REGISTRATION RIGHTS AGREEMENT


                               Dated April 6, 2000


                                     between


                            VIATEL FINANCING TRUST I


                                  VIATEL, INC.


                                       and


                        MORGAN STANLEY & CO. INCORPORATED


                            SALOMON SMITH BARNEY INC.


                         BANC OF AMERICA SECURITIES LLC

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                          REGISTRATION RIGHTS AGREEMENT


               THIS REGISTRATION  RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered  into on April 6,  2000  between  VIATEL  FINANCING  TRUST I, a  special
statutory  trust formed under the laws of the State of Delaware  (the  "TRUST"),
VIATEL,  INC., a Delaware  corporation  ("VIATEL" or the "COMPANY"),  and MORGAN
STANLEY & CO.  INCORPORATED,  SALOMON  SMITH  BARNEY  INC.  and BANC OF  AMERICA
SECURITIES LLC (the "PLACEMENT AGENTS").

               This Agreement is made pursuant to the Placement Agreement, dated
the date hereof,  between the Trust,  the Company and the Placement  Agents (the
"PLACEMENT  AGREEMENT").  In order to induce the Placement  Agents to enter into
the  Placement  Agreement,  the Trust and the Company have agreed to provide the
registration rights set forth in this Agreement. The execution of this Agreement
is a condition to the closing under the Purchase Agreement.

               The Trust and the Company  agree with the Placement  Agents,  (i)
for their  benefit as  Placement  Agents and (ii) for the benefit of the holders
from time to time of the Registrable Securities,  including the Placement Agents
(each of the foregoing a "HOLDER" and together the "HOLDERS"), as follows:

               In  consideration  of the foregoing,  the parties hereto agree as
follows:

               1. DEFINITIONS.

               Capitalized terms used herein without definition shall have their
respective  meanings  set  forth  in the  Placement  Agreement.  As used in this
Agreement,  the  following  capitalized  defined  terms shall have the following
meanings:

               "AFFILIATE"  shall have the same meaning as given to that term in
          Rule 405 of the 1933 Act or any successor rule thereunder.

               "APPLICABLE  CONVERSION  PRICE"  as of any date of  determination
          shall mean the  Conversion  Price,  as it may be adjusted from time to
          time, in effect as of such date of determination or, if no Convertible
          Debentures are then outstanding, the Conversion Price that would be in
          effect were Convertible Debentures then outstanding.

               "COMMON  STOCK" shall mean the shares of common  stock,  $.01 par
          value per share, of Viatel and any other shares of common stock as may
          constitute "Common Stock" for purposes of the Indenture, including the
          Underlying Common Stock.

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               "COMPANY"  shall have the  meaning  set forth in the  Preamble to
          this Agreement and shall also include the Company's successors.

               "CONVERSION  PRICE" shall have the meaning  assigned such term in
          Section 14.1 of the Indenture.

               "CONVERTIBLE DEBENTURES" shall mean the 7 3/4% Convertible Junior
          Subordinated  Debentures  due 2015 of  Viatel to be  purchased  by the
          Trust  pursuant to the Debenture  Purchase  Agreement  dated as of the
          date hereof between Viatel and the Trust.

               "CONVERTIBLE  PREFERRED  SECURITIES"  shall  mean  7  3/4%  Trust
          Convertible Preferred Securities of the Trust.

               "DAMAGES ACCRUAL PERIOD" See Section 2(e) hereof.

               "DAMAGES PAYMENT DATE" shall mean each distribution  payment date
          under  the   Declaration,   in  the  case  of  Convertible   Preferred
          Securities,  each Interest Payment Date (as defined in the Indenture),
          in the case of Convertible Debentures,  and each January 15, April 15,
          July 15, October 15, in the case of Underlying  Common Stock;  and, in
          the event  that any  Convertible  Preferred  Security  or  Convertible
          Debenture (or portion thereof) is called for redemption or surrendered
          for conversion,  the date of redemption or conversion, as the case may
          be, shall be deemed to be a Damages  Payment Date with respect to such
          Convertible  Preferred  Security or Convertible  Debenture (or portion
          thereof),  as the case may be, unless accrued and unpaid distributions
          or interest, as the case may be, are to paid to the holder on a record
          date  prior to such  date of  conversion  (in which  case the  Damages
          Payment Date shall be deemed to be the date on which  distributions or
          interest, as the case may be, are payable to such record holder).

               "DECLARATION" shall mean the Amended and Restated  Declaration of
          Trust dated as of the date hereof of the Trust as amended from time to
          time.

               "DEFERRAL PERIODS" See Section 2(d)(ii) hereof.

               "EFFECTIVENESS  PERIOD" shall mean the period commencing with the
          date  hereof  and ending on the date that all  Registrable  Securities
          have ceased to be Registrable Securities.

               "EVENT" See Section 2(e) hereof.

               "EVENT DATE" See Section 2(e) hereof.

               "EVENT TERMINATION DATE" See Section 2(e) hereof.

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               "FILING DATE" See Section 2(a) hereof.

               "GUARANTEE" shall mean the guarantee by Viatel of the Convertible
          Preferred  Securities pursuant to the Preferred  Securities  Guarantee
          Agreement  dated as of the date hereof  between Viatel and The Bank of
          New York, as preferred guarantee trustee.

               "HOLDER" shall have the meaning set forth in the Preamble to this
          Agreement.

               "INDENTURE"  shall  mean the  indenture,  dated  April  12,  2000
          between the Company and The Bank of New York, as trustee,  pursuant to
          which the Convertible Debentures are being issued.

               "INITIAL SHELF REGISTRATION" See Section 2(a) hereof.

               "LIQUIDATED DAMAGES AMOUNT" See Section 2(e) hereof.

               "MAJORITY  HOLDERS"  shall mean the  Holders of a majority of the
          outstanding Registrable Securities; PROVIDED THAT whenever the consent
          or  approval  of  Holders of a  specified  percentage  of  Registrable
          Securities is required hereunder,  Registrable  Securities held by the
          Company, the Trust or any of their respective affiliates (as such term
          is defined in Rule 405 under the 1933 Act) (other  than the  Placement
          Agents  or  subsequent  holders  of  Registrable  Securities  if  such
          subsequent  holders are deemed to be such affiliates  solely by reason
          of their holding of such Registrable  Securities) shall not be counted
          in  determining  whether  such  consent or  approval  was given by the
          Holders of such required percentage or amount.

               "MANAGING UNDERWRITERS" shall mean the investment banking firm or
          firms that shall manage or co-manage an Underwritten Offering.

               "1934 ACT" shall mean the  Securities  Exchange  Act of 1934,  as
          amended from time to time.

               "1933 ACT" shall mean the Securities Act of 1933, as amended from
          time to time.

               "NOTICE HOLDER" See Section 2(d)(i) hereof.

               "PERSON"  shall  mean an  individual,  partnership,  corporation,
          limited liability  company,  joint venture,  association,  joint stock
          company,  trust or  unincorporated  organization or other entity, or a
          government or agency or political subdivision thereof.

               "PLACEMENT  AGENTS"  shall  have  the  meaning  set  forth in the
          Preamble to this Agreement.

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<PAGE>

               "PLACEMENT  AGREEMENT"  shall have the  meaning  set forth in the
          Preamble to this Agreement.

               "PROSPECTUS" shall mean the prospectus included in a Registration
          Statement (including,  without limitation, a prospectus that discloses
          information  previously  omitted from a prospectus filed as part of an
          effective   registration   statement   in  reliance   upon  Rule  430A
          promulgated  under the 1933 Act),  as amended or  supplemented  by any
          amendment   or   prospectus   supplement,   including   post-effective
          amendments,  and in each case including all material  incorporated  by
          reference therein.

