation,  any  claim  by  way  of
          subrogation  to the  rights of the Agent  and the Banks  against  such
          person  under  the  Transaction  Documents  and  any  claim  by way of
          contribution  or  indemnity)  shall  be  released   automatically  and
          immediately upon such person ceasing to be a member of the Group.

23.       INDEMNITY

          The Borrower shall on demand by the Agent  indemnify each Bank against
          any loss, cost or reasonable out of pocket expenses which the Bank may
          sustain or incur as a consequence of:

          (a)  any sum  payable by the  Borrower  hereunder  not being paid when
               due;

          (b)  the  occurrence  of any Event of  Default or  Potential  Event of
               Default;

          (c)  an Advance  requested in a Utilisation  Notice not being provided
               for  any  reason  including   failure  to  fulfil  any  condition
               precedent  but  excluding  any  default by the Bank  claiming  an
               indemnity pursuant to this paragraph; or

          (d)  the Bank receiving  payments of principal  other than on the last
               day of an Interest Period or when due for any reason,  including,
               without  limitation,  prepayment in accordance with a Transaction
               Document.

          Such losses,  costs or expenses shall include the amount determined in
          good  faith by the Bank as being any loss  including  loss of  margin,
          cost or expense incurred by reason of the liquidation or re-employment
          of deposits or other funds  acquired or contracted  for by the Bank to
          fund or maintain any such Advance or amount.



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24.       AGENT

24.1      Appointment

          The Agent is hereby  appointed and authorised to act on behalf of each
          Bank  with  power to  enter  into  each  Transaction  Document  and to
          exercise  such  rights,  remedies,   powers  and  discretions  as  are
          specifically   delegated  to  them  under  the  Transaction  Documents
          together with such rights,  remedies,  powers and  discretions  as are
          incidental thereto. The Agent does not have any duties, obligations or
          liabilities to the Banks or any of them beyond those expressly  stated
          in this Agreement and the Transaction Documents.

24.2      Relationships

          (a)  Nothing  contained in this Agreement,  and no action taken by the
               Banks pursuant hereto,  shall be deemed to constitute the Banks a
               partnership, association, joint venture or other entity.

          (b)  In  performing  their  respective  functions and duties under the
               Transaction  Documents,  the Agent  shall act solely on behalf of
               the  Banks  and does not  assume  and  shall not be deemed in any
               circumstances  whatsoever  to have  assumed  any  responsibility,
               liability or obligation,  towards,  or  relationship of agency or
               trust with, or for, the Obligors.

24.3      Communications

          Except  where  this  Agreement  otherwise   expressly  provides,   all
          communications  to be made  between an Obligor and the Banks or any of
          them concerning the Facility shall be made by or through the Agent.

24.4      Instructions of Majority

          Subject to clause  24.5,  the Agent must act or refrain from acting in
          the exercise of any right or power,  or as to any matter not expressly
          provided for by this Agreement, in accordance with the instructions of
          the Majority  Banks and it shall be fully  protected in so doing.  Any
          such instructions shall be binding on all the Banks. In the absence of
          any such instructions,  the Agent may act or refrain from acting as it
          sees fit,  provided that it has used  reasonable  endeavours to obtain
          such instructions.  In no event, however,  shall the Agent be required
          to take any  action  which  exposes,  or is  likely to  expose,  it to
          personal  liability unless it is indemnified to its  satisfaction,  or
          which  is  contrary  to  this  Agreement  or any  law,  regulation  or
          directive.

24.5      Amendments

          If authorised by the Majority  Banks,  the Agent may (except where any
          other authority is required for the same by the express  provisions of
          the  Transaction  Documents)  grant  waivers or  consents or (with the
          agreement  of  the  Borrower)  vary  the  terms  of  the   Transaction
          Documents.  Any such waiver,  consent or variation so  authorised  and
          effected  by the Agent shall be binding on all the Banks and the Agent
          shall be under no liability  whatsoever in respect of any such waiver,
          consent or  variation,  provided  always  that,  except with the prior
          written  consent  of all the Banks and the  Borrower,  nothing in this
          clause shall authorise:

          (a)  the extension of any Availability Period; or

          (b)  any variation of the definition  "Majority  Banks" in clause 1.1;
               or


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<PAGE>

          (c)  any  extension  of the date for, or  alteration  in the amount or
               currency  of, or waiver of any  payment of  principal,  interest,
               Utilisation  Margin,  fee, commission or any other amount payable
               under any of the Transaction Documents; or

          (d)  any change to any Bank's Commitment; or

          (e)  any variation of clauses 11.5, 12, 27 or this clause 24.5; or

          (f)  any variation of any provision wherein (before such variation) it
               is provided that certain things may not be done without or may be
               done with the consent or approval of all the Banks; or

          (g)  any  waiver  or  consent  in  relation  to, or  variation  of the
               material  provisions  of, any Security or clause 20 or 21 of this
               Agreement; or

          (h)  (save as  otherwise  expressly  provided  for  elsewhere  in this
               Agreement or the relevant  Security)  any release of the security
               provided by any of the Securities over any asset.

24.6      No need for inquiries

          No Obligor  shall be  concerned to inquire as to whether the Agent has
          been given any  instructions  by the Majority Banks or as to the terms
          of any  instructions  so given  and may rely on all  notices  from the
          Agent without the need to make further enquiry.

24.7      Delegation

          The Agent may from time to time delegate the performance of its duties
          and  obligations  as Agent.  The Banks and each Obligor agree that any
          delegate of the duties and  obligations  of the Agent will be entitled
          to the benefit of the  provisions  of this clause 24 as if it were the
          Agent and, without  limitation,  will not be responsible or liable for
          any damage,  cost,  loss or expense  they or any of them may suffer or
          incur as a  result  of or in  connection  with an act or  omission  or
          negligence  of the delegate  except to the extent  arising as a direct
          result of the gross negligence or wilful misconduct of the delegate.

24.8      Agent not bound to Enquire

          The Agent is not obliged to ascertain or enquire:

          (a)  either  initially or on a continuing  basis,  as to the credit or
               financial  condition  or  affairs  of the  Obligors  or any other
               person; or

          (b)  as to the  performance or observance by the Obligors or any other
               person of any of the terms of any Transaction Document; or

          (c)  whether  any Event of Default or  Potential  Event of Default has
               occurred.


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24.9      Default

          The Agent  shall not be obliged  to make any  inquiry as to whether an
          Obligor is in breach of, or in default under a Transaction Document or
          as to the  existence  of the Event of  Default or  Potential  Event of
          Default  and  shall  not  be  deemed  to  have  any  knowledge  of the
          occurrence  of such a breach,  default,  Event of Default or Potential
          Event of Default unless it has received express written notice thereof
          from a Bank or an  Obligor,  stating  that such notice is a "Notice of
          Default"  and  describing  the  breach,  default,  Event of Default or
          Potential Event of Default.  In the event that the Agent receives such
          a notice,  or otherwise  acquires actual notice of an Event of Default
          or  Potential  Event of  Default it shall  promptly  notify the Banks.
          Subject to its being indemnified to its satisfaction,  the Agent shall
          take such  action  with  respect to an Event of Default as it shall be
          directed to take by the Majority Banks.  Until the Agent receives such
          directions  it may (but shall not be  obliged)  take or  refrain  from
          taking  such  action  as it  shall  in its  absolute  discretion  deem
          advisable in the best interests of the Banks.

24.10     Agent as Bank

          With  respect  to its own rights as a Bank (if any),  the Agent  shall
          have the same rights and powers under each Transaction Document as any
          other Bank and may exercise the same as though it were not  performing
          the duties  and  functions  delegated  to it as the Agent and the term
          "Banks" shall include the Agent in its individual capacity as a Bank.

24.11     Agent's dealings

          The Agent may, without any liability to account to the Banks or any of
          them,  accept deposits from, lend money to and generally engage in any
          kind of banking or financial, trust or other business with any Obligor
          as if they were not Agent and may accept fees and other  consideration
          from any  Obligor  for  services in  connection  with any  Transaction
          Document or  otherwise  without  having to account for the same to the
          Banks.

24.12     Notices and reports

          Promptly after its receipt thereof,  the Agent will make available for
          examination  by each Bank at its address for service of notices and on
          request by a Bank provide to the Bank a copy of each report, notice or
          other document required under this document or a Transaction  Document
          to be delivered to the Agent by an Obligor.

24.13     Not responsible

          (a)  The Agent shall not be  responsible to any Bank for failure of an
               Obligor to perform its obligations under a Transaction  Document,
               an Obligor's financial condition, the completeness or accuracy of
               any  statements,  representations  or warranties in a Transaction
               Document,   the   Information   Memorandum   (except   statements
               authorised  by  it)  or  any  document   delivered  under  or  in
               connection  with a  Transaction  Document,  the valid  execution,
               effectiveness, adequacy, genuineness, validity, enforceability or
               admissibility  in evidence of a Transaction  Document or any such
               other document or the failure of any party to perform and observe
               its obligations under a Transaction Document.


