Document:

<PAGE>

                                                                   EXHIBIT 10.23

                          LOAN AND SECURITY AGREEMENT
                          ---------------------------

     This LOAN AND SECURITY AGREEMENT ("Agreement"), is dated as of November 22,
                                        ---------
1999, by and between the following parties:

LENDER:        NTFC CAPITAL CORPORATION, a Delaware corporation with offices at
               501 Corporate Centre Drive, Suite 600, Franklin Tennessee 37067
               and its affiliates, successors or assigns

BORROWER:      PRIMUS TELECOMMUNICATIONS, INC., a Delaware corporation with its
               principal office at 1700 Old Meadow Rd., McLean, VA 22102
               ("Borrower").
                 --------

COMMITMENT
AMOUNT:        US$30,000,000.00

SUPPLIER:      NORTEL NETWORKS CORP.

     This Loan Agreement is entered into pursuant to that certain Proposal
Letter dated August 28, 1999, as supplemented and revised by that certain
Commitment Letter dated October 6, 1999, from Lender and accepted by Borrower as
evidenced hereby (collectively, the "Commitment Letter").

     IN WITNESS WHEREOF, the parties have executed this Loan Agreement by their
duly authorized representatives:

NTFC CAPITAL CORPORATION                PRIMUS TELECOMMUNICATIONS, INC.

BY:_____________________________        BY:_____________________________

TITLE:__________________________        TITLE:__________________________
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
1.   Certain Definitions..................................................

2.   Commitments to Lend..................................................

3.   The Notes and Payment Terms..........................................

4.   Procedures for Borrowing.............................................

5.   Place of Payment.....................................................

6.   Prepayment...........................................................

7.   Mandatory Prepayment.................................................

8.   Security Interest; Guaranties; Obligations Secured...................

9.   Description of Collateral............................................

10.  Maintenance, Use and Operation.......................................

11.  Representations, Warranties and Covenants of Borrower................

12.  Insurance............................................................

13.  Casualty.............................................................

14.  Default..............................................................

15.  Rights and Remedies of Default.......................................

16.  General Authority....................................................

17.  Expenses.............................................................

18.  Indemnity............................................................

19.  Assignment...........................................................

20.  Miscellaneous........................................................

21.  Notices..............................................................

22.  Counterparts.........................................................
</TABLE>

                                       i
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
                                  (continued)

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
23.  Entire Agreement.....................................................

24.  Binding Nature.......................................................

25.  Conditions of Closing................................................

26.  Conditions of Lending................................................
</TABLE>

                    SCHEDULES TO LOAN AND SECURITY AGREEMENT
                    ----------------------------------------

Schedule  2.01   Borrowers' Information, Offices, etc
Schedule  8.01   Collateral Description and Locations of Collateral
Schedule 11.01   Disclosure Schedule
Schedule 11.02   Permitted Encumbrances
Schedule 11.03   Senior Note Covenants
Schedule 11.04   Schedule of Qualifying Leases and Conveyances
Schedule 24.01   Post-Closing Documents

                     EXHIBITS TO LOAN AND SECURITY AGREEMENT
                     ---------------------------------------

Exhibit A        Form of Note
Exhibit B        Form of Borrowing Certificate
Exhibit C        Form of Borrower's Counsel Opinion
Exhibit D        Form of Borrower's Regulatory Counsel Opinion
Exhibit E        Form of Landlord's Consent
Exhibit F        Form of Collateral Assignment of Purchase Agreement
Exhibit G-1      Form of Subsidiary Guaranty -- Australia
Exhibit H-1      Form of Deed of Charge -- Australia

                                       ii
<PAGE>

                          LOAN AND SECURITY AGREEMENT

     THIS LOAN AND SECURITY AGREEMENT ("Agreement"), is dated as of November 22,
                                        ---------
1999, by and between PRIMUS TELECOMMUNICATIONS, INC., a Delaware corporation
with its principal office at 1700 Old Meadow Rd., McLean, VA 22102 ("Borrower")
                                                                     --------
and NTFC CAPITAL CORPORATION, a Delaware corporation with offices at 501
Corporate Centre Drive, Suite 600, Franklin Tennessee 37067 and its affiliates,
successors or assigns ("Lender").
                        ------

     This Loan Agreement is entered into pursuant to the Commitment Letter from
Lender and accepted by Borrower as evidenced hereby.

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:

     1.   CERTAIN DEFINITIONS: In addition to other words and terms defined in
          -------------------
the preamble hereof or elsewhere in this Agreement, or on the schedules hereto,
the following words and terms shall have the following meanings unless the
context otherwise clearly requires:

     "Advance(s)": any advance or loan of funds made by Lender to or on behalf
      ----------
of Borrower pursuant to this Agreement.

     "Amortization Schedule": a schedule described in Section 3(e) attached to a
      ---------------------                           ------------
Note showing anticipated amortization of that Note assuming full funding
thereof.

     "Assignee": an assignee described in Section 19 hereof.
      --------                            ----------

     "Borrowing Certificate": a certificate substantially in the form of Exhibit
      ---------------------
B hereto, executed by Borrower.

     "Borrowing Date": any Business Day on which an Advance is made to Borrower
      --------------
hereunder.

     "Borrower": Primus Telecommunications, Inc.; its successors and assigns.
      --------

     "Borrower's Obligations": all payment obligations of Borrower owed to
      ----------------------
Lender hereunder, including indemnity, expense reimbursement, taxes, fee and
other obligations set forth in this Agreement, any Note and/or other Loan
Documents.

     "Business Day": a day other than a Saturday, Sunday or other day on which
      ------------
commercial banks in Nashville, Tennessee, are authorized or required by law to
close.

     "Change in Control": any change in the direct or indirect control of,
      -----------------
or the ability or right to control, a majority of the voting shares of any class
of securities or ownership rights in Borrower or in the right and/or the power
to control the election of the board of directors of

                                       1
<PAGE>

Borrower.

     "Closing Date": as defined on Schedule 24.01 hereto.
      ------------                 --------------

     "Collateral": as defined and described in Sections 8 and 9 hereof.
      ----------                               ----------------

     "Collateral Schedule": as defined and described in Section 9 hereof.
      -------------------                               ---------

     "Commitment Letter": that certain Proposal Letter dated August 28, 1999,
      -----------------
from Lender, as supplemented and revised by that certain Commitment Letter dated
October 6, 1999, from Lender and accepted by Borrower as evidenced hereby.

     "Consent": a consent to a collateral assignment of the NORTEL Purchase
      -------
Agreement, a consent to a collateral assignment of a Vendor Purchase Agreement,
a Landlord Consent, and/or a Mortgagee's Consent.

     "Deed of Charge": a Deed of Charge substantially in the form of Exhibit H-1
      --------------                                                 -----------
attached hereto, to be executed by any Australian Subsidiary acquiring rights to
Equipment and a Deed of Charge or other security agreement in form reasonably
acceptable to Lender for a Subsidiary located in a different jurisdiction
acquiring rights to Equipment other than pursuant to a Qualifying Lease.

     "Default": any of the conditions or occurrences specified in Section 14,
      -------                                                     ----------
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition has been satisfied.

     "Default Rate": a rate of interest equal to the lesser of (i) three
      ------------
percentage points (3%) in excess of the Interest Rate or (ii) the maximum
permissible rate under applicable law in effect at any time.

     "Equipment": the equipment defined in Section 9 hereof.
      ---------                            ---------

     "Event of Default": any of the events specified in Section 14 hereof,
      ----------------                                  ----------
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, under 14 or otherwise, has been satisfied.

     "Event of Loss": as defined in Section 13 hereof.
      -------------                 ----------

     "Financing Termination Date": December 31, 2000, the date on which Lender's
      --------------------------
agreement to make any further Advances to Borrower terminates.

     "First Funding Date": the date of the first funding by a Lender under any
      ------------------
Loan hereunder.

     "GAAP": generally accepted accounting principles in the United States of
      ----
America (as such principles may change from time to time) applied on a
consistent basis (except for changes in application in which Borrower's
independent certified public accountants concur),

                                       2
<PAGE>

applied both to classification of items and amounts.

     "Governmental Authority": the federal government, any state or
      ----------------------
political subdivision thereof, any city or municipal entity, any foreign
government having jurisdiction over Borrower, any of its Subsidiaries or their
respective properties, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
over or with respect to Borrower or any of its Subsidiaries or their respective
businesses or any Collateral.

     "Guaranty": a Guaranty or Guaranty Agreement substantially in the form of
      --------
Exhibit G-1 attached hereto, to be executed by any Australian Subsidiary
-----------
acquiring rights to Equipment and a Guaranty in form reasonably acceptable to
Lender for a Subsidiary located in a different jurisdiction acquiring rights to
Equipment other than pursuant to a Qualifying Lease.

     "Indebtedness": as to any Person, at a particular time, (a) indebtedness
      ------------
for borrowed money or for the deferred purchase price of property or services in
respect of which such Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which such Person otherwise assures a
creditor against loss; (b) obligations under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases in respect of
which obligations such Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which obligations such Person assures a
creditor against loss; (c) obligations of such Person to purchase or repurchase
accounts receivable, chattel paper or other payment rights sold or assigned by
such Person; and (d) indebtedness or obligations of such Person under or with
respect to letters of credit, notes, bonds or other debt instruments.

     "Installation Site(s)": any of the sites where Equipment is or is to be
      --------------------
located, including those set forth on Schedule 8.01 hereto.

     "Interest Only Period": as defined in Section 3(e) hereof.
      --------------------                 ------------

     "Interest Payment Date": as defined in Section 3(e) hereof.
      ---------------------                 ------------

     "Interest Payments": as set forth in Section 3(e) hereof
      -----------------                   ------------

     "Interest Rate": as set forth in Section 3(e) hereof.
      -------------                   ------------

     "Landlord Consent": a consent substantially in the form of Exhibit E hereto
      ----------------                                          ---------
or in other form acceptable to Lender, to be executed by the owner/landlord,
sublessor and/or licensor (including carriers) of any real property where any of
the Collateral is to be located.

     "Lease": a Lease of the Equipment by Borrower as lessor and a Subsidiary of
      -----
Borrower as lessee.

     "Lender": NTFC Capital Corporation; and its successors and assigns.
      ------

                                       3
<PAGE>

     "Lender's Expenses": as described in 17 hereof.
      -----------------                   --

     "Lien": any mortgage, pledge, hypothecation, lien (statutory or other),
      ----
judgment lien, security interest, security agreement, charge or other
encumbrance, or other security arrangement of any nature whatsoever, including,
without limitation, any installment contract, conditional sale or other title
retention arrangement, any sale of accounts receivable or chattel paper, and any
assignment, deposit arrangement or lease intended as, or having the effect of,
security and the filing of any financing statement under the UCC or comparable
law of any jurisdiction.

     "Loan": the loans and loan facilities described in Section 3 hereof and all
      ----                                              ---------
Advances pursuant hereto.

     "Loan Documents": a collective reference to this Agreement, each Note, any
      --------------
Guaranty Deed of Charge or assignment of Lease, and all other documents,
instruments, agreements and certificates evidencing or securing any advance
hereunder or any obligation for the payment or performance thereof and/or
executed and delivered in connection with any of the foregoing.

     "Maturity Date": the date defined in each Note, which shall be the Payment
      -------------
Date sixty (60) months after the date of such Note, on which all principal,
interest, premium, expenses, fees, penalties and other amounts due under that
Note shall be finally due and payable.

     "Mortgagee's consent": a consent to be executed by any Person holding a
      -------------------
lien on real property leased or otherwise provided to Borrower or any of its
Subsidiaries on which any of the Equipment is located.

     "Note": collectively, one or more promissory notes issued by Borrower to
      ----
Lender pursuant to this Agreement, and all extensions, renewals, modifications,
replacements, amendments, restatements and refinancings thereof.

     "Obligations": all indebtedness, liabilities and obligations of Borrower to
Lender of any class or nature, whether arising under or in connection with this
Agreement, a Note and/or the other Loan Documents or otherwise, whether now
existing or hereafter incurred, direct or indirect, absolute or contingent,
secured or unsecured, matured or unmatured, joint or several, whether for
principal, interest, fees, Lender's Expenses, lease obligations, indemnities or
otherwise, including, without limitation, future advances of any sort, all
future advances made by Lender for taxes, levies, insurance and/or repairs to or
maintenance of the Collateral, the unpaid principal amount of, and accrued
interest on, a Note, and any Lender's Expenses.

     "Payment Date": the date on which any payment under any Note is due, as set
      ------------
forth in Section 3 hereof.
         ---------
     "Permitted Encumbrances": the Liens permitted under Section 11(k) hereof.
      ----------------------                             -------------

     "Product Computing Loads": as defined in Section 10 hereof.
      -----------------------                 ----------

                                       4
<PAGE>

     "Purchase Agreement": individually and collectively, the Purchase Agreement
      ------------------
and the Vendor Purchase Agreement.

     "Qualifying Lease": a Lease to a Subsidiary of Borrower in a form
      ----------------
reasonably acceptable to Lender.

     "Regulatory Authorizations": all approvals, authorizations, licenses,
      -------------------------
filings, notices, registrations, consents, permits, exemptions, registrations,
qualifications, designations, declarations, or other actions or undertakings now
or hereafter made by, to or in respect of any Governmental Authority, including,
without limitation, any certificates of public convenience and all grants,
approvals, licenses, filings and registrations from or to the Federal
Communications Commission or any state Public Utilities Commission or any
foreign Governmental Authority having jurisdiction over Borrower or any of its
Subsidiaries that is necessary in order to enable Borrower or any of its
Subsidiaries to own, construct, maintain and operate the Equipment or any
System, and any authorizations specified on Schedule 11.01 hereto.
                                            --------------

     "Required Consents": the Regulatory Authorizations or consents of other
      -----------------
Persons required with respect to Borrower's execution, delivery and performance
of this Agreement and the other Loan Documents, as described in Sections 26 and
                                                                -----------
27 hereto.
--
     "Software" and "Software Licenses": any software now or hereafter owned by,
      --------       -----------------
or licensed to, Borrower or any of its Subsidiaries or with respect to which
Borrower or any of its Subsidiaries has or may have license or use rights and
all licenses with respect to such rights.

     "Subsidiary": as to any Person, a corporation, partnership, limited
      ----------
liability company, or other entity in which equity interests having ordinary
voting power to elect a majority of the board of directors, managers or similar
persons of the entity are at the time directly or indirectly owned or controlled
by such Person (regardless of any contingency which does or may suspend or
dilute the voting rights of such class). Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of Borrower and also to entities that are under
common control with Borrower by being Subsidiaries of Borrower's parent
corporation, Primus Telecommunications Group, Inc. Specifically, all references
to an Australian Subsidiary include any corporation in the position of a
Subsidiary of Primus Telecommunications Group, Inc., of which Borrower is also a
Subsidiary.

     "Supplier": NORTEL and any other Vendor approved in writing by Lender.
      --------

     "System": Borrower's or any of its Subsidiaries' telecommunications network
      ------
or system constructed and/or operated by Borrower or any of its Subsidiaries or
lessee of Equipment permitted hereunder (including any future development and
expansions thereof), of which any Equipment forms a part

     "Taxes": as defined in Section 3(h) hereof.
      -----                 ------------

     "UCC": the Uniform Commercial Code as the same may from time to time be in
      ---
effect

                                       5
<PAGE>

in the State of Tennessee, or the Uniform Commercial Code of another
jurisdiction, to the extent it may be required to apply to any item or items of
Collateral.

          "Vendor" means any manufacturer or supplier of Equipment or licensor
           ------
or supplier of Software approved in writing by Lender, in each case other than
NORTEL.

          "Vendor Purchase Agreement": any purchase agreement, together with any
           -------------------------
amendments or supplements thereto, between a Vendor and Borrower or an assignor
of Borrower and all purchase orders and invoices issued pursuant thereto for the
sale of Equipment.

          2.   COMMITMENT TO LEND: Subject to the terms and conditions provided
in this Loan and Security Agreement ("Agreement") and so long as no Event of
                                      ---------
Default (as defined in Section 14 hereof) or event or condition which with
                       ----------
notice or passage of time or both would constitute an Event of Default has
occurred and is continuing hereunder, Lender agrees to lend to Borrower, until
the Financing Termination Date, an amount in the aggregate not to exceed the
Commitment Amount set forth on the first page of this Agreement, which sum shall
be used solely for the purchase by Borrower of telecommunications equipment and
associated software sublicenses from the Supplier or another approved Vendor
pursuant to one or more Purchase Agreements made by and between the Supplier (or
another approved Vendor) and Borrower for installation in the United States or
Canada, Australia, Japan, Germany, the United Kingdom and other jurisdictions
approved by Lender in writing.

          3.   NOTES AND PAYMENT TERMS:

          (a)  All Advances of funds to Borrower shall be evidenced by a Note in
the form of Exhibit A executed by Borrower, which shall be in a form and
            ---------
substance satisfactory to the Lender and evidence the obligation of Borrower to
pay the Indebtedness evidenced by that Note, plus any accrued interest thereon,
and all extensions, renewals or modifications thereof including, without
limitation, any Lender's Expenses or other amounts due to Lender under the Note
or this Agreement.

