Document:

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                                                                 EXHIBIT 10.25

                                       ROV
                                SERVICE AGREEMENT

This agreement (hereinafter referred to as the "Agreement"), is effective as
from the first day of January 1999,

BETWEEN

THE "SERVICE PROVIDERS":

FRANCE CABLES ET RADIO, a corporation organised and existing under the laws of
France, headquartered at 124 rue Reaumur, 75091 PARIS cedex 02, France
(hereinafter referred to as "FCR"), and FRANCE TELECOM, a company with limited
liability organised and existing under the laws of France, headquartered at 6,
Place d'Alleray, 75505 PARIS cedex 15, FRANCE (hereinafter referred to as
"FRANCE TELECOM" or "FT", and with FCR hereinafter collectively referred to as
"FT/FCR") and,

ELETTRA TLC S.P.A., a company organised and existing under the laws of Italy,
having its registered office at Viale Europa, 190-00144 Roma - ITALY
(hereinafter referred to as "ELETTRA")

                                                                    on one hand,

AND

the companies or legal entities identified in Schedule 1 of this Agreement
(hereinafter collectively referred to as "the Maintenance Authorities")

                                                              on the other hand,

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

  Confidential Treatment has been requested with respect to the portions of
this agreement marked with three asterisks (***) and the redacted material
has been filed separately with the Securities and Exchange Commission.

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                                   WITNESSETH

Whereas, certain of the Maintenance Authorities having a common interest in the
efficient and effective maintenance and repair of submarine cable systems in the
Mediterranean, Red and Black Seas and desirous to obtain the support and use of
an undersea dedicated Remotely Operated Vehicle (ROV), as hereinafter defined,
to assist them in their maintenance and repair activities, had selected FT/FCR
to undertake submarine cable Repair, Maintenance and Improvement Services for
the benefit of all the Maintenance Authorities and consequently had signed a ROV
Service Agreement on 01 December 1994 (hereinafter referred to as the "Original
Agreement").

Whereas, additional parties have been entered as Maintenance Authorities under
the Original Agreement after the execution of the said agreement.

Whereas, the Maintenance Authorities, have selected an additional service
provider to undertake submarine cable Repair, Maintenance and Improvement
Services for their benefit: an Italian company named ELETTRA.

Whereas, FT/FCR and ELETTRA have agreed to provide the use of their cableships
(as hereinafter defined) with a ROV workpackage to the Maintenance Authorities,
it being understood that for FT/FCR, FCR will supply the Cable Ship and the ROV
and FRANCE TELECOM will operate them.

Whereas, all the Parties to this Agreement deem more appropriate to execute a
new agreement including clearly the modifications and the necessary additional
provisions rather than to execute an amendment to the Original Agreement,
consequently this Agreement cancels and supersedes the Original Agreement.

NOW, THEREFORE THE PARTIES IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN
EXPRESSED AGREE AS FOLLOWS:

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ARTICLE 1 DEFINITIONS

In this Agreement, unless the context otherwise requires, the following
expressions shall have the meanings hereby assigned to them:

1.1. "ACCOUNTING UNITS"       means the units allocated to Maintenance
                              Authorities and to Designated Cables defined in
                              Schedule 1 for the purpose of apportioning among
                              Maintenance Authorities the ROV Costs. These units
                              are derived by using the formula contained in
                              Schedule 4 and are listed on such Schedule 4.
                              These Accounting Units may also be referred to as
                              "AU".

1.2. "ACCOUNTING UNIT COST"   Means the cost allocated to each AU determined by
                              adding the annual Standing Charges of both ROVs
                              and the Central Billing Party (as defined in
                              Article 1.5) service and by dividing this total
                              amount by the total estimated number of AU as
                              given in Schedule 4.

1.3. "ASSIGNED PORT"          Means the port from which a cable ship hosting the
                              ROV is at any given time mobilised to undertake
                              Repair or Maintenance & Improvement work under
                              this Agreement.

                              The Assigned Port of the ROV installed on the NC
                              Raymond CROZE, is La SEYNE-SUR-MER, France.

                              The Assigned Port of the ROV installed on the PC
                              TELIRI or PC CERTAMEN is CATANIA - Italy.

1.4. "CABLESHIP"              means any of the following vessels when assigned
                              to the MECMA agreement:

                              -    NC RAYMOND CROZE (or a substitute ship) owned
                                   by FCR and operated by FT

                              -    PC TELIRI or PC CERTAMEN (or a substitute
                                   ship) owned and operated by ELETTRA.

                              -    Any other cableship agreed between the
                                   Maintenance Authorities and the Service
                                   Providers to host a ROV and provide Repair
                                   and Maintenance & Improvement services under
                                   this Agreement

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1.5. "CENTRAL BILLING PARTY"  means the Party designated in Article 10.2,
                              responsible for:

                              (i)  performing all billing and associated
                                   financial functions under this Agreement, and

                              (ii) preparing the ROV budget and collecting all
                                   actual financial data evidencing the ROV
                                   Costs. The Central Billing Party may also be
                                   referred to as "CBP".

1.6. "DESIGNATED CABLES"      means the submarine cables which are listed in
                              Schedule 1, as amended from time to time, on which
                              Repair and Maintenance & Improvement shall be
                              undertaken with the ROV under this Agreement.

1.7. "MAINTENANCE & IMPROVEMENT"
                              means work carried out on a Designated Cable
                              involving the use of the ROV, other than a Repair,
                              and which is deemed by the relevant Maintenance
                              Authority(ies) to be required in order to reduce
                              the susceptibility of the Designated Cable to
                              future service-affecting, faults, howsoever
                              caused.

1.8. "MANAGEMENT COMMITTEE"   means the Committee established by Article 10.1.

1.9. "MECMA"                  means the MEditerranean Cable Maintenance
                              Agreement, which came into force on 01 January
                              1993 and its 3 amendments or any agreement which
                              may replace it.

1.10."OPERATING ZONE"         means the MECMA operational zone in which the ROV
                              will operate under this Agreement.

1.11."OPERATIONAL DATE"       means the date upon which the ROV and the
                              Cableship are mobilised to provide Repair or
                              Maintenance and Improvement at the request of
                              a Maintenance Authority, as mutually agreed
                              between the Service Providers and such Maintenance
                              Authority.

1.12."OUTSIDE WORK"           means work outside the terms of this Agreement
                              carried out by an ROV and for which neither
                              Standing Charges nor Running Costs are chargeable
                              in any manner under this Agreement.

1.13."REPAIR"                 means work carried out on a Designated Cable
                              involving the use of the ROV, at the request of a
                              Maintenance Authority in

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                              order to remedy a service-affecting fault suffered
                              by the Designated Cable.

1.14."ROV"                    means either:

                              -   the remotely operated vehicle of the SCORPIO
                                  2000 series and its Ancillary Tools described
                                  in Annex 1 of Schedule 7, owned and operated
                                  by FT/FCR or,

                              -   the remotely operated vehicle of the Phoenix 2
                                  series described in Annex 2 of Schedule 7
                                  owned and operated by ELETTRA.

1.15."ROV COSTS"              means the aggregate of Running Costs and Standing
                              Charges.

1.16."RUNNING COSTS"          means costs, additional to Standing Charges which
                              are incurred for the operation of the ROV
                              specifically as a result of an individual
                              operation or operations.

