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Definitive Proxy Solicitation Material — Merger or Acquisition   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14A     Definitive Proxy Solicitation Material -- Merger     197    965K 
                          or Acquisition                                         

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 1999 
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SCHEDULE 14A
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 

Filed by the Registrant /X/                                             

Filed by a Party other than the Registrant / /                          

Check the appropriate box:                                              
/ /  Preliminary Proxy Statement                                        
/ /  Confidential, for Use of the Commission Only (as permitted by Rule 
14a-6(e)(2))                                                  
/X/  Definitive Proxy Statement                                         
/ /  Definitive Additional Materials                                    
/ /  Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12      

      METROMEDIA INTERNATIONAL GROUP, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):                              

/ /  No fee required.                                                           
/ /  Fee computed on table below per Exchange Act Rules 14a-6(i)(1)             
and 0-11.                                                             
(1) Title of each class of securities to which transaction applies:   
(2) Aggregate number of securities to which transaction applies:      
(3) Per unit price or other underlying value of transaction computed  
pursuant to Exchange Act Rule 0-11:                           
(4) Proposed maximum aggregate value of transaction:                  
(5) Total fee paid:                                                   

/X/  Fee paid previously with preliminary materials.                            

/ /  Check box if any part of the fee is offset as provided by Exchange Act Rule
  0-11(a)(2) and identify the filing for which the offsetting fee was paid
    previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.                   

(1) Amount Previously Paid:                                           
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(2) Form, Schedule or Registration Statement No.:                     
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(3) Filing Party:                                                     
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(4) Date Filed:                                                       
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PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS
MERGER PROPOSED--YOUR VOTE IS VERY IMPORTANT

PLD Telekom Inc. has agreed to merge with a subsidiary of Metromedia    
International Group, Inc. If the merger is completed, PLD stockholders will     
receive a fraction of a share of Metromedia common stock for each share of PLD  
common stock they own, that will be determined based upon an exchange ratio.    

   As a result of the exchange ratio, PLD stockholders will receive Metromedia
common stock with a value of a minimum of $3.50 per share and a maximum of $4.48
per share for each share of PLD common stock, unless the average of Metromedia's
stock price is below $5.25. In that case, PLD can request that Metromedia give  
PLD stockholders Metromedia common stock with a value of $3.50 for each PLD     
share they own. If Metromedia refuses this request or if Metromedia's average   
stock price is below $4.00, PLD can refuse to merge.                            

To understand more fully the calculation of this exchange ratio and the 
determination of the number of shares of Metromedia common stock that each PLD  
stockholder will receive in the merger, we refer you to the chart on page 3 of  
this document. Metromedia stockholders will continue to own their existing      
shares after the merger.                                                        

  Metromedia's shares are traded on the American and Pacific Stock Exchanges
under the symbol "MMG." As of August 30, 1999, Metromedia's stock price on the  
AMEX was $6.375. PLD's shares are traded on the Nasdaq Stock Market's National  
Market under the symbol "PLDI." As of August 30, 1999, PLD's stock price as     
quoted on the Nasdaq Stock Market's National Market was $3.03.                  

We cannot complete the merger without the approval of the holders of a  
majority of the outstanding Metromedia shares present in person or by proxy at  
the Metromedia annual meeting and a majority of the outstanding shares of PLD   
common stock. Holders of approximately 38% of PLD's common stock have agreed to 
vote for the merger. This means that at least 12.1% more of PLD's stockholders  
must vote for the merger to ensure its approval by PLD.                         

Metromedia has scheduled an annual meeting to vote on the merger and the matters
noted below. PLD has scheduled a special meeting to vote on the merger. Whether 
or not you plan to attend, please take the time to vote by completing and       
mailing the enclosed voting form to us.                                         

The date, time and place of the stockholder meetings are as follows:    

For Metromedia stockholders:                                                    

SEPTEMBER 30, 1999                                                      
9:30 A.M.                                                               
1285 AVENUE OF THE AMERICAS                                             
NEW YORK, NEW YORK 10019                                                

For PLD stockholders:                                                           

SEPTEMBER 30, 1999                                                      
9:00 A.M.                                                               
1285 AVENUE OF THE AMERICAS                                             
NEW YORK, NEW YORK 10019                                                

  This document also constitutes the proxy statement for Metromedia's annual
meeting of stockholders, at which Metromedia stockholders will be asked to vote 
upon the election of directors, to ratify the selection of KPMG LLP as          
Metromedia's independent public accountants for the year ending December 31,    
1999 and to vote on a stockholder proposal.                                     

This joint proxy statement/prospectus provides our stockholders with    
detailed information about the merger. This document is also the prospectus of  
Metromedia for the Metromedia common stock that will be issued to PLD           
stockholders in the merger. We encourage you to read this entire document       
carefully.                                                                      

                                                        [Enlarge/Download Table]
                                                                                      
Stuart Subotnick                       James R.S. Hatt                                
President and Chief Executive Officer  Chairman, President and Chief Executive Officer

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

This document is dated August 31, 1999 and is being first mailed to stockholders
on or about August 31, 1999.                                                    

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  METROMEDIA INTERNATIONAL GROUP, INC.
------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 30, 1999

To the stockholders of Metromedia International Group, Inc.:            

NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders of   
Metromedia International Group, Inc., a Delaware corporation, will be held at   
9:30 a.m., local time, on September 30, 1999, at Paul, Weiss, Rifkind, Wharton &
Garrison, 1285 Avenue of the Americas, New York, NY 10019. At this annual       
meeting, you will be asked to vote on proposals:                                

1.  to approve the issuance of shares of common stock of Metromedia in          
    connection with the merger agreement among Metromedia, PLD Telekom Inc., and
Moscow Communications, Inc.;                                            

2.  to approve the election of three Class I directors, in each case, to serve  
   for a three year term ending in the year 2002 or until their successors are
elected and qualified;                                                  

3.  to ratify the selection of KPMG LLP as Metromedia's independent accountants 
for the fiscal year ending December 31, 1999;                           

4.  to consider and vote upon a proposal submitted by a stockholder of          
  Metromedia to amend Metromedia's certificate of incorporation to reinstate
the right of the stockholders of Metromedia to take action by written   
consent and to call special meetings of the stockholders; and           

5.  to transact such other business as may properly come before the annual      
meeting or any adjournment of postponement thereof.                     

   THE METROMEDIA BOARD HAS UNANIMOUSLY APPROVED THE ISSUANCE OF THE SHARES OF
METROMEDIA COMMON STOCK PURSUANT TO THE MERGER AGREEMENT AND RECOMMENDS THAT    
METROMEDIA STOCKHOLDERS VOTE FOR THE APPROVAL OF THE ISSUANCE OF THE SHARES OF  
METROMEDIA COMMON STOCK PURSUANT TO THE MERGER AGREEMENT. THE METROMEDIA BOARD  
ALSO UNANIMOUSLY RECOMMENDS THAT METROMEDIA STOCKHOLDERS VOTE FOR PROPOSALS TWO 
AND THREE AND AGAINST PROPOSAL FOUR, THE STOCKHOLDER PROPOSAL.                  

  The accompanying proxy statement/prospectus contains important information
with respect to the proposed issuance of Metromedia's common stock, and we urge 
you to read it carefully.                                                       

Stockholders of record at the close of business on August 12, 1999, are 
entitled to notice of and to vote at the annual meeting and any adjournment or  
postponement thereof.                                                           

   The affirmative vote of a majority of the shares of Metromedia common stock
present at the annual meeting in person or by proxy is required to approve the  
issuance of the shares of Metromedia common stock pursuant to the merger        
agreement. The three nominees for election as directors receiving the highest   
number of votes will be elected as directors for a term ending in 2002. The     
affirmative vote of the holders of a majority of the shares of Metromedia common
stock outstanding on the record date is required to approve proposal three, the 
ratification of the selection of independent accountants, and proposal four, a  
stockholder proposal.                                                           

TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE     
POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL    
MEETING IN PERSON. ANY EXECUTED BUT UNMARKED PROXY CARDS WILL BE VOTED FOR      
APPROVAL OF PROPOSALS ONE, TWO AND THREE AND AGAINST PROPOSAL FOUR. YOU MAY     
REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY             
STATEMENT/PROSPECTUS AT ANY TIME BEFORE IT HAS BEEN VOTED AT THE ANNUAL MEETING.
ANY STOCKHOLDER ATTENDING THE ANNUAL MEETING MAY VOTE IN PERSON EVEN IF THE     
STOCKHOLDER HAS RETURNED A PROXY.                                               

PLEASE DO NOT SEND METROMEDIA STOCK CERTIFICATES IN YOUR PROXY ENVELOPE.

                                                                [Download Table]
                                  
BY ORDER OF THE BOARD OF DIRECTORS

     /s/ Arnold L. Wadler         
     Arnold L. Wadler             
     SECRETARY                    

East Rutherford, New Jersey                                                     
August 31, 1999                                                                 

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      PLD TELEKOM INC.
------------------------

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS 
TO BE HELD ON SEPTEMBER 30, 1999

To the stockholders of PLD Telekom Inc.:                                

NOTICE IS HEREBY GIVEN that a special meeting of the stockholders of PLD
Telekom Inc., a Delaware corporation, will be held at 9:00 a.m., local time, on 
September 30, 1999, at Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of 
the Americas, New York, NY 10019. At this special meeting, you will be asked to 
vote on proposals:                                                              

1.  to consider and vote upon a proposal to approve the Agreement and Plan of   
    Merger, dated as of May 18, 1999, by and among PLD, Metromedia International
Group, Inc. and Moscow Communications, Inc.; and                        

2.  to transact such other business as may properly come before the special     
meeting or any adjournment of postponement thereof.                     

  THE PLD BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND RECOMMENDS
THAT PLD STOCKHOLDERS VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT.            

  The accompanying proxy statement/prospectus contains important information
with respect to the Metromedia common stock and the merger agreement and the    
transactions contemplated thereby, and we urge you to read it carefully.        

Stockholders of record at the close of business on August 12, 1999 are  
entitled to notice of and to vote at the special meeting and any adjournment or 
postponement thereof.                                                           

The affirmative vote of a majority of the shares of PLD common stock    
outstanding on the record date is required to approve the merger agreement.     

 TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE SPECIAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE     
POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL   
MEETING IN PERSON. ANY EXECUTED BUT UNMARKED PROXY CARDS WILL BE VOTED FOR      
APPROVAL OF PROPOSAL ONE. YOU MAY REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN  
THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS AT ANY TIME BEFORE IT HAS BEEN VOTED
AT THE SPECIAL MEETING. ANY STOCKHOLDER ATTENDING THE SPECIAL MEETING MAY VOTE  
IN PERSON EVEN IF THE STOCKHOLDER HAS RETURNED A PROXY.                         

PLEASE DO NOT SEND PLD STOCK CERTIFICATES IN YOUR PROXY ENVELOPE.       

                                      BY ORDER OF THE BOARD OF DIRECTORS
                       /s/ James R.S. Hatt

                   James R.S. Hatt
                           CHAIRMAN, PRESIDENT AND
                           CHIEF EXECUTIVE OFFICER

New York, NY                                                                    
August 31, 1999                                                                 

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WHERE YOU CAN FIND MORE INFORMATION 

We each file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and 
copy any document that we file at the Securities and Exchange Commission's      
Public Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549 and also 
at the regional offices of the Securities and Exchange Commission located at 7  
World Trade Center, Suite 1300, New York, New York 10048 and the Citicorp Center
at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Please    
call 1-800-SEC-0330 for further information on the operation of the Public      
Reference Room. Reports, proxy statements and other information regarding       
issuers that file electronically with the Securities and Exchange Commission,   
including our filings, are also available to the public from the Securities and 
Exchange Commission's Web site at "http://www.sec.gov."                         

Metromedia has filed with the Securities and Exchange Commission a      
registration statement on Form S-4. This joint proxy statement/prospectus is a  
part of the registration statement and constitutes a prospectus of Metromedia   
for the Metromedia common stock to be issued to PLD stockholders in the merger. 
As allowed by the Securities and Exchange Commission rules, this joint proxy    
statement/ prospectus does not contain all the information you can find in the  
registration statement or the exhibits to the registration statement.           

   THE SECURITIES AND EXCHANGE COMMISSION ALLOWS OUR COMPANIES TO "INCORPORATE
BY REFERENCE" THE INFORMATION WE FILE WITH THEM, WHICH MEANS THAT WE CAN        
DISCLOSE IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT US TO YOU THAT IS   
NOT INCLUDED IN OR DELIVERED WITH THIS JOINT PROXY STATEMENT/ PROSPECTUS BY     
REFERRING YOU TO THOSE DOCUMENTS.                                               

  The information incorporated by reference is considered to be part of this
joint proxy statement/ prospectus. Information that we file later with the      
Securities and Exchange Commission will automatically update and supersede this 
information. We incorporate by reference the documents listed below and any     
filing we will make with the Securities and Exchange Commission under Sections  
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 following the  
date of this joint proxy statement/prospectus and prior to the date of the      
Metromedia annual meeting or the PLD special meeting:                           

METROMEDIA                                                              

  1.  Annual Report on Form 10-K/A (Amendment No. 2) of Metromedia (file no.
       001-5706) filed on August 31, 1999 for the fiscal year ended December 31,
1998;                                                             

 2.  Quarterly Report on Form 10-Q/A (Amendment No. 1) of Metromedia (file
       no. 001-5706) filed on August 31, 1999 for the fiscal quarter ended March
31, 1999;                                                         

 3.  Quarterly Report on Form 10-Q/A (Amendment No. 1) of Metromedia (file
      no. 001-5706) filed on August 31, 1999 for the fiscal quarter ended June
30, 1999;                                                         

   4.  Current Report on Form 8-K dated May 18, 1999 (file no. 001-5706) filed
on May 20, 1999;                                                  

5.  Current Report on Form 8-K dated August 4, 1999 (file no. 001-5706) 
filed on August 4, 1999; and                                      

  6.  The description of common stock contained in Metromedia's registration
  statement on Form 8-A (file no. 001-5706) filed on October 10, 1995.

PLD                                                                     

1.  Annual Report on Form 10-K/A (Amendment No. 2) of PLD (file no.     
    000-20444) filed on August 31, 1999 for the fiscal year ended December
31, 1998;                                                         

2.  Quarterly Report on Form 10-Q/A (Amendment No. 2) of PLD (file no.  
    000-20444) filed on August 31, 1999 for the fiscal quarter ended March
31, 1999;                                                         

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3.  Quarterly Report on Form 10-Q/A (Amendment No. 1) of PLD (file no.  
       000-20444) filed on August 31, 1999 for the fiscal quarter ended June 30,
1999;                                                             

   4.  Current Report on Form 8-K/A (Amendment No. 1) dated May 18, 1999 (file
no. 000-20444) filed on August 30, 1999; and                      

  5.  The description of PLD common stock in PLD's registration statement on
  Form 20-F as amended (file no. 000-20444) filed on January 13, 1993.

    Copies of Metromedia's annual report on Form 10-K/A and quarterly reports on
Form 10-Q/A for the fiscal quarters ended March 31, 1999 and June 30, 1999,     
accompany the joint proxy statement/ prospectus that will be sent to Metromedia 
stockholders.                                                                   

YOU MAY REQUEST A COPY OF THESE FILINGS, AT NO COST, BY WRITING OR      
TELEPHONING US AT THE FOLLOWING ADDRESS:                                        

IN THE CASE OF METROMEDIA, TO:                                          

METROMEDIA INTERNATIONAL GROUP, INC.                                    
ONE MEADOWLANDS PLAZA                                                   
EAST RUTHERFORD, NEW JERSEY 07073                                       
ATTENTION: SECRETARY                                                    

TELEPHONE REQUESTS MAY BE DIRECTED TO: (201) 531-8000                   

IN THE CASE OF PLD, TO:                                                 

PLD TELEKOM INC.                                                        
505 PARK AVENUE                                                         
21ST FLOOR                                                              
NEW YORK, NEW YORK 10022                                                
ATTENTION: SECRETARY                                                    

TELEPHONE REQUESTS MAY BE DIRECTED TO (212) 527-3800                    

   IN ORDER TO ENSURE TIMELY DELIVERY OF THESE DOCUMENTS, YOU SHOULD MAKE SUCH
REQUEST BY SEPTEMBER 23, 1999.                                                  

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TABLE OF CONTENTS 

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QUESTIONS AND ANSWERS ABOUT THE METROMEDIA/PLD MERGER.....................................................          1

SUMMARY...................................................................................................          2
  The Companies...........................................................................................          2
  What You Will Receive in the Merger.....................................................................          2
  Our Reasons for the Merger..............................................................................          3
  Voting Agreement........................................................................................          5
  Recommendation to PLD Stockholders......................................................................          5
  Opinion of PLD's Financial Advisor......................................................................          5
  Recommendation to Metromedia Stockholders...............................................................          5
  Opinion of Metromedia's Financial Advisor...............................................................          5
  Dissenters' Rights......................................................................................          5
  Preferred Stockholders..................................................................................          5
  Conditions to the Merger................................................................................          5
  Accounting Treatment....................................................................................          6
  Comparison of Stockholder Rights........................................................................          6
  Termination of the Merger Agreement.....................................................................          6
  Termination Payments....................................................................................          6
  Income Tax Consequences of the Merger...................................................................          7
  Regulatory Approvals....................................................................................          7
  Forward-Looking Statements..............................................................................          7
  Selected Historical Financial Information...............................................................          8
  Unaudited Selected Pro Forma Combined Financial Data....................................................         11
  Comparative Per Share Information.......................................................................         11
  Comparative Per Share Market Price Information..........................................................         12

RISK FACTORS..............................................................................................         13
  Metromedia expects to continue to incur losses from its continuing operations, which could prevent it              
    from pursuing its growth strategies and could cause it to default under its debt obligations..........         13
  Chinese governmental authorities are causing the termination of certain of Metromedia's joint ventures,            
    which could have negative effects on Metromedia's financial position and results of operations........         13
  Metromedia may not be able to realize fully all the benefits that it anticipates from the merger........         14
  Metromedia will be unable to meet its obligations if it does not receive distributions from its                    
    subsidiaries and its subsidiaries have no obligations to make any payments to it......................         14
  PLD has suffered recurring losses and may not be able to continue as a going concern....................         15
  As a result of the merger, Metromedia will have substantial debt, which may limit its ability to borrow,           
    restrict the use of its cash flows, constrain its business strategy and make it unable to meet its               
    debt obligations......................................................................................         15
  Metromedia may not be able to raise the substantial additional financing that will be required to                  
    satisfy its long-term business objectives, which would force it to significantly curtail its business            
    objectives and may materially and adversely affect its results of operations..........................         15
  Metromedia and PLD may be materially and adversely affected by competition from larger global                      
    communications companies or the emergence of competing technologies in their current or future                   
    markets...............................................................................................         16

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Metromedia may not be able to attract consumers to its services, which would negatively impact its                 
  operating results.....................................................................................         16
Metromedia cannot assure you that it will successfully complete the construction of its systems, which             
  would jeopardize licenses for its systems or provide opportunities to its competitors.................         17
Metromedia may not be able to successfully implement and manage the growth of its ventures, which would            
  affect its growth strategy............................................................................         17
The government licenses on which Metromedia depends to operate many of its businesses could be cancelled           
  or not renewed, which would impair the development of its services....................................         17
Metromedia and PLD do not fully control certain of their joint ventures' operations, strategies and                
  financial decisions and cannot assure you that they will be able to maximize their return on their               
  investments...........................................................................................         18
Metromedia's and PLD's dependence on local operators, interconnect parties or local customers may                  
  materially and adversely affect their operations......................................................         18
Metromedia cannot assure you that its equipment will be approved by the authorities regulating the                 
  markets in which it operates, which could have a material adverse effect on its operations in these              
  markets...............................................................................................         19
Metromedia may not be able to keep pace with the emergence of new technologies and changes in market               
  conditions, which would materially and adversely affect its result of operations......................         19
Certain failures to address the year 2000 problem may cause disruptions in the operation of Metromedia's           
  networks and Metromedia's services to customers.......................................................         20
Metromedia Company effectively controls Metromedia International Group and has the power to influence              
  the direction of its operations and prevent a change of control.......................................         20
Metromedia could incur environmental liabilities as a result of its current operations and past                    
  divestitures the cost of which could materially affect its results of operations......................         20
Metromedia operates in countries with significant political, social and economic uncertainties, which              
  could have a material adverse effect on its operations in these areas.................................         21
Metromedia faces enhanced economic, legal and physical risks by operating abroad........................         21
Laws restricting foreign investments in the telecommunications industry could adversely affect                     
  Metromedia's operations in these countries............................................................         22
Currency control restrictions in Metromedia's markets may have a negative effect on its business........         23
Recent economic difficulties in the Russian Federation and other emerging markets could have a material            
  adverse effect on Metromedia's operations in these countries..........................................         23
High inflation in Metromedia's markets may have a negative effect on Metromedia's business..............         23
Fluctuations in currency exchange rates in the countries in which Metromedia operates could negatively             
  impact Metromedia's results of operations in these countries..........................................         24
The commercial and corporate legal structures are still developing in Metromedia's target markets which            
  creates uncertainties as to the protection of its rights and operations in these markets..............         24
Russian law may hold Metromedia liable for the debts of its subsidiaries, which could have a material              
  adverse effect on its financial condition.............................................................         24
Metromedia operates in countries where the laws may not adequately protect shareholder rights which                
  could prevent Metromedia from realizing fully the economic benefits of its investments in these                  
  countries.............................................................................................         25
The exercise by News America of its registration rights could materially affect the market for, and                
  value of, the common stock of Metromedia..............................................................         25
Metromedia may default under its Snapper credit facility, which could materially and adversely affect              
  its business strategy and results of operations.......................................................         25

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  Metromedia is involved in legal proceedings, which could adversely affect its financial condition.......        25
  Metromedia's future results of operations may be substantially different from its statements about its            
    future prospects and you should not unduly rely on these statements...................................        25

THE METROMEDIA ANNUAL MEETING.............................................................................        27
  Date, Time and Place of the Metromedia Annual Meeting...................................................        27
  Purposes of the Metromedia Annual Meeting...............................................................        27
  Record Date.............................................................................................        27
  Required Votes..........................................................................................        28
  Proxies; Voting and Revocation..........................................................................        28
  Solicitation of Proxies.................................................................................        29
  No Dissenters' Appraisal Rights.........................................................................        29

THE PLD SPECIAL MEETING...................................................................................        30
  Date, Time and Place of the PLD Special Meeting.........................................................        30
  Purposes of the PLD Special Meeting; The Merger.........................................................        30
  Record Date.............................................................................................        30
  Required Votes..........................................................................................        30
  Proxies; Voting and Revocation..........................................................................        31
  Solicitation of Proxies.................................................................................        31
  No Dissenters' Appraisal Rights.........................................................................        31
  Preferred Stockholders..................................................................................        31

THE MERGER................................................................................................        32
  Background..............................................................................................        32
  Recommendation of the Metromedia Board; Metromedia's Reasons for the Merger.............................        34
  Recommendation of the PLD Board; PLD's Reasons for the Merger...........................................        35
  Opinion of Metromedia's Financial Advisor...............................................................        36
  Opinion of PLD's Financial Advisor......................................................................        42
  Federal Income Tax Consequences to Holders of PLD Common Stock..........................................        49
  Accounting Treatment....................................................................................        51
  Dividend Policy.........................................................................................        51
  Interests of PLD Directors and Officers in the Merger...................................................        51
  Interest of Metromedia Directors and Officers in the Merger.............................................        52
  Regulatory Approvals....................................................................................        53
  Stock Exchange Listing..................................................................................        53
  Federal Securities Laws Consequences....................................................................        53

THE MERGER AGREEMENT......................................................................................        54
  Terms of the Merger.....................................................................................        54
  Exchange of New Stock Certificates......................................................................        55
  Representations and Warranties..........................................................................        57
  Covenants...............................................................................................        58
  No Solicitation of Transactions.........................................................................        59
  Indemnification and Insurance...........................................................................        60
  Conditions to the Merger................................................................................        60
  Termination.............................................................................................        61
  Termination Fees and Expenses...........................................................................        62

RELATED AGREEMENTS........................................................................................        63
  Voting Agreement and Registration Rights Agreement......................................................        63

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                                                                                                             PAGE   
                                                                                                           ---------
                                                                                                                    
  Travelers Note and Warrant Modification Agreement.......................................................        63
  News Letter Agreement...................................................................................        63
  Agreement to Exchange and Consent; Terms of Metromedia Notes............................................        64
  Technocom Arrangements..................................................................................        65
  Metromedia Bridge Loan Agreement........................................................................        66
  Restructuring of PLD's Obligations......................................................................        66

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION..............................................        67

BUSINESS OF METROMEDIA....................................................................................        74

BUSINESS OF PLD...........................................................................................        76

DESCRIPTION OF MOSCOW COMMUNICATIONS, INC.................................................................        77

COMPARISON OF RIGHTS OF HOLDERS OF METROMEDIA COMMON STOCK AND PLD COMMON STOCK...........................        77
  General.................................................................................................        77
  Comparison of Stockholders' Rights......................................................................        77

ADDITIONAL INFORMATION FOR METROMEDIA MEETING.............................................................        80
  Security Ownership of Certain Beneficial Owners.........................................................        80
  Securities Beneficially Owned by Directors and Executive Officers.......................................        82
  Directors and Officers..................................................................................        84
  Certain Relationships and Related Transactions..........................................................        89
  Chief Executive Officer Compensation....................................................................        92
  Compliance with Internal Revenue Code Section 162(m)....................................................        92
  Performance Graph.......................................................................................        93
  Other Business..........................................................................................        97
ADDITIONAL INFORMATION FOR PLD MEETING....................................................................        97
OTHER INFORMATION.........................................................................................        99
INDEPENDENT PUBLIC ACCOUNTANTS............................................................................        99

LEGAL MATTERS.............................................................................................       100

EXPERTS...................................................................................................       100
STOCKHOLDER PROPOSALS.....................................................................................       102

APPENDIX A--THE MERGER AGREEMENT..........................................................................       A-1
APPENDIX B--OPINION OF SALOMON SMITH BARNEY INC...........................................................       B-1
APPENDIX C--OPINION OF DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION................................       C-1

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QUESTIONS AND ANSWERS ABOUT THE METROMEDIA/PLD MERGER 

Q.  WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?                              

A.  By September 30, 1999.                                                      

Q.  HOW DO PLD STOCKHOLDERS FIND OUT THE NUMBER OF METROMEDIA SHARES THEY WOULD 
RECEIVE AFTER THE MERGER IS COMPLETED?                                  

A.  PLD stockholders may call toll free any time at 1-800-566-9061 for the      
  current average Metromedia stock price and the number of Metromedia shares
    they would receive for their PLD shares based on that price. After September
   27, 1999, we will calculate the actual number of Metromedia shares you will
    receive, and this information will be available by calling the number above.

Q.  WHAT DO I NEED TO DO NOW?                                                   

A.  After carefully reading and considering the information contained in this   
   document, please indicate on your voting form how you want to vote and mail
    your signed and dated voting form in the enclosed return envelope as soon as
possible.                                                               

Q.  WHAT DO I DO IF I WANT TO CHANGE MY VOTE?                                   

A.  Just send in a later-dated, signed voting form to the proxy solicitor listed
below before the meeting or attend your meeting in person and vote.     

Q.  SHOULD PLD STOCKHOLDERS SEND IN THEIR STOCK CERTIFICATES NOW?               

A.  No. After the merger is completed, the exchange agent will send PLD         
  stockholders written instructions for exchanging their stock certificates.

Q.  IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE MY 
SHARES FOR ME WITHOUT MY INSTRUCTIONS?                                  

A.  No. You should instruct your broker to vote your shares, following the      
   directions provided by your broker. Your failure to instruct your broker to
vote your shares will be the equivalent of voting against the merger.   

Q.  WHAT IF I PLAN TO ATTEND MY MEETING IN PERSON?                              

A.  We recommend that you send in your voting form in any event. If you hold    
    Metromedia or PLD shares through a third party, such as a broker, you should
send an account statement or similar documentation of ownership to your 
proxy solicitor, requesting a ticket.                                   

WHO CAN HELP ANSWER YOUR QUESTIONS? 

  If you have more questions about the merger, you should contact your proxy
solicitor. The proxy solicitor for Metromedia and PLD stockholders is:          

MORROW & CO., INC.
445 PARK AVENUE, FIFTH FLOOR
NEW YORK, NEW YORK 10022
TEL.: (800) 566-9061 (TOLL FREE)

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SUMMARY 

   THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS DOCUMENT AND MAY NOT
CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU. TO UNDERSTAND THE      
MERGER FULLY AND FOR A MORE COMPLETE DESCRIPTION OF THE LEGAL TERMS OF THE      
MERGER, YOU SHOULD READ CAREFULLY THIS ENTIRE DOCUMENT, INCLUDING THE APPENDICES
AND THE OTHER DOCUMENTS TO WHICH WE HAVE REFERRED YOU. SEE "WHERE YOU CAN FIND  
MORE INFORMATION". WE HAVE INCLUDED PAGE REFERENCES PARENTHETICALLY TO DIRECT   
YOU TO MORE COMPLETE DESCRIPTIONS OF THE TOPICS PRESENTED IN THIS SUMMARY.      

THE COMPANIES (PAGE 74)                                                         

METROMEDIA INTERNATIONAL GROUP, INC.                                            
One Meadowlands Plaza                                                           
East Rutherford, New Jersey 07073                                               
(201) 531-8000                                                                  

 Metromedia is a global communications company. Through its communications
group, it is engaged in the development and operation of a variety of           
communications businesses in Eastern Europe, the republics of the former Soviet 
Union, the People's Republic of China and other selected emerging markets. These
businesses include cellular telecommunications, fixed telephony, international  
and long distance telephony, cable television, paging and radio broadcasting.   
See "Business of Metromedia" on page 74.                                        

Metromedia's objective is to establish itself as a major multiple-market
provider of modern communications services in Eastern Europe, the former Soviet 
Union and other selected emerging markets.                                      

   Metromedia also manufactures Snapper-Registered Trademark- brand power lawn
and garden equipment for sale to both residential and commercial customers.     
Snapper sells its lawnmowers, garden tractors, lawn equipment, garden tillers   
and snow throwers through its approximately 5,000 dealer network and through    
foreign distributors.                                                           

Metromedia's communications group's consolidated revenues represented   
approximately 12.6% of Metromedia's total revenues and Snapper's revenues       
represented approximately 87.4% of Metromedia's total revenues for the fiscal   
year ended December 31, 1998. Metromedia views Snapper as a non-core asset and  
manages it in order to maximize shareholder value.                              
PLD TELEKOM INC.                                                                
505 Park Avenue, 21st Floor                                                     
New York, New York 10022                                                        
(212) 527-3800                                                                  

   PLD, through its operating subsidiaries, is a major provider of local, long
distance and international telecommunications services in the Russian           
Federation, Kazakhstan and Belarus. See "Business of PLD" on page 76.           

  PLD's objective is to be a leading participant in the targeted development
of telecommunications infrastructure, products and services in the emerging     
markets of the Russian Federation and other countries of the former Soviet      
Union.                                                                          

WHAT YOU WILL RECEIVE IN THE MERGER (PAGE 54)                                   

Each share of PLD common stock you own will be exchanged for a number of
shares of Metromedia common stock based upon an exchange ratio (rounded to four 
decimals), which will depend on the average stock price of Metromedia's common  
stock.                                                                          

If the average stock price is less than $5.25, PLD may request that the 
exchange ratio be increased by issuing more Metromedia shares so that each PLD  
stockholder receives Metromedia shares valued at $3.50. Metromedia will have no 
obligation to increase the exchange ratio at PLD's request. If Metromedia       
decides not to accept this request for an exchange ratio increase or if the     
average stock price is less than $4.00, PLD will be entitled to terminate the   
merger agreement. As a result, if the                                           

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average stock price is between $4.00 and $5.25, PLD will request that Metromedia
increase the exchange ratio, but Metromedia has no obligation to agree to this  
request. Metromedia's average stock price will be equal to the average of the   
closing prices for the Metromedia common stock for the 20 consecutive trading   
days ended 3 days prior to the PLD meeting.                                     

                                                        [Enlarge/Download Table]

                                                                                            PLD HAS THE RIGHT TO 
                                                                      PER SHARE VALUE FOR   TERMINATE THE MERGER 
                                                                     PLD STOCK OR RANGE OF     AGREEMENT BASED   
                                                                     VALUE BASED UPON THE     SOLELY ON THE PER  
                                                 CORRESPONDING        AVERAGE METROMEDIA     SHARE VALUE OF THE  
   AVERAGE METROMEDIA STOCK PRICE RANGE         EXCHANGE RATIO         STOCK PRICE RANGE          EXCHANGE       
------------------------------------------  -----------------------  ---------------------  ---------------------
                                                                                                                 
$8.01 and above                             $4.48/Average                    $4.48                   No          
                                            Metromedia stock price                                               

$6.25-$8.00                                 .56                           $3.50-$4.48                No          

$5.25-$6.24                                 $3.50/Average                    $3.50                   No          
                                            Metromedia Stock Price                                               

$4.00-$5.24 and:                                                                                                 

  PLD requests that Metromedia increase     $3.50/Average                    $3.50                   No          
  the exchange ratio and Metromedia agrees  Metromedia Stock Price                                               

  PLD requests that Metromedia increase     .6667                         $2.67-$3.50                Yes         
  the exchange ratio and Metromedia                                                                              
  refuses                                                                                                        

$0.00-$3.99                                 .6667                         $0.00-$2.66                Yes         

   If PLD's stockholders' meeting had been held on August 2, 1999, the average
price of Metromedia common stock would have been $7.74, the exchange ratio would
have been .56, and the value for each share of PLD common stock would have been 
$4.34.                                                                          

  If the exchange ratio is .56, then based on the latest available number of
shares outstanding of Metromedia and PLD, PLD shareholders would own            
approximately 23.5% of Metromedia's outstanding common stock after giving effect
to the merger.                                                                  

You will not receive any fractional shares of Metromedia common stock.  
Instead, you will receive cash.                                                 

OUR REASONS FOR THE MERGER                                                      

The PLD board of directors considered the following material factors and
information in approving the merger agreement and recommending it to PLD        
stockholders:                                                                   

- the fact that approximately $165 million of PLD's outstanding debts   
(including accrued interest), some of which were due or coming due  
shortly, will be restructured consensually in connection with the   
consummation of the merger;                                         

- the fact that Metromedia has made available $7.0 million of interim   
financing to PLD to fund its working capital and capital expenditure
    requirements during the interim period from signing the merger agreement
until consummation of the merger;                                   

- the fact that the value of the shares of Metromedia common stock to be
   received as consideration in the merger represented approximately a 32%
premium over the closing price of PLD                               

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 common stock on May 17, 1999, the day before the merger agreement was
signed;                                                             

- the fact that the PLD board of directors believed that the Metromedia 
common stock would have greater liquidity than the PLD common stock;

- the ability of the combined companies to more easily access capital   
markets for additional debt and equity financing;                   

- potential reductions in corporate level overhead costs of the combined
    companies resulting from PLD not being a separate reporting person under
federal securities laws, which would improve the combined companies'
operating results;                                                  

   - the opinion of Salomon Smith Barney Inc., financial advisor to PLD, as to
  the fairness, from a financial point of view and as of the date of the
      opinion, of the exchange ratio provided for in the merger, and the related
   financial analyses performed by Salomon Smith Barney in connection with
its opinion;                                                        

    - the regulatory approvals required to complete the merger and the prospects
for receiving those approvals;                                      

- the fact that, based upon the advice from Morgan, Lewis & Bockius LLP,
special tax counsel to PLD, the merger should be treated for federal
   income tax purposes as a transaction which would be tax-free to the PLD
stockholders;                                                       

- the provisions of the merger agreement that permit PLD to consider    
   additional bona fide offers for PLD and to provide information to third
parties in response to those offers; and                            

   - the absence of any viable alternatives to the Metromedia proposal and the
difficulty that PLD would have in identifying and completing an     
alternative transaction were the merger not to occur.               

   The Metromedia board of directors considered the following material factors
and information in approving the issuance of the Metromedia common stock        
pursuant to the merger agreement and recommending it to Metromedia stockholders:

- the acquisition of PLD will expand Metromedia's strategic focus on    
providing telecommunications services and telecommunications        
infrastructure to Eastern Europe and the former Soviet Union;       

   - PLD's main ventures in the former Soviet Union are larger, have attracted
     more subscribers than Metromedia's consolidated ventures and will provide
greater cash flow to Metromedia's consolidated operations;          

- the fact that Metromedia was able to negotiate favorable, consensual  
restructurings of all of PLD's outstanding obligations;             

   - the May 16, 1999 opinion of Donaldson, Lufkin & Jenrette Securities Corp.
      to the effect that as of that date and, subject to certain assumptions and
      limitations, the exchange ratio was fair from a financial point of view to
  Metromedia, and the related financial analyses performed by Donaldson,
Lufkin & Jenrette Securities Corp. in connection with its opinion;  

- the nature of the parties' representations, warranties, covenants and 
     agreements, which the board believed would provide a reasonable degree of
certainty that the merger would be completed;                       

- potential reductions in corporate level overhead costs of the combined
    companies resulting from PLD no longer being a separate reporting person
      under federal securities laws, which would improve the combined companies'
operating results;                                                  

    - the regulatory approvals required to complete the merger and the prospects
for receiving those approvals; and                                  

- the potential adverse effects on Metromedia's business, operations and
financial condition if the merger was not                           

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completed following public announcement of the merger agreement as a
   result of the possible negative reaction in U.S. capital markets to the
failure by Metromedia to consummate a favorable transaction.        

 As a result, the Metromedia and PLD boards believe that the merger should
increase stockholder value to you.                                              

    To review the reasons for the merger in greater detail, see pages 34 through
36.                                                                             

VOTING AGREEMENT (PAGE 63)                                                      

    Holders of 38% of PLD's outstanding common stock have agreed to vote for the
merger. This means that at least 12.1% more of PLD's stockholders must vote for 
the merger to ensure its approval.                                              

RECOMMENDATION TO PLD STOCKHOLDERS (PAGE 35)                                    

  The PLD board has unanimously determined that the merger agreement and the
merger are fair to the PLD stockholders and in their best interests. The PLD    
board recommends that they vote for approval of the merger agreement.           

OPINION OF PLD'S FINANCIAL ADVISOR (PAGE 42)                                    

    In connection with the merger, the PLD board received a written opinion from
Salomon Smith Barney Inc. as to the fairness, from a financial point of view, of
the exchange ratio to the holders of PLD common stock. The full text of the     
written opinion of Salomon Smith Barney Inc. dated May 18, 1999 is attached to  
the back of this document as Appendix B, and should be read carefully in its    
entirety for a description of the assumptions made, matters considered and      
limitations on the review undertaken. THE OPINION OF SALOMON SMITH BARNEY INC.  
DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER WITH RESPECT TO ANY     
MATTER RELATING TO THE PROPOSED MERGER.                                         

RECOMMENDATION TO METROMEDIA STOCKHOLDERS (PAGE 34)                             

 The Metromedia board has unanimously determined that the merger agreement
and the merger are fair to the Metromedia stockholders and in their best        
interests. The Metromedia board recommends that the Metromedia stockholders vote
for approval of the merger agreement.                                           

OPINION OF METROMEDIA'S FINANCIAL ADVISOR (PAGE 36)                             

    Donaldson, Lufkin & Jenrette Securities Corporation, as financial advisor to
the Metromedia board, has delivered its written opinion to the Metromedia board 
that, as of May 16, 1999, the exchange ratio was fair from a financial point of 
view to Metromedia stockholders. The full text of the opinion of Donaldson,     
Lufkin & Jenrette Securities Corporation is attached as Appendix C. The opinion 
describes important assumptions and limitations and is not a recommendation as  
to how the Metromedia stockholders should vote on the merger.                   

DISSENTERS' RIGHTS (PAGES 29 AND 31)                                            

   Under Delaware law, Metromedia and PLD stockholders do not have dissenters'
rights with respect to the merger.                                              

PREFERRED STOCKHOLDERS (PAGES 28 AND 31)                                        

 Holders of PLD's preferred stock will not have a vote with respect to the
merger. Holders of Metromedia preferred stock will not have a vote with respect 
to the issuance of the shares of Metromedia common stock in the merger or any   
other proposals referred to in this document.                                   

CONDITIONS TO THE MERGER (PAGE 60)                                              

   We will not complete the merger unless a number of conditions are satisfied
or waived. These include:                                                       

- a majority of the holders of PLD common stock present in person or by 
proxy at the PLD special meeting must approve the                   

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      merger and the holders of a majority of Metromedia common stock present in
person or by proxy at the Metromedia annual meeting must approve the
    issuance of the shares of Metromedia common stock pursuant to the merger
agreement;                                                          

- the completion of the following transactions:                         

     - a restructuring of PLD's loans from the Travelers Insurance Company and
The Travelers Indemnity Company;                                

- a restructuring of PLD's loans from News America Incorporated;    

     - the exchange of PLD's outstanding senior discount notes and convertible
subordinated notes for new Metromedia notes; and                

- the purchase by PLD of all minority interests in its Technocom    
subsidiary;                                                     

in each case, as described beginning on page 63; and                    

   - the receipt by PLD of legal opinion confirming the tax-free nature of the
merger.                                                             

 The stockholders' approvals referred to above may not be waived by either
PLD or Metromedia. Any other condition to closing may be waived by the party for
whose benefit the condition is intended. The parties have not made any other    
determination as to whether they would waive any condition to closing. If the   
waiver of any conditions to closing constitutes a material change in the        
disclosure made in this document, including the waiver of the condition that PLD
receive the additional opinion of tax counsel described below in "Income Tax    
Consequences of the Merger," the parties will recirculate a revised proxy       
statement and resolicit stockholders' approval.                                 

A copy of the merger agreement is attached as Annex A to this document. 

ACCOUNTING TREATMENT (PAGE 51)                                                  

 The merger will be accounted for under the purchase method of accounting.
This means that after the merger, Metromedia will be required to record the     
excess of the consideration paid over the estimated fair value of net assets    
acquired and will subsequently amortize this cost against earnings.             

COMPARISON OF STOCKHOLDER RIGHTS (PAGE 77)                                      

    The certificates of incorporation and by-laws of PLD and Metromedia vary. As
a result, the PLD stockholders will have different rights as Metromedia         
stockholders than they currently have as PLD stockholders.                      

TERMINATION OF THE MERGER AGREEMENT (PAGE 61)                                   

We can agree to terminate the merger agreement without completing the   
merger. Either one of us can terminate the merger agreement:                    

- if the merger is not completed before October 31, 1999; or            

- if the other company has failed to perform its obligations under the  
merger agreement.                                                   

In addition, Metromedia and PLD can unilaterally terminate the merger   
agreement under those circumstances described on page 62.                       

TERMINATION PAYMENTS                                                            

PLD is required to pay Metromedia a termination payment of $6.25 million
(plus reimburse up to $1.0 million of expenses) if the merger agreement is      
terminated under those circumstances described on page 62.                      

  Metromedia is required to reimburse PLD for its expenses up to $500,000 if
the merger agreement is terminated under those circumstances described on page  
62.                                                                             

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INCOME TAX CONSEQUENCES OF THE MERGER (PAGE 49)                                 

 The merger is intended to be tax-free to you, except with respect to cash
received instead of fractional shares of Metromedia common stock.               

PLD has received an opinion of Morgan, Lewis & Bockius LLP, special tax 
counsel to PLD. In its opinion, the merger will be treated as a reorganization  
within the meaning of the Internal Revenue Code. As a result, no gain or loss   
will be recognized for federal income tax purposes by PLD stockholders except   
with respect to cash received in lieu of fractional shares. In addition, no gain
or loss will be recognized for federal income tax purposes by Metromedia, PLD   
and the Metromedia subsidiary. PLD's obligation to complete the merger is       
conditioned upon its receipt from its tax counsel of an additional opinion dated
as of the closing date of the merger that confirms the opinion previously       
delivered to PLD.                                                               

  THE TAX CONSEQUENCES OF THE MERGER TO YOU WILL DEPEND ON THE FACTS OF YOUR
OWN SITUATION. YOU SHOULD CONSULT YOUR TAX ADVISOR.                             

REGULATORY APPROVALS (PAGE 53)                                                  

 Early termination of the waiting period applicable to the consummation of
the merger under federal antitrust laws was granted on June 24, 1999, effective 
immediately. In addition, PLD has received assurances that the Department of    
Trade and Industry in the United Kingdom will not object to the change of       
control of PLD's U.K. telecommunications licenses which will result from the    
merger. The Federal Communications Commission has consented to the change of    
control of PLD's U.S. telecommunications licenses in connection with the merger.
Application was filed with the Department of Enterprise and Employment in       
Ireland to consent to the change of control of PLD and Technocom Limited, an    
Irish subsidiary of PLD. No other federal or other regulatory requirements or   
approvals must be complied with or obtained for the consummation of the merger. 

FORWARD-LOOKING STATEMENTS                                                      

  Statements in this document and in the documents incorporated by reference
in this document are or may be forward-looking statements that involve risks and
uncertainties. Actual results may differ materially from those expressed in such
statements depending on a variety of factors. You should carefully review all   
information, including the financial statements and the notes to the financial  
statements, included or incorporated by reference into this document. See "Risk 
Factors" on page 13.                                                            

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SELECTED HISTORICAL FINANCIAL INFORMATION                                       

  We are providing the following historical financial information to aid you
in your analysis of the financial aspects of the merger. The information is only
a summary and you should read it together with our consolidated financial       
statements and other financial information contained in our most recent annual  
and quarterly reports, which are incorporated by reference and from which we    
derived this information. See "Where You Can Find More Information."            

METROMEDIA-HISTORICAL FINANCIAL INFORMATION                             

The following selected consolidated financial data should be read in    
conjunction with Metromedia's consolidated financial statements, including the  
notes thereto, and the other financial data incorporated by reference in this   
joint proxy statement/prospectus. The consolidated statement of operations data 
and consolidated balance sheet data as of and for the years ended December 31,  
1998, 1997, 1996, 1995 and the fiscal year ended February 28, 1995 are derived  
from the consolidated financial statements of Metromedia and the notes related  
thereto, which were audited by KPMG LLP, independent certified public           
accountants. The consolidated financial statements as of December 31, 1998 and  
1997 and for each of the years in the three-year period ended December 31, 1998 
and the report of KPMG LLP thereon, are incorporated by reference in this joint 
proxy statement/prospectus. The selected consolidated statement of operations   
data and balance sheet data as of June 30, 1999 and for the six-month periods   
ended June 30, 1999 and 1998 are derived from the unaudited consolidated        
financial statements of Metromedia incorporated by reference in this joint proxy
statement/prospectus which, in the opinion of management, include all           
adjustments necessary for a fair presentation of the financial condition and    
results of operations of Metromedia for such periods. The results of operations 
for interim periods are not necessarily indicative of a full year's operations. 
Net loss per share is computed on the basis described in the notes to           
Metromedia's consolidated financial statements.                                 

  The consolidated financial statements for the year ended December 31, 1996
include two months (November and December 1996) of the results of operations of 
Snapper, Inc. In addition, the consolidated financial statements for the year   
ended December 31, 1995 include operations for The Actava Group Inc. and MCEG   
Sterling Incorporated from November 1, 1995 and two months for Orion Pictures   
Corporation (January and February 1995) that were included in the February 28,  
1995 consolidated financial statements. The net loss for the two month duplicate
period is $11.4 million.                                                        

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                                         SIX MONTHS                                                               
                                           ENDED                                                                  
                                          JUNE 30,                 YEARS ENDED DECEMBER 31,            YEAR ENDED 
                                    --------------------  ------------------------------------------  FEBRUARY 28,
                                      1999       1998       1998       1997       1996       1995         1995    
                                    ---------  ---------  ---------  ---------  ---------  ---------  ------------
                                                                                                                  
                                                        (IN THOUSANDS, EXCEPT PER SHARE DATA)                     
Consolidated Statement of Operations Data:                                                                        
Revenues..........................  $ 132,647  $ 134,458  $ 240,292  $ 204,328  $  36,592  $   5,158   $    3,545 
Equity in losses of unconsolidated                                                                                
  investees (1)...................     (5,933)    (7,645)   (18,151)   (53,150)    (7,835)    (6,367)      (1,785)
Loss from continuing operations                                                                                   
  (1) (2).........................    (22,877)   (45,152)  (135,986)  (130,901)   (72,146)   (36,265)     (19,141)
Net income (loss).................  $ (22,877) $ (39,885) $(123,670) $  88,443  $(115,243) $(412,976)  $  (69,411)
Income (loss) per common share--Basic:                                                                            
  Continuing operations...........  $   (0.44) $   (0.77) $   (2.19) $   (2.02) $   (1.33) $   (1.48)  $    (0.95)
  Net income (loss)...............  $   (0.44) $   (0.69) $   (2.01) $    1.26  $   (2.12) $  (16.83)  $    (3.43)
Ratio of earnings to fixed charges                                                                                
  (4).............................         --         --         --         --         --         --           -- 
Weighted average common shares                                                                                    
  outstanding.....................     69,137     68,810     68,955     66,961     54,293     24,541       20,246 
Dividends per common share........         --         --         --         --         --         --           -- 
Consolidated Balance Sheet Data (at end of period):                                                               
Total assets (3)..................  $ 559,532        N/A  $ 609,641  $ 789,272  $ 513,118  $ 328,600   $   40,282 
Notes and subordinated debt.......     44,659        N/A     51,834     79,416    190,754    171,004       24,948 

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

(1) Included in the year ended December 31, 1997 are equity in losses and       
writedown of investment in RDM Sports Group, Inc. of $45.1 million.     

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(2) For the year ended December 31, 1998, in connection with Metromedia's       
  communications group's paging operations, Metromedia adjusted the carrying
 value of goodwill and other intangibles, fixed assets, investments in and
   advances to its joint ventures and wrote down inventory. The total non-cash
nonrecurring charge and write down was $49.9 million.                   

(3) Total assets include the net assets of the entertainment assets and the     
Landmark Theatre Group, Inc. The net assets (liabilities) of the        
entertainment assets at December 31, 1996 and 1995 and February 28, 1995
were $11.0 million, $12.1 million and ($8.5) million, respectively. At  
 December 31, 1997 and 1996, the net assets of the Landmark Theatre Group,
Inc., which was acquired on July 2, 1996, were $46.8 million and $46.5  
million, respectively.                                                  

(4) For purposes of this computation, earnings are defined as pre-tax earnings  
or loss from continuing operations of Metromedia before adjustment for  
minority interests in consolidated subsidiaries or income or loss from  
   equity investees attributable to common stockholders plus fixed charges and
distributed income of equity investees.                                 

Fixed charges are the sum of:                                           

- interest expensed and capitalized,                                    

- amortization of deferred financing costs, premium and debt discounts, 

 - the portion of operating lease rental expense that is representative of
the interest factor (deemed to be one-third), and                   

- dividends on preferred stock.                                         

   The ratio of earnings to fixed charges of Metromedia was less than 1.00 for
each of the six months ended June 30, 1999 and 1998 and for the years ended     
December 31, 1998, 1997, 1996 and 1995 and for the year ended February 28, 1995;
thus earnings available for fixed charges were inadequate to cover fixed charges
for such periods. The deficiency in earnings to fixed charges for the six months
ended June 30, 1999 and 1998 and for the years ended December 31, 1998, 1997,   
1996 and 1995 and for the year ended February 28, 1995 were: $28.7 million,     
$48.2 million, $141.1 million, $95.3 million, $64.3 million, $30.1 million and  
$17.4 million, respectively.                                                    

PLD--HISTORICAL FINANCIAL INFORMATION                                           

The following selected consolidated financial data should be read in    
conjunction with PLD's consolidated financial statements, including the notes   
thereto, and the other financial data incorporated by reference in this joint   
proxy statement/prospectus. The statement of operations data and balance sheet  
data as of and for the years ended December 31, 1998 and 1997 are derived from  
the consolidated financial statements of PLD and the notes related thereto,     
which were audited by KPMG LLP, independent certified public accountants, whose 
report contains an explanatory paragraph that states that PLD's recurring       
losses, working capital deficiency and lack of sufficient funds on hand to meet 
its current debt obligations raise substantial doubt about the entity's ability 
to continue as a going concern. The consolidated financial statements and the   
selected financial data do not include any adjustments that might result from   
the outcome of that uncertainty. The consolidated statement of operations data  
and consolidated balance sheet data as of and for the years ended December 31,  
1996, 1995 and 1994 are derived from the consolidated financial statements of   
PLD and the notes related thereto, which were audited by KPMG LLP, Chartered    
Accountants. The consolidated financial statements as of December 31, 1998 and  
1997 and for the years then ended and the report of KPMG LLP thereon and the    
consolidated statements of operations, shareholders' equity and cash flows of   
PLD for the year ended December 31, 1996 and the report of KPMG LLP are         
incorporated by reference in this joint proxy statement/prospectus. The selected
financial data should be read in conjunction with the consolidated financial    
statements, the related notes and the independent auditors' reports. The        
selected consolidated statement of operations data and balance sheet data as of 
June 30, 1999 and for the six-month periods ended June 30, 1999 and 1998 are    
derived from the unaudited consolidated financial statements of PLD incorporated
by reference in this joint proxy statement/ prospectus, which in the opinion of 
management, include all adjustments necessary for a fair presentation of the    
financial condition and results of operations of PLD for such periods. The      
results of operations for interim periods are not necessarily indicative of a   
full year's operations. Net loss per share is computed on the basis described in
the notes to PLD's consolidated financial statements.                           

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                                     SIX MONTHS                                                                  
                                   ENDED JUNE 30,                      YEARS ENDED DECEMBER 31,                  
                               ----------------------  --------------------------------------------------------- 
                                  1999        1998        1998        1997        1996        1995       1994    
                               ----------  ----------  ----------  ----------  ----------  ----------  --------- 
                                                                                                                 
                                                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                      
Consolidated Statements of                                                                                       
  Operations Data:                                                                                               
Operating revenues............ $   57,328  $   74,406  $  145,360  $  114,424  $   61,966  $   29,120  $   8,526 
Operating expenses............     60,453      61,285     135,412     102,406      59,099      38,266     17,248 
                               ----------  ----------  ----------  ----------  ----------  ----------  --------- 
Operating income/(loss).......     (3,125)     13,121       9,948      12,018       2,867      (9,146)    (8,722)
                               ----------  ----------  ----------  ----------  ----------  ----------  --------- 
Loss before income taxes and                                                                                     
  minority interest...........    (17,323)      2,838     (23,561)     (3,428)     (6,271)    (13,440)    (9,491)
Income taxes..................      4,723       5,171       9,864       7,739       3,669       1,490         -- 
                               ----------  ----------  ----------  ----------  ----------  ----------  --------- 
Loss before minority                                                                                             
  interest....................    (22,046)     (2,333)    (33,425)    (11,167)     (9,940)    (14,930)    (9,491)
Minority interest.............      2,087       7,534       9,386       9,399       2,521         551         -- 
                               ----------  ----------  ----------  ----------  ----------  ----------  --------- 
Net loss...................... $  (24,133) $   (9,867) $  (42,811) $  (20,566) $  (12,461) $  (15,481) $  (9,491)
                               ----------  ----------  ----------  ----------  ----------  ----------  --------- 
                               ----------  ----------  ----------  ----------  ----------  ----------  --------- 
Loss per common share......... $    (0.64) $    (0.30) $    (1.21) $    (0.64) $    (0.39) $    (0.49) $   (0.78)
                               ----------  ----------  ----------  ----------  ----------  ----------  --------- 
                               ----------  ----------  ----------  ----------  ----------  ----------  --------- 
Weighted average number of                                                                                       
  shares of common stock                                                                                         
  outstanding (basic and                                                                                         
  diluted)....................     37,847      33,423      35,274      32,061      31,579      31,315     12,663 
Dividends per common share....         --          --          --          --          --          --         -- 

                                                        [Enlarge/Download Table]

                                                                            AS OF DECEMBER 31,                   
                                               JUNE 30,   ------------------------------------------------------ 
                                                 1999        1998       1997       1996       1995       1994    
                                              ----------  ----------  ---------  ---------  ---------  --------- 
                                                                                                                 
                                                                        (IN THOUSANDS)                           
CONSOLIDATED BALANCE SHEET DATA:                                                                                 
  Cash and cash equivalents(1)............... $    7,882  $    4,579  $  17,256  $  40,674  $  15,676  $  56,710 
  Non-cash working capital deficiency........    (44,665)    (20,578)   (18,642)   (26,440)   (22,001)   (17,706)
  Escrow funds...............................     15,220      14,908     33,868     40,984         --         -- 
  Property and equipment, net................    172,171     168,937    134,998     93,039     45,357     21,718 
  Telecommunications licenses, net...........     71,867      77,359     81,837     72,310     49,583     54,099 
  Goodwill, net..............................     35,364      36,368     12,709      1,796      2,011         -- 
  Investments and other assets...............     17,021      15,128     17,092     37,256     27,282     18,925 
  Investment in Teleport-TP (2)..............         --          --         --         --     23,564     15,699 
  Total assets...............................    351,160     352,108    335,586    306,357    178,092    171,760 
Long-term debt...............................    150,095     151,814    133,516    107,954         --         -- 
Stockholders' equity.........................    101,657     124,877    127,231    137,954    135,832    147,470 

(1) The December 31, 1996 and 1995 balances include cash of $9.0 million and    
$6.1 million, respectively, held on deposit as collateral to secure bank
indebtedness of the same amount.                                        

(2) Teleport-TP became a consolidated subsidiary as of December 31, 1996 as a   
 result of the acquisition of an additional ownership interest on December
20, 1996.                                                               

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UNAUDITED SELECTED PRO FORMA COMBINED FINANCIAL DATA                            

    The following unaudited selected pro forma combined condensed financial data
are derived from the Unaudited Pro Forma Combined Financial Information included
elsewhere in this joint proxy statement/prospectus and should be read together  
with that data and with the notes to that data. These unaudited selected pro    
forma combined financial data:                                                  

  - are based upon the historical financial statements of Metromedia and PLD
   as of and for the six months ended June 30, 1999 and for the year ended
December 31, 1998;                                                  

- are adjusted to give effect to the merger;                            

   - are adjusted for the restructuring of all of PLD's outstanding senior and
     subordinated notes, the loans owed to the Travelers Insurance Company and
   News America and PLD's obligation to purchase the minority interests in
the PLD subsidiary Technocom Limited.                               

  With respect to the balance sheet data, the transactions referred to above
are assumed to have been completed as of June 30, 1999. With respect to the     
statement of operations data the transactions referred to above are assumed to  
have been completed as of the beginning of the periods presented.               

    These unaudited selected pro forma combined condensed financial data are for
illustrative purposes only and do not necessarily indicate the operating results
or financial position that would have been achieved had the merger and the      
restructuring described above been completed as of the dates indicated or of the
results that may be obtained in the future. In addition, the data does not      
reflect synergies that might be achieved from combining these operations.       

                                                        [Enlarge/Download Table]

                                                                                SIX MONTHS ENDED     YEAR ENDED 
                                                                                    JUNE 30,        DECEMBER 31,
                                                                                      1999              1998    
                                                                               -------------------  ------------
                                                                                (IN THOUSANDS, EXCEPT PER SHARE 
                                                                                             DATA)              
                                                                                                                
Statement of Operations Data:                                                                                   
Revenues......................................................................    $     189,975      $  385,652 
Equity in losses of unconsolidated investees..................................           (6,363)        (19,109)
Loss from continuing operations...............................................          (47,664)       (187,941)
Income (loss) per common share--Basic:                                                                          
  Continuing operations.......................................................    $       (0.61)     $    (2.25)
Weighted average common shares outstanding....................................           90,387          90,205 
Dividends per common share....................................................               --              -- 
Balance Sheet Data (at end of period):                                                                          
Total assets..................................................................    $     968,636             N/A 
Debt..........................................................................          228,246             N/A 

COMPARATIVE PER SHARE INFORMATION                                               

    The average common shares outstanding used in calculating pro forma loss per
common share from continuing operations are calculated assuming that the        
estimated number of shares of Metromedia common stock to be issued in the merger
were outstanding from the beginning of the periods presented. Options and       
warrants to purchase shares of common stock as well as shares of common stock   
issuable upon conversion of Metromedia's convertible preferred stock were not   
included in computing pro forma diluted earnings per common share because their 
inclusion would result in a smaller loss per common share.                      

  The book value per share amounts of Metromedia were calculated by dividing
shareholders' equity by the number of common shares outstanding, at the end of  
the period. The common stock outstanding used in calculating pro forma combined 
book value per share are 69,162,000 of Metromedia common stock outstanding at   
June 30, 1999 plus 21,250,000 shares representing the estimated number of       

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common shares to be issued in the merger. See Note 1 to the Unaudited Pro Forma 
Combined Financial Statements.                                                  

PLD pro forma equivalent amounts are calculated by multiplying the      
respective pro forma combined per share amounts by the exchange ratio of .56,   
using the closing price on May 18, 1999.                                        

                                                        [Enlarge/Download Table]

                                                                          SIX MONTHS ENDED             YEAR ENDED        
                                                                           JUNE 30, 1999           DECEMBER 31, 1998     
                                                                      ------------------------  ------------------------ 
HISTORICAL                                                             METROMEDIA       PLD      METROMEDIA       PLD    
--------------------------------------------------------------------  -------------  ---------  -------------  --------- 
                                                                                                                         
Loss per common share from continuing operations....................    $   (0.44)   $   (0.64)   $   (2.19)   $   (1.21)
Cash dividend declared per common share.............................           --           --           --           -- 
Book value per common share at end of period........................    $    5.72    $    2.69    $    6.16    $    3.30 

                                                        [Enlarge/Download Table]

                                                                                        METROMEDIA          PLD     
                                                                                         PRO FORMA       PRO FORMA  
PRO FORMA AND PRO FORMA EQUIVALENT PER SHARE DATA                                        COMBINED       EQUIVALENT  
------------------------------------------------------------------------------------  ---------------  -------------
                                                                                                                    
Loss per common share from continuing operations for the:                                                           
  Year ended December 31, 1998......................................................     $   (2.25)      $   (1.26) 
  Six months ended June 30, 1999....................................................     $   (0.61)      $   (0.34) 

Cash dividends declared per common share:                                                                           
  Year ended December 31, 1998......................................................            --              --  
  Six months ended June 30, 1999....................................................            --              --  
Book value per common share June 30, 1999...........................................     $    6.19       $    3.47  

COMPARATIVE PER SHARE MARKET PRICE INFORMATION                                  

Metromedia common stock is traded on the American and Pacific Stock     
Exchanges under the symbol "MMG." PLD common stock is traded on the Nasdaq      
National Market and the Toronto Stock Exchange under the symbols "PLDI" and     
"PLD", respectively. We list below the per share closing market prices as       
reported on the American Stock Exchange Composite Transactions Tape for shares  
of Metromedia common stock and on the Nasdaq National Market for shares of PLD  
common stock. We list this information as of May 17, 1999, the last trading day 
before public announcement of the signing of the merger agreement, and as of    
August 30, 1999 the latest practicable date prior to the printing of this       
document.                                                                       

    We also list the implied equivalent per share value for shares of PLD common
stock, which is the Metromedia common stock price multiplied by the exchange    
ratio of .56, assuming the average Metromedia stock price is equal to or greater
than $6.25 but less than or equal to $8.00.                                     

We urge you to obtain current market quotations for PLD common stock and
Metromedia common stock before voting on the merger.                            

                                                        [Enlarge/Download Table]

                                                                                                    PLD SHARE   
                                                                        PLD SHARE   METROMEDIA     EQUIVALENT   
                                                                          PRICE     SHARE PRICE       VALUE     
                                                                       -----------  -----------  ---------------
                                                                                                                
May 17, 1999..........................................................  $    2.75    $  6.50        $    3.64   
August 30, 1999.......................................................  $    3.03    $  6.375       $    3.57   

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RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE INFORMATION BELOW AS WELL AS ALL OTHER
INFORMATION PROVIDED TO YOU IN THIS JOINT PROXY STATEMENT/PROSPECTUS IN DECIDING
WHETHER TO APPROVE THE MERGER, INCLUDING INFORMATION IN THE SECTION OF THIS     
PROSPECTUS ENTITLED "--METROMEDIA'S FUTURE RESULTS OF OPERATIONS MAY BE         
SUBSTANTIALLY DIFFERENT FROM ITS STATEMENTS ABOUT ITS FUTURE PROSPECTS AND YOU  
SHOULD NOT UNDULY RELY ON THESE STATEMENTS."                                    

METROMEDIA EXPECTS TO CONTINUE TO INCUR LOSSES FROM ITS CONTINUING OPERATIONS,  
WHICH COULD PREVENT IT FROM PURSUING ITS GROWTH STRATEGIES AND COULD CAUSE IT TO
DEFAULT UNDER ITS DEBT OBLIGATIONS.                                             

Metromedia cannot assure you that it will succeed in establishing an    
adequate revenue base or that its services will be profitable or generate       
positive cash flow. Metromedia has reported substantial losses from operations  
over the previous three years. For the six months ended June 30, 1999 and for   
the years ended December 31, 1998, 1997 and 1996, it reported a loss from       
continuing operations of approximately $22.9 million, $136.0 million, $130.9    
million and $72.1 million, respectively, and a net loss of $22.9 million, $123.7
million, net income of $88.4 million, and a net loss of $115.2 million,         
respectively. Metromedia expects that it will report significant operating      
losses, including losses attributable to Snapper, Inc., for the fiscal year     
ended December 31, 1999. In addition, many of the joint ventures in its         
communication group are still in the early stages of their development and      
Metromedia expects this group to continue to generate significant losses as it  
continues to build-out and market its services. Accordingly, Metromedia expects 
to generate consolidated losses for the foreseeable future.                     

    Continued losses and negative cash flow may prevent Metromedia from pursuing
its strategies for growth and could cause it to be unable to meet its debt      
service obligations, its capital expenditures or working capital needs.         

CHINESE GOVERNMENTAL AUTHORITIES ARE CAUSING THE TERMINATION OF CERTAIN OF      
METROMEDIA'S JOINT VENTURES, WHICH COULD HAVE NEGATIVE EFFECTS ON METROMEDIA'S  
FINANCIAL POSITION AND RESULTS OF OPERATIONS.                                   

 Because legal restrictions in China prohibit foreign participation in the
operation or ownership in the telecommunications sector, Metromedia's           
telecommunications joint ventures in China have been established so as to       
provide financing, technical advice, consulting and other services for the      
construction and development of telephony networks for China United             
Telecommunications Incorporated, known as China Unicom, a Chinese               
telecommunications operator.                                                    

  Metromedia has recently been notified by China Unicom that a department of
the Chinese government has requested termination of two of Metromedia's         
telecommunications joint ventures with China Unicom. Negotiations have commenced
with representatives of China Unicom on the amount of compensation and terms of 
the resolution of all issues between the parties. The content of the            
negotiations includes determining the investment principal of these joint       
ventures, appropriate compensation and other matters related to termination of  
contracts. Metromedia was further notified that due to technical reasons which  
were not specified, the cash distribution plan for the first half of 1999 had   
not been decided and that China Unicom also expected to discuss this subject    
with the joint ventures. As a result, Metromedia cannot assure you that it will 
receive compensation from the Chinese government for the termination of its     
joint ventures or that the compensation that it will receive, if any, will be   
adequate.                                                                       

   While the notification only involved two of Metromedia's telecommunications
joint ventures, Metromedia expects that the other two telecommunications        
projects in which it has invested will receive similar notifications. In        
addition, China Unicom has suspended cooperation on further development of      
networks with these joint ventures, which Metromedia believes reflects China    
Unicom's intention to negotiate the termination of its relationship with these  
joint ventures as well.                                                         

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 In light of the current uncertainty, Metromedia is unable to estimate the
impact on its financial condition and results of operations of such negotiations
and expected winding up of its other two Chinese telecommunications joint       
ventures. Metromedia believes that negotiations, if adversely concluded, could  
have a materially negative effect on Metromedia's financial position and        
operating results. Depending on the amount of compensation it receives,         
Metromedia will record a non cash charge equal to the difference between the sum
of the carrying values of its investment and advances made to joint ventures    
plus goodwill less the cash compensation it receives from the joint ventures    
which China Unicom has paid. Metromedia's investment in and advances to joint   
ventures and goodwill balance at June 30, 1999 were approximately $71 million   
and $67 million respectively. See "Business of Metromedia."                     

