Document:

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                                                                   EXHIBIT 10.18

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETED ASTERISKS HAS BEEN OMITTED AND FILED SEPERATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                           MASTER AGREEMENT FOR DATA
                    COMMUNICATIONS AND VALUE ADDED SERVICES
                                  (ARGENTINA)

This Master Agreement for Data Communications and Value Added Services (this
"Agreement") entered into on December 23, 1999 (the "Effective Date") by and
between AOL Argentina S.R.L., an Argentine limited liability company with
offices in Maipu 1300, Piso 10 Capital Federal (CP 1006) ("AOL") and IMPSAT
S.A., with offices in Alferez Pareja 256, Buenos Aires, Capital Federal (CP
1007) ("IMPSAT").

     WHEREAS, AOL is an Internet and online service provider which desires to
build a proprietary AOLnet data communications network in Argentina;

     WHEREAS, AOLnet is defined to be the subset of AOL's dial-up access network
in which AOL has complete control of (i) the usage, location and quantities of
the applicable equipment; (ii) the purchase, usage, and deployment of all
hardware and software utilized to support the network infrastructure; and (iii)
the right to resell all available capacity to third parties.

     WHEREAS, IMPSAT is a provider of data communications services and value
added services, including Internet access services;

     WHEREAS, IMPSAT has agreed to build out a portion of AOLnet in Argentina
and provide communications services and value added services to AOL;

     WHEREAS, the parties desire to formalize their relationship;

NOW, THEREFORE, in consideration of the mutual promises set forth herein, the
parties agree as follows:

1.   Scope of Services.  IMPSAT shall install, activate, maintain, and operate
     -----------------
Modems for AOL's nationwide dial-up network in AOL-designated cities in
Argentina, as set forth in Exhibit C ("Deployment Plan").  The parties further
agree to negotiate in good faith regarding future expansion of AOL-designated
cities within Argentina. The initial total network size shall be [*] Modems. For
purposes of this Agreement, "Modem" shall mean an individual data channel,
having the bandwidth specified in Paragraph 2.1("Network Charges") from a
specified location in Argentina to any of the then-current AOL data centers.
This channel may be established via an analog or digital ingress (e.g., a
channelized E-1, ISDN or ADSL circuit) to a Modem Box.  "Modem Box" shall mean
the physical product, which houses the Modems and the netserver capacity to
provide intelligence regarding the network.

     1.1  Commitments. AOL agrees to order from IMPSAT a minimum of [*] modems
          -----------
for the buildout of AOLnet in Argentina by May 2001; provided, however, that
IMPSAT meets all required performance criteria as determined by AOL in its sole
discretion based on agreed performance criteria. Such performance criteria
include, but are not limited to: (i) meeting the monthly buildout targets
specified by AOL, and (ii) meeting the requisite service levels for such
buildout (including without limitation the performance levels specified in
Exhibit A).  If in any
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month IMPSAT fails to meet any of its installation commitments, AOL's minimum
commitment for all following months shall be reduced by one-twelfth of the
percentage by which IMPSAT has fallen short of its quality and capacity
requirements for such month. The above-described reduction in commitment shall
not limit any of AOL's other rights and remedies hereunder or at law. Except for
the specific commitments expressed above, AOL shall not otherwise be committed
to purchase modems or services from IMPSAT.

     1.2  IMPSAT Obligations.
          ------------------

          (a)  IMPSAT shall deploy any capacity requests accepted by IMPSAT
within ninety (90) days of acceptance. The parties agree that IMPSAT may not
implement any changes with respect to the manufacturer of the Modems and routers
deployed throughout the network without AOL's prior written approval. IMPSAT
also agrees to deinstall Modem capacity from one site and reinstall it at
another site, at AOL's sole discretion and cost, within ninety (90) days after
AOL's request for such deinstallation/reinstallation. If IMPSAT refuses to
accept a capacity request or does not deploy a capacity request within ninety
(90) days after accepting such request, AOL shall be free to request
installation of such capacity from another provider. Further, any such capacity
request that IMPSAT refuses or does not timely fulfill shall nevertheless be
counted towards AOL's minimum commitment as specified in Paragraph 1.1
("Commitments"). IMPSAT also agrees to implement any new technology on an
expedited basis for AOL who shall determine the technology and vendor of choice
for the Modems and related equipment and, in the event of significant changes to
cost directly resulting therefrom, the parties may revisit the fees set forth in
Paragraph 2 ("Fees").

          (b)  Subject to Paragraph 1.2 c) and d), AOL will have the right to
direct IMPSAT to withdraw Returnable Dedicated Modems (as defined below) within
90 days of the latest acceptance date of such Modems. "Returnable Dedicated
Modem" shall mean [*] of the number of Modems IMPSAT is deploying in connection
with an AOL initial buildout request, as defined in Paragraph 1 ("Scope of
Services").

          (c)  For the Returnable Dedicated Modems, the parties shall negotiate
the terms upon which AOL shall loan to IMPSAT the use of such equipment (i.e.,
the right to return such equipment for full refund therefor), including all
hardware, software, spare parts and installation services necessary for the
operation of the service for 90 days.

          (d)  Ten (10) days before the end of such 90-day period, AOL shall
provide IMPSAT with a written communication defining how many of the Returnable
Dedicated Modems will be kept, and how many will be returned. For each 30
Returnable Dedicated Modems returned by AOL(i) from the Effective Date until 31
December 2000, AOL shall pay IMPSAT the cost of the removal of such Returnable
Dedicated Modems, provided that IMPSAT shall do its best efforts to minimize
such cost and (ii) from 1 January 2001 forward AOL shall pay IMPSAT the rate,
without taxes, of [*] per Returnable Dedicated Modem.

     1.3  Implementation of Network and Value Added Services.  AOL shall have
          --------------------------------------------------
absolute control over the locations being served and the establishment of a
reasonable schedule for installations.  In the event that AOL directs a change
in service location or circuit type or a reallocation of Modems among locations
after tasking has been issued or Modems have been activated, any additional
costs incurred by IMPSAT, including any service termination or service
activation costs, will be reimbursed by AOL.  AOL shall retain control of how
the users connect

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to the network and how the network connects to AOL. IMPSAT shall control the
design and use of the network backbone, the value added services, and the
backhaul circuits from the virtual PoPs to the physical PoPs. IMPSAT shall
determine the location of actual Modem installation, and IMPSAT shall also
identify the number and location of spare Modems necessary to ensure compliance
with the performance specifications described in Exhibit A.

2.   Fees.
     ----

     2.1  Network Charges.  In exchange for the network services and value added
          ---------------
services to be provided hereunder, IMPSAT will be paid the following for Modems
accepted by AOL, without taxes (all prices are quoted in Argentine pesos
according to law 23.982):

          (a)  [*] per Dedicated Modem per month for the Modems comprising the
Domestic network (the "Base Domestic Price"), provided that such fee per [*]
Modem will not be charged with regards to a Returnable Dedicated Modem at such
time that it is returned or withdrawn in accordance with Paragraph 1.2(b).

          (b)  [*] per Dedicated Modem per month for the Modems comprising the
International (IWAN) network (the "Base International Price"), provided that
such fee per [*] Modem will not be charged with regards to a Returnable
Dedicated Modem at such time that it is returned or withdrawn in accordance with
Paragraph 1.2(b).

          (c)  The Base Price paid to IMPSAT shall include all costs relating to
the management of the dial-up network, including but not limited to: (a) the
network circuit requirement (E-3), a LEC circuit requirement of 1 per 30 Modems,
and a backhaul requirement of 1 E1 per 256 Modems; (b) recurring LEC circuit
charges; (c) recurring backhaul circuit charges; (d) amortization of all one-
time circuit installation fees; (e) analog POTs lines; (f) non-capital
equipment; (g) site maintenance; (h) recurring co-location charges; (i) co-
location installation fees; (j) other one-time installation fees; (k) Modem
management fees; (l) equipment lease expenses at IMPSAT sites; and (m) the cost
of any spare equipment. For purposes of this paragraph, the DS-3 requirements
are as follows:

               Throughput      Modems per DS-3 (or equivalent)
               ----------      -------------------------------

                  [*]                        [*]
                                               -

DS-3s shall be defined as a network circuit with a 45-megabit capacity with
utilization no higher than [*].

          (d)  The Base Price is valid for a [*] bps service only. Each
additional [*] bps increment as set forth above that is requested by AOL will
result in an additional [*] per Modem per month to the Base Price. The parties
agree that the network sizing assumes that backhaul and backbone circuits are
sized at no greater than [*] peak utilization per individual circuit, measured
as an average over recurring five minute windows.

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          (e)  Subject to Paragraph 11 ("Indemnity"), AOL agrees to pay all
applicable goods and services taxes relating to the services provided under this
Agreement as identified in the relevant invoice provided pursuant to Paragraph
2.4 ("Payment Terms").