1.17."SERVICE PROVIDER(S)"    means, as the case may be, either:

                              -    FT/FCR providing Cableship Raymond CROZE and
                                   ROV services or,

                              -    ELETTRA providing Cableship TELIRI or
                                   CERTAMEN and ROV services.

1.18."STANDING CHARGES"       means the costs of the ROV as detailed in Schedule
                              2.

1.19."TRAINING EXERCISES"     means the activities described in Article 3.2.4.

1.20."TRANSIT TIME"           means:

                              (a)  the period of time from departure of a
                                   Cableship from its Assigned Port until its
                                   arrival at the site of the work to be
                                   performed pursuant to Article 3.2, or

                              (b)  the period of time from the departure from
                                   the work site until its arrival in its
                                   Assigned Port, or

                              (c)  the period of time for transit between work
                                   sites, or

                              (d)  the period of time for transit between
                                   Assigned Ports.

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ARTICLE 2 PURPOSE OF THIS AGREEMENT

This Agreement sets forth the terms and conditions under which each ROV will be
used to carry out Repair and Maintenance & Improvement of Designated Cables.

ARTICLE 3 OPERATIONAL USE OF ROV

3.1.     OPERATING ZONE

         Each ROV shall be assigned to and operated in the Operating Zone, under
this Agreement.

3.2.     USES OF ROV

         3.2.1. Repair of Designated Cables

                Each ROV shall be used primarily for the Repair of
                Designated Cables in order to ensure the continuity of
                service provided by such cables

         3.2.2. Maintenance & Improvement

                Subject to the requirement of the Article 3.2.1 being
                satisfied, each ROV shall be used for the Maintenance &
                Improvement of the Designated Cables on an interruptible basis.

         3.2.3. Outside Work

                Provided that the availability of the ROV to undertake
                Repair or Maintenance & Improvement of Designated Cables is
                satisfied the ROV may be used by the Service Provider or a
                Scheduled Maintenance Authority for Outside Work. The use of
                ROV for Outside Work is subject to the approval of the
                Management Committee, which approval shall not be
                unreasonably withheld or delayed. The allocation of ROV
                costs during such Outside Work is defined in Article 9 below.

                In case the Outside Work is relevant to the repair or
                maintenance & improvement of cables within the Operating
                Zone which are not Designated Cables, the operational
                conditions of intervention of the ROV, during its period of
                assignment under this Agreement, shall require the prior
                agreement of the Management Committee.

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         3.2.4. Training Exercises

                The Service Providers shall have the opportunity to perform
                Training Exercises when the ROV is assigned to the
                Agreement. The relevant Service Provider shall provide the
                Management Committee with details of the nature, purpose,
                duration and location of the proposed Training Exercises.
                The use of ROV for Training Exercises is subject to the
                approval of the Management Committee, which approval shall
                not be unreasonably withheld or delayed. The allocation of
                ROV costs during such Training Exercises is defined in
                Article 9 below.

ARTICLE 4 ROV AVAILABILITY

4.1. The Service Provider shall use its best efforts to make the ROV
     operationally available for use at all times for work on the Designated
     Cables except in the following circumstances:

     4.1.1.     Whilst the ROV is undergoing periodic maintenance or
                refurbishment.

     4.1.2.     From the starting date of any Outside Work until its conclusion.

     4.1.3.     Whilst the ROV is unavailable by reason of Force Majeure.

     4.1.4.     Whilst the ROV is damaged to the extent that it cannot perform
                Repair or Maintenance & Improvement or it becomes a total loss
                or a constructive total loss.

                If a ROV becomes a total loss or a constructive total loss,
                the Service Provider shall notify the Chairman of the
                Management Committee and, if required by the Management
                Committee, use reasonable endeavours to provide a substitute
                ROV subject to terms and conditions to be proposed by the
                Service Provider, and agreed to by the Management Committee.

                If a ROV is damaged to such an extent that requires repairs,
                the Maintenance Authorities shall bear its Standing Charges
                up to a maximum period of 90 (ninety) days from the
                beginning of such repairs.

ARTICLE 5 MOBILIZATION OF THE ROV

Unless otherwise agreed between the Service Provider and the Maintenance
Authority requesting the use of the ROV, the ROV shall be mobilised by the
Maintenance Authority from the Assigned Port.

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ARTICLE 6 OPERATING PROCEDURES

6.1. The Maintenance Authority requesting the use of the ROV to undertake
     Repair or Maintenance & Improvement on a Designated Cable shall notify its
     request by telephone or facsimile to FT/FCR or to ELETTRA, as the case may
     be, at the address shown in Schedule 8.

     Where notification is given by telephone, it shall be confirmed by
     facsimile at the earliest opportunity and at the latest on the first
     working day after the notification by telephone.

     On receipt by the Service Provider of such notification by a
     Maintenance Authority, the Service Provider shall take the necessary
     action to ensure that the ROV is mobilised aboard the designated
     Cableship without undue delay, typically within 24 hours.

6.2. The Maintenance Authority requesting the use of the ROV shall be
     responsible for the engagement and costs of the cableship designated to
     host the ROV. Such engagement shall be regulated by a separate agreement
     between the cableship operator and the Maintenance Authority.
     Notwithstanding the foregoing, the Service Provider shall determine the
     suitability of any designated cableship to host the ROV and undertake
     Repair or Maintenance & Improvement with it.

6.3. When the Service Provider is notified to commence a ROV operation under
     this Agreement, the Service Provider will, within 24 hours, notify the
     Maintenance Authorities of the status of use of the ROV, as specified
     below:

     6.3.1. Upon receipt of notification by the Service Provider that the ROV is
            required to undertake an operation or if the ROV is engaged in
            Outside Work, the Service Provider shall transmit a notification of
            commencement of ROV operation or Outside Work, specifying the
            expected duration of such operation or work.

     6.3.2. After completion of the ROV operation or work, the Service Provider
            shall transmit a notification of completion of a ROV operation or
            work.

     6.3.3. Upon a ROV's change in operational status eg: standby, Repair,
            Maintenance & Improvement or Training Exercises, the Service
            Provider shall transmit a notification of the change in status of
            the ROV.

ARTICLE 7 OPERATIONAL RESPONSIBILITIES
          PLANNING AND DIRECTION

7.1. The Maintenance Authority requiring any Repair or Maintenance &
     Improvement work to be carried out may elect to be responsible for planning
     and directing such operation which

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     shall be performed by the personnel of the Cableship under the control and
     supervision of the Engineer in Charge of the Service Providers. If the
     Maintenance Authority does not so elect to be responsible then the Service
     Provider shall be responsible for the planning and direction of the
     operation. In all cases the Maintenance Authority shall make available to
     the Service Provider the necessary technical information required for
     Repair or Maintenance & Improvement to be carried out to the appropriate
     Designated Cable.

     The Service Provider shall always be responsible for the planning,
     direction and performance of the repair unless the relevant Maintenance
     Authority declares otherwise. In this case, a formal agreement will be
     signed between the Maintenance Authority and the Service Provider.

7.2. The Maintenance Authority shall appoint one of the authorised
     representatives, should more than one be carried, as a "Senior
     Representative". The Senior Representative shall be responsible for
     planning and directing the Repair or Maintenance & Improvement operation,
     pursuant to Article 7.1 above.

ARTICLE 8 STANDING CHARGES AND RUNNING COSTS

8.1. The ROV Costs, including Standing Charges and Running Costs, relating to
     the period running from 1st January 1999 to 31st December 1999 are defined
     in Schedules 2 and 3 respectively.

