Document:

EXHIBIT 10.3

                                                                       EXHIBIT A
                                                                 FORM OF WARRANT

--------------------------------------------------------------------------------
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. NEITHER THIS WARRANT NOR SUCH
SECURITIES NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED
OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933 AND THE
APPLICABLE RULES AND REGULATIONS THEREUNDER.

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

                            RSL COMMUNICATIONS, LTD.

                 Warrant for the Purchase Class A Common Shares

                                                  ________ Class A Common Shares

      FOR VALUE RECEIVED, RSL COMMUNICATIONS, LTD. (the "Company"), a Bermuda
corporation, hereby certifies that RONALD S. LAUDER, or his registered assigns
(the "Holder") is entitled, subject to the provisions of this Warrant, to
purchase from the Company, at any time or from time to time during the Exercise
Period, as hereinafter defined, an aggregate of ________ fully paid and
nonassessable Class A Common Shares of the Company, par value $0.00457 per
share, at a purchase price per share equal to the Exercise Price as hereinafter
defined. The term "Common Stock" shall mean the aforementioned Class A Common
Shares, par value $0.00457 per share, of the Company, together with any other
equity securities that may be issued by the Company in substitution therefor.
The number of shares of Common Stock to be received upon the exercise of this
Warrant and the Exercise Price are subject to adjustment from time to time as
hereinafter set forth.

      Section 1. Definitions. The following terms, as used herein, have the
following respective meanings:

      "Act" means the Securities Act of 1933, as amended.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Exercise period" means the period of time from the Issuance Date until
5:00 P.M., local time in New York City, on the date that is the seventh
anniversary of the Issuance Date.

      "Exercise Price" shall be a price per share of Common Stock equal to
$11.50.

<PAGE>

      "Issuance Date" means ____________________.

      "Unit Warrants" means the Warrants to purchase the Company's Class A
Common Stock initially attached to the Senior Notes due 2006 issued by RSL
Communications PLC, a United Kingdom corporation and wholly owned subsidiary of
the Company.

      "Warrant Shares" means the shares of Common Stock deliverable upon
exercise of this Warrant, as adjusted from time to time, except as provided in
Section 10 hereof.

      Section 2. Exercise of Warrant. Subject to the provisions of Section 10,
this Warrant may be exercised in whole or in part, at any time or from time to
time, during the Exercise Period, by presentation and surrender hereof to the
Company at its principal office at the address set forth on the signature page
hereof (or at such other address as the Company may hereafter notify the Holder
in writing), or at the office of its stock transfer agent or warrant agent, if
any, with the Warrant Exercise Form annexed hereto duly executed and accompanied
by proper payment of the Exercise Price for the number of Warrant Shares
specified in such form. The Exercise Price shall be paid in cash, in currency of
the United States of America. If this Warrant should be exercised in part only,
the Company shall, upon surrender of this Warrant, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable hereunder. Upon receipt by the Company of this
Warrant and such Warrant Exercise Form, together with the applicable Exercise
Price, at such office, in proper form for exercise, the Holder shall be deemed
to be the holder of record of the Warrant Shares, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Holder. The Company shall pay any and all documentary stamp or similar issue
taxes payable in respect of the issue of the Warrant Shares. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issuance or delivery of certificates representing
Warrants or Warrant Shares in a name other than that of the Holder at the time
of surrender for exercise and, until the payment of such tax, shall not be
required to issue such Warrant Shares.

      Section 3. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise, shall be
validly issued, fully paid and nonassessable, free and clear of all liens,
security interests, charges and other encumbrance or restrictions on sale and
free and clear of all preemptive rights, subject, however, to the provisions of
Section 10.

                                       2
<PAGE>

      Section 4. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of such fractional share, determined as
follows:

            (i) If the Common Stock is listed on a national securities exchange
      or admitted to unlisted trading privileges on such an exchange, the
      current market value shall be the last reported sale price of the Common
      Stock on such exchange on the last Business Day prior to the date of
      exercise of this Warrant or if no such sale is made on such day, the mean
      of the closing bid and asked prices for such day on such exchange; or

            (ii) If the Common Stock is not so listed or admitted to unlisted
      trading privileges, the current market value shall be the mean of the last
      bid and asked prices reported on the last Business Day prior to the date
      of the exercise of this Warrant (A) by the Nasdaq National Market or (B)
      by the Nasdaq Small Cap market or (C) if reports are unavailable under
      clause (A) or (B) above by the National Quotation Bureau Incorporated; or

            (iii) If the Common Stock is not so listed or admitted to unlisted
      trading privileges and bid and asked prices are not so reported, the
      current market value shall be an amount determined in such reasonable
      manner as may be prescribed by the Board of Directors of the Company.

      Section 5. Exchange, Transfer, Assignment or Loss of Warrant. This Warrant
is exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company for other Warrants of different
denominations, entitling the Holder or Holders thereof to purchase in the
aggregate the same number of Warrant Shares. The Holder of this Warrant shall be
entitled without obtaining the consent of the Company, to assign its interest in
this Warrant in whole or in part to any person or persons, subject to the
provisions of Section 10. Subject to the provisions of Section 10, upon
surrender of this Warrant to the Company, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, the Company
shall, without charge, execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees named in such instrument of assignment and, if the
Holder's entire interest is not being assigned, in the name of the Holder, and
this Warrant shall promptly be cancelled. This Warrant may be divided or
combined with other Warrants that carry the same rights upon presentation hereof
at the office of the Company, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
Holder hereof. The term "Warrant" as used herein includes any Warrants into
which this Warrant may be divided or for which it may be exchanged. Upon receipt
by the Company of evidence satisfactory to it of the loss, theft, destruction

                                       3
<PAGE>

or mutilation of this Warrant, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and cancellation
of this Warrant, if mutilated, the Company shall execute and deliver a new
Warrant of like tenor and date.

      Section 6. Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant.

      Section 7. Anti-dilution Provisions. In case the Company shall, while this
Warrant remains in effect, (i) declare a dividend or make a distribution on its
Common Stock payable in shares of its capital stock (whether shares of Common
Stock or of capital stock of any other class) other than dividends paid in
respect of the Company's Series A preferred shares, (ii) subdivide shares of its
Common Stock into a greater number of shares, (iii) combine its outstanding
Common Stock into a smaller number of shares, or (iv) issue any shares of its
capital stock by reclassification of its Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), the Holder shall be entitled to purchase
the aggregate number and kind of shares which, if the Warrant had been exercised
immediately prior to such event, the Holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination or reclassification; and the Exercise Price shall
automatically be adjusted immediately after the record date, in the case of a
dividend or distribution, or the effective date, in the case of a subdivision,
combination or reclassification, to allow the purchase of such aggregate number
and kind of shares. Such adjustments shall be made successively whenever any
event listed above shall occur.

      No adjustment pursuant to this Section 7 in the number of Warrant Shares
purchasable hereunder shall be required unless such adjustment would require an
increase or decrease of at least one whole share; provided, however, that any
adjustments which by reason of this sentence are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 7 shall be made to the nearest share. In the
event that at any time, as a result of an adjustment made pursuant to this
Section 7, the Holder shall become entitled to receive any shares of the capital
stock of the Company other than Common Stock, thereafter the number of such
other shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in this
Section 7, and the provisions of this Warrant with respect to the Common Stock
shall apply on like terms to any such other shares.

      Section 8. Officers' Certificate. Whenever the number of Warrant Shares
purchasable hereunder shall be adjusted as required by the provisions of Section
7, the Company shall forthwith file in the custody of its Secretary or an
Assistant Secretary at

                                       4
<PAGE>

its principal office an officers' certificate showing the adjusted number of
Warrant Shares purchasable hereunder determined as herein provided, setting
forth in reasonable detail the facts requiring such adjustment and the manner of
computing such adjustment. Each such officers' certificate shall be signed by
the chairman, president or chief financial officer of the Company and by the
secretary or any assistant secretary of the Company. Each such officers'
certificate shall be made available at all reasonable times for inspection by
the Holder or any holder of a Warrant executed and delivered pursuant to Section
4 hereof and the Company shall, forthwith after each such adjustment, mail a
copy, by certified mail, of such certificate to the Holder or any such holder.