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          (b)  Each Bank  acknowledges  that it has not relied on any statement,
               opinion,  forecast or other  representation  made by the Agent to
               induce it to enter into this Agreement or agree to participate in
               the  Facility  whether  made  in the  Information  Memorandum  or
               otherwise and that it has made and (without reliance on the Agent
               and based on such documents as it considers  appropriate) it will
               continue to make its own  appraisal of the affairs and  financial
               condition of each Obligor and its own  decisions as to whether or
               not to take action under a Transaction Document.

          (c)  The  Agent  will not be  obliged  on a  continuing  basis or at a
               particular  time to provide any Bank with any  financial or other
               information  with respect to an Obligor other than as provided in
               clause 24.12.

          (d)  Without  limitation to clause 24.9, the Agent will not be obliged
               to keep itself  informed as to the  performance and observance by
               the Obligors of their respective obligations and responsibilities
               under this document and the Transaction Documents.

          (e)  The  Agent  shall not be liable  for any  cost,  loss,  damage or
               expense of  whatsoever  nature  suffered or incurred by a Bank or
               any other person except to the extent  arising as a direct result
               of the gross negligence or wilful misconduct of the Agent.

24.14     Indemnity

          Each Bank  shall  reimburse  the Agent  rateably  in  accordance  with
          Commitments  (to the extent that it is not reimbursed by the Borrower)
          on demand,  for charges and expenses incurred by it in connection with
          the negotiation,  preparation, execution, stamping and registration of
          the  Transaction  Documents,  in  contemplation  of, or  otherwise  in
          connection with, the enforcement or preservation of any rights under a
          Transaction  Document or in carrying out its duties as Agent under the
          Transaction  Documents including,  in each case, the fees and expenses
          of legal and other  professional  advisers.  Each Bank shall indemnify
          the Agent  rateably in  accordance  with its  Commitments  against all
          liability,  damage, costs, claims and expenses suffered or incurred or
          made against the Agent in connection with a Transaction Document,  the
          performance  or purported  performance  of its duties as Agent under a
          Transaction Document or any action taken or omitted to be taken by the
          Agent under (or  purportedly  under) a Transaction  Document except to
          the extent,  however,  that such  liability,  damage,  cost,  claim or
          expense  directly  results from the Agent's gross negligence or wilful
          misconduct.

24.15     Observe laws

          The Agent may refrain from doing  anything which would or might in its
          opinion  either  be  contrary  to any  relevant  law  of any  relevant
          jurisdiction  or any  official  directive  or  render it liable to any
          person and may do anything which in its opinion is necessary to comply
          with any relevant law or official directive.


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 24.16    Replacement

          (a)  The Agent (the "retiring Agent") may:

               (i)  resign at any time by giving not less than 20 Banking  Days'
                    written notice thereof to the Banks and the Borrower; and
              (ii)  be removed  from office upon not less than 20 Banking  Days'
                    prior written  notice signed by or on behalf of the Majority
                    Banks.

          (b)  Upon receipt of a notice of resignation  from the retiring Agent,
               or the giving of a notice of removal of the retiring  Agent,  the
               Majority  Banks shall have the right,  in  consultation  with the
               Borrower,  to  appoint  a  successor  Agent.  In the case only of
               resignation  of the  retiring  Agent,  if within 20 Banking  Days
               after the giving of a notice of  resignation,  no successor Agent
               has been appointed,  the retiring Agent may, in consultation with
               the  Borrower,  appoint  a  successor  Agent  which  shall  be  a
               reputable and experienced  financier  having an office in Sydney,
               Melbourne or Wellington.

          (c)  The  resignation  or  removal  of  the  retiring  Agent  and  the
               appointment  of the successor  Agent shall both become  effective
               upon the successor  Agent notifying the Banks and the Borrower of
               its  acceptance  of  such  appointment,  and  specifying  for the
               purposes  of this  Agreement  an office in Sydney,  Melbourne  or
               Wellington.  Upon giving such  notification,  the successor Agent
               shall succeed to and be vested with all the rights,  obligations,
               powers  and  duties  and   privileges  of  the  Agent  under  the
               Transaction  Documents  in place of the  retiring  Agent  and the
               retiring   Agent  shall  be   discharged   from  its  duties  and
               obligations under the Transaction Documents.

          (d)  The provisions of this clause 24 shall continue in effect for the
               benefit of a retiring  Agent in respect of any  actions  taken or
               omitted to be taken  while the  retiring  Agent was acting as the
               Agent.

24.17     No authority

          Each Bank  acknowledges  and agrees that it does not have authority on
          behalf of the other Banks to waive any right or remedy of the Banks or
          the  Agent or to  modify  or vary,  or agree to  modify  or vary,  any
          provision of any Transaction Document.

24.18     Agent as Trustee

          (a)  The Agent in its  capacity as trustee or  otherwise  shall not be
               liable for any failure,  omission,  or defect in  perfecting  the
               security constituted by the Securities.

          (b)  The Agent in its  capacity  as  trustee or  otherwise  may accept
               without enquiry such title as an Obligor may have to the property
               over which security is intended to be created by the Securities.

          (c)  Each  Bank  hereby  confirms  its  approval  of  the  Transaction
               Documents and any security  created  pursuant  thereto and hereby
               authorises,  empowers and directs the Agent (by itself or by such


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<PAGE>


               person(s) as it may  nominate) to execute and enforce the same as
               trustee or as otherwise provided (and whether or not expressly in
               the Banks' names) on its behalf.

25.       HEDGING ARRANGEMENTS

25.1      Undertakings of Swap Counterparties

          Except as the Majority Banks have previously  consented in writing, no
          Swap Counterparty will:

          (a)  demand  (other than as may be  necessary in order to exercise any
               right  to  terminate  or close  out any  hedging  transaction  as
               provided  in and  permitted  under  clause  25.1(b))  or  receive
               payment,  prepayment  or  repayment  of, or any  distribution  in
               respect of, or on account of, any of the Hedging  Liabilities  in
               cash or in kind, or apply any money or property in or towards the
               discharge of any Hedging Liabilities except:

               (i)  for  scheduled  payments  arising  under  the  terms  of the
                    Hedging  Agreements  entered into by the Borrower  with that
                    Swap Counterparty; and/or
              (ii)  for the proceeds of enforcement  of the Securities  received
                    and applied in the order permitted by this Agreement;

          (b)  exercise  any  right  to  terminate  or  close  out  any  hedging
               transaction  under the  Hedging  Agreements  prior to its  stated
               maturity (whether by reason of the Borrower becoming a Defaulting
               Party thereunder (and as defined therein) or otherwise) unless it
               has given written notice to the Agent and:

               (i)  the  Borrower  has  defaulted  on a  payment  due  under the
                    Hedging  Agreements  after allowing for any required  notice
                    and any applicable days of grace and such default  continues
                    for more than 7 Banking  Days after  notice of such  default
                    being given to the Agent; or
              (ii)  the  Agent  has  declared  all or  part  of the  Obligations
                    prematurely due and payable under clause 19.2; or
             (iii)  the continued  existence of the Hedging  Agreements would be
                    illegal;

          (c)  discharge all or any part of the Hedging  Liabilities by set-off,
               any right of combination  of accounts or otherwise  except if and
               to the extent that those Hedging  Liabilities are permitted to be
               paid under paragraph (a) above; or

          (d)  permit to subsist or receive  any  Encumbrance  or any  financial
               support   (including   without   limitation  the  taking  of  any
               participation,  the giving of any  guarantee,  indemnity or other
               assurance  against loss, or the making of any deposit or payment)
               for, or in respect of, any of the Hedging  Liabilities other than
               under the Securities or any other  Encumbrance or support granted
               for the full benefit (save to the extent otherwise required so as
               to comply with applicable law) of the Agent and the Banks.


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25.2      Hedging Agreements

          Each  Swap  Counterparty  will  provide  to the  Agent  copies  of all
          documents  constituting the Hedging  Agreements to which it is a party
          as soon as reasonably practicable.

26.       SET-OFF

          Each  Obligor  authorises  each  Bank at any  time  after  an Event of
          Default has occurred and is  continuing  to apply without prior notice
          any credit  balance  (whether or not then due) to which the Obligor is
          at any time  entitled  on any  account at any office of the Bank in or
          towards  satisfaction of any sum then due and unpaid from that Obligor
          to the Bank and the Obligors each further  authorise each Bank without
          prior notice at any time after an Event of Default has occurred and is
          continuing  to set-off any amount  owing  (whether  present or future,
          actual,  contingent or prospective  and on any account  whatsoever) by
          that Obligor against any liability (whether present,  future,  actual,
          contingent or  prospective)  of the Obligor  hereunder or on any other
          account  whatsoever.  No Bank shall be obliged to exercise  any of its
          rights  under this  clause,  which shall be without  prejudice  and in
          addition to any right of set-off,  combination  of  accounts,  lien or
          other right to which it is at any time otherwise  entitled (whether by
          operation of law,  contract or otherwise).  Each Bank shall notify the
          Agent and the relevant Obligor  forthwith upon its exercise of a right
          of set-off  involving  any  Obligor  giving  full  details in relation
          thereto and the Agent shall inform the other Banks.