8.2. For the following calendar years, the ROV costs shall be submitted to the
     Management Committee for approval at least 3 months before the beginning of
     the related year.

8.3. ROV Standing Charges shall not increase by more than *** year on year.

ARTICLE 9 ALLOCATION OF ROV COSTS

     9.1. ALLOCATION OF STANDING CHARGES

     9.1.1. The Standing Charges, adjusted as appropriate pursuant to Article
            9.3.2., shall be shared among the Maintenance Authorities for the
            Designated Cables in proportion to the Accounting Units allocated to
            them in Schedule 4.

     9.1.2. Notwithstanding the provision of Article 9.1.1 above the unit cost
            of the Accounting Units shall in any case not exceed the maximum
            amount of *** per Accounting Unit per year for the whole duration of
            this Agreement.

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9.1.3. In the event that the Standing Charges are not approved by the
       Management Committee, the Standing Charges of the previous year shall
       form the basis of billing until the dispute is resolved.

9.1.4. For the purpose of calculating the Standing Charges applicable to any
       particular period of time, the estimated or actual Standing Charges
       shall be divided by 335 to give an appropriate daily rate.

9.2.   ALLOCATION OF RUNNING COSTS

9.2.1. When a Maintenance Authority requests the use of the ROV for Repair or
       Maintenance & Improvement of a Designated Cable, all Running Costs for
       the period of such work including those for Transit Time and, if
       applicable, mobilisation aboard the designated Cableship and
       demobilisation, shall be borne by the Maintenance Authority(ies)
       responsible for the Designated Cable under Repair or Maintenance &
       Improvement.

9.2.2. Where a Cableship carrying the ROV undertakes a series of ROV
       operations without returning to its Assigned Port, the ROV Running
       Costs for Transit Time between two or more operations shall be
       allocated between the Maintenance Authorities concerned according to
       the following procedure.

       Time spent in transit before the work starts on the first ROV
       operation, time spent in transit between the end of each ROV operation
       and the start of the next, and time spent in transit from the end of
       the last in the series of ROV operations to the arrival of the
       Cableship at its Assigned Port is aggregated to arrive at total
       Transit Time. Running Costs for Transit Time are allocated to each ROV
       operation in proportion to the distance to be covered by the Cableship
       to carry out each stand alone operation.

9.3.   ALLOCATION OF ROV COSTS FOR EACH CATEGORY OF USE

       9.3.1. Repair, Maintenance & Improvement of Designated Cables

       For the period of such work, Standing Charges shall be apportioned
       according to Article 9.1, and Running Costs, including those for
       Transit Time, shall be allocated according to Article 9.2.

       9.3.2. Outside Work

       When the ROV shall be used to carry out Outside Work, for the period
       of such work including Transit Time and if applicable, mobilisation
       aboard the designated

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       Cableship and demobilisation, Standing Charges and Running Costs shall
       not be charged to this Agreement.

       9.3.3. Periods of non-availability

       When the ROV is damaged to the extent that it cannot perform Repair or
       Maintenance & Improvement the ROV Standing Charges for periods in
       excess of 90 days shall not be charged to this Agreement in accordance
       with Article 4.1.4.

9.3.4. Training Exercises

       For the period of such work, Standing Charges shall be apportioned
       according to Article 9.1, while Running Costs, including those for
       Transit Time, shall not be charged to this Agreement.

ARTICLE 10 MANAGEMENT COMMITTEE AND CENTRAL BILLING PARTY

10.1.  MANAGEMENT COMMITTEE

       10.1.1. Organisation:

               The Maintenance Authorities and the Service Providers shall
               form a Management Committee in which each party shall be
               represented by a single representative. A representative may
               designate an alternate to participate in a Management
               Committee meeting.

       10.1.2. Functions:

               The Management Committee shall have the following functions:

               (a)      to amend this Agreement with the unanimous approval of
                        the Parties,

               (b)      to review and approve the annual ROV Budgetary estimates
                        and the final cost of the Accounting Unit,

               (c)      to review the management of all activities required by
                        this Agreement,

               (d)      to approve the use of the ROV for Outside Works,

               (e)      to approve the charges associated with the CBP function.

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       10.1.3. Procedures:

               A Party shall be elected to serve as Chairman of the
               Management Committee for a term of twelve months by simple
               majority of the present members of the Management Committee.

               Meetings shall normally be held once a year unless decided
               otherwise by the Management Committee. They will be held on
               the call of the Chairman or of at least two representatives
               of the Parties. At least a 30 days advance notice of each
               meeting shall be given with a copy of the draft agenda. In
               cases of emergency, such notice period may be reduced.

               The quorum for any meeting shall consist of a number of
               members representing at least 75 % of the total Accounting
               Units according to Schedule 1.

               All decisions of the Management Committee shall be subject
               in the first instance to consultation among its members who
               shall endeavour to make decisions by unanimous consent. In
               the event it fails to reach unanimous consent, it shall make
               decisions by simple majority votes. Each member shall have a
               number of voting rights equal to its number of Accounting
               Units as set forth in Schedule 1.

10.2.  CENTRAL BILLING PARTY:

       10.2.1. FCR shall act as Central Billing Party under this Agreement.

       10.2.2. The Central Billing Party shall be responsible for the
               preparation and submission of ROV annual budget, submission of
               billing, accounting and settlement of all amounts due from the
               Maintenance Authorities under this Agreement.

       10.2.3. At least once a year the Central Billing Party shall submit a
               financial report and accounts to the Management Committee
               describing and summarising its activities during the year
               concerned.

       10.2.4. The CBP costs are 120 000 (one hundred and twenty thousand)
               French Francs per year for the duration of the Agreement. This
               amount may be revised annually from the 4th year.

               The CBP costs shall be submitted to the Management Committee
               for approval at least 3 months before the beginning of the
               related year.

               The CBP costs shall not increase by more than 5% year on year.

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ARTICLE 11 INVOICING PROCEDURE AND ARRANGEMENTS

11.1. Invoices showing the amounts due from the Maintenance Authorities for
      their respective shares of the ROV Costs for each quarter shall be sent to
      them by the Central Billing Party on or before the 15th day of the month
      before the start of each quarter. Such invoices shall be based on the
      actual Running Costs incurred and on the approved estimated Accounting
      Unit cost and shall include:

                              (a)    Standing Charges based on the estimated
                                     Accounting Unit cost,

                              (b)    Running Costs as incurred quarterly,

                              (c)    interest on invoices not paid when due,
                                     and,

                              (d)    Central Billing Charges in accordance with
                                     Article 11.6.

11.2. On or before the first working day of the last month preceding each
      quarter, the Service Providers shall advise the Central Billing Party as
      to the details of Standing Charges (including retrospective adjustments)
      and Running Costs. Running Costs details shall be included in the bills
      next due to be rendered to Maintenance Authorities.

      Unless otherwise agreed between the Service Providers and the Central
      Billing Party, such details shall be advised in French Francs (FRF).

11.3. Invoices shall be denominated and payable in French Francs (FRF), unless
      otherwise agreed between the Maintenance Authorities and the Central
      Billing Party.

11.4. Invoices shall be payable by the last working day of the second month of
      the quarter to which they relate, or if the issue of an invoice is
      delayed, seventy days from the date of issue, whichever is the later.

      Invoices not paid by the due date will incur a quarterly compounded
      interest charge at a rate of one hundred and twenty five (125%) percent
      of the PIBOR for sixty (60) days applicable on the first working day
      following the date by which payment is due, which rate will be applied
      throughout the period during which the payment is overdue.

