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                                                                  EXHIBIT 10.5

                    INTERIM CHIEF EXECUTIVE OFFICER AGREEMENT

This Agreement ("the Agreement") is entered into as of October 10, 2002
("Effective Date") between FLAG TELECOM GROUP LIMITED, a limited company
organized under the laws of Bermuda ("Company") and SPAGNOLO GROUP LP, a Texas
limited partnership whose address is 6641 Woodland Hills Lane Plano, Texas 75024
(hereinafter "CEO").

1.   SERVICES; PLACE OF PERFORMANCE; TERM

     1.1    SCOPE OF SERVICES. CEO's Designee (as defined below) will perform
     the services ("Services") described in the Task Orders executed by the
     parties and attached hereto as EXHIBIT A.

     1.2    PLACE OF PERFORMANCE. CEO's Designee shall perform Services
     primarily at Company's or its affiliates' office in London, England;
     PROVIDED, THAT, CEO's Designee may be required to travel on Company
     business during the Term.

     1.3    TERM. Unless terminated earlier in accordance with this Agreement,
     the term of this Agreement shall be the lesser of six months, beginning on
     the Effective Date, or until such time as the Company retains a new chief
     executive officer (the "Term").

2.   PAYMENT

     2.1    PAYMENT. Company will pay CEO in the amounts and in accordance with
     the arrangements specified in each Task Order. CEO shall not be eligible
     for any other payments or benefits other than those that are specifically
     provided in the Task Order.

     2.2    INVOICING. Except as otherwise set forth in a Task Order, CEO will
     invoice semi-monthly for the Services. Company will pay the amounts
     properly invoiced as soon as administratively possible following Company's
     receipt of the invoice.

     2.3    EXPENSES. Company will reimburse CEO for all reasonable business
     expenses incurred by CEO in connection with the Services in accordance with
     Company's business expense reimbursement policy as it may exist from time
     to time.

3.   WARRANTIES

     3.1    CEO and Designee (as defined below) warrant that (a) it will perform
     the Services hereunder in a competent, professional and workmanlike manner
     utilizing reasonable care, prudence and skill as would be reasonably
     expected for the chief executive officer of a comparable company, (b) Mark
     F. Spagnolo, an employee of CEO (the "Designee"), will be the only
     individual providing the Services and acting as a service provider to
     Company, and (c) neither CEO nor Designee is precluded from providing the
     Services pursuant to any law, regulation, contract or otherwise. During the
     Term, CEO shall cause the Designee to adhere to all Company employment
     policies, including, without limitation, those relating to conduct, as
     though Designee were an employee of Company for that purpose.

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4.   TERMINATION

     4.1    TERMINATION. Either party may terminate this Agreement for any
     reason, or no reason, upon thirty (30) days prior written notice; PROVIDED,
     THAT, this Agreement shall automatically terminate without notice upon (i)
     expiration of the Term, (ii) Designee's death or disability, or (iii) CEO's
     and/or Designee's, as the case may be, termination by Company for cause or
     due to any other material breach of this Agreement. In the event of a
     termination, Company will pay CEO for all Services rendered and reasonable
     expenses (to the extent such expenses would otherwise be reimbursable)
     incurred by CEO prior to the termination of the Agreement, and otherwise
     will have no further obligations hereunder. CEO shall have no liability to
     the Company for acts or omissions committed by the CEO in good faith and
     with a reasonable belief that such acts or omission were in the best
     interests of the Company unless CEO acted negligently with respect thereto.

     4.2    SURVIVAL. The terms of Sections 3 through 8 will survive the
     termination or expiration of this Agreement for any reason to carry out
     their intended effect.

5.   INDEPENDENT CONTRACTOR RELATIONSHIP

     5.1    CEO will undertake the Services to be performed hereunder as an
     independent contractor. CEO will determine the manner and method of its
     performance of the Services, and Company's general right to direct the
     Services will not make CEO, or its agents, or personnel, the agents or
     employees of Company. The provision of Services under this Agreement will
     not result in any partnership, joint venture, or trust relationship between
     CEO and Company. Neither party will have the authority to make any
     statements, representations, or commitments of any kind on behalf of the
     other party, or to take any action binding upon the other. As an
     independent contractor, CEO shall not participate in any employee benefit
     plan, program or policy, including vacation.