          (b)  Each Note shall be dated the Closing Date or the First Funding
Date with respect thereto and shall mature on the Note's stated Maturity Date.
Except as otherwise provided herein, each Note shall bear interest from the
borrowing date on the outstanding unpaid Principal Amount thereof at the
Interest Rate stated below (compounded monthly and computed on the basis of a
year of 365 days for the actual days elapsed). In computing interest on the
Notes, the Borrowing Date shall be included and the Payment Date excluded.
Borrower and Lender understand that the Amortization Schedule attached to each
Note is intended to amortize fully the principal amount of that Note and any
other principal and interest amounts outstanding will be added to the final
payment on the Maturity Date. In any event, the entire outstanding principal
amount of the Note and all accrued but unpaid interest and all other outstanding
amounts due thereunder shall be paid on the Maturity Date with respect thereto.
If a Payment Date is not a Business Day, the Payment Date shall

                                       6
<PAGE>

be on the first business day following the day which is not a Business Day, and
interest thereon shall be payable at the rate in effect during such extension.
Each payment shall be credited first to accrued and unpaid interest and the
balance to the Principal Amount (provided that in any event the entire Principal
Amount of the Notes then outstanding together with any accrued and unpaid
interest shall be paid on the Maturity Date). The Lender is authorized to
endorse the date and amount of each Advance and each payment of the Principal
Amount and interest with respect to the Notes on the Amortization Schedule
annexed to and constituting a part of the Notes, which endorsement shall
constitute prima facie evidence of the accuracy of the information endorsed.

          (c)  All payments shall be made in lawful money of the United States
of America in immediately available funds and without set off or counterclaim to
the Lender or any subsequent assignee of a Note.

          (d)  Unless otherwise provided on a Note executed subsequent to the
Closing Date of this Agreement, the first twenty-four (24) monthly months
following the First Funding Date of each Loan shall be an Interest Only Period
during which Borrower shall make Interest Payments only at the Interest Rate.
Thereafter, beginning on first Business Day of the twenty-fifth (25th) month and
for thirty-six (36) consecutive months, Borrower shall make amortizing Payments
in accordance with the Amortization Schedule attached to the applicable Note.

          (e)  The "Interest Rate" on each Loan shall be equal to a rate
                    -------------
determined by adding 495 basis points to the published yield on Five (5) Year
Constant Maturity United States Treasury Notes as reported in Federal Reserve
Statistical Release H.15(519), as published by the Board of Governors of the
Federal Reserve System, or any successor publication by the Board of Governors
of the Federal Reserve System, three days prior to the First Funding Date with
respect to that Loan. Beginning with the first amortizing Payment, unless
otherwise provided in the Amortization Schedule attached to a Note, each
amortizing Payment shall consist of an Interest Payment and a Principal Payment
constituting a partial repayment of the applicable Loan as set forth below:

          Payment Number                         Percentage of Loan
          --------------                         ------------------

              25 - 36                                     1.667%
              37 - 48                                     2.500%
              49 - 59                                     4.167%
              60                                 All Unpaid Principal
                                                Plus any other Obligation

          (f)  Whenever any Payment due under a Loan is not made within ten(10)
days after the date when due, Borrower agrees to pay on demand (as a fee to
offset Lender's Expenses), one and one-half percent (1-1/2%) per month of all
overdue amounts from the due date until paid, but not exceeding the lawful
maximum, if any.

          (g)  Notwithstanding any provision of this Agreement, it is the intent
of Lender and Borrower that Lender, or any subsequent holder of a Note, shall
never be entitled to

                                       7
<PAGE>

receive, collect, reserve or apply, as interest, any amount in excess of the
maximum non-usurious lawful rate of interest permitted to be charged by
applicable law, as amended or enacted from time to time. In the event Lender, or
any subsequent holder of a Note, ever receives, collects, reserves or applies as
interest, interest in excess of the then maximum lawful rate of interest, such
amount which would be excessive interest shall be deemed a partial prepayment of
the Principal Amount and treated hereunder as such (except that no prepayment
premium otherwise applicable shall be payable thereon), or, if the Principal
Amount and all other amounts due are paid in full, any remaining excess funds
shall immediately be paid to Borrower which made the excessive payment. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the maximum lawful rate of interest, Borrower and Lender
shall, to the maximum extent permitted under applicable law, (a) exclude
voluntary prepayments and the effects thereof as it may relate to any fees
charged by the Lender, and (b) amortize, prorate, allocate and spread, in equal
parts, the total amount of interest throughout the entire term of the
Indebtedness; provided that if the Indebtedness is paid in full prior to the end
of the full contemplated term hereof, and if the interest received over the
actual period of existence hereof exceeds the maximum lawful rate of interest,
Lender or any subsequent holder of a Note shall refund to Borrower the amount of
such excess, and in such event shall not be subject to any penalties provided by
any laws for contracting for, charging, reserving, collecting or receiving
interest in excess of the maximum lawful rate of interest.

          (h)  Borrower agrees to pay all amounts owing by it under this
Agreement, any Note or the other Loan Documents free and clear of and without
deduction for any present or future taxes (excepting any taxes assessed on
Lender's income by the United States of America) (collectively, the "Taxes") and
                                                                     -----
represents that it has paid, and agrees that it shall pay, when due all
applicable deductions or withholdings for or on account of any Taxes, levies,
duties, fees, deductions or withholdings, restrictions or conditions of any
nature imposed by or on behalf of any jurisdiction (other than the United States
of America) or any taxing authority (other than the United States of America)
whatsoever on the payments by Borrower to Lender under this Agreement, any Note
or the other Loan Documents and

               (i)   that if it is prevented by operation of law from paying any
          Taxes, then the interest rate or fees required to be paid under this
          Agreement, any Note or the other Loan Documents shall be increased by
          the amount necessary to yield to Lender interest or fees at the rates
          specified in this Agreement, any Note or the other Loan Documents
          after provision for the payment of all such Taxes and without taking
          into account any tax benefits accruing to Lender from such payment;

               (ii)  that it shall at the request of Lender execute and deliver
          to Lender such further instruments as may be necessary or desirable to
          effect the increase in the interest or fees as provided for in clause
          (A) immediately above, including a new Note to be issued in exchange
          for any Note theretofore issued;

               (iii) that it shall hold Lender harmless from and against any
          liabilities with respect to any Taxes (whether or not properly or
          legally asserted); and

                                       8
<PAGE>

               (iv) that it shall provide Lender with the original or a
          certified copy of evidence of the payment of any Taxes by it, as
          Lender may reasonably request, or, if no Taxes have been paid, to
          provide to Lender, at Lender's request, with a certificate from the
          appropriate taxing authority or an opinion of counsel acceptable to
          Lender stating that no Taxes are payable.

          (i)  If Lender shall receive a refund of any Taxes paid by Borrower
pursuant to this Section by reason of the fact that such Taxes were not
correctly or legally asserted, Lender shall within sixty (60) days after receipt
of such refund pay to Borrower the amount of such refund, as determined solely
by Lender; provided, however, that in no event shall the amount paid by Lender
           --------  -------
to Borrower pursuant to this sentence exceed the amount of Taxes originally paid
by Borrower; and further provided that Lender shall not have any obligation
                 ------- --------
under this Agreement to claim or otherwise seek to obtain any such refund.

          4.   PROCEDURES FOR BORROWING: Borrower shall execute and deliver to
Lender, at least five (5) business days prior to the date of the requested
Advance (unless Lender shortens such period), a Borrowing Certificate in the
form of Exhibit B to request Advances to finance the acquisition by Borrower of
        ---------
Equipment. Each Borrowing Certificate shall be in form and substance
satisfactory to Lender, and shall specify the business day on which the
borrowing is to be made and the amount of the borrowing and have attached
thereto the applicable purchase order issued by Borrower and related invoice
from the Supplier which is to be paid by Lender with the proceeds of the Loan
and a Collateral Schedule listing and describing the Equipment and Software to
be financed. On the borrowing date specified in the Borrowing Certificate,
providing that all conditions precedent have been satisfied, Lender shall
transmit the borrowed funds to an account maintained by and in the name of
Supplier. The aggregate principal amount of each borrowing shall be not less
than $25,000. Lender shall not be required to make Advances more than twice per
calendar month.

          5.   PLACE OF PAYMENT: The Principal Amount, interest and fees, if
any, shall be payable at 501 Corporate Centre Drive, Suite 600, Franklin,
Tennessee 37067, or such other place as may be designated, from time to time in
writing, by Lender or any subsequent holder.

          6.   PREPAYMENT: Borrower may, at its option but subject to the
satisfaction of the requirements of the next sentence, at any time and from time
to time, prepay any Loan, in whole or in part, upon at least (30) business days
prior written notice to Lender specifying the date and amount of prepayment in a
minimum amount of $50,000. Any such prepayment occurring during the first,
second and third years following the First Funding Date of such Loan shall be
subject to a prepayment premium equal to a percentage of the amount being
prepaid as follows: three percent (3%) if the prepayment is made during the
first year following the First Funding Date; two percent (2%) if the prepayment
is made during the second year following the First Funding Date; and one percent
(1%) if the prepayment is made during the third year following the First Funding
Date. Any Loan may be prepaid without premium thereafter.

          7.   MANDATORY PREPAYMENT: Upon Lender's demand, if Borrower leases

                                       9
<PAGE>

or sells or disposes of any Equipment other than pursuant to a Qualifying Lease
or secured by an appropriate Guaranty and Deed of Charge (if applicable) or upon
the written consent of Lender, or if any Lease ceases to be a Qualifying Lease,
Borrower shall prepay all Advances to the extent proceeds thereof were used to
purchase Equipment and related Software so leased or sold, pro rata to the
Lender according to their respective percentages of the aggregate Advances made
hereunder. All such prepayments shall include all principal, accrued interest,
Prepayment Premium (if any), and expenses then outstanding and due (the
"Mandatory Prepayments")
 ---------------------

          8.   SECURITY INTEREST; GUARANTIES; OBLIGATIONS SECURED:

          (a)  Borrower (as debtor) hereby assigns as collateral and grants to
Lender (as secured party), as security for all of the Indebtedness, a continuing
security interest and/or charge in and to, all of Borrower's (or any
Subsidiary's except an Australian Subsidiary where the Lender's right, title and
interest are secured by a Guaranty and a Deed of Charge) right, title and
interest in and to the property and the property rights described in Section 9
                                                                     ---------
hereof, whether now owned or hereafter acquired or arising, wherever located,
together with all substitutions therefor and all accessions, replacements and
renewals thereof, to the extent financed or refinanced with proceeds of an
Advance hereunder.

          (b)  Borrower shall cause each Subsidiary that acquires rights in any
such Collateral to execute and deliver to Lender a Guaranty substantially in the
form of Exhibit G-1 attached hereto (or such other form as Lender shall
        -----------
reasonably require on the advice of counsel) guaranteeing so much of the
Indebtedness hereunder as is represented by the purchase price and installation
costs and other associated costs of such Collateral, plus the financing costs
attributable thereto. Borrower also shall cause each such Subsidiary to grant to
Lender a security interest and/or charge in the Collateral in which it acquires
rights either directly or as security for the Subsidiary's Guaranty, at the
discretion of Lender reasonably exercised on the advice of counsel.

          9.   DESCRIPTION OF COLLATERAL.Borrower (as debtor) hereby assigns to
Lender as collateral, and grants to Lender (as secured party) a continuing
security interest (or in foreign jurisdictions, the equivalent) in and to, all
of Borrower's right, title and interest in and to the following kinds and types
of property, whether now owned or hereafter acquired or arising, wherever
located, together with all substitutions therefor and all accessions,
replacements and renewals thereof, to the extent financed or refinanced with
proceeds of an Advance hereunder, and in all proceeds and products thereof,
including without limitation the collateral specifically described on Schedule
                                                                      --------
8.01 hereto located in the locations described on Schedule 8.01, including the
----                                              -------------
rights and interests of any Subsidiary acquiring rights in such collateral not
separately secured to the Lender by a Guaranty and Deed of Charge (collectively,
the "Collateral"):
     ----------

          (a)  All Equipment financed or refinanced with proceeds of an Advance
and in each case any and all additions, substitutions, and replacements to or of
any of the foregoing, together with all attachments, components, parts,
improvements, upgrades, and accessions installed thereon or affixed thereto, but
excluding such additions, attachments, components, parts, improvements,
upgrades, and accessions not financed pursuant hereto provided that the

                                       10
<PAGE>

removal thereof would not harm the Equipment to which it is attached. The
Equipment shall include installation services provided by NORTEL or any other
Vendor in connection therewith (collectively, "Equipment");
                                               ---------

          (b)  All of Borrower's right, title and interest in and to the NORTEL
Purchase Agreement, which shall be evidenced by a Collateral Assignment of
Purchase Agreement substantially in the form of Exhibit F to this Agreement,
                                                ---------
together with any future or additional purchase agreements subsequently entered
into with NORTEL or any other Supplier whose Equipment is financed pursuant
hereto, to be delivered with consents to the Lender from NORTEL or such Supplier
for those subsequent assignments within ten (10) business days after the
effective date of each subsequent purchase agreement using substantially the
same form as Exhibit F to this Agreement; .
             ---------

          (c)  All general intangibles and intangible property (including all
contracts and contract rights) constituting part of, or provided by or through
NORTEL or any Vendor in connection with the Equipment or associated with any
System which are necessary for the proper operation of the Equipment, including
without limitation insurance proceeds and amounts due under insurance policies,
licenses, license rights, rights in intellectual property, Software, Software
Licenses, computer programming (including source codes, object codes and all
other embodiments of computer programming or information), refunds, warranties
and indemnification rights, and all amounts owed at any time to Borrower by
Lender or NORTEL or by a Supplier in connection with a Purchase Agreement
relating to Equipment (collectively, "General Intangibles");
                                      -------------------

          (d)  All of Borrower's right, title and interest in and to all Leases
of Equipment by Borrower as lessor, which shall be further evidenced by
assignments of Leases reasonable acceptable to Lender; and

          (e)  All Equipment and Software listed on a Collateral Schedule
attached to a Borrowing Certificate, each Collateral Schedule hereby being
incorporated in and made a part of this Agreement.

          10.  MAINTENANCE, USE AND OPERATION:

          (a)  At all times during the Term, Borrower or any Subsidiary that
leases or acquires an interest in any Equipment, at its sole cost and expense,
shall maintain the applicable Equipment and System in good repair, condition and
working order in accordance with established maintenance procedures such that
the System performs in accordance with published specifications, and Borrower or
the lessee of Equipment shall maintain (and upgrade if necessary) the Equipment
at all times within two of the Supplier's latest Product Computing Loads.
Borrower shall, and shall cause any Subsidiary which leases or acquires an
interest in any Equipment, to use the Equipment and all parts thereof for its
designated purpose and in compliance with all applicable laws and shall at all
time keep the Equipment in its possession and control and not permit such
Equipment to be moved from the Installation Sites, as set forth in Schedule
                                                                   --------
8.01, without Lender's prior written consent.
----

          (b)  The Equipment is, and shall at all time be deemed to be, personal
property

                                       11
<PAGE>

even iF the Equipment is affixed or attached to real property or any
improvements thereon. At Lender's request, Borrower or any lessee of Equipment
shall at no charge promptly cause to be affixed to the Equipment any tags,
decals, or plates furnished by Lender indicating Lender's interest in the
Equipment, and Borrower or a lessee of Equipment shall not permit their removal
or concealment. Borrower or any lessee of Equipment shall at all times keep the
Equipment free and clear of all liens and encumbrances, except those arising
through actions of Lender or permitted in writing by Lender. Borrower or any
lessee of Equipment at its respective expense, shall otherwise cooperate to
defend the interest of Lender in the applicable Equipment and to maintain the
status of the Equipment and all parts thereof as personal property.

          (c)  Borrower will, at Borrower's expense, furnish a Landlord's
Consent or Mortgagee's Consent, as appropriate, from any party having an
interest in any real estate or building in which any Equipment is located or
furnish an acknowledgment satisfactory to Lender from any affiliate, landlord,
mortgagee, easement grantor, or other person who is in a position to claim
rights in property where the Equipment is located, promising to give Lender
notice of any claimed default by Borrower with respect to such property interest
and an opportunity to remove the Equipment and other elements of the System upon
commercially reasonable terms. Lender may inspect the System at any time during
normal business hours of a Borrower or lessee of Equipment subject to its normal
operational procedures.

          11.  REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER. Borrower
represents, warrants and covenants to Lender and, so long as this Agreement is
in effect and any part of Borrower's Obligations to Lender under any Loan remain
unfulfilled, and shall continue to warrant, represent and covenant in each
Borrowing Certificate that:

          (a)  Borrower and each Subsidiary which leases or acquires an interest
in Equipment is a corporation duly organized, validly existing, and in good
standing under the laws of the state or nation of its incorporation and that it
is authorized to do business and/or is in good standing as a foreign corporation
in each jurisdiction in which any System it operates is located, and each
Borrower and Subsidiary which leases or purchases Equipment is authorized and
licensed under applicable law to operate as a facilities based carrier therein,
and each Borrower and Subsidiary which leases or purchases Equipment has the
corporate power and capacity to enter into this Agreement, any Loan authorized
pursuant to this Agreement, or any Lease of Equipment, as the case may be, and
to perform all of its obligations hereunder and thereunder.

          (b)  This Agreement, the Schedules, the Exhibits, and all other Loan
Documents and the performance by Borrower and each Subsidiary which leases or
purchases Equipment hereunder of their respective obligations have been duly and
validly authorized and approved under all laws and regulations and procedures
applicable to Borrower or any Subsidiary which leases or acquires an interest in
Equipment hereunder, and under the terms and provisions of the resolutions of
such entity's governing body, a copy of which has been provided herewith or will
be provided in connection with any subsequent Loan; the consent of all necessary
persons or bodies has been obtained; and all of such documents executed by
Borrower or any Subsidiary which leases or acquires an interest in Equipment
hereunder

                                       12
<PAGE>

have been duly and validly executed and delivered by authorized representatives
of such entity and constitute valid, legal and binding obligations of such,
enforceable against such entity in accordance with their respective terms.