      Section 9. Reclassification, Reorganization, Consolidation or Merger. In
case of any Reorganization Transaction (as hereinafter defined), the Company
shall, as a condition precedent to such transaction, cause effective provisions
to be made so that the Holder shall have the right thereafter, by exercising
this Warrant, to purchase the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization Transaction by a
holder of the number of shares of Common Stock that might have been received
upon exercise of this Warrant immediately prior to such Reorganization
Transaction. Any such provision shall include provision for adjustments in
respect of such shares of stock and other securities and property that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 9 shall similarly apply
to successive Reorganization Transactions. For purposes of this Section 9,
"Reorganization Transaction" shall mean (excluding any transaction covered by
Section 7) any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a subdivision or
combination of the outstanding Common Stock and other than a change in the par
value of the Common Stock) or any consolidation or merger of the Company with or
into another corporation (other than a merger in which the Company is the
continuing corporation and that does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock issuable
upon exercise of this Warrant) or any sale, lease transfer or conveyance to
another corporation of the property and assets of the Company as an entirety.

      Section 10. Transfer to Comply with the Securities Act of 1933. The
Holder, by his acceptance hereof, represents and warrants that he is acquiring
the Warrants and any Warrant Shares for investment purposes, for his own account
and not in conjunction with any other person, directly or indirectly, and not
with an intent to sell or distribute the Warrants or any Warrant Shares except
in compliance with applicable United States federal and state securities law in
a manner which would not result in the issuance of the Warrants being treated as
a public offering. This Warrant and the Warrant Shares may be transferred and
assigned; provided, however, that neither this Warrant nor any of the Warrant
Shares, nor any interest in either, may be sold, assigned, pledged,
hypothecated, encumbered or in any other manner transferred or disposed of, in
whole or in part, except in compliance with applicable United States federal and
state securities laws and the

                                       5
<PAGE>

terms and conditions hereof. Each Certificate for Warrant Shares issued upon
exercise of this Warrant, unless at the time of exercise such Warrant Shares are
registered under the Act, shall bear the following legend:

            THIS CERTIFICATE AND THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933. NEITHER THIS CERTIFICATE NOR
      SUCH SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE SOLD,
      ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER
      TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF
      1933 AND THE APPLICABLE RULES AND REGULATIONS THEREUNDER.

Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend unless, in the
opinion of counsel for the Company, the securities represented thereby need no
longer be subject to the restriction contained herein. The provisions of this
Section 10 shall be binding upon all subsequent holders of certificates bearing
the above legend and all subsequent holders of this Warrant, if any.

      Section 11. Registration Rights. The Holder shall be entitled to the same
rights as the holders of Unit Warrants to registration of the offering of such
Holder's Warrant Shares under the Act.

      Section 12. Listing on Securities Exchanges. The Company shall use its
best efforts to list the Warrant Shares on each national securities exchange on
which any Common Stock may at any time be listed, subject to official notice of
issuance upon the exercise of this Warrant, and shall use its best efforts to
maintain, so long as any other shares of its Common Stock shall be so listed,
such listing of all shares of Common Stock from time to time issuable upon the
exercise of this Warrant; and the Company shall use its best efforts to so list
on each national securities exchange, and shall use its best efforts to maintain
such listing of, any other shares of capital stock of the Company issuable upon
the exercise of this Warrant if and so long as any shares of capital stock of
the same class shall be listed on such national securities exchange by the
Company. Any such listing shall be at the Company's expense.

      Section 13. Availability of Information. The Company shall comply with the
reporting requirements of Sections 13 and 15(d) of the Exchange Act to the
extent it is required to do so under the Exchange Act. The Company shall also
cooperate with each Holder of any Warrants and holder of any Warrant Shares in
supplying such information as may be necessary for such holder to complete and
file any information reporting forms currently or hereafter required by the
Securities and Exchange Commission as a condition to the availability of an
exemption from the Act for the sale of any Warrants or Warrant

                                       6
<PAGE>

Shares. The provisions of this Section 13 shall survive termination of this
Warrant, whether upon exercise of this Warrant in full or otherwise.

            IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of _________________.

                                    RSL COMMUNICATIONS, LTD.

                                    By:  _______________________________
                                            Title:
                                            Address:

                                       7
<PAGE>

                              WARRANT EXERCISE FORM

                                                    Dated ________________, 20__

      The undersigned hereby irrevocably elects to exercise the within Warrant
to the extent of purchasing ___________ shares of Common Stock and hereby makes
payment of ______________ in payment of the exercise price thereof.

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

                     INSTRUCTIONS FOR REGISTRATION OF STOCK

Name
________________________________________________________________________________
(please typewrite or print in block letters)

Address
________________________________________________________________________________

Signature _________________________________________________

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

                                 ASSIGNMENT FORM

      FOR VALUE RECEIVED, ____________________________________ hereby sells,
assigns and transfers unto

Name
________________________________________________________________________________
(please typewrite or print in block letters)

Address
________________________________________________________________________________

its right to purchase _____________ shares of Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint______________________
___________________________________ Attorney, to transfer the same on the books
of the Company, with full power of substitution in the premises.

Date: _______________, 19__

                                    Signature __________________________

                                       8EXHIBIT 10.4

                                                         Public Deed No. 44/2000

                              P U B L I C  D E E D
                              (Offentliche Urkunde)

Before me, the undersigned Public Notary of the Canton of Zug, Switzerland,
Peter B. Arnold, at his offices at Untermuli 6, CH-6300 Zug, Switzerland,
appeared on Saturday, this 6th day of May 2000:

Mr. Stefan Koller, Attorney at Law and Notary Public, born 23.09.1958, Swiss
citizen, residing at CH-6312 Steinhausen, Switzerland, Rebenstrasse 6, having
his offices at Untermuli 6, CH-6300 Zug, Switzerland, here not acting in his own
name, but as representative, exempt of personal liability, acting without
express authority in the name and on behalf of

Seat Pagine Gialle S.p.A., Via Aurelio Saffi, 18, I-1038 Turin, Italy

and

RSL COM Deutschland GmbH, D-60528 Frankfurt am Main, Lyonerstr. 9

and

J.P. Morgan Securities Limited, 60 Victoria Embankment, GB-London EC 4Y 0JP

and

Morgan Stanley Bank AG, Junghofstrasse 13-15, D-60311 Frankfurt am Main

under the reservation to supply to the acting notary a forthcoming certified
consent by each one of the foregoing parties, in legally appropriate form, as
soon as reasonably possible and without undue delay.

<PAGE>

This having been done, the person appearing declared, requesting that it be
notarised, the following:

I.    RSL Com Deutschland GmbH and Seat Pagine Gialle S.p.A. hereby conclude the
      Joint Venture Agreement as Annex I with the following Exhibits:

1     Articles of Association of Telegate Holding GmbH, Planegg-Martinsried,
      Germany, to be amended as shown in Exhibit 1 to the Joint Venture
      Agreement

2     Business Plan as Exhibit 2 to the Joint Venture Agreement

3     Option Agreement between Seat Pagine Gialle S.p.A. and RSL Com Deutschland
      GmbH as Exhibit 3, such Exhibit 3 with Sub-Exhibits 1 to 4, with a Share
      Purchase Agreement in Sub-Exhibit 4, Sub-Exhibit 4 with a Share Transfer
      Agreement in Annex 1;

4     RSL Com Deutschland GmbH, J.P. Morgan Securities Ltd. and with regard to
      the Escrow Agreement as referred to below Morgan Stanley Bank AG hereby
      conclude the Borrowing and Forward Purchase Agreement as Exhibit 4 to the
      Joint Venture Agreement which consists of:

            the Overseas Securities Lender's Agreement together with a Schedule
            concluded between RSL Com Deutschland GmbH and J.P. Morgan
            Securities Ltd.;

            the Borrowing Request concluded between RSL Com Deutschland GmbH and
            J.P. Morgan Securities Ltd.;

            the Agreement for the Transfer of Shares concluded between RSL Com
            Deutschland GmbH and J.P. Morgan Securities Ltd., with a
            shareholders' resolution of May 4, 2000 (Appendix 1), an approval of
            the managing director of May 4, 2000 (Appendix 2), a shareholders'
            resolution of May 6, 2000 (Appendix 3), and approval of future
            shareholder dated May 6, 2000 (Appendix 4);

            the Escrow Agreement with an Account Opening Application and the
            General Business Conditions of Morgan Stanley Bank AG concluded

