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                                                                    Exhibit 99.3






                                                                  EXECUTION COPY

                           DATED AS OF 3RD APRIL 2001



                      FLAG TELECOM GLOBAL NETWORKS LIMITED

                                       AND

                      FLAG TELECOM IRELAND NETWORK LIMITED

                                       AND

                    VERIZON GLOBAL SOLUTIONS HOLDINGS II LTD.





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

                         RE-SALE AND PURCHASE AGREEMENT

                     (DARK FIBRE AND CO-LOCATION FACILITIES)

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





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                         RE-SALE AND PURCHASE AGREEMENT

THIS AGREEMENT (the "AGREEMENT") is entered into as of 3rd April , 2001

BETWEEN:

(1)    FLAG TELECOM GLOBAL NETWORKS LIMITED ("FTGNL"), a company organised under
       the laws of Bermuda with its registered office at Cedar House, 41 Cedar
       Avenue, Hamilton HM12, Bermuda; and

       FLAG TELECOM IRELAND NETWORK LIMITED ("FTINL"), a company limited by
       shares organized under the laws of Ireland with its registered office
       located at 6 Fitzwilliam Square, Dublin 2, Ireland,

       (FTGNL and FTINL and its Affiliates referred to together as "FLAG"); and

(2)    VERIZON GLOBAL SOLUTIONS HOLDINGS II LTD., a company organized under the
       laws of Bermuda with its registered office located at 41 Cedar Avenue,
       Hamilton HM 12, Bermuda, acting on behalf of one or more of its
       Affiliates to be nominated hereunder.

WHEREAS:

A.     Pursuant to the KPNQ Agreement, KPNQ agreed to grant and FLAG agreed to
       acquire an IRU in relation to Dark Fibre and a licence in relation to
       Collocation Facilities (both as therein defined) for a term of [*] years
       with effect from 28 February 2001, subject to Clause 2.1 of the KPNQ
       Agreement.

B.     VGSL wishes to develop a European backbone network and to secure
       collocation space. To this end VGSL wishes to secure, by IRU, a portion
       of the Dark Fibre and a licence in relation to a portion of the
       Collocation Facilities to be acquired by FLAG under the KPNQ Agreement.






--------

* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions.



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C.     Clause 15.2 of the KPNQ Agreement permits FLAG to resell, assign, lease,
       transfer or otherwise dispose of any of its rights, title or interest
       thereunder, but not its obligations, to any third party.

D.     FLAG intends to exercise its rights under Clause 15.2 of the KPNQ
       Agreement for the benefit of VGSL by the re-sale of certain portions of
       the Dark Fibre and Collocation Facilities and an assignment of the rights
       relating thereto so as to give VGSL the same or equal rights to those
       which FLAG acquired from KPNQ and to enable VGSL to deal directly with
       KPNQ.

In consideration of the premises recited above and of the mutual promises and
undertakings set forth in this Agreement, and intending to be legally bound, the
Parties hereby agree as follows:

1.     DEFINITIONS AND INTERPRETATION

       1.1    In this Agreement, the following words and phrases shall have the
              following meanings ascribed to them unless the context otherwise
              requires:

              "ADDITIONAL ASSETS"  Has the meaning given to it in Section 4.3;

              "AFFILIATE"          Means any subsidiary or holding company
                                   of a Party or any other subsidiary of a
                                   holding company of a Party (and the terms
                                   "subsidiary" and "holding company" have the
                                   meanings ascribed to them in sections 736,
                                   736A and 736B of the Companies Act 1985, save
                                   that in each case such definition shall
                                   include foreign-registered companies);

              "BUSINESS DAY"       Means any day other than a Saturday,
                                   a Sunday or a day on which banks in the City
                                   of London are generally closed for inter-bank
                                   business;



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              "EURO"               Means the single currency of participating
                                   states of the European Communities adopted in
                                   accordance with the legislation of the
                                   European Union;

              "INITIAL ASSETS"     Has the meaning given to it in Section 4.3;

              "IRU"                Means an indefeasible right of use;

              "KPNQ"               Means KPNQwest Services UK Limited, a company
                                   registered in England with registered number
                                   3522705, whose registered office is at 10 Old
                                   Jewry, London EC2R 8DN;