               "REGISTRABLE  SECURITIES"  shall mean the  Convertible  Preferred
          Securities,   the  Guarantee,   the  Convertible  Debentures  and  the
          Underlying  Common  Stock,  whether or not such  securities  have been
          converted  or  exchanged,  and at all  times  subsequent  to any  such
          conversion or exchange,  and any security  issued with respect thereto
          upon any stock dividend,  split or similar event until, in the case of
          any such security, (i) it is effectively registered under the 1933 Act
          and disposed of in accordance with the Registration Statement covering
          its  offering  and sale,  (ii) it is  saleable  by the Holder  thereof
          pursuant to Rule 144(k) or any successor provision or (iii) it is sold
          to the  public  pursuant  to Rule 144 and,  as  result of the event or
          circumstance  described  in any of the  foregoing  clauses (i) through
          (iii),  the legends  with  respect to transfer  restrictions  required
          under the  Declaration  and the  Indenture are removed or removable in
          accordance with the terms of the Declaration or the Indenture,  as the
          case may be.

               "REGISTRATION  EXPENSES" shall mean any and all expenses incident
          to performance of or compliance by the Company and the Trust with this
          Agreement,  including without limitation:  (i) all SEC, stock exchange
          or National Association of Securities Dealers,  Inc.  registration and
          filing fees,  (ii) all fees and expenses  incurred in connection  with
          compliance   with  state   securities  or  blue  sky  laws  (including
          reasonable fees and  disbursements  of counsel for any underwriters or
          Holders  in  connection  with  blue  sky  qualification  of any of the
          Registrable  Securities),   (iii)  all  expenses  of  any  Persons  in
          preparing or assisting in  preparing,  word  processing,  printing and
          distributing  any   Registration   Statement,   any  Prospectus,   any
          amendments  or  supplements  thereto,  any  underwriting   agreements,
          securities  sales  agreements  and  other  documents  relating  to the
          performance of and  compliance  with this  Agreement,  (iv) all rating
          agency  fees,  (v)  all  fees  and   disbursements   relating  to  the
          qualification of the Indenture under applicable  securities laws, (vi)
          the fees and  disbursements of the Trustee and its counsel,  (vii) the
          fees and  disbursements  of counsel  for the Company and the Trust and
          the reasonable fees and  disbursements  of one counsel for the Holders

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          (which  counsel  shall be selected by the  Majority  Holders and which
          counsel may also be counsel for the  Placement  Agents) and (viii) the
          fees and  disbursements of the independent  public  accountants of the
          Company,  including  the  expenses  of any  special  audits  or  "cold
          comfort"  letters  required  by or incident  to such  performance  and
          compliance,  but  excluding  fees  and  expenses  of  counsel  to  the
          underwriters  (other than  reasonable  fees and  expenses set forth in
          clause  (ii)  above) or the Holders  and  underwriting  discounts  and
          commissions  and  transfer  taxes,  if any,  relating  to the  sale or
          disposition of Registrable Securities by a Holder.

               "REGISTRATION STATEMENT" shall mean any registration statement of
          the Company or the Trust that covers any of the Registrable Securities
          pursuant to the  provisions of this  Agreement and all  amendments and
          supplements   to   any   such   Registration   Statement,    including
          post-effective  amendments,  in each  case  including  the  Prospectus
          contained therein, all exhibits thereto and all material  incorporated
          by reference therein.

               "RULE 144"  shall mean Rule 144 under the 1933 Act,  as such Rule
          may be amended from time to time,  or any similar  rule or  regulation
          hereafter adopted by the SEC.

               "SEC" shall mean the Securities and Exchange Commission.

               "SELLING PERIOD" See Section 2(d)(i) hereof.

               "SHELF REGISTRATION" shall mean a registration  effected pursuant
          to Section 2(a) hereof.

               "SUBSEQUENT SHELF REGISTRATION" See Section 2(b) hereof.

               "TRUST"  shall have the meaning set forth in the  preamble to the
          agreement.

               "TRUSTEE"  shall  mean The  Bank of New  York  (or any  successor
          entity),  the  Institutional  Trustee under the Declaration or, in the
          event the  Convertible  Debentures  are  distributed to holders of the
          Convertible  Preferred  Securities upon  dissolution of the Trust, the
          Trustee under the Indenture.

               "UNDERLYING  COMMON STOCK" shall mean the Common Stock into which
          the Convertible Debentures are convertible.

               "UNDERWRITERS" See Section 3.

               "UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall mean
          a  registration  in  which  Registrable  Securities  are  sold  to  an
          Underwriter (as hereinafter defined) for reoffering to the public.

               2. SHELF REGISTRATION.

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               (a) SHELF  REGISTRATION.  The Company and the Trust shall prepare
and file with the SEC,  as soon as  practicable  but in any event on or prior to
the date ninety (90) days following the latest date of original  issuance of the
Convertible  Preferred Securities (the "FILING DATE"), a registration  statement
for an offering to be made on a delayed or continuous basis pursuant to Rule 415
of the 1933 Act (the "SHELF  REGISTRATION")  registering the resale from time to
time by Holders thereof of all of the Registrable Securities (the "INITIAL SHELF
REGISTRATION").  The Initial Shelf  Registration shall be on Form S-3 or another
appropriate  form  permitting  registration  of the  Registrable  Securities for
resale  by  the  Holders  in  one  or  more  Underwritten  Offerings,  privately
negotiated  transactions,  sales on the Nasdaq National Market, sales to brokers
or dealers or  otherwise.  The Company and the Trust shall use their  reasonable
best efforts to cause the Initial Shelf  Registration  to be declared  effective
under the 1933 Act as soon as  practicable,  but in no event later than 180 days
after the date hereof, and to keep the Initial Shelf  Registration  continuously
effective  under the 1933 Act until the earlier of the end of the  Effectiveness
Period.

               (b) If the Initial Shelf  Registration  or any  Subsequent  Shelf
Registration  (as defined  below)  ceases to be effective  for any reason at any
time  during the  Effectiveness  Period  (other  than  because  all  Registrable
Securities registered thereunder shall have been sold or shall have ceased to be
Registrable  Securities),  the Company and the Trust shall use their  reasonable
best  efforts  to obtain  the  prompt  withdrawal  of any order  suspending  the
effectiveness  thereof,  and in any event shall, subject to Section 2(d), within
thirty  (30)  days  of  such  cessation  of   effectiveness   amend  such  Shelf
Registration  in a manner  reasonably  expected to obtain the  withdrawal of the
order  suspending  the  effectiveness  thereof,  or  file  an  additional  Shelf
Registration  covering all of the  Registrable  Securities (a "SUBSEQUENT  SHELF
REGISTRATION"). If a Subsequent Shelf Registration is filed, the Company and the
Trust shall use their  reasonable  best efforts to cause such  Subsequent  Shelf
Registration to be declared  effective as soon as practicable  after such filing
and to keep such Registration  Statement continuously effective until the end of
the Effectiveness Period.

               (c) The  Company  and the Trust  shall  supplement  and amend the
Shelf  Registration  if  required  by the  rules,  regulations  or  instructions
applicable to the  registration  form under the 1933 Act used by the Company and
the  Trust  for  such  Shelf  Registration,  if  required  by the 1933 Act or if
reasonably  requested  by the  Placement  Agents on behalf of the Holders of the
Registrable Securities covered by such Registration Statement or by the Managing
Underwriters of such Registrable Securities;  provided that the party or parties

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making such request shall have  furnished to the Company and the Trust with such
request a written  description  of such  request and  reasonable  legal  grounds
therefor.

