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                                                                    Exhibit 99.1

                                                                  EXECUTION COPY


                              COLLOCATION AGREEMENT


This COLLOCATION AGREEMENT ("AGREEMENT") dated as of 4 April 2001, with effect
from 19 February, 2001 is between FLAG ATLANTIC UK LIMITED ("FA-UK"), a company
organized under the laws of England and having its principal office at 9, South
Street, London W1K 2XA, United Kingdom, FLAG ATLANTIC FRANCE SARL ("FA-France"),
a company organized under the laws of France and having its principal office at
25, rue Greffulhe, 92300 Levallois Perret, France, and VERIZON GLOBAL SOLUTIONS
U.K. LTD., a corporation organized under the laws of England, and having its
principal office at Becket House 1 Lambeth Palace Road, London SE1 7EU, United
Kingdom and VERIZON GLOBAL SOLUTIONS FRANCE SAS, a corporation organized under
the laws of France, and having its principal office at 10 Place Vendome, 75001
Paris, France (FA-UK and FA-France are collectively referred to herein as "FLAG
Atlantic"; Verizon Global Solutions U.K. Ltd. and Verizon Global Solutions
France SAS are collectively referred to herein as VGSI; FLAG Atlantic and VGSI
are each a "Party" and collectively the "Parties").

                                    RECITALS

      WHEREAS, on 7 October 1999 NYNEX Long Distance d/b/a Bell Atlantic Long
Distance Company ("BA") and FLAG Atlantic executed a capacity right of use
agreement ("CRUA") whereby BA would acquire certain capacity on the FLAG
Atlantic-1 submarine cable system (the "System") under construction by FLAG
Atlantic and/or its Affiliates;

      WHEREAS, Bell Atlantic Long Distance will assign its rights, duties and
obligations under the CRUA to VGSI as permitted in clause 13.1 of the CRUA;

      WHEREAS, FA-UK and FA-France and/or their Affiliates own, lease or
otherwise control certain POPs which are suitable for the placement and
operation of telecommunications equipment; and

      WHEREAS, VGSI and/or its Affiliates desire to access the POPs in one or
more locations for the purpose of placing therein VGSI Equipment on the terms
and conditions set forth herein.

      NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which the Parties hereby
acknowledge, the Parties hereto agree as follows:


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1.      DEFINITIONS

        1.1     The following terms shall have the meanings set forth in this
                clause 1 when used in this Agreement, unless explicitly stated
                to the contrary. Capitalized terms not otherwise defined herein
                shall have the meaning set forth in the CRUA:

                1.1.1   "Affiliate" shall mean any other entity that controls,
                        is controlled by or is under common control with an
                        entity.

                1.1.2   "Collocation Fees" shall have the meaning set forth in
                        clause 4.1 hereto.

                1.1.3   "Collocation Schedule" shall mean the portion of
                        Schedule 2 pertaining to an individual POP.

                1.1.4   "Commencement Date" shall mean 19 February 2001 for the
                        London Hosting Centre and the date the Equipment Space
                        is made available to VGSI for the Paris POP.

                1.1.5   "Equipment Space" shall mean that area of space to be
                        used for the installation of VGSI Equipment within any
                        POP identified on Schedule 2, to be determined as set
                        forth in clause 5.1.

                1.1.6   "FLAG Atlantic Services" shall have the meaning set
                        forth in clause 11.1 hereof.

                1.1.7   "Force Majeure Event" means fire, strike, embargo, any
                        requirement imposed by government regulation, civil or
                        military authorities, act of God or by the public enemy,
                        or other cause beyond a Party's reasonable control.
                        Default of any of FLAG Atlantic's subcontractors or
                        suppliers shall not constitute a Force Majeure Event
                        unless such default arises out of causes beyond the
                        reasonable control of both FLAG Atlantic and its
                        subcontractors or suppliers and without the fault or
                        negligence of either of them.

                1.1.8   "License" shall have the meaning set forth in clause 2.1
                        hereof.

                1.1.9   "Lien" shall mean any lien, mortgage, encumbrance,
                        pledge, lease, security interest or claim of any kind.

                1.1.10  "Network Operations Centers" shall mean those FLAG
                        Atlantic operational centers assigned to the monitoring
                        and network management of the System.

                1.1.11  "Other Equipment" shall mean any equipment or material
                        located at any POP other than VGSI Equipment.



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                1.1.12  "Personnel" shall mean officers, employees, agents,
                        contractors, licensees, invitees and vendors of a person
                        or entity and its Affiliates.

                1.1.13  "POP" shall mean a point of presence and in this
                        Agreement refers specifically to the collocation
                        facilities specified in clause 5.1.

                1.1.14  "[*] Costs" shall mean all [*] costs payable by VGSI at
                        the relevant POP.

                1.1.15  "Service Request" shall have the meaning set forth in
                        clause 6.3 hereof.

                1.1.16  "Term" shall have the meaning set forth in clause 3.1
                        hereof.

                1.1.17  "Underlying Lease" shall mean any underlying agreement
                        between FLAG Atlantic (or any Affiliate of FLAG
                        Atlantic) and the owner, lessor or licensor of the
                        property in which a POP is located.

                1.1.18  "VGSI Equipment" shall mean VGSI-provided equipment, to
                        be installed, maintained and operated in the Equipment
                        Space, as generally described in Schedule 2.

                1.1.19  "VGSI Specifications" shall mean detailed specifications
                        and instructions regarding the proper method of
                        installation, maintenance and/or operation of VGSI
                        Equipment.

2.      LICENSE AND PERMISSIBLE USE

        2.1     Subject to the terms and conditions contained herein, FLAG
                Atlantic hereby grants to VGSI a license to install, operate,
                repair, maintain and/or replace the VGSI Equipment in the
                Equipment Space (the "License") for the purposes of connecting
                to, deriving capacity from and otherwise utilizing the System
                and/or the network of FLAG Atlantic or its affiliates or VGSI or
                its Affiliates and/or the networks of other operators or service
                providers. The License granted herein shall be interpreted for
                all purposes as comprising two distinct sets of rights and
                obligations:

                (i)     one License with respect to the Equipment Space located
                        in the United Kingdom, between Verizon Global Solutions
                        UK Ltd and FA-UK (?) Ltd and

                (ii)    one License with respect to the Equipment Space located
                        in France, between Verizon Global Solutions France SAS
                        and FA-France.