METROMEDIA MAY NOT BE ABLE TO REALIZE FULLY ALL THE BENEFITS THAT IT ANTICIPATES
FROM THE MERGER.                                                                

   Metromedia and PLD previously operated independently. They entered into the
merger agreement with the expectation that the merger would create opportunities
to achieve cost synergies, revenue growth, technological development and other  
synergistic benefits. The value of the Metromedia common stock following        
consummation of the merger may be affected by the ability to achieve the        
benefits expected to result from the consummation of the merger. Achieving the  
benefits of the merger will depend in part upon meeting the challenges inherent 
in the successful combination of two business enterprises of the size and scope 
of Metromedia and PLD, which include:                                           

  - the possible resulting diversion of management attention for an extended
period of time;                                                     

- the possible loss of management-level and highly qualified employees; 

- the possible inability to integrate the management culture, enterprise
systems and operations of these two companies; and                  

- the involvement of Metromedia in different businesses in which it has 
limited experience.                                                 

We cannot assure you that we will meet these challenges and that these  
challenges will not negatively impact the operations of Metromedia following the
merger. Delays encountered in the transition process could have a material      
adverse effect upon the revenues, level of expenses, operating results and      
financial condition of the combined company. We cannot assure you that the      
combined company will realize any of these anticipated benefits.                

METROMEDIA WILL BE UNABLE TO MEET ITS OBLIGATIONS IF IT DOES NOT RECEIVE        
DISTRIBUTIONS FROM ITS SUBSIDIARIES AND ITS SUBSIDIARIES HAVE NO OBLIGATIONS TO 
MAKE ANY PAYMENTS TO IT.                                                        

  Metromedia is a holding company with no direct operations and no assets of
significance other than the stock of its subsidiaries. As such, Metromedia is   
dependent on the earnings of its subsidiaries and the distribution or other     
payment of these earnings to it to meet Metromedia's obligations, including its 
ability to make distributions to its stockholders. Metromedia's subsidiaries are
separate legal entities that will have no obligation to pay any amounts         
Metromedia owes to third parties, whether by dividends, loans or other payments.
Snapper, Inc.'s credit facility contains substantial restrictions on dividends  
and other payments by Snapper to Metromedia. In addition, many of Metromedia's  
joint ventures are in their early stages of development and are operating       
businesses that are capital intensive. As a result, Metromedia will only be able
to rely on cash on hand, proceeds from the disposition of non-core assets and   
net proceeds from additional financings through a public or private sale of debt
or equity securities to meet its cash requirements, including the making of any 
distributions to Metromedia stockholders.                                       

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PLD HAS SUFFERED RECURRING LOSSES AND MAY NOT BE ABLE TO CONTINUE AS A GOING    
CONCERN.                                                                        

    PLD has suffered recurring losses, has a working capital deficiency and does
not presently have access to sufficient funds on hand to meet its current debt  
obligations. These factors raise substantial doubt about PLD's ability to       
continue as a going concern, if the merger is not consummated, as indicated in  
the report for fiscal 1998 of KPMG LLP, PLD's independent auditors. See "Related
Agreements--Restructuring of PLD's Obligations."                                

AS A RESULT OF THE MERGER, METROMEDIA WILL HAVE SUBSTANTIAL DEBT, WHICH MAY     
LIMIT ITS ABILITY TO BORROW, RESTRICT THE USE OF ITS CASH FLOWS, CONSTRAIN ITS  
BUSINESS STRATEGY AND MAKE IT UNABLE TO MEET ITS DEBT OBLIGATIONS.              

As a result of the merger, Metromedia will issue $212,520,268 in new    
Metromedia notes and will incur other indebtedness to certain PLD security      
holders described in "Related Agreements."                                      

This indebtedness has important consequences, including:                

- Metromedia's ability to borrow additional amounts for working capital,
capital expenditures or other purposes will be limited,             

    - a substantial portion of its cash flow from operations will be required to
make debt service payments,                                         

    - Metromedia's leverage could limit its ability to capitalize on significant
     business opportunities and its flexibility to react to changes in general
economic conditions, competitive pressures and adverse changes in   
government regulation,                                              

- Metromedia's ability to pay dividends will be restricted, and         

- Metromedia will be limited in its ability to merge, consolidate, or   
dispose of its assets.                                              

  Metromedia cannot assure you that its cash flow and capital resources will
be sufficient to repay any indebtedness incurred in the merger or that it may   
incur in the future, or that it will be successful in obtaining alternative     
financing. In the event that Metromedia is unable to repay its debts, it may be 
forced to reduce or delay the completion or expansion of its networks, sell some
of its assets, obtain additional equity capital or refinance or restructure its 
debt. Even if new financing is available, it may not be on terms that are       
acceptable to Metromedia. The indebtedness being incurred in connection with the
merger imposes substantial covenants on Metromedia. Complying with these        
covenants may cause Metromedia to take actions that it otherwise would not take,
or not take actions that it otherwise would take. Please refer to the section in
this prospectus entitled "Related Agreements--Agreement to Exchange and Consent;
Terms of Metromedia Notes."                                                     

METROMEDIA MAY NOT BE ABLE TO RAISE THE SUBSTANTIAL ADDITIONAL FINANCING THAT   
WILL BE REQUIRED TO SATISFY ITS LONG-TERM BUSINESS OBJECTIVES, WHICH WOULD FORCE
IT TO SIGNIFICANTLY CURTAIL ITS BUSINESS OBJECTIVES AND MAY MATERIALLY AND      
ADVERSELY AFFECT ITS RESULTS OF OPERATIONS.                                     

Many of Metromedia's joint ventures operate businesses that are capital 
intensive and require the investment of significant amounts of capital in order 
to construct and develop operational systems and market their services. As a    
result, Metromedia will require substantial additional financing to satisfy its 
long-term business objectives, including its on-going working capital,          
acquisition and expansion requirements. Metromedia may seek to raise this       
additional capital through the public or private sale of debt or equity         
securities. If Metromedia incurs additional debt, it may become subject to      
additional or more restrictive financial covenants and ratios. Metromedia cannot
assure you that additional financing will be available to it on acceptable      
terms, if at all. If adequate additional funds are not available, Metromedia may
be required to curtail significantly its long-term business objectives and its  
results from operations may be materially and adversely affected.               

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METROMEDIA AND PLD MAY BE MATERIALLY AND ADVERSELY AFFECTED BY COMPETITION FROM 
LARGER GLOBAL COMMUNICATIONS COMPANIES OR THE EMERGENCE OF COMPETING            
TECHNOLOGIES IN THEIR CURRENT OR FUTURE MARKETS.                                

 Metromedia and PLD operate in businesses which are highly competitive and
they compete with many other well-known communications and media companies, many
of which have established operating infrastructures and substantially greater   
financial, management and other resources than them.                            

Metromedia and PLD also face potential competition from competing       
technologies which could emerge over time in Eastern Europe, the republics of   
the former Soviet Union and other selected emerging markets and compete directly
with their operations. For example, Metromedia believes that it will not be able
to effectively compete for its traditional paging customers in markets where GSM
technology is combined with calling party pays and prepaid calling card service.
Similarly, Metromedia cannot assure you that PLD's nationwide cellular network  
in Kazakhstan will be able to compete with the development of the               
newly-introduced GSM technology in this market.                                 

 In addition, each of the principal partners in PLD's operating businesses
have interests that may conflict with those of PLD and in certain instances     
could compete directly with PLD and its networks. This competition could        
seriously undermine the local support for PLD's networks, affect PLD's results  
of operations in these countries and jeopardize Metromedia's ability to fully   
realize the value of its economic investments in these countries. See           
'--Metromedia and PLD do not fully control certain of their joint ventures'     
operations, strategies and financial decisions and cannot assure you that they  
will be able to maximize their returns on their investments" and "--Metromedia's
dependence on certain local operators, interconnect parties or local customers  
may materially and adversely affect its operations." For example, PLD's partner 
in PLD's operating business in St. Petersburg has recently completed the        
installation of a fiber optic network in St. Petersburg which could provide     
serious competition to PLD's network in this area. The cellular network of PLD's
operating business in Kazakhstan directly competes with the public switched     
telephone network of Kazakhtelekom, PLD's partner in this operating business,   
and a recently established GSM mobile phone service joint venture in which      
Kazakhtelekom has an interest. PLD's long distance network in Moscow is in      
direct competition with the long distance national network operated by          
Rostelecom, PLD's partner in its Moscow operating business.                     

In addition, Metromedia does not expect to maintain or to be granted    
exclusive licenses to operate its communications businesses in any of the       
markets where it currently provides or plans to provide its services.           

METROMEDIA MAY NOT BE ABLE TO ATTRACT CONSUMERS TO ITS SERVICES, WHICH WOULD    
NEGATIVELY IMPACT ITS OPERATING RESULTS.                                        

    Metromedia's operating results are dependent upon its ability to attract and
maintain subscribers to its cable, paging and telephony systems and the sale of 
commercial advertising time on its radio stations. These in turn depend on the  
following factors, several of which are beyond Metromedia's control:            

  - the general economic conditions in the markets where Metromedia's cable,
telephone systems, paging and radio stations are located,           

- the relative popularity of Metromedia's systems, including its radio  
stations,                                                           

- the demographic characteristics of the potential subscribers to       
Metromedia's systems and audience of its radio stations,            

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   - the technical attractiveness to customers of the equipment and service of
Metromedia's systems, and                                           

- the activities of its competitors.                                    

METROMEDIA CANNOT ASSURE YOU THAT IT WILL SUCCESSFULLY COMPLETE THE CONSTRUCTION
OF ITS SYSTEMS, WHICH WOULD JEOPARDIZE LICENSES FOR ITS SYSTEMS OR PROVIDE      
OPPORTUNITIES TO ITS COMPETITORS.                                               

   Most of Metromedia's joint ventures require substantial construction of new
systems and additions to the physical plants of existing systems. Construction  
projects are adversely affected by cost overruns and delays not within          
Metromedia's control or the control of its subcontractors, such as those caused 
by governmental changes and material or equipment shortages or delays in        
delivery of material or equipment. Metromedia cannot assure you that this       
construction will be completed on time or on budget. The failure to complete    
construction of a communications system on a timely basis could jeopardize the  
franchise or license for Metromedia's system or provide opportunities to its    
competitors.                                                                    

METROMEDIA MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT AND MANAGE THE GROWTH OF   
ITS VENTURES, WHICH WOULD AFFECT ITS GROWTH STRATEGY.                           

Many of Metromedia's ventures are either in developmental stages or have
only recently commenced operations and Metromedia has incurred significant      
operating losses to date. Metromedia is currently pursuing additional           
investments in a variety of communications businesses both in its existing      
markets and in additional markets. In implementing and managing its strategy of 
growing its businesses, Metromedia must:                                        

- assess the strengths and weaknesses of development opportunities,     

 - evaluate the costs and uncertain returns of developing and constructing
the facilities for operating systems, and                           

 - integrate and manage the operations of existing and additional systems.

Metromedia cannot assure you that it will successfully implement its growth     
strategy.                                                                       

THE GOVERNMENT LICENSES ON WHICH METROMEDIA DEPENDS TO OPERATE MANY OF ITS      
BUSINESSES COULD BE CANCELLED OR NOT RENEWED, WHICH WOULD IMPAIR THE DEVELOPMENT
OF ITS SERVICES.                                                                

Metromedia's joint ventures' operations are subject to governmental     
regulation and approvals in the markets in which these joint ventures operate.  
Metromedia's joint ventures operate under licenses that are issued for limited  
periods. Some of these licenses expire over the next several years, and some are
renewable annually. Metromedia's failure to renew these licenses may have a     
material adverse effect on Metromedia. Seven licenses held or used by           
Metromedia's joint ventures will expire during 1999. For most of the licenses   
held or used by Metromedia's joint ventures, no statutory or regulatory         
presumption exists for renewal by the current license holder and Metromedia     
cannot assure you that these licenses will be renewed upon the expiration of    
their current terms.                                                            

    Additionally, some of the licenses pursuant to which Metromedia's businesses
operate contain network build-out milestones. Metromedia's failure to renew any 
of these licenses or meet these milestones could result in the loss of these    
licenses, which may have a material adverse effect on Metromedia's operations.  
In addition, Metromedia cannot assure you that its joint ventures will obtain   
the necessary approvals to operate additional cable television, fixed telephony 
or paging systems or radio broadcast stations in any of the markets in which it 
is seeking to establish its business. PLD has exceeded the number of lines which
the main license of its operating business in St. Petersburg allows it to       
operate in St. Petersburg and the surrounding region and Metromedia cannot      
assure you that the                                                             

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Russian licensing authorities will not terminate or renegotiate this license or 
otherwise force PLD to reduce the number of its subscribers or impose other     
penalties on PLD.                                                               

METROMEDIA AND PLD DO NOT FULLY CONTROL CERTAIN OF THEIR JOINT VENTURES'        
OPERATIONS, STRATEGIES AND FINANCIAL DECISIONS AND CANNOT ASSURE YOU THAT THEY  
WILL BE ABLE TO MAXIMIZE THEIR RETURN ON THEIR INVESTMENTS.                     

 Metromedia and PLD have invested in virtually all of their joint ventures
with local partners. In certain cases, the degree of Metromedia's and PLD's     
voting power and the voting power and veto rights of their joint venture        
partners may limit Metromedia or PLD from effectively controlling the           
operations, strategies and financial decisions of the joint ventures in which   
they have an ownership interest. In addition, in certain cases, Metromedia and  
PLD may be dependent on the continuing cooperation of their partners in the     
joint ventures and any significant disagreements among the participants could   
have a material adverse effect on their ventures. In addition, in some markets  
where Metromedia or PLD conducts or may in the future conduct business, certain 
decisions of a joint venture also require government approval. As a result,     
Metromedia and PLD cannot assure you that they will be able to maximize their   
return on all of their investments.                                             

  In addition, in many instances, Metromedia's and PLD's partners in a joint
venture include a governmental entity or an affiliate of a governmental entity. 
This poses a number of risks, including:                                        

 - the possibility of decreased governmental support or enthusiasm for the
  venture as a result of a change of government or government officials,

- a change of policy by the government, and                             

- the ability of the governmental entities to exert undue control or    
influence over the project in the event of a dispute or otherwise.  

In addition, to the extent Metromedia's or PLD's joint ventures become  
profitable and generate sufficient cash flows in the future, Metromedia and PLD 
cannot assure you that the joint ventures will pay dividends or return capital  
at any time. Moreover, Metromedia's and PLD's equity interests in these         
investments generally are not freely transferable. Therefore, Metromedia and PLD
cannot assure you of their ability to realize economic benefits through the sale
of their interests in their joint ventures.                                     

METROMEDIA'S AND PLD'S DEPENDENCE ON LOCAL OPERATORS, INTERCONNECT PARTIES OR   
LOCAL CUSTOMERS MAY MATERIALLY AND ADVERSELY AFFECT THEIR OPERATIONS.           

   Metromedia and PLD are dependent on local operators or interconnect parties
for a significant portion of their operations. For example, Metromedia has      
recently been notified by the Chinese telecommunications operator with which it 
operates its Chinese joint ventures that a department of the Chinese government 
had requested termination of two of its telecommunications joint ventures. In   
addition, this Chinese telecommunications operator has suspended cooperation on 
further development of networks with Metromedia's other two telecommunications  
joint ventures. See "Business of Metromedia." Also, PLD's operating business in 
St. Petersburg is dependent on Russian operators for the completion of most of  
its calls. Metromedia cannot assure you that this operating business will       
continue to have access to these operators' networks or that it will be able to 
have access to these networks with favorable tariffs. The loss of access to     
these networks or increases in tariffs could have a material adverse effect upon
PLD. PLD's operating business in Kazakhstan is also entitled to interconnection 
free of charge to networks operated by Kazakhtelekom, the Kazakhstan public     
switched telephone network operator, for the completion of its local, long      
distance and international calls. The loss of, or any significant limitation on,
its access to this network could have a material adverse effect on PLD. Further,
Kazakhtelekom may try to use its authority to endeavor to assess interconnection

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charges on PLD's operating business in Kazakhstan, which may materially impact  
this operating business' profitability.                                         

Metromedia and PLD are also dependent on local operators or interconnect
parties' facilities for certain of their operations. For example, PLD's         
operating business in St. Petersburg is dependent on Russian operators'         
buildings, ducts and tunnels in order to house its exchanges and to reach its   
customers. The loss of access to these facilities or the availability of access 
only on unfavorable terms could have a material adverse effect upon PLD.        
Similarly, PLD's operating business in Moscow is also dependent upon the        
facilities of local operators for the operation of its existing network in      
Moscow and to terminate certain traffic to users. The loss of the right to use  
these facilities could have a material adverse effect on PLD.                   

    Certain customers account for a significant portion of the total revenues of
certain of PLD's operations and the loss of these customers would materially and
adversely affect PLD's results of operations.                                   

In addition, several of PLD's customers, interconnect parties or local  
operators experience liquidity problems from time to time. PLD's dependence on  
these parties may make it vulnerable to their liquidity problems, both in terms 
of pressure for financial support for the expansion of their operations and     
facilities, and in PLD's ability to achieve prompt settlement of accounts.      

METROMEDIA CANNOT ASSURE YOU THAT ITS EQUIPMENT WILL BE APPROVED BY THE         
AUTHORITIES REGULATING THE MARKETS IN WHICH IT OPERATES, WHICH COULD HAVE A     
MATERIAL ADVERSE EFFECT ON ITS OPERATIONS IN THESE MARKETS.                     

   Many of Metromedia's proposed operations will be dependent upon approval of
its proposed equipment by the communications authorities of the markets in which
Metromedia and its joint ventures operate or plan to operate. Metromedia cannot 
assure you that the equipment it plans to use in these markets will be approved.
The failure to obtain a type approval for Metromedia's equipment could have a   
materially adverse effect on many of its proposed operations.                   

METROMEDIA MAY NOT BE ABLE TO KEEP PACE WITH THE EMERGENCE OF NEW TECHNOLOGIES  
AND CHANGES IN MARKET CONDITIONS, WHICH WOULD MATERIALLY AND ADVERSELY AFFECT   
ITS RESULTS OF OPERATIONS.                                                      

   The communications industry has been characterized in recent years by rapid
and significant technological changes and changes in market conditions.         
Competitors could introduce new or enhanced technologies with features which    
would render Metromedia's technology obsolete or significantly less marketable. 
Metromedia's ability to compete successfully will depend to a large extent on   
its ability to respond quickly and adapt to technological changes and advances  
in its industry. There can be no assurance that Metromedia will be able to keep 
pace, or will have the financial resources to keep pace, with the technological 
demands of the marketplace.                                                     

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CERTAIN FAILURES TO ADDRESS THE YEAR 2000 PROBLEM MAY CAUSE DISRUPTIONS IN THE  
OPERATION OF METROMEDIA'S NETWORKS AND METROMEDIA'S SERVICES TO CUSTOMERS.      

    Many computer and communications network systems, terminal devices, software
products and manufacturing devices will not function properly in the year 2000  
and beyond due to a once-common programming standard that represents years using
two digits. This problem is often referred to as the year 2000 problem. It is   
possible that Metromedia's and its joint venture partners' currently installed  
computer and communications network systems, terminal devices, software         
products, manufacturing devices or other information technology systems,        
including embedded technology, or those of its and its joint venture partners'  
suppliers, contractors, interconnect parties or major systems developers working
either alone or in conjunction with other softwares or systems, will not        
properly function in the year 2000 because of the year 2000 problem. Metromedia 
is not directly responsible for the year 2000 readiness of many of its joint    
ventures and in some cases has no access to the joint venture's management      
regarding these matters. Russia and the other republics of the former Soviet    
Union appear to be substantially behind Western countries in their year 2000    
compliance and readiness. Metromedia and PLD have been unable to determine with 
any degree of certainty the extent to which their interconnect partners in the  
former Soviet Union are non-compliant because those parties have generally been 
reluctant to share this information. If Metromedia and its joint venture        
partners, or its customers, suppliers, contractors, interconnect parties and    
major systems developers are unable to address their year 2000 issues in a      
timely manner, a material adverse effect on Metromedia's results of operations  
and financial condition could result. Metromedia and its joint venture partners 
are currently working to evaluate and resolve the potential impact of the year  
2000 on its processing of date-sensitive information and network systems.       
Metromedia cannot assure you that the year 2000 problem will only have a minimal
cost impact or that its joint venture partners and other companies will convert 
their systems on a timely basis and that their failure will not have an adverse 
effect on Metromedia's systems.                                                 

METROMEDIA COMPANY EFFECTIVELY CONTROLS METROMEDIA INTERNATIONAL GROUP AND HAS  
THE POWER TO INFLUENCE THE DIRECTION OF ITS OPERATIONS AND PREVENT A CHANGE OF  
CONTROL.                                                                        

   Metromedia Company and its affiliates collectively own approximately 26% of
the outstanding shares of common stock of Metromedia International Group and are
its largest stockholders. They have nominated or designated a majority of the   
members of the board of directors. Metromedia International Group's charter and 
Delaware law provide that the majority of the members of the board of directors 
will nominate the directors for election to the board of directors. However, for
the foreseeable future it is likely that directors designated or nominated by   
Metromedia Company will continue to constitute a majority of the members of the 
board of directors. As a result, Metromedia Company will likely control the     
direction of future operations of Metromedia International Group, including     
decisions regarding acquisitions and other business opportunities, the          
declaration of dividends and the issuance of additional shares of capital stock 
and other securities. This concentration of ownership may have the effect of    
delaying, deferring or preventing a change of control of Metromedia             
International Group. Metromedia International Group's certificate of            
incorporation and by-laws also contain provisions which may also have the effect
of delaying, deferring or preventing a change of control of it.                 

METROMEDIA COULD INCUR ENVIRONMENTAL LIABILITIES AS A RESULT OF ITS CURRENT     
OPERATIONS AND PAST DIVESTITURES THE COST OF WHICH COULD MATERIALLY AFFECT ITS  
RESULTS OF OPERATIONS.                                                          

 Metromedia has been in operation since 1929 through its predecessors and,
over the years, has operated in diverse industries including equipment, sporting
goods and furniture manufacturing, sheet metal processing, and trucking.        
Metromedia has divested almost all of its non-communications and                
non-media-related operations. However, in the course of these divestitures, it  
has retained certain indemnification obligations for environmental cleanup      
matters and, in one case, a contaminated parcel                                 

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at which it has undertaken cleanup activities. In other cases, particularly for 
operations that Metromedia divested in the past, it could incur unanticipated   
environmental cleanup obligations, to the extent they may exist or arise in the 
future, as a result of changes in legal requirements that have occurred since   
these divestitures or otherwise. Because some divestitures may have occurred    
many years ago, Metromedia cannot assure you that environmental matters will not
arise in the future that could have a material adverse effect on its results of 
operations or financial condition.                                              

METROMEDIA OPERATES IN COUNTRIES WITH SIGNIFICANT POLITICAL, SOCIAL AND ECONOMIC
UNCERTAINTIES, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON ITS OPERATIONS IN  
THESE AREAS.                                                                    

Metromedia operates in countries in Eastern Europe, the republics of the
former Soviet Union, China and other selected emerging markets. These countries 
face significant political, social and economic uncertainties which could have a
material adverse effect on its operations in these areas. These uncertainties   
include:                                                                        

- possible internal military conflicts,                                 

- civil unrest fueled by economic and social crises in those countries, 

- political tensions between national and local governments which often 
    result in the enactment of conflicting legislation at various levels and
may result in political instability,                                

- bureaucratic infighting between government agencies with unclear and  
overlapping jurisdictions,                                          

   - high unemployment, high inflation, high foreign debt, weak currencies and
the possibility of widespread bankruptcies,                         

- unstable governments,                                                 

- pervasive regulatory control of the state over the telecommunications 
industry (see "--Laws restricting foreign investments in the        
      telecommunications industry could adversely affect Metromedia's operations
   in these countries" and "--Chinese governmental authorities are causing
  the termination of certain of Metromedia's joint ventures, which could
   have negative effects on Metromedia's financial position and results of
operations"),                                                       

- uncertainty whether many of the countries in which Metromedia operates
   will continue to receive the substantial financial assistance they have
     received from several foreign governments and international organizations
which helps to support their economic development,                  

- failure by government entities to meet their outstanding foreign debt 
repayment obligations, and                                          

  - the risk of increased support for a renewal of centralized authority and
increased nationalism resulting in possible restrictions on foreign 
ownership and/or discrimination against foreign owned businesses.   

Metromedia cannot assure you that the pursuit of economic reforms by the
governments of any of these countries will continue or prove to be ultimately   
effective, especially in the event of a change in leadership, social or         
political disruption or other circumstances affecting economic, political or    
social conditions. See "Business of Metromedia."                                

METROMEDIA FACES ENHANCED ECONOMIC, LEGAL AND PHYSICAL RISKS BY OPERATING       
ABROAD.                                                                         

Metromedia has invested substantially all of its resources in operations
outside of the United States and plans to make additional international         
investments in the near future. Metromedia runs a number of risks by investing  
in foreign countries including:                                                 

- loss of revenue, property and equipment from expropriation,           
   nationalization, war, insurrection, terrorism and other political risks
  (see "--Laws restricting foreign investments in the telecommunications
industry could adversely affect Metromedia's operations in these    
countries" and "--Chinese governmental authorities are causing the  
termination of certain of Metromedia's                              

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joint ventures, which could have negative effects on Metromedia's   
financial position and results of operations"),                     

  - increases in taxes and governmental royalties and involuntary changes to
   its licenses issued by, or contracts with, foreign governments or their
affiliated commercial enterprises,                                  

- official data published by the governments of many of the countries in
   which it operates is substantially less reliable than that published by
Western countries,                                                  

  - changes in foreign and domestic laws and policies that govern operations
of overseas-based companies,                                        

    - amendments to, or different interpretations or implementations of, foreign
  tax laws and regulations that could adversely affect the profitability
after tax of Metromedia's joint ventures,                           

- criminal organizations in certain of the countries in which Metromedia
  operates that could threaten and intimidate our businesses. Metromedia
 cannot assure you that pressures from criminal organizations will not
increase in the future and have a material adverse effect on its    
operations, and                                                     

  - high levels of corruption and non-compliance with the law exists in many
countries in which Metromedia operates businesses. This problem     
     significantly hurts economic growth in these countries and the ability of
Metromedia to compete on an even basis with other parties.          

See "Business of Metromedia."                                           

LAWS RESTRICTING FOREIGN INVESTMENTS IN THE TELECOMMUNICATIONS INDUSTRY COULD   
ADVERSELY AFFECT METROMEDIA'S OPERATIONS IN THESE COUNTRIES.                    

    Metromedia may also be materially and adversely affected by laws restricting
foreign investment in the field of communications. Some countries in which      
Metromedia operates, including the Russian Federation and China, have extensive 
restrictions on foreign investments in the communications field. There is no way
of predicting whether additional ownership limitations will be enacted in any of
Metromedia's markets, or whether any such law, if enacted, will force Metromedia
to reduce or restructure its ownership interest in any of its ventures. If      
additional ownership limitations are enacted in any of Metromedia's markets and 
Metromedia is required to reduce or restructure its ownership interests in any  
ventures, it is unclear how this reduction or restructuring would be            
implemented, or what impact this reduction or restructuring would have on       
Metromedia and on its financial condition or results of operations.             

Current Chinese law and regulations prohibit foreign companies and joint
ventures in which they participate from providing telephony services to         
customers in China and generally limit the role that foreign companies or their 
joint ventures may play in the telecommunications industry. Since mid-1998,     
there has been uncertainty regarding possible significant changes in the        
regulation of and policy concerning foreign participation in and financing of   
the telecommunications industry in China, including the continued viability of  
the structure that Metromedia currently use for its investments in the Chinese  
telecommunications industry. If the Chinese laws or regulations change and      
restrict further the participation of foreign companies in the Chinese          
telecommunications market or the Chinese authorities challenge the validity of  
Metromedia's operations in China:                                               

- Metromedia's licenses to operate in China could be invalidated,       

- the legal validity of its contracts could be challenged which would   
deprive Metromedia of avenues of legal recourse,                    

- Metromedia could be exposed to fines or criminal sanctions, or        

- Metromedia could not obtain financing within China or abroad.         

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See "--Chinese governmental authorities are causing the termination of  
certain of Metromedia's joint ventures, which could have negative effects on    
Metromedia's financial position and results of operations."                     

The Russian Federation has periodically proposed legislation that would 
limit the ownership percentage that foreign companies can have in radio and     
television businesses and/or limit the number of radio and television businesses
that any company could own in a single market. While this proposed legislation  
has not been enacted, it is possible that this legislation could be enacted in  
Russia and that other countries in Eastern Europe and the republics of the      
former Soviet Union may enact similar legislation which could have a material   
adverse effect on our business operations, financial condition or prospects.    

CURRENCY CONTROL RESTRICTIONS IN METROMEDIA'S MARKETS MAY HAVE A NEGATIVE EFFECT
ON ITS BUSINESS.                                                                

 The existence of currency control restrictions in certain of Metromedia's
markets may make it difficult for Metromedia to convert or repatriate its       
foreign earnings and adversely affect its ability to pay overhead expenses, meet
its debt obligations and continue to expand its communications business.        
Metromedia's joint ventures often require specific licenses from the central    
banks of many of the countries in which they operate for certain types of       
foreign currency loans, leases and investments. The joint ventures' failure to  
obtain these currency licenses could result in the imposition of fines and      
penalties, significant delays in purchasing equipment and resulting difficulties
in generating cash flows. The documentary requirements for obtaining the        
currency licenses are burdensome and Metromedia cannot assure you that the      
licensing entity will not impose additional, substantive requirements for the   
grant of a license or deny a request for a license on an arbitrary basis.       
Furthermore, the time typically taken by the relevant central banks to issue    
these licenses can be lengthy, in some cases up to one year or more.            

RECENT ECONOMIC DIFFICULTIES IN THE RUSSIAN FEDERATION AND OTHER EMERGING       
MARKETS COULD HAVE A MATERIAL ADVERSE EFFECT ON METROMEDIA'S OPERATIONS IN THESE
COUNTRIES.                                                                      

    In 1998, a number of emerging market economies suffered significant economic
and financial difficulties resulting in liquidity crises, devaluation of        
currencies, higher interest rates and reduced opportunities for financing. At   
this time, the prospects for recovery for the economies of the Russian          
Federation and other republics of the former Soviet Union and Eastern Europe    
negatively affected by the economic crisis remain unclear. The economic crisis  
has resulted in a number of defaults by borrowers in the Russian Federation and 
other countries and a reduced level of financing available to investors in these
countries. The devaluation of many of the currencies in the region has also     
negatively affected the U.S. dollar value of the revenues generated by certain  
of Metromedia's joint ventures and may lead to certain additional restrictions  
on the convertibility of certain local currencies. Metromedia expects that these
problems will negatively affect the financial performance of certain of its     
cable television, telephony, radio broadcasting and paging ventures.            

HIGH INFLATION IN METROMEDIA'S MARKETS MAY HAVE A NEGATIVE EFFECT ON            
METROMEDIA'S BUSINESS.                                                          

 Some of Metromedia's subsidiaries and joint ventures operate in countries
where the inflation rate is extremely high. Since the break-up of the Soviet    
Union, the economies of many of the former republics have been characterized by 
high rates of inflation. Inflation in Russia increased dramatically following   
the August 1998 financial crisis and there are increased risks of inflation in  
Kazakhstan. The inflation rates in Belarus have been at hyperinflationary levels
for some years and as a result, the currency has essentially lost all intrinsic 
value.                                                                          

   Metromedia's operating results will be hurt if it is unable to increase its
prices enough to offset any increase in the rate of inflation, or if            
anti-inflationary legislation holding down prices is enacted.                   

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FLUCTUATIONS IN CURRENCY EXCHANGE RATES IN THE COUNTRIES IN WHICH METROMEDIA    
OPERATES COULD NEGATIVELY IMPACT METROMEDIA'S RESULTS OF OPERATIONS IN THESE    
COUNTRIES.                                                                      

 The value of the currencies in the countries in which Metromedia operates
tends to fluctuate, sometimes significantly. For example, during 1998 and in the
early part of 1999, the value of the Russian Rouble has been under considerable 
economic and political pressure and has suffered significant declines against   
the U.S. dollar and other currencies. Metromedia currently does not hedge       
against exchange rate risk and therefore could be negatively impacted by        
declines in exchange rates between the time one of its joint ventures receives  
its funds in local currency and the time it distributes these funds in U.S.     
dollars to Metromedia.                                                          

THE COMMERCIAL AND CORPORATE LEGAL STRUCTURES ARE STILL DEVELOPING IN           
METROMEDIA'S TARGET MARKETS WHICH CREATES UNCERTAINTIES AS TO THE PROTECTION OF 
ITS RIGHTS AND OPERATIONS IN THESE MARKETS.                                     

    Commercial and corporate laws in Eastern Europe, the republics of the former
Soviet Union and China are significantly less developed or clear than comparable
laws in the United States and countries of Western Europe and are subject to    
frequent changes, preemption and reinterpretation by local or administrative    
regulations, by administrative officials and, in the case of Eastern Europe and 
republics of the former Soviet Union, by new governments. There are also often  
inconsistencies among laws, presidential decrees and governmental and           
ministerial orders and resolutions, and conflicts between local, regional and   
national laws and regulations. In some cases, laws are imposed with retroactive 
force and punitive penalties. In other cases, laws go unenforced. The result has
been considerable legal confusion which creates significant obstacles to        
creating and operating Metromedia's joint ventures. Metromedia cannot assure you
that the uncertainties associated with the existing and future laws and         
regulations in its markets will not have a material adverse effect on its       
ability to conduct its business and to generate profits. See "Business of       
Metromedia."                                                                    

There is also significant uncertainty as to the extent to which local   
parties and entities, particularly government authorities, in Metromedia's      
markets will respect Metromedia's contractual and other rights and also the     
extent to which the "rule of law" has taken hold and will be upheld in each of  
these countries. The courts in many of Metromedia's markets often do not have   
the experience, resources or authority to resolve significant economic disputes 
and enforce their decisions, and may not be insulated from political            
considerations and other outside pressures. Metromedia cannot assure you that   
the licenses held by its businesses or the contracts providing its businesses   
access to the airwaves or other rights or agreements essential for operations   
will not be significantly modified, revoked or canceled without justification.  
If that happens, Metromedia's ability to seek legal redress may be substantially
delayed or even unavailable in such cases. See "Business of Metromedia."        

RUSSIAN LAW MAY HOLD METROMEDIA LIABLE FOR THE DEBTS OF ITS SUBSIDIARIES, WHICH 
COULD HAVE A MATERIAL ADVERSE EFFECT ON ITS FINANCIAL CONDITION.                

    Generally, under the Civil Code of the Russian Federation and the Law of the
Russian Federation on Joint Stock Companies, shareholders in a Russian joint    
stock company are not liable for the obligations of the joint stock company, and
only bear the risk of loss of their investment. However, if a parent company has
the capability under its charter or by contract to direct the decision-making of
a subsidiary company, the parent company will bear joint and several            
responsibility for transactions concluded by its subsidiary in carrying out its 
direction. In addition, a parent company capable of directing the actions of its
subsidiary is secondarily liable for its subsidiary's debts if the subsidiary   
becomes insolvent or bankrupt as a result of the action or inaction of its      
parent. In this instance, other shareholders of the subsidiary could claim      
compensation for the subsidiary's losses from the parent company which caused   
the subsidiary to take action or fail to take action, knowing that this action  
or failure to take action would result in losses. It is possible that Metromedia
may be deemed to be this type of parent company for some of its subsidiaries,   
and could therefore be liable in some cases for the debt of these subsidiaries, 
which could have a material adverse effect on it.                               

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METROMEDIA OPERATES IN COUNTRIES WHERE THE LAWS MAY NOT ADEQUATELY PROTECT      
SHAREHOLDER RIGHTS WHICH COULD PREVENT METROMEDIA FROM REALIZING FULLY THE      
ECONOMIC BENEFITS OF ITS INVESTMENTS IN THESE COUNTRIES.                        

Shareholders have limited rights and legal protections under the laws in
many of the countries in which Metromedia operates. The concept of fiduciary    
duties on the part of management or directors to their companies is also new and
is not well developed. In some cases, the officers of a company may take actions
without regard to or in contravention of the directions of the shareholders or  
the board of directors appointed by the shareholders.                           

 In other cases, a shareholder's ownership interest may be diluted without
its knowledge or approval or even erased from the shareholder's ownership       
registry. Metromedia cannot assure you that it could obtain legal redress for   
any such action in the court systems of these countries.                        

THE EXERCISE BY NEWS AMERICA OF ITS REGISTRATION RIGHTS COULD MATERIALLY AFFECT 
THE MARKET FOR, AND VALUE OF, THE COMMON STOCK OF METROMEDIA                    

   Metromedia has agreed to file before the consummation of the merger and use
its reasonable best efforts to have declared effective within six months of the 
consummation of the merger a registration statement for all the shares of common
stock that News America Incorporated will receive in the merger and which will  
then represent approximately 9% of Metromedia's outstanding common stock        
assuming a .56 exchange ratio. Metromedia has also granted certain incidental   
registration rights to News America Incorporated. The sale by News America      
Incorporated of a large number of its shares could have an adverse effect on the
market price for Metromedia's common stock. In addition, the inclusion in a     
Metromedia-initiated registration of the shares held by News America            
Incorporated may adversely affect Metromedia's ability to raise needed capital. 

METROMEDIA MAY DEFAULT UNDER ITS SNAPPER CREDIT FACILITY, WHICH COULD MATERIALLY
AND ADVERSELY AFFECT ITS BUSINESS STRATEGY AND RESULTS OF OPERATIONS.           

Snapper has defaulted in compliance with financial covenants under its  
credit facilities and, although these defaults have been waived, we cannot      
assure you that it will not default again under its credit facility. Any default
could materially and adversely affect Snapper and Metromedia's results of       
operations. See "--As a result of the merger, Metromedia will have substantial  
debt, which may limit its ability to borrow, restrict the use of its cash flows,
constrain its business strategy and make it unable to meet its debt             
obligations."                                                                   

METROMEDIA IS INVOLVED IN LEGAL PROCEEDINGS, WHICH COULD ADVERSELY AFFECT ITS   
FINANCIAL CONDITION.                                                            

  Metromedia is involved in several legal proceedings in connection with its
investment in RDM Sports Group, Inc.                                            

  If Metromedia is unsuccessful in defending against the allegations made in
these proceedings, an award of the magnitude being sought in these legal        
proceedings would have a material adverse effect on its financial condition and 
results of operations. In addition, Metromedia cannot assure you that it will   
not determine that the advantages of entering into a settlement outweigh the    
risk and expense of protracted litigation or that ultimately it will be         
successful in defending against these allegations.                              

METROMEDIA'S FUTURE RESULTS OF OPERATIONS MAY BE SUBSTANTIALLY DIFFERENT FROM   
ITS STATEMENTS ABOUT ITS FUTURE PROSPECTS AND YOU SHOULD NOT UNDULY RELY ON     
THESE STATEMENTS.                                                               

Any statements in this document about our expectations, beliefs, plans, 
objectives, assumptions or future events or performance are not historical facts
and are forward-looking statements within the meaning of Section 27A of the     
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  
These forward-looking statements are often but not always made through the use  
of words or phrases like "believes," "expects," "may," "will," "should" or      
"anticipates" or the negative of these                                          

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words or phrases or other variations on these words or phrases or comparable    
terminology, or by discussions of strategy that involves risks and              
uncertainties.                                                                  

These forward-looking statements involve known and unknown risks,       
uncertainties and other factors which may cause Metromedia's actual results,    
performance or achievements or industry results to be materially different from 
any future results, performance or achievements expressed or implied by these   
forward-looking statements. These risks, uncertainties and other factors        
include, among others:                                                          

   - general economic and business conditions, which will, among other things,
impact demand for Metromedia's products and services,               

- industry capacity, which tends to increase during strong years of the 
business cycle,                                                     

- changes in public taste, industry trends and demographic changes,     

- competition from other communications companies, which may affect     
Metromedia's ability to generate revenues,                          

  - political, social and economic conditions and changes in laws, rules and
  regulations or their administration or interpretation, particularly in
      Eastern Europe, the former Soviet Union, China and other selected emerging
markets, which may affect Metromedia's results of operations,       

  - timely completion of construction projects for new systems for the joint
    ventures in which Metromedia has invested, which may impact the costs of
these projects,                                                     

 - developing legal structures in Eastern Europe, the former Soviet Union,
    China and other selected emerging markets, which may affect Metromedia's
ability to enforce its legal rights,                                

   - cooperation of local partners for Metromedia's communications investments
in Eastern Europe, the former Soviet Union, China and other selected
emerging markets, which may affect its results of operations,       

- exchange rate fluctuations,                                           

 - license renewals for Metromedia's communications investments in Eastern
Europe, the former Soviet Union, China and other selected emerging  
markets,                                                            

- the loss of any significant customers,                                

- changes in business strategy or development plans,                    

- the quality of management,                                            

- the availability of qualified personnel,                              

- changes in or the failure to comply with government regulation, and   

- other factors referenced in this prospectus.                          

  Accordingly, any forward-looking statement is qualified in its entirety by
reference to these risks, uncertainties and other factors and you should not    
place any undue reliance on them. Furthermore, any forward-looking statement    
speaks only as of the date on which it is made. New factors emerge from time to 
time and it is not possible for Metromedia to predict which will arise. In      
addition, Metromedia cannot assess the impact of each factor on its business or 
the extent to which any factor, or combination of factors, may cause actual     
results to differ materially from those contained in any forward-looking        
statement.                                                                      

Furthermore, this document constitutes a Year 2000 Readiness Disclosure 
Statement, and the statements in this joint proxy statement/prospectus are      
subject to the Year 2000 Information and Readiness Disclosure Act, and          
Metromedia and PLD hereby claim the protection of this Act for this document and
all information contained herein.                                               

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THE METROMEDIA ANNUAL MEETING 

DATE, TIME AND PLACE OF THE METROMEDIA ANNUAL MEETING                           

   Metromedia is sending this joint proxy statement/prospectus to Metromedia's
stockholders as part of the solicitation of proxies by the Metromedia board of  
directors for use at the Metromedia annual meeting to be held on September 30,  
1999, at 9:30 a.m., local time, at 1285 Avenue of the Americas, New York, New   
York 10019. Metromedia is first mailing this joint proxy statement/prospectus,  
the attached notice of annual meeting of stockholders and the enclosed voting   
form to Metromedia's stockholders on or about August 31, 1999.                  

PURPOSES OF THE METROMEDIA ANNUAL MEETING                                       

THE MERGER (PROPOSAL NUMBER ONE)                                        

   At the Metromedia annual meeting, Metromedia stockholders will consider and
vote upon a proposal to approve the issuance of the shares of Metromedia common 
stock pursuant to the Agreement and Plan of Merger, dated as of May 18, 1999, by
and among Metromedia, Moscow Communications, Inc. and PLD. This agreement       
provides for the merger of Moscow Communications into PLD, with PLD continuing  
as the surviving corporation. Upon completion of the merger, PLD will become a  
wholly owned subsidiary of Metromedia. Metromedia is seeking the approval by its
stockholders of the issuance of the shares of Metromedia common stock pursuant  
to the merger agreement because the rules of the American Stock Exchange require
stockholder approval of any transaction involving the issuance of 20% or more of
a listed company's stock. The approval of the issuance of the shares of         
Metromedia common stock is tantamount to approving the merger.                  

OTHER MATTERS (PROPOSALS TWO, THREE AND FOUR)                           

Metromedia stockholders will also consider and vote upon:               

   - proposal two, to approve the election of three Class I directors, in each
 case, to serve for a three year term ending in the year 2002 or until
their successors are elected and qualified,                         

- proposal three, the ratification of the selection of KPMG LLP as      
    Metromedia's independent accountants for the fiscal year ending December
31, 1999 and                                                        

- proposal four, a proposal of a Metromedia stockholder to amend the    
    certificate of incorporation of Metromedia to reinstate the right of the
    stockholders of Metromedia to take action by written consent and to call
special meetings of the stockholders.                               

Metromedia knows of no matter to be brought before the Metromedia annual
meeting other than these four proposals. If any other business should properly  
come before the annual meeting, the persons named in the voting form will vote  
in their discretion.                                                            

   THE METROMEDIA BOARD HAS UNANIMOUSLY APPROVED THE ISSUANCE OF THE SHARES OF
METROMEDIA COMMON STOCK PURSUANT TO THE MERGER AGREEMENT AND RECOMMENDS THAT    
METROMEDIA STOCKHOLDERS VOTE FOR THE APPROVAL OF THE ISSUANCE OF THE SHARES OF  
METROMEDIA COMMON STOCK PURSUANT TO THE MERGER AGREEMENT. THE METROMEDIA BOARD  
ALSO UNANIMOUSLY RECOMMENDS THAT METROMEDIA STOCKHOLDERS VOTE FOR PROPOSALS TWO 
AND THREE AND AGAINST PROPOSAL FOUR, THE STOCKHOLDER PROPOSAL.                  

RECORD DATE                                                                     

  The Metromedia board has fixed the close of business on August 12, 1999 as
the record date for the Metromedia annual meeting. Only holders of Metromedia   
common stock on the record date will be entitled to vote at the Metromedia      
annual meeting and any adjournments or postponements thereof. At the record     
date, 69,175,254 shares of Metromedia common stock were outstanding and entitled
to vote.                                                                        

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The presence, in person or by proxy, of a majority of these shares of Metromedia
common stock is necessary to constitute a quorum at the Metromedia annual       
meeting. Abstentions and broker non-votes will be included in the determination 
of shares present at the Metromedia annual meeting for purposes of determining a
quorum. Under the rules of the American Stock Exchange, brokers who hold shares 
in street name for customers will have the authority to vote on certain matters 
only with instructions from the customer on how to vote. Shares that are not    
voted because brokers did not receive any such instructions, are referred to as 
"broker non-votes." Broker non-votes have the effect of a vote against the      
approval of the issuance of the shares of Metromedia common stock pursuant to   
the merger agreement.                                                           

REQUIRED VOTES                                                                  

All properly executed proxies delivered and not properly revoked will be
voted at the Metromedia annual meeting as specified in such proxies. If         
Metromedia stockholders do not specify a choice, their shares represented by a  
signed voting form will be voted for the approval of the issuance of the shares 
of Metromedia common stock pursuant to the merger agreement (proposal one), for 
the election of the persons nominated in proposal two, for the approval of      
proposal three and against proposal four.                                       

- The affirmative vote of a majority of the shares of Metromedia common 
    stock present at the annual meeting in person or by proxy is required to
     approve the issuance of the shares of Metromedia common stock pursuant to
the merger agreement.                                               

   - The three nominees for election as directors receiving the highest number
of votes will be elected as directors for a term ending in 2002.    

- The affirmative vote of the holders of a majority of the shares of    
 Metromedia common stock outstanding on the record date is required to
    approve proposal three, the ratification of the selection of independent
accountants and proposal four, a stockholder proposal.              

   The holders of Metromedia preferred stock will not be entitled to vote with
respect to the issuance of the shares of Metromedia common stock in the merger  
or any other proposals referred to in this document. Non-voting shares,         
including broker non-votes, and abstentions will have the effect of a vote      
against the merger agreement and will have no effect on the outcome and vote on 
the other proposals. The directors, executive officers and affiliates of        
Metromedia hold approximately 25% of the outstanding shares of Metromedia common
stock and have indicated that they intend to vote in favor of each Metromedia   
proposal and against the stockholder proposal.                                  

PROXIES; VOTING AND REVOCATION                                                  

  Each share of Metromedia common stock is entitled to one vote with respect
to the issuance of the shares of Metromedia common stock pursuant to the merger 
agreement and the other proposals referred to in this document. The proxies may 
propose and vote for one or more adjournments or postponements of the Metromedia
annual meeting to permit further solicitation of proxies in favor of such       
proposals. However, no proxy that is voted against the merger agreement and the 
other proposals referred to in this document will be voted in favor of any      
adjournment or postponement. Votes will be tabulated at the Metromedia annual   
meeting by inspectors of election appointed by Metromedia.                      

   Metromedia stockholders may revoke their proxies at any time prior to their
being voted by filing an instrument of revocation with the secretary of         
Metromedia (Metromedia International Group, Inc., One Meadowlands Plaza, East   
Rutherford, New Jersey 07073). Metromedia stockholders may also revoke their    
proxies by filing a duly executed proxy bearing a later date or by appearing at 
the Metromedia annual meeting in person, notifying the secretary and voting by  
ballot at the Metromedia annual meeting. If Metromedia stockholders attend the  
meeting, they may vote in person whether or not they have previously given a    
proxy, but the presence of any Metromedia stockholder, without                  

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notifying the secretary of Metromedia, at the meeting will not revoke a         
previously given proxy. In addition, if Metromedia stockholders beneficially    
hold shares of Metromedia common stock that are not registered in their own     
name, they will need additional documentation from the record holder of such    
shares to attend and vote personally at the Metromedia meeting.                 

SOLICITATION OF PROXIES                                                         

  Metromedia will share equally with PLD the expense of printing and mailing
this document and the material used in this solicitation of proxies. Proxies    
will be solicited through the mail and directly by officers, directors and      
regular employees of Metromedia and PLD not specifically employed for such      
purpose, without additional compensation. Metromedia will reimburse banks,      
brokerage houses and other custodians, nominees and fiduciaries for their       
reasonable expenses in forwarding these proxy materials to the principals.      
Metromedia and PLD have jointly engaged Morrow & Co., Inc. to represent it in   
connection with the solicitations of proxies at a cost to Metromedia of         
approximately $6,000 plus expenses.                                             

NO DISSENTERS' APPRAISAL RIGHTS                                                 

Under Delaware law, Metromedia stockholders will not have appraisal or  
dissenters' rights in connection with the merger if the merger is approved or   
with respect to any other matter to be voted on at the Metromedia annual        
meeting.                                                                        

  THE MATTERS TO BE CONSIDERED AT THE METROMEDIA ANNUAL MEETING ARE OF GREAT
IMPORTANCE TO METROMEDIA STOCKHOLDERS. THE METROMEDIA BOARD URGES ALL METROMEDIA
STOCKHOLDERS TO READ AND CAREFULLY CONSIDER THE INFORMATION PRESENTED IN THIS   
DOCUMENT, AND TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED VOTING   
FORM IN THE ENCLOSED POSTAGE-PAID ENVELOPE.                                     

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THE PLD SPECIAL MEETING 

DATE, TIME AND PLACE OF THE PLD SPECIAL MEETING                                 

   PLD is sending this joint proxy statement/prospectus to PLD stockholders as
part of the solicitation of proxies by the PLD board of directors for use at a  
PLD special meeting to be held on September 30, 1999, at 9:00 a.m., local time, 
at 1285 Avenue of the Americas, New York, New York, 10019. PLD is first mailing 
this joint proxy statement/prospectus, the attached notice of special meeting of
stockholders and the enclosed voting form to PLD stockholders on or about August
31, 1999.                                                                       

PURPOSES OF THE PLD SPECIAL MEETING; THE MERGER                                 

At the special meeting, PLD stockholders will consider and vote upon a  
proposal to approve the Agreement and Plan of Merger, dated as of May 18, 1999, 
by and among Metromedia, Moscow Communications, Inc. and PLD. This agreement    
provides for the merger of Moscow Communications into PLD, with PLD continuing  
as the surviving corporation. Upon completion of the merger, PLD will become a  
wholly owned subsidiary of Metromedia.                                          

 PLD knows of no matter to be brought before the PLD special meeting other
than the merger. If any other business should properly come before the special  
meeting, the persons named in the voting form will vote in their discretion.    

  THE PLD BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND RECOMMENDS
THAT YOU VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT.                         

RECORD DATE                                                                     

The PLD board has fixed the close of business on August 12, 1999 as the 
record date for the PLD special meeting. Only holders of PLD common stock on the
record date will be entitled to vote at the PLD special meeting and any         
adjournments or postponements thereof. At the record date, 37,846,789 shares of 
PLD common stock were outstanding and entitled to vote. The presence, in person 
or by proxy, of a majority of these shares of PLD common stock is necessary to  
constitute a quorum at the PLD special meeting. Abstentions and broker non-votes
will be included in the determination of shares present at the PLD special      
meeting for purposes of determining a quorum. Shares that are not voted because 
brokers did not receive instructions to vote from their holder are referred to  
as "broker non-votes." Broker non-votes have the effect of a vote against the   
merger.                                                                         

REQUIRED VOTES                                                                  

All properly executed proxies delivered and not properly revoked will be
voted at the PLD special meeting as specified in such proxies. If PLD           
stockholders do not specify a choice, their shares represented by a signed      
voting form will be voted for the approval of the merger agreement.             

    The affirmative vote of the holders of record of a majority of the shares of
PLD common stock outstanding on the record date is required to approve the      
merger agreement. Holders of approximately 38% of PLD's common stock have       
already agreed to vote for the merger. This means that only 12.1% more of PLD's 
stockholders must vote for the merger to ensure its approval.                   

    The holders of PLD preferred stock will not be entitled to vote with respect
to the merger agreement. Non-voting shares, including broker non-votes, and     
abstentions will have the effect of a vote against the merger agreement. The    
executive officers and directors of PLD beneficially own an aggregate of 178,100
shares of PLD common stock (excluding currently exercisable stock options) or   
approximately 0.5% of the outstanding shares of PLD common stock and have       
indicated that they intend to vote their shares to approve the merger agreement.
The other affiliates of PLD beneficially                                        

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own an aggregate of 14,381,780 shares of PLD common stock (excluding currently  
exercisable warrants and convertible notes), representing 38% of the outstanding
shares of PLD common stock.                                                     

PROXIES; VOTING AND REVOCATION                                                  

  Each share of PLD common stock is entitled to one vote with respect to the
merger agreement. The proxies may propose and vote for one or more adjournments 
or postponements of the PLD special meeting to permit further solicitation of   
proxies in favor of such proposals. However, no proxy that is voted against the 
merger agreement will be voted in favor of any adjournment or postponement.     
Votes will be tabulated at the special meeting by inspectors of election        
appointed by Metromedia and PLD.                                                

  PLD stockholders may revoke their proxies at any time prior to their being
voted by filing an instrument of revocation with the secretary of PLD (PLD      
Telekom Inc., 505 Park Avenue, 21st Floor, New York, New York 10022). PLD       
stockholders may also revoke their proxies by filing a duly executed proxy      
bearing a later date or by appearing at the PLD special meeting in person,      
notifying the secretary and voting by ballot at the special meeting. If PLD     
stockholders attend the meeting, they may vote in person whether or not they    
have previously given a proxy, but the presence of any PLD stockholder, without 
notifying the secretary of PLD, at the meeting will not revoke a previously     
given proxy. In addition, if PLD stockholders beneficially hold shares of PLD   
common stock that are not registered in their own name, they will need          
additional documentation from the record holder of such shares to attend and    
vote personally at the PLD meeting.                                             

SOLICITATION OF PROXIES                                                         

  PLD will share equally with Metromedia the expense of printing and mailing
this document and the material used in this solicitation of proxies. Proxies    
will be solicited through the mail and directly by officers, directors and      
regular employees of Metromedia and PLD not specifically employed for such      
purpose, without additional compensation. PLD will reimburse banks, brokerage   
houses and other custodians, nominees and fiduciaries for their reasonable      
expenses in forwarding these proxy materials to the principals. PLD and         
Metromedia have engaged Morrow & Co., Inc., to represent it in connection with  
the solicitations of proxies at a cost to PLD of approximately $4,000 plus      
expenses.                                                                       

NO DISSENTERS' APPRAISAL RIGHTS                                                 

   Under Delaware law, PLD stockholders will not have appraisal or dissenters'
rights in connection with the merger if the merger is approved or with respect  
to any other matter to be voted on at the special meeting.                      

PREFERRED STOCKHOLDERS                                                          

 Holders of PLD's preferred stock will not have a vote with respect to the
merger.                                                                         

THE MATTERS TO BE CONSIDERED AT THE PLD SPECIAL MEETING ARE OF GREAT    
IMPORTANCE TO PLD STOCKHOLDERS. THE PLD BOARD URGES ALL PLD STOCKHOLDERS TO READ
AND CAREFULLY CONSIDER THE INFORMATION PRESENTED IN THIS DOCUMENT, AND TO       
COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED VOTING FORM IN THE        
ENCLOSED POSTAGE-PAID ENVELOPE.                                                 

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THE MERGER

BACKGROUND                                                                      

    As discussed in its annual report on Form 10-K/A for the year ended December
31, 1998, in April 1998 PLD's then principal shareholder, Cable and Wireless    
plc, a global telecommunications operator, agreed to sell its entire interest in
PLD to News America Incorporated, a subsidiary of The News Corporation Limited, 
one of the world's largest media companies. As a result of certain related      
transactions, News America would acquire an approximately 38% interest in PLD.  

  The transaction required the consent of PLD's stockholders and preliminary
proxy materials for a stockholders meeting were filed with the Securities and   
Exchange Commission in April 1998. PLD's management anticipated that, following 
an affirmative stockholder vote, PLD would seek to obtain additional equity     
financing in order to finance its investments and operations in the former      
Soviet Union and, in particular, to repay $15.42 million of short term          
indebtedness due to The Travelers Insurance Company and an affiliate. PLD       
management also anticipated that the process to obtain this financing would     
start in late June 1998.                                                        

Proxy materials for the PLD stockholders meeting were not cleared for   
mailing until late July 1998. The stockholders approved the transaction on      
August 13, 1998, and the transaction closed on Friday, August 14, 1998.         

    On Monday, August 17, 1998 the Russian government announced that it would no
longer support the rouble and a major devaluation of that currency followed. At 
the same time the government announced a moratorium on foreign debt repayments. 
These events precipitated a serious crisis within the Russian financial system. 
Banks and businesses failed, and economic activity slowed significantly. As a   
result of this, the ability of PLD to obtain financing of any kind was          
effectively halted. When it became apparent that this condition was likely to   
continue for some while, the PLD board of directors started to consider         
alternatives to protect shareholder value, including a transaction with a       
strategic partner that had more significant financial resources or better access
to the capital markets.                                                         

At the same time, PLD management started discussions with The Travelers 
Insurance Company relating to the deferral of payments falling due between      
September and December 1998. PLD management also arranged with News America, its
largest stockholder, for News America to make short-term working capital loans  
to PLD, and to guarantee a portion of the payments due to Travelers Insurance   
Company. PLD also continued to look for equity investors, although it quickly   
appeared that the continuing effects of the Russian crisis meant that the       
parties in a position to make such an investment would be limited to those      
already doing business in Russia. PLD made presentations to two such investors  
in late 1998, as well as continuing an exploratory dialogue commenced earlier   
with a third party regarding the possibility of a transaction.                  

   In October 1998, officers of Metromedia approached PLD to determine whether
PLD would be interested in a business combination. Metromedia's senior          
management periodically reviews potential business combination candidates as a  
means to grow its revenues and cash flow and enhance stockholder value. Prior to
October 1998, Metromedia was familiar with PLD because it was a U.S. public     
company that operated telecommunications businesses in Russia and the republics 
of the former Soviet Union, an area which Metromedia believes has significant   
growth potential given the limited availability of telephone service.           
Metromedia's senior management believed that PLD might be receptive to the      
possibility of a business combination because of PLD's shortage of available    
capital combined with the fact that the crisis within the Russian financial     
system had limited PLD's access to additional capital. There were preliminary   
discussions between the parties, but these did not develop because PLD believed 
that it had identified a buyer for one of its operating businesses who was not a
party with which it previously had discussions and which would provide a        
significant cash infusion into the company. Metromedia made a further approach  
to PLD in early February 1999 with a proposal for                               

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a merger transaction. By this time it was apparent to PLD management that the   
proposed sale of its operating business would not proceed quickly, if at all.   
Accordingly, senior executives of PLD and Metromedia, together with             
representatives of PLD's financial advisor, Salomon Smith Barney, engaged in    
preliminary discussions regarding the terms of a potential transaction.         

At the same time, PLD management continued to maintain contact with the 
three parties referred to in the last sentence of the fifth paragraph above to  
endeavor to gauge their level of interest in a possible transaction.            

    During March 1999, Metromedia, through its legal and finance departments and
its outside legal counsel and financial advisor, conducted due diligence on PLD 
and its assets. PLD's legal and financial departments, together with its        
financial advisor, simultaneously conducted due diligence of Metromedia and its 
assets. While this due diligence effort was underway, the parties began to focus
concurrently on preparing and negotiating definitive agreements. On March 17,   
1999, Metromedia delivered an initial draft of the merger agreement to PLD. From
March 18, 1999 to March 23, 1999, Metromedia, PLD, News America and their       
respective legal advisors negotiated terms of definitive merger and voting      
agreements. During this time, the parties discussed various issues related to   
the proposed merger, including potential exchange ratios, the amount of, and    
terms and conditions upon which Metromedia would be entitled to receive a       
termination fee and the conditions to Metromedia's consummating the merger. At  
all times, Metromedia insisted that the proposed transaction between Metromedia 
and PLD was subject to the successful negotiation of the principal terms of a   
restructuring of all of PLD's outstanding senior and subordinated notes, the    
loans owed to The Travelers Insurance Company and News America and PLD's        
obligation to purchase the minority interests in the PLD subsidiary, Technocom  
Limited. As a result, while Metromedia's and PLD's management had reached       
substantial agreement on the principal terms of the merger agreement, commencing
on March 24, 1999 and continuing through May 17, 1999, Metromedia, PLD and the  
respective legal and financial advisors negotiated with PLD's creditors and the 
Technocom minority shareholders the terms of the restructuring of PLD's         
obligations to them.                                                            

    On March 29, 1999, the board of directors held a meeting at which Metromedia
executives made a preliminary presentation on PLD and its assets and the board  
engaged in a general discussion regarding PLD. On May 13, 1999 the board of     
directors of Metromedia held another meeting at which Metromedia executives made
a further presentation on PLD and its assets. On May 16, 1999 the board of      
directors of Metromedia held a third meeting at which the Metromedia legal      
advisors made a presentation of the principal terms of the proposed agreement   
with PLD and the restructuring of its obligations, as well as a legal analysis  
of the transaction. In anticipation of the meeting, each board member was       
provided with the most current draft of the merger agreement and the agreements 
governing the restructuring of PLD's obligations. Representatives of Donaldson, 
Lufkin & Jenrette also presented their financial analysis and delivered their   
oral opinion that, as of such date, subject to assumptions and limitations, the 
exchange ratio contained in the merger agreement was fair from a financial point
of view to Metromedia. After discussion, the Metromedia board determined that   
the merger agreement and the merger with PLD was advisable and in the best      
interests of Metromedia's stockholders and the board approved the merger        
agreement. The board also unanimously resolved to recommend that Metromedia's   
stockholders vote to adopt and approve the merger agreement. For a discussion of
the reasons underlying the board's decision and the facts considered by the     
board, see "--Recommendation of the Metromedia Board; Metromedia's Reasons for  
the Merger."                                                                    

During March, April and early May the board of directors of PLD was kept
generally informed by the management of PLD as to the status of the discussions 
with Metromedia and PLD's creditors. The board was also kept informed of        
discussions that PLD management had during this period with the three other     
parties who had expressed an interest in pursuing a business transaction with   
PLD and which are referred to in the fifth and seventh paragraphs above. In one 
such case the party made an offer for one of PLD's operating businesses which   
PLD management determined to reject as not as                                   

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attractive as consummating a transaction with Metromedia, both because the price
offered for the business appeared to be substantially below its value and       
because the sale was not in PLD's strategic interest. In the other two cases    
discussions never moved beyond an expression of interest, and in one case the   
other party notified PLD that it was not interested in pursuing the discussions 
any further.                                                                    

  On May 15, 1999, the board of directors of PLD held a meeting at which the
Metromedia proposal and the related arrangements with PLD's creditors were      
discussed. The board was provided with a summary of the background to the       
transaction and the material terms of the transaction. In addition, Salomon     
Smith Barney reviewed with the PLD board the financial analyses performed by    
Salomon Smith Barney in connection with its evaluation of the exchange ratio    
from a financial point of view, and rendered its oral opinion that, as of such  
date and based upon and subject to review of the final merger agreement and     
other customary matters, the exchange ratio provided for in the merger agreement
was fair from a financial point of view to the holders of PLD common stock.     
After discussion, the PLD board unanimously determined that the merger agreement
and the merger with Metromedia were advisable and in the best interests of PLD's
stockholders. The board then unanimously approved the merger and determined to  
recommend that the PLD stockholders vote to adopt the merger agreement. For a   
discussion of the reasons underlying the board's decision and the facts         
considered by the board, see "--Recommendation of the PLD Board; PLD's Reasons  
for the Merger."                                                                

RECOMMENDATION OF THE METROMEDIA BOARD; METROMEDIA'S REASONS FOR THE MERGER.    

In deciding to approve the merger and the issuance of the shares of     
Metromedia common stock in the merger, the Metromedia board concluded that      
merging with PLD was in the best interests of Metromedia and its stockholders.  
In evaluating the merger, the board considered the following material relevant  
factors and information:                                                        

- the acquisition of PLD will expand Metromedia's strategic focus on    
providing telecommunications services and telecommunications        
infrastructure to Eastern Europe and the former Soviet Union;       

   - PLD's main ventures in the former Soviet Union are larger, have attracted
     more subscribers than Metromedia's consolidated ventures and will provide
greater cash flow to Metromedia's consolidated operations;          

- the fact that Metromedia was able to negotiate favorable consensual   
restructurings of all of PLD's outstanding obligations;             

- the May 16, 1999 opinion of Donaldson, Lufkin & Jenrette to the effect
that as of that date and, subject to specified assumptions and      
      limitations, the exchange ratio was fair from a financial point of view to
Metromedia;                                                         

- the financial analyses presented to the board by Donaldson, Lufkin &  
Jenrette in connection with the delivery of its opinion, which is   
  summarized in this document under the caption "Opinion of Metromedia's
      Financial Advisor" and which supported its opinion that as of May 16, 1999
     the exchange ratio was fair from a financial point of view to Metromedia;

- the nature of the parties' representations, warranties, covenants and 
     agreements, which the board believed would provide a reasonable degree of
certainty that the merger would be completed;                       

- potential reductions in corporate level overhead costs of the combined
    companies resulting from PLD no longer being a separate reporting person
      under federal securities laws, which would improve the combined companies'
operating results;                                                  

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    - the regulatory approvals required to complete the merger and the prospects
for receiving those approvals; and                                  

- the potential adverse effects on Metromedia's business, operations and
financial condition if the merger was not completed following public
     announcement of the merger agreement as a result of the possible negative
reaction in U.S. capital markets to the failure by Metromedia to    
consummate a favorable transaction.                                 

This discussion is not intended to list all factors or information      
considered by the board, but Metromedia believes the above includes all material
factors considered by the board. In light of the number and variety of          
information and factors the board considered, the board did not find it         
practicable to, and did not, assign any specific or relative weights to the     
factors listed above. In addition, individual directors may have given differing
weights to different factors.                                                   

   THE METROMEDIA BOARD HAS UNANIMOUSLY APPROVED THE ISSUANCE OF THE SHARES OF
METROMEDIA COMMON STOCK PURSUANT TO THE MERGER AGREEMENT AND RECOMMENDS THAT    
METROMEDIA STOCKHOLDERS VOTE FOR THE APPROVAL OF THE ISSUANCE OF THE SHARES OF  
METROMEDIA COMMON STOCK PURSUANT TO THE MERGER AGREEMENT.                       

