Document:

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                                                                     Exhibit 4.2

                  AMENDED AND RESTATED 1999 STOCK OPTION PLAN
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                        MERCURY INTERACTIVE CORPORATION

                             AMENDED AND RESTATED
                            1999 STOCK OPTION PLAN

                         (Effective December 16, 1999)

     1.   Purposes of the Plan.  The purposes of this Stock Option Plan are to
          --------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to such individuals of the
Company and to promote the success of the Company's business.  Options granted
hereunder may be either Incentive Stock Options or Nonstatutory Stock Options,
at the discretion of the Administrator and as reflected in the terms of the
written option agreement.

     2.   Definitions.  As used herein, the following definitions shall apply:
          -----------

          (a) "Administrator"  means the Committee, if one has been appointed,
               -------------
or the Board of Directors of the Company, if no Committee is appointed.

          (b) "Board" means the Board of Directors of the Company.  A member of
               -----
the Board shall be referred to hereinafter as a "Director."

          (c) "Code" means  the Internal Revenue Code of 1986, as amended.
               ----

          (d) "Committee"  means the Committee appointed by the Board of
               ---------
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed.

          (e) "Common Stock" means the Common Stock of the Company.
               ------------

          (f) "Company" means Mercury Interactive Corporation, a Delaware
               -------
corporation.

          (g) "Continuous Status as an Employee" means that the employment or
               --------------------------------
consulting relationship is not interrupted or terminated by the Company, any
Parent or Subsidiary.  Continuous Status as an Employee  shall not be considered
interrupted in the case of:  (i) any leave of absence approved by the
Administrator, including sick leave, military leave, or any other personal
leave; provided, however, that for purposes of Incentive Stock Options, any such
leave may not exceed ninety (90) days, unless reemployment upon the expiration
of such leave is guaranteed by contract (including certain Company policies) or
statute; or (ii) transfers between locations of the Company or between the
Company, its Parent, its Subsidiaries or its successor.

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          (h) "Employee" means any person, including officers and directors,
               --------
employed by the Company or any Parent or Subsidiary of the Company.  The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.

          (i) "Exchange Act" means the Securities Exchange Act of 1934, as
               ------------
amended.

          (j) "Incentive Stock Option" means any Option intended to qualify as
               ----------------------
an incentive stock option within the meaning of Section 422 of the Code.

          (k) "Nonstatutory Stock Option" means an Option not intended to
               -------------------------
qualify as an Incentive Stock Option.

          (l) "Option" means a stock option granted pursuant to the Plan.
               ------

          (m) "Optioned Stock" means the Common Stock subject to an Option.
               --------------

          (n) "Optionee" means an Employee  who receives an Option.
               --------

          (o) "Parent" means a "parent corporation", whether now or hereafter
               ------
existing, as defined in Section 424(e) of the Code.

          (p) "Plan" means this 1999 Stock Option Plan.
               ----

          (q) "Share" means a share of the Common Stock, as adjusted in
               -----
accordance with Section 11 of the Plan.

          (r) "Subsidiary" means a "subsidiary corporation", whether now or
               ----------
hereafter existing, as defined in Section 424(f) of the Code.

     3.   Stock Subject to the Plan.  Subject to the provisions to Section 11 of
          -------------------------
the Plan, the total number of Shares reserved and available for issuance is the
number equal to the sum of (i) 2,300,000 and (ii) on the first day of any fiscal
year,  the number equal to 4% of the sum of the number of Shares outstanding as
of the last business day preceding the first day of such new fiscal year plus
the number of shares subject to outstanding and unexercised options (the
"Percentage Increase"). The Percentage Increase shall be determined annually on
the first day of each new fiscal year of the Company beginning with fiscal year
2000 and ending with (and including) fiscal year 2003.  Notwithstanding the
preceding sentence, the maximum annual Percentage Increase which may be
allocated to Incentive Stock Options in any single fiscal year shall be
1,900,000 Shares, for a maximum aggregate number of 9,900,000 Shares allocable
to Incentive Stock Options under the Plan.

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     Subject to Section 11 of the Plan, if any Shares that have been optioned
under an Option cease to be subject to such Option (other than through exercise
of the Option), or if any Option granted hereunder is forfeited, or any such
award otherwise terminates prior to the issuance of Common Stock to the
participant, the Shares that were subject to such Option shall again be
available for distribution in connection with future Option grants under the
Plan.  Shares that have actually been issued under the Plan, upon exercise of an
Option, shall not in any event be returned to the Plan and shall not become
available for future distribution under the Plan.

     4.   Administration of the Plan.
          --------------------------

          (a)  Procedure.
               ---------

               (i)   Multiple Administrative Bodies. The Plan may be
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administered by different bodies with respect to Directors, Officers who are not
Directors, and Employees who are neither Directors nor Officers.

               (ii)  Administration With Respect to Directors and Officers
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Subject to Section 16(b). With respect to Option grants made to Employees who
------------------------
are also Officers or Directors subject to Section 16(b) of the Exchange Act, the
Plan shall be administered by (A) the Board, if the Board may administer the
Plan in compliance with the rules governing a plan transaction intended to
qualify as an exempt transaction under Rule 16b-3 and/or in accordance with
Section 162(m) of the Code, or (B) a Committee (or Committees) designated by the
Board to administer the Plan, which Committee shall be constituted to comply
with the rules governing a plan transaction intended to qualify as an exempt
transaction under Rule 16b-3 and/or in accordance with Section 162(m) of the
Code. Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time, as the Board
deems appropriate (and for the purposes of satisfying Rule 16b-3 and/or Section
162(m)), it may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan .

               (iii) Administration With Respect to Other Persons.  With respect
                     --------------------------------------------
to Option grants made to Employees who are neither Directors nor Officers of the
Company, the Plan shall be administered by (A) the Board or (B) a committee
designated by the Board, which committee shall be constituted in such a manner
as to satisfy the legal requirements relating to the administration of stock
option plans, if any, of state corporate law, the relevant stock exchange and
the Code  (the "Applicable Rules").  Once appointed, such Committee shall serve
in its designated capacity until otherwise directed by the Board.  The Board may
increase the size of the Committee and appoint additional members, remove
members (with or without cause) and substitute new members, fill vacancies
(however caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by the Applicable
Rules.

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          (b)  Powers of the Administrator.  Subject to the provisions of the
               ---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

               (i)    to determine the Fair Market Value of the Common Stock, in
accordance with Section 8(b) of the Plan;

               (ii)   to select the Employees to whom Options may be granted
hereunder;

               (iii)  to determine whether and to what extent Options are
granted hereunder;

               (iv)   to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;

               (v)    to approve forms of agreement for use under the Plan;

               (vi)   to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

               (vii)  to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;

               (viii) to prescribe, amend and rescind rules and regulations
relating to the Plan;

               (ix)   to modify or amend each Option (subject to Section 14(b)
of the Plan);

               (x)    to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;

               (xi)   to determine and recommend the terms of any Option
exchange program or repricing program for Options granted under the Plan, and
subject to prior stockholder approval, to institute and implement any such
program;

               (xii)  to determine the terms and restrictions applicable to
Options; and

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               (xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.

          (c)  Effect of Administrator's Decision.  The Administrator's
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decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

     5.   Eligibility.
          -----------

          (a)  Nonstatutory Stock Options and Incentive Stock Options  may be
granted to only to Employees.

          (b)  Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option.  However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options.

          (c)  For purposes of Section 5(b), Options shall be taken into account
in the order in which they were granted, and the Fair Market Value of the Shares
shall be determined as of the time the Option with respect to such Shares is
granted.

          (d)  Nothing in the Plan or any Option granted hereunder shall confer
upon any Optionee any right with respect to continuation of employment or
consulting relationship with the Company, nor shall it interfere in any way with
the Optionee's right or the Company's right to terminate his employment or
consulting relationship at any time, with or without cause.

          (e)  The following limitations shall apply to grants of Options to
Employees:

               (i)    No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 400,000 Shares.

               (ii)   The foregoing limitation shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 11.

               (iii)  If an Option is canceled (other than in connection with a
transaction described in Section 11), the canceled Option will be counted
against the limit set forth in Section 5(e)(i).  For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

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     6.   Term of Plan.  The term of the Plan shall be ten (10) years,
          ------------
commencing on August 31, 1999 and terminating on August 31, 2009 unless sooner
terminated under Section 13 of the Plan.

     7.   Term of Option.  The term of each Option shall be no more than ten
          --------------
(10) years from the date of grant.  However, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be no more than five (5) years from the date of
grant.

     8.   Exercise Price and Consideration.
          --------------------------------

          (a)  The per Share exercise price under each Option shall be such
price as is determined by the Board, subject to the following:

                    (i)  In the case of an Incentive Stock Option

                         (A)  granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.

                         (B)  granted to any Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

                    (ii) In the case of a Nonstatutory Stock Option the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.

For purposes of this Section 8(a), in the event that an Option is amended to
reduce the exercise price, the date of grant of such Option shall thereafter be
considered to be the date of such amendment.

          (b)  The Fair Market Value shall be determined by the Board in good
faith; provided, however, that where there is a public market for the Common
Stock, the Fair Market Value per Share shall be the mean of the bid and asked
prices (or the closing price per share if the Common Stock is listed on the
National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market System) of the Common Stock for the date of grant, as reported
in the Wall Street Journal (or, if not so reported, as otherwise reported by the
NASDAQ System) or, in the event the Common Stock is listed on a stock exchange,
the Fair Market Value per Share shall be the closing price on such exchange on
the date of grant of the Option, as reported in the Wall Street Journal.

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          (c)  The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment.  In the
case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant.  Such consideration may
consist entirely of:

               (i)   cash;

               (ii)  check;

               (iii) promissory note;

               (iv)  other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

               (v)   delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price and
any tax withholding resulting from such exercise;

               (vi)  any combination of the foregoing methods of payment; or

               (vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by applicable laws.

          (d)  Prior to issuance of the Shares upon exercise of an Option, the
Optionee shall pay or make adequate provision for any federal or state
withholding obligations of the Company, if applicable.

     9.   Exercise of Option.
          ------------------

          (a)  Procedure for Exercise; Rights as a Stockholder. Any Option
               -----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board at the time of grant, including performance criteria
with respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan.

          An Option may not be exercised for a fraction of a Share.

