Document:

<PAGE>

                FIBRE, CAPACITY AND FACILITIES PURCHASE AGREEMENT

THIS AGREEMENT, dated as of the ______ day of _______________ 1999, is among
FLAG ATLANTIC LIMITED, a company organised under the laws of Bermuda and having
its principal office at The Emporium Building, 69 Front Street, 4th Floor,
Hamilton, Bermuda, FLAG ATLANTIC USA LIMITED, a company organised under the laws
of Delaware, USA and having its principal office at 570 Lexington Avenue, 38th
Floor, New York, NY 10022, USA, (FLAG ATLANTIC LIMITED AND FLAG ATLANTIC USA
LIMITED being hereinafter jointly and severally referred to as "FA-1") and GTS
TRANSATLANTIC CARRIER SERVICES LIMITED ("Purchaser"), a company organised under
the laws of Bermuda and having its principal office at Clarendon House, 2 Church
Street, Hamilton, HM11, Bermuda.

                                   WITNESSETH:

WHEREAS, FLAG Atlantic Limited is constructing and will directly and/or
indirectly own, operate and maintain a fibre optic cable system to be known as
FLAG Atlantic-1 (the "System") consisting of a subsea element (the "Subsea
Element") and two backhaul elements (the "Backhaul Elements"), the System,
Subsea Element and Backhaul Elements being more fully described in Schedule 1;
and

WHEREAS, FLAG Atlantic USA Limited is constructing and will own all that part of
the System that is within the territory (including the territorial waters) of
the United States of America; and

WHEREAS, the System is currently scheduled to go into service in stages with the
initial stage, as more particularly described in Schedule 1 ("Initial Stage"),
currently scheduled to go into service on or about 31 March 2001 ("Scheduled
Initial RFS Date"), and the final stage, as more particularly described in
Schedule 1 ("Final Stage"), currently scheduled to go into service on or about
30 June 2001 ("Scheduled Final RFS Date"); and

WHEREAS, Purchaser desires to purchase from FA-1, and FA-1 is willing to sell to
Purchaser: (i) an indefeasible and exclusive right of use ("IRU") in the
derivable capacity from one fibre pair (the "Capacity") on each Link (as such
term is described in Schedule 1) of the Subsea Element; (ii) the exclusive right
to use one dedicated dark fibre pair (the "Dark Fibre Pair") on each Link of the
Backhaul Elements; and (iii) all such other rights as are set out in Schedule 2
(together the "Rights"); and

WHEREAS, FLAG Atlantic Limited, FLAG Atlantic USA Limited and Purchaser (the
"Parties") desire to define the terms and conditions under which the Rights will
be acquired by Purchaser.

NOW, THEREFORE, the Parties hereby agree as follows:

1.       GRANT OF RIGHTS AND DELIVERY

1.1      Purchaser agrees to purchase and FA-1 agrees to grant to Purchaser, the
         Rights for the sum of *** (the "Purchase Price"), payable in accordance
         with the schedule set forth in clause 2.1, in each case subject to the
         terms and conditions of this Agreement.

<PAGE>

1.2      Where provision is made in this Agreement for the provision of
         operations and maintenance services ("O&M") by FA-1, O&M shall be
         provided by FA-1 to Purchaser *** in accordance with Schedule 3.

1.3      Testing and Inspection

1.3.1    ***

1.3.2    ***

1.3.3    ***

1.4      *** The fibre pair so allocated is herein referred to as the "Allocated
         Fibre Pair". Except as set out below, the Preliminary Bandwidth (as
         such term is described in Schedule 2) will be provided and the rest of
         the Capacity will be installed on the Allocated Fibre Pair. ***

                 ***

1.5      Upon the Initial RFS Date, FA-1 will activate the Preliminary Bandwidth
         of the Capacity in each of Links 2, 5, 6 in accordance with the terms
         of this Agreement.

1.6      Upon the Final RFS Date, FA-1 will activate the Preliminary Bandwidth
         of the Capacity in Link 9 in accordance with the terms of this
         Agreement.

1.7      Subject to Purchaser complying with clause 2.1, the Rights shall pass
         to and vest in Purchaser as follows:

1.7.1    in the Capacity, from the Initial RFS Date for the Initial Stage and
         from the Final RFS Date for the Final Stage;

1.7.2    in the Dark Fibre Pair and in each Facility (as such term is described
         in Schedule 2), from the date that the relevant Landing Station,
         Terminal Point or amplifier/regenerator site is made available to FA-1
         for the installation of its equipment being at least 120 days prior to
         the Initial RFS Date;

1.7.3    The Rights shall subsist until the System is decommissioned in
         accordance with clause 8;

1.7.4    Purchaser shall have no legal ownership or other rights in the System
         itself or in the physical assets thereof, in any proceeds from the
         disposition of the System or in any other capacity therein, except as
         specifically provided herein.

1.8      Except as otherwise required by law or generally accepted accounting
         policies, the Parties agree to file their respective income tax returns
         to reflect the terms of clause 1.7 and not to take any actions
         inconsistent therewith.

1.9      ***

                                                                               2

<PAGE>

1.10     Notwithstanding anything in this Agreement to the contrary, following
         the grant of any of the Rights relating to the Capacity or Dark Fibre
         Pair, Purchaser may resell, assign, transfer or otherwise use any such
         rights for any lawful purpose. Notwithstanding any resale, assignment
         or transfer, Purchaser remains liable for its obligations under this
         Agreement. FA-1 agrees and acknowledges that from the Initial RFS Date
         it shall have no right to use the Capacity or Dark Fibre Pair forming
         part of the Initial Stage during the term of this Agreement and that
         from the Final RFS date it shall have no right to use the Capacity
         forming part of the Final Stage during the term of this Agreement.

2.       PAYMENTS

2.1      Purchaser shall pay to FA-1 the Purchase Price for the Rights as
         follows (and all such payments shall be non-refundable except as
         otherwise provided in clause 4.4):

2.1.1    Purchaser shall pay to FA-1 *** of the Purchase Price on receipt of a
         notice from FA-1 that FA-1 Financial Closure (as defined in clause 22)
         has occurred.

2.1.2    Purchaser shall pay the remaining *** of the Purchase Price in
         instalments of *** of the Purchase Price, such instalments being paid
         quarterly with the first payment on 31 December 1999 ***.

2.2      Purchaser shall pay to FA-1 such amounts for the operation and
         maintenance of the System as are set forth in, or determined pursuant
         to, Schedule 4 ("O&M Payments").

2.3      FA-1 shall render to Purchaser invoices for amounts payable pursuant to
         this Agreement. Invoices for the Purchase Price shall be rendered in
         accordance with clause 2.1. Invoices for O&M Payments shall be rendered
         pursuant to Schedule 4. All invoices shall be due and payable within 30
         days after delivery to Purchaser.

2.4      Any amount payable pursuant to this Agreement which is not paid when
         due shall accrue interest at the annual rate of *** above the U.S.
         Dollar LIBOR for one month as quoted in The Wall Street Journal on the
         first business day of the month in which the payment is due. All such
         default interest shall accrue from the day following the date payment
         of the relevant amount was due until it is paid in full and shall
         accrue both before and after judgement. Such interest shall be payable
         on demand.

2.5      All amounts payable by Purchaser pursuant hereto shall be paid in full
         in U.S. dollars by wire transfer free and clear of all bank or transfer
         charges to such account(s) as FA-1 may by notice to Purchaser designate
         without reduction for any deduction or withholding for or on account of
         any tax, duty or other charge of whatever nature imposed by any taxing
         authority. If Purchaser is required by law to make any deduction or
         withholding from any payment hereunder, Purchaser shall pay such
         additional amount to FA-1 so that after such deduction or withholding
         the net amount received by FA-1 will be not less than the amount FA-1
         would have received had such deduction or withholding not been
         required. Purchaser shall make the

                                                                               3

<PAGE>

         required deduction or withholding, shall pay the amount so deducted or
         withheld to the relevant governmental authority and shall promptly
         provide FA-1 with evidence of such payment.