                If the Parties deem it appropriate they shall restate this
                License as two separate Licenses. FA-UK and FA-France each
                hereby reserves all rights not specifically



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                granted to VGSI, and agrees to use reasonable commercial efforts
                to secure and maintain any authorizations, licenses, permits and
                approvals required pursuant to any Underlying Lease or otherwise
                required in connection with its performance of this Agreement (a
                "Required Authorization"). Notwithstanding anything to the
                contrary herein, if FA-UK or FA-France allows any Required
                Authorization to lapse, or fails to timely secure a Required
                Authorization, during the term hereof, VGSI may, at its own
                reasonable expense, secure such Required Authorization, to the
                extent of its interests in the Equipment Space and FLAG Atlantic
                Services.

        2.2     This document shall comprise a complete and binding agreement
                between the respective Parties set forth in clause 2.1 above
                with respect to each POP immediately upon delivery by FLAG
                Atlantic or its Affiliate to VGSI of a Collocation Schedule
                pertaining to the technical specifications and contact
                information only for an individual POP which FLAG Atlantic or
                its Affiliate owns, or in which FLAG Atlantic or its Affiliate
                has a leasehold interest, or which FLAG Atlantic or its
                Affiliate has a right to occupy. For the avoidance of doubt, the
                Collocation Schedule shall not contain any commercial term that
                will amend the terms of this Agreement except to the extent
                permitted pursuant to clause 2.3. Each Collocation Schedule, and
                any amendments thereto, shall incorporate the terms and
                conditions of this Agreement, provided, however, that:

                2.2.1   FA-UK and FA-France each represents and warrants that it
                        has sufficient right to grant the relevant License and
                        perform its obligations under this Agreement without
                        further formalities;

                2.2.2   the Collocation Schedule shall set forth any conflicting
                        term or provision for the POP in question; and

                2.2.3   in the event of any conflict or inconsistency between
                        this Agreement and the terms set forth in a Collocation
                        Schedule, the terms of the Collocation Schedule shall in
                        all cases prevail.

        2.3     The terms of this Agreement relating to any POP in France or the
                UK shall be modified (or the terms shall be deemed modified) if,
                and to the extent, necessary to comply with local law or public
                policy or to ensure enforceability under French or English law
                or regulations, if and as applicable. The Parties shall
                translate such terms into French, if necessary, provided,
                however, that the English version shall prevail unless French
                law requires otherwise.

        2.4     FLAG Atlantic shall deliver to VGSI a Collocation Schedule
                substantially in the form of and containing the information set
                forth in Schedule 2 hereto. Upon delivery pursuant to clause 19,
                such Collocation Schedule shall be deemed to be part of Schedule
                2.



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        2.5     VGSI shall be permitted to sublicense the License to its own
                customers, provided that each such customer agrees to comply
                with the terms and conditions relating to such Equipment Space
                set forth in this Agreement and in the relevant Collocation
                Schedule.

        2.6     VGSI acknowledges that VGSI has been granted the License to
                occupy the Equipment Space solely for the purposes set forth
                herein, and that VGSI shall not use the Equipment Space, or
                allow access thereto or use thereof, except in conformity with
                the terms of the License and of this Agreement. Without limiting
                the generality of the foregoing, VGSI shall not interfere and
                shall ensure that its Personnel and Personnel of the permitted
                users of the Equipment Space shall not interfere with any Other
                Equipment. FLAG Atlantic shall not interfere, and shall ensure
                that its Personnel and Personnel of the permitted users of the
                POP shall not interfere, with any VGSI Equipment, except in the
                event of an emergency.

        2.7     VGSI will have the right, subject to approval of the relevant
                landlord, to install at its own cost its own permanent -48V DC
                power plant with sufficient batteries to handle a minimum of 4
                hours of reserve for all VGSI Equipment in each POP. VGSI will
                work with both FLAG Atlantic and the relevant landlord to obtain
                the approvals (including with respect to the applicable
                floor-loading limits) required for the structural and building
                issues associated with the installation of the power plant(s)
                referred to in this clause 2.7. The intent is to migrate from
                FLAG Atlantic provided Benning or equivalent Remote Power Units
                ("RPU") towards a dedicated VGSI owned and operated -48V DC
                power plant.

3.      TERM OF LICENSE

        3.1     The term (the "Term") of the License for the London Hosting
                Centre shall commence on 19 February 2001 and shall terminate on
                [*]. The Term of the License for the Paris POP shall commence on
                the date the Equipment Space in the Paris POP is made available
                to VGSI and shall terminate on the [*].

        3.2     Notwithstanding clause 3.1 above, VGSI shall be able to
                terminate this Agreement at any time after [*] by giving FLAG
                Atlantic 60 days' notice in writing.

4.      COLLOCATION FEES AND OTHER CHARGES

        VGSI shall pay to FLAG Atlantic the following charges starting from the
        Commencement Date for each of the POPs:

        4.1     COLLOCATION FEES - The collocation fees ("Collocation Fees")
                shall be VGSI's pro-rata share of the actual, documented costs
                incurred by FLAG Atlantic to provide Equipment Space plus a [*]
                mark-up. VGSI's pro-rata share shall be calculated as


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                the ratio of VGSI's Equipment Space to the total usable space in
                each POP. In London, the total usable space at the date of this
                Agreement is [*] square meters; in the Paris POP the total
                usable space is [*] square meters. Collocation Fees include [*],
                (as shown in Schedule 1 and described in clause 4.2 below) and
                [*] Fees ("[*] Fees"). The [*] Fees shall include all [*] Costs
                (i.e., the cost of [*] by VGSI and VGSI's [*] share ([*] share
                based on VGSI's share of the [*]) of [*] Costs) and other costs
                identified (for budgetary purposes only) in Schedule 1 plus a
                [*] mark-up. [*] Fees shall be payable quarterly in arrears
                against invoices.

        4.2     [*] FEES. VGSI shall pay the [*] of US$[*] per square meter for
                VGSI's Equipment Space in the London Hosting Centre and US$[*]
                per square meter for VGSI's Equipment Space in the Paris POP.
                These charges are for recovery of FLAG Atlantic's [*] (including
                [*] costs) allocable to the VGSI Equipment Space. [*] fees shall
                be payable in advance against invoice.

                VGSI is not required to prepay any [*] costs included in FLAG
                Atlantic's estimated costs budget. However, if FLAG actually
                incurs [*] costs, VGSI will pay its pro-rata share of those [*]
                costs, based on FLAG Atlantic's invoice.

        4.3     The schedule of [*] assumes VGSI's use of the Equipment Space
                for a term of no less than [*].

5.      VGSI EQUIPMENT SPACE

        5.1     [*] SPACE.