RECOMMENDATION OF THE PLD BOARD; PLD'S REASONS FOR THE MERGER                   

In deciding to approve the merger, the board unanimously concluded that 
holding a portion of a share of Metromedia common stock equal to the exchange   
ratio represented a more favorable investment opportunity than holding one share
of PLD common stock. The board took into account the risks inherent in each     
investment. In evaluating the merger, the board considered the following        
material factors and information:                                               

- the fact that approximately $165 million of PLD's outstanding debt    
      (including accrued interest), some of which was due or coming due shortly,
    will be consensually restructured in connection with the consummation of
the merger;                                                         

- the fact that Metromedia has made available $7.0 million of interim   
financing to PLD to fund its working capital and capital expenditure
    requirements during the interim period from signing the merger agreement
until consummation of the merger;                                   

- the fact that the value of the shares of Metromedia common stock to be
   received as consideration in the merger represented approximately a 32%
   premium over the closing price of PLD common stock on May 17, 1999, the
date before the merger agreement was signed;                        

 - the fact that the board believed that the Metromedia common stock would
have greater liquidity than the PLD common stock;                   

- the ability of the combined companies to more easily access capital   
markets for additional debt and equity financing;                   

- potential reductions in corporate level overhead costs of the combined
    companies resulting from PLD not being a separate reporting person under
federal securities laws, which would improve the combined companies'
operating results;                                                  

  - the opinion of Salomon Smith Barney as to the fairness, from a financial
  point of view and as of the date of the opinion, of the exchange ratio
    provided for in the merger, and the related financial analyses performed
by Salomon Smith Barney in connection with its opinion and which is 
     summarized in this document under the caption "Opinion of PLD's Financial
Advisor;"                                                           

    - the regulatory approvals required to complete the merger and the prospects
for receiving those approvals;                                      

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- the fact that, based upon the advice from Morgan, Lewis & Bockius LLP,
special tax counsel to PLD, the merger should be treated for federal
   income tax purposes as a transaction which would be tax-free to the PLD
stockholders;                                                       

- the provisions of the merger agreement that permit PLD to consider    
   additional bona fide offers for PLD and to provide information to third
parties in response to those offers; and                            

   - the absence of any viable alternatives to the Metromedia proposal and the
difficulty that PLD would have in identifying and completing an     
alternative transaction were the merger not to occur.               

This discussion is not intended to list all factors or information      
considered by the board of directors, but PLD believes the above includes all   
material factors considered by the board. In light of the number and variety of 
information and factors the board considered, the board did not find it         
practical to, and did not assign any specific or relative weights to the factors
listed above. In addition, individual directors may have given different weights
to different factors. For a discussion of the interests of members of PLD's     
management and board in the merger, see "--Interests of PLD Directors and       
Officers in the Merger" on page 51. The board recognized these interests and    
determined that they neither supported nor detracted from the advisability of   
the merger to PLD's stockholders.                                               

  THE PLD BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND RECOMMENDS
THAT PLD STOCKHOLDERS VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT.            

OPINION OF METROMEDIA'S FINANCIAL ADVISOR                                       

    The board of directors of Metromedia engaged Donaldson, Lufkin & Jenrette to
act as its financial advisor in connection with the merger. On May 16, 1999,    
Donaldson, Lufkin & Jenrette rendered an oral opinion to Metromedia's board of  
directors, subsequently confirmed in writing as of the same date, to the effect 
that, as of such date, and based upon and subject to the assumptions,           
limitations and qualifications set forth in such opinion, the exchange ratio was
fair, from a financial point of view, to Metromedia.                            

THE FULL TEXT OF DONALDSON, LUFKIN & JENRETTE'S OPINION IS INCLUDED AS  
APPENDIX C AND SHOULD BE READ CAREFULLY IN ITS ENTIRETY, INCLUDING WITHOUT      
LIMITATION, THE DESCRIPTIONS OF THE PROCEDURES FOLLOWED, ASSUMPTIONS MADE, OTHER
MATTERS CONSIDERED AND LIMITATIONS OF THE REVIEW UNDERTAKEN IN ARRIVING AT SUCH 
OPINION. DONALDSON, LUFKIN & JENRETTE'S OPINION WAS PREPARED FOR AND ADDRESSED  
TO METROMEDIA'S BOARD OF DIRECTORS AND ONLY ADDRESSES THE FAIRNESS, FROM A      
FINANCIAL POINT OF VIEW, OF THE EXCHANGE RATIO TO METROMEDIA AND DOES NOT       
CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER OF METROMEDIA OR TO ANY          
STOCKHOLDER OF PLD AS TO HOW SUCH STOCKHOLDER SHOULD VOTE AT THE METROMEDIA     
ANNUAL MEETING OR THE PLD SPECIAL MEETING, RESPECTIVELY.                        

   Donaldson, Lufkin & Jenrette's opinion does not constitute an opinion as to
the price at which Metromedia's common stock and PLD's common stock will        
actually trade at any time. The exchange ratio was determined in arms-length    
negotiations between Metromedia and PLD, in which Donaldson, Lufkin & Jenrette  
advised Metromedia. No restrictions or limitations were imposed by Metromedia   
upon Donaldson, Lufkin & Jenrette with respect to the investigations made or the
procedures followed by Donaldson, Lufkin & Jenrette in rendering its opinion.   

In arriving at its opinion, Donaldson, Lufkin & Jenrette, among other   
things:                                                                         

- reviewed a draft of the merger agreement as well as the agreement to  
      exchange and consent relating to the PLD notes (described on page 64 under
"Related Agreements--Agreement to Exchange and Consent; Terms of    
Metromedia Notes"), including exhibits to such agreements           

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    and documents referred to in such agreements, and assumed that the final
form of such agreements would not vary in any respect that would be 
material to its analysis;                                           

   - reviewed financial and other information that was publicly available that
    Donaldson, Lufkin & Jenrette deemed relevant relating to Metromedia, PLD
and the industries in which they operate;                           

- reviewed information furnished to it by Metromedia and PLD, including 
     information provided during discussions with their respective managements
     and financial projections and other information relating to the business,
   operations, financial condition and prospects of each of Metromedia and
PLD, prepared by their respective managements;                      

  - compared certain financial and securities data of each of Metromedia and
  PLD with various other companies whose securities are traded in public
markets;                                                            

- reviewed the historical stock prices and trading volumes of each of   
Metromedia's common stock and PLD's common stock;                   

- assumed that the restructuring transaction with respect to PLD's 14%  
    senior discount notes due 2004 and 9% convertible subordinated notes due
     2006 will be consummated in accordance with the agreement to exchange and
consent;                                                            

- assumed that the restructuring with respect to the Travelers Insurance
     Company's and The Travelers Indemnity Company's revolving credit note and
warrant agreement (described at page 63 under "Related              
   Agreements--Travelers Note and Warrant Modification Agreement") will be
consummated in accordance with the note and warrant modification    
agreement;                                                          

- assumed that the purchase of the shares of Technocom Limited will be  
consummated in accordance with each of the Elite option modification
     agreement and the Plicom option modification agreement (described at page
65 under "Related Agreements--Technocom Arrangements;"); and        

- conducted such other financial studies, analyses and investigations as
     Donaldson, Lufkin & Jenrette deemed appropriate for purposes of rendering
its opinion.                                                        

In rendering its opinion, Donaldson, Lufkin & Jenrette relied upon and  
assumed the accuracy and completeness of all of the financial and other         
information that was available to it from public sources, that was provided to  
it by Metromedia and PLD or their respective representatives, or that was       
otherwise reviewed by it. Donaldson, Lufkin & Jenrette also assumed that the    
financial projections and other information relating to the prospects of        
Metromedia and PLD supplied to it were reasonably prepared on bases reflecting  
the best currently available estimates and good faith judgments of the          
respective managements of Metromedia and PLD as to the likely future financial  
performance of Metromedia and PLD respectively. Donaldson, Lufkin & Jenrette    
expressed no opinion with respect to such forecasts or the assumptions on which 
they were based, nor did Donaldson, Lufkin & Jenrette assume responsibility for 
making any independent evaluation or appraisal of the assets or liabilities of  
Metromedia. Donaldson, Lufkin & Jenrette also did not assume any responsibility 
for making any independent investigation of any legal matters affecting         
Metromedia or PLD and assumed the correctness of all legal advice given to each 
of them and to Metromedia's board of directors, including advice as to the tax  
consequences of the merger.                                                     

   Donaldson, Lufkin & Jenrette's opinion was necessarily based upon economic,
market, financial and other conditions as they existed on information available 
to it as of the date of its opinion. It should be understood that, although     
subsequent developments may affect its opinion, Donaldson, Lufkin & Jenrette    
does not have any obligation to update, revise or reaffirm its opinion as a     
result of changes in such conditions or otherwise.                              

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The following is a brief summary of the analyses performed by Donaldson,
Lufkin & Jenrette in connection with Donaldson, Lufkin & Jenrette's opinion and 
included in its presentation to Metromedia's board of directors. For purposes of
the following analysis, Donaldson, Lufkin & Jenrette used (a) the 0.5600        
exchange ratio provided in the merger agreement based upon the closing stock    
prices of Metromedia's common stock and PLD's common stock on May 14, 1999 and  
(b) the 0.6667 exchange ratio provided in the merger agreement in the event the 
average Metromedia's common stock price for the relevant period is less than    
$5.25. The Metromedia board did not ask DLJ to consider the exercise by PLD of  
the "top-up" right in its analysis in the event the Metromedia average stock    
price was less than $5.25. The Metromedia board believed that, since the number 
of shares to be issued by Metromedia in order to satisfy a "top-up" request     
could not be determined with any certainty on the date the DLJ opinion was      
rendered, DLJ could not render an opinion with respect to a transaction in which
the number of shares of Metromedia common stock and the dilution to Metromedia's
stockholders could not be determined. If PLD were to exercise its top-up right  
and Metromedia were to elect to increase the exchange ratio, Metromedia would   
request a new fairness opinion from Donaldson, Lufkin & Jenrette regarding the  
fairness of the topped-up consideration. Metromedia may determine to proceed    
with the merger if it does not receive such a fairness opinion and will in such 
instance recirculate a revised proxy statement and resolicit stockholder        
approval.                                                                       

  Each of the analyses described below was carried out in order to provide a
different perspective on the transaction and add to the total mix of information
available. Donaldson, Lufkin & Jenrette did not form a conclusion as to whether 
any individual analysis, considered in isolation, supported or failed to support
an opinion as to fairness from a financial point of view. Rather, in reaching   
its conclusion, Donaldson, Lufkin & Jenrette considered the results of the      
analyses in light of each other and ultimately reached its opinion based on the 
results of the analyses taken as a whole. Included in the discussion below are  
summaries of some of the statistical information appearing in such discussion   
presented in a tabular format. While these tables are presented for the purpose 
of clarity and ease of reference, they are not substitutes for, and must be read
along with, all of the information appearing under the captions immediately     
preceding them as well as all of the information set forth in this document.    

    (i) COMMON STOCK PERFORMANCE ANALYSIS. Donaldson, Lufkin & Jenrette reviewed
       the closing prices and trading volumes of PLD's common stock on a daily
       basis for a period from May 14, 1998 to May 14, 1999. Donaldson, Lufkin
  & Jenrette did not draw any conclusion from this analysis but this
     analysis did provide information as to how the capital markets valued
the PLD common stock.                                           

SUMMARY OF PLD COMMON STOCK PERFORMANCE 

                                                        [Enlarge/Download Table]

TRADING PERIOD FROM MAY 14, 1998 TO MAY 14, 1999                                           HIGH        LOW       AVERAGE  
---------------------------------------------------------------------------------------  ---------  ---------  -----------
                                                                                                                          
Price per share of PLD common stock....................................................  $    8.75  $    1.00   $    3.54 

(ii) EXCHANGE RATIO ANALYSIS. Donaldson, Lufkin & Jenrette reviewed the 
    daily closing prices of Metromedia's common stock and PLD's common
        stock to determine a hypothetical exchange ratio based upon the market
        prices of Metromedia's common stock and PLD's common stock. Donaldson,
Lufkin & Jenrette analyzed the implied exchange ratio between 
      Metromedia's common stock and PLD's common stock for the period from
         May 14, 1998 to May 14, 1999 and the average for the last 20, 60 and 90
       days. Donaldson, Lufkin & Jenrette performed this analysis to compare
     the 0.5600 exchange ratio pursuant to the merger agreement with the
    exchange ratios between Metromedia's common stock and PLD's common
       stock prevailing in the open market and to determine the magnitude of
the premium being paid by Metromedia in the merger.           

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IMPLIED EXCHANGE RATIO ANALYSIS 

                                                                [Download Table]

                     METROMEDIA/PLD      EXCHANGE RATIO PREMIUM   
                    -----------------  ---------------------------
                                                                  
May 14, 1999......         0.4095                    36.8%        
20-Day Average....         0.4573                    22.5         
60-Day Average....         0.4893                    14.4         
90-Day Average....         0.4283                    30.7         

   (iii) DISCOUNTED CASH FLOW ANALYSIS. Donaldson, Lufkin & Jenrette performed a
      discounted cash flow analysis for Metromedia on a stand-alone basis,
     for PLD on a stand-alone basis and for Metromedia pro forma for the
       merger. These analyses were based upon financial projections prepared
   by the management of each company for the five-year period ending
         fiscal 2003. Donaldson, Lufkin & Jenrette calculated EBITDA for each of
 Metromedia and PLD. EBITDA is after-tax operating earnings plus
    depreciation and amortization and other non-cash items. Donaldson,
         Lufkin & Jenrette performed this analysis to determine the magnitude of
    accretion in the present value of Metromedia's expected cash flows
resulting from the merger.                                    

        Donaldson, Lufkin & Jenrette calculated the terminal value of Metromedia
 and PLD at the end of the forecast period, by applying a range of
     estimated EBITDA multiples selected in Donaldson, Lufkin & Jenrette's
     subjective judgment. The terminal value estimates are an hypothetical
        approximation of the value of the enterprise's cash flows beyond the end
of the five year period covered by management's projection.     

      The multiples of management's projected EBITDA and Donaldson, Lufkin &
Jenrette's subjective estimate of the terminal values were then 
     discounted to the present using a range of discount rates selected in
Donaldson, Lufkin & Jenrette's subjective judgment.             

DISCOUNTED CASH FLOW ANALYSIS 

                                                        [Enlarge/Download Table]

                                                                                                PRO FORMA       
                                                         METROMEDIA             PLD            METROMEDIA       
                                                     ------------------  -----------------  -----------------   
                                                                                                                
Range of EBITDA multiples........................... 10.0x to 13.0x      10.5x to 13.5x     10.2x to 13.2x      
Discount Rates...................................... 25% to 35%          25% to 35%         25% to 35%          
Implied per share equity value...................... $4.30 to $8.27(1  ) $5.87 to $10.83  (1)                   
Implied per share equity value using a 0.5600                                                                   
  exchange ratio....................................                                        $5.75 to $10.87  (1)
Implied per share equity value using a 0.6667                                                                   
  exchange ratio....................................                                        $5.50 to $10.41  (1)

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

(1) Based upon management's projections of EBITDA.                              

   The above analysis shows that the range of implied per share equity
    value for Metromedia would grow from $4.30 to $8.27 on a stand-alone
      basis to $5.50 to $10.41 after giving effect to the acquisition of PLD
using a 0.6667 exchange ratio.                                  

      DLJ further analyzed management's model of EBITDA for Metromedia after
       giving effect to the acquisition. Donaldson, Lufkin & Jenrette selected
discount rates and EBITDA multiples used in the analysis in its 
       subjective judgment. Donaldson, Lufkin & Jenrette used different EBITDA
  multiples for each of Metromedia's lines of business. The selected
EBITDA                                                          

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multiples are a hypothetical approximation of the value at which
management's expected future cash flows could be sold.          

                                                                [Download Table]
                                                                           
Range of EBITDA multiples                                    10.0x to 13.5x
Range of discount rates                                      25% to 35%    
                                                             1.3098 to     
Range of exchange ratios                                     1.3652        

       The exchange ratios modeled in this analysis were, in each case, higher
       than the 0.6667 exchange ratio to be paid by Metromedia pursuant to the
merger agreement.                                               

 (iv) COMPARABLE COMPANY ANALYSIS. No other company utilized in Donaldson,
         Lufkin & Jenrette's analysis of comparable publicly traded companies is
        identical to Metromedia or PLD. Accordingly, this analysis necessarily
         involves complex considerations and judgments concerning differences in
       financial and operating characteristics of each of Metromedia and PLD
 and other factors that could affect the public trading value of
  Metromedia, PLD or any other comparable company included in such
  analysis. Mathematical analysis (such as determining the mean or
  median) is not in itself a meaningful method of using comparable
       company data. Donaldson, Lufkin & Jenrette performed this analysis in
    order to compare the ratio of PLD's enterprise value to its EBITDA
       (using a 0.5600 exchange ratio and May 14, 1999 market valuations) to
those of the comparable companies at May 14, 1999.            

      Donaldson, Lufkin & Jenrette analyzed the operating performance of PLD
       relative to five companies deemed by Donaldson, Lufkin & Jenrette to be
reasonably comparable to PLD. These companies were:             

      Telesystem International Wireless Inc., Millicom International
    Cellular SA, United International Holdings Inc., Bell Canada
   International Inc. and Metromedia International Group, Inc.

    Historical financial information used with respect to the comparable
 companies was as of the most recent financial statements publicly
  available for each company as of May 14, 1999. Donaldson, Lufkin &
  Jenrette examined certain publicly available financial data of the
        comparable companies including enterprise value (defined as market value
       of common equity plus book value of total debt and preferred stock less
  cash) as multiples of the latest publicly available twelve months'
EBITDA.                                                         

  Donaldson, Lufkin & Jenrette analyzed the relative value of PLD by
      comparing certain market trading statistics for PLD as of the close of
       trading on May 14, 1999 as well as the implied trading statistics based
      on the market exchange ratio of 0.5600, in each case with those of the
comparable companies.                                           

COMPARABLE COMPANY ANALYSIS 

                                                        [Enlarge/Download Table]

                                                                                                      PLD              PLD     
                                                                                                 (USING MARKET     (AT MAY 14, 
ENTERPRISE VALUE/LATEST TWELVE MONTH EBITDA                   HIGH       MEDIAN        LOW      EXCHANGE RATIO)       1999)    
----------------------------------------------------------  ---------  -----------  ---------  -----------------  -------------
                                                                                                                               
Comparable companies......................................      55.8x       26.9x       23.3x         5.0x(1)          4.4x(2) 

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

(1)   9.2x based upon PLD's management's projection of PLD's 1999 proportionate 
share of its equity investees' EBITDA                                   

(2)   8.1x based upon PLD's management's projection of PLD's 1999 proportionate 
share of its equity investees' EBITDA                                   

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   The comparable company analysis showed that Metromedia was paying a
    lower multiple over PLD's latest twelve month EBITDA than the EBITDA
   multiples implied by the prevailing market prices of the comparable
companies.                                                      

  (v) ACCRETION/DILUTION ANALYSIS. Donaldson, Lufkin & Jenrette analyzed the
     pro forma effect of the merger on Metromedia's projected earnings per
      share for fiscal 1999 to fiscal 2003 in order to determine whether the
        effect of the merger was projected by management to add to (be accretive
    to) Metromedia's stand alone earnings per share or subtract from (be
       dilutive to) Metromedia's stand alone earnings per share in each of the
selected years. Metromedia stockholders should note that not all
acquisitions in the marketplace are projected by the acquiror's 
        management to be accretive in any given year. This analysis was based on
     a number of assumptions, including, among other things, the projected
   financial performance of Metromedia and PLD and prevailing interest
  rates. The analysis indicated that (accounting for the merger as a
purchase) the pro forma earnings per share for Metromedia was   
anticipated, using management's projections, to be accretive to 
     Metromedia's stand-alone earnings per share estimates for each of the
projected fiscal years 1999 through fiscal 2000.                

 The summary set forth above is not a complete description of the analyses
performed by Donaldson, Lufkin & Jenrette, but describes, in summary form, the  
material elements of the analyses made by Donaldson, Lufkin & Jenrette in       
arriving at Donaldson, Lufkin & Jenrette's opinion. The preparation of a        
fairness opinion involves determinations as to the most appropriate and relevant
methods of financial analysis and the application of these methods to the       
particular circumstances and, therefore, such an opinion is not readily         
summarized.                                                                     

  Donaldson, Lufkin & Jenrette's conclusion involved significant elements of
judgment and qualitative analyses as well as financial and quantitative         
analyses. Donaldson, Lufkin & Jenrette did not place particular reliance or     
weight on any individual factor, but instead concluded that its analyses, taken 
as a whole, supported its determination. Accordingly, notwithstanding the       
separate factors summarized above, Donaldson, Lufkin & Jenrette believes that   
its analyses must be considered as a whole and that selecting portions of its   
analysis and the factors considered by it, without considering all analyses and 
factors, could create an incomplete or misleading view of the evaluation process
underlying its opinion.                                                         

In performing its analyses, Donaldson, Lufkin & Jenrette made numerous  
assumptions with respect to industry performance, business and regulatory,      
financial, economic, monetary, political and market conditions and other        
matters, many of which are beyond the control of Metromedia or PLD. In addition,
analyses relating to the value of the businesses or securities do not purport to
be appraisals, or to reflect the prices at which such businesses or securities  
can actually be sold. The analyses performed by Donaldson, Lufkin & Jenrette are
not necessarily indicative of actual values or future results, which may be     
significantly more or less favorable than suggested by such analyses.           

Metromedia selected Donaldson, Lufkin & Jenrette to render an opinion in
connection with the merger based upon Donaldson, Lufkin & Jenrette's            
qualifications, expertise and reputation, including the fact that Donaldson,    
Lufkin & Jenrette, as part of its investment banking business, is regularly     
engaged in the valuation of businesses and their securities in connection with  
mergers and acquisitions, underwritings, sales and distributions of listed and  
unlisted securities, private placements and valuations for corporate and other  
purposes.                                                                       

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    Pursuant to the terms of an engagement letter dated May 16, 1999, Metromedia
agreed:                                                                         

(a) to pay Donaldson, Lufkin & Jenrette:                                

-  a fee of:                                                      

          (1) $350,000 upon notification that Donaldson, Lufkin & Jenrette was
prepared to deliver its opinion; and              

           (2) $2,500,000, less any amounts paid pursuant to clause (1), payable
          in cash promptly upon consummation of a business combination
               between Metromedia and PLD in one or a series of transactions, by
          merger, consolidation, or any other business combination, by
             purchase involving all or a substantial amount of the business,
securities or assets of PLD or otherwise; and     

      -  reimbursement for all of Donaldson, Lufkin & Jenrette's out-of-pocket
      expenses, including the reasonable fees and expenses of counsel,
incurred by Donaldson, Lufkin & Jenrette;                 

  (b) to indemnify Donaldson, Lufkin & Jenrette for liabilities and expenses
arising out of a transaction, including liabilities under federal 
securities laws; and                                              

    (c) in the event a transaction is not consummated and Metromedia is entitled
    to receive a "termination fee," "break-up fee," "topping fee" or other
      form of compensation payable in cash or other assets, including, but not
       limited to, an option to purchase securities from PLD or reimbursement of
   expenses, then Metromedia will pay to Donaldson, Lufkin & Jenrette in
   cash, promptly upon Metromedia's receipt of such fee, compensation or
   reimbursement of expenses, an amount equal to fifteen percent of such
      fee, compensation or reimbursement received. Any fees paid to Donaldson,
    Lufkin & Jenrette under clause (a)(1) and (a)(2) will be deducted from
the portion of the fee, compensation or reimbursement payable to  
Donaldson, Lufkin & Jenrette.                                     

 The terms of the fee arrangement with Donaldson, Lufkin & Jenrette, which
Donaldson, Lufkin & Jenrette and Metromedia believe are customary in            
transactions of this nature, were negotiated at arms-length between Metromedia  
and Donaldson, Lufkin & Jenrette. Metromedia's board of directors was aware of  
such arrangement, including the fact that a significant portion of the aggregate
fee payable to Donaldson, Lufkin & Jenrette is contingent upon consummation of  
the merger.                                                                     

 Donaldson, Lufkin & Jenrette provides a full range of financial, advisory
and brokerage services and in the course of its normal trading activities may   
from time to time effect transactions and hold positions in the securities or   
debt of Metromedia and/or PLD for its own account and for the accounts of       
customers. Donaldson, Lufkin & Jenrette has performed investment banking and    
other services for Metromedia in the past and has been compensated for such     
services, including:                                                            

  - rendering an opinion in June 1997 as the fairness from a financial point
      of view to Metromedia of the sale of certain of Metromedia's entertainment
  assets to P&F Acquisition Corp. for which Donaldson, Lufkin & Jenrette
received usual and customary compensation and                       

  - acting as lead manager in Metromedia's September 1997 public offering of
 its 7.25% Cumulative Convertible Preferred Stock for which Donaldson,
     Lufkin & Jenrette received usual and customary underwriters compensation.

OPINION OF PLD'S FINANCIAL ADVISOR                                              

   Salomon Smith Barney was retained by PLD to act as its financial advisor in
connection with the proposed merger. In connection with its engagement, PLD     
requested that Salomon Smith Barney evaluate the fairness, from a financial     
point of view, to the holders of PLD common stock of the                        

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exchange ratio provided for in the merger. On May 15, 1999, at a meeting of the 
PLD board held to evaluate the proposed merger, Salomon Smith Barney delivered  
to the PLD board an oral opinion to the effect that, as of that date and based  
upon and subject to review of the final merger agreement and other customary    
matters, the exchange ratio was fair, from a financial point of view, to the    
holders of PLD common stock. Salomon Smith Barney's oral opinion was confirmed  
by delivery of a written opinion dated May 18, 1999, the date of the merger     
agreement.                                                                      

In arriving at its opinion, Salomon Smith Barney:                       

- reviewed the merger agreement;                                        

    - held discussions with senior officers, directors and other representatives
 and advisors of PLD and senior officers and other representatives and
      advisors of Metromedia concerning the businesses, operations and prospects
of PLD and Metromedia;                                              

    - examined publicly available business and financial information relating to
   PLD and Metromedia as well as financial forecasts and other information
and data for PLD and Metromedia which were provided to or otherwise 
discussed with Salomon Smith Barney by the managements of PLD and   
    Metromedia, including information relating to strategic implications and
operational benefits anticipated to result from the merger;         

- reviewed the financial terms of the merger as described in the merger 
agreement in relation to, among other things, current and historical
market prices and trading volumes of PLD common stock and Metromedia
common stock, the financial condition and historical and projected  
  earnings and other operating data of PLD and Metromedia, including the
      near-term liquidity needs of, and capital resources available to, PLD, and
the capitalization of PLD and Metromedia;                           

    - considered, to the extent publicly available, the financial terms of other
transactions recently effected which Salomon Smith Barney considered
relevant in evaluating the merger;                                  

   - analyzed financial, stock market and other publicly available information
  relating to the businesses of other companies whose operations Salomon
Smith Barney considered relevant in evaluating those of PLD and     
Metromedia;                                                         

- evaluated the potential pro forma financial impact of the merger on   
Metromedia; and                                                     

   - conducted other analyses and examinations and considered other financial,
      economic and market criteria as Salomon Smith Barney deemed appropriate in
arriving at its opinion.                                            

  In rendering its opinion, Salomon Smith Barney assumed and relied, without
independent verification, upon the accuracy and completeness of all financial   
and other information and data publicly available or furnished to or otherwise  
reviewed by or discussed with Salomon Smith Barney. With respect to these       
financial forecasts and other information and data, the managements of PLD and  
Metromedia advised Salomon Smith Barney that they were reasonably prepared on   
bases reflecting the best currently available estimates and judgments of the    
managements of PLD and Metromedia as to the future financial performance of PLD 
and Metromedia and the strategic implications and operational benefits          
anticipated to result from the merger.                                          

   Salomon Smith Barney assumed, with the consent of PLD, that the merger will
be treated as a tax-free reorganization for federal income tax purposes. Salomon
Smith Barney's opinion relates to the relative values of PLD and Metromedia.    
Salomon Smith Barney did not express any opinion as to what the value of        
Metromedia common stock actually will be when issued to PLD stockholders        
pursuant to the merger or the prices at which the Metromedia common stock will  
trade subsequent to the merger. Salomon Smith Barney did not make and was not   
provided with an independent evaluation or appraisal                            

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of the assets or liabilities, contingent or otherwise, of PLD or Metromedia nor 
did Salomon Smith Barney make any physical inspection of the properties or      
assets of PLD or Metromedia.                                                    

  In connection with its opinion, Salomon Smith Barney was not requested to,
and did not, solicit third party indications of interest in the possible        
acquisition of all or a part of PLD. Salomon Smith Barney expressed no view as  
to, and its opinion does not address, the relative merits of the merger as      
compared to any alternative business strategies that might exist for PLD or the 
effect of any other transaction in which PLD might engage. Salomon Smith        
Barney's opinion was necessarily based upon information available, and          
financial, stock market and other conditions and circumstances existing and     
disclosed, to Salomon Smith Barney as of the date of its opinion. Although      
Salomon Smith Barney evaluated the exchange ratio from a financial point of     
view, Salomon Smith Barney was not asked to and did not recommend the specific  
consideration payable in the merger, which was determined through negotiation   
between PLD and Metromedia. No other instructions or limitations were imposed by
PLD on Salomon Smith Barney with respect to the investigations made or          
procedures followed by Salomon Smith Barney in rendering its opinion.           

   THE FULL TEXT OF SALOMON SMITH BARNEY'S WRITTEN OPINION DATED MAY 18, 1999,
WHICH DESCRIBES THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON THE 
REVIEW UNDERTAKEN, IS ATTACHED TO THIS DOCUMENT AS APPENDIX B AND SHOULD BE READ
CAREFULLY IN ITS ENTIRETY. SALOMON SMITH BARNEY'S OPINION IS DIRECTED TO THE PLD
BOARD AND RELATES ONLY TO THE FAIRNESS OF THE EXCHANGE RATIO FROM A FINANCIAL   
POINT OF VIEW, DOES NOT ADDRESS ANY OTHER ASPECT OF THE MERGER OR ANY RELATED   
TRANSACTION AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER WITH    
RESPECT TO ANY MATTER RELATING TO THE PROPOSED MERGER. THE SUMMARY OF SALOMON   
SMITH BARNEY'S OPINION INCLUDED IN THIS DOCUMENT IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE FULL TEXT OF THE OPINION.                                      

In preparing its opinion, Salomon Smith Barney performed a variety of   
financial and comparative analyses, including those described below. The summary
of these analyses is not a complete description of the analyses underlying      
Salomon Smith Barney's opinion. The preparation of a fairness opinion is a      
complex analytic process involving various determinations as to the most        
appropriate and relevant methods of financial analysis and the application of   
those methods to the particular circumstances and, therefore, a fairness opinion
is not readily susceptible to summary description. Accordingly, Salomon Smith   
Barney believes that its analyses must be considered as a whole and that        
selecting portions of its analyses and factors or focusing on information       
presented in tabular format, without considering all analyses and factors or the
narrative description of the analyses, could create a misleading or incomplete  
view of the processes underlying its analyses and opinion.                      

In its analyses, Salomon Smith Barney considered industry performance,  
general business, economic, market and financial conditions and other matters   
existing as of the date of its opinion, many of which are beyond the control of 
PLD and Metromedia. No company, transaction or business used in those analyses  
as a comparison is identical to PLD, Metromedia or the proposed merger, nor is  
an evaluation of those analyses entirely mathematical; rather, the analyses     
involve complex considerations and judgments concerning financial and operating 
characteristics and other factors that could affect the merger, public trading  
or other values of the companies, business segments or transactions being       
analyzed.                                                                       

    The estimates contained in Salomon Smith Barney's analyses and the valuation
ranges resulting from any particular analysis are not necessarily indicative of 
actual values or predictive of future results or values, which may be           
significantly more or less favorable than those suggested by its analyses. In   
addition, analyses relating to the value of businesses or securities do not     
purport to be appraisals or to reflect the prices at which businesses or        
securities actually may be sold. Accordingly, Salomon Smith Barney's analyses   
and estimates are inherently subject to substantial uncertainty.                

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 Salomon Smith Barney's opinion and analyses were only one of many factors
considered by the PLD board in its evaluation of the merger and should not be   
viewed as determinative of the views of the PLD board or management with respect
to the exchange ratio or the proposed merger.                                   

  The following is a summary of the material financial analyses performed by
Salomon Smith Barney in connection with the rendering of its opinion. THE       
FINANCIAL ANALYSES SUMMARIZED BELOW INCLUDE INFORMATION PRESENTED IN TABULAR    
FORMAT. IN ORDER TO FULLY UNDERSTAND SALOMON SMITH BARNEY'S FINANCIAL ANALYSES, 
THE TABLES MUST BE READ TOGETHER WITH THE TEXT OF EACH SUMMARY. THE TABLES ALONE
DO NOT CONSTITUTE A COMPLETE DESCRIPTION OF THE FINANCIAL ANALYSES. CONSIDERING 
THE DATA SET FORTH BELOW WITHOUT CONSIDERING THE FULL NARRATIVE DESCRIPTION OF  
THE FINANCIAL ANALYSES, INCLUDING THE METHODOLOGIES AND ASSUMPTIONS UNDERLYING  
THE ANALYSES, COULD CREATE A MISLEADING OR INCOMPLETE VIEW OF SALOMON SMITH     
BARNEY'S FINANCIAL ANALYSES.                                                    

PLD SEGMENTED PUBLIC MARKET VALUATION.                                          

  Salomon Smith Barney performed separate public market analyses for each of
PLD's subsidiaries, PeterStar, Teleport, ALTEL and BCL, in order to derive      
implied equity reference ranges for those subsidiaries based on the trading     
multiples of a group of publicly traded peer companies. Salomon Smith Barney    
derived these implied equity reference ranges by applying trading multiples of  
various operational measures for selected public companies in the telecom       
industry to corresponding operational measures of PeterStar, Teleport, ALTEL and
BCL. In the case of PeterStar, Salomon Smith Barney compared firm value,        
calculated as market values, plus debt, less cash, as multiples of, among other 
things, calendar year 1998 and estimated calendar year 1999 earnings before     
interest, taxes, depreciation and amortization. In the case of Teleport, ALTEL  
and BCL, Salomon Smith Barney compared firm value as multiples of calendar year 
1998 revenues and calendar year 1998 and estimated calendar year 1999 earnings  
before interest, taxes, depreciation and amortization. All multiples were based 
on closing stock prices on May 12, 1999. Estimated financial data for the       
selected companies were based on publicly available research analysts'          
estimates, and estimated financial data for PLD were based on internal estimates
of the management of PLD. The following selected companies were used in these   
public market analyses:                                                         

PeterStar Selected Companies                                                    

- Singapore Telecommunications, Ltd.                                    

- Hongkong Telecom IMS, Ltd.                                            

- Telekom Malaysia Berhad                                               

- Philippine Long Distance Telephone Company                            

- Telecom Corporation of New Zealand Limited                            

- PT Telekomunikasi Indonesia                                           

- PT Indonesian Satellite Corporation                                   

Teleport Selected Companies                                                     

- PT Indonesian Satellite Corporation                                   

ALTEL Selected Companies                                                        

- Vimpel-Communications SP                                              

BCL Selected Companies                                                          

- Vimpel-Communications SP                                              

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- Rostelecom                                                            

Salomon Smith Barney derived an implied equity reference range for PLD's        
ownership interest in PeterStar, Teleport, ALTEL, and BCL by multiplying PLD's  
percentage ownership in those subsidiaries by the implied equity reference      
ranges derived for those subsidiaries from the public market analyses. Salomon  
Smith Barney then derived an implied aggregate equity reference range for PLD.  
For this purpose, Salomon Smith Barney added:                                   

- the implied equity reference ranges for PLD's ownership interest in   
PeterStar, Teleport, ALTEL, and BCL, plus                           

 - PLD's invested capital in PLD's subsidiaries, Cardlink and PLDncompass,
plus                                                                

    - the implied equity reference range for PLD's subsidiary, BELCEL derived by
  multiplying a range of values per population coverage by the number of
BELCEL's population coverage.                                       

  Salomon Smith Barney then subtracted from the resulting amount the implied
value of PLD's corporate expenses.                                              

This analysis indicated the following implied per share equity reference
range for PLD, as compared to the per share equity value for PLD implied by the 
exchange ratio based on the closing stock price of Metromedia common stock on   
May 12, 1999:                                                                   

                                                                [Download Table]

  Implied Per     Per Share Equity Value for PLD Implied by the
     Share         Exchange Ratio Based on Closing Stock Price 
Equity Reference                       of                      
 Range for PLD       Metromedia Common Stock on May 12, 1999   
----------------  ---------------------------------------------
                                                               
 $1.93 to $2.69                     $    3.71                  

PLD SEGMENTED DISCOUNTED CASH FLOW ANALYSIS.                                    

    Salomon Smith Barney performed separate discounted cash flow analyses on the
stand-alone unlevered free cash flows for each of PeterStar, Teleport, ALTEL,   
BCL, Cardlink and PLDncompass in order to estimate the projected free cash flows
that these subsidiaries could generate over the fiscal years 1999 through 2003. 
Ranges of estimated terminal value for these subsidiaries were calculated by    
applying the terminal value multiples reflected in the table below to the       
projected 2003 earnings before interest, taxes, depreciation and amortization of
these subsidiaries. The cash flows and terminal values were then discounted to  
present value using the discount rates reflected in the table below:            

                                                        [Enlarge/Download Table]

                                                                       Selected Terminal               
                                                                        Value Multiples   Discount Rate
                                                                       -----------------  -------------
                                                                                                       
PeterStar.............................................................  9.0 x to 10.0 x         25.0%  
Teleport..............................................................  7.0 x to  8.0 x         30.0%  
ALTEL.................................................................  3.25x to  4.25x         25.0%  
BCL...................................................................  4.0 x to  5.0 x         30.0%  
Cardlink..............................................................  4.0 x to  5.0 x         30.0%  
PLDncompass...........................................................  2.5 x to  3.5 x         25.0%  

Salomon Smith Barney then derived an implied aggregate equity reference range   
for PLD. For this purpose, Salomon Smith Barney added:                          

- the implied equity reference ranges derived from these discounted cash
flow analyses, plus                                                 

- the implied equity reference range for BELCEL derived by multiplying a
range of values per population coverage by the number of BELCEL's   
population coverage, plus                                           

- intercompany debt.                                                    

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Salomon Smith Barney then subtracted from the resulting amount the implied value
of PLD's corporate expenses and net debt.                                       

   This analysis was based both on internal estimates of the management of PLD
("Case I") and on sensitivity adjustments made to the Case I estimates in       
consultation with PLD management ("Case II"). This analysis indicated the       
following implied per share equity reference range for PLD for Case I and Case  
II, as compared to the per share equity value for PLD implied by the exchange   
ratio based on the closing stock price of Metromedia common stock on May 12,    
1999:                                                                           

                                                        [Enlarge/Download Table]

                                        Implied Per     Per Share Equity Value for PLD Implied by the
                                           Share         Exchange Ratio Based on Closing Stock Price 
                                      Equity Reference                       of                      
                                       Range for PLD       Metromedia Common Stock on May 12, 1999   
                                      ----------------  ---------------------------------------------
                                                                                                     
Discounted Cash Flow Analysis                                                                        
  (Case I)...........................  $3.23 to $3.94                     $    3.71                  
Discounted Cash Flow Analysis                                                                        
  (Case II)..........................  $1.95 to $2.57                     $    3.71                  

METROMEDIA SEGMENTED DISCOUNTED CASH FLOW ANALYSIS.                             

    Salomon Smith Barney performed separate discounted cash flow analyses on the
stand-alone unlevered free cash flows for each of Metromedia's businesses,      
Snapper, Telephony, Cable, Radio and Paging, in order to estimate the projected 
free cash flows that these businesses could generate over the fiscal years 1999 
through 2003. Ranges of estimated terminal value for these businesses were      
calculated by applying the terminal value multiples reflected in the table below
to the projected 2003 earnings before interest, taxes, depreciation and         
amortization of these businesses. The cash flows and terminal values were then  
discounted to present value using the ranges of discount rates reflected in the 
table below:                                                                    

                                                        [Enlarge/Download Table]

                                                                       Selected                        
                                                                       Terminal                        
                                                                   Value Multiples     Discount Rate   
                                                                   ----------------  ------------------
                                                                                                       
Snapper...........................................................  7.0x to  8.0x        11.0% to 13.0%
Telephony.........................................................  11.0x to 12.0x       17.0% to 19.0%
Cable.............................................................  8.0x to  9.0x        17.0% to 19.0%
Radio.............................................................  13.0x to 14.0x       17.0% to 19.0%
Paging............................................................  4.0x to  6.0x        17.0% to 19.0%

Salomon Smith Barney then derived an implied aggregate equity reference range   
for Metromedia. For this purpose, Salomon Smith Barney added:                   

- the implied equity reference ranges derived from these discounted cash
flow analyses, plus                                                 

- the potential value of Metromedia's investment in China.              

Salomon Smith Barney then subtracted from the resulting amount the implied value
of Metromedia's corporate expenses and net debt.                                

This analysis was based on internal estimates of the management of      
Metromedia. This analysis indicated the following implied per share equity      
reference range for Metromedia, as compared to the closing stock price of       
Metromedia common stock on May 12, 1999:                                        

                                                                [Download Table]

    Implied Per Share        Closing Stock Price of   
    Equity Reference         Metromedia Common Stock  
      Range for PLD              on May 12, 1999      
-------------------------  ---------------------------
                                                      
       $7.19 to $9.98               $    6.63         

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RELATIVE CONTRIBUTION EXCHANGE RATIO ANALYSIS.                                  

Salomon Smith Barney performed an exchange ratio analysis comparing the 
relative contributions of PLD and Metromedia to the combined company, based on  
internal estimates of the managements of PLD and Metromedia. Salomon Smith      
Barney compared each of the implied aggregate equity reference ranges derived   
for PLD from the PLD segmented public market analysis and the PLD discounted    
cash flow analyses to the aggregate implied equity reference range for          
Metromedia derived from the Metromedia discounted flow analysis. Salomon Smith  
Barney then derived an implied exchange ratio based on the relative             
contributions of each of PLD and Metromedia for each of these comparisons. This 
analysis indicated the following implied exchange ratio ranges based on these   
relative contributions as compared to the merger exchange ratio at the top of   
the collar and the bottom of the collar:                                        

                                                        [Enlarge/Download Table]

                                                                                          Bottom of   
                                               Implied Exchange Ratio  Top of Collar       Collar     
                                                  Ranges Based on          Merger          Merger     
                                               Relative Contributions  Exchange Ratio  Exchange Ratio 
                                               ----------------------  --------------  ---------------
                                                                                                      
Discounted Cash Flow Analysis                                                                         
  (Case I)....................................    0.3236x to 0.5480x        0.5600x         0.6667x   
Discounted Cash Flow Analysis                                                                         
  (Case II)...................................    0.1953x to 0.3571x        0.5600x         0.6667x   
PLD Public Market Analysis to Metromedia                                                              
  Discounted Cash Flow Analysis...............    0.1937x to 0.3735x        0.5600x         0.6667x   

HISTORICAL EXCHANGE RATIO ANALYSIS.                                             

    Salomon Smith Barney reviewed the implied historical exchange ratios for PLD
common stock and Metromedia common stock determined by dividing the price per   
share of PLD common stock by the price per share of Metromedia common stock for 
the three-year period beginning on May 11, 1996 through May 11, 1999, and for   
the period beginning September 1, 1998 through May 11, 1999. This analysis      
indicated the following high, low and average of the historical exchange ratios 
during these periods and on May 11, 1999, as compared to the merger exchange    
ratio at the top of the collar and the bottom of the collar:                    

                                                        [Enlarge/Download Table]

                                            High Historical    Low Historical    Average Historical 
                                            Exchange Ratio     Exchange Ratio      Exchange Ratio   
                                           -----------------  -----------------  -------------------
                                                                                                    
May 11, 1996 to May 11, 1999..............         0.92x              0.22x               0.56x     
September 1, 1998 to May 11, 1999.........         0.92x              0.22x               0.43x     

                                                                [Download Table]

    Exchange Ratio           Top of Collar        Bottom of Collar   
    on May 11, 1999      Merger Exchange Ratio  Merger Exchange Ratio
-----------------------  ---------------------  ---------------------
                                                                     
         0.42x                  0.5600x                0.6667x       

PRO FORMA MERGER ANALYSIS.                                                      

  Salomon Smith Barney analyzed the potential pro forma financial effects of
the merger on Metromedia's free cash flow and earnings per share for calendar   
years 1999 through 2003. This analysis was based on internal estimates of the   
managements of PLD and Metromedia without giving effect to potential synergies  
that may result from the merger. The results of the pro forma merger analysis   
suggested that the merger could be accretive to, or result in an increase in,   
Metromedia's free cash flow and earnings per share commencing in the first full 
fiscal year after consummation of the merger.                                   

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The actual results achieved by the combined company may vary from projected     
results and the variations may be material.                                     

OTHER FACTORS.                                                                  

    In rendering its opinion, Salomon Smith Barney also reviewed and considered,
among other things:                                                             

- historical and projected financial data for PLD and Metromedia;       

- historical market prices and trading volumes for PLD common stock and 
     Metromedia common stock, the relationship between movements in PLD common
   stock and movements in the Russian ASP Industrial Average Index and the
   relationship between movements in Metromedia common stock, movements in
    the Russian ASP Industrial Average Index, movements in the Hungary Index
and movements in the Czech Republic Index; and                      

   - selected analysts' reports on PLD, including calendar years 1999 and 2000
earnings per share estimates of such analysts.                      

MISCELLANEOUS.                                                                  

    Pursuant to the terms of its engagement, PLD has agreed to pay Salomon Smith
Barney upon completion of the merger an aggregate financial advisory fee equal  
to a percentage of the aggregate consideration, including liabilities assumed,  
payable in connection with the merger. The fee payable to Salomon Smith Barney  
is currently estimated to be approximately $2.7 million. PLD has also agreed to 
reimburse Salomon Smith Barney for its travel and other out-of-pocket expenses, 
including the fees and expenses of its legal counsel, and to indemnify Salomon  
Smith Barney and related persons against liabilities, including liabilities     
under the federal securities laws, arising out of its engagement.               

   In the ordinary course of business, Salomon Smith Barney and its affiliates
may actively trade or hold the securities of PLD and Metromedia for their own   
account or for the account of customers and, accordingly, may at any time hold a
long or short position in those securities. Salomon Smith Barney and its        
affiliates have in the past provided financial services, including investment   
banking services and financing, to PLD unrelated to the proposed merger, for    
which services Salomon Smith Barney and its affiliates have received            
compensation. The Revolving Credit Agreement dated November 26, 1997 between    
certain affiliates of Salomon Smith Barney and PLD will be restructured in      
connection with the merger. A portion of the outstanding amount of this         
Revolving Credit Agreement will be repaid and a portion will be exchanged into  
shares of PLD common stock, which will subsequently be converted in the merger  
into shares of Metromedia common stock and warrants to purchase shares of       
Metromedia common stock. In addition, Salomon Smith Barney and its affiliates,  
including Citigroup Inc. and its affiliates, may maintain relationships with    
PLD, Metromedia and their respective affiliates.                                

Salomon Smith Barney is an internationally recognized investment banking
firm and was selected by PLD based on its experience, expertise and familiarity 
with PLD and its business. Salomon Smith Barney regularly engages in the        
valuation of businesses and their securities in connection with mergers and     
acquisitions, negotiated underwritings, competitive bids, secondary             
distributions of listed and unlisted securities, private placements and         
valuations for estate, corporate and other purposes.                            

FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS OF PLD COMMON STOCK                  

GENERAL                                                                 

   The following describes the material federal income tax consequences of the
merger to PLD stockholders. However, this discussion does not address all       
aspects of taxation that may be relevant to particular stockholders in light of 
their personal investment or tax circumstances. Nor does this                   

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discussion address all the tax consequences for stockholders subject to special 
treatment under the federal income tax laws, such as insurance companies,       
financial institutions, broker-dealers, foreign corporations and persons who are
not citizens or residents of the United States. In addition, this discussion    
does not give a detailed discussion of any state, local or foreign tax          
considerations. This discussion may not be applicable to holders who acquired   
PLD common stock pursuant to the exercise of options or warrants or otherwise as
compensation. WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX
CONSEQUENCES OF THE MERGER, INCLUDING THE APPLICABLE FEDERAL, STATE, LOCAL AND  
FOREIGN TAX CONSEQUENCES TO YOU OF THE MERGER.                                  

 This discussion is based on the Internal Revenue Code of 1986, applicable
Department of Treasury regulations, judicial authority, and administrative      
rulings and practice, all as of the date of this joint proxy                    
statement/prospectus. Future legislative, judicial, or administrative changes or
interpretations may adversely affect the accuracy of the statements and         
conclusions described in this document. Any such changes or interpretations     
could be applied retroactively and could affect the tax consequences of the     
merger to you.                                                                  

    No ruling has been sought from the Internal Revenue Service as to the United
States federal income tax consequences of the merger, and the opinions of       
counsel referred to below are not binding on the Internal Revenue Service or any
court.                                                                          

MATERIAL TAX CONSEQUENCES OF THE MERGER                                 

   PLD has received an opinion of Morgan, Lewis & Bockius LLP, its special tax
counsel, dated as of the date of this document, describing the material United  
States federal income tax consequences of the merger. The following is a summary
of that opinion:                                                                

(a) No gain or loss will be recognized by Metromedia, Metromedia's
subsidiary or PLD as a result of the merger;              

(b) No gain or loss will be recognized by you upon your receipt of
           Metromedia common stock in exchange for your PLD common stock, except
   with respect to cash received instead of fractional shares of
Metromedia common stock;                                  

  (c) The aggregate tax basis of the shares of Metromedia common stock
   received in exchange for your PLD common stock in the merger,
         including fractional shares for which cash is received, will be the
         same as the aggregate tax basis of your PLD common stock exchanged;

      (d) The holding period for shares of Metromedia common stock received in
        the merger will include the holding period of the PLD common stock
       exchanged, but only if you held the PLD common stock as a capital
asset at the time we complete the merger; and             

 (e) If you receive cash instead of a fractional share of Metromedia
common stock, you will recognize gain or loss equal to the
        difference, if any, between your tax basis in the fractional share
  (as described in (c) above) and the amount of cash received.

   A copy of the opinion of Morgan, Lewis & Bockius LLP is filed as an exhibit
to the registration statement of which this joint proxy statement/prospectus is 
a part. See "Where you can find more information."                              

  PLD's obligation to complete the merger is conditioned upon its receipt of
an additional opinion from Morgan Lewis & Bockius LLP, its special tax counsel, 
dated as of the closing date of the merger, confirming the opinion previously   
delivered that the merger will be treated as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code. If PLD decides to waive the     
receipt of this additional opinion, the parties will recirculate a revised proxy
statement and resolicit stockholders' approval. See "The Merger                 
Agreement--Conditions to the Merger."                                           

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BACKUP WITHHOLDING                                                      

Noncorporate holders of PLD common stock may be subject to backup       
withholding at a rate of 31% on cash payments received instead of a fractional  
share interest in Metromedia common stock. Backup withholding will not apply,   
however, to a stockholder who:                                                  

 - furnishes a correct taxpayer identification number and certifies, under
     penalties of perjury, that he or she is not subject to backup withholding
on a Form W-9,                                                      

- provides a certificate of foreign status on Form W-8 or               

- is otherwise exempt from backup withholding.                          

A stockholder who fails to provide the correct taxpayer identification  
number on Form W-9 may be subject to a $50 penalty imposed by the Internal      
Revenue Service. We will provide a Form W-9 to you after the merger.            

REPORTING REQUIREMENTS                                                  

You will be required to attach a statement to your tax returns for the  
taxable year in which the merger is completed that contains the information set 
forth in Section 1.368-3(b) of the Department of Treasury regulations. The      
statement must include your tax basis in the PLD common stock surrendered and a 
description of the Metromedia common stock received in the merger.              

ACCOUNTING TREATMENT                                                            

 The merger will be accounted for under the purchase method of accounting.
This means that, after the merger, Metromedia will be required to record the    
excess of the consideration paid over the estimated fair value of net assets    
acquired and will subsequently amortize this cost against earnings.             

DIVIDEND POLICY                                                                 

   Metromedia currently has no plans to pay cash dividends on its common stock
in the foreseeable future. Metromedia intends to retain earnings to finance the 
development and expansion of its businesses. The decision of the Metromedia     
board as to whether or not to pay cash dividends in the future will depend upon 
a number of factors, including Metromedia's future earnings, capital            
requirements, financial condition, and the existence or absence of any          
contractual limitations on the payment of dividends.                            

 PLD has agreed not to declare, set aside, make or pay any dividend on its
common stock until the completion of the merger.                                

INTERESTS OF PLD DIRECTORS AND OFFICERS IN THE MERGER                           

GENERAL                                                                 

   Members of the PLD board and PLD management may be deemed to have interests
in the merger that are different from and in addition to their interests as PLD 
stockholders. The PLD board recognized these interests and determined that these
interests neither supported nor detracted from the fairness of the transaction  
to you.                                                                         

NEWS AMERICA                                                            

  Mr. I. Martin Pompadur, one of PLD's directors, is also an officer of News
America. News America and an affiliate are parties to a voting agreement dated  
as of May 18, 1999 with Metromedia, pursuant to which these parties have agreed 
to vote in favor of the merger and against any competing proposal. These parties
are also parties to other agreements with Metromedia pursuant to which          

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Metromedia will register shares of its common stock received by these parties in
the merger, and with Metromedia Company, which with its partners is the largest 
stockholder of Metromedia, pursuant to which it will grant tag-along rights to  
such parties. For further details, see "Related Agreements-- Voting Agreement   
and Registration Rights Agreement." In addition, upon the consummation of the   
merger, loans made by News America to PLD will be repaid in full.               

INDEMNIFICATION                                                         

    Metromedia has agreed to cause PLD, from and after the effective time of the
merger, to indemnify the present and former directors and officers of PLD and   
has agreed to maintain directors' and officers' liability insurance for such    
individuals in place for six years following completion of the merger. For      
further details regarding these arrangements, see "The Merger                   
Agreement--Indemnification and Insurance."                                      

APPOINTMENT TO METROMEDIA BOARD                                         

   The merger agreement provides that PLD has the right to appoint two persons
to the Metromedia board of directors and News America has the right to designate
one of these two persons. Metromedia intends to expand its board to accommodate 
these appointments. No other current PLD directors will continue as directors of
PLD in Metromedia. No determination has been made as to the management of PLD   
after consummation of the merger.                                               

ACCELERATED VESTING OF OPTIONS                                          

   Metromedia agreed to assume all outstanding stock options of PLD (vested or
unvested) in the merger agreement. According to the terms of PLD's stock option 
plans, options held by all employees and non-employee directors of PLD will     
automatically accelerate upon completion of the merger. All currently           
outstanding options granted to non-employee directors are fully vested and will 
therefore not be affected by the acceleration.                                  

    In addition, as a condition to consummation of the merger, eight officers of
PLD must agree to waive:                                                        

    - the acceleration of any amounts due as a result of the consummation of the
  merger under any employment or other compensation arrangement to which
they are a party and                                                

   - the acceleration of the vesting of any unvested employee stock options of
      PLD that would otherwise accelerate as a result of the consummation of the
merger.                                                             

Except as described in this section, all employment agreements in effect
immediately prior to the merger will continue to remain in effect after the     
merger unchanged. Metromedia intends to offer all PLD employees substantially   
comparable benefit plans following the merger to the plans currently offered PLD
employees.                                                                      

INTEREST OF METROMEDIA DIRECTORS AND OFFICERS IN THE MERGER                     

GENERAL                                                                         

  Members of the Metromedia board and Metromedia management may be deemed to
have interests in the merger that are different from and in addition to their   
interests as Metromedia stockholders. The Metromedia board recognizes these     
interests and determined that these interests neither supported nor detracted   
from the fairness of the transactions to you.                                   

NEWS TAG-ALONG RIGHTS                                                           

In connection with Metromedia's agreement to merge with PLD, Metromedia 
entered into a voting agreement dated May 18, 1999 with News America and its    
affiliate which provides that these                                             

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stockholders will vote in favor of the merger and against any competing proposal
at the special meeting of PLD stockholders. In order to induce News America and 
its affiliates to enter into this agreement, Metromedia Company who together    
with its general partners, John W. Kluge and Stuart Subotnick and their         
affiliates, are the largest stockholders of Metromedia, agreed to grant News    
America and its affiliate tag-along rights on sales by Metromedia Company of    
Metromedia common stock. The voting agreement provides that so long as News     
America and its affiliate own more than 5% of the stock of Metromedia, each time
Metromedia Company and its partners sell any common stock of Metromedia, News   
America and its affiliate will have the right to sell a proportionate amount of 
their stock of Metromedia to the buyer. Mr. Kluge and Mr. Subotnick serve as    
Chairman and Vice Chairman, President and Chief Executive Officer, respectively,
of Metromedia.                                                                  

REGULATORY APPROVALS                                                            

Federal antitrust laws prohibit us from completing the merger until a   
required notification and report form is filed and a required waiting period has
expired or been terminated. On May 26, 1999, we filed the required notification 
and report forms. The waiting period for the filings terminated on June 24,     
1999. Even though the waiting period was terminated, the Antitrust Division of  
the Department of Justice or the Federal Trade Commission could take action     
under the antitrust laws that could adversely affect the merger. However, we do 
not believe that the completion of the merger will result in the violation of   
any applicable antitrust laws.                                                  

In addition, the completion of the merger requires the consent of the   
Federal Communications Commission, assurance that the Department of Trade and   
Industry of the United Kingdom will not object to the change of control of PLD's
U.S. and U.K. telecommunications licenses, respectively, which will result from 
the consummation of the merger, and also assurance from the Department of       
Enterprise and Employment in Ireland that there will be no objection to the     
change of control of PLD and Technocom Limited, an Irish subsidiary of PLD. The 
Federal Communications Commission has consented to the change of control of     
PLD's U.S. telecommunications licenses in connection with the merger. We have   
received assurances from the U.K. Department of Trade and Industry that they    
will not object to the change of control of PLD's U.S. and U.K.                 
telecommunications licenses and believe that we will be able to obtain the      
necessary assurances from the Irish Department of Enterprise and Employment on a
timely basis. We do not believe that any additional material governmental       
filings or consents are required with respect to the merger, other than the     
filing of the articles of merger with the Delaware Secretary of State.          

STOCK EXCHANGE LISTING                                                          

    The Metromedia common stock to be issued to you in the merger will be listed
on the American Stock Exchange, subject to official notice of issuance. The     
completion of the merger is conditioned upon the authorization for listing on   
the American Stock Exchange of such Metromedia common stock.                    

FEDERAL SECURITIES LAWS CONSEQUENCES                                            

 All shares of Metromedia common stock received by PLD stockholders in the
merger will be freely transferable under the Federal securities laws, except for
shares received by persons who are deemed to be "affiliates" of PLD prior to the
completion of the merger. These shares may be resold by them only in            
transactions permitted by the resale provisions of Rule 145 of the Securities   
Act of 1933 (or Rule 144 in the case of persons who become affiliates of        
Metromedia) or as otherwise permitted under the Securities Act of 1933. Persons 
who may be deemed to be affiliates of Metromedia or PLD generally include       
individuals or entities that control, are controlled by, or are under common    
control with, such parties. Metromedia has agreed to file a shelf registration  
statement with respect to the shares of Metromedia common stock to be received  
by the PLD stockholders who have entered into the voting agreement. Please refer
to "Related Agreements--Voting Agreement and Registration Rights Agreement" on  
page 63.                                                                        

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THE MERGER AGREEMENT

 The following is a brief summary of the material provisions of the merger
agreement. A copy of the merger agreement is attached as Appendix A to this     
document and is incorporated in this document by reference. WE URGE YOU TO READ 
THE MERGER AGREEMENT CAREFULLY AND IN ITS ENTIRETY.                             

TERMS OF THE MERGER                                                             

GENERAL                                                                 

    The merger agreement contemplates the merger of a Metromedia subsidiary into
PLD. After the merger, PLD will survive as a wholly owned subsidiary of         
Metromedia. The merger will be completed once we file the articles of merger    
with the Delaware Secretary of State. We believe that this filing will occur at 
the same time as the closing under the merger agreement which, unless we        
otherwise agree, will occur on the first business day after the satisfaction or 
waiver of the conditions set forth in the merger agreement.                     

CONVERSION OF SECURITIES                                                

Once we complete the merger, the following will occur:                  

   Unless described differently below or in the sections labeled "--Fractional
Shares" and "Exchange of New Stock Certificates--Dividends and Distributions,"  
each of the shares of PLD common stock will be converted into a number of shares
of Metromedia common stock equal to an exchange ratio.                          

The exchange ratio will be calculated based on the average daily closing
stock prices for the common stock of Metromedia as reported on the American     
Stock Exchange Composite Transactions Tape for the 20 consecutive trading days  
ending on the third business day immediately before the meeting of PLD's        
stockholders to approve the merger. Based on this average, the exchange ratio   
will be as follows:                                                             

                                                        [Enlarge/Download Table]

           AVERAGE METROMEDIA STOCK PRICE:                       EXCHANGE RATIO (ER):    
------------------------------------------------------        ---------------------------
                                                                                         
less than $5.25                                         ER =            0.6667           

less than $6.25 but                                     ER =             $3.50           
  equal or greater than $5.25                                     average stock price    
equal to or greater than $6.25 but                      ER =             0.56            
  less than or equal to $8.00                                                            
greater than $8.00                                      ER =             $4.48           
                                                                  average stock price    

If the average Metromedia stock price is less than $5.25, PLD may       
immediately before the completion of the merger request that the exchange ratio 
be increased to equal:                                                          

                                                                [Download Table]
                               
                   $3.50       
ER =        average stock price

If Metromedia declines this request, or if the average Metromedia stock 
price is below $4.00, PLD can terminate the merger agreement.                   

If PLD or Metromedia issues additional shares or options prior to the   
special meeting, the exchange ratio will be adjusted to reflect the additional  
shares or options.                                                              

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FRACTIONAL SHARES                                                       

   Metromedia will not issue any fractional shares of its stock in the merger.
As promptly as practicable after we complete the merger, Chase/Mellon           
Shareholder Services, as our exchange agent in the merger, will determine the   
aggregate number of fractional shares which would be issued to all PLD          
stockholders. Chase/Mellon Shareholder Services will then sell the excess shares
at then prevailing prices on the American Stock Exchange.                       

Until the net proceeds of such sales have been distributed to you,      
Chase/Mellon Shareholder Services will hold such proceeds in trust for your     
benefit. Metromedia will pay the costs of the sale of such excess shares.       
Chase/Mellon Shareholder Services will determine the portion of the proceeds to 
which each of you will be entitled, if any, by multiplying the amount of the    
aggregate net proceeds from the sale by your proportionate interest in the      
proceeds, which will depend on your PLD stock ownership. Instead of the         
foregoing, however, Metromedia may satisfy payment for such excess shares by    
delivering cash (without interest) to Chase/Mellon Shareholder Services in an   
amount equal to the aggregate amount of all such excess shares multiplied by the
closing price of Metromedia common stock on the American Stock Exchange on the  
trading day immediately prior to the date we complete the merger.               

STOCK OPTIONS AND OTHER STOCK RIGHTS                                    

 Once we complete the merger, each option or warrant to purchase shares of
PLD common stock issued under PLD's stock option plan or warrant agreements or  
otherwise, as the case may be, will be assumed by Metromedia. This means that   
each PLD stock option or warrant will be converted into an option or warrant to 
acquire shares of Metromedia common stock. The number of shares of Metromedia   
common stock to be subject to the option or warrant will be equal to the product
of the number of shares of PLD common stock subject to the original option or   
warrant and the exchange ratio. Metromedia will not issue any fractional shares 
and all fractional shares will be eliminated. The exercise price per share of   
Metromedia common stock under the option or warrant will be equal to the        
exercise price per share of PLD common stock under the original option or       
warrant divided by the exchange ratio.                                          

PREFERRED STOCK                                                         

PLD will redeem any shares of its preferred stock outstanding before the
merger is completed for Cdn. $1.00 per share and in accordance with the terms of
PLD's certificate of incorporation. At the time the merger is completed, all    
shares of PLD preferred stock will be canceled and will thereafter represent    
only the right to receive the per share redemption payment of Cdn. $1.00. As of 
the date of this document, 446,884 shares of PLD preferred stock were           
outstanding.                                                                    

EXCHANGE OF NEW STOCK CERTIFICATES                                              

EXCHANGE AGENT                                                          

Once we complete the merger, Metromedia will deposit with Chase/Mellon  
Shareholder Services, for your benefit, the certificates representing the shares
of Metromedia common stock, and any related dividends or distributions, issuable
pursuant to the merger in exchange for outstanding shares of PLD common stock.  
For this purpose, the number of shares of Metromedia common stock issuable means
the product of the exchange ratio and the number of outstanding shares of PLD's 
common stock as of the time we complete the merger.                             

    After we complete the merger, Chase/Mellon Shareholder Services will mail to
each of you a letter of transmittal and instructions for use in surrendering    
your PLD shares in exchange for certificate(s) representing shares of Metromedia
common stock. Upon surrender of your PLD stock certificate to                   

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Chase/Mellon Shareholder Services, you will be entitled to receive a certificate
representing that number of whole shares of Metromedia common stock and cash    
instead of any fractional share of Metromedia common stock, plus any dividends, 
which you have the right to receive in the merger. Your PLD stock certificate(s)
will then be canceled.                                                          

DIVIDENDS AND DISTRIBUTIONS                                             

  NO DIVIDENDS OR OTHER DISTRIBUTIONS DECLARED OR MADE AFTER THE MERGER WITH
RESPECT TO METROMEDIA COMMON STOCK WITH A RECORD DATE AFTER THE DATE WE COMPLETE
THE MERGER WILL BE PAID TO YOU UNTIL YOU SURRENDER YOUR PLD STOCK               
CERTIFICATE(S). NO CASH PAYMENT INSTEAD OF FRACTIONAL SHARES WILL BE PAID TO YOU
UNTIL YOU SURRENDER SUCH CERTIFICATE(S).                                        

 Following your surrender to Chase/Mellon Shareholder Services of any such
certificate(s), as a record holder of certificates representing whole shares of 
Metromedia common stock, you will be paid, without interest:                    

    - the amount of any cash payable instead of a fractional share of Metromedia
common stock to which you are entitled;                             

 - the amount of dividends or other distributions with a record date after
   the date we complete the merger already paid with respect to your whole
shares of Metromedia common stock; and                              

- at the appropriate payment date, the amount of dividends or other     
      distributions with a record date after the date we complete the merger but
      prior to surrender and a payment date subsequent to surrender payable with
respect to your whole shares of Metromedia common stock.            

TRANSFERS                                                               

  As soon as we complete the merger, the stock transfer books of PLD will be
closed, and there will be no further registration of transfers of PLD common    
stock.                                                                          

TERMINATION OF EXCHANGE FUND                                            

Metromedia will receive any portion of Metromedia common stock or the   
proceeds from the sale of any excess Metromedia shares which remains            
undistributed to PLD stockholders six months after the date we complete the     
merger. Any PLD stockholder who has not previously complied with the exchange   
procedures may then look only to Metromedia for payment.                        

NO LIABILITY                                                            

  We will not be liable to any PLD stockholder or Metromedia stockholder for
any undistributed Metromedia common stock or cash from the proceeds of the sale 
of any excess Metromedia shares which is delivered to a public official pursuant
to any applicable abandoned property or similar laws.                           

