ASIA GLOBAL CROSSING LTD, S-4, 2001-01-10

ASIA GLOBAL CROSSING LTD
S-4, 2001-01-10
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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 10, 2001

REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

ASIA GLOBAL CROSSING LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
BERMUDA 4813 98-022-4159
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

WESSEX HOUSE
45 REID STREET
HAMILTON HM12, BERMUDA
(441) 296-8600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

CT CORPORATION SYSTEM
111 EIGHTH AVENUE
NEW YORK, NY 10011
(212) 479-8200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

<TABLE>
<S> <C>
CHARLES F. CARROLL, ESQ. ALAN M. KLEIN, ESQ.
ASIA GLOBAL CROSSING LTD. SIMPSON THACHER & BARTLETT
360 N. CRESCENT DRIVE 425 LEXINGTON AVENUE
BEVERLY HILLS, CA 90210 NEW YORK, NY 10017
(310) 385-5200 (212) 455-2000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE AGGREGATE OFFERING AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PRICE PER UNIT PRICE REGISTRATION FEE
---------------------------------- ---------------------- ---------------------- ---------------------- ----------------------
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
13.375% Senior Notes due 2010..... $408,000,000 100% $408,000,000 $102,000
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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<PAGE> 2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT CONSTITUTE A
SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE
THE OFFER, SOLICITATION OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED JANUARY 10, 2001

PROSPECTUS

$408,000,000

[ASIA GLOBAL CROSSING LOGO]
ASIA GLOBAL CROSSING LTD.

OFFER TO EXCHANGE ALL OUTSTANDING
$408,000,000 13.375% SENIOR NOTES DUE 2010

FOR

$408,000,000 13.375% SENIOR NOTES DUE 2010
WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933

THE EXCHANGE OFFER

We are offering to exchange our outstanding notes for new notes with
substantially identical terms that have been registered under the Securities Act
and are freely tradeable. In this document, we refer to our outstanding notes as
the "outstanding notes" and our new notes as the "exchange notes".

The exchange offer expires at 5:00 p.m., New York City time, on
, unless extended. We do not currently intend to extend the
expiration date.

In the exchange offer:

- we will exchange all outstanding notes that you validly tender and do not
validly withdraw before the exchange offer expires for an equal principal
amount of exchange notes; and

- you may withdraw tenders of outstanding notes at any time before the
exchange offer expires.

RESALES OF THE EXCHANGE NOTES

You may sell the exchange notes in the over-the-counter market, on the
Luxembourg Stock Exchange, in negotiated transactions or through a combination
of those methods.

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

INVESTING IN THE EXCHANGE NOTES INVOLVES RISKS, WHICH WE DESCRIBE IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 16 OF THIS PROSPECTUS.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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

THE DATE OF THIS PROSPECTUS IS , 2001.
<PAGE> 3

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER TO SELL THESE SECURITIES IN
ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER
THAN THE DATE ON THE FRONT COVER OF THIS PROSPECTUS.

TABLE OF CONTENTS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Summary..................................................... 1
Risk Factors................................................ 16
The Exchange Offer.......................................... 29
Special Note Regarding Forward-Looking Statements........... 39
Use of Proceeds............................................. 39
Capitalization.............................................. 40
Selected Unaudited Pro Forma Financial Information.......... 41
Selected Supplemental Consolidated Financial Information.... 43
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 53
Business.................................................... 64
Management.................................................. 80
Principal Shareholders...................................... 89
Description of Capital Stock................................ 92
Formation Transactions...................................... 94
Transactions with Related Parties........................... 95
Regulation.................................................. 113
Description of Other Indebtedness........................... 118
Description of Notes........................................ 120
Book-Entry Procedures and Settlement........................ 156
Certain Income Tax Consequences............................. 158
Plan of Distribution........................................ 162
Legal Matters............................................... 163
Experts..................................................... 163
Service of Process and Enforcement of Liabilities........... 163
Where You Can Find More Information......................... 164
Listing and General Information............................. 165
Index to Consolidated Financial Statements.................. F-1
Unaudited Pro Forma Information............................. F-115
</TABLE>

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

The Bermuda Monetary Authority has given its consent to the issue and the
transfer of the exchange notes. Approvals or permissions received from the
Bermuda Monetary Authority do not constitute a guaranty by the Bermuda Monetary
Authority as to our performance or our credit worthiness. Accordingly, in giving
those approvals or permissions, the Bermuda Monetary Authority will not be
liable for our performance or default or for the correctness of any opinions or
statements expressed in this document.

The Bermuda Monetary Authority has classified us as non-resident in Bermuda
for exchange control purposes. Accordingly, we may convert currency, other than
Bermuda currency, held for our account to any other currency without
restriction. Persons, firms or companies regarded as residents of Bermuda for
exchange control purposes require specific consent under the Exchange Control
Act, 1972 of Bermuda, and regulations promulgated under that Act, to purchase
any shares in our capital stock or any debt securities that we may issue. Under
the terms of the consent given to us by the Bermuda Monetary Authority, the
issuance and transfer of the exchange notes between persons, firms or companies
regarded as non-resident in Bermuda for exchange control purposes may be
effected without further permission from the Bermuda Monetary Authority.

ii
<PAGE> 4

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE UNIFORM
SECURITIES ACT WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS
EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE
CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER
RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE
FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION
MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR
QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR
TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE
PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE
PROVISIONS OF THIS PARAGRAPH.

iii
<PAGE> 5

SUMMARY

This section contains a general summary of the information contained in
this prospectus. It may not include all the information that is important to
you. You should read the entire prospectus, including "Risk Factors" and the
financial statements and notes to those statements included in this prospectus,
before making an investment decision. References to "we," "us" and "our" in this
prospectus refer to Asia Global Crossing Ltd. and its subsidiaries and
predecessors except where we clearly indicate otherwise. References to "notes"
in this prospectus refer to both our outstanding notes and the exchange notes.

ASIA GLOBAL CROSSING

We intend to be a leading pan-Asian telecommunications carrier that
provides Internet, data and voice services to wholesale and business customers.
We intend to offer data center services in Asia through a joint venture with
Exodus Communications, Inc. We have a limited operating history, substantial
indebtedness and substantial future capital requirements.

Significant elements of our network are already operational, including:

- a trans-Pacific subsea cable;

- a key segment of our national network in Japan;

- two data centers in Tokyo and one in Hong Kong; and

- the largest fully-fiber optic network in Hong Kong.

Directly and through joint ventures, we are currently constructing other
key elements of our network, including the following:

- an East Asian subsea cable;

- additional segments of our national networks in Japan and Hong Kong;

- city fiber networks in Tokyo and Osaka; and

- additional data centers in Tokyo and Hong Kong.

By the end of 2001, we expect our network to connect the principal
commercial and financial centers across Asia. In addition, we will offer our
customers worldwide Internet services and data services through seamless
connectivity within the Global Crossing network which, inclusive of our network,
is expected to span approximately 162,544 route kilometers, serving five
continents, 27 countries and more than 200 major cities.

In November 1999, we were formed as a joint venture among Global Crossing
Ltd., Microsoft Corporation and Softbank Corp. We intend to capitalize on the
anticipated significant growth in Asian Internet and telecommunications traffic
and the increasingly favorable regulatory environment. Our strategy is to form
strategic alliances or joint ventures in key markets in order to gain a
first-mover advantage, more readily penetrate local markets, overcome regulatory
barriers and develop exclusive relationships with leading telecommunications
providers in the Asian markets we intend to serve.

We currently offer the following services:

- managed bandwidth services to telecommunications carriers and Internet
companies;

- Internet transit services, including dedicated Internet access;

- domestic and international private line services; and

- Web-hosting and Internet infrastructure services.

1
<PAGE> 6

We intend to offer the following additional services:

- advanced Internet services, including e-mail hosting, unified messaging
and storage;

- data transport services; and

- integrated voice and data services, including multimedia services such as
video conferencing and e-commerce services.

We intend to replicate these network and service capabilities in each
market to which we extend our network. We also expect to benefit from Global
Crossing's telecommunications, sales and marketing expertise.

We have significant indebtedness, which we describe in the second risk
factor on page 16. We also need to obtain significant additional financing to
complete our network and implement our business plan. Until January 2000, we had
no revenues and minimal operating costs.

OUR CORPORATE INFORMATION

We are incorporated in Bermuda, and the address of our principal executive
offices is Wessex House, 45 Reid Street, Hamilton HM12, Bermuda. Our telephone
number is 441-296-8600. The address of our principal location in the United
States is 360 North Crescent Drive, Beverly Hills, California 90210. We also
have offices in Hong Kong, Tokyo and Korea.

2
<PAGE> 7

THE EXCHANGE OFFER

On October 12, 2000, we completed the private offering of the outstanding
notes. In connection with that offering, we entered into a registration rights
agreement with the initial purchasers in the private offering. In that
agreement, we agreed to deliver to you this prospectus, and we agreed to
complete the exchange offer within 210 days after the date of the original
issuance of the outstanding notes. You are entitled to exchange in the exchange
offer your outstanding notes for exchange notes which have substantially
identical terms with the outstanding notes, except that:

- the exchange notes have been registered under the Securities Act and are
freely tradeable; and

- the special interest which would be payable on the outstanding notes in
specified circumstances relating to our failure to timely commence and
complete this exchange offer is no longer applicable.

The following section summarizes the terms of the exchange offer:

The exchange offer............ To the holders of the outstanding notes, we are
offering to exchange up to:

- $408,000,000 aggregate principal amount of
exchange notes for up to the same amount of
outstanding notes.

You may exchange outstanding notes only in
amounts which are multiples of $1,000.

Resales....................... Based on an interpretation by the staff of the
SEC outlined in a series of no-action letters
issued to third parties, including Exxon
Capital Holdings Corporation and Morgan Stanley
& Co. Incorporated, we believe that you may
offer the exchange notes for resale and resell
or otherwise transfer the exchange notes
without compliance with the registration and
prospectus delivery provisions of the
Securities Act, as long as you:

- are acquiring the exchange notes in the
ordinary course of your business; and

- have not engaged in, do not intend to engage
in and have no arrangement or understanding
with any person to participate in a
distribution of the exchange notes.

However, you may not rely on the previous
paragraph and must comply with the registration
and prospectus delivery provisions of the
Securities Act if you:

- are an affiliate of ours within the meaning
of Rule 405 under the Securities Act;

- do not acquire exchange notes in the ordinary
course of your business; or

- tender in the exchange offer with the
intention to participate or for the purpose
of participating in a distribution of
exchange notes.

Expiration.................... The exchange offer will expire at 5:00 p.m.,
New York City time, on , or on a
later date and time if we decide to extend the
exchange offer. We refer to the date on which
the exchange offer will expire as the
"expiration date."

3
<PAGE> 8

Withdrawal of tenders......... You may withdraw any outstanding notes that you
tender in the exchange offer at any time prior
to 5:00 p.m., New York City time, on the
expiration date. We will return without expense
to you any outstanding notes not accepted for
exchange for any reason promptly after the
expiration or termination of the exchange
offer.

Certain conditions to
the exchange offer.......... The exchange offer is subject to customary
conditions, which we may waive. Please read the
section "The Exchange Offer -- Certain
Conditions to the Exchange Offer" on page 32.

Procedures for tendering
outstanding notes........... If you wish to accept the exchange offer, you
must:

- complete, sign and date the accompanying
letter of transmittal or a facsimile of that
letter according to the instructions
contained in this prospectus and that letter;

- mail or otherwise deliver the letter of
transmittal or a facsimile of that letter,
together with the outstanding notes and any
other required documents, to the exchange
agent at the address indicated on the cover
page of the letter of transmittal; or

- if you hold outstanding notes through
Depository Trust Company ("DTC") and wish to
participate in the exchange offer, you must
comply with the Automated Tender Offer
Program procedures of DTC, by which you will
tender your outstanding notes and agree to be
bound by the letter of transmittal.

By signing or agreeing to be bound by the
letter of transmittal, you will represent to us
that, among other things:

- any exchange notes that you receive will be
acquired in the ordinary course of your
business;

- you have no arrangement or understanding with
any person or entity to participate in a
distribution of the exchange notes;

- if you are a broker-dealer that will receive
exchange notes for your own account in
exchange for outstanding notes that you
acquired as a result of market-making or
other trading activities, you will deliver a
prospectus, as required by law, in connection
with any resale of those exchange notes; and

- you are not an affiliate of ours within the
meaning of Rule 405 under the Securities Act
or, if you are an affiliate, you will comply
with any applicable registration and
prospectus delivery requirements of the
Securities Act.

Special procedures for
beneficial owners........... If you are a beneficial owner of outstanding
notes which are registered in the name of a
broker, dealer, commercial bank,

4
<PAGE> 9

trust company or other nominee and you wish to
tender your outstanding notes in the exchange
offer, you should contact the registered holder
promptly and instruct the registered holder to
tender on your behalf. If you wish to tender on
your own behalf, before completing and
executing the letter of transmittal, you must
either make appropriate arrangements to
register ownership of the outstanding notes in
your name or obtain a properly completed bond
power from the registered owner. However, the
transfer of registered ownership may take
considerable time, and you may not be able to
complete it before the expiration date.

Guaranteed delivery
procedures.................... If you wish to tender your outstanding notes
and (1) your outstanding notes are not
immediately available or (2) you cannot deliver
your outstanding notes, the letter of
transmittal or any other document required by
the letter of transmittal or (3) you are unable
to comply with the applicable procedures under
DTC's Automated Tender Offer Program before the
expiration date, you must tender your
outstanding notes under the guaranteed delivery
procedures outlined in this prospectus under
"The Exchange Offer -- Guaranteed Delivery
Procedures" on page 35.

Effect on some terms of the
outstanding notes........... Once we complete the exchange of all validly
tendered outstanding notes in the exchange
offer, we will have satisfied our obligation
under the registration rights agreement to
effect the exchange offer, and we will not be
liable to pay special interest on the
outstanding notes as described in that
agreement. If you fail to tender your
outstanding notes in the exchange offer, you
will continue to hold outstanding notes and you
will be entitled to all the rights and
limitations applicable to the outstanding notes
in the indenture, except for the rights under
the registration rights agreement that by their
terms terminate when the exchange offer is
completed.

Some adverse consequences of
failure to exchange......... We expect that a substantial portion of the
outstanding notes will be tendered and accepted
in the exchange offer. In that case, the
trading market for the outstanding notes will
be adversely affected.

If you fail to tender your outstanding notes in
the exchange offer, your notes will continue to
be subject to the transfer restrictions
outlined in the outstanding notes and in the
indenture. In general, the outstanding notes
may not be offered or sold, unless registered
under the Securities Act or in a transaction
not subject to the registration requirements of
the Securities Act and applicable state
securities laws.

We do not intend to register any outstanding
notes under the Securities Act other than in
the exchange offer.

5
<PAGE> 10

Certain income tax
considerations................ The exchange of outstanding notes for exchange
notes in the exchange offer will not be a
taxable event for (1) United States federal
income tax purposes or (2) Bermuda income tax
purposes.

Use of proceeds............... We will not receive any cash proceeds from the
issuance of the exchange notes in the exchange
offer.

Exchange agent................ The exchange agent for the exchange offer will
be United States Trust Company of New York. You
may find the exchange agent's address and
telephone number in "The Exchange
Offer -- Exchange Agent and Luxembourg Exchange
Agent" on page 36.

Luxembourg exchange agent..... The Luxembourg exchange agent for the exchange
offer will be Kredietbank S.A. Luxembourgeoise.
You may find the Luxembourg exchange agent's
address and telephone number in "The Exchange
Offer -- Exchange Agent and Luxembourg Exchange
Agent" on page 36.

THE EXCHANGE NOTES:

Issuer........................ Asia Global Crossing Ltd., a Bermuda company

Securities offered............ $408,000,000 aggregate principal amount of
Senior Notes due 2010

Maturity...................... October 15, 2010

Interest...................... 13.375% per year. We will pay interest on the
notes on April 15 and October 15 of each year,
beginning on April 15, 2001.

Ranking....................... The exchange notes are unsecured and rank
equally with all our other senior unsecured
debt. We are a holding company, and therefore
the exchange notes will be effectively
subordinated to all indebtedness (other than
the outstanding notes) and other liabilities of
our subsidiaries.

Optional redemption........... We may redeem some or all of the exchange notes
at any time on or after October 15, 2005 at the
redemption prices described under the heading
"Description of Notes -- Optional Redemption"
on page 122 of this document.

On or before October 15, 2003, we may redeem up
to 35% of the original principal amount of the
notes using the net proceeds of equity
offerings at a redemption price described under
"Description of Notes -- Equity Offering
Redemption" on page 122 of this document.

We may redeem all but not part of the notes if
we become subject to a change of control at any
time before October 15, 2005 at the redemption
prices described under the heading "Description
of Notes -- Change of Control Redemption" on
page 122 of this document.

6
<PAGE> 11

We may redeem all but not part of the notes if
there are specified changes in tax law at a
redemption price described under the heading,
"Description of Notes -- Optional Tax
Redemption" on page 123 of this document.

Change of control............. Upon the occurrence of a change of control,
unless we have exercised our right to redeem
all of the notes as described above, you will
have the right to require us to repurchase all
or a portion of your exchange notes at a
purchase price in cash equal to 101% of the
principal amount thereof, plus accrued interest
to the date of repurchase. See "Description of
Notes -- Repurchase at the Option of
Holders -- Change of Control."

Certain covenants............. The Indenture will, among other things,
restrict our ability and the ability of certain
of our subsidiaries to:

- borrow money;

- make distributions, redeem equity interests
or redeem subordinated debt;

- make investments;

- use assets as security in other transactions;

- sell assets;

- guarantee other debt;

- enter into agreements that restrict dividends
from subsidiaries;

- sell capital stock of subsidiaries;

- merge or consolidate; and

- enter into transactions with affiliates.

These covenants will be subject to a number of
important exceptions. For more details, see
"Description of Notes."

Luxembourg listing............ Application has been made to list the exchange
notes on the Luxembourg Stock Exchange.

RISK FACTORS

Prospective investors in the notes should carefully consider all of the
information in this prospectus and, in particular, should evaluate the specific
factors set forth under the caption "Risk Factors."

7
<PAGE> 12

OUR CORPORATE STRUCTURE

The following diagram illustrates our corporate structure, simplified to
eliminate certain entities which act as holding companies.

[Corporate Structure diagram]

[Corporate structure chart showing Asia Global Crossing Ltd. owned 57.5% by
Global Crossing Ltd., 15.8% by each of Microsoft Corporation and Softbank Corp.
and 10.9% by the Public and Others. These ownership percentages are determined
based on an assumed initial public offering price per share of our Class A
common stock of $15.00. The corporate structure chart also shows Asia Global
Crossings Ltd. owning 100% of GCT Pacific Holdings, Ltd., 49% of Global Access
Limited, 50% of Hutchison Global Crossing Holdings Limited, 89% of Global Center
Japan Corporation, 100% of Global Crossing Japan Corporation and 100% of Asia
Global Crossing Development Co. The corporate structure chart also shows GCT
Pacific Holdings, Ltd. owning 50% of Pacific Crossing Ltd. and 100% of SCS
(Bermuda) Ltd., which in turn owns 14.5% of Pacific Crossing Ltd. The corporate
structure chart also shows GCT Pacific Holdings, Ltd. owning 100% of East Asia
Crossing Ltd. The corporate structure chart also shows Hutchinson Global
Crossing Holdings Limited owning a 100% of Hutchison Global Crossing Limited.]

8
<PAGE> 13

SUMMARY SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

The table below shows our selected supplemental consolidated financial
information prepared in accordance with United States GAAP. This information has
been prepared using our supplemental consolidated financial statements as of the
dates indicated and for the year ended December 31, 1999, for the period from
April 1, 1998, date of inception, to December 31, 1998 and for the nine months
ended September 30, 2000 and 1999. The supplemental consolidated financial
statements have been prepared to give retroactive effect to the contribution of
Hutchison Global Crossing and Global Access Limited to us on October 12, 2000.
The supplemental consolidated financial information as of December 31, 1999 and
1998 and for the year ended December 31, 1999 and for the period from April 1,
1998, date of inception, to December 31, 1998 has been derived from our
supplemental consolidated financial statements audited by Arthur Andersen,
independent public accountants. These supplemental financial statements are
included in this prospectus beginning on page F-1. We derived the remaining data
from unaudited supplemental consolidated financial statements.

In reading the following selected supplemental consolidated financial
information, please note the following:

- On September 24, 1999, we were formed as an indirect wholly owned
subsidiary of Global Crossing. On November 24, 1999, we became a wholly
owned subsidiary of a joint venture among Global Crossing, Softbank and
Microsoft, known as Asia Global Crossing Holdings Ltd.

- On November 24, 1999, Global Crossing contributed to us GCT Pacific
Holdings Ltd., a wholly owned subsidiary of Global Crossing which we
refer to as GCT Pacific. GCT Pacific owns our interest in Pacific
Crossing Ltd. Since we and GCT Pacific are entities under common control,
our consolidated financial statements include information relating to GCT
Pacific as if we were in existence on April 1, 1998, the date of
inception of GCT Pacific, in a method similar to a pooling of interest.

- On November 24, 1999, Global Crossing contributed all its rights in East
Asia Crossing to us.

- At December 31, 1999, we beneficially owned 57.75% of Pacific Crossing
Ltd. Before January 1, 2000, our investment in Pacific Crossing Ltd. was
accounted for under the equity method because we were not able to
exercise effective control over Pacific Crossing Ltd. In March 2000, we
increased our interest in Pacific Crossing Ltd. to 64.5%, and the Pacific
Crossing Ltd. shareholders agreement was amended to give us effective
control over Pacific Crossing Ltd. As a result, we have consolidated
Pacific Crossing Ltd. as of January 1, 2000.

- The first segment of Pacific Crossing-1 commenced service in December
1999, and we anticipate that the full system will be completed by year
end 2000.