          An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to

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exercise the Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company. Full payment may, as
authorized by the Board, consist of any consideration and method of payment
allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such stock certificate
as promptly as practicable upon exercise of the Option. In the event that the
exercise of an Option is treated in part as the exercise of an Incentive Stock
Option and in part as the exercise of a Nonstatutory Stock Option pursuant to
Section 5(b), the Company shall issue a separate stock certificate evidencing
the Shares treated as acquired upon exercise of an Incentive Stock Option and a
separate stock certificate evidencing the Shares treated as acquired upon
exercise of a Nonstatutory Stock Option, and shall identify each such
certificate accordingly in its stock transfer records. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 11 of the
Plan.

          Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

          (b)  Termination of Status as an Employee.  In the event of
               ------------------------------------
termination of an Optionee's Continuous Status as an Employee  with the Company,
such Optionee may, but only within thirty (30) days after the date of such
termination (or such other period as is set out by the Administrator in the
Option Agreement, but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to the
extent that Optionee was entitled to exercise it at the date of such
termination.  To the extent that Optionee was not entitled to exercise the
Option at the date of such termination, or if Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the Option
shall terminate.

          (c)  Disability of Optionee. Notwithstanding the provisions of Section
               ----------------------
9(b) above, in the event of termination of an Optionee's Continuous Status as an
Employee  as a result of his total and permanent disability (as defined in
Section 22(e)(3) of the Code), he may exercise his Option to the extent he was
entitled to exercise it at the date of such termination within six (6) months
from the date of such termination (or such other period as is specified in the
grant, but in no event later than the date of expiration of the term of such
Option as set forth in the Option Agreement).  To the extent that the Optionee
was not entitled to exercise the Option at the date of termination, or does not
exercise such Option (to the extent exercisable) within the time specified
herein, the Option shall terminate.

          (d)  Death of Optionee. Notwithstanding the provisions of Section 9(b)
               -----------------
above, in the event of the death of an Optionee:

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          (i)  during the term of the Option, who is at the time of his death an
Employee  of the Company and who shall have been in Continuous Status as an
Employee  since the date of grant of the Option, the Option may be exercised, at
any time within six (6) months following the date of death ((or such other
period as is specified in the grant, but in no event later than the date of
expiration of the term of such Option as set forth in the Option Agreement), by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, as to all
of the Optioned Stock, including Shares as to which it would not otherwise be
exercisable, and such Shares shall be fully vested and not subject to any
repurchase option; or

          (ii) during the post-termination exercise period specified in the
grant with respect to terminations under Section 9(b) above,  at any time within
six (6) months following the date of death (or such other period as is
determined by the Administrator, but in no event later than the date of
expiration of the term of such Option as set forth in the Option Agreement), by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that had accrued at the date of termination.

     10.  Non-Transferability of Options. Except as otherwise designated by the
          ------------------------------
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.

     11.  Adjustments Upon Changes in Capitalization, Dissolution, Merger, Asset
          ----------------------------------------------------------------------
          Sale or Change of Control.
          -------------------------

          (a)  Changes in Capitalization.  Subject to any required action by the
               -------------------------
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration."  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,

                                      -9-
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shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

          (b)  Dissolution or Liquidation.  In the event of the proposed
               --------------------------
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action.  The Board may, in the exercise of its
sole discretion in such instances, declare that any Option shall terminate as of
a date fixed by the Board and give each Optionee the right to exercise his or
her Option as to all or any part of the Optioned Stock, including Shares as to
which the Option would not otherwise be exercisable.

          (c)  Merger or Asset Sale.  In the event of a merger of the Company
               --------------------
with or into another corporation or the sale of substantially all of the assets
of the Company:

               (i)  Each outstanding Option shall be assumed or an equivalent
option substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. Any Shares subject to a repurchase option of the Company
shall be exchanged for the consideration (whether stock, cash, or other
securities or property) received in the merger or asset sale by the holders of
the Common Stock for the successor corporation or a parent or subsidiary of such
successor corporation for each Share held on the effective date of the
transaction and such consideration shall, in the case of securities of the
successor corporation, be subject to a repurchase option with terms consistent
to the Company's repurchase option and in the case of any other property shall
be subject to vesting according to the schedule for the lapse of the repurchase
option.

               (ii) In the event that the successor corporation refuses to
assume or substitute for the Option, the Optionee shall have the right to
exercise the Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable, and such Shares shall be fully
vested and not subject to any repurchase option. In the event that the successor
corporation fails to assume the restricted stock purchase agreement pursuant to
which the Optionee purchased unvested Shares, the Company's repurchase option
shall lapse and the shares shall be fully vested. If an Option is exercisable in
lieu of assumption or substitution in the event of a merger or sale of assets,
the Administrator shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely

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Common Stock of the successor corporation or its Parent, the Administrator may,
with the consent of the successor corporation, provide for the consideration to
be received upon the exercise of the Option, for each Share of Optioned Stock
subject to the Option, to be solely common stock of the successor corporation or
its Parent equal in Fair Market Value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

     12.  Stock Withholding to Satisfy Withholding Tax Obligations.  At the
          --------------------------------------------------------
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph.  When an Optionee incurs tax liability in
connection with the exercise of an Option, which tax liability is subject to tax
withholding under applicable tax laws, and the Optionee is obligated to pay the
Company an amount required to be withheld under applicable tax laws, the
Optionee may satisfy the withholding tax obligation by electing to have the
Company withhold from the Shares to be issued upon exercise of the Option that
number of Shares having a Fair Market Value equal to the amount required to be
withheld.  The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is determined (the
"Tax Date").

     All elections by an Optionee to have Shares withheld for this purpose
shall be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:

     (a)  the election must be made on or prior to the applicable Tax Date;

     (b)  once made, the election shall be irrevocable as to the particular
Shares of the Option as to which the election is made;

     (c)  all elections shall be subject to the consent of the Administrator;

     (d)  if the Optionee is subject to Rule 16b-3, the election must comply
with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.

     In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.

     13.  Time of Granting Options.  The date of grant of an Option shall, for
          ------------------------
all purposes, be the date on which the Board makes the determination granting
such Option.  Notice of the determination shall be given to each Employee  to
whom an Option is so granted within a reasonable time after the date of such
grant.

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     14.  Amendment and Termination of the Plan.
          -------------------------------------

          (a)  Amendment and Termination.  The Board may amend or terminate the
               -------------------------
Plan from time to time in such respects as the Board may deem advisable;
provided that the following changes shall require approval of the stockholders
of the Company in the manner described in Section 18 of the Plan (i) revisions
or amendments to increase the number of Shares in the Share Pool (other than in
connection with an adjustment under Section 11 of the Plan); (ii) changes in the
designation of the class of persons eligible to be granted Options and/or (iii)
the reduction of the exercise price of any Option to the then current Fair
Market Value if the Fair Market Value of the Common Stock covered by such Option
shall have declined since the date the Option was granted.

          (b)  Effect of Amendment or Termination.  Any such amendment or
               ----------------------------------
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

     15.  Conditions Upon Issuance of Shares.  Shares shall not be issued
          ----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

          As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

     16.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.  The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

     17.  Option Agreement.  Options shall be evidenced by written option
          ----------------
agreements in such form as the Board shall approve.

                                      -12-
<PAGE>

     18.  Stockholder Approval. Any required stockholder approval obtained at a
          --------------------
duly held stockholders' meeting, may be obtained by the affirmative vote of the
holders of a majority of the outstanding Shares of the Company present or
represented and entitled to vote thereon.

                                      -13-CAPACITY

 

 

 

 

 

 

 

 

 

 

 

CAPACITY PURCHASE AGREEMENT

BETWEEN

GLOBAL CROSSING USA INC. 

AND

EXODUS COMMUNICATIONS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

PART 1 - SPECIFIC TERMS

THIS CAPACITY PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement"),
entered into as of August 27, 1999 between GLOBAL CROSSING USA INC., a
corporation organized and existing under the laws of the State of Delaware and
having its principal office in Beverly Hills, California (said company, and any
permitted successor or assign hereunder, the "Grantor") and
EXODUS COMMUNICATIONS, INC. a corporation organized and existing under the laws
of the State of Delaware and having its principal office in Santa Clara,
California (said company, and any permitted successor or assign hereunder, the
"Purchaser").  The Grantor and the Purchaser are herein
sometimes collectively referred to as the "Parties" and each,
individually, as a "Party."  

W I T N E S S E T H :

WHEREAS, the Purchaser desires to acquire and the Grantor desires to
grant rights with respect to Capacity on an indefeasible right of use basis
("IRU") and such Capacity represents capacity on the Global
Crossing Network between the System Interfaces at the applicable Points of
Presence (these, and other capitalized terms are hereinafter defined); and

WHEREAS, Global Crossing Network Center Ltd., a corporation organized
and existing under the laws of Bermuda and having its principal office in
Bermuda (said company, and any permitted successors or assigns, the
"Maintenance Company") has agreed to perform or cause to be
performed all operation, administration and maintenance with respect to the
Global Crossing Network;

NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, covenant and agree with each other as
follows:

A.AGREEMENT. 

This Agreement consists of two Parts (Part 1 and Part 2) and various
Annexes and Schedules, all of which, taken together, comprise this
"Agreement."  Part 1 contains specific terms and signatures
("Part 1" or "Specific Terms").  Part 2, which
is attached hereto, contains general terms ("Part 2" or
"General Terms").  The provisions of each Part and the Annexes
and Schedules attached thereto are equally binding on the Parties; provided,
however, that, in the case of any inconsistency between any provisions of
the Specific Terms and of the General Terms, the provisions of the Specific
Terms shall govern.  For convenience of reference, provisions of the Specific
Terms are referred to as "Paragraphs" and provisions of the General
Terms are referred to as "Sections".

B.INITIAL COMMITTED CAPACITY.

As of the date of this Agreement the Initial Committed Capacity consists
of the indicated number of MCUs of Capacity on the Traffic Connections listed on
Schedule 1A hereto.

C.PURCHASE PRICE.

(1)  The Purchase Price in respect of each MCU of Initial Committed
Capacity shall be the price per MCU indicated in Schedule 1A hereto.

(2)  The Purchase Price in respect of each MCU of Capacity to be
purchased pursuant to Section 2(b) of this Agreement (the "Additional
Committed Capacity"), if any, shall be an amount agreed upon by the Parties
hereto and set forth in a Schedule 2A executed pursuant to said Section
2(b).

D.INITIAL ANNUAL MAINTENANCE COST PAYMENT.

(1)  The Initial Annual Maintenance Cost Payment payable by the
Purchaser with respect to each MCU of Initial Committed Capacity shall be the
amount per MCU indicated in Schedule 1A hereto.