          (c)  No other approval, Consent, Regulatory Authorization, or
withholding of objection is required from any Governmental Authority with
respect to the entering into or performance by Borrower of this Agreement, or
the performance by Borrower or any Subsidiary which leases or acquires an
interest in Equipment hereunder of the transactions contemplated hereby.

          (d)  The entering into and performance of this Agreement and any Loan
entered into pursuant hereto will not violate any judgment, order, law or
regulation applicable to Borrower or result in any breach of, or constitute a
default under, or result in the creation of any lien, charge, security interest
or other encumbrance upon any assets of Borrower or on any Equipment pursuant to
any instrument to which Borrower is a party or by which it or its assets may be
bound, except pursuant to the transactions and documents contemplated in this
Agreement.

          (e)  Borrower and each of its Subsidiaries has conducted and continues
to conduct its business in all material respects in accordance with applicable
laws, and has paid or will cause to be paid all taxes, assessments and other
governmental charges as and when due except those challenged in good faith by
appropriate proceedings. Except as set forth in Schedule 11.01, Borrower and
                                                --------------
each of its Subsidiaries has all of the Regulatory Authorizations necessary to
conduct their respective businesses in the jurisdictions were such businesses
are conducted, and Borrower covenants to obtain all Regulatory Authorizations
required for any future operations by Borrower and each of its Subsidiaries in
any jurisdiction.

          (f)  Except as set forth in Schedule 11.01 there are no actions, suits
                                      --------------
or proceedings pending or, to the knowledge of Borrower's senior executive
officers, threatened against or affecting Borrower or any of its Subsidiaries in
any court or before any Governmental Authority, board or commission which, if
adversely determined, could reasonably be expected to have a material adverse
effect on the ability of Borrower and its Subsidiaries taken as a whole to
perform its obligations hereunder or under any Loan authorized pursuant hereto.

          (g)  Lender has a valid first perfected security interest (or in
foreign jurisdictions, the equivalent), subject only to Permitted Encumbrances,
in all Collateral pursuant hereto, or under any Loan authorized pursuant hereto,
at each Installation Site where it may be located, which secures all Obligations
of Borrower hereunder.

          (h)  Borrower has reviewed its operations and those of its
Subsidiaries with a view to assessing whether its business (together with the
businesses of its Subsidiaries on a consolidated basis), will be vulnerable to a
Year 2000 Problem or will be vulnerable to the effects of a Year 2000 Problem
suffered by any major commercial customers of Borrower or of any of its
Subsidiaries, and has a reasonable basis to believe that no Year 2000 Problem
could reasonably be expected to cause a material adverse effect to Borrower and
its Subsidiaries on a consolidated basis. For purposes of this Agreement, "Year
2000 Problem" means any

                                       13
<PAGE>

significant risk that computer hardware, software or equipment containing
embedded microchips essential to the business or operations of Borrower will
not, in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively and reliably as in the case of times or time
periods occurring before January 1, 2000, including the making of leap year
calculations. The foregoing representation with respect to Equipment financed
pursuant hereto is limited to the representations and warranties of the Supplier
with respect to such Equipment.

          (i)  Borrower shall take all actions necessary and commit adequate
resources to assure that computer-based and other systems of Borrower and its
Subsidiaries are able to process dates effectively, including dates before, on
and after January 1, 2000, without experiencing any Year 2000 Problem that could
reasonably be expected to cause a material adverse effect to Borrower and its
Subsidiaries taken as a whole.

          (j)  Borrower shall provide to Lender, at the same time it provides
them to First Union National Bank (or any other trustee with respect to its
12.75% Senior Notes described below), copies of its consolidated annual
financial statements prepared in accordance with GAAP, audited by a firm of
auditors nationally recognized or approved by Lender in writing; and, within
forty-five (45) days of the end of any quarter, unaudited quarterly consolidated
balance sheets, income statements and cash flow statements prepared in
accordance with GAAP, throughout the term of this Agreement..

          (k)  Neither Borrower nor any Subsidiary of Borrower shall create or
suffer to exist any Lien on the Collateral, or any part thereof, whether
superior or subordinate to the Lien of the Loan Documents, or assign, convey,
sell or otherwise dispose of or encumber its interest in the Collateral, or any
part thereof (including, without limitation, execution of any lease), nor permit
any such action to be taken, except for the following permitted dispositions and
encumbrances ("Permitted Encumbrances"): (i) the Lien created hereby or pursuant
               ----------------------
to the other Loan Documents; (ii) Liens for taxes not yet due, or which are
being contested in good faith and by appropriate proceedings; (iii) carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business which are overdue for a period not
longer than thirty (30) days or which are being contested in good faith and by
appropriate proceedings; (iv) pledges or liens in connection with workers'
compensation, unemployment insurance and other social security legislation; (v)
deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (vi) easements, rights-of-way, restrictions and
other similar encumbrances that are not substantial in amount, and which do not
in any case materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of Borrower; (vii) judgment
liens with respect to which execution has been stayed within ten (10) days by
appropriate judicial proceedings and the posting of adequate security which may
not be any of the Collateral; (viii) Qualifying Leases and Deeds of Charge;
(viii) a Change in Control not constituting a default pursuant to Section 14(i)
                                                                  -------------
hereof; and (ix) specific liens, if any, identified on Schedule 11.02 hereto.
                                                       --------------
Any of the foregoing Liens shall remain "Permitted Encumbrances" as long as they
are being contested by Borrower in good faith.

                                       14
<PAGE>

          (l)  Borrower shall comply in all material respects with the Covenants
set forth in Schedule 11.03 attached hereto, which are derived from the
             --------------
covenants of Borrower contained in the Trust Indenture between Borrower and
First Union National Bank dated October 15, 1999 pertaining to Borrower' 12.75%
Senior Notes due 2009.

          (m)  Borrower shall not permit or acquiesce in any change, waiver or
other alteration with respect to any Lease that could reasonably be expected to
have a material adverse effect upon it, provided, however, that Qualifying
                                        --------  -------
Leases may be amended without Lender's consent to the extent permitted by the
terms of a previously approved form of Qualifying Lease.

          (n)  Borrower shall, and shall cause each Subsidiary which leases or
acquires an interest in any Equipment to, maintain its existence, good standing
and rights in full force and effect in its jurisdiction of organization.
Borrower shall, and shall cause each Subsidiary which leases or acquires an
interest in any Equipment to, qualify to do business and remain qualified and in
good standing and shall obtain all necessary authorizations to do business in
each jurisdiction in which failure to receive or retain such could reasonably be
expected to have a material adverse effect upon Borrower and its Subsidiaries
taken as a whole or upon Lender's ability to exercise its rights and remedies
with respect to the Collateral.

          (o)  Borrower shall, and shall cause any Subsidiary which leases or
acquires an interest in any Equipment to continue to engage solely in the
business described on Schedule 2.01 hereto; and acquire and maintain in full
                      -------------
force and effect all rights, privileges, franchises and licenses necessary for
the operation and maintenance of such business (including, without limitation
any license or authorization required by the FCC or any PUC or any other
Governmental Authority).

          (p)  Promptly upon their becoming available to Borrower, it shall
deliver to Lender copies of (i) all annual or special reports or effective
registration statements which Borrower or any of its Subsidiaries shall file
with any Governmental Authority, including the FCC or any PUC (or any successor
thereto) or any securities exchange, (ii) financial statements, material
reports, and other information distributed by Borrower to its creditors or the
financial community in general, and (iii) all press releases issued by or
concerning Borrower or its Subsidiaries.

          12.  INSURANCE: Borrower or any lessee of Equipment shall, at its
expense, upon delivery of each item of Equipment to its Installation Site and at
all times thereafter, cause each item of Equipment to remain insured against all
risks or loss or damage for an amount at least equal to the portion of the Loan
Amount attributable to that item of Equipment, as depreciated, or the
replacement cost, whichever is greater. All insurance polices shall name Lender
as an additional insured and loss payee, as appropriate, and shall be with an
insurer, having a "Best Policy Holders" rating of "A1" or better (or the
equivalent), and in such form, amount and deductibles as are reasonably
satisfactory to Lender. The proceeds of any such polices shall be payable to
Lender or Borrower or any lessee of Equipment, as their interests may appear.
Each such policy must state by endorsement that the insurer shall give Lender
not less than thirty (30) days prior written

                                       15
<PAGE>

notice of any amendment, renewal or cancellation. Borrower or any lessee of
Equipment shall upon request, furnish to Lender satisfactory evidence that such
insurance coverage is in effect. Borrower may self insure with respect to the
above coverage, with Lender's prior written consent.

          13.  CASUALTY: If any Equipment, in whole or in part, shall be lost or
stolen or destroyed, or damaged from any cause whatsoever, or is taken in any
condemnation or similar proceedings by a Governmental Authority (any such event
is hereafter called an "Event of Loss"), Borrower shall promptly and fully
                        -------------
notify Lender thereof. Borrower shall, at its option, do the following: (i)
immediately place the affected Equipment and Software in good condition and
working order, or (ii) replace the affected item with like equipment or software
in good repair, condition and working order, or (iii) to the extent not fully
covered by insurance as set forth in Section 12 above, pay to Lender, within
                                     ----------
thirty (30) days of the later of the Event of Loss or a determination of less
than full insurance coverage, an amount equal to the applicable Loan, plus any
other amounts then due and unpaid with respect to such Equipment and Software,
less applicable insurance proceeds. Upon the making of all required payments by
Borrower pursuant to (iii) Borrower shall be entitled to retain possession of
the applicable Equipment or the sublicense to the applicable Software, (with no
warranties) subject to the rights, if any, of the insurer. If Lender shall
receive any other insurance proceeds or net awards, Lender shall apply all or
part of such proceeds and awards to any Obligations of Borrower to Lender.

          14.  DEFAULT: Borrower shall be in default under each Loan upon the
occurrence of any of the following events ("Event of Default" or "default"):

          (a)  The failure of any Borrower to pay when due any Payment Amount or
any other amounts payable under this Agreement or any Note within five (5) days
of the date when due;

          (b)  A breach or failure in the observance or performance by any
Borrower or any of its Subsidiaries of any other material provision of this
Agreement or any other Loan Document which is not remedied within thirty (30)
days after receipt by Borrower or any of its Subsidiaries of notice of such
breach or failure;

          (c)  Any material representation, warranty or covenant made herein, or
in any certificate, document, financial or other statement delivered in
connection with this Agreement, or hereafter made by Borrower proves to have
been incorrect in any material adverse respect when made or given;

          (d)  Borrower, or any surety or guarantor of the Indebtedness
evidenced by this Agreement or a Note (i) files a petition or has a petition
filed against it under the bankruptcy code, or any proceeding for relief of
insolvent debtors; (ii) generally fails to pay its debts as such debts become
due; (iii) shall admit in writing its inability to pay its debts as they become
due; (iv) has a custodian, trustee or receiver appointed, voluntarily or
otherwise, for it or its assets; (v) benefits from, or is subject to, the entry
of an order for relief by any court of insolvency; (vi) makes an assignment for
the benefit of creditors; (vii) becomes insolvent (however otherwise evidenced);
(viii) liquidates, winds-up, dissolves or suspends business; or

                                       16
<PAGE>

(ix) has commenced against it any case, proceeding or other action seeking the
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets, which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within sixty (60) days from the entry thereof;

          (e)  Borrower shall (i) commit a default in any payment of any other
instrument or agreement (other than with Lender) that could reasonably be
expected to cause a material adverse effect to Borrower and its Subsidiaries on
a consolidated basis, or (ii) default in the observance of any other provision
of such other instrument or agreement as to cause, or permit the holder of such
instrument or agreement to cause, the obligations thereunder to become due prior
to its stated maturity;

          (f)  One or more judgments or decrees shall be entered against
Borrower or any of its Subsidiaries involving in the aggregate a liability (not
paid or fully covered by insurance) that could reasonably be expected to cause a
material adverse effect to Borrower and its Subsidiaries on a consolidated
basis, if such judgment or decree shall not have been vacated, discharged, or
stayed or bonded pending appeal within sixty (60) days after the entry thereof;
or

          (g)  Any guaranty or any subordination agreement required or delivered
in connection with this Agreement is breached or becomes ineffective, or any
guarantor, or subordinating creditor disavows its obligations under the guaranty
or subordination agreement, as the case may be; or

          (h)  Borrower or any of its Subsidiaries fails to perform any of its
obligations under any other agreement or lease with Lender (subject to any cure
rights or notice periods contained in such other agreement or lease); or

          (i)  If any Change in Control of Borrower should occur without
Lender's prior written consent if such Change in Control results or would result
upon consummation in an entity obligated hereunder that is less creditworthy
than Borrower, based upon financial information with respect to the transaction
which must be supplied by Borrower sufficiently in advance of the consummation
thereof so as to enable Lender reasonably to determine such creditworthiness; or

          (j)  The occurrence of a material adverse effect on, or material
adverse change in, (i) the business, operations or financial condition of
Borrower and its Subsidiaries taken as a whole, (ii) the ability of Borrower to
perform its obligations under this Agreement, any Note, or the other Loan
Documents, or (iii) the Lender's ability to enforce the rights and remedies
granted under this Agreement or the other Loan Documents, in all cases whether
attributable to a single circumstance or event or an aggregation of
circumstances or events.

          (k)  If Borrower shall grant, or suffer to exist for more than twenty
(20) days, or fail to contest immediately after discovering the same, any lien
on any Collateral hereunder in favor of any person other than Lender (except for
a purchase money security interest in favor of NORTEL or other approved
Supplier).

                                       17
<PAGE>

          15.  RIGHTS AND REMEDIES ON DEFAULT:

          (a)  At Lender's option, upon the occurrence of any such Event of
Default under Section 14, and at any time thereafter, at Lender's option,
              ----------
Lender's commitment to lend shall terminate and/or all unmatured Indebtedness
evidenced by any Note will immediately become due and payable without
presentation, demand, protest, or notice of any kind (except as expressly
provided for herein), all of which are expressly waived. Lender may exercise,
from time to time, any rights and remedies available to it under this Agreement,
any Note, the Uniform Commercial Code and other applicable law. Borrower agrees
that upon the occurrence and during the continuance of an Event of Default, to
the extent permitted by applicable law (i) any amounts payable under this
Agreement or under any Note shall thereafter bear interest at a rate per annum
equal to the Interest Rate plus three percent (3%) (in lieu of the 1-1/2% per
month referenced in Section 3(f) hereof), or the maximum rate per annum allowed
                   -------------
by law, whichever is less, compounded monthly and payable on demand (both before
and after judgment), until the Indebtedness is paid in full or the Event of
Default is cured, (ii) it will, at Lender's request, assemble the Collateral and
make it available to Lender at places which Lender shall reasonably select, and
(iii) Lender, by itself or its agent, may, without notice to any person and
without judicial process of any kind, enter into any premises or upon any land
owned, leased or otherwise under the real or apparent control of Borrower, or
any agent of Borrower, where the Collateral may be, or where Lender believes the
Collateral may be, and disassemble, render unusable, and/or repossess all or any
item of the Collateral, disconnecting and separating the Collateral from any
other property. Borrower expressly waives all further rights to possession of
the Collateral after the occurrence and during the continuance of an Event of
Default and all claims for injuries suffered through, or loss caused by, such
entering and/or repossession.

          (b)  Lender shall have the right to sell, lease or otherwise dispose
of the Collateral (or contract to do so), whether in its then condition or after
further preparation or processing, either at public or private sale, in lots or
in bulk, for cash or for credit, with or without warranties or representations,
and upon such terms and conditions as Lender, in its sole discretion, may deem
advisable. Lender shall have the right to purchase at any such sale. Lender will
give Borrower reasonable notice of the time and place of any public sale of the
Collateral or of the time after which any private sale or other intended
disposition of the Collateral is to be made. Unless otherwise provided by law,
the requirement of reasonable notice shall be met if such notice is delivered to
the address of Borrower set forth above at least ten (10) days before the time
of the sale or disposition. Any proceeds of any disposition by Lender of any of
the Collateral may be first applied by Lender to the payment of Lender's
Expenses, incurred in connection with the repossession, care, safekeeping, sale
or otherwise of any or all of the Collateral, or in any way relating to the
rights of Lender hereunder. Any balance of such proceeds may be applied by
Lender toward the payment of the Indebtedness in such order as Lender, in its
sole discretion, shall determine. Borrower shall be liable for, and shall pay to
Lender on demand, any deficiency which may remain after such sale, lease or
other disposition, and Lender agrees to remit to Borrower any surplus resulting
therefrom.

          (c)  If, for the purposes of obtaining judgment in respect of any
claim under this Agreement or any other Loan Document in any court, it is
necessary to convert a sum due

                                       18
<PAGE>

hereunder or thereunder to the Lender in any currency (the "Original Currency")
into another currency (the "Other Currency"), the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures Lender could
purchase the Original Currency with the Other Currency on the Business Day
preceding that on which final judgment is paid or satisfied.

          (d)  The obligations of Borrower in respect of any sum due in the
Original Currency to the Lender under this Agreement or any other Loan Document
shall, notwithstanding any judgment in any Other Currency, be discharged only to
the extent that on the business day following receipt by Lender of any sum
adjudged to be so due in such Other Currency, Lender may in accordance with
normal banking procedures purchase the Original Currency with such Other
Currency. If the amount of the Original Currency so purchased is less than the
sum originally due to the Lender in the Original Currency, Borrower shall, as a
separate obligation and notwithstanding any such judgment, jointly and
severally, indemnify Lender against such loss, and if the amount of the Original
Currency so purchased exceeds the sum originally due to Lender in the Original
Currency, Lender shall remit such excess to Borrower.

          (e)  Notwithstanding the foregoing, Lender shall not exercise any
remedy in violation of applicable law in the jurisdiction where such remedy is
exercisable.