- The supplemental consolidated financial information as of September 30,
2000 and for the nine months ended September 30, 2000 and 1999 are
derived from our unaudited supplemental consolidated financial
statements. We have made adjustments, consisting of normal recurring
adjustments to present the supplemental consolidated financial position,
which in the opinion of our management are necessary for a fair
presentation. Results of operations for the nine months ended September
30, 2000 are not necessarily indicative of the results that may be
expected for the full year or for any future period.

- On October 12, 2000, we completed our initial public offering in which we
sold 68 million shares of our Class A common stock at a price of $7.00
per share. The net proceeds of our initial public offering, which we
received on October 12, 2000, after deducting underwriting discounts,
commissions and costs, were approximately $452 million. On November 8,
2000, an additional 500,000 shares at $7.00 per share were sold in
connection with the exercise of the underwriters' over-allotment option.
The additional net proceeds were approximately $3.3 million, after
deducting the underwriters' discounts, commissions and costs.

9
<PAGE> 14

- Concurrent with our initial public offering, we issued the outstanding
notes at a price of 97.990% of the principal amount thereof. The
outstanding notes have a face value of $408 million, mature on October
15, 2010 and bear an interest rate of 13.375%. Interest on the
outstanding notes is payable on April 15 and October 15 of each year,
beginning April 15, 2001.

- Concurrent with our initial public offering, Global Crossing, Soffbank
and Microsoft contributed their respective interests in Hutchison Global
Crossing Holdings Limited and subsidiaries ("HGC" or "Hutchison Global
Crossing"), representing 50% of the total ownership interest in HGC, to
us. At the same time, Global Crossing contributed its 49% interest in
Global Access Limited ("GAL") to us. These contributions are accounted by
us similar to the pooling-of-interests method of accounting because HGC,
GAL and us are entities under common control of Global Crossing. Prior to
these contributions, Global Crossing accounted for its investments in HGC
and GAL under the equity method of accounting.

- We monitor our financial performance using certain metrics which reflect
our performance and liquidity on a consolidated basis, and on a
proportionate ownership basis, reflecting our interests in our
consolidated and non-consolidated affiliates.

- Cash Revenue refers to revenue plus incremental cash deferred revenue,
which is the incremental change in deferred revenue relating to cash
receipts. We present Cash Revenue because it is a financial indicator
used by investors and analysts to compare companies on the basis of cash
receipts from sales of capacity and services. This information should not
be considered as an alternative to any measure of performance as
promulgated under GAAP.

- Adjusted EBITDA is defined as operating income (loss), plus goodwill,
amortization, depreciation and amortization, non-cash cost of capacity
sold, stock related expenses and incremental cash deferred revenue. This
definition is consistent with financial covenants contained in the our
significant financing agreements. We present Adjusted EBITDA because it
is a financial indicator used by investors and analysts to analyze and
compare companies on the basis of operating performance and because we
believe that Adjusted EBITDA is an additional, meaningful measure of
performance and liquidity. We use Adjusted EBITDA to monitor our
compliance with our financial covenants. This information should not be
considered as an alternative measure of performance as promulgated under
GAAP. Our calculation of Adjusted EBITDA may be different from the
calculation used by other companies and, therefore, comparability may be
limited.

- Proportionate Cash Revenue represents the sum of our ownership percentage
of the Cash Revenue of each member of the Combined Entities (includes
Asia Global Crossing, Hutchison Global Crossing and Global Access
Limited) after eliminating certain inter-company transactions. Cash
Revenue not assigned to specific systems is excluded.

- Proportionate Adjusted EBITDA reflects the sum of our ownership
percentage of the Adjusted EBITDA of each member of the Combined Entities
after eliminating certain inter-company transactions. Cash Revenue not
assigned to specific systems is excluded.

- Group Customer Cash Revenue represents the total of all Cash Revenue
received by us and our non-consolidated affiliates from third parties
without reference to our ownership percentages.

- We believe these proportionate metrics are relevant given the importance
of joint venture operations in achieving our business objectives. In
calculating these proportionate metrics, cash received by any member of
the Combined Entities for capacity purchases on specific systems are
treated as cash received by the companies which provide the capacity.
Cash received which may be applied to capacity purchases on systems to be
specified at a future time, are not included in calculating Proportionate
Cash Revenue or Proportionate Adjusted EBITDA, as we cannot determine our
ownership of the systems on which these payments will be applied.
10
<PAGE> 15

At the end of the current quarter, a total of $39.8 million of cash
deferred revenue resulted from cash receipts for which the customers may
select systems at a future time.

- The ratio of earnings to fixed charges is computed by aggregating pre-tax
income from continuing operations before adjustment for minority
interests and income or loss from equity investees, and fixed charges and
dividing the total by fixed charges. Fixed charges consist of interest
expense, including amortization of deferred debt issuance costs and the
interest portion of capital lease obligations, and the portion of rental
expense that is representative of the interest factor, deemed to be
one-third of rental expense. Where the earnings would be insufficient to
cover fixed charges, the amount of the deficiency is presented.

11
<PAGE> 16

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1998
NINE MONTHS ENDED (DATE OF
SEPTEMBER 30, YEAR ENDED INCEPTION) TO
-------------------- DECEMBER 31, DECEMBER 31,
2000 1999 1999 1998
--------- -------- ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
SUPPLEMENTAL CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenue................................... $ 130,455 $ -- $ -- $ --
Expenses.................................. 184,060 66 1,201 --
--------- -------- -------- ---------
Operating income (loss)................... (53,605) (66) (1,201) --
Equity in income (loss) of affiliates..... (33,540) (7,845) 2,978 (2,507)
Minority interest......................... (9,632) -- --
Other income, net......................... 9,800 8,745 11,598 5,374
--------- -------- -------- ---------
Income (loss) before provision for
income taxes....................... (86,977) 834 13,375 2,867
Provision for income taxes................ (1,353) -- -- --
--------- -------- -------- ---------
Net income (loss)....................... $ (88,330) $ 834 $ 13,375 $ 2,867
========= ======== ======== =========
SUPPLEMENTAL OTHER DATA:
Proportionate Cash Revenue................ $ 208,599 $ -- $ 36,298 $ --
Proportionate Adjusted EBITDA............. 86,617 (6,259) 20,182 (940)
Group Customer Cash Revenue............... 418,749 -- 62,854 --
Cash from operating activities............ 145,262 8,654 22,045 5,366
Cash used for investing activities........ (415,550) (12,000) (90,652) (231,006)
Cash from financing activities............ $ 364,307 $ -- $ 73,013 $ 231,018
Ratio (deficiency) of earnings to fixed
charges(1).............................. $ (88,308) -- -- --
CALCULATION OF PROPORTIONATE ADJUSTED
EBITDA:
Operating Income (loss)................... $ (53,605) $ (66) (1,201) $ --
Depreciation and amortization............. 13,539 -- -- --
Non-cash cost of capacity sold............ 98,194 -- -- --
Incremental cash deferred revenue......... 116,904 -- -- --
--------- -------- -------- ---------
Adjusted EBITDA...................... 175,032 (66) (1,201)
Minority interest in Adjusted EBITDA...... (42,493) -- -- --
Proportionate Adjusted EBITDA from non-
consolidated joint ventures............. 36,659 (6,193) 21,383 (940)
Elimination adjustments with affiliates... (42,781) -- -- --
Incremental cash deferred revenue from
payments for non-specific capacity...... (39,800) -- -- --
--------- -------- -------- ---------
Proportionate Adjusted EBITDA............. $ 86,617 $ (6,259) $ 20,182 $ (940)
========= ======== ======== =========
</TABLE>

12
<PAGE> 17

---------------
(1) There were no fixed charges in 1999 and 1998. Accordingly, we are unable to
present the ratio of earnings to fixed charges for these periods.

13
<PAGE> 18

SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION

We have prepared the following summary unaudited pro forma condensed
combined financial information based on our supplemental consolidated financial
statements which give retroactive effect to the contribution of Hutchison Global
Crossing and Global Access Limited to us. The supplemental consolidated
financial statements are adjusted to give retroactive effect to (1) the purchase
of additional interest and the related consolidation of Pacific Crossing Ltd.,
(2) our initial public offering and (3) our private offering of our outstanding
notes.

The unaudited pro forma financial information does not include any
potential synergies relating to Pacific Crossing Ltd., Hutchison Global Crossing
and Global Access Limited or increased opportunities to generate additional
revenue in Asia. You should not rely on pro forma financial information as an
indication of the results that would have been achieved if these transactions
had taken place earlier or the future results that we will experience after
completion of these transactions.

You should read this summary unaudited pro forma condensed combined
financial information in conjunction with the detailed financial statements,
which are included in this prospectus beginning on page F-1.

In reading the summary unaudited pro forma condensed combined financial
information, you should note the following:

- Before December 1999, Pacific Crossing-1 and the Global Access Limited
network were not ready for commercial service and had no significant
operations.

- In December 1999, the northern segment of Pacific Crossing-1 and a
segment of the Global Access Limited network connecting Pacific
Crossing-1 to Tokyo became ready for commercial service. We recognized
revenue of $61.1 million from sale of Pacific Crossing-1 capacity during
1999. The revenue from sales of capacity on the Global Access Limited
network was deferred and is being amortized over the contract period.
Revenue for the nine months ended September 30, 2000 was $130.5 million
which was primarily from the sales of Pacific Crossing-1 capacity.

- The equity in loss of affiliate represents our 50% interest of the net
losses of Hutchison Global Crossing, the amortization expense of goodwill
resulting from the formation of Hutchison Global Crossing and our 49%
interest of the net losses of Global Access Limited for the periods
presented.

- The pro forma ratio of earnings to fixed charges is computed by
aggregating pre-tax income from continuing operations before adjustment
for minority interests and income or loss from equity investees, and
fixed charges and dividing the total by fixed charges. Fixed charges
consist of interest expense, including amortization of deferred debt
issuance costs and the interest portion of capital lease obligations, and
the portion of rental expense that is representative of the interest
factor, deemed to be one-third of rental expense. Where the earnings
would be insufficient to cover fixed charges, the amount of the
deficiency is presented.

14
<PAGE> 19

PRO FORMA ASIA GLOBAL CROSSING
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED
----------------------- DECEMBER 31,
2000 1999 1999
----------- -------- -------------
<S> <C> <C> <C>
PRO FORMA CONDENSED COMBINED STATEMENTS OF
OPERATIONS DATA:
Revenue.......................................... $ 130,455 $ -- $ 61,100
Expenses:
Cost of sales.................................. 98,194 -- 20,722
Operations, administration and maintenance..... 36,499 2,000 8,000
General and administrative..................... 35,828 2,491 9,370
Depreciation and amortization.................. 13,539 -- 3,169
--------- -------- --------
Operating income (loss).......................... (53,605) (4,491) 19,839
Equity in loss of affiliate...................... (33,540) (4,646) (6,915)
Minority interest................................ (9,632) 2,677 (7,995)
Other income (expense)........................... (76) -- 459
Interest income.................................. 11,427 8,826 12,062
Interest expense................................. (30,591) (44,469) (58,696)
--------- -------- --------
Loss before provision for income taxes........... (116,017) (42,103) (41,246)
Provision for income taxes....................... (1,353) -- --
--------- -------- --------
Net loss....................................... $(117,370) $(42,103) $(41,246)
========= ======== ========

OTHER DATA:
Ratio (deficiency) of earnings to fixed
charges........................................ $(130,371) $(60,883) $(54,026)
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30,
2000
-------------
(UNAUDITED)
-------------
<S> <C> <C> <C>
PRO FORMA CONDENSED COMBINED BALANCE SHEET DATA:
Cash and cash equivalents......................... $ 948,082
Restricted cash and cash equivalents.............. 75,733
Property and equipment, net....................... 1,685,272
Investment in affiliates.......................... 447,707
Total assets...................................... 3,357,628
Long-term debt.................................... 1,150,000
Total liabilities................................. 1,578,065
Minority interest................................. 150,026
Shareholders' equity.............................. $1,629,537
</TABLE>

15
<PAGE> 20

RISK FACTORS

Before you participate in the exchange offer, you should carefully consider
the risks described below and the other information included in this prospectus.

RISK FACTORS RELATING TO OUR BUSINESS

OUR LIMITED OPERATING HISTORY MAKES FORECASTING OUR FUTURE REVENUE AND OPERATING
RESULTS DIFFICULT, WHICH MAY IMPAIR OUR ABILITY TO MANAGE OUR BUSINESS AND YOUR
ABILITY TO ASSESS OUR PROSPECTS.

We were formed in November 1999 and our financial information before
January 2000 relates principally to a period in which we were constructing and
developing Pacific Crossing-1. Until January 2000, we had no revenues and
minimal operating costs. As a consequence, we have a limited history upon which
we can rely in planning and making the critical decisions that will affect our
future operating results. Similarly, because of the relatively immature state of
our business, it will be difficult for investors to evaluate our prospects. We
will need to make decisions in the immediate future regarding resource
allocations for network development and marketing and sales. If our predictions
about the best use of our resources turn out to be inaccurate, we may not make
the best use of our resources, and we may forego better opportunities. Our
limited history makes it difficult for investors to gauge our capability in
making these decisions.

WE HAVE SIGNIFICANT INDEBTEDNESS WHICH MAY RESTRICT OUR GROWTH, PLACE US AT A
COMPETITIVE DISADVANTAGE AND PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER
THE NOTES.

In addition, as of September 30, 2000, Global Access Limited had a total of
Y6 billion of short-term loans from affiliates, and Hutchison Global Crossing
had long-term loans from shareholders of HK$417.3 million. We anticipate that
Global Access Limited and Hutchison Global Crossing will incur additional
indebtedness, as described in "Description of Other Indebtedness -- Shareholder
Loans" on page 119.

Our substantial debt and debt service requirements could affect our ability
to operate our business and may limit our ability to take advantage of potential
business opportunities. For example, our substantial debt and debt service
requirements could:

- make it more difficult for us to satisfy our obligations with respect to
the notes and our other indebtedness;

- limit our ability to obtain additional financing for acquisitions or
working capital to make investments or other expenditures or to obtain
additional financing on terms favorable to us;

- require us to dedicate a substantial portion of our cash flow from
operations to make interest and principal payments on our indebtedness,
reducing the funds that would otherwise be available to us for our
operations and future business opportunities;

- subject us to the risk of interest rate increases on our indebtedness
with variable interest rates; and

- make it more difficult for us to respond to changes affecting our
financing, construction, development or operating plans.

If we breach any of the covenants contained in the indenture that governs
the notes, we would be in default under the indenture. In that case, the
principal and accrued interest on the notes would become due and payable. In
addition, if we default under the indenture, that default could constitute a
cross-default under the instruments governing our other indebtedness. In that
event, our other indebtedness would also become due and payable. We may not be
able to repay all those amounts, and the lenders could proceed against us in
legal proceedings.
16
<PAGE> 21

WE MAY NOT BE ABLE TO REPAY OR SERVICE OUR EXISTING DEBT; FAILURE TO DO SO OR TO
REFINANCE OUR DEBT COULD PREVENT US FROM COMPLETING OUR NETWORK OR IMPLEMENTING
OUR BUSINESS PLAN.

We may not be able to repay, service or refinance our existing debt, which
could prevent us from completing our network or implementing our business plan.
Our deficiency of earnings to fixed charges for the nine-month period ended
September 30, 2000 was approximately $88.3 million and on a pro forma basis was
approximately $130.4 million. Until we complete the principal segments of our
network, we will continue to spend more building the network than we will earn
from selling capacity on it. Accordingly, we expect to experience negative cash
flows after capital expenditures while we are developing our network. Our
ability to repay and service our debt depends upon a number of factors, many of
which are beyond our control. For example, if our revenues and cash flows fail
to grow, we may not be able to service or repay our existing debt. In addition,
we rely on dividends, loan repayments and other intercompany cash flows from our
subsidiaries and affiliates to repay and service our obligations. Some of our
operating subsidiaries and affiliates have entered into, and we expect that some
others will enter into, a senior secured corporate credit facility. Accordingly,
the payment of dividends from these operating subsidiaries and the making and
repayments of loans and advances are subject to statutory, contractual and other
restrictions. In addition, we expect to obtain additional financing whose terms
could impose additional restrictions on our operations and ability to pay
dividends and result in significant interest expense to us. If this happens, we
may be required to refinance or renegotiate the terms of our long-term debt. We
do not know if refinancing our debt will be possible on commercially reasonable
terms or at all at that time or if we will be able to renegotiate successfully
the terms of our long-term debt.

IF WE FAIL TO OBTAIN ADDITIONAL FINANCING, WE MAY NOT BE ABLE TO DEVELOP OUR
BUSINESS.

If we are unable to raise sufficient financing on satisfactory terms and
conditions in the future, we may not be able to expand our business. To complete
our network and implement our business plan, we anticipate that we will require
substantial additional equity and debt financing. For example, we are developing
Pacific Crossing-1 at a total projected cost of approximately $1.1 billion,
excluding any upgrades, and we have incurred debt of approximately $750 million
in its construction. We are also currently developing East Asia Crossing, and we
expect that the portion of East Asia Crossing connecting Japan, Hong Kong,
Taiwan and Korea will have a total projected cost of approximately $750 million
with additional costs of approximately $629 million to be incurred if and when
we expand this network to Malaysia, the Philippines and Singapore. Our ability
to obtain additional financing will depend upon a number of factors, many of
which are beyond our control. For example, we may not be able to obtain
additional financing because we already have substantial debt and because we may
not have sufficient cash flows to service or repay our existing or any
additional debt.

TO SERVICE OUR INDEBTEDNESS, WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.

Our ability to make scheduled payments of principal of, or to pay the
interest on, or to refinance, our indebtedness will depend on our future
performance, which, to a certain extent, is subject to general economic,
financial, competitive, regulatory and other factors that are beyond our
control. Based upon the current level of operations, we believe that cash flow
from operations and available cash will be adequate to meet our liquidity needs
for the foreseeable future. However, we cannot assure you that our business will
generate sufficient cash flow in an amount sufficient to enable us to pay our
indebtedness, including the notes, or to fund our other liquidity needs.

PRICE DECLINES FOR WHOLESALE BANDWIDTH CAPACITY MAY UNDERMINE OUR PROFITABILITY.

Declines in the price for wholesale bandwidth capacity may seriously
undermine our profitability. As a result of the construction of trans-Pacific
networks by our competitors, the price for wholesale bandwidth capacity in the
trans-Pacific market has started to decline rapidly. This price decline has
lowered the price at which we are able to sell our services in that market. More
drastic price declines
17
<PAGE> 22

have occurred in the trans-Atlantic market, where Global Crossing operates. We
believe that wholesale bandwidth pricing in the trans-Pacific market is likely
to continue to decline in future years, and we expect to experience similar
price declines in other markets in which we will operate. Specifically, we
anticipate that prices for our products and services and network transmission
capacity, in general, will continue to decline over the next several years, due
primarily to the following:

- price competition as various network providers continue to install
networks that might compete with ours;

- recent technological advances that result in substantial increases in the
transmission capacity of both new and, to a lesser extent, existing fiber
optic telecommunications networks; and

- strategic alliances or similar transactions, such as long-distance
capacity purchasing alliances among groups of carriers, that could
increase the parties' purchasing power.

There could also be a larger decline in prices than we expect.

THE LACK OF COMPETITIVE PRICING FOR OUR SERVICES MAY UNDERMINE OUR
PROFITABILITY.

Our services may not be competitively priced, which may negatively affect
our profitability. We have entered into an agreement with Global Crossing, which
we describe under "Transactions with Related Parties --Relationships Between
Ourselves and Global Crossing -- Agreement with Global Crossing" on page 95.
That agreement provides that a joint pricing committee will determine the
pricing of services outside Asia. We do not know whether the pricing committee
will set prices at a competitive level. Moreover, under the agreement, we are
obligated to use exclusively Global Crossing's network and services outside
Asia. Therefore, our ability to price services competitively may be further
undermined if Global Crossing's network and services are not priced
competitively.

WE MAY BE UNABLE TO DEPLOY PARTS OF OUR NETWORK ON A TIMELY OR COST-EFFICIENT
BASIS, WHICH MAY CAUSE OUR REVENUE TO DECLINE, RESULT IN OPERATING LOSSES OR
PLACE US AT A COMPETITIVE DISADVANTAGE.

Delays in the completion of parts of our network or the networks of our
joint ventures or failure to complete those parts in a cost-efficient manner
could cause our revenue to decline or result in operating losses. In addition,
such delays could place us at a competitive disadvantage in the markets in which
we intend to operate. Some of our competitors have encountered similar delays.
The timely and cost-efficient completion of Pacific Crossing-1, East Asia
Crossing and other parts of our network and the networks of our joint ventures
depends on a variety of factors, many of which we cannot control. Some of those
factors relate to the ability to connect to other networks, the availability of
suitable landing sites, favorable regulatory environment or rights-of-way and
unforeseen engineering or construction challenges.

IF WE FAIL TO EXPAND OUR MARKETING AND SALES OPERATIONS SUBSTANTIALLY, WE MAY
FAIL TO INCREASE MARKET AWARENESS AND SALES OF OUR SERVICES.

If we are unable to expand our marketing and sales operations, we may not
be able to increase market awareness or sales of our services, which may prevent
us from achieving and maintaining profitability. As of September 30, 2000,
Global Crossing's sales force generated $89.5 million in revenue for us,
representing 69% of our revenue as of that date. As of September 30, 2000, our
sales force generated $41.0 million or 31% of our revenue. In addition, Global
Access Limited and Hutchison Global Crossing use their own sales forces to
market and sell their services. We have been expanding our sales force and plan
to hire additional marketing and sales personnel and system and consulting
engineers, particularly individuals with experience in the telecommunications
industry. Our services require a sophisticated sales effort that targets key
people within our prospective clients' organization. To target these key people,
we need the efforts of personnel with necessary contacts as well as specialized
system and consulting engineers within our organization. We may not be able to

18
<PAGE> 23

hire the number of qualified sales personnel and system and consulting engineers
we need because competition for these individuals is intense and finding
individuals with relevant industry specific experience is difficult. In
addition, we may not have the financial capability to hire a sufficient number
of qualified personnel. We expect to face greater difficulty attracting these
personnel with equity incentives as a public company than we did as a privately
held company.