27.       PRO RATA SHARING

          If at any time  the  proportion  which a Bank  ("Overpaid  Bank")  has
          received  or  recovered  by  set-off  or  otherwise  in respect of its
          portion  of any sum  due  from  an  Obligor  to the  Banks  under  the
          Transaction  Documents  is greater  (the  amount of the  excess  being
          herein referred to as the "excess amount") than the proportion thereof
          received or recovered by the Bank receiving or recovering the smallest
          or no proportion thereof, then:

          (a)  the Overpaid Bank shall promptly notify the Agent;

          (b)  the  Overpaid  Bank  shall,   within  10  Banking  Days  of  such
               notification,  pay to the  Agent an  amount  equal to the  excess
               amount;

          (c)  the Agent shall treat such payment as if it were a payment by the
               Obligor on account of the sum owed to the Banks as aforesaid; and

          (d)  at the option of the Overpaid Bank:

               (i)  subject to clause 27(f), the liability of the Obligor to the
                    Overpaid  Bank shall be increased  (or treated as not having
                    been reduced); or
              (ii)  the Obligor  shall fully  indemnify the Overpaid Bank making
                    such payment for the amount thereof;


                                       73
<PAGE>

          provided that:

          (e)  if a Bank has  commenced an action or  proceeding in any court to
               recover  sums  owing  to  it  pursuant  to  this  Agreement  or a
               Transaction  Document and as a result  thereof,  or in connection
               therewith,  has received an excess amount,  the Bank shall not be
               required to share any  portion of such excess  amount with a Bank
               which was notified of such legal action or  proceeding  and which
               had the  legal  right  to,  but did  not,  join  such  action  or
               proceeding or commence and diligently prosecute a separate action
               or proceeding to enforce its rights in the same or another court;
               and

          (f)  if all or a portion of the  relevant  receipt or payment by or to
               an Overpaid  Bank is  thereafter  rescinded or must  otherwise be
               restored  to an  Obligor,  the Banks shall repay to the Agent for
               the  account  of the  Overpaid  Bank  such  amount  as  shall  be
               necessary to ensure that  (subject to clause 27(e)) all the Banks
               share  rateably in the amount of the receipt or payment  retained
               by the Overpaid  Bank and the  provisions of clause 27(c) and (d)
               shall apply only to the retained amount.

28.       EXPENSES AND STAMP DUTIES

28.1      Expenses

          The Borrower on demand by the Agent or the Banks will pay to or at the
          direction  of the  Agent  or the  Banks  (as  the  case  may  be)  all
          reasonable  out of pocket  expenses  including  legal fees,  costs and
          disbursements  (on a solicitor/own  client basis) assessed without the
          necessity of  taxation,  incurred or payable by the Agent or the Banks
          (except  that the  Borrower  will only be liable to pay the legal fees
          and  disbursements  of one firm  acting for the Agent and Banks and is
          not liable to pay any legal fees,  costs and expenses  incurred by any
          Banks instructing separate legal counsel) in connection with:

          (a)  the preparation and negotiation of the Transaction  Documents and
               the Securities and any subsequent consent, agreement, approval or
               waiver thereunder or amendment thereto;

          (b)  the execution of the Transaction Documents and the Securities and
               any subsequent consent, agreement,  approval or waiver thereunder
               or amendment thereto;

          (c)  the enforcement, attempted enforcement or the preservation of any
               rights  under  the  Transaction   Documents  and  the  Securities
               including,  without  limitation,  any  expenses  incurred  in the
               evaluation of any matter of material concern to the Agent;

          (d)  the obtaining of persons to  participate in the Facility as Banks
               (including,  without  limitation,   advertising,   accommodation,
               travelling and out-of-pocket expenses); and

          (e)  the  carrying  out by the Agent (or any delegate of the Agent) of
               any of their duties under the Transaction Documents.


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<PAGE>


28.2      Levies

          (a)  (Payment of all duties): The Borrower must pay all levies, stamp,
               loan transaction, registration and similar Taxes, including fines
               and penalties,  financial  institutions duty and debits tax which
               may be  payable  to or  required  to be paid  by any  appropriate
               authority  or  determined  to be payable in  connection  with the
               execution,   delivery,   performance   or   enforcement   of  the
               Transaction   Documents   or  any   payment,   receipt  or  other
               transaction contemplated by them.

          (b)  (Indemnity): The Borrower will indemnify and keep indemnified the
               Agent and each Bank  against  any loss or  liability  incurred or
               suffered  by it as a  result  of  the  delay  or  failure  by the
               Borrower to pay such Taxes.

29.       ASSIGNMENTS AND CONFIDENTIALITY

29.1      Successors and assigns

          This  Agreement  is binding on and enures to the benefit of each party
          hereto and its respective successors and permitted assigns.

29.2      Assignments by the Borrower

          The Borrower  cannot  assign any of its rights  under any  Transaction
          Document  without the prior  written  consent of the Agent acting with
          the approval of all the Banks.

29.3      Banks

          A Bank may assign all or any of its rights or  transfer  all or any of
          its rights and obligations under the Transaction  Documents to another
          bank or financial institution at any time if:

          (a)  it has first  consulted with the Borrower  regarding the identity
               of the new Bank;

          (b)  any necessary prior  Authorisation  from any Government Agency or
               other department is obtained;

          (c)  in the case of an  assignment  of  rights  only,  the  Agent  has
               received  notice  of the  assignment  under  which  the  assignee
               irrevocably  authorises  the  assignor  to act as the  assignee's
               agent  with full  power and  authority  to  exercise  the  rights
               assigned and to receive (and give valid  receipts  for) all money
               payable  under the  Transaction  Documents  in  respect  of those
               rights;

          (d)  in the  case  of a  transfer  of  rights  and  obligations,  such
               transfer is effected by a substitution  in accordance with clause
               29.4;

          (e)  in the case of an  assignment  or  transfer of part of its rights
               and  obligations,  the Bank assigns or transfer a pro-rata  share
               the Facility; and

          (f)  it receives the prior consent of the Agent.


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29.4      Substitution

          (a)  If a Bank  wishes  to  transfer  all or  any  of its  rights  and
               obligations  under  the  Transaction   Documents  to  a  bank  or
               financial  institution,  it and  the  proposed  transferee  shall
               execute  and  deliver  to  the  Agent  4   counterparts   of  the
               Substitution Certificate.

          (b)  On receipt of a Substitution  Certificate  the Agent shall (if it
               is satisfied  that the  substitution  complies  with clause 29.3)
               promptly:

               (i)  notify the Borrower and each other Bank;
              (ii)  countersign the  counterparts on behalf of all other parties
                    to this Agreement;
             (iii)  enter the transfer in a register  kept by it (which shall be
                    conclusive); and
              (iv)  retain one  counterpart  and deliver one counterpart to each
                    of  the  relevant  transferor  and  transferee  and  to  the
                    Borrower.

          (c)  On any such  certificate  being  countersigned  by the  Agent the
               transferor shall be relieved of its obligations to the extent and
               from the date  specified in such  certificate  and the transferee
               shall be bound by the  Transaction  Documents  to the  extent and
               from the date stated in the certificate.

          (d)  Each other party to this  Agreement  irrevocably  authorises  the
               Agent  to  sign  each  such   certificate   on  its   behalf  and
               acknowledges that:

               (i)  upon such a  certificate  being signed by the Agent it shall
                    be deemed for all purposes to have consented to the transfer
                    of obligations provided for in the certificate; and
              (ii)  it  will  continue  to be  bound  by the  provisions  of the
                    Transaction Documents accordingly.

          (e)  Unless  the  Agent  otherwise  agrees,  no  transfer  of a Bank's
               obligations  may be  effected  while  any  Utilisation  Notice is
               current.

29.5      Bank accession

          (a)  If a  bank  approved  by  the  Underwriters  (acting  reasonably)
               ("Acceding  Bank") wishes to become a party to this Agreement and
               to provide  Commitments  in addition to the  Commitments of those
               Banks  existing  immediately  prior  to  the  proposed  accession
               ("Existing  Banks"),  the  Borrower  (on behalf of itself and the
               Guarantors) and the Acceding Bank will execute and deliver to the
               Agent 3 counterparts of a Bank Accession Certificate.

          (b)  On  receipt  of  a  Bank  Accession  Agreement  the  Agent  shall
               promptly:

               (i)  notify  each  Existing  Bank of the  Acceding  Bank  and its
                    proposed  Commitment  (if  they  have  not  already  been so
                    notified);
              (ii)  countersign the  counterparts on behalf of all other parties
                    to this  Agreement;
             (iii)  enter the accession in a register kept by it; and
              (iv)  retain one  counterpart  and deliver one counterpart to each
                    of the Borrower and the Acceding Bank.

          (c)  Each other party to this  Agreement  irrevocably  authorises  the
               Agent  to  sign  each  such   certificate   on  its   behalf  and
               acknowledges that:

               (i)  upon such a  certificate  being signed by the Agent it shall
                    be  deemed  for  all  purposes  to  have  consented  to  the
                    accession provided for in the certificate; and
              (ii)  it  will  continue  to be  bound  by the  provisions  of the
                    Transaction Documents accordingly.

          (d)  Upon  the  Acceding  Bank  becoming  a  Bank  pursuant  to a Bank
               Accession Certificate,  each Existing Bank will transfer at par a
               portion  of the  outstanding  Advances  at that  time so that the
               Acceding Bank  participates in the outstanding  Advances pro rata
               according to its respective Commitment.

