<PAGE>




                                                               SCARAB III AND IV

                                                                 USERS AGREEMENT





































<PAGE>

                                TABLE OF ARTICLES

ARTICLE

                  PREAMBLE                                                 PAGE
                  --------                                                 ----

1.       DEFINITIONS                                                       2-4

2.       INTERPRETATION                                                    5

3.       PURPOSE OF THIS AGREEMENT                                         5

4.       PARTICIPATION OF OTHER PARTIES                                    5

5.       OPERATING COMMITTEE                                               6-7

6.       CENTRAL BILLING PARTY                                             7-8

7.       PREPARATION AND AMENDMENT Or SCHEDULE C                           8

8.       USE OF SCARAB SYSTEMS AM CHARGES                                  9-11

9.       SCARAB SYSTEM AVAILABILITY                                        11

10.      OPERATING PROCEDURES                                              12

11.      OPERATIONAL RESPONSIBILITIES                                      13-14

12.      PRIORITY OF USE OF SCAM SYSTEMS                                   14-15

13.      ALLOCATION OF COSTS                                               15

14.      CAPITAL ADDITIONS AND COST ESCALATION                             15

15.      ESTIMATED STANDING CHARGES AND RUNNING COSTS                      15-16

16.      ALLOCATION OF STANDING CHARGES                                    17

17.      ALLOCATION OF RUNNING COSTS                                       17-19

18.      BILLING ARRANGEMENTS                                              24-28

19.      ACTUALS ADJUSTMENT                                                22

<PAGE>


                                TABLE OF ARTICLES

ARTICLE

                  PREAMBLE                                                 PAGE
                  --------                                                 ----

20.      SCAM SYSTEM COSTS IN PARTICULAR CIRCUMSTANCES                     22-23

21.      TOTAL LOSS OR CONSTRUCTIVE TOTAL LOSS                             23-24

22.      KEEPING OF RECORDS                                                30

23.      LIABILITY AND INDEMNITY                                           24-25

24.      RELATIONSHIP AMONG THE PARTIES                                    25

25.      PERFORMANCE OF AGREEMENT                                          25

26.      AMENDMENTS TO AGREEMENT                                           26

27.      ASSIGNMENT OR TRANSFER                                            26-27

28.      TERM OF THIS AGREEMENT                                            33-34

29.      AGREEMENT BINDING ON SUCCESSORS                                   27

30.      EXECUTION OF AGREEMENT                                            27

31.      TESTIMONIUM                                                       28-29




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                               TABLE OF SCHEDULES
                               ------------------

                                                                           PAGE
                                                                           ----

SCHEDULE A       SCARAB SYSTEM OWNERS                                      30
SCHEDULE B       PROCEDURES FOR THE DERIVATION OF ACCOUNTING               31-32
                 UNITS FOR DESIGNATED CABLES

Schedule C       Schedule of Cables and Accounting Units:                  39-41

Schedule C1      -    EAST ZONE                                            39-41
Schedule C2      -    WEST ZONE                                            42-44

Schedule D       Definition of STANDING CHARGES and                        49-52
                 RUNNING COSTS.

Schedule E       COMMITMENT AGREEMENT                                      55-56

Schedule F       Telex/Fax Formats

Schedule Fl      -   Notification of Commencement of a SCARAB              57
                     operation.

Schedule F2      -   Notification of Completion of a SCARAB                58
                     operation.

Schedule F3      -   Notification of change of SCARAB System               59
                     operational status.

Schedule F4      -   Estimate of RUNNING COSTS for SCARAB                  60
                     System operation.

 Schedule G      SCARAB SYSTEM PERFORMANCE SPECIFICATIONS

 Schedule Gl     -    SCARAB III                                           61-64
 Schedule G2     -    SCARAB IV                                            65-66


<PAGE>

SCARAB III AND IV USERS AGREEMENT


PREAMBLE

This SCARAB III & IV Users Agreement (hereinafter referred to as this
"AGREEMENT") made and entered into this 28 day of February 1990, between and
among American Telephone and Telegraph Company, a corporation organised and
existing under the laws of the State of New York and having an office at 412
Mount Kemble Avenue, Morristown, New Jersey, USA (herein called "AT&T");
Transpacific Communications, Incorporated, a corporation organised and existing
under the laws of the State of Delaware, and having an office at 412 Mount
Kemble Avenue, Morristown, New Jersey, USA (herein called "TRANSPACIFIC");
British Telecommunications ple, a public limited company, registered in England
(No: 1800000) whose registered office is at 81 Newgate Street, London EClA 7AJ,
England (herein called "British Telecom"or "BT"); BT(Marine) Ltd, having its
registered office at Berth 203, Western Docks, Southampton, SO1 0HH England
(herein called "BT(M)"); Ministere des Postes des Telecommunications et de
l'Espace de la Republique Francaise (herein called "FRANCE TELECOM"); Telefonica
de Espana S.A., a corporation organised and existing under the laws of Spain and
having its principal office at Gran Via 28, Madrid, Spain (herein called
"TELEFONICA"); Telecommunications Marinas S.A., whose registered office is at
Silva 2, 4th Floor, 28013 Madrid, Spain (herein called "TEMASA"); Teleglobe
Canada Inc., a Canadian business corporation having its registered office at 680
Sherbrooke Street West, Montreal, Quebec H3A 2S4, Canada (herein called
"TELEGLOBE") and Teleglobe Marine Inc, a Canadian business corporation having
its registered office at 2075 Rue Universite, Montreal, Quebec H3A 2L1, Canada
(herein called "TMI"), herein referred to collectively as the "PARTIES"

WITNESSETH:

WHEREAS the PARTIES all have an interest in the efficient and effective
construction, laying, installation, operation, maintenance and repair of
submarine cable systems in the Atlantic Ocean region including the Caribbean and
Mediterranean Seas and

WHEREAS the PARTIES all have an interest in the support and use of appropriate
work tools to assist in such activities and

WHEREAS the PARTIES or their parents were among the parties to the SCARAB I & II
Users Agreement made on 29 June 1984 effective from 1 July 1983, as amended
(herein called "the 1984 Users Agreement") and

WHEREAS the PARTIES or their parents were the parties to the Interim Agreement
to Plan for the Implementation of New SCARAB Systems entered into on 22
September 1988 (herein called "the Interim Agreement") and


<PAGE>

WHEREAS the PARTIES now wish to replace the Interim Agreement and to provide for
the support and use of SCARAB III and SCARAB IV and

WHEREAS the PARTIES now wish to replace the Interim Agreement and to provide for
the support and use of SCARAB III and SCARAB IV on similar terms to those of the
1984 Users Agreement.

NOW, THEREFORE, the PARTIES, in consideration of the mutual covenants herein
expressed, agree with each other as follows:

ARTICLE 1
DEFINITIONS

1.       In this AGREEMENT, unless the context otherwise requires, the following
         expressions have the meanings hereby assigned to them:

         1.1      "ACCOUNTING UNITS" for DESIGNATED CABLES means the units
                  within a ZONE used to form the basis for allocating the costs
                  of the SCARAB SYSTEMS to DESIGNATED CABLES within a ZONE and
                  are calculated as described in Article 7.

         1.2      "ATLANTIC CABLE MAINTENANCE AND REPAIR AGREEMENT"
                  (ACMA) means the agreement effective from 1 April 1989, or its
                  successor, between and among cable maintenance authorities and
                  ship owners for the maintenance of cables in the Atlantic
                  Area.

         1.3      "CAPITAL ADDITIONS" means expenditures for enhancements or
                  additions of a capital nature to the SCARAB SYSTEMS that occur
                  after the INITIAL CAPITAL COST.

         1.4      "CENTRAL BILLING PARTY" means the PARTY designated in
                  Article 6.

         1.5      "COMMITMENT AGREEMENT" means the formal agreement defined in
                  Article 4 whereby an entity, not a signatory to this
                  AGREEMENT, participates in the use of the SCARAB SYSTEMS.

         1.6      "DESIGNATED CABLES" means the cables entered into the ACMA
                  which are listed in Schedule C.

         1.7      "FINANCIAL YEAR" means the period between the respective


                                      -2-
<PAGE>

                  OPERATIONAL DATE of each SCARAB SYSTEM and 31 March 1991 and
                  each subsequent period of twelve (12) months ending on 31
                  March each year.