2.6      In the case of payments of the Purchase Price, until the Initial RFS
         Date there shall be such controls over the account(s) designated by
         FA-1 pursuant to clause 2.5 so as to ensure that payments of the
         Purchase Price may only be used to make timely payments required to be
         made by FA-1 in connection with the planning, design, construction and
         project management of the System. Any interest arising from amounts
         held in the account(s) shall accrue for the benefit of FA-1.

2.7      Subject to clause 2.1.2, Purchaser's obligation to make payments
         hereunder shall not be subject to any rights of set-off, counterclaim,
         deduction, defence or other right which Purchaser may have against FA-1
         or any other party.

2.8      Should any invoice for O&M Payments or other service payments or part
         thereof be under dispute as to its correctness, then default interest
         shall not accrue on the amount in dispute pursuant to clause 2.4 above
         provided that within 30 days of receipt of the invoice, Purchaser has
         advised FA-1 by electronic mail, facsimile or like means of
         communication of the amount in dispute and the nature of that dispute.

2.9      Purchaser shall pay the undisputed amount of the invoice by the payment
         date. The amount in dispute shall be investigated by the Parties and
         resolved in a timely manner.

2.10     Notwithstanding the foregoing, in the event that upon investigation the
         amount in dispute or part thereof is found to be correct as originally
         invoiced, Purchaser shall pay, in addition to the amount in dispute,
         interest in accordance with clause 2.4 on all unpaid portions which are
         found to have been correctly invoiced, such interest to be paid from
         the date payment of the relevant amount was originally due until it is
         paid in full.

2.11     Prior to FA-1 Financial Closure, Purchaser shall deliver to FA-1 such
         security for payment of the Purchase Price as is set forth in Schedule
         5.

3.       TAXES

3.1      Save as the context requires or as otherwise stated herein all
         references to payments made in this Agreement are references to such
         payments exclusive of all sales and use taxes, gross turnover taxes,
         value added taxes, or other similar turnover or sales based taxes,
         excise taxes, duties, fees, charges, levies, surcharges to recover the
         cost of universal service contributions, or similar liabilities (other
         than the general income taxes of FA-1) imposed by any authority,
         government or government agency in connection with or as a result of
         or in respect of the supply for which the payment is or is deemed to
         be consideration (collectively "taxes"). Where applicable such taxes
         shall be added to the invoice and shall be paid to FA-1 at the same
         time as the relevant invoice is settled in accordance with clause 2.

                                                                               4

<PAGE>

3.2      In the event that value added tax in the U.K. or France is considered
         to be applicable, FA-1 shall notify Purchaser to this effect prior to
         the issuance of the relevant VAT invoice and both Parties shall work
         together in good faith to restructure the arrangements to reduce the
         impact of VAT on Purchaser, where legally possible, but such that there
         is no adverse cash flow impact for FA-1. Notwithstanding these
         discussions, invoices (excluding the VAT) shall be issued and be
         payable in accordance with clause 2.

3.3      Purchaser shall be responsible for all rates and similar property based
         taxes appropriately assessed and arising directly or indirectly from
         Purchaser's interest in and exercise of the Rights.

4.       DEFAULT AND TERMINATION

4.1      Except as provided in this Agreement, neither Party shall have a right
         to terminate or cancel this Agreement for any reason whatsoever.

4.2      In the event that Purchaser shall have failed to pay any amount payable
         by Purchaser pursuant hereto for more than *** days after its due date,
         then Purchaser shall not be entitled to activate any additional
         capacity within the Subsea Element pursuant to this Agreement or the
         Dark Fibre Pair or to effect any upgrade pursuant to clause 7 until
         Purchaser has paid in full all amounts overdue together with applicable
         default interest. If such failure continues for a further *** days,
         FA-1 shall be entitled to refrain from performing any services for
         Purchaser required by this Agreement, deny Purchaser the right of
         access to co-located spaces (except for the purpose of maintaining its
         existing services to its customers), and refuse to carry out any
         additional break-outs along the route of the Dark Fibre Pair until
         Purchaser has paid in full all undisputed amounts overdue together with
         applicable default interest.

4.3      FA-1 reserves the right to temporarily or permanently deactivate all
         then activated Capacity (and refuse to activate any additional
         Capacity) and/or to disconnect Purchaser's equipment from the System in
         the event that Purchaser is in breach of clause 9.1 or if, in FA-1's
         reasonable judgement, Purchaser's use of the System may damage or
         disrupt the System. Except in case of emergency FA-1 shall notify
         Purchaser in advance of its intent to deactivate Capacity and FA-1
         shall not permanently deactivate the Capacity without first allowing
         Purchaser a reasonable period (being not less than 90 days) within
         which Purchaser may remedy the breach of clause 9.1 or amend its use of
         the System so that the cause or potential cause of the damage or
         disruption has been rectified and the risk removed, as the case may be.
         FA-1 shall reconnect the Capacity as soon as Purchaser has established
         to FA-1's satisfaction that the breach of clause 9.1 has been cured or
         that the cause or potential cause of damage or disruption to be System
         has been rectified and the risk removed.

4.4      If this clause becomes applicable pursuant to clause 2.1.2 or if the
         Initial RFS Date has not occurred within *** months after the Scheduled
         Initial RFS Date (*** months if the delay is caused by a force majeure
         event) Purchaser may by written notice terminate this Agreement.
         Purchaser shall have no obligation to make any further payments under
         this Agreement following such termination and FA-1 shall within ***
         days of such termination refund to

                                                                               5

<PAGE>

         Purchaser any portion of the Purchase Price already paid by Purchaser
         to FA-1 which has not been used to make timely payments required to be
         made by FA-1 in connection with the planning, design, construction and
         project management of the System. Subject to Clauses 4.5 and 4.6, the
         foregoing shall be the limit of Purchaser's rights for delays to the
         Initial RFS Date.

4.5      ***

4.6      ***

5.       OPERATION AND MAINTENANCE

5.1      FA-1 shall be responsible for the operation and maintenance of the
         System including arranging for the repair of the System in the event of
         any fault. Purchaser's responsibility with regard to operation and
         maintenance of the System shall be to make the O&M Payments as and when
         they become due pursuant to this Agreement and to notify FA-1 of each
         fault related to the Dark Fibre Pair/Capacity on becoming aware of the
         same, locate the site of such fault, and in relation to the Dark Fibre
         Pair to shut down Purchaser's lasers within two hours of receipt of
         instructions to enable FA-1 to safely repair the fault. If Purchaser
         fails to shut down its lasers within the required time period, FA-1
         shall be entitled to remove the lasers from the Dark Fibre Pair in
         order to safely repair the Dark Fibre Pair or the System provided that
         FA-1 takes reasonable care in so doing. Purchaser shall also be
         required to provide FA-1 reasonable assistance to determine if a fault
         on the System is due to one or more of Purchaser's break-out points on
         the System.

5.2      ***

5.3      Any planned works that will interrupt the Capacity on any Link of the
         Subsea Element or will interrupt the Dark Fibre Pair or will hinder
         access to the Facilities shall be notified to Purchaser at least 15
         days in advance.

5.4      FA-1 shall promulgate procedures for the maintenance, use and operation
         of the System according to standards generally accepted in the
         telecommunications cable industry and in order to maintain the
         Standards and shall provide Purchaser with a copy thereof. FA-1 may
         from time to time amend such procedures provided that such amendments
         do not affect the quality or use of the Rights and remain consistent
         with standards generally accepted in the telecommunications cable
         industry and shall provide Purchaser with a copy of each amendment
         prior to its effectiveness.

5.5      In operating and maintaining the System, FA-1 shall provide operation
         and maintenance on an equal and non-discriminatory basis.