          16.  GENERAL AUTHORITY: Upon the occurrence and during the continuance
of an Event of Default hereunder, Lender shall have the full power to exercise
at any time and from time to time all or any of the following powers with
respect to all or any of the Collateral:

          (a)  To demand, sue for collection, receive and give acquittance for
any and all monies due or to become due upon or by virtue thereof;

          (b)  To receive, take, endorse, assign and deliver any and all checks,
notes, drafts, documents and other property taken or received by Lender in
connection therewith;

          (c)  To settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereof;

          (d)  To sell, transfer, assign or otherwise deal in or with the same
or the proceeds thereof, as fully and effectually as if Lender were the absolute
owner thereof; and

          (e)  In general, to do all things necessary to perform the terms of
this Agreement, including, without limitation, to take any action or proceedings
which Lender deems necessary or appropriate to protect and preserve the security
interest of Lender in the Collateral. In the case of failure of Borrower to
comply with any provision of this Agreement, Lender shall have the right, but
shall not be obligated, to so comply in whole or in part, and all moneys spent,
and expenses and obligations incurred or assumed by Lender in connection with
such performance or compliance, shall be payable on demand together with
interest on such amounts equal to the Interest Rate plus three percent (3%) from
the date and amount is

                                       19
<PAGE>

expended or advanced by the Lender until paid. Such sums plus interest shall
constitute indebtedness secured hereby. Lender's effecting such compliance shall
not be a waiver of Borrower's default. Lender shall be under no obligation or
duty to exercise any of the powers hereby conferred upon it.

          17.  EXPENSES: Borrower agrees (a) to pay or reimburse Lender for all
its reasonable costs, fees, charges and expenses incurred or arising in
connection with the negotiation, review, preparation and execution of this
Agreement, the Loan Documents, any commitment or proposal letter, or any
amendment, supplement, waiver, modification to, or restructuring of this
Agreement, the Indebtedness incurred hereunder, or the other Loan Documents,
including, without limitation, reasonable outside counsel legal fees and
disbursements, expenses, document charges and other charges of Lender, (b) to
pay or reimburse Lender for all its reasonable costs, fees, charges and expenses
incurred in connection with the administration of this Agreement and the other
Loan Documents or the enforcement, protection or preservation of any rights
under or in connection with this Agreement or any other Loan Documents,
including, without limitation, reasonable outside counsel legal fees and
disbursements, audit fees and charges, and all reasonable out-of-pocket
expenses, (c) to pay, indemnify, and to hold Lender harmless from, any and all
recording and filing fees and taxes and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes (excluding
income and franchise taxes and taxes of similar nature), if any, which may be
payable or determined to be payable in connection with the execution and
delivery or recordation or filing of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement and the other Loan Documents.
All of the amounts described in this Section are referred to collectively as the
"Lender's Expenses," shall be payable upon Lender's demand, and shall accrue
 -----------------
interest at the Interest Rate in effect when such demand is made from five (5)
days after the date of demand until paid in full. All Lender's Expenses, and
interest thereon, shall be part of the Indebtedness and shall be secured by the
Collateral. The agreements in this Section shall survive repayment of the other
Indebtedness. All Lender's Expenses that are outstanding on any Borrowing Date
shall be paid before or with such Advance. If Borrower has not paid to Lender
the amount of all Lender's Expenses billed to Borrower before such Borrowing
Date, Lender shall be authorized to retain from any Advance on such Borrowing
Date the amount of such Lender's Expenses that remain unpaid. Borrower's
obligation to pay Lender's Expenses shall not be limited by any limitation on
the amount of the Commitment that may be designated as available for such
purposes, and any amounts so designated shall be used to pay Lender's Expenses
accrued at the time of any Advance before any of the legal fees or similar
expenses of Borrower.

          18.  INDEMNITY: Borrower shall indemnify Lender against and hold
Lender harmless from, and covenants to defend Lender against, any and all
losses, claims, encumbrances, actions, suits, damages, obligations, liabilities
and liens (and all Lender's Expenses) arising out of or in any way related to
each Loan including, without limitation, the selection, purchase, delivery,
ownership, licensing, possession, maintenance, condition, use, operation,
rejection or return of the Collateral, the recovery of claims under insurance
policies thereon, from Borrower's failure to commence operation of a System, or
from any misuse, breach or violation of the Software sublicense, including
without limitation, unauthorized

                                       20
<PAGE>

duplication of or modification to the Software, or arising by operation of law,
excluding, however, any of the foregoing which result from the sole negligence
or willful misconduct of Lender and further excluding such losses, claims,
encumbrances, actions, suits, damages, obligations, liabilities and liens
arising from the sole negligence or willful misconduct of Lender in the exercise
of its remedies hereunder. Borrower agrees that upon written notice by Lender of
the assertion of any claims, liens, encumbrances, actions, damages, obligations
or liabilities, Borrower shall assume full responsibility for, or at Borrower's
option, reimburse Lender for the defense thereof. The provisions of this Section
shall continue in full force and effect notwithstanding full payment of the
Obligations under the Loans and survive the termination of this Agreement or any
Loan for any reason, provided, however, the provisions hereof shall not survive
longer than the applicable statute of limitations.

          19.  ASSIGNMENT: Lender may, in whole or in part, with notice to, but
without the consent of Borrower, sell, assign all or any portion of a Loan
hereunder and any amounts due or to become due hereunder to one or more third
party assignees ("Assignee"), which interests may be reassigned in whole or in
part. No such assignment shall be effective against Borrower unless and until
Borrower shall have received a copy or written notice thereof identifying the
name and address of the Assignee. Upon receiving written notice from Lender,
Borrower shall if so directed, make all Payments and other amounts due directly
to Assignee without abatement, deduction or setoff and free from any deduction
for any other person or entity. Any Assignee shall be entitled to rely on
Borrower's agreements as stated in his Agreement, any Note or other Loan
Documents, as applicable, and shall be considered a third-party beneficiary
thereof. Borrower shall also promptly execute and deliver or cause to be
executed and delivered to Lender or any Assignee any additional documentation as
Lender or the Assignee may reasonably request to acknowledge the assignment.
Lender shall be relieved of its future obligations under the Loan as a result of
such assignment if the Assignee assumes Lender's future obligations hereunder.

WITHOUT LENDER'S PRIOR WRITTEN CONSENT, BORROWER SHALL NOT ASSIGN, LEASE,
TRANSFER, PLEDGE, MORTGAGE OR OTHERWISE ENCUMBER (COLLECTIVELY, A "TRANSFER")
ANY LOAN OR COLLATERAL HEREUNDER OR PERMIT ANY LEVY, LIEN OR ENCUMBRANCE THEREON
EXCEPT FOR QUALIFYING LEASES AND DEEDS OF CHARGE, OR A CHANGE IN CONTROL NOT
CONSTITUTING A DEFAULT PURSUANT TO SECTION 14(i) HEREOF OR AS OTHERWISE
PERMITTED HEREIN. LENDER AGREES NOT TO UNREASONABLY WITHHOLD CONSENT TO AN
ASSIGNMENT BY BORROWER TO A WHOLLY OWNED SUBSIDIARY OF BORROWER OF ITS RIGHTS
HEREIN. ANY ATTEMPTED NON-CONSENSUAL TRANSFER BY BORROWER SHALL BE VOID AB
INITIO. NO TRANSFER SHALL RELIEVE BORROWER OF ANY OF ITS OBLIGATIONS UNDER THE
LOAN UNLESS LENDER RELEASES BORROWER FROM SUCH OBLIGATIONS IN WRITING.

          20.  MISCELLANEOUS: (a) Any failure of Lender to require strict
performance by Borrower, or any waiver by Lender of any provision of this
Agreement or any other Loan Document shall not be construed as a consent to or
waiver of any other breach of the same or of any other provision; (b) No
obligation of the Lender hereunder shall survive the expiration or other
termination of this Agreement; (c) All of the Borrower's indemnities, waiver,
assumptions of liability and duties contained in this Agreement and all Lender's

                                       21
<PAGE>

disclaimers shall continue in full force and effect and survive the expiration
or other termination of this Agreement; (d) Borrower agrees to execute and
deliver or cause to be executed and delivered, upon demand, any and all other
documents necessary to evidence the intent of any Loan authorized hereunder, or
to protect Lender's interest in any Collateral, including any UCC financing
statements or other security documents or any waivers of interest or liens, and
to this end, Borrower appoints Lender as its attorney-in-fact to execute and
deliver all such financing statements or other documents and to collect
insurance proceeds. Borrower agrees to pay the costs of filing and recording
such documentation; (e) Borrower shall deliver to Lender such additional
financial information available to the public or other creditors as Lender may
reasonably request; (f) This Agreement shall be governed by the laws of the
Commonwealth of Virginia, except to the extent the internal laws of the state or
nation where the Collateral is located govern the perfection of security
interests in such property or the exercise of remedies therein; (g) If any
provision shall be held to be invalid or unenforceable, the validity and
enforceability of the remaining provisions shall not in any way be affected or
impaired; (i) In the event Borrower fails to pay or perform any obligations
under this Agreement, Lender may, at its option, pay or perform said obligation,
and any payment made or expense incurred by Lender in connection therewith shall
be due and payable by Borrower upon demand by Lender with interest thereon
accruing at the maximum rate permitted by law until paid; (h) No loan charge,
late charge fee or interest, if applicable, is intended to exceed the maximum
amount permitted to be charged or collected by applicable law. If one or more of
such charges exceed such maximum, then such charges will be reduced to the
legally permitted maximum charge and any excess charge will be used to reduce
the applicable Loan Amount or refunded; (i) Time is of the essence in this
Agreement and in each of its provisions.

          21.  NOTICES: Notices, demands and other communications to be
effective shall be transmitted in writing by telex, telecopy, or other facsimile
transmission, by hand delivery, or if given in the United States, by first
class, Registered or Certified Mail, return receipt requested, or by an
overnight courier service, addressed to Lender or to Borrower at the applicable
address in the preamble, or at such other address as the parties may hereinafter
substitute by written notice. Notice shall be effective in the United States
four (4) days after the date it was mailed (if mailed in the United States), or
upon receipt, which may be evidenced in electronic form, whichever is earlier.

          22.  COUNTERPARTS: The Loan, including the Exhibits and any Schedules
and other Loan Documents, may be executed by one or more of the parties on any
number of separate counterparts (which may be originals or copies sent by
facsimile transmission) each of which counterparts shall be an original, but all
of which taken together shall be deemed to constitute on and the same
instrument.

                                       22
<PAGE>

          23.  ENTIRE AGREEMENT: This Agreement and its Schedules and Exhibits
and other Loan Documents executed and delivered in connection herewith
constitute the entire agreement between Lender and Borrower with respect to the
subject matter hereof and supersede the Commitment Letter (except as referenced
herein), all previous negotiations, proposals, commitments, writings, and
understandings of any nature whatsoever. No agent, employee, or representative
of Lender has any authority to bind Lender to any representation or warranty
concerning the Equipment or Software and, unless such representation or warranty
is specifically included in this Agreement or other Loan Documents executed by
Lender, it shall not be enforceable by Borrower against Lender.

          24.  BINDING NATURE: This Agreement and each Loan shall be binding
upon and inure to the benefit of Lender and Borrower and their respective
successors and permitted assigns and/or Subsidiaries. It is acknowledged for the
purpose of this Agreement that no Australian Subsidiary is a party to this
Agreement and that obligations expressed on behalf of Subsidiaries hereunder, so
far as they could apply to an Australian Subsidiary, are obligations of Borrower
to cause that obligation to be performed. A Guaranty and Deed of Charge in favor
of Lender by an Australian Subsidiary contain the obligations of the Australian
Subsidiary to Lender.

          25.  CONDITIONS OF CLOSING: The Closing Date is stated on Schedule
                                                                    --------
24.01 hereto. In On or before the Closing Date, the following conditions must
-----
have been satisfied:

          (a)  Closing Certificates. A certificate of Borrower signed by a duly
               --------------------
authorized Responsible Officer, certifying as to (i) true copies of
Organizational Documents of Borrower in effect on such date; (ii) true copies of
all corporate action taken by Borrower relative to this Agreement, each Note,
and the other Loan Documents; (iii) the names, true signatures and incumbency of
the Responsible Officers of Borrower authorized to execute and deliver this
Agreement, each Note, and the other Loan Documents; (iv) a Certificate of Good
Standing (or equivalent certificate) for Borrower duly issued by the Secretary
of State of each state in which Borrower intends to do business; and (v) such
other matters as Lender shall reasonably request.

          (b)  Opinions of Counsel. Lender shall have received the following
               -------------------
opinions, all dated as of the Closing Date and in form and substance
satisfactory to Lender:

               (i)  A written opinion of counsel to Borrower, substantially in
          the form of Exhibit C hereto;
                      ---------

               (ii) A written opinion of regulatory counsel for Borrower,
          substantially in the form of Exhibit D hereto; and
                                       ---------

          (c)  Closing Documents. Lender shall have received the following
               ------------------
documents, all in form and substance satisfactory to Lender:

               (i)  Agreement.  This Agreement, duly executed by Borrower;
                    ---------

                                       23
<PAGE>

               (ii)   Notes.  Each Note, duly executed by Borrower;
                      -----

               (iii)  Financing Statements. All UCC-1 financing statements or
                      ---------------------
         other filings or recordations necessary to perfect the Liens granted
         hereby, each duly executed by Borrower, and duly recorded in all the
         offices identified on Schedule 8.01 hereto;
                               -------------

               (iv)   Collateral Assignment of Purchase Agreement. The
                      ---------------------------------------------
         Collateral Assignment of Purchase Agreement, duly executed by Borrower,
         and the Consent to Collateral Assignment of Purchase Agreement, duly
         executed by NORTEL;

               (v)    Insurance. Policies and certificates of insurance required
                      ---------
         by Section 12, accompanied by evidence of the payment of the premiums
            ----------
         therefor;

               (vi)   Financial Statements. The financial statements described
                      --------------------
         in Section 10(k) hereof;
            -------------

               (vii)  Balance Sheet. A balance sheet of Borrower, dated as of
                      -------------
         the end of the fiscal quarter preceding the Closing Date, certified by
         a Responsible Officer as fairly presenting the financial condition of
         Borrower.

               (viii) Certificate of Financial Condition. A Certificate of
                      ------------------------------------
         Financial Condition, duly executed by a Responsible Officer of
         Borrower.

               (ix)   Copies of all executed Leases, each of which must be a
         Qualifying Lease, together with a duly executed assignment of lease
         with respect to each Lease.

               (x)    Guaranties. Original executed Guaranties of any
                      ----------
         Subsidiaries to which any Collateral is conveyed or to be conveyed by
         Borrower or in the case of the Australian Subsidiary in the form of
         Exhibit G-1.
         -----------

               (xi)   Deeds of Charge. Original executed Deeds of Charge of any
                      ---------------
         Subsidiaries to which any Collateral is conveyed or to be conveyed by
         Borrower or in the case of the Australian Subsidiary in the form of
         Exhibit H-1.
         -----------

               (xii)  An updated Schedule 11.04, which contains an accurate list
                                 --------------
         of all executed and proposed Leases or other conveyances of Collateral,
         and their status.

               (xiii) Pre-Closing Lien Searches. Lien searches from all
                      -------------------------
         jurisdictions reasonably determined by Lender to be appropriate,
         effective as of a date reasonably close to the Closing Date, reflecting
         no other Liens (other than Permitted Encumbrances) on any of the
         Collateral.

                                       24
<PAGE>

          26.  CONDITIONS OF LENDING:

          (a)  Conditions for First Advance. On or before the First Funding
               ------------------------------
Date, with respect to each Loan, the following conditions shall have been met to
Lender's satisfaction:

               (i)   Post-Closing Lien Searches. Lender shall have received
                     --------------------------
          satisfactory results of Lien searches in all jurisdictions reasonably
          determined by Lender to be appropriate, reflecting the filing of
          financing statements in favor of Lender pursuant hereto and no other
          Liens other than Permitted Encumbrances.

               (ii)  Required Consents. Lender shall have received satisfactory
                     -----------------
          evidence of Borrower's obtaining the Required Consents.

          (b)  Conditions for All Loans and Advances. The obligation of Lender
               -------------------------------------
to make any Loan or Advance hereunder is subject to Borrower's performance of
its obligations hereunder on or before the date of such Loan or Advance, and to
the satisfaction of the following further conditions on or before the Borrowing
Date for any Loan or Advance, including the first Advance:

               (i)   Filings, Registrations and Recordings. Any financing
                     -------------------------------------
          statements or other recordings required hereunder shall have been
          properly filed, registered or recorded in each office in each
          jurisdiction required in order to create in favor of Lender a
          perfected first-priority Lien on the Collateral, subject to no other
          Lien; Lender shall have received acknowledgment copies of all such
          filings, registrations and recordations stamped by the appropriate
          filing officer; and Lender shall have received results of searches of
          such filing offices, and satisfactory evidence that any other Liens
          (other than Permitted Encumbrances) on the Collateral have been duly
          released, that all necessary filing fees, recording fees, taxes and
          other expenses related to such filings, registrations and recordings
          have been paid in full.

               (ii)  Borrowing Certificate. Lender shall have received a duly
                     ---------------------
          executed Borrowing Certificate in the form of Exhibit B, including a
          detailed Collateral Schedule listing all goods and services to be paid
          with the proceeds of the Advance and accompanied by other supporting
          documentation satisfactory to Lender.

               (iii) Reporting Requirements. Borrower shall have provided Lender
                     -----------------------
          with all relevant reports and information required under Section 11
                                                                   ----------
          hereof.