29.6      Increased Costs and Illegality

          If  any  change  in  lending  office  of any  Bank  or  assignment  or
          substitution  of or with  respect  to all or any part of the rights or
          obligations  of a Bank under this  Agreement  pursuant to clause 29.3,
          29.4 or 29.5 is made  which  results  (or  would  but for this  clause
          result) at the time thereof in amounts  becoming payable under clauses
          12.2 or 14.l,  then the assignee or  transferee  (or, in the case of a
          change in lending office,  the Bank) shall be entitled to receive such
          amounts only to the extent that the assignor or transferor  would have
          been so entitled had there been no such assignment, transfer or change
          in lending office. Nothing in this clause will affect the rights of an
          assignee  or  transferee  under  clauses  12.2 or 14.1 in  relation to
          amounts  which may  become  payable  after the time of  assignment  or
          transfer. No such assignment or transfer shall be made if the assignee
          or transferee would be entitled immediately  afterwards to give notice
          under clause 13.

29.7      Sub-participations

          Any Bank shall be entitled freely to enter into any  sub-participation
          or other  arrangement with any third party relating to the Transaction
          Documents  which does not transfer to that third party any  obligation
          and/or any legal or  equitable  interest in any of the rights  arising
          under this Agreement.

29.8      Confidentiality

          (a)  Subject to paragraph (b), no Bank shall disclose any confidential
               or unpublished information or documents supplied by an Obligor in
               connection with the Transaction  Documents which are specifically
               indicated by the Obligor to be confidential.


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<PAGE>


          (b)  A Bank shall be entitled to disclose any confidential information
               or documents:

               (i)  in any proceeding  arising out of or in connection  with any
                    Transaction  Document to the extent that such  disclosure is
                    deemed by the Bank necessary to protect its interests;
              (ii)  if required to do so under a binding order of any Government
                    Agency or any procedure for discovery in any proceedings;
             (iii)  if  required  to do so under  any law or any  administrative
                    guideline,  directive,  request  or  policy  whether  or not
                    having the force of law and, if not having the force of law,
                    the  observance of which is in accordance  with the practice
                    of responsible bankers or financial institutions;
              (iv)  otherwise  as  required  or  permitted  by  any  Transaction
                    Document;
               (v)  to its  legal  advisers  and its  consultants  as long as it
                    advises them of the  confidential  nature of the information
                    or documents or that nature is clear from the  circumstances
                    of the disclosure;
              (vi)  to a proposed assignee or transferee or sub-participant with
                    the prior  written  consent of the  Borrower  which  consent
                    shall not  unreasonably  be  withheld or delayed and will be
                    deemed to have been given if not  refused  within 15 Banking
                    Days of a request therefor;
             (vii)  relating to its level of  exposure to any Obligor  under any
                    Hedging  Agreement or on any other account,  to the Agent or
                    any other Bank; or
            (viii)  with the prior written consent of the Borrower.

          (c)  This clause 29.8 shall survive the termination of this Agreement.

30.       GOVERNING LAW AND JURISDICTION

30.1      Governing law

          This  Agreement is governed by and  construed in  accordance  with the
          laws applying in New Zealand.

30.2      Jurisdiction

          (a)  (Acceptance of  jurisdiction):  Each of the Obligors  irrevocably
               submits  to  and  accepts,  generally  and  unconditionally,  the
               non-exclusive  jurisdiction of the courts and appellate courts of
               New Zealand with respect to any legal action or proceedings which
               may be brought at any time relating in any way to any Transaction
               Document.

          (b)  (No  objection  to  inconvenient  forum):  Each  of the  Obligors
               irrevocably waives any objection it may now or in the future have
               to  the  venue  of  any  action  or  proceedings  relating  to  a
               Transaction Document including any objection it may now or in the
               future have that any such action or  proceeding  has been brought
               in an inconvenient forum.


                                       78
<PAGE>

31.       MISCELLANEOUS

31.1      Certificate of Agent

          A certificate in writing signed by an officer of the Agent  certifying
          the amount  payable by an Obligor  hereunder or stating any other act,
          matter or thing  relating to any  Transaction  Document is prima facie
          and binding on each  Obligor in the  absence of manifest  error on the
          face of the certificate.

31.2      Notices

          Any notice or other  communication which must be given, served or made
          under or in connection with any Transaction Document:

          (a)  must be in writing in order to be valid;

          (b)  is sufficient if executed by the party giving,  serving or making
               the same or on its behalf by any attorney,  director,  secretary,
               other duly authorised officer or solicitor of such party;

          (c)  will be  deemed  to  have  been  duly  given,  served  or made in
               relation to a person if it is delivered or posted by prepaid post
               to the address, or sent by facsimile to the number of that person
               set out herein (or at such other address or number as is notified
               in  writing  by that  person  to the other  parties  from time to
               time); and

          (d)  will be deemed to be given, served or made:

               (i)  (in the case of  prepaid  post) on the  fifth  day after the
                    date of posting;
              (ii)  (in the case of  facsimile)  on  receipt  of a  transmission
                    report confirming successful transmission; and
             (iii)  (in the case of delivery by hand) on delivery.

31.3      Continuing obligation

          Each  Transaction   Document   constitutes  a  continuing   obligation
          regardless of any settlement of account,  intervening payment, express
          or  implied  revocation  or any other  matter or thing,  until a final
          discharge thereof has been given to the Borrower and the Guarantors.

31.4      Settlement conditional

          Any  settlement  or  discharge  between  the Agent,  the Banks and the
          Borrower  and/or the  Guarantors  is  conditional  on any  security or
          payment  given or made by the  Borrower,  any  Guarantor  or any other
          person in relation to the  Obligations  not being  avoided,  repaid or
          reduced by virtue of any  Insolvency  Provision.  If such  security or
          payment is so avoided,  repaid or reduced, the Agent and the Banks are
          entitled  to recover  the value or amount of such  security or payment
          avoided,  repaid  or  reduced  from the  Borrower  and the  Guarantors
          subsequently as if such settlement or discharge had not occurred.


                                       79
<PAGE>


31.5      Further assurance

          The  Borrower  and the  Guarantors  on  demand by the Agent and at the
          entire  cost and  expense  of the  Borrower  and the  Guarantors  will
          perform all such acts and execute all such agreements,  assurances and
          other  documents and  instruments  as the Agent requires to perfect or
          improve  the rights and powers  afforded,  created,  or intended to be
          afforded or created, by any Transaction Document.

31.6      Attorney

          Each Obligor hereby irrevocably appoints:

          (a)  the Agent and each Bank, severally;

          (b)  each director and secretary and  authorised  officer from time to
               time of the Agent and each Bank; and

          (c)  any duly appointed agent of the Agent and each Bank,

          jointly and  severally  the attorney of the Obligor,  in the Obligor's
          name and on the Obligor's  behalf, at any time from time to time while
          an Event of Default  subsists  and in such  manner as the Agent or the
          relevant  Bank, as the case may be, in its absolute  discretion  shall
          think fit to:

          (d)  do all acts  necessary  or proper to further or fully  assure any
               Transaction Document or any Bill to the Bank; and

          (e)  do all acts  necessary or proper to perfect or improve the rights
               and powers  afforded  or  created,  or intended to be afforded or
               created, by any Transaction Document.

31.7      Severability of provisions

          Any provision of any  Transaction  Document which is illegal,  void or
          unenforceable   will  be  ineffective  to  the  extent  only  of  such
          illegality,  voidness or  unenforceability  without  invalidating  the
          remaining provisions hereof or thereof.

31.8      Remedies cumulative

          The rights and remedies  conferred  by this  Agreement on the Agent or
          the Banks  are  cumulative  and in  addition  to all  other  rights or
          remedies  available  to the  Agent or the Banks by law or by virtue of
          any Transaction Document.

31.9      Waiver

          A failure to exercise or enforce or a delay in exercising or enforcing
          or the partial exercise or enforcement of any right,  remedy, power or
          privilege  arising under any Transaction  Document by the Agent or the


                                       80
<PAGE>

          Banks  will not in any way  preclude,  or  operate as a waiver of, any
          further exercise or enforcement thereof or the exercise or enforcement
          of any other right,  remedy, power or privilege thereunder or provided
          by law.

31.10     Consents and approvals

          Where any act, matter or thing under any Transaction  Document depends
          on the  consent  or  approval  of the  Agent  or  Banks,  then  unless
          expressly provided otherwise therein,  that consent or approval may be
          given or withheld in the absolute  and  unfettered  discretion  of the
          Agent or Banks (as the case requires) and may be given subject to such
          conditions as the Agent or Banks (as the case requires)  thinks fit in
          its absolute and unfettered discretion.

31.11     Written waiver, consent and approval

          Any  waiver,  consent  or  approval  given  by  the  Agent  under  any
          Transaction  Document  will only be effective and only binds the Banks
          if it is given in writing,  and executed by the Agent or on its behalf
          by an officer for the time being of the Agent.

31.12     Time of essence

          Time is of the essence in respect of each Obligor's  obligations under
          the Transaction Documents.

31.13     Consultants fees

          Where the Agent has to make any  determination  (whether in respect of
          an Advance or otherwise), it may employ such consultants or persons as
          it thinks fit to assist in making  such  determination.  The  Borrower
          will reimburse the Agent for all reasonable  fees paid by the Agent to
          any such  consultants  or persons  upon  receipt  of a written  demand
          therefor.