          (f)  AOL shall not be required to pay for the use of any Modem or
Modem Box for any period of time during a billing cycle in which such Modem or
Modem Box is inoperable or otherwise out of service.

     2.2  Volume Discounts.   In exchange for AOL committing to the capacity set
          -----------------
forth in Paragraph 1.1 ("Commitments"), IMPSAT agrees to provide the following
discounts to AOL during the term of the agreement;

          (a)  For Modem orders that result in a total installed Modem base of
between [*] Modems, a cumulative discount of [*] will be applied to the combined
per Modem cost for the entire Modem base, including the newly ordered Modems.

          (b)  For Modem orders that result in a total installed Modem base of
between [*] Modems, a cumulative discount of [*] will be applied to the combined
per Modem cost for the entire Modem base, including the newly ordered Modems.

          (c)  For Modem orders that result in a total installed Modem base of
greater than [*] Modems, a cumulative discount of [*] will be applied to the
combined per Modem cost for the entire Modem base, including the newly ordered
Modems.

     2.3  Price Changes.  In the event that changes to government regulations
          -------------
affect the services provided in this Agreement and result in savings or
additional costs to IMPSAT, IMPSAT agrees to pass through the total amount of
such savings or additional costs to AOL. AOL and IMPSAT further agree, at [*]
intervals or a mutually agreeable time period, to in good faith evaluate and
adjust prices quoted in Paragraph 2.1 ("Network Charges"), which may have been
influenced by changes in inflation (e.g. referencing the IGP-DI rate), increased
efficiency (e.g. better tools requiring fewer support staff), or reduced costs
structures (e.g. increased capacity).  IMPSAT hereby agrees that the foregoing
covenant is a material term of this Agreement.

     2.4  Payment Terms.  At such point that AOL accepts Modems in accordance
          -------------
with this Agreement, IMPSAT will invoice AOL on a monthly basis the charges
specified in this Paragraph 2 for all services provided to AOL under this
Agreement.  Invoices shall identify applicable taxes as agreed upon by the
parties.  All payments due to IMPSAT under this Agreement shall be invoiced in
arrears to AOL.  All undisputed invoices shall be payable within  [*] days of
receipt of the invoice. In the event that AOL disputes an invoice, AOL shall pay
only the undisputed portion of the invoice, until the dispute is resolved. AOL
or its designee shall pay vendor invoices forwarded by IMPSAT for Modems. IMPSAT
acknowledges that it is AOL's billing policy not to honor any invoices for
services performed more than [*] days before the receipt of the invoice by AOL.

          (a)  In the event AOL fails to pay IMPSAT any undisputed amount due in
accordance with the payment schedule herein proposed, IMPSAT shall provide AOL
with notice of such non-payment and if, within [*] days after receipt of such
notice AOL has not paid, then AOL shall pay IMPSAT, as damages for financial
distress, a fine of [*] of the undisputed

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amount, plus interest of [*] per month of the undisputed amount, in addition to
the amount originally due, calculated from the date such amount should have been
paid until its actual receipt by IMPSAT. Such value shall be adjusted in order
to compensate IMPSAT for inflationary losses, if any, as per Paragraph 2.3
("Price Changes").

          (b)  All invoices shall be considered undisputed unless, within the
seventeen (17) days following receipt of the invoice, AOL provides IMPSAT with a
notice of invoice in dispute, containing references to the actual invoice, and a
detailed explanation of the cause of dispute.

     2.5  Market Pricing.
          --------------

          (a)  Commencing [*], IMPSAT shall charge AOL Market Price, provided
that the Market Price is at least [*] lower than the then current contract
price. AOL will notify IMPSAT of changes in Market Price no more often than
twice every [*] months thereafter and IMPSAT will have [*] days following such
notice to modify the price accordingly. To the extent IMPSAT does not modify the
price accordingly, AOL can elect at its option, either to terminate its
unfulfilled purchase commitment or terminate the agreement, in whole or in part
and without liability, upon notice to IMPSAT.

          (b)  "Market Price" for any Dedicated Modem shall mean the price
offered to AOL by any Market Vendor for services reasonably similar to those
Services provided for a Dedicated Modem under this Agreement.

          (c)  "Market Vendor" shall mean any Vendor with similar service levels
and performance standards as the services included in this Agreement, that
offers to provide reasonably similar service to AOL in a manner which is not
illegal. Furthermore, said Vendor must offer to provide AOL, over a period of no
less than 12 months, with at least thirty percent (30%) of AOL's incremental
increase Dedicated Modem requirements over such period.

          (d)  The Volume Discounts indicated in Paragraph 2.2 will be canceled
upon the application of the Market Pricing and shall not be applicable to such
Market Pricing.

          (e)  To the extent necessary to compare hourly or similar pricing
offered to AOL pursuant to this Paragraph 2.5 with the pricing applicable to a
Dedicated Modem, the parties will use the average number of hours used per
Dedicated Modem per month by AOL during the preceding 12 months. Such hourly or
similar pricing being compared must be the peak pricing offered by the Vendor.

     2.6  [*]
          ---

          (a) Except for [*] that have [*] from [*] in excess of the services
[*] by AOL, IMPSAT shall not provide Dedicated Modems or [*] services to any
other Applicable Purchaser (i) [*] that are [*] than those [*] available to AOL
herehunder, or (ii) pursuant to [*] Applicable Purchaser [*] contained herein.
"Applicable Purchaser" shall mean any party [*] that is obligated to purchase,
[*] Dial-Up Access Ports from IMPSAT.

          (b)  As long as AOL has purchased [*]:

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               (i) the charges hereunder shall each be [*] provided by IMPSAT
          for Dedicated Modems or reasonably similar services than the contained
          herein to any other Applicable Purchaser that has [*] from IMPSAT an
          aggregate quantity of Dedicated Modems that is [*] of the
          corresponding aggregate quantity of Dedicated Modems that AOL is
          committed to purchase under this Agreement;

               (ii)   the Charges shall each be [*] provided by IMPSAT for
          Dedicated Modems or reasonably similar services than the contained
          herein to any other Applicable Purchaser [*] from IMPSAT at any point
          in time [*], but [*], of the corresponding aggregate quantity of
          Dedicated Modems that AOL is committed to purchase under this
          Agreement; and

               (iii)  the Charges shall each be [*] provided by IMPSAT for
          Dedicated Modems or reasonably similar services than the contained
          herein to any other Applicable Purchaser that purchases from IMPSAT at
          any point in time [*] of the corresponding aggregate quantity of
          Dedicated Modems that AOL is committed to purchase under this
          Agreement.

               (iv)   If at any time during the Term the Charge [*] by this
          Paragraph 2.6, then IMPSAT shall [*] in accordance with this Section
          2.6 effective as of the date that such [*] became required by this
          Section 2.6.

          (c) AOL shall have [*] with respect to any [*] For example, this
Paragraph would entitle AOL to [*]

               (i) allocated to resolve network difficulties or to provide
          network disaster recovery;

               (ii) allocated in conjunction with IMPSAT's offer of new
          technology, infrastructure or data-related services to its Customers;

          (d) AOL shall have the right in its sole discretion to purchase,
pursuant to the terms, conditions and pricing set forth in this Agreement and
pursuant to a mutually agreed-upon process that is consistent with IMPSAT's
customary sales efforts, [*] after the Effective Date. AOL shall have the right
to purchase [*]

          (e) AOL may audit IMPSAT's compliance with this Section pursuant to
Article 7 of the Agreement. In addition, upon AOL's request from time to time,
[*] In the event that [*] in accordance with this Paragraph 2.6, AOL shall be
entitled to [*] upon notice to IMPSAT.

3.   Acceptance Testing.
     ------------------

     3.1  Acceptance Criteria and Data.  Newly activated Modem Boxes will be
          ----------------------------
subject to an acceptance test by AOL.  Each acceptance test shall last for a
period of six (6) days.  AOL shall have the option of rejecting a Modem Box and
associated circuits which meets or exceeds one or more of the following failure
thresholds:  (a) [*] of user sessions terminate without a user-initiated logoff
sequence; (b) [*] of user calls fail to connect to the Modem Box (such data will
be provided by IMPSAT for the Modem Boxes on a daily basis.  The six day
acceptance period will be contingent upon receiving this data on a daily basis
beginning with a Modem Box activation); (c) greater than [*] of user calls which
successfully connect to the Modem Box fail to connect to the AOL front end.
IMPSAT shall provide to AOL all of the performance data necessary to conduct the
acceptance tests on a daily basis during the testing period.  If such data is
not received by AOL daily, the applicable Modem Box shall automatically be
deemed rejected. In the event that a newly activated Modem Box is rejected after
the six (6) day acceptance test because of failures and/or problems not
attributable to IMPSAT but to circumstances alien to IMPSAT such as, but not
limited, to customer modem incompatibilities and/or insolvable hardware
restrictions on AOL's required equipment, the failure thresholds stated in this
paragraph will be reevaluated and any modifications will be mutually agreed upon
in writing by AOL and IMPSAT.