              "KPNQ AGREEMENT"     Means the Dark Fibre IRU and Collocation
                                   Facilities Agreement dated as of 28 February,
                                   2001and made between (1) KPNQ and (2) FLAG, a
                                   true and complete copy of which is attached
                                   at Exhibit 2;

              "POWER COSTS"        Means those power costs payable in
                                   relation to the Resold Assets as set forth in
                                   Clause 6.2 and Clause 3 of Schedule 8 to the
                                   KPNQ Agreement;

              "RACK SPACE COSTS"   Means a non-recurring fee of USD[*] per Rack
                                   Space (as defined by the KPNQ Agreement)
                                   plus an annual fee of USD[*] per Rack Space
                                   thereafter payable in relation to the Resold
                                   Assets under Clause 6.2 of the KPNQ
                                   Agreement;




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* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions.



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              "RESOLD ASSETS"      Means the Dark Fibre and Collocation
                                   Facilities agreed to be re-sold by FLAG to
                                   VGSL pursuant to this Agreement as more
                                   particularly described in Section 4 and
                                   Exhibit 1;

              "SIDE LETTER"        Means the letter of even date from
                                   KPNQ to VGSL in the form attached as Exhibit
                                   4;

              "TAXES"              Means any tax, duty or other charges of
                                   whatever nature imposed by any taxing or
                                   government authority including, without
                                   limitation, VAT;

              "TRI-PARTITE         Means the Tripartite Agreement to be entered
               AGREEMENT"          into on the date hereof (in the form
                                   attached at Exhibit 3) between (1) FLAG,
                                   (2) KPNQ and (3) VGSL;

              "USD" or "US$"       Means the lawful currency for the
                                   time being of the United States of America;

              "VGSL"               Means one or more Affiliates of Verizon
                                   Global Solutions Holdings II Ltd., that shall
                                   be nominated by such company in respect to
                                   the rights and obligations hereunder;

              "VAT" or "VALUE"     Means value added tax as provided for in
                ADDED TAX          the Value Added Tax Act 1994 and any other
                                   tax of a similar fiscal nature whether
                                   imposed in the United Kingdom (instead of
                                   or in addition to value added tax) or
                                   elsewhere.

       1.2    In this Agreement, unless the context requires otherwise:

              (a)    any reference to a "PARTY" or "THE PARTIES" is to a party
                     or the parties (as the



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                     case may be) to this Agreement;

              (b)    any reference to "THIS AGREEMENT" includes the Exhibits,
                     which form part of this Agreement for all purposes; and

FTNIL AND FTGNL SHALL BE JOINTLY AND SEVERALLY LIABLE TO VGSL IN RESPECT OF
THEIR UNDERTAKINGS IN THIS AGREEMENT, AND THE ACTION OR SIGNATURE OR EITHER
SHALL BE DEEMED THE ACTION OR SIGNATURE OF BOTH.

2.     WARRANTIES

       2.1    Each of the Parties represents and warrants to the other that:

              (a)    it is a corporation duly organised, validly existing and in
                     good standing under the laws of its country or state of
                     incorporation as appropriate;

              (b)    it has the full right and authority to enter into, execute,
                     deliver and perform its obligations under this Agreement
                     and that this Agreement constitutes a legal, valid and
                     binding obligation on it; and

              (c)    the execution, delivery and performance of this Agreement
                     by it does not violate, conflict with or constitute a
                     breach of, its organisational documents, its contract with
                     a third party or any order, decree or judgement of any
                     court, tribunal or governmental authority binding on it.

       2.2    FLAG represents and warrants that at the date of this Agreement it
              has performed and complied with its obligations under the KPNQ
              Agreement.

3.     CONDITIONS AND OTHER DOCUMENTS

       3.1    The obligations of the Parties to each other under this Agreement
              are conditional upon:

              (a)    VGSL and FTINL entering into a Network Alliance Agreement
                     dated as of April 3, 2001 pursuant to which VGSL will
                     provide transport and related telecommunications services
                     to FTINL and its Affiliates to support the



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                     services that FTINL and its Affiliates offer to their
                     customers;

              (b)    FLAG, VGSL and KPNQ entering into the Tri-Partite Agreement
                     dated as of 3 April 2001 pursuant to which VGSL is granted
                     certain additional rights in relation to the Dark Fibre and
                     Collocation Facilities in order to minimise its risks in
                     connection with its use of the Resold Assets in the event
                     of the occurrence of certain events (as more particularly
                     described in section 3 of the Tri-partite Agreement); and

              (c)    KPNQ signing and delivering the Side Letter to VGSL;

              (d)    FLAG giving KPNQ written notice of the re-sale of the
                     Resold Assets in accordance with Clause 15.2 of the KPNQ
                     Agreement, and FLAG hereby undertake to satisfy this
                     condition within 7 Business Days of the date hereof.

