US$10,287,919

ACCOUNTS PAYABLE FINANCING AGREEMENT

dated as of March 25, 2003,

by and among

IMPSAT S.A.

as Borrower,

NORTEL NETWORKS LIMITED,

as Administrative Agent,

and

The Lenders Party Hereto From Time to Time

as Lenders

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ACCOUNTS PAYABLE FINANCING AGREEMENT

     THIS ACCOUNTS PAYABLE FINANCING AGREEMENT (this Agreement) dated as of March 25, 2003, by and among IMPSAT S.A., a corporation (sociedad annima) organized pursuant to the laws of the Republic of Argentina (the Borrower); Nortel Networks Limited (formerly known as Nortel Networks Corporation) (Nortel), a corporation organized pursuant to the laws of the Province of Ontario, Canada, as administrative agent (the Agent or Administrative Agent); and the several lenders party hereto from time to time, as lenders (together with Nortel, the Lenders).

W I T N E S S E T H:

     WHEREAS, the Borrower, Nortel, as administrative agent, Deutsche Bank Trust Company Americas, as collateral agent (the Collateral Agent) and certain lenders (including Nortel) (collectively the Argentine Agreement Lenders) are each party to an Amended and Restated Financing Agreement dated as of June 11, 2001 as amended pursuant to amendments dated as of October 25, 2001 and November 24, 2001 respectively (as the same may have been further amended, supplemented or otherwise modified, the Existing Argentine Financing Agreement);

     WHEREAS, the Argentine Agreement Lenders made available to the Borrower under the terms and conditions of the Existing Argentine Financing Agreement a credit facility to assist in financing the purchase by the Borrower or its Affiliates of telecommunications equipment and services manufactured or supplied by Nortel or its Affiliates related to the design, procurement, installation, commissioning, and operation of a broadband telecommunications network in Argentina (the Project) under (i) a Turnkey Project Agreement by and among the Borrower, Nortel Networks de Argentina S.A. (Nortel Argentina) and Nortel dated as of September 6, 1999 (as amended, supplemented or otherwise modified from time to time, the Turnkey Contract) and (ii) a Supply Contract by and among the Borrower, Nortel Argentina, Nortel and certain Affiliates of Nortel and the Borrower dated as of November 5, 1999 (as amended, and restated as of May 30, 2002, the Supply Agreement) (the Turnkey Contract and the Supply Agreement, collectively, the Nortel Contracts);

     WHEREAS, the Borrower is a Subsidiary of IMPSAT Fiber Networks, Inc. (formerly known as IMPSAT Corporation), a corporation organized pursuant to the laws of the State of Delaware, U.S.A. (IMPSAT);

     WHEREAS, the Argentine Agreement Lenders, the Borrower and IMPSAT have agreed to restructure indebtedness outstanding under the Existing Argentina Financing Agreement pursuant to the terms of that certain Amended and Restated Financing Agreement, dated as of March 25, 2003 (as the same may be amended, supplemented or otherwise modified the Restated Argentine Financing Agreement) among the Borrower, the Argentine Agreement Lenders, the Administrative Agent and the Collateral Agent;

     WHEREAS, in order to implement a restructuring of certain obligations of IMPSAT, the Borrower and other Subsidiaries of IMPSAT, IMPSAT filed (i) a voluntary petition for relief

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under Chapter 11 of Title 11 of the United States Code on June 11, 2002 (the Chapter 11 Proceedings) and (ii) as part of such Chapter 11 Proceedings a disclosure statement and plan of reorganization (the Plan) (which was approved by the United States Bankruptcy Court for the Southern District of New York and subsequently confirmed on December 11, 2002);

     WHEREAS, pursuant to the Nortel Contracts, the Borrower is obligated to pay an amount of $10,287,919 to Nortel Argentina, which amount represents the purchase price of certain telecommunications equipment and services manufactured or supplied by Nortel or its Affiliates and purchased by Borrower therefrom under the Nortel Contracts (the Outstanding Accounts Payable);