<PAGE>

            between RSL Com Deutschland GmbH, J.P. Morgan Securities Ltd. and
            Morgan Stanley Bank AG;

            the ISDA 1992 Multicurrency Cross Border Master Agreement together
            with a Schedule concluded between RSL Com Deutschland GmbH and J.P.
            Morgan Securities Ltd.;

            the Forward Purchase Transaction concluded between RSL Com
            Deutschland GmbH and J.P. Morgan Securities Ltd.;

            the Master Netting Agreement concluded between RSL Com Deutschland
            GmbH and J.P. Morgan Securities Ltd.;

5     RSL Com Deutschland GmbH and Seat Pagine Gialle S.p.A. conclude the Share
      Purchase Agreement together with a Share Transfer Agreement as Annex 1 to
      the Share Purchase Agreement as Exhibit 5 to the Joint Venture Agreement;

6     Guarantee given by the Parent Company of RSL

and Schedules       5 e (financial statements),
                    5 i (agreements),
                    5 l (Betriebsvereinbarungen) ,
                    5 p (litigation),
                    5.2 (data room index list).

II.   RSL Com Deutschland GmbH, Seat Pagine Gialle S.p.A., J.P. Morgan
      Securities Ltd. and Morgan Stanley Bank AG hereby conclude the Arbitration
      Agreement as Annex II.

III.  Words and expressions in this deed and its appendices and annexes shall
      have the meanings defined in the respective part of this deed, and
      definitions used in one agreement contained in this deed are not
      necessarily applicable in another agreement contained in this deed.

IV.   The costs of this deed shall be borne by the Seat Pagine Gialle S.p.A. All
      other costs shall be borne by the party by which they are incurred.

<PAGE>

The notary informed the person appearing that

-     shareholders in a GmbH can be held jointly and severally liable for
      capital contributions not fully paid in,

-     insofar as the transfer of the title is subject to conditions precedent,
      the title passes only if those conditions are fulfilled.

The above and all appendices and annexes were laid out for inspection to the
person appearing and were approved by the person appearing and read out aloud to
the person appearing before the notary, approved by the person appearing and
executed by him in his own hand as follows:

Zug/Switzerland, this 6th day of May 2000

/s/
--------------------------
Stefan Koller

<PAGE>

                             Joint Venture Agreement

                              (Umbrella Agreement)

between

Seat Pagine Gialle SpA, with domicile in Turin (hereinafter "Seat"), an Italian
stock corporation,

and

RSL COM Deutschland GmbH, with domicile in Frankfurt am Main, a German limited
liability company (hereinafter "RSL"),

(hereinafter together the "Parties")

                                    Preamble

Seat is mainly active in the fields of producing and publishing telephone
directories and similar publications, and of selling advertising space in such
directories and publications, as well as providing direct marketing services, in
Italy and elsewhere.

RSL is active in the field of providing a broad range of voice, data, internet
and value-added product and service solutions within the telecommunications
industry.

RSL is active in the said field through amongst others (since 1998) a
participation of approx. 50.2 % in Telegate Holding GmbH (hereinafter the
"Holding"), a German holding company which in turn holds approx. 51% of the
shares in Telegate AG (hereinafter "Telegate"), a German stock corporation whose
shares are traded on the Frankfurt Neuer Markt and which is also active in the
field of providing directory assistance and other information, mostly via
telephone but also through an internet portal. Concurrently with the
notarization of this Agreement, Seat will notarize an agreement with the sole
other shareholder in the Holding, L, (the "L Umbrella Agreement") with a view to
acquire L's shareholding in the Holding.

<PAGE>

RSL wishes to expand the existing cooperation between RSL and Telegate currently
consisting of providing call completion services domestically and
internationally into a strategic partnership with Seat, as the new joint
venture-partner, by means of entering into a joint venture with Seat through
joint shareholding in the Holding (as a consequence of L's exit), allowing Seat
to take the lead in the joint venture and restricting RSL's role therein to
support Seat; it is anticipated that the support by RSL will no longer be needed
after a certain period of time. In view of that later time RSL wishes to offer
Seat and Seat wishes to offer RSL the right to request Seat to acquire RSL's
remaining shareholding in the Holding.

RSL wishes to allow Seat to take the lead in the Holding, and thus wishes to
transfer to Seat a 1.6 % share in the Holding thereby conferring the majority of
the Holding to Seat; via JPMorgan acting as an intermediary in this transaction
(hereinafter the "Intermediary"). For that purpose, RSL will transfer the said
share to Intermediary in in a separate Borrowing and Forward Purchase Agreement
(Exhibit 4 to this Agreement), and Intermediary will transfer the said share to
Seat in a separate Share Purchase (Contribution) Agreement (Exhibit 5 to this
Agreement).

By the present Agreement, Seat and RSL agree what shall apply between them in
connection with the above.

                                    Section 1

                   The Principles Governing the Joint Venture

1.    Strategic Partnership between RSL and Seat

      The Parties wish to enter into a strategic partnership with the aim of
      fostering the growth of Telegate. The undertakings of RSL under this
      Agreement shall show that RSL as the current majority shareholder in the
      Holding continues its support of Telegate also after surrendering control
      to Seat. At the same time, Seat as the new controlling shareholder of the
      Holding requires flexibility to integrate Telegate into its own overall
      strategic objectives.

<PAGE>

      The Parties agree that in the Holding Seat shall hold approx. 51.4 % and
      RSL approx. 48.6 %. For that purpose, RSL shall transfer shares in the
      Holding with an aggregate nominal value of DM 800 (corresponding in total
      to approx. 1.6 % of the share capital of the Holding) to Seat, as set
      forth in Section 2 subparagraph 1 and Section 3 subparagraph 1 below.

2.    Scope of Joint Venture Activities

      The joint venture activities shall relate to the support of Telegate's
      European and American expansion (see subparagraph a) below) and internet
      activities (see subparagraph b) below) and Italian expansion in particular
      (see subparagraph c) below).

      a)    European and American Expansion

            RSL undertakes to offer support to Telegate regarding the following
            matters on a non-exclusive basis, and subject to arm's length
            commercial terms and conditions:

            (i)   Inbound access

            (ii)  Completion services

            (iii) Network allocation

            (iv)  Real estate allocation

            (v)   Regulatory support

            (vi)  RSL own usage

            (vii) Billing services

      b)    Cooperation in the Internet Activities

            RSL undertakes to offer support to Telegate regarding the following
            matters on a non-exclusive basis, and subject to adequate terms and
            conditions:

<PAGE>

            (i)   Cooperation with RSL ASP (application service provider)
                  activity

            (ii)  Cooperation with RSL free internet access product line

            (iii) Use of RSL web hosting.

            Seat undertakes to offer support to Telegate regarding the following
            matters on a non-exclusive basis, and subject to adequate terms and
            conditions:

            (i)   Development of 11880.com internet service offering

      c)    Italian Expansion

            Seat undertakes to offer support to Telegate regarding the following
            matters on a non-exclusive basis , and subject to adequate terms and
            conditions:

            (i)   Development of audio services portal activities

            (ii)  Cooperation with Seat on developing White Pages activities

            (iii) Development of 11880.com internet service offering

3.    Implementation

      a)    Articles of Association of the Holding

            The Parties agree that the Articles of Association of the Holding
            shall have the form shown in Exhibit 1 to this Agreement. The
            Parties shall comply with such amended Articles of Association as of
            the day when Seat becomes a shareholder of the Holding even if the
            amendment of the Articles of Association (to be resolved upon
            pursuant to Section 11 subparagraph 1 litt. a) below) should by then
            not yet be registered with the competent commercial register.

<PAGE>

      b)    Business Plan

            The Parties shall develop in good faith a business plan based on the
            business targets as set out in Exhibit 2 to this Agreement. Such
            business plan shall be approved by a shareholders' resolution to be
            taken no later than September 30, 2000, unless the Parties agree
            otherwise. Any revision and changes to this plan shall also be
            agreed upon by way of a shareholders' resolution.

      c)    Strategy Meetings / Working Group

            The Parties shall establish a working group which shall hold regular
            meetings in order to review the progress and in order to prepare any
            necessary modification to the business plan. Meetings shall take
            place at least every 2 months upon request of either party and shall
            typically be held by way of telephone-/video conferences. The party
            inviting to the meeting shall be responsible for drafting the
            minutes.