                5.1.1   VGSI shall [*] be allocated space ("[*] Space") as
                        follows:

<Table>
<Caption>
                         ------------------------------- -----------------------------------------
                         FACILITY                        SPACE
                         ------------------------------- -----------------------------------------

                        <S>                             <C>
                         London Hosting Centre           [*]m2 in the 6th floor, [*]m2 [*] on
                         6 Greenwich View Place          the 6th floor, and [*]m2 on the 7th
                         Mill Harbour                    floor.
                         London

                         ------------------------------- -----------------------------------------
                         Paris POP                       [*]m2 in room 8, [*]m2 in an
                         114 rue Ambroise                alternative room
                         Croizat
                         St Denis
                         Paris
                         ------------------------------- -----------------------------------------
</Table>



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                5.1.2   VGSI shall receive [*]m2 of [*] Space at the Paris POP
                        by 3 April 2001. FLAG Atlantic shall make commercially
                        reasonable efforts to make available to VGSI the [*]
                        [*]m2 ("[*] Space"), as space [*] at the Paris POP by 1
                        June 2001. If FLAG Atlantic is unable to procure [*]
                        space to VGSI pursuant to this clause, VGSI will accept
                        [*] space of the same size.

                5.1.3   The charges ([*] fees and [*] Fees) for the [*] Space in
                        the Paris POP shall be prorated with reference to the
                        amount of space actually available to VGSI starting on
                        the Commencement Date for the Paris POP until the [*]
                        Space is made available. On delivery of the [*] Space,
                        VGSI will pay the balance of the [*] Fees and shall
                        begin paying the [*] Fees for the [*] Space.

        5.2     ADDITIONAL SPACE. VGSI shall have [*] Space in each of the
                London Hosting Centre and the Paris POP (the "[*] Space"), to be
                paid as follows:

                5.2.1   LONDON HOSTING CENTRE. The charge for [*] Space per
                        square meter shall be [*] plus [*] Fees. The Term of the
                        [*] Space for the London Hosting Centre shall expire on
                        expiration of the Term for the [*] Space for the London
                        Hosting Centre.

                5.2.2   PARIS POP. The charge for the [*] Space per square meter
                        shall be [*] plus [*] Fees. The Term of the [*] Space
                        for the Paris POP shall expire on expiration of the Term
                        for the [*] Space for the Paris POP.

                5.2.3   All additional fit out costs incurred by FLAG Atlantic
                        and agreed with VGSI in advance in providing [*] Space
                        will be borne by VGSI and paid in advance.

                5.2.4   VGSI is not required to pre-pay contingency costs
                        estimated in the FLAG Atlantic budget for the [*] Space.
                        However, should FLAG Atlantic incur justifiable
                        contingency costs in providing the [*] Space, VGSI shall
                        pay [*] based on FLAG Atlantic's documented invoice.
                        VGSI's [*] shall be based on VGSI's [*] in the London
                        Hosting Centre and the Paris POP.

6.      ACCESS TO POPS; INSTALLATION AND MAINTENANCE OF EQUIPMENT

        6.1     FLAG Atlantic acknowledges that VGSI and its duly authorized and
                qualified Personnel and the duly authorized and qualified
                Personnel of its permitted users of the Equipment Space shall
                have access, for the purposes of this Agreement, to the
                Equipment Space twenty-four (24) hours per day, seven days a
                week and to all data and information available to FLAG Atlantic
                relating to the performance of its obligations under this
                Agreement, such as maintenance logs. Access to the



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                Equipment Space by VGSI shall be contingent upon the observance
                of FLAG Atlantic's safety, security and access procedures which
                shall be promulgated in accordance with the best industry
                practices and provided to VGSI in paper format (by notice
                pursuant to clause 19) and in electronic copy (by e-mail, to
                such address as VGSI may specify from time to time). Such
                security and access procedures shall set out methods of
                procedure for work performed in each POP. Access to POPs for
                maintenance activities by VGSI and its authorized contractors
                will be unescorted, provided, however, that VGSI shall provide
                reasonable advance notice to the Network Operation Center prior
                to arrival and notify the relevant Network Operations Center
                upon arrival. VGSI's contractors installing VGSI Equipment and
                visitors will be escorted by VGSI or by FLAG Atlantic as
                appropriate. The cost of escort by FLAG Atlantic shall be borne
                by VGSI. The Parties agree that only suitably qualified staff
                shall be permitted to work on equipment in the POPs.

        6.2     The VGSI Equipment shall be installed, maintained and repaired
                only by (i) VGSI or VGSI's employees or contractors, or (ii)
                FLAG Atlantic, upon VGSI's request and subject to acceptance by
                FLAG Atlantic pursuant to clause 6.3 or 6.4 hereof. However, any
                installation of cable other than cable affecting solely VGSI
                Equipment at the POP by or on behalf of VGSI shall be under the
                direct supervision of FLAG Atlantic.

        6.3     If VGSI desires FLAG Atlantic to provide services to VGSI
                Equipment, such as installation, first line maintenance, shifts
                and changes, FLAG Atlantic will perform such services, if
                commercially feasible, upon the acceptance by FLAG Atlantic of a
                request to FLAG Atlantic (the "Service Request") which shall
                specify (i) the nature of the requested service, (ii) the
                requested time-period within which the service is to be
                performed, (iii) a list of tools and/or supplies necessary to
                perform the service, and (iv) the appropriate VGSI
                Specifications. If FLAG Atlantic accepts the Service Request,
                FLAG Atlantic warrants that it will provide the service in a
                professional and workmanlike manner and in accordance with the
                VGSI Specifications set forth in the Service Request. With
                respect to the Service Request, VGSI shall pay to FLAG Atlantic
                (w) a pro-rata portion of any documented applicable third party
                standing charges, plus (x) all documented costs for materials
                and supplies purchased by FLAG Atlantic for the sole purpose of
                performing the service, plus (y) all applicable labor charges
                for personnel involved in providing the service, which shall be
                based on FLAG Atlantic's cost, plus (z) a [*]% margin. VGSI
                shall, at its cost, provide such training to FLAG Atlantic's
                maintenance personnel as is necessary to perform the Service
                Request.

        6.4     A VGSI Service Request for the installation by FLAG Atlantic of
                the VGSI Equipment shall also include (i) VGSI's proposed
                installation schedule, (ii) identification of all VGSI Equipment
                to be installed, and (iii) the space, power,


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                environmental and other requirements for the VGSI Equipment.
                FLAG Atlantic may request the submission of further information
                required for the performance of such installation services.

        6.5     VGSI shall, prior to any installation, submit suitable
                documentation to FLAG Atlantic evidencing that the VGSI
                Equipment meets appropriate industry specifications and safety
                requirements.

7.      RELOCATION OF POPS

        7.1     Subject to clause 7.3, upon notice to VGSI delivered as soon as
                reasonably practicable (where reasonably practicable, no less
                than 18 months), FLAG Atlantic may relocate either of the POPs
                and/or all or any portion of the Equipment Space. If FLAG
                Atlantic relocates a POP, VGSI will be [*]. Upon receiving its
                rebate, VGSI has the option of [*]. Alternatively, VGSI may [*]
                with FLAG Atlantic, subject to [*]. Notwithstanding the above,
                if VGSI [*] with FLAG Atlantic, VGSI will pay [*] costs incurred
                by FLAG Atlantic to relocate equipment and [*].