       3.2    If any of the above-mentioned conditions are not satisfied, this
              Agreement shall (subject to any written agreement of the Parties
              to the contrary) become null and void and neither Party shall be
              entitled to make a claim against the other Party in connection
              with this Agreement save for any claim in respect of an antecedent
              breach.

4.     RE-SALE OF RIGHTS

       4.1    Subject to payment by VGSL pursuant to Section 5.1 hereof in
              relation to the Initial Assets, FLAG hereby re-sells to VGSL with
              full title guarantee and free of all claims, liens, equities,
              charges and encumbrances:

              (a)    the Dark Fibre segments to be identified by VGSL and set
                     forth in Exhibit 1, Part 1;

              (b)    the Collocation Facilities to be identified by VGSL and set
                     forth in Exhibit 1, Part 2; and

              (c)    all of its rights, title and interest under the KPNQ
                     Agreement in relation to



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                     the above save for the rights expressly excluded under
                     Section 4.2(a) below.

              In relation to any rights granted by KPNQ to FLAG which do not
              specifically relate to the Resold Assets and which are necessary
              or desirable for VGSL in relation to its acquisition or use of the
              Resold Assets, but are required by and retained by FLAG, the
              Parties agree that VGSL shall be a third party beneficiary of
              those rights and that FLAG will provide VGSL with reasonable
              assistance and cooperation in relation to their enforcement
              against KPNQ.

       4.2    The following are expressly excluded from any re-sale to VGSL
              pursuant to the terms of this Agreement:

              (a)    any option rights of FLAG pursuant to Clause 10.5 of the
                     KPNQ Agreement; and

              (b)    any obligations of FLAG under the KPNQ Agreement.

       4.3    In addition to the initial quantities of Dark Fibre and
              Collocation Facilities to be identified by VGSL and set out in
              Exhibit 1 (the "INITIAL ASSETS"), VGSL may, by prior written
              notice, require a re-sale of additional Dark Fibre and Collocation
              Facilities to the extent that FLAG has such assets available to it
              pursuant to the KPNQ Agreement (the "ADDITIONAL ASSETS"); and such
              re-sale shall, in each case, be effected by the execution by the
              Parties of a supplementary page to (and in the form comprising)
              Exhibit 1, setting out details of the Additional Assets.

       4.4    VGSL will conduct a due diligence exercise in relation to such
              Dark Fibre and Collocation Facilities it proposes to include
              within the Initial Assets, to ascertain that these comply with
              VGSL's technical and acceptance criteria. VGSL shall, by written
              notice to FLAG within 30 days of the date hereof, identify at
              least US$13 million of the Dark Fibre and Collocation Facilities
              to be included within the Initial Assets. No later than 30 June
              2001, VGSL shall, by written notice to FLAG identify the balance
              of Dark Fibre and Collocation Facilities to be included



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              in this Agreement. The Parties shall execute a duly completed form
              of Exhibit 1 detailing the same no later than 30 June 2001.



5.     PRICES; CHARGES; PAYMENT; AND TAXES

       5.1    The amount payable pursuant to Section 5.4(a) shall be US$[*]
              million. VGSL shall pay to FLAG the price applicable for any
              re-sale by FLAG to VGSL pursuant to this Agreement, which shall
              be:

              (a)    US$[*] per metre of Dark Fibre pairs resold to VGSL; and

              (b)    US$[*] per usable square metre of Collocation Facilities
                     resold to VGSL.

              The purchase of Additional Assets in excess of the US$[*] million
              specified in this Agreement shall be subject to additional VGSL
              approvals and execution of appropriate documentation.



       5.2    In addition to the sums referred to in Section 5.1, VGSL shall pay
              to FLAG:

              (a)    the sum of US$[*] per metre per year for operation and
                     maintenance expenses for the Dark Fibre and Collocation
                     Facilities assigned to VGSL;

              (b)    the Installation Costs; and

              (c)    the Power Costs.