      PIBOR is the Paris Inter bank Offer Rate for French Francs as published
      in "Les Echos".

11.5. On the first working day of the third month of each quarter, the Central
      Billing Party shall remit to or settle with the Service Providers, in
      French Francs (FRF), the amounts notified by it under Article 11.2.

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11.6. The Central Billing Party shall charge the costs associated with the
      performance of the Central Billing function. The charges shall be included
      in the Accounting Unit cost.

11.7. If an invoice for a Designated Cable remains unpaid for 180 days after the
      due date, the other Maintenance Authorities shall reimburse the Central
      Billing Party a proportional share of the unpaid invoice, including a
      proportional share of the interests incurred. The amounts paid by such
      Maintenance Authorities shall be in proportion to their Accounting Units.

11.8. Nothing contained in this Article shall release the defaulting Maintenance
      Authority from its obligations under this Agreement. The defaulting
      Maintenance Authority will continue to be billed its share of all ROV
      Costs in proportion to the Accounting Units allocated to it. If the
      defaulting Maintenance Authority fails to pay any bill within 365 days of
      its due date, the Service Provider shall be released from any obligation
      to undertake work for that Maintenance Authority. At such time, Central
      Billing Party shall prepare and issue a revised Schedule 1 which will
      exclude the defaulting Maintenance Authority. The defaulting Maintenance
      Authority will continue to be excluded from Schedule 1 until all
      outstanding invoices, including applicable interest, have been paid in
      full.

11.9. In the event that a Maintenance Authority for a Designated Cable has
      failed to pay a bill within 180 days of the due date, and that Designated
      Cable has more than one Maintenance Authority, the Central Billing Party
      shall notify such other Maintenance Authority(ies) for that cable of such
      defaults for non-payment. Notwithstanding Article 11.7, a Maintenance
      Authority for a Designated Cable having more than one Maintenance
      Authority shall have the option, at any time within 365 days of the due
      date of a bill, to pay any unpaid bill including any applicable interests
      of another Maintenance Authority for that cable, and upon such payment,
      the defaulting Maintenance Authority shall no longer be deemed to be in
      default for non-payment of such bill and the cable involved shall not be
      excluded from Schedule 1.

11.10. Upon receipt by the Central Billing Party from the defaulting Maintenance
      Authority or from another Maintenance Authority for a Designated Cable
      having more than one Maintenance Authority of any amount reimbursed by the
      other Maintenance Authority(ies) in accordance with Article 11.7, any such
      amounts shall be distributed to the other Maintenance Authorities in the
      same proportions as those Maintenance Authorities reimbursed the Central
      Billing Party under Article 11.7.

ARTICLE 12 ROV COSTS ADJUSTMENT

As soon as possible and not more than 6 months after the end of each year, the
Management Committee shall approve a final cost of the AU based on the total
Standing Charges in accordance with Article 10, and the actual number of AU
according to Schedule 4 for a given financial year.

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Such adjustment shall be reflected to Maintenance Authorities through the next
quarterly settlement, or if near the expiry date of this Agreement, in a final
invoice.

ARTICLE 13 LIABILITY AND INDEMNITY

13.1. Each of FCR, FRANCE TELECOM and ELETTRA shall be liable for all direct
      damages to persons or property arising in the discharge of its obligations
      under this Agreement to the extent that such damages have resulted from
      the intentional or negligent acts or omissions of FCR, FRANCE TELECOM or
      ELETTRA, its Agents or Employees. FCR, FRANCE TELECOM or ELETTRA shall
      indemnify and hold harmless the Maintenance Authority concerned against
      all claims, actions, demands, or judgements for such direct damages.

13.2. Each Maintenance Authority shall be liable for all direct damages to
      persons or property arising in the discharge of its obligations under this
      Agreement to the extent that such damages have resulted from the
      intentional or negligent acts or omissions of the Maintenance Authority,
      its Agents or Employees. Such Maintenance Authority shall indemnify and
      hold harmless FCR, FRANCE TELECOM or ELETTRA, as appropriate, against all
      claims, actions, demands or judgements for such direct damages.

13.3. Each of FCR, FRANCE TELECOM, or ELETTRA shall be liable for injury or
      damages to persons or property sustained by its Employees or Agents in the
      course of their employment or agency to the extent that such injury or
      damages are not caused by the negligence or intentional acts or omissions
      of a Maintenance Authority and to that extent will indemnify and hold
      harmless the Maintenance Authorities against all claims, actions, demands,
      or judgement for damages sustained by employees or Agents of FCR, FRANCE
      TELECOM or ELETTRA except to the extent that such claims, actions, demands
      and judgements arise out of the negligence or intentional acts of a
      Maintenance Authority.

13.4. The Central Billing Party shall exercise due care, diligence and
      promptness in the discharge of its duties and the Parties jointly shall
      indemnify and hold harmless the Central Billing Party against any claims,
      actions, demands or judgements arising out of the Central Billing Party's
      performance, purported performance or nonperformance of its function under
      this Agreement, except to the extent that such claim, actions, demands or
      judgements arise out of the negligence or intentional acts or omissions of
      the Central Billing Party.

13.5. Except as stated in Articles 13.1., 13.2., 13.3. and 13.4., no party shall
      be liable for any other damages suffered by any Party nor shall any Party
      be required to indemnify or hold harmless any other Party against claims
      made by any person or entity against any Party for damages arising from
      the acts or omissions of any other Party in the discharge of their
      respective obligations under this Agreement.

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ARTICLE 14 RELATIONSHIP AMONG THE PARTIES

The relationship between or among the Parties shall not be that of partners and
nothing herein contained shall be deemed to constitute a partnership between
them, and the common enterprise among the Parties shall be limited to the
express provisions of this Agreement.

ARTICLE 15 AMENDMENTS TO AGREEMENT

15.1. This Agreement and any of the provisions hereof may be altered or added to
      only by an agreement in writing, signed by a duly authorised person on
      behalf of each of the Parties after approval of the Management Committee
      on a unanimous basis.

15.2. The inclusion of additional Maintenance Authority(ies) into this Agreement
      is governed by the provision of Article 16 hereafter.

ARTICLE 16 INCLUSION OF ADDITIONAL MAINTENANCE
           AUTHORITY(IES) AND DESIGNATED CABLES

16.1. Where any entity assumes the maintenance responsibility for any cable
      system, or part thereof within the Operating Zone, and if that entity is
      not a Patty to this Agreement then that entity may request to be admitted
      as a Maintenance Authority under this Agreement. Upon such request, the
      signature of the Chairman of the Management Committee on the document of
      accession, as set forth in Schedule 5, witnessing the admission of the new
      Party shall have the effect of binding all the other Parties as each
      itself had signed such document and the Chairman of the Management
      Committee shall then transmit a copy of the document to all the Parties.
      At the same time the cable system concerned, or part thereof, shall be
      entered into Schedule 1 as a Designated Cable.

16.2. When a Maintenance Authority being a Party to this Agreement assumes
      responsibility for any cable system, or part thereof, within the Operating
      Zone, which is not a Designated Cable, and if that Maintenance Authority
      wishes such cable system, or part thereof, to become a Designated Cable,
      it shall be entered into Schedule 1 and hence become a Designated Cable
      for the balance of the term of this Agreement.

16.3. In case of inclusion of additional Maintenance Authorities and Designated
      Cables, the other appropriate Schedules of this Agreement shall be amended
      accordingly.