NO INTEREST                                                             

    No interest will be paid or accrued on cash paid to PLD stockholders instead
of fractional shares. In addition, no interest will be paid or accrued on unpaid
dividends and distributions, if any, which may be payable upon surrender of PLD 
stock certificates.                                                             

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REPRESENTATIONS AND WARRANTIES                                                  

   The merger agreement contains various representations and warranties of PLD
relating to, among other things:                                                

- its organization and qualification and its subsidiaries;              

- capitalization;                                                       

- its authority relative to the merger agreement;                       

- no violation of laws or other agreements;                             

- receipt of consents and approvals required for the merger;            

  - possession of franchises, licenses, permits and other approvals required
for operation of business;                                          

- filings with the Securities and Exchange Commission and its financial 
statements;                                                         

    - absence of changes or events which would have a material adverse affect on
PLD;                                                                

 - the opinion of Salomon Smith Barney with respect to the fairness of the
exchange ratio from a financial point of view;                      

- brokers;                                                              

- no impact of take-over statutes;                                      

- employee benefit plans;                                               

- accounting treatment of the merger;                                   

- identification of material contracts;                                 

- absence of litigation;                                                

- environmental matters;                                                

- intellectual property;                                                

- taxes;                                                                

- absence of non-competition agreements;                                

   - the lack of any requirement to be registered under the Investment Company
Act of 1940;                                                        

- the accuracy of information supplied by PLD in connection with this   
document; and                                                       

- vote necessary to approve the merger.                                 

 The merger agreement also contains various representations and warranties
made by Metromedia and its merger subsidiary as to, among other things:         

- their organization and qualification and their subsidiaries;          

- capitalization;                                                       

- their authority relative to the merger agreement;                     

- no violation of laws or other agreements;                             

- consents and approvals required for the merger;                       

  - possession of franchises, licenses, permits and other approvals required
for operation of businesses;                                        

 - filings with the Securities and Exchange Commission and their financial
statements;                                                         

   - absence of changes or events which will have a material adverse effect on
Metromedia or its merger subsidiary.                                

- employee benefit plans;                                               

- accounting treatment of the merger;                                   

- identification of material contracts                                  

- absence of litigation;                                                

- environmental matters;                                                

- intellectual property;                                                

- taxes;                                                                

- absence of non-competition agreements;                                

   - the lack of any requirement to be registered under the Investment Company
Act of 1940;                                                        

   - the opinion of Donaldson, Lufkin & Jenrette Securities Corp. with respect
to the fairness of the exchange ratio;                              

- brokers;                                                              

- absence of take-over statutes;                                        

- the accuracy of information supplied for inclusion or incorporation by
reference in this document; and                                     

- vote necessary to approve the merger.                                 

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COVENANTS                                                                       

PLD has agreed it will generally:                                       

- conduct its business in the ordinary course of business and consistent
with past practice;                                                 

- not amend its organizational documents;                               

   - not pay any dividends on its common stock, reclassify its common stock in
any way or issue any other securities instead of its common stock or
acquire any shares of its common stock;                             

- except for pay or benefits increases made in the ordinary course of   
business, not change the terms of its existing pay or benefits      
     arrangements with management or its employees or otherwise enter into new
employment or severance agreements with any of those persons;       

 - not issue, pledge or otherwise encumber any shares of its common stock;

    - except for activities in the ordinary course of business, not sell, lease,
      license or otherwise encumber or dispose of any of its material properties
or assets;                                                          

- except for borrowings made in the ordinary course of business and from
  Metromedia to PLD under the bridge loan agreement, not incur any debt,
guarantee any debt securities of another person or make any loans or
capital contributions to any other person;                          

- terminate, cancel or make any significant change in any contract or   
agreement material to PLD and its subsidiaries;                     

- not take any action with respect to accounting policies, other than as
required by law or by generally accepted accounting principles; and 

- not make any tax election or settle any material income tax liability.

Metromedia has agreed it will generally:                                

- conduct its business in the ordinary course of business and consistent
with past practice;                                                 

- not amend its organizational documents;                               

   - not pay any dividends on its common stock, reclassify its common stock in
any way or issue any other securities instead of its common stock or
acquire any shares of its common stock;                             

- not sell, lease, transfer or otherwise dispose of all or most of its  
properties and assets;                                              

  - except for borrowings made in the ordinary course of business, not incur
 any debt, guarantee any debt securities of another person or make any
loans or capital contributions to any other person; and             

- not take any action with respect to accounting policies, other than as
required by law or by generally accepted accounting principles.     

Each of us has also agreed to:                                          

    - cooperate with each other in the preparation of information filed with the
Securities and Exchange Commission, including this document.        

 - update the other with respect to changes to our respective companies up
      until we complete the merger, particularly with respect to any change that
could be expected to violate the merger agreement;                  

   - ensure that there are no material misstatements or omissions contained in
the documents we file with the Securities and Exchange Commission in
connection with the merger; and                                     

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- use its reasonable best efforts to obtain the necessary stockholder   
approval required to approve the merger.                            

NO SOLICITATION OF TRANSACTIONS                                                 

 PLD has agreed that it will not take any action which could cause a third
party to make a proposal to acquire an interest in PLD or propose, enter into or
participate in any discussions or negotiations regarding any such proposal.     

However, this does not prohibit PLD from, prior to its special meeting: 

    - furnishing information based on a confidentiality letter concerning PLD to
   a third party which has made an unsolicited proposal that the PLD board
determines such party is capable of financing;                      

- engaging in discussions or negotiations with the third party which has
made such an unsolicited proposal; or                               

 - following receipt of the unsolicited proposal, taking and disclosing to
its stockholders a position with respect to such proposal.          

    However, in each case referred to above, the PLD board must conclude in good
faith, following receipt of a written opinion addressed to PLD from outside     
counsel, that such action is necessary for the PLD board to satisfy its         
fiduciary obligations to its stockholders. The PLD board must also conclude that
the third party which made the unsolicited proposal has the ability and the     
financial wherewithal to complete an acquisition of PLD.                        

If the board receives such a proposal, PLD must immediately inform      
Metromedia of the material terms and conditions of such proposal and the        
identity of the person making it and will keep Metromedia fully informed        
regarding any significant details or developments with respect to any such      
proposal and of all significant steps it is taking in response to such proposal.

PLD has agreed that neither its board nor any committee thereof will:   

- propose to withdraw or modify its recommendation to approve the merger
agreement or                                                        

- propose to approve or recommend any third-party proposal to acquire an
interest in PLD which it determines is reasonably capable of being  
financed.                                                           

   However, the PLD board, to the extent it concludes in good faith, following
receipt of a written opinion addressed to PLD from outside counsel, that such   
action is necessary for the PLD board to comply with its fiduciary obligations  
to its stockholders, may approve or recommend a written proposal made by a third
party to acquire PLD on terms which a majority of the members of the board      
determines in their good faith judgment (after consultation with independent    
financial advisors) to be more favorable to PLD's stockholders than the merger  
and for which financing, to the extent required, is then fully committed or     
which, in the good faith judgment of a majority of such members (after          
consultation with independent financial advisors), is reasonably capable of     
being financed by such third party.                                             

  However, even if the PLD board approves or recommends a competing proposal
of the type referred to in the paragraph above, the board will not have the     
option to terminate the merger agreement but must, if Metromedia requests it,   
submit it to a vote of PLD's stockholders. The practical effect of this         
provision is that even if the PLD board determines that the merger is no longer 
advisable or recommends that the stockholders reject it, it would still have to 
submit it to the approval of the PLD stockholders. As a result, the merger could
still be approved by the PLD stockholders despite the PLD board's opposition to 
the merger because, having already given their approval, the PLD board is       
without authority to terminate the merger agreement on this basis.              

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  News America and an affiliate, who together own approximately 38% of PLD's
common stock, have agreed that they will vote for the merger and against any    
other proposal in all events.                                                   

INDEMNIFICATION AND INSURANCE                                                   

After the merger is completed, Metromedia will preserve all rights to   
indemnification existing as of May 18, 1999, the date of the merger agreement,  
in favor of any director, officer or employee of PLD for a period of at least   
six years following the merger. Metromedia will also indemnify directors,       
officers and employees of PLD against liabilities or claims arising before the  
merger is completed and as a result of their positions at PLD. Finally,         
Metromedia will pay such persons legal expenses in connection with any          
proceeding arising out of any matter and occurring up until the merger is       
completed.                                                                      

CONDITIONS TO THE MERGER                                                        

    Our respective obligations to complete the merger depend on the satisfaction
or waiver by the other party of each of the following conditions:               

  - the approval of the merger by holders of a majority of PLD's outstanding
     common stock and the approval of the issuance of the shares of Metromedia
      common stock pursuant to the merger agreement by a majority of the holders
      of Metromedia common stock present in person or by proxy at the Metromedia
annual meeting;                                                     

- the American Stock Exchange listing of the shares of Metromedia common
     stock to be issued in the merger, subject to official notice of issuance;

 - we obtain all approvals from governmental authorities and consents from
  third parties that are necessary and that there be no litigation which
would impair our ability to complete the merger;                    

 - the effectiveness of the registration statement on Form S-4 to register
the Metromedia common stock to be issued to PLD stockholders in the 
merger;                                                             

  - we each receive letters from the other's independent accountants stating
   that they have performed certain procedures requested by Metromedia and
PLD relating to tables, statistics, and other financial information 
  included (or incorporated by reference) in the registration statement;

  - our representations and warranties are true and accurate in all material
respects;                                                           

- we comply in all material respects with our respective covenants and  
obligations under the merger agreement; and                         

   - there has been no change in or effect on the business, assets, results of
     operations, prospects or condition of our respective companies that is or
     could reasonably be expected to be materially adverse to us or that could
  reasonably be expected to materially impair our ability to perform our
obligations under the merger agreement or to complete the merger.   

Metromedia's obligation to complete the merger agreement depends on the 
satisfaction or waiver of each of the following conditions:                     

- PLD will have delivered to Metromedia the required letters from all   
  persons who may be deemed to be "affiliates" within the meaning of the
federal securities laws;                                            

  - PLD, The Travelers Insurance Company and The Travelers Indemnity Company
complete the transactions described below under "Related            
Agreements--Travelers Note and Warrant Modification Agreement;"     

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 - PLD, Elite International Limited and Plicom Limited restructure the put
 and call agreements currently in effect between them related to their
interests in Technocom Limited as described below under "Related    
Agreements--Technocom Arrangements;"                                

- Metromedia and News America Incorporated complete the transactions    
    contemplated by the News letter agreement described below under "Related
Agreements--News Letter Agreement;"                                 

   - at least 95% in aggregate principal amount of the PLD 14% senior discount
      notes due 2004 and 9% convertible subordinated notes due 2006 tender their
     notes in an exchange offer for Metromedia 10.5% senior discount notes due
   2007, and also consent to the amendments to the existing indentures for
  the PLD notes as contemplated by the agreement to exchange and consent
described below under "Related Agreements--Agreement to Exchange and
Consent; Terms of Metromedia Notes;" and                            

    - eight officers of PLD waive the acceleration of amounts due as a result of
 the consummation of the merger under employment or other compensation
   agreements, and the vesting of a total of 1,300,003 unvested options to
acquire PLD common stock that are being assumed by Metromedia in the
merger.                                                             

  Neither Metromedia nor PLD has made a determination as to whether it would
waive one or more foregoing conditions. Neither party may waive the requirement 
of stockholders' approval or the expiration of the waiting period required under
the Hart-Scott-Rodino Act, which occurred on June 24, 1999. If the waiver of any
of the foregoing conditions constitutes a material change in the disclosure made
in this document, the parties will recirculate a revised proxy statement and    
resolicit stockholders' approval.                                               

The obligation of PLD to complete the merger also depends on PLD having 
received an additional opinion from Morgan, Lewis & Bockius LLP, special tax    
counsel to PLD, dated as of the date we complete the merger, confirming the     
opinion previously delivered by them that the merger will constitute a          
reorganization for U.S. federal income tax purposes within the meaning of       
Section 368(a) of the Internal Revenue Code. See "The Merger--Federal Income Tax
Consequences to Holders of PLD Common Stock." If PLD decides to waive the       
receipt of this additional opinion, the parties will recirculate a revised proxy
statement and resolicit stockholders' approval.                                 

   Morgan, Lewis will confirm its opinion as of the closing date of the merger
provided that:                                                                  

    - no change in law shall have occurred between the date of this document and
the closing date,                                                   

- the statements concerning the merger set forth in this joint proxy    
statement/prospectus remain accurate and complete,                  

- Morgan, Lewis shall have received confirmation of the factual         
   representations made in letters of PLD and Metromedia to Morgan, Lewis,
and                                                                 

- the merger shall be completed as contemplated by the merger agreement.

    No ruling has been sought from the Internal Revenue Service as to the United
States federal income tax consequences of the merger, and the opinions of       
counsel are not binding upon the Internal Revenue Service or any court.         

TERMINATION                                                                     

  The merger may be abandoned, at any time before we complete the merger and
before or after you approve the merger, in the following circumstances:         

- by our mutual written consent;                                        

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- by either one of us, if the merger is not completed before October 31,
1999 through no fault of the party wishing to terminate the merger  
agreement;                                                          

- by either one of us, if a final decree or injunction prevents the     
completion of the merger;                                           

- by Metromedia, if                                                     

- the PLD board of directors has ceased to support the merger or  
       recommended to PLD's stockholders a competing proposal or transaction
or                                                            

    - a competing offer for the common stock of PLD is pending and the PLD
       board of directors fails to recommend against the acceptance of these
competing offers;                                             

  - by either one of us, if the merger is not approved by the requisite vote
of stockholders of Metromedia or PLD;                               

 - by Metromedia, if PLD's representations and warranties become untrue or
      because PLD breaches these representations and warranties or its covenants
in a material way;                                                  

 - by PLD, if Metromedia's representations and warranties become untrue or
   because Metromedia breaches these representations and warranties or its
covenants in a material way; or                                     

- by PLD, if Metromedia refuses to increase the exchange ratio at PLD's 
    request in the manner described under "--Terms of the Merger--Conversion
  of Securities" or if the average Metromedia closing price is less than
$4.00 per share.                                                    

TERMINATION FEES AND EXPENSES                                                   

    Except as otherwise stated in the merger agreement, all expenses incurred in
the merger will be paid by the party incurring such expenses.                   

  PLD has agreed to pay Metromedia its out-of-pocket expenses (not to exceed
$1 million) plus $6.25 million if the merger agreement is terminated by         
Metromedia:                                                                     

   (a) - because the PLD board of directors withdraws, modifies or changes its
          approval recommendation of the merger agreement, recommends to the PLD
  stockholders another transaction proposal or a tender offer or
   exchange offer for the outstanding shares of PLD's common stock
       commences and the PLD board of directors fails to recommend against
acceptance of such tender or exchange offer;                

    - because PLD did not obtain the requisite stockholder vote to approve
         the merger at a time when a third party has communicated to PLD and its
       stockholders its proposal to acquire a substantial interest in PLD or
other material corporate transaction; or                      

   - because of a material breach by PLD of any material representation,
warranty or agreement it made in the merger agreement, and    

    (b) if at such time the merger agreement is solely terminable for any or all
of the reasons set forth in clause (a).                                         

  Metromedia has agreed to pay PLD its out-of-pocket expenses (not to exceed
$500,000) if the merger agreement is terminated by virtue of:                   

  (a) Metromedia not obtaining the requisite stockholder vote to approve the
       merger or a material breach by Metromedia of any of its agreements in the
merger agreement, and                                             

    (b) if at such time, the merger agreement is solely terminable for either or
both of the reasons referred to in clause (a).                    

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RELATED AGREEMENTS

VOTING AGREEMENT AND REGISTRATION RIGHTS AGREEMENT                              

In connection with Metromedia's agreement to merge with PLD, Metromedia 
entered into an agreement with News America and its affiliate, which together   
hold 14,381,780 shares of PLD common stock representing approximately 38% of the
outstanding voting power of PLD common stock. These stockholders have agreed to 
vote in favor of the merger and against any competing proposal at the special   
meeting of stockholders of PLD that will vote on the merger. In return,         
Metromedia has entered into a registration rights agreement with News America   
and its affiliate which provides that Metromedia will put in place a shelf      
registration statement no later than six months after the merger is consummated 
to register the shares of common stock of Metromedia that News America and its  
affiliate will receive in the merger.                                           

In addition, Metromedia Company, which with its partners is the largest 
stockholder of Metromedia, has agreed to grant News America and its affiliate   
tag-along rights on sales by Metromedia Company of Metromedia common stock. So  
long as News America and its affiliate own more than 5% of the stock of         
Metromedia, each time Metromedia Company and its partners sell any of their     
stock of Metromedia, News America and its affiliate will have the right to sell 
a proportionate amount of their stock of Metromedia to the buyer.               

  The voting agreement will terminate if the merger agreement is terminated.

TRAVELERS NOTE AND WARRANT MODIFICATION AGREEMENT                               

 Metromedia and PLD have also entered into a Note and Warrant Modification
Agreement, dated as of May 18, 1999, with The Travelers Insurance Company and   
The Travelers Indemnity Company. This agreement provides that all principal     
payable by PLD to Travelers under their Revolving Credit Note and Warrant       
Agreement, dated as of November 26, 1997, with PLD will be deferred until the   
earlier of the date of the consummation of the merger or termination of the     
merger agreement. Furthermore, upon the consummation of the merger, Travelers   
will relinquish all warrants held or to which it may be entitled to purchase    
shares of common stock of PLD.                                                  

   In consideration for Traveler's agreement to defer the payment of principal
and to relinquish its PLD warrants at closing, PLD will repay $8.5 million of   
the Travelers loan upon consummation of the merger and the remaining amount     
outstanding under the Travelers credit agreement ($4.92 million) on August 30,  
2000. The interest rate on the amount outstanding will be an annual rate of     
10.5% payable monthly. Travelers will also be entitled to receive at the closing
of the merger, 100,000 shares of PLD common stock (which will be converted in   
the merger into shares of Metromedia common stock at the applicable exchange    
ratio) and 10-year warrants to purchase 700,000 shares of Metromedia common     
stock exercisable beginning on the third anniversary of the closing date at a   
price to be determined in December 2000 that will be between $10 and $15 per    
share. However, if the amount outstanding has not fully been repaid by August   
30, 2000, then the exercise price of the warrants will be reset to $.01.        
Travelers will also maintain its existing security interests in certain PLD     
assets and its debt will be guaranteed by Metromedia and three of PLD's         
subsidiaries.                                                                   

NEWS LETTER AGREEMENT                                                           

Metromedia has also entered into a Letter Agreement, dated as of May 18,
1999, with News America Incorporated. Pursuant to this agreement, News America  
has agreed that it will not exercise its rights upon the occurence of any       
defaults of PLD under the Revolving Credit Agreement, dated as of September 30, 
1998, with PLD until the earlier of the completion of the merger or the         
termination or expiration of the merger agreement. News America has also agreed 
not to exercise any rights that it may have to convert its loans under the      
credit agreement into shares of common stock of PLD between                     

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the signing and the closing of the merger. At closing all principal ($6.45      
million outstanding as of the date of this joint proxy statement/prospectus) and
accrued interest, payable at a reduced 10% interest rate, will be payable in    
full and News America will also be released from its obligations under $3.1     
million of guarantees made of amounts outstanding under the Travelers Credit    
Agreement.                                                                      

AGREEMENT TO EXCHANGE AND CONSENT; TERMS OF METROMEDIA NOTES                    

It is a condition to the completion of the merger that the holders of at
least 95% in aggregate principal amount of each of PLD's 14% senior discount    
notes due 2004 and 9% convertible subordinated notes due 2006 agree to exchange 
their PLD notes for new Metromedia notes with the terms described below and     
consent to certain amendments to the existing indentures for their PLD notes.   

 In order to endeavor to ensure satisfaction of this condition, Metromedia
has entered into an Agreement to Exchange and Consent with holders of           
$122,230,000 of PLD's 14% senior discount notes due 2004 (or approximately 99.4%
of the outstanding senior discount notes) and of $25,000,000 in aggregate       
principal amount of PLD's 9% convertible subordinated notes due 2006 (or        
approximately 94.3% of the outstanding convertible subordinated notes), in which
such noteholders have agreed to:                                                

- exchange $1,000 principal amount of their PLD notes for $1,000 (in the
     case of PLD's 14% senior discount notes) or $900 (in the case of PLD's 9%
   convertible subordinated notes) accreted amount of new Metromedia notes
    subject only to consummation of the merger and the registration with the
Securities and Exchange Commission of exchange notes that will be   
   identical to the new Metromedia notes and will be exchanged for the new
Metromedia notes 20 business days after consummation of the merger; 

- consent to certain amendments to the PLD note indentures that will    
   eliminate substantially all restrictive covenants from these indentures
and release the properties and assets of PLD from the security and  
    collateral arrangements that currently secure the payment of all amounts
due on the PLD notes; and                                           

    - waive certain events of default under the PLD notes that would result from
  the consummation of the merger as well as the payment of interest that
     would become due under the PLD notes until the earlier of the termination
of the merger agreement or October 31, 1999.                        

In order to satisfy the noteholders' condition with respect to the      
registration of Metromedia exchange notes, Metromedia has filed a registration  
statement on Form S-4 to register the exchange notes that will be offered to    
holders of PLD notes that accept new Metromedia notes upon consummation of the  
merger.                                                                         

  The new Metromedia notes and the exchange notes will have identical terms.
The Metromedia notes will mature on the anniversary of the closing of the merger
in 2007 and will accrete in value until the date that is 2 1/2 years from the   
closing of the merger, at a rate of 10 1/2% per year, compounded semi-annually, 
to a principal amount of $1,291.55 for each $1,000 accreted value at original   
issuance on the date that is 2 1/2 years from the closing of the merger. The    
notes will not pay cash interest before the date that is 2 1/2 years from the   
closing of the merger. Thereafter, the notes will pay interest in cash          
semi-annually at a rate of 10 1/2% per year. Metromedia will not be able to     
redeem any of the notes before the date that is 2 1/2 years from the closing of 
the merger. Metromedia will be able to redeem the notes at any time thereafter, 
at Metromedia's sole option, in whole or in part, at a redemption price equal to
the principal amount of the notes, plus accrued and unpaid interest, if any,    
through but excluding the date of redemption.                                   

    If a change of control of Metromedia occurs, holders of the Metromedia notes
will have the right to require Metromedia to make an offer to repurchase all of 
the notes at a repurchase price in cash                                         

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equal to 101% of their accreted value, plus accrued and unpaid interest, if any,
through but excluding the date of repurchase.                                   

    The Metromedia notes will be senior unsecured notes. They will rank equal in
right of payment to all existing and future senior indebtedness of Metromedia   
and will rank senior in right of payment to all subordinated indebtedness of    
Metromedia. The notes will be effectively junior in right to payment to:        

  - all existing and future secured indebtedness of Metromedia to the extent
of the assets that secure this indebtedness, and                    

- all existing and future indebtedness of Metromedia's subsidiaries.    

The indenture under which the Metromedia notes will be issued will limit
Metromedia's ability and its subsidiaries' ability to:                          

  - incur additional indebtedness or issue capital stock or preferred stock,

- pay dividends on, and repurchase or redeem its and its subsidiaries'  
capital stock and repurchase or redeem subordinated obligations,    

- invest and sell assets and subsidiary stock,                          

- engage in transactions with related entities, and                     

- incur additional liens.                                               

   In addition, the indenture for the notes will limit Metromedia's ability to
engage in consolidations, mergers and transfers of substantially all of its     
assets and also contains limitations on restrictions on distributions from its  
subsidiaries. All of these limitations and prohibitions have a number of        
important qualifications and exceptions.                                        

 Under the terms of the indentures for each of the PLD 14% senior discount
notes due 2004 and 9% convertible subordinated notes due 2006, upon a change of 
control of PLD, the holders of these notes will be entitled to require PLD to   
repurchase their notes in whole or in part at a purchase price in cash equal to 
101% of the accreted value plus accrued and unpaid interest, if any, and        
additional amounts, if any, and special interest, if any, to the date of        
repurchase. The merger of PLD with Metromedia constitutes a PLD change of       
control event under these indentures and the holders of $1,500,000 in aggregate 
principal amount of PLD's 9% convertible subordinated notes due 2006 have       
informed Metromedia and PLD that they would require PLD to repurchase their     
notes following the consummation of the Merger of PLD with Metromedia.          

TECHNOCOM ARRANGEMENTS                                                          

Metromedia and PLD have also entered into option modification agreements
with the two minority shareholders of Technocom Limited, a subsidiary of PLD,   
pursuant to which PLD will purchase all of these two shareholders' shares of    
Technocom Limited for an aggregate purchase price of $12.6 million, equal to 50%
of the price PLD would have been otherwise obligated to pay for these shares    
beginning on June 30, 1999. In addition, PLD also agreed to continue to pay     
consulting fees to these shareholders through closing. In the case of one such  
shareholder, consulting fees accrued but unpaid through June 30, 1999 amounted  
to $83,333 and such fees will continue to accrue at the rate of $75,000 per     
calendar quarter. In the case of the other shareholder, consulting fees accrued 
but unpaid through June 30, 1999 amounted to $43,055 and such fees will continue
to accrue at the rate of $39,583 per calendar quarter. As a result of these     
purchases, PLD will own 100% of the stock of Technocom Limited upon consummation
of the merger.                                                                  

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METROMEDIA BRIDGE LOAN AGREEMENT                                                

  Metromedia entered into a bridge loan agreement with PLD pursuant to which
it has agreed to extend revolving bridge loans to PLD of up to $7.0 million at  
an annual interest rate of 10% to fund PLD's ongoing operations during the      
period from the execution of the merger agreement to the earlier of the         
consummation of the merger or the termination or expiration of the merger       
agreement. All amounts payable under the bridge loan agreement are due and      
payable on the earlier of termination or expiration of the merger agreement or  
October 31, 1999. The loans under this agreement are secured by a pledge by PLD 
of approximately 58% of the capital stock of PLD's Technocom Limited subsidiary.
The bridge loan agreement contains negative covenants that restrict PLD's       
activities during this period. As of the date of this document, PLD had borrowed
$5.0 million under the bridge loan agreement.                                   

RESTRUCTURING OF PLD'S OBLIGATIONS                                              

 In connection with the consummation of the merger and as discussed above,
the following is a summary of the status of PLD's outstanding debt obligations: 

 - The installment of interest due June 1, 1999 on the PLD senior discount
     notes was deferred by all of the holders until the closing of the merger.
     If the closing occurs, it will be converted into principal and the senior
      discount notes will be exchanged for Metromedia notes. See "--Agreement to
Exchange and Consent; Terms of Metromedia Notes."                   

- The installment of interest due June 1, 1999 on the PLD convertible   
    subordinated notes was deferred by holders of 94.3% of these notes until
  the closing of the merger. The interest due to the holders who did not
     defer was paid in full. If the closing occurs, the deferred interest will
      be converted into principal and the convertible subordinated notes will be
     exchanged for Metromedia notes. See "--Agreement to Exchange and Consent;
Terms of Metromedia Notes."                                         

   - Principal payments under the Travelers notes were deferred to the closing
    of the merger. PLD continues to pay interest monthly on these notes. See
"--Travelers Note and Warrant Modification Agreement."              

- Principal and interest payments on the News America notes have been   
 deferred to the closing of the merger. See "--News Letter Agreement."

    - The right on the part of Plicom and Elite to put their shares of Technocom
   to PLD has been deferred to the closing of the merger. See "--Technocom
Arrangements."                                                      

    - While the business plans of its operating subsidiaries call for additional
   capital investments in 1999, some of which are anticipated to come from
      PLD, PLD is not contractually committed to fund those investments and can,
if necessary, defer or decline to proceed with any or all of such   
investments.                                                        

  - PLD currently has approximately $16,000,000 in escrow which is available
 to fund purchases of equipment for use by its operating subsidiaries.

- PLD has secured a line of credit from Metromedia in the amount of     
   $7,000,000 to provide working capital and to cover other costs (such as
 outstanding balances due on equipment purchases) over the anticipated
wsperiod to closing, $5,000,000 of which has been drawn to date. PLD
    believes that the amount of this line of credit, together with its other
    cash, is sufficient to fund its operations to closing. See "--Metromedia
Bridge Loan Agreement."                                             

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UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

  The following Unaudited Pro Forma Combining Balance Sheet of Metromedia as
of June 30, 1999 and Unaudited Pro Forma Combining Statements of Operations for 
the six months ended June 30, 1999 and the year ended December 31, 1998         
illustrate the effect of the merger and the restructuring of PLD's obligations  
and purchase of the Technocom Limited minority interests. The Unaudited Pro     
Forma Combining Balance Sheet assumes that the transactions referred to above   
are completed as of June 30, 1999 and the Unaudited Pro Forma Combining         
Statements of Operations assumes that the transactions referred to above have   
been completed as of the beginning of the periods presented.                    

Under the terms of the transaction, the holders of PLD common stock will
receive shares of Metromedia common stock on the basis of an exchange ratio that
values each share of PLD common stock at $3.50 per share if the average         
Metromedia price per share is between $5.25 and $6.25 at closing. If the average
price of Metromedia common stock exceeds $6.25 per share, each share of PLD     
common stock will be exchanged for .56 shares of Metromedia common stock, not to
exceed $4.48 per share of Metromedia common stock. If the average price of      
Metromedia common stock is less than $5.25 per share, each share of PLD common  
stock will be exchangeable for .6667 shares of Metromedia common stock, subject 
to termination and "top-up" rights.                                             

 We have prepared these Unaudited Pro Forma Combining Financial Statements
assuming an exchange ratio of .56 (which assumes an average price of Metromedia 
common stock in excess of $6.25 but less than $8.00) and a stock price of $6.93.
The actual exchange ratio will be determined on the date of determination in    
accordance with the formulas set forth in the merger agreement. See "The Merger 
Agreement."                                                                     

ACCOUNTING TREATMENT                                                            

We will record the merger as a purchase transaction. For accounting     
purposes, Metromedia will be deemed to be the surviving corporation in the      
merger.                                                                         

    The pro forma adjustments are based upon currently available information and
upon assumptions that management of each of Metromedia and PLD believes are     
reasonable. We will account for the merger based upon the estimated fair market 
value of the net tangible and intangible assets acquired at the date of         
acquisition. The adjustments included in the Unaudited Pro Forma Combining      
Financial Statements represent the preliminary determination of these           
adjustments based upon available information. We cannot assure you that the     
actual adjustments will not differ significantly from the pro forma adjustments 
reflected in the pro forma financial information.                               

  The Unaudited Pro Forma Combining Financial Statements are not necessarily
indicative of either future results of operations or results that might have    
been achieved if the foregoing transactions had been consummated as of the      
indicated dates. The Unaudited Pro Forma Combining Financial Statements should  
be read in conjunction with the historical financial statements of Metromedia   
and PLD, together with the related notes thereto. We have incorporated those    
historical financial statements in this document by reference.                  

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METROMEDIA INTERNATIONAL GROUP, INC.
UNAUDITED PRO FORMA COMBINING BALANCE SHEET 
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                               JUNE 30, 1999                         
                                       --------------------------------------------------------------
                                                                     PRO FORMA                       
                                                                    MERGER AND                       
                                                                       DEBT            METROMEDIA    
                                       METROMEDIA       PLD        RESTRUCTURING        PRO FORMA    
                                       HISTORICAL   HISTORICAL      ADJUSTMENTS         COMBINED     
                                       -----------  -----------  -----------------  -----------------
                                                                                                     
Cash and cash equivalents.............  $ 101,948    $   7,882       $  (6,741)(1)     $    96,914   
                                                                        (8,500)(1)                   
                                                                       (12,595)(1)                   
                                                                          (300)(1)                   
                                                                        15,220(2)                    
Accounts receivable...................     39,256       14,094              --              53,350   
Inventories...........................     56,356        3,557              --              59,913   
Other current assets..................      9,592       13,984          (3,014)(3)          20,562   
                                       -----------  -----------  -----------------  -----------------
    Current assets....................    207,152       39,517         (15,930)            230,739   
Escrow funds..........................         --       15,220         (15,220)(2)              --   
Investments in and advances to Joint                                                                 
  Ventures............................    156,199        8,607              --             164,806   
Property, plant and equipment, net....     34,209      172,171              --             206,380   
Intangibles...........................    157,743      107,231         (35,364)(1)         359,952   
                                                                       130,342(1)                    
Other assets..........................      4,229        8,414          (5,884)(1)           6,759   
                                       -----------  -----------  -----------------  -----------------
    Total assets......................  $ 559,532    $ 351,160       $  57,944         $   968,636   
                                       -----------  -----------  -----------------  -----------------
                                       -----------  -----------  -----------------  -----------------

Accounts payable and accrued                                                                         
  expenses............................  $  83,838    $  35,109       $   6,000(1)      $   111,791   
                                                                       (12,560)(1)                   
                                                                          (582)(1)                   
                                                                           (14)(3)                   
Short-term debt.......................        886       30,283          (6,450)(1)           8,299   
                                                                       (13,420)(1)                   
                                                                        (3,000)(3)                   
Other current liabilities.............         --       10,908              --              10,908   
                                       -----------  -----------  -----------------  -----------------
    Current liabilities...............     84,724       76,300         (30,026)            130,998   
Long-term debt........................     43,773      150,095        (138,251)(1)         219,947   
                                                                         4,920(1)                    
                                                                       159,410(1)                    
Other liabilities.....................      4,807           --              --               4,807   
                                       -----------  -----------  -----------------  -----------------
    Total liabilities.................    133,304      226,395          (3,947)            355,752   
                                       -----------  -----------  -----------------  -----------------
Minority interest.....................     30,318       23,108              --              53,426   
Stockholders' equity:                                                                                
  7 1/4% cumulative convertible                                                                      
    preferred stock...................    207,000           --              --             207,000   
  Preferred stock.....................         --            4              (4)(1)              --   
  Common stock........................     69,162          378            (378)(1)          90,412   
                                                                        21,250(1)                    
Paid-in surplus.......................  1,012,987      245,332        (245,332)(1)       1,155,285   
                                                                       126,013(1)                    
                                                                         4,228(1)                    
                                                                         8,697(1)                    
                                                                         3,360(1)                    
Accumulated deficit...................   (887,674)    (144,057)        144,057(1)         (887,674)  
Accumulated other comprehensive                                                                      
  loss................................     (5,565)          --              --              (5,565)  
                                       -----------  -----------  -----------------  -----------------
Total stockholders' equity............    395,910      101,657          61,891             559,458   
                                       -----------  -----------  -----------------  -----------------
    Total liabilities and                                                                            
      stockholders' equity............  $ 559,532    $ 351,160       $  57,944         $   968,636   
                                       -----------  -----------  -----------------  -----------------
                                       -----------  -----------  -----------------  -----------------

See accompanying notes to unaudited pro forma combining financial statements. 

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METROMEDIA INTERNATIONAL GROUP, INC.
UNAUDITED PRO FORMA COMBINING STATEMENT OF OPERATIONS 
(IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        [Enlarge/Download Table]

                                                                 SIX MONTHS ENDED JUNE 30, 1999                 
                                                 ---------------------------------------------------------------
                                                                                 PRO FORMA                      
                                                                                 MERGER AND                     
                                                                                    DEBT           METROMEDIA   
                                                   METROMEDIA        PLD       RESTRUCTURING       PRO FORMA    
                                                 HISTORICAL (13)  HISTORICAL    ADJUSTMENTS         COMBINED    
                                                 ---------------  ----------  ----------------  ----------------
                                                                                                                
Revenues........................................   $   132,647    $   57,328     $       --       $    189,975  

Cost and expenses:                                                                                              
  Cost of sales and operating expenses..........        79,572        17,483             --             97,055  
  Selling, general and administrative...........        60,602        26,450             --             87,052  
  Depreciation and amortization.................         8,587        16,520         (1,004)(7)         30,620  
                                                                                      6,517(8)                  
                                                 ---------------  ----------       --------     ----------------
Operating loss..................................       (16,114)       (3,125)        (5,513)           (24,752) 
Other income (expense):                                                                                         
  Interest expense..............................        (6,929)      (14,367)        11,880(4)         (15,754) 
                                                                                     (8,369)(4)                 
                                                                                      1,289(5)                  
                                                                                      1,014(6)                  
                                                                                       (258)(6)                 
                                                                                        (14)(11)                

  Interest income...............................         4,246           489           (669)(10)          4,052 
                                                                                        (14)(11)                
  Equity in losses of unconsolidated                                                                            
    investees...................................        (5,933)         (430)            --             (6,363) 
  Other.........................................        (2,794)          110             --             (2,684) 
                                                 ---------------  ----------       --------     ----------------
Loss before income tax expense and minority                                                                     
  interest......................................       (27,524)      (17,323)          (654)           (45,501) 
Income tax expense..............................          (205)       (4,723)            --             (4,928) 
Minority interest...............................         4,852        (2,087)            --              2,765  
                                                 ---------------  ----------       --------     ----------------
Net loss........................................       (22,877)      (24,133)          (654)           (47,664) 
Cumulative convertible preferred stock dividend                                                                 
  requirement...................................        (7,504)           --             --             (7,504) 
                                                 ---------------  ----------       --------     ----------------
Net loss attributable to common stockholders....   $   (30,381)   $  (24,133)    $     (654)      $    (55,168) 
                                                 ---------------  ----------       --------     ----------------
                                                 ---------------  ----------       --------     ----------------

Weighted average number of common shares--Basic                                                                 
  (12)..........................................        69,137        37,847                            90,387  
                                                 ---------------  ----------                    ----------------
                                                 ---------------  ----------                    ----------------

Loss per common share--Basic:                                                                                   
Net loss attributable to common stockholders....   $     (0.44)   $    (0.64)                     $      (0.61) 
                                                 ---------------  ----------                    ----------------
                                                 ---------------  ----------                    ----------------

See accompanying notes to unaudited pro forma combining financial statements. 

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METROMEDIA INTERNATIONAL GROUP, INC.
UNAUDITED PRO FORMA COMBINING STATEMENT OF OPERATIONS 
(IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        [Enlarge/Download Table]

                                                                         YEAR ENDED DECEMBER 31, 1998                 
                                                        --------------------------------------------------------------
                                                                                       PRO FORMA                      
                                                                                       MERGER AND                     
                                                         METROMEDIA                       DEBT           METROMEDIA   
                                                         HISTORICAL        PLD       RESTRUCTURING       PRO FORMA    
                                                            (13)       HISTORICAL     ADJUSTMENTS         COMBINED    
                                                        -------------  -----------  ----------------  ----------------
                                                                                                                      
Revenues...............................................  $   240,292   $   145,360     $       --       $    385,652  
Cost and expenses:                                                                                                    
  Cost of sales and operating expenses.................      155,916        45,348             --            201,264  
  Selling, general and administrative..................      153,327        63,993             --            217,320  
  Depreciation and amortization........................       20,588        26,071         (1,080)(7)         58,613  
                                                                                           13,034(8)                  

  Nonrecurring charge..................................       40,317            --             --             40,317  
                                                        -------------  -----------       --------     ----------------
Operating income (loss)................................     (129,856)        9,948        (11,954)          (131,862) 
Other income (expense):                                                                                               
  Interest expense.....................................      (16,331)      (23,732)        20,760(4)         (33,906) 
                                                                                          (16,738)(4)                 
                                                                                               35(5)                  
                                                                                            2,617(6)                  
                                                                                             (517)(6)                 
  Interest income......................................       12,746         2,384         (1,309)(10)         13,821 
  Equity in losses of unconsolidated investees.........      (18,151)         (958)            --            (19,109) 
Other..................................................        5,390       (11,203)            --             (5,813) 
                                                        -------------  -----------       --------     ----------------
Loss before income tax benefit (expense) and minority                                                                 
  interest.............................................     (146,202)      (23,561)        (7,106)          (176,869) 
Income tax benefit (expense)...........................          358        (9,864)            --             (9,506) 
Minority interest......................................        9,858        (9,386)        (2,038)(9)         (1,566) 
                                                        -------------  -----------       --------     ----------------
Loss from continuing operations........................     (135,986)      (42,811)        (9,144)          (187,941) 
Cumulative convertible preferred stock dividend                                                                       
  requirement..........................................      (15,008)           --             --            (15,008) 
                                                        -------------  -----------       --------     ----------------
Loss from continuing operations attributable to common                                                                
  stockholders.........................................  $  (150,994)  $   (42,811)    $   (9,144)      $   (202,949) 
                                                        -------------  -----------       --------     ----------------
                                                        -------------  -----------       --------     ----------------
Weighted average number of common shares-- Basic                                                                      
  (12).................................................       68,955        35,274                            90,205  
                                                        -------------  -----------                    ----------------
                                                        -------------  -----------                    ----------------
Loss per common share--Basic:                                                                                         
Loss from continuing operations attributable to common                                                                
  stockholders.........................................  $     (2.19)  $     (1.21)                     $      (2.25) 
                                                        -------------  -----------                    ----------------
                                                        -------------  -----------                    ----------------

See accompanying notes to unaudited pro forma combining financial statements. 

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METROMEDIA INTERNATIONAL GROUP, INC.

NOTES TO UNAUDITED PRO FORMA COMBINING FINANCIAL STATEMENTS 

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

(1) Reflects the acquisition by Metromedia of PLD at June 30, 1999 as follows:  

(i) the issuance of 21.25 million common shares of Metromedia using an  
      exchange ratio of .56 shares of Metromedia for each share of PLD since
    the price of Metromedia stock is greater than $6.25 and less than or
equal to $8.00;                                                 

  (ii) the exchange by holders of PLD's 14.0% senior discount notes due 2004
         with a carrying value of $111,751,000 and 9.0% subordinated convertible
  notes with a carrying value of $26,500,000 together with accrued
interest payable of $12,560,000 (together, the PLD notes) for 
   Metromedia's 10.5% senior discount notes due 2007 with a value of
     $159,410,000. Under the terms of the transactions, holders of PLD's
  14.0% senior discount notes will receive Metromedia 10.5% senior
        discount notes with an accreted value of $123.0 million and holders of
         PLD's 9.0% subordinated convertible notes will receive Metromedia 10.5%
 senior discount notes with an accreted value of $23.85 million.
      Additionally, the holders of the PLD 14.0% senior discount notes and
   9.0% subordinated convertible notes will receive Metromedia 10.5%
   senior discount notes with an accreted value of $12.56 million as
payment for accrued interest payable on such notes;           

(iii) the repayment of $6.45 million of News America notes payable and    
         $582,000 of interest payable for $6.741 million. Under the terms of the
  transaction, News America has agreed to retroactively reduce the
        interest rate it has charged to PLD from 20% per year to 10% per year,
   thereby resulting in a reduction of the accrued interest payable;

  (iv) the purchase of the equity interests of the two minority shareholders
        of Technocom Limited. Under the terms of the transaction, the minority
       shareholders of Technocom Limited have agreed to sell their interests
  in Technocom Limited to PLD for a purchase price of $12,595,000;

(v) the payment of $8.5 million of $13.42 million of the loans owed to  
      Travelers. Under the terms of the transaction, Travelers has agreed to
      accept $8.5 million of the principal amount owed by PLD at closing and
     to defer repayment of the remaining $4.92 million of principal amount
     owed by PLD until the earlier of August 30, 2000 or one year from the
closing date of the transaction;                                

 (vi) the redemption of PLD's Series II and Series III preferred stock for
cash;                                                         

 (vii) the value of warrants to purchase 700,000 shares of Metromedia common
      stock issued to Travelers in exchange for outstanding warrants. Such
         value has been determined using the Black-Scholes method assuming 72.5%
       volatility, a risk free interest rate of 5.2% and an average exercise
period of 10 years;                                           

 (viii) the value of options exchanged for outstanding PLD options. Such value
   has been determined using the Black-Scholes method assuming 72.5%
        volatility, a risk free interest rate of 5.07% and an average exercise
period of 3 years;                                            

(ix) the value of warrants exchanged for outstanding PLD warrants. Such 
         value has been determined using the Black-Scholes method assuming 72.5%
        volatility, a risk free interest rate of 5.02% and an average exercise
period of 2 years;                                            

(x) estimated transaction costs; and                                    

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METROMEDIA INTERNATIONAL GROUP, INC.

NOTES TO UNAUDITED PRO FORMA COMBINING FINANCIAL STATEMENTS (CONTINUED) 

 (xi) the elimination of historical net assets acquired comprised of PLD's
       historical stockholders' equity, historical debt and related interest
   either repaid or refinanced in the merger reduced by goodwill and
      deferred financing fee (in thousands, except per share information).

                                                                [Download Table]
                                                                                 
Issuance of Common Stock                                                         
  PLD shares outstanding at June 30, 1999 adjusted for                           
    100,000 shares to be issued to Travelers................    37,947           
  Number of shares issued to acquire PLD....................    21,250           
  Per share price........................................... $    6.93           
                                                             ---------           
Value of shares issued......................................            $ 147,263
Value of debt exchanged.....................................              159,410
Repayment of News America notes payable and interest........                6,741
Payment for minority interests of Technocom Limited.........               12,595
Partial repayment of loans owed to Travelers................                8,500
Payment for PLD preferred stock.............................                  300
Value of warrants issued to Travelers.......................                4,228
Value of options exchanged..................................                8,697
Value of warrants exchanged.................................                3,360
Estimated transaction costs.................................                6,000
                                                                        ---------
Purchase price..............................................              357,094
Less Net Assets Acquired                                                         
  PLD Historical Stockholders' Equity.......................   101,657           
  PLD Historical Debt and Related Interest Repaid or                             
    Refinanced..............................................   166,343           
  PLD Historical Goodwill...................................   (35,364)          
  PLD Historical Deferred Financing Fees....................    (5,884)          
                                                             ---------           
                                                                          226,752
                                                                        ---------
Excess of cost over historical net assets acquired..........            $ 130,342
                                                                        ---------
                                                                        ---------

  For illustrative purposes, Metromedia has made a preliminary allocation of
  excess cost over estimated net assets acquired to goodwill as PLD's assets
and liabilities are estimated to approximate fair value. The final      
   allocation of purchase price to assets and liabilities acquired will depend
   upon the final purchase price as determined by the final exchange ratio and
  the amount of debt and related interest to be repaid or refinanced and the
final estimates of fair values of assets and liabilities of PLD at the  
    closing date. Metromedia will undertake a study to determine the fair values
of assets and liabilities acquired and will allocate the purchase price 
  accordingly. Metromedia believes that the carrying value of current assets
   and current liabilities approximates fair value and that the excess of cost
over historical net assets acquired will be allocated to property and   
    equipment, telecommunication licenses and goodwill. However, there can be no
   assurance that the actual allocation will not differ significantly from the
pro forma allocation.                                                   

(2) Reflects removal of restrictions on escrowed funds in connection with the   
exchange of the PLD notes.                                              

(3) Reflects elimination of bridge loan provided to PLD by Metromedia together  
with accrued interest.                                                  

(4) Reflects the elimination of historical interest expense attributable to the 
PLD notes and the recording of interest expense for the Metromedia 10.5%
senior discount notes.                                                  

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METROMEDIA INTERNATIONAL GROUP, INC.

NOTES TO UNAUDITED PRO FORMA COMBINING FINANCIAL STATEMENTS (CONTINUED) 

(5) Reflects the elimination of historical interest expense attributable to the 
News America notes payable.                                             

(6) Reflects the elimination of interest expense attributable to the $13.42     
  million of Travelers' 12.0% revolving credit notes and accrual of interest
on $4.92 million of Travelers' notes at 10.5%.                          

(7) Reflects the elimination of amortization of historical PLD goodwill.        

(8) Reflects amortization expense of the excess of cost over historical net     
assets acquired in the merger by use of the straight-line method over 10
years. Should the allocation of such excess of cost over historical net 
assets acquired differ significantly as described in note 1 above,      
amortization expense could increase since the lives of assets other than
goodwill may be shorter.                                                

(9) Reflects reversal of minority interest income recorded by PLD as a result of
    the allocation of a portion of the 1998 net loss of Technocom Limited to the
  minority. In connection with the acquisition of the minority interest, the
  pro-forma assumes that the minority interest was acquired at the beginning
    of the period (January 1, 1998). As such, the entry reflects the reversal of
the 1998 credit for allocation of losses to the minority interest. As of
December 31, 1998, the minority interest was fully depleted and no such 
allocation of the Technocom Limited loss has been made subsequent to    
December 31, 1998.                                                      

(10) Reflects elimination of interest income on cash used in connection with    
    payments of certain PLD debt and purchase of minority interests of Technocom
Limited.                                                                

(11) Reflects elimination of interest income and expense on bridge financing    
facility provided to PLD by Metromedia.                                 

(12) The average common shares outstanding used in calculating pro forma loss   
    per common share from continuing operations are calculated assuming that the
 estimated number of shares of Metromedia common stock to be issued in the
    merger were outstanding from the beginning of the periods presented. Options
   and warrants to purchase shares of common stock as well as shares of common
  stock issuable upon conversion of Metromedia's convertible preferred stock
  were not included in computing pro forma diluted earnings per common share
because their inclusion would result in a smaller loss per common share.

(13) Ningbo Ya Mei Telecommunications, Ltd., one of Metromedia's two joint      
ventures in Ningbo Municipality, China, has received a letter from China
    Unicom stating that the supervisory department of the Chinese government had
   requested that China Unicom terminate the project with Ningbo Ya Mei. China
  Unicom subsequently informed Metromedia that the notification also applies
    to Metromedia's other joint venture in Ningbo Municipality. The notification
 from China Unicom requested that negotiations begin immediately regarding
    the amounts to be paid to Ningbo Ya Mei, including return of investment made
   and appropriate compensation and other matters related to the winding up of
the joint venture's activities as a result of this notice. Negotiations 
 regarding the terms of the termination have begun and are continuing. The
    content of the negotiations includes determining the investment principal of
Metromedia's Ningbo joint ventures, appropriate compensation and other  
   matters related to termination of contracts. The letter further stated that
due to technical reasons which were not specified, the cash distribution
   plan for the first half of 1999 had not been decided, and that China Unicom
also expected to discuss this subject with Ningbo Ya Mei. As a result,  
 Metromedia cannot currently determine the amount of compensation that its
Ningbo joint ventures will receive.                                     

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While there can be no assurance that China Unicom will provide similar  
   letters to Metromedia's other two sino-sino-foreign telephony-related joint
ventures, Metromedia expects that these joint ventures will also be the 
  subject of project termination negotiations. Metromedia cannot yet predict
    the effect on it of the Ningbo joint ventures' negotiations and the expected
  winding up of Metromedia's other two telephony-related joint ventures, but
Metromedia believes such negotiations, if adversely concluded, or the   
   failure to make scheduled cash distributions, could have a material adverse
    effect on its financial position and results of operations. Depending on the
    amount of compensation it receives, Metromedia will record a non cash charge
equal to the difference between the sum of the carrying values of its   
  investment and advances made to joint ventures plus goodwill less the cash
compensation it receives from the joint ventures which China Unicom has 
    paid. Metromedia's investment in and advances to joint ventures and goodwill
balance at June 30, 1999 were approximately $71 million and $67 million 
respectively. No adjustment has been made to the unaudited pro forma    
    combined financial statements to writedown goodwill relating to Metromedia's
telecommunications joint ventures in China.                             

BUSINESS OF METROMEDIA

 Metromedia is a global communications company. Through its communications
group, Metromedia is engaged in the development and operation of a variety of   
communications businesses in Eastern Europe, the republics of the former Soviet 
Union, the People's Republic of China and other selected emerging markets. These
businesses include telephony, cable television, paging and radio broadcasting.  
Metromedia also owns Snapper, Inc., which manufactures premium-priced power     
lawnmowers, lawn tractors, garden tillers, snow throwers and related parts and  
accessories under the Snapper-Registered Trademark- brand.                      

Metromedia's objective is to establish itself as a major multiple-market
provider of modern communications services in Eastern Europe, the former Soviet 
Union and other selected emerging markets.                                      

At June 30, 1999, Metromedia owned interests in and participated with   
partners in the management of joint ventures that had 48 operational systems.   
These operational systems consisted of 12 cable television systems, two GSM     
cellular telephone systems, one joint venture that is building out an           
operational GSM system and providing financing, technical assistance and        
consulting services to the local system operator, one international and long    
distance telephony provider, two wireless local loop operator, 13 paging systems
and 17 radio broadcasting stations. In addition, Metromedia has interests in and
participates with partners in the management of several joint ventures that, as 
of June 30, 1999, had four pre-operational systems. In Eastern Europe and the   
former Soviet Union, Metromedia generally owns 50% or more of the operating     
joint ventures in which it invests.                                             

  Metromedia's joint ventures experienced significant growth in 1998. At the
end of 1998, Metromedia had approximately 520,182 subscribers compared to       
305,198 at the end of 1997, which represents an increase of approximately 70%.  
The total combined revenues of Metromedia's communications group's consolidated 
and unconsolidated joint ventures for the years ended December 31, 1998, 1997   
and 1996 were $130.1 million, $91.2 million and $57.2 million, respectively. As 
many of Metromedia's joint ventures are not consolidated in Metromedia's results
of operations, Metromedia's communications group reported consolidated revenues 
of $30.2 million for the year ended December 31, 1998, or approximately 12.6% of
Metromedia's total reported revenues for the year ended December 31, 1998.      
Metromedia expects that this percentage will increase as its communications     
group's joint ventures grow their businesses.                                   

Recent adverse economic conditions in the Russian Federation and Eastern
Europe and the uncertainties associated with the governmental policies to       
address these conditions could affect Metromedia's cable television, paging and 
radio broadcasting businesses in Russia, Belarus and other emerging countries.  
The recent slowdown in growth in China and possible significant changes in the  

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regulation of foreign participation in and financing of the telecommunications  
industry in China could affect the ability of Metromedia's Chinese joint        
ventures to generate revenue, cash flows or net income. Please refer to the     
section in this document entitled "Risk Factors."                               

 Because legal restrictions in China prohibit foreign participation in the
operation or ownership in the telecommunications sector, Metromedia's           
telecommunications joint ventures in China are limited to providing financing,  
technical advice, consulting and other services for the construction and        
development of telephony networks for China United Telecommunications           
Incorporated, known as China Unicom, a Chinese telecommunications operator. The 
completed networks are operated by China Unicom. In return Metromedia receives  
payments from China Unicom based on the distributable cash flow generated by the
networks.                                                                       

Ningbo Ya Mei Telecommunications, Ltd., one of Metromedia's two         
telecommunications joint ventures in Ningbo Municipality, China, has received a 
letter from China Unicom stating that the supervisory department of the Chinese 
government had requested that China Unicom terminate the project with Ningbo Ya 
Mei. China Unicom subsequently informed Metromedia that the notification also   
applies to Metromedia's other telecommunications joint venture in Ningbo        
Municipality. The notification from China Unicom requested that negotiations    
begin immediately regarding the amounts to be paid to Ningbo Ya Mei, including  
return of investment made and appropriate compensation and other matters related
to the winding up of the joint venture's activities as a result of this notice. 
Negotiations regarding the terms of the termination have begun and are          
continuing. The content of the negotiations includes determining the investment 
principal of Metromedia's Ningbo joint ventures, appropriate compensation and   
other matters related to termination of contracts. The letter further stated    
that due to technical reasons which were not specified, the cash distribution   
plan for the first half of 1999 had not been decided, and that China Unicom also
expected to discuss this subject with Ningbo Ya Mei. As a result, Metromedia    
cannot currently determine the amount of compensation that its Ningbo joint     
ventures will receive.                                                          

While there can be no assurance that China Unicom will provide similar  
letters to Metromedia's other two sino-sino-foreign telephony-related joint     
ventures, Metromedia expects that these joint ventures will also be the subject 
of project termination negotiations. China Unicom has suspended cooperation on  
further development of networks with these joint ventures and Metromedia        
believes that this action reflects China Unicom's intention to negotiate the    
termination of its relationship with these joint ventures as well. Metromedia   
cannot yet predict the effect on it of the Ningbo joint ventures' negotiations  
and the expected winding up of Metromedia's other two telephony-related joint   
ventures, but Metromedia believes such negotiations, if adversely concluded, or 
the failure to make scheduled cash distributions, could have a material adverse 
effect on its financial position and results of operations. Depending on the    
amount of compensation it receives, Metromedia will record a non cash charge    
equal to the difference between the sum of the carrying values of its investment
and advances made to joint ventures plus goodwill less the cash compensation it 
receives from the joint ventures which China Unicom has paid. Metromedia's      
investment in and advances to joint ventures and goodwill balance at June 30,   
1999 were approximately $71 million and $67 million respectively. Metromedia is 
currently evaluating other investment opportunities in China and recently       
announced the establishment of a new joint venture in China to develop and      
operate an e-commerce system.                                                   

   Metromedia owned Snapper before the shift in its business focus to a global
communications company. Accordingly, it views Snapper as a non-core asset and   
manages Snapper in order to maximize stockholder value. Snapper manufactures    
Snapper brand power lawn and garden equipment for sale to both residential and  
commercial customers. The residential equipment includes self-propelled and     
push-type walk-behind lawnmowers, rear-engine riding lawnmowers, garden         
tractors, zero-turn radius lawn equipment, garden tillers, snow throwers, and   
related parts and accessories. The commercial mowing equipment includes         
commercial quality self-propelled walk-behind lawnmowers, and wide-area and     
front-mount zero-turn radius lawn equipment.                                    

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  Snapper products are premium-priced, generally selling at retail from $300
to $10,500. Snapper sells to and supports directly an approximately 5,000-dealer
network for the distribution of its products. Snapper also sells its products   
through foreign distributors.                                                   

A large percentage of the residential and commercial sales of lawn and  
garden equipment are made during a 17-week period from early spring to          
mid-summer. Although some sales are made to the dealers and distributors prior  
and subsequent to this period, the largest volume of sales is made during this  
time. The majority of revenues during the late fall and winter periods are      
related to snow thrower shipments. Snapper has an agreement with a financial    
institution which makes floor-plan financing for Snapper products available to  
dealers. If there is a default by a dealer, Snapper is obligated to repurchase  
any new and unused equipment recovered from the dealership. At December 31,     
1998, there was approximately $96.4 million outstanding under this floor-plan   
financing arrangement. Metromedia has guaranteed Snapper's payment obligations  
under this arrangement.                                                         

    Snapper also makes available, through General Electric Credit Corporation, a
retail customer revolving credit plan. This credit plan allows consumers to pay 
for Snapper products over time. Consumers also receive Snapper credit cards     
which can be used to purchase additional Snapper products.                      

Snapper manufactures its products in McDonough, Georgia at facilities   
totaling approximately 1.0 million square feet. Excluding engines, transmission 
and tires, Snapper manufactures a substantial portion of the component parts for
its products. Most of the parts and material for Snapper's products are         
commercially available from a number of sources.                                

 For the year ended December 31, 1998, Snapper reported revenues of $210.1
million, or approximately 87.4% of Metromedia's total consolidated revenues for 
the year ended December 31, 1998. Metromedia expects that this percentage will  
decrease as the communications group's consolidated joint ventures grow their   
businesses.                                                                     

BUSINESS OF PLD 

   PLD, through its operating subsidiaries, is a major provider of local, long
distance and international telecommunications services in the Russian           
Federation, Kazakhstan and Belarus.                                             

  PLD's objective is to be a leading participant in the targeted development
of telecommunications infrastructure, products and services in the emerging     
markets of the Russian Federation and other countries of the former Soviet      
Union.                                                                          

Its five principal operating businesses are:                            

  - PeterStar Company Limited: a provider of integrated local, long distance
     and international telecommunications services in St. Petersburg through a
fully digital fiber optic network;                                  

- Technocom Limited: a provider, through Teleport-TP, of dedicated      
international telecommunications services to Russian and foreign    
      businesses in Moscow and an operator of a satellite-based pan-Russian long
distance network;                                                   

- Baltic Communications Limited: a provider of dedicated international  
telecommunications services in St. Petersburg;                      

 - ALTEL (formerly BECET International): a provider of a national cellular
service in Kazakhstan; and                                          

   - Belarus-Netherlands Belcel Joint Venture: a provider of the only national
cellular service in Belarus.                                        

 In addition, PLD is developing a portfolio of international long distance
products and services under the name "PLDncompass" targeted at carriers and     
corporate customers in the United States, the                                   

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United Kingdom and Europe which require telecommunications services to and from 
the countries of the former Soviet Union.                                       

   The fostering of existing, and the creation of new, partnerships with local
and regional partners is crucial to the long-term success of PLD in this        
environment. In its operating businesses, PLD's partners include:               

  - Petersburg Telephone Network: the local telephone system operator in St.
Petersburg;                                                         

- St. Petersburg Intercity & International Telephone: the gateway for   
     national and international long distance calls to and from St. Petersburg
    which, together with Petersburg Telephone Network, holds an indirect 14%
interest in PeterStar Company Limited;                              

- Kazakhtelekom: the state-owned national telecommunications operator in
Kazakhstan and the holder of a 50% interest in ALTEL; and           

   - AO Rostelecom: the primary long distance and international carrier in the
Russian Federation and a 44% stockholder in Teleport-TP.            

    In August 1998, News America and its affiliate acquired a 38% stake in PLD's
common stock.                                                                   

Recent adverse economic conditions in the Russian Federation and Eastern
Europe and the uncertainties associated with the governmental policies to       
address these conditions could affect PLD's businesses in Russia, Belarus and   
other countries of the former Soviet Union. Please refer to the section in this 
document entitled "Risk Factors."                                               

DESCRIPTION OF MOSCOW COMMUNICATIONS, INC.

Moscow Communications, Inc. is a wholly-owned subsidiary of Metromedia  
organized under the laws of the State of Delaware. It was incorporated in May   
1999 solely for use in the merger, and is engaged in no other business. Its     
executive offices are located at One Meadowlands Plaza, East Rutherford, New    
Jersey 07073.                                                                   

COMPARISON OF RIGHTS OF HOLDERS OF
METROMEDIA COMMON STOCK AND PLD COMMON STOCK

GENERAL                                                                         

   Metromedia is incorporated under the laws of Delaware and, accordingly, the
rights of the Metromedia stockholders are governed by the certificate of        
incorporation of Metromedia, the by-laws of Metromedia and the laws of the state
of Delaware. PLD is also incorporated under the laws of Delaware and,           
accordingly, the rights of the PLD stockholders are governed by the certificate 
of incorporation of PLD, the by-laws of PLD and the laws of the state of        
Delaware. After the merger, PLD stockholders will hold shares of Metromedia     
common stock, and their rights will therefore be governed by the certificate of 
incorporation and by-laws of Metromedia.                                        

COMPARISON OF STOCKHOLDERS' RIGHTS                                              

Set forth on the following pages is a summary comparison of material    
differences among the rights of a Metromedia stockholder under the current      
Metromedia charter and by-laws (left column), and the rights of a PLD           
stockholder under the current PLD charter and by-laws (right column).           

  The summary set forth below highlights the material distinctions among the
governing documents of Metromedia and PLD and is not intended to provide a      
comprehensive summary of each of such company's governing documents. Copies of  
the PLD charter and by-laws and the Metromedia charter and by-laws will be sent 
to PLD and Metromedia stockholders upon request. See "Where You Can Find More   
Information."                                                                   

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                                                        [Enlarge/Download Table]
                                                                                            
             CURRENT METROMEDIA                                 CURRENT PLD                 

AUTHORIZED CAPITAL STOCK                                                                    

400,000,000 shares of common stock, par value  100,000,000 shares of common stock, par value
$1.00 per share. Metromedia had 69,175,254     $.01 per share. PLD had 37,846,789 shares of 
shares of common stock outstanding as of       common stock oustanding as of August 30,     
August 30, 1999.                               1999.                                        

70,000,000 shares of preferred stock, par      100,000,000 shares of preferred stock, par   
value $1.00 per share.                         value $.01 per share.                        

Shares of preferred stock may be issued from   Shares of preferred stock may be issued from 
time to time in one or more series by the      time to time in one or more series by the PLD
Metromedia board of directors. The Metromedia  board of directors. The PLD board of         
board of directors has authority to fix the    directors has authority to determine the     
voting powers and the designations,            designation, rights, privileges, restrictions
preferences and other rights; and the          and conditions of the shares of preferred    
qualifications, limitations and restrictions   stock of each series. PLD had 446,884 shares 
of these series. Metromedia had 4,140,000      of preferred stock outstanding as of August  
shares of preferred stock outstanding as of    2, 1999.                                     
August 2, 1999.                                                                             

PREEMPTIVE RIGHTS                                                                           
None.                                          None.                                        

MARKETS TRADED                                                                              
American Stock Exchange                        NASDAQ                                       
Pacific Stock Exchange                         Toronto Stock Exchange                       
                                               Berlin Stock Exchange                        
                                               Frankfurt Stock Exchange                     
                                               Munich Stock Exchange                        

                                     STOCKHOLDER ACTION                                     
ANNUAL MEETINGS                                                                             
Held in the month of March, April or May on    As set by the board of directors.            
such date as may be designated by the board                                                 
of directors, and in the absence of any such                                                
designation it shall be held on the second                                                  
Tuesday of April each year.                                                                 

SPECIAL MEETINGS                                                                            
May be called at any time by the Chairman or   May be called only by the Chairman of the    
Vice Chairman of the board of directors.       Board, the President or by the board of      
                                               directors pursuant to a resolution adopted by
                                               a majority of the total number of directors  
                                               then in office.                              

             CURRENT METROMEDIA                                 CURRENT PLD                 

ACTION BY WRITTEN CONSENT                                                                   
Prohibited.                                    Allowed if a written consent or consents in  
                                               writing, setting forth the action to be      
At the Metromedia annual meeting, the          taken, is signed by the holders of           
Metromedia stockholders will be asked to vote  outstanding stock having not less than the   
upon a proposal of a stockholder of            minimum number of votes that would be        
Metromedia to amend Metromedia's certificate   necessary to authorize or take such action at
of incorporation to reinstate the rights of    a meeting at which all shares entitled to    
stockholders to take action by written         vote thereon were present and voted.         
consent and to call special meetings.                                                       

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ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND OTHER PROPOSALS                                  
Not less than 60 days nor more than 90 days    Not less than 60 days nor more than 90 days  
prior to the first anniversary of              prior to the first anniversary of PLD's last 
Metromedia's last annual meeting, except if    annual meeting, except if the meeting is     
the meeting is advanced more than 30 days or   advanced more than 30 days or delayed more   
delayed more than 60 days from this            than 60 days from this anniversary date, then
anniversary date, then 10 days following       10 days following public disclosure by PLD of
public disclosure by Metromedia of the date    the date of the meeting.                     
of the meeting.                                                                             

                                     BOARD OF DIRECTORS                                     
CLASSIFICATION                                                                              
Directors are classified into three classes.   Not classified.                              
Each class serves a three-year term and one                                                 
class is elected at each annual meeting of                                                  
stockholders.                                                                               

CUMULATIVE VOTING FOR DIRECTORS                                                             
No.                                            No.                                          

NUMBER OF DIRECTORS                                                                         
7-15, as fixed by the board of directors.      1-15 as fixed by the board of directors.     

                                                        [Enlarge/Download Table]
                                                                                            
             CURRENT METROMEDIA                                 CURRENT PLD                 

REMOVAL                                                                                     
Directors may be removed only for cause by a   May be removed, with or without cause, by the
majority stockholder vote.                     holders of a majority of the votes entitled  
                                               to vote at an election of directors.         
BOARD VACANCIES                                                                             
Filled by a majority vote of the remaining     May be filled by a majority of the directors 
directors then in office, directors so chosen  then in office, though less than a quorum.   
hold office for a term expiring at annual      Whenever the holders of any class or classes 
meeting of stockholders at which the term of   of stock or series thereof are entitled to   
the class to which they have been elected      elect one or more directors by the provisions
expires.                                       of the certificate of incorporation,         
                                               vacancies and newly created directorships of 
                                               such class or classes or series may be filled
                                               by a majority of the directors elected by    
                                               such class or classes or series thereof then 
                                               in office, or by a sole remaining director so
                                               elected.                                     

DIRECTOR QUALIFICATIONS                                                                     
No special requirements.                       No special requirements.                     

INDEMNIFICATION                                                                             
Any authorized representative in any           Authorized representatives in third party and
proceedings, whether civil, criminal,          corporate proceedings may be indemnified if  
administrative or investigative, may be        such person acted in good faith, in a manner 
indemnified to the full extent permitted by    reasonably believed to be in the best        
law.                                           interest of the corporation and without      
                                               reasonable cause to believe the conduct was  
                                               unlawful if it was unlawful.                 