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     3.2  Notice of Failure.  In the event that a newly activated Modem Box
          -----------------
meets or exceeds any of the failure thresholds specified in Paragraph 3.1
("Acceptance Criteria and Data") within the six (6) day test period, AOL may, at
                     -
its option, send IMPSAT an e-mail notice of rejection, specifying the failure
thresholds which were met or exceeded during the test.  In determining
acceptance, AOL shall not hold IMPSAT accountable for problems due to AOL's
client software.  Provided that all relevant daily performance data has been
provided to AOL as required by Paragraph 3.1 ("Acceptance Criteria and Data")
any Modem Boxes that have not been rejected by AOL by the end of the sixth day
following activation will be deemed accepted.

     3.3  Rejected Modem Boxes.  Rejected Modem Boxes shall be removed from
          --------------------
service pending further troubleshooting and corrective action by IMPSAT.
Following such troubleshooting and corrective action by IMPSAT, IMPSAT may re-
activate the Modem Boxes for customer use, and a new six-day acceptance period
shall commence.  No fees shall be charged to AOL during the period in which
IMPSAT is implementing troubleshooting and corrective action or during the
subsequent new six (6) day testing period.

     3.4  Payment Obligations.  The payment obligation of AOL for any Modem Box
          -------------------
begins at the end of the six (6) day testing period and only upon acceptance of
such Modem Box by AOL.

4.   Technical and Operational Requirements.  IMPSAT shall provide services that
     --------------------------------------
meet the specifications as set forth in this Paragraph 4 and in Exhibit B
("Operational Requirements"):

     4.1  Netserver and Backbone Capacity.
          -------------------------------

          (a)  from the netserver to the backbone, there will be no more than
[*] Modems per T1 line or [*] Modems per E1 line;

          (b) the backbone is sized for aggregate dial and Internet traffic.

     (c) the IWAN lines to AOL shall be sized at [*] of peak utilization as
measured over recurring five-minute windows.

     4.2  Access and Connection Protocol.  IMPSAT shall provide support for the
          ------------------------------
following AOLnet access methods, access technology, connection protocols and hub
architecture:

          (a)  the proprietary AOL P3 protocol

          (b)  PPP

          (c)  TCP/IP

          (d)  UDP

          (e) ISDN synchronous & asynchronous (v.120), if available

          (f) 128K Multi-link ISDN, if available

          (g)  L2TP

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          (h)  xDSL

          (i)  1-way Cable

          (j)  Routing to multiple services including but not limited to AOL and
any other AOL-offered service as requested by AOL, provided that the user's
TCP/IP connection terminates at a site, which is subject to subparagraph (l)
below.

          (k)  Routing to resale customers that may be part of AOL's overall
network allocation, provided that the user's TCP/IP connection terminates at a
site which is subject to subparagraph (l) below.

          (l)  Routing to other AOL-specified sites in addition to, Reston,
Virginia, Manassas, Virginia, and Dulles, Virginia, provided that the cost of
routing to the other AOL-specified sites does not exceed the cost of routing the
equivalent traffic to Reston, Manassas, or Dulles, subject to prior agreement by
IMPSAT and AOL on how IP routing is implemented.

     4.3  IP Addresses.  IMPSAT shall acquire and manage IP addresses for all
          ------------
protocols utilized by AOL during the term of this Agreement.  Each individual
[*] shall be provided [*] such that [*] and IMPSAT further agrees that IP
                                      -
addresses be allocated in contiguous class C/24 blocks. AOL shall be provided
the source IP addresses prior to use two weeks in advance of implementation
within the network. IMPSAT acknowledges and agrees that it must assign IP
addresses in connection with its implementation of the PPP protocol in a manner
that permits AOL to reliably identify the location and identity of users.

     4.4  IETF Standards.  IMPSAT shall, in its network design and topology,
          --------------
comply with IETF approved and adopted standards applicable to the access methods
set forth in Paragraph 4.2 ("Access and Protection Protocol").

     4.5  Domain Name Services.  IMPSAT shall provide domain name service as
          --------------------
follows:

          (a)  resolve domain name service queries to AOL destinations

          (b)  support domain name service for AOL service access to the AOL
domain and any zones resident on AOL name servers

          (c)  maintaining domain name service servers

          (d)  support AOL in the acquisition of IP address blocks as requested
by AOL

          (e)  IMPSAT shall not require return of address blocks currently in
use by AOL and shall provide additional blocks from the allocated IMPSAT space
in accordance with the rules of ARIN.

     4.6  Changes in Operating Requirement.  AOL may direct changes to the
          --------------------------------
operating requirements described in this Paragraph 4 to provisioned bandwidth,
AOLnet access methods, access technology, and hub architecture, and IMPSAT will
respond promptly with any adjusted pricing related to such request.  In the
event that such changes necessitate an extension of the timeframe originally
scheduled for the installation of Modems, the installation schedule shall be
extended the same amount of time required to execute such changes.

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5.   Network Performance.
     -------------------

     5.1  Service Performance Levels.  The network shall perform in accordance
          --------------------------
with the service performance levels set forth in Exhibit A ("Service Performance
Levels").  AOL shall notify IMPSAT in the event that the network fails to meet
the Service Performance Levels in two consecutive months or on an average over a
three-month period.  IMPSAT shall have three (3) months following the receipt of
such notice to cure such failure.  If IMPSAT fails to cure such failure within
such three (3) month period, AOL may, at its sole option, either (i) terminate
this Agreement for default, in accordance with Paragraph 8.2 ("Termination") or
(ii) suspend the minimum network order commitments of Paragraph 1.1
("Commitments") until such time as the network meets or exceeds the Service
Performance Levels (based on average measurements over three (3) calendar
months).  For purposes of the foregoing, suspending the minimum network order
commitments shall mean that for each month until the network has been brought
into compliance with the Service Performance Levels, AOL shall have no
obligation to place any orders for network capacity with IMPSAT for such month.
Further, AOL shall have no obligation following any period of suspension to make
up for any network capacity orders not made during such period of suspension

     5.2  IMPSAT shall ensure that the network be Year 2000 compliant and shall
represent and warrant to such compliance.  Year 2000 compliant shall mean:

          (a)  Business processes and procedures must contain no logical or
arithmetic inconsistencies and will function without interruption prior to,
during and after Year 2000.

          (b)  The Year 2000 must have the ability to recognize and manage
business processes and procedures that occur in association with the leap year.

          (c)  All interfaces and processes must be able to handle the data
storage, display and output of date driven information as it relates to the
century, in order to eliminate date ambiguity.

          (d)  Successfully and reliably process date relevant functions and
data containing dates from, into and between the twentieth and twenty-first
centuries.

          (e)  The above definitions apply, provided that all other products
(e.g., hardware, software, and firmware) interfacing with AOL and CompuServe
properly exchange date data with it.

     5.3  Architectural Independence.

          (a)  Alternate Carriers.  In the event that IMPSAT determines that
               ------------------
another carrier's offerings represent a superior value, or other factors which
may make another carrier's offerings preferable, IMPSAT may utilize a carrier
other than its current carrier for the network or any portion thereof.  IMPSAT
acknowledges AOL's goal is to achieve architectural independence among its
service providers to minimize the probability that a single failure could impact
more than one AOL service provider.  IMPSAT shall solicit AOL's input prior to
the use of a carrier other than its current carrier.

          (b)  International Circuits. During the term of this Agreement but not
               ----------------------
before two years from the Effective Date, AOL may decide to obtain or build
international transit capacity for connecting the portion of the AOLnet network
located in Argentina or other parts of Latin America to AOL data centers located
outside of Latin America. In the event of such an occurrence, AOL agrees to
explore opportunities with IMPSAT to either re-evaluate the current
International circuit agreement and give IMPSAT the first option to meet
competitive pricing or to assist in the procurement of a new international
circuit. AOL shall [*].

                                       9
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     5.4  IMPSAT Representation. IMPSAT represents and warrants that any and all
          ----------------------
the equipment used in the implementation of a Modem and Modem Box, as defined
above have been certified through the equipment supplier by the relevant
authorities in Argentina and in accordance with the applicable laws and
regulations.

6.   Project Management.  IMPSAT shall set up an AOL project team, staffed with
     ------------------
a IMPSAT Vice-President and a dedicated AOL project manager (both subject to
AOL's approval in its sole discretion), who will be responsible for building,
maintaining, and operating AOLnet and the AOL Internet access.  The IMPSAT
project manager shall be AOL's primary point of contact and [*], for guidance
and advice.