31.14     Moratorium legislation

          To the fullest extent permitted by law, the provisions of all statutes
          whether existing now or in the future and whether  operating  directly
          or  indirectly  to lessen or  otherwise to vary or affect in favour of
          any Obligor any obligation under any Transaction Document, or to delay
          or  otherwise  prevent or  prejudicially  affect the  exercise  of any
          rights  or  remedies  conferred  on the  Agent or any Bank  under  any
          Transaction  Document,  are hereby  expressly  waived,  negatived  and
          excluded.

31.15     Binding on each signatory

          Each  Transaction  Document  is  binding  on each  of the  signatories
          notwithstanding  that any one or more of the named parties hereto does
          not execute it, that there is any invalidity,  forgery or irregularity
          touching its execution or that it is or becomes unenforceable, void or
          voidable against a named party.


                                       81
<PAGE>


31.16     Counterparts

          This  Agreement  may be executed in a number of  counterparts,  all of
          which taken  together  will be deemed to  constitute  one and the same
          document.

31.17     Entire Agreement

          To the extent  permitted by law,  the  Transaction  Documents  and the
          Underwriting  Letter together embody the entire  understanding  of the
          parties  and  constitute  the entire  terms  agreed  upon  between the
          parties and supersede any prior agreement  (whether or not in writing)
          between  the  parties  in  relation  to the  subject  matter  of  this
          Agreement.

32.       NO REPRESENTATION BY OR RELIANCE ON THE BANK OR AGENT

          Each party other than each Bank and the Agent acknowledges that:

          (a)  no  Bank  or  Agent  has  any  duty to  supply  that  party  with
               information  in relation to or  affecting  the other or others of
               them  prior to the date  hereof or  during  the  currency  of any
               Transaction Document;

          (b)  it has relied upon that party's own  inquiries as to the other or
               others of them, the nature and extent of the entire  relationship
               between them and between them and each Bank and the Agent whether
               or not recorded in the Transaction Documents,  and the nature and
               effect of the Transaction Documents; and

          (c)  it has not entered into any  Transaction  Document in reliance on
               or as a result of any representation, promise, statement, conduct
               or  inducement  to that  party by or on behalf of any Bank or the
               Agent  or by or on  behalf  of  any  Obligor  otherwise  than  as
               embodied in the  Transaction  Documents or as notified in writing
               by that  party  to the  Banks  and the  Agent  prior  to the date
               hereof.

                                       82


<PAGE>


 SCHEDULE 1

             BANKS

NAME & ADDRESS FOR NOTICES                                          COMMITMENT

Toronto Dominion Australia Limited, Level 36,
385 Bourke Street, Melbourne, Victoria                              $32,500,000

Attention:      Manager Credit Administration
Facsimile:      (613) 9670 3779


Paribas, Taipei Branch
(Offshore Banking Unit)                                             $32,500,000
205 TunHua North Road
11th Floor
Taipei, Taiwan 10592

Attention:      Manager Operations
Facsimile:      (8862) 27 13 1182

Copy Notices to:

Paribas Group Australia Limited
Level 11, 3 Spring Street,
Sydney  NSW  2000

Attention:      Leo Leslie/
                Chrisoula Theos
Facsimile:      (612) 9241 5363


Export Development Corporation                                      $20,000,000
151 O'Connor Street
Ottawa
Ontario K1A 1K3

Attention:      Stephen Hebert
                Loan Services Officer

                Viola Wedge-Moores
                Loan Services Manager

Facsimile:      (613) 598 2514


Credit Lyonnais S.A., Singapore Branch                              $20,000,000
3 Temasek Avenue
#11-01 Centennial Tower
Singapore   039190

Attention:      Kok Che Yu /
                Thomas Baetz

Facsimile:      (65) 333 8556


                                       83
<PAGE>


NAME & ADDRESS FOR NOTICES                                          COMMITMENT


The Development Bank of Singapore Ltd                               $10,000,000
6 Shenton Way
DBS Building
Tower One
Singapore 068809

Attention:      Sannly Cheng
                Associate

Facsimile:      (65) 225 0282


The National Bank of New Zealand Limited                            $10,000,000
6th Floor, NBNZ House
1 Victoria Street
Wellington, New Zealand

Attention:   Mark T. Hiddleston

Facsimile:   (644) 802 2022


TOTAL COMMITMENT
                                                                    $125,000,000




                                       84
<PAGE>

             SCHEDULE 2

             RATIOS

             PART 1: Operating Ratios


   Month              Total Debt/Homes       Subscribers    OR     Equivalent
                         Serviceable                               Billing Units
                             ($)

January 1999               1,400                 13,000                14,500

February 1999              1,400                 14,500                16,500

March 1999                 1,300                 17,000                20,000

April 1999                 1,250                 20,000                24,000

May 1999                   1,200                 24,000                28,000

June 1999                  1,200                 28,000                32,000

July 1999                  1,250                 32,000                37,000

August 1999                1,300                 36,000                42,000

September 1999             1,300                 40,000                46,000

October 1999               1,300                 44,000                51,000

November 1999              1,300                 47,000                55,000

December 1999              1,300                 50,000                60,000

March 2000                 1,300                 54,000                66,000

June 2000                  1,300                 58,000                72,000

September 2000             1,300                 61,000                78,000


             PART 2: Financial Ratios pre 30 September 2000


  Period Ending                   Minimum EBITDA                 Minimum Revenue

31 December 1998                   (5,250,000)                             -

31 January 1999                    (5,750,000)                       700,000

28 February 1999                   (5,500,000)                       800,000

31 March 1999                      (4,250,000)                     1,000,000

30 April 1999                      (3,750,000)                     1,250,000

31 May 1999                        (3,250,000)                     1,450,000

30 June 1999                       (3,000,000)                     1,750,000

31 July 1999                       (2,500,000)                     2,000,000

31 August 1999                     (2,150,000)                     2,200,000

30 September 1999                  (1,750,000)                     2,500,000

31 October 1999                    (1,250,000)                     2,700,000

30 November 1999                     (750,000)                     2,900,000

31 December 1999                     (250,000)                     3,100,000

31 March 2000                        2,750,000                    11,500,000

30 June 2000                         3,250,000                    12,500,000

30 September 2000                    4,000,000                    13,500,000

                                       85
<PAGE>

             PART 3: Financial Ratios post 30 June 2000

    3 Month           Total Debt/Annualised EBITDA      EBITDA/Interest Expense
  Period Ending

31 December 2000                 6.50                            -

31 March 2001                    6.25                          2.00

30 June 2001                     6.00                          2.00

30 September 2001                5.50                          2.00

31 December 2001                 5.25                          2.00

31 March 2002                    5.00                          2.50

30 June 2002                     4.75                          2.50

30 September 2002                4.50                          2.50

31 December 2002                 4.25                          2.50

31 March 2003                    4.00                          3.00

30 June 2003                     3.50                          3.00

30 September 2003                3.50                          3.00

31 December 2003                 3.50                          3.00

31 March 2004                    3.50                          4.00

30 June 2004                     3.50                          4.00

30 September 2004                3.50                          4.00

31 December 2004                 3.50                          4.00

31 March 2005                    3.50                          5.00



                                       86
<PAGE>

             SCHEDULE 3

             DOCUMENTARY CONDITIONS PRECEDENT


1.   A certified copy of the constitutional documents of each Obligor.

2.   A certified  copy of a resolution  or  resolutions  of the directors of the
     Borrower approving the Facility and authorising:

     (a)  the  execution  by the  Borrower of this  Agreement  and of any of the
          Original Securities to be given by the Borrower; and

     (b)  a person or  persons to sign  Bills,  notices,  certificates  or other
          documents in connection with the Facility on behalf of the Borrower.

3.   A certified copy of a resolution or resolutions of each Original  Guarantor
     approving the giving of the guarantee by that  Guarantor in this  Agreement
     and authorising:

     (a)  the execution by the Original  Guarantor of this  Agreement and of any
          of the Original Securities to be given by that Original Guarantor; and

     (b)  a person or persons to sign notices,  certificates  or other documents
          in connection with the Facility on behalf of the Guarantor.

4.   Evidence,  satisfactory to the Agent,  that the powers of attorney (if any)
     used to execute any of the  Transaction  Documents on behalf of any Obligor
     have been or will be  registered,  if  necessary  or two  originals  of the
     powers of attorney have been provided.

5.   A certified  copy of the  signatures  of all persons  authorised to sign on
     behalf of the Borrower and the Original Guarantors.

6.   A copy of the Original Securities in registrable form.

7.   Replies to all requisitions of the Agent and its solicitors relating to the
     Facility and the Original Securities.

8.   A  certified  copy or  originals  of each of the  Material  Contracts  duly
     executed and stamped (if required).

9.   A certified  copy of (and of all  applications  for) any and all approvals,
     consents, licences, exemptions and other requirements (whether governmental
     requirements  or  otherwise)  required  for  each  Obligor  to carry on its
     business or to enter into or perform its obligations  under the Transaction
     Documents.

10.  An opinion,  addressed to the Agent and the Banks, of the legal advisers to
     the Agent and the Banks as to such matters  relating to the Obligors and/or
     the Transaction Documents as the Agent may require.