LIMITATION OF PERSONAL LIABILITY OF DIRECTORS                                               
To the extent permitted under Delaware law.    To the extent permitted under Delaware law.  

SPECIAL MEETINGS OF THE BOARD                                                               
May be called by the Chairman of the board of  May be called at the request of the Chairman 
directors, the Vice Chairman of the board of   of the Board, the President or a majority of 
directors, by the President or by a majority   the board of directors then in office.       
of the directors.                                                                           

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TRANSACTIONS WITH INTERESTED STOCKHOLDERS, EXTRAORDINARY TRANSACTIONS AND SECURITIES        
ISSUANCES                                                                                   
No specific requirements.                      No specific requirements.                    

REPURCHASE OF SECURITIES                                                                    
No specific requirements.                      No specific requirements.                    

             CURRENT METROMEDIA                                 CURRENT PLD                 

CHARTER AMENDMENTS                                                                          
No specific requirements.                      No specific requirements.                    

BY-LAWS AMENDMENTS                                                                          
May be amended by a vote of a majority of the  May be amended by a vote of the board of     
entire board of directors that would be in     directors or of the stockholders, provided   
office if no vacancy existed, whether or not   notice of the proposed change was given in   
present at a meeting. Any by-laws made,        the notice of the meeting and, in the case of
amended or repealed by the board of directors  a meeting of the board of directors, in a    
may be amended or repealed, and any by-laws    notice given not less than two (2) days prior
may be made, by the stockholders of the        to the meeting. In the case of amendments by 
corporation by vote of a majority of the       the board of directors, the affirmative vote 
holders of shares of stock of the              of a majority of the directors then in office
corporation.                                   will be required to alter, amend or repeal   
                                               any provision of the by-laws. In the case of 
                                               amendments by the affirmative vote of the    
                                               holders of at least 66 2/3 percent of the    
                                               voting power of all the then outstanding     
                                               shares having the right to vote thereon,     
                                               voting together as a single class, will be   
                                               required to alter, amend or repeal any       
                                               provision of the by-laws.                    

  The shares of Metromedia common stock to be issued to the PLD stockholders
in the merger are additional shares of the currently outstanding Metromedia     
common stock. The exact number of shares of Metromedia common stock that will be
issued will vary according to the average price of the Metromedia common stock  
three business days before the PLD's stockholders' meeting. If the meeting were 
held on August 2, 1999, approximately 21,000,000 additional shares of Metromedia
common stock would be issued based upon the latest available figure for the     
number of PLD shares outstanding and the average Metromedia stock price as of   
July 27, 1999 (three business days before August 2, 1999). There are no         
preemptive rights with respect to these shares. The securities will be issued by
Metromedia in consideration for all of the outstanding shares of PLD common     
stock.                                                                          

ADDITIONAL INFORMATION FOR METROMEDIA MEETING 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                                 

The following table sets forth as of March 31, 1999 certain information 
regarding each person, including any "group" as that term is used in Section    
13(d)(3) of the Securities Exchange Act of 1934, known to own beneficially (as  
such term is defined in Rule 13d-3 under the Exchange Act) more than 5% of      
Metromedia's outstanding common stock. In accordance with the rules promulgated 
by the Securities and Exchange Commission, such ownership includes shares       
currently owned as well as shares which the named person has the right to       
acquire beneficial ownership of within 60 days, including shares which the named
person has the right to acquire through the exercise of any option, warrant or  

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right, or through the conversion of a security. Accordingly, more than one      
person may be deemed to be a beneficial owner of the same securities.           

                                                        [Enlarge/Download Table]

                                                                                         PRE-MERGER       POST-MERGER  
                                                               NUMBER OF SHARES OF      PERCENTAGE OF    PERCENTAGE OF 
                                                            COMMON STOCK BENEFICIALLY    OUTSTANDING      OUTSTANDING  
NAME AND ADDRESS OF BENEFICIAL OWNER                                OWNED (1)           COMMON STOCK    COMMON STOCK(2)
----------------------------------------------------------  -------------------------  ---------------  ---------------
                                                                                                                       
Metromedia Company........................................            7,989,206                 12%               9%   
  One Meadowlands Plaza                                                                                                
  East Rutherford, NJ 07073                                                                                            

John W. Kluge.............................................           18,326,043(3)              26%              20%   
  215 East 67th Street                                                                                                 
  New York, NY 10021                                                                                                   

Stuart Subotnick..........................................           18,557,268(3)              27%              20%   
  215 East 67th Street                                                                                                 
  New York, NY 10021                                                                                                   

Snyder Capital Management, L.P............................            5,896,092(4)               9%               7%   
  350 California Street, Suite 1460                                                                                    
  San Francisco, CA 94104-1436                                                                                         

News America Incorporated.................................                    0                  0%               9%(5)
  1211 Avenue of the Americas                                                                                          
  New York, NY 10036                                                                                                   

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

(1) Unless otherwise indicated by footnote, the named persons have sole voting  
  and investment power with respect to the shares of Metromedia common stock
beneficially owned.                                                     

(2) Based upon an exchange ratio of .56.                                        

(3) Metromedia Company is a Delaware general partnership owned and controlled by
John W. Kluge and Stuart Subotnick, each of whom is a director of       
Metromedia. The amount set forth in the table above includes 12,415,455 
shares beneficially owned by Mr. Kluge and Mr. Subotnick beneficially   
   through Metromedia Company (7,989,206) and Met Telcell, Inc. (4,426,249), a
corporation owned and controlled by Messrs. Kluge and Subotnick, and    
5,270,548 shares of Metromedia common stock owned directly by a trust   
    affiliated with Mr. Kluge of which Mr. Subotnick is a trustee (the 5,270,588
shares include 200,000 shares of 7.25% cumulative convertible preferred 
  stock which shares are currently convertible into 666,000 shares of common
  stock), and, with respect to Mr. Subotnick, 231,225 shares of common stock
owned directly by Mr. Subotnick. Mr. Subotnick disclaims beneficial     
 ownership of the shares owned by the trust. The amounts shown for Messrs.
Kluge and Subotnick also include options to acquire 640,000 shares      
    exercisable within 60 days of the date hereof owned by each of Messrs. Kluge
and Subotnick.                                                          

(4) Pursuant to a report on Schedule 13G filed with the Securities and Exchange 
Commission on February 5, 1999 by Snyder Capital Management, L.P. Synder
    Capital Management, L.P. is wholly owned by Nvest Companies, L.P., a limited
partnership affiliated with Nvest, L.P. a publicly traded limited       
partnership. The general partner of Nvest, L.P. and the managing general
  partner of Nvest Companies, L.P. is an indirect wholly owned subsidiary of
   Metropolitan Life Insurance Company. As of June 30, 1998, Metropolitan Life
Insurance Company beneficially owned all the of the general partner     
   interests in Nvest Companies and Nvest, L.P. and, in the aggregate, general
partner and limited partner interests of Nvest Companies and Nvest, L.P.
  representing approximately 47% of the economic interest in the business of
Nvest Companies.                                                        

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(5) Based upon Amendment No. 2 to Schedule 13D, filed on May 28, 1999, with the 
Securities and Exchange Commission by The News Corporation Limited, News
  America Incorporated, News PLD LLC and K. Rupert Murdoch. The amount shown
  represents 8,053,796 shares of Metromedia common stock that will be issued
  to News America and News PLD LLC, respectively, in the merger, assuming an
exchange ratio of .56. These shares will be issued in exchange for      
14,381,780 shares of PLD common stock currently held by News America and
News PLD LLC, respectively. The News Corporation Limited, News America  
  Incorporated and Mr. Murdoch, as persons who may be deemed to control News
   PLD LLC, may be deemed to beneficially own the shares beneficially owned by
News PLD LLC. The amount shown does not include 3,804,369 shares of PLD 
common stock issuable upon conversion of currently outstanding revolving
  credit notes issued to News America by PLD because News America has agreed
    not to convert these notes prior to the consummation of the merger, at which
time they will be repaid in full.                                       

The foregoing information is based on a review as of June 30, 1999 by   
Metromedia of statements filed with the Securities and Exchange Commission under
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934. To the best    
knowledge of Metromedia, except as set forth above, no person beneficially owns 
more than 5% of Metromedia's outstanding common stock.                          

SECURITIES BENEFICIALLY OWNED BY DIRECTORS AND EXECUTIVE OFFICERS               

    The following table sets forth the beneficial ownership of Metromedia common
stock as of March 31, 1999 with respect to:                                     

- each director and director nominee of Metromedia,                     

- each executive officer named in the Summary Compensation Table under  
"Executive Compensation" and                                        

- all directors and executive officers of Metromedia as a group.        

                                                        [Enlarge/Download Table]

                                                                             PRE-MERGER         POST-MERGER       
                                                  NUMBER OF SHARES OF       PERCENTAGE OF      PERCENTAGE OF      
                                               COMMON STOCK BENEFICIALLY     OUTSTANDING        OUTSTANDING       
NAME OF BENEFICIAL OWNER                               OWNED (1)            COMMON STOCK       COMMON STOCK       
---------------------------------------------  -------------------------  -----------------  -----------------    
                                                                                                                  
John P. Imlay, Jr............................                    56,000(     (4)         *           *            
Clark A. Johnson.............................                   136,500(     (4)         *           *            
Silvia Kessel................................                   203,085(5)         *                 *            
John W. Kluge................................                18,326,043(     (7)            26%            20%    
Robert A. Maresca............................                    60,000(8)         *                 *            
Carl E. Sanders..............................                    87,497(        (9)         *         *           
Vincent D. Sasso, Jr.........................                    45,000(10)         *                *            
Richard J. Sherwin...........................                   866,546(11)           1.2%           *            
Stuart Subotnick.............................                18,557,268(         12)            27%            20%
Arnold L. Wadler.............................                   215,415(5)         *                 *            
Leonard White................................                     1,000(   13)         *             *            
All Directors and Executive Officers as a                                                                         
  group (11 persons).........................                20,924,271            29.2%              22.5%       

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

*   Holdings do not exceed one percent of the total outstanding shares of       
Metromedia common stock.                                                

(1) Unless otherwise indicated by footnote, the named individuals have sole     
   voting and investment power with respect to the shares of Metromedia common
stock beneficially owned.                                               

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(2) Includes options to acquire 40,000 shares of Metromedia common stock issued 
 under the Metromedia International Group, Inc. 1996 Incentive Stock Plan.
 The 1996 Stock Plan was approved by Metromedia's stockholders at the 1996
Annual Meeting of Metromedia Stockholders.                              

(3) Includes options to acquire 15,000 shares of Metromedia common stock under  
the 1996 Stock Plan.                                                    

(4) Includes options to acquire 1,000 shares of Metromedia common stock under   
the 1996 Stock Plan.                                                    

(5) Includes options to acquire 200,000 shares under the 1996 Stock Plan.       

(6) Includes 12,415,455 shares of Metromedia common stock beneficially owned    
through Metromedia Company of which Mr. Kluge is a general partner      
  (7,989,206 shares) and Met Telcell (4,426,249 shares), a corporation owned
and controlled by Messrs. Kluge and Subotnick, and 5,270,588 shares of  
   Metromedia common stock owned directly by a trust affiliated with Mr. Kluge
   of which Mr. Subotnick is a trustee, which includes 200,000 shares of 7.25%
cumulative convertible preferred stock, which shares are currently      
convertible into 666,000 shares of common stock. Mr. Subotnick disclaims
beneficial ownership of the shares owned by the trust.                  

(7) Includes options to acquire 600,000 shares of common stock, exercisable     
within 60 days of the date hereof.                                      

(8) Includes options to acquire 60,000 shares of common stock under 1996 Stock  
Plan.                                                                   

(9) Includes options to acquire 10,000 shares of common stock under Metromedia's
1991 Non-Employee Director Stock Option Plan.                           

(10) Includes options to acquire 45,000 shares of common stock under the 1996   
Stock Plan.                                                             

(11) Includes options to acquire 657,908 shares of common stock exercisable     
within 60 days of the date hereof.                                      

(12) Includes 231,225 shares owned directly by Mr. Subotnick.                   

(13) Includes options to acquire 20,000 shares of common stock under the 1996   
Stock Plan.                                                             

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DIRECTORS AND OFFICERS                                                          

DIRECTORS OF METROMEDIA                                                 

    The Metromedia board of directors, which presently consists of nine members,
is divided into three classes. The Class I Directors were elected for a term    
expiring at the annual meeting of stockholders to be held in 1999, the Class II 
Directors were elected for a term expiring at the annual meeting of stockholders
to be held in 2000, and the Class III Directors were elected for a term expiring
at the annual meeting of stockholders to be held in 2001. Members of each class 
hold office until their successors are elected and qualified. At each succeeding
annual meeting of the stockholders of Metromedia, the successors of the class of
directors whose terms expire at that meeting shall be elected by a plurality    
vote of all votes cast at such meeting and will hold office for a three-year    
term. The Class I Directors, whose terms expire at the Metromedia annual meeting
of stockholders to be held in 1999, are John W. Kluge, Stuart Subotnick and John
P. Imlay, Jr. The Class II Directors, whose terms expire at the Metromedia      
annual meeting of stockholders to be held in 2000, are Richard J. Sherwin and   
Leonard White. The Class III Directors, whose terms expire at the Metromedia    
annual meeting of stockholders to be held in 2001, are Silvia Kessel, Carl E.   
Sanders, Arnold L. Wadler and Clark A. Johnson.                                 

For more information regarding each of Metromedia's directors, including
biographical information, see "Election of Directors."                          

MEETINGS AND CERTAIN COMMITTEES OF THE BOARD                            

The Metromedia board of directors held four regular meetings in 1998. In
addition, the Metromedia board of directors (including the executive committee) 
took action by unanimous written consent four times in 1998. All directors      
attended at least 75% of the aggregate total number of meetings of the          
Metromedia board of directors and all committees of the Metromedia board of     
directors on which they served except John W. Kluge who attended 50% of such    
meetings.                                                                       

The Metromedia board of directors has delegated certain functions to the
following standing committees:                                                  

  THE EXECUTIVE COMMITTEE.  The Metromedia executive committee is authorized
to exercise, to the extent permitted by law, all of the powers of the Metromedia
board of directors in the management and affairs of Metromedia. The executive   
committee took action by unanimous written consent nine times in 1998. The      
current members of the executive committee are Messrs. Kluge and Subotnick.     

THE AUDIT COMMITTEE.  The Metromedia audit committee is responsible for:

- reviewing the professional services and independence of Metromedia's  
independent auditors and the scope of the annual external audit     
recommended by the independent auditors,                            

- ensuring that the scope of the annual external audit is sufficiently  
comprehensive,                                                      

- reviewing, in consultation with Metromedia's independent auditors and 
    Metromedia's finance and accounting departments, the plan and results of
    the annual external audit, the adequacy of Metromedia's internal control
systems and the results of Metromedia's internal audit and          

- reviewing with management and Metromedia's independent auditors       
Metromedia's annual and quarterly financial statements, financial   
 reporting practices and the results of such external audit. The audit
  committee met four times during 1998. The current members of the audit
committee are Messrs. Imlay, Johnson and White.                     

THE COMPENSATION COMMITTEE.  The Metromedia compensation committee's    
functions are to review, approve, recommend and report to the board of directors
on matters specifically relating to the                                         

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compensation of Metromedia's executive officers and other key executives and to 
administer Metromedia's stock option plans. The compensation committee held two 
meetings during 1998. In addition, the compensation committee took action by    
unanimous written consent two time during 1998. The current members of the      
compensation committee are Gov. Sanders and Messrs. Imlay, Johnson and White.   

  THE NOMINATING COMMITTEE.  The Metromedia nominating committee's principal
function is to identify candidates and recommend to Metromedia's board of       
directors nominees for membership on the board of directors. The nominating     
committee expects normally to be able to identify from its own resources the    
names of qualified nominees, but it will accept from stockholders               
recommendations of individuals to be considered as nominees, provided           
Metromedia's stockholders follow procedures specified in Metromedia's by-laws.  

These procedures provide that, in order to nominate an individual to the
board of directors, a Metromedia stockholder must provide timely notice of such 
nomination in writing to the secretary of Metromedia and a written statement by 
the candidate of his or her willingness to serve. Such notice must include the  
information required to be disclosed in solicitations for proxies for election  
of directors pursuant to Regulation 14A under the Securities Exchange Act of    
1934, along with the name, record address, class and number of shares of common 
stock beneficially owned by the stockholder giving such notice. To be timely,   
notice must be received by Metromedia not less than 60 days nor more than 90    
days prior to the first anniversary of the date of Metromedia's annual meeting  
for the preceding year. However, in the event the date of the annual meeting of 
stockholders is advanced by more than 30 days or delayed by more than 60 days   
from this anniversary date, this notice must be received within 10 days         
following public disclosure by Metromedia of the date of the annual or special  
meeting at which directors are to be elected. For purposes of this notice       
requirement, disclosure shall be deemed to be first made when disclosure of such
date of the annual or special meeting of stockholders is first made in a press  
release reported by the Dow Jones News Service, Associated Press or other       
comparable national news service, or in a document which has been publicly filed
by Metromedia with the Securities and Commission pursuant to Sections 13, 14 or 
15(d) of the Securities Exchange Act of 1934. Any such nominations should be    
submitted in writing to Metromedia, One Meadowlands Plaza, East Rutherford, New 
Jersey 07073-2137, Attention: Arnold L. Wadler, Secretary. The Metromedia       
nominating committee took action by unanimous written consent once in 1998. The 
current members of the nominating committee are Messrs. Kluge and Wadler and Ms.
Kessel.                                                                         

COMPENSATION OF DIRECTORS                                               

   During 1998, each director of Metromedia who was not employed by Metromedia
or affiliated with Metromedia Company received a $2,000 monthly retainer plus a 
separate attendance fee for each meeting of the board of directors or committee 
of the board of directors in which such director participated. During 1998, the 
attendance fees were $1,200 for each meeting of the board of directors attended 
by a non-employee director in person and $500 for each meeting of the board of  
directors in which a non-employee director participated by conference telephone 
call. Members of committees of the board of directors are paid $500 for each    
meeting attended.                                                               

   Prior to December 13, 1995, non-employee directors were entitled to receive
options to purchase shares of Metromedia common stock under Metromedia's 1991   
Non-Employee Director Stock Option Plan. Under this plan, each non-employee     
director who was a director of Metromedia on August 3, 1992 was granted an      
option to purchase 10,000 shares of common stock at an exercise price of        
$11.875, the closing price of the common stock on the trading day immediately   
preceding the date of grant. Options granted to these non-employee directors    
became fully vested as to all 10,000 shares upon approval of certain amendments 
to this plan at Metromedia's 1993 annual meeting of stockholders.               

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This plan further provided that each person who became a non-employee   
director of Metromedia after August 3, 1992 would receive an option to purchase 
10,000 shares of Metromedia common stock on the day such director is elected as 
a director, at an exercise price equal to the closing price of the Metromedia   
common stock on the trading day preceding such director's election. Options     
granted to these non-employee directors became fully vested and exercisable as  
to all 10,000 shares on March 31 in the year after the date the Non-Employee    
Director was elected, provided Metromedia had net income for the year in which  
the non-employee director was elected or earnings equal to or better than       
budgeted results for such year.                                                 

 All options granted under the plan have a term of ten years. The plan had
originally been scheduled to terminate on June 27, 2001. However, at a meeting  
of the Metromedia board of directors held on December 13, 1995, the board       
terminated the plan. Options outstanding as of December 13, 1995 are unaffected 
by the termination of the plan.                                                 

   On August 29, 1996, the Metromedia stockholders adopted the 1996 Metromedia
International Group, Inc. Incentive Stock Plan. Pursuant to this plan, at a     
compensation committee meeting held on January 31, 1996, Metromedia granted     
options to purchase 50,000 shares of Metromedia's common stock at an exercise   
price of $12.75, the closing price of the common stock on the trading day       
immediately preceding the date of grant to each director other than Messrs.     
Wadler, Sherwin and White and Ms. Kessel. On March 26, 1997, Metromedia         
cancelled all such options and reissued them at an exercise price of $9.31 (See 
"Ten-Year Option/SAR Repricings" table below), 20,000 of these options were     
vested as of that date. An additional 10,000 options vested on March 26, 1998.  
In addition, on March 26, 1997, Metromedia granted options to Messrs. Imlay,    
Johnson and Sanders to purchase an additional 25,000 shares of Metromedia common
stock at an exercise price of $9.31 per share, of which 5,000 options vested as 
of the grant date and the remainder vest ratably over a four year period.       

   In November 1997, Metromedia amended and restated this plan to, among other
things:                                                                         

- increase the maximum number of options which may be granted to any    
optionee to one million,                                            

 - permit the compensation committee to grant non-tandem stock options and
stock appreciation rights,                                          

   - more narrowly circumscribe the "change of control" provisions of the plan
and                                                                 

- make a number of technical amendments to the plan.                    

EXECUTIVE OFFICERS OF METROMEDIA                                        

    The executive officers of Metromedia and their respective ages and positions
are as follows:                                                                 

                                                        [Enlarge/Download Table]

NAME                                     AGE     POSITION                                                          
---------------------------------------  ---     ------------------------------------------------------------------
                                                                                                                   
John W. Kluge..........................      84  Chairman                                                          
Stuart Subotnick.......................      57  Vice Chairman, President and Chief Executive Officer              
Silvia Kessel..........................      49  Executive Vice President, Chief Financial Officer and Treasurer   
Arnold L. Wadler.......................      56  Executive Vice President, General Counsel and Secretary           
Robert A. Maresca......................      64  Senior Vice President                                             
Vincent D. Sasso, Jr...................      41  Vice President                                                    

  The following is a biographical summary of the experience of the executive
officers of Metromedia other than those who are also directors. For the         
backgrounds of each of Metromedia's directors, including biographical           
information, see "Election of Directors" below.                                 

Mr. Maresca has served as a Senior Vice President of Metromedia since   
November 1, 1995 and has served as a Senior Vice President-Finance of Metromedia
for over five years.                                                            

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  Mr. Sasso has served as Metromedia's Vice President of financial reporting
since July 1996. Prior to that time, Mr. Sasso served in a number of positions  
at KPMG LLP from November 1984 to June 1996, including partner from July 1994 to
June 1996.                                                                      

EXECUTIVE COMPENSATION                                                  

Metromedia's Chief Executive Officer and Metromedia's other most highly 
compensated executive officers are employed and paid by Metromedia Company, and 
Metromedia Company provides the services of such executive officers to          
Metromedia pursuant to a management agreement. See "Certain Relationships and   
Related Transactions--Metromedia's Relationship with Metromedia Company."       
Metromedia has allocated a portion of such management fee to the payment of the 
salaries of Metromedia's Chief Executive Officer and Metromedia's executive     
officers based upon the services provided to Metromedia by such officers on     
behalf of Metromedia Company.                                                   

SUMMARY COMPENSATION TABLE

The following Summary Compensation Table sets forth information on      
compensation awarded to, earned by or paid to the Chief Executive Officer and   
Metromedia's other most highly compensated executive officers for services      
rendered to Metromedia and its subsidiaries during the fiscal year ended        
December 31, 1998, 1997, and 1996. Messrs. Subotnick, Wadler, Maresca, Sasso and
Ms. Kessel were employed and paid by Metromedia Company and amounts shown below 
with respect to each of them reflect the portion of their compensation paid by  
Metromedia to Metromedia Company in respect of such executive's services to     
Metromedia, pursuant to the management agreement. Metromedia estimates that     
Messrs. Subotnick, Wadler, Maresca, Sasso and Ms. Kessel spent approximately 20,
20, 20, 30 and 20 hours per week, respectively, working on matters for          
Metromedia. The compensation expensed by Metromedia and paid to Metromedia      
Company pursuant to the management agreement includes payment for salary only   
and does not include any payment relating to bonus or other compensation. No    
other amounts were paid by Metromedia to these executive officers during 1998.  

                                                        [Enlarge/Download Table]

                                                                                               AWARDS NUMBER OF                  
                                                                                                  SECURITIES                     
                                                                               OTHER ANNUAL    UNDERLYING STOCK      ALL OTHER   
NAME AND PRINCIPAL POSITION              YEAR     SALARY($)     BONUS($)     COMPENSATION($)        OPTIONS         COMPENS.($)  
-------------------------------------  ---------  ----------  -------------  ----------------  -----------------  ---------------
                                                                                                                                 
Stuart Subotnick.....................       1998  $  765,000           --               --       -- 1,050,000               --   
  President and Chief Executive             1997  $  750,000           --               --                 --               --   
  Officer                                   1996  $   55,328(1)          --             --                                  --   
Silvia Kessel........................       1998  $  382,500           --               --                 --               --   
  Executive Vice President, Chief           1997  $  375,000           --               --            250,000               --   
  Financial Officer and Treasurer           1996  $  350,000           --               --                 --               --   
Arnold L. Wadler.....................       1998  $  382,500           --               --                 --               --   
  Executive Vice President, General         1997  $  375,000           --               --            250,000               --   
  Counsel and Secretary                     1996  $  350,000           --               --                 --               --   
Robert A. Maresca....................       1998  $  220,000           --               --                 --               --   
  Senior Vice President and Chief           1997  $  220,000           --               --             75,000               --   
  Accounting Officer                        1996  $  200,000           --               --                 --               --   
Vincent D. Sasso, Jr.................       1998  $  180,000           --               --                 --               --   
  Vice President of Financial               1997  $  175,000           --               --             75,000               --   
  Reporting                                 1996  $   75,000(2)          --             --                 --               --   

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

(1) Mr. Subotnick was appointed President and Chief Executive Officer of        
   Metromedia on December 4, 1996. The amounts shown for Mr. Subotnick reflect
   the portion of the payment made by Metromedia to Metromedia Company for the
period December 4, 1996 through December 31, 1996.                      

(2) Mr. Sasso was appointed Vice President of Financial Reporting in July of    
1996. The amount shown for Mr. Sasso reflects the portion of the payment
  made by Metromedia to Metromedia Company from such period through December
31, 1996.                                                               

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AGGREGATED OPTION AND SAR EXERCISES IN 1998 
AND FISCAL YEAR-END OPTION AND SAR VALUES 

The following table sets forth information concerning the exercise of   
options or SARs by the named executive officers during the 1998 fiscal year and 
the number of unexercised options and SARs held by such officers at the end of  
the 1998 fiscal year.                                                           

FISCAL YEAR END VALUE $5.438

                                                        [Enlarge/Download Table]

                                                                   NUMBER OF            VALUE OF UNEXERCISED IN  
                                          VALUE REALIZED     SECURITIES UNDERLYING                THE            
                                           (MARKET PRICE    UNEXERCISED OPTIONS/SARS       MONEY OPTIONS/SARS    
                               SHARES           AT           AT FISCAL YEAR END(#)       AT FISCAL YEAR END($)   
                             ACQUIRED ON   EXERCISE LESS   --------------------------  --------------------------
NAME                          EXERCISE    EXERCISE PRICE)  EXERCISABLE  UNEXERCISABLE  EXERCISABLE  UNEXERCISABLE
---------------------------  -----------  ---------------  -----------  -------------  -----------  -------------
                                                                                                                 
Stuart Subotnick...........         -0-            -0-        430,000        620,000          -0-            -0- 
Arnold L. Wadler...........         -0-            -0-        150,000        100,000          -0-            -0- 
Silvia Kessel..............         -0-            -0-        150,000        100,000          -0-            -0- 
Robert A. Maresca..........         -0-            -0-         45,000         30,000          -0-            -0- 
Vincent D. Sasso, Jr.......         -0-            -0-         30,000         45,000          -0-            -0- 

TEN-YEAR OPTION/SAR REPRICINGS

    The following table sets forth information concerning the repricing of stock
options held by any named executive officer during the last ten years.          

                                                        [Enlarge/Download Table]

                                         NUMBER OF          MARKET PRICE OF   EXERCISE PRICE AT      NEW       LENGTH OF ORIGINAL 
                                   SECURITIES UNDERLYING   STOCK AT TIME OF        TIME OF        EXERCISE     OPTION TERMINATION 
                                       OPTIONS/SAR'S         REPRICING OR       REPRICING OR      PRICE(1)             AT         
NAME                     DATE     REPRICED OR AMENDED($)     AMENDMENT($)       AMENDMENT($)         ($)       DATE OF REPRICING  
---------------------  ---------  -----------------------  -----------------  -----------------  -----------  --------------------
                                                                                                                                  
Stuart Subotnick.....    3/26/97            50,000             $  9.3125          $   12.75       $    9.31    8 years/10 months  
  President and Chief                                                                                                             
  Executive Officer                                                                                                               
Arnold L. Wadler.....    3/26/97           250,000             $  9.3125          $   12.75       $    9.31    8 years/10 months  
  Executive Vice                                                                                                                  
  President, General                                                                                                              
  Counsel and                                                                                                                     
  Secretary                                                                                                                       
Silvia Kessel........    3/26/97           250,000             $  9.3125          $   12.75       $    9.31    8 years/10 months  
  Executive Vice                                                                                                                  
  President, Chief                                                                                                                
  Financial Officer                                                                                                               
  and Treasurer                                                                                                                   
Robert A. Maresca....    3/26/97            75,000             $  9.3125          $   12.75       $    9.31    8 years/10 months  
  Senior Vice                                                                                                                     
  President and Chief                                                                                                             
  Accounting Officer                                                                                                              

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

(1) At the time of repricing 40% of the options were vested, the remaining 60%  
vest ratably over a three year period.                                  

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                  

METROMEDIA'S RELATIONSHIP WITH METROMEDIA COMPANY                       

 Metromedia Company and its affiliates are collectively the largest single
stockholder of Metromedia, beneficially owning, as of March 31, 1999,           
approximately 27% of the issued and outstanding shares of Metromedia common     
stock.                                                                          

Metromedia is a party to a number of agreements and arrangements with   
Metromedia Company and its affiliates, the material terms of which are          
summarized below.                                                               

   MANAGEMENT AGREEMENT.  Metromedia is a party to a management agreement with
Metromedia Company dated November 1, 1995, as amended, pursuant to which        
Metromedia Company provides Metromedia with management services, including      
legal, insurance, payroll and financial accounting systems and cash management, 
tax and benefit plans. This management agreement terminates on October 31, 1999,
and is automatically renewed for successive one year terms unless either party  
terminates upon 60 days prior written notice. Pursuant to an amendment dated    
January 1, 1999, the management fee under this management agreement was         
increased to $3.75 million per year, payable monthly at a rate of $312,500 per  
month. Metromedia is also obligated to reimburse Metromedia Company for all its 
out-of-pocket costs and expenses incurred and advances paid by Metromedia       
Company in connection with the management agreement. Pursuant to the management 
agreement, Metromedia has agreed to indemnify and hold Metromedia Company       
harmless from and against any and all damages, liabilities, losses, claims,     
actions, suits, proceedings, fees, costs or expenses (including reasonable      
attorneys' fees and other costs and expenses incident to any suit, proceeding or
investigation of any kind) imposed on, incurred by or asserted against          
Metromedia Company in connection with the management agreement. In fiscal 1998, 
Metromedia Company received no money for its out-of-pocket costs and expenses or
for interest on advances extended by it to Metromedia pursuant to the management
agreement.                                                                      

TRADEMARK LICENSE AGREEMENT.  Metromedia is party to a license agreement
with Metromedia Company, dated November 1, 1995 as amended on June 13, 1996,    
pursuant to which Metromedia Company has granted Metromedia a non-exclusive,    
non-transferable, non-assignable right and license, without the right to grant  
sublicenses, to use the trade name, trademark and corporate name "Metromedia" in
the United States and, with respect to Metromedia International                 
Telecommunications, Inc. ("MITI"), worldwide, royalty-free for a term of 10     
years. This license agreement can be terminated by Metromedia Company upon one  
month's prior written notice in the event of:                                   

- the expiration or termination of the management agreement;            

- a "change in control" of Metromedia (as defined below); or            

  - any of the stock or all or substantially all of the assets of any of the
 subsidiaries of Metromedia is sold or transferred, in which case, the
Metromedia license agreement shall terminate with respect to such   
subsidiary.                                                         

A change in control of Metromedia is defined as:                        

   - a transaction in which a person or "group" (within the meaning of Section
    13(d)(3) of the Securities Exchange Act of 1934) not in existence at the
 time of the execution of the Metromedia license agreement becomes the
    beneficial owner of stock entitling such person or group to exercise 50%
or more of the combined voting power of all classes of stock of     
Metromedia;                                                         

  - a change in the composition of Metromedia's board of directors whereby a
     majority of the members thereof are not directors serving on the board at
      the time of the Metromedia license agreement or any person succeeding such
director who was recommended or elected by such directors;          

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- a reorganization, merger or consolidation whereby, following the      
    consummation thereof, Metromedia Company would hold less than 10% of the
combined voting power of all classes of Metromedia's stock;         

  - a sale or other disposition of all or substantially all of the assets of
Metromedia; or                                                      

  - any transaction the result of which would be that the common stock would
      not be required to be registered under the Securities Exchange Act of 1934
 and the holders of common stock would not receive common stock of the
    survivor of the transaction which is required to be registered under the
Securities Exchange Act of 1934.                                    

In addition, Metromedia Company has reserved the right to terminate the 
Metromedia license agreement in its entirety immediately upon written notice to 
Metromedia, if, in Metromedia Company's sole judgment, Metromedia's continued   
use of "Metromedia" as a trade name would jeopardize or be detrimental to the   
goodwill and reputation of Metromedia Company.                                  

Pursuant to the Metromedia license agreement, Metromedia has agreed to  
indemnify and hold Metromedia Company harmless against any and all losses,      
claims, suits, actions, proceedings, investigations, judgments, deficiencies,   
damages, settlements, liabilities and reasonable legal (and other expenses      
related thereto) arising in connection with the Metromedia license agreement.   

Metromedia believes that the terms of each of the transactions described
above were no less favorable to Metromedia than could have been obtained from   
non-affiliated parties.                                                         

INDEMNIFICATION AGREEMENTS                                              

    Metromedia has entered into indemnification agreements with certain officers
and directors of Metromedia. These indemnification agreements provide for       
indemnification of such directors and officers to the fullest extent authorized 
or permitted by law. They also provide for:                                     

   - advancement by Metromedia of expenses incurred by the director or officer
in defending certain litigation                                     

  - the appointment in certain circumstances of an independent legal counsel
to determine whether the director or officer is entitled to         
indemnification and                                                 

- the continued maintenance by Metromedia of directors' and officers'   
   liability insurance (which currently consists of $15 million of primary
coverage). These indemnification agreements were approved by the    
  stockholders of Metromedia at its 1993 annual meeting of stockholders.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934    

  Section 16(a) of the Securities Exchange Act of 1934 requires Metromedia's
directors and executive officers, and persons who beneficially own more than 10%
of the outstanding Metromedia common stock, to file with the Securities and     
Exchange Commission and the American Stock Exchange initial reports of ownership
and reports of changes in ownership of the Metromedia common stock. Such        
officers, directors and greater than 10% stockholders are required by the       
regulations of the Securities and Exchange Commission to furnish Metromedia with
copies of all reports that they file under Section 16(a). To Metromedia's       
knowledge, based solely on a review of the copies of such reports furnished to  
Metromedia and written representations that no other reports were required, all 
Section 16(a) filing requirements applicable to Metromedia's officers, directors
and greater than 10% beneficial owners were complied with by such persons during
fiscal year ended December 31, 1998.                                            

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION             

   The compensation committee of the board of directors of Metromedia consists
of Gov. Sanders and Messrs. Imlay, Johnson and White. The compensation committee
is comprised entirely of independent directors and is responsible for developing
and making recommendations to the board with respect to Metromedia's executive  
compensation policies.                                                          

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COMPENSATION COMMITTEE REPORT ON COMPENSATION                           

 The following report of the compensation committee discusses Metromedia's
executive compensation policies generally and, specifically, the relationship of
Metromedia's performance in 1998 to the compensation by Metromedia of its       
executive officers:                                                             

    Metromedia's executive officers are employed and paid by Metromedia Company,
and Metromedia Company provides the services of such executive officers to      
Metromedia pursuant to a management agreement. For the year ended December 31,  
1998, Metromedia paid Metromedia Company a management fee of $3.5 million       
pursuant to the management agreement. Metromedia has allocated a portion of such
management fee to the payment of the salaries of Metromedia's executive officers
based upon the services provided to Metromedia by such officers on behalf of    
Metromedia Company.                                                             

  BACKGROUND.  In general, Metromedia's compensation committee seeks to link
the compensation allocable to the services provided by each executive officer to
the performance of Metromedia and to the management fee payable pursuant to the 
management agreement. In addition, the members of Metromedia's compensation     
committee constitute all of the members of Metromedia's board of directors who  
are not affiliated with Metromedia Company, and such members are therefore the  
directors whose approval is required to authorize the management fee under the  
management agreement. Within these parameters, the executive compensation       
program attempts to provide an overall level of executive compensation, as a    
component of the management fee, that is competitive with companies of          
comparable size, similar market and operating characteristics and similar       
prospects.                                                                      

During 1996, Metromedia's compensation committee reviewed total officer 
compensation against a market comparison group of approximately 12 companies in 
the communications industry to assess the competitiveness of the compensation of
Metromedia's executive officers. During 1997, the compensation committee        
reviewed chief executive officer and chairman compensation against a market     
comparison group of 11 companies in the communications industry to assess       
further the competitiveness of the compensation of Metromedia's chief executive 
officer. The compensation committee has since obtained updated information      
regarding compensation of the 1997 comparison group.                            

In such reviews, the compensation committee considered Metromedia's     
executive compensation in view of Metromedia's size, the number of operating    
units, and the role and responsibilities of Metromedia's executive officers. In 
comparing the compensation of its executives with that of executives of         
companies in the two comparison groups, the compensation committee considered   
the competitiveness of the amounts of the management fee allocated to salaries  
of Metromedia's executive officers, assuming that such amounts were paid        
directly to such officers, and taking cognizance of the fact that such officers 
performed duties for Metromedia Company in addition to their duties for         
Metromedia, and received additional compensation therefor. The compensation     
committee also considered the differences between the business of Metromedia and
the businesses of the members of the comparison groups.                         

  The companies included in the NASDAQ Telecommunications Index for purposes
of analyzing the performance of Metromedia's common stock during 1998 (see      
"Performance Graph" below) are not identical to the 12 companies in the 1996    
comparison group or the 11 companies in the 1997 comparison group. Nevertheless,
Metromedia believes that the cross-section of companies included in the NASDAQ  
Telecommunications Index and the two comparison groups are sufficiently similar 
and provide a reasonable basis for the compensation committee to develop        
justified compensation policies and for an investor to evaluate the performance 
of Metromedia's common stock.                                                   

   STOCK OPTIONS.  Metromedia's compensation committee believes that the grant
of stock options will motivate executives to create long-term growth in         
shareholder value. Pursuant to Metromedia's 1996 Stock Option Plan, Metromedia  
grants options at the discretion of the compensation committee, usually         
annually. The number of option shares covered by such grants is determined based
upon assessment of the individual's performance. The compensation committee     
considers the recommendation of and relies on information provided by           
Metromedia's Chief Executive Officer in                                         

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determining the number of option shares to be granted to the non-CEO executive  
officers. The compensation committee believes that the periodic grant of        
time-vested stock options provides an incentive that focuses the executives'    
attention on managing the business as owners of an equity stake in Metromedia.  
It further motivates executives to maximize long-term growth and profitability  
because the value of the options increases only as Metromedia's stock price     
increases after the option grant.                                               

In March 1997, the compensation committee reviewed certain options      
previously granted to employees of Metromedia and the market price of           
Metromedia's common stock during the past year. The committee recognized that   
options issued by Metromedia are utilized as compensation and to provide        
incentives to improve Metromedia's performance and thereby positively influence 
the market price for Metromedia's common stock for the benefit of all           
shareholders. The committee determined that the market price had declined       
despite Metromedia's significant accomplishments, that certain options          
previously granted under the stock option plan were at exercise prices          
significantly in excess of the current market prices of Metromedia's common     
stock, and that these outstanding stock options, if left in place, would not    
achieve the underlying objectives discussed above.                              

    Accordingly, on March 26, 1997, Metromedia granted replacement stock options
to replace certain previously issued stock options under such plan. The         
replacement options did not involve the grant of any additional shares.         
Metromedia granted the replacement options at an exercise price of $9.31 per    
share, the fair market value per share of shares of Metromedia's common stock on
such date. No other option repricing or exchange has occurred in the past ten   
years.                                                                          

CHIEF EXECUTIVE OFFICER COMPENSATION                                            

    The Summary Compensation Table sets forth amounts of the management fee paid
during 1998 to Metromedia Company and allocable to compensation of Stuart       
Subotnick, Metromedia's President and Chief Executive Officer, by Metromedia.   
The compensation committee established the amount of the management fee         
allocable to Mr. Subotnick's base salary in December 1996 upon the resignation  
of the former chief executive officer of Metromedia, Mr. John D. Phillips, and  
the compensation committee subsequently increased this amount. The compensation 
committee determined the amount of the management fee allocable to Mr.          
Subotnick's base salary by analyzing the compensation of chief executive        
officers in the comparison groups, along with the amounts previously paid to Mr.
Phillips. The compensation committee believes such analysis is reasonable.      

COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)                            

  One of the factors the compensation committee considers in connection with
compensation matters is the anticipated tax treatment to Metromedia and to the  
executives of the compensation arrangements. The deductibility of certain types 
of compensation depends upon the timing of an executive's vesting in, or        
exercise of, previously granted rights. Moreover, interpretation of, and changes
in, the tax laws and other factors beyond the compensation committee's control  
also affect the deductibility of compensation. Accordingly, the compensation    
committee will not necessarily limit executive compensation to that deductible  
under Section 162(m) of the Code. The compensation committee will consider      
various alternatives to preserving the deductibility of compensation payments   
and benefits to the extent consistent with its other compensation objectives.   

    The foregoing report of the compensation committee shall not be deemed to be
incorporated by reference into any filing of Metromedia under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except 
to the extent that Metromedia specifically incorporates such information by     
reference, and shall not otherwise be deemed filed under such acts.             

                                 Submitted by the compensation
             committee
                                         of Metromedia's board of directors as
      of
                  March 29, 1999

                      John P. Imlay, Jr.
                    Clark A. Johnson
                   Carl E. Sanders
                 Leonard White

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PERFORMANCE GRAPH                                                               

  As Metromedia views Snapper as a non-core asset which it manages solely in
order to maximize shareholder value, it does not believe that it would be       
appropriate for it to compare its performance with that of companies operating  
in a line of business similar to Snapper's line of business. Rather, Metromedia 
believes that its performance should be compared to that of telecommunications  
companies because the telecommunications business constitutes the strategic     
focus of its business operations. As a result, the following graph sets forth   
Metromedia's total stockholder return as compared to the Standard & Poor's 500  
Index and the NASDAQ Telecommunications Stock Index for the five year period    
from January 1, 1993 through December 31, 1998. The total stockholder return    
assumes $100 invested at the beginning of the period in Metromedia's common     
stock, the Standard & Poor's 500 Index and the NASDAQ Telecommunications Index. 

METROMEDIA INTERNATIONAL GROUP, INC. CUMULATIVE TOTAL RETURN

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC                     

                                                        [Enlarge/Download Table]

      COMPARISON OF CUMULATIVE TOTAL RETURN SINCE DECEMBER 1993 AMONG                                      

                                                                                                           
                Metromedia International Group, Inc. & Select Indices                                      
                                          Metromedia Int. Group, Inc.  S&P 500 Index  NASDAQ Telecomm Index
1993                                                              100            100                    100
1994                                                              122            101                     84
1995                                                              187            139                    113
1996                                                              132            170                    117
1997                                                              127            227                    166
1998                                                               72            291                    271
                                                        [Enlarge/Download Table]

                                                                              1993       1994       1995       1996       1997   
                                                                            ---------  ---------  ---------  ---------  ---------
                                                                                                                                 
Metromedia Int. Group, Inc................................................. $     100  $     122  $     187  $     132  $     127
S&P 500 Index.............................................................. $     100  $     101  $     139  $     170  $     227
NASDAQ Telecomm Index...................................................... $     100  $      84  $     113  $     117  $     166


                                                                              1998                                               
                                                                            ---------                                            
                                                                                                                                 
Metromedia Int. Group, Inc................................................. $      72                                            
S&P 500 Index.............................................................. $     291                                            
NASDAQ Telecomm Index...................................................... $     271                                            

PROPOSAL NO. 2--ELECTION OF DIRECTORS                                           

The following table sets forth certain information with respect to the  
members of Metromedia's board of directors, including the three incumbent Class 
I Directors (Messrs. Imlay, Kluge, and Subotnick) who have been nominated by the
board of directors for re-election as Class I Directors at the 1999 annual      
meeting.                                                                        

 The board of directors knows of no reason why any of its nominees will be
unable or will refuse to accept election. If any nominee becomes unable or      
refuses to accept election, the board of directors                              

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will either reduce the number of directors to be elected or select a substitute 
nominee. If a substitute nominee is selected, proxies will be voted in favor of 
such nominee.                                                                   

    The affirmative vote of the holders of a plurality of shares of common stock
present in person or represented by proxy at the annual meeting will be required
to elect each of the three Class I Directors to Metromedia's board.             

                                                        [Enlarge/Download Table]

                                                                                                 CLASS OF    DIRECTOR  
NAME, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND CERTAIN DIRECTORSHIPS                AGE     DIRECTORS      SINCE   
--------------------------------------------------------------------------------------  ---     ----------  -----------
                                                                                                                       
John P. Imlay, Jr.....................................................................      62     Class I        1993 
  Served from 1990 until December 1996 as Chairman of Dun & Bradstreet Software                                        
  Services, Inc., an application software company located in Atlanta, Georgia. Mr.                                     
  Imlay is the former Chairman of Management Science America, a mainframe applications                                 
  software company. Management Science America was acquired by Dun & Bradstreet                                        
  Software Services, Inc. in 1990. Mr. Imlay is also a director of the Atlanta                                         
  Falcons, a National Football League team, IMS Health, Inc., World Access, Inc. and                                   
  The Gartner Group. Mr. Imlay is a member of the audit committee and the compensation                                 
  committee.                                                                                                           

John W. Kluge.........................................................................      84     Class I        1995 
  Chairman of the board of directors of Metromedia since November 1, 1995. Chairman of                                 
  the Board and a director of Orion Pictures Corporation from 1992 until July 1997.                                    
  Chairman and President of Metromedia Company and its predecessor-in-interest,                                        
  Metromedia, Inc. for over five years. Director of Metromedia Fiber Network, Inc.,                                    
  Conair Corporation and Occidental Petroleum Corporation. Mr. Kluge is Chairman of                                    
  the executive committee and the nominating committee.                                                                

Stuart Subotnick......................................................................      57     Class I        1995 
  President and Chief Executive Officer since December 4, 1996 and Vice Chairman of                                    
  the board of directors of Metromedia since November 1, 1995. Vice Chairman of the                                    
  board and a director of Orion Pictures Corporation from 1992 until July 1997                                         
  Executive Vice President of Metromedia Company and its predecessor-in-interest,                                      
  Metromedia, Inc. for over five years. Director of Metromedia Fiber Network, Inc.                                     
  Carnival Cruise Lines, Inc., and Chairman of Big City Radio, Inc. Mr. Subotnick is a                                 
  member of the executive committee.                                                                                   

Richard J. Sherwin....................................................................      55    Class II        1995 
  Co-President of Metromedia International Telecommunications, Inc. Mr. Sherwin has                                    
  served as Co-President and director of Metromedia International Telecommunications                                   
  and its predecessor companies for over five years. Prior to that, Mr. Sherwin served                                 
  as the Chief Operating Officer of Graphic Scanning Corp., a paging and wireless                                      
  telecommunications company.                                                                                          

Leonard White.........................................................................      59    Class II        1995 
  President and Chief Executive Officer of Rigel Enterprises, a management and private                                 
  investment firm, since July 1997. Served as President and Chief Executive Officer of                                 
  Orion Pictures Corporation from March 1992 until July 1997 and Metromedia                                            
  Entertainment Group from 1995 until July 1997. Chairman of the Board and Chief                                       
  Executive Officer of Orion Home Entertainment Corporation, a subsidiary of Orion                                     
  Home Entertainment,                                                                                                  

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                                                                                                 CLASS OF    DIRECTOR  
NAME, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND CERTAIN DIRECTORSHIPS                AGE     DIRECTORS      SINCE   
--------------------------------------------------------------------------------------  ---     ----------  -----------
  from March 1991 until March 1992. President and Chief Operating Officer of Orion                                     
  Home Video division of Orion Home Entertainment from March 1987 until March 1991.                                    
  Mr. White is a director of Metromedia Fiber Network, Inc., Big City Radio, Inc. and                                  
  American Film Technologies. Mr. White is Chairman of the audit committee and a                                       
  member of the compensation committee.                                                                                
                                                                                                                       

Clark A. Johnson......................................................................      67   Class III        1990 
  Mr. Johnson served as chairman and Chief Executive Officer of Pier 1 Imports, Inc.,                                  
  a specialty retailer of decorative home furnishings, from August 1988 until his                                      
  retirement in February 1999. Mr. Johnson is a director of Albertson's, Inc.,                                         
  Anacomp, Inc., Heritage Media Corporation, InterTAN, Inc. and Pier 1 Imports, Inc.                                   
  Mr. Johnson is a member of the compensation and audit committees.                                                    

Silvia Kessel.........................................................................      49   Class III        1995 
  Executive Vice President, Chief Financial Officer and Treasurer of Metromedia since                                  
  August 29, 1996 and Senior Vice President, Chief Financial Officer and Treasurer of                                  
  Metromedia since November 1, 1995. Executive Vice President and a director of Orion                                  
  Pictures Corporation from January 1993 until June 1997. Senior Vice President of                                     
  Orion from June 1991 to November 1992. Senior Vice President of Metromedia Company                                   
  since January 1994. President of Kluge & Company for over five years. Managing                                       
  Director of Kluge & Company for over five years. Director and Executive Vice                                         
  President of Metromedia Fiber Network, Inc. and Big City Radio, Inc. Director of                                     
  Liquid Audio, Inc., an internet music company. Ms. Kessel is a member of the                                         
  nominating committee.                                                                                                

Carl E. Sanders.......................................................................      73   Class III        1967 
  Engaged in the private practice of law as Chairman of Troutman Sanders, a law firm                                   
  located in Atlanta, Georgia. Director of Metromedia since 1967, except for a                                         
  one-year period from April 1970 to April 1971. Former Governor of the State of                                       
  Georgia and a director of Carmike Cinemas, Inc., Norrell Corporation, Healthdyne,                                    
  Inc., World Access, Inc. and formerly a director of RDM Sports Group, Inc. from                                      
  December 1994 to May 1997. Mr. Sanders is Chairman of the compensation committee.                                    

Arnold L. Wadler......................................................................      56   Class III        1995 
  Executive Vice President, General Counsel and Secretary of Metromedia since August                                   
  29, 1996 and Senior Vice President, General Counsel and Secretary of Metromedia                                      
  since November 1, 1995. Senior Vice President, Secretary and General Counsel of                                      
  Metromedia Company and its predecessor-in-interest, Metromedia, Inc., for over five                                  
  years. Director, Executive Vice President, General Counsel and Secretary of                                          
  Metromedia Fiber Network, Inc. and Big City Radio, Inc. Director of Orion Pictures                                   
  Corporation from 1992 until July 1997. Mr. Wadler is Chairman of the nominating                                      
  committee.                                                                                                           

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PROPOSAL NO. 3--RATIFICATION OF 
THE APPOINTMENT OF INDEPENDENT AUDITORS 

The board of directors of Metromedia has appointed the firm of KPMG LLP,
independent auditors, to audit the consolidated financial statements of         
Metromedia and its subsidiaries for the fiscal year ending December 31, 1999,   
subject to ratification by Metromedia's stockholders.                           

  A partner of KPMG LLP is expected to be present at the 1999 annual meeting
and to be provided with an opportunity to make a statement if such partner      
desires to do so and to be available to respond to appropriate questions from   
stockholders.                                                                   

   If the Metromedia stockholders do not ratify the appointment of KPMG LLP as
Metromedia's independent auditors for the forthcoming fiscal year, such         
appointment will be reconsidered by the audit committee and the board of        
directors.                                                                      

 The affirmative vote of the holders of a majority of shares of Metromedia
common stock present in person or represented by proxy at the 1999 annual       
meeting will be required to approve and adopt Proposal Number 3.                

    THE METROMEDIA BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION OF
THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF METROMEDIA'S         
CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999. 

PROPOSAL NO. 4--THE CHARTER AMENDMENT 

Alan G. Hevesi, investment adviser and a trustee of the New York City   
Teachers' Retirement System ("NYCTRS"), c/o The City of New York, Office of the 
Comptroller, 1 Centre Street, New York, New York 10007-2341, owner of 15,900    
shares of Common Stock, has submitted the following proposal on behalf of       
NYCTRS.                                                                         

"BE IT RESOLVED, that the shareholders of Metromedia International Group
  request that the Board of Directors amend the certificate of incorporation
to reinstate the rights of the shareholders to take action by written   
consent and to call special meetings."                                  

STATEMENT IN SUPPORT: "The rights of the shareholders to take action by 
written consent and to call special meetings should not be abridged. The
  Company's elimination of these rights, in our opinion, effectively removes
  important processes by which shareholders can act expeditiously to protect
their investment interests.                                             

   For example, the right of shareholders to act to remove incumbent directors
for egregious conduct should not be limited to the annual meeting. Also,
  shareholders should not be prevented from giving timely consideration to a
bidder's proposal to acquire control of the Company, or a dissident     
shareholder's slate of nominees for election to the Board of Directors, 
because such proposals are required to be presented only at the annual  
meeting."                                                               

 Statement Of The Metromedia Board: Presently, the restated certificate of
incorporation and by-laws of Metromedia:                                        

    - require, among other things, that special meetings of stockholders for any
     purpose be called by either the Chairman or Vice Chairman of Metromedia's
board and                                                           

 - do not provide for stockholder action by written consent. If Metromedia
amended its organizational documents as proposed, it would allow its
     stockholders to call special meetings and act without a meeting whenever,
    however frequently and for whatever reason such stockholders may desire.
  For the reasons stated below, Metromedia's board of directors believes
      that the requested amendments to the organization documents are not in the
best interests of Metromedia and its stockholders.                  

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Applicable Delaware law does not grant stockholders of a corporation the
absolute right to call a special meeting or act by written consent, and instead 
permits each individual corporation to determine in its organizational documents
whether stockholders will have such rights. Metromedia's board believes that the
Delaware legislature adopted this approach due to the significant financial and 
administrative burdens that a special meeting or stockholder action by consent  
can impose on a public corporation.                                             

Approximately 7,037 persons and entities are the record holders of      
Metromedia's common stock, each of whom, if Proposal No. 4 is approved, would be
entitled under the proposal to demand a special meeting or institute action by  
written consent. Each such stockholder would also be entitled to notice of, and 
to receive proxy materials relating to, any special meeting, thereby            
necessitating actual expenditures (legal, printing and postage) in addition to  
those associated with the Metromedia's annual meeting. In addition, the calling 
of a special meeting would necessitate the diversion of corporate officers and  
employees from their other duties in order to prepare for such a meeting.       
Metromedia's board believes that the interest of Metromedia's stockholders would
be better served utilizing these resources to improve its businesses. Similarly,
Metromedia's board believes that permitting action to be taken by written       
consent would create confusion as multiple stockholders would be able to solicit
written consents on various matters and would divert valuable corporate         
resources to this process.                                                      

   In light of the foregoing, Metromedia's board believes that the adoption of
Proposal No. 4 could leave Metromedia exposed to numerous calls for special     
meetings and stockholder action by consent that may be of little or no benefit  
to stockholders and which are a significant burden to Metromedia. Stockholders, 
such as the proponent of Proposal No. 4, remain free to make proposals at       
Metromedia's annual meeting. Metromedia's board believes that the Chairman and  
Vice Chairman of Metromedia's board are in the best position to determine if a  
special meeting is warranted.                                                   

FOR THE REASONS STATED ABOVE, THE METROMEDIA BOARD OF DIRECTORS BELIEVES
THAT PROPOSAL NO. 4 IS NOT IN THE BEST INTERESTS OF METROMEDIA AND ITS          
STOCKHOLDERS. ACCORDINGLY, THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE       
AGAINST PROPOSAL NO. 4                                                          

APPROVAL BY THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE    
OUTSTANDING SHARES OF COMMON STOCK IS REQUIRED FOR APPROVAL OF PROPOSAL NO. 4.  

OTHER BUSINESS                                                                  

 Metromedia's board does not intend to bring any other business before the
meeting and it is not aware that anyone else intends to do so. If any other     
business comes before the meeting, it is the intention of the persons named in  
the enclosed voting form to vote as proxies in accordance with their best       
judgment.                                                                       

ADDITIONAL INFORMATION FOR PLD MEETING

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                                 

The following table sets forth certain information as of March 31, 1999,
except as otherwise noted, with respect to shares of common stock beneficially  
owned by owners of more than five percent of the outstanding common stock of PLD
by all current directors and nominees, by the most highly                       

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compensated executive officers of PLD and by all current directors and executive
officers of PLD as a group.                                                     

                                                        [Enlarge/Download Table]

                                                                                    NUMBER OF SHARES                 
                                                                                   BENEFICIALLY OWNED    PERCENT OF  
BENEFICIAL OWNER                                                                          (1)             CLASS (2)  
--------------------------------------------------------------------------------  --------------------  -------------
                                                                                                                     
News America Incorporated (3)...................................................        18,223,081             43.7% 
K. Rupert Murdoch (3)...........................................................        18,223,081             43.7% 
Merrill Lynch & Co., Inc. (4)...................................................         7,254,328             16.7% 
Citicorp Inc. (5)...............................................................         2,259,230              6.0% 
James R.S. Hatt (6).............................................................           440,999              1.2% 
Dr. Boris Antoniuk (7)..........................................................            10,000                *  
Edward Charles Dilley (7).......................................................            10,000                *  
Simon Edwards (8)...............................................................           338,666                *  
Gordon Humphrey (7).............................................................            15,000                *  
Gennady Kudriavtsev (7).........................................................            15,000                *  
Dr. Vladimir Kvint (7)..........................................................            15,000                *  
I. Martin Pompadur..............................................................                --                *  
David M. Stovel (7).............................................................            27,500                *  
E. Clive Anderson (9)...........................................................           353,433                *  
Ian Armour (10).................................................................           181,666                *  
John G. Davies (7)..............................................................           333,333                *  
All current directors and executive officers of PLD as a group (12) persons.....         1,740,597              4.4% 

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

(1) In accordance with Securities and Exchange Commission regulations, the table
    lists all shares as to which such persons have or share the power to vote or
to direct disposition. The number of shares indicated includes shares   
issuable upon the exercise of outstanding stock options, warrants or    
convertible securities held by each individual or group to the extent   
  exercisable or convertible at March 31, 1999 or within 60 days thereunder.
 Unless otherwise indicated, each person has the sole power to vote and to
direct disposition of the shares listed as beneficially owned by such   
person.                                                                 

(2) Percentage for each individual or group calculated with reference to an     
   aggregate of 37,846,789 shares of PLD common stock outstanding at March 31,
    1999 and all shares issuable upon the exercise of outstanding stock options,
  warrants or convertible securities that are exercisable by such individual
   or group within 60 days of March 31, 1999. Percentages of less than 1% have
not been indicated.                                                     

(3) This information is based upon Amendment No. 1 to Schedule 13D, filed April 
12, 1999, with the Securities and Exchange Commission by The News       
 Corporation Limited, News America Incorporated, NewsPLD LLC and K. Rupert
Murdoch. The amount shown includes 14,381,780 shares of common stock and
currently exercisable warrants to purchase 250,000 shares of PLD common 
stock held by NewsPLD LLC, a wholly owned subsidiary of News America    
    Incorporated (which expired on June 22, 1999). The News Corporation Limited,
 News America Incorporated and Mr. Murdoch, as person who may be deemed to
control NewsPLD LLC, may be deemed to beneficially own the shares       
   beneficially owned by NewsPLD LLC. The amount shown also includes 3,591,301
shares of common stock issuable upon conversion of currently outstanding
revolving credit notes issued to News America Incorporated, which may be
deemed to be beneficially owned by each of The News Corporation Limited,
News America Incorporated and Mr. Murdoch. NewsPLD LLC, News America    
Incorporated and Mr. Murdoch are each located at 1211 Avenue of the     
Americas, New York, NY 10036.                                           

(4) This information is based upon Amendment No. 3 to Schedule 13G, filed       
February 5, 1999, with the Securities and Exchange Commission by Merrill
Lynch & Co., Inc., which is located at World                            

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Financial Center, North Tower, 200 Vesey Street, New York, NY 10381, and
    Merrill Lynch Global Allocation Fund, Inc., which is located at 800 Scudders
   Mill Road, Princeton, New Jersey 08536. The amount shown includes shares of
common stock issuable upon the conversion of 9% convertible subordinated
notes of PLD (CUSIP 71623PAC) and upon exercise of certain warrants to  
    purchase shares of common stock. In the aggregate, Merrill Lynch & Co., Inc.
may be deemed to beneficially own 1,698,200 shares of common stock,     
$19,200,000 aggregate principal amount of convertible notes and 172,000 
warrants. The convertible notes are convertible, at the rate of 144.93  
shares per $1,000 principal amount, at a conversion price of $6.90 per  
share. Merrill Lynch & Co., Inc. disclaims beneficial ownership of the  
securities of PLD.                                                      

(5) This information is as of December 31, 1998 and is based upon Schedule 13G, 
filed January 22, 1999, with the Securities and Exchange Commission by  
    Citigroup Inc., which is located at 153 East 53rd Street New York, NY 10043.
  PLD believes that Citigroup Inc.'s holdings of PLD's securities consist of
shares of common stock and warrants to purchase common stock, but the   
Schedule 13G does not distinguish between such securities. Citicorp Inc.
disclaims beneficial ownership of the securities of PLD.                

(6) The amount shown includes currently exercisable options to purchase 329,999 
shares of common stock.                                                 

(7) The amount shown consists entirely of currently exercisable options to      
purchase PLD common stock.                                              

(8) The amount shown includes currently exercisable options to purchase 306,666 
shares of common stock.                                                 

(9) The amount shown includes currently exercisable options to purchase 333,333 
shares of common stock.                                                 

(10) The amount shown includes currently exercisable options to purchase 166,666
shares of common stock.                                                 

OTHER INFORMATION 

WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY       
REPRESENTATION ABOUT THE MERGER OR ABOUT US THAT DIFFERS FROM OR ADDS TO THE    
INFORMATION IN THIS JOINT PROXY STATEMENT/ PROSPECTUS OR IN THE DOCUMENTS THAT  
WE PUBLICLY FILE WITH THE SECURITIES AND EXCHANGE COMMISSION. THEREFORE, IF     
ANYONE DOES GIVE YOU DIFFERENT OR ADDITIONAL INFORMATION, YOU SHOULD NOT RELY ON
IT.                                                                             

 IF YOU ARE IN A JURISDICTION WHERE IT IS UNLAWFUL TO OFFER TO EXCHANGE OR
SELL, OR TO ASK FOR OFFERS TO EXCHANGE OR BUY, THE SECURITIES OFFERED BY THIS   
JOINT PROXY STATEMENT/PROSPECTUS OR TO ASK FOR PROXIES, OR IF YOU ARE A PERSON  
TO WHOM IT IS UNLAWFUL TO DIRECT SUCH ACTIVITIES, THEN THE OFFER PRESENTED BY   
THIS JOINT PROXY STATEMENT/PROSPECTUS DOES NOT EXTEND TO YOU.                   

 THE INFORMATION CONTAINED IN THIS JOINT PROXY STATEMENT/PROSPECTUS SPEAKS
ONLY AS OF ITS DATE UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER  
DATE APPLIES.                                                                   

INDEPENDENT PUBLIC ACCOUNTANTS

KPMG LLP serves as Metromedia's and PLD's independent certified public  
accountants. A representative of KPMG LLP will be present at each of the        
Metromedia annual meeting of stockholders and PLD special meeting of            
stockholders to answer questions by stockholders and will have the opportunity  
to make a statement if so desired.                                              

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LEGAL MATTERS 

   The validity of the shares of Metromedia common stock to be issued pursuant
to the terms of the merger agreement will be passed upon by Paul, Weiss,        
Rifkind, Wharton & Garrison.                                                    

EXPERTS 

The consolidated financial statements of Metromedia International Group,
Inc. and subsidiaries as of December 31, 1998 and 1997 and for each of the years
in the three-year period ended December 31, 1998, have been audited by KPMG LLP,
independent certified public accountants, as set forth in their report with     
respect to these consolidated financial statements. These consolidated financial
statements are included in Metromedia International Group, Inc.'s annual report 
on Form 10-K for the year ended December 31, 1998, and are incorporated by      
reference in this joint proxy statement/prospectus in reliance upon the report  
given and upon the authority of said firm as experts in accounting and auditing.

  The consolidated financial statements of PLD Telekom Inc. and subsidiaries
as of December 31, 1998 and 1997 and for the years then ended, have been audited
by KPMG LLP, independent certified public accountants, as set forth in their    
report with respect to these consolidated financial statements. The report of   
KPMG LLP covering the December 31, 1998 consolidated financial statements       
contains an explanatory paragraph that states that PLD Telekom Inc.'s recurring 
losses, working capital deficiency, and lack of sufficient funds to meet its    
current debt obligations raise substantial doubt about the entity's ability to  
continue as a going concern. The consolidated financial statements do not       
include any adjustments that might result from the outcome of that uncertainty. 
These consolidated financial statements are included in PLD Telekom Inc.'s      
annual report on Form 10-K and Form 10-K/A for the year ended December 31, 1998,
and are incorporated by reference in this joint proxy statement/ prospectus in  
reliance upon the report given and upon the authority of said firm as experts in
accounting and auditing.                                                        

The consolidated statements of operations, shareholders' equity and cash
flows of PLD Telekom Inc. and subsidiaries for the year ended December 31, 1996,
have been audited by KPMG LLP, chartered accountants, as set forth in their     
report with respect to these consolidated financial statements. These           
consolidated financial statements are included in PLD Telekom Inc.'s annual     
report on Form 10-K and Form 10-K/A for the year ended December 31, 1998, and   
are incorporated by reference in this joint proxy statement/prospectus in       
reliance upon the report given and upon the authority of said firm as experts in
accounting and auditing.                                                        

    The financial statements of Baltic Communications Limited as of December 31,
1998 and 1997 and for years ended December 31, 1998 and 1997 and the nine months
ended December 31, 1996, have been audited by KPMG, independent auditors, as set
forth in their report with respect to these financial statements. The report of 
KPMG covering the December 31, 1998 financial statements contains an explanatory
paragraph that states that Baltic Communications Limited's parent, PLD Telekom  
Inc., does not presently have sufficient funds on hand to meet its current debt 
obligations. Baltic Communications Limited is a guarantor of such obligations.  
PLD Telekom Inc.'s failure to make payments in full when required could result  
in a claim being made against Baltic Communications Limited under its guaranty  
and a cross-default under and acceleration of other debt obligations for which  
Baltic Communications Limited is also a guarantor. These factors raise          
substantial doubt about the entity's ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the  
outcome of that uncertainty. These financial statements are included in PLD     
Telekom Inc.'s annual report on Form 10-K and Form 10-K/A for the year ended    
December 31, 1998, and are incorporated by reference in this joint proxy        
statement/prospectus in reliance upon the report given and upon the authority of
said firm as experts in accounting and auditing.                                