               (d) Each  Holder of  Registrable  Securities  agrees that if such
Holder  wishes to  distribute  its  Registrable  Securities  pursuant to a Shelf
Registration and related Prospectus,  it will do so only in accordance with this
Section  2(d).  Each Holder of  Registrable  Securities  agrees to give  written
notice  to the  Company  and the Trust  prior to any  intended  distribution  of
Registrable Securities under the Shelf Registration,  which notice shall specify
the  date on which  such  Holder  intends  to begin  such  distribution  and any
information  with  respect  to such  Holder  and the  intended  distribution  of
Registrable  Securities  by such  Holder  required  to  amend  the  Registration
Statement with respect to such intended  distribution of Registrable  Securities
by such Holder.  Within five business days after such date,  the Company and the
Trust shall either:

               (i)  (A)  If   necessary,   prepare  and  file  with  the  SEC  a
          post-effective  amendment to the Shelf Registration or a supplement to
          the related  Prospectus  or a supplement  or amendment to any document
          incorporated  therein by reference or file any other required document
          so that  such  Registration  Statement  will  not  contain  an  untrue
          statement of a material fact or omit to state a material fact required
          to be stated therein or necessary to make the  statements  therein not
          misleading,  and so that, as thereafter delivered to purchasers of the
          Registrable Securities being sold thereunder, such Prospectus will not
          contain  an untrue  statement  of a  material  fact or omit to state a
          material fact  required to be stated  therein or necessary to make the
          statements  therein,  in light of the  circumstances  under which they
          were made, not misleading;  (B) provide the Holders of the Registrable
          Securities who gave such notice copies of any documents filed pursuant
          to  Section  2(d)(i)(A);  and (C)  inform  each such  Holder  that the
          Company and the Trust have complied with their  obligations in Section
          2(d)(i)(A) and that the Registration  Statement and the Prospectus may
          be used for sales of  Registrable  Securities (or that, if the Company
          or the  Trust  has  filed  a  post-effective  amendment  to the  Shelf
          Registration  which has not yet been declared  effective,  the Company
          and the Trust will notify each such  Holder to that  effect,  will use
          reasonable efforts to secure the effectiveness of such  post-effective
          amendment  and will  immediately  notify each such Holder  pursuant to
          Section  2(d)(i)(A) hereof when the amendment has become effective and
          that the  Registration  Statement and the  Prospectus  may be used for
          sales of Registrable Securities).

               Each Holder who has given notice of intention to distribute  such
          Holder's  Registrable  Securities in accordance with this Section 2(d)
          (a  "NOTICE  HOLDER")  shall  distribute  all or any such  Registrable
          Securities  pursuant to the Shelf  Registration and related Prospectus
          only during the 45-day  period  commencing  with the date on which the
          Company and the Trust give such notice (such 45-day period is referred
          to as a "SELLING PERIOD").  The Notice Holders will not distribute any

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          Registrable  Securities  pursuant to such  Registration  Statement  or
          Prospectus  after such Selling  Period  without giving a new notice of
          intention to distribute  pursuant to Section 2(d) hereof and receiving
          a further  notice from the  Company and the Trust  pursuant to Section
          2(d)(i)(C) hereof.

               (ii) In the event of the  happening  of any event (A) of the kind
          described in Section  2(e) hereof or (B) that the Company  believes in
          good faith makes it advisable to suspend use of the  Prospectus  for a
          discrete period of time due to pending material corporate developments
          or similar  material events that have not yet been publicly  disclosed
          and as to  which  the  Company  believes  in good  faith  that  public
          disclosure will be  disadvantageous  to the Company or the Trust,  the
          Company shall deliver a  certificate  in writing,  signed by its Chief
          Executive Officer or Chief Financial  Officer,  to the Notice Holders,
          and the Managing Underwriters,  if any, to the effect of the foregoing
          and,  upon  receipt of such  certificate,  each such  Notice  Holder's
          Selling  Period will not  recommence or shall be suspended  until such
          Notice  Holder's  receipt  of copies of the  supplemented  or  amended
          Prospectus  provided for in Section  2(d)(i)(A) hereof, or until it is
          advised in writing by the Company that the Prospectus may be used, and
          it has received copies of any additional or supplemental  filings that
          are   incorporated  or  deemed   incorporated  by  reference  in  such
          Prospectus.  The Company and the Trust will use their  reasonable best
          efforts to ensure that the use of the Prospectus  may be resumed,  and
          the Selling Period will commence or recommence, as soon as practicable
          and,  in the case of a pending  development  or event  referred  to in
          Section  2(d)(ii)(B)  hereof,  as soon as the  earlier  of (x)  public
          disclosure of such pending material  corporate  development or similar
          material  event or (y) the date  upon  which  in the  judgment  of the
          Company,  public disclosure of such material corporate  development or
          similar material event would not be  disadvantageous to the Company or
          the Trust.  Notwithstanding  the foregoing,  the period during which a
          Selling  Period  is  suspended,  whether  or not  consecutive,  in any
          12-month period, shall not exceed 60 days (a "DEFERRAL PERIOD").

               (e) The  parties  hereto  agree that the  Holders of  Registrable
Securities will suffer  damages,  and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
has not been filed on or prior to the Filing Date,  (ii) prior to the end of the
Effectiveness  Period,  the SEC shall have  issued a stop order  suspending  the
effectiveness of the Shelf  Registration,  (iii) the aggregate number of days in
any one  Deferral  Period  exceeds  the  periods  permitted  pursuant to Section
2(d)(ii)  hereof  or  (each  of the  events  of a type  described  in any of the
foregoing  clauses (i) through (iii) are  individually  referred to herein as an
"Event,"  and the Filing Date in the case of clause  (i),  the date on which the
effectiveness  of the Shelf  Registration has been suspended or proceedings with
respect to the Shelf  Registration  under  Section  8(d) or 8(e) of the 1933 Act
have been  commenced in the case of clause (ii),  the date on which the duration
of a Deferral  Period exceeds the aggregate  number of days permitted by Section
2(d)(ii)  hereof being referred to herein as an "EVENT  DATE").  Events shall be
deemed to  continue  until the  "EVENT  TERMINATION  DATE,"  which  shall be the

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following  dates with respect to the  respective  types of Events:  the date the
Initial  Registration  Statement  is  filed  in the case of an Event of the type
described in clause (i), the date that all stop orders suspending  effectiveness
of the Shelf  Registration have been removed and the proceedings  initiated with
respect to the Shelf Registration under Section 8(d) or (e) of the 1933 Act have
terminated,  as the case may be, in the case of Events of the types described in
clause (ii), and  termination  of the Deferral  Period which caused the limit on
the duration of a Deferral  Period set forth in Section  2(d)(ii) to be exceeded
in the case of the  commencement  of an Event of the type  described  in  clause
(iii).

               Accordingly, upon the occurrence of any Event Date and until such
time as there are no Events which have  occurred and are  continuing (a "DAMAGES
ACCRUAL  PERIOD"),  commencing  on and  including  the Event  Date on which such
Damages Accrual Period began, the Company agrees to pay, as liquidated  damages,
and not as a penalty,  an additional  amount (the "LIQUIDATED  DAMAGES AMOUNT"):
(i) to each Holder of (x) a Convertible  Preferred  Security or (y) in the event
that the  Convertible  Debentures  are  distributed  to holders  of  Convertible
Preferred  Securities  upon  dissolution  of the  Trust in  accordance  with the
Declaration,  a Convertible  Debenture,  accruing at a rate equal to one-half of
one percent per annum (50 basis  points) on an amount  equal to the  liquidation
amount  of such  Convertible  Preferred  Security  or  principal  amount of such
Convertible Debenture,  as the case may be, held by such Holder and (ii) to each
Holder of Underlying  Common Stock,  accruing at a rate equal to one-half of one
percent per annum (50 basis points) calculated on an amount equal to the product
of (x) the Applicable  Conversion Price as of the business day immediately prior
to the applicable  Damages Payment Date times (y) the number of shares of Common
Stock   that  are   Registrable   Securities   held  by  such   Notice   Holder.
Notwithstanding  the foregoing,  no Liquidated Damages Amounts shall accrue with
respect to any  Registrable  Security from and after the earlier of (x) the date
such security is no longer a  Registrable  Security,  and (y)  expiration of the
Effectiveness  Period. The rate of accrual of the Liquidated Damages Amount with
respect to any period shall not exceed the rate  provided for in this  paragraph
notwithstanding the occurrence of multiple concurrent Events. Liquidated Damages
Amounts  shall be  computed  on the  basis of a 360-day  year of  twelve  30-day
months,  PROVIDED that Liquidated Damages Amounts payable for any period shorter
than a month will be computed on the basis of the actual  number of days elapsed
per 30- day month.