4.    Structure of the Holding / Obligation to not Sell Share

      In light of its role assumed in the Joint Venture, RSL undertakes that it
      will not wholly or partly dispose of its shareholding in the Holding in
      any way, be it by selling, transferring, encumbering, pledging or granting
      any other rights to third parties of whatever nature in its shareholding
      in the Holding to a third party. For each violation of this undertaking,
      RSL shall owe a penalty equal to the consideration that would have been
      applicable if the Put Option or the Call Option pursuant to the Option
      Agreement (Exhibit 3 to this Agreement) had been exercised (at the time of
      the violation), it being understood that Seat may claim from RSL any
      higher amount of damage which it can show to have occurred. Seat has also
      the right to claim from RSL to restore its full and unencumbered
      shareholding in the Holding, and to then transfer its shareholding in the
      Holding to Seat at 90 % of the afore-mentioned penalty.

5.    Changes in the Holding

      The Parties agree that the Holding shall continue to hold its present
      shareholding in Telegate. RSL and Seat will undertake in good faith

<PAGE>

      negotiations with a view to change the size of the shareholding of the
      Holding in Telegate, if that is necessary in order to allow Seat to
      acquire the Remaining Shareholding by way of a contribution in kind, as is
      nearer explained in Section 8 of this Agreement and in the Option
      Agreement (Exhibit 3 to this Agreement), provided that such change must in
      no way adversely affect the position of RSL in and with regard to the
      exercise of the options under the Option Agreement.

6.    Changes in Telegate's share capital

      In the event that during the term of the Joint Venture Telegate intends to
      increase its share capital in a manner leading to Holding holding only 50%
      or less of the shares in Telegate RSL shall have the opportunity of either
      subscribing shares on a pro-rata basis to its indirect shareholding (as a
      consequence of which the amount of shares in Telegate covered by the put-
      and call-option according to the Option Agreement shall be adjusted
      accordingly) or getting sufficient time, but not more than two months
      after a respective request of Seat (but in no case earlier than January 1,
      2001) to obtain consent of its bondholders allowing it to reduce the
      holding of Holding in Telegate to 50% or less. In the event RSL chooses to
      seek for the consent of its bondholders and the aforementioned period
      expires without RSL stating to Seat that approval has been obtained Seat
      shall be entitled to exercise its call-option under the Option Agreement.

                                    Section 2

                 The Majority-Conferring Share and its Transfer

Concurrently to the notarization of the present Agreement, Seat will notarize
the L Umbrella Agreement with, whereby Seat will acquire a shareholding of a
nominal DM 25,400 corresponding to approx. 49.8 % in the Holding. By virtue of
the present Agreement, Seat shall acquire an additional shareholding of approx.
1.6 % in the Holding (as nearer set forth in this Section 2) which additional
shareholding shall hereinafter be referred to as the "Majority-Conferring
Share".

<PAGE>

1.    The Majority-Conferring Share shall be a share in the Holding with a
      nominal value of DM 800 out of a total nominal share capital of the
      Holding of DM 51,000 and hence representing approx. 1.6 % of the share
      capital in the Holding. RSL shall create the Majority-Conferring Share by
      splitting its existing share in the Holding with a nominal value of DM
      25,600 into two shares with nominal amounts of DM 24,800 and DM 800 (the
      Majority-Conferring Share), respectively. Concurrently with the
      notarization of this Agreement, (i) RSL has declared the said split by the
      declaration shown in Appendix 2 to the Agreement for the Transfer of
      Shares attached to the Borrowing and Forward Purchase Agreement (Exhibit
      4); (ii) the Holding has approved of the said split, by the declaration
      shown in Appendix 1 to the Agreement for the Transfer of Shares attached
      to the Borrowing and Forward Purchase Agreement (Exhibit 4); (iii) and L,
      RSL and the Intermediary, each in its capacity as (future) shareholder of
      the Holding, shall approve of the transfers of the Majority-Conferring
      Share, by the declaration shown in Appendices 1, 3 and 4 to the Agreement
      for the Transfer of Shares attached to the Borrowing and Forward Purchase
      Agreement (Exhibit 4).

2.    The Majority-Conferring Share shall be transferred from RSL to the
      Intermediary by virtue of the Borrowing and Forward Purchase Agreement
      (Exhibit 4). The Intermediary shall transfer the Majority-Conferring Share
      further to Seat as a contribution in kind to the an increase of the share
      capital of Seat, through a Share Purchase (Contribution) Agreement which
      shall be notarized concurrently with this Agreement, which is attached as
      Exhibit 5 to this Agreement and pursuant to which the transfer to Seat
      shall become effective at the shortest possible interval before the newly
      issued shares shall in freely tradeable form be delivered to the
      Intermediary.

                                    Section 3

                                  Consideration

1.    The consideration for the Majority-Conferring Share, owed by Seat to the
      Intermediary (only), shall consist in shares in Seat in such number as is
      defined in subparagraph 2, and shall be due at such time as is defined in
      subparagraph 3.

<PAGE>

      The consideration for the Majority-Conferring Share, to which RSL is
      entitled against the Intermediary (only), shall consist in cash generated
      by the monetization of the shares due by Seat to the Intermediary, in such
      amount as set forth in subparagraph 4, and shall be due at such time as
      set forth in subparagraph 5.

2.    The number of shares in Seat due for the Majority-Conferring Share shall
      be calculated as follows:

      (i)   Firstly, it shall be established what number of Telegate shares the
            Majority-Conferring Share indirectly represents (Example: If there
            is a total of 12,730,000 outstanding Telegate shares of which the
            Holding owns 6,490,577 shares, and the Holding has a registered
            share capital of DM 51,000, then the Majority-Conferring Share with
            a nominal value of DM 800 shall represent 101,813 shares in
            Telegate);

      (ii)  Secondly, the value of the shares in Telegate and Seat shall be
            assessed. (a) For this purpose, the value of each share in Telegate
            shall be deemed to be the higher of (aa) 150 and (bb) the official
            closing price as published by Bloomberg for Telegate shares on the
            Frankfurt Stock Exchange one day prior to the notarization of this
            Agreement (hereinafter "T.May3"); whilst (b) the value of each share
            in Seat shall be the Official Closing Price ("Prezzo di
            Riferimento") as published by Bloomberg for Seat shares on the Milan
            Stock Exchange one day prior to the notarization of this Agreement
            (hereinafter "S.May3").

      (iii) By comparing the respective values, which is to be done by dividing
            (a) the higher of (aa) 150 and (bb) T.May3 by (b) S.May3, the number
            of Seat shares is obtained which correspond to one Telegate share.

3.    Seat shall transfer such number of Seat shares as result from the above
      calculation to the Intermediary at such moment when an according number of
      Seat shares will be available following

      (i)   a resolution, to be passed at Seat's extraordinary shareholders'
            meeting scheduled to take place on or around June 30, 2000, whereby
            the registered share capital of Seat shall be increased by such an
            amount and in such ways as is necessary to allow Seat to provide the
            Intermedi-

<PAGE>

            ary with such number of new Seat shares as will be owed as
            consideration for (i) the Majority-Conferring Share, and (ii) the
            Shareholding as defined in and pursuant to the L Umbrella Agreement;
            and

      (ii)  the completion of such additional steps as are required under
            Italian law for making the new shares resulting from the said
            shareholders' resolution on the capital increase, available as
            freely tradeable shares.

      The Parties expect the said new Seat shares to be available as freely
      tradeable shares on or around August 7, 2000. If this is not the case by
      October 15, 2000, Section 4 subparagraph 3 shall apply.