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The consolidated financial statements of NWE Capital (Cyprus) Ltd. and  
subsidiaries as of December 31, 1998 and 1997 and for each of the years in the  
three-year period ended December 31, 1998, have been audited by KPMG,           
independent auditors, as set forth in their report with respect to these        
consolidated financial statements. The report of KPMG covering the December 31, 
1998 consolidated financial statements contains an explanatory paragraph that   
states that NWE Capital (Cyprus) Ltd.'s parent, PLD Telekom Inc. does not       
presently have sufficient funds on hand to meet its current debt obligations.   
PLD Telekom Inc.'s failure to make payment in full when required could result in
a cross-default under and acceleration of other debt obligations for which NWE  
Capital (Cyprus) Ltd. is a guarantor. These factors raise substantial doubt     
about the entity's ability to continue as a going concern. The consolidated     
financial statements do not include any adjustments that might result from the  
outcome of that uncertainty. These consolidated financial statements are        
included in PLD Telekom Inc.'s annual report on Form 10-K and Form 10-K/A for   
the year ended December 31, 1998, and are incorporated by reference in this     
joint proxy statement/prospectus in reliance upon the report given and upon the 
authority of said firm as experts in accounting and auditing.                   

    The financial statements of PLD Capital Asset (U.S.) Inc. as of December 31,
1998 and for the year then ended, have been audited by KPMG LLP, independent    
certified public accountants, as set forth in their report with respect to these
financial statements. The report of KPMG LLP covering the December 31, 1998     
financial statements contains an explanatory paragraph that states that PLD     
Capital Asset (U.S.) Inc.'s parent, PLD Telekom Inc., does not presently have   
sufficient funds on hand to meet its current debt obligations. PLD Telekom      
Inc.'s failure to make payment in full when required could result in a          
cross-default under and acceleration of other debt obligations for which PLD    
Capital Asset (U.S.) Inc. is a guarantor. These factors raise substantial doubt 
about the entity's ability to continue as a going concern. The financial        
statements do not include any adjustments that might result from the outcome of 
that uncertainty. These financial statements are included in PLD Telekom Inc.'s 
annual report on Form 10-K and Form 10-K/A for the year ended December 31, 1998,
and are incorporated by reference in this joint proxy statement/prospectus in   
reliance upon the report given and upon the authority of said firm as experts in
accounting and auditing.                                                        

   The consolidated financial statements of Technocom Limited and subsidiaries
as of December 31, 1998 and 1997 and for each of the years in the three-year    
period ended December 31, 1998, have been audited by KPMG, Chartered            
Accountants, as set forth in their report with respect to these consolidated    
financial statements. The report of KPMG covering the December 31, 1998         
consolidated financial statements contains an explanatory paragraph that states 
that Technocom Limited's recurring losses, working capital deficiency and lack  
of sufficient funds on hand to meet its current obligations raise substantial   
doubt about the entity's ability to continue as a going concern. The            
consolidated financial statements do not include any adjustments that might     
result from the outcome of that uncertainty. These consolidated financial       
statements are included in PLD Telekom Inc.'s annual report on Form 10-K and    
Form 10-K/A for the year ended December 31, 1998, and are incorporated by       
reference in this joint proxy statement/prospectus in reliance upon the report  
given and upon the authority of said firm as experts in accounting and auditing.

 The consolidated financial statements of Wireless Technology Corporations
Limited and subsidiary as of December 31, 1998 and 1997 and for each of the     
years in the three-year period ended December 31, 1998, have been audited by    
KPMG, independent auditors, as set forth in their report with respect to these  
consolidated financial statements. The report of KPMG covering the December 31, 
1998 consolidated financial statements contains an explanatory paragraph that   
states that Wireless Technology Corporation Limited's parent, PLD Telekom Inc., 
does not presently have sufficient funds on hand to meet its current debt       
obligations. Wireless Technology Corporations Limited is a guarantor of such    
obligations. PLD Telekom Inc.'s failure to make payment in full when required   
could result in a claim being made against Wireless Technology Corporations     
Limited under its guaranty and a cross-default under and acceleration of other  
debt obligations for which Wireless                                             

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Technology Corporations Limited is also a guarantor. These factors raise        
substantial doubt about the entity's ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might     
result from the outcome of that uncertainty. These consolidated financial       
statements are included in PLD Telekom Inc.'s annual report on Form 10-K and    
Form 10-K/A for the year ended December 31, 1998, and are incorporated by       
reference in this joint proxy statement/ prospectus in reliance upon the report 
given and upon the authority of said firm as experts in accounting and auditing.

The financial statements of PLD Asset Leasing Limited as of December 31,
1997 and 1996 and for each of the years in the two-year period ended December   
31, 1997 have been audited by Moore Stephens, Chartered Accountants, as set     
forth in their report with respect to these financial statements. These         
financial statements are included in PLD Telekom Inc.'s annual report on Form   
10-K and Form 10-K/A for the year ended December 31, 1998, and are incorporated 
by reference in this joint proxy statement/prospectus in reliance upon the      
report given and upon the authority of said firm as experts in accounting and   
auditing.                                                                       

STOCKHOLDER PROPOSALS 

   Any stockholder who wishes to present a proposal at the 2000 annual meeting
of stockholders of Metromedia, and who wishes to have such proposal included in 
Metromedia's proxy statement for that meeting, must deliver a copy of such      
proposal to Metromedia Fiber Network, One Meadowlands Plaza, East Rutherford,   
New Jersey 07073, Attention: Secretary, no later than December 11, 1999;        
provided, however, that if the 2000 annual meeting of stockholders is held on a 
date more than 30 days before or after the corresponding date of the 1999 annual
meeting of stockholders, any stockholder who wishes to have a proposal included 
in Metromedia's proxy statement for that meeting must deliver a copy of the     
proposal to Metromedia's Secretary at a reasonable time before the proxy        
solicitation is made. Metromedia reserves the right to decline to include in its
proxy statement any stockholder's proposal, which does not comply with the rules
of the Securities and Exchange Commission for inclusion therein.                

   Any stockholder who wishes to present a proposal at the 1999 annual meeting
of stockholders of PLD which will only be held if the merger with Metromedia is 
not consummated, and who wishes to have such proposal included in PLD's proxy   
statement for that meeting, must deliver a copy of such proposal to PLD Telekom 
Inc., 505 Park Avenue, 21(st) Floor, New York, NY 10022, Attention: Secretary,  
no later than September 30, 1999; provided, however, that if the 1999 annual    
meeting of stockholders is held on a date more than 30 days before or after the 
corresponding date of the 1998 annual meeting of stockholders, any stockholder  
who wishes to have a proposal included in PLD's proxy statement for that meeting
must deliver a copy of the proposal to PLD's Secretary at a reasonable time     
before the proxy solicitation is made. PLD reserves the right to decline to     
include in its proxy statement any stockholder's proposal, which does not comply
with the rules of the Securities and Exchange Commission for inclusion therein. 

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                                                                      Appendix A

                                                                  EXECUTION COPY

================================================================================

AGREEMENT AND PLAN OF MERGER

 among

 PLD TELEKOM INC.,

METROMEDIA INTERNATIONAL GROUP, INC.

 and

 MOSCOW COMMUNICATIONS, INC.

Dated as of May 18, 1999

================================================================================

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                                                                                          PAGE
                                                                                              
RECITALS....................................................................................1 

ARTICLE 1              THE MERGER...........................................................2 
         Section 1.1   The Merger...........................................................2 
         Section 1.2   Closing..............................................................2 
         Section 1.3   Effective Time.......................................................2 
         Section 1.4   The Certificate of Incorporation.....................................2 
         Section 1.5   The By-Laws..........................................................2 
         Section 1.6   Directors of Surviving Corporation...................................2 
         Section 1.7   Officers of Surviving Corporation....................................3 

ARTICLE 2              EFFECT OF THE MERGER ON CAPITAL STOCK;                                 
                       EXCHANGE OF CERTIFICATES.............................................3 
         Section 2.1   Effect on Capital Stock..............................................3 
         Section 2.2   Exchange of Certificates for Shares..................................6 
         Section 2.3   No Appraisal Rights.................................................10 
         Section 2.4   Adjustments to Prevent Dilution.....................................10 

ARTICLE 3              REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................10 
         Section 3.1   Organization and Qualification; Subsidiaries........................10 
         Section 3.2   Certificate of Incorporation and By-Laws............................11 
         Section 3.3   Capitalization......................................................11 
         Section 3.4   Authority...........................................................13 
         Section 3.5   No Conflict.........................................................13 
         Section 3.6   Governmental Required Filings and Consents..........................14 
         Section 3.7   Permits; Compliance with Law........................................14 
         Section 3.8   Securities and Exchange Commission ("SEC") Filings;                    
                       Financial Statements................................................15 
         Section 3.9   Absence of Certain Changes or Events................................16 
         Section 3.10  Employee Benefit Plans..............................................17 
         Section 3.11  Accounting and Tax Matters..........................................17 
         Section 3.12  Contracts; Debt Instruments.........................................18 
         Section 3.13  Litigation..........................................................18 
         Section 3.14  Environmental Matters...............................................18 
         Section 3.15  Intellectual Property...............................................20 
         Section 3.16  Taxes...............................................................23 
         Section 3.17  Non-Competition Agreements..........................................24 
         Section 3.18  Certain Agreements..................................................24 
         Section 3.19  Investment Company Act..............................................24 
         Section 3.20  Opinion of Financial Advisor........................................24 

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         Section 3.21  Brokers.............................................................24 
         Section 3.22  Certain Statutes....................................................25 
         Section 3.23  Information.........................................................25 
         Section 3.24  Vote Required.......................................................25 

ARTICLE 4              REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB.........26 
         Section 4.1   Organization and Qualification; Subsidiaries........................26 
         Section 4.2   Certificate of Incorporation and By-Laws............................26 
         Section 4.3   Capitalization......................................................27 
         Section 4.4   Authority...........................................................28 
         Section 4.5   No Conflict.........................................................28 
         Section 4.6   Governmental Required Filings and Consents..........................29 
         Section 4.7   Permits; Compliance with Law........................................29 
         Section 4.8   SEC Filings; Financial Statements...................................30 
         Section 4.9   Absence of Certain Changes or Events................................31 
         Section 4.10  Employee Benefit Plans..............................................32 
         Section 4.11  Accounting and Tax Matters..........................................32 
         Section 4.12  Contracts; Debt Instruments.........................................32 
         Section 4.13  Litigation..........................................................33 
         Section 4.14  Environmental Matters...............................................33 
         Section 4.15  Intellectual Property...............................................34 
         Section 4.16  Taxes...............................................................35 
         Section 4.17  Non-Competition Agreements..........................................36 
         Section 4.18  Investment Company Act..............................................37 
         Section 4.19  Opinion of Financial Advisor........................................37 
         Section 4.20  Brokers.............................................................37 
         Section 4.21  Certain Statutes....................................................37 
         Section 4.22  Information.........................................................37 
         Section 4.23  Vote Required.......................................................38 
         Section 4.24  Interim Operations of Merger Sub....................................38 

ARTICLE 5              COVENANTS...........................................................38 
         Section 5.1   Conduct of Business of the Company..................................38 
         Section 5.2   Conduct of Business of the Parent...................................40 
         Section 5.3   Other Actions.......................................................42 
         Section 5.4   Updated Letters; Notification of Certain Matters....................42 
         Section 5.6   Stockholders Meetings...............................................45 
         Section 5.7   Access to Information; Confidentiality..............................45 
         Section 5.8   No Solicitation.....................................................46 
         Section 5.9   Affiliates..........................................................48 
         Section 5.10  Directors' and Officers' Indemnification and Insurance..............48 
         Section 5.11  Letters of Accountants..............................................49 

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         Section 5.12  Reasonable Best Efforts.............................................49 
         Section 5.13  Consents; Filings; Further Action...................................50 
         Section 5.14  Plan of Reorganization..............................................51 
         Section 5.15  Public Announcements................................................51 
         Section 5.16  Obligations of Merger Sub...........................................51 
         Section 5.17  Stock Exchange Listings and De-Listings.............................52 
         Section 5.18  Expenses............................................................52 
         Section 5.19  Takeover Statutes...................................................52 
         Section 5.20  Board of Directors..................................................52 

ARTICLE 6              CONDITIONS..........................................................52 
         Section 6.1   Conditions to Each Party's Obligation to Effect the Merger..........52 
                  (a)  Stockholder Approval................................................52 
                  (b)  Listing.............................................................53 
                  (c)  Governmental Consents...............................................53 
                  (d)  Litigation..........................................................53 
                  (e)  Registration Statement..............................................53 
                  (f)  Accountants' Letters................................................53 
         Section 6.2   Conditions to Obligations of the Parent and Merger Sub..............53 
                  (a)  Representations and Warranties......................................54 
                  (b)  Performance of Obligations of the Company...........................54 
                  (c)  Material Adverse Effect.............................................54 
                  (d)  Consents Under Agreements...........................................54 
                  (e)  Affiliate Letters...................................................54 
                  (f)  The Travelers Revolving Credit Note and                                
                       Warrant Agreement...................................................54 
                  (g)  Exchange Offer......................................................54 
                  (h)  Technocom Limited Put/Call Agreements...............................55 
                  (i)  News Arrangements...................................................55 
                  (j)  Certain Payments....................................................55 
         Section 6.3   Conditions to Obligation of the Company.............................55 
                  (a)  Representations and Warranties......................................55 
                  (b)  Performance of Obligations of the Parent and                           
                       Merger Sub..........................................................56 
                  (c)  Tax Opinion.........................................................56 
                  (d)  Material Adverse Effect.............................................56 

ARTICLE 7              TERMINATION.........................................................56 
         Section 7.1   Termination.........................................................56 
         Section 7.2   Effect of Termination...............................................57 
         Section 7.3   Amendment...........................................................58 
         Section 7.4   Waiver..............................................................58 
         Section 7.5   Expenses following Termination......................................58 

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ARTICLE 8              MISCELLANEOUS.......................................................59 
         Section 8.1   Certain Definitions.................................................59 
         Section 8.2   Non-Survival of Representations, Warranties and Agreements..........60 
         Section 8.3   Counterparts........................................................61 
         Section 8.4   GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.......................61 
         Section 8.5   Notices.............................................................62 
         Section 8.6   Entire Agreement....................................................62 
         Section 8.7   No Third Party Beneficiaries........................................63 
         Section 8.8   Obligations of the Parent and of the Company........................63 
         Section 8.9   Severability........................................................63 
         Section 8.10  Interpretation......................................................63 
         Section 8.11  Assignment..........................................................63 
         Section 8.12  Specific Performance................................................64 


EXHIBITS                                                                        

Exhibit A                  Company Voting Agreements                            
Exhibit B                  Travelers Note and Warrant Modification Agreement    
Exhibit C                  Agreement to Exchange and Consent                    
Exhibit D                  Technocom Put/Call Arrangement                       
Exhibit E                  News Letter Agreement                                

COMPANY DISCLOSURE LETTER                                                       

Section 3.1(b)             Company Subsidiaries                                 
Section 3.3(b)             Other Stock Option Agreements                        
Section 3.3(c)             Liens on Capital Stock; Material Obligations         
Section 3.5(b)             Conflicts                                            
Section 3.6                Governmental Consents                                
Section 3.8(a)             Filing Subsidiaries                                  
Section 3.9(e)             Certain Changes                                      
Section 3.10(a)            Benefit Plans                                        
Section 3.12               Material Contracts                                   
Section 3.14               Environmental Matters                                
Section 3.15(a)(i)         Intellectual Property                                
Section 3.15(a)(ii)        Licenses                                             
Section 3.15(a)(iii)       Proposed Intellectual Property Agreements            
Section 3.16(a)            Taxes                                                

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Section 3.16(b)            Tax Extensions                                       
Section 3.16(c)            Tax Claims                                           
Section 3.17               Non-Competition Agreements                           
Section 3.18               Certain Agreements                                   
Section 5.1                Conduct of Business                                  
Section 5.1(f)             Asset Transactions                                   
Section 6.2(j)             Waivers                                              

PARENT DISCLOSURE LETTER                                                        
Section 4.1(a)             Organization                                         
Section 4.1(b)             Parent Subsidiaries                                  
Section 4.3(b)             Other Stock Option Agreements                        
Section 4.3(c)             Liens on Capital Stock; Material Obligations         
Section 4.5(a)(i)          Violations                                           
Section 4.5(b)             Conflicts                                            
Section 4.6                Governmental Consents                                
Section 4.7                Permits                                              
Section 4.10(a)            Benefit Plans                                        
Section 4.12               Material Contracts; Changes in Indebtedness          
Section 4.14               Environmental Matters                                
Section 4.15(a)(i)         Intellectual Property                                
Section 4.15(a)(ii)        Licenses                                             
Section 4.15(a)(iii)       Proposed Intellectual Property Agreements            
Section 4.16(a)            Taxes                                                
Section 4.16(c)            Tax Extensions                                       
Section 4.16(d)            Tax Claims                                           
Section 4.17               Non-Competition Agreements                           
Section 5.2                Conduct of Business                                  
Section 5.2(d)             Asset Transactions                                   
Section 5.5                Terms of New Notes; Terms of Exchange Offer          

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INDEX OF DEFINED TERMS

                                                        [Enlarge/Download Table]


Term                                                                      Section     
----                                                                      -------     
                                                                                      
affiliate................................................................ 8.1(a)      
Affiliate Letters........................................................ 5.9         
Agreement................................................................ Title       
Average Parent Stock Price............................................... 2.1(a)(i)   
Benefit Plans............................................................ 3.10(a)     
Blue Sky Laws............................................................ 3.6         
Bridge Loan Agreement.................................................... 5.1(g)      
business day............................................................. 8.1(b)      
Certificate.............................................................. 2.1(a)(i)   
Certificate of Merger.................................................... 1.3         
Claims................................................................... 3.13        
Closing.................................................................. 1.2         
Closing Date............................................................. 1.2         
Code..................................................................... Recitals    
Company.................................................................. Title       
Company Benefit Plans.................................................... 3.10(a)     
Company Charter Documents................................................ 3.2         
Company Common Stock..................................................... 2.1(a)(i)   
Company Disclosure Letter................................................ 3.1(b)      
Company Financial Advisor................................................ 3.20        
Company Governmental Consents............................................ 3.6         
Company Permits.......................................................... 3.7         
Company Preferred Shares................................................. 2.1(a)(ii)  
Company Preferred Stock.................................................. 3.3(a)      
Company Required Consents................................................ 3.5(b)      
Company SEC Reports...................................................... 3.8(a)      
Company Senior Notes..................................................... 5.5(a)      
Company Series II Preferred Stock........................................ 2.1(a)(ii)  
Company Series III Preferred Stock....................................... 2.1(a)(ii)  
Company Share............................................................ 2.1(a)      
Company Shares........................................................... 2.1(a)      
Company Stock Option..................................................... 2.1(b)      
Company Stockholders Meeting............................................. 5.5(a)      
Company Subsidiaries..................................................... 3.1(a)      
Company Voting Agreement................................................. Recitals    
Company Warrant.......................................................... 2.1(b)      
Company's Option Plan.................................................... 3.3(b)      
Confidentiality Agreement................................................ 5.7(b)      
Contracts................................................................ 3.5(a)(iii) 
control.................................................................. 8.1(a)      
controlled by............................................................ 8.1(a)      

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Term                                                                      Section     
----                                                                      -------     

controlling.............................................................. 8.1(a)      
Convertible Notes........................................................ 2.1(b)      
Effective Time........................................................... 1.3         
Environment.............................................................. 3.14        
Environmental Claims..................................................... 3.14        
ERISA.................................................................... 3.10(a)     
Excess Parent Shares..................................................... 2.2(d)(i)   
Exchange Act............................................................. 3.6         
Exchange Agent........................................................... 2.2(a)(i)   
Exchange Offer........................................................... 5.5(a)      
Exchange Offer Registration Statement.................................... 5.5(a)      
Exchange Ratio .......................................................... 2.1(a)(i)   
Exchange Trust........................................................... 2.2(d)(i)   
Excluded Company Shares.................................................. 2.1(a)(i)   
Expenses................................................................. 7.5(a)      
FCPA..................................................................... 3.7         
GAAP..................................................................... 3.8(b)      
GCL...................................................................... Recitals    
Governmental Entity...................................................... 3.6         
group.................................................................... 8.1(d)      
Hazardous Substance...................................................... 3.14        
HSR Act.................................................................. 3.6         
including................................................................ 8.1(c)      
Indemnified Parties...................................................... 5.10(a)     
Intellectual Property.................................................... 3.15(a)(ii) 
Investment Company Act................................................... 3.19        
IP Licenses.............................................................. 3.15(a)(ii) 
Law...................................................................... 3.5(a)(ii)  
Liens.................................................................... 3.3(c)      
Material Adverse Effect on the Company................................... 3.1(a)      
Material Adverse Effect on the Parent.................................... 4.1(a)      
Merger................................................................... Recitals    
Merger Consideration..................................................... 2.1(a)(i)   
Merger Sub............................................................... Title       
Merging Parties.......................................................... 3.14        
MIG Form 10K............................................................. 4.2         
New Parent Notes......................................................... 5.5(a)      
News..................................................................... 6.2(i)      
News Notes............................................................... 3.3(b)      
PLD Form 10K............................................................. 3.2         
Parent................................................................... Title       
Parent Benefit Plans..................................................... 4.10(a)     
Parent Charter Documents................................................. 4.2         

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Term                                                                      Section     
----                                                                      -------     

Parent Common Stock...................................................... 2.1(a)(i)   
Parent Disclosure Letter................................................. 4.1(b)      
Parent Financial Advisor................................................. 4.18        
Parent Governmental Consents............................................. 4.6         
Parent Material Contract................................................. 4.12        
Parent Permits........................................................... 4.7         
Parent Preferred Stock................................................... 4.3(a)      
Parent SEC Reports....................................................... 4.8(a)      
Parent Stock Options..................................................... 4.3(b)      
Parent Stockholders Meeting.............................................. 5.5(a)      
Parent Subsidiaries...................................................... 4.1(a)      
Parent's Option Plan..................................................... 4.3(b)      
Permits.................................................................. 3.14        
person................................................................... 8.1(d)      
Proposed Intellectual Property Agreements................................ 3.15(a)(iii)
Proxy Materials.......................................................... 5.5(a)      
Proxy Statement.......................................................... 5.5(a)      
Qualified Transaction Proposal........................................... 5.8(a)      
Redemption Payment....................................................... 2.1(a)(ii)  
Registration Statement................................................... 5.5(a)      
Registration Statement Effective Date.................................... 5.5(a)      
Release.................................................................. 3.14        
Representatives.......................................................... 5.7(a)      
Requisite Company Vote................................................... 3.4(a)      
Requisite Parent Vote.................................................... 4.4         
Safety and Environmental Laws............................................ 3.14        
SEC...................................................................... 3.8         
Securities Act........................................................... 3.6         
7 1/4% Preferred Stock...................................................... 4.3(a)   
Shareholders............................................................. Recitals    
Software................................................................. 3.15(a)(ii) 
Sub Common Stock......................................................... 4.3(d)      
subsidiary............................................................... 8.1(e)      
subsidiaries............................................................. 8.1(e)      
Superior Acquisition Proposal............................................ 5.8(b)      
Surviving By-Laws........................................................ 1.5         
Surviving Charter........................................................ 1.4         
Surviving Corporation.................................................... 1.1         
Systems.................................................................. 3.15(g)     
Takeover Statute......................................................... 3.22        
Taxes.................................................................... 3.16        
Technology............................................................... 3.15(a)(ii) 
Terminating Company Breach............................................... 7.1(f)      

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Term                                                                      Section     
----                                                                      -------     

Terminating Parent Breach................................................ 7.1(g)      
Termination Amount....................................................... 7.5(b)      
Termination Notice....................................................... 2.1(a)(i)(D)
Topped-Up Exchange Ratio................................................. 2.1(a)(i)(D)
Top-Up Request Notice.................................................... 2.1(a)(i)(D)
Transaction Proposals.................................................... 5.8(a)      
under common control with................................................ 8.1(a)      
Year 2000 Compliant...................................................... 3.15(g)     


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AGREEMENT AND PLAN OF MERGER

      AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of May 18,
1999, among PLD Telekom Inc., a Delaware corporation (the "COMPANY"), Metromedia
International Group, Inc., a Delaware corporation (the "PARENT"), and Moscow    
Communications, Inc., a Delaware corporation and a wholly owned subsidiary of   
the Parent ("MERGER SUB").                                                      

RECITALS

    WHEREAS, the respective boards of directors of each of the Parent,
Merger Sub and the Company have determined that it is in the best interests of  
their respective stockholders to combine the respective businesses of the Parent
and the Company, and consequently have approved the merger of Merger Sub with   
and into the Company (the "MERGER") and approved and adopted the Merger, in     
accordance with the General Corporation Law of the State of Delaware (the "GCL")
and upon the terms and subject to the conditions set forth in this Agreement;   

    WHEREAS, it is intended that, for federal income tax purposes, the
Merger shall qualify as a reorganization under the provisions of Section 368(a) 
of the Internal Revenue Code of 1986, as amended (the "CODE"), and the rules and
regulations promulgated under the Code;                                         

  WHEREAS, concurrently with the execution of this Agreement, as a
condition to the willingness of the Parent to enter into this Agreement, (i)    
certain holders (the "SHAREHOLDERS") of Company Shares (as defined below) are   
entering into the Voting Agreement with the Parent, a copy of which is attached 
to this Agreement as Exhibit A (the "COMPANY VOTING AGREEMENT"), providing for, 
among other things, the agreement of the Shareholders to vote their respective  
Company Shares in favor of approval and adoption of this Agreement and the      
Merger at the Company Shareholders Meeting (as defined below);                  

         WHEREAS, certain terms used in this Agreement which are not capitalized
have the meanings specified in Section 8.1; and                                 

        WHEREAS, the Company, the Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this   
Agreement.                                                                      

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NOW, THEREFORE, in consideration of the premises, and of the  
representations, warranties, covenants and agreements contained in this         
Agreement, the parties agree as follows:                                        

 ARTICLE 1

THE MERGER

      SECTION 1.1 THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, at the Effective Time, Merger Sub shall be merged  
with and into the Company and the separate corporate existence of Merger Sub    
shall cease. The Company shall be the surviving corporation in the Merger       
(sometimes referred to as the "SURVIVING CORPORATION") and shall continue to be 
governed by the laws of the State of Delaware, and the separate corporate       
existence of the Company with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger. The Merger shall have the   
effects set forth in Section 259 of the GCL.                                    

      SECTION 1.2 CLOSING. The closing of the Merger (the "CLOSING") shall
take place (a) at the offices of Paul, Weiss, Rifkind, Wharton & Garrison, New  
York, New York at 10:00 A.M. on the business day on which the last to be        
fulfilled or waived of the conditions set forth in Article 6 (other than those  
conditions that by their nature are to be satisfied at the Closing, but subject 
to the fulfillment or waiver of those conditions) shall be satisfied or waived  
in accordance with this Agreement or (b) at such other place and time and/or on 
such other date as the Company and the Parent may agree in writing (the "CLOSING
DATE").                                                                         

  SECTION 1.3 EFFECTIVE TIME. As soon as practicable following the
Closing, the Company and the Parent will cause a Certificate of Merger (the     
"CERTIFICATE OF MERGER") to be signed, acknowledged and delivered for filing    
with the Secretary of the State of Delaware as provided in Section 251 of the   
GCL. The Merger shall become effective at the time when a Certificate of Merger 
has been duly filed with the Secretary of State of the State of Delaware or such
other time as shall be agreed upon by the parties and set forth in the          
Certificate of Merger and in accordance with the GCL (the "EFFECTIVE TIME").    

  SECTION 1.4 THE CERTIFICATE OF INCORPORATION. The certificate of
incorporation of Merger Sub in effect immediately prior to the Effective Time   
shall, from and after the Effective Time, be the certificate of incorporation of
the Surviving Corporation (the "SURVIVING CHARTER"), until duly amended as      
provided in the Surviving Charter or by applicable law.                         

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     SECTION 1.5 THE BY-LAWS. The by-laws of Merger Sub in effect at the
Effective Time shall, from and after the Effective time, be the by-laws of the  
Surviving Corporation (the "SURVIVING BY-LAWS"), until duly amended as provided 
in the Surviving By-Laws or by applicable law.                                  

         SECTION 1.6 DIRECTORS OF SURVIVING CORPORATION. The directors of Merger
Sub at the Effective Time shall, from and after the Effective Time, be the      
directors of the Surviving Corporation until their successors have been duly    
elected or appointed and qualified or until their earlier death, resignation or 
removal in accordance with the Surviving Charter and the Surviving By-Laws.     

    SECTION 1.7 OFFICERS OF SURVIVING CORPORATION. The officers of the
Company at the Effective Time shall, from and after the Effective Time, be the  
officers of the Surviving Corporation until their successors have been duly     
elected or appointed and qualified or until their earlier death, resignation or 
removal in accordance with the Surviving Charter and the Surviving By-Laws.     

 ARTICLE 2

EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES

         SECTION 2.1 EFFECT ON CAPITAL STOCK. At the Effective Time, as a result
of the Merger and without any action on the part of the holder of any capital   
stock of the Company:                                                           

(a) MERGER CONSIDERATION.                   

                         (i) Each share (each a "COMPANY SHARE" and together
the "COMPANY SHARES") of the common stock, par value $.01 per share, of the     
Company (the "COMPANY COMMON STOCK") issued and outstanding immediately prior to
the Effective Time (other than Company Shares that are owned by the Parent,     
Merger Sub or any other Parent Subsidiary or Company Shares that are owned by   
the Company or any Company Subsidiary and in each case not held on behalf of    
third parties (collectively, "EXCLUDED COMPANY SHARES")) shall be converted by  
virtue of the Merger and without any action on the part of the holder thereof   
into the right to receive and become exchangeable for a number of shares of     
common stock, par value $1.00 per share, of the Parent ("PARENT COMMON STOCK"), 
equal to the "EXCHANGE RATIO" determined in the manner set forth below:         

                                 (A) If the Average Parent Stock Price (as
       defined below) is less than $6.25 and equal to or greater than $5.25,
then the                                                      

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  "Exchange Ratio" shall be equal to the quotient (rounded to four
    decimal points) obtained by dividing (I) $3.50 by (II) the Average
Parent Stock Price;                                           

                                (B) If the Average Parent Stock Price is
      equal to or greater than $6.25 and less than or equal to $8.00, then
the "Exchange Ratio" shall be .56;                            

                                (C) If the Average Parent Stock Price is
     greater than $8.00, then the "Exchange Ratio" shall be equal to the
    quotient (rounded to four decimal points) obtained by dividing (x)
$4.48 by (y) the Average Parent Stock Price; or               

                                (D) If the Average Parent Stock Price is
      less than $5.25, then the "Exchange Ratio" shall be .6667; PROVIDED,
        THAT the Company shall have the right to give written notice to Parent
     (the "TOP-UP REQUEST NOTICE") requesting that the Exchange Ratio be
  increased to equal the quotient (rounded to four decimal points)
      obtained by dividing (x) $3.50 by (y) the Average Parent Stock Price
         (the "TOPPED-UP EXCHANGE RATIO"); PROVIDED FURTHER THAT, if the Average
      Parent Stock Price is less than $4.00, then the Company also has the
        right to give a Termination Notice (as defined below) to Parent in the
        manner provided below that states that the Company elects to terminate
      this Agreement in accordance with Section 7.1(h). The Top-Up Request
        Notice shall be delivered to and received by Parent no later than 2:00
   p.m. on the second Business Day prior to the Company Stockholders
     Meeting. Parent, may, in its sole discretion, agree or not agree to
        increase the Exchange Ratio to the Topped-Up Exchange Ratio. Within 24
        hours of receiving the Top-Up Request Notice, Parent shall provide the
      Company written notice of its determination with respect thereto. If
        Parent agrees to increase the Exchange Ratio to the Topped-Up Exchange
    Ratio, the Exchange Ratio shall be equal to the Topped-Up Exchange
       Ratio for purposes of this Agreement. If Parent does not agree in its
      sole discretion that the Exchange Ratio shall be increased to be the
      Topped-Up Exchange Ratio (which disagreement shall be deemed to have
         occurred if Parent does not respond to the Top-Up Request Notice within
         the 24 hour period specified above), the Company shall either (x) agree
        that the Exchange Ratio shall be .6667 or (y) give written notice (the
"TERMINATION NOTICE") to the Parent that the Company elects to
        terminate this Agreement. Any Termination Notice shall be delivered to
         Parent no later than 5:00 p.m. on the Business Day prior to the Company
        Stockholders Meeting; PROVIDED, THAT if the Termination Notice has not
      been received by Parent by such time, the Company shall be deemed to
         have accepted .6667 as the Exchange Ratio and the Company shall have no
    further right to terminate this Agreement pursuant to this Section
2.1(a)(i)(D) or Section 7.1(h).                               

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        For purposes of this Agreement, the "AVERAGE PARENT STOCK PRICE" means
the average of the daily closing prices of the Parent Common Stock as reported  
on the American Stock Exchange Composite Transactions Tape (as reported by THE  
WALL STREET JOURNAL (national edition)) for the twenty (20) consecutive trading 
days ending on the third business day (including such third business day in the 
determination) immediately prior to the Company Stockholders Meeting.           

       The number of shares of Parent Common Stock issuable pursuant to this
Section 2.1(a)(i) shall be subject to adjustment as provided in Section 2.4 and 
such shares, together with cash in lieu of fractional shares of Parent Common   
Stock, if any, payable pursuant to Section 2.2(d) shall collectively be referred
to as the "MERGER CONSIDERATION." At the Effective Time, all Company Shares     
shall no longer be outstanding, shall be canceled and retired and shall cease to
exist, and each certificate (a "CERTIFICATE") formerly representing any Company 
Shares (other than Excluded Company Shares) shall thereafter represent only the 
right to receive the Merger Consideration and any distribution or dividend under
Section 2.2(b).                                                                 

               (ii) Each share of the Series II preferred stock, par value
$.01 per share, of the Company (the "COMPANY SERIES II PREFERRED STOCK") and    
each share of the Series III Preferred Stock, par value $.01 per share, of the  
Company ("the COMPANY SERIES III PREFERRED STOCK" and collectively, with the    
Company Series II Preferred Stock, the "COMPANY PREFERRED SHARES") issued and   
outstanding immediately prior to the Effective Time shall at the Effective Time 
be redeemed as provided in the Company Charter Documents (as defined below) at a
redemption price of Cdn $1.00 per share (the "REDEMPTION PAYMENT"). At the      
Effective Time, all Company Preferred Shares shall no longer be outstanding,    
shall be canceled and retired and shall cease to exist, and each certificate    
formerly representing any Company Preferred Shares shall thereafter represent   
only the right to receive the Redemption Payment.                               

       (b) STOCK OPTIONS, WARRANTS, CONVERTIBLE NOTES, ETC. At the Effective
Time, each outstanding option to purchase shares of Company Common Stock (a     
"COMPANY STOCK OPTION") issued pursuant to the Company's Option Plan (as defined
below) and each outstanding warrant to acquire shares of Company Common Stock (a
"COMPANY WARRANT") issued pursuant to a warrant agreement or otherwise appearing
on the Company's Schedule of Warrants, Options and Conversions dated as of April
30, 1999, whether vested or unvested, shall be assumed by Parent and any        
remaining outstanding 9% Convertible Subordinated Notes due 2006 (the           
"CONVERTIBLE NOTES") that have not been tendered in the Exchange Offer (as      
defined below) shall be assumed by the Parent. Each Company Stock Option and    
Company Warrant shall be deemed, without further action on the part of Parent or
the holders of such Company Stock Options and Company Warrants, to constitute an
option or a warrant, as the case may be, to acquire, on the same terms and      
conditions as were applicable under such                                        

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Company Stock Option or Company Warrant (except to the extent that such terms   
and conditions may be altered in accordance with their terms as a result of the 
transactions contemplated hereby), and the Convertible Notes after the Effective
Time shall be convertible for, shares of Parent Common Stock in such amount and 
at the exercise price provided below:                                           

                           (i) the number of shares of Parent Common Stock to be
subject to the option, warrant or Convertible Note (as adjusted) shall be equal 
to the product of (x) the number of shares of Company Common Stock subject to   
the original option, warrant or Convertible Note and (y) the Exchange Ratio     
(rounded to four decimal points);                                               

                        (ii) the exercise price per share of Parent Common
Stock under the option, warrant or Convertible Note (as adjusted) shall be equal
to (x) the exercise price per share of Company Common Stock under the original  
option, warrant or Convertible Note divided by (y) the Exchange Ratio (rounded  
to the nearest $0.01); and                                                      

                          (iii) fractional shares of any assumed Company Stock
Options or Company Warrants resulting from the adjustments set forth in this    
Section 2.1(b) shall be eliminated.                                             

       In the case of any option to which section 421 of the Code applies by
reason of its qualification under any of sections 422-424 of the Code, the      
exercise price, the number of shares purchasable pursuant to such option and the
terms and conditions of exercise of such option shall be effected in a manner   
consistent with the requirements of section 424(a) of the Code.                 

                  (c) CANCELLATION OF SHARES. Each Excluded Company Share issued
and outstanding immediately prior to the Effective Time shall, by virtue of the 
Merger and without any action on the part of the holder of such Excluded Company
Share, no longer be outstanding, shall be canceled and retired without payment  
of any consideration therefor and shall cease to exist.                         

               (d) MERGER SUB. At the Effective Time, each share of common
stock, par value $.01 per share, of Merger Sub issued and outstanding           
immediately prior to the Effective Time shall be converted into one validly     
issued, fully paid and nonassessable share of common stock, par value $.01 per  
share, of the Surviving Corporation, and the Surviving Corporation shall be a   
wholly owned subsidiary of the Parent.                                          

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SECTION 2.2 EXCHANGE OF CERTIFICATES FOR SHARES.              

(a) EXCHANGE PROCEDURES.                    

                   (i) LETTER OF TRANSMITTAL. Promptly after the
Effective Time, the Surviving Corporation shall cause an exchange agent selected
by the Parent and reasonably acceptable to the Company (the "EXCHANGE AGENT") to
mail to each holder of record of a Certificate (other than Certificates in      
respect of Excluded Company Shares) (A) a letter of transmittal specifying that 
delivery shall be effected, and that risk of loss and title to the Certificates 
shall pass, only upon delivery of the Certificates (or affidavits of loss in    
lieu of Certificates) to the Exchange Agent, in a form and with other provisions
reasonably acceptable to both the Parent and the Company, and (B) instructions  
for exchanging the Certificates for (1) certificates representing shares of     
Parent Common Stock, and (2) cash in lieu of fractional shares.                 

                         (ii) SURRENDER OF CERTIFICATES. Upon surrender of a
Certificate for cancellation to the Exchange Agent together with such letter of 
transmittal, duly executed, the holder of that Certificate shall be entitled to 
receive in exchange (A) a certificate representing that number of whole shares  
of Parent Common Stock that the holder is entitled to receive under this Article
2, (B) a check in the amount (after giving effect to any required tax           
withholding) of any cash in lieu of fractional shares that such holder has the  
right to receive under the provisions of this Article 2, and the Certificate so 
surrendered shall immediately be canceled. No interest will be paid or accrued  
on any amount payable upon due surrender of the Certificates.                   

                       (iii) UNREGISTERED TRANSFEREES. In the event of a
transfer of ownership of Company Shares that is not registered in the transfer  
records of the Company, a certificate representing the proper number of shares  
of Parent Common Stock, together with a check for any cash to be paid upon the  
surrender of the Certificate and any other dividends or distributions in respect
of those shares, may be issued or paid to such a transferee if the Certificate  
formerly representing such Company Shares is presented to the Exchange Agent,   
accompanied by all documents required to evidence and effect the transfer and to
evidence that any applicable stock transfer taxes have been paid. If any        
certificate for shares of Parent Common Stock is to be issued in a name other   
than that in which the surrendered Certificate is registered, it shall be a     
condition of such exchange that the person requesting such exchange shall pay   
any transfer or other taxes required by reason of the issuance of certificates  
for shares of Parent Common Stock in a name other than that of the registered   
holder of the surrendered Certificate, or shall establish to the satisfaction of
the Parent or the Exchange Agent that such tax has been paid or is not          
applicable.                                                                     

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                (iv) NO OTHER RIGHTS. Until surrendered as
contemplated by this Section 2.2(a), each Certificate shall be deemed at any    
time after the Effective Time to represent only the right to receive the        
certificate representing shares of Parent Common Stock and cash in lieu of any  
fractional shares of Parent Common Stock, as contemplated by this Section       
2.2(a). All shares of Parent Common Stock, together with any cash paid under    
Section 2.2(b) or Section 2.2(d) issued upon the surrender for or exchange of   
Certificates in accordance with the terms of this Agreement, shall be deemed to 
have been issued in full satisfaction of all rights pertaining to the Company   
Shares formerly represented by such Certificates.                               

                  (b) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. Whenever
a dividend or other distribution is declared by the Parent in respect of Parent 
Common Stock and the record date for that dividend or other distribution is at  
or after the Effective Time, that declaration shall include dividends or other  
distributions in respect of all shares issuable under this Agreement. No        
dividends or other distributions in respect of the Parent Common Stock shall be 
paid to any holder of any unsurrendered Certificate until that Certificate is   
surrendered for exchange in accordance with this Article 2. Subject to the      
effect of applicable laws, following surrender of any such Certificate, there   
shall be issued or paid to the holder of the certificates representing whole    
shares of Parent Common Stock issued in exchange therefor, without interest, (i)
at the time of such surrender, the dividends or other distributions with a      
record date after the Effective Time and a payment date on or prior to the date 
of issuance of such whole shares of Parent Common Stock and not previously paid,
and (ii) at the appropriate payment date, the dividends or other distributions  
payable with respect to such whole shares of Parent Common Stock with a record  
date after the Effective Time but with a payment date subsequent to surrender.  
For purposes of dividends or other distributions in respect of shares of Parent 
Common Stock, all shares of Parent Common Stock to be issued pursuant to the    
Merger shall be deemed issued and outstanding as of the Effective Time.         

                 (c) NO FURTHER TRANSFERS. After the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further     
registration of transfers on the records of the Company of the Company Shares or
Company Preferred Shares that were outstanding immediately prior to the         
Effective Time.                                                                 

(d) FRACTIONAL SHARES.                      

                          (i) No certificates or scrip representing fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle its owner to 
vote, to receive dividends or to any other rights of a stockholder of the       
Parent. Notwithstanding any other provision of this Agreement, each holder of   
Company                                                                         

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Shares exchanged pursuant to the Merger who would otherwise have been entitled  
to receive a fraction of a share of Parent Common Stock (after taking into      
account all Certificates delivered by such holder) shall receive from the       
Exchange Agent, in accordance with the provisions of this Article 2, a cash     
payment in lieu of such fractional shares of Parent Common Stock, as applicable,
representing such holder's proportionate interest, if any, in the net proceeds  
from the sale by the Exchange Agent in one or more transactions (which sale     
transactions shall be made at such times, in such manner and on such terms as   
the Exchange Agent shall determine in its reasonable discretion) on behalf of   
all such holders of the aggregate of the fractional shares of Parent Common     
Stock, as applicable, which would otherwise have been issued (the "EXCESS PARENT
SHARES"). The sale of the Excess Parent Shares by the Exchange Agent shall be   
executed on the American Stock Exchange and shall be executed in round lots to  
the extent practicable. Until the net proceeds of such sale or sales have been  
distributed to the holders of Certificates, the Exchange Agent will hold such   
proceeds in trust (the "EXCHANGE TRUST") for the holders of Certificates. All   
commissions, transfer taxes and other out-of-pocket transaction costs, including
the expenses and compensation of the Exchange Agent, incurred in connection with
this sale of the Excess Parent Shares shall be paid out of the Exchange Trust   
prior to the distribution of proceeds therefrom to holders of Certificates. As  
soon as practicable after the determination of the amount of cash, if any, to be
paid to holders of Certificates in lieu of any fractional shares of Parent      
Common Stock, the Exchange Agent shall make available such amounts to such      
holders of Certificates without interest. The Exchange Agent shall determine the
portion of such net proceeds to which each holder of Company Shares shall be    
entitled, if any, by multiplying the amount of the aggregate net proceeds by a  
fraction the numerator of which is the amount of the fractional share interest  
to which such holder of Company Shares is entitled (after taking into account   
all Company Shares then held by such holder) and the denominator of which is the
aggregate amount of fractional share interests to which all holders of          
Certificates representing Company Shares are entitled.                          

                           (ii) Notwithstanding the provisions of subsection (i)
of this Section 2.2(d), the Parent may elect, at its option exercised prior to  
the Effective Time and in lieu of the issuance and sale of Excess Shares and the
making of the payments contemplated in such subsection, to pay to the Exchange  
Agent an amount in cash sufficient for the Exchange Agent to pay each holder of 
Company Shares an amount in cash equal to the product obtained by multiplying   
(A) the fractional share interest to which such holder would otherwise be       
entitled (after taking into account all Company Shares held at the Effective    
Time by such holder) by (B) the closing price for a share of Parent Common Stock
on the American Stock Exchange on the first business day immediately following  
the Effective Time and, in such case, the Exchange Fund, all references in this 
Agreement to the cash proceeds of the sale of the Excess Shares and similar     
references shall be deemed to mean and refer to the payments calculated as set  
forth in this Section 2.2(d)(ii).                                               

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            (e) TERMINATION OF EXCHANGE PERIOD; UNCLAIMED STOCK. Any
shares of Parent Common Stock and any portion of the Exchange Fund or of        
dividends or other distributions with respect to the Parent Common Stock        
deposited by the Parent with the Exchange Agent (including the proceeds of any  
investments of those funds) that remains unclaimed by the stockholders of the   
Company 180 days after the Effective Time shall be paid to the Parent. Any      
former stockholders of the Company who have not theretofore complied with this  
Article 2 shall thereafter look only to the Parent for payment of their Merger  
Consideration and any dividends and other distributions issuable or payable     
pursuant to Section 2.1 and Section 2.2(b) upon due surrender of their          
Certificates (or affidavits of loss in lieu of Certificates), in each case,     
without any interest. Notwithstanding the foregoing, none of the Parent, the    
Surviving Corporation, the Exchange Agent or any other person shall be liable to
any former holder of Company Shares for any amount properly delivered to a      
public official under applicable abandoned property, escheat or similar laws. If
any Certificates shall not have been surrendered prior to five years after the  
Effective Time (or immediately prior to such earlier date on which any Merger   
Consideration in respect of such Certificate would otherwise escheat to or      
become the property of any Governmental Entity), any amounts payable in respect 
of such Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any person previously entitled to those amounts.                             

                (f) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an    
affidavit of that fact by the person claiming such Certificate to be lost,      
stolen or destroyed and the posting by such person of a bond in the form        
customarily required by the Parent as indemnity against any claim that may be   
made against it with respect to such Certificate, the Exchange Agent will issue 
in exchange for such lost, stolen or destroyed Certificate the shares of Parent 
Common Stock, any unpaid dividends or other distributions and any cash payment  
in lieu of a fractional share in respect of that Certificate issuable or payable
under this Article 2 upon due surrender of and deliverable in respect of the    
Company Shares represented by such Certificate under this Agreement, in each    
case, without interest.                                                         

       SECTION 2.3 NO APPRAISAL RIGHTS. In accordance with Section 262(b)(1)
of the GCL, no appraisal rights shall be available to holders of Company Shares 
in connection with the Merger.                                                  

         SECTION 2.4 ADJUSTMENTS TO PREVENT DILUTION. In the event that prior to
the Effective Time there is a change in the number of Company Shares or shares  
of Parent Common Stock or securities convertible or exchangeable into or        
exercisable for Company Shares or shares of Parent Common Stock issued and      
outstanding as a result of a distribution, reclassification, stock split        
(including a reverse stock split), stock                                        

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dividend or distribution or other similar transaction, the Exchange Ratio shall 
be equitably adjusted to eliminate the effects of that event.                   

 ARTICLE 3

 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        The Company represents and warrants to the Parent and Merger Sub that:

SECTION 3.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.     

              (a) Each of the Company and each subsidiary of the Company
other than dormant subsidiaries that are immaterial to the business and         
operations of the Company (collectively, the "COMPANY SUBSIDIARIES") has been   
duly organized and is validly existing and in good standing under the laws of   
the jurisdiction of its incorporation or organization, as the case may be, and  
has the requisite power and authority and all necessary governmental approvals  
to own, lease and operate its properties and to carry on its business as it is  
now being conducted. Each of the Company and each Company Subsidiary is duly    
qualified or licensed to do business, and is in good standing, in each          
jurisdiction where the character of the properties owned, leased or operated by 
it or the nature of its business makes such qualification or licensing          
necessary, except for such failures to be so qualified or licensed and in good  
standing that, individually or in the aggregate, have not resulted and could not
reasonably be expected to result in a Material Adverse Effect on the Company.   
For purposes of this Agreement, "MATERIAL ADVERSE EFFECT ON THE COMPANY" means  
any change in or effect on the business, assets, properties, results of         
operations or financial condition of the Company or any Company Subsidiaries    
that is or could reasonably be expected to be materially adverse to the Company 
and the Company Subsidiaries, taken as a whole, or that could reasonably be     
expected to materially impair the ability of the Company to perform its         
obligations under this Agreement or consummate the Merger and the other         
transactions contemplated hereby.                                               

                (b) Section 3.1(b) of the Disclosure Letter delivered to the
Parent and Merger Sub by the Company prior to the execution of this Agreement   
(the "COMPANY DISCLOSURE LETTER") sets forth a complete and correct list of all 
of the Company Subsidiaries. Except as set forth in Section 3.1(b) of the       
Company Disclosure Letter, neither the Company nor any Company Subsidiary holds 
any interest in any person other than the Company Subsidiaries so listed.       

         SECTION 3.2 CERTIFICATE OF INCORPORATION AND BY-LAWS. The copies of the
Company's certificate of incorporation and by-laws, each as amended through     

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the date of this Agreement (collectively, the "COMPANY CHARTER DOCUMENTS") that 
are incorporated by reference in, as exhibits to, the Company's Annual Report on
Form 10-K for the year ended December 31, 1998, as amended by its filing on Form
10K/A (the "PLD FORM 10K"), and all comparable corporate organizational         
documents of the Company Subsidiaries made available to the Parent by the       
Company are complete and correct copies of those documents. Except as set forth 
in Section 3.2 of the Company Disclosure Letter, the Company Charter Documents  
and all comparable corporate organizational documents of the Company            
Subsidiaries are in full force and effect. The Company is not in violation of   
any of the provisions of the Company Charter Documents.                         

SECTION 3.3 CAPITALIZATION.                                   

               (a) The authorized capital stock of the Company consists of
(i) 100,000,000 shares of Company Common Stock and (ii) 100,000,000 shares of   
Preferred Stock, par value $.01 per share (the "COMPANY PREFERRED STOCK"). As of
April 30, 1999, (i) 37,846,789 shares of Company Common Stock were issued and   
outstanding, all of which were validly issued and are fully paid, nonassessable 
and not subject to preemptive rights, (ii) 405,217 shares of Series II Preferred
Stock and 41,667 shares of Series III Preferred Stock were issued and           
outstanding, all of which were validly issued and are fully paid, nonassessable 
and not subject to preemptive rights, (iii) 4,550,333, 5,453,800 and 9,910,462  
shares of Company Common Stock were reserved for issuance upon exercise of      
outstanding Company Stock Options, Company Warrants or convertible debentures or
notes, respectively.                                                            

                 (b) Between April 30, 1999 and the date of this Agreement, no
Company Stock Options have been granted by the Company under the PLD Equity     
Compensation Plan (the "COMPANY'S OPTION PLAN"). Except for (i) Company Stock   
Options to purchase an aggregate of 4,550,333 shares of Company Common Stock    
outstanding or available for grant under the Company's Option Plan, or under    
agreements or arrangements set forth in Section 3.3(b) of the Company Disclosure
Letter, (ii) Company Warrants to purchase an aggregate of 5,453,800 shares of   
Company Common Stock and (iii) $26,500,000 principal amount of the Convertible  
Notes and $9,550,000 principal amount of outstanding obligations in respect of  
guarantees or loans advanced by News America Incorporated ("NEWS NOTES")        
convertible for 3,840,580 and 6,069,882 shares of Company Common Stock,         
respectively, there are no options, warrants, conversion rights, stock          
appreciation rights, redemption rights, repurchase rights or other rights,      
agreements, arrangements or commitments of any character to which the Company is
a party or by which the Company is bound relating to the issued or unissued     
capital stock of the Company or any Company Subsidiary or obligating the Company
or any Company Subsidiary to issue or sell any shares of capital stock of, or   
other equity interests in, the Company or any Company Subsidiary. Section 3.3(b)
of the Company Disclosure Letter sets forth,                                    

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as of the date of this Agreement, (w) the persons to whom Company Stock Options 
have been granted or Company Warrants, Convertible Notes or News Notes have been
issued, (x) the aggregate principal amount of Convertible Notes and News Notes  
outstanding and the applicable conversion prices thereof, (y) the exercise      
prices for the Company Stock Options and Company Warrants held by each such     
person and (z) whether such Company Stock Options are subject to vesting and, if
subject to vesting, the dates on which each of those Company Stock Options vest.

               (c) All shares of Company Common Stock subject to issuance,
upon issuance prior to the Effective Time on the terms and conditions specified 
in the instruments under which they are issuable, will be duly authorized,      
validly issued, fully paid, nonassessable and will not be subject to preemptive 
rights. Except as set forth in Section 3.3(c) of the Company Disclosure Letter, 
there are no outstanding contractual obligations of the Company or any Company  
Subsidiary to repurchase, redeem or otherwise acquire any shares of Company     
Common Stock or any capital stock of any Company Subsidiary. Except as set forth
in Section 3.3(c) of the Company Disclosure Letter, each outstanding share of   
capital stock of each Company Subsidiary is duly authorized, validly issued,    
fully paid, nonassessable and not subject to preemptive rights and each such    
share owned by the Company or a Company Subsidiary is free and clear of all     
security interests, liens, claims, pledges, options, rights of first refusal,   
agreements, limitations on the Company's or such other Company Subsidiary's     
voting rights, charges and other encumbrances of any nature whatsoever          
(collectively, "LIENS"). Except as set forth in Section 3.3 of the Company      
Disclosure Letter there are no outstanding material contractual obligations of  
the Company or any Company Subsidiary to provide funds to, or make any          
investment (in the form of a loan, capital contribution or otherwise) in, any   
Company Subsidiary that is not wholly owned by the Company or in any other      
person.                                                                         

SECTION 3.4 AUTHORITY.                                        

         (a) The Company has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations     
under this Agreement and to consummate the Merger and the other transactions    
contemplated by this Agreement to be consummated by the Company. The execution  
and delivery of this Agreement by the Company and the consummation by the       
Company of such transactions have been duly and validly authorized by all       
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate such         
transactions, other than, with respect to the Merger, the adoption of this      
Agreement by stockholders of the Company representing a majority of the Company 
Common Stock entitled to vote hereon (the "REQUISITE COMPANY VOTE"). This       
Agreement has been duly authorized and validly executed and delivered by the    
Company and constitutes a legal, valid and binding                              

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obligation of the Company, enforceable against the Company in accordance with   
its terms.                                                                      

                 (b) The Board of Directors of the Company (i) has unanimously
adopted the plan of merger set forth in this Agreement and approved this        
Agreement and the other transactions contemplated by this Agreement and (ii) has
declared that the Merger and this Agreement and the other transactions          
contemplated by this Agreement are advisable.                                   

SECTION 3.5 NO CONFLICT.                                      

           (a) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not:  

                       (i) conflict with or violate any provision of any
        Company Charter Document or any equivalent organizational documents of
any Company Subsidiary;                                       

                 (ii) assuming that all consents, approvals,
     authorizations and other actions described in Section 3.5(b) of the
  Company Disclosure Letter have been obtained and all filings and
   obligations described in Section 3.5(b) of the Company Disclosure
         Letter have been made, conflict with or violate any foreign or domestic
      law, statute, ordinance, rule, regulation, order, judgment or decree
         ("LAW") applicable to the Company or any Company Subsidiary or by which
      any property or asset of the Company or any Company Subsidiary is or
may be bound or affected; or                                  

                        (iii) except as set forth in Section 3.5(b) of the
    Company Disclosure Letter, result in any breach of or constitute a
       default (or an event which with or without notice or lapse of time or
    both would become a default) under, or give to others any right of
       termination, amendment, acceleration or cancellation of, or result in
       the creation of a Lien on any property or asset of the Company or any
         Company Subsidiary under any note, bond, mortgage, indenture, contract,
   agreement, commitment, lease, license, permit, franchise or other
   instrument or obligation (collectively, "CONTRACTS") to which the
         Company or any Company Subsidiary is a party or by which any of them or
       their assets or properties is or may be bound or affected, except for
        such breaches, defaults or other occurrences which, individually or in
       the aggregate, have not resulted and could not reasonably be expected
to result in a Material Adverse Effect on the Company.        

                  (b) Section 3.5(b) of the Company Disclosure Letter sets forth
a correct and complete list of all Contracts to which the Company or any        

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Company Subsidiaries are a party or by which they or their assets or properties 
is or may be bound or affected under which consents or waivers are or may be    
required prior to consummation of the transactions contemplated by this         
Agreement (collectively, the "COMPANY REQUIRED CONSENTS").                      

       SECTION 3.6 GOVERNMENTAL REQUIRED FILINGS AND CONSENTS. The execution
and delivery of this Agreement by the Company do not, and the performance of    
this Agreement by the Company will not, require any consent, approval,          
authorization or permit of, or filing with or notification to, any domestic or  
foreign national, federal, state, provincial or local governmental, regulatory  
or administrative authority, agency, commission, court, tribunal or arbitral    
body or self-regulated entity (each, a "GOVERNMENTAL ENTITY"), except (i) for   
those consents or approvals set forth in Section 3.6 of the Company Disclosure  
Letter (the "COMPANY GOVERNMENTAL CONSENTS"), (ii) for applicable requirements  
of the Securities Exchange Act of 1934, as amended (together with the rules and 
regulations promulgated thereunder, the "EXCHANGE ACT"), and the Securities Act 
of 1933, as amended (together with the rules and regulations promulgated        
thereunder, the "SECURITIES ACT"), (iii) applicable requirements of state       
securities or "blue sky" laws ("BLUE SKY LAWS"), (iv) the pre-merger            
notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder (the "HSR
ACT"), and (v) for the filing of the Certificate of Merger as required by the   
GCL.                                                                            

       SECTION 3.7 PERMITS; COMPLIANCE WITH LAW. Each of the Company and the
Company Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,    
approvals and orders of any Governmental Entity necessary for the Company or any
Company Subsidiary to own, lease and operate its properties or to carry on its  
business as it is now being conducted (collectively, the "COMPANY PERMITS"),    
except where the failure to have, or the suspension or cancellation of, any of  
the Company Permits, individually or in the aggregate, has not resulted and     
could not reasonably be expected to result in a Material Adverse Effect on the  
Company, and, as of the date of this Agreement, no suspension or cancellation of
any of the Company Permits is pending or, to the knowledge of the Company,      
threatened, except where the failure to have, or the suspension or cancellation 
of, any of the Company Permits, individually or in the aggregate, has not       
resulted and could not reasonably be expected to result in a Material Adverse   
Effect on the Company or except as otherwise set forth in Section 3.7 of the    
Company Disclosure Letter. Neither the Company nor any Company Subsidiary is in 
conflict with, or in default or violation of, (i) any Law applicable to the     
Company or any Company Subsidiary or by which any property or asset of the      
Company or any Company Subsidiary is or may be bound or affected or (ii) any    
Company Permits, in either case, except where such conflict, default or         
violation could not reasonably be expected to result in a Material Adverse      
Effect on the Company. To the Company's knowledge, the business of the Company  
is not being conducted in violation of any                                      

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portion of the Foreign Corrupt Practices Act, Pub. L. No. 95-213, 91 Stat.1494  
(December 19, 1977), as amended (the "FCPA"), or any regulation promulgated     
thereunder, and there are not pending any investigations, reviews or inquiries  
made by any Governmental Entity of the Company, any Company Subsidiaries or any 
of their respective affiliates with respect to the FCPA, nor to the knowledge of
the Company has any Governmental Entity threatened to conduct the same.         

 SECTION 3.8 SECURITIES AND EXCHANGE COMMISSION ("SEC") FILINGS;
FINANCIAL STATEMENTS.                                                           

                (a) The Company has filed all forms, reports, statements and
other documents (including all exhibits, annexes, supplements and amendments to 
such documents) required to be filed by it under the Exchange Act and the       
Securities Act since January 1, 1996 (collectively, including any such documents
filed subsequent to the date of this Agreement, the "COMPANY SEC REPORTS") and  
the Company has made available to the Parent each Company SEC Report filed with 
the SEC. The Company SEC Reports, including any financial statements or         
schedules included or incorporated by reference, (i) comply and will comply with
the requirements of the Exchange Act or the Securities Act or both, as the case 
may be, applicable to those Company SEC Reports and (ii) did not and will not at
the time filed contain any untrue statement of a material fact or omit to state 
a material fact required to be stated or necessary in order to make the         
statements made in those Company SEC Reports, in the light of the circumstances 
under which they were made, not misleading. Except as set forth in Section      
3.8(a) of the Company Disclosure Letter, no Company Subsidiary is subject to the
periodic reporting requirements of the Exchange Act or is otherwise required to 
file any documents with the SEC or any national securities exchange or quotation
service or comparable Governmental Entity.                                      

              (b) Each of the consolidated balance sheets included in or
incorporated by reference into the Company SEC Reports (including the related   
notes and schedules) fairly presented or will fairly present, in all material   
respects, the consolidated financial position of the Company as of the dates set
forth in those consolidated balance sheets. Each of the consolidated statements 
of income and of cash flows included in or incorporated by reference into the   
Company SEC Reports (including any related notes and schedules), fairly         
presented or will fairly present, in all material respects, the consolidated    
results of operations and cash flows, as the case may be, of the Company and the
consolidated Company Subsidiaries for the periods set forth in those            
consolidated statements of income and of cash flows (subject, in the case of    
unaudited quarterly statements, to notes and normal year-end audit adjustments  
that will not be material in amount or effect), in each case in conformity with 
United States generally accepted accounting principles ("GAAP") (except, in the 
case of unaudited quarterly statements, as permitted by Form 10-Q of the SEC)   
consistently applied throughout the periods indicated.                          

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                 (c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the consolidated Company Subsidiaries as of    
December 31, 1998 including the related notes, neither the Company nor any      
Company Subsidiary has any liabilities or obligations of any nature (whether    
accrued, absolute, contingent or otherwise) that would be required to be        
reflected on a balance sheet or in the related notes prepared in accordance with
GAAP, except for liabilities or obligations incurred in the ordinary course of  
business since December 31, 1998 that, individually or in the aggregate, have   
not resulted and could not reasonably be expected to result in a Material       
Adverse Effect on the Company.                                                  

      SECTION 3.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1998, and except as otherwise disclosed in the PLD Form 10-K, the Company and   
the Company Subsidiaries have conducted their businesses only in the ordinary   
course and in a manner consistent with past practice and, since such date, there
has not been:                                                                   

   (a) any Material Adverse Effect on the Company;

           (b) any damage, destruction or other casualty loss with
respect to any asset or property owned, leased or otherwise used by it or any   
Company Subsidiaries, whether or not covered by insurance, which damage,        
destruction or loss, individually or in the aggregate, has resulted or could    
reasonably be expected to result in a Material Adverse Effect on the Company;   

                (c) any material change by the Company in its or any Company
Subsidiary's accounting methods, principles or practices;                       

                 (d) any declaration, setting aside or payment of any dividend
or distribution in respect of Company Shares or any redemption, purchase or     
other acquisition of any of the Company's securities;                           

            (e) Except as described in Section 3.9(e) of the Company
Disclosure Letter any increase in the compensation or benefits or establishment 
of any bonus, insurance, severance, deferred compensation, pension, retirement, 
profit sharing, stock option (including, the granting of stock options, stock   
appreciation rights, performance awards or restricted stock awards), stock      
purchase or other employee benefit plan, or any other increase in the           
compensation payable or to become payable to any executive officers of the      
Company or any Company Subsidiary except in the ordinary course of business     
consistent with past practice or except as required by applicable Law.          

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SECTION 3.10 EMPLOYEE BENEFIT PLANS.                          

          (a) Except as set forth in Section 3.10 of the Company
Disclosure Letter and except as could not, individually or in the aggregate,    
reasonably be expected to have a Material Adverse Effect on the Company: (A)    
each pension, retirement, savings, disability, medical, dental, health, life,   
death benefit, group insurance, profit sharing, deferred compensation, stock    
option, bonus, incentive, severance pay, or other employee benefit plan, trust, 
arrangement, contract, commitment, agreement or policy (each a "BENEFIT PLAN")  
of the Company or any Company Subsidiary (the "COMPANY BENEFIT PLANS") has been 
administered and is in compliance with the terms of such plan and all applicable
laws, rules and regulations, (B) no "reportable event" (as such term is used in 
section 4043 of the Employee Retirement Income Security Act of 1974, as amended 
("ERISA") (other than those events for which the 30 day notice has been waived  
pursuant to the regulations), "prohibited transaction" (as such term is used in 
section 406 of ERISA or sec tion 4975 of the Code) or "accumulated funding      
deficiency" (as such term is used in section 412 or 4971 of the Code) has       
heretofore occurred with respect to any Company Benefit Plan and (C) each       
Company Benefit Plan intended to qualify under Section 401(a) of the Code has   
received a favorable determination from the IRS regarding its qualified status  
and no notice has been received from the IRS with respect to the revocation of  
such qualification.                                                             

         (b) There is no litigation or administrative or other
proceeding involving any Company Benefit Plan nor has the Company or any Company
Subsidiary received notice that any such proceeding is threatened, in each case 
where an adverse determination could reasonably be expected to have a Material  
Adverse Effect on the Company. Neither the Company nor any Company Subsidiary   
has incurred, nor, to the Company's knowledge, is reasonably likely to incur any
withdrawal liability with respect to any "multiemployer plan" (within the       
meaning of section 3(37) of ERISA) which remains unsatisfied in an amount which 
could reasonably be expected to have a Material Adverse Effect on the Company.  
The termination of, or withdrawal from, any Company Benefit Plan or             
multiemployer plan to which the Company or any Company Subsidiaries contributes,
on or prior to the Closing Date, will not subject the Company or any Company    
Subsidiary to any liability under Title IV of ERISA that could reasonably be    
expected to have a Material Adverse Effect on the Company.                      

      SECTION 3.11 ACCOUNTING AND TAX MATTERS. Neither the Company nor, to
the knowledge of the Company, any of its affiliates has taken or agreed to take 
any action, nor is the Company aware of any agreement, plan or other            
circumstance that would prevent the Merger from constituting a transaction      
qualifying as a reorganization under Section 368(a) of the Code.                

  SECTION 3.12 CONTRACTS; DEBT INSTRUMENTS. Except as set forth in
Section 3.12 of the Company Disclosure Letter there is no Contract that is      
material to                                                                     

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the business, financial condition or results of operations of the Company and   
the Company Subsidiaries taken as a whole. Neither the Company nor any Company  
Subsidiary is in violation of or in default under (nor does there exist any     
condition which with the passage of time or the giving of notice would cause    
such a violation of or default under) any Contract to which it is a party or by 
which it or any of its properties or assets is or may be bound or affected,     
except for violations or defaults that, individually or in the aggregate, have  
not resulted and could not reasonably be expected to result in a Material       
Adverse Effect on the Company. Set forth in Section 3.12 of the Company         
Disclosure Letter is a description of any material changes to the amount and    
terms of the indebtedness of the Company and the consolidated Company           
Subsidiaries as described in the notes to the financial statements set forth as 
incorporated by reference in the PLD Form 10K.                                  