        7.2     FLAG Atlantic agrees that in specifying the time-scale for any
                relocation of the VGSI Equipment, FLAG Atlantic shall, where
                reasonably practicable, consult with VGSI about any relocation
                of the VGSI Equipment and use all reasonable endeavors to
                specify a time-scale that causes minimum disruption to the
                operation of the VGSI Equipment.

        7.3     FLAG Atlantic may relocate any of the POPs as a result of an
                eminent domain or similar proceeding or if required by
                circumstances beyond FLAG Atlantic's reasonable control.

8.      OWNERSHIP OF EQUIPMENT

        The VGSI Equipment shall be and remain the sole property of VGSI. Each
        Party shall take reasonable precautions for the security of the VGSI
        Equipment. In addition, any supplies or materials purchased by FLAG
        Atlantic at VGSI's expense in accordance with the terms of the License
        shall be the sole property of VGSI.

9.      WITHOLDING; TAXES

        9.1     WITHHOLDING. All amounts payable by VGSI pursuant hereto shall
                be paid in full in U.S. dollars by wire transfer, free and clear
                of all bank or transfer charges to such account(s) as FLAG
                Atlantic may by notice to VGSI designate without reduction for
                any deduction or withholding for or on account of any tax, duty
                or other charge of whatever nature imposed by any taxing
                authority in lieu of a direct tax on FLAG Atlantic in connection
                with its income. If VGSI is required by law to


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                make any deduction or withholding from any payment hereunder,
                VGSI shall pay such additional amount to FLAG Atlantic so that
                after such deduction or withholding the net amount received by
                FLAG Atlantic shall be not less than the amount FLAG Atlantic
                would have received had such deduction or withholding not been
                required. VGSI shall make the required deduction or withholding,
                shall pay the amount so deducted or withheld to the relevant
                governmental authority and shall promptly provide FLAG Atlantic
                with evidence of such payment.

        9.2     TAXES. Save as the context requires or as otherwise stated
                herein all references to payments made in this Agreement are
                references to such payments exclusive of all applicable sales
                and use taxes, gross turnover taxes, value added taxes, or other
                similar turnover or sales based taxes, excise taxes, duties and
                levies chargeable under applicable law in respect of the supply
                for which the payment is or is deemed to be consideration. Where
                applicable, such taxes shall be added to the invoice and shall
                be paid to FLAG Atlantic at the same time as the relevant
                invoice is settled in accordance with clause 12. FLAG Atlantic
                shall be solely responsible for payment of taxes on its income
                and, except as provided in clause 9.1, for withholding taxes,
                including, but not limited to, social security and payroll taxes
                for its employees. VGSI shall be solely responsible for payment
                of taxes on its income, and for withholding taxes, including,
                but not limited to, social security and payroll taxes for its
                employees. Neither Party shall have any liability for such taxes
                which are to be borne by the other Party. Each Party shall
                indemnify the other Parties and their respective Affiliates for
                all claims, losses, penalties, interest, attorney's fees, and
                costs and expenses, including litigation costs, arising from any
                failure to make timely payment of such taxes, duties, and fees
                such Party is required to pay under this Agreement. Each Party
                shall co-operate in any effort by any other Party to contest
                application or payment or to seek refunds of any such taxes,
                duties, and levies.

        9.3     VAT. Subject to clause 9.1, in the event that value added tax in
                the UK or France is considered to be applicable, FLAG Atlantic
                shall notify VGSI to this effect prior to the issuance of the
                relevant VAT invoice and both Parties shall work together in
                good faith to restructure the arrangements to reduce the impact
                of VAT on VGSI, where legally possible, but such that there is
                no adverse cashflow impact for FLAG Atlantic. Notwithstanding
                these discussions, invoices (excluding the VAT) shall be issued
                and be payable in accordance with clause 12.

        9.4     LICENSE USE TAX. VGSI shall be responsible for all taxes
                appropriately assessed and directly attributable to VGSI's use
                of the License.

10.     ALTERATIONS TO POPS


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        10.1    VGSI shall not make any additions or alterations to the POPs
                unless approved in advance by FLAG Atlantic in writing.
                Notwithstanding the above, VGSI will have the right to install
                VGSI Equipment in the Equipment Space.

        10.2    Any additions or alterations made pursuant to clause 10.1 hereof
                shall be at VGSI's sole expense and risk.

11.     SERVICES PROVIDED BY FLAG ATLANTIC

        11.1    During the Term, at each POP FLAG Atlantic shall provide the
                following (the "FLAG Atlantic Services"), in compliance with all
                local laws and regulations, at no additional charge to VGSI:

                11.1.1  plant for sufficient commercial power and DC
                        rectification to feed standard DWDM
                        amplifying/regenerating equipment;

                11.1.2  a diesel generator or equivalent, and fuel, sufficient
                        to maintain the load of the POP for a minimum of 48
                        hours;

                11.1.3  a battery plant capable of handling the load of the POP
                        for a minimum of 30 minutes to ensure uninterrupted
                        power;

                11.1.4  HVAC units necessary to support heat dissipation
                        requirements; and

                11.1.5  a fire protection system.

        11.2    FLAG Atlantic shall fit-out the POPs with appropriate power and
                air conditioning and VGSI shall be entitled to sufficient power
                and air conditioning for industry-typical loads assuming full
                use of the Equipment Space. The aggregate power consumption
                provided to VGSI will not exceed 500 watts per square meter of
                leased space in the London Hosting Centre. The aggregate power
                consumption power will not exceed 500 watts per square meter in
                the Paris POP.

12.     INVOICES

        12.1    FLAG Atlantic shall render to VGSI invoices for all amounts
                payable pursuant to this Agreement. All invoices shall be due
                and payable within 30 days after receipt by VGSI.

        12.2    Any amount payable pursuant to this Agreement which is not paid
                when due shall accrue interest at the annual rate of 3% above
                the U.S. Dollar LIBOR for one month as quoted in THE WALL STREET
                JOURNAL on the first business day of the month in which the
                payment is due or the maximum rate permitted under the laws of
                the



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                State of New York, USA, whichever is less (the "Late Payment
                Rate"). All such default interest shall accrue from the day
                following the date payment of the relevant amount was due until
                it is paid in full (and shall accrue both before and after
                judgement). Such interest shall be payable on demand.

