Document:

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                                                                    Exhibit 10.8

                    BELL ATLANTIC EMPLOYEE SERVICES AGREEMENT

  THIS AGREEMENT is made as of May 21,1998 BETWEEN

  (1)    BELL ATLANTIC GLOBAL SYSTEMS COMPANY, a Delaware corporation with
         an office at 4 West Red Oak Lane, White Plains, New York 10604, USA
         ("Bell Atlantic"): and

  (2)    FLAG LIMITED, a Bermuda company, with its registered office at 12
         Par-La-Ville Road, Richmond House, 5th Floor, Hamilton HM 08 Bermuda
         ("FLAG").

  WHEREAS:

  (A)    FLAG is in the business of operating and maintaining an undersea
         fiber optic cable system linking multiple countries from Europe to Asia
         (the "System").

  (B)    Pursuant to the terms and conditions contained in that certain
         Marketing Transition Agreement among Bell Atlantic, FLAG and Bell
         Atlantic Network Systems (Bermuda) Limited dated May 14, 1998 (the
         "Transition Agreement"), Bell Atlantic has agreed to provide the
         services of those employees set forth in Exhibit A (the "Bell Atlantic
         Employees") to FLAG, and Bell Atlantic, will be compensated for
         providing such Bell Atlantic Employees to FLAG.

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  NOW THEREFORE, IT IS HEREBY AGREED as follows:

         1.       BELL ATLANTIC OBLIGATIONS

         1.1 During the term hereof, the Bell Atlantic Employees shall provide
services to FLAG on a full time basis for the respective periods set forth in
Exhibit A. The services rendered by the Bell Atlantic Employees shall be
rendered under the direction and control of FLAG's senior management. If
requested by FLAG, the Bell Atlantic Employees shall work out of such office of
FLAG or any of its subsidiaries as FLAG may reasonably request. In the event of
an international assignment, FLAG shall pay associated international assignment
expenses on a basis to be agreed upon by FLAG and Bell Atlantic prior to the
assignment.

         1.2 The Bell Atlantic Employees' respective salaries, fees and any
related agreements have been reviewed and accepted by FLAG. FLAG may by notice
require Bell Atlantic to remove any Bell Atlantic Employee at any time for
unsatisfactory performance, allowing for a reasonable time in light of the
circumstances of the removal and the need to substitute a replacement employee.
Bell Atlantic shall use its best efforts to ensure that any replacement for any
Bell Atlantic Employee shall possess suitable technical, managerial or other
appropriate qualifications commensurate with his or her functions. Bell Atlantic
shall submit the name, salary, fees and any related agreement of any such
replacement to FLAG for its written approval (such approval not to be
unreasonably withheld or delayed). Any such replacement employee shall be a Bell
Atlantic Employee for

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purposes hereof.

         2.       FLAG PAYMENTS

         2.1 In respect of each Bell Atlantic Employee providing services to
  FLAG during a calendar month (or any part thereof) during the term of this
  Agreement, Bell Atlantic shall invoice FLAG following the end of such calendar
  month for the pre-approved employee costs incurred by Bell Atlantic during
  that month for such Bell Atlantic Employee, such costs to include such Bell
  Atlantic Employee's (i), salary and (ii), benefits, vacation pay, annual
  incentive award and payroll costs (the costs of (ii) being an agreed upon
  fixed percentage of salary); provided that the determination of whether any
  Bell Atlantic Employee is entitled to receive an annual incentive award
  outside of the target range within Bell Atlantic Corporation shall be made by
  FLAG and Bell Atlantic, and provided further that nothing shall prevent FLAG
  from awarding any supplemental bonus directly to any Bell Atlantic Employee.
  FLAG shall within 45 days of the receipt of such invoice pay Bell Atlantic the
  amount of such invoice.

           2.2 FLAG shall promptly reimburse each Bell Atlantic Employee for out
  of pocket expenses incurred by such Bell Atlantic Employee in providing
  services pursuant hereto in accordance with FLAG's expense reimbursement
  policy.

           2.3 FLAG shall pay interest at a rate per annum equal to the prime
  rate of Chase Manhattan Bank plus three percent on the amount of any invoice
  which is not paid by its due

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  date in full, except to the extent FLAG is disputing in good faith such
  amount. Such interest shall accrue on the undisputed overdue amount from the
  due date until payment in full. If FLAG disputes in good faith any invoice or
  part thereof, FLAG shall pay all undisputed portions of the invoice.

           2.4 All payments made to Bell Atlantic hereunder shall be made in
  U.S. dollars in same day available funds to such bank account as Bell Atlantic
  shall notify to FLAG from time to time.

           2.5 All payments to be made by FLAG hereunder, other than following a
  termination of this Agreement due to a breach by Bell Atlantic, shall be made
  without set-off or counterclaim except to the extent that any deduction or
  withholding is required by law. Bell Atlantic shall be entitled to any refunds
  thereof.

           3.     DURATION

           3.1 This Agreement shall be effective as of the date hereof and
  unless sooner terminated in accordance with the provisions of Section 4 hereof
  shall continue in force for a period of three years.

           4.     TERMINATION

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           4.1 If either party commits, a material breach of this Agreement and
  either such breach is not cured within 30 days after notice from the other
  party specifying the breach or, if not reasonably curable during such period,
  such party has not commenced and diligently continued its efforts to effect a
  cure or has not fully cured such breach within 60 days after such notice, the
  other party shall be entitled to terminate this Agreement.

           4.2 FLAG may terminate this Agreement for any or all of the Bell
  Atlantic Employees without cause at any time by giving 30 days' prior notice
  to Bell Atlantic. In the event any Bell Atlantic Employee does not wish to
  continue to provide services to FLAG pursuant hereto, Bell Atlantic shall give
  FLAG as much notice as practicable and shall, if requested by FLAG, provide a
  replacement in accordance with Section 1.2 hereof.

           4.3 Except as otherwise set forth in this Agreement, termination
  shall be in addition to, and not in lieu of, other rights and remedies. The
  rights and obligations of either party that have accrued prior to such
  termination, including but not limited to the right to payment for the Bell
  Atlantic Employees, shall not be affected thereby.

           5.     LIABILITY

           5.1 Each party shall indemnify and bold the other party harmless
  against any losses, damages, liabilities, claims or demands, including all
  costs, expenses and reasonable attorney's fees on account thereof or in
  connection with any investigation or preparation related thereto or the

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  enforcement of this indemnification provision, that may be made or incurred as
  a result of the negligent or willful acts or omissions of the indemnifying
  party. However, Bell Atlantic shall not be responsible in any way, and FLAG
  shall indemnify Bell Atlantic, for losses, damages, claims, or demands that
  may be made or incurred as a result of the acts or omissions of the Bell
  Atlantic Employees to the extent that they act pursuant to the instructions of
  FLAG. The indemnified party agrees to notify the indemnifying party promptly
  of any written claims or demands against the indemnified party for which the
  indemnifying party would be responsible for hereunder. The Indemnified party
  shall not settle or compromise any such claims or demands without the prior
  consent of the indemnifying party.

           5.2 THE PARTIES AGREE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER
  PARTY FOR ANY SPECIAL DAMAGES, INCIDENTAL DAMAGES, CONSEQUENTIAL DAMAGES OR
  LOSS OF PROFITS ARISING OUT OF THIS AGREEMENT.

           6.     MISCELLANEOUS

           6.1 Except for the Transition Agreement, this Agreement supersedes
  and merges all prior proposals, understandings and any other agreements, oral
  or written, between the parties relating to the subject matter of this
  Agreement. This Agreement may not be modified or altered except by written
  instrument duly executed by the parties.

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           6.2 This Agreement shall be binding upon, and inure to the benefit
  of, each of the parties hereto and their respective successors and permitted
  assigns, provided that no party hereto may assign this Agreement without the
  prior written consent of the other party, and any attempted assignment without
  such consent shall be null and void and provided further that FLAG may assign
  any of its rights and/or obligations to any appropriate subsidiary of FLAG.
  Nothing contained herein, express or implied, shall be deemed to confer any
  right or remedy upon, or obligate any party to any person or entity other than
  the parties hereto.

           6.3 Neither party shall be considered an agent of the other party or
  shall have the right, power or authority to create any obligation or duty,
  express or implied, on behalf of the other party.

           6.4 This Agreement may be entered into in any number of counterparts
  and by the parties hereto in separate counterparts, each of which when so
  executed and delivered shall be an original, but all the counterparts shall
  together constitute one and the same instrument.

           6.5 This Agreement shall be governed by and construed in accordance
  with the laws of the state of New York, without giving effect to the
  principles of conflicts of laws thereof.

           6.6 Unless settled by mutual agreement, any dispute or difference
  whatsoever that might arise from the performance or as to the meaning of this
  Agreement or as to any matter or items of whatsoever nature howsoever arising
  out of or in connection with this Agreement shall be submitted to arbitration
  in accordance with and subject to the Rules of Conciliation and Arbitration of
  the

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  International Chamber of Commerce and finally settled by three arbitrators
  appointed in accordance with such rules, unless the parties agree upon a
  single arbitrator under such rules. The place of arbitration shall be New York
  City, and the language of the arbitration shall be English. Any decision or
  award of the arbitral tribunal shall be final and binding upon the parties.
  The costs of such arbitration shall be borne in equal proportions by the
  parties provided that each party shall bear the cost of its own legal counsel.

           6.7 Each notice, demand or other communication given or made under
  this Agreement shall be in writing and delivered or sent to the relevant party
  at its address or fax number set out below (or such other address or fax
  number as the addressee has by five days' prior notice specified to the
  sending party):

           Any notice required to be delivered to Bell Atlantic shall be sent
to:

           Bell Atlantic Global Systems Company
           Attn.: Director of Human Resources
           4 West Red Oak Lane
           White Plains, NY 10604
           Facsimile: 914-644-6977

           With a copy to:

           Bell Atlantic
           Legal Department
           Attn: Richard G. Warren, Esq.
           1095 Avenue of the Americas
           New York, NY  10036
           Facsimile: 212-764-2739

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           Any notice required to be delivered to FLAG shall be sent to:

           FLAG Limited
           Richmond House
           12 Par-la-Ville Road
           Hamilton HM08 Bermuda
           Attn.: Chief Executive Officer
           Facsimile: 441-296-0938

           7.     CONFIDENTIALITY

           It is understood and mutually agreed that:

           (a) Except as required by law or regulation, the parties hereto shall
  keep strictly confidential this Agreement and any facts, claims, allegations
  or terms and conditions relating to all or part hereof, any statements,
  negotiations, proceedings or opinions in connection herewith and any
  information made available by either party to the other (including by FLAG or
  any of its subsidiaries to any Bell Atlantic Employee) pursuant hereto; and

         (b) Except as required by law or regulation, neither party hereto shall
  create any publicity or make any statement to anyone concerning the other
  party to this Agreement or any of their affiliates, or present or former
  officers, directors, employees or agents. IN WITNESS WHEREOF, the Parties have
  caused this Agreement to be executed by their duly authorized representatives
  effective as of the day and year first written above.

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  FLAG LIMITED                                   BELL ATLANTIC GLOBAL
                                                 SYSTEMS COMPANY

  By: /s/ Andres Bandi                           By: /s/ Daniel C. Petri
     ----------------------------                   ----------------------------

  Name:  Andres Bandi                            Name:  Daniel C. Petri
       --------------------------                     --------------------------

  Title: Chairman & CEO                          Title: President
        -------------------------                      -------------------------

                                       10<PAGE>

                    FIBER OPTIC LINK AROUND THE GLOBE (FLAG)
                                  CABLE SYSTEM

                          CONSTRUCTION AND MAINTENANCE
                                    AGREEMENT

<PAGE>

              FIBER OPTIC LINK AROUND THE GLOBE (FLAG) CABLE SYSTEM

                     CONSTRUCTION AND MAINTENANCE AGREEMENT

This Agreement is made and entered into this ______ day of ______________ 199_,
between and among the Signatories identified in Schedule A attached hereto;

WHEREAS, the Founding Signatory wishes to provide a fiber optic submarine cable
system to be called the "FLAG Cable System" to furnish digital transmission
facilities between and among points in the United Kingdom, Spain, Italy, Egypt,
the United Arab Emirates, India, Thailand, Malaysia, Hong Kong, the Republic of
Korea and Japan, and

WHEREAS, the Signatories have recognized the need for high capacity fiber optic
cable facilities providing a direct telecommunications link connecting Europe
and the Far East through the Indian Ocean Region, and

WHEREAS, the following Signatories have signed a Memorandum of Understanding
dated as of July 19, 1993, for the purpose of jointly planning the
implementation of the FLAG Cable System in advance of this Agreement; Arab
Republic of Egypt National Telecommunications Organization; The Communications
Authority of Thailand; Emirates Telecommunications Corporation; FLAG Limited;
The Government of Gibraltar; Hong Kong Telecom International Limited;
International Digital Communications Inc.; IRITEL S.p.A. (the predecessor
corporation to TELECOM ITALIA S.p.A.); Korea Telecom; Mercury Communications
Limited; PT (PERSERO) Indonesia Satellite Corporation; SPT Telecom, a.s.;

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Telef6nida de Espana S.A.; Telekom Malaysia Berhad; and Videsh Sanchar Nigam
Limited, and

WHEREAS, the Signatories have agreed to set forth the terms and conditions upon
which the FLAG Cable System shall be owned, constructed, maintained and
operated.