5.6      ***

5.7      FA-1 undertakes to operate and maintain the System as economically as
         is reasonably possible.

                                                                               6

<PAGE>

6.     INTENTIONALLY LEFT BLANK

7.     SYSTEM ENHANCEMENTS AND UPGRADES

7.1      FA-1 reserves the right to upgrade the amount of the capacity of the
         System and to make any enhancements to the System from time to time.
         ***

7.2      FA-1 will notify Purchaser of any planned upgrade of, or enhancement
         to, the System. Such notice shall set forth the costs of such upgrade
         or enhancement, based on its pricing agreement with or proposal from
         its suppliers. If Purchaser wishes to participate in such upgrade or
         enhancement for the purposes of upgrading or enhancing the Capacity it
         shall notify FA-1 within 30 days of receiving notice from FA-1. If
         Purchaser agrees to participate in the upgrade or enhancement, the
         upgrade or enhancement will then be treated as FA-1 project managing
         the upgrade or enhancement, pursuant to clause 7.3. If Purchaser elects
         not to participate or fails to timely respond to the notice, FA-1 shall
         be entitled to proceed with the upgrade or enhancement without
         participation by Purchaser.

7.3      Purchaser shall be entitled at its own cost at any time to upgrade the
         Capacity, including upgrading the Capacity to over 400 Gbps if this
         becomes possible. FA-1 shall carry out each upgrade (including the
         provision of the necessary transponders) on Purchaser's behalf in
         increments of 40 Gbps on each Link being upgraded. *** Upon FA-1
         receiving a request to upgrade from Purchaser, FA-1 will within 60
         days, subject to receiving from Purchaser the information required,
         submit to Purchaser costs for the upgrade. The Proposal will identify
         third party costs and project management costs and a completion
         timeline for the upgrade ***. The upgrade will be carried out in
         accordance with the terms of this Agreement (including BIS Testing).

7.4      Purchaser shall be entitled at its own cost at any time to equip the
         Dark Fibre Pair provided that such activities are carried out in
         consultation with FA-1 and at a time, not later than 30 days after the
         date Purchaser wishes to do the work, mutually agreed by the Parties
         (which agreement shall not be unreasonably withheld or delayed).

8.       SYSTEM DECOMMISSIONING

         The System shall be decommissioned at such time, no earlier than 15
         years and no later than 25 years from the Initial RFS Date, as either
         FA-1 or the holders of three quarters of the then activated capacity on
         the System determine that the System is technically obsolete or has
         reached the end of its useful economic life. There shall be no
         compensation payable to Purchaser whether Purchaser voted for or
         against decommissioning. FA-1 shall where possible notify Purchaser if
         the System or any material portion thereof is to be decommissioned at
         least 12 months prior to such decommissioning (or by such later date as
         may be possible if 12 months notice is not possible). This provision is
         without prejudice to

                                                                               7

<PAGE>

         the rights of FA-1 to decommission the System without any liability to
         Purchaser whatsoever in the event of a force majeure event which makes
         it impossible to maintain the business efficacy of the System.

9.       REPRESENTATIONS, WARRANTIES AND COVENANTS

9.1      Purchaser represents, warrants and covenants to FA-1 as follows:

9.1.1    Purchaser is duly established and in good standing under the laws of
         Bermuda and has full power and authority to enter into this Agreement.

9.1.2    This Agreement constitutes the legal, valid and binding obligation of
         Purchaser, enforceable against Purchaser in accordance with its terms.

9.1.3    Purchaser or its affiliate has obtained or will obtain all necessary
         consents, licenses, permits and other approvals, both governmental and
         private, as may be necessary to permit Purchaser to perform its
         obligations under this Agreement and to acquire and use the Capacity.

9.1.4    Purchaser shall perform its obligations under this Agreement and use
         the Capacity in a manner consistent with applicable law, and shall not
         use, or permit the Capacity to be used, for any illegal purpose or in
         any other unlawful manner.

9.2      FLAG Atlantic Limited and FLAG Atlantic USA Limited each represents,
         warrants and covenants to Purchaser as follows:

9.2.1    It is duly established and in good standing under the laws of the
         country of its incorporation and has full power and authority to enter
         into this Agreement.

9.2.2    This Agreement constitutes its legal, valid and binding obligation
         enforceable against it in accordance with its terms.

9.2.3    It shall perform its obligations under this Agreement in a manner
         consistent with applicable law.

9.2.4    ***

9.2.5    ***

9.2.6    ***

9.3      Except as provided above, FA-1 disclaims, and Purchaser waives, all
         representations and warranties regarding the System, including any
         warranty of merchantability or fitness for a particular use, and in
         particular, without limiting the foregoing FA-1 does not warrant that
         the Dark Fibre Pair or Capacity will be uninterrupted or error free or
         that the Dark Fibre Pair or Capacity will meet Purchaser's requirements
         for the equipment to be deployed by Purchaser

                                                                               8

<PAGE>

         in connection with the Dark Fibre Pair or Capacity or services to be
         offered by Purchaser utilising this equipment.

10.      FORCE MAJEURE

         No failure or omission by any Party to carry out or observe any of the
         terms and conditions of this Agreement (other than any payment
         obligation) shall give rise to any claim against such Party or be
         deemed a breach of this Agreement if such failure or omission arises
         from an act of God, an act of any government or any other circumstance
         beyond the reasonable control of that Party commonly known as "force
         majeure".

11.      CONFIDENTIALITY

         Other than in connection with an assignment permitted under clause 13
         or if it is required by applicable law in connection with the
         enforcement of this Agreement, neither FA-1 nor Purchaser shall
         disclose the terms of this Agreement to any third party without the
         prior written consent of the other Party. Without limiting the
         generality of the foregoing, neither FA-1 nor Purchaser shall issue any
         press release or otherwise publicise the existence or the terms of this
         Agreement without the prior written consent of the other Party.

12.      NO LICENCE

12.1     Nothing  in this  Agreement  shall or shall be deemed to give rise to
         any right of  Purchaser  to use any FA-1 Intellectual Property.

12.2     For the purposes of this clause "Intellectual Property" means any and
         all patents, trade marks, rights in designs, copyrights, and topography
         rights, (whether registered or not and any applications to register or
         rights to apply for registration of any of the foregoing), rights in
         inventions, know-how, trade secrets and other confidential information,
         rights in databases and all other intellectual property rights of a
         similar or corresponding character which may now or in the future
         subsist in any part of the world, and "FA-1 Intellectual Property"
         means Intellectual Property owned by or licensed to FA-1 together with
         the goodwill relating thereto.

13.      ASSIGNMENT

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

                                                                               9

<PAGE>

         under this Agreement to any other persons following exercise of any
         rights or remedies on such collateral security, neither this Agreement
         nor any of the rights, interest or obligations hereunder shall be
         assigned or transferred by any of the Parties hereto without the prior
         written consent of the other Parties, and any attempted assignment or
         transfer in violation of this clause shall be void.

13.2     Notwithstanding clause 13.1, FLAG Atlantic Limited and FLAG Atlantic
         USA Limited may allocate their rights and obligations under this
         Agreement between themselves and their Affiliates.

13.3     FLAG Atlantic Limited and FLAG Atlantic USA Limited may use
         subcontractors or agents to fulfil their obligations hereunder provided
         that FLAG Atlantic Limited and FLAG Atlantic USA Limited remain fully
         liable for the performance of those obligations.

13.4     Notwithstanding Clause 13.1, Purchaser may assign its rights under this
         Agreement to its Affiliates.

13.5     For the purpose of this clause and clause 19.1 "Affiliate" means any
         person or body corporate, controlling, controlled by or under common
         control with the relevant Party.

14.      ENTIRE AGREEMENT

         This Agreement constitutes the whole agreement between the Parties and
         supersedes any previous agreements, arrangements or understandings
         between them relating to the subject matter hereof. Each of the Parties
         acknowledges that it is not relying on any statements, warranties or
         representations given or made by any of them relating to the subject
         matter hereof, save as expressly set out in this Agreement.

15.      VARIATION

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

16.      WAIVER

16.1     Failure by a Party at any time to enforce any of the provisions of this
         Agreement shall neither be construed as a waiver of any rights or
         remedies hereunder nor in any way affect the validity of this Agreement
         or any part of it and no waiver of a breach of this Agreement shall
         constitute a waiver of any subsequent breach.