         1.8      "FORCE MAJEURE" means such circumstances or events that are
                  outside the control of the PARTIES, such circumstances or
                  events include, but would not be restricted to, acts of God,
                  or of the public enemy, acts of governments, insurrection,
                  fires, floods, epidemics, quarantine restrictions, freight
                  embargoes, strikes or adverse weather conditions.

         1.9      "INITIAL CAPITAL COST" of each SCARAB SYSTEM means the total
                  construction cost of each SCARAB SYSTEM determined in
                  accordance with the relevant provisions of the SCARAB OWNERS
                  AGREEMENT and advised in writing to the PARTIES to this
                  AGREEMENT.

         1.10     "MAINTENANCE & IMPROVEMENT" means work carried out on a
                  DESIGNATED CABLE, other than a REPAIR, involving the use of a
                  SCARAB SYSTEM and which is deemed by the relevant MAINTENANCE
                  AUTHORITY to be required in order to reduce the susceptibility
                  of the DESIGNATED CABLE to furnish service-affecting faults,
                  however caused.

         1.11     "MAINTENANCE AUTHORITY", in relation to a DESIGNED CABLE,
                  means a telecommunications administration or recognised
                  private operating agency which is solely or jointly
                  responsible for the maintenance of that DESIGNATED CABLE as
                  shown in Schedule C.

         1.12     "NON-DESIGNATED CABLES" means cables entered into the ACM
                  which are not listed in Schedule C.

         1.13     "OPERATOR" means an OWNER who has been directly assigned by
                  the respective OWNERS to be responsible for the operation and
                  maintenance of a particular SCARAB SYSTEM.

         1.14     "OPERATING COMMITTEE" means a committee established under
                  Article 5.

         1.15     "OPERATING COSTS" means those costs incurred, excepting
                  Depreciation, Interest on Capital and RUNNING COSTS, in the
                  operation and maintenance of the SCARAB SYSTEMS.

         1.16     "OPERATIONAL DATE" of each SCARAB SYSTEM means the date upon
                  which the respective SCARAB SYSTEM entered into service,
                  determined in accordance with the relevant provisions of the
                  SCARAB OWNERS AGREEMENT and advised in writing to the PARTIES
                  to this AGREEMENT.

         1.17     "OUTSIDE WORK" means the categories of work defined in
                  Articles 8.3 and 8.4.


                                      -3-
<PAGE>

         1.18     "OWNER" means a PARTY identified in Schedule A as having an
                  investment in the SCARAB SYSTEMS.

         1.19     "PARTY" means a signatory to this AGREEMENT or to a COMMITMENT
                  AGREEMENT.

         1.20     "PORT" means the port from which a ship departs or returns
                  with a SCARAB SYSTEM for an operation.

         1.21     "REPAIR" means work carried out on a DESIGNATED CABLE
                  involving the use of a SCARAB SYSTEM and which is deemed by
                  the relevant MAINTENANCE AUTHORITY to be required in order to
                  remedy a service-affecting fault suffered by the DESIGNATED
                  CABLE, however caused.

         1.22     "RUNNING COSTS" means costs, additional to STANDING CHARGES,
                  which are incurred specifically as a result of an individual
                  operation or operations, as defined in Schedule D.

         1.23     "SCARAB III" means an unmanned submersible system together
                  with supporting ancillary equipment as further defined in
                  Schedule G1 and collectively owned and operated by the
                  relevant OWNERS listed in Schedule A.

         1.24     "SCARAB IV" means an unmanned submersible system together with
                  supporting ancillary equipment as further defined in Schedule
                  G2 and collectively owned and operated by the relevant OWNERS
                  listed in Schedule A.

         1.25     "SCARAB SYSTEM" means a reference equally applicable to either
                  or both SCARAB III and SCARAB IV.

         1.26     "SCARAB OWNERS AGREEMENT" means the Agreement known as the
                  SCARAB III & IV Owners Agreement among the owners of the
                  SCARAB SYSTEMS.

         1.27     "STANDING CHARGES" means the costs as defined in Schedule D.

         1.28     "ZONE" means an operational area (as defined in the ACMA as
                  either "EAST" or "WEST") to which a SCARAB SYSTEM is primarily
                  assigned.

                                      -4-
<PAGE>

ARTICLE 2
INTERPRETATION

         2.1      Schedules A through to G2 attached hereto are an integral part
                  of this AGREEMENT and any reference herein to a Schedule is a
                  reference to a Schedule to this AGREEMENT.

         2.2      The marginal titles of Articles do not form part of this
                  AGREEMENT.

         2.3      Any reference herein to an Article, Paragraph or Sub-paragraph
                  is a reference to an Article, Paragraph or Sub-paragraph of
                  this AGREEMENT.

ARTICLE 3
PURPOSE OF THIS AGREEMENT

         3.1      The purpose of this AGREEMENT is to provide the terms and
                  conditions for the support and use of the SCARAB SYSTEMS.

         3.2      This AGREEMENT shall supersede and replace the Interim
                  Agreement in respect of each SCARAB SYSTEM with effect from
                  the respective OPERATIONAL DATE of each SCARAB SYSTEM and
                  shall from each such OPERATIONAL DATE govern the relationship
                  of the PARTIES in all respects as to the support and use of
                  the respective SCARAB SYSTEM.

         3.3      The PARTIES hereby remise, release and discharge each other
                  from any claims upon each other for any deeds or actions
                  performed or not performed before the respective OPERATIONAL
                  DATE with respect to their interests in the respective SCARAB
                  SYSTEM.


ARTICLE 4
PARTICIPATION OF OTHER PARTIES

         4.1      The OPERATING COMMITTEE may agree to invite other parties to
                  the ACMA to participate in the use of the SCARAB SYSTEMS under
                  the terms and conditions of this AGREEMENT. Such participation
                  shall be effected by such other party entering into a
                  COMMITMENT AGREEMENT, annexed as Schedule E, and thereby
                  sharing in the rights and obligations of this AGREEMENT.

         4.2      The PARTIES shall hereby authorise the Chairman of the
                  OPERATING COMMITTEE to sign such COMMITTEE AGREEMENT for and
                  on their behalf.

                                      -5-

<PAGE>

ARTICLE 5
OPERATING COMMITTEE

         5.1      The OPERATING COMMITTEE is hereby established to supervise the
                  operation of this AGREEMENT and shall comprise a single
                  representative of each of the PARTIES.

         5.2      The OPERATING COMMITTEE shall elect a Chairman annually from
                  among its members. All decisions of the OPERATING COMMITTEE,
                  including election of its Chairman, shall be subject in the
                  first instance to consultation among its members who shall
                  endeavour to make decisions by agreement. In the event it
                  fails to reach agreement, it shall make decisions by votes
                  cast at a meeting of the OPERATING COMMITTEE by its members
                  weighted in the same proportion as their percentage
                  contribution to STANDING CHARGES shown on Schedule C of this
                  AGREEMENT. Should the question before the OPERATING COMMITTEE
                  relate specifically to either the EAST ZONE or the WEST ZONE
                  SCARAB SYSTEM operations then votes shall be weighted in
                  accordance with the sum total of Schedule C applicable to that
                  ZONE. If the question before the OPERATING COMMITTEE relates
                  to both ZONES then votes will be in accordance with the
                  percentage contributions to STANDING CHARGES related to a
                  combination of Schedules C1 and C2. A concurring vote of at
                  least three (3) PARTIES representing over fifty (50) per cent
                  of the weighted voting rights for the affected ZONE, shall be
                  required to decide any question before the OPERATING
                  COMMITTEE. No vote shall be taken unless at least two (2)
                  weeks notice of the meeting has been given. However, on the
                  agreement of all PARTIES, the two (2) weeks written notice may
                  be waived, and voting may take place, by telex or facsimile.

         5.3      The OPERATING COMMITTEE shall:

                  5.3.1        Meet as often as circumstances require, but not
                               less than once a year, to review the operation of
                               the AGREEMENT.

                  5.3.2        Share experiences of the effectiveness and
                               efficiency of SCARAB SYSTEM operations and review
                               the operational performance of the SCARAB SYSTEMS
                               and of the OPERATORS.

                  5.3.3        Approve the inclusion of CAPITAL ADDITIONS in the
                               calculation of the STANDING CHARGES of the SCARAB
                               SYSTEMS in accordance with the relevant
                               provisions of Article 14.