NOW WITNESSETH that, in consideration of the mutual covenants and conditions
contained herein, the Signatories hereby covenant and agree with each other as
follows:

                                       -3-

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1.       DEFINITIONS AND INTERPRETATIONS

         1.1 The following definitions shall apply (except where the context
         otherwise requires) to certain terms used in this Agreement:

                  1.1.1. AFFILIATE: An Affiliate shall mean, with. respect to an
                  entity, any other entity that controls, is controlled by or is
                  under common control with that entity, control being defined
                  as ownership of more than fifty percent (50%) in value of the
                  outstanding voting stock, or other form of interest in the
                  capital of, or of a partnership interest in, an entity.

                  1.1.2. BASIC SYSTEM MODULE: A Basic System Module shall
                  consist of an STM 1digial line signal at 155,520 Kilobits per
                  second (Kbps) with interface signal in accordance with ITU-TS
                  Recommendations G707 to G709.

                  1.1.3. BEACH JOINT A Beach Joint shall be the physical
                  connection between the submersible portion of the Submarine
                  System and the land-based portion of the Submarine System.

                  1.1.4. BIT SEQUENCE INDEPENDENCE: The property of a binary
                  transmission channel, telecommunication circuit or connection
                  that permits all sequences of binary signal elements to be
                  conveyed over it at its specified bit rate, without change to
                  the value of any signal elements in accordance with the
                  appropriate ITU-TS Recommendations.

                                       -4-

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                  1.1.5. BRANCHING UNIT: A Branching Unit is a junction point
                  for the FLAG Cable System, and includes a housing and any
                  associated plant and equipment.

                  1.1.6. CABLE LANDING POINT: A Cable Landing Point shall be the
                  Beach Joint or, if there is no Beach Joint in a particular
                  Country, the high water mark as shown on the nautical charts
                  of that Country.

                  1.1.7. CAPACITY: Capacity in the FLAG Cable System shall be
                  defined as follows:

                           1.1.7.1. Design Capacity: Design Capacity is the
                                    Capacity which each Segment S and Segments
                                    X-1 and X-2 can ultimately provide. The
                                    Design Capacity of each fiber pair consists
                                    of thirty-two (32) Basic System Modules,
                                    with each Basic System Module providing
                                    sixty-three (63) MIUs, for a Design Capacity
                                    of two thousand sixteen (2,016) MIUs.

                           1.1.7.2. Assignable Capacity: Assignable Capacity is
                                    Capacity in Segment S and in Segments X-1
                                    and X-2 which: (i) has been conveyed by the
                                    Founding Signatory by sale or lease and is
                                    assigned to Signatories or to International
                                    Telecommunications Entities, or (ii) is
                                    owned by the Founding Signatory and is
                                    expected to be conveyed to Signatories or
                                    International Telecommunications Entities by
                                    sales or leases during a reasonable future
                                    period.

                                       -5-

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                           That portion of Assignable Capacity which is held on
                           an ownership basis is used to compute the voting
                           interests of the Signatories as specified in Schedule
                           C.

                           1.1.7.3. Latent Capacity: Latent Capacity is the
                                    Design Capacity less the Assignable
                                    Capacity. The Latent Capacity is owned by
                                    the Founding Signatory and is capacity held
                                    in reserve for future sale or lease. Latent
                                    Capacity may be used for restoration
                                    purposes.

                  1.1.8. COUNTRY: Country shall mean a country, territory or
                  place, as appropriate.

                  1.1.9. FLAG CABLE SYSTEM: The cable system described in
                  Paragraph 2 and Schedule B, together with its associated plant
                  and equipment.

                  1.1.10. FLAG INTERFACE POINT: The 155,520 kilobits per second
                  (Kbps) digital input/output ports on the digital distributing
                  frame (including the digital distribution frame itself) shall
                  be the FLAG Interface Point where the Submarine System
                  connects with other transmission facilities or equipment.

                  1.1.11. FOUNDING SIGNATORY: Founding Signatory refers to FLAG
                  Limited, a company incorporated in Bermuda with its principal
                  place of business office in Bermuda.

                                      -6-

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                  1.1.12. INTERNATIONAL TELECOMMUNICATIONS ENTITY: Any entity
                  authorized or permitted under the laws and regulations of its
                  Country to acquire and use facilities for the provision of
                  international telecommunications services.

                  1.1.13. ITU-TS: The International Telecommunications Union -
                  Telecommunication Standardization Sector (previously referred
                  to as CCITT).

                  1.1.14. ITU-TS RECOMMENDATION: A recommendation approved in
                  accordance with the procedure laid down in Resolution No. 2
                  (IXTH Plenary Assembly, Melbourne, November 1988).

                  1.1.15. LANDING PARTY SIGNATORY: A Landing Party Signatory is
                  a Signatory. that is so identified in Schedule A.

                  1.1.16. LONDON INTERBANK OFFERED RATE (LIBOR): LIBOR shall
                  mean the London Interbank Offered Rate for ninety (90) day
                  loans, being the arithmetic mean of the averages, rounded to
                  the nearest one-sixteenth, of the bid and offered rates for
                  10,000,000 (ten million) U.S. dollars quoted by the reference
                  bank at 11:00 a.m. local time each working day. The reference
                  bank is Morgan Guaranty Trust Company or such other bank as
                  may be specified by the Management Committee, as necessary.

                                      -7-

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                  1.1.17. LICENSES: All governmental approvals, consents,
                  authorizations, licenses and permits and other authorizations
                  which are necessary to enable the FLAG Cable System to be
                  landed, installed, operated and maintained.

                  1.1.18. MINIMUM INVESTMENT UNIT OR MIU: A unit designated as
                  the minimum unit of investment in any Segment representing 30
                  bearer channels and allowing the effective use of 2,048 Kbps.

                  1.1.19. NON-LANDING PARTY SIGNATORY: A Non-Landing Party
                  Signatory is a Signatory that is so identified on Schedule A.

                  1.1.20. READY FOR PROVISIONAL ACCEPTANCE (RFPA) DATE: The date
                  on which Segment S and Segments X-1 and X-2, as described in
                  Paragraph 2, are accepted by the Founding Signatory, pursuant
                  to the terms and conditions set forth in the Supply Contract.
                  The RFPA Date is presently contemplated to be March 2, 1997.

                  1.1.21. READY FOR CUSTOMER SERVICE (RFCS) DATE: The date on
                  which the FLAG Cable System shall be available for customer
                  service. That date shall be at least thirty (30) days after
                  the RFPA Date. The RFCS Date is presently contemplated to be
                  April 2, 1997.

                  1.1.22. SCHEDULING: Any document attached hereto and
                  identified as a Schedule which is made part hereof, as it may
                  be amended from time to time in accordance with this
                  Agreement.

                                      -8-

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                  1.1.23. SEGMENT: A Segment described in Paragraph 2 and
                  identified by the letters S, X-1, X-2 or T.

                  1.1.24. SIGNATORIES: Those entities identified in Schedule A,
                  and such other entities that may subsequently become parties
                  to this Agreement pursuant to Paragraph 30.

                  1.1.25. SUBMARINE SVSTEM: The Submarine System shall comprise
                  all plant and equipment, including spare plant and test
                  equipment, forming Segment S and connecting the FLAG Interface
                  Points so as to provide the Basic System Modules described in
                  Paragraph 5.

                  1.1.26. SUOPLY CONTRACT: The contract entered into by the
                  Founding Signatory as described in Paragraph 7.

         1.2 Unless the context otherwise requires, the singular shall be taken
         to mean the plural and the plural shall be taken to mean the singular.

         1.3 The captions of the paragraphs and the initial recitals are for
         convenience only, and do not form a part of this Agreement and shall
         not have any effect on the interpretation thereof.

         1.4 All Schedules and Appendices attached to this Agreement are deemed
         to be fully incorporated herein by this reference for all purposes, as
         though fully set forth at length herein.

                                      -9-

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2.       FLAG CABLE SYSTEM SEGMENTS

         In accordance with the arrangements contained in this Agreement, the
         FLAG Cable System shall be engineered, provided, constructed,
         maintained and operated between and among a terminal in the United
         Kingdom, a terminal in Spain, a terminal in Italy, a terminal in
         Alexandria, Egypt, a terminal in Suez, Egypt, a terminal in the United
         Arab Emirates, a terminal in India, a terminal in Malaysia, a terminal
         in Thailand, a terminal in Hong Kong, a terminal in the Republic of
         Korea and a terminal in Japan. For purposes of this Agreement, the FLAG
         Cable System shall be regarded as consisting of the following Segments:

         2.1 SEGMENTS T

         Segment T-1       A cable station at Porthcurno, the United Kingdom
                           connecting the United Kingdom to Spain by Segment
                           S-1.

         Segment T-2       A cable station at Estepona, Spain connecting Spain
                           to the United Kingdom by Segment S-11, and connecting
                           Spain to Italy by Segment S-2.

         Segment T-3       A cable station at Palermo, Italy connecting Italy to
                           Spain by Segment S-2, and connecting Italy to
                           Alexandria, Egypt by Segment S-3.

                                      -10-

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         Segment T-4       A cable station at Alexandria, Egypt connecting Egypt
                           to Italy by Segment S-3, and connecting Alexandria,
                           Egypt to Suez, Egypt by Segment X-1 and Segment S-4.

         Segment T-5       A cable station at Suez, Egypt connecting Suez, Egypt
                           to Alexandria, Egypt by Segment X-1 and Segment S-4,
                           and connecting Suez, Egypt to the United Arab
                           Emirates by Segment S-5.

         Segment T-6       A cable station at Fujairah, the United Arab Emirates
                           connecting the United Arab Emirates to Suez, Egypt by
                           Segment S-5, and connecting the United Arab Emirates
                           to India by Segment S-6.

         Segment T-7       A cable station at Bombay, India connecting India to
                           the United Arab Emirates by Segment S-6, and
                           connecting India to Malaysia by Segment S-7.

         Segment T-8       A cable station at Penang, Malaysia, connecting
                           Malaysia to India by Segment S-7, and connecting
                           Malaysia to Songkhla, Thailand by Segment S-8 and
                           Segment X-2.

         Segment T-9       A cable station at Songkhla, Thailand connecting
                           Thailand to Malaysia by Segment X-2 and Segment S-8,
                           and connecting Thailand to Hong Kong by Segment S-9.

                                      -11-

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         Segment T-10      A cable station at Lantau Island, Hong Kong
                           connecting Hong Kong to Thailand by Segment S-9, and
                           connecting Hong Kong to the Republic of Korea by
                           Segment S-10.

         Segment T-11      A cable station at Keoje, Korea connecting the
                           Republic of Korea to Hong Kong by Segment S-10, and
                           connecting the Republic of Korea to Japan by Segment
                           S-11.

         Segment T-12      A cable station at Miura, Japan connecting Japan to
                           the Republic of Korea by Segment S-11.

         Each aforementioned Segment T shall consist of:

         (i)      an appropriate share of land, civil works, equipment and
                  buildings at the specified locations for the cable landing and
                  for the cable route, including cable rights-of-way and ducts
                  between a cable station and its respective Cable Landing Point
                  and an appropriate share of common services and equipment at
                  each of those locations, together with equipment (other than
                  multiplex equipment described in (iii) below), including but
                  not limited to, heating, ventilating, air conditioning, alarm
                  and station ground systems, in each of those cable stations
                  which is solely associated with the FLAG Cable System, but not
                  a part of Segment S; and

                                      -12-

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         (ii)     an appropriate share of AC and DC power including back up
                  power systems as required; and

         (iii)    multiplex equipment, if necessary, to establish transmission
                  rates below the STM-1 (155,520 Kbps) level down to the E-1
                  (2,048 Kbps) level in each of the cable stations, associated
                  solely and directly with Assignable Capacity in the FLAG Cable
                  System.