                                       16

<PAGE>

ARTICLE 17 ASSIGNMENT OR TRANSFER

During the continuance of this Agreement, no Party shall, without the written
consent of the other Parties, sell, assign, transfer or dispose of its rights or
obligations under this Agreement, in whole or in part, except to a legal
successor or subsidiary of such Party or corporation controlling, or under the
same control as, such Party.

Nothing contained in this Agreement shall restrict the right of the Service
Provider to lease equipment subcontract or employ such personnel or agents as it
deems appropriate to fulfil its obligations hereunder.

ARTICLE 18 TERM OF THIS AGREEMENT

This Agreement shall come into force as from the 1st January 1999 and shall
terminate the 31 December 2001.

The Agreement may be renewed by the Parties. At least one year before the date
of such expiry, the Parties shall decide on such a possible renewal and on the
terms and conditions of this renewal. This renewal will be subject to a written
agreement amongst the Parties. The Parties will decide either to amend this
Agreement or to execute a new agreement.

ARTICLE 19 WITHDRAWAL

19.1. If a Maintenance Authority wishes to withdraw from this Agreement, it
      shall serve at least one year notice in writing to the other Parties of
      its intention to withdraw from this Agreement.

19.2. As soon as practicable and in any event not more than three (3) months
      after the serving of any such notice of withdrawal, the other Parties will
      decide if this Agreement should continue in force without the withdrawing
      Party or if this Agreement will be terminated upon the effective date of
      such withdrawal.

19.3. In the event that the non-withdrawing Parties agree that this Agreement
      shall continue in force without the withdrawing Party and prior to the
      effective date of such withdrawal, the non-withdrawing Parties shall
      forthwith make appropriate amendments to the Schedules to this Agreement
      and it shall continue to be effective as provided in Article 17. Should
      such an agreement not be reached, the Agreement shall terminate upon the
      first effective date of any notice of withdrawal served in accordance with
      rticle 19.1.

                                       17

<PAGE>

ARTICLE 20 FORCE MAJEURE

20.1. No Party shall be liable to the others for any failure to carry out its
      obligations or delay in performance under this Agreement due to an event
      of Force Majeure such as war, civil war, sabotage, piracy, fire,
      epidemics, break down in government or public order, seizure by judicial
      procedure, strike or lockout, perils of the seas, accident of navigation
      or any other circumstance cause or reason beyond its reasonable control.

20.2. The time for performance of the obligations under this Agreement shall be
      extended by a reasonable period in the event of such Force Majeure. The
      Party suffering from Force Majeure may terminate its participation in this
      Agreement after giving reasonable notice in the event Force Majeure has
      not ceased 3 months after its occurrence.

ARTICLE 21 AGREEMENT BINDING ON SUCCESSORS

This Agreement shall be binding on the Parties, their respective successors, and
permitted assigns.

ARTICLE 22 INSOLVENCY

Upon the occurrence of each or any of the following events:

         (i)        if, except for the purposes of re-organisation, any Party is
                    wound up or a petition is presented or an order is made or a
                    resolution is passed for the winding up of any Party or a
                    meeting is convened for the purpose of considering any such
                    resolution;

         (ii)       if any Party is placed under official management, that is
                    if, pursuant to a resolution of creditors or members of that
                    Party or an order of a court, a person is appointed to take
                    custody of all or part of the property of that Party and to
                    conduct its business and manage its affairs and comply with
                    the legislation in respect of companies applicable in the
                    place where he is so appointed, or if any Party causes a
                    meeting of its members or creditors to be summoned for the
                    purpose of placing it under official management;

         (iii)      if any Party makes default under any charge or security in
                    favour of any creditor of that Party;

         (iv)       if any indebtedness of any Party becomes due and payable
                    prior to the stated maturity thereof as a result of a
                    default or is not paid upon the maturity thereof;

                                       18

<PAGE>

         (v)        if an inspector of all or any part of the affairs of any
                    Party is appointed pursuant to the legislation in respect of
                    companies applicable in the place of incorporation of that
                    Party or in a place where that Party carries on business;

         (vi)       if a compromise or arrangement is proposed between any Party
                    and its creditors or any class of them or if an application
                    is made to a court for an order summoning a meeting of
                    creditors or any class of them of any Party;

         then any Party affected by each or any of the above listed events shall
         immediately inform all the other Parties thereof, and all the Parties
         shall then consult to decide what further action is necessary.

ARTICLE 23 INSURANCE

(a)      Each Service Provider respectively shall be responsible for obtaining
         its necessary insurance coverage.

(b)      If requested by a Maintenance Authority, the Service Provider shall
         provide individually and on a confidential basis to that Maintenance
         Authority copies of relevant insurance policies and, if applicable,
         copies of the booklet giving details of the Protection and Indemnity
         cover and proper evidence of the payment of all premiums.

ARTICLE 24 GOVERNING LAW

This Agreement shall in all respects be governed by and be construed in
accordance with the laws of Switzerland Canton of Geneva.

ARTICLE 25 ARBITRATION

(a)      All disputes arising in connection with this Agreement and which cannot
         be settled by amicable negotiation to the mutual satisfaction of the
         Parties concerned, the dispute shall be finally settled under the Rules
         of Conciliation and Arbitration of the International Chamber of
         Commerce in Paris as in effect on the date hereof by one or more
         arbitrators appointed in accordance with the said Rules.

(b)      The site of the arbitration shall be Geneva (Switzerland). The language
         of the arbitration shall be English. The arbitrators will apply the
         procedural rules of arbitration of the International Chamber of
         Commerce. Any award rendered shall be final and conclusive and
         judgement thereon may be rendered in any court having jurisdiction for
         its enforcement.

19

<PAGE>

(c)      The performance of this Agreement by the Parties shall continue during
         such arbitration or legal proceedings.

ARTICLE 26 EXECUTION AND COUNTERPART

This Agreement shall be executed in 8 counterparts in the English language and
each counterpart when delivered shall be considered an original. New Maintenance
Authorities shall be added to this Agreement by means of a Document of Accession
as set forth in Schedule 5 and the Document of Accession shall for each such
addition be executed in two counterparts in the English language and certified
copies shall be delivered to all the Parties.

ARTICLE 27 INTERPRETATION

All references to the Party(ies), Article(s), and Schedule(s) refer to the
Party(ies), Article(s) and Schedule(s) under this Agreement. In addition, and
where the context so requires, the singular shall be taken to mean the plural
and the plural shall be taken to mean the singular.

ARTICLE 28 ENTIRE AGREEMENT

This Agreement together with the Schedules hereto constitutes the entire
agreement between the Parties in relation to its subject matter and supersedes
all prior verbal or written understandings between and among the Parties.

This Agreement supersedes all prior verbal or written understandings between the
Parties and constitutes the entire agreement with respect to the subject matter
of this Agreement

This Agreement includes the following documents which are attached hereto and
incorporated herein by reference.

Schedule 1          Maintenance Authorities and Designated Cables

Schedule 2          Standing Charges

Schedule 3          Running Costs Estimate

Schedule 4          Accounting Units Calculation and Billing Schedule

Schedule 5          Document of Accession to the ROV Service Agreement

                                       20

<PAGE>

Schedule 6          Request for inclusion of a Cable system in the ROV Service
                    Agreement

Schedule 7          ROV description

                    Annex 1:  Scorpio 2000
                    Annex 2:  Phoenix II

Schedule 8          Representatives of the Service Providers - Mailing Addresses
                    and Contacts for Maintenance Purposes

ARTICLE 29 HEADINGS

For the purposes of interpretation of this Agreement and Schedules, all headings
thereof shall be deemed not to form part of this Agreement.