               (iv)  No Regulatory Event. No action by any Governmental
                     -------------------
          Authority (in either Borrower's or Lender's reasonable determination)
          that could reasonably be expected to cause a material adverse effect
          to Borrower and its Subsidiaries on a consolidated basis shall have
          occurred and be continuing, or would exist upon the consummation of
          transactions to occur on such Borrowing Date.

                                       25
<PAGE>

                  (v)    No Default or Event of Default. No Default or Event of
                         ---------------------------------
         Default shall have occurred and be continuing or would exist upon the
         consummation of transactions to occur on such Borrowing Date.

                  (vi)   No Material Adverse Change. No material adverse change
                         --------------------------
         in the financial condition of Borrower and its Subsidiaries on a
         consolidated basis shall have occurred, or would occur after giving
         effect to such Advance, since the date of the last financial statements
         delivered to Lender pursuant hereto.

                  (vii)  Representations and Warranties. The representations and
                         ------------------------------
         warranties contained in Section 11 hereof shall be true on and as of
                                 ----------
         the date of each such Advance hereunder.

                  (viii) Lender's Expenses. All closing costs, and other
                         -----------------
         Lender's Expenses shall have been paid in full.

                  (ix)   Opinions. Lender shall have received from Borrower such
                         --------
         opinions of counsel for Borrower or a Subsidiary of Borrower as may be
         reasonably acceptable to Lender in form and substance with respect to
         the perfection and priority of the Liens created by the Security
         Documents in each such jurisdictional location.

                  (x)    Details, Proceedings and Documents. All legal details
                         ----------------------------------
         and proceedings in connection with the transactions contemplated by
         this Agreement shall be reasonably satisfactory to Lender and Lender
         shall have received all such counterpart originals or certified or
         other copies of such documents and proceedings in connection with such
         transactions, in form and substance reasonably satisfactory to Lender,
         as Lender may from time to time request.

                  (xi)   Consents. Lender shall have received Required Consents
                         --------
         duly executed by all parties and in form satisfactory to Lender.

                  (xii)  Fees. Lender shall have received the fee(s) described
                         ----
         in Sections 3 and 17 hereof.
            ----------     --

                  (xiii) Purchase Agreements. Lender shall have received a copy
         of each executed NORTEL Purchase Agreement and/or Vendor Purchase
         Agreement with respect to which proceeds of an Advance shall be used to
         acquire NORTEL Equipment or other Equipment, and Lender's shall have
         reviewed and approved the Equipment to be acquired with proceeds of an
         Advance, together with the collateral assignment and consent specified
         in Section 25 of this Agreement.
            ----------

                  (xv)   Lease Schedule. Lender shall have received an updated
                         --------------
         Schedule 11.04, which contains an accurate list of all executed and
         --------------
         proposed Leases and their status.

                                       26
<PAGE>

               (xvi) Post-Closing Items. The post-closing items described on
                     ------------------
          Schedule 24.01 hereto, if any, shall have been completed in the time
          --------------
          permitted, and Borrower shall have provided Lender with satisfactory
          evidence thereof.

          (c)  Affirmation of Representations and Warranties. Any Borrowing
               ---------------------------------------------
Certificate or other request for any Advance hereunder shall constitute a
representation and warranty that (i) the representations and warranties
contained in hereof are true and correct on and as of the date of such request
with the same effect as though made on and as of the date of such request and
(ii) on the date of such request no Default or Event of Default has occurred and
is continuing or exists or will occur or exist after giving effect to such
Advance (for this purpose such Advance being deemed to have been made on the
date of such request). Failure of Lender to receive notice from a Borrower to
the contrary before such Advance is made shall constitute a further
representation and warranty by the Borrower that (x) the representations and
warranties of the Borrower contained in the first sentence of this Section 26(c)
                                                                   -------------
are true and correct on and as of the date of such Advance with the same effect
as though made on and as of the date of such Advance and (y) on the date of the
Advance no Default or Event of Default has occurred and is continuing or exists
or will occur or exist after giving effect to such Advance.

          (d)  Deadline for Funding Conditions. Lender shall have no obligation
               -------------------------------
to make any Advances hereunder if all of the conditions set forth in Sections 25
                                                                     -----------
and 26 hereof have not been fully satisfied, and the first Advance made
    --
hereunder, within the period of four (4) calendar months following the Closing
Date.

                      END OF LOAN AND SECURITY AGREEMENT
                          (Signatures on First Page)

                                       27
<PAGE>

                                                                SCHEDULE 2.01 TO
                                                                ----------------
                                                     LOAN AND SECURITY AGREEMENT
                                                     ---------------------------

                             Borrower Information
                             --------------------

                                       1
<PAGE>

                                                                SCHEDULE 8.01 TO
                                                                ----------------
                                                     LOAN AND SECURITY AGREEMENT
                                                     ---------------------------

              Collateral Descriptions and Locations of Collateral
              ---------------------------------------------------

                                       1
<PAGE>

                                                               SCHEDULE 11.01 TO
                                                               -----------------
                                                     LOAN AND SECURITY AGREEMENT
                                                     ---------------------------

                              Disclosure Schedule
                              -------------------

                                       1
<PAGE>

                                                               SCHEDULE 11.02 TO
                                                               -----------------
                                                     LOAN AND SECURITY AGREEMENT
                                                     ---------------------------

                            Permitted Encumbrances
                            ----------------------

                                       2
<PAGE>

                                                               SCHEDULE 11.03 TO
                                                               -----------------
                                                     LOAN AND SECURITY AGREEMENT
                                                     ---------------------------

                             Senior Note Covenants
                             ---------------------

                                       1
<PAGE>

                                                               SCHEDULE 11.04 TO
                                                               -----------------
                                                     LOAN AND SECURITY AGREEMENT
                                                     ---------------------------

                       Qualifying Leases and Conveyances
                       ---------------------------------

                                       2
<PAGE>

                                                               SCHEDULE 25.01 TO
                                                               -----------------
                                                     LOAN AND SECURITY AGREEMENT
                                                     ---------------------------

                            Post-Closing Conditions
                            -----------------------

                                       1
<PAGE>

                                PROMISSORY NOTE

US $30,000,000                                       November 22, 1999
(or such amount as may
be advanced hereunder)

     FOR VALUE RECEIVED, PRIMUS TELECOMMUNICATIONS, INC., a Delaware
corporation with its principal place of business at 1700 Old Meadow Road,
McLean, VA 22102 ("Borrower") promises and agrees to pay to the order of NTFC
                   --------
CAPITAL CORPORATION, a Delaware corporation, its successors, assigns or any
subsequent holder of this Note (the "Lender") at its offices located at 501
                                     ------
Corporate Centre Drive, Suite 600, Franklin, Tennessee 37067, or at such other
place as may be designated in writing by Lender, in lawful money of the United
States of America in immediately available funds:

     the lesser of Thirty Million Dollars and 00/100 (US$30,000,000), or all
     amounts advanced hereunder pursuant to the Loan Agreement (defined below),
     plus legal fees, charges and expenses,

together with interest thereon and other amounts due as provided below. The
amortization schedule attached hereto is for convenience only, and the failure
of the Lender to attach an amortization schedule, or any error or incorrect
notation by the Lender on any amortization schedule, shall not diminish the
obligations of the Borrower under this Note.

     This Note shall mature November 21, 2004 (the "Maturity Date"), on which
date all then-outstanding principal, interest, premium, expenses, fees,
penalties and other amounts due under the Note shall be finally due and payable.

     This Note is issued pursuant to that certain Loan and Security Agreement
dated November 22, 1999, by and between Borrower and Lender (as it may be
modified, amended or restated from time to time, the "Loan Agreement"). Any
                                                      --------------
term not otherwise defined in this Note shall have the same meaning as in the
Loan Agreement. Reference is made to the Loan Agreement, which, among other
things, permits the acceleration of the maturity hereof upon the occurrence of
certain events and for prepayments in certain circumstances and upon certain
terms and conditions. This Note is secured by, among other things, the
Collateral described in the Loan Agreement and the other Loan Documents.

     All Advances hereunder shall bear interest from the date of such
Advance (the "Borrowing Date") on the outstanding unpaid Principal Amount
thereof until such amount is due and payable (whether on any Payment Date, at
the Maturity Date, by acceleration, or otherwise), for each Advance, at a fixed
rate equal to a rate determined by adding 495
<PAGE>

basis points to the published yield on the Five (5) Year Constant Maturity
United States Treasury Notes as reported in Federal Reserve Statistical Release
H.15(519) as published by the Board of Governors of the Federal Reserve System,
or any successor publication by the Board of Governors of the Federal Reserve
System, three days prior to the First Funding Date with respect to that Loan.
The interest rate shall be expressed as an annual rate of interest, compounded
monthly, and calculated on the basis of a 365-day year.

     This Note shall have an "Interest Only Period," which is the twenty-four
(24) months immediately following the date of this Note, during which only the
interest on the principal outstanding under the Loan shall be paid monthly in
arrears, together with other amounts (if any) as provided in the Loan Agreement.

     Following the expiration of the Interest Only Period, all outstanding
principal amounts, together with interest, shall be paid in arrears in thirty-
six (36) monthly installments on the first day of the month (each, a "Payment
Date"). Beginning with the first amortizing Payment, unless otherwise provided
in the Amortization Schedule attached to this Note, each amortizing Payment
shall consist of an Interest Payment and a Principal Payment constituting a
partial repayment of the Principal amount due hereunder as set forth below:

  Payment Number                        Percentage of Loan
  --------------                        -------------------

     25 - 36                                   1.667%
     37 - 48                                   2.500%
     49 - 59                                   4.167%
     60                                 All Unpaid Principal
                                      Plus any other Obligation

All payments of principal will be credited to the repayment of all outstanding
Advances represented on that Schedule pro rata. The final payment shall be in an
amount equal to all outstanding principal hereunder, plus all accrued and unpaid
interest and all other unpaid charges and expenses hereunder.

     In the event of any additional Advances hereunder after the initial Payment
Date on Schedule A, an additional amortization schedule (Schedule B, etc.) will
        ----------                                       ----------
be attached for each additional Advance, reflecting the amortization of the
principal amount of such Advance and the applicable Interest Rate. All such
amortization schedules shall provide for amortization of all principal and
interest through the Maturity Date. If any principal, interest, or other charge
or expense remains outstanding on the Maturity Date, such amount shall be added
to the payment due on the Maturity Date.

  Borrower may, at its option but subject to the satisfaction of the
requirements of the next sentence, at any time and from time to time, prepay
this Note, in whole or in part, upon at least (30) business days prior written
notice to Lender specifying the date and amount of prepayment in a minimum
amount of $50,000. Any such prepayment
<PAGE>

occurring during the first, second and third years following the date hereof
shall be subject to a prepayment premium equal to a percentage of the amount
being prepaid as follows: three percent (3%) if the prepayment is made during
the first year following the date hereof; two percent (2%) if the prepayment is
made during the second year following the date hereof; and one percent (1%) if
the prepayment is made during the third year following the date hereof. The Note
may be prepaid without premium thereafter.

     Whenever any Payment due under a Loan is not made within ten(10) days after
the date when due, Borrower agrees to pay on demand (as a fee to offset Lender's
Expenses), one and one-half percent (1-1/2%) per month of all overdue amounts
from the due date until paid, but not exceeding the lawful maximum, if any.

     Notwithstanding the foregoing, if Borrower shall fail to pay within ten
(10) days after the due date any principal amount or interest or other amount
payable under this Note, Borrower shall pay to Lender, to defray the
administrative costs of handling such late payments, an amount equal to interest
on the amount unpaid, to the extent permitted under applicable law, at a rate
equal to the lesser of three percent (3%) higher than the then applicable
interest rate or the maximum permissible interest rate under applicable law (the
"Default Rate") (instead of the Interest Rate and in lieu of the 1-1/2% per
month referenced in the immediately preceding paragraph), from the due date
until such overdue principal amount, interest or other unpaid amount is paid in
full (both before and after judgment) whether or not any notice of default in
the payment thereof has been delivered under the Loan Agreement. In addition,
but without duplication, upon the occurrence and during the continuance of an
Event of Default, all outstanding amounts hereunder shall bear interest at the
Default Rate (instead of the Interest Rate) until such amounts are paid in full
or such Event of Default is waived in writing by Lender.

     Notwithstanding any provision of this Note or the Loan Agreement to the
contrary, it is the intent of the Lender and the Borrower that the Lender or any
subsequent holder of this Note shall never be entitled to receive, collect,
reserve or apply, as interest, any amount in excess of the maximum rate of
interest permitted to be charged by applicable law, as amended or enacted, from
time to time. In the event Lender, or any subsequent holder of this Note, ever
receives, collects, reserves or applies, as interest, any such excess, such
amount which would be excessive interest shall be deemed a partial prepayment of
principal and treated as such (except that no prepayment premium will be payable
thereon), or, if the principal indebtedness and all other amounts due are paid
in full, any remaining excess funds shall immediately be paid to the Borrower.
In determining whether or not the interest paid or payable, under any specific
contingency, exceeds the highest lawful rate, the Borrower and the Lender shall,
to the maximum extent permitted under applicable law, (a) exclude voluntary
prepayments and the effects thereof as it may relate to any fees charged by the
Lender, and (b) amortize, prorate, allocate, and spread, in equal parts, the
total amount of interest throughout the entire term of the indebtedness;
provided that if the indebtedness is paid and performed in full prior to the end
of the full contemplated term hereof, and if the interest received for the
actual period of existence hereof exceeds the maximum
<PAGE>

lawful rate, the Lender or any subsequent holder of the Note shall refund to the
Borrower the amount of such excess or credit the amount of such excess against
the principal portion of the indebtedness, as of the date it was received, and,
in such event, the Lender shall not be subject to any penalties provided by any
laws for contracting for, charging, reserving or receiving interest in excess of
the maximum lawful rate.

     All amounts received for payment under this Note shall at the option of
Lender be applied first to any unpaid expenses due Lender under this Note or
under any other documents evidencing or securing the obligations of Borrower to
Lender, then to any unpaid late charges, then to any unpaid interest accrued at
the Default Rate, then to all other accrued but unpaid interest due under this
Note and finally to the reduction of outstanding principal due under this Note.

     Upon the occurrence of any one or more of the Events of Default specified
in the Loan Agreement (each, an "Event of Default"), all amounts then remaining
unpaid on this Note shall be, or may be declared to be, immediately due and
payable as provided in the Loan Agreement, without further notice, at the option
of the Lender. Lender may waive any Event of Default before or after the same
has been declared and restore this Note to full force and effect without
impairing any rights hereunder, such right of waiver being a continuing one, but
one waiver shall not imply any additional or subsequent waiver. Time is of the
essence of this Note.

     Demand, presentment, notice and protest are expressly waived, except for
notices to Borrower otherwise expressly required in the Loan Agreement. Borrower
and any and all endorsers, guarantors and other parties liable on this Note, and
any and all general partners of Borrower or any endorsers, guarantors or other
parties liable on this Note (collectively, the "Obligors") jointly and severally
waive presentment for payment, protest, notice of protest, notice of nonpayment
of this Note, demand and all legal diligence in enforcing collection, and hereby
expressly consent to (i) any and all delays, extensions, renewals or other
modifications of this Note or any waivers of any term hereof, (ii) any release
or discharge by Lender of any of the Obligors, (iii) any release, substitution
or exchange of any security for the payment hereof, (iv) any failure to act on
the part of Lender, and (vi) any indulgence shown by Lender from time to time
(without notice or further assent from any of the Obligors) and hereby agree
that no such action, failure to act or failure to exercise any right or remedy
by Lender shall in any way affect or impair the obligations of any of the
Obligors.

     BORROWER HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE COURTS
LOCATED IN DAVIDSON OR WILLIAMSON COUNTY, TENNESSEE, INCLUDING WITHOUT
LIMITATION FEDERAL COURTS SITTING IN THE MIDDLE DISTRICT OF TENNESSEE AND THE
CHANCERY COURT FOR DAVIDSON OR WILLIAMSON COUNTY, TENNESSEE, FOR ANY SUIT
BROUGHT OR ACTION COMMENCED IN CONNECTION WITH THIS NOTE, ANY DOCUMENTS EXECUTED
OR DELIVERED IN CONNECTION HEREWITH, INCLUDING WITHOUT LIMITATION THE LOAN
AGREEMENT, OR ANY RELATIONSHIP BETWEEN LENDER AND BORROWER, AND AGREES NOT TO

<PAGE>

CONTEST OR CHALLENGE VENUE IN ANY SUCH COURTS.

     Borrower irrevocably consents to the service of process of any such courts
in any such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, return receipt requested, to Borrower at the
address opposite its signature below or to such other address as Borrower may
have furnished to Lender in writing, and agrees that such service shall become
effective fifty (50) days after such mailing. However, nothing herein shall
affect the right of Lender or Borrower to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
Lender or Borrower in any other jurisdiction.

     BORROWER HEREBY KNOWINGLY, WILLINGLY AND IRREVOCABLY WAIVES ITS RIGHTS TO
DEMAND A JURY TRIAL IN ANY ACTION OR PROCEEDING INVOLVING THIS NOTE, ANY
DOCUMENTS EXECUTED OR DELIVERED IN CONNECTION HEREWITH INCLUDING WITHOUT
LIMITATION THE LOAN AGREEMENT OR ANY RELATIONSHIP BETWEEN BORROWER AND LENDER.
BORROWER AGREES THAT LENDER MAY FILE AN ORIGINAL COUNTERPART OR COPY OF THIS
PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF BORROWER'S EXPRESS WAIVER OF ITS
RIGHT TO TRIAL BY JURY.

     IN ANY ACTION TO ENFORCE THIS NOTE, BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHTS UNDER THE LAWS OF ANY STATE TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY,
PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN ACTUAL DIRECT DAMAGES.