         2.2 SEGMENTS S:

         The whole of the submarine cable system provided between and among, and
         including, the FLAG Interface Points at the cable stations at
         Porthcurno, the United Kingdom; Estepona, Spain; Palermo, Italy;
         Alexandria, Egypt; Suez, Egypt; Fujairah, the United Arab Emirates;
         Bombay, India; Penang, Malaysia; Songkhla, Thailand; Lantau Island,
         Hong Kong; Keoje, Korea and Miura, Japan, consisting of the following
         Segments:

         Segment S-1       That part of Segment S between the FLAG Interface
                           Point at the cable station at Porthcurno, the United
                           Kingdom and the FLAG Interface Point at the cable
                           station at Estepona, Spain.

         Segment S-2       That part of Segment S between the FLAG Interface
                           Point at the cable station at Estepona, Spain and the
                           FLAG Interface Point at the cable station at Palermo,
                           Italy.

                                      -13-

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         Segment S-3       That part of Segment S between the FLAG Interface
                           Point at the cable station at Palermo, Italy and the
                           FLAG Interface Point at the cable station at
                           Alexandria, Egypt.

         Segment S-4       That part of Segment S between the FLAG Interface
                           Point at the cable station at Alexandria, Egypt and
                           the point where the digital input/output ports of the
                           Basic System Module on the digital distribution frame
                           (including the digital distribution frame itself) of
                           the Submarine System connect with Segment X-1 at Port
                           Said, Egypt.

         Segment S-5       That part of Segment S between the FLAG Interface
                           Point at the cable station at Suez, Egypt and the
                           FLAG Interface Point at the cable station at
                           Fujairah, the United Arab Emirates.

         Segment S-6       That part of Segment S between the FLAG Interface
                           Point at the cable station at Fujairah, the United
                           Arab Emirates and the FLAG Interface Point at the
                           cable station at Bombay, India.

         Segment S-7       That part of Segment S between the FLAG Interface
                           Point at the cable station at Bombay, India and the
                           FLAG Interface Point at the cable station at Penang,
                           Malaysia.

                                      -14-

<PAGE>

         Segment S-8       That part of Segment S between the FLAG Interface
                           Point at the cable station at Penang, Malaysia and
                           the point where the digital input/output ports of the
                           Basic System Module on the digital distribution frame
                           (including the digital distribution frame itself) of
                           the Submarine System connect with Segment X-2 at
                           Satun, Thailand.

         Segment S-9       That part of Segment S between the FLAG Interface
                           Point at the cable station at Songkhla, Thailand and
                           the FLAG Interface Point at the cable station at
                           Lantau Island, Hong Kong.

         Segment S-10      That part of Segment S between the FLAG Interface
                           Point at the cable station at Lantau Island, Hong
                           Kong and the FLAG Interface Point at the cable
                           station at Keoje, Korea.

         Segment S-11      That part of Segment S between the FLAG Interface
                           Point at the cable station at Keoje Korea and the
                           FLAG Interface Point at the cable station at Miura,
                           Japan.

                           Segments S-1 and S-2 shall each include a one-half
                           portion of Branching Unit 1 (BU1), as shown in
                           Schedule B-1, and a one half portion of the Submarine
                           System between BU1 and Segment T-2.

                                      -15-

<PAGE>

                           Segments S-5 and S-6 shall each include a one-half
                           portion of Branching Unit 2 (BU2), as shown in
                           Schedule B-1, and a one-half portion of the Submarine
                           System between BU2 and Segment T-6.

                           Segments S-7 and S-8 shall each include a one-half
                           portion of Branching Unit 3 (BU3), as shown in
                           Schedule B-1, and a one half portion of the Submarine
                           System between BU3 and Segment T-8.

         2.3 SEGMENT X-1:

         That part of the FLAG Cable System between the cable station at
         Alexandria, Egypt and the cable station at Suez, Egypt, wholly
         dedicated to the provision of the FLAG Cable System, and connecting the
         following Segments:

                  T-4 to T-5; and

                  S-4 to T-5.

         Segment X-1 will consist of dedicated fiber pairs, in two
         geographically diverse buried terrestrial cables laid across Egypt,
         each providing sufficient capacity for accommodating the whole capacity
         required between Alexandria and Suez, Egypt.

         SEGMENT X-2:

         That part of the Cable System between the cable station at Songkhla,
         Thailand, and the point where Segment S-8 connects with Segment X-2 at
         Satun, Thailand,

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<PAGE>

         wholly dedicated to the provision of the FLAG Cable System, and
         connecting the following Segments:

                           S-8 to T-9.

         Segment X-2 will consist of dedicated fiber pairs, in two
         geographically diverse buried terrestrial cables laid across Thailand,
         each providing sufficient capacity for accommodating the whole capacity
         required between Segments S-8 and T-9.

         2.4 Each aforementioned Segment S shall also include:

                  (i)      all transmission, power feeding and test equipment
                           directly associated with Segment S;

                  (ii)     the transmission cable equipped with appropriate
                           repeaters and joint housings between the cable
                           stations;

                  (iii)    the power feed earth system or an appropriate share
                           thereof; and

                  (iv)     digital cross connect system equipment, dedicated to
                           the FLAG Cable System, used to interconnect
                           Assignable Capacity transiting the FLAG Cable System
                           through a Segment T and also for Assignable Capacity
                           accessing a Segment T at the 155,520 Kbps level.

         2.5 Segments X-1 and X-2 shall also include:

                                      -17-

<PAGE>

                  (i)      all transmission, power feeding and test equipment
                           directly associated with such Segments X-1 and X-2;

                  (ii)     the power equipment provided wholly for use with the
                           equipment listed in (i) above; and

                  (iii)    the transmission system including cable equipped with
                           appropriate repeaters, if required, between the
                           Segments as defined in Paragraph 2.3.

         2.6 ALL SEGMENTS:

         In this Agreement, references to any Segment however expressed, shall
         include, unless the context otherwise requires, additional property
         incorporated therein by agreement of the Founding Signatory and the
         Landing Party Signatories. Each Segment shall be regarded as including
         its related spare and standby units and components, including, but not
         limited to, repeaters, cable lengths and terminal equipment, or an
         appropriate share thereof.

3.       OWNERSHIP

         3.1 Each Segment S shall be owned by the respective Signatories,
         retroactive to the RFPA Date, in common and undivided shares in the
         proportions set out in Schedule D in respect of such Segment upon
         payment to the Founding Signatory in accordance with terms and
         conditions of applicable capacity sales agreements. Each Signatory
         shall have the right to activate and use its Assignable Capacity in
         each relevant Segment S as of the RFPA Date and shall be responsible as
         of that date for all obligations arising as an

                                      -18-

<PAGE>

         incident of ownership in the FLAG Cable System, including, without
         limitation, payment of operation and maintenance charges pursuant to
         Paragraph 11, provided, however, that if payment for such Assignable
         Capacity is not received within thirty (30) days of the due date under
         the applicable capacity sales agreement, ownership will not vest
         retroactively, and the Founding Signatory may, without prejudice to any
         other remedies it may have, deactivate such Assignable Capacity.

         3.2 As an incident of ownership of Segment S, each Signatory shall have
         the right to use such part of the Assignable Capacity in each relevant
         Segment in accordance with Paragraph 13 for the duration of this
         Agreement.

         3.3. Each Segment T and Segments X-1 and X-2 shall be owned by the
         Landing Party Signatory in whose Country the relevant Segment is
         physically situated.

         3.4. Each Signatory may deal with its ownership share in any Segment S
         and the right to use its part of the Assignable Capacity in accordance
         with the terms of this Agreement, but no Signatory shall otherwise have
         or exercise in relation to any such Segment any right incident to a
         right of ownership of property except jointly with all other
         Signatories.

4.       ESTABLISHMENT OF MANAGEMENT COMMITTEE

         4.1. For the purpose of directing the engineering, provision,
         installation, bringing into service, continued operation, maintenance
         and coordination of exploitation of the FLAG

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<PAGE>

         Cable System, the Signatories shall form a Management Committee
         (hereinafter called the "MC'), which shall continue to exist during the
         term of this Agreement and shall consist of a representative of each of
         the Signatories. The MC shall make or cause to be made all decisions on
         behalf of the Signatories to implement the purposes of this Agreement,
         except with respect to matters expressly reserved to the Founding
         Signatory pursuant to this Agreement. Although each Signatory must
         designate a single representative, each Signatory may bring expert
         assistance to the meetings of the MC. Two or more Signatories may
         designate the same person to serve as their representative at specific
         meetings of the MC and its subcommittees established pursuant to
         Paragraph 4.3. In the event of voting as specified pursuant to
         Paragraphs 4.5 and 4.6, such person representing more than one
         Signatory shall separately vote the interest to which each Signatory
         represented is entitled.

         4.2. Until the day following the RFPA Date, the chairman of the MC
         shall be appointed by the Founding Signatory. Thereafter, the members
         of the MC shall appoint a chairman from among the Founding Signatory
         and the Landing Party Signatories, for periods determined by them,
         provided that the first chairman of the MC appointed after the RFPA
         Date shall be selected from among the Landing Party Signatories.

         4.3. The MC may form subcommittees to aid in the performance of its
         duties. Terms of reference

                                      -20-

<PAGE>

         for specified subcommittees are attached in Appendix A. Terms of
         reference for other subcommittees shall be decided by the MC. The
         subcommittees shall consist of representatives of the Founding
         Signatory and the other Signatories. The subcommittees shall reach
         agreement by consensus. If consensus is not achieved, the matter shall
         be referred to the MC for decision. The MC shall be authorized to
         dissolve a subcommittee formed pursuant to this paragraph.

         4.4. No decisions of the MC or its subcommittees shall override any
         provisions of this Agreement or diminish in any way the rights granted
         to any Signatory under this Agreement.

         4.5. Meetings of the MC may be convened at the discretion of the
         chairman and additionally shall be convened by the chairman when
         requested to do so by one or more Signatories representing at least
         five percent (5%) of the total voting interests. The voting interest of
         each Signatory shall be as specified in Schedule C. The chairman shall
         in normal circumstances give at least thirty (30) days notice to all
         members of the convening of a meeting of the MC and at that time shall
         furnish an agenda therefor. In extraordinary circumstances, the period
         of notice may be reduced where at least two-thirds (2/3) of the voting
         interests is in agreement. The quorum for any meeting of the MC or any
         subcommittee shall be the Founding Signatory and two or more
         representatives of other Signatories together representing not less
         than five percent (5%) of the total voting interests.

                                      -21-

<PAGE>

         4.6. All decisions made by the MC shall be subject, in the first
         instance, to consultation among its members, who shall make every
         effort to reach agreement by consensus. Except as otherwise provided in
         Paragraph 23, in the event that consensus cannot be reached, the
         decisions will be carried on the basis of an affirmative vote of the
         representatives of Signatories representing at least a simple majority
         of the total voting interests represented at the meeting, provided,
         however, that in the case of decisions pursuant to Paragraph 9.1 and
         other decisions that may have a financial impact on the rounding
         Signatory with respect to contractual obligations incurred by the
         Founding Signatory under this Agreement, such simple majority shall
         include the Founding Signatory. On and prior to the RFPA Date, if such
         vote results in a tie, the chairman of the MC shall cast the deciding
         vote.

5.       CONFIGURATION OF THE FLAG CABLE SYSTEM

         5.1. As shown in Schedule B-1, the FLAG Cable System shall consist of
         thirty-two (32) Basic System Modules on one fiber pair available for
         traffic and restoration between: the United Kingdom and Italy, Italy
         and Egypt, Egypt and India, India and Thailand, Thailand and Hong Kong,
         Hong Kong and the Republic of Korea, and the Republic of Korea and
         Japan.

         5.2. As shown in Schedule B-1, the FLAG Cable System shall also consist
         of thirty-two (32) Basic System Modules on a second fiber pair
         available for traffic and restoration between: the United Kingdom and
         Spain, Spain and Italy, Italy and Egypt, Egypt and the

                                      -22-

<PAGE>

         United Arab Emirates, the United Arab Emirates and India, India and
         Malaysia, Malaysia and Thailand, Thailand and Hong Kong, Hong Kong and
         the Republic of Korea, and the Republic of Korea and Japan.

6.       OBLIGATIONS OF THE SIGNATORIES

         6.1. Except as otherwise provided in Paragraphs 6.2 and 6.6, all costs
         incurred under the Supply Contract for the provision and installation
         of the Submarine System and Segments X-1 and X-2 shall be borne by the
         Founding Signatory.