(2)  The Initial Annual Maintenance Cost Payment payable by the
Purchaser with respect to each MCU of Additional Committed Capacity shall be an
amount agreed upon by the Parties hereto and set forth in a Schedule 2A executed
pursuant to Section 2(b).

E.REQUESTED ACTIVATION DATE. 

(1)  The Requested Activation Date for each MCU of Initial Committed
Capacity is set forth in Schedule 1A hereto.

(2)  The Requested Activation Date for each MCU of Additional
Committed Capacity shall be agreed upon by the Parties hereto and set forth in a
Schedule 2A executed pursuant to Section 2(b).

The foregoing referenced dates do not constitute representations,
warranties, covenants or agreements that the Initial Committed Capacity or
Additional Committed Capacity, as the case may be, will be available on the
Requested Activation Date.

F.ANTICIPATED AVAILABILITY DATE. 

(1)  The Anticipated Availability Date for each Traffic Connection
constituting Initial Committed Capacity is set forth in Schedule 1A hereto.

(2)  The Anticipated Availability Date for each Traffic Connection on
which Additional Committed Capacity is to be purchased shall be the date
specified by the Grantor pursuant to Section 2(b) of this Agreement and set
forth in a Schedule 2A executed pursuant to said Section 2(b).

The foregoing referenced dates do not constitute representations,
warranties, covenants or agreements that any Anticipated Availability Date will
be met. 

G.ANTICIPATED ROUTE

(1)  On the date hereof, the Grantor anticipates that the Initial
Committed Capacity will be routed across the Systems and/or other parts of the
Global Crossing Network as set forth in Schedule 1B hereto.

(2)  The anticipated route for each MCU of Additional Committed
Capacity, if any, shall be the anticipated route specified by the Grantor and
set forth in a Schedule 2B prepared by the Grantor.

(3)  Schedules 1B and 2B shall be completed by and at the sole
discretion of the Grantor.  The routes, if any, set forth in Schedule 1B or 2B
are solely for the internal purposes of the Grantor, and they are not
representations, warranties, covenants or agreements of the Grantor or
conditions to the obligations of the Purchaser.  Failure of the Grantor to
complete Schedule 1B or 2B shall not affect the Purchaser's rights, obligations
or liabilities under this Agreement.

(4)  The Route for each MCU of Capacity shall be identified in the
Activation Notice.  The Activation Notice shall be sent to Purchaser within 5
days of the Activation Date.

H.ADDITIONAL AGREEMENTS.

The Purchaser acknowledges that it may be necessary for the Parties to
enter into additional agreements to allow the Grantor to grant an IRU in any
Capacity hereunder.  As a result, the Purchaser agrees to enter into any such
additional documents, instruments or certificates as are reasonably required, in
the Grantor's opinion, to consummate any of the transactions contemplated
hereby; provided, however, that no such additional agreement shall materially
alter or amend the terms and conditions of this Agreement.

I.JAPANESE BACKHAUL.

In the event that Purchaser does not have the necessary
governmental authority to acquire the Committed Capacity on an IRU basis in one
or more jurisdictions in Japan, or if any jurisdiction(s) in Japan does not
currently recognize or does not recognize in the future the conveyance of
telecommunications facilities on an IRU basis, then as to such jurisdiction(s)
only, the Agreement shall be considered an agreement for a lease of such
Capacity ("Capacity Lease").  The term of the Capacity Lease shall be
the period set forth in Section 12 of the General Terms.  The total lease
payments for any such Capacity Lease shall be the amount set forth in Paragraph
C of the Specific Terms, in addition to any other payments provided for in the
Agreement, including but not limited to Initial and Annual Maintenance Cost
Payments, Taxes, and "default interest."  All amounts owed under the
Agreement shall be paid as provided in the Agreement and Purchaser shall receive
no credit or discount as a result of the above-described change in status of the
rights granted under the Agreement.

In the event that the Agreement is deemed a Capacity Lease in
one or more jurisdictions, then as to such jurisdictions only, the terms
"purchase," "Purchaser," and any variations thereon shall
mean "lease," "Lessee," or the appropriate variation
thereof, and the terms "indefeasible right of use" and "IRU"
shall mean "Lease."  Any other terms and conditions of the Agreement
also shall be deemed modified only to the extent necessary to be consistent with
the grant of a lease to the Purchaser.  All other terms and conditions of the
Agreement shall remain unchanged and fully valid and enforceable.

Purchaser agrees not make any claim that the Agreement is
invalid or unenforceable as the result of it being deemed a Capacity Lease in
one or more jurisdictions.

It is the intent of the parties that the Purchaser be granted
an IRU or the next highest rights with regard to use of the Committed Capacity.
To the extent that any jurisdiction(s) recognizes the conveyance of
telecommunications facilities on an IRU basis at any time during the term of the
Agreement, then for so long as that jurisdiction(s) recognizes such type of
conveyance, this Paragraph shall be of no force or effect as to such
jurisdiction.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement effective
on the date first written above.

 

 

 
GLOBAL CROSSING USA INC.

 

 

    /s/ Barry Porter

By:   Barry Porter

Title: President

 

 

 

EXODUS COMMUNICATIONS, INC.

 

 

    /s/ Ellen Hancock

By:   Ellen Hancock

Title: President

 

PURCHASER'S ADDRESS FOR NOTICES:

Exodus Communications, Inc.

2831 Mission College Blvd.

Santa Clara, California 95054-1838

Attention: General Counsel

Telephone: (408) 346-2350

Fax: (408) 346-2420

The undersigned hereby agrees to the provisions of Sections 7, 8, 20(a) and
20(f) of this Agreement.  All of the provisions of this Agreement which govern
the rights and obligations of the Grantor hereunder shall apply to the rights
and obligations of the Maintenance Company under said Sections 7, 8, 20(a) and
20(f).  This Agreement shall also apply to any subsequent purchases of Capacity
pursuant to Section 2(b) of this Agreement.

 

 
GLOBAL CROSSING NETWORK CENTER LTD.

 

    /s/ Lorraine Dean
By:   Lorraine Dean

Title: Secretary

Schedule 1A

DESCRIPTION OF INITIAL COMMITTED CAPACITY

Traffic Connections are to be described as Point of Presence
to Point of Presence (for example, New York - Tokyo).  If more than one location
for connectivity exists in a particular city, the specific address of the
intended Point of Presence should be set forth in a footnote to this
Schedule.

	
 

 

Traffic Connection
	

 

Number of MCUs
	

Purchase Price per MCU
	
Initial Annual Maintenance Cost Payment per MCU
	

Anticipated Availability Date
	

Requested Activation Date

	

New York City to Frankfurt

	

2
	

$3,750,000

Payment shall be as follows:
o$1,875,000 on or
before September 30, 1999.

o$1,875,000 on or
before April 1, 2000.

o$1,875,000 on or
before July 1, 2000.

o$1,875,000 on or
before September 30, 2000.

	
o$150,000 per annum
from the date hereof until September 30, 2000.

o$200,000 per annum
from October 1, 2000 until December 31, 2004.

o$150,000 per annum
from January 1, 2005 through the remaining term of the IRU.

	

September 30, 1999
	

September 30, 1999

	

New York City to London

	

2
	

$3,750,000

Payment shall be as follows:
o$1,875,000 on or
before September 30, 1999.

o$1,875,000 on or
before Apri1 1, 2000.

o$1,875,000 on or
before July 1, 2000.

o$1,875,000 on or
before September 30, 2000.

	
o$150,000 per annum
from the date hereof until September 30, 2000.

o$200,000 per annum
from October 1, 2000 until December 31, 2004.

o$150,000 per annum
from January 1, 2005 through the remaining term of the IRU.

	

September 30, 1999
	

September 30, 1999

	

Tokyo, Japan to Santa Clara, CA

	

1
	

$6,200,000
	

$220,000
	

December 31, 1999

(Northern Leg)
	

December 31, 1999

	

Tokyo, Japan to Santa Clara, CA

	

1
	

$6,200,000
	

$220,000
	

December 31, 1999

(Northern Leg)
	

June 30, 2000

	

Tokyo, Japan to Santa Clara, CA

	

1
	

$6,200,000
	

$220,000
	

July 31, 2000
	

December 31, 2000

	

Tokyo, Japan to Santa Clara, CA

	

1
	

$6,200,000
	

$220,000
	

July 31, 2000
	

June 30, 2001

	

PEC Ring connecting London, Paris, Frankfurt, Amsterdam and one other then-ready
for service city on such PEC Ring.

	

1
	

$7,000,000
	

$250,000
	

December 31, 1999
	

December 31, 1999

Schedule 1B

ANTICIPATED ROUTES

[Set forth the anticipated route for each Traffic
Connection]

	
Traffic Connection
	
Systems Crossed

	

_____________________________    . . . . . . . . . 
	

________________________________

________________________________

________________________________

________________________________

	

_____________________________   . . . . . . . . . . 
	

________________________________

________________________________

________________________________

________________________________

	

 

_____________________________   . . . . . . . . . . . . . 
	

 

________________________________

________________________________

________________________________

________________________________

	

 

_____________________________   . . . . . . . . . . . . .
	

 

________________________________

________________________________

________________________________

________________________________

	 	 

Schedule 2A

COMMITMENT FOR ADDITIONAL CAPACITY

This Commitment is executed and delivered pursuant to Section
2(b) of the Capacity Purchase Agreement, dated _____ __, ____, between the
undersigned.  The undersigned hereby agree that all the terms and conditions of
such Capacity Purchase Agreement shall apply to the purchase of the Capacity set
forth below.  Traffic Connections are to be described as Point of Presence to
Point of Presence (for example, New York - Tokyo).  If more than one location
for connectivity exists in a particular city, the specific address of the
intended Point of Presence should be set forth in a footnote to this
Schedule.

	
 

 

Traffic Connection
	

 

Number of MCUs
	

Purchase Price per MCU
	
Initial Annual Maintenance Cost Payment per MCU
	

Anticipated Availability Date
	

Requested Activation Date

	

 
	 	 	 	 	 
	
 

 
	 	 	 	 	 
	
 

 
	 	 	 	 	 
	
 

 
	 	 	 	 	 
	
 

 
	 	 	 	 	 

 

GRANTOR

By:    

Title:

PURCHASER

By:   

Title:

Schedule 2B

ANTICIPATED ROUTES

[Set forth the anticipated route for each Traffic
Connection]

	
Traffic Connection
	
Systems Crossed

	

_____________________________ 
	

________________________________

________________________________

________________________________

________________________________

	

 

_____________________________   . . . . . . . . . . . . .
	

 

________________________________

________________________________

________________________________

________________________________

	

 

_____________________________   . . . . . . . . . . . . .
	

 

________________ _______________

________________________________

________________________________

________________________________

	

 

_____________________________   . . . . . . . . . . . . .
	

 

________________________________

________________________________

________________________________

________________________________

 

Schedule 3 

 

CONFIGURATION OF THE SYSTEM (subject to change)

 

1.  The following is a description of the segments that make up each
System.

Atlantic Crossing - 1 shall be regarded as consisting of the
following Segments:

Segment S-1:A submarine cable linking Segments T-
1 and T-2.