4.    RSL shall receive from the Intermediary a cash amount for the
      Majority-Conferring Share which is to be calculated as follows
      (hereinafter the "Cash Equivalent"):

      (i)   Firstly, it shall be established (the same way as in subparagraph 2
            (i)) what number of Telegate shares the Majority-Conferring Share
            indirectly represents;

      (ii)  Secondly, the price of the Telegate share shall be deemed to be the
            higher of (aa) 150 and (bb) the closing price as published by
            Bloomberg for the Telegate share on the Frankfurt Stock Exchange one
            day prior to the notarization of this Agreement;

      (iii) Thirdly, the number of Telegate shares represented by the
            Majority-Conferring Share (subparagraph (i)) shall be multiplied
            with the price of the Telegate share as resulting from subparagraph
            (ii).

5.    The Intermediary shall pay the Cash Equivalent into an escrow account two
      banking days after the notarization of the Borrowing and Forward Purchase
      Agreement (Exhibit 4). The escrow shall be released to RSL, including the
      interest accrued, on the earlier of (i) such day when Seat shall transfer
      the new Seat shares to the Intermediary, pursuant to subparagraph 3, and
      (ii) October 16, 2000 provided Seat decides to uphold this agreement
      pursuant to Section 4 No. 3 (b).

6.    The Intermediary is not a party to this Agreement. All arrangements which
      need to be made between the Intermediary and Seat, and between the
      Intermediary and

<PAGE>

      RSL in light of the provisions of this Section, are contained in the
      Borrowing and Forward Purchase Agreement to be notarized by RSL and the
      Intermediary concurrently with the notarization of this Agreement (Exhibit
      4), and in the Sale and Purchase (Contribution) Agreement to be notarized
      by Seat and the Intermediary concurrently with the notarization of this
      Agreement (Exhibit 5).

                                    Section 4

                   Conditions Precedent; Event of Termination;
                      Event of Requalification; Rescission

1.    Conditions Precedent

      This Agreement shall not become effective (except for its Section 12,
      Section 13 subparagraphs 1 and 2, and 14 which shall become effective upon
      the notarization of this Agreement) prior to the fulfilment of the
      following conditions precedent:

      a)    The L Umbrella Agreement has been notarized and any agreements and
            resolutions and other declarations attached to it have been
            notarized or signed by the parties thereto;

      b)    The transactions contemplated in this Agreement and in the L
            Umbrella Agreement, have received merger control clearance from the
            competent antitrust authority or authorities, or the applicable
            statutory waiting period has expired;

      c)    The ultimate parent company of RSL has provided the guarantee as set
            forth in Section 10,

2.    Automatic Termination

      This Agreement shall automatically cease to be effective without a need
      for further declarations from the Parties, and all effects already
      materialized under

<PAGE>

      this Agreement shall be unwound, (except for its Section 12, Section 13
      subparagraphs 1, 2 and 3, and 14) if the resolution by the shareholders'
      of Seat to be taken pursuant to Section 3 subparagraph 3 (i) is not taken
      by July 31, 2000.

3.    Termination and Requalification

      In such a case where the resolution by the shareholders' of Seat to be
      taken pursuant to Section 3 subparagraph 3 (i) has been taken and there is
      no event of termination pursuant to subparagraph 2, but where the
      conditions contemplated in Section 3 subparagraph 3 (ii) have not
      materialized by October 15, 2000, 23.59 p.m., Seat may in its discretion
      decide whether (a) it terminates this agreement against a break-up fee
      payable to RSL in the amount of 7,500,000 or (b) whether it upholds this
      agreement provided however that in this case (b) the consideration to the
      Intermediary pursuant to Section 3 subparagraph 2 shall no longer be due
      in the form of new Seat shares, but in the form of a cash amount
      corresponding to the Cash Equivalent (as defined in Section 3 subparagraph
      4).

4.    Rescission

      Seat may rescind this Agreement (zurucktreten) if RSL is not the sole
      owner of the Majority-Conferring Share; or that RSL is not the sole owner
      of the Remaining Shareholding (as defined in Section 8), or that L is not
      the sole owner of the Shareholding as defined in the L Umbrella Agreement,
      or that the Holding is not the sole owner of the majority of the
      outstanding shares in Telegate; or that any of the mentioned shareholding
      and shares is not completely free of any rights, liens and encumbrances
      whatsoever for the benefit of third parties (except for the requirement
      under the articles of association of the Holding whereby the transfer of
      shares in the Holding requires the approval of all other shareholders).

      Seat may also rescind this Agreement if for any reason not attributable to
      Seat, the transfer of the Shareholding as defined in the L Umbrella
      Agreement to Seat is not done or does not become effective by the time due
      under the L Umbrella Agreement.

<PAGE>

      Seat may declare the rescission pursuant to this subparagraph only prior
      to the moment when both (i) the transfer of the Shareholding as defined in
      the L Umbrella Agreement to Seat has become effective and (ii) the
      transfer of the Majority-Conferring Share to Seat has become effective.

                                    Section 5

                              Guarantees given by R

1.    RSL represents and warrants by way of an independent guarantee obligation
      pursuant toss.ss. 305 and 241 of the German Civil Code ("selbstandiges
      Garantieversprechen") to Seat that the following statements are true,
      complete and correct in all material respects as of the time of
      notarization this Agreement. All of the following guarantees when
      referring to the "Companies" mean all of the Holding, Telegate and all
      direct and indirect majority-held German subsidiaries of Telegate
      including but not limited to Datagate GmbH, 11880.com GmbH, and Telegate
      Anklam Gesellschaft fur telefonische Informationsdienste mbH.

      a)    Authority to Enter into this Agreement

            RSL has the corporate power and authority to enter into this
            Agreement with no requirement for (further) internal or intra-group
            approvals. All corporate actions, if any, which are necessary and
            appropriate for RSL to take in order to enter into this Agreement
            have been taken.

      b)    Absence of Conflicting Obligations

            Except for this Agreement, there is no contract, option or any other
            right of another party binding upon (or which at any time in the
            future may become binding upon) RSL or upon any of the Companies to
            sell, transfer, pledge, mortgage or in any other way dispose of or
            encumber any of the shares in any (other) of the Companies.

<PAGE>

      c)    The Companies

            Each of the Companies and teleSAFE.net AG and phonecom Kommunikation
            GmbH are validly existing under the laws of the jurisdiction which
            applies to it. With regard to none of the Companies there is a
            resolution to put it in liquidation or to unwind it in whichever
            way. With regard to none of the Companies have insolvency
            proceedings or settlement proceedings of whatever nature been
            proposed, requested or opened by any person or entity, at any time.

      d)    Unrestricted Share Ownership

            RSL is the sole and lawful owner of shares with a total nominal
            value of DM 25.600 in the Holding such shareholding representing the
            majority shareholding in the Holding whose total registered share
            capital amounts to DM 51,000.

            The Holding is the sole and lawful owner of a number of 6,490,577 of
            all outstanding shares in Telegate which in the total amount to a
            number of 12,730,000 (not including the authorised share capital of
            up to another 200,000 shares).

            Telegate is the sole and lawful direct or indirect owner of 100 % of
            the shares in Datagate GmbH, 11880.com GmbH and telegate Anklam
            Gesellschaft fur telefonische Informationsdienste GmbH and of a 33
            1/3 % shareholding in teleSAFE.net AG and of a 35 % shareholding in
            phonecom Kommunikation GmbH.

            All shares in all of the Companies are duly authorized, validly
            issued and fully paid up, and free and clear of any third party's
            rights (including any rights of pledge and rights of first refusal),
            restrictions, encumbrances and liens whatsoever and no repayment of
            share capital has been effected, and no share capital increases are
            pending at the Companies or have been agreed, in particular no share
            capital increases allowing any party other than one of the Companies
            to take a shareholding in any of the Companies (except for what has
            been announced in the agenda of the annual general meeting of
            Telegate convened for May 31, 2000).