                Notwithstanding clause 12.3, in the event that upon
                investigation the amount in dispute or part thereof is found to
                be correct as originally invoiced, VGSI shall pay, in addition
                to the amount in dispute, interest at the Late Payment Rate, in
                accordance with this clause on such portion of the disputed
                amount which is found to have been correctly invoiced, such
                interest to be paid from the date payment of the relevant amount
                was originally due until it is paid in full. If VGSI pays a
                disputed charge and upon investigation the amount in dispute is
                found to be properly disputed (because it was not due as
                invoiced), the FLAG Atlantic shall repay to VGSI, in addition to
                the amount wrongly invoiced, interest at the Late Payment Rate,
                on such portion of the disputed amount which is found to have
                been wrongly invoiced, such interest to be paid from the payment
                date of the wrongly paid amount until it is repaid by FLAG
                Atlantic to VGSI in full.

        12.3    If VGSI disputes any invoiced amount in good faith, VGSI must
                provide to FLAG Atlantic, on or before the due date of the
                invoice, reasonable notice and a detailed explanation of the
                basis of the dispute, and pay any undisputed amount in
                accordance with this Agreement. Failure by VGSI to pay amounts
                disputed by VGSI in good faith shall not be deemed a default by
                VGSI hereunder, or the basis for termination of this Agreement
                by FLAG Atlantic. The Parties will make a good faith effort to
                resolve all billing disputes as expeditiously as possible.

        12.4    Except as otherwise set forth herein, VGSI's obligation to pay
                amounts that have become due and payable pursuant hereto shall
                not be subject to any set-off, counterclaim, deduction, defense
                or other right which VGSI may have against FLAG Atlantic or any
                other party under this Agreement or otherwise.

12A.    DEFAULT

        In the event that VGSI shall have failed to pay any amount payable by
        VGSI pursuant hereto (and not being disputed in good faith) for more
        than 60 days after its due date, then VGSI shall not be entitled to
        occupy the Paris POP or to any [*] Space or [*] Space (to the extent
        such options have not already been exercised). If such failure continues
        for an additional 60 days, FLAG Atlantic shall be entitled to refrain
        from performing any services for VGSI required by this Agreement and to
        deny VGSI the right of access to


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

                                       12
<Page>

        any Equipment Space until VGSI has paid in full all amounts overdue
        together with applicable default interest.

13.     LIABILITIES, INDEMNITIES AND COVENANTS

        13.1    Notwithstanding any other provision in this Agreement to the
                contrary, neither Party shall be liable to the other Party for
                any indirect, special, punitive or consequential damages
                (including, but not limited to, any loss of profit or business
                or claim from any customer for loss of services) arising out of
                this Agreement or from any breach of any of the terms and
                conditions of this Agreement.

        13.2    Each Party (the "Indemnified Party") agrees to defend, indemnify
                and hold harmless the other Party and its respective Affiliates
                and the other Party's and its Affiliates' directors, officers,
                agents and employees (each hereinafter referred to as the
                "Indemnified Party") from and against any and all third party
                claims, claims, fines or penalties (including the amount of any
                settlement approved by the Indemnifying Party) (collectively,
                "Claims"), and any expenses of enforcing this provision, which
                any Indemnified Party may suffer, incur or become subject to,
                and to reimburse the Indemnified Party for any reasonable legal
                expenses incurred by such Indemnified Party in connection with
                defending any actions related to any Claim, to the extent such
                Claim arises out of, relates to or is based upon (i) any false
                or untrue representation made by the Indemnifying Party in this
                Agreement, or (ii) gross negligence or willful misconduct by the
                Indemnifying Party, in connection with the Indemnifying Party's
                operation of its business or failure to perform under this
                Agreement, or (iii) the Indemnifying Party's violation or
                alleged violation of any applicable law or rule, regulation,
                order or decree of a governmental or regulatory body of
                competent jurisdiction. Each Party has no obligation under this
                Agreement to indemnify any Indemnified Party for that portion of
                any Claim that arises from the Indemnified Party's negligence,
                gross negligence or willful misconduct.

        13.3    FLAG Atlantic will, to the extent applicable, comply with the
                Government Requirements set forth in Schedule 3 in the
                performance of this Agreement. Reference to "Seller" in Schedule
                3 shall be deemed to be references to FLAG Atlantic.

14.     INSURANCE

        14.1    VGSI shall, at its own expense, procure and maintain in force
                during the Term for each Facility the insurance coverage
                provided for in this clause 17 in a form and with underwriters
                with an A.M. Best and Company rating acceptable to FLAG
                Atlantic:



                                       13
<Page>

                14.1.1  Worker's Compensation and Employer's Liability insurance
                        shall be provided as required by any applicable law or
                        regulation. Employer's Liability insurance shall be
                        provided in amounts not less than (pound)10 million in
                        the United Kingdom and France, and $1 million for each
                        accident for bodily injury and $1 million each employee
                        for bodily injury in the United States.

                14.1.2  Third Party Liability Insurance covering losses and
                        claims from injuries or death to any person (including
                        any employee or customer of VGSI) or damage to any
                        property (including that of FA-1, its customers, and
                        VGSI's customers) suffered on or about the Facilities.
                        Coverage shall be provided in amounts not less than $2
                        million per occurrence, $5 million products completed
                        operations aggregate and $5 million general aggregate
                        and shall include contractual, independent contractors,
                        broad form property and personal injury coverage.

                14.1.3  Umbrella and/or Excess Liability coverage in the amount
                        of $100 million, excess of the coverage specified in
                        clause 14.1.2.

                14.1.4  All Risk Property coverage on a full replacement cost
                        basis insuring all of VGSI's real and personal property
                        situated on or within the Facilities. VGSI may also
                        elect to purchase business interruption and contingent
                        business interruption insurance, knowing that neither
                        FLAG Atlantic nor any of its Affiliates has any
                        liability for loss of profit or revenues should an
                        interruption of service occur.

                14.1.5  Builder's Risk / Installation Floater Insurance on an
                        "All Risk" basis and a completed value basis during the
                        course of construction at any Equipment Space until
                        completion thereof. The policy shall cover fire,
                        vandalism, malicious mischief and collapse, for the full
                        replacement value covering the interests of VGSI, FLAG
                        Atlantic and each of its Affiliates and Barclays Bank
                        PLC (and their respective contractors and
                        subcontractors) in all work incorporated into the
                        building and all materials and equipment located in or
                        about any Equipment Space.

        14.2    The insolvency, liquidation, bankruptcy or failure of any
                insurer providing insurance for VGSI or its subcontractors, or
                failure of any such insurer to pay claims accruing, or failure
                of VGSI to acquire or maintain such insurance, shall not excuse
                VGSI from complying with any of the provisions of this clause
                14.