11.  An  opinion,  addressed  to the  Agent  on  behalf  of the  Banks as to the
     enforceability of the Transaction Documents to which SaskTel NZ, UIHNZ, UAP
     and STHC is a party against that party.

12.  The Business Plan.

13.  Evidence  that all  insurance  policies are in existence as required  under
     this  Agreement and any of the Securities  and where  applicable,  that the
     Agent's  interest has been noted thereon and if requested  certified copies
     of each such insurance policy.

14.  Model audit.

15.  Directors  certificate  in the form of Schedule 9 for the Borrower and each
     Guarantor.

For the purposes of this Schedule, "certified" means a copy certified to be such
by a director or Officer of the Borrower.

                                       87

<PAGE>


             SCHEDULE 4

             FORM OF UTILISATION NOTICE


To:          Toronto Dominion Australia Limited


From:        Saturn Communications Limited  Date: [          ]

             UTILISATION NOTICE (ADVANCE).
             Facility Agreement dated [           ]

Dear Sirs

We hereby give you notice pursuant to clause 4.1 of the above Facility Agreement
that we require an Advance  to be made to us under the  Facility  Agreement,  as
follows

(a)  Utilisation Date: [            ]

(b)  Amount: [          ]

(c)  Interest Period: [          ]

(d)  Purpose: [              ]

Payment instructions with respect to the proceeds of the Advance are as follows:

[                       ]

Terms used in this Utilisation Notice and defined in the Facility Agreement have
the same meaning in this Utilisation Notice as in the Facility Agreement.

We confirm that no Event of Default or  Potential  Event of Default has occurred
and is continuing or would result from the borrowing of the proposed Advance. We
also confirm that the representations, warranties and undertakings in clauses 16
(except for clauses 16.2(c),  (d), (e) and (f)) and 17 of the Facility Agreement
have been  complied  with and the  statements in those clauses are correct as at
the date of this Utilisation Notice.

Yours faithfully

[Authorised Signatory]

For and on behalf of Saturn Communications Limited

                                       88
<PAGE>

             SCHEDULE 5

             ACCESSION AGREEMENT

THIS ACCESSION  AGREEMENT is dated the [ ] day of , 19 and made BETWEEN [ ] (the
"Additional  Guarantor"),  Saturn Communications  Limited (the "Borrower"),  [ ]
(each an  "Existing  Guarantor"),  Toronto  Dominion  Australia  Limited  in its
capacity as Agent under the Facility Agreement referred to in Recital (A) hereof
and on behalf of the  Banks  parties  to and  defined  as such in such  Facility
Agreement.

WHEREAS:

(A)  By and upon and subject to the terms of a facility agreement (the "Facility
     Agreement",  which term includes any  supplements  and  amendments  thereto
     which may at any time be made in relation thereto and also any Substitution
     Certificates, Bank Accession Certificates and Accession Agreements) dated
     [            ] made between the Borrower and Guarantors as therein defined,
     the  several  banks parties thereto as Banks and Toronto Dominion Australia
     Limited, as  Agent an amortising  term loan facility was made  available to
     the Borrower (as defined in the Facility Agreement).

(B)  Each of the entities  expressed  to be party  hereto,  whether  directly or
     through  signature hereof by the Agent or the Borrower on its behalf,  is a
     party to the  Facility  Agreement  either by having been an original  party
     thereto or pursuant to an Accession Agreement,  Bank Accession  Certificate
     or a Substitution Certificate to which it is party or otherwise.

(C)  The Additional  Guarantor wishes to become party to the Facility  Agreement
     as a Guarantor  pursuant to the procedure  established  in clause 21 of the
     Facility Agreement by the execution of this Accession Agreement.

(D)  It is the intention of the parties that this Accession Agreement shall take
     effect as a deed.

NOW IT IS HEREBY AGREED as follows:

1.   Definitions

     Terms  used  herein  which  are  defined  in  or  to  which  a  meaning  or
     construction  is assigned by or in the  Facility  Agreement  shall,  unless
     otherwise defined herein,  have the same meaning and construction herein as
     therein.

2.   Agreements, Confirmations and Representations

     (a)  The Additional Guarantor hereby:

          (i)  confirms  that it has received a copy of the  Facility  Agreement
               together  with such other  documents  and  information  as it has
               required in connection herewith and therewith;
         (ii)  agrees to become,  with  effect  from the date of this  Accession
               Agreement, a Guarantor under the Facility Agreement, agrees to be
               bound in that capacity with effect from such date by the terms of
               the Facility Agreement and undertakes  accordingly to perform its
               obligations  as  a  Guarantor  thereunder;
        (iii) confirms the accuracy of the  information  set out under its name
               at the end of this Accession Agreement;
         (iv)  represents  and warrants as an Obligor to the Banks and the Agent
               in the terms of clause 16 (other than  paragraphs  16.2(c),  (d),
               (e) and (f)) of the Facility  Agreement by reference to the facts
               and circumstances existing at the date hereof; and
          (v)  confirms  that it has not  relied  on the  Banks or the  Agent to
               assess  or  inform  it as to the  legality,  validity,  effect or
               enforceability  of the Facility  Agreement or any other  document
               referred to therein or the accuracy or  completeness  of any such
               information  as is  referred  to in  paragraph  (i)  above or the
               creditworthiness,  affairs,  condition  or  status  of any of the
               parties to the Facility Agreement, or any such other document.

                                       89
<PAGE>


     (b)  The  Borrower,  the  Existing  Guarantor(s),  the  Agent and the Banks
          hereby agree amongst themselves and with the Additional Guarantor that
          the Additional  Guarantor shall become party to the Facility Agreement
          with effect from the date of this Accession Agreement.

3.   Law

     This Accession  Agreement  shall be governed by and construed in accordance
     with the laws applying in New Zealand.


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

SIGNATURES

Additional Guarantor:

[               ]

Borrower:

SATURN COMMUNICATIONS LIMITED

for itself and as agent for and on behalf of the Existing Guarantors
By:


Agent:

TORONTO DOMINION  AUSTRALIA LIMITED for itself and as Agent and on behalf of the
Banks.

By:




                                       90
<PAGE>

             SCHEDULE 6

             SUBSTITUTION CERTIFICATE

Substitution Certificate made the             day of

BY                                                     ("Existing Bank");

AND                                                    ("New Bank");

AND       Toronto  Dominion  Australia  Limited for itself and as agent for each
          party under the Facility Agreement ("Agent").

WHEREAS

A.   The Existing Bank and the New Bank presently have the Commitments specified
     in Schedule 1 of this Certificate.

B.   The  New  Bank  wishes  to  [assume   [some/all]  of  the  Existing  Bank's
     Commitments and] participate in the outstanding Advances under the Facility
     Agreement.

C.   After the  Substitution  Date the Existing  Bank and the New Bank will have
     the Commitments specified in the Schedule.

1.        DEFINITIONS AND INTERPRETATION

1.1       Definitions

          In this Certificate:

          "Borrower" means Saturn Communications Limited.

          "Facility  Agreement"  means the agreement dated [ ] between  (amongst
          others) the Borrower and the Agent  together with and as  supplemented
          by  all  Accession   Agreements,   Bank  Accession   Certificates  and
          Substitution Certificates.

          "Substituted  Commitments" means the Commitments  specified as such in
          Schedule 1 of this Certificate.

          "Substituted  Obligations" means the obligations and  responsibilities
          identical  to  the   obligations   and   responsibilities   under  the
          Transaction  Documents  of  the  Existing  Bank  in  relation  to  the
          Substituted Commitments.

          "Substituted  Portion"  means the amount of each  outstanding  Advance
          specified as such in Schedule 2 of this Certificate.

          "Substituted  Rights" means rights,  remedies and powers  identical to
          the rights, remedies and powers under the Transaction Documents of the
          Existing  Bank in  relation  to the  Substituted  Commitments  and the
          Substituted Portion.

          "Substitution  Date"  means  the  later  of the  date  on  which  this
          Certificate  is  executed on behalf of the Agent or such later date as
          the parties hereto may agree in writing.

1.2       Interpretation

          (a)  A reference in this  Certificate to "identical"  obligations  and
               responsibilities or rights, remedies and powers is a reference to
               the character of those obligations and responsibilities,  rights,
               remedies  and powers  rather  than to the  identity of the person
               obliged to perform them or entitled to them.

          (b)  Terms  defined  or  given  a  special  meaning  in  the  Facility
               Agreement have the same meaning in this Certificate.

1.3       Transaction Documents

          This Certificate is a Transaction Document.

                                       91
<PAGE>

2.        REPRESENTATION

          The Existing Bank  represents  and warrants to the New Bank that as at
          the date of this  Certificate the Existing Bank's present  Commitments
          under  the  Facility  Agreement  are as  shown in  Schedule  1 and the
          Existing Bank's  participation in outstanding  Advances is as shown in
          Schedule 2 of this Certificate.

3.        SUBSTITUTED OBLIGATIONS

          Release from Future Obligations

          The Existing Bank is released from the  Substituted  Obligations  with
          effect on and from the  Substitution  Date.  The Existing  Bank shall,
          however,  remain bound by its obligations and  responsibilities  under
          the Transaction  Documents which accrue prior to the Substitution Date
          save as provided in clause 5 below.