16.2     Termination of this Agreement shall not operate as a waiver of any
         breach by a Party of any of the provisions hereof and shall be without
         prejudice to any rights or remedies of a Party which may arise as a
         consequence of such breach or which may have accrued hereunder up to
         the date of such termination.

                                                                              10

<PAGE>

16.3     No waiver of a breach of this Agreement shall be effective unless given
         in writing.

17.      INVALIDITY

17.1     If any provision of this Agreement is or becomes (whether pursuant to
         any judgement or otherwise) invalid, illegal or unenforceable in any
         respect under the law of any applicable jurisdiction:

         (a)      the validity, legality and enforceability under the law of
                  that jurisdiction of any other provision; and

         (b)      the validity, legality and enforceability under the law of any
                  other jurisdiction of that or any other provision,

         shall not be affected or impaired in any way thereby.

18.      NOTICE

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

         If to Purchaser:

         GTS Transatlantic Carrier Services Limited
         Clarendon House
         2 Church Street
         Hamilton HM11
         Bermuda

         With a copy to:

         GTS
         Terhulpsesteenweg 6A
         1560 Hoeilaart
         Belgium

         Attention: Legal Director
         Tel: + 32 2 658 5200
         Fax: + 32 2 658 5101

         If to FA-1:

                                                                              11

<PAGE>

         FLAG Atlantic Limited
         The Emporium Building
         69 Front Street
         4th Floor
         Hamilton HM 12
         Bermuda

         Attention: FLAG Atlantic-1
         Tel:  +1-441-296-0909
         Fax: +1-441-296-0938

         With a copy to:

         FLAG Telecom Limited
         103 Mount Street - 3rd Floor
         London  W1Y  5HE
         U.K.

         Attention:  General Counsel
         Tel:  +44-171-317-0800
         Fax: +44-171-317-0808

18.2     Purchaser acknowledges that all communications in connection with this
         Agreement shall be between Purchaser and FLAG Atlantic Limited. For
         this purpose, FLAG Atlantic USA Limited hereby appoints FLAG Atlantic
         Limited as its agent to receive and send all communications in
         connection with this Agreement.

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

19.      LIABILITY

19.1     Except to the extent stated in clauses 1.4, 4.4 to 4.6 and 9.2.5 ***
         FA-1 shall not be liable to Purchaser for any loss or damage sustained
         by reason of any delay in completion, failure or breakdown of the
         facilities constituting the System or any interruption of service,
         regardless of the cause of such delay in completion, failure or
         breakdown, and regardless of how long it shall last.

                                                                              12

<PAGE>

19.2     Notwithstanding any other provision in this Agreement to the contrary,
         no Party shall be liable to any other Party for any indirect, special,
         punitive or consequential damages (including, but not limited to, any
         loss of profit or business or claim from any customer for loss of
         services) arising out of this Agreement or from any breach of any of
         the terms and conditions of this Agreement.

19.3     Any financier of the System, at its election, shall have a right to
         cure any breach by FA-1 (or, if applicable, an affiliate thereof) under
         this Agreement, provided however, that such financier shall not assume
         any liabilities of FA-1 under this Agreement.

20.      COUNTERPARTS

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

21.      WAIVER OF IMMUNITY

         The Parties acknowledge that this Agreement is commercial in nature,
         and the Parties expressly and irrevocably waive any claim or right
         which they may have to immunity (whether sovereign immunity or
         otherwise) for themselves or with respect to any of their assets in
         connection with an arbitration, arbitral award or other proceedings to
         enforce this Agreement, including, without limitation, immunity from
         service of process, immunity of any of their assets from pre- or
         post-judgement attachment or execution and immunity from the
         jurisdiction of any court or arbitral tribunal.

22.      FA-1 FINANCIAL CLOSURE

22.1     The obligation of the Purchaser to pay the Purchase Price (or any
         installment thereof) and the obligation of FA-1 to provide the Rights
         are conditional upon the occurrence of FA-1 Financial Closure.

22.2     If FA-1 Financial Closure has not occurred by 12 October 1999, then
         this Agreement shall terminate (with the exception of clauses 11, 19,
         21 and 23 which shall survive termination).

22.3     For the purposes of this Agreement, "FA-1 Financial Closure" shall be
         deemed to take place on the date when FA-1 and its shareholders have
         put in place arrangements satisfactory to them for the financing of the
         construction of the System.

                                                                              13

<PAGE>

23.      GOVERNING LAW AND DISPUTE RESOLUTION

23.1     This Agreement shall be construed in accordance with New York law,
         without regard to the law of New York governing conflicts of law.

23.2     The Parties shall seek to resolve any disputes between them by referral
         of such disputes to the Co-Chairmen of the Board of FA-1 and the
         Managing Director of Purchaser. If the Parties fail to agree within 7
         days of the initiation of this procedure the dispute shall be referred
         to arbitration in accordance with the Arbitration Agreement entered
         into between FA-1 and Purchaser (amongst others) of even date hereof.

24.      FINANCING AGREEMENT

         Notwithstanding any in this Agreement to the contrary, Purchaser shall
         not be entitled to activate or upgrade any capacity on the System to
         the extent and for so long as this would cause FLAG Atlantic Limited to
         violate Section 6.30 of the Financing Agreement.

                                                                              14

<PAGE>

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

FLAG ATLANTIC LIMITED

         /s/ Samih Kawar
BY ________________________
Name:    Samih Kawar
Title:   Director

FLAG ATLANTIC USA LIMITED

         /s/ James E. Shields                             /s/ Larry F. Bautista
BY ________________________                       BY ________________________
Name:    James E. Shields                         Name:    Larry F. Bautista
Title:   Authorised Signatory                     Title:   Authorised Signatory

GTE INTELLIGENT NETWORK SERVICES INCORPORATED

         /s/ Steven H. Blumenthal
By __________________________
Name:    Steven H. Blumenthal
Title:   Vice President, Engineering GTEI

GTE INTELLIGENT NETWORK SERVICES INCORPORATED

         /s/ Mark P. Hileman
By __________________________
Name:    Mark P. Hileman
Title:   Assistant Secretary-GNI

                                                                              15<PAGE>

                                                                   EXHIBIT 10.20

                                                                  EXECUTION COPY

                         CAPACITY RIGHT OF USE AGREEMENT

THIS AGREEMENT, dated as of the ______ day of _______________ 1999, is among
FLAG ATLANTIC LIMITED, a company organised under the laws of Bermuda and having
its principal office at The Emporium Building, 69 Front Street, 4th Floor,
Hamilton, Bermuda, FLAG ATLANTIC USA LIMITED, a company organised under the laws
of Delaware, USA and having its principal office at 570 Lexington Avenue, 38th
Floor, New York, NY 10022, USA, (FLAG ATLANTIC LIMITED AND FLAG ATLANTIC USA
LIMITED being hereinafter jointly and severally referred to as "FA-1")
PSINETWORKS COMPANY, a corporation organised under the laws of Delaware, USA and
having its principal office at 510 Huntmar Park Drive, Herndon, VA 20170 USA,
PSINET TELECOM LIMITED, a company organised under the laws of England and having
its principal office at Brookmount Court, Unit A&B, Kirkwood Road, Cambridge CB4
2QH, UK and PSINETWORKS SARL, a company organised under the laws of Switzerland
and having its principal office at Rue Fritz - Coorrisier 103, 2300 La Chaux -
de - Fonds, Switzerland (PSINETWORKS COMPANY, PSINET TELECOM LIMITED and
PSINETWORKS SARL being hereinafter jointly and severally referred to as
"Purchaser").