         6.2. The costs of additional equipment and services requested by the
         Landing Party Signatories to be procured under the Supply Contract
         pursuant to Paragraph 7.3, which are not included in the Submarine
         System or Segments X-1 and X-2, shall be borne by the Landing Party
         Signatories.

         6.3. Appendix B contains a list of the initial costs associated with
         the FLAG Cable System in addition to costs arising under the Supply
         Contract. Appendix B specifies which of the Signatories is responsible
         for the performance and costs of the specified items.

         6.4. Each of the Landing Party Signatories shall provide and install
         the Segment T located in its respective country in sufficient time to
         permit the FLAG Cable System to be placed in operation by the RFPA
         Date.

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<PAGE>

         6.5. Arab Republic of Egypt National Telecommunications Organization
         (ARENTO) and the Communications Authority of Thailand (CAT) shall
         furnish all necessary and appropriate assistance to the Founding
         Signatory in the provision of Segments X-1 and X- 2, respectively, in
         sufficient time to permit the FLAG Cable System to be placed in
         operation by the RFPA Date.

         6.6. The Founding Signatory shall pay for two-thirds of the costs of
         the digital cross connect system equipment, as described in Paragraph
         2.4 (iv), with each of the Landing Party Signatories paying for the
         remaining one-third of such costs of such equipment placed in each of
         their respective cable stations and in consideration for such payment
         the Landing Parties shall receive Indefeasible Right of Use (IRU) in
         such equipment.

         6.7. All Signatories shall provide full cooperation with each other in
         matters concerning the FLAG Cable System and the promotion of the best
         interests of the FLAG Cable System.

         6.8. All Signatories shall, as necessary and practical, enter into
         agreements for utilizing alternative capacity for restoration purposes
         in the event of failure of part or all of the FLAG Cable System.

                                      -24-

<PAGE>

7.       SUPPLY CONTRACT

         7.1. The Founding Signatory shall develop the technical design of the
         FLAG Cable System in accordance with good engineering practice and
         appropriate international technical and operating standards, shall
         ensure the technical compliance of the FLAG Cable System at the FLAG
         Interface Points with appropriate ITU-TS Recommendations, and shall
         compile a specification of the FLAG Cable System.

         7.2. The Founding Signatory shall cause to be conducted a survey of the
         submarine route for the Submarine System.

         7.3. The Founding Signatory shall have sole responsibility for the
         provision and installation of the Submarine System and Segments X-1 and
         X-2 and, to that end, shall enter into the Supply Contract with one or
         more suppliers for services, plant and equipment and for the
         engineering, provision and installation of the Submarine System and
         Segments X-1 and X-2. At the request of the Landing Party Signatories
         and after consultation with the relevant subcommittee, the Founding
         Signatory may include in the Supply Contract equipment and services
         which are associated with the FLAG Cable System, but which are not
         included in the Submarine System or Segments X-1 and X-2. The costs of
         services, plant, and equipment procured under the Supply Contract shall
         be allocated as specified in Paragraph 6.

         7.4. The Founding Signatory shall ensure that the Supply Contract shall
         afford the Founding Signatory or its designated representatives
         reasonable rights of access to

                                      -25-

<PAGE>

         examine, test and inspect all engineering, provisioning and
         installation activities and equipment, material and supplies

         7.5. The Founding Signatory shall make available to the Landing Party
         Signatories on a timely basis technical information relating to the
         construction, provision and operation of the FLAG Cable System which
         may be required to discharge the responsibilities of the Landing Party
         Signatories to obtain and maintain in force Licenses, provide their
         respective Segment T and transiting facilities, and connect the FLAG
         Cable System to inland systems. The Landing Party Signatories shall
         afford confidential treatment to such information.

         7.6. The Founding Signatory shall ensure that the Supply Contract shall
         require the supplier(s) with whom that Supply Contract is placed to
         provide plant, equipment and services necessary to allow the Submarine
         System and Segments X-1 and X-2 to be placed into operation on the RFPA
         Date, and shall take any and all actions as may be necessary and
         appropriate to enforce the terms of the Supply Contract. The Founding
         Signatory does not warrant or guarantee that the supplier(s) under the
         Supply Contract will place into operation the Submarine System and
         Segments X-1 and X-2 either at all or by any particular date.

         7.7. The Founding Signatory shall ensure that the Supply Contract shall
         require the supplier(s) with whom the Supply Contract is placed to
         provide a performance guarantee and warranty in accordance with good
         engineering practice and relevant international

                                      -26-

<PAGE>

         technical and operating standards and which will result in the
         technical compliance of the FLAG Cable System at the FLAG Interface
         Points with appropriate ITU-TS Recommendations.

         7.8. If the costs to correct a failure, breakdown or interruption of
         the FLAG Cable System are covered by a warranty under the Supply
         Contract, the Founding Signatory shall credit the running charges
         otherwise payable by the Signatories based on the share of such costs
         allocable to each Signatory, pursuant to Paragraph 11.2, with the
         amount received from the supplier under its warranty, less the
         reasonable costs expended by the Founding Signatory to pursue such
         warranty claim.

         7.9. The Signatories acknowledge that the Founding Signatory does not
         warrant or guarantee the performance of the Submarine System by reason
         of the supplier's failure to perform the terms and conditions of the
         Supply Contract. The Founding Signatory shall take any and all actions
         as may be necessary and appropriate to enforce the terms of the Supply
         Contract.

8.       RIGHT OF USE OF SEGMENTS X-1 AND X-2 AND SEGMENT T

         8.1. ARENTO grants the right of use of Segment X-1, at no charge to
         Signatories and to other International Telecommunication Entities which
         have acquired Assignable Capacity, pursuant to Paragraph 13, on
         Segments S-3 and S-4 that interconnect with Segment S-5 via Segment X-1
         for the purpose of transiting Egypt by the FLAG Cable System.

                                      -27-

<PAGE>

         CAT grants the right of use of Segment X-2, at no charge to Signatories
         and to other International Telecommunication Entities which have
         acquired Assignable Capacity, pursuant to Paragraph 13 on Segment S-8
         that interconnects with Segment S-9 via Segment X-2 for the purpose of
         transiting Thailand by the FLAG Cable System or terminating in Thailand
         via Segment S-8.

         8.2. Each of the Landing Party Signatories grants to other Signatories,
         except the Founding Signatory, to whom Assignable Capacity in the FLAG
         Cable System is conveyed, the right of use of the Segment T owned by
         the relevant Landing Party Signatory for such Assignable Capacity
         entering the FLAG Cable System at the relevant Segment T as specified
         in Schedule K. For the right of use granted under this Paragraph 8.2,
         each Signatory shall pay the consideration as specified in Paragraph
         8.5 in the proportion as set forth in Schedule L. The consideration
         payable for the right of use in a Segment T shall be based on a
         Signatory's pro-rata share of the notional capacity of the relevant
         Segment T as specified in Schedule K and shall be used to recover the
         capital and other costs, by a nonrecurrent charge, and the operation
         and maintenance costs, by recurrent charges, as defined in Paragraph
         8.5.

         8.3. Each of the Landing Party Signatories shall make necessary
         equipment in its Segment T available to the Founding Signatory on
         reasonable terms and conditions so as

                                      -28-

<PAGE>

         to enable the Founding Signatory to lease Assignable Capacity to
         International Telecommunications Entities.

         8.4. Each of the Landing Party Signatories shall be obligated to allow
         Signatories and other International Telecommunications Entities
         acquiring Assignable Capacity the use of the relevant Segment T, at no
         charge, solely for the purpose of transiting through the FLAG Cable
         System in accordance with this Agreement, other than the Segment T used
         for entering the FLAG Cable System.

         8.5. The consideration payable by Signatories granted a right of use
         pursuant to Paragraph 8.2 shall consist of the following charges:

                  8.5.1 Non-recurrent charge for capital and other costs as used
                  in this Paragraph 8 with reference to the provision of each
                  Segment T including land, access roads, cable rights-of-way,
                  ducts and buildings at such stations, or to causing them to be
                  provided and constructed, or to installing or causing to be
                  installed cable station equipment, shall include all
                  expenditures incurred which shall be fair and reasonable in
                  amount and either shall have been directly and reasonably
                  incurred for the purpose of, or to be properly chargeable in
                  respect of, such provision, construction, and installation,
                  including, but not limited to, the purchase costs of land,
                  building costs, amounts incurred for development, engineering
                  design, materials, manufacturing, procurement and inspection,
                  installation, removing (with

                                      -29-

<PAGE>

                  appropriate reduction for salvage), testing associated with
                  installation, custom duties, taxes (except income tax imposed
                  upon the income of a Landing Party Signatory), financial
                  charges attributable to other parties' shares of costs,
                  supervision, overheads and insurance or a reasonable allowance
                  in lieu thereof. Losses against which insurance was not
                  provided, or for which an allowance in lieu thereof was not
                  taken, shall constitute capital costs.

                  8.5.2. Recurrent charge for operation and maintenance costs as
                  used in this Paragraph 8 with reference to each Segment T
                  shall include costs reasonably incurred in maintaining and
                  operating the facilities involved, including, but not limited
                  to, the costs of attendance, testing, adjustments, repairs and
                  replacements, customs duties, taxes (except income taxes
                  imposed upon the income of the Landing Party Signatory) paid
                  in respect of such facilities, administrative costs, financial
                  charges attributable to other parties' shares of costs, and
                  costs and expenses reasonably incurred on account of claims
                  made by or against other persons or entities in respect of
                  such facilities or any part thereof and damages or
                  compensation payable by the Landing Party Signatory owning a
                  Segment T on account of such claims. Costs, expenses, damages,
                  or compensation payable to such owner on account of such
                  claims made against other persons shall be shared by the
                  Signatories and other parties in the same proportions as they
                  share the costs of maintaining and operating a Segment T.

                                      -30-

<PAGE>

                  8.5.3. Included in the non-recurrent charge and the recurrent
                  charge specified in Paragraph 8.5 are one-third of the
                  capital, operation and maintenance costs of the digital cross
                  connect system equipment as described in Paragraph 2.4 (iv),
                  located in the Segment T involved.

         8.6. Where a cable station, land or buildings or certain equipment
         situated therein that is not part of the Submarine System, such as
         power supply or testing and maintenance equipment, is or will be shared
         by the FLAG Cable System and other communications systems terminating
         at the cable station, the capital, operation and maintenance costs of
         such shared cable station, land or buildings or equipment (not solely
         attributable to a particular communications system or systems) shall be
         allocated among the systems involved in the proportions in which they
         use the cable station, land or buildings or equipment in order to
         determine what charge is reasonable in respect of the right of use
         granted in this Paragraph 8. For such purposes, the proportionate use
         of a shared cable station, land or buildings or equipment therein
         attributable to a particular cable system shall be determined on the
         basis of the ratio of: (i) the installed costs of the cable station
         equipment (excluding shared equipment) associated with the particular
         cable system to (ii) the installed costs of the cable station
         'equipment (excluding shared equipment) associated with all systems,
         including the FLAG Cable System, which make use of the shared cable
         station, land, building or equipment.

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<PAGE>

         8.7. Payments due under this Paragraph 8 shall be made in accordance
         with the following principles and such other billing and payment
         procedures as may be determined by the MC from time to time:

                  8.7.1. On or around sixty (60) days before the RFPA Date the
                  Landing Party Signatory owning the relevant Segment T (or the
                  Central Billing Party (CBP) if there shall be one) shall
                  render the bill to each of the other Signatories as specified
                  in Schedule L of the amount receivable as a non-recurrent
                  charge in payment of capital and other costs which are due to
                  other parties which participate in other communications
                  systems sharing the Segment T and which are entitled to share
                  such payments at the time the right of use interests commence
                  pursuant to Paragraph 8.11 hereof. In the case of preliminary
                  bills, appropriate adjustments will be made as soon as
                  practicable after the actual costs are determined.

                  8.7.2. Each billed Signatory shall pay its bill to the billing
                  Landing Party Signatory (or the CBP if there shall be one) on
                  or before the date on which the right of use in the relevant
                  Segment T becomes effective under Paragraph 8.1 1. As soon as
                  practicable after receiving such payments, each Landing Party
                  Signatory shall distribute the portion of said payments among
                  the parties to the other communications systems sharing the
                  same cable station in the proportions to which they are
                  entitled.