        14.3    All deductibles or self-insured retentions in the above
                insurance coverage are for the account of VGSI and shall, under
                no circumstances, be the responsibility of FLAG Atlantic or any
                of its Affiliates.



                                       14
<Page>

        14.4    Certificates of insurance, as evidence of the insurance required
                by this Agreement, shall be furnished by VGSI to FLAG Atlantic.
                The certificates of insurance shall provide that there will be
                no cancellation, reduction, or material modification of coverage
                without 30 days prior written notice to FLAG Atlantic. Notice of
                cancellation should be forwarded to FLAG Atlantic, at the
                following address:

                FLAG Atlantic UK Limited
                9, South Street
                London W1K 2XA
                United Kingdom
                Tel: +44 20 7317 0800
                Fax:+44 20 7317 0898

                With a copy to: General Counsel

        14.5    The limits specified herein are minimum requirements and shall
                not be construed in any way as limits of liability or as
                constituting acceptance by FLAG Atlantic or any of its
                Affiliates of such responsibility for financial liabilities in
                excess of such limits.

        14.6    FLAG Atlantic shall give VGSI prompt notification of any claim
                with respect to any of the insurance to be provided hereunder,
                accompanied by full details giving rise to such claim. VGSI
                shall afford FLAG Atlantic all such assistance as may be
                required for the preparation and negotiation of insurance
                claims.

        14.7    Policies shall include a provision or endorsement naming FLAG
                Atlantic, its designated Affiliates and Barclays Bank PLC as
                additional insureds and loss payees, with appropriate "Cross
                Liability" and "Severability of Interests". Underwriters shall
                agree to waive their rights of subrogation against FLAG Atlantic
                and its affiliates regarding risks insured pursuant to clauses
                14.1.4. and 14.1.5. FLAG Atlantic and its Affiliates and
                Barclays Bank PLC shall be protected against all liability
                occasioned by an occurrence insured against. All said policies
                of insurance shall be: (i) written on an "occurrence" basis and
                (ii) written as primary policy coverage regarding the interests
                of FLAG Atlantic and its designated Affiliates and Barclays Bank
                PLC, and any other insurance maintained by FLAG Atlantic and/or
                its designated Affiliates is excess and not contributing
                insurance.

15.     ASSIGNMENT

        15.1    This Agreement and all the provisions hereof shall be binding
                upon and inure to the benefit of the Parties hereto and their
                respective successors and permitted assigns; provided that,
                except for the assignment of FLAG Atlantic's rights (but not
                FLAG Atlantic's obligations) under this Agreement to one or more
                financial institutions, lenders, creditors and export credit
                agencies as collateral security for financing provided to FLAG
                Atlantic or in connection with a sale of receivables



                                       15
<Page>

                by FLAG Atlantic, neither this Agreement nor any of the rights,
                interest or obligations hereunder shall be assigned or
                transferred by any of the Parties hereto without the prior
                written consent of the other Parties, and any attempted
                assignment or transfer in violation of this clause shall be
                void. Notwithstanding the foregoing, VGSI may assign its rights,
                duties and obligations under this Agreement upon notice to FLAG
                Atlantic, but without FLAG Atlantic's prior consent, to VGSI
                Affiliates or to any transferee of or successor to all or
                substantially all of the business assets of VGSI, provided:

                15.1.1  the Affiliate, transferee or successor agrees to be
                        bound by all terms and conditions of this Agreement; and

                15.1.2  the Affiliate, transferee or successor is authorised or
                        permitted under the laws and regulations of its country
                        to acquire and use the Equipment Space.

        15.2    Notwithstanding the foregoing, FLAG Atlantic may assign its
                rights, duties and obligations under this Agreement upon notice
                to VGSI, but without VGSI's prior consent to an FLAG Atlantic
                Affiliate:

                15.2.1  to the extent commercially necessary for such Affiliate
                        to perform obligations of FLAG Atlantic under the terms
                        hereof; and

                15.2.2  subject to such Affiliate agreeing to be bound by all
                        the terms of this Agreement.

        15.3    FLAG Atlantic may use subcontractors or agents to fulfil its
                obligations hereunder and shall be wholly liable therefor as if
                such subcontractors were its agents.

16.     FORCE MAJEURE

        No failure or omission by either Party to carry out or observe any of
        the terms and conditions of this Agreement (other than payment
        obligations) shall give rise to any claim against such Party or be
        deemed a breach of this Agreement if such failure or omission arises
        from a Force Majeure Event provided that the observation of reasonable
        care and industry standards would not have avoided such failure or
        omission.

17.     SURRENDER OF THE EQUIPMENT SPACE

        17.1    Upon termination of the License with respect to any Equipment
                Space, VGSI shall surrender such Equipment Space in good
                condition, reasonable wear and tear excepted. VGSI shall be
                responsible at its own cost:



                                       16
<Page>

                17.1.1  to remove the VGSI Equipment and personal property from
                        the relevant POPs and to reimburse FLAG Atlantic for its
                        direct costs properly incurred in repairing any damage
                        caused by such removal (reasonable wear and tear
                        excepted); and

                17.1.2  to remove all additions and alterations made or
                        installed by VGSI and to restore such Equipment Space
                        and the related POPs to the same condition as existed on
                        the day the VGSI Equipment was first installed
                        (reasonable wear and tear excepted).

        17.2    In the event VGSI fails to remove the VGSI Equipment and
                personal property from such Equipment Space and POPs, or fails
                to remove any additions or alterations in accordance with clause
                17.1.2, within a reasonable period following termination of the
                License with respect to any Equipment Space (in no event less
                than thirty (30) days following termination of the relevant
                License or, if such termination is disputed, in no event less
                than twenty one days following final resolution of such
                dispute), FLAG Atlantic may, without further notice to VGSI:

                17.2.1  remove and store the VGSI Equipment and personal
                        property for VGSI's benefit and at VGSI's sole expense;
                        and/or (as the case may be)

                17.2.2  perform the work required pursuant to clause 17.1.2 at
                        VGSI'S risk and expense.

18.     GOVERNING LAW AND DISPUTE RESOLUTION

        18.1    Subject to clause 2.2, this Agreement shall be construed in
                accordance with New York law, without regard to the law of New
                York governing conflicts of law.