3.1       Assumption of Obligations

          The New Bank  undertakes  to the  Existing  Bank and the Agent that it
          shall assume the Substituted  Obligations on and from the Substitution
          Date.

4.        SUBSTITUTED RIGHTS

          The  Existing  Bank  shall no longer be  entitled  to the  Substituted
          Rights  or the  Substituted  Portion  and the New  Bank  shall  become
          entitled to the Substituted Rights and the Substituted  Portion,  with
          effect on and from the Substitution Date.

5.        EFFECT ON TRANSACTION DOCUMENTS

          The Existing  Bank,  the New Bank and the Agent agree that with effect
          on and from the Substitution Date:

          (a)  the New Bank and each  party to each  Transaction  Document  will
               assume obligations and  responsibilities  towards each other, and
               have  rights,  remedies  and powers in  relation  to each  other,
               determined on the basis that the obligations and responsibilities
               of the New Bank are the  Substituted  Obligations and the rights,
               remedies and powers of the New Bank are the Substituted Rights;

          (b)  the  Existing  Bank will be  released  from its  obligations  and
               responsibilities under each of the Transaction Documents accruing
               on  and  after  the  Substitution  Date  to  the  extent  of  the
               Substituted  Obligations  and it will  cease  to be  entitled  to
               exercise  any rights,  remedies or powers  under the  Transaction
               Documents arising on or after the Substitution Date in respect of
               the Substituted Rights; and

          (c)  the New Bank will be deemed a party to each Transaction  Document
               to which the Existing Bank is a party as a Bank with  Commitments
               equal to the Substituted Commitments.

6.        NO EFFECT ON ACCRUED RIGHTS AND OBLIGATIONS

          Save as expressly  provided herein this  Certificate  shall not affect
          the  Existing  Bank's  rights,   remedies  and  powers  arising,   and
          obligations and  responsibilities  accrued,  prior to the Substitution
          Date.

                                       92
<PAGE>

7.        LIQUEFYING BILLS

          Nothing contained in this Certificate releases,  relieves or otherwise
          affects the obligations and responsibilities and the rights,  remedies
          and  powers,  of the  Existing  Bank in respect of Bills  drawn  under
          clause 9 of the Facility  Agreement.  The New Bank will not assume any
          obligations or  responsibilities,  or acquire any rights,  remedies or
          powers, in respect of such Bills.

8.        PAYMENTS

8.1       Consideration

          The  Existing  Bank and the New Bank shall  agree  separately  between
          themselves  the  amounts  (if any)  payable  from one to the  other in
          relation  to the  substitution  in respect of  principal  and  accrued
          interest and fees.

8.2       Agent

          On and from the  Substitution  Date the Agent  will make all  payments
          received by it in respect of the Substituted Commitments,  Substituted
          Obligations,  Substituted  Rights and  Substituted  Portion to the New
          Bank.

9.        INDEPENDENT ASSESSMENT

          Without  limiting  clause 6 of this  Certificate,  the New Bank agrees
          that the provisions of clause 24.13 of the Facility Agreement binds it
          as  if  the  reference  therein  to  this  "Agreement"  included  this
          Certificate and (subject to any agreement to the contrary  between the
          Existing  Bank and New  Bank) the  reference  therein  to the  "Agent"
          included the Existing Bank.

10.       ACKNOWLEDGEMENTS

          The New Bank  acknowledges that it has received a complete and current
          copy of each Transaction  Document  together with such other documents
          and information as it has required in connection therewith.

11.       GOVERNING LAW

          This Certificate is governed by the laws applying in New Zealand.



                                       93

<PAGE>

             Schedule 1: Commitments
                                                              Commitment
--------------------------------------------------------------------------

Existing Bank's present Commitments                         $[           ]

New Bank's present Commitments                              $[           ]

Substituted Commitments                                     $[           ]

Existing Bank's Commitments after substitution              $[           ]

New Bank's Commitments after substitution                   $[           ]


             Schedule 2: Advances

                     Total              Existing                   Substituted
                  Outstanding           Bank's                     Portion
                                        Participation
--------------------------------------------------------------------------------


Advances        $[           ]         $[           ]             $[           ]




SIGNED as an agreement.

[To be signed by Existing Bank, New Bank and Agent]




                                       94
<PAGE>

             SCHEDULE 7

                                 NOTICE FROM UAP

                   [LETTERHEAD OF UIH AUSTRALIA/PACIFIC, INC.]



[Date]



Toronto Dominion Australia Limited
Level 36
385 Bourke Street
MELBOURNE  VIC  3000

Attention  [*]

Dear Sir

SATURN COMMUNICATIONS LIMITED

We refer to:

(a)  the Indenture dated as of 14 May 1996 between UIH  Australia/Pacific,  Inc.
     ("UAP")  and  Firstar  Bank  of  Minnesota   N.A.,  as  supplemented  by  a
     Supplemental Indenture dated as of 30 June 1997 (the "Indentures"); and

(b)  the  terms and  conditions  of the  syndicated  senior  term debt  facility
     arranged  by  Toronto  Dominion   Australia   Limited  ("TDA")  for  Saturn
     Communications Limited ("SCL") dated [         ] (the "Senior Debt Terms").

Having  reviewed the Senior Debt Terms and consulted with our lawyers we confirm
that the  provision of a financing  for SCL in  accordance  with the Senior Debt
Terms will not cause a breach either of the Indentures.

We acknowledge that TDA will rely on this letter in providing finance to SCL and
confirm that this letter may also be  disclosed to and relied on by  prospective
syndicate banks which participate in the proposed financing for SCL.

Signed on behalf of UAP by [       ] with the authority of the directors of UAP.


                                       95
<PAGE>

             SCHEDULE 8

                             COMPLIANCE CERTIFICATE

TO:        Toronto Dominion Australia Limited (in its capacity as Agent)
           ACN 004 958 020
           Level 36
           385 Bourke Street
           MELBOURNE  VIC  3000

FROM:      Saturn Communications Limited

COMPLIANCE CERTIFICATE

Reference is made to the NZ$125,000,000  Syndicated Senior Secured Debt Facility
Agreement  dated [ ] between  (amongst  others)  Saturn  Communications  Limited
("Company")  and Toronto  Dominion  Australia  Limited in its  capacity as Agent
("Facility Agreement") and all Accession Agreements, Bank Accession Certificates
and Substitution Certificates entered into in respect of the Facility Agreement.

Words  defined  in  the  Facility  Agreement  have  the  same  meaning  in  this
Certificate.

This Certificate is given by the Company on behalf of all Obligors.

1.        RATIOS

1.1       Total Debt/Homes Serviceable Ratio

          The ratio of Total Debt to Homes  Serviceable for the Group for the
          period from [     ] to [ ] was [     ].

1.2       Total Subscribers

          The number of Subscribers as at [             ] was [              ].

1.3       Equivalent Billing Units

          The Equivalent Billing Units for the Group for the period from [     ]
          to [     ] was [     ].

1.4       EBITDA

          EBITDA for the Group for the period from [        ] to [         ] was
          [        ].

1.5       Revenue

          The Revenue of the Group for the period from [         ] to [        ]
          was [        ].

1.6       Total Debt/Annualised  EBITDA

          The ratio of Total  Debt to  Annualised  EBITDA  for the Group for the
          period from [      ] to [      ] was [      ].

1.7       EBITDA/Interest Expense

          The ratio of EBITDA to  Interest  Expense for the Group for the period
          from [       ] to [      ] was [      ].

2.        REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

          The representations, warranties and undertakings in clauses 16 (except
          for  clauses  16.2(c),  (d),  (e)  and  (f))  and 17 of  the  Facility
          Agreement  have been complied with and the statements in those clauses
          are  correct  as at the date of this  Certificate  [except  as set out
          below:].

We, [              ], being  [directors/director  and Chief Financial Officer of
the Company] certify that the contents of this Certificate are true  and correct
as at the date of this Certificate.


 .......................................   ......................................
Name of Director                          [Name of Director /Chief Financial
Officer]


Date: .................................

                                       96
<PAGE>
             SCHEDULE 9

                         FORM OF DIRECTOR'S CERTIFICATE
[Date]

Toronto Dominion Australia Limited
Level 36
385 Bourke Street
MELBOURNE  VIC  3000

Attention:   Legal Counsel

I, [name of director], a director of [Saturn  Communications  Limited/Kiwi Cable
Company Limited] (the "Company") certify as follows:

1.   Board resolutions

1.1  The board of directors of the Company (the "Board") has passed resolutions:

     (a)  approving the  transactions  (the  "Transaction")  contemplated by the
          documents  listed in the  schedule  below (the  "Documents"),  and the
          Documents themselves; and

     (b)  authorising execution of the Documents by the Company in the manner in
          which they have actually been executed.

1.2  The resolutions  were duly passed in writing signed by all of the directors
     of the Company entitled to receive notice of a meeting of the Board.

     OR

     The resolutions were duly passed at a meeting of the Board:

     (a)  which was properly convened; and

     (b)  in respect of which all quorum requirements were duly observed.