                                   WITNESSETH:

WHEREAS, except as set out below, FLAG Atlantic Limited is constructing and will
directly and/or indirectly own, operate and maintain a fiberoptic cable system
to be known as FLAG Atlantic-1 (the "System") consisting of a subsea element
(the "Subsea Element") and two backhaul elements (the "Backhaul Elements"), the
System, Subsea Element and Backhaul Elements being more fully described in
Schedule 1; and

WHEREAS, FLAG Atlantic USA Limited is constructing and will own all that part of
the System that is within the territory (including the territorial waters) of
the United States of America; and

WHEREAS, the System is currently scheduled to go into service in stages with the
initial stage, as more particularly described in Schedule 1, ("Initial Stage")
currently scheduled to go into service on or about 31 March 2001 ("Scheduled
Initial RFS Date") and the final stage, as more particularly described in
Schedule 1 ("Final Stage"), currently scheduled to go into service on or about
30 June 2001 ("Scheduled Final RFS Date"); and

WHEREAS, Purchaser desires to acquire from FA-1, and FA-1 is willing to provide
to Purchaser the Rights (as defined below); and

WHEREAS, Purchaser has already made a payment to FA-1 of *** million of the
Purchase Price (as defined below); and

                                                                    Page 1 of 26
<PAGE>

WHEREAS, FA-1 and Purchaser (the "Parties") desire to define the terms and
conditions under which the Rights will be acquired by Purchaser.

NOW, THEREFORE, the Parties hereby agree as follows:

1.     PURCHASE OF RIGHTS

1.1    Purchaser agrees to acquire, and FA-1 agrees to grant to Purchaser, for
       *** (the "Purchase Price"), subject to the terms and conditions of this
       Agreement: (i) an indefeasible and exclusive right of use ("IRU") in the
       derivable capacity from one fibre pair (the "Capacity") on each Link (as
       such term is described in Schedule 1) of the Subsea Element; (ii) the
       exclusive right to use one dedicated fibre pair (the "Terrestrial Fibre
       Pair") on each Link of the Backhaul Elements; and (iii) all such other
       rights as are set out in Schedule 2 (together the "Rights").

1.2    FA-1 shall notify Purchaser of the actual date upon which the Initial
       Stage of the System is able to carry commercial traffic ("Initial RFS
       Date") and the actual date upon which the Final Stage of the System is
       able to carry commercial traffic ("Final RFS Date").

1.3    Subject to Purchaser complying with clause 2.1, the Rights shall pass to
       and vest in Purchaser as follows:

       1.3.1  in the Capacity, from the Initial RFS Date (or, if later, the date
              of payment by Purchaser of the penultimate instalment of the
              Purchase Price in accordance with Schedule 3) for the Initial
              Stage and from the Final RFS Date (or, if later, the date of
              payment by Purchaser of the final instalment of the Purchase Price
              in accordance with Schedule 3) for the Final Stage;

       1.3.2  in the Terrestrial Fibre Pair and in each Facility (as such term
              is described in Schedule 2), from the date that the Terrestrial
              Fibre Pair is made available to FA-1 or the relevant Landing
              Station, Terminal Point or amplifier/regenerator site is made
              available to FA-1 for the installation of its equipment (in each
              case being at least 60 days prior to the Initial RFS Date) but not
              for commercial use until the Initial RFS Date (or, if later, the
              date of payment by Purchaser of the penultimate instalment of the
              Purchase Price in accordance with Schedule 3);

       1.3.3  the Rights shall subsist until the System is decommissioned in
              accordance with clause 7.

1.4    Within *** days after the Initial RFS Date, or, if later, within *** days
       after payment by Purchaser of the penultimate instalment of the Purchase
       Price in accordance with Schedule 3, FA-1 will activate the initial
       bandwidth of the Capacity (40 gigabits per second, consisting of four
       wavelengths of ten gigabits per second per wavelength) in each of Links
       2, 5, and 6 in accordance with the terms of this Agreement.

                                                                    Page 2 of 26
<PAGE>

1.5    Within ten days after the Final RFS Date, or, if later, within ten days
       after payment by Purchaser of the final instalment of the Purchase Price
       in accordance with Schedule 3, FA-1 will activate the initial bandwidth
       of the Capacity (40 gigabits per second, consisting of four wavelengths
       of ten gigabits per second per wavelength) in Link 9 in accordance with
       the terms of this Agreement.

1.6    Purchaser shall have no legal ownership or other rights in the System
       itself (including its physical assets), in any proceeds from the
       disposition of the System or in any other capacity therein, except as
       specifically provided herein.

2.     PAYMENTS

2.1    Having already paid to FA-1 *** of the Purchase Price for the Rights to
       be acquired pursuant hereto, Purchaser shall pay the remaining *** of the
       Purchase Price pursuant to the payment schedule set out in Schedule 3
       ("Payment Schedule").

2.2    Purchaser shall pay to FA-1 such amounts for the operation and
       maintenance of the System as are set forth in, or determined pursuant to,
       Schedule 5 ("O&M Payments").

2.3    FA-1 shall render to Purchaser invoices for amounts payable pursuant to
       this Agreement. Invoices for the Purchase Price shall be rendered in
       accordance with clause 2.1. Invoices for O&M Payments shall be rendered
       pursuant to Schedule 5. All invoices shall be due and payable within 30
       days after delivery to Purchaser.

2.4    Any amount payable pursuant to this Agreement which is not paid when due
       shall accrue interest at the annual rate of *** above the U.S. Dollar
       LIBOR for one month as quoted in THE WALL STREET JOURNAL on the first
       business day of the month in which the payment is due. All such default
       interest shall accrue from the day following the date payment of the
       relevant amount was due until it is paid in full and shall accrue both
       before and after judgement. Such interest shall be payable on demand.

2.5    All amounts payable by Purchaser pursuant hereto shall be paid in full in
       U.S. dollars by wire transfer free and clear of all bank or transfer
       charges to such account(s) as FA-1 may by notice to Purchaser designate
       without reduction for any deduction or withholding for or on account of
       any tax, duty or other charge of whatever nature imposed by any taxing
       authority. If Purchaser is required by law to make any deduction or
       withholding from any payment hereunder, Purchaser shall pay such
       additional amount to FA-1 so that after such deduction or withholding the
       net amount received by FA-1 will be not less than the amount FA-1 would
       have received had such deduction or withholding not been required.
       Purchaser shall make the required deduction or withholding, shall pay the
       amount so deducted or withheld to the relevant governmental authority and
       shall promptly provide FA-1 with evidence of such payment. ***

                                                                    Page 3 of 26
<PAGE>

2.6    In the case of payments of the Purchase Price, until the Initial RFS Date
       there shall be such controls over the account(s) designated by FA-1
       pursuant to clause 2.5 so as to ensure that payments of the Purchase
       Price may only be used to make timely payments required to be made by
       FA-1 in connection with the planning, design, construction and project
       management of the System. Any interest arising from amounts held in the
       account(s) shall accrue for the benefit of FA-1 ***.

2.7    Purchaser's obligation to pay the Purchase Price and other amounts shall
       not be subject to any rights of set-off, counterclaim, deduction, defense
       or other right which Purchaser may have against FA-1 or any other party.

3.     TAXES

3.1    Save as the context requires or as otherwise stated herein all references
       to payments made in this Agreement are references to such payments
       exclusive of all sales and use taxes, gross turnover taxes, value added
       taxes, or other similar turnover or sales based taxes, excise taxes,
       duties, fees, charges, levies, surcharges to recover the cost of
       universal service contributions, or similar liabilities (other than the
       general income taxes of FA-1) imposed by any authority, government or
       government agency in connection with or as a result of or in respect of
       the supply for which the payment is or is deemed to be consideration
       (collectively "taxes"). Where applicable such taxes shall be added to the
       invoice and shall be paid to FA-1 at the same time as the relevant
       invoice is settled in accordance with clause 2. In the event that
       Purchaser provides FA-1 with a duly authorised exemption certificate,
       exempting Purchaser from any such tax, FA-1 agrees to exempt Purchaser in
       accordance with the applicable tax law, effective on the date the
       exemption certificate is received by FA-1.

3.2    Purchaser shall be responsible for all rates and similar property based
       taxes appropriately assessed and arising directly or indirectly from
       Purchaser's interest in and exercise of the Rights.