        18.2    Except as otherwise provided herein, any dispute or controversy
                at law arising under or in connection with this Agreement,
                provided neither party shall have given notice of termination
                hereof to the other, shall be finally settled under the Rules of
                Arbitration of the International Chamber of Commerce by one
                arbitrator appointed in accordance with such Rules and familiar
                with the commercial law of the State of New York. Any such
                dispute or controversy to be settled under this clause shall be
                between VGSI and FLAG Atlantic. The place of arbitration shall
                be London. The arbitration shall be conducted in English. The
                decision and award resulting from such arbitration shall be
                final and binding on the Parties. Judgment upon the arbitration
                award may be rendered by any court of competent jurisdiction, or
                application may be made to such court for a judicial acceptance
                of the award and an order of enforcement. Insofar as permissible
                under the applicable laws, the Parties hereby waive all rights
                to object to any action for judgment or execution which may be
                brought before a court of competent jurisdiction on an
                arbitration award or on a judgment rendered thereon. Disputes



                                       17
<Page>

                at equity, such as disputes where monetary compensation is
                insufficient to provide adequate relief, or in issue following
                notice by a party of termination hereof, may be resolved in
                court or by arbitration as the parties may then agree.

19.     NOTICES

        19.1    Any notice, request, demand or other communication required or
                permitted hereunder shall be sufficiently given if in writing in
                English and delivered by hand or sent by prepaid registered or
                certified mail (airmail if international), by facsimile or by
                prepaid international courier service of international
                reputation addressed to the appropriate Party at the following
                address or to such address as such Party may from time to time
                designate:

                If to VGSI:

                VGSI
                1095 Avenue of the Americas, 38th Floor
                New York, NY  10036
                Attention:  John Cuddy or BGSI Counsel
                Fax:  212-764-2739

                With a copy to:

                VGSI
                110 Allen Road
                Suite 300
                Liberty Corner,
                New Jersey 07938
                Attention: Larry Rath or VP Network
                Fax:  +703-974-0691

                If to FLAG Atlantic:

                FLAG Atlantic UK Limited
                9 South Street
                London W1K 2XA
                United Kingdom
                Attention:  VP Finance
                Tel:  +44 20 7317 0800
                Fax: +44 20 7317 0898



                                       18
<Page>

        19.2    Any notice, request, demand or other communication given or made
                pursuant to this clause shall be deemed to have been received
                (i) in the case of hand delivery or courier, on the date of
                receipt as evidenced by a receipt of delivery from the
                recipient, (ii) in the case of mail delivery, on the date which
                is seven days after the mailing thereof and (iii) in the case of
                transmission by facsimile, on the recipient's business day next
                following the date of transmission with confirmed answer back.
                Each such communication sent by facsimile shall be promptly
                confirmed by notice in writing hand-delivered or sent by
                courier, mail or air mail as provided herein, but failure to
                send such a confirmation shall not affect the validity of such
                communication.

20.     INVALIDITY

        If any provision of this Agreement is found by an arbitral, judicial or
        regulatory authority having jurisdiction to be void or unenforceable,
        such provision shall be deemed to be deleted from this Agreement and the
        remaining provisions shall continue in full force and effect.

21.     VARIATION

        No variation or amendment of this Agreement shall be effective unless in
        writing signed by authorized representatives of each of the Parties.

22.     COUNTERPARTS

        This Agreement may be executed in counterparts. Any single counterpart
        or set of counterparts signed, in either case, by all the Parties hereto
        shall constitute a full and original Agreement for all purposes.

23.     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
        shall be applied against either Party. 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 clause, section, subsection,
        paragraph, subparagraph, exhibit, Schedule or attachment shall be deemed
        a reference to such portion of this Agreement unless otherwise
        specified.

24.     WAIVERS

                                       19
<Page>

        Except as set forth in clause 4, 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.

25.     INTEGRATION, CONSISTENCY

        This Agreement and all Exhibits, Schedules and other attachments
        attached hereto (which Exhibits, Schedules 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 this Agreement shall
        prevail, except in relation to any amendment thereof pursuant to clause
        2.3.


                                       20
<Page>


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



FLAG ATLANTIC UK LIMITED                    FLAG ATLANTIC FRANCE SARL
By:                                         By:
         -------------------------                   -------------------------
Name:                                       Name:
         -------------------------                   -------------------------
Title:                                      Title:
         -------------------------                   -------------------------



VERIZON GLOBAL SOLUTIONS U.K.               VERIZON GLOBAL SOLUTIONS
LTD                                         FRANCE SAS

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



                                       21
<Page>

                                   SCHEDULE 1


1.      London:-

        [*]

2.      Paris:-

        [*]

*       The [*] figures shown above do not include any [*] referred to in clause
        5.2.4.








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


                                       22
<Page>

                                   SCHEDULE 2


POP NAME:
                                ----------------------------------------------
POP LOCATION:
                                ----------------------------------------------
VGSI CONTACT:
                                ----------------------------------------------
NAME:
                                ----------------------------------------------
ADDRESS:
                                ----------------------------------------------

                                ----------------------------------------------
TELEPHONE NO:
                                ----------------------------------------------
FACSIMILE NO:
                                ----------------------------------------------
E-MAIL:
                                ----------------------------------------------
EFFECTIVE DATE:
                                ----------------------------------------------
DESCRIPTION OF EQUIPMENT
SPACE:
                                ----------------------------------------------

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

                                ----------------------------------------------
DESCRIPTION OF VGSI EQUIPMENT:
                                ----------------------------------------------

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

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

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

                                ----------------------------------------------
SPECIAL CONDITIONS


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



                                       23
<Page>



                                   SCHEDULE 3


                             GOVERNMENT REQUIREMENTS



To the extent that this Agreement is subject to them, FLAG Atlantic shall comply
with the applicable provisions of the following: Exec. Order No. 11246, Exec.
Order No. 11625, Exec. Order No. 12138, Exec. Order No. 11701, Exec. Order No.
11758, Section 503 of the Rehabilitation Act of 1973 as amended by PL93-516 and
PL102-569, Vietnam Era Veteran's Readjustment Assistance Act of 1974, Veteran's
Compensation, Education and Employment Amendments of 1982, and the rules,
regulations and relevant orders of the Secretary of Labor pertaining to the
Executive Orders and Statutes listed above. The following table describes the
clauses which are included in this Agreement.

<Table>
<Caption>
                     ANNUAL CONTRACT VALUE              CLAUSES
                     ---------------------              -------

                    <S>                                <C>
                     Under $10,000                      5*
                     $10,000 - $50,000                  1, 2, 5*, 6, 7, 8,
                     $50,000 - $500,000                 1, 2, 3**, 4**, 5, 6,
                                                        7, 8, 9
                     Over $500,000                      1, 2, 3**, 4**, 5, 6,
                                                        7, 8***, 9
</Table>


1.      Equal Employment Opportunity Provisions

        In accordance with Executive Order 11246, dated September 24, 1965 and
        Subpart 22.8 of Subchapter D of Chapter 1 of Title 48 of the Code of
        Federal Regulations as may be amended from time to time, the Parties
        incorporate herein by this reference the regulations and clauses
        required by those provisions to be made a part of government contracts
        and subcontracts.