IF WE FAIL TO EXPAND OUR SERVICES, WE MAY NOT BE ABLE TO GROW OUR BUSINESS OR
IMPLEMENT OUR BUSINESS PLAN.

Failure to expand our services may restrict our ability to enter new
markets and develop and maintain new customers. For example, we may not be able
to survive competition in countries in which there is an increasing consumer
demand for advanced Internet services unless we are able to provide these
services. However, in order to expand our services, we must undertake a number
of actions, which we may not be able to complete successfully. These actions
include:

- increase capacity on our planned systems;

- develop and acquire additional undersea cable projects;

- develop and acquire additional terrestrial fiber or capacity; and

- introduce new services and products, which leverage the capabilities of
existing and planned systems.

In addition, in some jurisdictions, a number of the services we propose to
offer may be subject to regulatory constraints which may affect the timing or
cost to us of offering those services, or ability to offer them at all. In
Taiwan, for example, we are currently not permitted to construct terrestrial
transmission facilities. Therefore, we will have to obtain the necessary
terrestrial connection to our undersea cables from other network operators,
which may increase our costs. In addition, at present we are permitted to sell
transmission capacity on our Taiwan network only to other facilities-based
providers, which may limit our customer base.

The success of our network will also be dependent on our continued ability
to provide high quality telecommunications services through upgrading our
systems and our ability to protect our network from external damage. As we grow,
the timing and implementation of our upgrades will become more important.
However, the quality and availability of our services could be disrupted because
of our inability to make timely or error-free upgrades to our network.

COMPETITION IN OUR INDUSTRY IS INTENSE AND GROWING, AND WE MAY BE UNABLE TO
COMPETE EFFECTIVELY.

Some of our competitors have announced plans to construct, have begun to
construct or are currently operating fiber optic networks across the Pacific
Ocean and across a number of Asian countries, including Japan and Hong Kong, two
of the key Asian telecommunications markets in which we operate. If we are
unable to compete effectively against these competitors, it could lead to price
reductions, lower revenue, under-utilization of our network, reduced operating
margins and loss of market share. Many of our competitors have, and some
potential competitors are likely to enjoy, competitive advantages, including:

- greater name recognition in a particular market;

- greater financial, technical, marketing and other resources;

- larger installed bases of customers; and

- well-established relationships with current and potential customers.

As a consequence, our competitors may be able to develop and expand their
network infrastructures and service offerings more quickly, adapt to new or
emerging technologies and changes in customer requirements more readily, take
advantage of acquisition and other opportunities

19
<PAGE> 24

more effectively, devote greater resources to the marketing and sale of their
products and adopt more aggressive pricing policies than we can.

In addition, new market entrants or the creation of stronger competitors
through combinations could result in increased price competition, which would
make it difficult for us to attract new customers, retain existing customers or
attain revenue and gross margin levels sufficient to generate a return on our
prior investment in our business. A list of our principal competitors is
included under "Business -- Competition" on page 78.

USE OF THE INTERNET, ELECTRONIC COMMERCE AND OTHER BANDWIDTH-INTENSIVE
APPLICATIONS IN ASIA MAY NOT INCREASE AS SUBSTANTIALLY AS WE EXPECT, WHICH WOULD
LIMIT DEMAND FOR CAPACITY AND SERVICES AND LIMIT OUR ABILITY TO INCREASE OUR
REVENUE.

Demand for our services may not grow as we expect, which could limit demand
for our services and limit our ability to increase our revenue. Our business
plan assumes that the use of the Internet, electronic commerce and other
bandwidth-intensive applications in Asia will increase substantially in the next
few years, in a manner similar to the increased use in the United States market
in the past few years. The potential for Internet growth in many Asian countries
is subject to a number of potential obstacles, including high access charges,
lower overall computer literacy, regulatory constraints and the wide spread use
of the English language in Internet content and applications. In addition,
overall demand for our services in Asia may be reduced by unfavorable economic
conditions, such as the recent economic downturn of the Asian economies. If the
use of bandwidth-intensive applications in Asia does not increase as
anticipated, demand for many of our services, including sales of capacity, dark
fiber, which is fiber without electronic equipment attached, managed bandwidth
services and our value-added services, will be lower than we currently
anticipate. Our ability to generate revenue would be negatively affected as
well.

IF WE FAIL TO MANAGE EXPANSION EFFECTIVELY, WE MAY ENCOUNTER SIGNIFICANT
DIFFICULTIES IN OPERATING OUR BUSINESS.

We are experiencing rapid expansion and expect this expansion to continue
for the foreseeable future. If we fail to manage this expansion effectively, we
may encounter significant difficulties in operating our business. As a result of
this rapid expansion, we expect that we will need to continue to improve our
financial and managerial controls, reporting systems and procedures and will
need to continue to expand, train and manage our work force. This growth has
placed, and will continue to place, a significant strain on our management
systems and resources by requiring us to manage multiple relationships with
joint venture partners, customers, service providers and other third parties. In
addition, our expansion into various Asian countries has increased, and will
continue to increase, that strain by requiring us to deal with a number of
significantly different economic, political and regulatory environments. Our
expansion also requires, and will continue to require, significant travel time
by our management team.

IF ANY OF OUR SYSTEMS OR THE GLOBAL CROSSING SYSTEMS FAILS TO OPERATE FOR ITS
FULL DESIGN LIFE, OUR REVENUE AND ABILITY TO IMPLEMENT OUR BUSINESS PLAN MAY BE
SIGNIFICANTLY UNDERMINED.

Failure of any of our systems or the Global Crossing systems to operate for
its full design life could have a significantly negative impact on our revenue
and our ability to implement our business plan. Each of our systems and the
Global Crossing systems either has or is expected to have a design life of
generally 25 years; however, we cannot predict the actual useful life of any of
these systems. We believe that our systems and the Global Crossing systems are
subject to operational risks as we describe in the risk factor immediately
below.

20
<PAGE> 25

OUR FACILITIES AND THE CABLE SYSTEMS ON WHICH WE DEPEND MAY FAIL, WHICH WOULD
INTERRUPT THE SERVICES WE PROVIDE AND MAKE IT DIFFICULT FOR US TO RETAIN AND
ATTRACT CUSTOMERS.

If our services are interrupted due to system failures, we risk losing
existing customers that are affected by the failures, and our ability to attract
and maintain new customers may be restricted. The operation, administration,
maintenance and repair of our and Global Crossing's systems require the
coordination and integration of sophisticated and highly specialized hardware
and software technologies and equipment located throughout the world. We do not
know that, even if built to specifications, our systems or Global Crossing's
systems will function as expected in a cost-effective manner. The failure of the
hardware or software to function as required could render a cable system unable
to perform at design specifications. Subsea cable systems are also subject to
damage or breakage due to fishing nets, anchors or other factors. Although the
network structure used in our systems is intended to eliminate service
interruptions by automatically rerouting traffic, rerouting may not always be
successful. Furthermore, systems which are under construction are unable to
reroute until both loops of the ring are complete. Pacific Crossing-1 has
experienced failures to reroute traffic while under construction. Although we
are able to sell long-term capacity on a cable system before both loops of the
ring are complete, most customers are reluctant to repurchase value-added
services, such as leased lines, before the system is complete due to the risk of
service interruption.

IF WE FAIL TO OBTAIN ACCESS TO TERRESTRIAL NETWORKS IN KEY MARKETS, WE MAY NOT
BE ABLE TO REMAIN COMPETITIVE.

If we fail to connect our subsea cables with terrestrial networks in key
markets, we may not be able to maintain our existing customers or attract new
customers. We expect that in all key markets in Asia we will rely on joint
ventures with local parties to obtain access to terrestrial networks in those
markets. For example, in Japan and Hong Kong, we expect to connect our subsea
cables with the Hutchison Global Crossing and Global Access Limited networks.
However, we may not be able to form joint ventures in any or all key markets or,
even if we do form joint ventures, we may not be able to gain access to their
terrestrial networks. In that case, we will have to purchase the right to access
terrestrial networks of third parties on terms that will likely be less
favorable to us than the terms we would have obtained from one of our joint
ventures. This could prevent us from offering our services on competitive terms,
which could undermine our ability to maintain or attract customers.

LOSS OF KEY EXECUTIVE OFFICERS COULD WEAKEN OUR BUSINESS EXPERTISE AND DELAY THE
COMPLETION OF OUR NETWORK AND OTHER BUSINESS PLANS.

The loss of any of our key executive officers in the future could
significantly impede our financial plans, network completion, expansion of
services, marketing and other objectives. We believe that the growth and future
success of our business will depend in large part on our continued ability to
attract, motivate and retain highly-skilled qualified personnel. We may not be
successful in doing so, as the competition for qualified personnel in the
telecommunications industry is intense. We do not have key person life insurance
policies covering any of our employees.

SOME OF OUR OFFICERS AND DIRECTORS ARE SHAREHOLDERS, DIRECTORS AND OFFICERS OF
GLOBAL CROSSING OR OTHER COMPANIES AND MAY, AS A RESULT, HAVE CONFLICTS OF
INTEREST.

Some of our executive officers and directors may have conflicts of interest
which could have a material negative impact on the management and growth of our
business. Some of our executive officers and directors are shareholders,
directors and officers of Global Crossing, which owns 315.6 million shares of
our outstanding Class B Common Stock, which represents approximately 64% of the
combined voting power of all of our outstanding common stock. As of July 31,
2000, our directors and executive officers as a group collectively beneficially
owned approximately 10% of the outstanding common stock of Global Crossing. In
addition, some of our directors and executive officers serve as officers and
directors of other companies and are active investors in the telecommunications
industry. Being one of our directors or officers and a shareholder, director or
officer of another company could create conflicts of interest when the director
or officer is faced with decisions that could have different
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implications for us and the other company. A conflict of interest could also
exist with respect to allocation of time and attention of persons who are
directors or officers of ours and another company. The pursuit of these other
business interests could distract these directors and officers from pursuing
opportunities on our behalf.

POLITICAL AND ECONOMIC CONDITIONS IN ASIA ARE UNPREDICTABLE AND MAY DISRUPT OUR
OPERATIONS IF THESE CONDITIONS BECOME UNFAVORABLE TO OUR BUSINESS.

We expect to derive a substantial percentage of our revenue from the Asian
market. Changes in political or economic conditions in the region are difficult
to predict and could negatively affect our operations or cause the Asian market
to become less attractive to businesses, which could reduce our revenues. Many
countries in Asia have experienced significant economic downturns in the past,
resulting in slower real gross domestic product growth for the entire region as
a result of higher interest rates and currency fluctuations. Declining economic
growth rates in the future could cause expenditures for telecommunications and
Internet-based products to decrease, which would negatively impact our business
and our profitability over time. In addition, an economic downturn in Asia could
also lead to a devaluation of currencies. This could decrease our revenue for
the Asian region as our customers are likely to demand less of our services,
since the cost of our services in their local currencies would increase.

BECAUSE MANY OF OUR CUSTOMERS DEAL PREDOMINANTLY IN FOREIGN CURRENCIES, WE MAY
BE EXPOSED TO EXCHANGE RATE RISKS, AND OUR NET INCOME MAY SUFFER DUE TO CURRENCY
TRANSLATIONS.

Because of foreign currency declines and regulatory restrictions, our
customers may be unable to pay for our services in United States dollars; in
that case, our net income may suffer due to currency translations. We primarily
invoice for international capacity in United States dollars and will invoice
international services in the same manner. However, most of our customers and
many of our prospective customers derive their revenue in currencies other than
United States dollars. The obligations of customers with substantial revenue in
foreign currencies may be subject to unpredictable and indeterminate increases
in the event that those currencies decline in value relative to the United
States dollar. Furthermore, those customers may become subject to exchange
control regulations restricting the conversion of their revenue currencies into
United States dollars. In that event, the affected customers may not be able to
pay us in United States dollars. In addition, in cases where we invoice for our
capacity and services in currencies other than United States dollars, our net
income may suffer due to currency translations if those currencies decline in
value relative to the United States dollar and we do not enter into currency
hedging arrangements in respect of those payment obligations. Declines in the
value of foreign currencies relative to the United States dollar could adversely
affect our ability to market our services to customers whose revenues are
denominated in those currencies. In addition, our obligations under the notes
and some of our other indebtedness are denominated in United States dollars. To
the extent that we are dependent on revenues denominated in foreign currencies
to service our debt requirements, fluctuations in the exchange rate between
those foreign currencies and the United States dollar may adversely affect our
ability to pay our obligations under the notes and some of our other
indebtedness.

OUR OPERATIONS ARE SUBJECT TO REGULATION IN THE COUNTRIES IN WHICH WE OPERATE
AND REQUIRE US TO OBTAIN AND MAINTAIN A NUMBER OF GOVERNMENTAL LICENSES AND
PERMITS. IF WE FAIL TO OBTAIN AND MAINTAIN THOSE LICENSES AND PERMITS, WE MAY
NOT BE ABLE TO CONDUCT OUR BUSINESS.

- Our international operations in the United States are governed by the
Submarine Cable Act and the Communications Act of 1934, as amended by the
Telecommunications Act of 1996. We may be required to file periodic
regulatory reports and pay regulatory fees in connection with our
operations in the United States. We may fail to comply with these
obligations, which could lead to the imposition of sanctions, up to and
including the revocation of our authorization to operate.

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- Our operations in Asia are governed by the respective laws of the
countries in which we operate. The regulation of telecommunications
networks and services in those countries is changing rapidly and varies
widely. In most of the countries in which we have or plan to have
operations, the telecommunications regulation is evolving and in light of
parallel technological, social and economic developments may not always
be clear or consistent. In addition, some Asian countries limit
competition for most services. In other countries, where there is a
commitment to open markets to foreign investment, the liberalization
trend may not continue, may slow down or may continue with a narrow
scope. We may fail to comply with the telecommunications laws and
regulations of one or more of the countries in which we operate, which
could result in the temporary or permanent suspension of operations,
including of our cable stations or other systems which are key links in
our network, in one or more countries. In addition, many of the countries
in which we operate are conducting proceedings that will affect the
implementation of their telecommunications legislation. We cannot predict
the outcomes of these proceedings. The outcomes of these proceedings may
affect the manner in which we are permitted to provide our services in
these countries and may have a significantly negative effect on our
business.

- In the ordinary course of constructing our networks and providing our
services, we are required to obtain and maintain a variety of
telecommunications and other licenses and authorizations in the countries
in which we operate. In most countries, we expect that we will be
required to obtain one or more telecommunications authorizations to
construct our telecommunications networks and provide our
telecommunications services. We also must comply with a variety of
regulatory obligations, including obtaining permits to land our cables in
some or all of the territories they will be connected to. We may not be
able to obtain or maintain necessary licenses and authorizations or to
comply with the obligations imposed upon license holders in one or more
countries, which may result in sanctions, including the revocation of
authority to provide facilities or services in one or more countries. We
may not receive all requisite licenses on a timely basis or at all. We
have not yet applied for the requisite licenses in Korea, the
Philippines, Malaysia or China. If the necessary licenses are not granted
to us or if the approval process takes more time than we anticipate, it
could have a significantly negative effect on our operations. See
"Regulation" on page 113.

- In some jurisdictions regulatory constraints and related considerations
may require us to rely on joint ventures or third parties to obtain and
maintain the licenses, permits and registrations we require to conduct
our planned operations in these jurisdictions. These arrangements may
create for us a number of risks, including loss of autonomy and
flexibility in our business planning and operations and the loss of
control over regulatory compliance.

REGULATORY RESTRICTIONS ON FOREIGN OWNERSHIP IN THE VARIOUS COUNTRIES IN WHICH
WE OPERATE MAY IMPEDE OUR ABILITY TO CONDUCT OUR BUSINESS AND IMPLEMENT OUR
BUSINESS PLAN.

Regulatory restrictions on foreign ownership in the Asian countries in
which we operate may restrict our ability to conduct our business and implement
our business plan. We expect to be able to enter into the majority of the Asian
markets through joint ventures with local partners. However, some countries may
prohibit us from owning a controlling interest in those joint ventures or from
entering into those transactions at all. For example, Korea and Taiwan currently
limit foreign ownership of telecommunication carriers like us to 49% and 60%,
respectively. China does not currently allow foreign ownership of
telecommunications providers. However, China has committed itself to permitting
limited, non-controlling foreign ownership in some telecommunications providers
if it is admitted to the World Trade Organization.

IF OUR FUTURE TAX LIABILITIES ARE GREATER THAN WE ANTICIPATE, OUR BUSINESS MAY
BE NEGATIVELY IMPACTED.

We cannot predict the amount of tax to which we may become subject, as
changes in our business or applicable law or challenges by taxing authorities
may significantly increase the amount of
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taxes we have to pay. We believe that a significant portion of the income
derived from our undersea systems will not be subject to tax by either of:

- Bermuda, which currently does not have a corporate income tax, or

- some other countries in which we conduct activities or in which our
customers are located.

We base this belief upon:

- the anticipated nature and conduct of our business, which may change; and

- our understanding of our position under the tax laws of the various
countries in which we have assets or conduct activities, which position
is subject to review and possible challenge by taxing authorities and to
possible changes in law, which may have retroactive effect.

Our income derived from our undersea systems may, however, become subject
to taxation in the future in countries in which we operate as a result of
changes in the nature of our business or applicable tax laws. In that case, we
may have less cash flow than anticipated to conduct our business. This could
impair our ability to service our indebtedness.

RISK FACTORS RELATING TO OUR RELATIONSHIP WITH OUR FOUNDING SHAREHOLDERS

OUR GOVERNANCE STRUCTURE MAY NOT PERMIT US TO RESPOND PROMPTLY TO IMPORTANT
MATTERS, WHICH MAY PUT US AT A COMPETITIVE DISADVANTAGE AGAINST COMPETITORS WHO
ARE ABLE TO MAKE IMPORTANT BUSINESS DECISIONS WITHOUT THE CONSENSUS OF THEIR
SHAREHOLDERS.

Under our bye-laws and the shareholders agreement among our founding
shareholders, the affirmative votes of our board members appointed by Microsoft
and Softbank are required for a number of important business decisions. For a
more detailed description of these important business decisions, see
"Transactions with Related Parties -- Relationships Among Ourselves and our
Founding Shareholders -- Actions requiring the approval of our directors
nominated by Microsoft and Softbank" on page 101. Neither our bye-laws nor the
shareholders agreement provides for any deciding vote if the board members
appointed by Microsoft and Softbank disagree on matters requiring their
approval. As a result of this governance structure, we may not be able to
respond promptly in the event of a disagreement among our founding shareholders
or the members of our board appointed by them with respect to important
strategic or operational matters. This may place us at a competitive
disadvantage against competitors who are able to make decisions without reaching
the consensus of their shareholders.

OUR FOUNDING SHAREHOLDERS HAVE INTERESTS THAT MAY CONFLICT WITH OURS, WHICH MAY
LEAD TO DECISIONS THAT MAY BE UNFAVORABLE TO US.

OUR FOUNDING SHAREHOLDERS OWN OR MAY ENGAGE IN COMPETING BUSINESSES. As
described under "Transactions with Related Parties -- Relationships Among
Ourselves and our Founding Shareholders -- Non-competition arrangements" on page
102, our founding shareholders have or may acquire interests in other
businesses, including telecommunications operators and Internet service
providers, in a number of countries in which we intend to operate. These
businesses may compete with us or may compete with us in the future. The
existence of competing activities and services may cause our founding
shareholders to resist expansions of our business that would otherwise present
an attractive business opportunity for us.

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OUR FOUNDING SHAREHOLDERS MAY ENGAGE IN OPPORTUNITIES IN OUR TERRITORY IF
THEY ARE OFFERED TO US AND WE DECLINE TO PURSUE THEM. THIS COMPETITION MAY CAUSE
A REDUCTION IN OUR MARKET SHARE AND OUR REVENUE. Our founding shareholders may
compete with us in our markets, which may cause a reduction in our market share
and revenue. As described under "Transactions with Related
Parties -- Relationships Among Ourselves and our Founding
Shareholders -- Non-competition arrangements" on page 102, under various
circumstances, our founding shareholders may pursue corporate opportunities that
might be appropriate for us, if they first present them to us and we choose not
to pursue them. If we initially decline to pursue opportunities, we may
experience situations where we are in direct competition with our founding
shareholders.

WE MAY NOT BE ABLE TO BENEFIT FROM MICROSOFT'S AND SOFTBANK'S COMMITMENT TO
PURCHASE A SIGNIFICANT AMOUNT OF CAPACITY ON OUR NETWORK. Our founding
shareholders have entered into a capacity commitment agreement described in more
detail under "Transactions with Related Parties -- Relationships Among Ourselves
and Our Founding Shareholders -- Capacity Commitment Agreement" on page 104. If
our founding shareholders terminate or amend that agreement, which they may do
without our consent, we may not be able to benefit fully or at all from
Microsoft's and Softbank's commitment under that agreement to purchase capacity
on Pacific Crossing-1 and Global Access Limited in an aggregate amount of
$200,000,000 each over a three-year period.

RISK FACTORS RELATING TO THE EXCHANGE OFFER

IF YOU FAIL TO TENDER YOUR OUTSTANDING NOTES IN THE EXCHANGE OFFER, THEN THE
LIQUIDITY OF THE MARKET FOR YOUR OUTSTANDING NOTES MAY BE SUBSTANTIALLY LIMITED.

We expect that a substantial portion of the outstanding notes will be
tendered and accepted in the exchange offer and exchanged for exchange notes.
When the exchange offer is completed, the amount of outstanding notes will be
reduced by the amount of exchange notes that we will issue. Accordingly, we
expect that the liquidity of the market, or the "float," for the outstanding
notes after the exchange offer is completed will be substantially limited.
Generally, a lower "float" of a security could result in less demand to purchase
such security and could, therefore, result in lower prices for such security.
For the same reason, to the extent that a large amount of outstanding notes are
not tendered or are tendered and not accepted in the Exchange Offer, the trading
market for the exchange notes could be adversely affected.

IF YOU FAIL TO EXCHANGE YOUR OUTSTANDING NOTES IN THE EXCHANGE OFFER, YOUR
OUTSTANDING NOTES WILL CONTINUE TO BE SUBJECT TO TRANSFER RESTRICTIONS.