       5.3    FLAG shall invoice ("INVOICE") VGSL with respect to each amount
              payable under this Section 5 (the "BILLED ENTITY") in accordance
              with the following provisions of this Section 5.

       5.4    FLAG shall Invoice the Billed Entity:


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* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions.


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              (a)    promptly after the date of this Agreement, for the
                     aggregate amount set forth in Exhibit 1;

              (b)    promptly after the re-sale of any Additional Assets
                     pursuant to Section 4.3; and

              (c)    promptly after receipt by FLAG of an invoice in respect of
                     any charges due in accordance with Section 5.2, together in
                     each case with a copy of each such invoice.

       5.5    Each Invoice shall be paid by the Billed Entity by wire transfer,
              made pursuant to the instructions set forth below, in immediately
              available funds, so that the payment is received by FLAG not later
              than the date (the "DUE DATE") which is 30 calendar days from the
              date of the Invoice; provided, however, that the Due Date for
              payment of the amount pursuant to Section 5.4(a) shall be the date
              on which FLAG makes payment of the initial payment under the
              Network Alliance Agreement. Any delinquent Invoice shall bear late
              payment fees at the rate of 1.5% per month (or such lower rate as
              may be required by law) from the Due Date until paid.

              Wire Transfer Instructions (subject to change by FLAG by not less
              than 10 Business Days prior notice in writing):

                     [*]

       5.6    FLAG shall invoice for all sums payable under this Agreement:

              (a)    in relation to those amounts payable pursuant to Sections
                     5.4(a) and 5.4(b) in US$ and all such invoices shall be
                     paid in US$; and

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* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions.


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              (b)    in relation to those amounts payable pursuant to Section
                     5.4(c) in the currency of the applicable KPNQ invoice
                     (which shall be either US$ or EUROs) and all such invoices
                     shall be paid in that currency. 6. TAXES

6.     TAXES

       6.1    Each Party shall be responsible for their own taxes on its net
              income arising under this Agreement.

       6.2    If VGSL is required by law to deduct or withhold any taxes from
              any amounts payable under this Agreement, such amounts shall be
              increased as necessary so that FLAG receives an amount equal to
              the sum it would have received had no such deduction or
              withholding been made, provided that VGSL shall make timely
              payment of, the amount withheld (before penalties attach thereto
              or interest accrues thereon) to the applicable taxing authority.
              FLAG will co-operate with VGSL in order to assist VGSL to obtain
              such relief from any withholdings or deductions required by law as
              is available under any applicable double taxation treaty.

       6.3    To the extent that any sum due hereunder is subject to Value Added
              Tax, VGSL and FLAG shall work together in good faith such that,
              prior to the issuance of any invoices, any invoicing arrangements
              are structured so as to minimise the impact of Value Added Tax for
              either Party, subject always to applicable law.

       6.4    So far as legally possible, FLAG will provide VGSL with such
              documentation in respect of VAT as VGSL requires for the purposes
              of recovering any amount in respect of VAT in any relevant
              jurisdiction.



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7.     OTHER COVENANTS

       7.1    FLAG undertakes to VGSL that it will pay the charges to be paid by
              it and perform the covenants and conditions on its part contained
              in the KPNQ Agreement in accordance with the terms thereof.

       7.2    FLAG shall forthwith disclose to VGSL in writing any matter or
              thing which arises or may arise or become known to it after the
              date of this Agreement which is likely to amount to a Condition
              (as defined in the Tri-Partite Agreement) or is otherwise material
              to be known by VGSL.

       7.3    FLAG will give or procure to be given to VGSL all such information
              and other assistance which VGSL may reasonably require from time
              to time in relation to the Resold Assets for the purpose of
              implementing and exercising its rights under this Agreement.

8.     TERM OF THE AGREEMENT

       8.1    This Agreement is effective and the Parties' obligations shall
              commence upon the date first set forth above.

       8.2    This Agreement grants VGSL an indefeasible right to use the Resold
              Assets and shall continue in effect for the term of the rights in
              relation to the Resold Assets under the KPNQ Agreement unless
              terminated earlier in accordance with Section 9.

9.     TERMINATION RIGHTS

       9.1    In the event of a breach of any material term or condition of this
              Agreement by a Party, the other Party may terminate this Agreement
              upon 60 days written notice, unless the breaching Party cures the
              breach during the 60 day period or, if such breach cannot be
              reasonably be cured within a 60 day period, if the breaching Party
              institutes good faith efforts to cure such breach during such 60
              day period and such breach is cured within 180 days.