Segment S-2:A submarine cable linking Segments T-
1 and T-3.

Segment S-3a:A submarine cable linking Segments
T-2 and T-4.

Segment S-3b:A submarine cable linking
Segments T-3 and T-4.

Segment S-3c:A submarine cable linking
Segments T-2 and T-3 (which goes through Segment T-4).

Segment S-4:The portion of the System linking
Segments T-1 and T-4.

Segment T-1: A cable station in Brookhaven,
New York, United States, together with that portion of the System which is
located between such cable station and the point which is one-half mile beyond
the United States territorial limit.

Segment T-2:A cable station in White Sands,
United Kingdom, together with that portion of the System which is located
between such cable station and the point which is one-half mile beyond the
United Kingdom territorial limit.

Segment T-3:A cable station in Sylt, Germany,
together with that portion of the System which is located between such cable
station and the point which is one-half mile beyond the Germany territorial
limit.

Segment T-4:A cable station in Beverwijk,
Netherlands, together with that portion of the System which is located between
such cable station and the point which is one-half mile beyond the Netherlands
territorial limit. 

Inland Capacity:All capacity provided by Global
Crossing, including third party capacity, as backhaul services to connect (i)
the cable station in Brookhaven, New York, United States with locations in New
York, New York, including but not limited to, 60 Hudson Street and 111
8th Avenue, and  (ii) the cable station in White Sands, United
Kingdom with locations England, including but not limited to, Slough, London,
Docklands, London and Porthcurno, Cornwall.

Mid-Atlantic Crossing shall be regarded as consisting of the
following Segments:

Segment S-1:A submarine cable linking Segments T-
1 and T-2.

Segment S-2:A submarine cable linking Segments T-
1 and T-3.

Segment S-3:A submarine cable linking Segments T-
2 and T-3.

Segment T-1: A cable station in Brookhaven,
New York, United States, together with that portion of the System which is
located between such cable station and the point which is one-half mile beyond
the United States territorial limit.

Segment T-2:A cable station in Hollywood,
Florida, United States together with that portion of the System which is located
between such cable station and the point which is one-half mile beyond the
United States territorial limit.

Segment T-3:A cable station in St. Croix,
United States Virgin Islands, together with that portion of the System which is
located between such cable station and the point which is one-half mile beyond
the United States Virgin Islands territorial limit.

Inland Capacity:All capacity provided by Global
Crossing, including third party capacity, as backhaul services to connect (i)
the cable station in Brookhaven, New York, United States with locations in New
York, New York, including but not limited to, 60 Hudson Street and 111
8th Avenue, and  (ii) the cable station in Hollywood, Florida, United
States and Miami, Florida.

Pan American Crossing shall be regarded as consisting of the
following Segments:

Segment S-1:A submarine cable linking Segments T-
1 and T-2.

Segment S-2:A submarine cable linking Segments T-
2 and T-3.

Segment S-3:A submarine cable linking Segments T-
3 and T-4.

Segment S-4:A submarine cable linking Segments T-
4 and T-5.

Segment T-1: A cable station in St. Croix,
United States Virgin Islands, together with that portion of the System which is
located between such cable station and the point which is one-half mile beyond
the United States territorial limit.

Segment T-2:A cable station in Fort Amador,
Panama, together with that portion of the System which is located between such
cable station and the point which is one-half mile beyond Panama territorial
limit.

Segment T-3:A cable station in Mazatlan, Mexico, together with
that portion of the System which is located between such cable station and the
point which is one-half mile beyond the Mexico territorial limit.

Segment T-4:A cable station in Tijuana, Mexico, together with
that portion of the System which is located between such cable station and the
point which is one-half mile beyond the Mexico territorial limit.

Segment T-5:A cable station in Grover Beach,
California, United States together with that portion of the System which is
located between such cable station and the point which is one-half mile beyond
the United States territorial limit. 

Inland Capacity:All capacity provided by
Global Crossing, including third party capacity, as backhaul services to connect
(i) the cable station in Fort Amador, Panama with locations in _________  (ii)
the cable station in Mazatlan, Mexico with locations in Mexico, including but
not limited to ________, (iii) the cable station in Tijuana, Mexico with
locations in Mexico, including but not limited to ______, (iv) the cable station
in Grover Beach, California, United States with locations in California,
including but not limited to San Luis Obispo.

 

Pacific Crossing - 1 shall be regarded as consisting of the
following Segments:

Segment S-1:A submarine cable linking Segments T-
1 and T-2.

Segment S-2:A submarine cable linking Segments T-
3 and T-4.

Segment S-3:A submarine cable linking Segments T-
1 and T-3.

Segment S-4:A submarine cable linking
Segments T-2 and T-3.

Segment T-1: A cable station in Norma Beach,
Washington, United States, together with that portion of the System which is
located between such cable station and the point which is one-half mile beyond
the United States territorial limit.

Segment T-2:A cable station in Ajiguara,
Japan, together with that portion of the System which is located between such
cable station and the point which is one-half mile beyond the Japan territorial
limit.

Segment T-3:A cable station in Shima, Japan,
together with that portion of the System which is located between such cable
station and the point which is one-half mile beyond the Japan territorial
limit.

Segment T-4:A cable station in Grover Beach,
California, United States, together with that portion of the System which is
located between such cable station and the point which is one-half mile beyond
the United States territorial limit.

Inland Capacity:All capacity provided by Global
Crossing, including third party capacity, as backhaul services to connect (i)
the cable station in Grover Beach, California, United States with locations in
California, including but not limited to San Luis Obispo, (ii) the cable station
in Norma Beach, Washington, United States with Seattle, Washington (iii) the
cable station in Ajiguara, Japan with locations in Japan, including but not
limited to Tokyo, Osaka, and Nagoya, (iv) the cable station in Shima, Japan with
locations in Japan, including but not limited to Tokyo, Osaka and Nagoya.

For the purposes of this Agreement, it is assumed that, under the current law
of all countries listed herein, the territorial waters of such country extend
twelve nautical miles seaward from the coast of such country.  If such
assumption shall prove to be incorrect, or if a law shall change such assumption
and, in fact, the territorial waters of any such country extend beyond twelve
nautical miles, the parties hereto shall adjust the T Segment of the applicable
Terminal Party.

Pan European Crossing consists of a fiber optic network with Points of
Presence in the following European cities:

United KingdomLondon and Whitesands
FranceVeules les Roses, La Defense, Paris, Calais, Roissy, Lyon,
Marseille and Strasbourg

BelgiumBrussels, Kortrijk, and Antwerp

NetherlandsRotterdam and Amsterdam

GermanyHamburg, Hanover, Berlin, Leipzig, Dresden, Nuremberg,
Stuttgart, Munich, Dusseldorf, Cologne and Frankfurt

SwitzerlandZurich

ItalyTurin and Milan

DenmarkCopenhagen

2.  Capabilities of each System

(a) With respect to AC-1, MAC and PC-1, upon completion of the
construction and final acceptance from the contractor, (i) each Segment shall
have the ability to carry commercial traffic between the two landing points of
such Segment meeting performance criteria of ITU-T G.826, shall have line
monitoring and protection switching capability and shall provide for STM-1
interconnectivity capability to the Segment terminal equipment according to ITU-
T G.826, and (ii) each System shall have the ability to carry commercial traffic
throughout the System meeting performance criteria of ITU-T G.826 with self
healing ring protection capability and per Segment protection capability, shall
have line monitoring and per Segment protection switching capability and shall
have network management. 

(b) With respect to PAC, upon completion of the
construction and final acceptance from the contractor, (i) each Segment shall
have the ability to carry commercial traffic between the two landing points of
such Segment meeting performance criteria of ITU-T G.826, [shall have line
monitoring and protection switching capability] and shall provide for STM-1
interconnectivity capability to the Segment terminal equipment according to ITU-
T G.826, and (ii) the System shall have the ability to carry commercial traffic
throughout the System meeting performance criteria of ITU-T G.826 [and per
Segment protection capability, shall have line monitoring and per Segment
protection switching capability] and shall have network management. 

(c)  [INFORMATION AS TO PERFORMANCE STANDARDS FOR PEC
TO BE ADDED AS NECESSARY]

(d) With respect to any Inland Capacity purchased
hereunder, (i) the fiber optic telecommunications system carrying such capacity
shall have the ability to carry commercial traffic between certain Points of
Presence meeting performance criteria of ITU-T G.826, shall have protection
switching capability and (ii) the interface to the Point of Presence shall be
STM-1 (optical interface) as specified in ITU Recommendation G.957 and 1+1
protected or equivalent.

Schedule 4

TERMINATION DATES

 

SystemTermination Date

Atlantic Crossing - 125 years from the date such System was put
in service

Pacific Crossing - 125 years from the date such System was put in
service

Pan American Crossing25 years from the date such System was put in
service

Mid-Atlantic Crossing25 years from the date such System was put in
service

South American Crossing25 years from the date such System was put in
service

Pan European Crossing[15 years from the date such System was put in
service]

Global Access Ltd.15 years from the date such System was put in
service

[TO BE UPDATED]

OPTION PRICES

 

SystemOption Price per MCU

Pan European Crossing$ ____________

Global Access Ltd.$ ____________

Schedule 5

FORM OF ACTIVATION NOTICE

 

 

 

[PURCHASER]

[ACTIVATION DATE]

 

 

RE: Activation of STM-1 circuit between _______________.

 

 

Reference is made to that certain Capacity Purchase Agreement dated ______,
1999, between Global Crossing USA Inc. (the "Grantor") and
____________ (the "Purchaser") (the "CPA").  Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to them in the CPA.

This notice is being provided to you pursuant to Paragraph G(4) of CPA.

The circuit that you have purchased was activated on [ACTIVATION DATE], and
has been assigned the following Route:

	
System
	
Segment
	
Inland Capacity

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
	
	

The Route described above is based on the configuration of the System as
provided in Schedule 3 to the CPA.

 

Global Crossing USA Inc.

 

 

_______________________

 

1.DEFINITIONS.