               The  Company  shall  pay  the  liquidated   damages  due  on  any
Convertible Preferred Security, Convertible Debenture or Underlying Common Stock
by  depositing  with the  Trustee,  in trust for the  benefit of the  Holders of
Convertible Preferred Securities or Convertible Debentures entitled thereto (or,
in the case of Underlying  Common Stock,  by depositing  with the transfer agent
for the benefit of the Holders of Underlying Common Stock entitled thereto),  as
the case may be,  at least one  business  day  prior to the  applicable  Damages
Payment Date, sums sufficient to pay all accrued and unpaid  liquidated  damages
from and including  the last Damages  Payment Date to which  liquidated  damages
have been paid in full (or, if no  liquidated  damages have been paid in respect
of the relevant Damages Accrual Period, from and including the first day of such

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Damages  Accrual  Period) to, but  excluding,  such Damages  Payment  Date.  The
Liquidated  Damages Amount due shall be payable on each Damages  Payment Date to
the Holders of Registrable  Securities entitled thereto holding such Registrable
Securities on the record date for such Damages  Payment Date (which record date,
in the case of Underlying Common Stock,  shall be established by the Company but
shall in any  event be  between  10 and 60 days  prior to the  relevant  Damages
Payment  Date);  PROVIDED  that,  if any  Convertible  Preferred  Securities  or
Convertible Debentures (or portions thereof) are called for redemption,  accrued
and unpaid  liquidated  damages  thereon shall be paid to the person entitled to
receive accrued and unpaid interest  thereon;  and PROVIDED  FURTHER that if any
Convertible  Preferred Security or Convertible Debenture (or portion thereof) is
surrendered  for  conversion  from and after the close of  business on a regular
record  date and prior to the  corresponding  distribution  payment or  interest
payment  date,  as the case may be, then accrued and unpaid  liquidated  damages
thereon  shall be paid to the  person  entitled  to receive  accrued  and unpaid
distributions  or interest,  as the case may be, in respect of such  Convertible
Preferred Security or Convertible Debenture (or portion thereof) as the case may
be;  and  PROVIDED  FURTHER  that  if  any  Convertible  Preferred  Security  or
Convertible  Debenture (or portion thereof) is surrendered for conversion at any
other time, then the converting  Holder thereof shall be entitled to receive all
accrued  and unpaid  Liquidated  Damages  thereon to but  excluding  the date of
conversion.  The Trustee shall be entitled,  on behalf of the Notice Holders and
the Holders of  Convertible  Preferred  Securities,  Convertible  Debentures  or
Underlying  Common Stock,  to seek any available  remedy for the  enforcement of
this  Agreement,   including  for  the  payment  of  such  liquidated   damages.
Notwithstanding  the foregoing,  the parties agree that the sole damages payable
for a violation of the terms of this Agreement with respect to which  liquidated
damages are expressly provided shall be such liquidated damages.

               All of the Company's  obligations  set forth in this Section 2(e)
which are  outstanding  with respect to any  Registrable  Securities at the time
such security ceases to be a Registrable  Security shall survive until such time
as all such  obligations  with respect to such security  have been  satisfied in
full.

               The parties hereto agree that the liquidated damages provided for
in this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by holders of Registrable Securities,  other than the Placement Agents,
by  reason of the  failure  of the Shelf  Registration  to be filed or  declared
effective or  unavailable  (absolutely  or as a practical  matter) for effecting
resales of Registrable  Securities,  as the case may be, in accordance  with the
provisions hereof.

               (f) The Company shall pay all Registration Expenses in connection
with  the  registration  pursuant  to  Section  2.  Each  Holder  shall  pay all
underwriting  discounts and commissions and transfer taxes, if any,  relating to
the sale or disposition of such Holder's Registrable  Securities pursuant to the
Shelf Registration.

               3. REGISTRATION PROCEDURES.

                                       10
<PAGE>

               In connection  with the  obligations of the Company and the Trust
with respect to the Registration  Statements  pursuant to Section 2 hereof,  the
Company and the Trust shall as expeditiously as possible:

               (a) prepare and file with the SEC a Registration Statement on the
          appropriate form under the 1933 Act, which form shall be available for
          the sale of the Registrable  Securities by the selling Holders thereof
          and use their best  efforts to cause such  Registration  Statement  to
          become  effective and remain  effective in  accordance  with Section 2
          hereof;   PROVIDED  that  before  the  effective   date  of  any  such
          Registration  Statement or Prospectus or any amendments or supplements
          thereto (other than documents that would be  incorporated or deemed to
          be  incorporated  therein by reference and that Viatel or the Trust is
          required by applicable  securities laws or stock exchange requirements
          to file)  Viatel and the Trust shall  furnish to Morgan  Stanley & Co.
          Incorporated  copies of all such documents proposed to be filed, which
          documents  will be  subject  to the  review  of  Morgan  Stanley & Co.
          Incorporated;

               (b) subject to Section  2(d),  prepare and file with the SEC such
          amendments  and   post-effective   amendments  to  each   Registration
          Statement  as may be  necessary  to keep such  Registration  Statement
          effective for the applicable  period  specified in Section 2 and cause
          each  Prospectus  to  be  supplemented  by  any  required   prospectus
          supplement and, as so  supplemented,  to be filed pursuant to Rule 424
          under  the 1933 Act;  and,  subject  to  Section  2(d),  comply in all
          material  respects with the provisions of the 1933 Act with respect to
          the  disposition  of  all  securities  covered  by  such  Registration
          Statement during the applicable period in accordance with the intended
          methods  of  disposition  by the  sellers  thereof  set  forth in such
          Registration  Statement  as  so  amended  or  such  Prospectus  as  so
          supplemented;

               (c) furnish to each Holder of Registrable Securities,  to counsel
          for the  Placement  Agents,  to counsel  for the  Holders  and to each
          Underwriter of an Underwritten Offering of Registrable Securities,  if
          any, without charge, as many copies of each Prospectus, including each
          preliminary  Prospectus,  and any amendment or supplement  thereto and
          such other  documents  as such Holder or  Underwriter  may  reasonably
          request,  in order to facilitate the public sale or other  disposition
          of the Registrable  Securities;  and the Company and the Trust consent
          to the use of such Prospectus and any amendment or supplement  thereto
          in accordance  with  applicable law by each of the selling  Holders of
          Registrable  Securities and any such  Underwriters  in connection with
          the offering and sale of the Registrable  Securities covered by and in
          the manner described in such Prospectus or any amendment or supplement
          thereto in accordance with applicable law;

               (d) use their  reasonable best efforts to register or qualify the
          Registrable  Securities under all applicable state securities or "blue

                                       11
<PAGE>

          sky"  laws  of  such   jurisdictions  as  any  Holder  of  Registrable
          Securities  covered  by  a  Registration  Statement  shall  reasonably
          request in writing by the time the applicable  Registration  Statement
          is declared  effective by the SEC, to  cooperate  with such Holders in
          connection  with any  filings  required  to be made with the  National
          Association of Securities Dealers,  Inc. and do any and all other acts
          and things  which may be  reasonably  necessary or advisable to enable
          such Holder to consummate the disposition in each such jurisdiction of
          such Registrable Securities owned by such Holder;  PROVIDED,  HOWEVER,
          that  neither  the  Company  nor the Trust  shall be  required  to (i)
          qualify as a foreign  corporation  or as a dealer in securities in any
          jurisdiction  where it would not  otherwise be required to qualify but
          for this  Section  3(d),  (ii) file any general  consent to service of
          process  or  (iii)   subject   themselves  to  taxation  in  any  such
          jurisdiction if it is not so subject;