     5.2    All wages paid to employees of CEO, including, without limitation,
     the Designee, shall constitute wages paid to such employees solely by CEO
     and neither Company, nor its officers, directors, and employees shall have
     any obligation or liability whatsoever to CEO for workers' compensation,
     federal and state payroll taxes, unemployment compensation, minimum wages,
     Social Security assessments or similar charges, taxes or liabilities
     applicable to an employment relationship. CEO further agrees that it shall
     maintain sufficient insurance to protect it, its Designee and such other
     parties who may perform services on its behalf hereunder from claims under
     workers' compensation laws and other similar acts, and also from any
     damage, personal injury or death suffered by it, its Designee or any
     parties engaged by it, and which may arise in the performance of services
     hereunder.

     5.3    CEO recognizes and acknowledges that it is free from control or
     direction over the performance of its services, both under this Agreement
     and in fact, and CEO represents to Company that it (i) has established a
     place of business separate, independent and outside of any place of
     business of Company, (ii) is engaged in an independently established trade,
     occupation, or business, and (iii) has other customers and clients for
     which it performs services. Designee may, at the direction of Company's
     Chairman, meet with third parties on behalf of Company to discuss potential
     client, strategic or financial relationships with Company. CEO may not
     contact the same third parties in any matters for at least six (6) months
     following the end of the Term in any way that would violate the provisions
     of this Agreement.

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     5.4    CEO and/or Designee agrees to fully indemnify Company and its
     shareholders, subsidiaries, affiliates, officers, directors, employees and
     independent contractors against and will hold Company, its shareholders,
     subsidiaries, affiliates, officers, directors, employees and independent
     contractors harmless from any and all claims, costs, damages, demands,
     expenses (including without limitation attorneys' fees), judgments, losses
     or other liabilities of any kind or nature whatsoever arising from or
     directly or indirectly related to CEO's and/or Designee's breach of any
     provision(s) of this Agreement, including but not limited to any breach or
     failure, and the resulting tax ramifications thereof, of CEO and/or
     Designee to comply with this Section 5.

6.   INTELLECTUAL PROPERTY; CONFIDENTIALITY

     6.1    The provisions of EXHIBIT B are hereby incorporated herein and made
     a part hereof.

     6.2    The parties have executed a confidentiality and non-disclosure
     agreement on September 13, 2002 whose terms shall be incorporated herein
     and made a part hereof. For the avoidance of doubt, the parties to such
     agreement are CEO, the Designee and Company.

7.   GENERAL PROVISIONS

     7.1    INDEMNIFICATION. Company shall provide indemnification coverage for
     CEO and its Designee to the same extent as if such parties were executive
     officers of Company to the maximum extent permitted under Company's
     Bye-Laws.

     7.2    NON-SOLICITATION. During the Term of this Agreement, and for a
     period of one year thereafter, CEO and/or Designee will not, directly or
     indirectly, on behalf of itself or as a partner or as an officer, director,
     employee, agent, consultant or shareholder of any other entity or person,
     or as a trustee, fiduciary or other representative of any other person or
     entity, induce, or attempt to induce any employee of Company or its
     affiliates to leave the employ of Company or its affiliates, or in any way
     interfere with the relationship between any such employee and Company or
     its affiliates.

     7.3    SEVERABILITY. If any term or provision of this Agreement is be found
     by a court of competent jurisdiction or by an arbitrator to be invalid,
     illegal or otherwise unenforceable, such finding will not affect the other
     terms or provisions of this Agreement or the whole of this Agreement, but
     such term or provision found to be invalid, illegal or otherwise
     unenforceable will be deemed modified or narrowed to the extent necessary
     in the court's or arbitrator's opinion to render such term or provision
     enforceable, and the rights and obligations of the parties will be
     construed and enforced accordingly, preserving to the fullest permissible
     extent the intent and agreements of the parties set forth in this
     Agreement.

     7.4    NOTICES. Any notice or other communication given pursuant to this
     Agreement must be in writing and will be effective when delivered
     personally to the party for whom intended, or when signed for by that
     person (or that person's authorized representative) if delivered by
     messenger or express courier service or by certified or registered United
     States or United Kingdom mail, or five (5) days following deposit of the
     same into the United States or United Kingdom mail, first class postage
     prepaid, provided that in each case other than personal delivery the notice
     is addressed and sent to such party at the address set forth above.