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<PAGE>

                  8.7.3. The Signatories shall be billed individually for, and
                  shall each pay its proportionate share of any additional
                  capital costs of the Segment T allocable to this Agreement
                  incurred after the grant to the Signatories of the right of
                  use interests in each of the Segment Ts becomes effective, and
                  of the portion of the recurrent charge of the Segment T for
                  operation and maintenance costs commencing at the time such
                  right of use becomes effective. Such bills shall be rendered
                  in accordance with Schedule L but not more frequently than
                  once a month.

                  8.7.4. For the purpose of this -Agreement, financial charges
                  shall be computed at a rate equal to the lowest publicly
                  announced rate or minimum commercial lending rate for ninety
                  (90) day loans, however described, in the currency of the
                  relevant Landing Party Signatory's Country, or the currency of
                  billing, as applicable, charged by established commercial
                  banks in the Country concerned on the fifteenth (15th) day of
                  the month in which the costs were incurred by the billing
                  Signatory. If such a day is not a business day, the rate
                  prevailing on the next business day shall be used.

                  8.7.5. The billing currencies and computation of extended
                  payment charges, which shall accrue from the day on which
                  payment was due until paid in the case that all or a part of
                  amounts billed were not paid, of each Landing Party Signatory
                  shall be set forth in Appendix C.

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<PAGE>

         8.8. For the purpose of effectuating the assignment or transfer of
         Assignable Capacity in Segment S pursuant to Paragraph 13, the
         following principles shall apply to the Right of Use transactions of
         Segment T:

                  8.8.1. Each of the Landing Party Signatories shall make its
                  underwritten capacity in the relevant Segment T held by such
                  Landing Party Signatory, over and above its requirements as
                  specified in Schedule K, available to other Signatories and
                  International Telecommunications Entities to whom Assignable
                  Capacity in the FLAG Cable System is made available by the
                  Signatories pursuant to Paragraph 13, but not to the Founding
                  Signatory, on a right of use basis or such a basis other than
                  transfer of ownership interests, for such Capacity entering
                  the FLAG Cable System at the relevant Segment T.

                  8.8.2. For the transfer of right of use interests pursuant to
                  this Paragraph 8.8, the non-recurrent charge shall be
                  determined in accordance with Paragraphs 8.5.1 and 8.5.3 and
                  any additional capital costs incurred subsequent to the RFPA
                  Date together with, but not limited to, cost factors for
                  accumulated operation and maintenance costs, financial charges
                  and depreciation, all to provide a reasonable return to each
                  Landing Party Signatory for its investment in the underwritten
                  capacity in its Segment T. The recurrent charges payable shall
                  be as specified in Paragraphs 8.5.2. and 8.5.3.

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<PAGE>

                  8.8.3. Schedules K and L shall be appropriately modified to
                  reflect the changes in the Signatories' proportionate shares
                  in the relevant Segment T pursuant to Paragraphs 8 and 30.

         8.9. Each of the Landing Party Signatories shall, in consultation with
         the Founding Signatory, increase the national capacity of the relevant
         Segment T at the time all the underwritten capacity held by the
         relevant Landing Party Signatory is disposed of and additional
         requirements exceeding the then notional capacity are identified or
         such other occasions as may be determined by the relevant Landing Party
         Signatories and Schedules K and L shall be modified as appropriate.

         8.10. In the case that the notional capacity of a Segment T is
         increased after the RFPA Date, appropriate financial adjustments shall
         be made between and among the Signatories, other International
         Telecommunications Entities and the Landing Party Signatory involved to
         adjust the non-recurrent and recurrent charges paid and to be paid for
         the Segment T involved to ensure that each party involved shall bear
         its proper share of such charges as provided in this Paragraph 8.

         8.11. The right of use granted under Paragraphs 8.1 and 8.2 shall
         commence on the RFPA Date or the date a Signatory places any of its
         Assignable Capacity into operation, whichever occurs first. The right
         of use granted under Paragraphs 8.8 shall commence on the date on which
         such Capacity is acquired or placed into operation, whichever occurs

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<PAGE>

         first. The right of use granted under this Paragraph shall continue for
         the term of this Agreement.

         8.12. Each Landing Party Signatory shall notify the Founding Signatory.
         in writing of the charges it makes in respect of the right of use
         granted under Paragraphs 8.2 and 8.8 and of the changes in such charges
         sixty (60) days before such changes are implemented.

         8.13. If any Segment T, or portion thereof, is not available for any
         reason, the relevant Landing Party Signatory, in agreement with the
         other Signatories hereto, shall take all necessary measures to ensure
         that another suitable cable station shall be made available as a
         substitute for such Segment T, on fair and equitable terms not
         deviating substantially from the terms contained in this Agreement.

         8.14. Nothing contained herein shall be deemed to vest in any Signatory
         other than the owner of a particular Segment T, any salvage rights in
         such Segment or any cable station substituted therefor.

         8.15. Notwithstanding Paragraphs 8.2 and 8.8 the Signatories may, prior
         to the commencement of the right of use, elect to renounce their right
         of use entitlement and to instead have use of a Segment T for the
         duration of this Agreement on such terms and conditions as are agreed
         upon between the Signatories concerned.

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<PAGE>

9.       ADDITIONAL CAPITAL COSTS OF THE SUBMARINE SYSTEM AND SEGMENTS X-1 AND
         X-2

         9.1. If, subsequent to the RFPA Date, additional work or property is
         incorporated in the Submarine System or Segments X-1 and X-2 to
         enhance, optimize or increase the efficiency of either the Submarine
         System or Segments X-1 and X-2 in accordance with the approval and
         directions of the MC, the capital costs thereof shall be borne by all
         the Signatories in proportion to their respective Assignable Capacity
         in the affected Segment of the FLAG Cable System, as set forth in
         Schedule G.

10.      OPERATION AND MAINTENANCE DUTIES AND RIGHTS

         10.1. The FLAG Cable System shall be jointly operated and maintained in
         efficient working order and operation by the Founding Signatory and the
         Landing Party Signatories as provided in this Paragraph 10.

         10.2. On behalf of all the Signatories, the Founding Signatory and the
         Landing Party Signatories shall jointly prepare, and update from time
         to time as necessary, a FLAG Operation and Maintenance Plan (FOMP). The
         FOMP shall contain detailed procedures that reflect the
         responsibilities of the Founding Signatory and the Landing Party
         Signatories as defined in this Paragraph 10. The FOMP shall be made
         available to all Signatories.

         10.3. The Founding Signatory shall be solely responsible for
         negotiating, executing, and administering contracts, for the
         maintenance and repair of the submersible portion of

                                      -37-

<PAGE>

         Segment S. The Founding Signatory and the Landing Party Signatories
         concerned shall use their best efforts to ensure that the FLAG Cable
         System shall be included in the appropriate Maintenance Zone Agreements
         on terms no less favorable than those applicable to other fiber optic
         cable systems.

         10.4. The FLAG Network Operations Center (FNOC) for the FLAG Cable
         System shall be provided under a supply contract and will be operated
         and maintained by the Founding Signatory in coordination with all
         relevant Landing Party Signatories.

         10.5. The FNOC shall provide overall network surveillance and overall
         coordination of maintenance and repair operations of the FLAG Cable
         System. The Founding Signatory shall coordinate the deployment of
         vessels for repair and maintenance operations in accordance with the
         procedures defined in the FOMP.

         10.6. Each Landing Party Signatory shall be responsible for the
         operation and maintenance of that portion of Segment S located in its
         Country between the Cable Landing Point and the FLAG Interface Point,
         and shall use all reasonable efforts to operate and maintain such
         portion of Segment S in efficient working order and operation.

         10.7. Each Landing Party Signatory shall be responsible for the
         operation and maintenance of Segment T located in its Country, and
         shall use all reasonable efforts to operate and maintain such Segment
         in efficient working order and operation.

                                      -38-

<PAGE>

         10.8. ARENTO and CAT shall, in addition, be responsible for the
         operation and maintenance of Segments X-1 and X-2, respectively, and
         shall use all reasonable efforts to maintain such Segments in efficient
         working order and operation.

         10.9. The Founding Signatory shall, upon suitable notification and in
         compliance with applicable laws and regulations, have the right of
         reasonable access to Segments S, X-1, X-2 and T located within each
         Landing Party Signatory's Country for the purposes of installation,
         inspection, testing, training of Landing Party Signatory and Founding
         Signatory personnel, and other functions, all in coordination with the
         respective Landing Party Signatory. The Founding Signatory shall
         identify to the respective Landing Party Signatory the
         representative(s) who will be granted access under this Paragraph.

         10.10. A Landing Party Signatory shall, upon suitable notification and
         in compliance with applicable laws and regulations, have reasonable
         access to the FNOC for observation and training of its personnel, in
         coordination with the Founding Signatory. The Landing Party Signatory
         shall identify to the Founding Signatory the representative(s) who will
         be granted access under this Paragraph.

         10.11. Should conditions exist in any Segment S or Segments X-1 and X-2
         that may impair the integrity of the FLAG Cable System, as identified
         by the Founding Signatory or any Landing Party Signatory, the Founding
         Signatory shall initiate and coordinate planned maintenance on such
         relevant Segment S, which may include the deactivation of such Segment.
         Prior to the initiation of such planned maintenance operations, the
         Founding

                                      -39-
<PAGE>

         Signatory shall coordinate, where appropriate, with the other
         Signatories. The Founding Signatory shall, to the extent possible,
         advise the other Signatories in writing sixty (60) days, or such
         shorter period as may be agreed by the Signatories, prior to initiating
         a planned maintenance operation, of the timing, scope, and costs of
         such planned maintenance operations of Segments S, X-1 and X-2. Should
         one or more Signatories representing at least ten percent (10%) of the
         total voting interest , specified in Schedule C, wish to review or
         change such an operation prior to its occurrence, the Founding
         Signatory shall be notified in writing within thirty (30) days of such
         advice. Upon such notification, the Founding Signatory shall convene an
         ad hoc meeting of the Signatories. to consider such review or change.

         10.12. Should a Landing Party Signatory believe a maintenance activity
         will require an interruption of service to Segments T, X-1 and X-2 or
         that portion of Segment S between the Cable Landing Point and the FLAG
         Interface Point, the Landing Party Signatory shall notify the Founding
         Signatory. The Landing Party Signatory, in consultation with the
         Founding Signatory, shall determine whether an interruption of service
         is warranted and, if so, the timing and duration of an interruption.
         The Landing Party Signatory shall, to the extent possible, advise the
         other Signatories in writing sixty (60) days, or such shorter period as
         may be agreed by the Signatories, prior to initiating a planned
         maintenance operation, of the timing, scope, and costs of such planned
         maintenance operations of Segments T or X-1 and X-2. Should one or more
         Signatories representing at least ten percent (10%) of the total voting
         interest, specified in Schedule C, wish to review or

                                      -40-
<PAGE>

         change such an operation prior to its occurrence, the Founding
         Signatory shall be notified in writing within thirty (30) days of such
         advice. Upon such notification, the Founding Signatory shall convene an
         ad hoc meeting of the Signatories to consider such review or change.

         10.13. Should a Landing Party Signatory become aware of any dangerous
         activities, attributable to a third party, which may cause an
         interruption of service to Segments T, X-1 and X-2 or that portion of
         Segment S between the Cable Landing Point and the FLAG Interface Point,
         the Landing Party Signatory shall notify the Founding Signatory.

         10.14. In the event of disruption of service due to Force Majeure
         pursuant to Paragraph 29 or other emergency, the Founding Signatory and
         the appropriate Landing Party Signatories shall cooperate in restoring
         service as quickly as possible and such Signatories shall, to the
         extent that it is practicable to do so, take such measures as are
         necessary to attain that objective.

         10.15. If the Founding Signatory fails to repair those facilities for
         the maintenance of which it is responsible under Paragraph 10.3, within
         a reasonable time after being called upon to do so by a Landing Party
         Signatory, the Landing Party Signatory may, to the extent that it is
         practicable to do so, perform the necessary duties and responsibilities
         of the Founding Signatory and charge the Founding Signatory the costs
         reasonably incurred in doing so.

                                      -41-
<PAGE>

         10.16. If a Landing Party Signatory fails to repair those facilities
         for the maintenance of which it is responsible under Paragraphs 10.6,
         10.7 and 10.8, within a reasonable time after being called upon to do
         so by the Founding Signatory, the Founding Signatory may, to the extent
         that it is practicable to do so, perform the necessary duties and
         responsibilities of the Landing Party Signatory, and charge the
         relevant Landing Party Signatory the costs reasonably incurred in doing
         so.