               (e) notify each Holder of Registrable Securities, counsel for the
          Holders  and  counsel  for  the  Placement  Agents  promptly  and,  if
          requested  by any such  Holder  or  counsel,  confirm  such  advice in
          writing  (i)  when  a  Prospectus,   any  Prospectus   supplement,   a
          Registration Statement or a post-effective amendment to a Registration
          Statement or post-effective  amendment has been filed with the SEC and
          when a Registration  Statement or post-effective  amendment has become
          effective,  (ii) of any  request  by the SEC or any  state  securities
          authority for amendments and  supplements to a Registration  Statement
          and Prospectus or for additional  information  after the  Registration
          Statement  has become  effective,  (iii) of the issuance by the SEC or
          any  state  securities  authority  of any stop  order  suspending  the
          effectiveness  of a  Registration  Statement or the  initiation of any
          proceedings for that purpose, (iv) if, between the effective date of a
          Registration  Statement  and the  closing  of any sale of  Registrable
          Securities covered thereby,  the representations and warranties of the
          Company  or  the  Trust  contained  in  any  underwriting   agreement,
          securities  sales  agreement  or  other  similar  agreement,  if  any,
          relating to the offering  cease to be true and correct in all material
          respects or if the Company or the Trust receives any notification with
          respect to the  suspension  of the  qualification  of the  Registrable
          Securities  for  sale in any  jurisdiction  or the  initiation  of any
          proceeding for such purpose,  (v) of the happening of any event during
          the period a  Registration  Statement  is  effective  which  makes any
          statement  made  in  such   Registration   Statement  or  the  related
          Prospectus untrue in any material respect or which requires the making
          of any changes in such  Registration  Statement or Prospectus in order
          to make the statements  therein not misleading in any material respect
          and (vi) of any  determination  by the Company  that a  post-effective
          amendment to a Registration Statement would be appropriate;

               (f)  subject to  Section  2(d) make  every  reasonable  effort to
          obtain the withdrawal of any order  suspending the  effectiveness of a
          Registration  Statement  at the earliest  possible  moment and provide
          prompt notice to each Holder of the withdrawal of any such order;

                                       12
<PAGE>

               (g)  furnish to each  Holder of  Registrable  Securities  and the
          Placement Agents,  without charge, at least one conformed copy of each
          Registration  Statement  and  any  post-effective   amendment  thereto
          (without  documents  incorporated  therein by  reference  or  exhibits
          thereto, unless requested);

               (h) cooperate with the selling Holders of Registrable  Securities
          to  facilitate  the timely  preparation  and delivery of  certificates
          representing  Registrable  Securities  to be sold and not  bearing any
          restrictive  legends and enable such  Registrable  Securities to be in
          such denominations and registered in such names as the selling Holders
          may reasonably request at least two business days prior to the closing
          of any sale of Registrable Securities;

               (i) upon the  occurrence  of any event  contemplated  by  Section
          3(e)(v)  hereof,  use their best  efforts to prepare and file with the
          SEC  a  supplement  or  post-effective  amendment  to  a  Registration
          Statement  or the  related  Prospectus  or any  document  incorporated
          therein by reference or file any other  required  document so that, as
          thereafter delivered to the purchasers of the Registrable  Securities,
          such  Prospectus  will not contain any untrue  statement of a material
          fact or omit to state a material fact necessary to make the statements
          therein, in the light of the circumstances under which they were made,
          not misleading. Each of the Company and the Trust agrees to notify the
          Holders to suspend use of the  Prospectus  as promptly as  practicable
          after the occurrence of such an event, and the Holders hereby agree to
          suspend  use of the  Prospectus  until the either  the  Company or the
          Trust has  amended or  supplemented  the  Prospectus  to correct  such
          misstatement or omission;

               (j) a  reasonable  time prior to the  filing of any  Registration
          Statement,  any Prospectus,  any amendment to a Registration Statement
          or amendment or  supplement to a Prospectus or any document that is to
          be  incorporated  by  reference  into a  Registration  Statement  or a
          Prospectus after initial filing of a Registration  Statement,  provide
          copies of such document to the Holders and their counsel and make such
          of the representatives of the Company as shall be reasonably requested
          by the  Holders or their  counsel  available  for  discussion  of such
          document,  and shall not at any time file or make any amendment to the
          Registration  Statement,   any  Prospectus  or  any  amendment  of  or
          supplement to a Registration Statement or a Prospectus or any document
          (other than a document  which the Company is legally  required to file
          under the 1934 Act) which is to be  incorporated  by reference  into a
          Registration Statement or a Prospectus, of which the Holders and their
          counsel shall not have previously been advised and furnished a copy or
          to which the Holders or their counsel shall reasonably object;

               (k) obtain a CUSIP  number  for all  Registrable  Securities  not
          later  than  the  effective  date of the  Registration  Statement  and

                                       13
<PAGE>

          provide the Trustee and the  transfer  agent for the Common Stock with
          printed  certificates  for the Registrable  Securities  which are in a
          form  eligible  for deposit  with The  Depositary  Trust  Company,  as
          applicable;

               (l) cause the  Registrable  Securities  covered by the applicable
          Registration Statement to be registered with or approved by such other
          governmental  agencies or authorities within the United States (except
          as may be  required  solely  as a  consequence  of the  nature of such
          selling  Holder,  in which case Viatel and the Trust will cooperate in
          all reasonable respects with the filing of such Registration Statement
          and the granting of such  approvals) as may be necessary to enable the
          selling  Holder or Holders  thereof to consummate  the  disposition of
          such Registrable Securities;

               (m)  upon  execution  of  customary  confidentiality   agreements
          reasonably  satisfactory  to the  Company  and  the  Trust  and  their
          counsel,  make  available for  inspection by a  representative  of the
          Holders of the Registrable Securities,  any Underwriter  participating
          in any disposition pursuant to such Shelf Registration,  and attorneys
          and accountants  designated by the Holders, at reasonable times and in
          a  reasonable  manner,  all  financial  and other  records,  pertinent
          documents  and  properties  of the Company,  and cause the  respective
          officers,  directors  and  employees  of the  Company  to  supply  all
          information   reasonably   requested   by  any  such   representative,
          Underwriter,  attorney  or  accountant  in  connection  with  a  Shelf
          Registration;

               (n) if reasonably requested by the Placement Agents or any Holder
          of Registrable Securities covered by such Registration Statement,  (i)
          promptly  incorporate  in a Prospectus  supplement  or  post-effective
          amendment such  information  with respect to such Holder as is legally
          required to be included  therein and (ii) make all required filings of
          such Prospectus supplement or such post-effective amendment as soon as
          the Company and the Trust have received notification of the matters to
          be incorporated in such filing;

               (o)  use  their  reasonable  best  efforts  to  enter  into  such
          customary  agreements  and take all such other  actions in  connection
          therewith  (including  those requested by the Holders of a majority of
          the  Registrable  Securities  being  sold)  in order  to  expedite  or
          facilitate the disposition of such Registrable  Securities  including,
          but not limited to, an Underwritten  Offering and in such  connection,
          (i) to the extent possible,  make such  representations and warranties
          to the Holders and any  Underwriters  of such  Registrable  Securities
          with respect to the business of the Company and its subsidiaries,  the
          Shelf Registration, Prospectus and documents incorporated by reference
          therein or deemed  incorporated by reference therein,  if any, in each
          case, in form,  substance and scope as are customarily made by issuers
          to underwriters in Underwritten  Offerings and confirm the same if and
          when  requested,  (ii) use their  reasonable  best  efforts  to obtain
          opinions of counsel to the Company  (which  counsel and  opinions,  in
          form,  scope and substance,  shall be reasonably  satisfactory  to the
          Holders and such Underwriters and their respective  counsel) addressed