7.   Audits.
     ------

     7.1  Each party reserves the right to audit the other party's relevant
books and records to verify the audited party's compliance with the terms of
this Agreement. This audit and any other audit permitted under this Agreement
[by one party of the books and records of the other party shall be performed by
an independent certified public accounting firm as follows: (i) following at
least [*] prior written notice to the audited party; (ii) at the auditing
party's sole cost and expense; (iii) in a reasonable scope and duration; (iv) in
a manner so as not to interfere with the audited party's business operations;
and (v) in compliance with the audited party's security requirements. Unless the
parties mutually agree otherwise, the number of audits that each party may
conduct shall not exceed [*]. Nothing contained in this paragraph is intended to
allow either party access to or review of confidential information, the
disclosure of which would violate the terms of an agreement with any third
party. Materials of the audited party reviewed by such independent certified
public accounting firm in the course of the audit shall be deemed confidential
and their use by the independent certified public accounting firm shall be
limited to the conduct of the audit and any resulting report shall not contain
any confidential information of the audited party or any third party. Such
accounting firm shall, prior to conducting such audit, execute a nondisclosure
agreement acceptable to the audited part containing the substantive provisions
of this paragraph. Any report or other information produced or reviewed by the
auditor shall not be distributed within the auditing party except to such
persons with a need to know. The foregoing report and/or information shall be
made available to the audited party on request. Each party shall maintain
complete and accurate records and shall retain such records for a period not
less than the term of this Agreement or such other longer period as may be
required by applicable law, rule, or regulation. The disclosure of any
documents, records or any other information shall be limited to portion of the
documents, records or information that relate to this Agreement.

     7.2  In the event of an Audit of Paragraph 2.6, AOL will agree to [*] its
rights to audit with the following [*]: 1) AOL shall perform an audit only in
the event [*] in compliance with Paragraph 2.6, 2) AOL shall use Deloitte &
Touche to conduct the audit or, in the event IMPSAT changes auditors, AOL shall
use IMPSAT's auditor if accepted by AOL, such acceptance not to be unreasonably
withheld, 3) AOL will restrict the scope of the audit to the question of
IMPSAT's compliance or noncompliance with Paragraph 2.6, and 4) AOL shall allow
IMPSAT to review the audit report and contest the results to the auditors prior
to disclosure of the report to AOL.

8.   Term and Termination.
     --------------------

     8.1  Term.  The term of this relationship shall be three (3) years from the
          ----
Effective Date.  The Agreement may be renewed at the option of AOL for
additional one-year periods upon six months notice to IMPSAT.  At the end of the
Agreement, the parties will implement a six-month transition period to allow for
the orderly migration of IMPSAT's customers and AOL's assumption of management
and control of the network.  The parties will resolve all transition issues in
an equitable manner.

     8.2  Termination.  Either party shall have the right to terminate for
          -----------
material breach, provided that any such breach is uncured after thirty (30) days
written notice. The parties hereby acknowledge that breach of any pricing
provision in Paragraph 2 ("Fees") and Paragraph 10 ("Certain Conditions") shall
be considered material.  If any undisputed amounts due and owing by AOL remain
unpaid ninety (90) days after date of invoice, then IMPSAT will provide notice
thereof to AOL and if AOL does not pay with ten (10) business days after receipt
of such notice, then IMPSAT may terminate this Agreement immediately upon
written notice without penalty.  Upon such termination, each party will work
reasonably with the other party and such party's designees to ensure a smooth
and timely transition of the network control and management to AOL within one
hundred eighty (180) days of the effective date of termination.

                                       10
<PAGE>

In the event of any termination, IMPSAT will transfer ownership of the telephone
numbers in the network to AOL or its designee, subject to the regulatory
feasibility of this procedure, if any.

9.   Confidentiality. Except as required by applicable law or stock exchange
     ---------------
regulation, the parties agree that all disclosures of confidential and/or
proprietary information before and during the term of this Agreement shall
constitute confidential information of the disclosing party.  Such confidential
information shall include, but not be limited to, AOL usage statistics, calling
patterns, ANI data, and all member information.  Each party shall use
commercially reasonable efforts to ensure the confidentiality of such
information supplied by the disclosing party, or which may be acquired by either
party in connection with or as a result of the provision of the services under
this Agreement.  Each party agrees that it shall not disclose, use, modify,
copy, reproduce, or otherwise divulge such confidential information.  Each party
further agrees to hold harmless and indemnify the other party in the event of
any disclosure by such party.

     9.1  The non disclosure obligation shall not be applicable to:

          (a) Information that is in or becomes part of the public domain
without violation of this Agreement by the receiving party;

          (b) Information that was known to be in the possession of the
receiving party on a non-confidential basis prior to the disclosure thereof to
the receiving party by the disclosing party, as evidenced by written records;

          (c) Information that was developed independently by the receiving
party's employees;

          (d) Information that is disclosed to the receiving party by a third
party under no obligation of confidentiality to the disclosing party and without
violation of this Agreement by the receiving party; or

          (e) Information that is authorized by the disclosing party in writing
for disclosure or release by the receiving party.

10.  Certain Conditions.
     ------------------

     10.1 AOL shall have the right to [*].  IMPSAT shall [*] provided that AOL
[*]  AOL shall enter into [*] and IMPSAT shall not [*]
                                                     -

     10.2 AOL and IMPSAT will analyze and agree upon the best structure to [*]

     10.3 IMPSAT shall, at its expense, translate this Agreement into Spanish
language and the parties shall mutually agree upon and execute a Spanish
translation hereof;

     10.4 The parties agree that once the [*] framework is established, they
shall negotiate in good faith [*] (at appropriate levels) [*] will receive, [*],
for the termination of [*] related to the [*] rendering of the Services
contemplated in this Agreement. Further, if, at any time during the term of this
Agreement, IMPSAT [*], then [*] agrees to [*] at appropriate levels. Within 10
days of AOL's written request, [*] IMPSAT's compliance with this Section 10.4.
IMPSAT hereby agrees that the foregoing covenant is a material term of this
Agreement.

                                       11
<PAGE>

     10.5 While IMPSAT is in good standing with this Agreement, AOL shall 1)
provide [*] with the right of [*] to procures [*] and 2) exert best efforts to
[*] requested by AOL.

11.  Indemnity.
     ---------

     11.1    IMPSAT agrees to indemnify, defend, and hold AOL harmless from
damages, losses, or liabilities (including reasonable attorneys' fees) arising
from (i) any third party claims of intellectual property rights infringement
arising from the use of any IMPSAT-developed materials; (ii) any third party
claims arising out of a breach by IMPSAT of this Agreement; and (iii) any third
party claims relating to any physical damage to property or personal injury
caused by IMPSAT; (iv) any tax claims resulting from deficiencies in the taxes
paid by IMPSAT in connection with this Agreement and (v) any third party claims
by employees of IMPSAT arising out of IMPSAT's relationship with AOL or any
employee, labor, or social security obligations of IMPSAT.

     11.2    AOL agrees to indemnify, defend and hold IMPSAT harmless from
damages, losses, or liabilities (including reasonable attorneys' fees) arising
from (i) any third party claims arising out of a breach by AOL of this
Agreement; (ii) any third party claims relating to any physical damage to
property or personal injury caused by AOL; and (iii) any tax claims resulting
from deficiencies in the taxes paid by AOL in connection with this Agreement.

12.  Limitation of Liability.  NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
     -----------------------
STATED OR IMPLIED HEREIN, NEITHER PARTY SHALL HAVE ANY LIABILITY WHATSOEVER FOR
ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES (INCLUDING LOST
PROFITS) SUFFERED BY THE OTHER OR BY ANY ASSIGNEE OR OTHER TRANSFEREE OF THE
OTHER, EVEN IF INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES, WHICH
INCLUDES, BUT IS NOT LIMITED TO, LOSS OF PROFITS, REVENUES OR BUSINESS
OPPORTUNITIES.

13.  Ownership and Remedies upon Termination or Expiration.  IMPSAT shall retain
     ------------------------------------------------------
title and ownership to the dial-up network equipment, including but not limited
to, Modems and related equipment; provided, however, that as a condition of such
ownership, the parties agree that (i) AOL, in its sole discretion, shall
determine the technology and vendor of choice for the Modems and related
equipment, and IMPSAT agrees to implement any new technology on an expedited
basis for AOL,; (ii) AOL shall recoup all of the economic benefit of any
endorsement by AOL of a specified technology or vendor for the Modems and
related equipment; (iii) AOL shall own the telephone numbers to each of the
dial-up points of presence, and IMPSAT shall not transfer such telephone numbers
to any third party without written permission from AOL; and (iv) IMPSAT shall
not enter into any lease agreements regarding the Modems without prior written
approval from AOL. Upon termination of this Agreement arising from a material
uncured breach by IMPSAT, the parties agree that (i) AOL (or its designee) shall
be allowed to manage the operation of the AOL portion of the network utilizing
AOL personnel and staff and IMPSAT equipment and software at IMPSAT locations,
and IMPSAT shall permit such AOL personnel and staff to have free and
unobstructed access to such IMPSAT locations for the purpose of managing such
operations, all [*] to AOL for [*] after the effective date of termination; (ii)
the parties shall implement a six month transition period to allow for AOL's
assumption of management and control of the network; and (iii) IMPSAT agrees to
the ability of AOL to seek injunctive relief and specific performance regarding
the remedies set forth herein as non-performance would cause AOL irreparable
harm. IMPSAT shall not encumber or permit the