         10.17. Notwithstanding the foregoing, no Signatory shall be liable to
         any other Signatory for any loss or damage sustained by reason of any
         failure in or breakdown of the facilities constituting the FLAG Cable
         System or any interruption of service, regardless of the cause of such
         failure, breakdown or interruption, and regardless of how long it shall
         last.

         10.18. The Founding Signatory may pursue claims arising before the RFPA
         Date in the event of any damage or loss to the Submarine System, and
         may file appropriate law suits or other proceedings. The Founding
         Signatory may settle claims for its own account arising before the RFPA
         Date and execute any releases and settlement agreements necessary to
         effect a settlement. In the case of claims arising on or subsequent to
         the RFPA Date, the Founding Signatory shall be authorized to pursue
         such claims in its own name, on behalf of the Signatories, in the event
         of any damage or loss to the Submarine System, provided however that
         the Founding Signatory shall give suitable written notification to the
         Signatories when such claim arises. Subject to obtaining the prior
         concurrence of the MC, the Founding Signatory may settle any such
         post-RFPA claims and execute any releases and settlement agreements on
         behalf of the Signatories as

                                      -42-
<PAGE>

         necessary to effect a settlement. The proceeds of a settlement or
         judgment, less the reasonable costs incurred by the Founding Signatory
         to effect such settlement or judgment, shall be shared by the
         Signatories in the percentages specified in Schedule F for the Segment
         S of the FLAG Cable System involved.

         10.19. The Founding Signatory may defend against any claims arising
         before the RFPA Date asserted by a third party involving the Submarine
         System. The Founding Signatory may settle such claims arising before
         the RFPA Date and execute any releases and settlement agreements as
         necessary to effect a settlement. In the case of claims arising on or
         subsequent to the RFPA Date brought against the Signatories, the
         Founding Signatory shall be authorized to defend against such claims on
         behalf of the Signatories, provided however that the Founding Signatory
         shall give suitable written notification to the Signatories when such a
         claim arises. Subject to obtaining the prior concurrence of the MC, the
         Founding Signatory may settle any such post-RFPA Date claims and
         execute any releases and settlement agreements on behalf of the
         Signatories as necessary to effect a settlement. The cost of any
         judgment or other remedy or settlement resulting from any such
         post-RFPA Date claim, plus the reasonable costs incurred by the
         Founding Signatory to effect such judgment or settlement, shall be
         shared by the Signatories in the percentages specified in Schedule F
         for the Segment S of the FLAG Cable System involved.

                                      -43-
<PAGE>

         10.20. Notwithstanding Paragraph 10.19, where a claim is brought in
         respect of a sacrificed anchor and/or loss of, or damage to fishing
         gear, the Founding Signatory may, in its sole discretion, settle each
         individual claim for an amount no greater than twenty-five thousand
         U.S. dollars ($25,000) for each incident, and the cost of such
         settlement shall be allocated in accordance with Paragraph 10.19.

         10.21. Notwithstanding Paragraphs 10.18, 10.19 and 10.20, when a claim
         on behalf of or against the Signatories arises on or subsequent to the
         RFPA Date in the Country, including the territorial waters, of a
         Landing Party Signatory, as a result of damage or loss to or alleged to
         be caused by the Submarine System, the Landing Party Signatory in whose
         Country the claim arises shall be authorized to pursue or defend
         against such claim in its own name, on behalf of the Signatories,
         provided, however, that such Landing Party Signatory shall give
         suitable written notification to the Signatories when such a claim
         arises. The relevant Landing Party Signatory shall coordinate its
         handling of the claim with the Founding Signatory. Subject to obtaining
         the prior concurrence of the MC, the relevant Landing Party Signatory
         may settle any such post- RFPA claims and execute any releases and
         settlement agreements on behalf of the Signatories as necessary to
         effect a settlement. The proceeds or costs of a settlement or judgment,
         together with the reasonable costs incurred by the relevant Landing
         Party Signatory to effect such settlement or judgment, shall be shared
         by the Signatories in the percentages specified in Schedule F for the
         Segment S of the FLAG Cable System involved.

                                      -44-
<PAGE>

11.      RESPONSIBILITY FOR OPERATION AND MAINTENANCE COSTS

         11.1. The cost of standby maintenance of Segments S, X-1 and X-2,
         including, but not limited to, the maintenance of Segments S, X-1 and
         X-2, the FNOC, the procurement of cable ship services covering, inter
         alia, ship depreciation, ship retrofit, crew, insurance (except
         insurance at sea), in-port expenses, the storage of submersible plant,
         remotely operated vehicles and other devices when included in the wet
         maintenance zone agreement standby charges, shall be recovered by the
         Founding Signatory through fixed charges payable by the Signatories and
         other holders of Assignable Capacity, in accordance with Schedules H-1
         through H-55 and. J, adjusted to reflect inflation.

         11.2. The cost of running charges, which shall be limited to recovery
         of the direct incremental costs incurred in connection with a repair
         operation involving Segment S or Segment X-1 or Segment X-2, including,
         but not limited to, the cost of fuel, at sea insurance, additional crew
         at sea, crew overtime, victualling, telecommunications, mobilization
         and de-mobilization expenses, consumables, replenished equipment, and
         remotely operated vehicles, to the extent not included in the wet
         maintenance agreement standby charges, shall be apportioned among
         Signatories (excluding the Founding Signatory) and other holders of
         Assignable Capacity on the affected Segment S, or Segment X-1 or
         Segment X-2 in accordance with Schedule F. Notwithstanding the
         foregoing:

                                      -45-
<PAGE>

                  (i)      the Founding Signatory shall be responsible for the
                           proportionate share of running charges attributable
                           to a repair operation involving Segment X-1 or
                           Segment X-2 or a Segment S occurring during the term
                           of a lease of the Founding Signatory's Assignable
                           Capacity in Segment X-1 or Segment X- 2 or such
                           Segment S; and

                  (ii)     the Founding Signatory shall be responsible for the
                           payment of three percent (3%) of the running charges,
                           if any, incurred in connection with repair operations
                           in each of the two maintenance regions of the FLAG
                           Cable System, commencing with the second repair
                           operation in a given maintenance region in each
                           one-year period commencing on the RFPA Date.

         11.3. The Founding Signatory shall reimburse each of the Landing Party
         Signatories for costs reasonably incurred in carrying out their
         respective responsibilities under Paragraph 10.6, with the exception of
         one-third the operation and maintenance costs of the digital cross
         connect system equipment, as described in Paragraph 2.4 (iv), which
         one-third shall be borne by the respective Landing Party Signatories.
         The amount to be reimbursed shall be determined by multiplying the
         total cost incurred by a Landing Party Signatory in operating and
         maintaining FLAG Cable System equipment located in the Country of the
         relevant Landing Party Signatory by the ratio of (i) the installed cost
         of that portion of the Submarine System between the Cable Landing Point
         and the FLAG Interface Point located in the Country of the respective
         Landing Party Signatory, less one-third of the

                                      -46-
<PAGE>

         capital costs of the digital cross connect system equipment as
         described in Paragraph 2.4 (iv), to (ii) the sum of the installed cost
         of the relevant Segment T and the cost defined in Paragraph 11.3. (i).

         11.4. The Founding Signatory shall pay to ARENTO and CAT such charges
         for carrying out of their respective responsibilities under Paragraph
         10.8 as may be agreed between the Founding Signatory and ARENTO or CAT,
         as the case may be.

         11.5. Accounts for operation and maintenance costs for Segment S and
         Segments X-1 and X-2 shall be rendered not more frequently than monthly
         in accordance with procedures to be established by the Founding
         Signatory. On the basis of such accounts, each Signatory shall pay such
         amounts as may be owed by the end of the calendar month following the
         calendar month in which the accounts are rendered.

         11.6. Accounts between the Founding Signatory and the other Signatories
         not paid when due will accrue additional costs for extended payment
         from the day following the date payment of such account was due until
         it is paid, said additional costs to accrue at an annual rate of three
         (3) percentage points greater than LIBOR.

         11.7. An account shall be deemed to have been accepted by the Signatory
         to whom it is rendered if that Signatory does not present a written
         objection on or before the date when payment is due. If such objection
         is made, the Signatories shall make every reasonable effort to settle
         the dispute concerning the account in question promptly. If they are
         unable to do so, the matter shall be referred to the MC (or any
         appropriate subcommittee

                                      -47-
<PAGE>

         designated by it) for decision. If the objection is sustained and the
         billed Signatory has paid the disputed account, the agreed upon
         overpayment shall be refunded to the objecting Signatory by the billing
         Signatory promptly together with any extended payment charges
         calculated thereon at a rate determined in accordance with Paragraph
         11.6 from the date of payment of the account to the date on which the
         refund is transmitted to the objecting Signatory. If the objection is
         not sustained and the billed Signatory has not paid the disputed
         account, said Signatory shall pay such account promptly together with
         any extended payment charges calculated thereon at a rate determined in
         accordance with Paragraph 11.6 from the date on which payment of the
         account was due until paid.

         11.8. Credits for refunds of financial charges and bills for extended
         payment charges shall not be rendered if the amount of the charges is
         less than one hundred (100) U.S. dollars (or the equivalent in the
         relevant currency of payment) for credits or bills rendered by the
         billing Signatories. In the case of bills containing costs billed on a
         preliminary billing basis, appropriate adjustments will be made in
         subsequent bills promptly after the actual costs involved are
         determined.

12.      BOOKS, RECORDS AND VOUCHERS

         12.1. The Founding Signatory shall retain records relevant to running
         charges assessed pursuant to Paragraph 11.2 for a period of not less
         than five (5) years from the date of the record. Each Signatory against
         whom such running charges are assessed shall have a right to inspect
         such records from time to time with reasonable notice and at its own
         expense.

                                      -48-
<PAGE>

         12.2. The Landing Party Signatories shall retain records relevant to
         the performance of their obligations regarding operation and
         maintenance pursuant to Paragraphs 10.6, 10.7 and 10.8 for a period of
         not less than five (5) years from the date of the record. Signatories
         owning Assignable Capacity in the relevant Segments of the FLAG Cable
         System operated and maintained pursuant to Paragraphs 10.6, 10.7 and
         10.8 and the Founding Signatory shall have the right to inspect such
         records from time to time -with reasonable notice and at their own
         expense.

         12.3. The Founding Signatory shall ensure that the Supply Contract
         requires the supplier to maintain during the lifetime of the FLAG Cable
         System all drawings and documents held by the supplier at final system
         acceptance and to allow the Founding Signatory reasonable access to
         such documents.

13.      ASSIGNMENT AND USE OF CAPACITY

         13.1. The Assignable Capacity owned by each Signatory is described in
         Schedule D. Assignable Capacity shall be purchased and sold or
         otherwise disposed of (including by way of the grant of IRU) only by
         way of half or whole interests in MIUs and in accordance with this
         Paragraph 13.

         13.2. Either before or after the RFPA Date, the Founding Signatory may
         convey interests in its Assignable Capacity as shown in Schedule D to
         other Signatories and/or other International Telecommunications
         Entities by sale of ownership, grant of IRU, lease, rental or such
         other basis as may be agreed between the Founding Signatory and the

                                      -49-
<PAGE>

         acquiring party. International Telecommunications Entities acquiring
         OWNERSHIP INTERESTS shall become Signatories pursuant to Paragraph
         30.3. The Founding Signatory shall not make Assignable or Latent
         Capacity available directly to the public or to any International
         Telecommunications Entity that is not authorized under the laws and
         regulations of the Country of the Landing Party Signatory where such
         Capacity terminates, and shall not make Assignable Capacity available
         to an Affiliate of the Founding Signatory except at a price that
         reflects fair market value.

         13.3. A Signatory (other than the Founding Signatory) shall not,
         without the consent of the Founding Signatory, transfer to other
         Signatories and/or other International Telecommunications Entities,
         Assignable Capacity between two given FLAG Interface Points, unless all
         of the Design Capacity between the same FLAG Interface Points has been
         transferred by the Founding Signatory to other Signatories or
         International Telecommunications Entities, except as provided for in
         Paragraphs 13.4, 13.5 and 13.6. In a case where transfer is authorized
         under this Paragraph, the transfer shall be on such basis, other than
         an ownership basis, as the parties concerned may agree.

         13.4. A Signatory shall be entitled to assign, transfer or dispose of
         its Assignable Capacity to an Affiliate of such Signatory, subject to
         any applicable laws and regulations (including laws and regulations
         relating to Registered Private Operating Agency status). A Signatory
         exercising its rights under this Paragraph 13.4 shall give written
         notice to the Founding Signatory in a timely manner of such assignment,
         transfer or disposition, and shall guarantee by a written instrument
         reasonably satisfactory in form and substance to

                                      -50-
<PAGE>

         the Founding Signatory, all of the obligations hereunder assigned,
         transferred or disposed of to such Affiliate.