Unless otherwise defined herein, all terms which are commonly used in the
telecommunications industry shall have the meanings generally given such terms
in such industry.  The terms defined in the preamble and in the recitals of the
Specific Terms and the General Terms, as well as those defined in the text of
this Agreement, shall have their respective meanings when used herein and the
following additional terms shall have the following meanings:

"Activation Date" as defined in Section 6 of the General
Terms.

"Activation Notice" means, the notice delivered in
connection with the activation of each MCU of capacity purchased hereunder, in
the form of Schedule 5 hereto.

"Actual Availability Date" as defined in Section 6 of
the General Terms.

"Annual Maintenance Cost Payment" means, with respect to
each MCU of Committed Capacity, the amount determined pursuant to Paragraph D of
the Specific Terms and Section 8 of the General Terms, which amount is payable
by Purchaser to Grantor pursuant to Section 8 of the General Terms.

"Anticipated Availability Date" means, with respect to
any MCU of Capacity on a Traffic Connection to be purchased by the Purchaser
hereunder, the date set forth pursuant to Paragraph F of the Specific Terms.

"Business Day" means a day other than a Saturday, Sunday
or other day on which commercial banks in Bermuda, New York City or the United
Kingdom are authorized or required to close.

"Capacity" means capacity available on the Global
Crossing Network.

"Carrier Party" means any entity authorized or permitted
under the laws of its respective country to acquire and use facilities for the
provision of international telecommunications services.

"Committed Capacity" means Capacity which the Purchaser
has at any time agreed to purchase pursuant to Section 2(a) or 2(b) of the
General Terms or any other provision of this Agreement.

"Customer Information Guide" means the manual which the
Grantor and/or the Maintenance Company shall publish from time to time and which
shall include, among other things, interconnection services ordering
procedures.

"Delayed Availability Date" means, with respect to any
Traffic Connection, the date that is the six-month anniversary of the
Anticipated Availability Date for such Traffic Connection.

"Dollars" or "$" means United States
dollars. 

"Force Majeure" means any event or circumstance or
combination of events or circumstances that is beyond the reasonable control of
the party sought to be held liable, including, but not limited to, any: (i)
delay in obtaining or failure to obtain any permit or governmental
authorization, (ii) act of God or of the public enemy, (iii) action, or failure
to act, of any governmental authority, (iv) war or warlike operations, (v) civil
war or commotion, mobilization, military call-up and acts of similar nature,
(vi) revolution, rebellion, sabotage, insurrection or riot, (vii) drought, fire,
flood, lightning, epidemic or quarantine restriction, (viii) strike or other
labor action, (ix) freight embargo, (x) unworkable weather, (xi) trawler or
anchor damage, (xii) damage caused by other marine activity such as fishing,
marine research or marine development, (xiii) failure or shortage of power
supplies or general unavailability of any raw materials or components, (xiv) act
or omission or transporters, (xv) act, or failure to act, of the Purchaser (in a
case where the Grantor or the Maintenance Company is sought to be held liable),
act, or failure to act of the Grantor (in a case where the Purchaser is sought
to be held liable) or act, or failure to act, of any representatives or agents
of the respective Parties or any of their respective affiliates (in a case where
the other party is sought to be held liable).

"Global Crossing Network" means the fiber optic network
comprised of the Systems, the Inland Capacity and the other fiber optic
transmission capacity which Grantor and/or its affiliates may own or obtain (at
their sole option) from another service provider, as more fully described on
Schedule 3 to the Specific Terms of this Agreement, as such network may be
expanded by the Grantor and its affiliates (at their sole option) from time to
time.

"Grantor's Account" means the bank account of the
Grantor maintained with City National Bank, 400 North Roxbury Drive, Beverly
Hills, CA 90210, or such other account as the Grantor may designate to the
Purchaser in writing. Wire instructions for the above-referenced account are as
follows:

Account Number:  101-373-797

Bank Name:  City National Bank

ABA No.: 1220-16066

Reference:  Global Crossing USA Inc.

Any questions regarding wire transfers to the Grantor's Account should be
directed to the attention of Ms. Sheila Hamilton at (310) 888-6105.

"Initial Annual Maintenance Cost Payment" as defined in
Section 8 of the General Terms.

"Initial Payment" as defined in Section 3(a) of the
General Terms.

"Inland Capacity" means capacity on a fiber optic
telecommunications system which connects a System to an inland Point of
Presence.  TheInland Capacity relating to each System is described on
Schedule 3 to this Agreement.

"Maintenance Company" means Global Crossing Network
Center Ltd.

"Maintenance Company's Account" means the bank account
of the Maintenance Company maintained with The Bank of Bermuda, Hamilton,
Bermuda, or such other account as the Maintenance Company may designate to the
Purchaser in writing.  Wire instructions for the above-referenced account are as
follows:

Citibank N.A.

111 Wall Street

New York, NY

FED ABA: 021000089

CHIPS ABA: 0008

S.W.I.F.T. Code: CITIUS33

For Credit to:

The Bank of Bermuda Limited

Hamilton, Bermuda

CHIPS UID: 005584

S.W.I.F.T. Code: BBDA BMHM

For Further Credit to:

Global Crossing Network Center Ltd.

Account Number: 1800-4749

Any questions regarding wire transfers to the Maintenance Company's Account
should be directed to the attention of Ms. Grace Young at (441) 295-4000.

"Minimum Capacity Unit" or "MCU" means
the unit measure of capacity to be purchased by the Purchaser on the Global
Crossing Network.  Unless otherwise specified in the Specific Terms, an STM-1 is
designated as the MCU for purposes of this Agreement.

"Payment Date" means, with respect to each MCU of
Capacity to be purchased by the Purchaser hereunder, the date on which the
Purchaser pays the Grantor, in immediately available Dollars, the amount
required to be paid by the Purchaser for such Capacity pursuant to Section 3(b)
of this Agreement.

"Payment Due Date" means, with respect to each MCU of
Committed Capacity, the Activation Date and, thereafter, on each January 1,
April 1, July 1 and October 1.

"Points of Presence" means the points of presence of the
Grantor and/or its affiliates on the Global Crossing Network.  Traffic
Connections terminate at the Points of Presence. Individually, each of the
Points of Presence may be referred to herein as a "Point of
Presence."

"Purchased Capacity" means the Capacity on the Traffic
Connections as to which the Purchaser has paid the Purchase Price and has been
granted an IRU in accordance with this Agreement.

"Purchase Price" means, with respect to each MCU of
Committed Capacity, the amount set forth pursuant to Paragraph C of the Specific
Terms and Section 3 of the General Terms, which amount is payable by the
Purchaser to the Grantor pursuant to Section 3(b) of the General Terms.

"Requested Activation Date" means, with respect to any
MCU of Committed Capacity, the date set forth pursuant to Paragraph E of the
Specific Terms.

"Route" means, the Traffic Connection consisting of the
Segments and Inland Capacity identified on the Activation Notice delivered with
respect to each MCU purchased hereunder.

"System Interface" means the digital/optical
input/output ports on the digital/optical distribution frame (including the
digital/optical distribution frame, itself) where the basic system module
connects with other transmission facilities or equipment.

"Systems" means the fiber optic cable systems set forth
in Schedule 3 to the Specific Terms and any other fiber optic cable system that
the Grantor (at its sole option) may designate as a "System" from time
to time. 

"Termination Date" as defined in Section 12(c) of this
Agreement.

"Total Purchase Price" means the aggregate amount of
purchase price payable by the Purchaser to the Grantor for any Committed
Capacity (exclusive of any Annual Maintenance Cost Payments in respect of such
Capacity).

"Traffic Connection" means "point-to-point"
connectivity for telecommunications traffic between two Points of Presence.
Capacity is or will be available on Traffic Connections between Points of
Presence on the Global Crossing Network.

"US Capacity Purchase Agreement" means that certain
Capacity Agreement, entered into as of the date hereof, pursuant to which the
Purchaser shall acquire dedicated intra-United States circuit capacity from the
Grantor for the transport of the Purchaser's telecommunications traffic.

2.  COMMITMENT; CONDITIONS TO OBLIGATION; IRU FOR PURCHASED
CAPACITY.

(a)  Purchase Obligation.  The Purchaser hereby irrevocably
and unconditionally (except as provided in Section 2(d) of the General Terms)
agrees to purchase the MCUs of Initial Committed Capacity specified pursuant to
Paragraph B of the Specific Terms hereof for the Purchase Price and on the other
terms and conditions set forth in this Agreement.

(b)  Additional Capacity.  (i)  At any time, so long as the
Grantor determines that Capacity is available on the Global Crossing Network and
so long as the Grantor and Purchaser have mutually agreed upon the applicable
Purchase Price, Annual Maintenance Cost Payment and Requested Activation Date,
the Purchaser may elect to purchase Capacity pursuant to this Agreement in
addition to that provided for in Section 2(a) hereof.

(ii)  The Purchaser and Grantor shall effect such election by
(A) jointly executing and delivering a written Schedule 2A and (B) the
Purchaser's paying the applicable Initial Payment pursuant to Section 3(a) to
the Grantor's Account.  Such Schedule 2A shall be deemed to be an irrevocable,
unconditional agreement of the Purchaser (except as provided by Section 2(d)
hereof) to (i) purchase the MCUs of Capacity specified therein for the Purchase
Price specified therein (ii) pay the Purchase Price and Annual Maintenance Cost
Payments specified therein when due, and (iii) comply with all other terms and
conditions set forth in this Agreement. 

(c)  Condition to Grantor's Obligation; Notice of Actual
Availability Date.  The Grantor's obligation to grant an IRU in any MCU of
Capacity allocated to a Traffic Connection hereunder is subject to the
occurrence of the Actual Availability Date(s) of such Capacity.  The Grantor
will give the Purchaser at least thirty (30) days prior written notice of each
estimated Actual Availability Date with respect to the Committed Capacity
allocated to a Traffic Connection, which notice shall be accompanied by an
invoice for the amount of Purchase Price due; provided, however, no prior
written notice is required with respect to any applicable portion of the
Committed Capacity allocated to a Traffic Connection if the Actual Availability
Date for such portion of Capacity has already occurred or is estimated to occur
within less than thirty (30) days after the execution of this Agreement.

(d)  Condition to Purchaser's Obligation.  The Purchaser's
agreement to purchase any MCU of Committed Capacity allocated to a Traffic
Connection as to which, at the time in question, an IRU has not been granted
hereunder, shall terminate (unless the Purchaser requests an extension of time)
if the Actual Availability Date for such Committed Capacity has not occurred by
the later of the Delayed Availability Date and the Requested Activation Date.
In such event, the Grantor shall refund all amounts of Initial Payment
previously received from the Purchaser with respect to Committed Capacity as to
which the Purchaser has not been granted an IRU.  The Purchaser shall not be
entitled to any other rights, remedies or damages, whatsoever, for the delay or
non-occurrence of any Actual Availability Date.