         SECTION 3.13 LITIGATION. There is no suit, claim, action, proceeding or
investigation (collectively, "CLAIMS") pending or, to the knowledge of the      
Company, threatened against the Company or any Company Subsidiary before any    
Governmental Entity that, if adversely determined, individually or in the       
aggregate, has resulted or could reasonably be expected to result in a Material 
Adverse Effect on the Company. Neither the Company nor any Company Subsidiary is
subject to any outstanding order, writ, injunction or decree which, individually
or in the aggregate, has resulted or could reasonably be expected to result in a
Material Adverse Effect on the Company.                                         

         SECTION 3.14 ENVIRONMENTAL MATTERS. Except as disclosed on Section 3.14
of the Company Disclosure Letter and except as could not reasonably be expected 
to have a Material Adverse Effect on the Company:                               

                (a) Neither the Company nor any Company Subsidiary is or has
been in violation in any material respect of any applicable Safety and          
Environmental Law (as hereafter defined).                                       

                (b) The Company and each Company Subsidiary have all Permits
(as hereafter defined) required pursuant to Safety and Environmental Laws that  
are material to the conduct of the business of the Company or any Company       
Subsidiary, all such Permits are in full force and effect, no action or         
proceeding to revoke, limit or modify any of such Permits is pending, and the   
Company and each Company Subsidiary is in compliance in all material respects   
with all terms and conditions thereof.                                          

          (c) Neither the Company nor any Company Subsidiary has
received, or expects to receive due to the consummation of the Agreement, any   
material Environmental Claim (as hereafter defined).                            

                (d) To the Company's knowledge, there is not now and has not
been at any time in the past a Release or threatened Release (as hereafter      
defined)                                                                        

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of Hazardous Substances into the Environment for which the Company or any       
Company Subsidiary may be directly or indirectly responsible.                   

                (e) To the Company's knowledge, there is not now and has not
been at any time in the past at, on or in any of the real properties owned,     
leased or operated by the Company or any Company Subsidiary, and, to the        
Company's knowledge, was not at, on or in any real property previously owned,   
leased or operated by the Company or any Company Subsidiary or any predecessor: 
(i) any generation, use, handling, Release, treatment, recycling, storage or    
disposal of any Hazardous Substances, (ii) any underground storage tank, surface
impoundment, lagoon or other containment facility (past or present) for the     
temporary or permanent storage, treatment or disposal of Hazardous Substances,  
(iii) any asbestos-containing material in a condition requiring abatement, (iv) 
any Release or threatened Release, or any visible signs of Releases or          
threatened Releases, of a Hazardous Substance to the Environment in form or     
quantity requiring remedial action under Safety and Environmental Laws, or (v)  
any Hazardous Substances present at such property, excepting such quantities as 
are handled in accordance with all applicable manufacturer's instructions and   
Safety and Environmental Laws and in proper storage containers, and as are      
necessary for the operations of the Company and the Company Subsidiaries.       

        For purposes of this Agreement, the following terms have the following
meanings:                                                                       

           (a) "ENVIRONMENT" means navigable waters, waters of the
contiguous zone, ocean waters, natural resources, surface waters, ground water, 
drinking water supply, land surface, subsurface strata, ambient air, both inside
and outside of buildings and structures, man-made buildings and structures, and 
plant and animal life on earth.                                                 

              (b) "ENVIRONMENTAL CLAIMS" means any notification, whether
direct or indirect, formal or informal, written or oral, pursuant to Safety and 
Environmental Laws or principles of common law relating to pollution, protection
of the Environment or health and safety, that any of the current or past        
operations of any of the Parent, any Parent Subsidiary, or the Company, or any  
Company Subsidiary (collectively, the "MERGING PARTIES"), as the case may be, or
any by-product thereof, or any of the property currently or formerly owned,     
leased or operated by any of the Merging Parties, or the operations or property 
of any predecessor of any of the Merging Parties is or may be implicated in or  
subject to any proceeding, action, investigation, claim, lawsuit, order,        
agreement or evaluation by any Governmental Entity or any other person.         

               (c) "HAZARDOUS SUBSTANCE" means any toxic waste, pollutant,
hazardous substance, toxic substance, hazardous waste, special waste, industrial
substance or waste, petroleum or petroleum-derived substance or waste,          

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radioactive substance or waste, or any constituent of any such substance or     
waste, or any other substance regulated under or defined by any Safety and      
Environmental Law.                                                              

                  (d) "PERMITS" means all licenses, permits, orders or approvals
of, and all required registrations with, any Governmental Entity.               

              (e) "RELEASE" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or        
migration into or through the indoor or outdoor Environment or into, through or 
out of any property, including the movement of Hazardous Substances through or  
in the air, soil, surface water, ground water or property.                      

                (f) "SAFETY AND ENVIRONMENTAL LAWS" means all federal, state
and local laws and orders relating to pollution, protection of the Environment, 
public or worker health and safety, or the emission, discharge, release or      
threatened release of pollutants, contaminants or industrial, toxic or hazardous
substances or wastes into the Environment or otherwise relating to the          
manufacture, processing, distribution, use, treatment, storage, disposal,       
transport or handling of pollutants, contaminants or industrial, toxic or       
hazardous substances or wastes, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 eT   
SEq., the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 eT SEq.,   
the Toxic Substances Control Act, 15 U.S.C. ss. 2601 ET SEQ., the Federal Water 
Pollution Control Act, 33 U.S.C. ss. 1251 eT SEq., the Clean Air Act, 42 U.S.C. 
ss. 7401 eT SEq., the Federal Insecticide, Fungicide and Rodenticide Act, 7     
U.S.C. ss. 121 eT SEq., the Occupational Safety and Health Act, 29 U.S.C. ss.   
651 eT SEq., the Asbestos Hazard Emergency Response Act, 15 U.S.C. ss. 2601 eT  
SEq., the Safe Drinking Water Act, 42 U.S.C. ss. 300f ET seq., the Oil Pollution
Act of 1990 and analogous state acts.                                           

SECTION 3.15 INTELLECTUAL PROPERTY.                           

(a) DISCLOSURE.                             

                      (i) Section 3.15(a)(i) of the Company Disclosure
Letter sets forth all material United States and foreign patents and patent     
applications, trademark and service mark registrations and applications,        
Internet domain name registrations and applications, and copyright registrations
and applications owned or licensed by the Company, specifying as to each item,  
as applicable: (A) the nature of the item, including the title; (B) the owner of
the item; (C) the jurisdictions in which the item is issued or registered or in 
which an application for issuance or registration has been filed; and (D) the   
issuance, registration or application numbers and dates.                        

                        (ii) Section 3.15(a)(ii) of the Company Disclosure
Letter sets forth all material licenses, sublicenses, and other agreements or   
permissions ("IP                                                                

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LICENSES") under which the Company is a licensor or licensee or otherwise is    
authorized to use or practice any Intellectual Property. For purposes of this   
Agreement, "INTELLECTUAL PROPERTY" means all of the following as they exist in  
all jurisdictions throughout the world, in each case, to the extent owned by,   
licensed to, or otherwise used by the Company or the Parent: (A) patents, patent
applications, and other patent rights (including any divisions, continuations,  
continuations-in-part, substitutions, or reissues thereof, whether or not       
patents are issued on any such applications and whether or not any such         
applications are modified, withdrawn, or resubmitted); (B) trademarks, service  
marks, trade dress, trade names, brand names, Internet domain names, designs,   
logos, or corporate names, whether registered or unregistered, and all          
registrations and applications for registration thereof; (C) copyrights,        
including all renewals and extensions, copyright registrations and applications 
for registration, and non-registered copyrights; (D) trade secrets, concepts,   
ideas, designs, research, processes, procedures, techniques, methods, know-how, 
data, mask works, discoveries, inventions, modifications, extensions,           
improvements, and other proprietary rights (whether or not patentable or subject
to copyright, mask work, or trade secret protection) (collectively,             
"TECHNOLOGY"); and (E) computer software programs, including all source code,   
object code, and documentation related thereto (the "SOFTWARE").                

                          (iii) Section 3.15(a)(iii) of the Company Disclosure
Letter sets forth and describes the status of any material agreements involving 
Intellectual Property currently in negotiation or proposed by the Company       
("PROPOSED INTELLECTUAL PROPERTY AGREEMENTS").                                  

                 (b) OWNERSHIP. The Company owns, free and clear of all Liens,
and has the unrestricted right to use, sell, or license, all Intellectual       
Property set forth in Section 3.15(a)(i) and, as applicable, Section 3.15(a)(ii)
of the Company Disclosure Letter, except for failures that, individually or in  
the aggregate, have not resulted and could not reasonably be expected to result 
in a Material Adverse Effect on the Company.                                    

                (c) CLAIMS. The Company has not been, during the three years
preceding the date of this Agreement, a party to any Claim, nor, to the         
knowledge of the Company, is any Claim threatened, that challenges the validity,
enforceability, ownership, or right to use, sell, or license any Intellectual   
Property owned or licensed by the Company, except for Claims that, individually 
or in the aggregate, have not resulted and could not reasonably be expected to  
result in a Material Adverse Effect on the Company. To the knowledge of the     
Company, no third party is infringing upon any Intellectual Property, except for
infringements that, individually or in the aggregate, have not resulted and     
could not reasonably be expected to result in a Material Adverse Effect on the  
Company.                                                                        

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                 (d) ADMINISTRATION AND ENFORCEMENT. The Company has taken all
necessary and desirable actions to maintain and protect each item of Intellec   
tual Property owned by the Company, except for failures to take such actions    
that, individually or in the aggregate, have not resulted and could not         
reasonably be expected to result in a Material Adverse Effect on the Company.   

               (e) PROTECTION OF TRADE SECRETS AND TECHNOLOGY. The Company
has taken all reasonable precautions to protect the secrecy, confidentiality,   
and value of its trade secrets and the proprietary nature and value of the      
Technology, except for failures to take such precautions that, individually or  
in the aggregate, have not resulted and could not reasonably be expected to     
result in a Material Adverse Effect on the Company.                             

               (f) SOFTWARE. All material Software is described in Section
3.15(a)(ii) of the Company Disclosure Letter. The Software performs in          
conformance with its documentation and is fully and freely transferable to the  
Parent without any third party consents, except for failures to perform or to be
fully and freely transferable that, individually or in the aggregate, have not  
resulted and could not reasonably be expected to result in a Material Adverse   
Effect on the Company.                                                          

                (g) YEAR 2000 COMPLIANCE. All Software, hardware, databases,
and embedded control systems (collectively, the "SYSTEMS") used by the Company  
are Year 2000 Compliant and to the Company's knowledge the Systems used by the  
Company's material suppliers are Year 2000 Compliant, except in each case for   
failures to be Year 2000 Compliant that, individually or in the aggregate, have 
not resulted and could not reasonably be expected to result in a Material       
Adverse Effect on the Company and except as set forth in Section 3.15(g) of the 
Company Disclosure Letter. For purposes of this Agreement, "YEAR 2000 COMPLIANT"
means that the Systems (i) accurately process date and time data (including     
calculating, comparing, and sequencing) from, into, and between the twentieth   
and twenty-first centuries, the years 1999 and 2000, and leap year calculations 
and (ii) operate accurately with other software and hardware that use standard  
date format (4 digits) for representation of the year.                          

            (h) EFFECT OF TRANSACTION. The Company is not, nor, as a
result of the execution and delivery of this Agreement or the performance of its
obligations under this Agreement, will be, in violation of any agreement        
relating to any Intellectual Property, except for violations that, individually 
or in the aggregate, have not resulted and could not reasonably be expected to  
result in a Material Adverse Effect on the Company. After the completion of the 
transactions contemplated by this Agreement, the Parent will own directly or    
indirectly all right, title, and interest in and to or have a license to use all
Intellectual Property on identical terms and conditions as the Company or a     
Company Subsidiary enjoyed immediately prior to such transactions, except for   
failures to own or have available for use that, individually or in the          

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aggregate, have not resulted and could not reasonably be expected to result in a
Material Adverse Effect on the Company.                                         

       SECTION 3.16 TAXES. (a) Except as set forth on Section 3.16(a) of the
Company Disclosure Letter, (i) the Company and each Company Subsidiary has      
timely filed (after giving effect to any extensions of the time to file which   
were obtained) prior to the date of this Agreement, and will file prior to the  
Effective Time, all returns required to be filed prior to the date of this      
Agreement and/or required to be filed prior to the Effective Time by any of them
with respect to, and has paid (or the Company has paid on its behalf), or has or
will set up an adequate reserve for the payment of, all federal, state, local,  
foreign and other taxes, together with interest and penalties thereon ("TAXES"),
required to be paid prior to the date of the Agreement or the Effective Time, as
the case may be, and the most recent financial statements contained in the      
Company SEC Reports reflect an adequate reserve for all Taxes payable by the    
Company and the Company Subsidiaries accrued through the date of such financial 
statements and (ii) no deficiencies for any Taxes have been proposed, asserted  
or assessed against the Company or any Company Subsidiary other than those which
are being contested in good faith and by proper proceedings by the Company,     
except in the case of clauses (i) and (ii) above, any of the foregoing which do 
not and will not have a Material Adverse Effect on the Company.                 

             (b) Except as set forth on Section 3.16(b) of the Company
Disclosure Letter, none of the Company, any Company Subsidiary, or to the       
Company's knowledge, any group of which the Company or any Company Subsidiary is
now or ever was a member, has filed or entered into any election, consent or    
extension agreement that extends any applicable statute of limitations or the   
time within which a return must be filed which statute of limitations has not   
expired or return has not been timely filed, except, in the case of Company     
Subsidiaries organized under the laws of jurisdictions outside the United States
and Canada, as has not and could not reasonably be expected to have a Material  
Adverse Effect on the Company.                                                  

             (c) Except as set forth on Section 3.16(c) of the Company
Disclosure Letter, (i) none of the Company, any Company Subsidiary or, to the   
Company's knowledge, any group of which the Company or any Company Subsidiary is
now or ever was a member, is a party to any action or proceeding pending or, to 
the Company's knowledge, threatened by any governmental authority for assessment
or collection of Taxes, (ii) no unresolved claim for assessment or collection of
Taxes has, to the Company's knowledge, been asserted, (iii) no audit or         
investigation of the Company or any Company Subsidiary by any governmental      
authority is pending or, to the Company's knowledge, threatened and (iv) no such
matters are under discussion with any governmental authority which, in the case 
of clauses (i-iv), could have a Material Adverse Effect on the Company.         

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                SECTION 3.17 NON-COMPETITION AGREEMENTS. Except as set forth
in Section 3.17 of the Company Disclosure Letter, neither the Company nor any   
Company Subsidiary is a party to any agreement which purports to restrict or    
prohibit in any material respect the Company and the Company Subsidiaries       
collectively from, directly or indirectly, engaging in any business involving   
telecommunications currently engaged in by the Company, any Company Subsidiary  
or any other persons affiliated with the Company. None of the Company's         
officers, directors or key employees is a party to any agreement which, by      
virtue of such person's relationship with the Company, restricts in any material
respect the Company or any Company Subsidiary or affiliate of either of them    
from, directly or indirectly, engaging in any of the businesses described above.

           SECTION 3.18 CERTAIN AGREEMENTS. Except as set forth in
Section 3.18 of the Company Disclosure Letter, and except for this Agreement, as
of the date of this Agreement, neither the Company nor any of the Company       
Subsidiaries is a party to any oral or written (i) agreement with any executive 
officer or other key employee of the Company or Company Subsidiary the benefits 
of which are contingent, or the terms of which are materially altered, upon the 
occurrence of a transaction involving the Company of the nature contemplated by 
this Agreement, or agreement with respect to any executive officer of the       
Company providing any term of employment or compensation guarantee (x) extending
for a period longer than one year after the Effective Time or (y) for the       
payment of in excess of $100,000 per annum or (ii) plan, including any stock    
option plan, stock appreciation right plan, restricted stock plan or stock      
purchase plan, any of the benefits of which will be increased, or the vesting of
the benefits of which will be accelerated, by the occurrence of any of the      
transactions contemplated by this Agreement or the value of any of the benefits 
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement.                                                              

                SECTION 3.19 INVESTMENT COMPANY ACT. Each of the Company and
the Company Subsidiaries either (i) is not an "investment company," or a company
"controlled" by, or an "affiliated company" with respect to, an "investment     
company," within the meaning of the Investment Company Act of 1940, as amended  
(the "INVESTMENT COMPANY ACT") or (ii) satisfies all conditions for an exemption
from the Investment Company Act, and, accordingly, neither the Company nor any  
of the Company is required to be registered under the Investment Company Act.   

            SECTION 3.20 OPINION OF FINANCIAL ADVISOR. Salomon Smith
Barney Inc. (the "COMPANY FINANCIAL ADVISOR") has delivered to the Board of     
Directors of the Company its oral opinion to the effect that, as of the date of 
this Agreement, the Exchange Ratio is fair to holders of Company Common Stock   
from a financial point of view, a copy of the written opinion of which will be  
delivered to the Parent after receipt thereof by the Company.                   

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                SECTION 3.21 BROKERS. No broker, finder or investment banker
other than the Company Financial Advisor is entitled to any brokerage, finder's 
or other fee or commission in connection with the Merger or the other           
transactions contemplated by this Agreement based upon arrangements made by or  
on behalf of the Company. Prior to the date of this Agreement, the Company has  
made available to the Parent a complete and correct copy of all agreements      
between the Company and the Company Financial Advisor under which the Company   
Financial Advisor would be entitled to any payment relating to the Merger or any
other transactions.                                                             

                SECTION 3.22 CERTAIN STATUTES. The Board of Directors of the
Company has taken or will take all appropriate and necessary actions to ensure  
that the restrictions on business combinations in Section 203 of the GCL will   
not have any effect on the Merger or the other transactions contemplated by this
Agreement. No "fair price," "moratorium," "control share acquisition" or other  
similar state or federal anti-takeover statute or regulation (each a "TAKEOVER  
STATUTE") is, as of the date of this Agreement, applicable to the Merger or any 
other transactions contemplated by this Agreement.                              

           SECTION 3.23 INFORMATION. None of the information to be
supplied by the Company for inclusion or incorporation by reference in the Proxy
Statement, the Registration Statement or the Exchange Offer Registration        
Statement will, in the case of the Registration Statement and the Exchange Offer
Registration Statement, at the time it becomes effective and at the Effective   
Time, contain any untrue statement of a material fact or omit to state any      
material fact required to be stated in the Registration Statement or necessary  
to make the statements in that Registration Statement or the Exchange Offer     
Registration Statement, as the case may be, not misleading, or, in the case of  
the Proxy Statement or any amendments or supplements of the Proxy Statement, at 
the time of the mailing of the Proxy Statement and any amendments or supplements
of the Proxy Statement and at the time of the Company Stockholders Meeting,     
contain any untrue statement of a material fact or omit to state any material   
fact required to be stated in the Proxy Statement or necessary in order to make 
the statements in the Proxy Statement, in light of the circumstances under which
they are made, not misleading. The Proxy Statement (except for those portions of
the Proxy Statement that relate only to Parent or subsidiaries or affiliates of 
the Parent) will comply as to form in all material respects with the provisions 
of the Exchange Act.                                                            

                 SECTION 3.24 VOTE REQUIRED. The Requisite Company Vote is the
only vote of the holders of any class or series of the Company's capital stock  
necessary (under the Company Charter Documents, the GCL, other applicable Law or
otherwise) to approve this Agreement, the Merger or the other transactions      
contemplated by this Agreement.                                                 

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 ARTICLE 4

REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND MERGER SUB

  Each of the Parent and Merger Sub represents and warrants to the
Company that:                                                                   

SECTION 4.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.     

           (a) Except as set forth in Section 4.1(a) of the Parent
Disclosure Letter, each of the Parent, Merger Sub, and each other subsidiary of 
the Parent other than dormant subsidiaries that are immaterial to the business  
and operations of the Parent (collectively, the "PARENT SUBSIDIARIES") has been 
duly organized and is validly existing and in good standing under the laws of   
its jurisdiction of its incorporation or organization, as the case may be, and  
has the requisite power and authority and all necessary governmental approvals  
to own, lease and operate its properties and to carry on its business as it is  
now being conducted. Each of the Parent, Merger Sub and each other Parent       
Subsidiary is duly qualified or licensed to do business, and is in good         
standing, in each jurisdiction where the character of the properties owned,     
leased or operated by it or the nature of its business makes such qualification 
or licensing necessary, except for such failures to be so qualified or licensed 
and in good standing that, individually or in the aggregate, have not resulted  
and could not reasonably be expected to result in a Material Adverse Effect on  
the Parent. For purposes of this Agreement, "MATERIAL ADVERSE EFFECT ON THE     
PARENT" means any change in or effect on the business, assets, properties,      
results of operations or financial condition of the Parent or any Parent        
Subsidiaries that is or could reasonably be expected to be materially adverse to
the Parent and the Parent Subsidiaries, taken as a whole, or that could         
reasonably be expected to materially impair the ability of the Parent or Merger 
Sub to perform its obligations under this Agreement or to consummate            
transactions contemplated hereby.                                               

                (b) Section 4.1(b) of the Disclosure Letter delivered to the
Company by the Parent and Merger Sub prior to the execution of this agreement   
(the "PARENT DISCLOSURE LETTER") sets forth a complete and correct list of all  
of the Parent Subsidiaries. Except as set forth in Section 4.1(b) of the Parent 
Disclosure Letter, neither the Parent nor any Parent Subsidiary holds any       
interest in any other person other than the Parent Subsidiaries so listed.      

         SECTION 4.2 CERTIFICATE OF INCORPORATION AND BY-LAWS. The copies of the
Parent's certificate of incorporation and by-laws, each as amended through the  
date of this Agreement (collectively, the "PARENT CHARTER DOCUMENTS") that are  
incorporated by reference in, as exhibits to, the Parent's Annual Report on Form
10-K for the year ended December 31, 1998, as amended by its filing on Form     
10K/A (the                                                                      

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"MIG FORM 10K"), and all comparable corporate organizational documents of the   
Parent Subsidiaries made available to the Company by the Parent are complete and
correct copies of those documents. Except as set forth in Section 4.2 of the    
Parent Disclosure Letter, the Parent Charter Documents and all comparable       
corporate organizational documents of the Parent Subsidiaries are in full force 
and effect. The Parent is not in violation of any of the provisions of the      
Parent Charter Documents.                                                       

SECTION 4.3 CAPITALIZATION.                                   

                  (a) The authorized capital stock of the Parent consists of (i)
400,000,000 shares of Parent Common Stock and (ii) 70,000,000 shares of         
Preferred Stock, par value $1.00 per share ("PARENT PREFERRED STOCK"). As of    
April 30, 1999, (A) 69,161,937 shares of Parent Common Stock were issued and    
outstanding, all of which were validly issued and are fully paid, nonassessable 
and not subject to preemptive rights, (B) 4,140,000 shares of 7 1/4% Cumulative 
Convertible Preferred Stock (the "7 1/4% PREFERRED STOCk") were issued and      
outstanding, all of which were validly issued and are fully paid, nonassessable 
and not subject to preemptive rights, (C) no shares of Parent Common Stock were 
held in the treasury of the Parent or by the Parent Subsidiaries, and (D)       
22,785,658 shares of Parent Common Stock were reserved for issuance upon        
exercise of outstanding Parent Stock Options or conversion of shares of 7 1/4%  
Preferred Stock. The shares of Parent Common Stock included in the Merger       
Consideration, when issued in accordance with this Agreement, will be duly      
authorized, validly issued, fully paid and nonassessable.                       

                 (b) Between April 30, 1999 and the date of this Agreement, no
options to purchase shares of Parent Common Stock ("PARENT STOCK OPTIONS") have 
been granted by the Parent under the Metromedia International Group, Inc. 1996  
Incentive Stock Option Plan (the "PARENT'S OPTION PLAN"). Except for (i) Parent 
Stock Options to purchase an aggregate of 2,442,188 shares of Parent Common     
Stock outstanding or available for grant under the Parent's Option Plan, (ii)   
under agreements or arrangements set forth in Section 4.3(b) of the Parent      
Disclosure Letter or (iii) 13,800,000 shares of Parent Common Stock issuable    
upon conversion of shares of 7 1/4% Preferred Stock, there are no options,      
warrants, conversion rights, stock appreciation rights, redemption rights,      
repurchase rights or other rights, agreements, arrangements or commitments of   
any character to which the Parent is a party or by which the Parent is bound    
relating to the issued or unissued capital stock of the Parent or any Parent    
Subsidiary or obligating the Parent or any Parent Subsidiary to issue or sell   
any shares of capital stock of, or other equity interests in, the Parent or any 
Parent Subsidiary.                                                              

           (c) Except as set forth in Section 4.3(c) of the Parent
Disclosure Letter, there are no outstanding contractual obligations of the      
Parent or any Parent Subsidiary to repurchase, redeem or otherwise acquire any  
shares of Parent Common Stock or any capital stock of any Parent Subsidiary.    
Except as set forth in                                                          

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Section 4.3(c) of the Parent Disclosure Letter, each outstanding share of       
capital stock of each Parent Subsidiary is duly authorized, validly issued,     
fully paid, nonassessable and not subject to preemptive rights and each such    
share owned by the Parent or a Parent Subsidiary is free and clear of all Liens.
Except as set forth in Section 4.3(c) of the Parent Disclosure Letter, there are
no material outstanding contractual obligations of the Parent or any Parent     
Subsidiary to provide funds in excess of $1 million to, or make any investment  
in excess of $1 million (in the form of a loan, capital contribution or         
otherwise) in, any Parent Subsidiary that is not wholly owned by the Parent or  
in any other person.                                                            

              (d) The authorized capital stock of Merger Sub consists of
1,000 shares of common stock, par value $.01 per share ("SUB COMMON STOCK"). All
of the issued and outstanding shares of Sub Common Stock are (A) owned by the   
Parent or another Parent Subsidiary wholly owned by the Parent and (B) duly     
authorized, validly issued, fully paid and nonassessable.                       

SECTION 4.4 AUTHORITY.                                        

           (a) Each of the Parent and Merger Sub has all necessary
corporate power and authority to execute and deliver this Agreement, to perform 
its obligations hereunder and to consummate the transactions contemplated hereby
to be consummated by it. The execution and delivery of this Agreement by each of
the Parent and Merger Sub and the consummation by each of the Parent and Merger 
Sub of such transactions have been duly and validly authorized by all necessary 
corporate action and no other corporate proceedings on the part of the Parent or
Merger Sub are necessary to authorize this Agreement or to consummate such      
transactions, other than, with respect to the approval of the issuance by the   
Parent of the Parent Common Stock to be issued in the Merger, by a majority of  
the outstanding shares of Parent Common Stock (the "REQUISITE PARENT VOTE").    
This Agreement has been duly authorized and validly executed and delivered by   
each of the Parent and Merger Sub and constitutes a legal, valid and binding    
obligation of each of the Parent and Merger Sub, enforceable against each of the
Parent and Merger Sub in accordance with its terms.                             

               (b) The Board of Directors of each of the Parent and Merger
Sub (i) has unanimously adopted the plan of merger set forth in this Agreement  
and approved this Agreement and the other transactions contemplated by this     
Agreement and (ii) has declared that the Merger and this Agreement and the other
transactions contemplated by this Agreement are advisable.                      

 SECTION 4.5 NO CONFLICT. (a) The execution and delivery of this
Agreement by the Parent and Merger Sub do not, and the performance of this      
Agreement by each of the Parent and Merger Sub will not:                        

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                       (i) conflict with or violate any provision of any
Parent Charter Document or any equivalent organizational documents of any Parent
Subsidiary except as set forth in Section 4.5(a) of the Parent Disclosure       
Letter;                                                                         

                 (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 4.5(b) of the Parent      
Disclosure Letter have been obtained and all filings and obligations described  
in Section 4.5(b) of the Parent Disclosure Letter have been made, conflict with 
or violate any foreign or domestic Law applicable to the Parent, Merger Sub or  
any other Parent Subsidiary or by which any property or asset of the Parent or  
any Parent Subsidiary is or may be bound or affected; or                        

                        (iii) except as set forth in Section 4.5(b) of the
Parent Disclosure Letter, result in any breach of or constitute a default (or an
event which with or without notice or lapse of time or both would become a      
default) under, or give to others any right of termination, amendment,          
acceleration or cancellation of, or result in the creation of a lien or other   
encumbrance on any property or asset of the Parent, Merger Sub, or any other    
Parent Subsidiary under, any Contract to which the Parent, Merger Sub or any    
other Parent Subsidiary is a party or by which any of them or their assets or   
Properties is or may be bound or affected, except for any such breaches,        
defaults or other occurrences which, individually or in the aggregate, have not 
resulted and could not reasonably be expected to result in a Material Adverse   
Effect on the Parent;                                                           

                 (b) Section 4.5(b) of the Parent Disclosure Letter sets forth
a correct and complete list of all Contracts to which Parent or any Parent      
Subsidiaries are a party or by which they or their assets or properties is or   
may be bound or affected under which consents or waivers are or may be required 
prior to consummation of the transactions contemplated by this Agreement.       

               SECTION 4.6 GOVERNMENTAL REQUIRED FILINGS AND CONSENTS. The
execution and delivery of this Agreement by the Parent and Merger Sub do not,   
and the performance of this Agreement by the Parent and Merger Sub will not,    
require any consent, approval, authorization or permit of, or filing with or    
notification to, any Government Entity except for (i) those consents or         
approvals set forth in Section 4.6 of the Parent Disclosure Letter (the "PARENT 
GOVERNMENTAL CONSENTS"), (ii) applicable requirements of the Exchange Act and   
the Securities Act, (iii) applicable requirements of Blue Sky Laws, (iv) the    
rules and regulations of the American Stock Exchange, Inc., (v) the pre-merger  
notification requirements of the HSR Act, and (vi) the filing of the Certificate
of Merger as required by the GCL.                                               

                 SECTION 4.7 PERMITS; COMPLIANCE WITH LAW. Except as set forth
in Section 4.7 of the Parent Disclosure Letter, each of the Parent and the      
Parent Subsidiaries is in possession of all franchises, grants, authorizations, 
licenses, permits,                                                              

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easements, variances, exceptions, consents, certificates, approvals and orders  
of any Governmental Entity necessary for the Parent or any Parent Subsidiary to 
own, lease and operate its properties or to carry on its business as it is now  
being conducted (collectively, the "PARENT PERMITS"), except where the failure  
to have, or the suspension or cancellation of, any of the Parent Permits,       
individually or in the aggregate, has not resulted and could not reasonably be  
expected to result in a Material Adverse Effect on the Parent, and, as of the   
date of this Agreement, no suspension or cancellation of any of the Parent      
Permits is pending or, to the knowledge of the Parent, threatened, except where 
the failure to have, or the suspension or cancellation of, any of the Parent    
Permits, individually or in the aggregate, has not resulted and could not       
reasonably be expected to result in a Material Adverse Effect on the Parent.    
Neither the Parent nor any Parent Subsidiary is in conflict with, or in default 
or violation of, (i) any Law applicable to the Parent or any Parent Subsidiary  
or by which any property or asset of the Parent or any Parent Subsidiary is or  
may be bound or affected or (ii) any Parent Permits, in either case, except     
where such conflict, default or violation could not reasonably be expected to   
result in a Material Adverse Effect on the Parent. To the Parent's knowledge,   
the business of the Parent is not being conducted in violation of any portion of
the FCPA, or any regulation promulgated thereunder, and there are not pending   
any investigations, reviews or inquiries made by any Governmental Entity of the 
Parent, any Parent Subsidiaries or any of their respective affiliates with      
respect to the FCPA, nor to the knowledge of the Parent has any Governmental    
Entity threatened to conduct the same.                                          

SECTION 4.8  SEC FILINGS; FINANCIAL STATEMENTS.               

               (a) The Parent has filed all forms, reports, statements and
other documents (including all exhibits, annexes, supplements and amendments to 
such documents) required to be filed by it under the Exchange Act and the       
Securities Act since January 1, 1996 through the date of this Agreement         
(collectively, including any such documents filed subsequent to the date of this
Agreement, the "PARENT SEC REPORTS") and the Parent has made available to the   
Company each Parent SEC Report. The Parent SEC Reports, including any financial 
statements or schedules included or incorporated by reference, (i) comply and   
will comply with the requirements of the Exchange Act or the Securities Act or  
both, as the case may be, applicable to those Parent SEC Reports and (ii) did   
not and will not at the time filed contain any untrue statement of a material   
fact or omit to state a material fact required to be stated or necessary in     
order to make the statements made in those Parent SEC reports, in the light of  
the circumstances under which they were made, not misleading. No Parent         
Subsidiary is subject to the periodic reporting requirements of the Exchange Act
or is otherwise required to file any documents with the SEC or any national     
securities exchange or quotation service or comparable Governmental Entity.     

              (b) Each of the consolidated balance sheets included in or
incorporated by reference into the Parent SEC Reports (including the related    
notes and                                                                       

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schedules) fairly presented or will fairly present, in all material respects,   
the consolidated financial position of the Parent as of the dates set forth in  
those consolidated balance sheets. Each of the consolidated statements of income
and of cash flows included in or incorporated by reference into the Parent SEC  
Reports (including any related notes and schedules) fairly presented or will    
fairly present, in all material respects, the consolidated results of operations
and cash flows, as the case may be, of the Parent and the consolidated Parent   
Subsidiaries for the periods set forth in those consolidated statements of      
income and of cash flows (subject, in the case of unaudited quarterly           
statements, to notes and normal year-end audit adjustments that will not be     
material in amount or effect), in each case in conformity with GAAP (except, in 
the case of unaudited quarterly statements, as permitted by Form 10-Q of the    
SEC) consistently applied throughout the periods indicated.                     

                 (c) Except as and to the extent set forth on the consolidated
balance sheet of the Parent and the consolidated Parent Subsidiaries as of      
December 31, 1998, including the related notes, neither the Parent nor any      
Parent Subsidiary has any liabilities or obligations of any nature (whether     
accrued, absolute, contingent or otherwise) that would be required to be        
reflected on a balance sheet or in the related notes prepared in accordance with
GAAP, except for liabilities or obligations incurred in the ordinary course of  
business since December 31, 1998, that, individually or in the aggregate, have  
not resulted and could not reasonably be expected to result in a Material       
Adverse Effect on the Parent.                                                   

       SECTION 4.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30,
1998 (or, with respect to Snapper, Inc., December 31, 1998), and except as      
otherwise disclosed in the MIG Form 10K, the Parent and the Parent Subsidiaries 
have conducted their businesses only in the ordinary course and in a manner     
consistent with past practice and, since such date, there has not been:         

  (a) any Material Adverse Effect on the Parent;

           (b) any damage, destruction or other casualty loss with
respect to any asset or property owned, leased or otherwise used by it or any   
Parent Subsidiaries, whether or not covered by insurance, which damage,         
destruction or loss, individually or in the aggregate, has resulted or could    
reasonably be expected to result in a Material Adverse Effect on the Parent;    

              (c) any material change by the Parent in its or any Parent
Subsidiary's accounting methods, principles or practices;                       

                 (d) any declaration, setting aside or payment of any dividend
or distribution in respect of Parent Shares or any redemption, purchase or other
acquisition of any of the Parent's securities; or                               

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       (e) any increase in the compensation or benefits or
establishment of any bonus, insurance, severance, deferred compensation,        
pension, retirement, profit sharing, stock option (including, the granting of   
stock options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any executive officers of the  
Parent or any Parent Subsidiary except in the ordinary course of business       
consistent with past practice or except as required by applicable Law.          

SECTION 4.10 EMPLOYEE BENEFIT PLANS.                          

         (a) Except as set forth in Section 4.10 of the Parent
Disclosure Letter and except as could not, individually or in the aggregate,    
reasonably be expected to have a Material Adverse Effect on the Parent: (A) each
Benefit Plan of the Parent or any Parent Subsidiary (the "PARENT BENEFIT PLANS")
has been administered and is in compliance with the terms of such plan and all  
applicable laws, rules and regulations, (B) no "reportable event" (as such term 
is used in section 4043 of ERISA) (other than those events for which the 30 day 
notice has been waived pursuant to the regulations), "prohibited transaction"   
(as such term is used in sec tion 406 of ERISA or section 4975 of the Code) or  
"accumulated funding deficiency" (as such term is used in section 412 or 4971 of
the Code) has heretofore occurred with respect to any Parent Benefit Plan and   
(C) each Parent Benefit Plan intended to qualify under Section 401(a) of the    
Code has received a favorable determination from the IRS regarding its qualified
status and no notice has been received from the IRS with respect to the         
revocation of such qualification.                                               

         (b) There is no litigation or administrative or other
proceeding involving any Parent Benefit Plan nor has the Parent or any Parent   
Subsidiary received notice that any such proceeding is threatened, in each case 
where an adverse determination could reasonably be expected to have a Material  
Adverse Effect on the Parent. Neither the Parent nor any Parent Subsidiary has  
incurred, nor, to the Parent's knowledge, is reasonably likely to incur any     
withdrawal liability with respect to any "multiemployer plan" (within the       
meaning of section 3(37) of ERISA) which remains unsatisfied in an amount which 
could reasonably be expected to have a Material Adverse Effect on the Parent.   
The termination of, or withdrawal from, any Parent Benefit Plan or multiemployer
plan to which the Parent or any Parent Subsidiaries contributes, on or prior to 
the Closing Date, will not subject the Parent or any Parent Subsidiary to any   
liability under Title IV of ERISA that could reasonably be expected to have a   
Material Adverse Effect on the Parent.                                          

        SECTION 4.11 ACCOUNTING AND TAX MATTERS. Neither the Parent nor Merger
Sub, nor to the knowledge of the Parent, any of Parent's affiliates has taken or
agreed to take any action, nor is the Parent aware of any agreement, plan or    
other                                                                           

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circumstance, that would prevent the Merger from constituting a transaction     
qualifying as a reorganization under Section 368(a) of the Code.                

  SECTION 4.12 CONTRACTS; DEBT INSTRUMENTS. Except as set forth in
Section 4.12 of the Parent Disclosure Letter, there is no Contract that is      
material to the business, financial condition or results of operations of the   
Parent and the Parent Subsidiaries taken as a whole (each, a "PARENT MATERIAL   
CONTRACT"). Neither the Parent nor any Parent Subsidiary is in violation of or  
in default under (nor does there exist any condition which with the passage of  
time or the giving of notice would cause such a violation of or default under)  
any Contract to which it is a party or by which it or any of its properties or  
assets is or may be bound or affected, except for violations or defaults that,  
individually or in the aggregate, have not resulted and could not reasonably be 
expected to result in a Material Adverse Effect on the Parent. Set forth in     
Section 4.12 of the Parent Disclosure Letter is a description of any material   
changes to the amount and terms of the indebtedness of the Parent and the       
consolidated Parent Subsidiaries as described in the notes to the financial     
statements set forth as incorporated by reference in the MIG Form 10K.          

         SECTION 4.13 LITIGATION. There is no Claim pending or, to the knowledge
of the Parent, threatened against the Parent or any Parent Subsidiary before any
Governmental Entity that, individually or in the aggregate, has resulted or     
could reasonably be expected to result in a Material Adverse Effect on the      
Parent. Neither the Parent nor any Parent Subsidiary is subject to any          
outstanding order, writ, injunction or decree which, individually or in the     
aggregate, has resulted or could reasonably be expected to result in a Material 
Adverse Effect on the Parent.                                                   

SECTION 4.14 ENVIRONMENTAL MATTERS. Except as disclosed on    
Section 4.14 of the Parent Disclosure Letter or in the Parent SEC Reports and   
except as could not reasonably be expected to have a Material Adverse Effect on 
the Parent:                                                                     

              (a) Neither the Parent nor any Parent Subsidiary is or has
been in violation in any material respect of any applicable Safety and          
Environmental Law.                                                              

              (b) The Parent and each Parent Subsidiary have all Permits
required pursuant to Safety and Environmental Laws that are material to the     
conduct of the business of the Parent or any Parent Subsidiary, all such Permits
are in full force and effect, no action or proceeding to revoke, limit or modify
any of such Permits is pending, and the Parent and each Parent Subsidiary is in 
compliance in all material respects with all terms and conditions thereof.      

                  (c) Neither the Parent nor any Parent Subsidiary has received,
or expects to receive due to the consummation of the Agreement, any material    
Environmental Claim.                                                            

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               (d) To the Parent's knowledge, there is not now and has not
been at any time in the past a Release or threatened Release of Hazardous       
Substances into the Environment for which the Parent or any Parent Subsidiary   
may be directly or indirectly responsible.                                      

               (e) To the Parent's knowledge, there is not now and has not
been at any time in the past at, on or in any of the real properties owned,     
leased or operated by the Parent or any Parent Subsidiary, and, to the Parent's 
knowledge, was not at, on or in any real property previously owned, leased or   
operated by the Parent or any Parent Subsidiary or any predecessor: (i) any     
generation, use, handling, Release, treatment, recycling, storage or disposal of
any Hazardous Substances, (ii) any underground storage tank, surface            
impoundment, lagoon or other containment facility (past or present) for the     
temporary or permanent storage, treatment or disposal of Hazardous Substances,  
(iii) any asbestos-containing material in a condition requiring abatement, (iv) 
any Release or threatened Release, or any visible signs of Releases or          
threatened Releases, of a Hazardous Substance to the Environment in form or     
quantity requiring remedial action under Safety and Environmental Laws, or (v)  
any Hazardous Substances present at such property, excepting such quantities as 
are handled in accordance with all applicable manufacturer's instructions and   
Safety and Environmental Laws and in proper storage containers, and as are      
necessary for the operations of the Parent and the Parent Subsidiaries.         

SECTION 4.15 INTELLECTUAL PROPERTY.                           

(a) DISCLOSURE.                             

                     (i) Section 4.15(a)(i) of the Parent Disclosure
Letter sets forth all material United States and foreign patents and patent     
applications, trademark and service mark registrations and applications,        
Internet domain name registrations and applications, and copyright registrations
and applications owned or licensed by the Parent, specifying as to each item, as
applicable: (A) the nature of the item, including the title; (B) the owner of   
the item; (C) the jurisdictions in which the item is issued or registered or in 
which an application for issuance or registration has been filed; and (D) the   
issuance, registration, or application numbers and dates.                       

                       (ii) Section 4.15(a)(ii) of the Parent Disclosure
Letter sets forth all material IP Licenses under which the Parent is a licensor 
or licensee or otherwise is authorized to use or practice any Intellectual      
Property.                                                                       

                         (iii) Section 4.15(a)(iii) of the Parent Disclosure
Letter sets forth and describes the status of any material Proposed Intellectual
Property Agreements.                                                            

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                (b) OWNERSHIP. The Parent owns, free and clear of all Liens,
and has the unrestricted right to use, sell, or license, all Intellectual       
Property set forth in Section 4.15(a)(i) and, as applicable, Section 4.15(a)(ii)
of the Parent Disclosure Letter, except for failures that, individually or in   
the aggregate, have not resulted and could not reasonably be expected to result 
in a Material Adverse Effect on the Parent.                                     

               (c) CLAIMS. The Parent has not been, during the three years
preceding the date of this Agreement, a party to any Claim, nor, to the         
knowledge of the Company, is any Claim threatened, that challenges the validity,
enforceability, ownership, or right to use, sell, or license any Intellectual   
Property owned or licensed by the Parent, except for Claims that, individually  
or in the aggregate, have not resulted and could not reasonably be expected to  
result in a Material Adverse Effect on the Parent. To the knowledge of the      
Parent, no third party is infringing upon any Intellectual Property, except for 
infringements that, individually or in the aggregate, have not resulted and     
could not reasonably be expected to result in a Material Adverse Effect on the  
Parent.                                                                         

                (d) ADMINISTRATION AND ENFORCEMENT. The Parent has taken all
necessary and desirable actions to maintain and protect each item of Intellec   
tual Property owned by the Parent, except for failures to take such actions     
that, individually or in the aggregate, have not resulted and could not         
reasonably be expected to result in a Material Adverse Effect on the Parent.    

                  (e) PROTECTION OF TRADE SECRETS AND TECHNOLOGY. The Parent has
taken all reasonable precautions to protect the secrecy, confidentiality, and   
value of its trade secrets and the proprietary nature and value of the          
Technology, except for failures to take such precautions that, individually or  
in the aggregate, have not resulted and could not reasonably be expected to     
result in a Material Adverse Effect on the Parent.                              

               (f) SOFTWARE. All material Software is described in Section
4.15(a)(ii) of the Parent Disclosure Letter. The Software performs in           
conformance with its documentation, except for failures to perform that,        
individually or in the aggregate, have not resulted and could not reasonably be 
expected to result in a Material Adverse Effect on the Parent.                  

                (g) YEAR 2000 COMPLIANCE. All Systems used by the Parent are
Year 2000 Compliant and to the Parent's knowledge the systems used by the       
Parent's material suppliers are Year 2000 Compliant, except in each case for    
failures to be Year 2000 Compliant that, individually or in the aggregate, have 
not resulted and could not reasonably be expected to result in a Material       
Adverse Effect on the Parent and except as set forth in Section 4.15(g) of the  
Parent Disclosure Letter.                                                       

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                  (h) EFFECT OF TRANSACTION. The Parent is not, nor, as a result
of the execution and delivery of this Agreement or the performance of its       
obligations under this agreement, will be, in violation of any agreement        
relating to any Intellectual Property, except for violations that, individually 
or in the aggregate, have not resulted and could not reasonably be expected to  
result in a Material Adverse Effect on the Parent.                              

       SECTION 4.16 TAXES. (a) Except as set forth on Section 4.16(a) of the
Parent Disclosure Letter, (i) the Parent and each Parent Subsidiary has timely  
filed (after giving effect to any extensions of the time to file which were     
obtained) prior to the date of this Agreement, and will file prior to the       
Effective Time, all returns required to be filed prior to the date of this      
Agreement and/or required to be filed prior to the Effective Time by any of them
with respect to, and has paid (or the Parent has paid on its behalf), or has or 
will set up an adequate reserve for the payment of, all Taxes required to be    
paid prior to the date of the Agreement or the Effective Time, as the case may  
be, and the most recent financial statements contained in the Parent SEC Reports
reflect an adequate reserve for all Taxes payable by the Parent and the Parent  
Subsidiaries accrued through the date of such financial statements and (ii) no  
deficiencies for any Taxes have been proposed, asserted or assessed against the 
Parent or any Parent Subsidiary other than those which are being contested in   
good faith and by proper proceedings by the Parent, except in the case of       
clauses (i) and (ii) above, any of the foregoing which do not and will not have 
a Material Adverse Effect on the Parent.                                        

             (b) The Federal income tax returns of the Parent and each
Parent Subsidiary consolidated in such returns have been examined by and settled
with the IRS, or the statute of limitations with respect to such years has      
expired, for all years through 1994.                                            

            (c) Except as set forth on Section 4.16(c) of the Parent
Disclosure Letter, none of the Parent, any Parent Subsidiary, or to the Parent's
knowledge, any group of which the Parent or any Parent Subsidiary is now or ever
was a member, has filed or entered into any election, consent or extension      
agreement that extends any applicable statute of limitations or the time within 
which a return must be filed which statute of limitations has not expired or    
return has not been timely filed except, in the case of Parent Subsidiaries     
organized under the laws of jurisdictions outside the United States, as has not 
and could not reasonably be expected to result in a Material Adverse Effect on  
the Parent.                                                                     

            (d) Except as set forth on Section 4.16(d) of the Parent
Disclosure Letter, (i) none of the Parent, any Parent Subsidiary or, to the     
Parent's knowledge, any group of which the Parent or any Parent Subsidiary is   
now or ever was a member, is a party to any action or proceeding pending or, to 
the Parent's knowledge, threatened by any governmental authority for assessment 
or collection of                                                                

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Taxes, (ii) no unresolved claim for assessment or collection of Taxes has, to   
the Parent's knowledge, been asserted, (iii) no audit or investigation of the   
Parent or any Parent Subsidiary by any governmental authority is pending or, to 
the Parent's knowledge, threatened and (iv) no such matters are under discussion
with any governmental authority which, in the case of clauses (i-iv), could have
a Material Adverse Effect on the Parent.                                        

                SECTION 4.17 NON-COMPETITION AGREEMENTS. Except as set forth
in Section 4.17 of the Parent Disclosure Letter, neither the Parent nor any     
Parent Subsidiary is a party to any agreement which purports to restrict or     
prohibit in any material respect the Parent and the Parent Subsidiaries         
collectively from, directly or indirectly, engaging in any business involving   
telecommunications currently engaged in by the Parent, any Parent Subsidiary,   
any other persons affiliated with the Parent, or the Company or any Company     
Subsidiaries. None of the Parent's officers, directors or key employees is a    
party to any agreement which, by virtue of such person's relationship with the  
Parent, restricts in any material respect the Parent or any Parent Subsidiary or
affiliate of either of them from, directly or indirectly, engaging in any of the
businesses described above.                                                     

                SECTION 4.18 INVESTMENT COMPANY ACT. Each of Parent and each
Parent Subsidiary either (i) is not an "investment company," or a company       
"controlled" by, or an "affiliated company" with respect to, an "investment     
company," within the meaning of the Investment Company Act or (ii) satisfies all
conditions for an exemption from the Investment Company Act, and, accordingly,  
neither the Parent nor any Parent Subsidiary is required to be registered under 
the Investment Company Act.                                                     

                  SECTION 4.19 OPINION OF FINANCIAL ADVISOR. Donaldson, Lufkin &
Jenrette Securities Corporation (the "PARENT FINANCIAL ADVISOR") has delivered  
to the Board of Directors of the Parent its oral opinion to the effect that, as 
of the date of this Agreement, the Exchange Ratio is fair to the Parent from a  
financial point of view, a copy of the written opinion of which will be         
delivered to the Company after receipt thereof by the Parent.                   

                SECTION 4.20 BROKERS. No broker, finder or investment banker
other than the Parent Financial Advisor is entitled to any brokerage, finder's  
or other fee or commission in connection with the Merger or the other           
transactions contemplated hereby based upon arrangements made by or on behalf of
the Parent or Merger Sub. The Parent has heretofore made available to the       
Company a complete and correct copy of all agreements between the Parent and the
Parent Financial Advisor pursuant to which the Parent Financial Advisor would be
entitled to any payment relating to the Merger or such other transactions.      

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                SECTION 4.21 CERTAIN STATUTES. The Board of Directors of the
Parent has taken or will take all appropriate and necessary actions such that   
the restrictions on business combinations in Section 203 of the GCL will not    
have any effect on the Merger or the other transactions contemplated hereby. No 
Takeover Statute is, as of the date hereof, applicable to the Merger or such    
other transactions.                                                             

           SECTION 4.22 INFORMATION. None of the information to be
supplied by the Parent or Merger Sub for inclusion or incorporation by reference
in the Registration Statement, the Exchange Offer Registration Statement or the 
Proxy Statement will, in the case of the Registration Statement and the Exchange
Offer Registration Statement, at the time it becomes effective and at the       
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated in that Registration Statement or the   
Exchange Offer Registration Statement, as the case may be, or necessary to make 
the statements in the Registration Statement or the Exchange Offer Registration 
Statement, as the case may be, not misleading, or, in the case of the Proxy     
Statement or any amendments thereof or supplements thereto, at the time of the  
mailing of the Proxy Statement and any amendments or supplements thereto and at 
the time of the Parent Stockholders Meeting, contain any untrue statement of a  
material fact or omit to state any material fact required to be stated in that  
Proxy Statement or necessary in order to make the statements in that Proxy      
Statement, in light of the circumstances under which they are made, not         
misleading. The Proxy Statement (except for such portions thereof that relate   
only to the Company or the Company Subsidiaries or affiliates of the Company)   
and the Registration Statement and the Exchange Offer Registration Statement    
will comply as to form in all material respects with the provisions of the      
Exchange Act and the Securities Act, respectively.                              

                SECTION 4.23 VOTE REQUIRED. The Requisite Parent Vote is the
only vote of the holders of any class or series of the Parent's capital stock   
necessary (under the rules and regulations of the American Stock Exchange, Inc.,
the Parent Charter Documents, the GCL, other applicable Law or otherwise to     
approve this Agreement, the issuance of Parent Common Stock in the Merger and   
the other transactions contemplated by this Agreement.                          

                 SECTION 4.24 INTERIM OPERATIONS OF MERGER SUB. Merger Sub was
formed solely for the purpose of engaging in the transactions contemplated by   
this Agreement and has not engaged in any business activities or conducted any  
operations other than in connection with the transactions contemplated by this  
Agreement.                                                                      

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 ARTICLE 5

 COVENANTS

        SECTION 5.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated
by this Agreement or with the prior written consent of the Parent, during the   
period from the date of this Agreement to the Effective Time, the Company will, 
and will use its best efforts to cause each of the Company Subsidiaries to,     
conduct its operations only in the ordinary course of business consistent with  
past practice and will use its reasonable best efforts to, and to use its best  
efforts to cause each Company Subsidiary to, preserve intact the business       
organization of the Company and each of the Company Subsidiaries, to keep       
available the services of the present officers and key employees of the Company 
and the Company Subsidiaries, and to preserve the good will of customers,       
suppliers and all other persons having business relationships with the Company  
and the Company Subsidiaries. Without limiting the generality of the foregoing, 
and except as otherwise contemplated by this Agreement or disclosed in Section  
5.1 of the Company Disclosure Letter, prior to the Effective Time, the Company  
will not, and will not permit any Company Subsidiary (or with respect to clauses
(e) and (h) below, use its best efforts not to permit any Company Subsidiary    
that is not a wholly-owned Company Subsidiary) to, without the prior written    
consent of the Parent:                                                          

               (a) adopt any amendment to the Company Charter Documents or
the comparable organizational documents of any Company Subsidiary;              

        (b) except for issuances of capital stock of Company
Subsidiaries to the Company or a wholly owned Company Subsidiary, issue, reissue
or sell, or authorize the issuance, reissuance or sale of (i) additional shares 
of capital stock of any class, or securities convertible into capital stock of  
any class, or any rights, warrants or options to acquire any convertible        
securities or capital stock, other than the issue of Company Shares, in         
accordance with the terms of the instruments governing such issuance on the date
hereof, pursuant to the exercise of Company Stock Options or Company Warrants or
the conversion of Convertible Notes outstanding on the date hereof, or (ii) any 
other securities in respect of, in lieu of, or in substitution for, Company     
Shares outstanding on the date hereof;                                          

       (c) declare, set aside or pay any dividend or other
distribution (whether in cash, securities or property or any combination        
thereof) in respect of any class or series of its capital stock other than      
between the Company and any Company Subsidiary;                                 

                 (d) split, combine, subdivide, reclassify or redeem, purchase
or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any

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shares of its capital stock, or any of its other securities, except for a       
redemption of the Company Preferred Shares in accordance with the terms of this 
Agreement;                                                                      

                 (e) except for (i) increases in salary, wages and benefits of
officers or employees of the Company or the Company Subsidiaries in the ordinary
course of business and in accordance with past practice, (ii) increases in      
salary, wages and benefits granted to officers and employees of the Company or  
the Company Subsidiaries in conjunction with new hires, promotions or other     
changes in job status in the ordinary course of business and consistent with    
past practices, increase the compensation or fringe benefits payable or to      
become payable to its directors, officers or employees (whether from the Company
or any Company Subsidiaries), or pay any benefit not required by any existing   
plan or arrangement (including the granting of stock options, stock appreciation
rights, shares of restricted stock or performance units) or grant any severance 
or termination pay to (except pursuant to existing agreements, plans or         
policies), or enter into any employment or severance agreement with, any        
director, officer or other employee of the Company or any Company Subsidiaries  
or establish, adopt, enter into, or amend any collective bargaining, bonus,     
profit sharing, thrift, compensation, stock option, restricted stock, pension,  
retirement, savings, welfare, deferred compensation, employment, termination,   
severance or other employee benefit plan, agreement, trust, fund, policy or     
arrangement for the benefit or welfare of any directors, officers or current or 
former employees, except in each case to the extent required by applicable Law; 
PROVIDED, HOWEVER, that nothing in this Agreement will be deemed to prohibit the
payment of benefits existing on the date hereof as they become payable;         

            (f) except as set forth in Section 5.1(f) of the Company
Disclosure Letter, acquire, sell, lease, license, transfer, pledge, encumber,   
grant or dispose of (whether by merger, consolidation, purchase, sale or        
otherwise) any assets, including capital stock of Company Subsidiaries (other   
than the acquisition and sale of inventory or the disposition of used or excess 
equipment and the purchase of raw materials, supplies and equipment, in either  
case in the ordinary course of business consistent with past practice), with a  
value in excess of $100,000 or enter into any material commitment or transaction
outside the ordinary course of business, other than transactions between a      
wholly owned Company Subsidiary and the Company or another wholly owned Company 
Subsidiary;                                                                     

                 (g) (i) incur, assume or prepay any long-term indebtedness or
incur or assume any short-term indebtedness (including, in either case, by      
issuance of debt securities), except that the Company and the Company           
Subsidiaries may incur, assume or prepay indebtedness in the ordinary course of 
business consistent with past practice and except for loans made by the Parent  
to the Company pursuant to the Bridge Loan Agreement dated as of the date hereof
between the Company and the Parent (the "BRIDGE LOAN AGREEMENT"), (ii) assume,  
guarantee, endorse or otherwise become liable or responsible (whether directly, 
contingently or otherwise) for the                                              

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obligations of any other person except in the ordinary course of business, or   
(iii) make any loans, advances or capital contributions to, or investments in,  
any other person except in the ordinary course of business and except for loans,
advances, capital contributions or investments between any wholly owned Company 
Subsidiary and the Company or another wholly owned Company Subsidiary;          

               (h) terminate, cancel or request any material change in, or
agree to any material change in any Contract which is material to the Company   
and the Company Subsidiaries taken as a whole, or enter into any Contract which 
would be material to the Company and the Company Subsidiaries taken as a whole, 
in either case other than in the ordinary course of business consistent with    
past practice; or make or authorize any capital expenditure, other than capital 
expenditures that are not, in the aggregate, for any fiscal year, in excess of  
the capital expenditures provided for in the Company's budget for the Company   
and the Company Subsidiaries taken as a whole for such fiscal year (a copy of   
which budget has been provided to the Parent);                                  

              (i) take any action with respect to accounting policies or
procedures, other than actions in the ordinary course of business and consistent
with past practice or as required pursuant to applicable Law or GAAP;           

                  (j) make any Tax election or settle or compromise any material
federal, state, local or foreign income Tax liability; or                       

                 (k) authorize or enter into any formal or informal written or
other agreement or otherwise make any commitment to do any of the foregoing.    

       SECTION 5.2 CONDUCT OF BUSINESS OF THE PARENT. Except as contemplated
by this Agreement or with the prior written consent of the Company, during the  
period from the date of this Agreement to the Effective Time, the Parent will,  
and will use its best efforts to cause each of the Parent Subsidiaries to,      
conduct its operations only in the ordinary course of business consistent with  
past practice and will use its reasonable best efforts to, and to use its best  
efforts to cause each Parent Subsidiary to, preserve intact the business        
organization of the Parent and each of the Parent Subsidiaries, to keep         
available the services of the present officers and key employees of the Parent  
and the Parent Subsidiaries, and to preserve the good will of customers,        
suppliers and all other persons having business relationships with the Parent   
and the Parent Subsidiaries. Without limiting the generality of the foregoing,  
and except as otherwise contemplated by this Agreement or disclosed in Section  
5.2 of the Parent Disclosure Letter, prior to the Effective Time, the Parent    
will not, and will not permit any Parent Subsidiary to, without the prior       
written consent of the Company:                                                 

            (a) adopt any amendment to the Parent Charter Documents;

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                  (b) except for dividends on the 7 1/4% Preferred Stock and pro
rata dividends set aside or paid by any Parent Subsidiary to the holders of its 
equity interests, declare, set aside or pay any dividend or other distribution  
(whether in cash, securities or property or any combination thereof) in respect 
of any class or series of its capital stock other than between the Parent and   
any Parent Subsidiary;                                                          

                 (c) split, combine, subdivide, reclassify or redeem, purchase
or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities, except for a       
redemption of shares of Parent Preferred Stock;                                 

            (d) except as set forth in Section 5.2 (d) of the Parent
Disclosure Letter, sell, lease, transfer or dispose of (whether by merger,      
consolidation, purchase, sale or otherwise) all or substantially all the        
Parent's and the Parent Subsidiaries' assets and properties;                    

                 (e) (i) incur, assume or prepay any long-term indebtedness or
incur or assume any short-term indebtedness (including, in either case, by      
issuance of debt securities), except that the Parent and the Parent Subsidiaries
may incur, assume or prepay indebtedness in the ordinary course of business     
consistent with past practice, (ii) assume, guarantee, endorse or otherwise     
become liable or responsible (whether directly, contingently or otherwise) for  
the obligations of any other person except in the ordinary course of business,  
or (iii) make any loans, advances or capital contributions to, or investments   
in, any other person except in the ordinary course of business and except for   
loans, advances, capital contributions or investments between any Parent        
Subsidiary and the Parent or another Parent Subsidiary; PROVIDED, HOWEVER, that 
this subsection shall not prohibit the Parent from providing interim financing  
to the Company or any Company Subsidiary from the date hereof until the closing 
date;                                                                           

              (f) take any action with respect to accounting policies or
procedures, other than actions in the ordinary course of business and consistent
with past practice or as required pursuant to applicable Law or GAAP; or        

                 (g) authorize or enter into any formal or informal written or
other agreement or otherwise make any commitment to do any of the foregoing.    

SECTION 5.3 OTHER ACTIONS. During the period from the date    
hereof to the Effective Time, the Company and the Parent shall not, and shall   
not permit any of their respective subsidiaries to, take any action that would, 
or that could reasonably be expected to, result in any of the conditions to the 
Merger set forth in Article 6 hereof not being satisfied.                       

   SECTION 5.4 UPDATED LETTERS; NOTIFICATION OF CERTAIN MATTERS. The
Parent and the Company shall each deliver, on the Closing Date, updated copies  
of the                                                                          

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Parent Disclosure Letter and Company Disclosure Letter, respectively, setting   
forth any changes to such letters from the date hereof through the Business Day 
prior to the Closing Date (it being understood and agreed that such updated     
letters are being provided for information purposes only and any matters        
discussed on such updated letters shall not cure any breach or default of any   
representation, warranty, covenant or condition in this Agreement). The Parent  
and the Company shall promptly notify each other of (a) the occurrence or       
non-occurrence of any fact or event which could reasonably be expected (i) to   
cause any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the      
Effective Time, (ii) to cause any material covenant, condition or agreement     
hereunder not to be complied with or satisfied in all material respects or (iii)
to result in, in the case of Parent, a Material Adverse Effect on the Parent;   
and, in the case of the Company, a Material Adverse Effect on the Company, (b)  
any failure of the Company or the Parent, as the case may be, to comply with or 
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder in any material respect; PROVIDED, HOWEVER, that no such           
notification shall affect the representations or warranties of any party or the 
conditions to the obligations of any party hereunder, (c) any notice or other   
material communications from any Governmental Entity in connection with the     
transactions contemplated by this Agreement and (d) the commencement of any     
suit, action or proceeding that seeks to prevent or seek damages in respect of, 
or otherwise relates to, the consummation of the transactions contemplated by   
this Agreement.                                                                 

SECTION 5.5 PROXY STATEMENT, REGISTRATION STATEMENTS.         

              (a) As promptly as practicable after the execution of this
Agreement, (i) the Parent and the Company shall jointly prepare and file with   
the SEC a single document that will constitute (A) the proxy statement of the   
Company relating to the special meeting of the Company's stockholders (the      
"COMPANY STOCKHOLDERS MEETING") to be held to consider approval and adoption of 
this Agreement and the Merger, (B) the proxy statement of the Parent relating to
the special meeting of the Parent's stockholders (the "PARENT STOCKHOLDERS      
MEETING") to be held to consider approval of the issuance of the Parent Common  
Stock to be issued in the Merger, (C) the registration statement on Form S-4 of 
the Parent (together with all amendments thereto, the "REGISTRATION STATEMENT"),
in connection with the registration under the Securities Act of the Parent      
Common Stock to be issued to the stockholders of the Company in connection with 
the Merger and the prospectus included in the Registration Statement (such      
single document, together with any amendments thereof or supplements thereto,   
the "PROXY STATEMENT") and (ii) the Parent shall prepare and file with the SEC  
the registration statement on Form S-4 of the Parent or a shelf registration    
statement on Form S-3, as the case may be (together with all amendments thereto,
the "EXCHANGE OFFER REGISTRATION STATEMENT"), providing for the offer to        
exchange and consent solicitation by Parent and registration under the          
Securities Act of certain of its new 10 1/2% Senior Notes due 2007 (the "NEW    
PARENT NOTES") to holders                                                       

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of each of the Company's 14 1/2% Senior Discount Notes due 2004 (the "COMPANY   
SENIOR NOTES") and Convertible Notes, which New Parent Notes will have the terms
substantially as specified in Section 5.5 of the Parent Disclosure Letter and   
which exchange offer and consent solicitation will be commenced on the basis and
with the terms substantially as specified in Section 5.5 of the Parent          
Disclosure Letter (the "EXCHANGE OFFER"). Substantially contemporaneously with  
the filing of the Proxy Statement with the SEC, copies of the Proxy Statement   
shall be provided to NASDAQ and the American Stock Exchange. The Parent and the 
Company each shall use its reasonable best efforts to cause the Registration    
Statement and the Exchange Offer Registration Statement to become effective as  
promptly as practicable, and, prior to the effective date of the Registration   
Statement (the "REGISTRATION STATEMENT EFFECTIVE DATE"), the Parent shall take  
all or any action required under any applicable Law in connection with the      
issuance of Parent Common Stock pursuant to the Merger. The Parent or the       
Company, as the case may be, shall furnish all information concerning the Parent
or the Company as the other party may reasonably request in connection with such
actions and the preparation of the Proxy Statement, the Registration Statement  
and the Exchange Offer Registration Statement. As promptly as practicable after 
the Registration Statement Effective Date, the proxy statements and prospectus  
included in the Proxy Statement (collectively, the "PROXY MATERIALS") will be   
mailed to the stockholders of the Parent and the Company and the Exchange Offer 
will be commenced. The Parent and the Company shall cause the Proxy Statement to
comply as to form and substance in all material respects with the applicable    
requirements of (i) the Exchange Act, including Sections 14(a) and 14(d) thereof
and the respective regulations promulgated thereunder, (ii) the Securities Act, 
(iii) the rules and regulations of the American Stock Exchange and NASDAQ and   
(iv) the GCL.                                                                   

           (b) The Proxy Statement shall include the unanimous and
unconditional recommendation of the Board of Directors of the Company to the    
stockholders of the Company that they vote in favor of the adoption of this     
Agreement and the Merger; PROVIDED, HOWEVER, that the Board of Directors of the 
Company may, at any time prior to the Effective Time, withdraw, modify or change
any such recommendation solely in accordance with the provisions of Section     
5.8(b) hereof. In addition, the Proxy Statement and the Proxy Materials will    
include a copy of the written opinions of the Company Financial Advisor and the 
Parent Financial Adviser referred to in Sections 3.20 and 4.19 respectively.    

                 (c) No amendment or supplement to the Proxy Statement will be
made without the approval of each of the Parent and the Company, which approval 
shall not be unreasonably withheld or delayed.                                  