1.3  The resolutions remain in full force and effect.

2.   Directors' self-interested transactions

     To the best of my  knowledge  and belief  after  making due  enquiry of all
     other  of  the  Company's  directors  (as  defined  in  section  126 of the
     Companies Act 1993 (the  "Act")),  none of the directors of the Company has
     an  interest  (as that term is defined  in  section  139 of the Act) in the
     Transactions.

     OR

     After making due enquiry,  it has been  determined  that one or more of the
     Company's  directors  (as defined in section 126 of the  Companies Act 1993
     (the "Act")) is, or may be,  interested (as that term is defined in section
     139 of the Act) in the  Transactions.  In approving  the  Documents and the
     Transactions,  the Board,  after taking into account all relevant  factors,
     considers  that the Company is  receiving  or will receive fair value under
     them.

     OR

     All of the Company's  entitled persons have agreed in writing  (pursuant to
     section 107(3) of the Act) to the Company's  entry into and  performance of
     the Documents and the Transactions (so that nothing in sections 140 and 141
     of the Act shall apply to the  Transactions).  A true and complete  copy of
     the relevant agreement is attached.

3.   Corporate benefit

     In approving the Documents and the  Transactions,  the Board,  after taking
     into account all relevant  factors,  has resolved that the Company's  entry
     into and  performance of the Documents and the  Transactions is in the best
     interests of the Company.

     OR

     In approving the Documents and the Transactions the Board has:

     (a)  (after  taking into  account all  relevant  factors and pursuant to an
          express  provision in the Company's  constitution),  resolved that the

                                       97
<PAGE>

          Company's  entry  into  and  performance  of  the  Documents  and  the
          Transactions  is in  the  best  interests  of  the  Company's  holding
          company; and

     (b)  (in any case where the Company is not a wholly owned subsidiary of the
          Company's  holding company)  obtained prior agreement to the Company's
          entry into and performance of the Documents and the Transactions  from
          the  Company's   shareholders   (other  than  the  Company's   holding
          company).

4.   Shareholder action

     It has been determined that the Transactions are a "major  transaction" for
     the purposes of section 129 of the Act. Accordingly all of the shareholders
     of the Company  have by special  resolution  (a true and  complete  copy of
     which is attached):

     (a)  approved the Documents and Transactions; and

     (b)  confirmed, approved and ratified the resolutions of the Board referred
          to above.

5.   Due execution

     Each of the Documents has been properly executed by the Company.

6.   Solvency

6.1  I am not aware of any liquidation  proceedings which have been commenced or
     are intended to be commenced  by any person  against the Company,  or which
     are intended or anticipated by the Company.

6.2  Having taken into account all relevant factors (including, in the case of a
     guarantee,  all rights of contribution and subrogation to which the Company
     would be  entitled  if  called  upon to  perform  its  obligations  and the
     solvency of the guaranteed parties),  the Board is satisfied that the value
     of the consideration or benefit received (or to be received) by the Company
     is not  less  than  the  value  of  the  consideration  provided  (or to be
     provided) by the Company.

     OR

     The Company:

     (a)  is able to pay its due debts;

     (b)  is not engaged or about to engage in business for which its  financial
          resources are unreasonably small;

     (c)  will be able to perform its  obligations  under the  Documents and the
          Transactions when required to do so; and

     (d)  will  not  become  unable  to pay its due  debts  as a  result  of the
          Documents and the Transactions.

7.   Financial assistance

     The  Transactions  do not include or involve any  provision  by the Company
     (directly or  indirectly)  of financial  assistance in connection  with the
     purchase  of a share  issued or to be issued by the  Company or its holding
     company.

8.   Constitution

     The  copy  of the  constitution  of the  Company  held  on its  records  as
     maintained  at the office of Registrar of Companies at  Wellington as at 27
     August 1998 is complete  and includes  all  alterations  to date other than
     those attached to this certificate.

Schedule of Documents

1.   Syndicated Senior Debt Facility Agreement

2.   Deed of Charge

3.   Freehold Mortgage*

Signed by         ..........................................
                  Director

Date:             ..........................................

*  Not relevant for Kiwi Cable Company Limited

                                       98
<PAGE>

             SCHEDULE 10

             BANK ACCESSION CERTIFICATE


THIS BANK ACCESSION  CERTIFICATE is dated the [ ] day of , 19 and made BETWEEN [
] (the "Acceding Bank"),  Saturn  Communications  Limited (the "Borrower"),  [ ]
(each a  "Guarantor"),  Toronto  Dominion  Australia  Limited in its capacity as
Agent under the Facility Agreement referred to in Recital A hereof and on behalf
of the Banks parties to and defined as such in such Facility Agreement.

WHEREAS:

A    By and upon and subject to the terms of a facility agreement (the "Facility
     Agreement",  which term includes any  supplements  and  amendments  thereto
     which may at any time be made in relation thereto and also any Substitution
     Certificates, Bank Accession Certificates and Accession Agreements) dated [
     ] made between the Borrower and Guarantors as therein defined,  the several
     banks parties thereto as Banks and Toronto Dominion Australia  Limited,  as
     Agent an amortising  term loan facility was made  available to the Borrower
     (as defined in the Facility Agreement).

B    Each of the entities  expressed  to be party  hereto,  whether  directly or
     through  signature hereof by the Agent or the Borrower on its behalf,  is a
     party to the  Facility  Agreement  either by having been an original  party
     thereto or pursuant to an Accession Agreement,  Bank Accession  Certificate
     or a Substitution Certificate to which it is party or otherwise.

C    The Acceding  Bank wishes to become  party to the  Facility  Agreement as a
     Bank pursuant to the procedure  established  in clause 29.5 of the Facility
     Agreement by the execution of this Certificate.

1.   DEFINITIONS AND INTERPRETATION

1.1  Definitions

     "Accession Date" means the later of:

     (a)  the date on which this  Certificate is executed on behalf of the Agent
          and on behalf of the Borrower and each Guarantor; and

     (b)  such later date as the parties hereto may agree in writing.

     "Existing Bank" means each Bank existing  immediately prior to the proposed
     accession, together the "Existing Banks".

     "New Commitments" means [                ].

     "New  Obligations"  means  the  obligations  and  responsibilities  of  the
     Acceding Bank in relation on the New  Commitments  which shall be identical
     to the obligations and responsibilities  under the Transaction Documents of
     the Existing Banks in relation to their respective Commitments.

1.2  Interpretation

     Terms defined or given a special meaning in the Facility Agreement have the
     same meaning in this Certificate.

2.   ACKNOWLEDGEMENT AND AGREEMENT

     The Acceding Bank hereby:

     (a)  confirms  that  it has  received  a copy  of  the  Facility  Agreement
          together with such other  documents and information as it has required
          in connection herewith and therewith; and

     (b)  agrees to become,  with  effect from the date of this  Certificate,  a
          Bank under the Facility Agreement, agrees to be bound in that capacity
          with effect from such date by the terms of the Facility  Agreement and
          undertakes   accordingly   to  perform  its   obligations  as  a  Bank
          thereunder;

3.   NEW COMMITMENT

     The  Acceding  Bank  undertakes  to the Existing  Banks,  the Agent and the
     Borrower that it shall assume the New Obligations on and from the Accession
     Date.

                                       99
<PAGE>


4.   EFFECT ON TRANSACTION DOCUMENTS

     The parties agree that with effect on and from the Accession Date:

     (a)  the Acceding  Bank and each party to each  Transaction  Document  will
          assume obligations and  responsibilities  towards each other, and have
          rights,  remedies and power in relation to each other,  determined  on
          the basis that the  obligations and  responsibilities  of the Acceding
          Bank are the New Obligations;

     (b)  the Acceding Bank will be deemed a party to each Transaction  Document
          to which the  Existing  Banks  are a party as a Bank with  Commitments
          equal to the New Commitments; and

     (c)  the  Total  Commitments  will be  increased  by the  amount of the New
          Commitments.

5.   NO EFFECT ON ACCRUED RIGHTS AND OBLIGATIONS

     Save as expressly  provided herein,  this Certificate  shall not affect the
     Existing Banks' rights,  remedies and powers  arising,  and obligations and
     responsibilities accrued under any Transaction Document.

6.   INDEPENDENT ASSESSMENT

     Without  limiting  clause 5 of this  Certificate,  the Acceding Bank agrees
     that the provisions of clause 24.13 of the Facility  Agreement  binds it as
     if the reference therein to this "Agreement"  included this Certificate and
     (subject to any  agreement to the contrary  between the Existing  Banks and
     Acceding Bank) the reference  therein to the "Agent"  included the Existing
     Banks.

7.   ACKNOWLEDGEMENTS

     The Acceding Bank  acknowledges that it has received a complete and current
     copy of each  Transaction  Document  together with such other documents and
     information as it has required in connection therewith.

8.   GOVERNING LAW

     This Certificate is governed by the laws applying in New Zealand.


IN  WITNESS   WHEREOF  the  parties  hereto  have  caused  this  Bank  Accession
Certificate to be duly executed on the date first written above.

SIGNATURES

Acceding Bank:

[                         ]

Borrower:

SATURN COMMUNICATIONS LIMITED

for itself and as agent for and on behalf of the Guarantors
By:


Agent:

TORONTO DOMINION  AUSTRALIA LIMITED for itself and as Agent and on behalf of the
Banks.

By:



                                      100