(e)  Grant of IRU.  Effective on the Payment Date, the Grantor
grants to the Purchaser, for the term set forth in Section 12 of this Agreement,
an IRU in the Purchased Capacity for which payment has been made in accordance
with Section 3(b) of this Agreement.  Each purchase and grant of an IRU takes
place in the United States.

(f)  Quiet Enjoyment.  So long as no event has occurred which
entitles the Grantor to suspend service under this Agreement, the Purchaser
shall be entitled to the quiet enjoyment and use of the rights granted hereunder
free from interference by any person claiming through the Grantor, such as the
Grantor's lenders.

(g) Additional Agreements.  The Grantor's obligation to grant
an IRU in any Capacity hereunder is subject to the receipt of such additional
documents, instruments or certificates from the Purchaser as are reasonably
required to consummate the transactions contemplated by this Agreement;
provided, however, that no such additional agreement shall materially alter or
amend the terms and conditions of this Agreement

3.  PAYMENT FOR CAPACITY.  

(a)  Initial Payment.  Within three (10) Business Days after
the date of this Agreement, in the case of the Initial Committed Capacity and,
in the case of any Additional Committed Capacity, on the date the Purchaser
elects to commit to purchase it in accordance with Section 2(b) of this
Agreement, the Purchaser shall make an initial payment to the Grantor's Account,
in immediately available Dollars, in an amount equal to 10% of the Total
Purchase Price of such Committed Capacity (in each case, the
"Initial Payment").  Each Initial Payment shall be non-
refundable (except as provided in Section 2(d) of this Agreement) and shall be
credited, pro rata, toward the payment of the Purchase Price for
each MCU of Committed Capacity with respect to which it was paid.

(b)  Payment of Purchase Price.  In exchange for the IRU
interest granted pursuant to this Agreement in any MCU of Purchased Capacity,
the Purchaser shall, on or before each Payment Due Date, pay to the Grantor's
Account, in immediately available Dollars, an amount equal to the Purchase Price
for the MCUs of Purchased Capacity to be purchased on such date, less the amount
of any Initial Payment to be credited to such Purchase Price pursuant to Section
3(a).  Each payment made under this Section 3(b) shall be non-refundable.

4.  TAXES

(a)  Taxes.  All payments made by the Purchaser under this
Agreement shall be made without any deduction or withholding for or on account
of any tax, duty or other charges, of whatever nature imposed by any taxing or
governmental authority (collectively, "Taxes").  If the
Purchaser is or was required by law to make any deduction or withholding from
any payment due hereunder to the Grantor or the Maintenance Company, then,
notwithstanding anything to the contrary contained in this Agreement, the gross
amount payable by the Purchaser to the Grantor or the Maintenance Company, as
applicable, will be increased so that, after any such deduction or withholding
for Taxes, the net amount received by the Grantor or the Maintenance Company, as
applicable, will not be less than the Grantor or the Maintenance Company, as
applicable, would have received had no such deduction or withholding been
required.  If any taxing or governmental authority asserts that the Purchaser
should have made a deduction for withholding for or on account of any Taxes with
respect to all or a portion of any payment made hereunder, the Purchaser hereby
agrees to indemnify the Grantor or the Maintenance Company, as applicable, for
such Taxes and to hold the Grantor or the Maintenance Company, as applicable,
harmless on an after-tax basis from and against any Taxes, interest or penalties
levied or asserted against them in connection therewith.

(b)  The Purchaser shall be responsible for and shall pay any applicable
value added taxes or other federal, state or local sales, use, excise,
privileged gross receipts or other similar taxes, duties or charges imposed by
any governmental authority in connection with the purchase of any Capacity
hereunder.  The payment of any such taxes, duties or charges will be in
addition to the payment of the Purchase Price and the Annual Maintenance Cost
Payments.

5.  AVAILABILITY OF CAPACITY; CABLE NETWORK CONFIGURATION; ACCESS
CONNECTIONS.

(a)  On the Activation Date, the Grantor will have the right to use
and provide the Purchased Capacity to the Purchaser. 

(b)  The Grantor and its affiliates shall have full and complete
control, authority and responsibility for determining any network and system
configuration or designs or changes therein, network and system upgrades,
routing configurations or rearrangement and all related functions with regard to
the provision of Capacity to the Purchaser.

(c)  The Purchased Capacity will be made available to the Purchaser
at the applicable Points of Presence.

(d)  Access connection services and service orders therefor shall be provided
in accordance with this Agreement and the Customer Information Guide.

6.  ACTUAL AVAILABILITY DATE; ACTIVATION.

(a)  The "Actual Availability Date" with respect to any
Capacity on a Traffic Connection shall be the date on which the Traffic
Connection is available for service.

(b)  The Activation Date shall occur on the later of (i) the
Actual Availability Date and (ii) the Requested Activation Date. 

 

7.  OPERATION AND MAINTENANCE OF SYSTEM.  

(a)  Maintenance.  

(i)  The Grantor and the Maintenance Company jointly agree to use
reasonable efforts to cause the Global Crossing Network to be maintained in
efficient working order, using the Maintenance Company's standard maintenance
procedures.  The Grantor and the Maintenance Company may vary the technical
parameters applicable to the Capacity so long as the quality of such Capacity is
not adversely affected.

(ii)  The Grantor, the Maintenance Company and their respective
affiliates will have sole responsibility for negotiating, executing and
administering contracts and all other aspects related to the construction,
operation, maintenance and repair of the Global Crossing Network.

(iii)  Should any condition exist in any portion of the Global
Crossing Network that, in the judgment of the Grantor and the Maintenance
Company, could impair the integrity of the Global Crossing Network, the Grantor
and the Maintenance Company shall initiate and coordinate planned maintenance,
which may include deactivation of such portion of the Global Crossing Network
(or shall cause such action to occur) with respect to such portion of the Global
Crossing Network.  The Grantor or the Maintenance Company shall, to the extent
reasonably practicable, advise the Purchaser in writing at least thirty (30)
days prior to initiating a planned maintenance operation, of the timing and
scope of such planned maintenance operation.

(iv)  In the event of disruption of service due to Force Majeure
or other emergency, the Grantor and the Maintenance Company shall cause service
to be restored as quickly as reasonably practicable, and the Grantor and the
Maintenance Company shall take such measures as are reasonably necessary to
obtain such objective.

(b)  Customer Care.  The Grantor and the Maintenance Company
jointly agree to perform or cause to be performed customary duties and
responsibilities pertaining to a Network Administrator/Customer Care Center for
the Global Crossing Network, as set forth in the Customer Information Guide.

(c)  Rules, Regulations and Requirements.  The Purchaser
understands and agrees to abide by all rules, regulations and requirements set
forth by each entity having rights in any portion of the Global Crossing
Network, including, but not limited to, specifications, equipment and floor
spacing.

(d)  No Salvage Rights.  Nothing contained in this Agreement
shall be deemed to vest in the Purchaser any salvage rights in any portion of
the Global Crossing Network.

8.  MAINTENANCE COSTS. 

(a)  Annual Maintenance Cost Payments.  The Purchaser shall be
liable to pay an annual amount for each MCU of Capacity on a Traffic Connection
purchased by the Purchaser hereunder equal to the Annual Maintenance Cost
Payment for such Traffic Connection.  The Purchaser shall pay to the Maintenance
Company's Account, in immediately available Dollars, the Annual Maintenance Cost
Payments for each MCU of Capacity in accordance with this Section 8.

(b)  Definitions.  For purposes of this Agreement:

(i)  "Initial Annual Maintenance Cost Payment"
means, with respect to each MCU of Capacity on a Traffic Connection purchased by
the Purchaser, the annual amount equal to the amount set forth as such pursuant
to Paragraph D of the Specific Terms for such Traffic Connection.

(ii)  "Annual Maintenance Cost Payment" means, with
respect to each MCU of Capacity on a Traffic Connection purchased by the
Purchaser, for the calendar year in which the Activation Date occurs, the
Initial Annual Maintenance Cost Payment.  For each calendar year following the
year in which the Activation Date occurs, the Annual Maintenance Cost Payment
for each MCU of Capacity on a Traffic Connection will be the Initial Annual
Maintenance Cost Payment.  The annual amount payable in the year the Activation
Date occurs will be reduced pro rata for the portion of the year prior to the
Activation Date of a Traffic Connection.

(c)  Payment Procedure.   Payment of the Initial Annual
Maintenance Cost Payment shall be due in the initial Payment Due Date.  Payments
of the Annual Maintenance Cost Payment for each MCU of Capacity on a Traffic
Connection shall be due and payable quarterly in advance on each Payment Due
Date, commencing with the first such Payment Due Date after the Activation Date
of each such MCU.  For any IRU granted between the Payment Due Dates, on the
date of such grant the Purchaser shall make a proportional payment for the
period from the date of such grant to the next succeeding quarterly payment
date.  Each payment made by the Purchaser hereunder shall be non-refundable.

9.  INVOICES; DEFAULT INTEREST. 

(a)  Invoices.  The Grantor, the Maintenance Company or their
respective authorized agents shall render invoices under this Agreement in
Dollars, and the Purchaser shall pay such amount in Dollars.  The Purchaser
shall make all payments by means of a wire transfer to the Grantor's Account or
the Maintenance Company's Account, as specified in this Agreement.  The
Purchaser shall make all payments required to be made pursuant to this
Agreement, other than the Initial Payment which shall be made in accordance with
the provisions of Section 3(a) hereof, on the later of (i) the date such payment
is due and (ii) thirty (30) days after an invoice is issued by the Grantor or
the Maintenance Company, as applicable.

(b)  Default Interest.  Any invoice rendered under this
Agreement by the Grantor, the Maintenance Company or their respective agents
which is not paid when due shall accrue interest at the annual rate of six
percent (6%) above the one month LIBOR rate for the Dollar, as quoted in The
Wall Street Journal on the first business day of the month in which such
payment is due.  Such interest shall accrue from the day following the date
payment was due until it is paid in full.  In the event that applicable law does
not allow the imposition of "default interest" at the rate established
in accordance with this Section 9(b), such "default interest" shall be
at the highest rate permitted by applicable law.  For purposes of this Section,
"paid" shall mean that funds are available for immediate use by the
Grantor or the Maintenance Company, as applicable.