If you do not exchange your outstanding notes for exchange notes in the
exchange offer, your outstanding notes will continue to be subject to the
transfer restrictions outlined in the offering memorandum distributed in
connection with the private offering of the outstanding notes. In general, the
outstanding notes may not be offered or sold unless they are registered or
exempt from registration under the Securities Act and applicable state
securities laws. Except as required by the registration rights agreement, we do
not intend to register resales of the outstanding notes under the Securities
Act.

RISK FACTORS RELATING TO OUR NOTES

OUR HOLDING COMPANY STRUCTURE WILL EFFECTIVELY SUBORDINATE THE NOTES TO THE
OBLIGATIONS OF OUR SUBSIDIARIES.

We are a holding company with no material assets other than the stock of
our subsidiaries and our joint ventures. Our subsidiaries and our joint ventures
now conduct substantially all of our operations and directly own substantially
all of our assets. You should be aware that our subsidiaries and our joint
ventures have no obligation, contingent or otherwise, to pay any amount pursuant
to the
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notes or to make any funds available for such payment. Therefore, our operating
cash flow and ability to meet our debt obligations, including the notes, will
depend on the cash flow provided by our subsidiaries and our joint ventures in
the form of loans, dividends or other payments to us as a shareholder. The
ability of our subsidiaries and our joint ventures to make such payments to us
will depend on their earnings, tax considerations, legal restrictions and
restriction under their indebtedness. Although the indenture limits the ability
of certain of our subsidiaries to enter into consensual restrictions on their
ability to pay dividends and make other payments, the limitations are subject to
a number of significant qualifications and exceptions. See "Description of
Notes -- Covenants -- Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries." In the event of insolvency, liquidation, dissolution
or reorganization of any of our subsidiaries and our joint ventures, the
creditors of such entity would be entitled to payment in full from such entity's
assets prior to our claim as an equity holder, except to the extent the claims
of our creditors are guaranteed by such subsidiary or joint venture. After
paying their own creditors, our subsidiaries or our joint ventures may not have
any remaining assets for distribution to us as a shareholder and, consequently,
there may not be any assets available for payment to you as a holder of notes.
The notes, therefore, are effectively subordinated to the obligations of our
subsidiaries and our joint ventures. At September 30, 2000, our subsidiaries and
our joint ventures had total liabilities of $1,178.1 million reflected on our
supplemental consolidated balance sheet.

SINCE MANY OF OUR SIGNIFICANT SUBSIDIARIES ARE NOT RESTRICTED BY THE INDENTURE,
THEIR OPERATIONS AND FINANCIAL RESULTS MAY NOT SUPPORT OUR ABILITY TO PAY
PRINCIPAL AND INTEREST ON THE NOTES.

The operations of many of our significant subsidiaries and investments,
including Pacific Crossing Ltd., Global Access Limited and Hutchison Global
Crossing Limited and their subsidiaries, are not subject to the covenants set
forth in the indenture. In addition, their financial results will not be
included in calculating financial covenants and tests applicable to us and our
restricted subsidiaries. As a result, their operations and financial results may
not support our ability to pay principal and interest on the notes. It may also
be difficult for you to evaluate the credit of our operations subject to the
indenture or monitor compliance with the indenture since financial statements
for us and our restricted subsidiaries are not included in this document and
will not be separately available in the future.

A SIGNIFICANT PORTION OF OUR ASSETS ARE SECURED BY A FIRST PRIORITY SECURITY
INTEREST. THEREFORE, YOUR ABILITY TO RECEIVE PAYMENTS ON THE NOTES IS JUNIOR TO
THOSE LENDERS WHO HAVE A SECURITY INTEREST IN OUR ASSETS.

The notes are not be secured by any of our assets. However, our obligations
under the PC-1 credit facility will be secured, subject to certain exceptions,
by a first priority security interest in some of the assets and revenues of
Pacific Crossing Ltd. and its subsidiaries. If Pacific Crossing Ltd. or any of
its subsidiaries become insolvent or is liquidated, or if payment under the PC-1
credit facility is accelerated, the lenders thereunder would be entitled to
exercise the remedies available to a secured lender. Accordingly, these lenders
will have a claim on substantially all of the assets so secured and will have
priority over any claim for payment under the notes. In any such event, because
the notes will not be secured by any of our assets, it is possible that there
would be no assets remaining from which claims of the holders of the notes could
be satisfied or, if any assets remained, they might be insufficient to satisfy
such claims fully. See "Description of Other Indebtedness."

UNDER FRAUDULENT CONVEYANCE LAWS, A COURT COULD VOID OBLIGATIONS UNDER THE NOTES
OR GUARANTEES.

Under the federal bankruptcy laws and comparable provisions of state
fraudulent conveyance laws, a court could void obligations under the notes or
the guarantees, subordinate those obligations to more junior obligations or
require you to repay any payments made under the notes or pursuant to the
guarantees, if an unpaid creditor or representative of creditors, such as a
trustee in bankruptcy or

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us as a debtor-in-possession, claims that the notes or the guarantees
constituted a fraudulent conveyance. For this claim to succeed, the claimant
must generally show that:

(1) fair consideration or reasonably equivalent value was not received in
exchange for the obligation; and

(2) at the time the obligation was incurred, the obligor:

- was insolvent;

- was rendered insolvent by reason of the obligation;

- was engaged in a business or transaction for which its remaining
assets constituted unreasonably small capital; or

- intended to incur, or believed that it would incur, debts beyond its
ability to pay them as the debts matured.

The measure of insolvency for these purposes will depend upon the law of
the jurisdiction being applied. Generally, however, a company will be considered
insolvent for these purposes if:

- the sum of its debts, including contingent liabilities, was greater than
the saleable value of all of its assets at a fair valuation; or

- the present fair saleable value of its assets was less than the amount
that would be required to pay its probable liability on its existing
debts, including contingent liabilities, as they become absolute and
mature; or

- it could not pay its debts as they become due.

Moreover, regardless of solvency, a court could void an incurrence of
indebtedness, including the notes, or subordinate indebtedness, including the
notes, if it determined that the transaction was made with intent to hinder,
delay or defraud creditors.

On the basis of historical financial information, recent operating history
and other factors, we believe that we, after giving effect to the debt incurred
in connection with the private offering of our outstanding notes and in this
offering, will not be insolvent, will not have unreasonably small capital for
the business in which it is engaged and will not have incurred debts beyond its
ability to pay such debts as they mature. However, we cannot assure you as to
what standard a court would apply in making such determinations or that a court
would agree with our conclusions in this regard.

WE MAY NOT BE PERMITTED OR HAVE THE ABILITY TO PURCHASE THE NOTES UPON A CHANGE
OF CONTROL AS REQUIRED BY THE INDENTURE.

Upon the occurrence of a change of control, unless we exercise our option
to repurchase the notes, we will be required to offer to purchase all
outstanding notes at 101% of the principal amount thereof plus accrued and
unpaid interest to the date of repurchase. However, the instruments evidencing
certain of our future borrowings may restrict our ability to repurchase the
notes, including pursuant to a change of control offer. In addition, a change of
control under the indenture may constitute an event of default under such
instruments that will permit the lenders to accelerate the debt thereunder and
may cause the acceleration of other senior debt. We cannot assure you that upon
a change of control we will obtain the consent of our senior lenders to
repurchase the notes or that we will have sufficient funds to repay our senior
indebtedness and repurchase the notes. Our failure to do so will constitute an
event of default under the indenture. Furthermore, a change of control of Global
Crossing is not likely to constitute a change in control in us for purposes of
the Indenture. See "Description of Notes -- Repurchase at the Option of
Holders -- Change of Control."

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AN ACTIVE TRADING MARKET MAY NOT DEVELOP FOR THE EXCHANGE NOTES.

The exchange notes will constitute a new class of securities for which
there is no established trading market. We do not intend to list the exchange
notes on a stock exchange (other than the Luxembourg Stock Exchange) or seek
their admission for trading in the National Association of Securities Dealers
Automated Quotation System. Although the initial purchasers for the outstanding
notes have informed us that they intend to make a market in the exchange notes,
they are not obligated to do so, and they may cease to do so at any time without
notice. Accordingly, we cannot assure you that an active trading market for the
exchange notes will develop or, if a trading market develops, that it will
continue. The lack of an active trading market for the exchange notes would have
a material adverse effect on the market price and liquidity of the exchange
notes. If a market for the exchange notes develops, they may trade at a discount
from their initial offering price, depending on many factors, including our
operating results, prevailing interest rates and the market for similar
securities.

Historically, the market for non-investment grade securities, such as the
exchange notes, has been subject to disruptions that have caused substantial
volatility in the prices of such securities. We cannot assure you that the
market for the exchange notes will not be subject to similar disruptions.

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THE EXCHANGE OFFER

BACKGROUND OF THE EXCHANGE OFFER

We have entered into a registration rights agreement with the initial
purchasers of the outstanding notes. In that agreement we agreed, under
specified circumstances, to file a registration statement relating to an offer
to exchange the outstanding notes for exchange notes. We also agreed to use our
reasonable best efforts to cause the offer to be consummated within 210 days
following the original issue of the outstanding notes on October 12, 2000. The
exchange notes will have terms substantially identical to the outstanding notes,
except that the exchange notes will not contain terms with respect to transfer
restrictions, registration rights and liquidated damages for failure to observe
certain obligations in the registration rights agreement.

In addition, in the registration rights agreement we agreed that, under the
circumstances outlined below, we will use our reasonable best efforts to cause
the SEC to declare effective a shelf registration statement with respect to the
resale of the outstanding notes and keep the shelf registration statement
effective for up to two years after its effective date. These circumstances
include:

- if applicable law, SEC rules or regulations or any interpretations of
those rules or regulations by the staff of the SEC do not permit us to
effect the exchange offer as contemplated by the registration rights
agreement;

- if any holder of the outstanding notes notifies us within 20 business
days following the consummation of the exchange offer that (1) that
holder is prohibited by law or SEC policy from participating in the
exchange offer or (2) that holder may not resell the exchange notes it
acquires in the exchange offer to the public without delivering a
prospectus and that this prospectus is not appropriate or available for
resales by that holder; or

- that holder is a broker-dealer and holds outstanding notes acquired
directly from us or any of our affiliates.

If we fail to comply with certain obligations under the registration rights
agreement, we will be required to pay special interest to holders of the
outstanding notes. So long as the exchange notes are listed on the Luxembourg
Stock Exchange and the rules of such stock exchange shall require, notice of the
exchange offer will be published in a newspaper having general circulation in
Luxembourg (which is expected to be the Luxembourger Wort).

RESALE OF EXCHANGE NOTES

Based on interpretations of the SEC staff outlined in no action letters
issued to unrelated third parties, we believe that you may offer to resell,
resell or otherwise transfer exchange notes issued in the exchange offer in
exchange for outstanding notes without compliance with the registration and
prospectus delivery provisions of the Securities Act, if:

- you are not an affiliate of ours within the meaning of Rule 405 under the
Securities Act;

- you acquire the exchange notes in the ordinary course of your business;
and

- you do not intend to participate in the distribution of the exchange
notes.

If you tender outstanding notes in the exchange offer with the intention of
participating in any manner in a distribution of the exchange notes, you:

- cannot rely on the position of the staff of the SEC enunciated in "Exxon
Capital Holdings Corporation" or similar interpretive letters; and

- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.

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<PAGE> 34

You may use this prospectus for an offer to resell, for the resale or for
other transfer of exchange notes only as specifically provided in this
prospectus. With regard to broker-dealers, only broker-dealers that acquired the
outstanding notes as a result of market-making activities or other trading
activities may participate in the exchange offer. Each broker-dealer that
receives exchange notes for its own account in exchange for outstanding notes
that the broker-dealer acquired as a result of market-making activities or other
trading activities must acknowledge that it will deliver a prospectus in
connection with any resale of the exchange notes. Please read the section
captioned "Plan of Distribution" on page 162 for more details regarding the
transfer of exchange notes.

TERMS OF THE EXCHANGE OFFER

If you wish to exchange outstanding notes for exchange notes in the
exchange offer, you will be required to make the following representations:

- any exchange notes will be acquired in the ordinary course of your
business;

- you have no arrangement with any person to participate in the
distribution of the exchange notes; and

- you are not an affiliate of ours within the meaning of Rule 405 of the
Securities Act or, if you are an affiliate, you will comply with
applicable registration and prospectus delivery requirements of the
Securities Act.

On the terms and subject to the conditions contained in this prospectus and
in the letter of transmittal, we will accept for exchange any outstanding notes
properly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the expiration date. We will issue $1,000 principal amount of exchange notes in
exchange for each $1,000 principal amount of outstanding notes you surrender in
the exchange offer. You may tender outstanding notes only in integral multiples
of $1,000.

The form and terms of the exchange notes will be substantially identical to
the form and terms of the outstanding notes, except that the exchange notes will
be registered under the Securities Act, will not bear legends restricting their
transfer and will not provide for any special interest if we fail to fulfill our
obligations under the registration rights agreement to file, and cause to be
effective, a registration statement. The exchange notes will evidence the same
debt as the outstanding notes. We will issue the exchange notes under the same
indenture that authorized the issuance of the outstanding notes, and the
exchange notes will be entitled to the benefits of that indenture. Consequently,
the outstanding notes and the exchange notes with substantially identical terms
will be treated as a single class of debt securities under that indenture. For a
description of the indenture, see "Description of Notes" on page 120.

The exchange offer is not conditioned upon any minimum aggregate principal
amount of outstanding notes being tendered for exchange.

As of the date of this prospectus, $408,000,000 aggregate principal amount
of the outstanding notes are outstanding. This prospectus and the letter of
transmittal are being sent to all registered holders of outstanding notes. There
will be no fixed record date for determining registered holders of outstanding
notes entitled to participate in the exchange offer.

We intend to conduct the exchange offer in accordance with the provisions
of the registration rights agreement, the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC.
Outstanding notes that are not tendered for exchange in the exchange offer will
remain outstanding and continue to accrue interest and will be entitled to the
rights and benefits their holders have under the indenture relating to the
outstanding notes.

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We will be deemed to have accepted for exchange properly tendered
outstanding notes when we have given oral or written notice of the acceptance to
the exchange agent. The exchange agent will act as agent for the tendering
holders for the purposes of receiving the exchange notes from us and delivering
exchange notes to those holders. Subject to the terms of the registration rights
agreement, we expressly reserve the right to amend or terminate the exchange
offer, and not to accept for exchange any outstanding notes not previously
accepted for exchange, upon the occurrence of any of the conditions specified
below under the caption "-- Certain Conditions to the Exchange Offer."

Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes. We will pay all charges and expenses, other than some
applicable taxes described below, in connection with the exchange offer. It is
important that you read the section labeled "-- Fees and Expenses" on page 37
for more details regarding fees and expenses incurred in the exchange offer.

EXPIRATION DATE; EXTENSIONS; AMENDMENTS

The exchange offer will expire at 5:00 p.m., New York City time on
, unless we, in our sole discretion, extend it.

In order to extend the exchange offer, we will notify the exchange agent
orally or in writing of any extension. We will notify the registered holders of
outstanding notes of the extension no later than 9:00 a.m., New York City time,
on the business day immediately after the previously scheduled expiration date.

We reserve the right, in our sole discretion:

- to delay accepting for exchange any outstanding notes;

- to extend the exchange offer or to terminate the exchange offer and to
refuse to accept outstanding notes not previously accepted if any of the
conditions outlined below under "-- Certain Conditions to the Exchange
Offer" have not been satisfied, by giving oral or written notice of the
delay, extension or termination to the exchange agent; or

- subject to the terms of the registration rights agreement, to amend the
terms of the exchange offer in any manner.

We will follow any delay in acceptance, extension, termination or amendment
of the exchange offer as promptly as practicable by oral or written notice to
the registered holders of outstanding notes. If we amend the exchange offer in a
manner that we determine to constitute a material change, we will promptly
disclose that amendment in a manner reasonably calculated to inform the holders
of outstanding notes of that amendment.

In addition, we will promptly notify the exchange agent and the Luxembourg
exchange agent of any extension by oral (promptly confirmed in writing) or
written notice and, so long as the exchange notes are listed on the Luxembourg
Stock Exchange and the rules of the stock exchange shall so require, promptly
publish notice of such extension in a newspaper having a general circulation in
Luxembourg (which is expected to be the Luxembourger Wort). Without limiting the
manner in which we may choose to make public announcements of any delay in
acceptance, extension, termination or amendment of the exchange offer, we will
have no obligation to publish, advertise or otherwise communicate any such
public announcement, other than by making a timely release to a financial news
service.

During any extensions, all outstanding notes previously tendered will
remain subject to the exchange offer, and we may accept them for exchange. We
will return any outstanding notes that we do not accept for exchange for any
reason without expense to their tendering holder as promptly as practicable
after the expiration or termination of the exchange offer.

31
<PAGE> 36

CERTAIN CONDITIONS TO THE EXCHANGE OFFER

Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange any exchange notes for, any outstanding notes,
and we may terminate the exchange offer as provided in this prospectus before
accepting any outstanding notes for exchange if, in our reasonable judgment:

- the exchange notes to be received will not be tradable by the holder
without restriction under the Securities Act, the Exchange Act and
without material restrictions under the blue sky or securities laws of
substantially all of the states of the United States;

- the exchange offer, or the making of any exchange by a holder of
outstanding notes, would violate applicable law or any applicable
interpretation of the staff of the SEC; or

- any action or proceeding has been instituted or threatened in any court
or by or before any governmental agency with respect to the exchange
offer that, in our judgment, would reasonably be expected to impair our
ability to proceed with the exchange offer.

In addition, we will not be obligated to accept for exchange the
outstanding notes of any holder that has not made to us:

- the representations described in the first paragraph under "-- Terms of
the Exchange Offer" on page 30 and "-- Procedures for Tendering" below;
and

- other representations as may be reasonably necessary under applicable SEC
rules, regulations or interpretations to make available to that holder an
appropriate form for registration of the exchange notes under the
Securities Act.

These conditions are for our sole benefit, and we may assert them
regardless of the circumstances that may give rise to them or waive them in
whole or in part at any or at various times in our sole discretion. If we fail
at any time to exercise any of the foregoing rights, this failure will not
constitute a waiver of any of those rights. Each of those rights will be deemed
an ongoing right that we may assert at any time or at various times.

In addition, we will not accept for exchange any outstanding notes
tendered, and will not issue exchange notes in exchange for any outstanding
notes that have been tendered, if at that time any stop order is threatened or
in effect with respect to the registration statement of which this prospectus
constitutes a part or the qualification of the indenture under the Trust
Indenture Act of 1939.

PROCEDURES FOR TENDERING

Only a holder of outstanding notes may tender outstanding notes in the
exchange offer. To tender in the exchange offer, you must:

- complete, sign and date the letter of transmittal, or a facsimile of the
letter of transmittal; have the signature on the letter of transmittal
guaranteed if the letter of transmittal so requires; and mail or deliver
the letter of transmittal or facsimile to the exchange agent or the
Luxembourg exchange agent before the expiration date; or

- comply with DTC's Automated Tender Offer Program procedures described
below.

In addition:

- the exchange agent or the Luxembourg exchange agent must receive before
the expiration date your outstanding notes along with the letter of
transmittal; or

- the exchange agent or the Luxembourg exchange agent must receive, before
the expiration date, a timely confirmation of book-entry transfer of your
outstanding notes into the exchange agent's account at DTC according to
the procedures for book-entry transfer described below or a properly
transmitted agent's message; or

- you must comply with the guaranteed delivery procedures described on page
35.

32
<PAGE> 37

The exchange agent or the Luxembourg exchange agent must receive physical
delivery of your letter of transmittal and other required documents at the
address indicated under " -- Exchange Agent and Luxembourg Exchange Agent" on
page 36 prior to 5:00 p.m., New York City time, on the expiration date.

Your tender that is not withdrawn before the expiration date will
constitute an agreement between you and us in accordance with the terms and
subject to the conditions specified in this prospectus and in the letter of
transmittal.

The method of delivery of outstanding notes, the letter of transmittal and
all other documents required by the exchange agent or the Luxembourg exchange
agent are at your election and risk. Rather than mail these items, we recommend
that you use an overnight or hand delivery service. In all cases, you should
allow sufficient time to assure delivery to the exchange agent or the Luxembourg
exchange agent before the expiration date. You should not send the letter of
transmittal or outstanding notes to us. You may request your broker, dealer,
commercial bank, trust company or other nominee to effect the above transactions
for you.

It is strongly recommended that holders send their letters of transmittal
and other documents directly to the exchange agent to avoid delays that may
arise from transmission of such documents to Luxembourg.

If you are a beneficial owner whose outstanding notes are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee and
wish to tender, you should contact the registered holder promptly and instruct
it to tender on your behalf. If you wish to tender on your own behalf, you must,
before completing and executing the letter of transmittal and delivering your
outstanding notes, either:

- make appropriate arrangements to register ownership of the outstanding
notes in your name; or

- obtain a properly completed bond power from the registered holder of the
outstanding notes.

The transfer of registered ownership may take considerable time and may not
be completed before the expiration date.

A member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., a commercial bank or trust
company having an office or correspondent in the United States or another
"eligible institution" within the meaning of Rule 17Ad-15 under the Exchange Act
must guarantee signatures on a letter of transmittal or a notice of withdrawal
described below, unless the outstanding notes are tendered:

- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the letter
of transmittal; or

- for the account of an eligible institution.

If the letter of transmittal is signed by a person other than the
registered holder of any outstanding notes listed on the outstanding notes, the
outstanding notes must be endorsed or accompanied by a properly completed bond
power. The bond power must be signed by the registered holder as the registered
holder's name appears on the outstanding notes and an eligible institution must
guarantee the signature on the bond power.

If the letter of transmittal or any outstanding notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, those persons should so indicate when signing. Unless we waive this
condition, those persons should also submit evidence satisfactory to us of their
authority to deliver the letter of transmittal.