4.     DEFAULT AND TERMINATION

4.1    In the event that Purchaser shall have failed to pay any amount payable
       by Purchaser pursuant hereto for more than *** days after its due date
       ***, then Purchaser shall not be entitled to activate any capacity within
       the Subsea Element or the Terrestrial Fibre Pair not theretofore
       activated or to effect any upgrade pursuant to clause 6 until Purchaser
       has paid in full all amounts overdue together with applicable default
       interest. If such failure continues for a further *** days, FA-1 shall be
       entitled to refrain from performing any services for Purchaser required
       by this Agreement and deny Purchaser the right of access to co-located
       spaces (except for the purposes of maintaining its then existing services
       to its customers) until Purchaser has paid in full all undisputed amounts
       overdue together with applicable default interest. ***

                                                                    Page 4 of 26
<PAGE>

4.2    If the defaulted payment is for any portion of the Purchase Price and
       such default continues for a further period of *** days after the initial
       *** days of delay referred to in clause 4.1, FA-1 may, in its discretion,
       either:

       4.2.1  require Purchaser forthwith to pay the unpaid balance of the
              Purchase Price; or

       4.2.2  terminate this Agreement and relieve Purchaser of its obligation
              to pay any portion of the Purchase Price which has not yet become
              due and its right to acquire the Rights pursuant hereto.

       Neither such termination of this Agreement nor the exercise by FA-1 of
       such remedy shall relieve Purchaser of its obligation to pay amounts
       already due hereunder plus default interest thereon.

4.3    Purchaser shall conduct all operations and use of the Capacity and the
       Terrestrial Fibre Pair in a manner which does not interrupt, impair or
       interfere with the operations of the System or the use thereof by FA-1 or
       any other purchaser or user of optical fibres or capacity in the System.
       If, after notification by FA-1, Purchaser does not take immediate
       corrective action to comply with its obligations under this clause 4.3,
       FA-1 may take reasonable action required to protect the System, including
       but not limited to the interruption of Purchaser's use of the Capacity or
       the Terrestrial Fibre Pair and installation of protective equipment.
       Purchaser shall, within 15 days of receipt of an invoice, reimburse FA-1
       for its total reasonable direct costs properly incurred *** for any
       protective measures reasonably required by FA-1 to be installed on the
       System resulting from the use of the Capacity or the Terrestrial Fibre
       Pair in violation of this clause. In applying restrictions on use of the
       System by FA-1's customers FA-1 shall act in an equal and
       non-discriminatory manner.

4.4    Except as provided herein, Purchaser shall have no right to terminate or
       cancel this Agreement or its obligation to purchase the Rights. If the
       Initial RFS Date has not occurred within *** months after the Scheduled
       Initial RFS Date Purchaser may by two months written notice terminate its
       purchase of the Rights. Purchaser shall have no obligation to make any
       further payments of the Purchase Price under this Agreement following
       such termination and FA-1 shall within *** days of such termination
       refund to Purchaser any portion of the Purchase Price already paid by
       Purchaser to FA-1 which has not been used to make timely payments
       required to be made by FA-1 in connection with the planning, design,
       construction and project management of the System. In the event Purchaser
       has not exercised this right of termination, FA-1 may notify Purchaser of
       the revised expected Initial RFS Date. Purchaser shall have 30 days from
       receipt of this notice to notify FA-1 that it wishes to terminate its
       obligation to purchase the Rights or that it accepts the delay to the
       revised expected Initial RFS Date (and failure by Purchaser to provide a
       timely notice shall be deemed acceptance of the delay). If the Initial
       RFS Date does not occur by the revised expected Initial RFS Date the
       above procedure will be repeated until the earlier of the occurrence of
       the Initial RFS Date and Purchaser's termination of its obligation to
       purchase the Rights.

4.5    If Purchaser has exercised its right to terminate its obligation to
       purchase the Rights and the Initial

                                                                    Page 5 of 26
<PAGE>

       RFS Date actually occurs prior to the date *** months after the Scheduled
       Initial RFS Date, Purchaser shall be entitled within six months from the
       Initial RFS Date to notify FA-1 that it wishes to acquire capacity on the
       System in the amount of the Purchase Price theretofore paid by Purchaser
       and not refunded pursuant to clause 4.4, the amount of the capacity being
       determined on the basis of the unit cost for the initial bandwidth that
       Purchaser would have received under this Agreement but for such
       termination. In such case, this Agreement shall be amended by the Parties
       to reflect the different nature of the capacity being acquired and the
       different rights and obligations of the Parties as a consequence thereof.

4.6    If the Initial RFS Date has not occurred within *** months after the
       Scheduled Initial RFS Date, Purchaser may by 30 days notice terminate
       this Agreement ***.

4.7    The foregoing shall be the limit of Purchaser's rights for delays to the
       Initial RFS Date.

4.8    ***

5.     OPERATION AND MAINTENANCE

5.1    FA-1 shall be responsible for the operation and maintenance of the System
       including arranging for the repair of the System in the event of any
       fault. Purchaser's responsibility with regard to operation and
       maintenance of the System shall be to make the O&M Payments as and when
       they become due pursuant to this Agreement and to notify FA-1 of each
       fault related to the Terrestrial Fibre Pair/Capacity on becoming aware of
       the same, locate the site of such fault, and in relation to the
       Terrestrial Fibre Pair to shut down Purchaser's lasers within two hours
       of receipt of instructions to enable FA-1 to safely repair the fault. If
       Purchaser fails to shut down its lasers within the required time period,
       FA-1 shall be entitled to remove the lasers from the Terrestrial Fibre
       Pair in order to safely repair the Terrestrial Fibre Pair or the System
       provided that FA-1 takes reasonable care in so doing.

5.2        ***

5.3    FA-1 shall promulgate procedures for the maintenance, use and operation
       of the System according to standards generally accepted in the
       telecommunications cable industry and shall provide Purchaser with a copy
       thereof (in draft form at least 60 days prior to the Initial RFS Date).
       FA-1 may from time to time amend such procedures and shall provide
       Purchaser with a copy of each amendment prior to its effectiveness.

5.4        ***

5.5    Following the Initial RFS Date, FA-1 shall solicit views from
       representative samplings of its customers on operation and maintenance of
       the System through such means as FA-1 considers appropriate. Purchaser
       may, of course, provide its views on an unsolicited basis. If Purchaser
       believes the manner in which FA-1 is operating and maintaining the System
       constitutes a breach

                                                                    Page 6 of 26
<PAGE>

       of this Agreement, Purchaser shall notify FA-1 and the Parties shall
       promptly meet to discuss Purchaser's concerns. If Purchaser is not
       satisfied with the outcome of such meeting or, notwithstanding the
       outcome, Purchaser believes that the manner in which FA-1 is operating
       and maintaining the System after the meeting constitutes a breach of this
       Agreement, Purchaser shall be entitled to require a meeting among FA-1,
       Purchaser and other users of the System, at which meeting Purchaser may
       voice its concerns. The Parties will in good faith consider
       implementation of the recommendations emanating from such meeting.

5.6    For ease of contract performance, each Party shall designate a single
       point of contact who shall manage and be responsible for such Party's
       performance of its obligations under this Agreement. Such persons shall
       be referred to as Project Managers. Each Party agrees that its Project
       Manager's performance of his or her respective responsibilities under
       this Agreement is integral to the overall performance of such Party's
       obligations to the other. To the extent that a Project Manager of a Party
       is not performing his or her obligations, the other Party may request a
       new Project Manager be assigned to assume the prior Project Manager's
       obligations, and any such request shall not be unreasonably denied.

6.     SYSTEM ENHANCEMENTS AND UPGRADES

6.1    FA-1 reserves the right to upgrade the amount of the capacity of the
       System and to make any enhancements to the System from time to time.

6.2    FA-1 will notify Purchaser of any planned upgrade of, or enhancement to,
       the System. Such notice shall set forth the costs of such upgrade or
       enhancement, based on its pricing agreement with or proposal from its
       suppliers. If Purchaser wishes to participate in such upgrade or
       enhancement for the purposes of upgrading or enhancing the Capacity it
       shall notify FA-1 within 30 days of receiving notice from FA-1. If
       Purchaser agrees to participate in the upgrade or enhancement, the
       upgrade or enhancement will then be treated as FA-1 project managing the
       upgrade or enhancement, pursuant to clause 6.4. If Purchaser elects not
       to participate or fails to timely respond to the notice, FA-1 shall be
       entitled to proceed with the upgrade or enhancement without participation
       by Purchaser.