<PAGE>

      e)    Financial Statements

            The financial statements (including the balance sheet and the profit
            and loss account) as of December 31, 1999 of all the Companies,
            whether audited or unaudited, consider all the assets, obligations,
            liabilities and risks of the businesses conducted by the respective
            Companies, as of December 31, 1999 which should be considered there
            applying the generally accepted accounting principles of the
            relevant jurisdiction(s). All financial statements as of December
            31, 1998 and December 31, 1999 which have been audited, and have
            received the unqualified certification (uneingeschrankter
            Bestatigungsvermerk) by the auditing Wirtschaftsprufer. All
            financial statements as of December 31, 1998 and December 31, 1999
            of the Holding, which have not been audited, are attached to this
            Agreement as Schedule 5 e in a form signed by the managing director
            of the Holding.

      f)    No Shareholder Loans

            There is no financial indebtedness of any of the Companies towards
            RSL or any company affiliated to RSL (other than the Companies). All
            business which is being conducted between RSL and any companies
            affiliated to RSL (other than the Companies) on the one hand and any
            of the Companies on the other hand is at arm's length and may be
            terminated by the Companies (should they wish to do so)
            substantially within such terms and under such conditions as are
            customary in the industry.

      g)    Conduct of Business

            Since December 31, 1999 the Companies have not disposed of their
            businesses or of a material part thereof and the Companies and their
            businesses have been conducted in their usual and ordinary course in
            all material respects employing the care of a diligent and
            conscientious manager (within the meaning of ss. 93 subparagraph 1
            of the German Stock Corporation Act and ss. 43 subparagraph 1 of the
            German Limited Liability Companies Act). Furthermore, since December
            31, 1999 there

<PAGE>

            have been no material adverse changes in the financial situation of
            the Companies.

      h)    Governmental Approvals, Licences and Permits, Compliance with Laws

            The current operations and activities of the Companies including
            without limitation their current operations and activites in the
            five business core areas (i) data (enrichment, combination and
            sale), (ii) internet, (iii) telephony (technical operations), (iv)
            TIS (telephony information services) and (v) CCS (call center
            services) are, to the best knowledge of RSL, all in compliance in
            all material respects with all laws and governmental regulations and
            orders.

            To the extent the operations and activities of the Companies require
            the the assignment of call numbers or the possession of governmental
            approvals, licences or permits (including all material approvals,
            licences or permits as may be required under applicable
            telecommunications laws, and including the assignment of the call
            numbers "11880", 11887", "11890" and the interconnect access code
            "01080"(provided however that the interconnect access "01080" is
            currently not used by Telegate and may therefore be revoked), such
            approvals, licences or permits are all being held by the respective
            Companies. Such assignments, approvals, licences and permits are in
            full force and effect and will not be terminated due to the
            transactions contemplated in this Agreement. RSL and Telegate do not
            know of any circumstances which could justify a revocation of these
            assignments, approvals, licences or permits. The conditions
            ("Bedingungen" and/or "Auflagen") accompanying these approvals,
            licences and permits have been complied with in all material
            respects.

      i)    Essential Agreements

            The interconnection agreement dated December 12, 1999 and the
            billing agreement dated October 12, 1998 Telegate has entered into
            with Deutsche Telekom AG (hereinafter together the "Essential
            Agreements") are all in full force and effect pursuant to the terms
            and conditions thereof, and enforceable in accordance with their
            terms and conditions against the other parties thereto, except as
            enforcement

<PAGE>

            thereof may be limited by applicable bankruptcy, insolvency,
            reorganization, moratorium or other similar laws affecting the
            rights of creditors. Neither Telegate (or any other of the
            Companies) nor the other parties are in default in any material
            respect under any material provision of the Essential Agreements.
            The Companies are not aware that the other party to any of the
            Essential Agreements has any intention not to continue any of the
            Essential Agreements as currently practised.

            Schedule 5 i shows a list of all agreements entered into by any of
            the Companies which require (irrespective of whether such agreements
            are considered Essential Agreements) a yearly expenditure in excess
            of DM 1,000,000 (DM One Million) or which cannot be terminated with
            one year's notice at the latest.

      j)    Trademarks, Know-how, Other Intellectual Property Rights and Domain
            Names

            The Companies are the owners of all know-how the Companies use in
            their businesses. Telegate is the owner of the trademark "Telegate"
            (all together hereinafter "Intellectual Property Rights"). Seat is
            informed about the current status of registration concerning the
            registered and applied for trademarks. All Intellectual Property
            Rights are free of liens and encumbrances by third parties. The
            Companies need not to rely on licence-agreements with third parties.

            The Companies are the sole and lawful owners, and do not need to
            rely on licences, of those of the internet domain names
            "telegate.com", "telegate.de", "travelgate.de" and "11880.com",
            which internet domain names are in each case clear and free of all
            liens, encumbrances and any other rights of third parties.

            To the best knowledge of RSL, there are no claims by third parties
            challenging any of the Company's rights or title, nor are there any
            factual violations, in each case with regard to any of the
            trademarks, domain names, know-how or other intellectual property or
            name rights of the Companies, or any products which are currently
            being developed in the Business.

<PAGE>

            To the best knowledge of RSL, the trademarks, domain names, know-how
            or other intellectual property or name rights of the Companies, and
            their use do not infringe any third party's rights.

      k)    Technical Equipment

            All technical equipment used by the Companies in carrying out their
            businesses, whether owned, leased or licensed, and including without
            limitation computer hardware, computer programs, switches and all
            other devices, is in good working order and is sufficient to cover
            substantially all current needs of the businesses of the Companies.

      l)    Employees

            All key employees of the Companies have been hired in the ordinary
            course of business. There have not been any written or oral promises
            of pay rises or any other additional remuneration to any of the key
            employees. There are no outstanding payments of salaries, bonuses,
            vacation pay, social insurance contributions and all other payments
            due under the employment relationships. No key employee at any of
            the Companies has made known the intention to leave. RSL or
            companies affiliated to it (other than the Companies) have not
            offered employment to any key employee of any of the Companies. No
            key employees have been given a right to receive a severance payment
            in case of termination of their employment agreements exceeding the
            rights provided for by statutory law or collective bargaining
            agreements, nor have the members of the management board of Telegate
            been granted any such right to receive a severance payment in cash
            or in kind. There is no labor litigation with any of the employees
            of the Companies exceeding in the individual case a value of DM
            100,000; and all labor litigation does in the aggregate not exceed a
            value of DM 500,000. Schedule 5-l shows a complete list of all
            material shop agreements ("Betriebsvereinbarungen") which the
            Companies have stipulated with the competent works councils. The
            Companies are, on the date hereof, not engaged in any material legal
            dispute with trade unions, shop councils or any other employees
            organizations.

<PAGE>

      m)    Insurances

            The Companies have taken out, for insured sums as are in accordance
            with applicable market standards, all the insurances which are
            mandatory under the law and all such other insurances as are
            appropriate or customary in the type of business as conducted by the
            Companies, and all insurance premiums have timely been paid.

      n)    Taxes

            The Companies have filed all tax returns, which returns are complete
            and correct in all material respects, required to be filed by them
            or on their behalf with any tax of governmental authority in any
            jurisdiction; and have paid in full all federal, state, local or
            foreign taxes, levy, impost, fees, duties, fiscal and social
            security and similar charges, including any interest and penalty
            thereon (collectively "Taxes") shown on such returns or for which
            they have been assessed, or have, with regard to all Taxes that are
            or may become due but have not yet been paid, made adequate accruals
            on their books, in accordance with generally accepted accounting
            principles applicable in the respective jurisdiction; and none of
            the Companies is engaged in a dispute with any tax or social
            security authority.

            Upon request of RSL, Seat shall cause the Company concerned to
            appeal at the cost of RSL and in accordance with its instructions,
            against tax assessments if such appeal may result in taxes being
            reimbursed to or not to be paid by the respective Company. In order
            to enable RSL to properly assess the chances of such an appeal and
            to proceed with such appeal, Seat shall cause the respective Company
            to make available to RSL all relevant information and documentation.
            The respective Company may settle with the consent of RSL only which
            consent will not be unreasonably withheld.

      o)    No Impediments

            There are no material legal or factual impediments preventing the
            Companies from carrying on their businesses to the extent and in the
            manner hitherto conducted, and there are no material unfulfilled
            obligations

<PAGE>

            imposed on the Companies by the authorities with respect to their
            businesses.

      p)    Litigation

            The Companies are not involved as plaintiff or defendant or as a
            joined party in any litigation, including arbitration proceedings or
            administrative proceedings, with a litigation value exceeding in the
            aggregate DM 5,000,000, nor has any such litigation, including
            arbitration proceedings or administrative proceedings, been
            threatened to the Companies, or is there a foreseeable need to take
            recourse to litigation, except in all cases as set forth in Schedule
            5 p.