The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's Automated Tender Offer
Program to tender. Participants in the program may, instead of physically
completing and signing the letter of transmittal and delivering it to the
exchange agent, transmit their acceptance of the exchange offer electronically.
They may do so by

33
<PAGE> 38

causing DTC to transfer the outstanding notes to the exchange agent in
accordance with its procedures for transfer. DTC will then send an agent's
message to the exchange agent. The term "agent's message" means a message
transmitted by DTC, received by the exchange agent and forming part of the
book-entry confirmation, to the effect that:

- DTC has received an express acknowledgment from a participant in its
Automated Tender Offer Program that is tendering outstanding notes that
are the subject of the book-entry confirmation;

- the participant has received and agrees to be bound by the terms of the
letter of transmittal or, in the case of an agent's message relating to
guaranteed delivery, that the participant has received and agrees to be
bound by the applicable notice of guaranteed delivery; and

- the agreement may be enforced against the participant.

We will determine in our sole discretion all questions as to the validity,
form, eligibility, including time of receipt, acceptance of tendered outstanding
notes and withdrawal of tendered outstanding notes. Our determination will be
final and binding. We reserve the absolute right to reject any outstanding notes
not properly tendered or any outstanding notes the acceptance of which would, in
the opinion of our counsel, be unlawful. We also reserve the right to waive any
defects, irregularities or conditions of tender as to particular outstanding
notes. Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of outstanding notes must be cured within the time that
we will determine. Although we intend to notify you of defects or irregularities
with respect to tenders of outstanding notes, neither we, the exchange agent,
the Luxembourg exchange agent nor any other person will incur any liability for
failure to give notification. Tenders of outstanding notes will not be deemed
made until any defects or irregularities have been cured or waived.

Any outstanding notes that have been tendered for exchange but that are not
exchanged for any reason will be returned to their holder without cost to the
holder or, in the case of outstanding notes tendered by book-entry transfer into
the exchange agent's account at DTC according to the procedures described above,
the outstanding notes will be credited to an account maintained with DTC for
outstanding notes as soon as practicable after withdrawal, rejection of tender
or termination of the exchange offer. Properly withdrawn outstanding notes may
be retendered by following one of the procedures described under "-- Procedures
for Tendering" at any time on or before the expiration date.

By signing the letter of transmittal, you, as a tendering holder of
outstanding notes, will represent to us that, among other things:

- any exchange notes that you receive will be acquired in the ordinary
course of your business;

- you have no arrangement or understanding with any person or entity to
participate in the distribution of the exchange notes;

- if you are not a broker-dealer, that you are not engaged in and do not
intend to engage in the distribution of the exchange notes;

- if you are a broker-dealer that will receive exchange notes for your own
account in exchange for outstanding notes that were acquired as a result
of market-making or other trading activities, that you will deliver a
prospectus, as required by law, in connection with any resale of those
exchange notes; and

- you are not an "affiliate" of ours within the meaning of Rule 405 of the
Securities Act or, if you are an affiliate, you will comply with any
applicable registration and prospectus delivery requirements of the
Securities Act.

34
<PAGE> 39

BOOK-ENTRY TRANSFER

The exchange agent will make a request to establish an account with respect
to the outstanding notes at DTC for purposes of the exchange offer promptly
after the date of this prospectus; and any financial institution participating
in DTC's system may make book-entry delivery of outstanding notes by causing DTC
to transfer the outstanding notes into the exchange agent's account at DTC in
accordance with DTC's procedures for transfer. Holders of outstanding notes who
are unable to deliver confirmation of the book-entry tender of their outstanding
notes into the exchange agent's account at DTC or all other documents required
by the letter of transmittal to the exchange agent on or before the expiration
date must tender their outstanding notes according to the guaranteed delivery
procedures described below.

GUARANTEED DELIVERY PROCEDURES

If you wish to tender your outstanding notes, but your outstanding notes
are not immediately available or you cannot deliver your outstanding notes, the
letter of transmittal or any other required documents to the exchange agent or
comply with the applicable procedures under DTC's Automated Tender Offer Program
before the expiration date, you may tender if:

- you make the tender through an eligible institution;

- before the expiration date, the exchange agent receives from the eligible
institution either a properly completed and duly executed notice of
guaranteed delivery, by facsimile transmission, mail or hand delivery, or
a properly transmitted agent's message and notice of guaranteed delivery:

- indicating your name and address, the registered number(s) of the
outstanding notes and the principal amount of outstanding notes tendered:

- stating that the tender is being made by those documents; and

- guaranteeing that, within three New York Stock Exchange trading days
after the expiration date, the letter of transmittal or facsimile of that
letter together with the outstanding notes or a book-entry confirmation
and any other documents required by the letter of transmittal will be
deposited by the eligible institution with the exchange agent; and

- the exchange agent receives the properly completed and executed letter of
transmittal or facsimile of that letter as well as all tendered
outstanding notes in proper form for transfer or a book-entry
confirmation, and all other documents required by the letter of
transmittal, within three New York Stock Exchange trading days after the
expiration date.

Upon request to the exchange agent, a notice of guaranteed delivery will be
sent to holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures outlined above.

WITHDRAWAL OF TENDERS

Except as otherwise provided in this prospectus, you may withdraw your
tender of outstanding notes at any time prior to 5:00 p.m., New York City time,
on the expiration date.

For a withdrawal to be effective:

- the exchange agent or the Luxembourg exchange agent must receive a
written note -- which may be by telegram, telex, facsimile transmission
or letter -- of withdrawal at one of the addresses indicated under
"-- Exchange Agent and Luxembourg Exchange Agent," on page 36; or

- you must comply with the appropriate procedures of DTC's Automated Tender
Offer Program system.

35
<PAGE> 40

Any notice of withdrawal must:

- specify the name of the person who tendered the outstanding notes to be
withdrawn;

- identify the outstanding notes to be withdrawn, including the principal
amount of the outstanding notes; and

- where certificates for outstanding notes have been transmitted, specify
the name in which the outstanding notes were registered, if different
from that of the withdrawing holder.

If certificates for outstanding notes have been delivered or otherwise
identified to the exchange agent or the Luxembourg exchange agent, then, before
the release of those certificates, the withdrawing holder must also submit;

- the serial numbers of the particular certificates to be withdrawn; and

- a signed notice of withdrawal with signatures guaranteed by an eligible
institution unless the holder is an eligible institution.

If you have tendered outstanding notes under the procedure for book-entry
transfer described above, any notice of withdrawal must be delivered to the
exchange agent and must specify the name and number of the account at DTC to be
credited with the withdrawn outstanding notes and otherwise comply with the
procedures of that facility. We will determine all questions as to the validity,
form and eligibility, including time of receipt, of notices, and our
determination will be final and binding on all parties. We will deem any
outstanding notes so withdrawn not to have been validly tendered for exchange
for purposes of the exchange offer.

EXCHANGE AGENT AND LUXEMBOURG EXCHANGE AGENT

We have appointed United States Trust Company of New York as exchange agent
for the exchange offer. You should direct questions and requests for assistance,
requests for additional copies of this prospectus or of the letter of
transmittal and requests for the notice of guaranteed delivery to the exchange
agent addressed as follows:

<TABLE>
<CAPTION>
For delivery by registered/certified mail: For delivery by hand before 4:30 p.m.:
------------------------------------------ --------------------------------------------
<S> <C>
United States Trust Company of New York United States Trust Company of New York
P.O. Box 843 Cooper Station 111 Broadway
New York, NY 10276 New York, NY 10006
Attn: Corporate Trust Services
For delivery by overnight courier/by hand Attn: Lower Level Corporate Trust Window By
after 4:30 p.m. on the expiration date: facsimile transmission
United States Trust Company of New York (for eligible institutions only): (212)
770 Broadway, 13th Floor New York, NY 10003 420-6211
Attn: Corporate Trust Operations Attn: Customer Service
Facsimile confirmation: (800) 548-6565
</TABLE>

In addition, we have appointed Kredietbank S.A. Luxembourgeoise as
Luxembourg exchange agent. Executed letters of transmittal may be delivered by
hand or sent registered or certified mail for next day delivery to the
Luxembourg exchange agent at the following address: 43 Boulevard Royal, L-2955
Luxembourg, Attention: Corporate Trust and Agencies. All attempted tenders to
the Luxembourg exchange agent must be confirmed by telephone by calling (011)
352-4797-39135. Delivery of the letter of transmittal to the Luxembourg exchange
agent to an address other than the address set forth above in conformity with
the procedures described will not constitute a valid delivery. It is strongly
recommended that holders sent their letters of transmittal and other documents
directly to the exchange agent to avoid delays that may arise from transmission
of such documents to Luxembourg.

Delivery of the letter of transmittal to an address other than as provided
above or transmission via facsimile other than as provided above does not
constitute a valid delivery of the letter of transmittal.

36
<PAGE> 41

FEES AND EXPENSES

We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, we may make additional solicitations by
telegraph, telephone or in person by our officers and regular employees and
those of our affiliates.

We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related
reasonable out-of-pocket expenses.

We will pay the cash expenses to be incurred in connection with the
exchange offer. The expenses are estimated in the aggregate to be approximately
$450,000. They include:

- SEC registration fees;

- fees and expenses of the exchange agent, Luxembourg exchange agent and
trustee;

- accounting and legal fees and printing costs; and

- related fees and expenses.

TRANSFER TAXES

We will pay all transfer taxes, if any, applicable to the exchange of
outstanding notes under the exchange offer. You, as the tendering holder,
however, will be required to pay any transfer taxes, whether imposed on the
registered holder or any other person, if:

- certificates representing outstanding notes for principal amounts not
tendered or accepted for exchange are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of
outstanding notes tendered;

- tendered outstanding notes are registered in the name of any person other
than the person signing the letter of transmittal; or

- a transfer tax is imposed for any reason other than the exchange of
outstanding notes under the exchange offer.

If you do not submit satisfactory evidence of payment of those taxes with
the letter of transmittal, the amount of those transfer taxes will be billed to
the tendering holder.

Holders who tender their outstanding notes for exchange will not be
required to pay any transfer taxes. However, holders who instruct us to register
exchange notes in the name of, or request that outstanding notes not tendered or
not accepted in the exchange offer be returned to, a person other than the
registered tendering holder will be required to pay any applicable transfer tax.

SOME ADVERSE CONSEQUENCES OF FAILURE TO EXCHANGE

If you fail to exchange your outstanding notes for exchange notes under the
exchange offer, you will remain subject to the restrictions on transfer of your
outstanding notes. In general, you may not offer or sell the outstanding notes
unless they are registered under the Securities Act, or if the offer or sale is
exempt from registration under the Securities Act and applicable state
securities laws. Except as required by the registration rights agreement, we do
not intend to register resales of the outstanding notes under the Securities
Act. Based on interpretations of the SEC staff, exchange notes issued in the
exchange offer may be offered for resale, resold or otherwise transferred by
their holders, other than any holder that is our "affiliate" within the meaning
of Rule 405 under the Securities Act, without compliance with the registration
and prospectus delivery provisions of the Securities Act, so long as the holders
acquired the exchange notes in the ordinary course of the holders' business and
the holders have no arrangement or understanding with respect to the

37
<PAGE> 42

distribution of the exchange notes to be acquired in the exchange offer. Any
holder who tenders in the exchange offer for the purpose of participating in a
distribution of the exchange notes:

- could not rely on the applicable interpretations of the SEC; and

- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.

The amount of outstanding notes after the exchange offer is complete will
be reduced by the amount of outstanding notes that will be tendered and
exchanged for exchange notes in the exchange offer. We expect that a substantial
portion of the outstanding notes will be tendered and accepted in the exchange
offer. In that case, the trading market for the outstanding notes will be
adversely affected.

ACCOUNTING TREATMENT

We will record the exchange notes in our accounting records at the same
carrying value as the outstanding notes, which is the aggregate principal
amount, as reflected in our accounting records on the date of exchange.
Accordingly, we will not recognize any gain or loss for accounting purposes in
connection with the exchange offer. We will record the expenses of the exchange
offer as incurred.

OTHER

Participation in the exchange offer is voluntary, and you should carefully
consider whether to accept. We urge you to consult your financial and tax
advisors in making your own decision on what action to take.

We may in the future seek to acquire untendered outstanding notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. We have no present plans to acquire any outstanding notes that are
not tendered in the exchange offer or to file a registration statement to permit
resales of any untendered outstanding notes.

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<PAGE> 43

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have included in this prospectus forward-looking statements that state
our own or our management's intentions, beliefs, expectations or predictions for
the future. Forward-looking statements are subject to a number of risks,
assumptions and uncertainties which could cause our actual results to differ
materially from those projected in the forward-looking statements. These risks,
assumptions and uncertainties include:

- the ability to complete systems within the currently estimated time
frames and budgets;

- the ability to compete effectively in a rapidly evolving and
price-competitive marketplace;

- changes in the nature of telecommunications regulation in the United
States and Asian and other countries;

- changes in business strategy;

- the successful integration of newly acquired businesses;

- the spread of Internet usage and other technological developments in
Asian countries and elsewhere;

- the impact of technological change; and

- risks that we mention under the heading "Risk Factors" on page 16 and
other risks referenced from time to time in our filings with the SEC.

In evaluating forward-looking statements, you should specifically consider
the numerous risks, among others, described under the heading "Risk Factors".

USE OF PROCEEDS

We will not receive any proceeds from the exchange offer. The proceeds from
our initial public offering, the underwriters exercise of a portion of their
overallotment option and the sale of the outstanding notes were $844.3 million,
after deducting assumed underwriting discounts and estimated offering expenses.
We expect to use the net proceeds as follows:

- approximately $610 million for the construction of our network;

- approximately $125 million to make investments in telecommunications and
Internet companies, and related businesses;

- approximately $9.6 million to repay outstanding indebtedness under
shareholder loans at interest rate of LIBOR plus 2%;

- up to approximately $79 million to purchase from Global Crossing
shareholder loans and future commitments it made to Hutchison Global
Crossing and Global Access Limited. The shareholder loans to Hutchison
Global Crossing bear an interest rate equal to the Hong Kong Dollar
Interbank Offered Rate, or HIBOR. The shareholder loans to Global Access
Limited bear an interest rate equal to 1.5% above the long-term prime
lending rate quoted by the Industrial Bank of Japan; and

- the balance for general corporate purposes, including the funding of
operating losses.

Pending those uses, we intend to invest the net proceeds in direct or
guaranteed obligations of the United States, interest-bearing, investment-grade
instruments or certificates of deposit.

Since we cannot specify with certainty the precise manner in which the net
proceeds will be allocated, our management will have broad discretion in the
application of the net proceeds.

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<PAGE> 44

CAPITALIZATION

The following table presents our capitalization as of September 30, 2000:

- on a supplemental actual basis, giving retroactive effect to the
contribution of Hutchison Global Crossing and Global Access Limited to us
as described under "Formation Transactions" on page 94; and

- on a pro forma basis to reflect the offering of the outstanding notes and
our initial public offering of common stock.

Other than as set forth in this prospectus, there has been no material
change in our capitalization since September 30, 2000.

You should read this table together with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" beginning on page 53
and the consolidated financial statements and the accompanying notes included in
this prospectus beginning on page F-1.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 2000
----------------------------
SUPPLEMENTAL
ACTUAL PRO FORMA
------------- -----------
(IN THOUSANDS, EXCEPT SHARE
DATA)
<S> <C> <C>
Long-term debt:
Pacific Crossing-1 credit facility........................ $ 750,000 $ 750,000
13.375% senior notes due 2010............................. -- 400,000
---------- ----------
Total long-term debt................................... 750,000 1,150,000
Minority interest........................................... 150,026 150,026
---------- ----------
Shareholders' equity:
Class A common stock, par value $0.01 per share
(1,200,000,000 shares authorized, 68,500,000 shares
issued and outstanding, pro forma)..................... -- 685
Class B common stock, par value $0.01 per share
(1,200,000,000 shares authorized, 486,625,125 shares
issued and outstanding)................................ 4,866 4,866
Additional paid-in capital.................................. 1,241,480 1,696,095
Accumulated deficit......................................... (72,088) (72,088)
Cumulative translation adjustment........................... (21) (21)
---------- ----------
Total shareholders' equity........................ 1,174,237 1,629,537
---------- ----------
Total capitalization......................... $2,074,263 $2,929,563
========== ==========
</TABLE>

The table above does not take into account any shares underlying stock
options granted to directors, officers or employees.

40
<PAGE> 45

SELECTED UNAUDITED PRO FORMA FINANCIAL INFORMATION

We have prepared the following selected unaudited pro forma condensed
combined financial information based on our supplemental consolidated financial
statements which give retroactive effect to the contribution of Hutchinson
Global Crossing and Global Access Limited to us. The supplemental consolidated
financial statements are adjusted to give retroactive effect to (1) the purchase
of additional interest and the related consolidation of Pacific Crossing Ltd.,
(2) our initial public offering and (3) our private offering of our outstanding
notes.

You should read this selected unaudited pro forma condensed combined
financial information in conjunction with the detailed financial statements,
which are included in this prospectus beginning on page F-1.

In reading the selected unaudited pro forma condensed combined financial
information, you should note the following:

- Before December 1999, Pacific Crossing-1 and the Global Access Limited
network were not ready for commercial service and had no significant
operations.

41
<PAGE> 46

PRO FORMA ASIA GLOBAL CROSSING
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED
--------------------- DECEMBER 31,
2000 1999 1999
--------- -------- ------------
<S> <C> <C> <C>
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
DATA:
Revenue.............................................. $ 130,455 $ -- $ 61,100
Expenses:
Cost of sales...................................... 98,194 -- 20,722
Operations, administration and maintenance......... 36,499 2,000 8,000
General and administrative......................... 35,828 2,491 9,370
Depreciation and amortization...................... 13,539 -- 3,169
--------- -------- --------
Operating income (loss).............................. (53,605) (4,491) 19,839
Equity in loss of affiliate.......................... (33,540) (4,646) (6,915)
Minority interest.................................... (9,632) 2,677 (7,995)
Other income (expense)............................... (76) -- 459
Interest income...................................... 11,427 8,826 12,062
Interest expense..................................... (30,591) (44,469) (58,696)
--------- -------- --------
Loss before provision for income taxes............... (116,017) (42,103) (41,246)
Provision for income taxes........................... (1,353) -- --
--------- -------- --------
Net loss........................................... $(117,370) $(42,103) $(41,246)
========= ======== ========

OTHER DATA:
Ratio (deficiency) of earnings to fixed charges...... $(130,371) $(60,883) $(54,026)
</TABLE>

42
<PAGE> 47

SELECTED SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

ASIA GLOBAL CROSSING SELECTED SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

The table below shows our selected supplemental consolidated financial
information prepared in United States GAAP. This information has been prepared
using our supplemental consolidated financial statements as of the dates
indicated and for the year ended December 31, 1999, for the period from April 1,
1998, date of inception, to December 31, 1998 and for the nine months ended
September 30, 2000 and 1999. The supplemental consolidated financial statements
have been prepared to give retroactive effect to the contribution of Hutchison
Global Crossing and Global Access Limited to us on October 12, 2000. The
supplemental consolidated financial information as of December 31, 1999 and 1998
and for the year ended December 31, 1999 and for the period from April 1, 1998,
date of inception, to December 31, 1998 has been derived from our supplemental
consolidated financial statements audited by Arthur Andersen, independent public
accountants. These supplemental financial statements are included in this
prospectus beginning on page F-25. We derived the remaining data from unaudited
supplemental consolidated financial statements.

In reading the following selected supplemental consolidated financial
information, please note the following:

- On November 24, 1999, Global Crossing contributed to us GCT Pacific. GCT
Pacific owns our interest in Pacific Crossing Ltd. Since we and GCT
Pacific are entities under common control, our consolidated financial
statements include information relating to GCT Pacific as if we were in
existence on April 1, 1998, the date of inception of GCT Pacific, in a
method similar to a pooling of interest.

- On November 24, 1999, Global Crossing contributed all its rights in East
Asia Crossing to us.

- The first segment of Pacific Crossing-1 commenced service in December
1999, and we anticipate that the full system will be completed by year
end 2000.

- The supplemental consolidated financial information as of September 30,
2000 and for the nine months ended September 30, 2000 and 1999, are
derived from our unaudited supplemental consolidated financial
statements. We have made adjustments, consisting of normal recurring
adjustments to present the supplemental consolidated financial position,
which in the opinion of our management are necessary for a fair
presentation. Supplemental results of operations for the nine months
ended September 30, 2000 are not necessarily indicative of the results
that may be expected for the full year or for any future period.

- On October 12, 2000, we completed our initial public offering in which we
sold 58 million shares of our Class A common stock at a price of $7.00
per share. The net proceeds of our initial public offering, which we
received on October 12, 2000, after deducting underwriting discounts,
commissions and costs, were approximately $452 million. On November 8,
2000, an additional 500,000 shares at $7.00 per share were sold in
connection with the exercise of the underwriters' over-allotment option.
The additional net proceeds were approximately $3.3 million, after
deducting the underwriters' discounts, commissions and costs.

43
<PAGE> 48

- Concurrent with our initial public offering, Global Crossing, Soffbank
and Microsoft contributed their respective interests in Hutchison Global
Crossing Holdings Limited and subsidiaries ("HGC" or "Hutchison Global
Crossing"), representing 50% of the real ownership interest in HGC, to
us. At the same time, Global Crossing contributed its 49% interest in
Global Access Limited ("GAL") to us. These contributions are accounted
for by us similar to the pooling-of-interests method of accounting
because HGC, GAL and us are entities under common control of Global
Crossing. Prior to these contributions, Global Crossing accounted for its
investments in HGC and GAL under the equity method of accounting.

- Group Customer Cash Revenue represents the total of all Cash Revenue
received by us and our non-consolidated affiliates from third parties
without reference to our ownership percentages.

At the end of the current quarter, a total of $39.8 million in cash
deferred revenue resulted from cash receipts for which the customers may
select systems at a future time.