                                       14
<PAGE>

          to each selling  Holder and  Underwriter  of  Registrable  Securities,
          covering  the matters  customarily  covered in opinions  requested  in
          underwritten  offerings,  (iii) use their  reasonable  best efforts to
          obtain "cold comfort"  letters from the independent  certified  public
          accountants  of the Company (and, if  necessary,  any other  certified
          public accountant of any subsidiary of the Company, or of any business
          acquired by the Company for which  financial  statements and financial
          data are or are required to be included in the Registration Statement)
          addressed  to each  selling  Holder  and  Underwriter  of  Registrable
          Securities,  such letters to be in customary form and covering matters
          of  the  type  customarily   covered  in  "cold  comfort"  letters  in
          connection  with  underwritten   offerings,   and  (iv)  deliver  such
          documents  and  certificates  as may be  reasonably  requested  by the
          Holders of a majority of the Registrable  Securities being sold or the
          Underwriters,  and which are  customarily  delivered  in  underwritten
          offerings,  to evidence the continued validity of the  representations
          and warranties of the Company made pursuant to clause (i) above and to
          evidence  compliance  with any  customary  conditions  contained in an
          underwriting agreement;

               (q) cooperate with the selling Holders of Registrable  Securities
          to  facilitate  the timely  preparation  and delivery of  certificates
          representing  Registrable  Securities  to be sold and not  bearing any
          restrictive legends;  and enable such Registrable  Securities to be in
          such  denominations  and  registered  in such names as the Holders may
          request;

               (r) cause all Underlying Common Stock covered by the Registration
Statement to be listed on each securities  exchange or quotation system on which
the  Common  Stock  is then  listed  no later  than  the  date the  Registration
Statement is declared  effective  and, in  connection  therewith,  to the extent
applicable,  to make such  filings  under the 1934 Act  (E.G.,  the  filing of a
Registration  Statement on Form 8-A) and to have such filings declared effective
thereunder.

               The Company and the Trust may require each Holder of  Registrable
Securities to furnish to the Company such  information  regarding the Holder and
the proposed  distribution by such Holder of such Registrable  Securities as the
Company  may from  time to time  reasonably  request  in  writing.  No Holder of
Registrable   Securities  may  include  its   Registrable   Securities  in  such
Registration  Statement  unless and until such Holder furnishes such information
to  the  Company.  Each  Holder  including  Registrable  Securities  in a  Shelf
Registration  shall agree to furnish  promptly  to the  Company any  information
regarding  such  Holder and the  proposed  distribution  by such  Holder of such
Registrable  Securities required to make any information previously furnished to
the Company by such Holder not materially misleading.

               Each  Holder  agrees  that,  upon  receipt of any notice from the
Company  or the Trust of the  happening  of any event of the kind  described  in
Section 3(e)(v) hereof,  such Holder will forthwith  discontinue  disposition of
Registrable  Securities  pursuant to a Shelf  Registration  until such  Holder's
receipt of the copies of the supplemented or amended Prospectus  contemplated by

                                       15
<PAGE>

Section  3(i)  hereof,  and,  if so directed  by the  Company,  such Holder will
deliver to the Company (at its expense) all copies in its possession, other than
permanent  file  copies  then in such  Holder's  possession,  of the  Prospectus
covering  such  Registrable  Securities  current  at the time of receipt of such
notice.  If the Company shall give any such notice to suspend the disposition of
Registrable  Securities  pursuant to a Shelf  Registration,  the Company and the
Trust shall extend the period during which the  Registration  Statement shall be
maintained effective pursuant to this Agreement by the number of days during the
period from and including the date of the giving of such notice to and including
the date when the Holders  shall have  received  copies of the  supplemented  or
amended Prospectus necessary to resume such dispositions.  There may not be more
than two such suspensions during any 365 day period and any such suspensions may
not exceed 30 days for each suspension.

               The  Holders  of  Registrable   Securities  covered  by  a  Shelf
Registration  who  desire to do so may sell such  Registrable  Securities  in an
Underwritten Offering; PROVIDED that the Company and the Trust shall be required
to use their  reasonable  best efforts to effect an  underwritten  offering only
upon the  request  of  Holders  of at least  25% of the  Registrable  Securities
outstanding  at the time such request is  delivered to the Company.  In any such
Underwritten  Offering,  the investment banker or investment bankers and manager
or managers  (the  "UNDERWRITERS")  that will  administer  the offering  will be
selected by the Majority Holders of the Registrable  Securities included in such
offering,  subject  to  approval  by the  Company,  which  approval  will not be
unreasonably withheld.

               4. HOLDER'S OBLIGATIONS.

               Each Holder, severally and not jointly, agrees, by acquisition of
the Registrable Securities, that such Holder of Registrable Securities shall not
be  entitled  to  sell  any  of  such  Registrable   Securities  pursuant  to  a
Registration Statement or to receive a Prospectus relating thereto,  unless such
Holder has furnished  Viatel and the Trust with the notice required  pursuant to
Section  2(d) hereof  (including  the  information  required to  accompany  such
notice)  and,  promptly  after the  request by Viatel and the Trust,  such other
information  regarding  such  Holder and the  distribution  of such  Registrable
Securities  as Viatel  and the Trust may from time to time  reasonably  request.
Viatel  and the  Trust  may  exclude  from  such  registration  the  Registrable
Securities of any Holder who does not furnish such  information  provided  above
for so long as such information is not so furnished.  Each Holder of Registrable
Securities as to which any Registration  Statement is being effected,  severally
and not  jointly,  agrees  promptly  to  furnish  to  Viatel  and the  Trust all
information required to be disclosed in order to make the information previously
furnished to Viatel and the Trust by such Holder not misleading. Any sale of any
Registrable  Securities  by any Holder  shall  constitute a  representation  and
warranty  by such  Holder,  severally  and not  jointly,  that  the  information
relating  to such  Holder  and its plan of  distribution  is as set forth in the
Prospectus  delivered by such Holder in connection with such  disposition,  that

                                       16
<PAGE>

such  Prospectus  does  not as of the  time  of such  sale  contain  any  untrue
statement of a material fact relating to such Holder or its plan of distribution
and that such  Prospectus does not as of the time of such sale omit to state any
material fact relating to such Holder or its plan of  distribution  necessary to
make the statements in such Prospectus,  in the light of the circumstances under
which they were made, not misleading.