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       9.2    This Agreement will terminate automatically as of the effective
              date of any election by VGSL pursuant to Sections 1 and 3 of the
              Tri-Partite Agreement. Such termination will be without further
              liability to either Party under the terms of this Agreement,
              except to the extent of any claims arising pursuant to the terms
              hereof prior to the date of termination.

10.    LIMITATION OF LIABILITY

       Each Party's liability in connection with this Agreement (whether based
       in contract, tort (including, without limitation, negligence),
       misrepresentation, warranty or any other legal or equitable grounds),
       shall in all cases be limited to direct damages suffered by the other
       Party, and the entire aggregate liability of each Party in connection
       with this Agreement, other than liability for failure to pay amounts due
       and owing hereunder, shall not exceed in any calendar year an amount
       equal to one-fifteenth of the aggregate price for the Resold Assets paid
       or payable at the date of any claim pursuant to this Section 10. In no
       event will either Party have any liability in connection with this
       Agreement (whether based in contract, tort (including, without
       limitation, negligence), misrepresentation, warranty or any other legal
       or equitable grounds) for, and each Party hereby waives and releases any
       claims it might otherwise have to be compensated by the other in
       connection with this Agreement or otherwise for, any: (a) consequential,
       special, incidental or indirect damages (such as, without limitation,
       loss of revenue, loss of profit, loss of data, loss of use, loss of
       goodwill, loss of savings, interruption of business or claims of third
       parties), even if such first Party has been advised of the possibility of
       such losses or damages; or (b) punitive or exemplary damages.

11.    RELATIONSHIP OF THE PARTIES

       The Parties acknowledge and agree that the relationship between them is
       solely that of independent contractors, and nothing herein shall be
       deemed to constitute a partnership between the Parties nor the
       appointment of one of the Parties as agent for the other. Neither Party,
       nor their respective employees, agents or representatives, has any right,




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       power or authority to act or create any obligation, express or implied,
       on behalf of the other Party.

12.    CONFIDENTIALITY

       12.1   Each Party agrees that all information furnished to it by the
              other Party (or its Affiliates), or to which it has access under
              this Agreement, shall be deemed the confidential and proprietary
              information or trade secrets (collectively referred to as
              "PROPRIETARY INFORMATION") of the Disclosing Party and shall
              remain the sole and exclusive property of the Disclosing Party
              (the Party furnishing the Proprietary Information referred to as
              the "DISCLOSING PARTY" and the other Party referred to as the
              "RECEIVING PARTY"). Neither Party shall use the Proprietary
              Information of the other Party for any purpose other than the
              performance of its obligations under this Agreement. Each Party
              shall treat the Proprietary Information of the other Party, and
              the contents of this Agreement, in a confidential manner and shall
              not, without the written consent of the Disclosing Party, directly
              or indirectly disclose the same to anyone other than its employees
              and Affiliates, and its professional advisors, consultants,
              vendors and contractors, who need to know such information for the
              purposes of this Agreement and who agree to be bound by the terms
              no less stringent than those of this Section 12.

       12.2   The confidentiality of obligations of this Section 12 do not apply
              to any portion of the Proprietary Information which (i) is or
              becomes public knowledge through no fault of the Receiving Party;
              (ii) is in the lawful possession of the Receiving Party prior to
              disclosure of the Proprietary Information to the Receiving Party
              by the Disclosing Party (as confirmed by the Receiving Party's
              records); or (iii) is disclosed to the Receiving Party without
              restriction on disclosure by a person who has the lawful right to
              disclose the information. If the Receiving Party is requested or
              legally compelled by any court, agency, authority, department,
              regulatory body or other instrumentality of any government or
              country to disclose any of the Proprietary Information of the
              Disclosing Party or any of the contents



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              of this Agreement, the Receiving Party agrees that it will provide
              the Disclosing Party with prompt written notice of such requests
              so that the Disclosing Party has the opportunity to pursue its
              legal and equitable remedies regarding potential disclosure, and
              the Receiving Party will seek confidential treatment for any such
              information which it is ultimately required to disclose.