                (d) The information supplied by the Company for inclusion in
the Proxy Statement, the Registration Statement or the Exchange Offer           
Registration Statement, as the case may be, shall not, at (i) the time the      
Registration Statement or Exchange Offer Registration Statement is declared     
effective, (ii) the time the Proxy                                              

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Materials (or any amendment thereof or supplement thereto) is first mailed to   
the stockholders of each of the Parent and the Company, (iii) the time of the   
Company Stockholders Meeting, (iv) the time of the Parent Stockholders Meeting  
and (v) the Effective Time, contain any untrue statement of a material fact or  
fail to state any material fact required to be stated in the Proxy Statement,   
the Registration Statement or the Exchange Offer Registration Statement, as the 
case may be, or necessary in order to make the statements in the Proxy          
Statement, the Registration Statement or the Exchange Offer Registration        
Statement, as the case may be, not misleading. If at any time prior to the      
Effective Time any event or circumstance relating to the Company or any Company 
Subsidiary, or their respective officers or directors, should be discovered by  
the Company that should be set forth in an amendment or a supplement to the     
Proxy Statement, the Registration Statement or the Exchange Offer Registration  
Statement, the Company shall promptly inform the Parent. All documents that the 
Company is responsible for filing with the SEC in connection with the           
transactions contemplated hereby will comply as to form and substance in all    
material respects with the applicable requirements of the GCL, the Securities   
Act and the Exchange Act.                                                       

               (e) The information supplied by the Parent for inclusion in
the Proxy Statement, the Registration Statement or the Exchange Offer           
Registration Statement, as the case may be, shall not, at (i) the time the      
Registration Statement or the Exchange Offer Registration Statement is declared 
effective, (ii) the time the Proxy Materials (or any amendment of or supplement 
to the Proxy Materials) are first mailed to the stockholders of each of the     
Parent and the Company, (iii) the time of the Company Stockholders Meeting, (iv)
the time of the Parent Stockholders Meeting and (v) the Effective Time, contain 
any untrue statement of a material fact or fail to state any material fact      
required to be stated in the Proxy Statement, the Registration Statement or the 
Exchange Offer Registration Statement, as the case may be, or necessary in order
to make the statements in the Proxy Statement, the Registration Statement or the
Exchange Offer Registration Statement, as the case may be, not misleading. If,  
at any time prior to the Effective Time, any event or circumstance relating to  
the Parent or any Parent Subsidiary, or their respective officers or directors, 
should be discovered by the Parent that should be set forth in an amendment or a
supplement to the Proxy Statement, the Registration Statement or the Exchange   
Offer Registration Statement, the Parent shall promptly inform the Company. All 
documents that the Parent is responsible for filing in connection with the      
transactions contemplated by this Agreement will comply as to form and substance
in all material aspects with the applicable requirements of the GCL, the        
Securities Act and the Exchange Act.                                            

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SECTION 5.6 STOCKHOLDERS MEETINGS.                            

                (a) The Company shall call and hold the Company Stockholders
Meeting as promptly as practicable after the Registration Statement Effective   
Date for the purpose of voting upon the adoption of this Agreement and the      
Parent and the Company will cooperate with each other to cause the Company      
Stockholders Meeting to be held as soon as practicable following the mailing of 
the Proxy Materials to the stockholders of the Company. The Company shall use   
its reasonable best efforts (through its agents or otherwise) to solicit from   
its stockholders proxies in favor of the adoption of this Agreement, and shall  
take all other action necessary or advisable to secure Requisite Company Vote,  
except to the extent that the Board of Directors of the Company determines in   
good faith that doing so would cause the Board of Directors of the Company to   
breach its fiduciary duties to the Company's stockholders under applicable Law  
after receipt of advice to such effect from independent legal counsel (who may  
be the Company's regularly engaged independent legal counsel). In addition, the 
Company shall use its reasonable best efforts to solicit, as directed by the    
Parent and at the Parent's expense, acceptance of the Exchange Offer by holders 
of Company Senior Notes and Convertible Notes.                                  

              (b) The Parent shall call and hold the Parent Stockholders
Meeting as promptly as practicable after the Registration Statement Effective   
Date for the purpose of voting upon the approval of the issuance of the Parent  
Common Stock to be issued in the Merger and the Parent and the Company will     
cooperate with each other to cause the Parent Stockholders Meeting to be held as
soon as practicable following the mailing of the Proxy Materials to the         
stockholders of the Parent. The Parent shall use its reasonable best efforts    
(through its agents or otherwise) to solicit from its stockholders proxies in   
favor of the adoption of such issuance, and shall take all other action         
necessary or advisable to secure the Requisite Parent Vote. In addition, the    
Parent shall use its reasonable best efforts to solicit acceptance of the       
Exchange Offer by holders of Company Senior Notes and Convertible Notes.        

SECTION 5.7 ACCESS TO INFORMATION; CONFIDENTIALITY.           

                 (a) Except as required under any confidentiality agreement or
similar agreement or arrangement to which the Parent or the Company or any of   
their respective subsidiaries is a party or under applicable Law or the         
regulations or requirements of any securities exchange or quotation service or  
other self regulatory organization with whose rules the parties are required to 
comply, from the date of this Agreement to the Effective Time, the Parent and   
the Company shall (and shall cause their respective subsidiaries to): (i)       
provide to the other (and its officers, directors, employees, accountants,      
consultants, legal counsel, financial advisors, investment bankers, agents and  
other representatives (collectively, "REPRESENTATIVES")) access at reasonable   
times upon prior notice to the officers, employees, agents, properties,         
offices and other facilities of the other and its subsidiaries and to the books 
and records                                                                     

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thereof; and (ii) furnish promptly such information concerning the business,    
properties, Contracts, assets, liabilities, personnel and other aspects of the  
other party and its subsidiaries as the other party or its Representatives may  
reasonably request. No investigation conducted under this Section 5.7 shall     
affect or be deemed to modify any representation or warranty made in this       
Agreement.                                                                      

            (b) The parties shall comply with, and shall cause their
respective Representatives to comply with, all of their respective obligations  
under the Confidentiality Agreement, dated October, 1998 (the "CONFIDENTIALITY  
AGREEMENT"), between the Parent and the Company with respect to the information 
disclosed under this Section 5.7.                                               

SECTION 5.8 NO SOLICITATION.                                  

                (a) Neither the Company nor any of the Company Subsidiar ies
shall, nor shall it or any of Company Subsidiaries authorize or permit any of   
their respective directors, officers, employees, investment bankers, attorneys  
or other agents or representatives, directly or indirectly to, (i) solicit,     
initiate, encourage (including by way of furnishing information or assistance)  
or take any other action to facilitate, any inquiry or the making of any        
proposal which constitutes, or may reasonably be expected to lead to, any       
acquisition or purchase of a substantial amount of assets of, or any equity     
interest in, the Company or any of its Subsidiaries or any tender offer         
(including a self tender offer) or exchange offer, merger, consolidation,       
business combination, sale of substantially all assets, sale of securities,     
recap italization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries (other than the transactions contemplated by 
this Agreement) or any other material corporate transaction the consummation of 
which would or could reasonably be expected to impede, interfere with, prevent  
or materially delay the Merger (collectively, "TRANSACTION PROPOSALS") or agree 
to or endorse any Transac tion Proposal or (ii) propose, enter into or          
participate in any discussions or negotiations regarding any of the foregoing,  
or furnish to any other Person any information with respect to its business,    
properties or assets or any of the foregoing, or otherwise cooperate in any way 
with, or assist or participate in, facilitate or encourage, any effort or       
attempt by any other Person to do or seek any of the forego ing; PROVIDED,      
HOWEVER, that the foregoing clauses (i) and (ii) shall not prohibit the Company 
from, prior to the Company Stockholders Meeting (A) furnishing information      
pursuant to an appropriate confidentiality letter concerning the Company and its
businesses, properties or assets to a third party which has made an unsolicited 
Qualified Transaction Proposal (as defined below), (B) engaging in discussions  
or negotiations with such a third party which has made an unsolicited Qualified 
Transac tion Proposal or (C) following receipt of an unsolicited Qualified      
Transaction Proposal, taking and disclosing to its shareholders a position with 
respect to such Qualified Transaction Proposal, but in each case referred to in 
the foregoing clauses (A) through (C) only after the Board of Directors of the  
Company concludes in good faith, following receipt of a written opinion         
addressed to                                                                    

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the Company from outside counsel, that such action is necessary for the Board of
Directors of the Company to comply with its fiduciary obligations to            
stockholders under applicable law. If the Board of Directors of the Company     
receives a Transaction Proposal, then the Company shall immediately (and in any 
event within 24 hours) inform Parent of the material terms and conditions of    
such proposal and the identity of the person making it and shall keep the Parent
fully informed regarding any significant details or developments with respect to
any such Transaction Proposal and of all significant steps it is taking in      
response to such Transaction Proposal. For purposes of this Agreement, the term 
"QUALIFIED TRANSACTION PROPOSAL" shall mean a Transaction Proposal for which    
financing is then fully committed or which the Board of Directors of the Company
determines in good faith after consultation with its outside financial advisors,
is reasonably capable of being financed and is not subject to any material      
contingencies relating to financing. Without limiting the foregoing, it is      
understood that any violation of the restrictions set forth in this Section     
5.8(a) by (or at the direction of) an officer, director of or any investment    
banker, attorney, accountant, agent or other advisor or representative of the   
Company or any Company Subsidiary, whether or not such person is purporting to  
act on behalf of the Company, and the Company Subsidiary or otherwise, shall be 
deemed to be a breach of this section by the Company. The Company immediately   
shall cease and cause to be terminated all existing discussions or negotiations 
with any persons conducted heretofore with respect to, or that could reasonably 
be expected to lead to, any Qualified Transaction Proposal.                     

             (b) Neither the Board of Directors of the Company nor any
committee thereof shall (i) withdraw or modify, or propose publicly to withdraw 
or modify, in a manner adverse to Parent, the recommendation or any approval or 
recommendation by the Board of Directors of the Company or any committee thereof
of this Agreement or the Merger or (ii) approve or recommend, or propose to     
approve or recommend, any Qualified Transaction Proposal. Notwithstanding the   
foregoing, the Board of Directors of the Company, to the extent it concludes in 
good faith, following receipt of a written opinion addressed to the Company from
outside counsel, that such action is necessary for the Board of Directors of the
Company to comply with its fiduciary obligations to stockholders under          
applicable law, may recommend (and, in connection therewith, withdraw or modify 
its recommendation or its approval of this Agreement or the Merger) a Superior  
Acquisition Proposal (as defined below); PROVIDED, THAT, neither the Company nor
the Board of Directors of the Company may in such instance terminate this       
Agreement but instead the Company, at the option of the Parent, shall,          
notwithstanding such withdrawal or modification of the recommendation or        
approval of this Agreement or the Merger by the Company's Board of Directors    
and/or the recommendation by the Company's Board of Directors that the Company's
stockholders reject this Agreement or the Merger, submit approval of this       
Agreement and the Merger to a vote of the holders of Company Common Stock at the
Company Stockholders Meeting, as contemplated by this Agreement, it being       
understood and agreed that, Parent, Company and Merger Sub elect this Agreement 
to be governed by the provisions of Section 251(c) of the GCL. For purposes of  
this Agreement,                                                                 

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"SUPERIOR ACQUISITION PROPOSAL" means a bona fide written proposal made by a    
third party to acquire the Company pursuant to a tender or exchange offer, a    
merger, a share exchange, a sale of all or substantially all of its assets or   
otherwise, in any such case, on terms which a majority of the members of the    
Board of Directors of the Company determines in their good faith judgment (after
consultation with independent financial advisors) to be more favorable to the   
Company and its stockholders than the Merger and for which financing, to the    
extent required, is then fully committed or which, in the good faith judgment of
a majority of such members (after consultation with independent financial       
advisors), is reasonably capable of being financed by such third party.         

 SECTION 5.9 AFFILIATES. Concurrently with the execution of this
Agreement, the Company is delivering to Parent (i) a letter identifying all     
persons who, to the knowledge of the Company, may be deemed to be "affiliates"  
of the Company under Rule 145 under the Securities Act, including, without      
limitation, all directors and executive officers of the Company, and (ii) not   
later than 30 days prior to the Company Stockholders Meeting copies of letter   
agreements, each in the form prepared by Parent and reasonably acceptable to the
Company, executed by each such Person so identified as an "affiliate" of the    
Company (the letters described in clauses (i) and (ii) being collectively       
referred to as "AFFILIATE LETTERS").                                            

      SECTION 5.10 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.

                (a) The Parent agrees that all rights to indemnification now
existing in favor of any employee, agent, director or officer of the Company and
the Company Subsidiaries (the "INDEMNIFIED PARTIES") as provided in their       
respective charters or by-laws, in an agreement between an Indemnified Party and
the Company or one of the Company Subsidiaries, or otherwise in effect on the   
date hereof shall survive the Merger and shall continue in full force and effect
for a period of not less than six years from the Effective Time; PROVIDED that  
in the event any claim or claims are asserted or made within such six-year      
period, all rights to indemnification in respect of any such claim or claims    
shall continue until final disposition of any and all such claims. The Parent   
also agrees to indemnify all Indemnified Parties to the fullest extent permitted
by applicable law with respect to all acts and omissions arising out of such    
individuals' services as officers, directors, employees or agents of the Company
or any of the Company Subsidiaries or as trustees or fiduciaries of any plan for
the benefit of employees, or otherwise on behalf of, the Company or any of the  
Company Subsidiaries, occurring prior to the Effective Time including the       
transactions contemplated by this Agreement. Without limiting of the foregoing, 
in the event any such Indemnified Party is or becomes involved in any capacity  
in any action, proceeding or investigation in connection with any matter,       
including the transactions contemplated by this Agreement, occurring prior to,  
and including, the Effective Time, the Parent will pay as incurred such         
Indemnified Party's legal and other expenses                                    

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(including the cost of any investigation and preparation) incurred in connection
therewith.                                                                      

                  (b) The Parent agrees that the Company and, from and after the
Effective Time, the Surviving Corporation shall cause to be maintained in effect
for not less than six years from the Effective Time the current policies of the 
directors' and officers' liability insurance maintained by the Company; PROVIDED
that the Surviving Corporation may substitute therefor policies of at least the 
same coverage containing terms and conditions which are no less advantageous and
provided that such substitution shall not result in any gaps or lapses in       
coverage with respect to matters occurring prior to the Effective Time; and     
PROVIDED, FURTHER, that the Surviving Corporation shall not be required to pay  
an annual premium in excess of 100% of the last annual premium paid by the      
Company prior to the date hereof and if the Surviving Corporation is unable to  
obtain the insurance required by this Section 5.10(b) it shall obtain as much   
comparable insurance as possible for an annual premium equal to such maximum    
amount.                                                                         

SECTION 5.11 LETTERS OF ACCOUNTANTS.                          

                  (a) The Company shall use its reasonable best efforts to cause
to be delivered to the Parent "comfort" letters of KPMG LLP ("KPMG"), the       
Company's independent public accountants, dated and delivered on each applicable
Registration Statement Effective Date and as of the Effective Time, and         
addressed to the Parent in form and substance reasonably satisfactory to the    
Parent and reasonably customary in scope and substance for letters delivered by 
independent public accountants in connection with transactions contemplated     
hereby.                                                                         

                 (b) The Parent shall use its reasonable best efforts to cause
to be delivered to the Company "comfort" letters of KPMG, the Parent's          
independent public accountants, dated and delivered on each applicable          
Registration Statement Effective Date and as of the Effective Time, and         
addressed to the Company, in form and substance reasonably satisfactory to the  
Company and reasonably customary in scope and substance for letters delivered by
independent public accountants in connection with transactions contemplated     
hereby.                                                                         

SECTION 5.12 REASONABLE BEST EFFORTS. Subject to the terms and
conditions provided in this Agreement and to applicable legal requirements, each
of the parties hereto agrees to use its reasonable best efforts to take, or     
cause to be taken, all action, and to do, or cause to be done, in the case of   
the Company, consistent with the fiduciary duties of the Company's Board of     
Directors, and to assist and cooperate with the other parties hereto in doing,  
as promptly as practicable, all things necessary, proper or advisable under     
applicable laws and regulations to ensure that the conditions set forth in      
Article 6 are satisfied and to consummate and make effective the transactions   
contemplated by this Agreement. If at any time after the Effective Time         

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any further action is necessary or desirable to carry out the purposes of this  
Agreement, including the execution of additional instruments, the proper        
officers and directors of each party to this Agreement shall take all such      
necessary action.                                                               

SECTION 5.13 CONSENTS; FILINGS; FURTHER ACTION.               

                 (a) Upon the terms and subject to the conditions hereof, each
of the parties hereto shall use its reasonable best efforts to (i) take, or     
cause to be taken, all appropriate action, and do, or cause to be done, all     
things necessary, proper or advisable under applicable Law or otherwise to      
consummate and make effective the Merger and the other transactions contemplated
hereby, (ii) obtain from Governmental Entities any Company Governmental Consents
and Parent Governmental Consents and any other consents, licenses, permits,     
waivers, approvals, authorizations or orders required to be obtained or made by 
the Parent or the Company or any of their subsidiaries in connection with the   
authorization, execution and delivery of this Agreement and the consummation of 
the Merger and the other transactions contemplated hereby, and (iii) make all   
necessary filings, and thereafter make any other submissions either required or 
deemed appropriate by each of the parties, with respect to this Agreement and   
the Merger and the other transactions contemplated hereby required under (A) the
Securities Act, the Exchange Act and any other applicable federal or Blue Sky   
Laws, (B) the HSR Act and any applicable other foreign antitrust, anti-monopoly 
or similar Laws, (C) the GCL, (D) any other applicable Law and (E) the rules and
regulations of NASDAQ, the American Stock Exchange and the Toronto Stock        
Exchange. The parties hereto shall cooperate and consult with each other in     
connection with the making of all such filings, including by providing copies of
all such documents to the nonfiling party and its advisors prior to filing, and 
none of the parties will file any such document if any of the other parties     
shall have reasonably objected to the filing of such document. No party to this 
Agreement shall consent to any voluntary extension of any statutory deadline or 
waiting period or to any voluntary delay of the consummation of the Merger and  
the other transactions contemplated hereby at the behest of any Governmental    
Entity without the consent and agreement of the other parties to this Agreement,
which consent shall not be unreasonably withheld or delayed.                    

                (b) Without limiting the generality of Section 5.13(a), each
party hereto shall promptly inform the others of any material communication from
the Federal Trade Commission, the Department of Justice or any other domestic or
foreign government or governmental or multinational authority regarding any of  
the transactions contemplated by this Agreement. If any party or any affiliate  
thereof receives a request for additional information or documentary material   
from any such government or authority with respect to the transactions          
contemplated by this Agreement, then such party will endeavor in good faith to  
make, or cause to be made, as soon as reasonably practicable and after          
consultation with the other party, an appropriate response in compliance with   
such request. The Parent will advise the                                        

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Company promptly in respect of any understandings, undertakings or agreements   
(oral or written) which the Parent proposes to make or enter into with the      
Federal Trade Commission, the Department of Justice or any other domestic or    
foreign government or governmental or multinational authority in connection with
the transactions contemplated by this Agreement. In furtherance and not in      
limitation of the foregoing, the Parent shall use its reasonable best efforts to
resolve such objections, if any, as may be asserted with respect to the         
transactions contemplated by this Agreement under any antitrust, competition or 
trade regulatory laws, rules or regulations of any domestic or foreign          
government or governmental authority or any multinational authority.            
Notwithstanding the foregoing, nothing in this Section 5.13 shall require, or be
construed to require, the Parent or the Company, in connection with the receipt 
of any regulatory approval, to proffer to, or agree to (A) sell or hold separate
and agree to sell, divest or to discontinue to or limit, before or after the    
Effective Time, any assets, businesses, or interest in any assets or businesses 
of the Parent, the Company or any of their respective affiliates (or to the     
consent to any sale, or agreement to sell, or discontinuance or limitation by   
the Parent or the Company, as the case may be, of any of its assets or          
businesses) or (B) agree to any conditions relating to, or changes or           
restriction in, the operations of any such asset or businesses which, in either 
case, could reasonably be expected to result in a Material Adverse Effect on the
Parent or a Material Adverse Effect on the Company or to materially and         
adversely impact the economic or business benefits to such party of the         
transactions contemplated by this Agreement.                                    

    SECTION 5.14 PLAN OF REORGANIZATION. This Agreement is intended to
constitute a "plan of reorganization" within the meaning of Section 1.368-2(g)  
of the income tax regulations promulgated under the Code. From and after the    
date of this Agreement and until the Effective Time, each party hereto shall use
its reasonable best efforts to cause the Merger to qualify, and will not,       
without the prior written consent of the parties hereto, knowingly take any     
actions or cause any actions to be taken which could prevent the Merger from    
qualifying, as a reorganization under the provisions of Section 368(a) of the   
Code. Following the Effective Time, and consistent with any such consent, none  
of the Surviving Corporation, the Parent or any of their affiliates shall       
knowingly take any action or knowingly cause any action to be taken which would 
cause the Merger to fail to so qualify as a reorganization under Section 368(a) 
of the Code.                                                                    

SECTION 5.15 PUBLIC ANNOUNCEMENTS. The initial press release  
concerning the Merger shall be a joint press release and, thereafter, the Parent
and Merger Sub and the Company shall consult with each other before issuing any 
press release or otherwise making any public statements with respect to this    
Agreement or any of the transactions contemplated hereby and shall not issue any
such press release or make any such public statement prior to such consultation,
except to the extent required by applicable Law or the requirements of NASDAQ,  
the American, Toronto, Berlin or Frankfurt Stock Exchanges, in which case the   
issuing party shall use its                                                     

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reasonable best efforts to consult with the other parties before issuing any    
such release or making any such public statement.                               

                 SECTION 5.16 OBLIGATIONS OF MERGER SUB. The Parent shall take
all actions necessary to cause Merger Sub to perform its obligations under this 
Agreement and to consummate the Merger on the terms and subject to the          
conditions set forth in this Agreement.                                         

             SECTION 5.17 STOCK EXCHANGE LISTINGS AND DE-LISTINGS. The
Parent shall use its reasonable best efforts to cause the shares of Parent      
Common Stock to be issued in the Merger to be approved for listing on the       
American Stock Exchange, subject to official notice of issuance, prior to the   
Effective Time. The parties shall use their reasonable best efforts to cause the
Surviving Corporation to cause the Company Common Stock to be de-listed from    
NASDAQ and the Toronto, Berlin and Frankfurt Stock Exchanges and de-registered  
under the Exchange Act as soon as practicable following the Effective Time.     

                  SECTION 5.18 EXPENSES. Except as otherwise provided in Section
7.5(b), whether or not the Merger is consummated, all Expenses incurred in      
connection with this Agreement and the Merger and the other transactions        
contemplated hereby shall be paid by the party incurring such Expense, except   
that Expenses incurred in connection with the filing fee for the Proxy Statement
and printing and mailing the Proxy Materials and the filing fee under the HSR   
Act shall be shared equally by the Parent and the Company.                      

                 SECTION 5.19 TAKEOVER STATUTES. If any Takeover Statute is or
may become applicable to the Merger or the other transactions contemplated      
hereby, each of the Parent and the Company and its board of directors shall     
grant such approvals and take such actions as are necessary so that such        
transactions may be consummated as promptly as practicable on the terms         
contemplated by this Agreement and otherwise act to eliminate or minimize the   
effects of such statute or regulation on such transactions.                     

                  SECTION 5.20 BOARD OF DIRECTORS. Parent shall take such action
as is required to expand the size of its Board of Directors to eleven (11)      
members and to cause the designation of two persons specified by the Company    
(one of which shall be designated by News America Incorporated) in writing prior
to the Effective Time to fill such vacancies.                                   

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 ARTICLE 6

CONDITIONS

 SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger and        
consummate the other transactions contemplated hereby to be consummated on the  
Closing Date is subject to the satisfaction or waiver at or prior to the        
Effective Time of each of the following conditions:                             

                (a) STOCKHOLDER APPROVAL. This Agreement and consummation of
the Merger shall have been duly approved by holders of outstanding Company      
Shares by the Requisite Company Vote and shall have been duly approved by the   
Parent as sole stockholder of Merger Sub, and the issuance of Parent Common     
Stock in the Merger shall have been duly approved by the holders of outstanding 
shares of Parent Common Stock by the Requisite Parent Vote.                     

                  (b) LISTING. The shares of Parent Common Stock issuable to the
Company's stockholders pursuant to this Agreement shall have been authorized for
listing on the American Stock Exchange upon official notice of issuance.        

               (c) GOVERNMENTAL CONSENTS. The waiting period applicable to
the consummation of the Merger under the HSR Act shall have expired or been     
terminated and other than the filing provided for in Section 1.3, all notices,  
reports and other filings required to be made prior to the Effective Time by the
Company or the Parent or any of their respective subsidiaries with, and all     
consents, registrations, approvals, permits and authorizations required to be   
obtained prior to the Effective Time by, the Company or the Parent or any of    
their respective subsidiaries from, any Governmental Entity in connection with  
the execution and delivery of this Agreement and the consummation of the Merger 
and the other transactions contemplated hereby (including, without limitation,  
all Company Governmental Consents and Parent Governmental Consents) shall have  
been made or obtained (as the case may be) upon terms and conditions that could 
not reasonably be expected to result in Material Adverse Effect on the Parent or
a Material Adverse Effect on the Company.                                       

                (d) LITIGATION. No court or Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any   
Law, order injunction or decree (whether temporary, preliminary or permanent)   
that is in effect and restrains, enjoins or otherwise prohibits consummation of 
the Merger or the other transactions contemplated hereby or that, individually  
or in the aggregate with all other such Laws, orders injunctions or decrees,    
could reasonably be expected to result in a Material Adverse Effect on the      
Parent or a Material Adverse Effect on the Company, and no Governmental Entity  
shall have instituted any proceeding or                                         

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threatened to institute any proceeding seeking any such Law, order injunction or
decree.                                                                         

               (e) REGISTRATION STATEMENTS. The Registration Statement and
the Exchange Offer Registration Statement shall have become effective under the 
Securities Act. No stop order suspending the effectiveness of such registration 
statements shall have been issued, and no proceedings for that purpose shall    
have been initiated or be threatened by the SEC.                                

              (f) ACCOUNTANTS' LETTERS. The Parent and the Company shall
have received the "comfort" letters described in Section 5.11.                  

     SECTION 6.2 CONDITIONS TO OBLIGATIONS OF THE PARENT AND MERGER SUB.
The obligations of each of the Parent and Merger Sub to effect the Merger and   
consummate the other transactions contemplated hereby to be consummated on the  
Closing Date are also subject to the satisfaction or waiver by the Parent at or 
prior to the Effective Time of the following conditions:                        

               (a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement that are qualified as to  
materiality shall be true and correct, and the representations and warranties of
the Company set forth in this Agreement that are not so qualified shall be true 
and correct in all material respects, in each case as of the date of this       
Agreement and as of the Closing Date, as though made on and as of the Closing   
Date, except to the extent the representation or warranty is expressly limited  
by its terms to another date, and the Parent shall have received a certificate  
(which certificate may be qualified by knowledge to the same extent as the      
representations and warranties of the Company contained in this Agreement are so
qualified) signed on behalf of the Company by an executive officer of the       
Company to such effect.                                                         

              (b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company
shall have performed in all material respects all obligations required to be    
performed by it under this Agreement at or prior to the Closing Date, and the   
Parent shall have received a certificate signed on behalf of the Company by an  
executive officer of the Company to such effect.                                

                  (c) MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
there shall have been no Material Adverse Effect on the Company, and the Parent 
shall have received a certificate of an executive officer of the Company to such
effect.                                                                         

                  (d) CONSENTS UNDER AGREEMENTS. The Company shall have obtained
the Company Required Consents and the consent, approval or waiver of each person
whose consent, approval or waiver shall be required in order to consummate the  

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transactions contemplated by this Agreement, except those for which the failure 
to obtain such consent, approval or waiver, individually or in the aggregate,   
could not reasonably be expected to result in a Material Adverse Effect on the  
Company.                                                                        

             (e) AFFILIATE LETTERS. The Parent shall have received the
Affiliate Letters referred to in Section 5.9 hereof.                            

                  (f) THE TRAVELERS REVOLVING CREDIT NOTE AND WARRANT AGREEMENT.
The Parent and the Company shall have consummated the transactions contemplated 
by the Note and Warrant Modification Agreement dated as of the date hereof, with
each of The Travelers Insurance Company and The Travelers Indemnity Company, a  
copy of which is attached as Exhibit B hereto, in accordance with the terms of  
such Agreement.                                                                 

                  (g) EXCHANGE OFFER. At least 95% in aggregate principal amount
of each of the Senior Company Notes and the Convertible Notes shall have        
properly and validly tendered and not withdrawn their Company Senior Notes and  
Convertible Notes, respectively, and consented to the consent solicitation, in  
each case in accordance with the terms of the Agreement to Exchange and Consent,
a copy of which is attached as Exhibit C hereto.                                

                 (h) TECHNOCOM LIMITED PUT/CALL AGREEMENTS. The Parent and the
Company shall have consummated the purchase of the shares of Technocom Limited  
in accordance with each of the Elite Option Modification Agreement and the      
Plicom Option Modification Agreement, each dated the date hereof, with each of  
Elite International Limited and Plicom Limited, copies of which are attached    
hereto as Exhibits D-1 and D-2.                                                 

      (i) NEWS ARRANGEMENTS. The Parent and News America
Incorporated ("NEWS") shall have consummated the transactions contemplated by   
the News Letter Agreement dated as of the date hereof with News, a copy of which
is attached as Exhibit E hereto, in accordance with the terms of such Letter    
Agreement, and News shall have received (i) the full proceeds of the repayment  
of the Loans (as defined in the News Letter Agreement) and interest thereon to  
and including the date of repayment, as specified in the News Letter Agreement, 
and (ii) written releases in form and substance satisfactory to News in respect 
of the Guarantees (as defined in the News Letter Agreement) and all obligations 
thereunder.                                                                     

                  (j) CERTAIN PAYMENTS. Each of the officers and other employees
listed in Section 6.2 of the Company Disclosure Letter shall have agreed to (i) 
waive the acceleration of any amounts due as a result of the Merger under the   
relevant employment or other compensation agreement that such person is a party 
to with the Company or a Company Subsidiary as specified in Section 6.2 of the  
Company Disclosure Letter and (ii) waive the acceleration of any unvested       
Company                                                                         

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Stock Options at the Effective Time which would otherwise accelerate as a result
of the consummation of the Merger, in each case in a manner reasonably          
satisfactory to the Parent.                                                     

        SECTION 6.3 CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of
the Company to effect the Merger and consummate the other transactions          
contemplated hereby to be consummated on the Closing Date is also subject to the
satisfaction or waiver by the Company at or prior to the Effective Time of the  
following conditions:                                                           

               (a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each of the Parent and Merger Sub set forth in this Agreement that
are qualified as to materiality shall be true and correct, and the              
representations and warranties of the Parent and Merger Sub set forth in this   
Agreement that are not so qualified shall be true and correct in all material   
respects, in each case as of the date of this Agreement and as of the Closing   
Date, as though made on and as of the Closing Date, except to the extent the    
representation or warranty is expressly limited by its terms to another date,   
and the Company shall have received a certificate (which certificate may be     
qualified by knowledge to the same extent as the representations and warranties 
of each of the Parent and Merger Sub contained in this Agreement are so         
qualified) signed on behalf of each of the Parent and Merger Sub by an executive
officer of the Parent to such effect.                                           

                (b) PERFORMANCE OF OBLIGATIONS OF THE PARENT AND MERGER SUB.
Each of the Parent and Merger Sub shall have performed in all material respects 
all obligations required to be performed by it under this Agreement at or prior 
to the Closing Date, and the Company shall have received a certificate signed on
behalf of the Parent and Merger Sub by an executive officer of the Parent to    
such effect.                                                                    

                (c) TAX OPINION. The Company shall have received the opinion
of Morgan, Lewis & Bockius, LLP, counsel to the Company, dated the Closing Date,
to the effect that the Merger will be treated for federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the Code.              

                  (d) MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
there shall have been no Material Adverse Effect on the Parent, and the Company 
shall have received a certificate of an executive officer of the Parent to such 
effect.                                                                         

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 ARTICLE 7

 TERMINATION

   SECTION 7.1 TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any requisite approval and adoption of this Agreement, as follows:              

               (a) by mutual written consent of the Parent and the Company
duly authorized by their respective boards of directors;                        

                  (b) by either the Parent or the Company, if the Effective Time
shall not have occurred on or before October 31, 1999; PROVIDED, HOWEVER, that  
(i) the right to terminate this Agreement under this Section 7.1(b) shall not be
available to the party whose failure to fulfill any obligation under this       
Agreement shall have been the cause of, or resulted in, the failure of the      
Effective Time to occur on or before such date; and (ii) if the applicable      
federal or foreign antitrust authority shall seek an order, injunction or decree
with respect to the legality of the Merger under applicable antitrust Laws, this
Agreement may be extended prior to the termination hereof by written notice of  
either the Parent or the Company to the other to the date that is 30 days       
following the date on which a ruling with respect to such an order injunction or
decree is entered by a trial court or administrative body;                      

         (c) by either the Parent or the Company, if any order
injunction or decree preventing the consummation of the Merger shall have been  
entered by any court of competent jurisdiction or Governmental Entity and shall 
have become final and nonappealable;                                            

           (d) by the Parent, if (i) the Board of Directors of the
Company withdraws, modifies or changes its approval or recommendation of this   
Agreement in a manner adverse to the Parent or shall have resolved to do so,    
(ii) the Board of Directors of the Company shall have recommended to the        
stockholders of the Company a Transaction Proposal or shall have resolved to do 
so or the Company shall have entered into an agreement with respect to a        
Qualified Transaction Proposal, or (iii) a tender offer or exchange offer for   
any outstanding shares of capital stock of the Company is commenced and the     
Board of Directors of the Company fails to recommend against acceptance of such 
tender offer or exchange offer by its stockholders (including by taking no      
position with respect to the acceptance of such tender offer or exchange offer  
by its stockholders);                                                           

                  (e) by the Parent or the Company, if this Agreement shall fail
to receive the requisite vote for adoption at either the Company Stockholders   
Meeting or the Parent Stockholders Meeting or any adjournment or postponement   
thereof;                                                                        

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    (f) by the Parent, upon a breach of any material
representation, warranty, covenant or agreement on the part of the Company set  
forth in this Agreement, or if any representation or warranty of the Company    
shall have become untrue, in either case such that the conditions set forth in  
either of Section 6.2(a) or 6.2(b) would not be satisfied (a "TERMINATING       
COMPANY BREACH"); PROVIDED, HOWEVER, that, if such Terminating Company Breach is
curable by the Company through the exercise of its reasonable best efforts and  
for so long as the Company continues to exercise such reasonable best efforts,  
the Parent may not terminate this Agreement under this Section 7.1(f);          

   (g) by the Company, upon breach of any material
representation, warranty, covenant or agreement on the part of the Parent set   
forth in this Agreement, or if any representation or warranty of the Parent     
shall have become untrue, in either case such that the conditions set forth in  
either of Section 6.3(a) or 6.3(b) would not be satisfied (a "TERMINATING PARENT
BREACH"); PROVIDED, HOWEVER, that, if such Terminating Parent Breach is curable 
by the Parent through its reasonable best efforts and for so long as the Parent 
continues to exercise such reasonable best efforts, the Company may not         
terminate this Agreement under this Section 7.1(g); or                          

         (h) by the Company in the manner specified in Section
2.1(a)(i)(D).                                                                   

       SECTION 7.2 EFFECT OF TERMINATION. Except as provided in Section 8.2,
in the event of termination of this Agreement pursuant to Section 7.1, this     
Agreement shall forthwith become void, there shall be no liability under this   
Agreement on the part of the Parent, Merger Sub or the Company or any of their  
respective Representatives, and all rights and obligations of each party hereto 
shall cease, subject to the remedies of the parties set forth in Sections 7.5(b)
and (c); PROVIDED, HOWEVER, that nothing in this Agreement shall relieve any    
party from liability for the wilful breach of any of its representations and    
warranties or the breach of any of its covenants or agreements set forth in this
Agreement which shall survive any such termination.                             

     SECTION 7.3 AMENDMENT. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors  
at any time prior to the Effective Time; PROVIDED that, after the approval of   
this Agreement by the stockholders of the Company, no amendment may be made that
would reduce the amount or change the type of consideration into which each     
Company Share shall be converted upon consummation of the Merger. This Agreement
may not be amended except by an instrument in writing signed by the parties     
hereto.                                                                         

        SECTION 7.4 WAIVER. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any obligation or other   
act of any other party hereto, (b) waive any inaccuracy in the representations  
and                                                                             

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warranties contained in this Agreement or in any document delivered pursuant    
hereto, and (c) waive compliance with any agreement or condition contained in   
this Agreement. Any waiver of a condition set forth in Section 6.1, or any      
determination that such a condition has been satisfied, will be effective only  
if made in writing by each of the Company and the Parent and, unless otherwise  
specified in such writing, shall thereafter operate as a waiver (or             
satisfaction) of such conditions for any and all purposes of this Agreement. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.                             

SECTION 7.5  EXPENSES FOLLOWING TERMINATION.                  

             (a) Except as set forth in this Section 7.5, all Expenses
incurred in connection with this Agreement and the transactions contemplated    
hereby shall be paid in accordance with the provisions of Section 5.18. For     
purposes of this Agreement, "EXPENSES" consist of all out-of-pocket expenses    
(including, all fees and expenses of counsel, accountants, investment bankers,  
experts and consultants to a party hereto and its affiliates) incurred by a     
party or on its behalf in connection with or related to the authorization,      
preparation, negotiation, execution and performance of this Agreement, the      
preparation, printing, filing and mailing of the Proxy Statement and/or the     
Proxy Materials (as the case may be), the solicitation of stockholder approvals 
and all other matters related to the closing of the transactions contemplated   
hereby.                                                                         

                  (b) The Company agrees that, if (i) the Parent shall terminate
this Agreement pursuant to Section 7.1(d), (ii) (A) Parent shall terminate this 
Agreement pursuant to Section 7.1(e) due to the failure to obtain the approval  
of the Company's stockholders at the Company Stockholders Meeting and (B) at the
time of such failure, any person shall have made a public announcement or       
otherwise communicated to the Company and its stockholders with respect to a    
Transaction Proposal with respect to the Company, or (iii) the Parent shall     
terminate this Agreement pursuant to Section 7.1(f) and such termination is the 
result of a material breach of any representation, warranty, covenant or        
agreement contained herein and if at such time the agreement is solely          
terminable for any or all such reasons, then in accordance with Section 7.5(c), 
after such termination, or in the case of clause (ii) after the consummation of 
such Transaction Proposal, the Company shall pay to Parent an amount equal to   
Parent's documented Expenses in connection with this Agreement and the          
transactions contemplated hereby (not to exceed $1 million) and a termination   
fee in the amount of $6,250,000 (collectively, such Expenses and such fee, the  
"TERMINATION AMOUNT"), which Termination Amount shall be exclusive of any       
Expenses paid pursuant to Section 5.18. The Parent agrees that if the Company   
shall terminate this Agreement (i) pursuant to Section 7.1(e) due to the failure
to obtain the approval of the Parent's Stockholders at the Parent Stockholders  
Meeting or (ii) pursuant to Section 7.1(g) and such termination is the result of
a material breach of any representation, warranty, covenant or agreement        
contained herein, and if at such time the Agreement is terminable solely for    
either or both such reasons, then the Parent shall pay to the                   

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Company an amount equal to the Company's documented, out-of-pocket expenses (not
to exceed $500,000) incurred in connection with this Agreement and the          
transactions contemplated hereby.                                               

                  (c) Any payment required to be made pursuant to Section 7.5(b)
shall be made to the Parent by the Company, or by the Company to the Parent, as 
applicable, not later than two Business Days after delivery to the Company by   
the Parent of notice of demand for payment and shall be made by wire transfer of
immediately available funds to an account designated by the Parent.             

                 (d) The Company acknowledges that the agreements contained in
this Section 7.5 are an integral part of the transactions contemplated by this  
Agreement, and that, without these agreements, the Parent would not enter into  
this Agreement; accordingly, if the Company fails to pay promptly the           
Termination Amount, and, in order to obtain such payment, the Parent commences a
suit which results in a judgment against the Company for the Termination Amount,
the Company shall pay the Parent's Expenses in connection with such suit,       
together with interest on the amount of the Termination Amount at the prime rate
of The Chase Manhattan Bank in effect on the date such payment was required to  
be made.                                                                        

 ARTICLE 8

 MISCELLANEOUS

    SECTION 8.1  CERTAIN DEFINITIONS.  For purposes of this Agreement:

                 (a) The term "AFFILIATE," as applied to any person, means any
other person directly or indirectly controlling, controlled by, or under common 
control with, that person. For the purposes of this definition, "CONTROL"       
(including, with correlative meanings, the terms "CONTROLLING," "CONTROLLED BY" 
and "UNDER COMMON CONTROL WITH"), as applied to any person, means the           
possession, directly or indirectly, of the power to direct or cause the         
direction of the management and policies of that person, whether through the    
ownership of voting securities, by contract or otherwise.                       

         (b) The term "BUSINESS DAY" means any day, other than
Saturday, Sunday or a federal holiday, and shall consist of the time period from
12:01 a.m. through 12:00 midnight Eastern time. In computing any time period    
under this Agreement, the date of the event which begins the running of such    
time period shall be included EXCEPT that if such event occurs on other than a  
business day such period shall begin to run on and shall include the first      
business day thereafter.                                                        

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              (c) The term "INCLUDING" means, unless the context clearly
requires otherwise, including but not limited to the things or matters named or 
listed after that term.                                                         

                  (d) The term "PERSON" shall include individuals, corporations,
limited and general partnerships, trusts, limited liability companies,          
associations, joint ventures, Governmental Entities and other entities and      
groups (which term shall include a "GROUP" as such term is defined in Section   
13(d)(3) of the Exchange Act).                                                  

           (e) The term "SUBSIDIARY" or "SUBSIDIARIES" means, with
respect to the Parent, the Company or any other person, any entity of which the 
Parent, the Company or such other person, as the case may be (either alone or   
through or together with any other subsidiary), owns, directly or indirectly,   
stock or other equity interests the holders of which are generally entitled to  
more than 50% of the vote for the election of the board of directors or other   
governing body of such corporation or other legal entity.                       

         SECTION 8.2 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
The representations, warranties and agreements in this Agreement and in any     
certificate delivered under this Agreement shall terminate at the Effective Time
or upon the termination of this Agreement under Section 7.1, as the case may be,
except that the agreements set forth in Articles 1 and 2 and Sections 5.10, 5.18
and 5.20 and this Article 8 shall survive the Effective Time, those set forth in
Sec tions 5.7(b), 5.18, 7.2 and 7.5 and this Article 8 shall survive termination
of this Agreement. Each party agrees that, except for the representations and   
warranties contained in this Agreement, the Company Disclosure Letter and the   
Parent Disclosure Letter, no party to this Agreement has made any other         
representations and warranties, and each party disclaims any other              
representations and warranties, made by itself or any of its officers,          
directors, employees, agents, financial and legal advisors or other             
Representatives with respect to the execution and delivery of this Agreement or 
the transactions contemplated by this Agreement, notwithstanding the            
delivery of disclosure to any other party or any party's representatives of any 
documentation or other information with respect to any one or more of the       
foregoing.                                                                      

        SECTION 8.3 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each such counterpart being deemed to be an original           
instrument, and all such counterparts shall together constitute the same        
agreement.                                                                      

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SECTION 8.4  GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.   

               (a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH 
THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW          
PRINCIPLES, EXCEPT THAT DELAWARE LAW SHALL APPLY TO THE EXTENT REQUIRED IN      
CONNECTION WITH THE EFFECTUATION OF THE MERGER. The parties irrevocably submit  
to the jurisdiction of the federal courts of the United States of America       
located in the State of New York solely in respect of the interpretation and    
enforcement of the provisions of this Agreement and of the documents referred to
in this Agreement, and in respect of the transactions contemplated by this      
Agreement and by those documents, and hereby waive, and agree not to assert, as 
a defense in any action, suit or proceeding for the interpretation or           
enforcement of this Agreement or of any such document, that it is not subject to
this Agreement or that such action, suit or proceeding may not be brought or is 
not maintainable in said courts or that the venue thereof may not be appropriate
or that this Agreement or any such document may not be enforced in or by such   
courts, and the parties hereto irrevocably agree that all claims with respect to
such action or proceeding shall be heard and determined in such a federal court.
The parties hereby consent to and grant any such court jurisdiction over the    
person of such parties and over the subject matter of such dispute and agree    
that mailing of process or other papers in connection with any such action or   
proceeding in the manner provided in Section 8.5 or in such other manner as may 
be permitted by law, shall be valid and sufficient service thereof.             

               (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND       
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDI  
TIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF  
ANY LITIGATION DIRECTLY OR INDIRECTLY ARIS ING OUT OF OR RELATING TO THIS       
AGREEMENT, OR THE TRANSAC TIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY      
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY 
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS 
AND CERTIFICATIONS IN THIS SECTION 8.4.                                         

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                  SECTION 8.5 NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party to the others shall be in writing   
and delivered personally or sent by registered or certified mail, postage       
prepaid, or by facsimile:                                                       

     IF TO THE PARENT OR MERGER SUB:

          Metromedia International Group, Inc.
One Meadowlands Plaza     
    East Rutherford, NJ 07073-2137
        Attention:  Arnold L. Wadler, Esq.
Fax:  (201) 531-2803      

WITH COPIES TO:           

              Paul, Weiss, Rifkind, Wharton & Garrison
 1285 Avenue of the Americas
   New York, New York 10019-6064
       Attention:  Douglas A. Cifu, Esq.
Fax: (212) 757-3990       

IF TO THE COMPANY:        

PLD Telekom, Inc.         
 505 Park Avenue, 21st Floor
New York, NY 10022        
 Attention:  General Counsel
Fax:  (212) 527-3995      

or to such other persons or addresses as may be designated in writing by the    
party to receive such notice as provided above.                                 

               SECTION 8.6 ENTIRE AGREEMENT. This Agreement (including any
exhibits and annexes to this Agreement), the Company Disclosure Letter and the  
Parent Disclosure Letter constitute the entire agreement and supersede all other
prior agreements, understandings, representations and warranties, both written  
and oral, among the parties, with respect to the subject matter of this         
Agreement.                                                                      

               SECTION 8.7 NO THIRD PARTY BENEFICIARIES. This Agreement is
not intended to confer upon any person other than the parties to this Agreement 
any rights or remedies under this Agreement.                                    

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             SECTION 8.8 OBLIGATIONS OF THE PARENT AND OF THE COMPANY.
Whenever this Agreement requires a Parent Subsidiary to take any action, that   
requirement shall be deemed to include an undertaking on the part of the Parent 
to cause that Parent Subsidiary to take that action if it is a wholly-owned     
Subsidiary or use its best efforts to cause the Subsidiary to take that action  
if it is not a wholly-owned Subsidiary. Whenever this Agreement requires a      
Company Subsidiary to take any action, that requirement shall be deemed to      
include an undertaking on the part of the Company to cause that Company         
Subsidiary to take that action and, after the Effective Time, on the part of the
Surviving Corporation to cause that Company Subsidiary to take that action if it
is a wholly-owned Subsidiary or use its best efforts to cause the Subsidiary to 
take that action if it is not a wholly-owned Subsidiary.                        

              SECTION 8.9 SEVERABILITY. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any         
provision shall not affect the validity or enforceability or the other          
provisions of this Agreement. If any provision of this Agreement, or the        
application of that provision to any person or any circumstance, is invalid or  
unenforceable, (a) a suitable and equitable provision shall be substituted for  
that provision in order to carry out, so far as may be valid and enforceable,   
the intent and purpose of the invalid or unenforceable provision and (b) the    
remainder of this Agreement and the application of the provision to other       
persons or circumstances shall not be affected by such invalidity or            
unenforceability, nor shall such invalidity or unenforceability affect the      
validity or enforceability of the provision, or the application of that         
provision, in any other jurisdiction.                                           

          SECTION 8.10 INTERPRETATION. The table of contents and
headings in this Agreement are for convenience of reference only, do not        
constitute part of this Agreement and shall not be deemed to limit or otherwise 
affect any of the provisions of this Agreement. Where a reference in this       
Agreement is made to a section, exhibit or annex, that reference shall be to a  
section of or exhibit or annex to this Agreement unless otherwise indicated.    
Wherever the words "include," "includes" or "including" are used in this        
Agreement, they shall be deemed to be followed by the words "without            
limitation."                                                                    

        SECTION 8.11 ASSIGNMENT. This Agreement shall not be
assignable by operation of law or otherwise, except that the Parent may         
designate, by written notice to the Company, another Parent Subsidiary that is  
wholly owned directly or indirectly by the Parent to be merged with and into the
Company in lieu of Merger Sub, in which event all references in this Agreement  
to Merger Sub shall be deemed references to such other Parent Subsidiary, and in
that case, all representations and warranties made in this Agreement with       
respect to Merger Sub as of the date of this Agreement shall be deemed          
representations and warranties made with respect to such other Parent Subsidiary
as of the date of such designation.                                             

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          SECTION 8.12 SPECIFIC PERFORMANCE. The parties to this
Agreement agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their        
specific terms or were otherwise reached. It is accordingly agreed that the     
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this     
Agreement in any court of the United States or any state having jurisdiction,   
this being in addition to any other remedy to which they are entitled at law or 
in equity.                                                                      

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                 IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties to this Agreement as of
the date first written above.                                                   

     PLD TELEKOM, INC.

           By: /s/ James R.S. Hatt
                                ------------------------------------
                 Name: James R.S. Hatt
                                Title: Chairman, President and Chief
                               Executive Officer

                        METROMEDIA INTERNATIONAL GROUP, INC.

         By: /s/ Silvia Kessel
                                ------------------------------------
               Name: Silvia Kessel
                                     Title: Chief Financial Officer, Executive
                                           Vice President, Treasurer and
                      Director

               MOSCOW COMMUNICATIONS, INC.

         By: /s/ Silvia Kessel
                                ------------------------------------
               Name: Silvia Kessel
                               Title: Vice President and Treasurer

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[LETTERHEAD OF SALOMON SMITH BARNEY INC.] 

                                                                      APPENDIX B

May 18, 1999                                                                    

The Board of Directors                                                          
PLD Telekom Inc.                                                                
505 Park Avenue                                                                 
New York, New York 10022                                                        

Members of the Board:                                                           

    You have requested our opinion as to the fairness, from a financial point of
view, to the holders of the common stock of PLD Telekom Inc. ("PLD") of the     
Exchange Ratio (defined below) provided for in the Agreement and Plan of Merger,
dated as of May 18, 1999 (the "Merger Agreement"), among PLD, Metromedia        
International Group, Inc. ("Metromedia") and Moscow Communications, Inc., a     
wholly owned subsidiary of Metromedia ("Merger Sub"). As more fully described in
the Agreement, Merger Sub will be merged with and into PLD (the "Merger") and   
each outstanding share of the common stock, par value $0.01 per share, of PLD   
(the "PLD Common Stock") will be converted into the right to receive that number
of shares of the common stock, par value $1.00 per share, of Metromedia (the    
"Metromedia Common Stock") determined as follows (the number of shares of       
Metromedia Common Stock into which shares of PLD Common Stock will be so        
converted, the "Exchange Ratio"): (i) if the average of the daily closing prices
of Metromedia Common Stock as reported on the American Stock Exchange Composite 
Transactions Tape for the 20 consecutive trading days ending on and including   
the third business day immediately prior to PLD's stockholders' meeting in      
respect of the Merger (the "Average Metromedia Stock Price") is less than $6.25 
and equal to or greater than $5.25, then the Exchange Ratio will be equal to the
quotient obtained by dividing (x) $3.50 by (y) the Average Metromedia Stock     
Price; (ii) if the Average Metromedia Stock Price is equal to or greater than   
$6.25 and less than or equal to $8.00, then the Exchange Ratio will be 0.56;    
(iii) if the Average Metromedia Stock Price is greater than $8.00, then the     
Exchange Ratio will be equal to the quotient obtained by dividing (x) $4.48 by  
(y) the Average Metromedia Stock Price; or (iv) if the Average Metromedia Stock 
Price is less than $5.25, then the Exchange Ratio will be 0.6667, subject to    
certain top-up and termination rights specified in the Merger Agreement.        

In arriving at our opinion, we reviewed the Merger Agreement and held   
discussions with certain senior officers, directors and other representatives   
and advisors of PLD and certain senior officers and other representatives and   
advisors of Metromedia concerning the businesses, operations and prospects of   
PLD and Metromedia. We examined certain publicly available business and         
financial information relating to PLD and Metromedia as well as certain         
financial forecasts and other information and data for PLD and Metromedia which 
were provided to or otherwise discussed with us by the respective managements of
PLD and Metromedia, including information relating to certain strategic         
implications and operational benefits anticipated to result from the Merger. We 
reviewed the financial terms of the Merger as set forth in the Merger Agreement 
in relation to, among other things: current and historical market prices and    
trading volumes of the PLD Common Stock and Metromedia Common Stock; the        
financial condition and historical and projected earnings and other operating   
data of PLD and Metromedia, including the near-term liquidity needs of, and     
capital resources available to, PLD; and the capitalization of PLD and          
Metromedia. We considered, to the extent publicly available, the financial terms
of other transactions recently effected which we considered relevant in         
evaluating the Merger and analyzed certain financial, stock market and other    
publicly available information relating to the businesses of other companies    
whose operations we considered relevant in evaluating those of PLD and          
Metromedia. We also evaluated the potential pro forma financial impact of the   
Merger on Metromedia. In addition to the foregoing, we conducted such other     
analyses and examinations and considered such other financial, economic and     
market criteria as we deemed appropriate in arriving at our opinion.            

 In rendering our opinion, we have assumed and relied, without independent
verification, upon the accuracy and completeness of all financial and other     
information and data publicly available or furnished to or otherwise reviewed by
or discussed with us. With respect to financial forecasts and other information 
and data provided to or otherwise reviewed by or discussed with us, we have been

B-1 

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The Board of Directors                                                          
PLD Telekom Inc.                                                                
May 18, 1999                                                                    
Page 2                                                                          

advised by the managements of PLD and Metromedia that such forecasts and other  
information and data were reasonably prepared on bases reflecting the best      
currently available estimates and judgments of the managements of PLD and       
Metromedia as to the future financial performance of PLD and Metromedia and the 
strategic implications and operational benefits anticipated to result from the  
Merger. We have assumed, with your consent, that the Merger will be treated as a
tax-free reorganization for federal income tax purposes. Our opinion, as set    
forth herein, relates to the relative values of PLD and Metromedia. We are not  
expressing any opinion as to what the value of the Metromedia Common Stock      
actually will be when issued to PLD stockholders pursuant to the Merger or the  
price at which the Metromedia Common Stock will trade subsequent to the Merger. 
We have not made or been provided with an independent evaluation or appraisal of
the assets or liabilities (contingent or otherwise) of PLD or Metromedia nor    
have we made any physical inspection of the properties or assets of PLD or      
Metromedia. In connection with our opinion, we were not requested to, and we did
not, solicit third party indications of interest in the possible acquisition of 
all or a part of PLD. We express no view as to, and our opinion does not        
address, the relative merits of the Merger as compared to any alternative       
business strategies that might exist for PLD or the effect of any other         
transaction in which PLD might engage. Our opinion is necessarily based upon    
information available to us, and financial, stock market and other conditions   
and circumstances existing and disclosed to us, as of the date hereof.          

Salomon Smith Barney Inc. has acted as financial advisor to PLD in      
connection with the proposed Merger and will receive a fee for such services, a 
significant portion of which is contingent upon the consummation of the Merger. 
We also will receive a fee upon the delivery of this opinion. We and our        
affiliates have in the past provided financial services, including investment   
banking services and financing, to PLD unrelated to the proposed Merger, for    
which services we and our affiliates have received compensation. As you are     
aware, the Revolving Credit Agreement dated November 26, 1997 between certain of
our affiliates and PLD will be restructured in connection with the Merger, a    
portion of the outstanding amount of which will be repaid and a portion of which
will be exchanged into shares of PLD Common Stock (which will subsequently be   
converted in the Merger into shares of Metromedia Common Stock) and warrants to 
purchase shares of Metromedia Common Stock. In the ordinary course of our       
business, we and our affiliates may actively trade or hold the securities of PLD
and Metromedia for our own account or for the account of our customers and,     
accordingly, may at any time hold a long or short position in such securities.  
In addition, we and our affiliates (including Citigroup Inc. and its affiliates)
may maintain relationships with PLD, Metromedia and their respective affiliates.

   Our advisory services and the opinion expressed herein are provided for the
information of the Board of Directors of PLD in its evaluation of the proposed  
Merger, and our opinion is not intended to be and does not constitute a         
recommendation to any stockholder as to how such stockholder should vote on the 
proposed Merger.                                                                

Based upon and subject to the foregoing, our experience as investment   
bankers, our work as described above and other factors we deemed relevant, we   
are of the opinion that, as of the date hereof, the Exchange Ratio is fair, from
a financial point of view, to the holders of PLD Common Stock.                  

Very truly yours,                                                               

/s/ Salomon Smith Barney Inc.                                                   

SALOMON SMITH BARNEY INC.                                                       

B-2 

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[LETTERHEAD OF DONALDSON, LUFKIN & JENRETTE]

                                                                      APPENDIX C

May 16, 1999                                                                    

Board of Directors                                                              
Metromedia International Group, Inc.                                            
One Meadowlands Plaza                                                           
East Rutherford, New Jersey 07073                                               

Ladies and Gentlemen:                                                           

   You have requested our opinion as to the fairness from a financial point of
view to Metromedia International Group, Inc. (the "Company") of the Exchange    
Ratio (as defined below) pursuant to the terms of the Agreement and Plan of     
Merger, to be dated as of May 18, 1999 (the "Agreement"), by and among the      
Company, PLD Telekom, Inc. ("PLD") and Moscow Communications, Inc., a wholly    
owned subsidiary of the Company ("Merger Sub"), pursuant to which Merger Sub    
will be merged (the "Merger") with and into the Company.                        

  Pursuant to the Agreement, each share (a "PLD Share") of the common stock,
par value $.01 per share, of PLD (the "PLD Common Stock"), issued and           
outstanding immediately prior to the effective time of the Merger (other than   
PLD Common Stock owned by the Company, Merger Sub, or any other subsidiary of   
the Company, PLD or any subsidiary of PLD and, in each case, not held on behalf 
of third parties) shall be converted into the right to receive and become       
exchangeable for a number of shares of common stock, par value $1.00 per share, 
of the Company (the "Company Common Stock"), equal to the exchange ratio        
determined in the manner set forth below (such exchange ratio, excluding any    
Topped-Up Exchange Ratio (as defined below, and as to which we express no       
opinion), the "Exchange Ratio"):                                                

    (A) If the Average Company Stock Price (as defined below) is less than $6.25
  and equal to or greater than $5.25, then the Exchange Ratio shall be
equal to the quotient (rounded to four decimal points) obtained by
dividing (i) 3.50 by (ii) the Average Company Stock Price;        

    (B) If the Average Company Stock Price is equal to or greater than $6.25 and
 less than or equal to $8.00, then the Exchange Ratio shall be 0.56;

(C) If the Average Company Stock Price is greater than $8.00, then the  
    Exchange Ratio shall be equal to the quotient (rounded to four decimal
     points) obtained by dividing (x) $4.48 by (y) the Average Company Stock
Price; or                                                         

    (D) If the Average Company Stock Price is less than $5.25, then the Exchange
Ratio shall be 0.6667.                                            

   Under the Agreement, if the Average Company Stock Price is less than $5.25,
PLD will have the right to request that the Exchange Ratio be increased to equal
the quotient (rounded to four decimal points) obtained by dividing (x) 3.50 by  
(y) the Average Company Stock Price (the "Topped-Up Exchange Ratio"); provided  
that if the Average Company Stock Price is less than $4.00, then PLD will have  
the right to terminate the Agreement. If the Company does not agree to increase 
the Exchange Ratio to the Topped-Up Exchange Ratio, PLD shall either (i) agree  
that the Exchange Ratio shall be 0.6667 or (ii) terminate the Agreement.        

The "Average Company Stock Price" means the average of the daily closing
prices of Company Common Stock as reported on the American Stock Exchange       
Composite Transactions Tape (as reported in THE WALL STREET JOURNAL (national   
edition)) for the twenty (20) consecutive trading days ending on the third      
business day (including such third business day in the determination)           
immediately prior to the special meeting of PLD's stockholders to be held to    
consider approval and adoption of the Agreement and the Merger.                 

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Metromedia International Group, Inc.                                            
May 16, 1999                                                              Page 2

   In arriving at our opinion, we have reviewed, among other things, the draft
dated May 13, 1999 of the Agreement and the exhibits thereto. We have also      
reviewed financial and other information that was publicly available or         
furnished to us by the Company and PLD including information provided during    
discussions with their respective management. Included in the information       
provided during discussions with the respective managements were certain        
financial projections of PLD for the period beginning January 1, 1999 and ending
December 31, 2003 prepared by the management of PLD and certain financial       
projections of the Company for the period beginning January 1, 1999 and ending  
December 31, 2003 prepared by the management of the Company. In addition, we    
have compared certain financial and securities data of the Company and PLD with 
various other companies whose securities are traded in public markets, reviewed 
the historical stock prices of Company Common Stock and PLD Common Stock and    
conducted such other financial studies, analyses and investigations as we deemed
appropriate for purposes of this opinion. In addition to the above, in arriving 
at our opinion, we have assumed that (i) the restructuring transaction with     
respect to PLD's 14.0% Senior Discount Notes due 2004 and 9% Convertible        
Subordinated Notes due 2006 will be consummated in accordance with that certain 
Agreement to Exchange and Consent, to be dated the date of the Agreement and    
included as an exhibit to the Agreement; (ii) the restructuring with respect to 
The Travelers Insurance Company's and The Travelers Indemnity Company's         
Revolving Credit Note and Warrant Agreement will be consummated in accordance   
with that certain Note and Warrant Modification Agreement, to be dated the date 
of the Agreement and included as an exhibit to the Agreement; (iii) the purchase
of the shares of Technocom Limited will be consummated in accordance with each  
of the Elite Option Modification Agreement and the Plicom Option Modification   
Agreement, each to be dated the date of the Agreement and included as an exhibit
to the Agreement; and (iv) the repayment of the revolving credit facility with  
News America Incorporated in accordance with the News Letter Agreement, to be   
dated the date of the Agreement and included as an exhibit to the Agreement.    

  In rendering our opinion, we have relied upon and assumed the accuracy and
completeness of all of the financial and other information that was available to
us from public sources, that was provided to us by the Company, PLD or their    
respective representatives, or that was otherwise reviewed by us. With respect  
to the financial projections supplied to us, we have relied on representations  
that they have been reasonably prepared on the basis reflecting the best        
currently available estimates and judgments of the management of the Company and
PLD as to the future operating and financial performance of the Company and PLD,
respectively. We have not assumed any responsibility for making any independent 
evaluation of any assets or liabilities or for making any independent           
verification of any of the information reviewed by us. We have relied as to     
certain legal matters on advice of counsel to the Company.                      

 Our opinion is necessarily based on economic, market, financial and other
conditions as they exist on, and on the information made available to us as of, 
the date of this letter. It should be understood that, although subsequent      
developments may affect this opinion, we do not have any obligation to update,  
revise or reaffirm this opinion as a result of changes in these conditions or   
otherwise. We are expressing no opinion as to the prices at which the Company   
Common Stock will actually trade at any time. Our opinion does not address the  
relative merits of the Merger and the other business strategies being considered
by the Company's Board of Directors (the "Board"), nor does it address the      
Board's decision to proceed with the Merger. Our opinion does not constitute a  
recommendation to any stockholder as to how such stockholder should vote on the 
proposed transaction.                                                           

   Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), as part of its
investment banking services, is regularly engaged in the valuation of businesses
and securities in connection with mergers, acquisitions, underwritings, sales   
and distributions of listed and unlisted securities, private placements and     
valuations for corporate and other purposes. DLJ has performed investment       
banking and other services for the Company in the past and has been compensated 
for such services, including (i) rendering an opinion in June 1997 as the       
fairness from a financial point of view to the Company of the Company's sale of 
certain of the Company's entertainment assets to P&F Acquisition Corp. for      

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Metromedia International Group, Inc.                                            
May 16, 1999                                                              Page 3

which we received usual and customary compensation and (ii) acting as lead      
manager in the Company's September 1997 public offering of its 7.25% Cumulative 
Convertible Preferred Stock for which we received usual and customary           
underwriters compensation.                                                      

   Based upon the foregoing and such other factors as we deem relevant, we are
of the opinion that the Exchange Ratio is fair to the Company from a financial  
point of view.                                                                  

                 Very truly yours,

                            DONALDSON, LUFKIN & JENRETTE
                      SECURITIES CORPORATION

                     By: /s/ WARREN C. WOO
            --------------------------------------------------------------------
                   Warren C. Woo
                       Managing Director

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VOTING FORM                                                                     
METROMEDIA INTERNATIONAL GROUP, INC.
ONE MEADOWLANDS PLAZA 
EAST RUTHERFORD, NEW JERSEY 07073 

SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON SEPTEMBER 30, 1999. 

  The undersigned hereby appoints Arnold L. Wadler and Silvia Kessel, or any
of them, each with full power of substitution, as proxies or proxy of the       
undersigned and hereby authorizes them to represent and vote as designated below
all shares of Common Stock, par value $1.00 per share, of Metromedia            
International Group, Inc. (the "Corporation") held of record by the undersigned 
at the close of business on August 12, 1999 at the Annual Meeting of            
Stockholders (the "Annual Meeting") to be held on September 30, 1999 at 1285    
Avenue of the Americas, New York, New York 10019, or any adjournment or         
postponement thereof, and, in their discretion, upon all matters incident to the
conduct of the Annual Meeting and such other matters as may properly be brought 
before the Annual Meeting.                                                      

This signed Voting Form revokes all proxies previously given by the     
undersigned to vote at the Annual Meeting of Stockholders or any adjournment or 
postponement thereof. The undersigned hereby acknowledges receipt of the Notice 
of Annual Meeting of Stockholders and the Joint Proxy Statement/ Prospectus     
relating to the Annual Meeting.                                                 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE PROPOSALS SET  
FORTH BELOW UNDER ITEMS 1-3.                                                    

1.  PROPOSAL ONE.  Approval of the merger of Moscow Communications, Inc., a     
Delaware corporation ("Merger Sub"), with and into PLD Telekom Inc., a Delaware 
corporation, and adoption of an Agreement and Plan of Merger, dated as of May   
18, 1999, among the Corporation, Merger Sub and PLD Telekom, Inc. (check one    
box)                                                                            

/ /  FOR            / /  AGAINST            / /  ABSTAIN

2.  PROPOSAL TWO.                                                               

    Election of Directors   For the nominees listed below)  WITHHOLD AUTHORITY
                     / /                             to vote for
                                                         nominees listed
                                                   below / /

Nominees: John P. Imlay, Jr., John W. Kluge, Stuart Subotnick (For, except vote 
withheld from the following nominees: 

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

(CONTINUED ON REVERSE SIDE) 

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3.  PROPOSAL THREE.  Ratification of the selection of KPMG LLP as the           
Corporation's independent auditors for the fiscal year ending December 31, 1999.
(check one box)                                                                 

/ /  FOR            / /  AGAINST            / /  ABSTAIN

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE FOLLOWING PROPOSAL.

4.  PROPOSAL FOUR.  Approval and adoption of an amendment to the Corporation's  
certificate of incorporation to permit stockholders to take action by written   
consent and to call special meetings. (check one box)                           

/ /  FOR            / /  AGAINST            / /  ABSTAIN

WHEN PROPERLY EXECUTED, THIS VOTING FORM WILL BE VOTED AS DIRECTED. IF NO       
DIRECTION IS GIVEN, THIS VOTING FORM WILL BE VOTED FOR PROPOSALS ONE, TWO AND   
THREE AND AGAINST PROPOSAL FOUR. PLEASE SIGN EXACTLY AS NAME APPEARS BELOW.     
                                      Dated ______________________________, 1999
                                      __________________________________________
                                      __________________________________________
                                     Signature
                                      __________________________________________
                                      Signature, if held jointly

                                    Please sign exactly as your name appears
                              on this Voting Form. If shares are
                                 registered in more than one name, the
                              signatures of all such persons are
                                      required. A corporation should sign in its
                                    full corporate name by a duly authorized
                                  officer, stating such officer's title.
                              Trustees, guardians, executors and
                               administrators should sign in their
                                     official capacity giving their full title
                                     as such. A partnership should sign in the
                                     partnership name by an authorized person,
                           stating such person's title and
                            relationship to the partnership.
                                  PLEASE COMPLETE, DATE, SIGN AND RETURN
                                THIS VOTING FORM PROMPTLY, USING THE
              ENCLOSED ENVELOPE.