2.    Section 460 of the German Civil Code (BGB) shall apply mutatis mutandis.
      Seat is deemed to know such documents which were contained in the data
      room in Planegg which was made accessible to representatives and advisers
      of Seat on March 28 and 29 and April 26 and 27 and May 2, 2000 which are
      listed in the list attached to this Agreement as Schedule 5.2.

3.    The above guarantees shall be deemed to be repeated by RSL also as of the
      time when the transfer of the Majority-Conferring Share to Seat becomes
      effective (Section 2 subparagraph 2), provided that (i) before such date
      RSL will have been given a reasonable opportunity to discuss with one or
      several members of the board of directors (Vorstand) of Telegate whether
      the above guarantees are still true, complete and correct in all material
      respects, and (ii) will have been provided by the management with a
      statement thereon. To the extent that RSL, as a result of the said
      discussion, makes specific limiting qualifications the above guarantees
      shall not be deemed to be repeated.

                                    Section 6

                       Liability for Breach of Guarantees

1.    If any of the guarantees given by RSL in Section 5 proves to be partly or
      wholly incorrect, the Party which learns first about such incorrectness
      shall inform the other Party thereof. For a period of 90 days starting
      with such

<PAGE>

      information, RSL shall have the possibility to cure the breach by
      restoring a situation where the guarantee is true.

2.    If RSL is unable to cure the breach or does for other reasons not cure the
      breach, RSL shall indemnify Seat for the amount that would have to be
      spent to fully restore the factual situation to the guaranteed situation
      ("damage"), limited, however, to a part such amount (as defined in
      subparagraph 3), which shall be paid, at RSL's choice, to either the
      Company or Companies to which the guarantee which is breached has the
      closest connection, or to Seat. If the payment of an indemnification
      occurs at such a time when the Joint Venture as agreed in Section 1 should
      no longer exist or where a Put Option Acceptance Declaration or a Call
      Option Acceptance Declaration has been made pursuant to the Option
      Agreement (Exhibit 3), any amount pursuant to this subparagraph shall be
      paid, at Seat's choice, to either the Company or Companies to which the
      guarantee which is breached has the closest connection, or to Seat.

3.    Whilst Seat shall have the right to recover full damages pursuant to
      subparagraph 2 from RSL and L in the aggregate (the latter gives Seat, in
      the L Umbrella Agreement, the same guarantees as are in this Agreement
      given by RSL), each of RSL and L shall only be severally liable for the
      damages. Of each damage, RSL shall bear a part of 25.6/51 (approx. 50.2%)
      and RSL shall bear a part of 25.4/51 (approx. 49.8 %).

4.    Where guarantees are given subject to the (best) knowledge, RSL shall be
      deemed to have the same knowledge as L has (and L shall, in the L Umbrella
      Agreement, be deemed to have the same knowledge as RSL has).

5.    The amount of the liability of RSL for breaches of guarantees shall be
      limited as follows:

      (i)   In calculating the aggregate liability of RSL and L, only such
            individual breaches of guarantees shall be taken into account which
            represent a damage of 0.5 million or more, provided that they
            represent in the aggregate a total damage of 5 million or more.

      (ii)  The liability of RSL shall not exceed 33.33 % of the Total
            Consideration; the Total Consideration shall be for the purposes of
            this subparagraph 5 (ii) shall mean Cash Equivalent (as defined in
            Section 3

<PAGE>

            subparagraph 4 of this Agreement) plus the cash Exercise Price as
            defined in ss. 4.1 of the Option Agreement.

      (iii) Until the moment in which the Cash Equivalent (as defined in Section
            3 subparagraph 4 of this Agreement) is to be released from escrow,
            no damages in excess of 33.33 % of the Cash Equivalent (as defined
            in Section 3 subparagraph 4), shall be payable yet (fallig) by RSL,
            and after the said moment damages shall be payable in the aggregate
            only within the limit set forth in subparagraph (ii).

            This subparagraph (iii) is not to be construed as a limitation
            whereby Seat shall resort to arbitration (as set forth in Section
            12) only after a certain moment in time, or whereby the arbitrators
            shall give their award only after a certain moment in time.

6.    None of the limitations as to the amount of the liability of RSL set forth
      in subparagraph (3) sentence 2 and subparagraph (5) shall apply in the
      case of a breach of the guarantee pursuant to which RSL is, as of the time
      of entering into the Borrowing and Forward Purchase Agreement (Exhibit 4),
      the sole owner of the Majority-Conferring Share; and the
      Majority-Conferring Share is completely free of any rights, liens and
      encumbrances whatsoever for the benefit of third parties. None of the
      limitations as to the amount of the liability of RSL set forth in
      subparagraph (3) and subparagraph (5) shall apply in the case of a breach
      of the guarantee pursuant to which RSL is the sole owner of the Remaining
      Shareholding; and the Remaining Shareholding is completely free of any
      rights, liens and encumbrances whatsoever for the benefit of third
      parties.

7.    None of the limitations as to the amount of the liability of RSL set forth
      in subparagraph (5) shall apply in the case of a breach of the guarantee
      (given in Section 5 subparagraph 1 d)) pursuant to which the Holding is
      the sole owner of the majority of the outstanding shares in Telegate and
      that such shareholding is completely free of any rights, liens and
      encumbrances whatsoever for the benefit of third parties, as of the time
      of the notarization of this Agreement.

8.    The liability of RSL for breaches of guarantees shall be limited in time
      as follows:

<PAGE>

      (i)   Seat may only bring such claims, which it has, by June 30, 2001,
            reasonably identified and communicated to RSL.

      (ii)  Where the guarantee given in Section 5 subparagraph 1 n) (Taxes) is
            breached, the date mentioned in subparagraph (i) shall be replaced
            by such date which is 6 months after the final tax assessment of the
            relevant tax has been made by the tax authorities (provided such
            date is later than the date mentioned in subparagraph (i)).

      (iii) For breaches of the guarantees given in Sections subparagraphs 6 and
            7 of this Section 6 there shall be no limitation in time except as
            set forth in section 195 of the German Civil Code.

9.    If and to the extent there are any claims of Seat under this Section at
      such time when the Cash Equivalent should be released from escrow or when
      cash consideration under the Option Agreement becomes due, then such Cash
      Equivalent shall remain in escrow and such cash consideration shall be put
      in escrow, in each case upon Seat request, and in each case limited to the
      amount of Seat's claim (if the pro-rata threshold amounts set forth in
      subparagraph 5 (i) and (ii) are exceeded), until an arbitral award shall
      have been given on Seat's claim. The escrow shall be released if Seat does
      not initiate arbitration procedures within three months from the time when
      the Cash Equivalent should have been released from escrow or the cash
      consideration would have become due. The instructions to be given to the
      bank where the escrow account shall be made pursuant in accordance with
      this subparapraph 9.

10.   No claim under this agreement shall lead to Seat being barred from
      exercising the call option nor to RSL from exercising the put option under
      the Option Agreement.

<PAGE>

                                    Section 7

                          Guarantees given by San Remo

Seat represents and warrants to RSL that the Seat shares to be delivered to the
Intermediary pursuant to Section 3 subparagraph 1 will be validly issued, free
and clear of any liens, charges, security interests, burdens, encumbrances or
other restrictions or limitations of any nature whatsoever (except for such
rights which the Intermediary itself may grant to third parties) and will be
freely tradeable on the Milan Stock Exchange, as any existing shares of Seat as
of the date when they are delivered to the Intermediary.

                                    Section 8

                    Acquisition of Remaining Shareholding and
                        Termination of the Joint Venture

1.    The Parties agree that Seat shall be entitled to acquire the Remaining
      Shareholding, and RSL shall be entitled to request Seat to acquire the
      Remaining Shareholding as set forth in the Option Agreement (Exhibit 3).
      The "Remaining Shareholding" means such shares in the Holding which RSL
      continues to hold after the disposal of the Majority-Conferring Share
      pursuant to Section 2 of this Agreement, which remaining shares shall have
      an aggregate nominal value of DM 24,800 and shall represent all of the
      outstanding share capital of the Holding except for the
      Majority-Conferring Share and for such shareholding in the Holding as Seat
      shall acquire under the L Umbrella Agreement.