               5. INDEMNIFICATION AND CONTRIBUTION.

               (a) The  Company  agrees  to  indemnify  and  hold  harmless  the
Placement  Agents,  each  Holder  and each  person,  if any,  who  controls  the
Placement  Agents or any Holder  within the meaning of either  Section 15 of the
1933 Act or Section 20 of the 1934 Act, or is under common  control  with, or is
controlled by, the Placement Agents or any Holder,  from and against all losses,
claims,  damages and liabilities  (including,  without limitation,  any legal or
other expenses  reasonably  incurred by the Placement Agents,  any Holder or any
such   controlling  or  affiliated   person  in  connection  with  defending  or
investigating  any such  action or  claim)  caused by any  untrue  statement  or
alleged  untrue  statement  of a material  fact  contained  in any  Registration
Statement (or any amendment  thereto) pursuant to which  Registrable  Securities
were registered under the 1933 Act, including all documents incorporated therein
by reference,  or caused by any omission or alleged  omission to state therein a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading,  or caused by any untrue  statement  or alleged  untrue
statement  of a  material  fact  contained  in any  Prospectus  (as  amended  or
supplemented  if the Company shall have  furnished any amendments or supplements
thereto),  or caused by any  omission  or alleged  omission  to state  therein a
material  fact  necessary to make the  statements  therein,  in the light of the
circumstances under which they were made, not misleading, except insofar as such
losses,  claims,  damages or liabilities are caused by any such untrue statement
or omission or alleged  untrue  statement  or  omission  based upon  information
relating  to the  Placement  Agents or any Holder  furnished  to the  Company in
writing by the Placement Agents or any selling Holder expressly for use therein;
PROVIDED that the foregoing  indemnity  agreement shall not inure to the benefit
of any Holder or any Person controlling such Holder, with respect to any sale or
disposition  of  Registrable  Securities  by such  Holder  in  violation  of the
penultimate  paragraph of Section 3 of this  Agreement.  In connection  with any
Underwritten  Offering  permitted by Section 3, the Company will also  indemnify
the  Underwriters,  if any,  selling  brokers,  dealers and  similar  securities
industry  professionals  participating in the  distribution,  their officers and
directors  and each  Person who  controls  such  Persons  (within the meaning of
either  Section  15 of the 1933 Act or  Section  20 of the 1934 Act) to the same
extent as provided above with respect to the  indemnification of the Holders, if
requested in connection with any Registration Statement.

               The foregoing notwithstanding, the Company shall not be liable to
the extent that such losses,  claims, damages or liabilities arise out of or are
based upon an untrue  statement  or alleged  untrue  statement  or  omission  or
alleged omission made in any Prospectus that is a preliminary  prospectus if (i)
such indemnified  person failed to send or deliver a copy of the Prospectus with
or prior to the  delivery  of written  confirmation  of the dale of  Registrable

                                       17
<PAGE>

Securities giving rise to such losses,  claims,  damages or liabilities and (ii)
the Prospectus would have corrected such untrue statement or omission.

               (b) Each Holder agrees,  severally and not jointly,  to indemnify
and hold  harmless  the  Company,  the  Placement  Agents and the other  selling
Holders,  and  each  of  their  respective  directors,  officers  who  sign  the
Registration  Statement and each Person,  if any, who controls the Company,  the
Placement  Agents and any other  selling  Holder  within  the  meaning of either
Section 15 of the 1933 Act or  Section 20 of the 1934 Act to the same  extent as
the  foregoing  indemnity  from the  Company  to the  Placement  Agents  and the
Holders,  but  only  with  reference  to  information  relating  to such  Holder
furnished  to the  Company in writing by such  Holder  expressly  for use in any
Registration  Statement (or any  amendment  thereto) or any  Prospectus  (or any
amendment or supplement thereto).

                  (c)  In  case  any  proceeding   (including  any  governmental
investigation)  shall be  instituted  involving  any  Person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above,
such person (the  "INDEMNIFIED  PARTY") shall promptly notify the Person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing (but the
failure  to so notify  an  indemnifying  party  shall  not  relieve  it from any
liability which it may have under this Section, except to the extent that it has
been prejudiced in any material  respect by such failure,  or from any liability
it  may  otherwise  have)  and  the  indemnifying  party,  upon  request  of the
indemnified  party,   shall  retain  counsel  reasonably   satisfactory  to  the
indemnified  party  to  represent  the  indemnified  party  and any  others  the
indemnifying  party may designate in such  proceeding and shall pay the fees and
disbursements  of  such  counsel  related  to  such  proceeding.   In  any  such
proceeding,  any  indemnified  party  shall  have the  right to  retain  its own
counsel,  but the fees and expenses of such  counsel  shall be at the expense of
such  indemnified  party unless (i) the  indemnifying  party and the indemnified
party shall have  mutually  agreed to the  retention of such counsel or (ii) the
named parties to any such proceeding  (including any impleaded  parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel  would be  inappropriate  due to actual or potential
differing  interests between them. It is understood that the indemnifying  party
shall  not,  in  respect  of the  legal  expenses  of any  indemnified  party in
connection with any proceeding or related  proceedings in the same jurisdiction,
be liable for (A) the  reasonable  fees and  expenses of more than one  separate
firm (in  addition  to any  local  counsel)  for the  Placement  Agents  and all
Persons,  if any, who control the Placement  Agents within the meaning of either
Section  15 of the 1933 Act or Section  20 of the 1934 Act,  (B) the  reasonable
fees and  expenses  of more than one  separate  firm (in  addition  to any local
counsel) for the Trust and the Company, its directors, its officers who sign the
Registration  Statement and each Person, if any, who controls the Company or the
Trust within the meaning of either such Section and (C) the reasonable  fees and
expenses of more than one separate  firm (in addition to any local  counsel) for
all Holders and all Persons,  if any, who control any Holders within the meaning
of either such Section,  and that all such fees and expenses shall be reimbursed
as they are  incurred.  In cases  involving  the  Placement  Agents and  Persons

                                       18
<PAGE>

controlling  the  Placement  Agents,  the firm shall be designated in writing by
Morgan Stanley & Co. Incorporated. In the case of any such separate firm for the
Company and the Trust and any such control  persons of the Company or the Trust,
such firm shall be designated in writing by the Company.  In such case involving
the Holders and such Persons who control Holders,  such firm shall be designated
in writing  by the  Majority  Holders.  In all other  cases,  such firm shall be
designated by the Company.  The  indemnifying  party shall not be liable for any
settlement  of any  proceeding  effected  without  its written  consent  but, if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying  party agrees to indemnify the  indemnified  party from and against
any loss or liability by reason of such settlement or judgment.  Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying  party to reimburse the indemnified  party for fees and expenses
of counsel as  contemplated by the second and third sentences of this paragraph,
the indemnifying  party agrees that it shall be liable for any settlement of any
proceeding  effected  without  its  written  consent if (x) such  settlement  is
entered into more than 60 days after receipt by such  indemnifying  party of the
aforesaid request and (y) such indemnifying  party shall not have reimbursed the
indemnified  party for such fees and expenses of counsel in accordance with such
request  prior to the date of such  settlement.  No  indemnifying  party  shall,
without the prior written  consent of the  indemnified  party (which consent may
not  be  unreasonably  withheld),  effect  any  settlement  of  any  pending  or
threatened  proceeding  in respect of which such  indemnified  party is or could
have been a party and indemnity could have been sought hereunder (whether or not
any  indemnified  party is an actual or potential  party to such  proceeding) by
such indemnified party, unless such settlement includes an unconditional release
of such  indemnified  party from all  liability  on claims  that are the subject
matter of such proceeding.

               (d) To the extent the  indemnification  provided for in paragraph
(a) or paragraph (b) of this Section 5 is unavailable to an indemnified party or
insufficient in respect of any losses,  claims,  damages or liabilities referred
to  therein,  then each  indemnifying  party  under such  paragraph,  in lieu of
indemnifying such indemnified  party thereunder,  shall contribute to the amount
paid or payable by such  indemnified  party as a result of such losses,  claims,
damages or  liabilities  in such  proportion  as is  appropriate  to reflect the
relative fault of the indemnifying party or parties, on the one hand, and of the
indemnified  party  or  parties,  on the  other  hand,  in  connection  with the
statements  or  omissions  that  resulted  in such  losses,  claims,  damages or
liabilities,  as  well  as any  other  relevant  equitable  considerations.  The
relative fault of the Company,  the Trust and the Holders shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged  omission to state a material fact
relates to information  supplied by the Company, the Trust or by the Holders and
the parties' relative intent,  knowledge,  access to information and opportunity
to correct or prevent  such  statement  or  omission.  The  Holders'  respective
obligations  to  contribute  pursuant  to  this  Section  5(d)  are  several  in
proportion to the respective principal amount of Registrable  Securities of such
Holder that were registered pursuant to a Registration Statement.