       12.3   Each Party acknowledges that its breach or threatened breach of
              this Section 12 may cause the Disclosing Party irreparable harm
              which would not be adequately compensated by monetary damages.
              Accordingly, in the event of any such breach or threatened breach,
              the Receiving Party agrees that equitable relief, including
              temporary or permanent injunctions, is an available remedy in
              addition to any legal remedies to which the Disclosing Party may
              be entitled.

       12.4   Neither Party may use the name, logo, trade name, service marks,
              trade marks, or printed materials of the other Party, in any
              promotional or advertising material, statement, document, press
              release or broadcast without the prior written consent of the
              other Party, which consent may be granted or withheld at the other
              Party's sole discretion.

       12.5   Each Party shall ensure that each of its managers and executive
              employees is legally bound by confidentiality obligations in
              connection with his or her employment by such Party.

13.    MISCELLANEOUS

       13.1   PUBLICITY. Neither Party will make any public announcement of this
              Agreement, without the prior consent of the other Party, which
              consent shall not be unreasonably withheld or delayed; provided
              that a Party may make such announcement without such prior consent
              if such an announcement is required by applicable laws or
              regulations or the rules of any applicable stock exchange and it
              is impracticable to obtain such prior consent.



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       13.2   WAIVERS. No waiver of any term or condition of this Agreement
              shall be enforceable unless it is in writing and signed by the
              Party against whom it is sought to be charged. No failure or delay
              by either Party in exercising any right, power or remedy will
              operate as a waiver of any such right, power or remedy, unless
              otherwise provided herein. The waiver by either Party of any of
              the covenants, conditions or agreements to be performed by the
              other or any breach thereof shall not operate or be construed as a
              waiver of any subsequent breach of any such covenant, condition or
              agreement.

       13.3   ASSIGNMENT. Neither Party may assign or transfer its rights or
              obligations under this Agreement without the other Party's written
              consent. Any assignment or transfer without the required consent
              is void. The foregoing notwithstanding, either Party may assign
              this Agreement or any of its rights or obligations hereunder to an
              Affiliate without the other Party's consent save that, if any such
              assignee ceases to be an Affiliate of such Party at any time
              during the term of this Agreement, such assignee shall immediately
              reassign its rights and obligations under this Agreement to the
              assigning Party.

       13.4   INTEGRATION; CONSISTENCY. This Agreement and all Exhibits, and
              other attachments attached hereto (which Exhibits and other
              attachments are hereby incorporated by reference), represent the
              entire agreement between the Parties with respect to the subject
              matter hereof and supersede and merge all prior agreements,
              promises, understandings, statements, representations, warranties,
              indemnities and inducements to the making of this Agreement relied
              upon by either Party, whether written or oral. In the event of any
              inconsistency between the terms of this Agreement and the terms of
              any Exhibits, schedules and other attachments incorporated herein,
              the terms of such Exhibits, schedules and other attachments shall
              prevail.

       13.5   CONSTRUCTION. The language used in this Agreement is deemed the
              language chosen by the Parties to express their mutual intent. No
              rule of strict construction



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              shall be applied against either Party. Article and Section
              headings are used in this Agreement for purposes of convenience
              only, and shall not be deemed a part of this Agreement nor used to
              interpret or construe the provisions hereof. Any reference herein
              to any article, section, subsection, paragraph, subparagraph,
              exhibit, schedule or attachment shall be deemed a reference to
              such portion of this Agreement unless otherwise specified.

       13.6   NOTICES. All notices, including but not limited to, demands,
              requests and other communications required or permitted hereunder
              (not including Invoices) shall be in writing and shall be deemed
              given: (i) when delivered in person, (ii) 24 hours after deposit
              with an overnight delivery service for next day delivery, (iii)
              the same day when sent by facsimile transmission during normal
              business hours, receipt confirmed by sender's equipment, or (iv)
              seven Business Days after deposit in the official mail service of
              the sender's jurisdiction, first class postage prepaid, registered
              or certified mail, return receipt requested, and addressed to the
              recipient Party at the address set forth below:

              If to FLAG:
                                          FLAG Telecom Global Network Limited
                                          Suite 770
                                          48 Par-la-Ville Road
                                          Hamilton HM11
                                          Bermuda

                                          Attn: Company Secretary
                                          Facsimile:

                                          FLAG Telecom Ireland Network Limited
                                          6 Fitzwilliam Square
                                          Dublin 2
                                          Ireland

                                          Attn: Company Secretary
                                          Facsimile:



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                  with a copy to:         FLAG Telecom Limited
                                          9 South Street
                                          London W1K 2XA

                                          Attn: General Counsel
                                          Facsimile #: +44-20-7317-0898

                  If to VGSL:             Verizon Global Solutions Inc.
                                          110 Allen Road
                                          Liberty Corner, New Jersey 07938

                                          Attn: Group Vice President of Carrier
                                                Sales
                                          Facsimile #: +1-908-647-3108

                  with a copy to:     General Counsel International
                                          1095 Avenue of the Americas,
                                          38th Floor
                                          New York, New York 10036

                                          Facsimile #: +1-212-764-2739

       13.7   COUNTERPARTS. This Agreement may be executed in several
              counterparts, each of which shall constitute an original, but all
              of which shall constitute one and the same instrument.

       13.8   NO THIRD PARTY BENEFICIARIES. The provisions of this Agreement and
              the rights and obligations created hereunder are intended for the
              sole benefit of VGSL and FLAG, and do not create any right, claim
              or benefit on the part of any other person not a Party to this
              Agreement, and, accordingly, the provisions of the Contracts
              (Rights of Third Parties) Act 1999 are hereby excluded.

       13.9   SURVIVAL. Any obligations of the Parties relating to monies owed,
              as well as those provisions relating to confidentiality,
              limitations on liability, indemnification and antecedent breach of
              the terms hereof, shall survive termination of this Agreement.

       13.10  SEVERABILITY. The illegality or unenforceability of any provision
              of this Agreement does not affect the legality or enforceability
              of any other provision or portion. If any provision or portion of
              this Agreement is deemed illegal or



                                       -17-
<Page>

              unenforceable for any reason, there shall be deemed to be made
              such minimum change in such provision or portion as is necessary
              to make it valid and enforceable as so modified.

       13.11  CUMULATIVE RIGHTS AND REMEDIES. Except as may otherwise be
              provided herein, the assertion by a Party of any right or the
              obtaining of any remedy hereunder shall not preclude such Party
              from asserting or obtaining any other right or remedy, at law or
              in equity, hereunder.

       13.12  AMENDMENTS. Any amendments or modifications to this Agreement must
              be in writing and signed by a Director or Vice President (or
              higher level officer) of each of the Parties.

       13.13  AUTHORITY. By its signature below, each Party acknowledges and
              agrees that sufficient allowance has been made for review of this
              Agreement by respective counsel and that each Party has been
              advised by its legal counsel as to its legal rights, duties and
              obligations under this Agreement.

       13.14  FURTHER ASSURANCE. Each Party shall, to the extent that it is
              reasonably able to do so, and shall use all reasonable endeavours
              to procure that any Affiliate shall, at the cost of the relevant
              party execute all documents and do all acts and things as may be
              required for the purpose of giving full effect to all the
              provisions of this Agreement.

       13.15  COSTS. Save as otherwise provided in this Agreement, the Parties
              shall pay their own costs and expenses in relation to the
              preparation, execution and carrying into effect of this Agreement.

14.    DISPUTE RESOLUTION AND GOVERNING LAW

       14.1   GOVERNING LAW. This Agreement and all matters relating to or
              arising in connection with it (including but not limited to any
              question regarding its



                                       -18-
<Page>

              construction, existence, validity or termination) will be
              construed and enforced in accordance with the law of England.

       14.2   DISPUTE RESOLUTION. All disputes, controversies or differences
              arising out of this Agreement will be submitted by the Parties to
              a panel composed of one principal appointed by each of the
              Parties. This panel will meet for three days, or for such longer
              period as they may agree, in order to resolve the dispute,
              controversy or difference. All information exchanged by the
              principals in resolving the dispute, controversy, or difference
              may be used by the Parties only for the purpose of resolving the
              dispute, controversy, or difference and for no other purpose
              except as may be agreed by the Parties in writing. If the
              principals resolve the dispute, the terms of the resolution will
              be set forth in a written settlement agreement that will be signed
              by the Parties. If the dispute, difference, or controversy is not
              resolved by the principals after three days of meetings, or for
              such longer period as the principals may agree, then the Parties
              may pursue formal arbitration as set forth in Section 14.3 below.
              Each Party will bear its own costs in connection with this
              informal dispute resolution process except as the Parties
              otherwise agree in writing. Nothing in the foregoing shall be
              deemed to limit any rights or remedies available to either Party
              at law or in equity.