                                       12
<PAGE>

Modems to be encumbered by any liabilities, liens, claims, charges, security
interests or encumbrances of any kind other than such encumbrances as existed at
the time IMPSAT obtained the Modems. Notwithstanding anything to the contrary in
this Agreement, any changes in the AOL telephone numbers shall require prior
written approval from AOL. AOL shall also retain title and ownership to all data
contained in written reports prepared and delivered to AOL hereunder. Any
software developed by IMPSAT incidental to the performance of services for AOL,
the cost of which is charged to, and reimbursed by, AOL shall be jointly owned
by IMPSAT and AOL without need for accounting, and IMPSAT may not use such
software for the benefit of a third party unless IMPSAT: (a) pays to AOL the
cost that was charged to AOL for the development of such software or (b) pays to
AOL one-half of the economic benefit derived therefrom. Notwithstanding the
foregoing, in no event shall IMPSAT use such software for the benefit of any
entity reasonably construed to be a competitor of AOL. IMPSAT further agrees to
execute any and all necessary documentation to perfect AOL's ownership rights in
such software as reasonably requested by AOL. IMPSAT further agrees that it has
no ownership rights or usage rights (except as necessary to fulfill its
obligations as set forth in this Agreement) to any AOL proprietary information
or software provided hereunder, including but not limited to any AOL proprietary
information or AOL software which may be incorporated into written material or
software delivered under this Agreement.

14.  General.
     -------

     14.1 Governing Law.  This Agreement shall be governed and construed under
          -------------
the laws of the Argentine Republic and the district court of Buenos Aires,
District Capital, Argentina, are hereby elected to settle any disputes arising
here from, with the exclusion of any other no matter how privileged it may be.

     14.2 Press Release.  The terms of this Agreement are confidential, and
          -------------
neither party shall disclose to any third party (other than bankers and lenders,
and legal and other professional advisers with a need to know) the terms and
conditions of this Agreement, provided however, that the parties may disclose
the existence of this agreement.  Such obligations shall apply except as
required by law or government regulation.  In addition, any press release or
public announcement with respect to this Agreement shall be subject to the
mutual approval of the parties, unless such major press releases or public
announcements are required by law.

     14.3 Force Majeure.
          -------------

          (a)  During the term of this Agreement, neither party shall be in
default of its obligations to the extent that its performance is delayed or
prevented by outside causes beyond its reasonable control and could not have
been reasonably contemplated, including but not limited to acts of God, natural
disasters, bankruptcy of a vendor, strikes and other labor disturbances, acts of
war or civil disturbance, or other equivalent or comparable events.

          (b)  In such event, the non-performing party will be excused from any
further performance obligations so affected for as long as such circumstances
prevail and such party continues to use commercially reasonable efforts to
recommence performance without delay.  AOL shall not be obligated to continue to
make the payments to IMPSAT as provided in this Agreement during any such period
of delay.

                                       13
<PAGE>

            (c)  Any party so delayed in its performance will immediately notify
the party to whom performance is due by telephone (to be confirmed promptly in
writing) and describe in reasonable detail the circumstances causing such delay.

            (d)  If any of the circumstances described in this paragraph
prevent, hinder, or delay performance of the Services necessary for the
performance of AOL's critical functions for more than [*] then AOL may terminate
this Agreement without penalty as of a date specified by AOL in a notice of
termination to IMPSAT. For the avoidance of doubt, at all times, AOL may procure
such services from an alternate source.

     14.4   Assignment.
            ----------

            (a)  Neither party may assign this Agreement or its rights or
obligations under this Agreement to a third party without the prior written
consent of the other party, whose consent shall not be unreasonably withheld.

            (b)  In the event of the consummation of a reorganization, merger,
or consolidation or sale or other disposition of [*].

            (c)  In the event of the consummation of a reorganization, merger,
or consolidation or sale or other disposition of [*].

     14.5   Notices.  All notices or reports permitted or required under this
            -------
Agreement shall be in writing and shall be delivered by personal delivery,
telegram, or facsimile transmission or by registered mail, return receipt
requested.  Notices shall be sent to the signatories of this Agreement at the
address set forth at the beginning of this Agreement or such other address as
either party may specify in writing.  Notices shall be effective upon receipt.
In the case of AOL, any and all notices to be provided to AOL under this
Agreement must also be provided to the attention of its General Counsel.

     14.6   No Agency.  Nothing contained herein shall be construed as creating
            ---------
any agency, partnership, or other form of joint enterprise between the parties.

     14.7   Full Power. Each party warrants that it has full power to enter into
            ----------
and perform this Agreement, and the person signing this Agreement on such
party's behalf has been duly authorized and empowered to enter into this
Agreement.  Each party further acknowledges that it has read this Agreement,
understands it, and agrees to be bound by it.

     14.8   IMPSAT represents and warrants that it has all the necessary permits
and authorizations to fulfil its obligations under this agreement.

     14.9   Survival.  Paragraphs 2.4 ("Payment Terms"), 8.2 ("Termination"), 9
            --------
("Confidentiality"), 10 ("Certain Conditions"), 11 ("Indemnity"), 12
                          ------------------
("Limitation of Liability"), 13 ("Ownership") and 14 ("General") of this
Agreement shall survive cancellation, termination or expiration of this
Agreement.

     14.10  Entire Agreement.  This Agreement constitutes the entire agreement
            ----------------
between the parties with respect to the subject matter hereof.  This Agreement
may only be changed by mutual agreement of authorized representatives of the
parties in writing.

                                       14
<PAGE>

     14.11  Waiver.  No failure on the part of either party to exercise, and no
            ------
delay in exercising any right or remedy hereunder, shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy granted hereby or by law.

     14.12  Language and Counterparts. This Agreement may be executed in Spanish
            -------------------------
and English, provided however that the Spanish version shall always prevail in
the event of any disputes concerning this Agreement. This Agreement may be
executed in several counterparts and exchanged via facsimile, each of which
shall be deemed an original, but all of which, when taken together, shall
constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the Effective Date.

AOL ARGENTINA ,                     IMPSAT S.A..

By: /s/ GUSTAVO GARRIDO             By:  /s/ Marcelo Girotti
   ---------------------------          ----------------------------

Name: GUSTAVO GARRIDO               Name: Marcelo Girotti

Title: GERENTE                      Title: CEO IMPSAT ARGENTINA

Date: December 23, 1999             Date: 12/31/99
     -------------------------           ---------------------------

                                    Name: /s/ Horacio Sajoux
                                          --------------------------

                                    Title: Executive Director

                                    Date:  December 23, 1999

                                      15
<PAGE>

                                   EXHIBIT A

                           Service Performance Levels

I.   Reports
     -------

IMPSAT will provide to AOL the following reports:

1.   Usage Reports

     A.   Daily reports on hourly usage by modem by city

     B.   Daily reports on percentage of ineffective calls

2.   Daily reports on circuit utilization, including but not limited to E1s, DS-
3s, OC-3s. These reports will include (i) 5 minute in and out bit rates; (ii)
packet loss (average, median and 95/th/ percentile for each major router pair);
(iii) round trip delays between major router pairs.

3.   Read only access by AOL to SNMP variables on AOL demarcation routers

II.  Service Level Requirements
     --------------------------

IMPSAT shall meet or exceed the AOLnet network average in the following areas:

1.   Connection Success (getting connected to the AOL service)

     A.   [*]

     B.   [*]

     C.   Training

     D.   Ineffectives

     E.   Customer Reported Problems

2.   Connection Quality (staying connected)

     A.   Percentage of [*]

     B.   [*]

     C.   [*]

3.   Problem Resolution

     A.   Modem Availability

     B.   Trouble Tickets Resolution Time

     C.   Service Down Time
<PAGE>

4.   Ability to Fill Orders

     A.   Modem Plan

     B.   Backbone Capacity Plan
                                       2
<PAGE>

                                   EXHIBIT B
                                   ---------

                            Operational Requirements
                            ------------------------

Network Engineering

          IMPSAT agrees to provide network engineering to address operational
and long-term planning issues.

II.  Operations

          IMPSAT will continue to provision, staff, and operate a Network
Operations Center ("NOC") with dedicated support for AOL. The scope of this task
will include the following IMPSAT support and value added services for the
network:

          A.   Operation of the NOC and co-located systems with trained and
               qualified personnel on a continuous 24 hours per day, 7 days per
               week basis.

          B.   Operation of all NOC equipment, monitoring, and fault isolation
               functions.

          C.   Coordinating the dispatch maintenance representatives for
               corrective maintenance activities and recording information in a
               Problem Report ("PR") as follows:

                    1.   In the Buenos Aires metropolitan area, the IMPSAT field
                         service will respond within [*] hour for all repairs
                         that cannot be completed through remote means

                    2.   IMPSAT will provide field service within [*] hours for
                         all repairs that cannot be completed through remote
                         means for all other locations.