         13.5. A Signatory shall be entitled to transfer its Assignable Capacity
         assigned to that Signatory to another Signatory or international
         Telecommunications Entity located in the Country of that Signatory. A
         Signatory exercising its rights under this Paragraph 13.5 shall give
         written notice to the Founding Signatory in a timely manner of such
         transfer.

         13.6. Assignable Capacity in any Segment of the FLAG Cable System that
         is wholly assigned to one Signatory or International Telecommunications
         Entity shall be considered as consisting of two half-interests in a
         MIU. A Signatory or International Telecommunications Entity to which
         such Capacity is assigned may make available to other Signatories or
         international Telecommunications Entities a half- interest in such
         wholly assigned MIUS.

         13.7. Assignable Capacity that is jointly assigned may not be
         transferred without the consent of each Signatory or International
         Telecommunications Entity to whom such Capacity is jointly assigned.

         13.8. Any Signatory and any other International Telecommunications
         Entity in the Country of a Landing Party Signatory may not acquire
         Assignable Capacity that does not access the FLAG Cable System in the
         Country of such Landing Party Signatory or other International
         Telecommunication Entity without the consent of the Founding Signatory,
         which consent shall not be unreasonably withheld. The Assignable
         Capacity to which a

                                      -51-
<PAGE>

         Signatory is entitled shall be made available, and may be terminated,
         only at those points prescribed in Schedules H-1 through H-55.

         13.9. The Assignable Capacity of the FLAG Cable System shall be subject
         to the provisions as set forth hereunder.

                  13.9.1 On the effective date of this Agreement, the Founding
                  Signatory, on the one hand, and the other Signatories, on the
                  other hand, shall each have assigned to them fifty percent
                  (50%) of Assignable Capacity, and such percentages shall
                  thereafter be adjusted as follows:

                  (i)      On or before the RFPA Date, as the Founding Signatory
                           conveys interests in its Assignable Capacity by sale
                           of ownership pursuant to Paragraph 13.2, there shall
                           be transferred from the Latent Capacity to the
                           Founding Signatory's holdings in Assignable Capacity
                           a number of MIUs required to maintain the Founding
                           Signatory's fifty percent (50%) share of Assignable
                           Capacity.

                  (ii)     After the RFPA Date, as the Founding Signatory
                           conveys interests in its Assignable Capacity by sale
                           of ownership pursuant to Paragraph 13.2, such
                           interests shall be deducted from the Founding
                           Signatory's then-current holdings in Assignable
                           Capacity.

                                      -52-
<PAGE>

                  (iii)    After the RFPA Date, if and whenever as a result of
                           such conveyances the Founding Signatory's holdings in
                           Assignable Capacity fall below twenty percent (20%)
                           of the Assignable Capacity then owned in the
                           aggregate by all Signatories including the Founding
                           Signatory, at the election of the Founding Signatory
                           there shall be transferred from the Latent Capacity
                           to the Founding Signatory's holdings in Assignable
                           Capacity such additional MIUs (if available) as are
                           necessary to retain the Founding Signatory's holdings
                           in Assignable Capacity at twenty percent (20%) of the
                           Assignable Capacity then assigned in the aggregate to
                           all Signatories.

                  (iv)     After the RFPA Date, if the Founding Signatory's
                           holdings in Assignable Capacity exceed such twenty
                           percent (20%) of the aggregate capacity due to the
                           grant of IRU or lease, the Founding Signatory's
                           voting interest shall be deemed to be twenty percent
                           (20%).

                  13.9.2 Notwithstanding the foregoing, the Founding Signatory
                  shall remain fully responsible for the payment of running
                  charges related to leased capacity, as provided in Paragraph
                  11-20(i).

                  13.9.3. the Founding Signatory shall provide timely written
                  notice to the MC of any increase in Assignable Capacity due to
                  a withdrawal from Latent Capacity. Whenever Assignable
                  Capacity is so increased, the Schedules shall be appropriately
                  modified to reflect such increase.

                                      -53-
<PAGE>

         13.10. In order to ensure that Assignable Capacity is utilized in an
         efficient and effective manner, the MC, or its nominated subcommittee,
         shall assist the FLAG Network Administrator in coordinating the
         allocation of Assigriable Capacity that has been conveyed pursuant to
         Paragraph 13.2.

14.      Obligation to Provide Transiting and Other

         FACILITIES TO EXTEND FLAG CABLE SYSTEM CAPACITY

         14.1. Except as provided in this Paragraph, each of the Signatories
         shall use all reasonable efforts to furnish and maintain or cause to be
         furnished and maintained in efficient working order for (i) the
         Signatories, and (ii) other International Telecommunications Entities
         acquiring Assignable Capacity, for the duration of this Agreement, such
         facilities in its respective Country as may be reasonably required for
         extending Assignable Capacity in the FLAG Cable System assigned to
         Signatories and other International Telecommunications Entities for the
         purpose of handling communications transiting its respective Country.
         No Signatory shall be required under this Agreement to furnish such
         facilities in its Country to Signatories and other International
         Telecommunications Entities of its own Country. Notwithstanding the
         foregoing, each Landing Party 8ignatory shall provide suitable
         interconnection arrangements to Signatories and other International
         Telecommunications Entities of its own Country. The provision of such
         facilities and interconnection arrangements shall be the subject of
         separate agreements.

                                      -54-
<PAGE>

         14.2. The facilities provided pursuant to Paragraph 14.1 shall be
         furnished and maintained on terms and conditions which shall be no less
         favorable to the users of the FLAG Cable System than those granted to
         other International Telecommunications Entities for transmission
         facilities of similar type and quality transiting the location
         involved. Such terms and conditions shall be consistent with applicable
         governmental regulations in the location in which the facilities are
         located.

         14.3. The obligations to provide facilities under this Paragraph 14
         shall not necessarily require the provision of intrinsically digital
         facilities, nor the provision of facilities which are Bit Sequence
         Independent at rates other than 2,048 and 155,520 Kbps, or at such
         other rates as may be mutually agreed with the Landing Parties
         concerned.

15.      OBLIGATION TO CONNECT THE FLAG CABLE SYSTEM WITH INLAND SYSTEMS

         15.1. Each of the Signatories at its own expense, on or before the RFPA
         Date shall do, or cause to be done, all such acts and things as may be
         necessary within its operating territory to provide suitable connection
         of the FLAG Cable System with its appropriate inland telecommunications
         system in its operating territory.

16.      RELATIONSHIP OF THE SIGNATORIES

         16.1. This Agreement shall not be construed so as to create a
         partnership or joint venture among or between the Signatories, and no
         Signatory shall have authority or power to act unilaterally as agent
         for any other Signatory. Each Signatory shall be individually

                                      -55-
<PAGE>

         responsible for payment of any income or other taxes which may be
         imposed on any of the proceeds, income or revenue that such Signatory
         may derive from the FLAG Cable System.

         16.2 Each of the Signatories may obtain policies of insurance to cover
         its respective interest in the FLAG Cable System, and any such insured
         Signatory may pursue and settle claims arising under such policies of
         insurance in its sole discretion and for its own benefit.

17.      DURATION OF THE AGREEMENT

         17.1. This Agreement shall become effective on the day and year first
         above written and, subject to the provisions of Paragraph 23, shall
         continue in operation until terminated by the MC not less than
         twenty-five (25) years from the RFPA Date. However, any Signatory may
         terminate its participation in this Agreement at the end of twenty-five
         (25) years from the RFPA Date or any time thereafter by giving at least
         one year prior notice in writing to the MC.

         17.2. Subject to alternative arrangements being agreed by the MC, upon
         the effective date of the termination of participation by a Signatory,
         the Schedules of this Agreement shall be appropriately modified.

                                      -56-
<PAGE>

18.      OBTAINING LICENSES

         18.1. The performance of this Agreement by the Signatories is
         contingent upon the continuance of all Licenses. If a License obtained
         by one or more Signatories is rescinded, the MC may decide to make any
         appropriate changes in the FLAG Cable System configuration, or, in the
         alternative, to terminate this Agreement pursuant to Paragraph 23.1.

         18.2. Each Landing Party Signatory represents and warrants to each
         other Signatory that it has obtained or shall obtain all Licenses as
         may be required in its Country for the construction, operation and
         maintenance of the FLAG Cable System, and that it will for the duration
         of this Agreement maintain all such Licenses in full force and effect
         and will obtain or grant and maintain all such additional Licenses as
         may at any time hereafter be required in its Country for the
         construction, operation and maintenance of the FLAG Cable System.

         18.3. The costs incurred in obtaining and maintaining all Licenses
         required in connection with the construction, operation and maintenance
         of the Segment T located in the territory of a Landing Party
         Signatory's Country shall be the responsibility of the relevant Landing
         Party Signatory.

         18.4. The costs incurred in obtaining and maintaining survey and
         installation permits, cable and pipeline crossing agreements and all
         Licenses required in connection with the construction, operation and
         maintenance of the submersible portion of the Submarine System shall be
         the responsibility of the Founding Signatory.

                                      -57-
<PAGE>

         18.5. All Signatories will cooperate with each other in obtaining and
         maintaining in force all Licenses and other permits required pursuant
         to this Agreement.

19.      CURRENCY AND PLACE OF PAYMENT

         19.1. All amounts due under this Agreement shall be payable (i) to the
         Founding Signatory from any other Signatory in U.S. dollars and at the
         designated office of the Founding Signatory; (ii) to a Landing Party
         Signatory from the Founding Signatory in the currency of the Country of
         the Landing Party Signatory and at the designated office of the Landing
         Party Signatory; and (iii) to a Landing Party Signatory from another
         Signatory (other than the Founding Signatory) as specified in Paragraph
         8.7.5.

20.      ASSIGNMENT AND TRANSFER

         20.1. Except as otherwise provided in Paragraph 13, during the
         continuance of this Agreement, no Signatory shall without the consent
         of the other Signatories (which consent shall not be unreasonably
         withheld) sell, assign, transfer, or dispose of its rights or
         obligations under this Agreement or of any interest in the FLAG Cable
         System except:

                  (i)      in the case of a Signatory other than the Founding
                           Signatory, to a successor or Affiliate of such
                           Signatory, in which case written notice shall be
                           given to the other Signatories in a timely manner by
                           the Signatory making said sale, assignment, transfer
                           or disposition, and

                                      -58-
<PAGE>

                  (ii)     in the case of the Founding Signatory, upon written
                           notice to the other Signatories in a timely manner:

                           (a) to a successor of the Founding Signatory,

                           (b) to an Affiliate having adequate financial
                           resources.

         20.2 Notwithstanding Paragraph 20.1, the Founding Signatory may
         transfer to a Landing Party Signatory, pursuant to an agreement between
         the Founding Signatory and such Landing Party Signatory, all or a
         portion of its ownership of Segment S within the territory of the
         Country of such Landing Party Signatory, provided, however, that such
         transfer shall in no way limit the rights and obligations of
         Signatories and of other International Telecommunications Entities to
         whom Assignable Capacity in Segment S has been or is conveyed.

21.      SUCCESSORS AND ASSIGNS

         21.1. This Agreement shall be binding upon the respective successors
         and permitted assigns of each Signatory.

22.      DEFAULT

         22.1. In the event that the Founding Signatory fails to fulfill its
         obligations under this Agreement by defaulting on its obligations to
         pay the Supplier for the provision and installation of the Submarine
         System or Segment X-1 or Segment X-2 or to pay to have

                                      -59-
<PAGE>

         the Submarine System or Segment X-1 or Segment X-2 maintained, the
         Founding Signatory, at the request of one or more Landing Party
         Signatories, shall enter into negotiations with such Landing Party
         Signatories to determine whether there exists a mutually acceptable
         basis upon which such Landing Party Signatories would assume all of the
         rights and obligations of the Founding Signatory with respect to the
         FLAG Cable System.

23.      TERMINATION OF AGREEMENT

         23.1. This Agreement may be terminated by the unanimous consent of the
         Founding Signatory and the Landing Party Signatories.

         23.2 In the event that this Agreement is terminated on or after the
         RFPA Date, the net assets of the Submarine System as they then exist
         will be disposed of and any proceeds or costs divided among the
         Signatories in proportion to each Signatory's share of the Design
         Capacity as set forth in Schedule D.

         23.3. The terms of this Agreement shall continue to bind the
         Signatories for such time and to such extent as may be necessary to
         give effect to their respective rights and obligations under this
         Paragraph 23.