                  5.3.4        Approve the Estimated STANDING CHARGES and
                               Estimated RUNNING COSTS of the SCARAB SYSTEMS in
                               accordance with the relevant provisions of
                               Article 15.


                                      -6-
<PAGE>

                  5.3.5    Appoint the CENTRAL BILLING PARTY in accordance with
                           Article 6.1.

                  5.3.6    Approve the estimated CENTRAL BILLING PARTY costs in
                           accordance with Article 6.4.

                  5.3.7    Appoint the Appointed Party in accordance with
                           Article 7.1.

                  5.3.8    Agree on an annual schedule of planned use of the
                           SCARAB SYSTEMS taking into account each MAINTENANCE
                           AUTHORITY'S respective contribution to STANDING
                           CHARGES in planning access to the SCARAB SYSTEMS.

                  5.3.9    Make decisions as to the participation of new parties
                           in accordance with the provisions of Article 4.

                  5.3.10   Resolve conflicts, if any, over use of SCARAB
                           SYSTEMS.

                  5.3.11   Establish such sub-committees and working parties as
                           it considers necessary to assist in carrying out its
                           functions.


ARTICLE 6
CENTRAL BILLING  PARTY

         6.1      The OPERATING COMMITTEE shall by agreement appoint one PARTY
                  to act as CENTRAL BILLING PARTY for the purpose of this
                  AGREEMENT. Unless and until otherwise decided by the OPERATING
                  COMMITTEE, BRITISH TELECOM shall act as CENTRAL BILLING PARTY
                  for the duration of this AGREEMENT.

         6.2      The CENTRAL BILLING PARTY shall be responsible for the
                  submissions of billing, accounting and settlement of all
                  amounts due from the MAINTENANCE AUTHORITIES under this
                  AGREEMENT and for the disbursement and settlement of all
                  amounts due to the OWNERS under this AGREEMENT.

         6.3      The CENTRAL BILLING PARTY shall also undertake the necessary
                  liaison with the Central Billing Party appointed under the
                  SCARAB OWNERS AGREEMENT.

         6.4      At least two months before the beginning of each FINANCIAL
                  YEAR, the CENTRAL BILLING PARTY will provide an estimate of
                  the cost of carrying out the central billing functions during
                  that FINANCIAL YEAR for the approval of


                                      -7-
<PAGE>

                  the OPERATING COMMITTEE. The costs actually incurred by the
                  CENTRAL BILLING PARTY in carrying out the central billing
                  functions shall be charged to the MAINTENANCE AUTHORITIES as
                  described in Article 18.7.

         6.5      Not more than two months after the end of each FINANCIAL YEAR,
                  the CENTRAL BILLING PARTY shall submit an Annual Report and
                  Accounts to the PARTIES describing and summarising its
                  activities in discharging the CENTRAL BILLING functions during
                  the FINANCIAL YEAR concerned.


ARTICLE 7
PREPARATION AND AMENDMENT OF SCHEDULE C

         7.1      The OPERATING COMMITTEE shall appoint one of the PARTIES to
                  prepare and revise Schedule C semi-annually. Unless and until
                  otherwise decided by the OPERATING COMMITTEE, AT&T shall act
                  as the Appointed Party for the duration of this AGREEMENT.

         7.2      The ACCOUNTING UNITS for each DESIGNATED CABLE shall be
                  derived and revised by the Appointed Party in accordance with
                  Schedule B. After the ACCOUNTING UNITS are revised, the
                  Appointed Party shall, in accordance with Schedule B, prepare
                  and send to each PARTY and the CENTRAL BILLING PARTY revised
                  Schedules Cl and C2. The revised Schedules C1 and C2 shall
                  become effective on 1 April, 1 October or such other dates as
                  required and specified in Schedule B.

         7.3      Each MAINTENANCE AUTHORITY for (a) a new cable system which
                  when introduced into the ACMA will be included in this
                  AGREEMENT as a DESIGNATED CABLE, (b) a DESIGNATED CABLE that
                  will be introducing newly equipped spare capacity into
                  service, (c) a DESIGNATED CABLE that will be expanding or
                  reducing its Bearer Capacity, (d) a DESIGNATED CABLE which is
                  to be taken out of service, (e) a DESIGNATED CABLE that will
                  incur an expansion or reduction in Notional Capacity or (f) a
                  DESIGNATED CABLE in respect of which the number of buried
                  nautical miles has been significantly increased; shall
                  promptly notify the Chairman of the OPERATING COMMITTEE, the
                  PARTIES and the Appointed Party of the relevant facts, and
                  Schedules Cl and C2 shall be amended in accordance with
                  Schedule B.


ARTICLE 8
USE OF SCARAB SYSTEMS AND CHARGES

         8.1      SCARAB III shall primarily be assigned to and operated in the
                  EAST ZONE and


                                      -8-
<PAGE>

                  SCARAB IV shall primarily be assigned to and operated in the
                  WEST ZONE. The cost of each SCARAB SYSTEM shall be allocated
                  to its respective assigned ZONE on the basis defined in
                  Articles 16 and 17.

         8.2      The SCARAB SYSTEMS shall be used primarily for the REPAIR of
                  DESIGNATED CABLES in order to insure the continuity of service
                  provided by such cables. Subject to such requirements being
                  satisfied, the SCARAB SYSTEMS shall be used for the
                  MAINTENANCE & IMPROVEMENT of the DESIGNATED CABLES on an
                  interruptible basis. The charges and their allocation
                  applicable to these categories of use and the basis of
                  availability shall be as follows:

                  8.2.1    REPAIR OF DESIGNATED CABLES: For the period of such
                           work, all RUNNING COSTS, including those for Passage
                           Time and, if applicable, mobilisation aboard the Host
                           Vessel and demobilisation, shall be borne by the
                           MAINTENANCE AUTHORITY responsible for the DESIGNATED
                           CABLE under REPAIR. STANDING CHARGES shall continue
                           to be allocated according to Article 16.

                  8.2.2    MAINTENANCE & IMPROVEMENT OF DESIGNATED CABLES:

                           a)       For the period of such work, all RUNNING
                                    COSTS, including those for Passage Time, and
                                    if applicable, mobilisation and
                                    demobilisation, shall be borne by the
                                    MAINTENANCE AUTHORITY responsible for the
                                    DESIGNATED CABLE concerned. STANDING CHARGES
                                    shall continue to be allocated according to
                                    Article 16.

                           b)       In the event that the planned requirement of
                                    the MAINTENANCE AUTHORITIES for MAINTENANCE
                                    & IMPROVEMENT work at the beginning of the
                                    FINANCIAL YEAR shall exceed the then
                                    envisaged availability of the SCARAB
                                    SYSTEMS, the OPERATING COMMITTEE shall
                                    decide how the envisaged SCARAB SYSTEM
                                    availability shall be allocated between the
                                    MAINTENANCE AUTHORITIES. Such allocations
                                    shall take into consideration: -

                                    i)       the number and aggregate duration
                                             of the requirements of each
                                             MAINTENANCE AUTHORITY for the
                                             FINANCIAL YEAR in question, and

                                    ii)      the respective number of ACCOUNTING
                                             UNITS of the DESIGNATED CABLES for
                                             which MAINTENANCE & IMPROVEMENT
                                             work is requested.

                  8.2.3        For the period of other activities of an
                               interruptible nature as approved by


                                      -9-
<PAGE>

                           the OPERATING COMMITTEE, all RUNNING COSTS, including
                           those for Passage Time and, if applicable,
                           mobilisation and demobilisation, shall be borne by
                           the MAINTENANCE AUTHORITY responsible for such
                           activity. STANDING CHARGES shall continue to be
                           allocated according to Article 16.

         8.3      Provided that the availability of the SCARAB SYSTEMS to
                  undertake the REPAIR and MAINTENANCE & IMPROVEMENT of the
                  DESIGNATED CABLES is not thereby prejudiced, the SCARAB
                  SYSTEMS may be used, with the approval of the relevant OWNERS
                  and of the OPERATING COMMITTEE, which approval shall not be
                  unreasonably withheld, by the OWNERS on behalf of a
                  MAINTENANCE AUTHORITY for construction work, including survey,
                  on cable systems which, when introduced into the ACMA will be
                  included as DESIGNATED CABLES. For the period of such work,
                  including Passage Time and, if applicable, mobilisation and
                  demobilisation, STANDING CHARGES and RUNNING COSTS shall not
                  be charged to this AGREEMENT.