                    3.   Initiation of a corrective maintenance request, plus
                         recording the time that the call is received by the
                         IMPSAT maintenance representative.

                    4.   Upon arrival of the maintenance representative at the
                         site, the NOC confirms the reported problems and
                         records the site arrival time with the representative.

                    5.   Upon notification to the NOC by the on-site maintenance
                         representative of any of the following conditions, AOL
                         representatives are conferred with for advice or
                         assistance: work stoppage, delay, denial of access to
                         the equipment.

                    6.   Upon restoration of service by the maintenance
                         representative, the NOC confirms operation of the
                         equipment and records the time when service was
                         restored and the reason for the outage in concert with
                         the maintenance representative.

          D.   Initiation of PRs, maintenance of a log of all PRs, coordination
               of PRs with support personnel and tracking of problems until
               resolution using a commercial trouble reporting system.
<PAGE>

          E.   Utilizing the SNMP capabilities and IMPSAT diagnostic software
               resident in the NOC for:

                    1.   Daily testing of  modems and local access numbers

                    2.   Measurements of the usage of each modem several times
                         during each 24 hour period

                    3.   Monitoring and recording the backbone and trunk
                         availability and utilization

                    4.   Accounting for the disposition of each call placed to
                         AOLnet (i.e. how many calls were placed, how many calls
                         were sent successfully to AOL, how many calls were lost
                         in the network due to routing problems, how many calls
                         were sent to AOL, but AOL did not accept them, etc.)

          F.   Providing on-site analyst support Monday through Friday
               (excluding IMPSAT holidays) during normal working hours. A
               dedicated access number shall be maintained for AOL's exclusive
               use, which shall always be operational. Analyst support is
               defined as including the following:

                    1.   Supporting short-term and long-term AOLnet problem
                         identification, analysis, and resolution.

                    2.   Ensuring that proper steps are taken to resolve the
                         problem

                    3.   Identifying and tracking all software, baseline and
                         patches, deployed in the AOLnet and NOC platforms

                    4.   Supporting the deployment of new software and hardware
                         to the AOLnet and NOC equipment as coordinated with AOL

                    5.   Providing support to network provisioning requirements

                    6.   Maintaining a technical library for the NOC

          G.   Performing on-call analyst support to AOLnet on a continuous 24
               hour per day, 7 days per week basis. On-call analyst personnel
               respond to urgent requests from the NOC in conjunction with the
               on-site IMPSAT personnel. Procedures for the conduct of network
               testing are in accordance with those developed in conjunction
               with AOL representatives.

          H.   Providing operational support to AOLnet in the area of network
               testing in association with provisioning actions. Such testing
               shall be conducted from the NOC in conjunction with the on-site
               IMPSAT installation team personnel.

          I.   Maintaining and providing updates and changes to NOC maps

          J.   Maintaining an authorized outage listing for NOC controller use

                                       2
<PAGE>

          K.   Acting as AOL's agent in network security matters on a day-to-day
               basis in accordance with commercially reasonable practices and
               making recommendations for improvements

          L.   Using commercial teleconferencing facilities in the resolution of
               network problems, escalation of problems, and planning activities

          M.   Providing electronic mail service support for the NOC via the
               e-mail/DNS capability resident on the Sun workstations

          N.   Providing a facsimile service resident in the NOC equipment

          O.   Delivering the following reports to the AOL representatives
               designated:

                    1.   Daily modem and site usage

                    2.   Daily call disposition reports

                    3.   Weekly summary of the amount of time required to close
                         PRs

                    4.   Daily ineffective call report

                    5.   Daily backbone utilization statistics

                    6.   Daily network latency and congestion statistics

                    7.   Trace data as required to debug client and AOLnet
                         problems

                    AOL may request additional reports that assist in improving
               AOLnet quality. IMPSAT will provide these additional reports, or
               the raw data, subject to technical reasonableness.

III. Design and Topology of AOLnet

          IMPSAT intends to continue to improve the network design to: reduce
risk, improve robustness, and enhance the price/performance of the transmission
system.

          A.   Traffic Assumptions

          B.   Location of Points of Presence

          C.   Network Architecture

          D.   Network Topology

          AOL shall be allowed to establish a route of last resort on the IMPSAT
network.  IMPSAT will manage such traffic and provision their network to
maintain a maximum circuit load as defined in Paragraph 2.1(d).

                                       3
<PAGE>

IV.  Network Support Organization

          IMPSAT has structured the program so that we can both rapidly build
out a network and deliver quality service, and it can provide to AOL value added
services.

          A.   Program Management: The program management group is responsible
               for the management of the project as a whole. The program
               management team is led by a program executive who has direct and
               immediate access to the senior management of IMPSAT
               Communications and a program manager who reports to the program
               executive. The program management team is the primary point of
               contact between IMPSAT and AOL and coordinates the activity of
               all functional groups within IMPSAT and is responsible for
               project and financial management of the program.

          B.   Engineering: Network engineering handles the technical aspects of
               the project, resolution of problems escalated by the NOC,
               planning for future network expansion, and improving performance
               and process. Engineering interacts directly with AOL and the NOC.

          C.   Deployment: The deployment team consists of field engineers and
               technicians and others who have experience dealing directly with
               local carriers, preparing sites, and installing equipment. Part
               of the team will be based at IMPSAT to coordinate activities and
               provide support for installers.

          D.   Operations: A NOC handles the operation and maintenance of the
               network. The NOC is connected to AOL's central facilities,
               including a direct telephone link to the AOL operations center.
               The NOC's monitoring capability is set up to detect and correct
               most network problems before they are visible to AOL or its
               customers.

          E.   The NOC directs the maintenance activity based on input from the
               monitoring systems and AOL. IMPSAT handles the large majority of
               repair tasks over the telephone with technicians at the PoPs by
               storing hardware at the PoPs, establishing working agreements
               with the PoPs and other service providers and by providing
               written procedures. When it is necessary to send technicians to
               deal with problems, IMPSAT uses its existing infrastructure of
               satellite offices and field engineers.

          F.   IMPSAT shall support AOL in the acquisition of DNS address blocks
               as requested by AOL. IMPSAT shall not require return of address
               blocks currently in use by AOL and shall provide additional
               blocks from the allocated IMPSAT space as requested by AOL. The
               provision at additional address blocks must continue for at least
               the next two years, and IMPSAT must give AOL a minimum of one-
               year notice should IMPSAT choose to terminate this service.

          G.   IMPSAT agrees not to restrict traffic to and from AOL unless
               requested to do so by AOL or required to do so by court order or
               applicable law.

          H.   IMPSAT shall manage the backbone and interconnection points with
               other Internet providers and customers to minimize loss and delay
               of AOL traffic. Such management shall include creation of new
               interconnection points as required.

                                       4
<PAGE>

          I.   Each party shall use reasonable efforts to aggregate routing
               information sent to the other and to control the addition and
               withdrawal of routing information.

          J.   IMPSAT shall announce AOL routing information at IMPSAT
               interchange points as agreed by AOL.

                                       5
<PAGE>

                                   EXHIBIT C

                                Deployment Plan

AOL-Designated Cities
---------------------

[*]

[*]

[*]

[*]

                                       6<PAGE>

                                                                    Exhibit 10.1
                                                                    ------------

                   R.T.S. RELATIONAL TECHNOLOGY SYSTEMS  LTD.

                      1996 STOCK OPTION AND INCENTIVE PLAN

                                 =============

1.  NAME

    This plan, as amended from time to time, shall be known as the R.T.S.
    Relational Technology Systems  Ltd. 1996 Stock Option And Incentive Plan.

2.  PURPOSE OF 1996 PLAN

    The purpose of the R.T.S. Relational Technology Systems Ltd. 1996 Stock
    Option and Incentive Plan (the "1996 Plan") is to afford an incentive to
    officers, directors, employees and consultants of R.T.S. Relational
    Technology Systems Ltd. (the "Company"), or any subsidiary of the Company
    which now exists or hereafter is organized or acquired by the Company, to
    acquire a proprietary interest in the Company, to continue as employees,
    directors and consultants, to increase their efforts on behalf of the
    Company and to promote the success of the Company's business. It is further
    intended that among other options granted some of the options granted by the
    Committee pursuant to the 1996 Plan shall constitute "incentive stock
    options" ("Incentive Stock Options" or "ISO") within the meaning of Section
    422 of the U.S. Internal Revenue Code of 1986, as amended (the "Code"),
    some of the options granted by the Committee pursuant to the 1996 Plan shall
    constitute "nonqualified stock options" ("Nonqualified Stock Options") and
    some of the options granted by the Committee shall be102 Stock Options ("102
    Stock Options")  pursuant to the provisions of Section 102 of the Israeli
    Income Tax Ordinance (New Version) 1961 and any regulations, rules, orders
    or procedures promulgated thereunder (together: the "Options") . The
    Committee may also grant restricted shares ("Restricted Stock") under the
    1996 Plan (Restricted Stock together with the Options shall be referred to
    as: "Options/Shares").