ARTICLE 30 REPRESENTATIVES AND CORRESPONDENCE

The Parties shall inform each other of their representatives for the purpose of
correspondence between the Parties.

ARTICLE 31 NOTICES

(a)      Any notice or consent required or permitted hereunder shall be given in
         writing or confirmed in writing as the context so requires and shall be
         deemed to be duly given if deposited by hand at, or despatched by
         airmail of the most expeditious class or by fax or electronic mail
         addressed to the registered office last quoted by the Party to whom it
         is addressed.

(b)      Unless it is expressly provided for herein or otherwise agreed, any
         such notice or consent shall be deemed to be served ten days from the
         date of despatch.

ARTICLE 32 PUBLICITY

Any publicity or news releases regarding this Agreement shall not be issued or
published without the prior agreement of the Parties.

                                       21

<PAGE>

ARTICLE 33 CONFIDENTIAL INFORMATION

Information furnished by one Party to another shall be kept confidential by the
Party receiving it and shall be used only for the purposes of this Agreement,
and may not be used for any other purposes without the prior written consent of
the Party owning the Information, unless such information:

         (i)        was previously known to the receiving Party free of any
                    obligation to keep it confidential, or

         (ii)       has come into the public domain other than by a breach of
                    confidentiality by the receiving Party, or

         (iii)      is received from a third party without similar restriction
                    and without breach of this Agreement, or

         (iv)       is necessary or proper disclosure under any applicable law,
                    rule or regulation or pursuant to the direction of any
                    Governmental Entity or Agency having jurisdiction in any
                    country of the Parties.

ARTICLE 34 PERFORMANCE OF AGREEMENT

The performance of this Agreement by the Parties hereto shall be contingent upon
either:

         (i)        the continued operation of at least one Designated Cable; it
                    being understood that the Parties shall consult each other
                    in such event and shall confer to decide further action
                    including the termination of this Agreement

         or

         (ii)       the necessary government approvals.

ARTICLE 35 SEVERABILITY

If any of the provisions of this Agreement shall be invalid or unenforceable,
such invalidity or unenforceability shall not invalidate or render unenforceable
the entire Agreement, but rather the entire Agreement shall be construed as if
not containing the particular invalid or unenforceable provision or provisions
and the rights and obligations of the parties shall be construed and enforced
accordingly.

                                       22

<PAGE>

ARTICLE 36 WAIVER

The waiver of any breach of any term or condition of this Agreement shall not be
deemed to be a waiver of any other breach of the same or any other term or
condition of this Agreement. No waiver shall be valid unless it is written and
signed on behalf of the Party making the waiver.

                                       23

<PAGE>

TESTIMONIUM

In witness whereof the parties hereto have executed this Agreement the day and
year here above written.

FOR AND ON BEHALF OF                ELETTRA ITALY
  /s/ Name of Signatory                               16/3/99
______________________________________________  DATE ______________________

FOR AND ON BEHALF OF                FLAG
  /s/ Name of Signatory                               15/3/99
______________________________________________  DATE ______________________

FOR AND ON BEHALF OF                FRANCE CABLE RADIO FRANCE
   /s/ A. Suard                                       15/3/99
______________________________________________  DATE ______________________

FOR AND ON BEHALF OF                FRANCE TELECOM FRANCE
  /s/ J. Genoux                                       19/3/99
______________________________________________  DATE ______________________

FOR AND ON BEHALF OF                SEAMEWE 1
  /s/ J. Genoux                                       19/3/99
______________________________________________  DATE ______________________

FOR AND ON BEHALF OF                SEAMEWE 2
  /s/ J. Genoux                                       19/3/99
______________________________________________  DATE ______________________

FOR AND ON BEHALF OF                SOCIETE DES TELECOMMUNICATIONS
                                    INTERNATIONALES DE DJIBOUTI (S.T.I.D),
                                    REPUBLICQUE DE DJIBOUTI

  /s/ Name of Signatory                               17/3/99
______________________________________________  DATE ______________________

FOR AND ON BEHALF OF                TELECOM ITALIA, ITALY
  /s/ Name of Signatory

______________________________________________  DATE ______________________

                                       24THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
OFFERED OR SOLD UNLESS REGISTERED AND QUALIFIED PURSUANT TO THE APPLICABLE
PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION OR QUALIFICATION APPLIES. THEREFORE, NO SALE OR TRANSFER OF
THIS SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE VALID,
AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY SUCH
TRANSACTION UNLESS (A) SUCH TRANSACTION HAS BEEN DULY REGISTERED UNDER THE
ACT AND QUALIFIED OR APPROVED UNDER APPROPRIATE STATE SECURITIES LAWS, OR (B)
THE ISSUER HAS FIRST RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO IT THAT SUCH REGISTRATION, QUALIFICATION OR APPROVAL IS NOT REQUIRED.

                                     WARRANT

                   For the Purchase of Shares of Common Stock
                                       of
                          CREATIVE HOST SERVICES, INC.

                       Void After 5 P.M. November 19, 2004

No.  1                                                 Date: November 19, 1999

 Warrant to Purchase One Hundred and Twenty Thousand (120,000) Shares of Common
                                     Stock

         THIS IS TO CERTIFY, that, for value received, David C. Olson, or
registered assigns (the "Holder"), is entitled, subject to the terms and
conditions hereinafter set forth, on or after the date hereof, and at any
time prior to 5 P.M., Pacific Standard Time ("PST"), on November 19, 2004 but
not thereafter, to purchase such number of shares of Common Stock, no par
value ("Common Stock" or the "Shares"), of Creative Host Services, Inc. (the
"Company"), from the Company as set forth above and upon payment to the
Company of an amount per Share of $1.375 (the "Purchase Price"), if and to
the extent this Warrant is exercised, in whole or in part, during the period
this Warrant remains in force, subject in all cases to adjustment as provided
in Section 2 hereof, and to receive a certificate or certificates
representing the Shares so purchased, upon presentation and surrender to the
Company of this Warrant, with the form of Subscription Agreement attached
hereto, including changes thereto reasonably requested by the Company, duly
executed and accompanied by payment of the Purchase Price of each Share.

                                   SECTION 1.
                              TERMS OF THIS WARRANT

         1.1 TIME OF EXERCISE. This Warrant may be exercised at any time and
from time to time after 9:00 A.M., PST, on the date hereof, (the "Exercise
Commencement Date"), but no later than 5:00 P.M., November 19, 2004 (the
"Expiration Time") at which time this Warrant shall become void and all
rights hereunder shall cease.

<PAGE>

         1.2      MANNER OF EXERCISE.

                  1.2.1 The Holder may exercise this Warrant, in whole or in
part, upon surrender of this Warrant, with the form of Subscription Agreement
attached hereto duly executed, to the Company at its corporate office in San
Diego, California, and upon payment to the Company of the full Purchase Price
for each Share to be purchased in lawful money of the United States, or by
certified or cashier's check, or wired funds, and upon compliance with and
subject to the conditions set forth herein.

                  1.2.2 Upon receipt of this Warrant with the form of
Subscription Agreement duly executed and accompanied by payment of the
aggregate Purchase Price for the Shares for which this Warrant is then being
exercised, the Company shall cause to be issued certificates for the total
number of whole Shares for which this Warrant is being exercised in such
denominations as are required for delivery to the Holder, and the Company
shall thereupon deliver such certificates to the Holder or its nominee.