         8.4      The use of a SCARAB SYSTEM by the relevant OWNERS or on behalf
                  of a MAINTENANCE AUTHORITY for purposes other than those
                  described in Articles 8.2 and 8.3 shall be subject to the
                  approval of the OPERATING COMMITTEE. For the period of such
                  use, including Passage Time and, if applicable, mobilisation
                  and demobilisation, STANDING CHARGES and RUNNING COSTS shall
                  not be charged to this AGREEMENT. The OPERATING COMMITTEE
                  shall determine the magnitude of any amount which the relevant
                  OWNERS or MAINTENANCE AUTHORITY concerned shall credit or
                  otherwise under this AGREEMENT in respect of such use.

         8.5      For any period spent (with the consent of the OPERATING
                  COMMITTEE members that are a Maintenance Authority within the
                  affected ZONE) in exercising a SCARAB SYSTEM and in training
                  the OPERATOR'S team, the STANDING CHARGES and the RUNNING
                  COSTS, including those incurred during Passage Time and, if
                  applicable, mobilisation and demobilisation shall be allocated
                  as provided in Articles 16 and 17.

         8.6      In the event of either SCARAB SYSTEM not being available for
                  the REPAIR of a DESIGNATED CABLE in its assigned ZONE, the
                  remaining SCARAB SYSTEM may, at the request of a MAINTENANCE
                  AUTHORITY and with the agreement of the MAINTENANCE
                  AUTHORITIES in the remaining SCARAB SYSTEM's assigned ZONE, be
                  transferred between ZONES to effect REPAIR to that DESIGNATED
                  CABLE save that:

                      i)   The remaining SCARAB SYSTEM shall complete any
                           REPAIRS on a DESIGNATED CABLE to which it is
                           committed in its own ZONE before


                                      -10-
<PAGE>

                           such transfer is permitted.

                  ii)      The remaining SCARAB SYSTEM may be immediately
                           recalled to its assigned ZONE in the event of a
                           REPAIR being required for a DESIGNATED CABLE in its
                           assigned ZONE with a greater number of ACCOUNTING
                           UMTS than the cable under REPAIR in the other ZONE.

                  iii)     For the period of such transfer between ZONES,
                           STANDING CHARGES and RUNNING COSTS including, if
                           applicable, those for mobilisation and demolisation,
                           shall be allocated in accordance with Articles 16 and
                           17.


ARTICLE 9
SCARAB SYSTEM AVAILABILITY

         9.1      The OPERATOR and the respective OWNERS of each SCARAB SYSTEM
                  shall use their beSt efforts to make the respective SCARAB
                  SYSTEM operationally available for use at all times for work
                  on the DESIGNATED CABLES except in the following
                  circumstances:-

                  9.1.1    whilst the SCARAB SYSTEM is undergoing periodic
                           maintenance or refurbishment.

                  9.1.2    from the starting date of any OUTSIDE WORK until its
                           conclusion.

                  9.1.3    whilst the SCARAB SYSTEM is unavailable by reason of
                           FORCE MAJEURE.

                  9.1.4    whilst the SCARAB SYSTEM is damaged to the extent
                           that it cannot perform REPAIRS or MAINTENANCE &
                           IMPROVEMENT work as envisaged in Article 20.1 or it
                           becomes a total loss or a constructive total loss.

         9.2      Article 20 contains provisions concerning the treatment of
                  SCARAB SYSTEM costs for periods during which a SCARAB SYSTEM
                  is unavailable.

ARTICLE 10
OPERATING PROCEDURES

         10.1     On receipt by an OPERATOR of notification by a MAINTENANCE
                  AUTHORITY that a SCARAB SYSTEM is required to undertake work
                  on a DESIGNATED CABLE, the OPERATOR shall take the necessary
                  action to ensure that the SCARAB SYSTEM is mobilised aboard
                  the nominated Host Vessel without avoidable delay. Where
                  notification is given by telephone, it shall


                                      -11-
<PAGE>

                  be confirmed by telex or facsimile at the earliest
                  opportunity.

         10.2     The MAINTENANCE AUTHORITY requesting the use of a SCARAB
                  SYSTEM shall be responsible for the nomination, engagement and
                  costs of a suitable Host Vessel. Notwithstanding the
                  foregoing, the OPERATOR of the respective SCARAB SYSTEM shall
                  be responsible for determining the suitability of any
                  nominated Host Vessel and the OPERATOR's decision in this
                  regard shall be final.

         10.3     When an OPERATOR is notified to commence a SCARAB SYSTEM
                  operation under this AGREEMENT or when a SCARAB SYSTEM changes
                  operational status, the respective OPERATOR shall, within 24
                  hours, notify the MAINTENANCE AUTHORITIES in the ZONE and the
                  other OWNERS, by telex or facsimile, as specified below:

                  10.3.1       Upon receipt of notification by an OPERATOR that
                               the respective SCARAB SYSTEM is required to
                               undertake an operation, the OPERATOR shall
                               transmit a Notification of Commencement of a
                               SCARAB SYSTEM operation in accordance with
                               Schedule Fl.

                  10.3.2       After completion of the SCARAB SYSTEM operation,
                               the OPERATOR shall transmit a Notification of
                               Completion of a SCARAB SYSTEM operation in
                               accordance with Schedule F2.

                  10.3.3       Upon a SCARAB SYSTEM's change in operational
                               status (ie: standby, repairs, OUTSIDE WORK,
                               training exercises, etc.) the respective OPERATOR
                               shall transmit a notification of the change in
                               status in accordance with Schedule F3.


         10.4     As soon as practicable after the completion of a SCARAB SYSTEM
                  operation under this AGREEMENT, the respective OPERATOR shall
                  advise the MAINTENANCE AUTHORITIES on whose behalf the
                  operation was undertaken, by telex or facsimile, of the
                  estimated RUNNING COSTS of the SCARAB SYSTEM on such operation
                  in the format of Schedule F4.

ARTICLE 11
OPERATIONAL RESPONSIBILITIES

         11.1     The responsibility for planning and directing work on a
                  DESIGNATED CABLE shall rest with the OPERATOR of the
                  respective SCARAB SYSTEM unless the MAINTENANCE AUTHORITY
                  concerned has elected to take on that responsibility.


                                      -12-
<PAGE>

         11.2     Whether or not such an election has been made:-

                  11.2.1   each SCARAB SYSTEM shall at all times remain under
                           the direct control of the respective OPERATOR and
                           nothing in this AGREEMENT shall be construed as a
                           demise or charter of a SCARAB SYSTEM to the
                           MAINTENANCE AUTHORITIES, jointly or severally, and

                  11.2.2   nothing in this AGREEMENT shall be deemed to reduce,
                           interfere with, or otherwise impair the full
                           authority and responsibility of the OPERATOR of a
                           SCARAB SYSTEM for its safe operation and navigation,
                           or for the safety of the OPERATOR'S personnel. In
                           complying with any directions given by an Authorised
                           Shipboard Representative designated by a MAINTENANCE
                           AUTHORITY, the OPERATOR shall take full account of
                           the risk of impairing the safety of the SCARAB SYSTEM
                           and of the OPERATOR's personnel.

         11.3     SCARAB SYSTEM operations shall be carried out in accordance
                  with the instructions supplied by the appropriate MAINTENANCE
                  AUTHORITY. If no such instructions are received, the normal
                  practices of the respective OPERATOR may be followed.

         11.4     The MAINTENANCE AUTHORITY for whom any work is being carried
                  out may assign to the operation concerned one (or, if
                  accommodation is available, more than one) representative for
                  the duration of the work. However, permission to board the
                  Host Vessel by any such representative shall be subject to the
                  acceptance by the representative and the MAINTENANCE AUTHORITY
                  of the Host Vessel owner's waiver-of-liability requirements.

         11.5     A MAINTENANCE AUTHORITY which has elected to undertake the
                  responsibility for planning and directing any work, shall
                  designate in writing its "Authorised Shipboard
                  Representative". If it does not do so, it shall designate in
                  writing an "Authorised Shore Representative".