6.3    Purchaser shall be entitled at its own cost at any time to upgrade the
       Capacity and/or the Terrestrial Fibre Pair provided that such upgrades
       are carried out in consultation with FA-1 and at a time mutually agreed
       by the Parties (which agreement will not be unreasonably withheld or
       delayed). Purchaser shall pay to FA-1 a fee equal to the direct costs
       incurred by FA-1 in connection with such upgrade (unless FA-1 is project
       managing the upgrade pursuant to clause 6.4). Purchaser shall be liable
       for any damage to any part of the System directly involved with any such
       upgrade and Purchaser shall be liable for any damage to or interruption
       of any other part of the System resulting in this case from the gross
       negligence or wilful misconduct of Purchaser (or any person acting on
       behalf of Purchaser) in connection with any such upgrade, except in
       either case where such damage or interruption results from Purchaser
       following FA-1's instructions. ***

                                                                    Page 7 of 26
<PAGE>

6.4    Purchaser may at any time request FA-1 to project manage any upgrade of
       the Capacity provided that each upgrade shall be a minimum of 40 gigabits
       per second on each Link being upgraded. Upon FA-1 receiving such request
       FA-1 will, within 60 days, subject to receiving from Purchaser the
       information required, submit to Purchaser a proposal for the upgrade
       ("Proposal"). The Proposal will identify third party costs and a
       completion timeline for the upgrade. Purchaser will notify FA-1 within 30
       days of receiving the Proposal as to whether it accepts or rejects the
       Proposal. ***

6.5    All amplifiers, SLTEs, LTEs and transponders added as a part of any
       upgrade by, or on behalf of, Purchaser in connection with the Subsea
       Element shall be owned by FA-1. Purchaser shall transfer to FA-1 title to
       upgraded equipment in consideration of FA-1 maintaining the upgraded
       equipment and spares.

7.     SYSTEM DECOMMISSIONING

       The System shall be decommissioned at such time, no earlier than 15 years
       and no later than 25 years from the Initial RFS Date, as either FA-1 or
       the holders of three quarters of the then activated capacity on the
       System determine that the System is technically obsolete or has reached
       the end of its useful economic life. There shall be no compensation
       payable to Purchaser whether Purchaser voted for or against
       decommissioning. This provision is without prejudice to the rights of
       FA-1 to decommission the System without any liability to Purchaser
       whatsoever, in the event of a catastrophic failure of all or a portion of
       the System, whether caused by natural hazard or major technical fault,
       which makes it impossible to maintain the business efficacy of the
       System, or if any governmental, municipal, institutional, or commercial
       authority, license, permission authorisation, right, or concession
       necessary for the business efficacy of the System is not granted, subject
       to prohibitive conditions or is terminated with no reasonable prospect of
       retrieval within a period of 12 months following the date of termination.
       ***

8.     REPRESENTATIONS, WARRANTIES AND COVENANTS

8.1    PSINetworks Company, PSINet Telecom Limited and PSINetwork SARL each
       represents, warrants and covenants to FA-1 as follows:

       8.1.1  It is duly established and in good standing under the laws of the
              jurisdiction of its corporation and has full power and authority
              to enter into this Agreement.

       8.1.2  This Agreement constitutes its legal, valid and binding
              obligation, enforceable against it in accordance with its terms.

       8.1.3  It will use commercially reasonable efforts to obtain all
              necessary consents, licenses, permits and other approvals, both
              governmental and private, as may be necessary to permit Purchaser
              to perform its obligations under this Agreement and to acquire and
              use the Rights.

                                                                    Page 8 of 26
<PAGE>

       8.1.4  It shall perform its obligations under this Agreement and use the
              Rights in a manner consistent with applicable law, and shall not
              use, or permit the Rights to be used, for any illegal purpose or
              in any other unlawful manner.

8.2    FLAG Atlantic Limited and FLAG Atlantic USA Limited each represents,
       warrants and covenants to Purchaser as follows:

       8.2.1  It is duly established and in good standing under the laws of the
              jurisdiction of its incorporation and has full power and authority
              to enter into this Agreement.

       8.2.2  This Agreement constitutes its legal, valid and binding obligation
              enforceable against it in accordance with its terms.

       8.2.3  It shall use commercially reasonable efforts to obtain all
              necessary consents, licenses, permits and other approvals, both
              governmental and private, as may be necessary to permit FA-1 to
              perform its obligations under this Agreement and to complete the
              construction of the System.

       8.2.4  It shall perform its obligations under this Agreement in a manner
              consistent with applicable law.

8.3    Except as provided above, FA-1 disclaims, and Purchaser waives, all
       representations and warranties regarding the System and the Rights,
       including any warranty of merchantability or fitness for a particular
       use, and in particular, without limiting the foregoing FA-1 does not
       warrant that the System or the Rights will be uninterrupted or error free
       or that the System or the Rights will meet Purchaser's requirements for
       the equipment to be deployed by Purchaser in connection with the System
       or the Rights or services to be offered by Purchaser utilising this
       equipment.

       9.     FORCE MAJEURE

       No failure or omission by any Party to carry out or observe any of the
       terms and conditions of this Agreement (other than any payment
       obligation) shall give rise to any claim against such Party or be deemed
       a breach of this Agreement if such failure or omission arises from an act
       of God, an act of any government or any other circumstance commonly known
       as "force majeure".

10.    CONFIDENTIALITY

10.1    Other than in connection with an assignment permitted under clause 12 or
        in connection with the enforcement of this Agreement or if disclosure is
        required by applicable law, neither FA-1 nor Purchaser shall disclose
        the terms of this Agreement to any third party without the prior written
        consent of the other Party. Without limiting the generality of the
        foregoing, neither FA-1 nor

                                                                    Page 9 of 26
<PAGE>

       Purchaser shall issue any press release or otherwise publicise the
       existence or the terms of this Agreement without the prior written
       consent of the other Party.

10.2   For purposes of this clause 10.2 and clauses 10.3, 10.4 and 10.5,
       Confidential Information shall include all information, of any nature,
       provided by one Party to the other in connection with this Agreement
       except for that information which the originating Party has expressly
       identified as being non-confidential. The receiving Party shall keep in
       confidence all Confidential Information and will not disclose such
       information to any third party other than in accordance with this
       Agreement. The receiving Party shall use no lesser degree of care than
       would apply to its own confidential information.

10.3   The provisions of clause 10.2 do not apply to any Confidential
       Information which:

       10.3.1 enters into the public domain other than by reason of a breach of
              this Agreement;

       10.3.2 is known to the Party to which it is disclosed at the time of its
              disclosure, other than as a result of a breach of any other
              covenant of confidentiality;

       10.3.3 is independently generated, developed or discovered at any time by
              or for the Party to which it is disclosed;

       10.3.4 is necessary for the purposes of permitting a Party to (1) perform
              its obligations under this Agreement provided that any third party
              which receives Confidential Information pursuant to this provision
              has agreed to be bound by the restrictions contained in this
              section in the same manner as if it were a party to this
              Agreement, or (2) enforce its rights under this Agreement;

       10.3.5 is required to be disclosed by law, regulation or stock exchange
              rules.

10.4   Confidential Information shall only be used for the purposes for which it
       was disclosed.

10.5   The obligations of confidentiality in this clause 10 shall continue for
       five years following the termination of this Agreement. 10.6 FA-1 shall
       ensure that the entities entitled to receive copies of notices pursuant
       to clause 17 shall abide by clauses 10.1 to 10.5.

11.    NO LICENCE

11.1   Nothing in this Agreement shall or shall be deemed to give rise to any
       right of Purchaser to use any FA-1 Intellectual Property, provided that
       Purchaser may require a license of FA-1 Intellectual Property in
       connection with an acquisition pursuant to clause 7.