45
<PAGE> 50

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1998
NINE MONTHS ENDED (DATE OF
SEPTEMBER 30, YEAR ENDED INCEPTION) TO
------------------------- DECEMBER 31, DECEMBER 31,
2000 1999 1999 1998
------------- -------- ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C>

SUPPLEMENTAL CONSOLIDATED
STATEMENT OF OPERATIONS DATA:
Revenue.............................. $ 130,455 $ -- $ -- $ --
Expenses:
Cost of sales...................... 98,194 -- -- --
Operations, administration and
maintenance..................... 36,499 66 -- --
General and administrative......... 35,828 -- 1,201 --
Depreciation and amortization...... 13,539 -- -- --
--------- -------- -------- ---------
Operating income (loss).............. (53,605) (66) (1,201) --
Equity in income (loss) of
affiliates......................... (33,540) (7,845) 2,978 (2,507)
Minority interest.................... (9,632) -- -- --
Other income (expense):
Other expense...................... (76) -- -- --
Interest income.................... 11,427 8,745 11,598 5,374
Interest expense................... (1,551) -- -- --
--------- -------- -------- ---------
Income (loss) before provision
for income taxes.............. (86,977) 834 13,375 2,867
Provision for income taxes........... (1,353) -- -- --
--------- -------- -------- ---------
Net income (loss).................. $ (88,330) $ 834 $ 13,375 $ 2,867
========= ======== ======== =========
SUPPLEMENTAL OTHER DATA:
Proportionate Cash Revenue........... $ 208,599 $ -- $ 36,298 $ --
Proportionate Adjusted EBITDA........ 86,617 (6,259) 20,182 (940)
Group Customer Cash Revenue.......... 418,749 -- 62,854 --
Cash from operating activities....... 145,262 8,654 22,045 5,366
Cash used for investing activities... (415,550) (12,000) (90,652) (231,006)
Cash from financing activities....... $ 364,307 $ -- $ 73,013 $ 231,018
Ratio (deficiency) of earnings to
fixed charges(1)................... $ (88,308) -- -- --
CALCULATION OF PROPORTIONATE ADJUSTED
EBITDA
Operating Income (loss).............. $ (53,605) $ (66) $ (1,201) $ --
Depreciation and amortization........ 13,539 -- -- --
Non-cash cost of capacity sold....... 98,194 -- -- --
Incremental cash deferred revenue.... 116,904 -- -- --
--------- -------- -------- ---------
Adjusted EBITDA................. 175,032 (66) (1,201)
Minority Interest in Adjusted
EBITDA............................. (42,493) -- -- --
Proportionate Adjusted EBITDA from
non-consolidated joint ventures.... 36,659 (6,193) 21,383 (940)
Elimination adjustments with
affiliates......................... (42,781) -- -- --
Incremental cash deferred revenue
from payments for non-specific
capacity........................... (39,800) -- -- --
--------- -------- -------- ---------
Proportionate Adjusted EBITDA........ $ 86,617 $ (6,259) $ 20,182 $ (940)
========= ======== ======== =========
</TABLE>

---------------
(1) There were no fixed charges in 1999 and 1998. Accordingly, we are unable to
present the ratio of earnings to fixed charges for these periods.

46
<PAGE> 51

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES
(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------
2000 1999 1998
------------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
SUPPLEMENTAL CONSOLIDATED BALANCE SHEET DATA:
Assets:
Cash and cash equivalents........................... $ 103,782 $ 9,784 $ 5,378
Restricted cash and cash equivalents................ 57,271 -- --
Accounts receivable, net............................ 24,480 -- --
Receivable from affiliates.......................... 88,561 89,735 --
Other assets........................................ 15,423 1,170 20
---------- -------- --------
Total current assets........................ 289,517 100,689 5,398
Restricted cash and cash equivalents.................. 18,462 138,118 231,000
Property and equipment, net........................... 1,685,272 101,598 --
Deferred finance fees, net............................ 21,969 -- --
Other assets.......................................... 39,401 -- --
Investments in affiliate.............................. 447,707 286,131 177,334
---------- -------- --------
Total assets................................ $2,502,328 $626,536 $413,732
========== ======== ========
Liabilities:
Accrued construction costs.......................... $ 230,699 $ -- $ --
Accounts payable and accrued liabilities............ 16,472 1,131 --
Deferred revenue.................................... 5,103 -- --
Payable to affiliates............................... 21,909 101,402 --
---------- -------- --------
Total current liabilities................... 274,183 102,533 --
---------- -------- --------
Long-term debt........................................ 750,000 -- --
Long-term deferred revenue............................ 142,681 -- --
Other long-term liabilities........................... 1,421 -- --
Loan payable to affiliate............................. 9,780 -- --
---------- -------- --------
Total liabilities........................... 1,178,065 102,533 --
---------- -------- --------
Minority interest..................................... 150,026 -- --
Shareholders' equity:
Common stock........................................ 4,866 4,866 4,866
Additional paid-in capital.......................... 1,241,480 502,895 405,999
Retained earnings (accumulated deficit)............. (72,088) 16,242 2,867
Cumulative translation adjustment................... (21) -- --
---------- -------- --------
Total shareholder's equity.................. 1,174,237 524,003 413,732
---------- -------- --------
Total liabilities and shareholder's
equity.................................... $2,502,328 $626,536 $413,732
========== ======== ========
</TABLE>

47
<PAGE> 52

PACIFIC CROSSING LTD., HUTCHISON GLOBAL CROSSING AND GLOBAL ACCESS LIMITED
SELECTED HISTORICAL FINANCIAL INFORMATION

PACIFIC CROSSING LTD.

The table below shows the selected historical financial information of
Pacific Crossing Ltd. prepared using United States GAAP. This information has
been prepared using the consolidated financial statements of Pacific Crossing
Ltd. as of the dates indicated and for the year ended December 31, 1999, for the
period from May 4, 1998, date of inception, to December 31, 1998 and for the six
months ended June 30, 2000 and 1999. The consolidated statement of operations
data for the year ended December 31, 1999 and for the period from May 4, 1998,
date of inception, to December 31, 1998 and the consolidated balance sheet data
as of December 31, 1999 and 1998 have been derived from financial statements
audited by Arthur Andersen, independent public accountants, which are included
in this prospectus beginning on page F-47. We derived the remaining data from
unaudited consolidated financial statements.

<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS ENDED MAY 4, 1998
JUNE 30, YEAR ENDED (DATE OF INCEPTION)
----------------------- DECEMBER 31, TO DECEMBER 31,
2000 1999 1999 1998
---------- --------- ------------ -------------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash revenue..................... $ 127,370 $ 3,122 $ 62,854 $ --
Revenue.......................... 107,550 -- 61,100 --
Income (loss) from continuing
operations..................... 34,116 (3,357) 22,520 (4,341)
Adjusted EBITDA.................. 101,907 1,486 46,685 (1,627)
Cash provided by (used in)
operating activities........... 31,785 (1,644) 6,842 (3,771)
Cash used in investing
activities..................... (173,096) (266,662) (706,285) (157,175)
Cash provided by financing
activities..................... 141,321 $ 268,622 699,616 161,379
Total assets..................... 1,328,087 1,124,138 231,677
Long-term obligations............ $ 800,101 $ 760,636 $ 201,246

CALCULATION OF ADJUSTED EBITDA:
Operating income (loss).......... $ 33,559 $ (1,636) $ 24,209 $ (1,627)
Depreciation and amortization.... 6,976 -- -- --
Non-cash cost of sales........... 41,552 -- 20,722 --
Incremental cash deferred
revenue........................ 19,820 3,122 1,754 --
---------- --------- ---------- ---------
Adjusted EBITDA.................. $ 101,907 $ 1,486 $ 46,685 $ (1,627)
========== ========= ========== =========
</TABLE>

48
<PAGE> 53

HUTCHISON GLOBAL CROSSING

The table below shows selected historical financial information for
Hutchison Global Crossing prepared in Hong Kong dollars based on United States
GAAP reconciled from Hutchison Global Crossing's Hong Kong GAAP combined
financial statements. This information has been prepared using the combined
financial statements as of the dates indicated and for the three years ended
December 31, 1999 and for the six months ended June 30, 2000 and 1999. The
combined statement of operations data for the three years ended December 31,
1999 and the combined balance sheet data as of December 31, 1999, 1998 and 1997
have been derived from financial statements audited by PricewaterhouseCoopers,
certified public accountants, which are included in this prospectus beginning on
page F-76. We derived the remaining data from unaudited combined financial
statements.

<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
--------------------------- ------------------------------------------
2000 1999 1999 1998 1997
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Cash revenue......... HK$ 465,200 HK$ 393,136 HK$ 840,512 HK$ 950,120 HK$1,262,106
Revenue.............. 465,200 393,136 840,512 950,120 1,262,106
Income (loss) from
continuing
operations......... (130,853) (113,942) (250,778) (279,526) (356,847)
Adjusted EBITDA...... (47,067) (43,514) (100,348) (162,808) (291,874)
Cash used in
operating
activities......... (21,140) (83,054) (206,149) (31,928) (200,364)
Cash used in
investing
activities......... (438,506) (372,250) (872,281) (756,189) (541,806)
Cash provided by
financing
activities......... 628,380 HK$ 455,178 1,078,358 767,671 761,334
Total assets......... 3,388,127 2,781,175 1,857,539 1,369,610
Long-term
obligations........ HK$ 619,790 HK$3,618,673 HK$2,306,024 HK$1,403,847
CALCULATION OF
ADJUSTED EBITDA:
Operating loss....... HK$ (134,278) HK$ (91,418) HK$ (205,598) HK$ (227,194) HK$ (319,871)
Depreciation and
amortization....... 87,211 47,904 105,250 64,386 27,997
------------ ------------ ------------ ------------ ------------
Adjusted EBITDA...... HK$ (47,067) HK$ (43,514) HK$ (100,348) HK$ (162,808) HK$ (291,874)
============ ============ ============ ============ ============
</TABLE>

49
<PAGE> 54

The unaudited translations of Hutchison Global Crossing's Hong Kong dollar
amounts into United States dollars have been translated using a convenience
translation rate of HK$7.80 = $1.00 as of June 30, 2000 and for the six months
ended June 30, 2000 and as of December 31, 1999 and for the year ended December
31, 1999. The convenience translations should not be construed as
representations that the Hong Kong dollar amounts have been, could have been or
could in the future be converted into United States dollars at this rate or any
rate of exchange.

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
------------------------ ------------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Cash revenue....................................... $ 59,641 $ 107,758
Revenue............................................ 59,641 107,758
Income (loss) from continuing operations........... (16,776) (32,151)
Adjusted EBITDA.................................... (6,034) (12,865)
Cash used in operating activities.................. (2,710) (26,429)
Cash used in investing activities.................. (56,219) (111,831)
Cash provided by financing activities.............. 80,562 138,251
Total assets....................................... 434,375 356,561
Long-term obligations.............................. $ 79,460 $ 463,932
CALCULATION OF ADJUSTED EBITDA:
Operating loss..................................... $(17,215) $ (26,359)
Depreciation and amortization...................... 11,181 13,494
-------- ---------
Adjusted EBITDA.................................... $ (6,034) $ (12,865)
======== =========
</TABLE>

50
<PAGE> 55

GLOBAL ACCESS LIMITED

The table below shows selected historical financial information for Global
Access Limited prepared in United States GAAP and Japanese yen. This information
has been prepared using the financial statements of Global Access Limited as of
the dates indicated and for the period from November 4, 1997, date of inception,
to December 31, 1997 and for the fiscal years ended December 31, 1999 and 1998
and for the six months ended June 30, 2000 and 1999. The statement of operations
data for the period from November 4, 1997, date of inception, to December 31,
1997 and for the fiscal years ended December 31, 1999 and 1998 and the balance
sheet data as of December 31, 1999, 1998 and 1997 were derived from financial
statements audited by Arthur Andersen, independent public accountants, which are
included in this prospectus beginning on page F-106. We derived the financial
information below from unaudited financial statements.

<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 4,
1997 (DATE
OF INCEPTION)
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED TO
JUNE 30, DECEMBER 31, DECEMBER 31,
------------------------- ------------------------- -------------
2000 1999 1999 1998 1997
----------- ---------- ----------- ---------- -------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Cash revenue......... Y10,203,876 Y -- Y -- Y -- Y --
Revenue.............. 864,666 -- 1,432 -- --
Income (loss) from
continuing
operations......... (869,480) (533,795) (1,363,168) (244,007) (829)
Adjusted EBITDA...... 8,710,291 (534,067) (1,312,257) (244,130) (829)
Cash provided by
(used in) operating
activities......... 8,963,578 (546,557) (1,425,040) (257,736) (834)
Cash used in
investing
activities......... (8,038,830) (1,404,956) (3,870,433) (297,736) --
Cash provided by
financing
activities......... -- 3,000,000 9,000,000 1,950,000 50,000
Total assets......... 20,060,292 -- 13,614,452 1,756,801 49,185
Long-term
obligations........ Y 9,881,784 Y -- Y -- Y -- Y --

CALCULATION OF
ADJUSTED EBITDA:
Operating income
(loss)............. Y (793,832) Y (534,067) Y(1,313,112) Y (244,130) Y (829)
Depreciation and
amortization....... 164,913 -- 1,535 -- --
Non-cash cost of
sales.............. -- -- 752 -- --
Incremental cash
deferred revenue... 9,339,210 -- (1,432) -- --
----------- ---------- ----------- ---------- -------
Adjusted EBITDA...... Y 8,710,291 Y (534,067) Y(1,312,257) Y (244,130) Y (829)
=========== ========== =========== ========== =======
</TABLE>

51
<PAGE> 56

The unaudited translations of Global Access Limited's Japanese yen amounts
into United States dollars have been translated using a convenience translation
rate of (Yen)105.18 = $1.00 as of June 30, 2000 and for the six months ended
June 30, 2000 and as of December 31, 1999 and for the year ended December 31,
1999. The convenience translations should not be construed as representations
that the Japanese yen amounts have been, could have been or could in the future
be converted into United States dollars at this rate or any other rate of
exchange.

<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED
JUNE 30, DECEMBER 31,
2000 1999
------------ ------------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Cash revenue............................................... $ 97,013 $ --
Revenue.................................................... 8,221 14
Income (loss) from operations.............................. (8,267) (12,960)
Adjusted EBITDA............................................ 82,813 (12,476)
Cash provided by (used in) operating activities............ 85,221 (13,549)
Cash used in investing activities.......................... (76,429) (36,798)
Cash provided by financing activities...................... -- 85,568
Total assets............................................... 190,723 129,440
Total long-term obligations................................ $ 93,951 $ --
CALCULATION OF ADJUSTED EBITDA:
Operating income (loss).................................... $ (7,547) $(12,484)
Depreciation and amortization.............................. 1,568 15
Non-cash cost of sale...................................... -- 7
Incremental cash deferred revenue.......................... 88,792 (14)
-------- --------
Adjusted EBITDA............................................ $ 82,813 $(12,476)
======== ========
</TABLE>

52
<PAGE> 57

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of
operations should be read in conjunction with our supplemental consolidated
financial statements and the related notes included elsewhere in this
registration statement. This discussion contains forward-looking statements that
involve risks and uncertainties. Our actual results may differ materially from
those anticipated in these forward-looking statements. Factors that may cause
such a difference include those set forth under "Risk Factors."

GENERAL

Concurrent with our initial public offering, Global Crossing, Microsoft and
Softbank contributed their aggregate interest of 50% in Hutchison Global
Crossing ("HGC") to us. At the same time, Global Crossing contributed its 49%
interest in Global Access Limited ("GAL") to us. These contributions are
accounted for by us similar to the pooling of interests method of accounting
because HGC, GAL and us are entities under common control of Global Crossing.
Prior to these contributions, Global Crossing accounted for its investments in
HGC and GAL under the equity method of accounting.

Our supplemental consolidated financial statements have been prepared to
give retroactive effect to the contribution of HGC and GAL to us by Microsoft,
Softbank and Global Crossing, respectively, at the completion of the initial
public offering. Our consolidated financial statements have been restated for
all periods presented as if HGC, GAL and us had been always combined under the
equity method of accounting since they were combined with Global Crossing. These
supplemental financial statements will become our historical consolidated
financial statements after financial statements covering the date of completion
of these contributions are issued.

We were formed in November 1999 and have a limited operating history. Upon
our formation, Global Crossing contributed GCT Pacific to us, which was then a
wholly owned subsidiary of Global Crossing and which held Global Crossing's
interest in Pacific Crossing Ltd. GCT Pacific was a holding company and did not
have any operations. Since we and GCT Pacific are entities under common control,
our consolidated financial statements include information relating to GCT
Pacific as if we were in existence on April 1, 1998, the date of inception of
GCT Pacific, in a method similar to a pooling of interests.

In December 1999, the first segment of Pacific Crossing-1 began commercial
service allowing Pacific Crossing Ltd. to recognize revenue on sales of
capacity. Before January 1, 2000, our investment in Pacific Crossing Ltd. was
accounted for under the equity method; consequently, our revenue did not include
Pacific Crossing Ltd. revenue. In March 2000, we increased our interest in
Pacific Crossing Ltd. to 64.5%, and the Pacific Crossing Ltd. shareholders
agreement was amended to give us effective control over Pacific Crossing Ltd. As
a result, we have consolidated Pacific Crossing Ltd. as of January 1, 2000.
Since we did not consolidate Pacific Crossing Ltd. results in 1999, the
comparability of our historical results for the nine-month periods ended
September 30, 2000 and September 30, 1999 is limited. Before December 1999,
Pacific Crossing Ltd. had no revenues.

Currently, a significant portion of our cash revenue is from the sale of
wholesale capacity to carrier customers on Pacific Crossing-1. Once East Asia
Crossing and future systems become operational, additional revenue will be
generated from these systems. The revenue from these systems will be offset by
additional costs including cost of capacity, selling, general and administrative
costs and other operational costs.

We expect that wholesale bandwidth pricing in the trans-Pacific market is
likely to continue to decline in future years as a result of the increasing
supply of trans-Pacific bandwidth capacity. We expect similar price declines in
other markets in which we will operate. Although prices are expected to continue
to decline, we anticipate that the impact to our revenue will be offset by the
increasing

53
<PAGE> 58

demand for bandwidth capacity. Our revenue through the end of year 2000 will be
primarily derived from the sale of wholesale bandwidth capacity on Pacific
Crossing-1. In fiscal year 2001, we expect a significant portion of our revenue
growth to be derived from the sale of wholesale bandwidth capacity on East Asia
Crossing and other services, including Internet, data, voice and web hosting
services, to wholesale and business customers.

We monitor our financial performance using certain metrics which reflect
our performance and liquidity on a consolidated basis, and on a proportionate
ownership basis, reflecting our interests in our consolidated and
non-consolidated affiliates.

Cash Revenue refers to revenue plus incremental cash deferred revenue,
which is the incremental change in deferred revenue relating to cash receipts.
We present Cash Revenue because it is a financial indicator used by investors
and analysts to compare companies on the basis of cash receipts from sales of
capacity and services. This information should not be considered as an
alternative to any measure of performance as promulgated under GAAP.

Adjusted EBITDA is defined as operating income (loss), plus goodwill
amortization, depreciation and amortization, non-cash cost of capacity sold,
stock related expenses and incremental cash deferred revenue. This definition is
consistent with financial covenants contained in our significant financing
agreements. We present Adjusted EBITDA because it is a financial indicator used
by investors and analysts to analyze and compare companies on the basis of
operating performance and because we believe that Adjusted EBITDA is an
additional, meaningful measure of performance and liquidity. We use Adjusted
EBITDA to monitor our compliance with our financial covenants. This information
should not be considered as an alternative to any measure of performance as
promulgated under GAAP. Our calculation of Adjusted EBITDA may be different from
the calculation used by other companies and, therefore, comparability may be
limited.

Proportionate Cash Revenue represents the sum of our ownership percentage
of the Cash Revenue of each member of the Combined Entities (includes Asia
Global Crossing, Hutchison Global Crossing, and Global Access Limited) after
eliminating certain inter-company transactions. Cash Revenue not assigned to
specific systems is excluded.

Proportionate Adjusted EBITDA reflects the sum of our ownership percentage
of the Adjusted EBITDA of each member of the Combined Entities after eliminating
certain inter-company transactions. Cash Revenue not assigned to specific
systems is excluded.

Group Customer Cash Revenue represents the total of all Cash Revenue
received by us and our non-consolidated affiliates from third parties without
reference to our ownership percentages.

We believe these proportionate metrics are relevant given the importance of
joint venture operations in achieving our business objectives. In calculating
these proportionate metrics, cash received by any member of the Combined
Entities for capacity purchases on specific systems are treated as cash received
by the companies which provide the capacity. Cash received which may be applied
to capacity purchases on systems to be specified at a future time, are not
included in calculating Proportionate Cash Revenue or Proportionate Adjusted
EBITDA, as we cannot determine our ownership of the systems on which these
payments will be applied. At the end of the current quarter, a total of $39.8
million of cash deferred revenue resulted from cash receipts for which the
customers may select systems at a future time.

RECENT FINANCIAL ACCOUNTING DEVELOPMENTS

As a result of Financial Accounting Standards Board ("FASB") Interpretation
No. 43, "Real Estate Sales, an interpretation of FASB Statement No. 66" ("FIN
43"), which became effective July 1, 1999, we have accounted for revenue from
terrestrial circuits sold after that date as operating leases and have amortized
that revenue over the terms of the related contracts, even though typically we
receive the full sales price in cash at the time of activation of these
circuits.

54
<PAGE> 59

We offer our customers flexible bandwidth products to multiple destinations
and anticipate that many of the contracts for subsea circuits entered into will
be part of a service offering. Therefore, we anticipate that many of these
contracts will not meet the criteria of sales-type lease accounting and will be
accounted for as operating leases. Consequently, we will defer revenue related
to those circuits and amortize that revenue over the appropriate term of the
contract. Accordingly, we will treat cash that we have received but not
recognized as deferred revenue. In certain circumstances, should a contract meet
all of the requirements of sales-type lease accounting, we will recognize
revenue without deferral upon payment and activation. None of the accounting
practices described above affect our cash flows.