     In the event this Note is placed in the hands of one or more attorneys for
collection or enforcement or protection of the holder's rights described herein
or in the Loan Agreement or the other Loan Documents, the Borrower agrees to pay
all reasonable attorneys' fees and all court and other out-of-pocket costs
incurred by the holder hereof (as of which shall be due on demand and shall bear
interest at the rate then payable hereunder from five (5) days after such demand
is made until paid).

     This Note is governed by and shall be construed in accordance with the
internal laws of the State of Tennessee. If any provision of this Note should
for any reason be invalid or unenforceable, the remaining provisions hereof
shall remain in full force and effect.

     This Note may not be changed, extended or terminated except in writing. No
waiver of any term or provision hereof shall be valid unless in writing signed
by Lender.
<PAGE>

  Executed as of November 22, 1999.

                                             PRIMUS TELECOMMUNICATIONS, INC.

                                             By:_______________________________

                                             Title:____________________________
<PAGE>

                                   SCHEDULE A

                         SCHEDULE OF LOANS AND PAYMENTS
                           OF PRINCIPAL AND INTEREST

          Principal    Amount of      Unpaid        Amount of     Unpaid
           Amount      Principal      Interest       Interest
  Date     of Loan       Paid         Balance          Paid       Balance

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

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_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______
<PAGE>

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______

_______    _______     _______        _______        _______      _______<PAGE>

                                                                   EXHIBIT 10.24
================================================================================

                     RESALE REGISTRATION RIGHTS AGREEMENT

                         Dated as of February 24, 2000

                 PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED

                        PRIMUS TELECOMMUNICATIONS, INC.

                PRIMUS TELECOMMUNICATIONS (AUSTRALIA) PTY. LTD.

                      PRIMUS TELECOMMUNICATIONS PTY. LTD.

                                      and

                              LEHMAN BROTHERS INC.

              MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

                       MORGAN STANLEY & CO. INCORPORATED

================================================================================
<PAGE>

          Resale Registration Rights Agreement, dated as of February 24, 2000,
among Primus Telecommunications Group, Incorporated, a Delaware corporation
(together with any successor entity, herein referred to as the "Issuer"), Primus
Telecommunications Incorporated, a Delaware corporation, Primus
Telecommunications (Australia) Pty. Ltd., an Australian corporation, Primus
Telecommunications Pty. Ltd., an Australian corporation, and Lehman Brothers
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley &
Co. Incorporated (collectively, the "Initial Purchasers").

          Pursuant to the Purchase Agreement, dated February 17, 2000, between
the Issuer, the Principal Subsidiaries (as defined below) and the Initial
Purchasers (the "Purchase Agreement"), the Initial Purchasers have agreed to
purchase from the Issuer up to $250,000,000 ($300,000,000 if the Initial
Purchasers exercise the over-allotment option in full) in aggregate principal
amount of 5 3/4% Convertible Subordinated Debentures due 2007 (the
"Debentures").  The Debentures will be convertible into fully paid,
nonassessable common stock, par value $.01 per share, of the Issuer  (the
"Common Stock") on the terms, and subject to the conditions, set forth in the
Indenture (as defined herein).  To induce the Initial Purchasers to purchase the
Debentures, and in satisfaction of a condition to the Initial Purchasers'
obligations under the Purchase Agreement, the Issuer has agreed to provide the
registration rights set forth in this Agreement.

          The parties hereby agree as follows:

          1.   Definitions.  As used in this Agreement, the following
capitalized terms shall have the following meanings:

          Advice:  As defined in Section 4(c)(ii) hereof.

          Agreement:  This Resale Registration Rights Agreement.

          Blue Sky Application:  As defined in Section 6(a) hereof.

          Broker-Dealer:  Any broker or dealer registered under the Exchange
     Act.

          Business Day:  A day other than a Saturday or Sunday or any federal
     holiday in the United States.

          Closing Date:  The date of this Agreement.

          Commission:  Securities and Exchange Commission.

          Common Stock:  As defined in the preamble hereto.

          Damages Payment Date:  Each Interest Payment Date.  For purposes of
     this Agreement, if no Debentures are outstanding, "Damages Payment Date"
     shall mean each February 15 and August 15.

          Debentures:  As defined in the preamble hereto.
<PAGE>

          Effectiveness Period:  As defined in Section 2(a)(iii) hereof.

          Effectiveness Target Date:  As defined in Section 2(a)(ii) hereof.

          Exchange Act:  Securities Exchange Act of 1934, as amended.

          Holder:  A Person who owns, beneficially or otherwise, Transfer
     Restricted Securities.

          Indemnified Holder:  As defined in Section 6(a) hereof.

          Indenture:  The Indenture, dated as of October 13, 1999, between the
     Issuer and Chase Manhattan Bank and Trust Company, National Association, as
     trustee (the "Trustee"), pursuant to which the Debentures are to be issued,
     as such Indenture is amended, modified or supplemented from time to time in
     accordance with the terms thereof.

          Initial Purchasers:  As defined in the preamble hereto.

          Interest Payment Date:  As defined in the Indenture.

          Issuer:  As defined in the preamble hereto.

          Liquidated Damages:  As defined in Section 3(a) hereof.

          Majority of Holders:  Holders holding over 50% of the aggregate
     principal amount of Debentures outstanding; provided that, for purpose of
     this definition, a holder of shares of Common Stock which constitute
     Transfer Restricted Securities and issued upon conversion of the Debentures
     shall be deemed to hold an aggregate principal amount of Debentures (in
     addition to the principal amount of Debentures held by such holder) equal
     to the product of (x) the number of such shares of Common Stock held by
     such holder and (y) the prevailing conversion price, such prevailing
     conversion price as determined in accordance with Section 12 of the
     Indenture.

          NASD:  National Association of Securities Dealers, Inc.

          Person:  An individual, partnership, corporation, unincorporated
     organization, trust, joint venture or a government or agency or political
     subdivision thereof.

          Prospectus:  The prospectus included in a Shelf Registration
     Statement, as amended or supplemented by any prospectus supplement and by
     all other amendments thereto, including post-effective amendments, and all
     material incorporated by reference into such Prospectus.

          Questionnaire Deadline:  As defined in Section 2(b) hereof.

                                       2
<PAGE>

          Record Holder:  With respect to any Damages Payment Date, each Person
     who is a Holder on the record date with respect to the Interest Payment
     Date on which such Damages Payment Date shall occur.  In the case of a
     Holder of shares of Common Stock issued upon conversion of the Debentures,
     "Record Holder" shall mean each Person who is a Holder of shares of Common
     Stock which constitute Transfer Restricted Securities on the February 1 or
     August 1 immediately preceding the Damages Payment Date.

          Registration Default:  As defined in Section 3(a) hereof.

          Sale Notice:  As defined in Section 4(e) hereof.

          Securities Act:  Securities Act of 1933, as amended.

          Shelf Filing Deadline:  As defined in Section 2(a)(i) hereof.

          Shelf Registration Statement:  As defined in Section 2(a)(i) hereof.

          Suspension Period.  As defined in Section 4(b)(i) hereof.

          TIA:  Trust Indenture Act of 1939, as in effect on the date the
     Indenture is qualified under the TIA.

          Transfer Restricted Securities:  Each Debenture and each share of
     Common Stock issued upon conversion of Debentures until the earlier of:

               (i)   the date on which such Debenture or such share of Common
     Stock issued upon conversion has been effectively registered under the
     Securities Act and disposed of in accordance with the Shelf Registration
     Statement;

               (ii)  the date on which such Debenture or such share of Common
     Stock issued upon conversion is transferred in compliance with Rule 144
     under the Securities Act or may be sold or transferred pursuant to Rule 144
     under the Securities Act (or any other similar provision then in force); or

               (iii) the date on which such Debenture or such share of Common
Stock issued upon conversion ceases to be outstanding (whether as a result of
redemption, repurchase and cancellation, conversion or otherwise).

          Underwritten Registration or Underwritten Offering:  A registration in
     which securities of the Issuer are sold to an underwriter for reoffering to
     the public.

                                       3
<PAGE>

          2.   Shelf Registration.

          (a)  The Issuer shall:

               (i)   not later than 90 days after the date hereof (the "Shelf
     Filing Deadline"), cause to be filed a registration statement pursuant to
     Rule 415 under the Securities Act (the "Shelf Registration Statement"),
     which Shelf Registration Statement shall provide for resales of all
     Transfer Restricted Securities held by Holders that have provided the
     information required pursuant to the terms of Section 2(b) hereof;

               (ii)  use its reasonable best efforts to cause the Shelf
     Registration Statement to be declared effective by the Commission as
     promptly as practicable, but in no event later than 180 days after the date
     hereof (the "Effectiveness Target Date"); and

               (iii) use its reasonable best efforts to keep the Shelf
     Registration Statement continuously effective, supplemented and amended as
     required by the provisions of Section 4(b) hereof to the extent necessary
     to ensure that (A) it is available for resales by the Holders of Transfer
     Restricted Securities entitled to the benefit of this Agreement and (B)
     conforms with the requirements of this Agreement and the Securities Act and
     the rules and regulations of the Commission promulgated thereunder as
     announced from time to time for a period (the "Effectiveness Period") of:

                     (1) two years following the last date of original issuance
          of Debentures; or

                     (2) such shorter period that will terminate when (x) all of
          the Holders of Transfer Restricted Securities are able to sell all
          Transfer Restricted Securities immediately without restriction
          pursuant to Rule 144(k) under the Securities Act or any successor rule
          thereto, (y) when all Transfer Restricted Securities have ceased to be
          outstanding (whether as a result of redemption, repurchase and
          cancellation, conversion or otherwise) or (z) all Transfer Restricted
          Securities registered under the Shelf Registration Statement have been
          sold.

          (b)  No Holder of Transfer Restricted Securities may include any of
its Transfer Restricted Securities in the Shelf Registration Statement pursuant
to this Agreement unless such Holder furnishes to the Issuer in writing, prior
to or on the 20th Business Days after receipt of a request therefor (the
"Questionnaire Deadline"), such information as the Issuer may reasonably request
for use in connection with the Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein and in any application to be filed with
or under state securities laws. In connection with all such requests for
information from Holders of Transfer Restricted Securities, the Issuer shall
notify such Holders of the requirements set forth in the preceding sentence. No
Holder of Transfer Restricted Securities shall be entitled to Liquidated Damages
pursuant to

                                       4
<PAGE>

Section 3 hereof unless such Holder shall have provided all such reasonably
requested information prior to or on the Questionnaire Deadline. Each Holder as
to which the Shelf Registration Statement is being effected agrees to furnish
promptly to the Issuer all information required to be disclosed in order to make
information previously furnished to the Issuer by such Holder not materially
misleading.

          3.   Liquidated Damages.

          (a)  If:

               (i)   the Shelf Registration Statement has not been declared
     effective by the Commission prior to or on the Effectiveness Target Date;

               (ii)  subject to the provisions of Section 4(b)(i) hereof, the
     Shelf Registration Statement is filed and declared effective but, during
     the Effectiveness Period and after the Effectiveness Target Date, shall
     thereafter cease to be effective or fail to be usable for its intended
     purpose without being succeeded within five Business Days by a post-
     effective amendment to the Shelf Registration Statement or a report filed
     with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
     Exchange Act that cures such failure and, in the case of a post-effective
     amendment, is itself immediately declared effective; or

               (iii) prior to or on the 45th or 75th day, as the case may be, of
     any Suspension Period, such suspension has not been terminated,

(each such event referred to in foregoing clauses (i) through (iii), a
"Registration Default"), the Issuer hereby agrees to pay liquidated damages
("Liquidated Damages") with respect to the Transfer Restricted Securities from
and including the day following the Registration Default to but excluding the
day on which the Registration Default has been cured:

                     (A)  in respect of the Debentures, to each holder of
          Debentures, (x) with respect to the first 90-day period during which a
          Registration Default shall have occurred and be continuing, in an
          amount per year equal to an additional 0.25% of the principal amount
          of the then outstanding and not converted Debentures, and (y) with
          respect to the period commencing on the 91st day following the day the
          Registration Default shall have occurred and be continuing, in an
          amount per year equal to an additional 0.50% of the principal amount
          of the then outstanding and not converted Debentures; provided that in
          no event shall the aggregate Liquidated Damages pursuant to this
          clause (A) and clause (B) accrue at a rate per year exceeding 0.50% of
          the sum of the principal amount of the then outstanding and not
          converted Debentures plus the principal amount of the converted
          Debentures; and

                     (B)  in respect of any shares of Common Stock, to each
          holder of shares of Common Stock issued upon conversion of Debentures,
          (x) with respect to the first 90-day period in which a Registration
          Default shall have occurred and be continuing, in an amount per year
          equal to 0.25% of the principal amount of the converted Debentures,
          and (y) with respect to the period commencing the 91st day following
          the day the Registration Default

                                       5
<PAGE>

          shall have occurred and be continuing, in an amount per year equal to
          0.50% of the principal amount of the converted Debentures; provided
          that in no event shall the aggregate Liquidated Damages pursuant to
          this clause (B) and clause (A) above accrue at a rate per year
          exceeding 0.50% of the sum of the principal amount of the outstanding
          and not converted Debentures plus the principal amount of the then
          converted Debentures.

          (b)  All accrued Liquidated Damages shall be paid in arrears to Record
Holders by the Issuer on each Damages Payment Date by wire transfer of
immediately available funds or by federal funds check. Following the cure of all
Registration Defaults relating to any particular Debenture or share of Common
Stock, the accrual of Liquidated Damages with respect to such Debenture or share
of Common Stock will cease.

          All obligations of the Issuer set forth in this Section 3 that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such Transfer Restricted Security
shall have been satisfied in full.

          The Liquidated Damages set forth above shall be the exclusive monetary
remedy available to the Holders of Transfer Restricted Securities for such
Registration Default.

          4.   Registration Procedures.

          (a)  In connection with the Shelf Registration Statement, the Issuer
shall comply with all the provisions of Section 4(b) hereof and shall, in
accordance with Section 2, prepare and file with the Commission a Shelf
Registration Statement relating to the registration on any appropriate form
under the Securities Act.

          (b)  In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities, the Issuer shall:

               (i)  Subject to any notice by the Issuer in accordance with this
     Section 4(b) of the existence of any fact or event of the kind described in
     Section 4(b)(iii)(D), use its reasonable best efforts to keep the Shelf
     Registration Statement continuously effective during the Effectiveness
     Period; upon the occurrence of any event that would cause the Shelf
     Registration Statement or the Prospectus contained therein (A) to contain a
     material misstatement or omission or (B) not be effective and usable for
     resale of Transfer Restricted Securities during the Effectiveness Period,
     the Issuer shall file promptly an appropriate amendment to the Shelf
     Registration Statement or a report filed with the Commission pursuant to
     Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in

                                       6
<PAGE>

     the case of clause (A), correcting any such misstatement or omission, and,
     in the case of either clause (A) or (B), use its reasonable best efforts to
     cause such amendment to be declared effective and the Shelf Registration
     Statement and the related Prospectus to become usable for their intended
     purposes as soon as practicable thereafter. Notwithstanding the foregoing,
     the Issuer may suspend the effectiveness of the Shelf Registration
     Statement by written notice to the Holders for a period not to exceed an
     aggregate of 45 days in any 90-day period (each such period, a "Suspension
     Period") if:

                     (x)  an event occurs and is continuing as a result of which
          the Shelf Registration Statement would, in the Issuer's reasonable
          judgment, contain an untrue statement of a material fact or omit to
          state a material fact required to be stated therein or necessary to
          make the statements therein not misleading; and

                     (y)  the Issuer reasonably determines that the disclosure
          of such event at such time would have a material adverse effect on the
          business of the Issuer (and its subsidiaries, if any, taken as a
          whole);

     provided that in the event the disclosure relates to a previously
     undisclosed proposed or pending material business transaction, the
     disclosure of which would impede the Issuer's ability to consummate such
     transaction, the Issuer may extend a Suspension Period from 45 days to 75
     days; provided, however, that the Suspension Periods shall not exceed an
     aggregate of 90 days in any 360-day period. Each holder, by its acceptance
     of a Debenture, agrees to hold any communication by us in response to a
     notice of a proposed material business transaction in confidence.

               (ii)  Prepare and file with the Commission such amendments and
     post-effective amendments to the Shelf Registration Statement as may be
     necessary to keep the Shelf Registration Statement effective during the
     Effectiveness Period; cause the Prospectus to be supplemented by any
     required Prospectus supplement, and as so supplemented to be filed pursuant
     to Rule 424 under the Securities Act, and to comply fully with the
     applicable provisions of Rules 424 and 430A under the Securities Act in a
     timely manner; and comply with the provisions of the Securities Act with
     respect to the disposition of all securities covered by the Shelf
     Registration Statement during the applicable period in accordance with the
     intended method or methods of distribution by the sellers thereof set forth
     in the Shelf Registration Statement or supplement to the Prospectus.

               (iii) Advise the underwriter(s), if any, and, in the case of (A),
     (C) and (D) below, the selling Holders promptly and, if requested by such
     Persons, to confirm such advice in writing:

                     (A)  when the Prospectus or any Prospectus supplement or
          post-effective amendment has been filed, and, with respect to the
          Shelf

                                       7
<PAGE>

          Registration Statement or any post-effective amendment thereto,
          when the same has become effective,

                     (B)  of any request by the Commission for amendments to the
          Shelf Registration Statement or amendments or supplements to the
          Prospectus or for additional information relating thereto,

                     (C)  of the issuance by the Commission of any stop order
          suspending the effectiveness of the Shelf Registration Statement under
          the Securities Act or of the suspension by any state securities
          commission of the qualification of the Transfer Restricted Securities
          for offering or sale in any jurisdiction, or the initiation of any
          proceeding for any of the preceding purposes, or

                     (D)  of the existence of any fact or the happening of any
          event, during the Effectiveness Period, that makes any statement of a
          material fact made in the Shelf Registration Statement, the
          Prospectus, any amendment or supplement thereto, or any document
          incorporated by reference therein untrue, or that requires the making
          of any additions to or changes in the Shelf Registration Statement or
          the Prospectus in order to make the statements therein not misleading.