                  1.2.3 In case the Holder shall exercise this Warrant with
respect to less than all of the Shares that may be purchased under this
Warrant, the Company shall execute a new Warrant for the balance of the
Shares that may be purchased upon exercise of this Warrant and deliver such
new Warrant to the Holder.

                  1.2.4 The Company covenants and agrees that it will pay
when due and payable any and all taxes which may be payable in respect of the
issue of this Warrant, or the issue of any Shares upon the exercise of this
Warrant. 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
this Warrant or of the Shares in a name other than that of the Holder at the
time of surrender, and until the payment of such tax the Company shall not be
required to issue such Shares.

         1.3      "CASHLESS" NET ISSUE EXERCISE.

                  1.3.1 Notwithstanding any provisions herein to the
contrary, if the Current Market Price of one Share is greater than the
Purchase Price, in lieu of exercising this Warrant by payment with cash,
certified check, or wired funds, the Holder may elect to receive that number
of Shares (as determined below) equal to the value of this Warrant (or the
portion thereof being exercised) by surrender of this Warrant at the
corporate office of the Company together with the duly executed form of
Subscription Agreement and notice of such election, in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:

                  X =      Y (A-B)
                           -------
                           A

         Where             X =   the number of shares of Common Stock to be
                                 issued to the Holder

                                       -2-

<PAGE>

                           Y =   the total number of shares of Common Stock
                                 to be purchased

                           A =   the Current Market Price of one Share of
                                 the Company's Common Stock on the day prior
                                 to exercise hereunder.

                           B =   Purchase Price.

                  1.3.2 The Current Market Price shall be determined as follows:

                           (a)   if the security at issue is listed on a
national securities exchange or admitted to unlisted trading privileges on
such an exchange or quoted on either the National Market System or the Small
Cap Market of the automated quotation service operated by Nasdaq, Inc.
("NASDAQ"), the current value shall be the last reported sale price of that
security on such exchange or system on the day for which the Current Market
Price is to be determined or, if no such sale is made on such day, the
average of the highest closing bid and lowest asked price for such day on
such exchange or system; or

                           (b)   if the security at issue is not so listed or
                                 quoted or admitted to unlisted trading
privileges and bid and asked prices are not reported, the current market
value shall be determined in good faith and in such reasonable manner as may
be prescribed from time to time by the Board of Directors of the Company.

         1.4      EXCHANGE OF WARRANT. This Warrant may be divided into,
combined with or exchanged for another Warrant or Warrants of like tenor to
purchase a like aggregate number of Shares. If the Holder desires to divide,
combine or exchange this Warrant, he shall make such request in writing
delivered to the Company at its corporate office and shall surrender this
Warrant and any other Warrants to be so divided, combined or exchanged. The
Company shall execute and deliver to the person entitled thereto a Warrant or
Warrants, as the case may be, as so requested. The Company shall not be
required to effect any division, combination or exchange which will result in
the issuance of a Warrant entitling the Holder to purchase upon exercise a
fraction of a Share. The Company may require the Holder to pay a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any division, combination or exchange of Warrants.

         1.5      HOLDER AS OWNER. Prior to surrender of this Warrant in
accordance with Section 1.6 for registration of assignment, the Company may
deem and treat the Holder as the absolute owner of this Warrant
(notwithstanding any notation of ownership or other writing hereon) for the
purpose of any exercise hereof and for all other purposes, and the Company
shall not be affected by any notice to the contrary.

         1.6      METHOD OF ASSIGNMENT. Any assignment or transfer of any
portion or all of this Warrant shall be made by surrender of this Warrant to
the Company at its principal office with the form of assignment attached
hereto duly executed and accompanied by funds sufficient to pay any transfer
tax. In such event, the Company shall, without charge, execute and deliver a
new Warrant

                                       -3-

<PAGE>

in the name of the assignee named in such instrument of assignment and this
Warrant shall promptly be canceled.

         1.7      RIGHTS OF HOLDER. Nothing contained in this Warrant shall be
construed as conferring upon the Holder the right to vote, consent or receive
notice as a shareholder in respect of any meetings of shareholders for the
election of directors or any other matter, or as having any rights whatsoever as
a shareholder of the Company.

         1.8      LOST CERTIFICATES. If this Warrant is lost, stolen, mutilated
or destroyed, the Company shall, on such reasonable terms as to indemnity or
otherwise as it may impose (which shall, in the case of a mutilated Warrant,
include the surrender thereof), issue a new Warrant of like denomination and
tenor as, and in substitution for, this Warrant, which shall thereupon become
void. Any such new Warrant shall constitute an additional contractual obligation
of the Company, whether or not the Warrant so lost, stolen, destroyed or
mutilated shall be at any time enforceable by anyone.

         1.9      COVENANTS OF THE COMPANY.  The Company covenants and agrees
as follows:

                  1.9.1 At all times the Company shall reserve and keep
available for the exercise of this Warrant such number of authorized shares of
Common Stock as are sufficient to permit the exercise in full of this Warrant.

                  1.9.2 The Company covenants that all Shares when issued upon
the exercise of this Warrant will be validly issued, fully paid, nonassessable
and free of preemptive rights.

                                   SECTION 2.
                          ADJUSTMENT OF PURCHASE PRICE
                 AND NUMBER OF SHARES PURCHASABLE UPON EXERCISE

         2.1      STOCK SPLITS. If the Company at any time or from time to time
after the issuance date of this Warrant effects a subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased, and conversely, if the Company
at any time or from time to time after the issuance date of this Warrant
combines the outstanding shares of Common Stock, the Purchase Price then in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this subsection 2.1 shall become effective at the close of
business on the date the subdivision or combination becomes effective.

         2.2      DIVIDENDS AND DISTRIBUTIONS. In the event the Company at any
time, or from time to time after the issuance date of this Warrant makes, or
fixes a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional shares of Common
Stock, then and in each such event the Purchase Price then in effect shall be
decreased as of the time of such issuance or, in the event such a record date is
fixed, as of the close of business on such record date, by multiplying the
Purchase Price then in effect by a fraction (i) the

                                       -4-

<PAGE>

numerator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (ii) the denominator of which shall be the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such dividend or
distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Purchase Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Purchase Price shall be
adjusted pursuant to this subsection 2.2 as of the time of actual payment of
such dividends or distributions.

         2.3      RECAPITALIZATION OR RECLASSIFICATION. If the Shares issuable
upon the exercise of the Warrant are changed into the same or a different number
of shares of any class or classes of stock, whether by recapitalization,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section 2), then, and in any such event, the
Holder shall thereafter be entitled to receive upon exercise of this Warrant
such number and kind of stock or other securities or property of the Company to
which a holder of Shares deliverable upon exercise of this Warrant would have
been entitled on such reclassification or other change, subject to further
adjustment as provided herein.