10.  DEFAULT.

(a)  Purchaser.  If the Purchaser fails to make any payment
required by this Agreement or the US Capacity Purchase Agreement on the date
that it is due, or if the Purchaser is otherwise in breach of this Agreement,
and such payment default continues unremedied for a period of at least five (5)
days or such other breach continues for a period of at least thirty (30) days,
the Grantor, the Maintenance Company or their respective authorized agents, may
notify the Purchaser in writing of such payment default or other breach and if
full payment is not received, or such other breach is not fully remedied within
fifteen (15) days of such notification, the Grantor and the Maintenance Company:
(i) may suspend all service provided to the Purchaser hereunder (including
suspending the Purchaser's right to use the Purchased Capacity), until such
payment default or other breach has been cured (including payment of default
interest, if any) and (ii) shall be entitled to pursue any and all rights and
legal and equitable remedies, including its rights and remedies to enforce the
Purchaser's obligations under this Agreement and the right to terminate or
cancel this Agreement.

(b)  Grantor.  If the Grantor or the Maintenance Company is in
breach of this Agreement and such breach continues for a period of at least
thirty (30) days, the Purchaser may notify the Grantor or the Maintenance
Company, as applicable, in writing of such breach and if such breach is not
fully remedied within fifteen (15) days of such notification, the Purchaser
shall, for so long as such breach continues, be entitled to pursue any and all
rights and legal and equitable remedies, including its rights and remedies to
enforce the Grantor's or the Maintenance Company's, as applicable, obligations
under this Agreement.

11.  USE OF CAPACITY.

(a)  The Purchaser's operation of the Purchased Capacity and any
equipment associated therewith shall be such as not to interrupt, interfere
with, or impair service over any of the facilities comprising the Global
Crossing Network, or impair privacy of any communications over such facilities,
cause damage to plant or create hazards to employees, affiliates or connecting
companies of the Grantor or the Maintenance Company, the Purchaser, or any other
user, owner or operator of the Global Crossing Network or the public.  The
Purchaser shall bear the cost of any additional protective apparatus reasonably
required to be installed because of the use of such facilities by the Purchaser,
any lessees or permitted transferees of the Purchaser, or any customer or
customers of the Purchaser or of any such lessee or transferee.  The Grantor
will use reasonable efforts to cause all other purchasers of capacity in the
Global Crossing Network to undertake obligations comparable to those of the
Purchaser set forth in this Section, and the Purchaser shall cause all permitted
users of any of the Purchased Capacity to undertake comparable obligations.  The
Purchaser represents, warrants and covenants that its use of the Purchased
Capacity shall comply with all applicable government codes, ordinances, laws,
rules, regulations and/or restrictions and the terms of this Agreement.

(b)  The Purchased Capacity shall be made available to the Grantor
and the Maintenance Company (or their respective subsidiaries or agents), at
such times reasonably agreeable to the Purchaser and the Grantor or the
Maintenance Company, as applicable, to permit the Grantor or the Maintenance
Company to conduct such tests and adjustments as may be necessary for such
capacity to be maintained in efficient working order.

(c) (i) The IRU in any Purchased Capacity may terminate prior to the
Termination Date, with respect to any System on the Global Crossing Network, on
such date as the Grantor, the Maintenance Company and the holders of not less
than 85% of Capacity on such System (the "Supermajority"), jointly
elect to retire the system (an "Early Retirement") in accordance with
the procedure set forth in Section 11(c)(ii).  Any system which is retired early
in accordance with this Section 11(c) shall hereinafter be referred to as a
"Decommissioned System."

(ii) Early Retirement shall occur, with respect to any System, only upon the
unanimous vote of each of (i) the Grantor, (ii) the Maintenance Company and
(iii) the Supermajority.

(iii) Notwithstanding the foregoing, Early Retirement shall terminate the
Parties' obligations under this Agreement only in connection with Capacity on
such Decommissioned System, and this Agreement shall continue in full force and
effect with respect to all other Capacity subject to this Agreement.

 

12.  DURATION OF AGREEMENT; TERM OF IRU.

(a)  This Agreement shall become effective as of the day and year set
forth in the preamble to this Agreement and shall continue in effect until all
IRUs granted hereunder have terminated, at which time this Agreement shall
terminate.

(b)  The termination of this Agreement (whether under this Section or
otherwise) shall not relieve the Parties from any liabilities arising prior to
such termination.

(c)  The term of the IRU granted to the Purchaser in any Traffic
Connection hereunder shall begin on the Activation Date and shall be comprised
of a series of IRUs in the various Systems and other portions of the Global
Crossing Network over which such Traffic Connection is routed, each of which
IRUs shall have the respective duration extending to the applicable
"Termination Date" set forth on Schedule 4 to the Specific Terms of
this Agreement for such System or other portion of the Global Crossing Network.
With respect to any portion of a Traffic Connection in which the term of the IRU
is less than twenty-five (25) years from the time such System or other portion
of the Global Crossing Network was put in service, the Grantor shall grant an
IRU in such Capacity, at the option of the Purchaser, for the period between the
expiration of such IRU and the twenty-fifth anniversary of the date such System
or other portion of the Global Crossing Network was put in service for a cost to
the Purchaser equal to the amount therefor set forth on Schedule 4 to the
Specific Terms of this Agreement.  The Purchaser shall effect such election by
(A) delivering to the Grantor a written, irrevocable election notice stating
that it wishes to extend the IRU in those portions of the Traffic Connection and
(B) paying the applicable amount set forth in the preceding sentence to the
Grantor's Account.  A failure by the Purchaser to exercise its option under this
Section 12(c) shall not relieve the Purchaser of its obligations with respect to
the other portions of the affected Traffic Connection. 

13.  APPROVALS; LICENSES.

The performance of this Agreement by each Party hereto is contingent upon
the acquisition, renewal and continuance of such approvals, consents,
governmental authorizations, licenses and permits by such Party and its
affiliates as may be required or reasonably deemed necessary by such Party for
performance by such Party hereunder and as may be satisfactory to it.  The
parties shall use reasonable efforts to obtain, renew and continue, and to have
renewed and continued, such approvals, consents, licenses and permits.  No
license under patents is granted by the Grantor or shall be implied or arise by
estoppel in the Purchaser's favor with respect to any apparatus, system or
method used by the Purchaser in connection with the use of the capacity granted
to it hereunder. 

14.  DISCLAIMER.  

Neither the Grantor, the Maintenance Company nor any of their respective
affiliates represents, warrants, covenants or guarantees that the Actual
Availability Date for any Traffic Connection or the completion of any System
will occur and the Grantor, the Maintenance Company and its affiliates will have
no obligation under this Agreement or otherwise unless and until the applicable
Availability Date occurs.  UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT,
ANY WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE
SPECIFICALLY DISCLAIMED.

15.  LIMITATIONS OF LIABILITY.  

(a)  In no event shall the Purchaser, the Grantor, the Maintenance
Company or any of their respective affiliates be liable to any party for
consequential, incidental, indirect or special damages, including, but not
limited to, loss of revenue, loss of business opportunity, or the costs
associated with the use of external restoration facilities, including, without
limitation, for any loss or damage sustained by reason of the unavailability of,
or any failure in or breakdown of the Global Crossing Network, any System, any
Traffic Connection, any portion thereof or the facilities associated with the
Global Crossing Network, the failure of any inland carrier to perform the terms
and conditions of any agreement to which it and the Purchaser are parties or for
any interruption of service, whatever the cause and however long it shall
last.

16.  SETTLEMENT OF DISPUTES.  

(a)  The parties hereto shall endeavor to settle amicably by mutual
discussions any disputes, differences or claims, whatsoever, related to this
Agreement.

(b)  Failing such amicable settlement, any controversy, claim or
dispute arising under or relating to this Agreement, including, without
limitation, the existence, validity, interpretation, performance, termination or
breach thereof, shall finally be settled by arbitration in accordance with the
International Arbitration Rules of the American Arbitration Association
("AAA").  There shall be three (3) arbitrators (the "Arbitration
Tribunal"), the first of which shall be appointed by the claimant in its
notice of arbitration, the second of which shall be appointed by the respondent
within thirty (30) days of the appointment of the first arbitrator and the third
of which shall be jointly appointed by the party-appointed arbitrators within
thirty (30) days thereafter, failing which such third arbitrator will be
appointed by the AAA within thirty (30) days.  The language of the arbitration
shall be English.  The Arbitration Tribunal shall issue a written opinion and
will not have authority to award punitive damages to either party.  Each party
shall bear its own costs and expenses, but the parties shall share equally the
expenses of the Arbitration Tribunal and the AAA.  This Agreement shall be
enforceable, any arbitration award shall be final and judgment thereon may be
entered in any court of competent jurisdiction.  The arbitration shall be held
in New York, NY, USA.

17.  GOVERNING LAW.  

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

18.  WAIVER OF IMMUNITY.  

The parties hereto acknowledge that this Agreement is commercial in
nature, and each party hereto expressly and irrevocably waives any claim or
right which it may have to immunity (whether sovereign immunity, act of state or
otherwise) for itself, or with respect to any of its assets, in connection with
an arbitration, arbitral award or other proceeding to enforce this Agreement,
including, without limitation, immunity from service of process, immunity of any
of its assets from pre- or post-judgment attachment or execution, and immunity
from the jurisdiction of any court or arbitral tribunal.

19.  EXPORT CONTROL.

The Parties acknowledge that to the extent any products, software or
technical information provided under this Agreement are or may be subject to any
applicable export laws and regulations, the Parties hereto agree that they will
not use, distribute, transfer or transmit the products, software or technical
information (even if incorporated into other products) except in compliance with
such export laws and regulations (or licenses or orders issued pursuant
thereto).  If requested by and Party hereto the other Parties agree to sign all
necessary export-related documents as may be required to comply
therewith.

20.  REPRESENTATIONS; INDEMNITY.

	The Grantor hereby represents and warrants to Purchaser that (i) the Grantor
is a corporation duly organized and validly existing under the laws of the State
of Delaware; (ii) the execution, delivery and performance of this Agreement by
the Grantor have been duly authorized by all necessary corporate action on the
part of the Grantor and this Agreement is a valid, binding and enforceable
obligation of the Grantor enforceable against it in accordance with its terms
and (iii) the execution, delivery and performance of this Agreement by the
Grantor does not violate, conflict with or constitute a breach of, the
organizational documents or any order, decree or judgment of any court, tribunal
or governmental authority binding on the Grantor.