     If at any time the Commission shall issue any stop order suspending the
     effectiveness of the Shelf Registration Statement, or any state securities
     commission or other regulatory authority shall issue an order suspending
     the qualification or exemption from qualification of the Transfer
     Restricted Securities under state securities or Blue Sky laws, the Issuer
     shall use its reasonable best efforts to obtain the withdrawal or lifting
     of such order at the earliest possible time.

               (iv)  Furnish to each of the selling Holders and each of the
     underwriter(s), if any, before filing with the Commission, a copy of the
     Shelf Registration Statement and copies of any Prospectus included therein
     or any amendments or supplements to any the Shelf Registration Statement or
     Prospectus (other than documents incorporated by reference after the
     initial filing of the Shelf Registration Statement), which documents will
     be subject to the review of such holders and underwriter(s), if any, for a
     period of two Business Days, and the Issuer will not file the Shelf
     Registration Statement or Prospectus or any amendment or supplement to the
     Shelf Registration Statement or Prospectus (other than documents
     incorporated by reference) to which a selling Holder of Transfer Restricted
     Securities covered by the Shelf Registration Statement or the
     underwriter(s), if any, shall reasonably object within two Business Days
     after the receipt thereof. A selling Holder or underwriter, if any, shall
     be deemed to have reasonably objected to such filing if the Shelf
     Registration Statement, amendment, Prospectus or supplement, as applicable,
     as proposed to be filed, contains a material misstatement or omission.

                                       8
<PAGE>

               (v)    Subject to the execution of a confidentiality agreement
     reasonably acceptable to the Issuer, make available at reasonable times for
     inspection by one or more representatives of the selling Holders,
     designated in writing by a Majority of Holders whose Transfer Restricted
     Securities are included in the Shelf Registration Statement, any
     underwriter, if any, participating in any distribution pursuant to the
     Shelf Registration Statement, and any attorney or accountant retained by
     the Majority of Holders or any of the underwriter(s), all financial and
     other records, pertinent corporate documents and properties of the Issuer
     as shall be reasonably necessary to enable them to exercise any applicable
     due diligence responsibilities, and cause the Issuer's officers, directors,
     managers and employees to supply all information reasonably requested by
     any such representative or representatives of the selling Holders,
     underwriter, attorney or accountant in connection with the Shelf
     Registration Statement after the filing thereof and before its
     effectiveness; provided, however, that any information designated by the
     Company as confidential at the time of delivery of such information shall
     be kept confidential by the recipient thereof.

               (vi)   If requested by any selling Holders or the underwriter(s),
     if any, promptly incorporate in the Shelf Registration Statement or
     Prospectus, pursuant to a supplement or post-effective amendment if
     necessary, such information as such selling Holders and underwriter(s), if
     any, may reasonably request to have included therein, including, without
     limitation: (1) information relating to the "Plan of Distribution" of the
     Transfer Restricted Securities, (2) information with respect to the
     principal amount of Debentures or number of shares of Common Stock being
     sold (3) the purchase price being paid therefor and (4) any other terms of
     the offering of the Transfer Restricted Securities to be sold in such
     offering; and make all required filings of such Prospectus supplement or
     post-effective amendment as soon as reasonably practicable after the Issuer
     is notified of the matters to be incorporated in such Prospectus supplement
     or post-effective amendment.

               (vii)  Furnish to each selling Holder and each of the
     underwriter(s), if any, without charge, at least one copy of the Shelf
     Registration Statement, as first filed with the Commission, and of each
     amendment thereto (and any documents incorporated by reference therein or
     exhibits thereto (or exhibits incorporated in such exhibits by reference)
     as such Person may request).

               (viii) Deliver to each selling Holder and each of the
     underwriter(s), if any, without charge, as many copies of the Prospectus
     (including each preliminary prospectus) and any amendment or supplement
     thereto as such Persons reasonably may request; subject to any notice by
     the Issuer in accordance with this Section 4(b) of the existence of any
     fact or event of the kind described in Section 4(b)(iii)(D), the Issuer
     hereby consents to the use of the Prospectus and any amendment or
     supplement thereto by each of the selling Holders and each of the
     underwriter(s), if any, in connection with the offering and the sale of the
     Transfer Restricted Securities covered by the Prospectus or any amendment
     or supplement thereto.

                                       9
<PAGE>

               (ix) If an underwriting agreement is entered into and the
     registration is an Underwritten Registration, the Issuer shall:

                    (A)  upon request, furnish to each selling Holder and each
          underwriter, if any, in such substance and scope as they may
          reasonably request and as are customarily made by issuers to
          underwriters in primary underwritten offerings, upon the date of
          closing of any sale of Transfer Restricted Securities in an
          Underwritten Registration:

                         (1)  a certificate, dated the date of such closing,
               signed by (y) the Chairman of the Board, its President or a Vice
               President and (z) the Chief Financial Officer of the Issuer
               confirming, as of the date thereof, such matters as such parties
               may reasonably request;

                         (2)  opinions, each dated the date of such closing, of
               counsel to the Issuer covering such matters as are customarily
               covered in legal opinions to underwriters in connection with
               primary underwritten offerings of securities; and

                         (3)  customary comfort letters, dated the date of such
          closing, from the Issuer's independent accountants (and from any other
          accountants whose report is contained or incorporated by reference in
          the Shelf Registration Statement), in the customary form and covering
          matters of the type customarily covered in comfort letters to
          underwriters in connection with primary underwritten offerings of
          securities;

                    (B)  set forth in full in the underwriting agreement, if
     any, indemnification provisions and procedures which provide rights no less
     protective than those set forth in Section 6 hereof with respect to all
     parties to be indemnified; and

                    (C)  deliver such other documents and certificates as may be
     reasonably requested by such parties to evidence compliance with clause (A)
     above and with any customary conditions contained in the underwriting
     agreement or other agreement entered into by the selling Holders pursuant
     to this clause (ix).

               (x)  Before any public offering of Transfer Restricted
     Securities, cooperate with the selling Holders, the underwriter(s), if any,
     and their respective counsel in connection with the registration and
     qualification of the Transfer Restricted Securities under the securities or
     Blue Sky laws of such jurisdictions as the selling Holders or
     underwriter(s), if any, may reasonably request and do any and all other
     acts or things necessary or advisable to enable the disposition in such
     jurisdictions of the Transfer Restricted Securities covered by the Shelf
     Registration Statement; provided, however, that the Issuer shall not be

                                       10
<PAGE>

     required (A) to register or qualify as a foreign corporation or a dealer of
     securities where it is not now so qualified or to take any action that
     would subject it to the service of process in any jurisdiction where it is
     not now so subject or (B) to subject themselves to taxation in any such
     jurisdiction if they are not now so subject.

               (xi)    Cooperate with the selling Holders and the
     underwriter(s), if any, to facilitate the timely preparation and delivery
     of certificates representing Transfer Restricted Securities to be sold and
     not bearing any restrictive legends (unless required by applicable
     securities laws); and enable such Transfer Restricted Securities to be in
     such denominations and registered in such names as the Holders or the
     underwriter(s), if any, may reasonably request at least two Business Days
     before any sale of Transfer Restricted Securities made by such
     underwriter(s).

               (xii)   Use its reasonable best efforts to cause the Transfer
     Restricted Securities covered by the Shelf Registration Statement to be
     registered with or approved by such other U.S. governmental agencies or
     authorities as may be necessary to enable the seller or sellers thereof or
     the underwriter(s), if any, to consummate the disposition of such Transfer
     Restricted Securities, subject to the proviso in clause (x) above.

               (xiii)  Subject to Section 4(b)(i) hereof, if any fact or event
     contemplated by Section 4(b)(iii)(D) hereof shall exist or have occurred,
     use its reasonable best efforts prepare a supplement or post-effective
     amendment to the Shelf Registration Statement or related Prospectus or any
     document incorporated therein by reference or file any other required
     document so that, as thereafter delivered to the purchasers of Transfer
     Restricted Securities, the Prospectus will not contain an untrue statement
     of a material fact or omit to state any material fact required to be stated
     therein or necessary to make the statements therein not misleading.

               (xiv)   Provide CUSIP numbers for all Transfer Restricted
     Securities not later than the effective date of the Shelf Registration
     Statement and provide the Trustee under the Indenture with certificates for
     the Debentures that are in a form eligible for deposit with The Depository
     Trust Company.

               (xv)    Cooperate and assist in any filings required to be made
     with the NASD and in the performance of any due diligence investigation by
     any underwriter that is required to be retained in accordance with the
     rules and regulations of the NASD.

               (xvi)   Otherwise use its reasonable best efforts to comply with
     all applicable rules and regulations of the Commission and all reporting
     requirements under the rules and regulations of the Exchange Act.

                                       11
<PAGE>

               (xvii)   Cause the Indenture to be qualified under the TIA not
     later than the effective date of the Shelf Registration Statement required
     by this Agreement, and, in connection therewith, cooperate with the trustee
     and the holders of Debentures to effect such changes to the Indenture as
     may be required for such Indenture to be so qualified in accordance with
     the terms of the TIA; and execute and use its reasonable best efforts to
     cause the trustee thereunder to execute all documents that may be required
     to effect such changes and all other forms and documents required to be
     filed with the Commission to enable such Indenture to be so qualified in a
     timely manner.

               (xviii)  Cause all Transfer Restricted Securities covered by the
     Shelf Registration Statement to be listed or quoted, as the case may be, on
     each securities exchange or automated quotation system on which similar
     securities issued by the Issuer are then listed or quoted.

               (xix)    Provide promptly to each Holder upon written request
     each document filed with the Commission pursuant to the requirements of
     Section 13 and Section 15 of the Exchange Act after the effective date of
     the Shelf Registration Statement.

               (xx)     If requested by the underwriters in an Underwritten
     Offering, make appropriate officers of the Issuer available to the
     underwriters for meetings with prospective purchasers of the Transfer
     Restricted Securities and prepare and present to potential investors
     customary "road show" material in a manner consistent with other new
     issuances of other securities similar to the Transfer Restricted
     Securities.

          (c)  Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Issuer of the existence of
any fact of the kind described in Section 4(b)(iii)(D) hereof, such Holder will,
and will use its reasonable best efforts to cause any underwriter(s) in an
Underwritten Offering to, forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the Shelf Registration Statement until:

               (i)      such Holder has received copies of the supplemented or
     amended Prospectus contemplated by Section 4(b)(xiii) hereof; or

               (ii)     such Holder is advised in writing (the "Advice") by the
     Issuer that the use of the Prospectus may be resumed, and has received
     copies of any additional or supplemental filings that are incorporated by
     reference in the Prospectus.

If so directed by the Issuer, each Holder will deliver to the Issuer (at the
Issuer's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice of suspension.

                                       12
<PAGE>

          (d)  Each Holder who intends to be named as a selling Holder in the
Shelf Registration Statement shall furnish to the Issuer in writing, within 20
Business Days after receipt of a request therefor as set forth in a
questionnaire, such information regarding such Holder and the proposed
distribution by such Holder of its Transfer Restricted Securities as the Issuer
may reasonably request for use in connection with the Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. (The form of
the questionnaire is attached hereto as Exhibit A.) Holders that do not complete
the questionnaire and deliver it to the Issuer shall not be named as selling
securityholders in the Prospectus or preliminary Prospectus included in the
Shelf Registration Statement and therefore shall not be permitted to sell any
Transfer Restricted Securities pursuant to the Shelf Registration Statement.
Each Holder who intends to be named as a selling Holder in the Shelf
Registration Statement shall promptly furnish to the Issuer in writing such
other information as the Issuer may from time to time reasonably request in
writing.

          (e)  Upon the effectiveness of the Shelf Registration Statement, each
Holder shall notify the Issuer at least three Business Days prior to any
intended distribution of Transfer Restricted Securities pursuant to the Shelf
Registration Statement (a "Sale Notice"), which notice shall be effective for
five Business Days. Each Holder of this Security, by accepting the same, agrees
to hold any communication by the Company in response to a Sale Notice in
confidence.

          5.   Registration Expenses.

          (a)  All expenses incident to the Issuer's performance of or
compliance with this Agreement shall be borne by the Issuer regardless of
whether a Shelf Registration Statement becomes effective, including, without
limitation:

               (i)   all registration and filing fees and expenses (including
     filings made by any Initial Purchasers or Holders with the NASD);

               (ii)  all fees and expenses of compliance with federal securities
     and state Blue Sky or securities laws;

               (iii) all expenses of printing (including printing of
     Prospectuses and certificates for the Common Stock to be issued upon
     conversion of the Debentures), messenger and delivery services and
     telephone;

               (iv)  all fees and disbursements of counsel to the Issuer and,
     subject to Section 5(b) below, the Holders of Transfer Restricted
     Securities;

               (v)   all application and filing fees in connection with listing
     (or authorizing for quotation) the Common Stock on a national securities
     exchange or automated quotation system pursuant to the requirements hereof;
     and

               (vi)  all fees and disbursements of independent certified public
     accountants of the Issuer (including the expenses of any special audit and
     comfort letters required by or incident to such performance).

                                       13
<PAGE>

          The Issuer shall bear its internal expenses (including, without
limitation, all salaries and expenses of their officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Issuer.

          (b)  In connection with the Shelf Registration Statement required by
this Agreement, the Issuer shall reimburse the Initial Purchasers and the
Holders of Transfer Restricted Securities being registered pursuant to the Shelf
Registration Statement, as applicable, for the reasonable fees and disbursements
of not more than one counsel, which shall be Weil, Gotshal & Manges LLP, or such
other counsel as may be chosen by a Majority of Holders for whose benefit the
Shelf Registration Statement is being prepared and which shall be reasonably
acceptable to the Issuer. The Issuer shall not be required to pay any
underwriter discount, commission or similar fees related to the sale of the
Securities.

          6.   Indemnification and Contribution.

          (a)  The Issuer and Primus Telecommunications, Inc., a Delaware
corporation, and Primus Telecommunications (Australia) Pty. Ltd., a company
organized under the laws of Australia, and Primus Telecommunications Pty. Ltd.,
a company organized under the laws of Australia (together, the "Principal
Subsidiaries"), jointly and severally, shall indemnify and hold harmless each
Holder, such Holder's directors, officers and employees and each person, if any,
who controls such Holder within the meaning of Section 15 of the Securities Act
(each, an "Indemnified Holder"), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to resales
of the Transfer Restricted Securities), to which such Indemnified Holder may
become subject, under the Securities Act or otherwise, insofar as any such loss,
claim, damage, liability or action arises out of, or is based upon:

               (i)  any untrue statement or alleged untrue statement of a
     material fact contained in (A) the Shelf Registration Statement or
     Prospectus or any amendment or supplement thereto or (B) any blue sky
     application or other document or any amendment or supplement thereto
     prepared or executed by the Issuer (or based upon written information
     furnished by or on behalf of the Issuer expressly for use in such blue sky
     application or other document or amendment on supplement) filed in any
     jurisdiction specifically for the purpose of qualifying any or all of the
     Transfer Restricted Securities under the securities law of any state or
     other jurisdiction (such application or document being hereinafter called a
     "Blue Sky Application"); or

               (ii) the omission or alleged omission to state therein any
     material fact required to be stated therein or necessary to make the
     statements therein, in the light of the circumstances under which they were
     made, not misleading,

                                       14
<PAGE>

and shall reimburse each Indemnified Holder promptly upon demand for any legal
or other expenses reasonably incurred by such Indemnified Holder in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Issuer shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in the Shelf Registration Statement or Prospectus or amendment or
supplement thereto or Blue Sky Application in reliance upon and in conformity
with written information furnished to the Issuer by or on behalf of any Holder
(or its related Indemnified Holder) specifically for use therein; provided
further that as to any preliminary Prospectus, this indemnity agreement shall
not inure to the benefit of any Indemnified Holder or any officer, employee,
director or controlling person of that Indemnified Holder on account of any
loss, claim, damage, liability or action arising from the sale of the Transfer
Restricted Securities sold pursuant to the Shelf Registration Statement to any
person by such Indemnified Holder if (i) that Indemnified Holder failed to send
or give a copy of the Prospectus, as the same may be amended or supplemented, to
that person within the time required by the Securities Act and (ii) the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in such preliminary Prospectus was corrected
in the Prospectus or a supplement or amendment thereto, as the case may be,
unless in each case, such failure resulted from noncompliance by the Issuer with
Section 4. The foregoing indemnity agreement is in addition to any liability
which the Issuer and the Principal Subsidiaries may otherwise have to any
Indemnified Holder.

          (b)  Each Holder, severally and not jointly, shall indemnify and hold
     harmless the Issuer, its directors, officers and employees and each person,
     if any, who controls the Issuer within the meaning of Section 15 of the
     Securities Act, from and against any loss, claim, damage or liability,
     joint or several, or any action in respect thereof, to which the Issuer or
     any such officer, employee or controlling person may become subject,
     insofar as any such loss, claim, damage or liability or action arises out
     of, or is based upon:

               (i)   any untrue statement or alleged untrue statement of any
     material fact contained in the Shelf Registration Statement or Prospectus
     or any amendment or supplement thereto or any Blue Sky Application; or

               (ii)  the omission or the alleged omission to state therein any
     material fact required to be stated therein or necessary to make the
     statements therein, in light of the circumstances under which they were
     made, not misleading,

but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Issuer by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein,
and shall reimburse the Issuer and any such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Issuer and the Principal Subsidiaries or

                                       15
<PAGE>

any such officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Holder may
otherwise have to the Issuer and any such director, officer, employee or
controlling person.