         2.4      SALE OF THE COMPANY. If at any time or from time to time
there is a capital reorganization of the Common Stock (other than a
recapitalization, subdivision, combination, reclassification or exchange of
shares provided for elsewhere in this Section 2) or a merger or consolidation
of the Company with or into another Company, or the sale of all or
substantially all of the Company's properties and assets to any other person,
then, as a part of such reorganization, merger, consolidation or sale,
provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Warrant such number of shares of stock or other
securities or property of the Company, or of the successor Company resulting
from such merger or consolidation or sale, to which a holder of Shares
deliverable upon exercise would have been entitled on such capital
reorganization, merger, consolidation, or sale. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section
2 with respect to the rights of the holders of the Warrants after the
reorganization, merger, consolidation or sale to the end that the provisions
of this Section (including adjustment of the Purchase Price then in effect
and number of shares purchasable upon exercise of the Warrants) shall be
applicable after that event and be as nearly equivalent to the provisions
hereof as may be practicable.

         2.5      OBSERVANCE OF DUTIES. The Company will not, by amendment of
its Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 2 and in the taking of all such action as may be necessary or
appropriate in order to protect the Exercise Rights of the holders of the
Warrants against dilution or other impairment.

                                       -5-

<PAGE>

                                   SECTION 3.
                  REGISTRATION UNDER THE SECURITIES ACT OF 1933

         3.1      REGISTRATION AND LEGENDS. This Warrant and the Shares
issuable upon exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended ("the Act"). Upon exercise, in whole or in
part, of this Warrant, the certificates representing the Shares shall bear
the following legend:

         THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
         SECURITIES ACT OF 1933 ("ACT") OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE OFFERED OR SOLD UNLESS REGISTERED AND QUALIFIED
         PURSUANT TO THE APPLICABLE PROVISIONS OF FEDERAL AND STATE
         SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION OR
         QUALIFICATION APPLIES. THEREFORE, NO SALE OR TRANSFER OF THIS
         SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE
         VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO
         ANY SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION HAS BEEN DULY
         REGISTERED UNDER THE ACT AND QUALIFIED OR APPROVED UNDER
         APPROPRIATE STATE SECURITIES LAWS, OR (B) THE ISSUER HAS FIRST
         RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH
         REGISTRATION, QUALIFICATION OR APPROVAL IS NOT REQUIRED.

         3.2      DEMAND REGISTRATION RIGHTS. On one occasion at any time
before the Expiration Date, the Company shall, upon the demand of the holders
of a majority of the Registrable Securities, register such securities and
file all necessary undertakings with the Securities and Exchange Commission
(the "SEC") so as to permit the Holder the right to sell publicly the Shares
issued on exercise of this Warrant.

         3.3      PIGGYBACK REGISTRATION RIGHTS. In the event that the right
to demand that the Registrable Securities be registered pursuant to Section
3.2 has not been exercised, the Company agrees to include any Shares issuable
upon exercise of this Warrant in any registration statement filed by the
Company at any time after the Exercise Commencement Date and before the
Expiration Date.

                                   SECTION 4.
                                  OTHER MATTERS

         4.1      BINDING EFFECT. All the covenants and provisions of this
Warrant by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.

                                       -6-

<PAGE>

         4.2      NOTICES. Notices or demands pursuant to this Warrant to be
given or made by the Holder to or on the Company shall be sufficiently given
or made if sent by certified or registered mail, return receipt requested,
postage prepaid, or facsimile and addressed, until another address is
designated in writing by the Company, as follows:

                          Creative Host Services, Inc.
                        6335 Ferris Square, Suites G & H
                           San Diego, California 92121
                          Telephone No.: (858) 587-7300
                          Facsimile No.: (858) 587-7309
                         Attention: Sayed Ali, President

Notices to the Holder provided for in this Warrant shall be deemed given or
made by the Company if sent by certified or registered mail, return receipt
requested, postage prepaid, and addressed to the Holder at his last known
address as it shall appear on the books of the Company.

         4.3      GOVERNING LAW. The validity, interpretation and performance
of this Warrant shall be governed by the laws of the State of California. The
venue for any legal proceedings under this Warrant will be in the appropriate
forum in the County of San Diego, State of California.

         4.4      PARTIES BOUND AND BENEFITTED. Nothing in this Warrant
expressed and nothing that may be implied from any of the provisions hereof
is intended, or shall be construed, to confer upon, or give to, any person or
corporation other than the Company and the Holder any right, remedy or claim
under any promise or agreement hereof, and all covenants, conditions,
stipulations, promises and agreements contained in this Warrant shall be for
the sole and exclusive benefit of the Company and its successors and of the
Holder, its successors and permitted assigns.

         4.5      HEADINGS. The Section headings herein are for convenience
only and are not part of this Warrant and shall not affect the interpretation
thereof.

         IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company as of November 19, 1999.

                                                    CREATIVE HOST SERVICES, INC.

                                                     By:
                                                        ------------------------
                                                        Sayed Ali, President

                                       -7-

<PAGE>

                              ASSIGNMENT OF WARRANT

       FOR VALUE RECEIVED, _______________________ hereby sells, assigns and
transfers

unto _____________________________ the within Warrant and the rights represented
thereby, and

does hereby irrevocably constitute and appoint _______________________________
Attorney, to

transfer said Warrant on the books of the Company, with full power of
substitution.

Dated: _____________________

                                                    Signed:___________________

Signature guaranteed:

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

                                       -1-

<PAGE>

                             SUBSCRIPTION AGREEMENT

                          FOR THE EXERCISE OF WARRANTS

         The undersigned hereby irrevocably subscribes for the purchase of
_____________ Shares pursuant to and in accordance with the terms and
conditions of this Warrant, which Shares should be delivered to the
undersigned at the address stated below. If said number of Shares are not all
of the Shares purchasable hereunder, a new Warrant of like tenor for the
balance of the remaining Shares purchasable hereunder should be delivered to
the undersigned at the address stated below.

         The undersigned elects to pay the aggregate Purchase Price for such
Shares in the following manner:

                  [  ]     by the enclosed cash or check made payable to the
                          Company in the amount of $________;

                  [  ]     by wire transfer of United States funds to the
                           account of the Company in the amount of
                           $____________, which transfer has been made before or
                           simultaneously with the delivery of this Notice
                           pursuant to the instructions of the Company; or

                  [  ]     by cashless exercise pursuant to Section 1.3 of the
                           Warrant.

         The undersigned agrees that: (1) the undersigned will not offer,
sell, transfer or otherwise dispose of any Shares unless either (a) a
registration statement, or post-effective amendment thereto, covering the
Shares has been filed with the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended (the "Act"), such sale, transfer or
other disposition is accompanied by a prospectus meeting the requirements of
Section 10 of the Act forming a part of such registration statement, or
post-effective amendment thereto, which is in effect under the Act covering
the Shares to be so sold, transferred or otherwise disposed of, and all
applicable state securities laws have been complied with, or (b) counsel
reasonably satisfactory to Creative Host Services, Inc. has rendered an
opinion in writing and addressed to Creative Host Services, Inc. that such
proposed offer, sale, transfer or other disposition of the Shares is exempt
from the provisions of Section 5 of the Act in view of the circumstances of
such proposed offer, sale, transfer or other disposition; (2) Creative Host
Services, Inc. may notify the transfer agent for the Shares that the
certificates for the Shares acquired by the undersigned are not to be
transferred unless the transfer agent receives advice from Creative Host
Services, Inc. that one or both of the conditions referred to in (1)(a) and
(1)(b) above have been satisfied; and (3) Creative Host Services, Inc. may
affix the legend set forth in Section 3.1 of this Warrant to the certificates
for the Shares hereby subscribed for, if such legend is applicable.

Dated:___________________________          Signed:______________________________

Signature guaranteed:                      Address:_____________________________
                                                   _____________________________

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

                                       -2-

<PAGE>

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