3.  ADMINISTRATION OF 1996 PLAN

    The Board of Directors (the "Board") or a Stock Option Committee (the
    "Committee") appointed and maintained by the Board shall have the power to
    administer the 1996 Plan.  The Committee shall consist of at least three
    members who shall serve at the pleasure of the Board, and any member of such
    Committee shall be eligible to receive Options/Shares under the 1996 Plan
    while serving on the Committee, unless otherwise specified herein.  The
    Board or the Committee shall have full power and authority:  (i) to
    designate participants; (ii) to designate Options/Shares or any portion
    thereof as Incentive
<PAGE>

                                      -2-

    Stock Options, as Nonqualified Stock Options, as Restricted Stock, as 102
    Stock Options, or otherwise; (iii) to determine the terms and provisions of
    respective Option/Shares agreements (which need not be identical) including,
    but not limited to, the number of Options/Shares in the Company to be
    granted, provisions concerning the time or times when and the extent to
    which the Options may be exercised and the nature and duration of
    restrictions as to transferability or restrictions constituting substantial
    risk of forfeiture; (iv) to accelerate the right of an optionee to exercise,
    in whole or in part, any previously granted Option ; (v) to interpret the
    provisions and supervise the administration of the 1996 Plan; and (vi) to
    determine any other matter which is necessary or desirable for, or
    incidental to administration of the 1996 Plan.

    The Board or the Committee shall have the authority to grant in its
    discretion to the holder of an outstanding Option, in exchange for the
    surrender and cancellation of such Option, a new Option having a purchase
    price lower than provided in the Option so surrendered and canceled and
    containing such other terms and conditions as the Board or the Committee may
    prescribe in accordance with the provisions of the 1996 Plan.

    All decisions and selections made by the Board or the Committee pursuant
    to the provisions of the 1996 Plan shall be made by a majority of its
    members except that no member of the Board or Committee shall vote on, or be
    counted for quorum purposes, with respect to any proposed action of the
    Board or Committee relating to any Option to be granted to that member.  Any
    decision reduced to writing and signed by a majority of the members who are
    authorized to make such decision shall be fully effective as if it had been
    made by a majority at a meeting duly held.

    Each member of the Board or the Committee shall be indemnified and held
    harmless by the Company against any cost or expense (including counsel fees)
    reasonably incurred by him, or liability (including any sum paid in
    settlement of a claim with the approval of the Company) arising out of any
    act or omission to act in connection with the 1996 Plan unless arising out
    of such member's own fraud or bad faith, to the extent permitted by
    applicable law.  Such indemnification shall be in addition to any rights of
    indemnification the member may have as directors or otherwise under the
    articles of association of the Company, any agreement, any vote of
    stockholders or disinterested directors, or otherwise.

4.  DESIGNATION OF PARTICIPANTS

    The persons eligible for participation in the 1996 Plan as recipients of
    Options/Shares shall include any employees or former employees of the
    Company or of any subsidiary of the Company.  Except for Incentive Stock
    Options Directors of the Company or of any subsidiary of the Company who are
    not employees of the Company or its subsidiaries, and additionally
    consultants or contractors of the Company or its subsidiaries, shall also be
    eligible for participation in the 1996 Plan as recipients of Options.  A
    person who has been granted an Option/Share hereunder may be granted
    additional Options/Shares, if the Board or the Committee shall so determine.
<PAGE>

                                      -3-

5.  TRUSTEE

    The 102 Stock Options which shall be granted to employees of the Company
    (or if required by law) shall be issued to a trustee nominated by the Board
    or the Committee (in accordance with the provisions of Section 102) (the
    "Trustee") and held for the benefit of the optionees for a period of not
    less than two years (24 months) from the date of grant.  The Trustee may
    also hold in trust any shares issued upon exercise of such 102 Stock Options
    pursuant to the provisions of Section 102.

    The Trustee shall not use the voting rights vested in any such shares held
    by the Trustee and shall not exercise said right in any way whatsoever,
    except in cases when, at his discretion and after consulting with the
    Committee, the Trustee believes that the said rights should be exercised for
    the protection of the optionees as a minority among the Company
    shareholders.

6.  SHARES RESERVED FOR 1996 PLAN

    Subject to adjustment as provided in Paragraph 8 hereof, a total of
    140,000 Ordinary  Shares, NIS1 par value per share, of the Company
    ("Shares") shall be subject to the 1996 Plan.  The Shares subject to the
    1996 Plan hereby are, reserved for sale for such purpose.  Any of such
    Shares which may remain unsold and which are not subject to outstanding
    options at the termination of the 1996 Plan shall cease to be reserved for
    the purpose of the 1996 Plan, but until termination of the 1996 Plan the
    Company shall at all times reserve a sufficient number of shares to meet the
    requirements of the 1996 Plan.  Should any Option for any reason expire or
    be canceled prior to its exercise or relinquishment in full, the shares
    therefore subject to such Option may again be subjected to an Option under
    the 1996 Plan.

7.  OPTION/SHARES  PRICE

    (a)   Except for Incentive Stock Options the purchase price of each Share
          subject to an Option or of each Restricted Stock  or any portion
          thereof shall be determined by the Committee in its sole and absolute
          discretion in accordance with applicable law, subject to guidelines as
          shall be suggested by the Board from time to time (but not less than
          the par value).

    (b)   The Option price shall be payable upon the exercise of the Option in
          cash, by check, or other form satisfactory to the Board or the
          Committee.

    (c)   The proceeds received by the Company from the sale of Options/Shares
          subject to an Option/Share granted under the 1996 Plan will be added
          to the general funds of the Company and used for its corporate
          purposes.
<PAGE>

                                      -4-

8.  ADJUSTMENTS

    Upon the occurrence of any of the following described events, a grantee's
    rights to purchase Options/Shares under the 1996 Plan shall be adjusted as
    hereinafter provided:

    (a)   If the Company is separated, reorganized, merged, consolidated or
          amalgamated with or into another corporation while unexercised
          /unvested Options/Shares remain outstanding under the 1996 Plan, there
          shall be substituted for the shares subject to the unexercised
          /unvested portions of such outstanding Options/Shares an appropriate
          number of shares of each class of shares or other securities of the
          separated, reorganized, merged, consolidated or amalgamated
          corporation which were distributed to the shareholders of the Company
          in respect of such shares, and appropriate adjustments shall be made
          in the purchase price per share to reflect such action.

    (b)   If the Company is liquidated or dissolved while unexercised/unvested
          Options/Shares remain outstanding under the 1996 Plan, then all such
          outstanding Options/Shares may be exercised/vested in full by the
          optionees/grantees as of the effective date of any such liquidation or
          dissolution of the Company without regard to the installment exercise
          provisions of Paragraph 9(b), by the optionees/grantees giving notice
          in writing to the Company of their intention to so exercise.

    (c)   If the outstanding shares of the Company shall at anytime be changed
          or exchanged by declaration of a stock dividend, stock split,
          combination or exchange of shares, recapitalization, extraordinary
          dividend payable in stock of a corporation other than the Company, or
          any other like event by or of the Company, and as often as the same
          shall occur, then the number, class and kind of Shares subject to this
          1996 Plan or subject to any Options theretofore granted, and the
          option prices, shall be appropriately and equitably adjusted so as to
          maintain the proportionate number of Shares without changing the
          aggregate option price; provided, however, that no adjustment shall be
          made by reason of the distribution of subscription rights on
          outstanding stock. Upon the happening of any of the foregoing, the
          class and aggregate number of shares issuable pursuant to the 1996
          Plan (as set forth in paragraph 6 hereof), in respect of which
          Options/Shares have not yet been exercised/vested, shall be
          appropriately adjusted.

    (d)   Anything herein to the contrary notwithstanding, if prior to the
          completion of the initial public offering of shares of the Company,
          all or substantially all of the shares of the Company are to be sold,
          or upon a -merger or reorganization or the like, the shares of the
          Company, or any class thereof, are to be exchanged for securities of
          another company, then in such event, each optionee shall be obliged to
          sell or exchange, as the case may be, the shares he purchased under
          the 1996 Plan in accordance with the instructions then issued by the
          Board.
<PAGE>

                                      -5-

9.  TERM AND EXERCISE OF OPTIONS/SHARES

    (a)   Options shall be exercised by the optionee by giving written notice to
          the Company, which exercise shall be effective upon receipt of such
          notice by the Secretary of the Company at its principal office.  The
          notice shall specify the number of Shares with respect to which the
          Option is being exercised.