       14.3   ARBITRATION. In the event that a dispute remains unsettled after
              the procedures set forth in Section 14.2 above have been
              exhausted, either Party may notify the other in writing that the
              dispute is being submitted to arbitration in accordance with and
              subject to the Rules of Arbitration of the International Chamber
              of Commerce and finally settled by three arbitrators appointed in
              accordance with such rules, unless the Parties to the arbitration
              agree upon a single arbitrator under such rules. The place of
              arbitration shall be London, U.K. The arbitrators shall decide any
              such dispute strictly in accordance with the governing law
              specified in Section 14.1. Any decision or award of the arbitral
              tribunal shall (save in the event of fraud or manifest error) be
              final and binding upon the Parties, and judgment on the decision
              or award may be entered in any court having jurisdiction thereof
              or



                                       -19-
<Page>

              having jurisdiction over either of the Parties or any of their
              assets, and the Parties hereby consent to the jurisdiction of any
              court in a proceeding to enforce such decision or award. The
              arbitrator(s) shall have the right to award costs, including legal
              fees.





                                       -20-
<Page>

      IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.



FLAG TELECOM GLOBAL
NETWORKS LIMITED


By:
      --------------------------------------------------
      Name:
      Title:

FLAG TELECOM IRELAND NETWORK
LIMITED


By:
      --------------------------------------------------
      Name:
      Title:

VERIZON GLOBAL SOLUTIONS
HOLDINGS II LTD.


By:
      --------------------------------------------------
      Name:
      Title:





                                       -21-
<Page>


                                    EXHIBIT 1

                    [TO BE FINALISED PURSUANT TO SECTION 4.4]

                               PART 1 - DARK FIBRE

<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------------
                     ROUTE                                 KILOMETERS                US$ PER         ROUTE TOTAL
                                                                                    KILOMETER           (US$)
----------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                  <C>                  <C>
1.
----------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

----------------------------------------------------------------------------------------------------------------------
2.
----------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

----------------------------------------------------------------------------------------------------------------------
3.
----------------------------------------------------------------------------------------------------------------------

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

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

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

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

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




                                       -22-
<Page>

<Caption>
----------------------------------------------------------------------------------------------------------------------
                     ROUTE                                 KILOMETERS                US$ PER         ROUTE TOTAL
                                                                                    KILOMETER           (US$)
----------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                  <C>                  <C>
4.
----------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

----------------------------------------------------------------------------------------------------------------------
5.
----------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

----------------------------------------------------------------------------------------------------------------------
6.
----------------------------------------------------------------------------------------------------------------------

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

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

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

----------------------------------------------------------------------------------------------------------------------
                     TOTAL
----------------------------------------------------------------------------------------------------------------------
</Table>


                         PART 2 - COLLOCATION FACILITIES

<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------------
CITY              ADDRESS                 m2 REQUIRED        m2 ON REQUEST          US$ PER SQUARE   TOTAL US$ FOR
                                                                                    METRE            m2 REQUIRED
----------------------------------------------------------------------------------------------------------------------
<S>              <C>                    <C>                 <C>                    <C>              <C>
                                                                                          [*]
----------------------------------------------------------------------------------------------------------------------
                                                                                          [*]
----------------------------------------------------------------------------------------------------------------------
                                                                                          [*]
----------------------------------------------------------------------------------------------------------------------
                 TOTAL                                                                     -
----------------------------------------------------------------------------------------------------------------------
</Table>

       NOTE:

       FLAG will provide VGSL with reasonable prior notice and a right of first
       refusal to take up the option space ("(m2) on Request" in the above
       table):

              a)     when the available contiguous space in a co-location site
                     would otherwise be reduced below the amount of such
                     optional space; and



----------------
* Confidential treatment has been requested from the Securities and Exchange
Commission. Omitted portions.

                                       -23-
<Page>

              b)     when the available non-contiguous space within a
                     Collocation Facilities site would otherwise be reduced
                     below the amount of such optional space.





                                       -24-
<Page>

                                    EXHIBIT 2

                                 KPNQ AGREEMENT






                                       -25-
<Page>


                                    EXHIBIT 3

                              TRI-PARTITE AGREEMENT







                                       -26-
<Page>



                                    EXHIBIT 4

                                   SIDE LETTER









                                       -27-