2.      Certification of Non-segregated Facilities

        FLAG Atlantic certifies that it does not and will not maintain any
        facilities it provides for its employees in a segregated manner, or
        permit its employees to perform their services at any location under its
        control, where segregated facilities are maintained; and that it will
        obtain a similar certification, prior to the award of any non-exempt
        subcontract.




                                       24
<Page>

3.      Certification of Affirmative Action Program

        FLAG Atlantic affirms that it has developed and is maintaining an
        Affirmative Action Plan as required by Subpart 22.8 of Subchapter D of
        Chapter 1 of Title 48 of the Code of Federal Regulations.

4.      Certification of Filing of Employer's Information Reports

        FLAG Atlantic agrees to file annually on or before the 31st day of March
        complete and accurate reports on Standard Form 100 (EEO-1) or such forms
        as may be promulgated in its place.

5.      Utilization of Small Business Concerns and Small Disadvantaged Business
        Concerns

        (a)         It is the policy of the United States that small business
                concerns and small business concerns owned and controlled by
                socially and economically disadvantaged individuals shall have
                the maximum practicable opportunity to participate in performing
                contracts let by any Federal agency.

        (b)         FLAG Atlantic hereby agrees to carry out this policy in the
                awarding of subcontracts to the fullest extent consistent with
                efficient contract performance. FLAG Atlantic further agrees to
                co-operate in any studies or surveys as may be conducted by the
                United States Small Business Administration or the awarding
                agency of the United States as may be necessary to determine the
                extent of FLAG Atlantic's compliance with this clause.

        (c)         As used in this contract, the term "Small Business Concern"
                shall mean a small business as defined pursuant to section 3 of
                the Small business Act and relevant regulations promulgated
                pursuant thereto. The term "Small Business Concern" owned and
                controlled by socially and economically disadvantaged
                individuals" shall mean a small business concern -

                (1)     Which is at least fifty-one percent (51%) owned by one
                        or more socially and economically disadvantaged
                        individuals; or, in the case of any publicly owned
                        business, at least fifty-one percent (51%) of the stock
                        of which is owned by one or more socially and
                        economically disadvantaged individuals; and

                (2)     Whose management and daily business operations are
                        controlled by one or more of such individuals. Seller
                        shall presume that socially and economically
                        disadvantaged individuals include Black Americans,
                        Hispanic Americans, Native Americans, Asian-Pacific
                        Americans, Asian-Indian Americans and other minorities,
                        or any other individual found to be



                                       25
<Page>

                        disadvantaged by the Administration pursuant to section
                        8 (a) of the Small Business Act.

        (d)         FLAG Atlantics acting in good faith may rely on written
                representations by their subcontractors regarding their status
                as either a Small Business Concern or a Small Business Concern
                owned and controlled by socially and economically disadvantaged
                individuals.

6.      Utilization of Women-Owned Small Businesses

        (a)     "Women-owned small businesses," as used in this clause, means
                businesses that are at least 51 percent owned by women who are
                United States citizens and who also control and operate the
                business. "Control," as used in this clause, means exercising
                the power to make policy decisions. "Operate," as used in this
                clause, means being actively involved in the day-to-day
                management of the business.

        (b)     It is the policy of the United States that women-owned small
                businesses shall have the maximum practicable opportunity to
                participate in performing contracts awarded by any Federal
                agency.

        (c)     FLAG Atlantic agrees to use its best efforts to give women-owned
                small businesses the maximum practicable opportunity to
                participate in the subcontracts it awards to the fullest extent
                consistent with the efficient performance of its contract.

7.      Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era
        In accordance with Exec. Order 11701, dated January 24, 1973, and
        Subpart 22.13 of Subchapter D of Chapter 1 of Title 48 of the Code of
        Federal Regulations, as may be amended from time to time, the parties
        incorporate herein by this reference the regulations and contract
        clauses required by those provisions to be made a part of Government
        contracts and subcontracts.

8.      Affirmative Action for Handicapped Workers In accordance with Exec.
        Order 11758, dated January 15, 1974, and Subpart 22.14 of Subchapter D
        of Chapter 1 of Title 48 of the Code of Federal Regulations as may be
        amended from time to time, the parties incorporate herein by this
        reference the regulations and contract clauses required by those
        provisions to be made a part of Government contracts and subcontracts.

9.      Employment Reports on Special Disabled Veterans and Veterans of the
        Vietnam Era

        (a)     FLAG Atlantic agrees to report at least annually, as required by
                the Secretary of Labor, on:



                                       26
<Page>

                (1)     The number of special disabled veterans and the number
                        of veterans of the Vietnam era in the work force of FLAG
                        Atlantic by job category and hiring location; and

                (2)     The total number of new employees hired during the
                        period covered by the report, and of that total, the
                        number of special disabled veterans, and the number of
                        veterans of the Vietnam era.

        (b)     The above items shall be reported by completing the form
                entitled "Federal Contractor Veterans' Employment Report
                VETS-100."

        (c)     Reports shall be submitted no later than March 31 of each year.

        (d)     The employment activity report required by paragraph (a) (2) of
                this section shall reflect total hires during the most recent
                12-month period as of the ending date selected for the
                employment profile report required by paragraph (a) (1) of this
                section. FLAG Atlantic may select an ending date: (1) As of the
                end of any pay period January through March 1st of the year the
                report is due, or (2) as of December 31, if FLAG Atlantic has
                previous written approval from the Equal Employment Opportunity
                Commission to do so for purposes of submitting the Employer
                Information Report EEO-1 (Standard Form 100).

        (e)     The count of veterans reported according to paragraphs (a) above
                shall be based on voluntary disclosure. Each FLAG Atlantic
                subject to the reporting requirements at 3 U.S.C. 2012(d) shall
                invite all special disabled veterans and veterans of the Vietnam
                era who wish to benefit under the affirmative action program at
                38 U.S.C. 2012 to identify themselves to FLAG Atlantic. The
                invitation shall state that the information is voluntarily
                provided, that the information will be kept confidential, that
                disclosure or refusal to provide the information will not
                subject the applicant or employee to any adverse treatment, and
                that the information will be used only in accordance with the
                regulations promulgated under 38 U.S.C. 2012. Nothing in this
                paragraph (e) shall preclude an employee from informing FLAG
                Atlantic at a future time of his or her desire to benefit from
                this program. Nothing in this paragraph (e) shall relieve FLAG
                Atlantic from liability for discrimination under 38 U.S.C 2012.


*       Applies only if this Agreement has further subcontracting opportunities.
**      Applies only to businesses with 50 or more employees.
***     FLAG Atlantic must also adopt and comply with a small business and small
        disadvantaged business subcontracting plan pursuant to Title 48 of the
        Code of Federal Regulations.



                                       27