The principal effect of the change in the type of contracts offered to our
customers beginning on January 1, 2000 is that an increasing percentage of our
capacity sales will be accounted for as operating leases rather than sales-type
leases, resulting in more revenue from those sales being deferred into future
periods than was previously the case. Accordingly, this change in contract terms
will reduce revenue recognized upon activation of the circuits in earlier
periods and increase revenue recognized in later periods.

In June 1999, the FASB issued Statements of Financial Accounting Standards
("SFAS") No. 137, "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of SFAS No. 133", which deferred
SFAS No. 133's effective date to all fiscal quarters of all fiscal years
beginning after June 15, 2000. This statement standardizes the accounting for
derivatives and hedging activities and requires that all derivatives be
recognized in the statement of financial position as either assets or
liabilities at fair value. Changes in the fair value of derivatives that do not
meet the hedge accounting criteria are to be reported in earnings. We are
currently evaluating the impact of adopting this standard.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements," which is required to be adopted by the Company in the quarter ended
December 31, 2000. SAB 101 clarifies certain conditions regarding the
culmination of an earnings process and customer acceptance requirements in order
to recognize revenue. The adoption of this new requirement is not expected to
have a material impact on our financial position or results of operations.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER
30, 1999

Revenue. Revenue for the nine months ended September 30, 2000 was $130.5
million which was primarily from sales of Pacific Crossing-1 capacity. Of this
amount, $122.3 million in revenue were recognized using sales-type lease
accounting, while the remaining $8.2 million in revenue were accounted for using
service accounting.

Proportionate Cash Revenue for the nine months ended September 30, 2000 was
$208.6 million, which was primarily due to sales of Pacific Crossing-1 capacity.
Pacific Crossing-1 was not ready for service until the fourth quarter of 1999.
Group Customer Revenue was $418.7 million during the nine months ended September
30, 2000 which was primarily attributed to sales of network capacity in 2000.
There was no Proportionate Cash Revenue and Group Customer Revenue in the same
period of 1999 since our systems were not in service.

Cost of sales. Cost of sales for the nine months ended September 30, 2000
was $98.2 million which relates primarily to sales of Pacific Crossing-1
capacity and a $40.5 million charge for losses on sales. In June 2000, we
reduced the carrying value of certain purchased capacity held for sale from $48
million to $10 million. In 1999, when the capacity was originally purchased it
was our intention to re-sell it to third party customers. Subsequent to the
acquisition of this capacity, our business plan changed primarily due to the
expanded construction of our Asian networks. In June 2000, based upon the
changes in our network and business plan, we determined that we had no
alternative use for this capacity and entered into discussions for its sale to
various third party customers. Accordingly, we recognized a loss of $38.0
million in respect of the excess of the carrying value of the capacity over
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<PAGE> 60

its current fair value of $10.0 million. In September 2000, all such purchased
capacity was sold and an additional loss of $2.5 million was recognized. There
was no cost of sales for the nine months ended September 30, 1999 since there
was no sales activity.

Operations, administration and maintenance. Operations, administration and
maintenance expense was $36.5 million for the nine months ended September 30,
2000 which was related to the costs to provide operating, administration and
maintenance functions for Pacific Crossing-1. There was no operations,
administration and maintenance expense for the nine months ended September 30,
1999 because Pacific Crossing Ltd. was not consolidated.

General and administrative. General and administrative costs for the nine
months ended September 30, 2000 were $35.8 million, which consisted principally
of salaries and employee benefits reflecting our staffing for multiple systems,
travel costs, professional fees and shared corporate service charges allocated
from Global Crossing. The general and administrative costs for the nine months
ended September 30, 1999 were insignificant since we were formed in September
1999.

Depreciation and amortization. Depreciation and amortization expense was
$13.5 million for the nine months ended September 30, 2000 relating primarily to
Pacific Crossing-1. There was no depreciation and amortization expense for the
nine months ended September 30, 1999 because Pacific Crossing-1 was not ready
for service.

Equity in income (loss) of affiliates. The equity in loss of affiliates
for the nine months ended September 30, 2000 increased to $33.5 million from
$7.8 million for the same period in 1999. The increase was primarily due to
$28.0 million equity in loss of Hutchison Global Crossing in 2000. We did not
account for Hutchison Global Crossing under the equity method of accounting
until January 2000.

Minority interest. Minority interest for the nine months ended September
30, 2000 was ($9.6) million which primarily represents our joint venture
partners' equity interest in the income of Pacific Crossing Ltd. We did not have
any minority interest until we consolidated Pacific Crossing Ltd. in January
2000.

Interest income. Interest income of $11.4 million for the nine months
ended September 30, 2000 relates primarily to returns on invested cash
contributed by Microsoft and Softbank and restricted cash for the construction
of Pacific Crossing-1. Interest income of $8.7 million for the nine months ended
September 30, 1999 relates primarily to the returns on invested restricted cash
for the construction of Pacific Crossing-1.

Interest expense. Interest expense of $1.6 million for the nine months
ended September 30, 2000 relates to the Pacific Crossing-1 credit facility.
There was no interest expense for the nine months ended September 30, 1999
because Pacific Crossing Ltd. was not consolidated.

Provision for income taxes. Bermuda does not impose a statutory income
tax, and consequently no provision for income taxes was recorded for entities
incorporated in Bermuda. We established a full valuation allowance as of
September 30, 2000 for all entities incurring a net loss and operating in taxing
jurisdictions to offset tax benefits recorded by entities without an operating
history. A valuation allowance is necessary until such time as we can quantify
any potential tax attributes related to the operating losses and the
realizability of those potential attributes. During the nine months ended
September 30, 2000, we recognized a provision for income taxes of $1.4 million
to provide for taxes on profits earned from telecommunication services where our
subsidiaries have a presence in taxable jurisdictions.

Net income (loss). For the nine months ended September 30, 2000, our net
loss was $88.3 million as compared to net income of $0.8 million for the nine
months ended September 30, 1999.

Proportionate Adjusted EBITDA. For the nine months ended September 30,
2000, we reported Proportionate Adjusted EBITDA of $86.6 million. The
Proportionate Adjusted EBITDA for the nine months ended September 30, 1999 was
$(6.3) million.
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RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 AND PERIOD FROM
APRIL 1, 1998 TO DECEMBER 31, 1998

Revenue. Proportionate Cash Revenue was $36.3 million for the year ended
December 31, 1999 which represents our proportionate ownership interest of
Pacific Crossing-1's cash revenue. Group customers cash revenue was $62.9
million for the year ended December 31, 1999, representing Pacific Crossing-1's
cash revenue. There was no cash revenue in 1998 since our systems were not in
service yet.

General and Administrative. General and administrative costs for the year
ended December 31, 1999 were $1.2 million. These charges consist principally of
salaries and employee benefits, travel costs, professional fees and management
service charges allocated from Global Crossing. There was no general and
administrative expense in 1998. The increase is attributable to costs incurred
after our formation.

Equity in income (loss) of affiliates. Income from affiliates for the year
ended December 31, 1999 was $3.0 million. During the period from April 1, 1998,
date of inception, to December 31, 1998, we reported a $2.5 million loss from
affiliates. In 1999, our equity in income of Pacific Crossing Ltd. was partially
offset by our equity in loss of Global Access Limited. In 1998, both affiliates
recorded net losses.

Interest income. Interest income for the year ended December 31, 1999 was
$11.6 million. During the period from April 1, 1998, date of inception, to
December 31, 1998, we reported interest income of $5.4 million. The increase of
115% is due to earnings on investments of restricted funds for the construction
of Pacific Crossing-1.

Net income. During the year ended December 31, 1999, we reported net
income of $13.4 million. During the period from April 1, 1998, date of
inception, to December 31, 1998, we reported net income of $2.9 million. The
increase of 362% was primarily due to the increase of equity in income (loss) of
affiliates and interest income.

Proportionate Adjusted EBITDA. For the year ended December 31, 1999, we
reported proportionate adjusted EBITDA of $20.2 million. The proportionate
adjusted EBITDA for the period from April 1, 1998 to December 31, 1998 was
($0.9) million.

LIQUIDITY AND CAPITAL RESOURCES

We estimate the cost of Pacific Crossing-1 to be approximately $1.1
billion. We have fully financed Pacific Crossing-1 through shareholder equity
investments and the $850 million Pacific Crossing-1 credit facility, under which
$750 million was outstanding at September 30, 2000.

We estimate the cost of East Asia Crossing connecting Japan, Hong Kong,
Taiwan, Korea, Malaysia, the Philippines and Singapore to be approximately $1.3
billion over the next two years.

On October 12, 2000, we completed our initial public offering in which we
sold 68 million shares of our Class A common stock at a price of $7.00 per
share. The net proceeds of the initial public offering after deducting
underwriting discounts, commissions and costs were approximately $452 million.
Concurrent with the initial public offering, we issued the outstanding notes for
net proceeds of approximately $389 million. The outstanding notes have a face
value of $408 million, mature on October 15, 2010 and bear an interest rate of
13.375%. Interest on the outstanding notes is payable on April 15 and October 15
of each year, beginning April 15, 2001. We have used and are using the
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<PAGE> 62

proceeds of these offerings for the construction of our network, the expansion
of our business and general corporate purposes.

Concurrently with the closing of our initial public offering, we entered
into two subordinated notes (the "Subordinated Notes") with Global Crossing.
Under the terms of the Subordinated Notes, Global Crossing committed to loan us
up to $200 million under each note which can be reduced by Global Crossing in an
amount based on any net cash proceeds received by us from (a) the issuance of
any shares of the our capital stock subsequent to our initial public offering
(excluding any shares sold as part of the exercise by the underwriters of their
overallotment option in connection with the initial public offering) and (b) the
issuance of any indebtedness which meet certain conditions under the terms of
the Subordinated Notes. One of the Subordinated Notes is available for
borrowings until certain conditions are met and the second Subordinated Note is
available for borrowings until December 31, 2002. The Subordinate Notes mature
on April 15, 2011 and bear interest at a rate of 14.875% per annum. Interest
shall be payable in cash semi-annually in arrears on April 15 and October 15 of
each year, commencing on April 15, 2001; provided that interest due on or before
October 15, 2005 will be paid by increasing the outstanding principal amount. We
are permitted to use the proceeds of the Subordinated Notes to pay a portion of
the costs of building our network, operating expenses, interest on our
indebtedness and general corporate purposes.

In light of the unfavorable market conditions at the time of the initial
public offering, we subsequently determined to amend the formula pursuant to
which the number of shares of our Class A common stock underlying options is
granted to employees. Previously, the number of option shares we authorized for
each employee was calculated by dividing a specified amount for each employee by
the initial public offering price of our Class A common stock, $7.00 per share.
Pursuant to the amended option formula, the number of each employee's option
shares will be calculated by dividing such employee's specified option amount by
$10.00. The effect of this amendment was to decrease the percentage of
outstanding option shares held by (a) our five most highly compensated employees
from 5.48% to 4.07% of our total outstanding shares and (b) all of our employees
from 7.85% to 5.49% of total outstanding shares. Subsequent to this reduction in
shares, we issued approximately 8,300,900 option shares which was approximately
1.5% of our total outstanding shares.

A total of approximately 83.2 million shares are currently authorized for
issuance under our Stock Incentive Plan. As of the date hereof, approximately
38.8 million shares of our options have been granted under the Stock Incentive
Plan. The maximum number of shares for which options and stock appreciation
rights may be granted during each calendar year to any participant is 5,000,000
shares. No award may be granted under the Stock Incentive Plan after the tenth
anniversary of its effective date, but awards granted before that date may
extend beyond that date.

We have extended limited amounts of financing to customers in connection
with certain capacity sales. Our customer financing terms may provide for
installment payments of up to four years. We believe that our extension of
financing to our customers will not have a material effect on our liquidity.

Cash provided by operating activities was $145.3 million and $8.7 million
for the nine months ended September 30, 2000 and 1999, respectively. The
balances principally represent cash received from capacity sales and interest
income received, less general and administrative expenses paid.

Cash used in investing activities was $415.6 million and $12.0 million for
the nine months ended September 30, 2000 and 1999, respectively. The balances
primarily represent cash paid for construction in progress, purchases of
property and equipment and cash paid for investments. The increase in cash used
in investing activities primarily relates to construction activities and
business expansions.

Cash provided by financing activities was $364.3 million for the nine
months ended September 30, 2000 and none for the nine months ended September 30,
1999, respectively. The increase in cash provided by financing activities
primarily relates to capital contributions from shareholders and joint venture
partners.

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As of September 30, 2000, we had $103.8 million in cash and cash
equivalents and $75.7 million in restricted cash and cash equivalents.

We have a substantial amount of indebtedness. Based upon the current level
of operations, our management believes that our cash flows from operations,
together with the net proceeds from our initial public offering of common stock
and our private offering of the outstanding notes, available borrowings under
Pacific Crossing-1 credit facility, and if necessary, the Subordinated Notes,
will be adequate to meet our anticipated requirements for working capital,
capital expenditures, discretionary investments, interest payments and scheduled
principal payments for the foreseeable future. There can be no assurance,
however, that our business will continue to generate cash flow at or above
current levels or that currently anticipated improvements will be achieved.
Also, there can be no assurance that our business and our continued ability to
raise capital will be adequate to meet our anticipated requirements for working
capital, capital expenditures, discretionary investments, interest payments and
scheduled principal payments for the foreseeable future. If we are unable to
meet our current capital needs, we may be required to reduce capital
expenditures, refinance all or a portion of our existing debt or obtain
additional financing.

Pacific Crossing Ltd. entered into an operations, administration and
maintenance agreement with Global Crossing Network Center, Ltd. The agreement is
for an initial term of eight years with two renewal periods of five years each
at Pacific Crossing Ltd.'s option. The amounts payable under the agreement are
$43 million, $43 million and $42.2 million for year 2000, 2001 and 2002,
respectively. These fees will increase by 3.0% each year starting in the year
ended December 31, 2003, through the end of the agreement in 2007.

Pacific Crossing Ltd. also has an operations, administration and
maintenance agreement with Global Access Limited with a fee of $5.8 million each
year through 2002, increasing by 3.0% thereafter through 2007.

We have agreed to form a joint venture company, to be owned 33% by
ourselves and 67% by Exodus, to offer a full range of Internet operations
outsourcing services to customers in Asia, including Web-hosting services,
managed service offerings, professional services and content distribution.
Pursuant to the joint venture agreement we will contribute $33 million in cash
and all of our Web-hosting and related assets to the joint venture. In addition,
the board of directors of the joint venture may require us to make additional
capital contributions of up to $167 million over the three-year period following
formation of the joint venture.

As of September 30, 2000, on a pro forma basis giving retroactive effect to
the contribution to us of Global Crossing's interests in Hutchison Global
Crossing and Global Access Limited, the private offering of our outstanding
notes and our initial public offering of common stock, we and our consolidated
subsidiaries had a total of $1.15 billion of long-term debt, of which $750
million was outstanding under the Pacific Crossing-1 credit facility. The
Pacific Crossing-1 credit facility comprised of a $840 million term loan
facility and a $10 million working capital facility. As of September 30, 2000,
we have drawn $750 million of borrowings under the term loan facility and have
remaining available borrowings of $90 million under the term loan facility and
$10 million under the working capital facility. On a pro forma basis, our
interest expense for the nine months ended September 30, 2000 would have been
$30.6 million.

INFLATION

We do not believe that our business is impacted by inflation to a
significantly different extent than the general economy.

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INTEREST RATE RISK

The table below provides information about the Company's market sensitive
financial instruments and constitutes a "forward-looking statement." The
Company's major market risk exposure is changing interest rates. The Company's
policy is to manage interest rates through the use of a combination of fixed and
floating rate debt. Interest rate swaps may be used to adjust interest rate
exposures when appropriate, based upon market conditions.

<TABLE>
<CAPTION>
FAIR VALUE
SEPTEMBER 30,
EXPECTED MATURITY DATES 2000 2001 2002 2003 2004 THEREAFTER TOTAL 2000
----------------------- ---- ------- ------- -------- -------- ---------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DEBT
Non Current -- US$ denominated
Pacific Crossing Credit
Facility........................ -- $83,260 $93,260 $113,260 $118,260 $341,960 $750,000 $750,000(1)
Average interest
rates -- variable.............
DERIVATIVE INSTRUMENTS
Interest rate swap floating for
fixed
Contract notional amount.......... -- -- -- -- $500,000 -- $500,000 $519,596(2)
Fixed rate paid by
counterparty..................
Floating rate paid by us........ 5.0%
</TABLE>

---------------
(1) The interest rates are one month US dollar LIBOR + 2.25 -- 2.50%, which were
8.9 -- 9.1% as of September 30, 2000.

(2) The interest rate is one month United States dollar LIBOR, which was 6.6% as
of September 30, 2000.

A hypothetical 10% change in interest rate would result in an increase or
decrease of approximately $7.9 million to the fair value of financial
instruments with exposures to interest rate risk as of September 30, 2000.

FOREIGN CURRENCY RISK

For those subsidiaries using the U.S. dollar as their functional currency,
translation adjustments are recorded in the accompanying condensed consolidated
statements of operations.

For those subsidiaries not using the U.S. dollar as their functional
currency, assets and liabilities are translated at exchange rates in effect at
the balance sheet date and income and expense accounts at average exchange rates
during the period. Resulting translation adjustments are recorded directly to a
separate component of shareholders' equity. As of and for the nine months ended
September 30, 2000 and 1999, the translation adjustments were immaterial.
Foreign currency transaction gains and losses are included in the statements of
operations as incurred.

HUTCHISON GLOBAL CROSSING

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND THE SIX
MONTHS ENDED JUNE 30, 1999

Revenue. Revenue increased 18.3% from HK$393.1 million in 1999 to HK$465.2
million in 2000. The increase was primarily due to increases in the number of
data leased lines and the number of subscribers to the ISP/portal services.
During the six months ended June 30, 2000 and 1999, respectively, there was no
difference between revenue and cash revenue.

Income (loss) from continuing operations. Loss from continuing operations
increased 14.9% from HK$(113.9) million in 1999 to HK$(130.9) million in 2000.
The increase was primarily due to the increase in depreciation and network
costs. Depreciation expense was higher in 2000 and in line with the increase in
fixed assets.

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Adjusted EBITDA. Adjusted EBITDA decreased 8.3% from HK$(43.5) million in
1999 to HK$(47.1) million in 2000, primarily due to the increase in network
costs. Adjusted EBITDA is defined as operating income (loss), plus goodwill
amortization, depreciation and amortization, non-cash cost of capacity sold,
stock related expenses and incremental cash deferred revenue. We anticipate that
this definition will be consistent with financial covenants to be contained in
our significant financing agreements. We present Adjusted EBITDA because it is a
financial indicator used by investors and analysts to analyze and compare
companies on the basis of operating performance and because we believe that
Adjusted EBITDA is an additional, meaningful measure of performance and
liquidity. We expect to use Adjusted EBITDA to monitor our compliance with our
financial covenants and to understand the financial indicators investors and
analysts are using to measure our performance. You should not consider this
information as an alternative to any measure of performance as promulgated under
GAAP. Our calculation of Adjusted EBITDA may be different from the calculation
used by other companies and, therefore, comparability may be limited.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE YEAR ENDED
DECEMBER 31, 1998

Revenue. Revenue decreased 11.5% from HK$950.1 million in 1998 to HK$840.5
million in 1999. The decrease was mainly due to declines in call volume and
reductions in prices resulting from increased competition for international
services. Strong growth in revenue from data and ISP/portal services partially
offsets the lower revenue from international services. Data and ISP/portal
services revenue contributed over 20% of the total revenue in 1999 compared to
4.1% in 1998. During the years ended December 31, 1999 and 1998, there was no
incremental cash deferred revenue.

Income (loss) from continuing operations. Loss from continuing operations
decreased 10.3% from HK$(279.5) million in 1998 to HK$(250.8) million in 1999.
The decrease was primarily due to a decrease of cost of services related to the
lower call volumes and prices, offset in part by an increase in selling, general
and administrative expenses.

Adjusted EBITDA. Adjusted EBITDA improved by 38.4% from HK$(162.8) million
in 1998 to HK$(100.3) million in 1999, primarily due to an improvement in the
overall gross profit margin as a result of an increasing proportion of higher
margin data services business. Adjusted EBITDA is defined as operating income
(loss), plus goodwill amortization, depreciation and amortization, non-cash cost
of capacity sold, stock related expenses and incremental cash deferred revenue.
We anticipate that this definition will be consistent with financial covenants
to be contained in our significant financing agreements. We present Adjusted
EBITDA because it is a financial indicator used by investors and analysts to
analyze and compare companies on the basis of operating performance and because
we believe that Adjusted EBITDA is an additional, meaningful measure of
performance and liquidity. We expect to use Adjusted EBITDA to monitor our
compliance with our financial covenants and to understand the financial
indicators investors and analysts are using to measure our performance. You
should not consider this information as an alternative to any measure of
performance as promulgated under GAAP. Our calculation of Adjusted EBITDA may be
different from the calculation used by other companies and, therefore,
comparability may be limited.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 AND THE YEAR ENDED
DECEMBER 31, 1997

Revenue. Revenue decreased 24.7% from HK$1,262.1 million in 1997 to
HK$950.1 million in 1998. In 1997, revenue came primarily from international
services. The decrease was primarily due to the declines in call volume and
reductions in prices resulting from increasing competition. Revenue from
business and carrier data increased significantly in 1998 although it only
represented 4% of revenue. During the years ended December 31, 1998 and 1997,
there was no incremental cash deferred revenue.

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Income (loss) from continuing operations. Loss from continuing operations
decreased 21.7% from HK$(356.8) million in 1997 to HK$(279.5) million in 1998.
The decrease was primarily due to a decrease of cost of services related to the
lower call volumes and prices.