         11.6     The function of the Authorised Shipboard Representative or the
                  Authorised Shore Representative designated under Article 11.5
                  is to communicate to the OPERATOR (in writing, or by
                  confirmatory radio message, if reasonably required) the
                  requirements of the MAINTENANCE AUTHORITY concerning the work;
                  these requirements shall relate only to the particular
                  operation on which the SCARAB SYSTEM is then engaged.

         11.7     The relevant MAINTENANCE AUTHORITY shall be responsible for
                  ensuring that the OPERATOR is provided with cable system
                  documentation and any


                                      -13-
<PAGE>

                  specialised equipment and expertise identified by the OPERATOR
                  as necessary for the operation concerned. The OPERATOR shall
                  exercise due diligence for the safe keeping of any plant and
                  equipment provided by a MAINTENANCE AUTHORITY.

ARTICLE 12
PRIORITY OF USE OF SCARAB SYSTEMS

         12.1     In the event of competing claims for the services of a SCARAB
                  SYSTEM to undertake REPAIR operations on two or more
                  DESIGNATED CABLES within a ZONE, the MAINTENANCE AUTHORITIES
                  concerned shall consult with one another having regard to the
                  consequences resulting from the failures and with a view to
                  agreeing on the sequence of SCARAB SYSTEM REPAIR operations.
                  If no agreement is reached, first priority shall be given to
                  the REPAIR of the DESIGNATED CABLE with the higher aggregate
                  number of ACCOUNTING UNITS in Schedules C1 and C2 taken
                  together. Where a DESIGNATED CABLE concerned forms part of a
                  branched cable system, the ACCOUNTING UNITS attributed to that
                  DESIGNATED CABLE for the purposes of this Paragraph shall be
                  the sum of the ACCOUNTING UNITS of the failed segment of the
                  DESIGNATED CABLE concerned and a proportion of the ACCOUNTING
                  UNITS of any other segments of the DESIGNATED CABLE forming
                  other parts of the same branched cable system in proportion to
                  the effect of the failed DESIGNATED CABLE on the
                  traffic-carrying capacity of said other DESIGNATED CABLES.

         12.2     Subject to the overriding consideration of Article 12.1.,
                  priority for use of the SCARAB SYSTEMS shall be in the
                  following descending order:

                  12.2.1   Service interrupted in the buried sections of
                           DESIGNATED CABLES.

                  12.2.2   Service interrupted in the non-buried sections of
                           DESIGNATED CABLES.

                  12.2.3   Maintenance and Improvement work on DESIGNATED
                           CABLES.

                  12.2.4   OUTSIDE WORK as agreed by the OPERATING COMMITTEE.

         12.3     If, while a SCARAB SYSTEM is committed to an operation, it is
                  required for an operation of higher priority, then the
                  MAINTENANCE AUTHORITY requiring the SCARAB SYSTEM on that
                  higher priority operation shall pay the transportation costs
                  of the SCARAB SYSTEM from its committed work site and back to
                  that work site, or to the PORT at the option of the
                  MAINTENANCE AUTHORITY of the lower priority operation.


                                      -14-
<PAGE>

ARTICLE 13
ALLOCATION OF COSTS

13.      SCARAB SYSTEM costs comprise:-

         (i)      STANDING CHARGES and
         (ii)     RUNNING COSTS.
                  as defined in Schedule D of this AGREEMENT.


ARTICLE 14
CAPITAL ADDITIONS AND COST ESCALATION

         14.1     CAPITAL ADDITIONS in excess of an aggregated total in any
                  FINANCIAL YEAR of twenty-five thousand (25,000) Pounds
                  Sterling for each SCARAB SYSTEM shall not be included in the
                  calculation of STANDING CHARGES without the approval of the
                  OPERATING COMMITTEE.

         14.2     Other than in the event of a designated OPERATOR failing to
                  comply with its contractual obligations or giving appropriate
                  notice of an intention to cease as OPERATOR, the respective
                  OWNERS may not change the OPERATOR, if such change is likely
                  to lead to a significant escalation in STANDING CHARGES or
                  RUNNING COSTS, without the approval of the OPERATING
                  COMMITTEE.


ARTICLE 15
ESTIMATED STANDING CHARGES AND RUNNING COSTS

         15.1     Not later than two (2) months before the start of each
                  FINANCIAL YEAR, the OPERATORS and other OWNERS of each SCARAB
                  SYSTEM will provide the CENTRAL BILLING PARTY with SCARAB
                  SYSTEM cost estimates relating to the forthcoming FINANCIAL
                  YEAR in accordance with the relevant provisions of the SCARAB
                  OWNERS AGREEMENT.

         15.2     Not later than one (1) month before the start of each
                  FINANCIAL YEAR, the CENTRAL BILLING PARTY shall, provide the
                  OPERATING COMMITTEE with:

                  15.2.1       the estimated STANDING CHARGE of each SCARAB
                               SYSTEM for the forthcoming FINANCIAL YEAR, in the
                               format defined in Schedule D.

                  15.2.2       the CAPITAL ADDITIONS included in the calculation
                               of Estimated


                                      -15-
<PAGE>

                           STANDING CHARGES in accordance with the requirements
                           of Article 14.1.

                  15.2.3   the Estimated RUNNING COSTS of each SCARAB SYSTEM
                           appropriate to the forthcoming FINANCIAL YEAR, in the
                           format defined in Schedule D.

                  for the approval of the OPERATING COMMITTEE, which approval
                  shall not be unreasonably withheld.

         15.3     When approved in accordance with the foregoing, the Estimated
                  STANDING CHARGES shall, in quarterly instalments based upon
                  the number of days in the quarter, form the basis of the
                  billing by the CENTRAL BILLING PARTY to the MAINTENANCE
                  AUTHORITIES during and in respect of the FINANCIAL YEAR. In
                  the event that the Estimated STANDING CHARGES or, if
                  applicable, the CAPITAL ADDITIONS included therein are not
                  approved by the OPERATING COMMITTEE, the Estimated STANDING
                  CHARGES shall form the basis of billing until the dispute is
                  resolved.

         15.4     Not later than two (2) months after the approval of the
                  Estimated STANDING CHARGES for a FINANCIAL YEAR, the CENTRAL
                  BILLING PARTY shall provide the OPERATING COMMITTEE with
                  budgetary estimates of CAPITAL ADDITIONS and STANDING CHARGES
                  for the succeeding two (2) FINANCIAL YEARS.

         15.5     In the event that during the course of a FINANCIAL YEAR the
                  CENTRAL BILLING PARTY determines that the STANDING CHARGES of
                  either SCARAB SYSTEM in that FINANCIAL YEAR will exceed the
                  approved Estimated STANDING CHARGES by more than ten (10)
                  percent, the CENTRAL BILLING PARTY shall provide the OPERATING
                  COMMITTEE with revised estimate of STANDING CHARGES for its
                  information.

ARTICLE 16
ALLOCATION OF STANDING CHARGES

         16.1     The STANDING CHARGES of each SCARAB SYSTEM, adjusted as
                  appropriate pursuant to Articles 8.3 and 8.4., shall be
                  allocated to the ZONE to which it is assigned for the duration
                  of that assignment, and shall be shared among the MAINTENANCE
                  AUTHORITIES having direct responsibility for the DESIGNATED
                  CABLES in that ZONE in proportion to the ACCOUNTING UNITS
                  allocated to them in Schedule Cl or C2 as appropriate.

         16.2     In the event that either SCARAB SYSTEM is transferred from its
                  assigned ZONE


                                      -16-
<PAGE>

                  to the other ZONE in accordance with Article 8.6, one half of
                  the STANDING CHARGES applicable to the period of transfer
                  shall be borne by each ZONE.

         16.3     For the purpose of calculating the STANDING CHARGES applicable
                  to any particular period of time, the annual STANDING CHARGES
                  shall be divided by 365 to give an appropriate daily rate.

         16.4     Any additional amounts credited to this AGREEMENT in
                  accordance with Article 8.4 shall be shared among the
                  MAINTENANCE AUTHORITIES having direct responsibility for the
                  DESIGNATED CABLES in the ZONE to which the respective SCARAB
                  SYSTEM is assigned in proportion to the ACCOUNTING UNITS
                  allocated to them in Schedule Cl or C2 as appropriate.