    (b)   Each Option granted under this 1996 Plan shall be exercisable on the
          date and for the number of shares as shall be provided in the option
          agreement evidencing the Option and setting forth the terms thereof.
          However, (i) no Option shall be exercisable after the expiration of
          seven (7) years from the date of grant, and (ii) no Incentive Stock
          Options may be granted to a person who at the time of the grant owns
          more than 10% of the voting stock of value of the Company.

    (c)   Options/Shares granted under the 1996 Plan shall not be transferable
          by optionees/grantees other than by will or the laws of descent and
          distribution, and during an optionee's lifetime shall be exercisable
          only by that optionee.

    (d)   Options granted to employees or directors may not be exercised after
          the termination of employment and/or service as a director unless (i)
          prior to the date of such termination, the Board or the Committee
          shall authorize, in the relevant option agreement or otherwise, an
          extension of the term of all or part of the option beyond the date of
          such termination for a period not to exceed the period during which
          the Option by its terms would otherwise have been exercisable, (ii)
          termination is without Cause (as determined by the Committee) or
          employee resigns, in which event any Options still in force and
          unexpired may be exercised within a period of 30 days from the date of
          such termination, but only with respect to the number of shares
          purchasable at the time of such termination, (iii) termination is the
          result of death or disability, in which event any Options still in
          force and unexpired may be exercised within a period of six (6) months
          from the date of termination, but only with respect to the number of
          shares purchasable at the time of such termination, or (iv)
          termination of employment is the result of retirement under any
          deferred compensation agreement or retirement plan of the Company or
          of any subsidiary of the Company or after age 60, while Options
          granted hereunder are still in force and unexpired, in which case the
          Board or Committee shall have the discretion to permit any unmatured
          installments of the Options to be accelerated as for the later of the
          date of retirement or a date one year following the date of grant, and
          the Options shall thereupon be exercisable in full without regard to
          the installment exercise provisions of Paragraph 9(b).
<PAGE>

                                      -6-

    (e)   The holders of Options/Shares shall not be or have any of the rights
          or privileges of shareholders of the Company in respect of any shares
          unless and until, following exercise/vesting date but subject always
          to the provisions of Section 5 above, certificates representing such
          shares shall have been issued by the Company and delivered to such
          holders.

    (f)   Any form of option agreement authorized by the 1996 Plan may contain
          such other provisions as the Board or the Committee may, from time to
          time, deem advisable.  Without limiting the foregoing, the Board or
          the Committee may, with the consent of the optionee/grantee, from time
          to time cancel all or any portion of any Option then subject to
          exercise, and the Company's obligation in respect of such Option may
          be discharged by (i) payment to the optionee of an amount in cash
          equal to the excess, if any, of the Fair Market Value of the shares at
          the date of such cancellation subject to the portion of the Option so
          canceled over the aggregate purchase price of such shares, (ii) the
          issuance or transfer to the optionee of Shares of the Company with a
          Fair Market Value at the date of such transfer equal to any such
          excess, or (iii) a combination of cash and shares with a combined
          value equal to any such excess, all as determined by the Board or the
          Committee in its sole discretion.

    (g)   Shares of Restricted Stock may not be sold, assigned, transferred,
          pledged, hypothecated or otherwise disposed of, except by will or the
          laws of descent and distribution, for such period as the Committee
          shall determine from the date on which the award is granted (the
          "Restricted Period"). The Committee may also impose such other
          restrictions and conditions on the shares as it deems appropriate
          including the satisfaction of performance criteria. Certificates for
          shares of stock issued pursuant to Restricted Stock awards shall bear
          an appropriate legend referring to such restrictions, and any attempt
          to dispose of any such shares of stock in contravention of such
          restrictions shall be null and void and without effect. During the
          Restricted Period, such certificates shall be held in escrow by an
          escrow agent appointed by the Committee. In determining the Restricted
          Period of an award, the Committee may provide that the foregoing
          restrictions shall lapse with respect to specified percentages of the
          awarded shares on successive anniversaries of the date of such award.

          Subject to such exceptions as may be determined by the Committee, if
          the Grantee's continuous employment with, or performance of, service
          for, the Company or any Parent or Subsidiary shall cease for any
          reason prior to the expiration of the Restricted Period of an award,
          any shares remaining subject to restrictions shall thereupon be
          forfeited by the grantee and transferred to a Subsidiary at no cost to
          the Company or such Parent or Subsidiary or shall be converted into a
          deferred stock.
<PAGE>

                                      -7-

10. INCENTIVE STOCK OPTIONS

    (a)   In case of ISO granted to employees, the aggregate Fair Market Value
          of Shares (determined as of the date of the grant of the ISO's) with
          respect to which ISO's are exercisable for the first time by any
          optionee during any calendar year shall not exceed the limitation
          provided under Section 422(d) of the Code.

    (b)   The options issued as ISOs must be granted within 7 years of the date
          that the Plan is adopted or the date that the Plan is approved by the
          stockholders, whichever is earlier.

    (c)   Any option issued as an ISO must by its terms be exerciseable only
          within 10 years of the date that it is granted.

    (d)   The option price for any ISO must not be less than the fair market
          value of the stock at the time that the option is granted. This
          requirement shall be deemed satisfied if there has been a good faith
          attempt to value the stock accurately for this purpose.

    (e)   The ISO by its terms must be non-transferable other than at death and
          must be exercisable during the employee's lifetime only by the
          employee.

11. PURCHASE OF INVESTMENT

    Unless Shares covered by the 1996 Plan have been listed for trade on any
    stock exchange (of any jurisdiction), or the Company has determined that
    such registration is unnecessary, each person exercising an Option under the
    1996 Plan may be required by the Company to give a representation in writing
    that he is acquiring such shares for his own account, for investment and not
    with a view to, or for sale in connection with, the distribution of any part
    thereof.

12. TERM DATE OF 1996 PLAN

    The 1996 Plan shall be effective as of January 1, 1996 and shall terminate
    on December 31, 2005.All Options not exercised as of December 31, 2005 shall
    expire.

13. AMENDMENTS OR TERMINATION

    The Board may, at any time and from time to time, amend, alter, or
    discontinue the 1996 Plan, except that no amendment or alteration shall be
    made which would impair the rights of the holder of any Options/Shares
    theretofore granted without his consent.
<PAGE>

                                      -8-

14. GOVERNMENT REGULATIONS

    The 1996 Plan, and the granting and exercise of Options/Shares hereunder,
    and the obligation of the Company to sell and deliver shares under such
    Options/Shares, shall be subject to all applicable laws, rules, and
    regulations, whether of the State of Israel or of the United States or any
    other State having jurisdiction over the Company and the optionee including
    the registration of the shares under the United States Securities Act of
    1933, and to such approvals by any governmental agencies or national
    securities exchanges as may be required.

15. CONTINUANCE OF EMPLOYMENT

    Neither the 1996 Plan nor the option agreement with the optionee shall
    impose any obligation on the Company or a subsidiary thereof, to continue
    any optionee/grantee in its employ, and nothing in the 1996 Plan or in any
    Option/Share granted pursuant thereto shall confer upon any optionee any
    right to continue in the employ of the Company or a subsidiary thereof or
    restrict the right of the Company or a subsidiary thereof to terminate such
    employment at any time.

16. GOVERNING LAW

    This 1996 Plan shall be governed by and construed and enforced in
    accordance with the laws of the State of Israel applicable to contracts made
    and to be performed therein, without giving effect to the principles of
    conflict of laws.

17. TAX CONSEQUENCES

    Any tax consequences arising from the grant or exercise of any
    Options/Shares, from the payment for shares covered thereby or from any
    other event or act (of the Company or the optionee) hereunder (including
    without limitation any tax consequences if for any reason, or by any
    authority, legal or other, according to any law or regulation, local or
    foreign, the options or shares of any type or kind granted under this 1996
    Plan or any portion thereof, would not constitute or not qualify for any
    type or kind of tax consequences), shall be borne solely by the optionee.
    Furthermore, the optionee shall agree to indemnify the Company and the
    Trustee and hold them harmless against and from any and all liability for
    any such tax or interest or penalty thereon, including without limitation,
    liabilities relating to the necessity to withhold, or to have withheld, any
    such tax from any payment made to the optionee/grantee.

18. NON-EXCLUSIVITY OF THE 1996 PLAN

    The adoption of the 1996 Plan by the Board shall not be construed as
    amending, modifying or rescinding any previously approved incentive
    arrangement or as creating any limitations on the power of the Board to
    adopt such other incentive arrangements as it may deem desirable, including,
    without limitation, the granting of stock options otherwise than under the
    1996 Plan, and such arrangements may be either applicable generally or only
    in specific cases.
<PAGE>

                                      -9-

19. MULTIPLE AGREEMENTS

    The terms of each Option/Share may differ from other Options/Shares
    granted under the 1996 Plan at the same time, or at any other time.  The
    Committee may also grant more than one Option/Share to a given
    optionee/grantee during the term of the 1996 Plan, either in addition to, or
    in substitution for, one or more Options/Shares  previously granted to that
    optionee/grantee.

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