          (c)  Promptly after receipt by an indemnified party under this Section
6 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent it has
been materially prejudiced by such failure and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 6.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and its respective directors, employees, officers
and controlling persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the indemnified party against the
indemnifying party under this Section 6 if such indemnified party shall have
been advised in writing that the representation of such indemnified party and
those directors, employees, officers and controlling persons by the same counsel
would be inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them, and in that event the fees
and expenses of such separate counsel shall be paid by the indemnifying party.
It is understood that the indemnifying party shall not be liable for the fees
and expenses of more than one separate firm (in addition to local counsel in
each jurisdiction) for all indemnified parties in connection with any proceeding
or related proceedings. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 6(a) and 6(b), shall use its reasonable best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall:

               (i)  without the prior written consent of the indemnified parties
     (which consent shall not be unreasonably withheld) settle or compromise or
     consent to the entry of any judgment with respect to any pending or
     threatened claim, action, suit or proceeding in respect of which
     indemnification or contribution may be sought hereunder (whether or not the
     indemnified parties are actual or potential parties to such claim or
     action) unless such settlement,

                                       16
<PAGE>

     compromise or consent includes an unconditional release of each indemnified
     party from all liability arising out of such claim, action, suit or
     proceeding, or

               (ii) be liable for any settlement of any such action effected
     without its written consent (which consent shall not be unreasonably
     withheld), but if settled with its written consent or if there be a final
     judgment for the plaintiff in any such action, the indemnifying party
     agrees to indemnify and hold harmless any indemnified party from and
     against any loss of liability by reason of such settlement or judgment in
     accordance with this Section 6.

          (d)  If the indemnification provided for in this Section 6 shall for
any reason be unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability
(or action in respect thereof) referred to therein, each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability (or action in respect thereof, in such proportion as is
appropriate to reflect the relative fault of the Company and the Principal
Subsidiaries, on the one hand, and the Holders, on the other hand, with respect
to the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company and the Principal Subsidiaries, on the one hand, or the
Holders, on the other hand, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Each of the Company and the Principal Subsidiaries and
each Holder agrees that it would not be just and equitable if contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation (even
if either the Holders or the Company and the Principal Subsidiaries, as the case
may be, were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 6(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6(d), no Holder
shall be required to indemnify or contribute any amount in excess of the amount
by which the total price at which the Transfer Restricted Securities purchased
by it were resold exceeds the amount of any damages which such Holder has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity. The Holders' obligations
to contribute as provided in this Section 6(d) are several and not joint.

                                       17
<PAGE>

               (e)  The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Initial Purchaser, any Holder or any person controlling any Initial
Purchaser or any Holder, or by or on behalf of the Company, its officers or
directors or any person controlling the Company, and (iii) any sale of Transfer
Restricted Securities pursuant to a Shelf Registration Statement.

          7.   Rule 144A.  In the event the Issuer is not subject to Section 13
or 15(d) of the Exchange Act, the Issuer hereby agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.

          8.   Participation in Underwritten Registrations.  No Holder may
participate in any Underwritten Registration hereunder unless such Holder:

               (i)  agrees to sell such Holder's Transfer Restricted Securities
     on the basis provided in any underwriting arrangements approved by the
     Persons entitled hereunder to approve such arrangements and

               (ii) completes and executes all reasonable questionnaires, powers
     of attorney, indemnities, underwriting agreements, lock-up letters and
     other documents reasonably required under the terms of such underwriting
     arrangements.

          Selection of Underwriters.  The Majority of Holders of Transfer
Restricted Securities covered by the Shelf Registration Statement who desire to
do so may sell such Transfer Restricted Securities in an Underwritten Offering.
In any such Underwritten Offering, the investment banker or investment bankers
and manager or managers that will administer the offering will be selected by a
Majority of Holders whose Transfer Restricted Securities are included in such
offering; provided, that such investment bankers and managers must be reasonably
satisfactory to the Issuer.

          9.   Miscellaneous.

          (a)  Remedies.  The Issuer acknowledges and agrees that any failure by
the Issuer to comply with its obligations under Section 2 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Issuer's obligations under Section 2 hereof. The
Issuer further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.

                                       18
<PAGE>

          (b)  No Inconsistent Agreements.  The Issuer will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. In addition, the Issuer shall
not grant to any of its security holders (other than the holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in the Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities. Other than as disclosed in the
Issuer's Offering Memorandum dated February 17, 2000, the Issuer has not
previously entered into any agreement (which has not expired or been terminated)
granting any registration rights with respect to its securities to any Person
which rights conflict with the provisions hereof.

          (c)  Adjustments Affecting Transfer Restricted Securities. The Issuer
shall not, directly or indirectly, take any action with respect to the Transfer
Restricted Securities as a class that would adversely affect the ability of the
Holders of Transfer Restricted Securities to include such Transfer Restricted
Securities in a registration undertaken pursuant to this Agreement.

          (d)  Amendments and Waivers.  This Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given, unless the Issuer has obtained the written
consent of a Majority of Holders; provided, however, that no amendment,
modification, supplement, waiver or consent to or departure from the provisions
of Section 6 that materially and adversely affects a Holder hereof shall be
effective as against any such Holder of Transfer Restricted Securities unless
consented to in writing by such Holder.

          (e)  Notices.  All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:

               (i)  if to a Holder, at the address set forth on the records of
     the registrar under the Indenture or the transfer agent of the Common
     Stock, as the case may be; and

               (ii) if to the Issuer or any of the Principal Subsidiaries:

                    1700 Old Meadow Road
                    McLean, VA 22102
                    Attention: David Slotkin, Esq.
                    Facsimile: (703) 902-2814

                    With a copy to:

                    Simpson Thacher & Bartlett

                                       19
<PAGE>

                       425 Lexington Avenue
                       New York, NY 10017
                       Attention: Edward P. Tolley, Esq.
                       Facsimile: (212) 455-2502

               (iii)   if to the Initial Purchasers:

                       c/o Lehman Brothers Inc.
                       Three World Financial Center
                       New York, NY 10285
                       Attention: Syndicate Department
                       Facsimile: (212) 528-6395.

          All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.

          Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

          A document or notice shall be deemed to have been furnished to the
Holders of the Transfer Restricted Securities if it is provided to the
registered holders of the Transfer Restricted Securities at the address set
forth in clause (1) above.

          (f)  Successors and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that (i) nothing contained herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms of the Purchase Agreement or the Indenture and (ii) this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder. If any transferee of any Holder
shall acquire Transfer Restricted Securities, in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Transfer Restricted Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof. The
Initial Purchasers (in their capacity as Initial Purchasers) shall have no
liability or obligation to the Issuer with respect to any failure by a Holder to
comply with, or breach by any Holder of, any of the obligations of such Holder
under this Agreement.

                                       20
<PAGE>

          (g)  Purchases and Sales of Debentures.  The Company shall not, and
shall use its reasonable best efforts to cause its affiliates (as defined in
Rule 405 under the Securities Act) not to, purchase and then resell or otherwise
transfer any Debentures.

          (h)  Third Party Beneficiary.  The Holders shall be third party
beneficiaries to agreements made hereunder between the Issuer and Principal
Subsidiaries, on the one hand, and the Initial Purchasers, on the other hand,
and such Initial Purchasers shall have the right to enforce such agreements
directly to the extent they deem such enforcement necessary or advisable to
protect their rights or the rights of Holders hereunder.

          (i)  Counterparts.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

          (j)  Securities Held by the Issuer or Their Affiliates.  Whenever the
consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Issuer or its "affiliates" (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

          (k)  Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          (l)  Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

          (m)  Consent to Jusisdiction.  Each party irrevocably agrees that any
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("Related Proceedings") may be instituted
in the federal courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the "Specified Courts"), and
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"Related Judgment"), as to which such Jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. The parties further agree that
service of any process, summons, notice or document by mail to such party's
address set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding in the Specified Courts, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum. Each of Primus
Telecommunications (Australia) Pty. Ltd. and Primus Telecommunications Pty. Ltd.
hereby irrevocably appoints CT Corporation System, which currently maintains a
New

                                       21
<PAGE>

York City office at 1633 Broadway, New York, New York 10019, United States of
America, as its agent to receive service of process or other legal summons for
purposes of any such action or proceeding that may be instituted in any state or
federal court in the City and State of New York.

          (n)  Severability.  If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.

          (o)  Entire Agreement.  This Agreement. together with the Purchase
Agreement and the Indenture, is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Issuer with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

          (p)  Required Consents.  Whenever the consent or approval of Holders
of a specified percentage of Transfer Restricted Securities is required
hereunder, Transfer Restricted Securities held by the Issuer or its affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.

                                       22
<PAGE>

          In Witness Whereof, the parties have executed this Agreement as of the
date first written above.

                                   Primus Telecommunications
                                     Group, Incorporated

                                       /s/ K. Paul Singh
                                   By:______________________________
                                      Name:  K. Paul Singh
                                      Title: President and Chief Executive
                                             Officer

                                   Primus Telecommunications,
                                     Inc.

                                       /s/ K. Paul Singh
                                   By:______________________________
                                      Name: K. Paul Singh
                                      Title: President

                                   Primus Telecommunications
                                     (Australia) Pty. Ltd.

                                       /s/ K. Paul Singh
                                   By:______________________________
                                      Name: K. Paul Singh
                                      Title: Director

                                   Primus Telecommunications
                                     Pty. Ltd.

                                       /s/ K. Paul Singh
                                   By:______________________________
                                      Name: K. Paul Singh
                                      Title: Director

                                       23
<PAGE>

                                   LEHMAN BROTHERS INC.
                                   MERRILL LYNCH, PIERCE FENNER &
                                   SMITH INCORPORATED
                                   MORGAN STANLEY & CO.
                                   INCORPORATED

                                   By: LEHMAN BROTHERS INC.

                                       /s/ Brian Reilly
                                   By:______________________________
                                      Authorized Representative

                                       24
<PAGE>

                                                                       Exhibit A

                 PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED

                       NOTICE OF REGISTRATION STATEMENT

                                      AND

               SELLING SECURITYHOLDER ELECTION AND QUESTIONNAIRE

                                _______________

                                     NOTICE

          Primus Telecommunications Group, Incorporated (the "Company") has
filed, or intends shortly to file, with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 or such other Form as
may be available (the "Shelf Registration Statement") for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities
Act"), of the Company's % Convertible Subordinated Debentures due 2007 (CUSIP
No.________) (the "Debentures"), and common stock, par value $ per share,
issuable upon conversion thereof (the "Shares" and together with the Debentures,
the "Transfer Restricted Securities") in accordance with the terms of the
Registration Rights Agreement, dated as of ________ __, 2000 (the "Registration
Rights Agreement") between the Company and Lehman Brothers Inc., and
___________. A copy of the Registration Rights Agreement is available from the
Company. All capitalized terms not otherwise defined herein have the meaning
ascribed thereto in the Registration Rights Agreement.

          To sell or otherwise dispose of any Transfer Restricted Securities
pursuant to the Shelf Registration Statement, a beneficial owner of Transfer
Restricted Securities generally will be required to be named as a selling
securityholder in the related Prospectus, deliver a Prospectus to purchasers of
Transfer Restricted Securities, be subject to certain civil liability provisions
of the Securities Act and be bound by those provisions of the Registration
Rights Agreement applicable to such beneficial owner (including certain
indemnification rights and obligations, as described below). To be included in
the Shelf Registration Statement, this Election and Questionnaire must be
completed, executed and delivered to the Company at the address set forth herein
for receipt PRIOR TO OR ON [insert date that is 20 business days from the notice
date] (the "Election and Questionnaire Deadline"). Beneficial owners that do not
complete and return this Election and Questionnaire prior to the Election and
Questionnaire Deadline and deliver it to the Company as provided below will not
be named as selling securityholders in the prospectus and therefore will not be
permitted to sell any Transfer Restricted Securities pursuant to the Shelf
Registration Statement.

                                      A-1
<PAGE>

          Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus.

          ELECTION

          The undersigned holder (the "Selling Securityholder") of Transfer
Restricted Securities hereby elects to include in the Shelf Registration
Statement the Transfer Restricted Securities beneficially owned by it and listed
below in Item 3 (unless otherwise specified under Item 3). The undersigned, by
signing and returning this Election and Questionnaire, understands that it will
be bound with respect to such Transfer Restricted Securities by the terms and
conditions of this Election and Questionnaire and the Registration Rights
Agreement.

          Pursuant to the Registration Rights Agreement, the Selling
Securityholder has agreed to indemnify and hold harmless the Company, the
Company's directors, the Company's officers who sign the Shelf Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against certain losses arising in connection with statements concerning
the Selling Securityholder made in the Shelf Registration Statement or the
related Prospectus in reliance upon the information provided in this Election
and Questionnaire.

          The Selling Securityholder hereby provides the following information
to the Company and represents and warrants that such information is accurate and
complete:

                                 QUESTIONNAIRE

1.   (a)  Full legal name of Selling Securityholder:

     (b)  Full legal name of registered holder (if not the same as (a) above)
          through which Transfer Restricted Securities listed in (3) below are
          held:

     (c)  Full legal name of DTC participant (if applicable and if not the same
          as (b) above) through which Transfer Restricted Securities listed in
          (3) are held:

2.   Address for notices to Selling Securityholders:

     Telephone:

     Fax:

     Contact Person:

                                      A-2
<PAGE>

3.   Beneficial ownership of Transfer Restricted Securities:

     (a)  Type of Transfer Restricted Securities beneficially owned, and
          principal amount of Debentures or number of shares of Common Stock, as
          the case may be, beneficially owned:

     (b)  CUSIP No(s). of such Transfer Restricted Securities beneficially
          owned:

4.   Beneficial ownership of the Issuer's securities owned by the Selling
     Securityholder:

     Except as set forth below in this Item (4), the undersigned is not the
     beneficial or registered owner of any securities of the Issuer other than
     the Transfer Restricted Securities listed above in Item (3) ("Other
     Securities").

     (a)  Type and amount of Other Securities beneficially owned by the Selling
          Securityholder:

     (a)  CUSIP No(s). of such Other Securities beneficially owned:

5.   Relationship with the Issuer

     Except as set forth below, neither the undersigned nor any of its
     affiliates, officers, directors or principal equity holders (5% or more)
     has held any position or office or has had any other material relationship
     with the Issuer (or their predecessors or affiliates) during the past three
     years.

     State any exceptions here:

6.   Plan of Distribution

     Except as set forth below, the undersigned (including its donees or
     pledgees) intends to distribute the Transfer Restricted Securities listed
     above in Item (3) pursuant to the Shelf Registration Statement only as
     follows (if at all).  Such Transfer Restricted Securities may be sold from
     time to time directly by the undersigned or, alternatively, through
     underwriters, broker-dealers or agents.  If the Transfer Restricted
     Securities are sold through underwriters or broker-dealers, the Selling
     Securityholder will be responsible for underwriting discounts or
     commissions or agent's commissions.  Such Transfer Restricted Securities
     may be

                                      A-3
<PAGE>

     sold in one or more transactions at fixed prices, at prevailing market
     prices at the time of sale, at varying prices determined at the time of
     sale, or at negotiated prices. Such sales may be effected in transactions
     (which may involve crosses or block transactions):

               on any national securities exchange or quotation service on which
     the Transfer Restricted Securities may be listed or quoted at the time of
     sale;

               in the over-the-counter market;

               in transactions otherwise than on such exchanges or services or
     in the over-the-counter market; or

               through the writing of options.

     In connection with sales of the Transfer Restricted Securities or
     otherwise, the undersigned may enter into hedging transactions with broker-
     dealers, which may in turn engage in short sales of the Transfer Restricted
     Securities and deliver Transfer Restricted Securities to close out such
     short positions, or loan or pledge Transfer Restricted Securities to
     broker-dealers that in turn may sell such securities.

     State any exceptions here:

     Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the prior
agreement of the Issuer.

     The undersigned acknowledges that it understands its obligation to comply
with the provisions of the Exchange Act and the rules and regulations
promulgated thereunder relating to stock manipulation, particularly Regulation M
thereunder (or any successor rules or regulations), in connection with any
offering of Transfer Restricted Securities pursuant to the Shelf Registration
Statement.  The undersigned agrees that neither it nor any person acting on its
behalf will engage in any transaction in violation of such provisions.

     The Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein.

     Pursuant to the Registration Rights Agreement, the Issuer has agreed under
certain circumstances to indemnify the Selling Securityholders against certain
liabilities.

     In accordance with the undersigned's obligation under the Registration
Rights Agreement to provide such information as may be required by law for
inclusion in the

                                      A-4
<PAGE>

Shelf Registration Statement, the undersigned agrees to promptly notify the
Issuer of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective. All notices hereunder and pursuant to the
Registration Rights Agreement shall be made in writing at the address set forth
below.

     By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and the
related Prospectus. The undersigned understands that such information will be
relied upon by the Issuer in connection with the preparation or amendment of the
Shelf Registration Statement and the related Prospectus.

                                      A-5
<PAGE>

     IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.

Dated:

Beneficial Owner

By:______________________________
   Name:
   Title:

Please return the completed and executed Notice and Questionnaire to Primus
Telecommunications Group, Incorporated at:

                           Primus Telecommunications Group, Incorporated
                           1700 Old Meadow Road
                           McLean, VA 22102
                           Attention: David Slotkin

                                      A-6

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