ARTICLE 17
ALLOCATION OF RUNNING COSTS

         17.1     The RUNNING COSTS of each SCARAB SYSTEM shall be allocated in
                  accordance with the following paragraphs of this Article 17
                  except where Article 8 provides otherwise.

         17.2     If, pursuant to Article 12, a MAINTENANCE AUTHORITY is given
                  precedence in competing claims for the services of a SCARAB
                  SYSTEM, the MAINTENANCE AUTHORITIES concerned shall agree a
                  fair and reasonable apportionment of the RUNNING COSTS for the
                  Passage Time from the time of the commitment of mobilisation
                  of the SCARAB SYSTEM in its assigned PORT until the completion
                  of demobilisation upon its return to PORT. If the MAINTENANCE
                  AUTHORITIES concerned cannot agree, the OPERATING COMMITTEE
                  shall determine the apportionment. Whilst awaiting the
                  OPERATING COMMITTEE decision, the respective OPERATOR may, for
                  the purposes of interim billing, charge such RUNNING COSTS to
                  the MAINTENANCE AUTHORITY invoking the priority. Such interim
                  billing shall be adjusted upon receipt of the OPERATING
                  COMMITTEE's decision.

         17.3     In the event that either SCARAB SYSTEM is transferred from its
                  assigned ZONE to the other ZONE in accordance with Article
                  8.6, the RUNNING COSTS and all associated transit costs shall
                  be charged to the MAINTENANCE AUTHORITY requesting the
                  transfer.

         17.4     RUNNING COSTS in respect of SCARAB SYSTEM exercises and
                  training undertaken in accordance with Article 8.5 shall be
                  allocated to the ZONE to which the respective SCARAB SYSTEM is
                  assigned and shall be shared among the MAINTENANCE AUTHORITIES
                  having direct responsibility for the


                                      -17-
<PAGE>

                  DESIGNATED CABLES in that ZONE in proportion to the ACCOUNTING
                  UNITS allocated to them in Schedule C1 or C2 as appropriate.

         17.5     Should an operation be suspended due to the Host Vessel being
                  required to undertake other work (eg: an ACMA repair operation
                  not involving the SCARAB SYSTEM), the SCARAB SYSTEM operation
                  shall be deemed to have ended at the time of Host Vessel
                  diversion and from such time RUNNING COSTS shall be allocated
                  to the MAINTENANCE AUTHORITIES in the ZONE concerned in the
                  proportions of Schedule C1 or C2 as appropriate.

         17.6     In the event that a SCARAB SYSTEM is used for a series of
                  operations without returning to its PORT, the MAINTENANCE
                  AUTHORITIES concerned may, if they wish, elect to share the
                  RUNNING COSTS during transit time on a basis different from
                  those outlined in Article 17.7. Any such election shall be
                  notified to the OPERATOR and CENTRAL BILLING PARTY as soon as
                  possible.

         17.7     Where a SCARAB SYSTEM undertakes a series of operations
                  without returning to its PORT, each SCARAB SYSTEM'S RUNNING
                  COSTS shall be allocated pursuant to the provisions of the
                  paragraphs below. The RUNNING COSTS for transit time shall be
                  attributed separately to the several operations concerned
                  according to the procedure set out below. For this purpose,
                  transit time before work starts on the first operations,
                  transit time between the end of each operation and the start
                  of the next, and transit time from the end of the last in the
                  series of operations to the arrival of the SCARAB SYSTEM at
                  its PORT is aggregated to arrive at total transit time.

                  a)       For the purposes of the following sub-paragraphs of
                           Article 17.7, references to an operation means all
                           work on the same cable including cut-ins and multiple
                           repairs. An operation ends when the SCARAB SYSTEM and
                           the Host Vessel have received permission from the
                           responsible MAINTENANCE AUTHORITY to leave the site
                           of the operation and have cleared the cable grounds.

                  b)       the particular distance from the PORT of each
                           operation is hereinafter referred to as the
                           "operational distance."

                  c)       The allocation of transit time to each operation is
                           that proportion of the total transit time which is
                           equal to the distance of each operation from the PORT
                           divided by the sum of all operational distances from
                           the PORT.

                  d)       Weather delays which occur before work on a
                           particular operation starts, whether while actually
                           in transit or standing by on the cable ground, are
                           included in transit time.


                                      -18-
<PAGE>

                  e)       Weather delays which occur during the course of an
                           operation shall be charged to that particular
                           operation.

ARTICLE 18
BILLING ARRANGEMENTS

         18.1     Bills showing the amounts due from the MAINTENANCE AUTHORITIES
                  for their respective shares of SCARAB SYSTEM costs for each
                  quarter shall be rendered to them by the CENTRAL BILLING PARTY
                  on or before the 20th day of the first month of each quarter.
                  Such bills shall be based on information received by the
                  CENTRAL BILLING PARTY under Paragraph 18.2 and on the approved
                  Estimated STANDING CHARGES and shall include:

                  (a)      estimated STANDING CHARGES in respect of the quarter,

                  (b)      a reduction of Estimated STANDING CHARGES in respect
                           of OUTSIDE WORK forecast for the quarter,

                  (c)      adjustments in respect of previous quarters' actual
                           OUTSIDE WORK and/or Actual STANDING CHARGES,

                  (d)      RUNNING COSTS, as incurred and advised to the CENTRAL
                           BILLING PARTY quarterly,

                  (e)      interest, pursuant to Article 18.5, on bills not paid
                           when due, and

                  (f)      CENTRAL BILLING PARTY charges in accordance with
                           Article 18.7.

         18.2     On or before the fifteenth day of the last month preceding
                  each quarter, each OWNER shall advise the CENTRAL BILLING
                  PARTY as to the details of SCARAB SYSTEM activities (including
                  retrospective adjustments) and Running Costs, to be included
                  in the bills next due to be rendered to MAINTENANCE
                  AUTHORITIES. Such details shall be advised in the currency of
                  the OWNER.

         18.3     For billing purposes, all such costs notified to the CENTRAL
                  BILLING PARTY shall be converted into the currency of the
                  CENTRAL BILLING PARTY at the exchange rates pertaining to
                  forward foreign exchange contracts which the CENTRAL BILLING
                  PARTY will enter into for the purchase of the amounts due to
                  each OWNER in its own currency on the first working day of the
                  third month of the quarter.

         18.4     Bills shall be rendered in the currency of the CENTRAL BILLING
                  PARTY and


                                      -19-
<PAGE>

                  shall be payable in that currency unless the CENTRAL BILLING
                  PARTY agrees otherwise.

         18.5     Bills shall be payable by the last working day of the second
                  month of the quarter to which they relate, or if the issue of
                  a bill is delayed, seventy days from the date of issue,
                  whichever is the later. Bills not paid by the due date will
                  incur a quarterly compounded interest charge at a rate of one
                  hundred and twenty five (125%) percent of the *LIBOR
                  applicable on the first working day following the date by
                  which payment is due, which rate will be applied throughout
                  the period during which the payment is overdue.

                  *LIBOR is the London Interbank Offer Rate for Sterling as
                  published in the London Financial Times.

         18.6     On the first working day of the third month of each quarter,
                  the CENTRAL BILLING PARTY shall remit to or settle with each
                  OWNER, in the OWNER's own currency, the amounts notified by it
                  under Article 18.2. Where appropriate, those amounts shall be
                  netted off against any amounts due from the OWNER in its
                  capacity as a MAINTENANCE AUTHORITY, such last-mentioned
                  amounts having been converted into the currency of the OWNER
                  concerned at rates prevailing at the time of settlement. Other
                  arrangements of a netting-off or similar nature are
                  permissible where agreed between the MAINTENANCE AUTHORITY or
                  MAINTENANCE AUTHORITIES concerned and the CENTRAL BILLING
                  PARTY. Such other arrangements will be reported upon annually
                  to the OPERATING COMMITTEE by the CENTRAL BILLING PARTY.

         18.7     The CENTRAL BILLING PARTY shall charge the costs associated
                  with the performance of the Central Billing function. The
                  charges made shall be allocated equally between ZONES and
                  included in the quarterly bills to the MAINTENANCE AUTHORITIES
                  in proportion to the ACCOUNTING UNITS allocated to them in
                  Schedules Cl and C2.