     WHEREAS, prior to the date hereof, Nortel Argentina has transferred and assigned, and Nortel has assumed, the Outstanding Accounts Payable;

     WHEREAS, Borrower and Nortel desire to restructure the Outstanding Accounts Payable, and evidence the payment obligations of Borrower in connection therewith, pursuant to this Agreement;

     WHEREAS, it is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities under the Nortel Contracts or evidence payment of all or any of such obligations or liabilities, that this Agreement shall hereafter evidence the payment obligations of the Borrower in respect of the Outstanding Accounts Payable and that from and after the Closing Date the purchase price obligations of Borrower in respect of the Outstanding Accounts Payable shall be evidenced by this Agreement, and the Nortel Contracts insofar as they set forth the obligations in respect of the outstanding Accounts Payable be of no further force or effect except as to evidence the incurrence of such obligations of the Borrower and IMPSAT thereunder and the representations and warranties made thereunder;

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged, the Parties agree as follows:

SECTION 1.   DEFINITIONS.

Section 1.1.   Defined Terms.

     The following capitalized terms shall have the meanings set forth in this Section 1.1 when used in this Agreement, including its preamble and recitals:

     Affiliate means, as to any Person (a) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five percent (5%) or more of the Voting Stock of such Person, (b) each Person that controls, is controlled by or is under common control with, such Person and (c) in the case of individuals, the immediate family members, spouses and lineal descendants of individuals who are Affiliates of the Borrower or IMPSAT. For purposes of this definition, control of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of Voting Stock, by contract, by virtue of being an executive officer or a director or otherwise.

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     Applicable Law means any statute, law, regulation, ordinance, rule, judgment, writ, rule of common law, common law duty, code, order, decree, governmental approval, administrative order, directed duty, request, license, authorization, permit, approval, concession, grant, franchise, directive, guideline, policy, requirement, or other governmental restriction, or any similar form of decision of, determination by, agreement with, or requirements of (or any interpretation or administration of any of the foregoing by) any Governmental Authority, whether in effect as of the date hereof or thereafter (including any Environmental Laws).

     Argentina means the Republic of Argentina.

     Argentine GAAP means generally accepted accounting principles in Argentina as established from time to time by the Consejo Profesional de Ciencias Econmicas.

     Assignment and Assumption Agreement means an assignment and assumption agreement between a Lender and an Eligible Assignee, and accepted by the Administrative Agent, substantially in the form of Exhibit A.

     Authorized Officer means, with respect to any Person, each of the following officers of such Person: (a) the Chief Executive Officer; (b) the Chief Financial Officer or (c) any other Person having substantially similar responsibilities and authority.

     BBVA means BBVA Banco Frances S.A.

     Borrower Annual Operating Budget means, with respect to each fiscal year of the Borrower beginning with its fiscal year ending on December 31, 2003, an annual operating budget delivered to the Lenders pursuant to Section 8.1(b)(6), with respect to such fiscal year.

     Borrower Business Plan Unless and until the Borrower shall have delivered to the Lenders a revised or updated business plan in accordance with Sections 8.1(b)(2) or (5), means the six-year consolidated Business Plan of the Borrower dated as of December 15, 2002, and not including any subsequent amendments, supplements or replacements thereof.

     Borrower Capital Markets Transaction means any public offering or private placement of debt securities of the Borrower or any of its Subsidiaries.

     Borrowers Net Debt means, on any date, (a) the Borrowers Total Debt outstanding on such date (excluding all Indebtedness of others guaranteed by the Borrower); minus (b) the amount of the Intercompany Indebtedness of the Borrower evidenced by Subordinated Intercompany Notes outstanding on such date; minus (c) the aggregate amount of cash and Temporary Cash Investments of the Borrower and its Subsidiaries that are subject to a Lien in favor of the Argentine Agreement Lenders pursuant to the Security Documents (as defined in the Restated Argentine Financing Agreement).

     Brazil means the Federative Republic of Brazil.

     Brazil Agreements means, collectively, the Financing Documents as defined in the Nortel Brazil Financing Agreement and the Brazil Supply Agreement.
 

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