	The Maintenance Company hereby represents and warrants to the Purchaser that
(i) the Maintenance Company is a corporation duly organized and validly existing
under the laws of Bermuda; (ii) the execution, delivery and performance of this
Agreement by the Maintenance Company have been duly authorized by all necessary
corporate action on the part of the Maintenance Company and this Agreement is a
valid, binding and enforceable obligation of the Maintenance Company enforceable
against it in accordance with its terms and (iii) the execution, delivery and
performance of this Agreement by the Maintenance Company does not violate,
conflict with or constitute a breach of, the organizational documents or any
order, decree or judgment of any court, tribunal or governmental authority
binding on the Maintenance Company.

	The Purchaser hereby represents and warrants to the Grantor that (i) the
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization; (ii) the execution, delivery
and performance of this Agreement by the Purchaser have been duly authorized by
all necessary corporate action on the part of the Purchaser and this Agreement
is a valid, binding and enforceable obligation of the Purchaser enforceable
against it in accordance with its terms; and (iii) the execution, delivery and
performance of this Agreement by the Purchaser does not violate, conflict with
or constitute a breach of, the organizational documents or any order, decree or
judgment of any court, tribunal or governmental authority binding on the
Purchaser.

	Each Party hereby represents and warrants to the other Parties that it has
obtained all approvals, consents, governmental authorizations, licenses and
permits as may be required to enter into this Agreement, and, in the case of the
Grantor and the Purchaser, grant or acquire, as the case may be, the IRU in the
Purchased Capacity.

	The foregoing representations and warranties shall survive the execution and
delivery of this Agreement.

	Subject to Section 15, the Purchaser agrees to indemnify and hold harmless
the Grantor, the Maintenance Company, their respective affiliates and any of
their respective officers, directors, employees, agents and representatives from
and against any loss, damage, expense or cost arising out of or in connection
with:  (i) any breach or violation by the Purchaser of applicable law or
governmental regulation and (ii) any claims of whatever nature by third
parties with respect to the services provided by the Purchaser or the
Purchaser's use of the Purchased Capacity.

	Subject to Section 15, the Grantor and the Maintenance Company agree to
indemnify and hold harmless the Purchaser and its officers, directors,
employees, agents and representatives  from and against any loss, damage,
expense or cost arising out of or in connection with: (i) any breach or
violation by the Grantor or the Maintenance Company of applicable law or
governmental regulation, and (ii) any claims of whatever nature by third parties
with respect to the services provided by the Grantor or the Maintenance Company.

21.  RELATIONSHIP OF THE PARTIES.

This Agreement shall not form a joint venture, partnership or similar
business arrangement between the parties hereto, and nothing contained herein
shall be deemed to constitute a partnership, joint venture or similar business
arrangement.

22.  NO THIRD PARTY BENEFICIARIES.

This Agreement does not provide and is not intended to provide third
parties (including, but not limited to, customers of the Purchaser, any
permitted transferee of the Purchased Capacity or any other permitted user of
the Purchased Capacity) with any remedy, claim, liability, reimbursement, cause
of action, or any other right.  Furthermore, the Purchaser acknowledges that it
is not a third party beneficiary of any agreement entered into by the Grantor,
the Maintenance Company or their respective affiliates, including, but not
limited to, construction contracts or any contract for the operation or
maintenance of the Global Crossing Network or any part thereof.

23.  ASSIGNMENT.

(a)  This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

(b)  The Grantor shall be solely responsible for complying with all
of the terms binding on the "Grantor" hereunder and the Maintenance
Company shall solely be responsible for complying with all of the terms binding
on the "Maintenance Company" hereunder and shall not be permitted to
assign, transfer or otherwise dispose of any or all of its right, title or
interest hereunder or delegate any or all of its obligations hereunder to any
person or entity except that the Grantor and the Maintenance
Company shall be permitted to (i) effect a collateral assignment of their
respective rights hereunder to one or more lenders to Grantor, the Maintenance
Company or their respective affiliates and (ii) assign, transfer or otherwise
dispose of any or all of their rights hereunder and delegate any or all of their
obligations hereunder to any present or future affiliated company of the Grantor
or the Maintenance Company or to an entity controlled by, under the same control
as, or controlling, the Grantor or the Maintenance Company.  The Grantor or the
Maintenance Company shall give the Purchaser notice of any such assignment,
transfer or other disposition or any such delegation.

(c)  The Purchaser shall be solely responsible for complying with all
of the terms binding on the "Purchaser" hereunder and shall not be
permitted to assign, transfer or otherwise dispose of any or all of its right,
title or interest hereunder (except for leases, licenses and transfers of the
right to use Capacity to the extent permitted under Section 23(d) below) or
delegate any or all of its obligations hereunder to any person or entity.

(d)  (i)  Subject to the limitations set forth in Section 23(d)(iii),
the Purchaser may enter into one or more agreements to lease or license the
right to use any Purchased Capacity, so long as all such leases or licenses with
any particular lessee or licensee (including all affiliates thereof) involve, in
the aggregate, less than one (1) MCU of Purchased Capacity;

(ii)  Subject to the limitations set forth in Section 23(d)(iii), the
Purchaser may transfer a right to use any Purchased Capacity to a Carrier Party,
so long as all such transfers to any particular transferee (including all
affiliates thereof) involve in the aggregate less than one MCU of Purchased
Capacity;

(iii)  The Purchaser may not enter into any arrangements to lease,
license or transfer a right to use an aggregate (in any combination of such
arrangements) of one or more MCUs of Purchased Capacity to any particular
lessee, licensee or transferee (including all affiliates thereof).

(iv)  No lease, license or transfer permitted by this Section 23(d)
shall involve any delegation or other transfer of any of the Purchaser's
obligations or liabilities hereunder.  Each lessee, licensee and transferee of
any right to use Purchased Capacity shall derive all of its rights solely
through the Purchaser and such rights shall be enforceable solely against the
Purchaser.  No such lessee, licensee or transferee shall become a third party
beneficiary of this Agreement or obtain any right, title or interest in, to or
under this Agreement or the ability to enforce any provision hereof, nor shall
any lessee, licensee or transferee thereof have any rights or claims against the
Grantor or the Maintenance Company for any reason whatsoever.  The rights of any
lessee, licensee or transferee of a right to use any Purchased Capacity shall be
subject and subordinate to all the terms of this Agreement (including the
Grantor's and the Maintenance Company's right to suspend service in the event of
a default by the Purchaser hereunder) and the Purchaser shall remain primarily
liable hereunder for the performance of all the terms of this Agreement to the
same extent as if such lease, license or transfer had not occurred.  Any such
lease, license or transfer agreement shall prohibit further assignment, transfer
or other disposition of Purchased Capacity except in accordance with the terms
of this Section 23.

 (e)  Only Carrier Parties which have acquired and hold the right to
use one or more whole MCUs of Capacity shall be entitled to utilize the services
of the Customer Care Center.  Every entity which has the right to use one or
more MCUs of Capacity shall promptly contact the Customer Care Center and
provide all such information reasonably requested by the Customer Care
Center.

(f)  Any assignment, transfer or other disposition by any Party which
is in violation of this Section 23 shall be null, void and of no force and
effect.

24.  NOTICES.

Each notice, demand, certification or other communication given or made
under this Agreement shall be in writing and shall be delivered by hand or sent
by registered mail or by facsimile transmission to the address of the respective
party as shown below (any change to the name, address and facsimile numbers may
be made at any time by giving fifteen (15) days prior written notice in
accordance with this Section.):

If to the Purchaser at the address set forth in the Specific Terms. 

If to the Grantor:

Global Crossing USA Inc.

150 El Camino Drive

Suite 204

Beverly Hills, CA 90212

USA

Attn:  President

Fax No.:   (310) 281-4942

If to the Maintenance Company:

Global Crossing Network Center Ltd.

Wessex House

45 Reid Street

Hamilton HM12, Bermuda

Attn:  President

Fax No.:  (441) 296-8606

 

Any such notice, demand or other communication shall be deemed to have
been received, if (i) delivered by hand, at the time of delivery, (ii) posted,
at the expiration of seven (7) days after the envelope containing the same shall
have been deposited in the post maintained for such purpose, postage prepaid,
or, (iii) sent by facsimile, at the date of transmission if confirmed receipt is
followed by postal notice.

25.  SEVERABILITY.

If any provision of this Agreement is found by an arbitral, judicial,
regulatory or other governmental authority having jurisdiction to be void or
unenforceable, such provision shall be deemed to be deleted from this Agreement
and the remaining provisions shall continue in full force and effect.

26.  HEADINGS.

The Paragraph and Section headings of this Agreement are for convenience
of reference only and are not intended to restrict, affect or influence the
interpretation or construction of provisions of such Section.

27.  COUNTERPARTS.

This Agreement may be executed in counterparts, each of which when
executed and delivered shall be deemed an original.  Such counterparts shall
together (as well as separately) constitute one and the same instrument.

28.  ENTIRE AGREEMENT.

This Agreement supersedes all prior written or oral understandings
between the Parties and, together with the Schedules and the Annexes hereto,
constitutes the entire agreement with respect to the subject matter herein.
This Agreement shall not be modified or amended except by a writing signed by
authorized representatives of the Parties.

29.  PUBLICITY AND CONFIDENTIALITY.

(a)  The provisions of this Agreement and any non-public information,
written or oral, with respect to this Agreement ("Confidential
Information") will be kept confidential and shall not be disclosed, in
whole or in part, to any person other than affiliates, officers, directors,
employees, agents or representatives of a party (collectively,
"Representatives") who need to know such Confidential
Information for the purpose of negotiating, executing and implementing this
Agreement.  Each party agrees to inform each of its Representatives of the non-
public nature of the Confidential Information and to direct such persons to
treat such Confidential Information in accordance with the terms of this Section
29.  Nothing herein shall prevent a party from disclosing Confidential
Information (i) upon the order of any court or administrative agency, (ii) upon
the request or demand of, or pursuant to any regulation of, any regulatory
agency or authority, (iii) to the extent reasonably required in connection with
the exercise of any remedy hereunder, (iv) to a party's legal counsel or
independent auditors, (v) in the case of the Grantor and the Maintenance
Company, to prospective lenders to the Grantor, the Maintenance Company or their
affiliates, and (vi) to any actual or proposed assignee, transferee or lessee of
all or part of its rights hereunder provided that such actual or proposed
assignee agrees in writing to be bound by the provisions of this Section 29.

(b)  The foregoing shall not restrict either Party from publicly
announcing that it has entered into this Agreement with the Parties.
Notwithstanding the foregoing, no such public announcement shall be permitted to
include any details contained in this Agreement.

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