         18.8     The CENTRAL BILLING PARTY shall at all times use its best
                  efforts to ensure that all bills rendered to MAINTENANCE
                  AUTHORITIES are paid as due. If a bill for a DESIGNATED CABLE
                  remains unpaid for 180 days after the due date, the other
                  MAINTENANCE AUTHORITIES in the same ZONE as the defaulting
                  MAINTENANCE AUTHORITY shall reimburse the CENTRAL BILLING
                  PARTY a proportional share of the unpaid bill, including a
                  proportional share of the interest incurred by the CENTRAL
                  BILLING PARTY. The amounts paid by such MAINTENANCE
                  AUTHORITIES shall be in proportion to their ACCOUNTING UNITS
                  within the applicable ZONE.


                                      -20-
<PAGE>

         18.9     Nothing contained in this Article shall release the defaulting
                  MAINTENANCE AUTHORITY from its obligations under this
                  AGREEMENT. The defaulting MAINTENANCE AUTHORITY will continue
                  to be billed its share of all SCARAB SYSTEM costs in
                  proportion to the ACCOUNTING UNITS allocated to it in Schedule
                  C1 or C2, as appropriate, prepared pursuant to Article 7. If
                  the defaulting MAINTENANCE AUTHORITY fails to pay any bill
                  within 365 days of its due date, the owners shall be released
                  from any obligation to undertake work for that MAINTENANCE
                  AUTHORITY. At such time, the Appointed Party shall prepare and
                  issue a revised Schedule C which will exclude the defaulting
                  MAINTENANCE AUTHORITY. The defaulting MAINTENANCE AUTHORITY
                  will continue to be excluded from Schedule C until all
                  outstanding balances, including applicable interest, have been
                  paid in full by the defaulting MAINTENANCE AUTHORITY.

         18.10    In the event that a MAINTENANCE AUTHORITY for a DESIGNATED
                  CABLE has failed to pay a bill within 180 days of the due
                  date, and that DESIGNATED CABLE has more than one MAINTENANCE
                  AUTHORITY (as shown in Schedule C), the CENTRAL BILLING PARTY
                  shall notify such other MAINTENANCE AUTHORITY(s) for that
                  cable of such default for nonpayment. Notwithstanding Article
                  18.9, a MAINTENANCE AUTHORITY for a DESIGNATED CABLE having
                  more than one MAINTENANCE AUTHORITY shall have the option, at
                  any time within 365 days of the due date of a bill, to pay any
                  unpaid bill of another MAINTENANCE AUTHORITY for that cable,
                  and upon such payment, the defaulting MAINTENANCE AUTHORITY
                  shall no longer be deemed to be in default for non-payment of
                  such bill and the cable involved shall not be excluded from
                  Schedule C. Such payment by another MAINTENANCE AUTHORITY on
                  behalf of a defaulting MAINTENANCE AUTHORITY shall not
                  prejudice the paying MAINTENANCE AUTHORITY'S legal rights
                  against the defaulting MAINTENANCE AUTHORITY.

         18.11    Upon receipt by the CENTRAL BILLING PARTY from the defaulting
                  MAINTENANCE AUTHORITY or from another MAINTENANCE AUTHORITY
                  for a DESIGNATED CABLE having more than one MAINTENANCE
                  AUTHORITY (pursuant to Article 18.10) of any amount reimbursed
                  by the other MAINTENANCE AUTHORITIES in the ZONE in accordance
                  with Article 18.8, any such amounts shall be distributed to
                  such other MAINTENANCE AUTHORITIES in the ZONE in the same
                  proportions as those MAINTENANCE AUTHORITIES reimbursed the
                  CENTRAL BILLING PARTY under Article 18.8.


                                      -21-
<PAGE>

ARTICLE 19
ACTUALS ADJUSTMENT

         19.1     As soon as possible and not more than six (6) months after the
                  end of each FINANCIAL YEAR, each OWNER will advise the CENTRAL
                  BILLING PARTY (in the categories defined in Schedule D) of its
                  actual expenditure contributing towards STANDING CHARGES for
                  that FINANCIAL YEAR in accordance with the relevant provisions
                  of the SCARAB OWNERS AGREEMENT.

         19.2     Not more than seven (7) months after the end of each FINANCIAL
                  YEAR, the CENTRAL BILLING PARTY shall provide the OPERATING
                  COMMITTEE with the Actual STANDING CHARGES for the FINANCIAL
                  YEAR concerned and make appropriate adjustments to amounts
                  billed under Article 18 on the basis of the corresponding
                  Estimated STANDING CHARGES. Such adjustments shall be
                  reflected to MAINTENANCE AUTHORITIES through the next
                  quarterly settlement.


ARTICLE 20
SCARAB SYSTEM COSTS IN PARTICULAR CIRCUMSTANCES

         20.1     If a SCARAB SYSTEM is damaged to such an extent as to have to
                  undergo repairs, the MAINTENANCE AUTHORITIES shall continue to
                  share the STANDING CHARGES in the proportions of Schedule C1
                  or C2 as appropriate during a period of up to 120 days from
                  the date of the damage, unless, at the time of the damage, the
                  SCARAB SYSTEM was engaged in work under Article 8.4.

         20.2     If the necessity of repair of a SCARAB SYSTEM results from the
                  deliberate act or negligence of a third party, the OWNERS
                  shall diligently pursue all claims against such third party,
                  but without prejudice to their right to settle or
                  compromise on terms which they consider reasonable. To the
                  extent that any sums recovered by way of damages or in
                  settlement of claims include the STANDING CHARGES paid by the
                  MAINTENANCE AUTHORITY during the repair period, that amount
                  shall be credited to the MAINTENANCE AUTHORITIES by the
                  OWNERS.

         20.3     SCARAB SYSTEM costs shall cease to be shared among the
                  MAINTENANCE AUTHORITIES for periods during which a SCARAB
                  SYSTEM is unavailable in any of the following circumstances:

                  20.3.1       from the time that it becomes a total loss or a
                               constructive total loss, except to the extent
                               that the OWNERS are committed to expenses which
                               would normally be recovered in the STANDING
                               CHARGES or RUNNING COSTS but which are not
                               covered by insurance,


                                      -22-
<PAGE>

                  20.3.2   during the period from the 120th day after damage to
                           a SCARAB SYSTEM has occurred, as specified in Article
                           20.1, until repairs have been completed and the
                           SCARAB SYSTEM is again available, or

                  20.3.3   during any period while the SCARAB SYSTEM is
                           performing work under Articles 8.3 and 8.4.

         20.4     During periods of assignment to this AGREEMENT, SCARAB SYSTEM
                  costs shall continue to be shared among the MAINTENANCE
                  AUTHORITIES in the proportions of Schedule Cl or C2 as
                  appropriate for periods during which a SCARAB SYSTEM is
                  unavailable in any of the following circumstances:

                  20.4.1   while the SCARAB SYSTEM is undergoing emergency
                           repairs,

                  20.4.2   while the SCARAB SYSTEM is unavailable by reason of
                           FORCE MAJEURE.


ARTICLE 21
TOTAL LOSS OR CONSTRUCTIVE TOTAL LOSS

         21.1     in the event of a total loss or constructive total loss of
                  either SCARAB SYSTEM, the remaining SCARAB SYSTEM shall assume
                  responsibility for the maintenance and repair of the
                  DESIGNATED CABLES in both ZONES and the Schedules C1 and C2
                  shall accordingly be combined to produce one Schedule C. Costs
                  shall be allocated among MAINTENANCE AUTHORITIES on the basis
                  of the now (combined) Schedule C from the date of such total
                  or constructive total loss (being retrospective if
                  applicable).

         21.2     In the event of a total loss or constructive total loss of
                  both or the remaining SCARAB SYSTEM this AGREEMENT shall
                  terminate with effect from the date of such loss.

         21.3     Notwithstanding Articles 21.1. and 21.2. each OPERATOR, as
                  applicable, may include any subsequent cost of terminating its
                  affairs as the OPERATOR as if such costs had been incurred on
                  the day of total loss or constructive total loss.


ARTICLE 22
KEEPING OF RECORDS

         22.      Each OPERATOR, other OWNER and the CENTRAL BILLING PARTY shall


                                      -23-
<PAGE>

                  keep and maintain for a period of not less than five (5) years
                  from the date the applicable bill is rendered, copies of such
                  books, records, vouchers, accounts or other information
                  regarding its costs and calculations with respect to the bill
                  rendered, as may be appropriate to support the respective
                  billing or advice of any such costs to or by the CENTRAL
                  BILLING PARTY and shall at all reasonable times make them
                  available for the inspection of the other PARTIES.

