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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 granted to VGSI, and agrees
               to use reasonable commercial efforts to secure and


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               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.

          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


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               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
               20 February 2021. 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 20th anniversary
               thereof.

          3.2  Notwithstanding clause 3.1 above, VGSI shall be able to terminate
               this Agreement at any time after 19 February 2011 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 ten (10) years.

5.        VGSI EQUIPMENT SPACE

          5.1  INITIAL SPACE.

               5.1.1     VGSI shall initially be allocated space ("Initial
                         Space") as follows:

<Table>
<Caption>

                         ------------------------------- ------------------------------------------
                         FACILITY                        SPACE
                         ------------------------------- ------------------------------------------
                         <S>                             <C>

                         London Hosting Centre           [*]m2 in the 6th floor, [*]m2 office space
                         6 Greenwich View Place          on 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 Initial Space at the Paris
                         POP by 3 April 2001. FLAG Atlantic shall make
                         commercially reasonable efforts to make available to
                         VGSI the remaining [*]m2 ("Remaining Space"), as space
                         adjacent to that occupied by VGSI at the Paris POP by 1
                         June 2001. If FLAG Atlantic is unable to procure
                         adjacent space to VGSI pursuant to this clause, VGSI
                         will accept non-adjacent space of the same size.

               5.1.3     The charges ([*] fees and [*] Fees) for the Initial
                         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 Remaining Space is made available. On
                         delivery of the Remaining Space, VGSI will pay the
                         balance of the [*] Fees and shall begin paying the [*]
                         Fees for the entire Initial Space.

          5.2  ADDITIONAL SPACE. VGSI shall have a right of first refusal to
               acquire, on the same proportional allocation of charges as
               applicable to the Initial Space, up to an additional 140 square
               meters of useable Equipment Space in each of the London Hosting
               Centre and the Paris POP (the "Additional Space"), to be paid as
               follows:

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

               5.2.2     PARIS POP. The charge for the Additional Space per
                         square meter shall be [*] plus [*] Fees. The Term of
                         the Additional Space for the Paris POP shall expire on
                         expiration of the Term for the Initial 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 Additional
                         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
                         Additional Space. However, should FLAG Atlantic incur
                         justifiable contingency costs in providing the
                         Additional 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

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               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
               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.

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          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, 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 rebated a percentage of
               its capital investment reflecting the unexpired time remaining
               and, if applicable, its share of any compensation owing from
               eminent domain proceedings. Upon receiving its rebate, VGSI has
               the option of terminating this Agreement and seeking new
               collocation space for its equipment. Alternatively, VGSI may
               enter into a new collocation agreement with FLAG Atlantic,
               subject to substantially the same terms and conditions as
               contained herein. Notwithstanding the above, if VGSI enters into
               a new collocation agreement with FLAG Atlantic, VGSI will pay it
               share of new capital expenses or fit out costs incurred by FLAG
               Atlantic to relocate equipment and prepare new Equipment Space,
               and an adjustment will be made to reflect the new rent payable by
               FLAG Atlantic in the new premises.

          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.


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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 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.


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          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

          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.


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          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 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 Remaining Space or Additional Space (to
          the extent such options have not already been exercised). If such



                                       12

<Page>

          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 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 at
               equity, such as disputes where monetary compensation is
               insufficient to provide


                                       17

<Page>

               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

          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


                                       18

<Page>

               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

          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


                                       19

<Page>

          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:-

          [*]



--------
* 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:

               (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


                                       26

<Page>

               (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