                                      -60-
<PAGE>

24.      ARBITRATION

         24.1. Unless settled by mutual agreement, any dispute or difference
         whatsoever that might arise from the performance or as to the meaning
         of this Agreement or as to any matter or items of whatsoever nature
         howsoever arising out of or in connection with this Agreement shall be
         submitted to arbitration in accordance with and subject to the Rules of
         Arbitration and Conciliation of the International Chamber of Commerce
         and finally settled by three arbitrators appointed in accordance with
         such rules, unless the parties to the arbitration agree upon a single
         arbitrator under such rules. The place of arbitration shall be The
         Hague, The Netherlands, and the language of the arbitration shall be
         English. Any decision or award of the arbitral tribunal shall be final
         and binding upon the parties to the arbitration proceeding. 'The costs
         of such arbitration shall be borne in equal proportions by the parties
         to the arbitration, provided that each party shall bear the cost of its
         own legal counsel.

         24.2 If any disputes or differences hereunder concern or involve more
         than two Signatories to this Agreement, the arbitration may proceed as
         a multi-party arbitration under the appropriate rules and guidelines of
         the International Chamber of Commerce. Any Signatory may intervene in
         any arbitration involving two or more Signatories and any Signatory
         that is a respondent in an arbitration under this Agreement may join
         any other Signatory in such arbitration.

                                      -61-
<PAGE>

25.      GOVERNING LAW

         25.1. This Agreement shall be construed and governed in accordance with
         the substantive laws in force in the State of New York, United States
         of America, without regard to the law of New York governing conflicts
         of law.

         25.2. The Signatories shall comply with all applicable laws of all
         nations having jurisdiction over the activities performed under or
         contemplated by this Agreement.

         25.3. If any provision of this Agreement is found by a regulatory or
         judicial 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.
         Notwithstanding the foregoing, the Signatories shall thereupon
         negotiate in good faith in order to agree upon the terms of a mutually
         satisfactory provision to be substituted for the provision found to be
         void or unenforceable.

26.      WAIVER OF IMMUNITY

         26.1. The Signatories hereto acknowledge that this Agreement is
         commercial in nature, and each Signatory expressly and irrevocably
         waives any claim or right which it may have to immunity (whether
         sovereign immunity 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,

                                      -62-
<PAGE>

         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.

27.      NOTICES

         27.1. Any notice or other communication given or made under this
         Agreement shall be in writing and shall be delivered by hand or
         transmitted by pre-paid first-class recorded-delivery post (by airmail,
         if overseas) or by facsimile. The address of each Signatory shall be
         its principal place of business as identified in Schedule A to this
         Agreement or such other address as has been previously notified to the
         other Signatories.

         27.2. A notice or other communication shall be deemed to have been duly
         delivered:

                  27.2.1. if delivered by hand at the time of delivery;

                  27.2.2. if 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;

                  27.2.3. if sent by facsimile, at the date of transmission if
                  receipt is followed by postal notice in accordance with
                  Paragraph 27.2.2.

                                      -63-
<PAGE>

28.      WAIVER

         28.1. The waiver by any Signatory of a breach or default of any
         provision of this Agreement or the failure of any Signatory on one or
         more occasions to enforce any of the provisions of this Agreement or to
         exercise any right or privilege hereunder shall not thereafter be
         construed as a waiver of any subsequent breach or default of a similar
         nature or as a general waiver of any such provision, right or privilege
         hereunder.

29.      FORCE MAJEURE

         29.1. A Signatory shall not be liable to any other Signatory for any
         loss or damage which may be suffered by that other Signatory by reason
         of any circumstances beyond the control of such first-mentioned
         Signatory and having a material adverse effect on the provision of any
         part of the FLAG Cable System in which such other Signatory is entitled
         to Assignable Capacity or has any other right or interest under this
         Agreement, including without limitation, any act of God, war, riot,
         fishing activity, fish bite, anchor damage, environmental conditions
         including, without limitations, severe weather conditions, or any
         order, act, fault, omission, sanction or request of any government,
         government authority or other public telecommunications authority,
         other than that of such first-mentioned Signatory.

                                      -64-
<PAGE>

30.      AMENDMENTS AND ADDITIONS

         30.1. Except as otherwise provided in this Paragraph 30, this Agreement
         and any of its provisions may be amended or added to only by amendatory
         agreement in writing signed by an authorized representative on behalf
         of each Signatory.

         30.2. Only one original of any amendatory agreement shall be executed.
         The Founding Signatory shall retain such executed original amendatory
         agreement and shall promptly distribute certified copies thereof to all
         other Signatories. Such certified copies shall be used in lieu of the
         executed original amendatory agreement in any arbitration, forum or
         proceeding.

         30.3.    (i)      This Agreement may be amended to allow for the
                           participation by additional Non-Landing Party
                           Signatories or for Signatories to increase their
                           Assignable Capacity by amendatory agreements executed
                           solely by the Founding Signatory and such additional
                           Non-Landing Party Signatories or such Signatories
                           acquiring additional Assignable Capacity. In such
                           case, the Schedules shall be appropriately amended.

                  (ii)     This Agreement and all Schedules hereto may be
                           amended to provide for the participation of the Saudi
                           Arabian Telecommunication Ministry of Posts,
                           Telegraphs & Telephones ("MOPT") as a Landing Party
                           Signatory owning a Segment T located in Jeddah, Saudi
                           Arabia and served via a Branching Unit, by an
                           amendatory agreement executed solely by the Founding
                           Signatory and the MOPT, provided that

                                      -65-
<PAGE>

                           participation by the MOPT shall not cause the RFPA
                           Date to be delayed. Such amendatory agreement shall
                           provide that the MOPT shall have the same rights and
                           obligations as the existing Landing Party
                           Signatories.

                  (iii)    This Agreement and all Schedules hereto may be
                           amended to provide for the participation of PT
                           (PERSERO) Indosat as a Landing Party Signatory owning
                           a Segment T to be located in Medan, Indonesia, served
                           via a fiber optic cable from Penang, Malaysia, or to
                           another landing point in Indonesia served via a
                           Branching Unit located on the FLAG Cable System
                           between Thailand and Hong Kong, by an amendatory
                           agreement executed solely by the Founding Signatory
                           and PT (PERSERO) Indosat, provided that participation
                           by PT (PERSERO) Indosat shall not cause the RFPA Date
                           to be deiayed. Such amendatory agreement shall
                           provide that PT (PERSERO) Indosat shall have the same
                           rights and obligations as the Landing Party
                           Signatories and shall participate in all
                           Subcommittees, including the Procurement
                           Subcommittee.

         30.4. Schedules K and L of this Agreement may be amended, as
         appropriate, to reflect transactions occurring pursuant to Paragraph 8.

                                      -66-
<PAGE>

         30.5. The Founding Signatory shall promptly distribute to all other
         Signatories certified copies of all amendatory agreements and
         amendments to the Schedules thereto made pursuant to Paragraphs 30.3
         and 30.4.

31.      EXECUTON OF AGREEMENT

         31.1. This Agreement is executed in one (1) original in the English
         language by all Signatories. The Founding Signatory shall retain such
         original and shall promptly distribute certified copies thereof to all
         other Signatories. Such certified copies shall be used in lieu of the
         executed original Agreement in any arbitration, forum or proceeding.

         31.2. This agreement shall not come into force and effect unless and
         until it has been executed by the Arab Republic of Egypt National
         Telecommunications Organization ("ARENTO") and Videsh Sanchar Nigam
         Limited ("VSNL"). In the event that such execution does not occur by
         March 31, 1995, this Agreement shall be null and void and no Signatory
         shall have any liability to any other Signatory with respect to the
         provisions set forth herein. In the event that this Agreement comes
         into force and effect, this Paragraph 31.2 shall be considered as
         automatically removed from the text of this Agreement.

32.      MEMORANDUM OF UNDERSTANDING SUPERSEDED

         32.1. This Agreement shall supersede in its entirety the Memorandum of
         Understanding dated as of July 19, 1993 entered ihto by and among the
         Founding Signatory and the following Signatories: Arab Republic of
         Egypt National Telecommunications

                                      -67-
<PAGE>

         Organization; The Communications Authority of Thailand; Emirates
         Telecommunications Corporation; the Government of Gibraltar; Hong Kong
         Telecom International Limited; International Digital Communications
         Inc.; IRITEL S.p.A. (the predecessor corporation to TELECOM ITALIA
         S.p.A.; Korea Telecom; Mercury Communications Limited; PT (PERSERO)
         Indonesia Satellite Corporation; SPT Telecom, a.s.; Telef6nica de
         Espana S.A.; Telekom Malaysia Berhad; and Videsh Sanchar Nigam Limited.

                                      -68-
<PAGE>

AS WITNESS the hands of the duly authorized -representatives of the Signatories
hereto the day and year first above written:

For FLAG Limited

/s/ Name of Signatory
---------------------

For Arab Republic of Egypt National Telecommunications Organization

/s/ Name of Signatory      27/12/94
-----------------------------------

For The Communications Authority of Thailand

/s/ Name of Signatory
---------------------

For Emirates Telecommunications Corporation

/s/ Name of Signatory
---------------------

For Hong Kong Telecom International Limited

/s/ Name of Signatory
---------------------

For International Digital Communications Inc.

/s/ Name of Signatory
---------------------

                                      -69-
<PAGE>

For BAHRAIN TELECOMMUNICATIONS COMPANY BSC

/s/ Name of Signatory
---------------------

For Belgacom

/s/ Name of Signatory
---------------------

For Cellular Communications Network (MALAYSIA) SDN, BHD

/s/ Name of Signatory
---------------------

/s/ Name of Signatory
---------------------

For Deutsche Bundepost Telekom

/s/ Name of Signatory
---------------------

For Eastern Telecommunications Philippines, Incorporated

/s/ Name of Signatory
---------------------

For General Directorate of Turkish PTT

/s/ Name of Signatory
---------------------

                                      -70-
<PAGE>

For Gibraltar NYNEX Communications United

/s/ Name of Signatory
---------------------

For Korea Telecon

/s/ Name of Signatory
---------------------

For Mercury Communications Limited

/s/ Name of Signatory
---------------------

For TELECOM ITALIA S.p.A.

/s/ Name of Signatory
---------------------

For Telefonica de Espana S.A.

/s/ Name of Signatory
---------------------

For Telekom Malaysia Berhad

/s/ Name of Signatory
---------------------

For Videsh Sanchar Nigam Limited

/s/ Name of Signatory
---------------------

                                      -71-
<PAGE>

For AT&T Corp.

/s/ Name of Signatory
---------------------

For Hungarian Telecommunications Company Ltd.

/s/ Name of Signatory
---------------------

/s/ Name of Signatory
---------------------

For International Telecom Japan Inc.

/s/ Name of Signatory
---------------------

For International Telecommunication Development Corporation

/s/ Name of Signatory
---------------------

For Kokusai Denshin Denwa Co., Ltd.

/s/ Name of Signatory
---------------------

For Office Des Telephones

/s/ Name of Signatory
---------------------

For OPTUS Networks Pty Limited

/s/ Name of Signatory
---------------------

                                      -72-
<PAGE>

For Pacific Gateway Exchange

/s/ Name of Signatory
---------------------

For Philippine Long Distance Telephone Company

/s/ Name of Signatory
---------------------

For Polish Telecom

/s/ Name of Signatory
---------------------

For PT SATELIT PALAPA INDONESIA

/s/ Name of Signatory
---------------------

For PTT Telecom BV

/s/ Name of Signatory
---------------------

For ROSTELECOM Joint Stock Company

/s/ Name of Signatory
---------------------

For Singapore Telecommunications Limited

---------------------

                                      -73-
<PAGE>

For Sprint Communications Company L.P.

/s/ Name of Signatory
---------------------

For Swiss Telecom PTT

/s/ Name of Signatory
---------------------

For Telecom Denmark A/S

/s/ Name of Signatory
---------------------

For Teleglobe Canada Inc.

/s/ Name of Signatory
---------------------

For Telkom SA Limited

---------------------
For Telemalta Corporation

/s/ Name of Signatory
---------------------

For Televerket A/S (Norwegian Telecom Ltd.)

/s/ Name of Signatory
---------------------

                                      -74-
<PAGE>

For Telia AB

/s/ Name of Signatory
---------------------

For Transoceanic Communications, Incorporated

/s/ Name of Signatory
---------------------

For Ukrainian Enterprise of Long-distance International and

Telecommunications and TV

/s/ Name of Signatory
---------------------

                                      -75-

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