2.    The Parties agree that upon Seat's acquisition of the Remaining
      Shareholding, the Joint Venture as agreed in Section 1 of this Agreement
      shall be terminated.

<PAGE>

                                    Section 9

           Non Competition Following Termination of the Joint Venture

      Following a period of two (2) years after Seat will have acquired the
      remaining shareholding in the Holding from RSL, RSL and its affiliates
      shall not directly or indirectly compete with the businesses currently
      carried out by the Companies in Germany.

                                   Section 10

                       Guarantee by Parent Company of RSL

      RSL Communication Ltd. in its capacity as the ultimate parent company of
      RSL guarantees ("garantiert") without limitation the fulfilment of all
      obligations of RSL arising out or in connection with this Agreement in the
      form shown in Exhibit 6 to this Agreement.

                                   Section 11

                         Other Documents to be Executed

1.    Prior or concurrent to the execution of this Agreement, the following
      documents shall be executed by the Parties thereto:

      (i)   A shareholder's resolution, by RSL and L, on amendments to the
            articles of association of the Holding, as shown in Exhibit 1 to
            this Agreement and as contemplated in Section 1 subparagraph 3 a) of
            this Agreement;

      (ii)  A filing statement to the competent commercial register of the
            Holding, (or a power of attorney enabling representatives of Seat to
            sign the filing statement) whereby the amendments to the articles of
            association are filed for registration with the commercial register
            to be signed by the sole managing director of the Holding which
            filing statement shall be presented to the commercial register
            forthwith;

<PAGE>

      (iii) Approval of the split of a share held by RSL, by the Holding, as
            shown in Appendix 1 to the Agreement for the Transfer of Shares
            attached to the Borrowing and Forward Purchase Agreement (Exhibit 4)
            and as contemplated in Section 2 subparagraph 1 of this Agreement,
            to be executed by the sole managing director of the Holding;

      (iv)  Approval of the transfer of the shares held by RSL in the Holding
            pursuant to this Agreement, by other shareholder L, as shown in
            Exhibit 6 to this Agreement and as contemplated in Section 2
            subparagraph 1 of this Agreement;

      (v)   A Borrowing and Forward Purchase Agreement, to be entered into by
            RSL and the Intermediary, as shown in Exhibit 4 to this Agreement
            and as contemplated in Section Section 2 subparagraph 1 of this
            Agreement;

      (vi)  A Share Purchase (Contribution) Agreement, to be entered into by the
            Intermediary and Seat, as shown in Exhibit 5 to this Agreement and
            as contemplated in Section Section 2 subparagraph 2 of this
            Agreement;

      (vii) An Option Agreement, to be entered into by RSL and Seat, as shown in
            Exhibit 3 to this Agreement and as contemplated at the end of
            Section 1 and in Section 8 of this Agreement;

2.    None of the documents to be signed prior or concurrently to the
      notarization of this Agreement shall thereafter be revoked or amended or
      otherwise changed without the approval of Seat.

3.    The Parties shall also after after the notarization of this Agreement
      execute such documents and do such other things, and shall cause
      Intermediary do execute such other documents and do such other things as
      may be necessary and appropriate to implement the terms and conditions of
      this Agreement.

<PAGE>

                                   Section 12

                         Applicable Law and Arbitration

      This Agreement shall be governed by German law except for such aspects as
      may mandatorily be governed by Italian law. Terms to which a German
      translation has been added shall be interpreted throughout the Agreement
      in the meaning assigned to the German translation. All disputes arising
      out of or in connection with this Agreement shall be finally settled under
      the Rules of Arbitration of the International Chamber of Commerce by three
      arbitrators appointed in accordance with the said rules. The arbitration
      proceedings shall be held in Paris and in English.

                                   Section 13

                                 Costs and Taxes

1.    Seat shall bear the costs of notarization of this Agreement and of those
      other agreements and resolutions which are attached to this Agreement.

2.    Each Party shall itself bear the costs of its own advisors and its other
      costs incurred in connection with preparing this Agreement.

3.    Each Party shall itself bear any taxes or other public duties which may
      become payable by it by reason of the transactions contemplated in this
      Agreement.

4.    In the case of an automatic event of termination (Section 4 subparagraph
      2) Seat shall reimburse RSL such fees for legal advisers and for an
      investment bank hired by RSL for the preparation of this Agreement, as are
      reasonable and usual-in-the-market.

<PAGE>

                                   Section 14

                                 Confidentiality

The Parties shall keep confidential the contents of this Agreement and its
attachments, and in particular all aspects regarding the monetization of the
Majority-Conferring Share to the extent admissible under the applicable laws,
unless they mutually agree otherwise.

Any public notice or press release (whether required by law or not) shall be
agreed upon by the Parties beforehand.

                                   Section 15

                                 No Assignments

Neither Seat nor RSL is entitled to transfer without the consent of the other
Party rights or obligations arising out of this Agreement to a third party
except for the transfer of title guarantees to be assigned to the Intermediary.

                                   Section 16

                                     Notices

16.1  Notices or declarations to Seat made in the context of this Agreement
      shall be deemed to be validly given if sent by registered mail or courier
      to the following address or such other address as notified in writing by
      Seat to RSL:

      RSL COM Deutschland GmbH, c/o RSL Communications, Ltd., attn: Avery S.
      Fischer, Esq., 810 Seventh Avenue, 39th Floor, New York, NY 10019

16.2  Notices or declarations to RSL made in the context of this Agreement shall
      be deemed to be validly given if sent by registered mail or courier to the
      following address or such other address as notified in writing by RSL to
      Seat:

      Angelo Novati, CFO, Seat Pagine Gialle SpA, Via Aurelio Saffi 18, 1038
      Turin, Italy.

<PAGE>

                                   Section 17

                                  Miscellaneous

17.1  Should any provision of this Agreement be or become invalid or
      unenforceable, the validity of the other parts of this Agreement shall not
      be affected thereby. The same applies if this Agreement contains any
      omissions. In lieu of the invalid or unenforceable provision or in order
      to complete any omission, a fair provision shall apply which, to the
      extent legally permissible, comes as close as possible to what the Parties
      had intended or would have intended, according to the spirit and purpose
      of this Agreement if they had considered the matter at the time this
      Agreement was executed.

17.2  Changes and amendments to this Agreement are only valid if they have been
      made in writing or, if notarisation is required by law, notarised.

Date _______________

/s/                                               /s/
________________________                          _________________________
RSL COM Deutschland GmbH                          Seat Pagine Gialle S.p.A.

<PAGE>

                             NOTARIAL AUTHENTICATION
                           (Oeffentliche Beurkundung)
                            (Public Deed No. 44/2000)

The undersigned Notary Public of the Canton of Zug, Switzerland, lic. iur. Peter
B. Arnold, Attorney at Law, hereby certifies and authenticates:

The foregoing Agreement corresponds with the intentions and the free will of the
party who personally appeared in the capacities as follows:

Mr. Stefan Koller, Attorney at Law and Notary Public, born 23.09.1958, Swiss
citizen, residing at CH-6312 Steinhausen, Switzerland, Rebenstrasse 6, having
his offices at Untermuli 6, CH-6300 Zug, Switzerland, here not acting in his own
name, but as representative, exempt of personal liability, acting without
express authority in the name and on behalf of

Seat Pagine Gialle S.p.A., Via Aurelio Saffi, 18, I-1038 Turin, Italy,

and

RSL COM Deutschland GmbH, D-60528 Frankfurt am Main, Lyonerstr. 9,

and

J.P. Morgan Securities Limited, 60 Victoria Embankment, GB-London EC 4Y 0JP,

and

Morgan Stanley Bank AG, Junghofstrasse 13-15, D-60311 Frankfurt am Main,

under the reservation to supply to the acting notary a forthcoming certified
consent by each one of the foregoing parties, in legally appropriate form, as
soon as reasonably possible and without undue delay.

The foregoing Deed and all appendices and annexes thereto were laid out for
inspection to and were approved by the person appearing. Subsequently, the Deed
was read out aloud to the person appearing before the notary, approved by the
person appearing and executed by him in his own hand.

This Public Deed is made out in one copy.

Zug/Switzerland, this 6th day of May 2000

                                          The Notary Public

                                          Peter B. Arnold

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]