     7.5    FORCE MAJEURE. Neither party will be liable for any delays or
     failures in performance of any obligations under this Agreement, due to
     causes beyond its reasonable control,

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     including, but not limited to: acts of God, fire, explosion, or other
     similar catastrophes; any law, order, regulation, direction, action or
     request of any government (or body thereof) having jurisdiction over either
     of the parties; national emergencies, insurrections, riots, wars or
     terrorist attacks; or strikes, lock-outs, work stoppages or other labor
     difficulties.

     7.6    COMPLETE AGREEMENT. This Agreement includes Task Orders executed
     hereunder (which are incorporated herein and made a part hereof) and sets
     forth the entire understanding between the parties with respect to the
     performance of the Services and the subject matter of this Agreement, and
     supersedes all prior and contemporaneous agreements, arrangements,
     correspondence, requests for proposals, proposals, and communications,
     whether oral or written, with respect to the performance of the Services or
     the subject matter of this Agreement.

     7.7    GOVERNING LAW. This Agreement will be governed by and construed in
     accordance with the laws of the State of New York without giving effect to
     any choice-of-law rules that may otherwise require application of the laws
     of another jurisdiction.

     7.8    LEGAL AND EQUITABLE REMEDIES. Company shall have the right to
     enforce this Agreement and any of its provisions by injunction, specific
     performance or other equitable relief, without bond and without prejudice
     to any other rights and remedies that Company may have for a breach of this
     Agreement by CEO and/or Designee.

     7.9    ASSIGNMENT. Neither this Agreement nor any interest herein nor any
     claim arising under or in connection with or relating to this Agreement may
     be assigned by CEO or Designee without Company's prior written consent, and
     any attempted assignment without such consent will be void. Company may
     assign this Agreement without the consent of CEO or Designee.

     7.10   SUCCESSORS. This Agreement will inure to the benefit of and will be
     binding upon the parties, their respective successors and permitted
     assignees and transferees, unless otherwise provided in this Agreement.

     7.11   AMENDMENTS. The terms and conditions of this Agreement may not be
     amended, changed, modified, supplemented or waived without the signature of
     each party. No waiver of any breach, delay or default under this Agreement
     will constitute a waiver of any other or subsequent breach, delay or
     default hereunder, whether or not similar.

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AGREED AND ACCEPTED:


FLAG TELECOM GROUP LIMITED       SPAGNOLO GROUP, LP

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Authorized Signature             Authorized Signature

                                 Mark F. Spagnolo, President
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Printed Name                     Printed Name


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Date                             Date


With respect to the Obligations and rights under Sections 6.1 (including Exhibit
B), 6.2, and 7.2:

DESIGNEE


---------------------------------
Name:
Date:

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                                    EXHIBIT A

                                   TASK ORDER

Task Order under Interim CEO Agreement (the "Agreement") with Flag Telecom Group
Limited dated as of October 10, 2002.

DESCRIPTION OF SERVICES:

Designee will be named as the Interim CEO of Company reporting to the Board of
Directors of Company and, except as specifically provided in the Agreement,
shall have such duties and responsibilities as are normally associated with the
position of chief executive officer and such other duties and responsibilities
as may be reasonably assigned by the Board of Directors of Company. These
services shall be rendered on a substantially full-time basis, provided Designee
shall be permitted to engage in outside activities which do not materially
interfere or conflict with his responsibilities to Company.

COMPENSATION:

During the Term, CEO shall be paid a consulting fee of $80,000 per month for
each full month of the term (partial months to be pro-rated based on the number
of days engaged during such month over the number of days in any such month).
Other than expense reimbursements, neither CEO or Designee shall receive any
additional compensation or benefits from company or its affiliates.

In addition to the foregoing, if CEO is subject to income taxes in the United
Kingdom and/or Bermuda with respect to the Services which is in excess of such
obligations that the CEO would otherwise have in the United States, then the CEO
shall be paid an additional amount by the Company such that it is in the same
income tax position as if it were only subject to U.S. income taxation.

AGREED AND ACCEPTED:

FLAG TELECOM GROUP LIMITED       SPAGNOLO GROUP, LP


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Authorized Signature             Authorized Signature

                                 Mark F. Spagnolo, President

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Printed Name                     Printed Name

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Date                             Date

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                                    EXHIBIT B

                              INTELLECTUAL PROPERTY

A.   NO USE OF NAME OR TRADEMARKS. Neither party will utilize the names or
trademarks of the other in connection with any advertising, marketing or
promotion of any kind without obtaining the other party's prior written consent.