ARTICLE 23
LIABILITY AND INDEMNITY

         23.1     Each OWNER or OPERATOR shall be liable for all direct damages
                  to persons or property arising in the discharge of its
                  obligations under this AGREEMENT to the extent that such
                  damages have resulted from the intentional or negligent acts
                  or omissions of the OWNERS or OPERATOR, its agents or
                  employees. The OWNERS or OPERATOR shall indemnify and hold
                  harmless the MAINTENANCE AUTHORITY concerned against all
                  claims, actions, demands, or judgements for such direct
                  damages.

         23.2     Each MAINTENANCE AUTHORITY shall be liable for all direct
                  damages to persons or property arising in the discharge of its
                  obligations under this AGREEMENT to the extent that such
                  damages have resulted from the intentional or negligent acts
                  or omissions of the MAINTENANCE AUTHORITY, its agents or
                  employees. The MAINTENANCE AUTHORITIES shall indemnify and
                  hold harmless the OWNERS and OPERATOR concerned against all
                  claims, actions, demands or judgements for such direct
                  damages.

         23.3     Each OWNER or OPERATOR shall be liable for injury or damages
                  to persons or property sustained by its employees or agents in
                  the course of their employment or agency to the extent that
                  such injury or damages are not caused by the negligence or
                  intentional acts of a MAINTENANCE AUTHORITY and to that extent
                  will indemnify and hold harmless the MAINTENANCE AUTHORITY
                  against all claims, actions, demands, or judgement for damages
                  sustained by employees or agents of the OWNER or OPERATOR
                  except to the extent that such claims, actions, demands and
                  judgements arise out of the negligence or intentional acts of
                  a MAINTENANCE AUTHORITY.

         23.4     The CENTRAL BILLING PARTY and the Appointed Party under
                  Article 7.1. shall each exercise due care, diligence and
                  promptness in the discharge of their respective duties and the
                  PARTIES jointly shall indemnify and hold harmless the CENTRAL
                  BILLING PARTY and the Appointed Party against any claims,
                  actions, demands or judgements arising out of the CENTRAL
                  BILLING PARTY'S andthe Appointed Party's performance,
                  purported performance or


                                      -24-
<PAGE>

                  non-performance of its function under this AGREEMENT.

         23.5     Except as stated in Articles 23.1., 23.2, 23.3 and 23.4, no
                  PARTY shall be liable for any other damages suffered by any
                  PARTY nor shall any PARTY be required to indemnify or hold
                  harmless any other PARTY against claims made by any person or
                  entity against any PARTY for damages arising from the acts or
                  omissions of any other PARTY in the discharge of their
                  respective obligations under this AGREEMENT.

ARTICLE 24
RELATIONSHIP AMONG THE PARTIES

         24.      The relationship between or among the PARTIES shall not be
                  that of partners and nothing herein contained shall be deemed
                  to constitute a partnership between them, and the common
                  enterprise among the PARTIES shall be limited to the express
                  provisions of this AGREEMENT.

ARTICLE 25
PERFORMANCE OF AGREEMENT

         25.      The performance of this AGREEMENT by the PARTIES is contingent
                  upon the obtaining and continuance of such approvals,
                  consents, governmental authorisations, licenses and permits as
                  may be required or be deemed necessary by the PARTIES and as
                  may be satisfactory to them, and the PARTIES shall use their
                  best efforts to obtain and to have continued in effect such
                  approvals, consents, authorisations, licenses and permits.

ARTICLE 26
AMENDMENTS  TO AGREEMENT

         26.      This AGREEMENT and any of the provisions hereof may be altered
                  or added to only by an agreement, in writing, signed by a duly
                  authorised person on behalf of each of the PARTIES.


ARTICLE 27
ASSIGNMENT OR TRANSFER

         27.      During the continuance of this AGREEMENT, no PARTY shall,
                  without the written consent of the other PARTIES, sell,
                  assign, transfer or dispose of its rights or obligations under
                  this AGREEMENT, in whole or in part, except to a legal
                  successor or subsidiary of such PARTY or corporation
                  controlling, or under the same control as, such PARTY. Nothing
                  contained in this AGREEMENT shall


                                      -25-
<PAGE>

                  restrict the right of the OPERATORS to subcontract or employ
                  such personnel or agents as they deem appropriate to fulfil
                  their obligations hereunder.


ARTICLE 28
TERM OF THIS AGREEMENT

         28.1     This AGREEMENT shall come into force in respect of each SCARAB
                  SYSTEM with effect from the OPERATIONAL DATE of each SCARAB
                  SYSTEM and subject to Article 21.2 shall terminate no sooner
                  than 31 March 1997. It shall continue thereafter unless any
                  PARTY serves at least one (1) years notice in writing to the
                  other PARTIES of its intention to withdraw from this
                  AGREEMENT. Such withdrawal shall not become effective until
                  the 31 March at least one (1) year following the date upon
                  which said notice is served and shall not in any case become
                  effective before 31 March 1997.

         28.2     As soon as practicable and in any event not more than three
                  (3) months after the serving of any such notice of withdrawal,
                  the other PARTIES will decide if this AGREEMENT should
                  continue in force without the withdrawing PARTY or if this
                  AGREEMENT will be terminated upon the effective date of such
                  withdrawal.

         28.3     In the event that the non-withdrawing PARTIES agree that this
                  AGREEMENT shall continue in force without the withdrawing
                  PARTY and prior to the effective date of such withdrawal, the
                  non-withdrawing PARTIES shall forthwith make appropriate
                  amendments to the Schedules to this AGREEMENT and it shall
                  continue to be effective as provided in Article 28.1. Should
                  such an agreement not be reached, the AGREEMENT shall
                  terminate upon the first effective date of any notice of
                  withdrawal served in accordance with Article 28.1.


ARTICLE 29
AGREEMENT BINDING ON SUCCESSORS

         29.      This AGREEMENT shall be binding an the PARTIES, their
                  respective successors, and permitted assigns.


ARTICLE 30
EXECUTION OF AGREEMENT

         30.      This AGREEMENT shall be executed in nine (9) counterparts in
                  the English language and nine (9) counterparts in the Spanish
                  language,, and each such


                                      -26-
<PAGE>

                  counterpart shall be an original, and such counterparts shall
                  together, as well as separately constitute one and the same
                  AGREEMENT. If any differences in interpretation should arise
                  between the English and Spanish language versions of this
                  AGREEMENT or any amendment hereof, the English language
                  version shall be decisive.

ARTICLE 31
 Testimonium

         31.      IN WITNESS WHEREOF the PARTIES hereto have severally
                  subscribed these presents or caused them to be subscribed in
                  their names and on their behalf by their duly authorised
                  respective officers.

                       AMERICAN TELEPHONE AND TELEGRAPH COMPANY


Date 1/29/90           By   /s/ Name of Signatory
                           -----------------------------------------------

                       TRANSPACIFIC COMMUNICATIONS, INCORPORATED


Date 1/29/90           By   /s/ Name of Signatory
                           -----------------------------------------------

                       BRITISH TELECOMMUNICATIONS plc.


Date 19/2/90           By   /s/ Name of Signatory
                           -----------------------------------------------

                       BT(MARINE) LTD.


Date 16 Feb, 1990      By   /s/ Name of Signatory
                           -----------------------------------------------

                       MINISTERE DES POSTES DES TELECOMMUNICATIONS
                       ET DE L'ESPACE.


Date 20 Feb, 1990      By   /s/ Name of Signatory
                           -----------------------------------------------



                                      -27-
<PAGE>

                       TELEFONICA DE ESPANA


Date 28/2/90           By   /s/ Name of Signatory
                           -----------------------------------------------


                       TELECOMUNICATIONS MARINAS SA

Date 28/2/90           By   /s/ Name of Signatory
                           -----------------------------------------------


                       TELEGLOBE CANADA INC.


Date 2 Feb., 1990      By   /s/ Name of Signatory
                           -----------------------------------------------

                       TELEGLOBE MARINE INC.


Date Feb 1, 1990       By   /s/ Name of Signatory
                           -----------------------------------------------





                                     - 29 -