                                       19
<PAGE>

               (e) The  Company,  the Trust and each Holder  agree that it would
not be just or  equitable  if  contribution  pursuant  to  this  Section  5 were
determined by PRO RATA allocation or by any other method of allocation that does
not take account of the  equitable  considerations  referred to in paragraph (d)
above.  The amount  paid or payable by an  indemnified  party as a result of the
losses, claims, damages and liabilities referred to in paragraph (d) above shall
be deemed to include,  subject to the limitations set forth above,  any legal or
other expenses  reasonably incurred by such indemnified party in connection with
investigating  or  defending  any such  action  or  claim.  Notwithstanding  the
provisions  of this  Section 5, no Holder  shall be  required  to  indemnify  or
contribute  any amount in excess of the amount by which the total price at which
Registrable  Securities  were  sold by such  Holder  exceeds  the  amount of any
damages that such Holder has  otherwise  been  required to pay by reason of such
untrue or alleged untrue  statement or omission or alleged  omission.  No person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the 1933 Act)  shall be  entitled  to  contribution  from any person who was not
guilty of such fraudulent  misrepresentation.  The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

               The  indemnity  and  contribution  provisions  contained  in this
Section 5 shall remain operative and in full force and effect  regardless of (i)
any termination of this Agreement,  (ii) any investigation  made by or on behalf
of the  Placement  Agents,  any Holder or any Person  controlling  the Placement
Agents or any  Holder,  or by or on  behalf of the  Trust,  the  Company,  their
officers or  directors  or any Person  controlling  the Trust or the Company and
(iii) any sale of Registrable Securities by any Holder.

               6. MISCELLANEOUS.

               (a) NO INCONSISTENT AGREEMENTS. Neither the Company nor the Trust
has entered into,  and on or after the date of this  Agreement  will enter into,
any agreement  which is  inconsistent  with the rights granted to the Holders of
Registrable  Securities  in this  Agreement  or  otherwise  conflicts  with  the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's or the Trust's other issued and outstanding  securities  under any
such agreements.

               (b)  AMENDMENTS AND WAIVERS.  The  provisions of this  Agreement,
including  the  provisions  of this  sentence,  may not be amended,  modified or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given  unless the  Company  and the Trust have  obtained  the written
consent of Holders of at least a  majority  of the then  outstanding  Underlying
Common Stock  constituting  Registrable  Securities (with Holders of Convertible
Preferred  Securities deemed to be the Holders, for purposes of this Section, of
the number of  outstanding  shares of  Underlying  Common  Stock into which such
Convertible  Preferred  Securities are  convertible or  exchangeable  or, in the
event that the  Convertible  Debentures  have been  distributed  to Holders upon
liquidation of the Trust,  with the Holders of Convertible  Debentures deemed to

                                       20
<PAGE>

be the Holders,  for purposes of this Section,  the number of outstanding shares
of  Underlying   Common  Stock  into  which  such  Convertible   Debentures  are
convertible);  PROVIDED, HOWEVER, that no amendment,  modification,  supplement,
waiver or consent to any departure from the provisions of Section 5 hereof shall
be effective as against any Holder of Registrable Securities unless consented to
in writing by such Holder.

               (c) NOTICES. All notices and other communications provided for or
permitted  hereunder  shall  be made in  writing  by hand  delivery,  registered
first-class  mail,  telex,  telecopier  or any  courier  guaranteeing  overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address  initially is, with respect to the Placement Agents,
the address set forth in the Purchase  Agreement;  and (ii) if to the Company or
the Trust,  initially at the Company's or the Trust's address,  respectively set
forth in the Placement Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 6(c).

               All such notices and communications  shall be deemed to have been
duly  given:  at the time  delivered  by hand,  if  personally  delivered;  five
business days after being  deposited in the mail,  postage  prepaid,  if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next  business  day, if timely  delivered to an air courier  guaranteeing
overnight delivery.

               Copies of all such notices, demands or other communications shall
be concurrently  delivered by the person giving the same to the Trustee,  at the
address specified in the Indenture.

               (d)  SUCCESSORS AND ASSIGNS.  This  Agreement  shall inure to the
benefit of and be binding upon the  successors,  assigns and transferees of each
of the  parties,  including,  without  limitation  and  without  the need for an
express assignment,  subsequent  Holders;  PROVIDED that nothing herein shall be
deemed to permit any  assignment,  transfer or other  disposition of Registrable
Securities  in  violation  of  the  terms  of  the  Purchase  Agreement.  If any
transferee of any Holder shall acquire  Registrable  Securities,  in any manner,
whether by operation of law or otherwise,  such Registrable  Securities shall be
held  subject to all of the terms of this  Agreement,  and by taking and holding
such  Registrable  Securities such person shall be  conclusively  deemed to have
agreed to be bound by and to  perform  all of the terms and  provisions  of this
Agreement and such person shall be entitled to receive the benefits hereof.  The
Placement  Agents (in their  capacity  as the  Placement  Agents)  shall have no
liability or  obligation to the Company or the Trust with respect to any failure
by a  Holder  to  comply  with,  or any  breach  by any  Holder  of,  any of the
obligations of such Holder under this Agreement.

                                       21
<PAGE>

               (e) PURCHASES AND SALES OF  REGISTRABLE  SECURITIES.  Neither the
Company  nor the  Trust  shall,  and  shall  use its best  efforts  to cause its
affiliates (as defined in Rule 405 under the 1933 Act) not to, purchase and then
resell or otherwise transfer any Registrable Securities.

               (f) THIRD PARTY  BENEFICIARY.  The  Holders  shall be third party
beneficiaries  to the  agreements  made  hereunder  between  the Company and the
Trust, on the one hand, and the Placement  Agents,  on the other hand, and shall
have the right to enforce such  agreements  directly to the extent it deems such
enforcement  necessary  or  advisable  to  protect  its  rights or the rights of
Holders hereunder.

               (g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate  counterparts,  each of which
when so  executed  shall be  deemed  to be an  original  and all of which  taken
together shall constitute one and the same agreement.

               (h) HEADINGS.  The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

               (i)  GOVERNING  LAW.  This  Agreement  shall be  governed  by and
construed in accordance with the internal laws of the State of New York.

               (j)  SEVERABILITY.  In the  event  that  any  one or  more of the
provisions contained herein, or the application thereof in any circumstance,  is
held   invalid,   illegal  or   unenforceable,   the   validity,   legality  and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby

               (k)  JOINT  AND  SEVERAL  OBLIGATIONS.  Anything  herein  to  the
contrary  notwithstanding,   the  representations,   warranties,  covenants  and
agreements  of Viatel and the Trust  contained in this  Agreement  are joint and
several, other than the obligations under Section 5 hereof.

              [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

                                       22
<PAGE>

               IN WITNESS  WHEREOF,  the parties have executed this Agreement as
of the date first written above.


                                            VIATEL, INC.


                                            By:  /s/ Allan L. Shaw
                                               _________________________________
                                               Name:  Allan L. Shaw
                                               Title: Chief Financial Officer



                                            VIATEL FINANCING TRUST I


                                            By:  VIATEL, INC., as Sponsor


                                               By:  /s/ Allan L. Shaw
                                                  ____________________________
                                                  Name:  Allan L. Shaw
                                                  Title: Chief Financial Officer

<PAGE>

Confirmed and accepted as of the date first above written:


MORGAN STANLEY & CO. INCORPORATED
SALOMON SMITH BARNEY INC.
BANC OF AMERICA SECURITIES LLC

Acting severally on behalf of themselves and the several
Placement Agents

By:  Morgan Stanley & Co. Incorporated


     By: /s/ James D. Allen
        ______________________________
        Name:  James D. Allen
        Title: Principal