B.   COMPANY WORK PRODUCT. Company retains all right, title and interest in and
to all software, programming documentation, technical ideas, concepts, know-how,
inventions, discoveries, improvements, techniques, notes, models, writings,
reports, formulas, specifications, memoranda, computer source code and
documentation and other data and all related intellectual property rights,
created, conceived and developed by Company prior to the commencement of this
Agreement (the "Company Prior Technology"). All right, title, and interest in
and to all derivative works, enhancements, extensions and modifications of or
related to Company Prior Technology or other products developed in whole or in
part by Company, including without limitation all intellectual property rights
therein (the "Company Developed Technology") shall be the sole property of
Company whether developed by Company, CEO or any other party in performing the
Services or otherwise.

C.   CEO WORK PRODUCT. CEO retains all right, title and interest in and to all
software, programming documentation, technical ideas, concepts, know-how,
inventions, discoveries, improvements, techniques, notes, models, writings,
reports, formulas, specifications, memoranda, computer source code and
documentation and other data and all related intellectual property rights,
originated, developed or owned by CEO or its employees or representatives prior
to the commencement of this Agreement (the "CEO Prior Technology"). All right,
title, and interest in and to all derivative works, enhancements, extensions and
modifications of or related to CEO Prior Technology developed in whole or in
part by CEO, including without limitation all intellectual property rights
therein (the "CEO Developed Technology") shall be the sole property of CEO. All
ideas, know-how, techniques or other intellectual property rights originated or
developed by CEO, excluding Company Prior Technology and Company Developed
Technology, developed by CEO during the term of the Agreement for work not
performed under this Agreement shall be the sole property of CEO. CEO will
notify Company of any CEO Prior Technology or CEO Developed Technology which CEO
uses in the performance of this Agreement.

D.   INVENTIONS AND DATA RIGHTS

     D.1 CEO and Designee agree that all notes, models, writings, reports,
     formulas, specifications, memoranda, computer source code and documentation
     and other data prepared and/or produced by CEO and Designee in the
     performance of this Agreement and which are or relate to Company Prior
     Technology or Company Developed Technology or result from work by CEO
     or/and Designee in the performance of this Agreement and all derivative
     works thereof are works made for hire and are assigned to and shall become
     the sole property of Company, including all rights therein of whatever kind
     or nature, and CEO and Designee agree not to disclose same to any other
     person, firm or corporation. Upon termination of its work on the project,
     or upon the termination or expiration of this Agreement, CEO and Designee
     agree to promptly deliver to Company all documents and other records that
     relate to the business activities of Company, and all other materials which
     belong to Company.

     D.2 CEO and Designee agree and do hereby assign to Company as its exclusive
     property,

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     their entire right, title and interest in those inventions, innovations or
     ideas developed or conceived by them solely or jointly with others, during
     the term of CEO's and/or Designee's work for or at Company, which
     inventions, innovations or ideas are or relate to Company Prior Technology
     or Company Developed Technology, or result from work by CEO and/or Designee
     in the performance of this Agreement. All rights, title and interest in
     such inventions shall be vested in Company immediately upon such
     development or conception. CEO and Designee further agree that, when
     requested, CEO and Designee will without charge to Company, but at Company
     `s expense, sign all papers, take all rightful oaths, and do all acts which
     may be necessary, desirable or convenient for securing and maintaining the
     patents, copyrights and legal protection for such inventions or innovations
     in any and all countries and for vesting title in Company, its successors,
     assigns, and legal representatives or nominees.

     D.3 If CEO and/or Designee, in the performance of this Agreement, discover,
     invent, or produce, without limitation, any information, computer programs,
     software or other associated intangible property, network configuration,
     formulae, product, device, system, technique, drawing, program or process
     which is a trade secret, such information, formulae, product, device,
     system, technique, drawing, program or process shall be assigned to
     Company. CEO and Designee agree to fully cooperate with Company in
     protecting the value and secrecy of any such trade secret, and further
     agree to execute any and all documents Company deems necessary to document
     any such assignment to Company. CEO and Designee appoint Company as CEO's
     and Designee's attorney-in-fact to execute any documents Company may deem
     necessary that relate to any such trade secret or assignment thereof to
     Company.

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