11.2   For the purposes of this clause "Intellectual Property" means any and all
       patents, trade marks, rights in designs, copyrights, and topography
       rights, (whether registered or not and any applications to register or
       rights to apply for registration of any of the foregoing), rights in
       inventions, know-how, trade secrets and other confidential information,
       rights in databases and all

                                                                   Page 10 of 26
<PAGE>

       other intellectual property rights of a similar or corresponding
       character which may now or in the future subsist in any part of the
       world, and "FA-1 Intellectual Property" means Intellectual Property owned
       by or licensed to FA-1 together with the goodwill relating thereto.

12.    ASSIGNMENT

12.1   This Agreement and all the provisions hereof shall be binding upon and
       inure to the benefit of the Parties hereto and their respective
       successors and permitted assigns; provided that, except for the
       assignment of FA-1's rights (but not its obligations) under this
       Agreement to one or more financial institutions and/or export credit
       agencies as collateral security for financing provided to FA-1 or in
       connection with a sale of receivables by FA-1 and the assignment by such
       financial institutions (and their assignees) of the rights and
       obligations under this Agreement to any other persons following exercise
       of any rights or remedies on such collateral security, neither this
       Agreement nor any of the rights, interest or obligations hereunder shall
       be assigned or transferred by any of the Parties hereto without the prior
       written consent of the other Parties, and any attempted assignment or
       transfer in violation of this clause shall be void. However, Purchaser
       may assign this agreement to any subsidiary or affiliate without prior
       written consent of FA-1 and in the event there is a merger or transfer of
       control of substantially all the assets of Purchaser, no prior approval
       of assignment of this Agreement is required.

12.2   Notwithstanding clause 12.1, FLAG Atlantic Limited and FLAG Atlantic USA
       Limited may allocate their rights and obligations under this Agreement
       between themselves and their affiliates.

12.3   FLAG Atlantic Limited and FLAG Atlantic USA Limited may use
       subcontractors or agents to fulfil their obligations hereunder.

13.    ENTIRE AGREEMENT

       This Agreement constitutes the whole agreement between the Parties and
       supersedes any previous agreements, arrangements or understandings
       between them relating to the subject matter hereof. Each of the Parties
       acknowledges that it is not relying on any statements, warranties or
       representations given or made by any of them relating to the subject
       matter hereof, save as expressly set out in this Agreement.

14.    VARIATION

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

15.    WAIVER

15.1   Failure by a Party at any time to enforce any of the provisions of this
       Agreement shall neither be construed as a waiver of any rights or
       remedies hereunder nor in any way affect the validity of this

                                                                   Page 11 of 26
<PAGE>

       Agreement or any part of it and no waiver of a breach of this Agreement
       shall constitute a waiver of any subsequent breach.

15.2   Termination of this Agreement shall not operate as a waiver of any breach
       by a Party of any of the provisions hereof and shall be without prejudice
       to any rights or remedies of a Party which may arise as a consequence of
       such breach or which may have accrued hereunder up to the date of such
       termination.

15.3   No waiver of a breach of this Agreement shall be effective unless given
       in writing.

16.    INVALIDITY

16.1   Subject to clause 16.2 below if any provision of this Agreement is or
       becomes (whether pursuant to any judgement or otherwise) invalid, illegal
       or unenforceable in any respect under the law of any applicable
       jurisdiction:

       16.1.1 the validity, legality and enforceability under the law of that
              jurisdiction of any other provision; and

       16.1.2 the validity, legality and enforceability under the law of any
              other jurisdiction of that or any other provision, shall not be
              affected or impaired in any way thereby.

16.2   The Parties acknowledge that the consideration for the Rights set out in
       clause 2 was agreed upon taking into account clauses 4, 7, 8, and 18 and
       in the event any of these clauses is or becomes (whether pursuant to any
       judgement or otherwise) invalid, illegal or unenforceable in any respect
       under the law of any jurisdiction, the Parties agree to renegotiate in
       good faith the amounts payable by Purchaser under clause 2.

17.    NOTICE

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

       If to Purchaser:

       510 Huntmar Park Drive
       Herndon, VA 20170
       USA

                                                                   Page 12 of 26
<PAGE>

       Attention:  VP Capacity Planning
       With a copy to : General Counsel
       Tel:  +1-703-904-4100
       Fax:  +1-703-904-4200

       If to FA-1:

       FLAG Atlantic Limited
       The Emporium Building
       69 Front Street
       4th Floor
       Hamilton HM 12
       Bermuda

       Attention: FLAG Atlantic-1
       Tel:  +1-441-296-0909
       Fax: +1-441-296-0938

       With a copy to the following entity for so long as it is affiliated with
FA-1:

       FLAG Telecom Limited
       103 Mount Street - 3rd Floor
       London  W1Y  5HE
       U.K.

       Attention:  General Counsel
       Tel:  +44-207-317-0800
       Fax: +44-207-317-0808

       With a copy to the following entity for so long as it is affiliated with
FA-1:

       GTS Carrier Services
       Terhulpsesteenweg 6A
       1560 Hoeilaart
       Belgium

       Attention:  General Counsel
       Tel:  +322-658-5200
       Fax: +322-658-5100

17.2   The Parties acknowledges that all communications in connection with this
       Agreement shall be between PSINetworks Company and FLAG Atlantic Limited.
       For this purpose, FLAG Atlantic USA Limited hereby appoints FLAG Atlantic
       Limited as its agent, and PSINet Telecom Limited

                                                                   Page 13 of 26
<PAGE>

       and PSINetworks SARL each appoints PSINetworks Company as its agent, to
       receive and send all communications in connection with this Agreement.

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

18.    LIABILITY

18.1   Except to the extent stated in clauses 2.6, 4.4, 4.6 and 4.8 and Schedule
       5 , FA-1 shall not be liable to Purchaser for any loss or damage
       sustained by reason of any delay in completion, failure or breakdown of
       the facilities constituting the System or any interruption of service,
       regardless of the cause of such delay in completion, failure or
       breakdown, and regardless of how long it shall last.

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

18.3   Any financier of the System, at its election, shall have a right to cure
       any breach by FLAG Atlantic Limited (or, if applicable, an affiliate
       thereof) under this Agreement, provided however, that such financier
       shall not assume any liabilities of FLAG Atlantic Limited under this
       Agreement.

18.4   Neither Party shall be liable to the other Party hereunder for
       occurrences caused by the failure of the other Party or any of its
       affiliates to duly perform its obligations hereunder or under any
       agreement relating to any Facility.

18.5   ***

19.    COUNTERPARTS

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

                                                                   Page 14 of 26
<PAGE>

20.    WAIVER OF IMMUNITY

       The Parties acknowledge that this Agreement is commercial in nature, and
       the Parties expressly and irrevocably waive any claim or right which they
       may have to immunity (whether sovereign immunity or otherwise) for
       themselves or with respect to any of their assets in connection with an
       arbitration, arbitral award or other proceedings to enforce this
       Agreement, including, without limitation, immunity from service of
       process, immunity of any of their assets from pre- or post-judgement
       attachment or execution and immunity from the jurisdiction of any court
       or arbitral tribunal.

21.    GOVERNING LAW

       This Agreement shall be construed in accordance with New York law,
       without regard to the law of New York governing conflicts of law.

22.    ***

       ***

                                                                   Page 15 of 26
<PAGE>

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

FLAG ATLANTIC LIMITED

       /s/ Samih Kawar
BY ________________________
Name:  Smaih Kawar
Title: Director

FLAG ATLANTIC USA LIMITED

    /s/ Gerard Caccappolo
BY ________________________
Name:  Gerard Caccappolo
Title: Authorised Signatory

PSINETWORKS COMPANY

     /s/ Name of Signatory
BY ________________________
Name:
Title:

PSINET TELECOM LIMITED

    /s/ Name of Signatory
BY ________________________
Name:
Title:

PSINETWORKS SARL

    /s/ Name of Signatory
BY ________________________
Name:
Title:

                                                                   Page 16 of 26

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]