Adjusted EBITDA. Adjusted EBITDA improved by 44.2% from a loss of
HK$(291.9) million in 1997 to a loss of HK$(162.8) million in 1998, primarily
due to an improvement in the overall gross profit margin following the reduction
in charges by other carriers for international delivery. Adjusted EBITDA is
defined as operating income (loss), plus goodwill amortization, depreciation and
amortization, non-cash cost of capacity sold, stock related expenses and
incremental cash deferred revenue. We anticipate that this definition will be
consistent with financial covenants to be contained in our significant financing
agreements. We present Adjusted EBITDA because it is a financial indicator used
by investors and analysts to analyze and compare companies on the basis of
operating performance and because we believe that Adjusted EBITDA is an
additional, meaningful measure of performance and liquidity. We expect to use
Adjusted EBITDA to monitor our compliance with our financial covenants and to
understand the financial indicators investors and analysts are using to measure
our performance. You should not consider this information as an alternative to
any measure of performance as promulgated under GAAP. Our calculation of
Adjusted EBITDA may be different from the calculation used by other companies
and, therefore, comparability may be limited.

GLOBAL ACCESS LIMITED

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND THE SIX
MONTHS ENDED JUNE 30, 1999

Revenue. In 2000, Global Access Limited recognized revenue of Y864.7
million. Sales from terrestrial capacity in 2000 generated revenue of Y260.8
million. Global Access Limited amortizes revenue from sales of terrestrial
capacity over 15 years on a straight-line basis, with amounts due or received
but not yet recognized, recorded as deferred revenue. In addition, Global Access
Limited recorded revenue of Y477.6 million for operations, administration and
maintenance services. Cash revenue was Y10,203.9 million for the first half of
2000. Global Access Limited did not record any revenue or cash revenue in the
first half of 1999.

Income (loss) from continuing operations. Loss from continuing operations
increased 62.9% from Y(533.8) million in 1999 to Y(869.5) million in 2000. The
increase was primarily due to an increase in operating expense and partially
offset by the increase of recognized revenue. The increase in general and
operating expenses was primarily due to increasing system planning, development
and design activities.

Adjusted EBITDA. Adjusted EBITDA increased from Y(534.1) million in 1999 to
Y8,710.3 million in 2000. The increase was principally due to an increase in
incremental cash deferred revenue after the system became operational. Adjusted
EBITDA is defined as operating income (loss), plus goodwill amortization,
depreciation and amortization, non-cash cost of capacity sold, stock related
expenses and incremental cash deferred revenue. We anticipate that this
definition will be consistent with financial covenants to be contained in our
significant financing agreements. We present Adjusted EBITDA because it is a
financial indicator used by investors and analysts to analyze and compare
companies on the basis of operating performance and because we believe that
Adjusted EBITDA is an additional, meaningful measure of performance and
liquidity. We expect to use Adjusted EBITDA to monitor our compliance with our
financial covenants and to understand the financial indicators investors and
analysts are using to measure our performance. You should not consider this
information as an alternative to any measure of performance as promulgated under
GAAP. Our calculation of Adjusted EBITDA may be different from the calculation
used by other companies and, therefore, comparability may be limited.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE YEAR ENDED
DECEMBER 31, 1998

Revenue. In 1998 and 1999, Global Access Limited was constructing the
Global Access Limited network. A portion of the system connecting from Ajigaura
to Tokyo commenced service in December
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1999. Before December 1999, Global Access Limited had no significant operations
other than planning and constructing the network. In December 1999, Global
Access Limited generated revenue from sale of capacity to us. Revenue recognized
in 1999 was Y1.4 million. During the years ended December 31, 1999 and 1998,
there was no incremental cash deferred revenue.

Income (loss) from continuing operations. Loss from continuing operations
increased 458.7% from Y(244.0) million in 1998 to Y(1,363.2) million in 1999.
The increase was primarily due to an increase in general and administrative
expenses and an increase in start-up expenses. The increase in general and
administrative expenses primarily consist of an increase of payroll expense of
Y301.3 million, rent expense of Y108.7 million and start-up charges of Y434.1
million. The increase related to the significant increased planning and
construction activities in 1999. Start-up expenses principally contain various
consulting fees and engineering charges paid to outside companies for the
planning, development and design of the Global Access Limited system.

Adjusted EBITDA. Adjusted EBITDA decreased from Y(244.1) million in 1998 to
Y(1,312.3) million in 1999. The decrease was due to an increase in operating
expenses. Adjusted EBITDA is defined as operating income (loss), plus goodwill
amortization, depreciation and amortization, non-cash cost of capacity sold,
stock related expenses and incremental cash deferred revenue. We anticipate that
this definition will be consistent with financial covenants to be contained in
our significant financing agreements. We present Adjusted EBITDA because it is a
financial indicator used by investors and analysts to analyze and compare
companies on the basis of operating performance and because we believe that
Adjusted EBITDA is an additional, meaningful measure of performance and
liquidity. We expect to use Adjusted EBITDA to monitor our compliance with our
financial covenants and to understand the financial indicators investors and
analysts are using to measure our performance. You should not consider this
information as an alternative to any measure of performance as promulgated under
GAAP. Our calculation of Adjusted EBITDA may be different from the calculation
used by other companies and, therefore, comparability may be limited.

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BUSINESS

OVERVIEW

We intend to be a leading pan-Asian telecommunications carrier that
provides Internet, data, voice and Web-hosting services to wholesale and
business customers. We are building an end-to-end network across Asia that will
include:

- subsea cables;

- terrestrial connections to our landing sites, commonly known as backhaul;

- national networks;

- city fiber networks;

- space, security and environmental controls for equipment owned by various
carriers, commonly known as telehouses; and

- Web-hosting centers.

We plan to extend our network of undersea cables, national terrestrial
networks, city fiber networks, telehouses and Web-hosting centers to principal
commercial and financial centers in Asia in order to provide our portfolio of
broadband and Internet services on a pan-Asian basis. Our network is planned to
connect Japan, Hong Kong, Taiwan, Korea, Malaysia, Singapore and the Philippines
to the United States. With these countries connected, our network will address a
combined Asian population of approximately 304.3 million with an aggregate 1999
gross domestic product or GDP of approximately $5.4 trillion. As regulations
permit, our network will also connect to China, which has a population of
approximately 1.3 billion and a 1999 GDP of approximately $1.0 trillion. We
intend to expand our network to other Asian countries as customer demand
requires. In addition, we will offer worldwide Internet, data, voice and
Web-hosting services to wholesale and multinational business customers via
Global Crossing's state-of-the-art fiber optic network of global scale and
scope.

In order to establish strong competitive positions in two of Asia's largest
telecommunications markets, we have formed joint ventures in Japan and Hong
Kong. In Japan, we have established Global Access Limited, a joint venture with
Vectant, Inc., a subsidiary of Marubeni, as well as GlobalCenter Japan, a joint
venture with Internet Research Institute and Softbank. We will contribute our
remaining interest in GlobalCenter Japan to our joint venture with Exodus. In
Hong Kong, we have formed Hutchison Global Crossing, a joint venture with
Hutchison Whampoa. We have also recently formed a joint venture in the
Philippines with Digital Telecommunications, Phils., Inc. and BI Group o/b
Broadband Infrastructure Group Ltd. We are actively pursuing strategic alliances
in other markets, where we believe that local partners bring established network
infrastructure, sales and marketing capabilities or beneficial relationships to
our business.

Through direct ownership and our interests in joint ventures, we have
constructed and are expanding a state-of-the-art network through which we will
deliver a broad portfolio of communications services to our customers. Our
network consists of the following network elements in the markets indicated:

- Trans-Pacific: We currently operate and have a controlling interest in
Pacific Crossing-1, a subsea cable that connects Japan to the United
States, where it seamlessly connects to the Global Crossing network.
Pacific Crossing-1 is designed to operate initially at 80 Gbps of service
capacity and is upgradeable to a minimum of 640 Gbps using dense
wavelength multiplexing technology.

- East Asia: We are now constructing East Asia Crossing, a subsea cable
that connects Japan to Hong Kong. We expect to extend East Asia Crossing
to Taiwan and Korea in the first half of 2001 and, at a later time, to
Malaysia, the Philippines and Singapore and, if and when regulations
permit, China. East Asia Crossing is designed to operate initially at
80 Gbps of service capacity and is upgradeable to a minimum of 2.56 Tbps,
which would be the highest capacity introduced to date in Asia.

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- Japan: We currently connect one landing station for Pacific Crossing-1 to
our Tokyo city fiber network, telehouse and regional operating center via
facilities owned and operated by Global Access Limited. Global Access
Limited is expanding its network to Osaka, Nagoya and cable landing
stations for other subsea cables in Japan. In addition, GlobalCenter
Japan became operational in April 2000 and is providing Web-hosting and
Internet infrastructure services to customers.

- Hong Kong: Hutchison Global Crossing owns and operates the largest
fully-fiber optic network in Hong Kong, over which Hutchison Global
Crossing provides Internet, data and voice services. In addition,
Hutchison Global Crossing owns a GlobalCenter data center, which began
its operations in June 2000. We expect that the Web-hosting business of
Hutchison Global Crossing may be contributed to our joint venture with
Exodus.

- Web-hosting: On September 27, 2000, we entered into an agreement with
Exodus Communications, Inc. that provides for the creation of a joint
venture company to be owned 33% by ourselves and 67% by Exodus. The
company, to be known as Exodus Asia-Pacific, will offer a full suite of
Internet operations outsourcing services to customers in Asia, including
Web-hosting services, managed service offerings, professional services
and content distribution.

Exodus is a leading provider of Internet operations outsourcing services.
Exodus conducts its business through a worldwide network of Internet data
centers located in North America, Europe and Asia-Pacific. Exodus is quoted on
the Nasdaq National Market.

We intend to replicate the network and service capabilities that we
currently offer in Japan and Hong Kong in each market to which we extend our
network. In addition, we intend to expand our Web-hosting business and Internet
infrastructure services to our target markets in Asia through joint ventures
with Exodus and local partners.

Through our high-speed Asian network, our portfolio of service offerings
and our connection to the Global Crossing network, we believe we are uniquely
positioned to meet the demands of our customers. We expect our customers will
primarily include new and incumbent telecommunications and Internet companies,
as well as multinational corporations. We believe that, at present, these
customers have a limited choice of independent service providers capable of
offering high-capacity, reliable, secure and cost-effective services within
Asia, which provides us with significant market opportunities. As of September
30, 2000, our customers included AboveNet, Cable & Wireless IDC, Exodus, KDD,
Qwest and Teleglobe. For the nine months ended September 30, 2000, Qwest
accounted for 44.9% of our supplemental consolidated revenue, KDD accounted for
13.3% of our supplemental consolidated revenue, Teleglobe accounted for 10.9% of
our supplemental consolidated revenue, and AboveNet accounted for 8.3% of our
supplemental consolidated revenue. Our supplemental revenue for the nine months
ended September 30, 2000 was $130.5 million.

RECENT BUSINESS DEVELOPMENTS

Taiwan. On September 15, 2000 and later amended on December 12, 2000, we
entered into an agreement to form a joint venture with Microelectronics
Technology Inc. The joint venture will be owned 60% by us and 40% by
Microelectronics Technology Inc. The joint venture became the first
telecommunications company to receive an approval of its international submarine
cable circuit leasing license, subject to certain conditions. This license
allows us to land our East Asia Crossing Cable in Taiwan and to lease broadband
capacity. We expect the joint venture will also acquire, construct, operate and
maintain a cable station, a backhaul system and a telehouse in Taiwan. Finally,
we expect the joint venture will market and sell in Taiwan capacity on the joint
venture's backhaul system.

Microelectronics Technology Inc. is Taiwan's first microwave technology
firm which designs, manufactures and supplies a broad range of microwave
integrated circuit products used for satellite broadcasting, communications and
telecommunications. Microelectronics Technology, Inc. has evolved

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from a microwave component manufacturer to a global provider of wireless
communications subsystems and systems.

On May 23, 2000, we invested $25 million in Digital United Holdings
Limited, or Digital United, in return for a 4% equity interest. In addition, we
and Digital United have agreed to use our reasonable efforts to explore
opportunities for cooperation in the data center business in Taiwan.

Digital United is the second largest provider of Internet access services
in Taiwan, offering dial-up, dedicated Internet access and broadband access
technologies. Digital United also provides intranets and virtual private
networks, e-commerce solutions, Internet services and Chinese language Internet
portals.

Korea. On June 2, 2000, we entered into a non-binding memorandum of
understanding with DACOM Corporation to build and operate a cable station for
East Asia Crossing, a backhaul network and a telehouse in Korea. Through joint
ventures, we plan to exploit Internet business and e-commerce opportunities in
Korea and the Asia-Pacific region. In addition, under the terms of the
memorandum of understanding, DACOM will purchase capacity on East Asia Crossing
and Pacific Crossing-1. This memorandum of understanding is non-binding and is
subject to us reaching definitive agreements with DACOM. We cannot assure you
when or even that we will reach definitive agreements with DACOM or, if we do
reach definitive agreements, what the terms of those agreements will be.

On November 21, 2000, we entered into a landing agreement with DACOM for
the Korean portion of East Asia Crossing. DACOM will have title to the cable
landing station and the portion of East Asia Crossing cable in Korean waters. We
will own and lease to DACOM the electronic equipment located inside the cable
station required to connect the East Asia Crossing cable.

DACOM is a leading Korean telecommunications company, providing Internet
and other on-line services, as well as wireline phone services, domestic and
international long distance, data and satellite telecommunications services.
DACOM is a publicly traded company in Korea.

Japan. On May 31, 2000, we and GlobalCenter Japan entered into an Internet
data center operations agreement with NTT Data Corporation to develop and
operate a technology park in a special purpose telecom building developed by NTT
Data in central Tokyo. The technology park concept is intended to leverage the
strengths of each party to the agreement; NTT Data's facilities, specialized
applications and systems integration expertise; our fiber optic network and IP
platform and GlobalCenter Japan's expertise in data center operations, to offer
building tenants an integrated data hosting and connectivity solution. The
agreement is subject to our reaching agreement on a number of related terms. We
cannot assure you when or even that we will reach an agreement on those terms
with NTT Data or, if we do reach an agreement, what the terms of that agreement
will be.

NTT Data is Japan's leading systems integrator and is engaged in
constructing systems in a wide array of sectors. These operations range from
large-scale projects in the financial and public administrative sectors,
including government entities, to diverse corporate networks.

Singapore. On May 20, 2000, we entered into a non-binding memorandum of
understanding with Singapore Technologies Telemedia to enter into joint venture
agreements for the purpose of forming two joint ventures, each of which will be
50% owned by each of us and Singapore Technologies Telemedia. The first joint
venture will build and operate backhaul and telehouses in Singapore, providing
us with the necessary components to extend East Asia Crossing into Singapore.
The joint venture's terrestrial network will also link to the Global Crossing
network through East Asia Crossing. In October 2000, the joint venture received
from the InfoComm Development Authority of Singapore a facilities-based operator
license which is pending perfection subject to our submission of a performance
bond by January 2001. This license entitles the joint venture to land East Asia
Crossing in Singapore, including the cable station, backhaul and telehouse. The
second joint venture will build and operate a GlobalCenter data center in
Singapore, which will adhere to GlobalCenter technical specifications. In
addition, under the terms of the memorandum of understanding, Singapore
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Technologies Telemedia has committed to purchase capacity on our network,
subject to our reaching definitive agreements with Singapore Technologies
Telemedia regarding the two joint ventures. We cannot assure you when or even
that we will reach definitive agreements with Singapore Technologies Telemedia
or, if we do reach definitive agreements, what the terms of those agreements
will be.

Singapore Technologies Telemedia is a leading global info-communications
service provider, which offers a wide suite of services through various
subsidiaries and associates. These services include fixed and mobile telephony,
e-commerce solutions and services, paging, mobile data communications and a
digital mobile communications network. Singapore Technologies Telemedia is a
wholly-owned subsidiary of Singapore Technologies Group, a multinational company
headquartered in Singapore.

Philippines. On December 17, 2000, we entered into an agreement with
Digital Telecommunications Phils., Inc., or Digitel, and BI Group o/b Broadband
Infrastructures Group Ltd., or BI Group, that provides for the creation of a
joint venture company. The company, to be known as Digital Asia Global Crossing
Inc., will be owned 40% by us, 40% by Digital Telecommunications and 20% by BI
Group. Digital Asia Global Crossing Inc. will develop, construct, own or lease,
operate and maintain a ring protected terrestrial backhaul network in the
Philippines and provide related services. Also, Digitel agreed to purchase $40
million of capacity on our network and BI Group agreed to purchase $20 million.

Digitel is one the largest providers of telecommunications services in the
Philippines, offering a full suite of products to its voice, data and Internet
access customers. Digitel is the telecommunications provider of JG Summit
Holdings, Inc., one of the largest business conglomerates in the Philippines.

BI Group is a Manila-based telecommunications investment and holding
company, focused on developing and consolidating bandwidth-intensive businesses
throughout Southeast Asia.

THE OPPORTUNITY FOR BROADBAND INTERNET AND DATA SERVICES IN ASIA

Asia is made up of a number of countries and territories with a wide range
of demographic characteristics and significant variances in the level of
development in their telecommunications infrastructure and differing regulatory
environments. The market opportunity for us to extend our network and offer our
services varies widely by country depending on a combination of these factors.
We intend to expand our network to serve the most important routes for Internet,
data and voice traffic which connect principal commercial and financial centers
in Asia. We have already established operations in Japan and Hong Kong, two of
the largest telecommunications markets in Asia. We also expect to serve six
other key Asian markets: Taiwan, Korea, Singapore, Malaysia, the Philippines
and, if and when regulations permit, China. These initial eight countries
account for a significant portion of the market opportunity for broadband
Internet and data services in Asia.

LARGE, HIGH GROWTH ECONOMIES

As of 1999, Asia had a total population of approximately 3.2 billion and an
aggregate 1999 GDP of $7.3 trillion, compared to the United States, which had a
population of approximately 273 million and a GDP of $9.2 trillion. The seven
countries that we are initially focusing on, together with China, accounted for
approximately $6.4 trillion or 87% of the combined GDP of Asia. Most of the
economies of Asia have experienced significant economic growth over the past
decade and have rebounded from the recent economic downturn. The combined GDP of
Asia, not including Japan, grew 6.0% in 1999. This compares favorably to GDP
growth of 4.0% in the United States during the same period. The International
Monetary Fund forecasts growth of combined GDP for Asia, not including Japan,
growing 6.2% in 2000. Although Japan has experienced prolonged recessionary
conditions, it remains the world's second largest economy, with a GDP of
$4.3 trillion, and is a key financial, commercial and technological center.

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The table below presents selected statistical data in our key target
markets in Asia. We derived the information presented in the first and second
columns below from the Economist Intelligence Unit, 1999. We derived the
information presented in the third column below from the World Development
Report, 1999.

<TABLE>
<CAPTION>
GDP
POPULATION US DOLLARS
IN MILLIONS IN BILLIONS TELEDENSITY
(1999) (1999) (1997)
----------- ----------- -----------
<S> <C> <C> <C>
Japan.................................................... 126.7 $4,352 479
Hong Kong................................................ 6.8 149 565
South Korea.............................................. 46.9 395 444
Taiwan................................................... 22.0 289 N/A
Singapore................................................ 3.2 89 543
Malaysia................................................. 21.9 79 195
Philippines.............................................. 76.8 76 29
China.................................................... 1,254.6 976 56
------- ------
Total............................................... 1,558.9 6,405
======= ======
</TABLE>

CONCENTRATION OF TELECOMMUNICATIONS MARKETS AND MULTINATIONAL CORPORATIONS

A significant portion of Asia's economic activity is focused in a
relatively small number of commercial and financial centers. These centers
contain a high concentration of people, multinational corporations and resulting
demand for telecommunications capacity. We believe that this concentration of
potential customers provides an opportunity for new competitive service
providers to enter these markets efficiently. We believe that the cities in Asia
with the highest concentration of multinational corporations are Tokyo, Hong
Kong, Singapore, Osaka and Taipei. According to International Data Corporation,
75% of Internet users in Asia are located in our target markets.

MARKETS WITH DEVELOPING TELECOMMUNICATIONS AND INTERNET INFRASTRUCTURE

Many markets in Asia have low levels of telecommunications penetration. For
example, the developed markets of Japan and Hong Kong in 1997 had teledensities
of 479 and 565 main lines per 1,000 people. The less developed markets of China
and the Philippines in 1997 had teledensities of 56 and 29 main lines per 1,000
people. By comparison, the United States in 1997 had a teledensity of 644 main
lines per 1,000 people.

The development of Internet access and Internet services in many countries
in Asia is also at an early stage. According to International Data Corporation,
in 1999, there were approximately 29.2 million Internet users in our target
markets, or approximately 20 per 1,000 people, compared to 87.3 million Internet
users in the United States or 320 per 1,000 people. These penetration levels are
low in part because the regulation of domestic markets in favor of incumbent
providers has not promoted and, in certain countries, has impeded investment in
network infrastructure. These penetration levels are also low due to the
relatively higher cost of Internet access in many parts of Asia, where we
believe local access charges are approximately two to four times higher than
comparable charges in the United States.

RAPIDLY DEREGULATING ASIAN TELECOMMUNICATIONS MARKETS

We believe that the ongoing deregulation of Asian telecommunications
markets will create opportunities for new entrants to compete with established
national telecommunications companies. Hong Kong and Korea have partially opened
up their telecommunications markets by awarding licenses to new entrants, some
of whom will, like us, be offering facilities-based services and others who will
be selling services on the facilities of others. Singapore completely opened up
its telecommunications market effective April 1, 2000, two years ahead of
schedule. Taiwan has

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announced the opening of its telecommunications market to new entrants offering
facilities-based services effective August 2000. We believe that this trend
toward deregulation will lead to higher levels of broadband traffic throughout
the region and into and out of the Asian markets.

ATTRACTIVE MARKET FOR INTERNATIONAL CAPACITY IN ASIA

We expect that the same factors that are driving traffic growth in
worldwide Internet, data and voice traffic will drive traffic growth in Asia.
These factors include increasing use of bandwidth-intensive applications;
increase in global commerce; improvements in last-mile access technology, such
as digital subscriber lines and cable modems; a general decline in prices of
telecommunications services; and continuing deregulation of telecommunications
markets. While these factors have already resulted in the proliferation of new
telecommunications service providers and multinational corporations that require
increasing quantities of international bandwidth in the United States and
Europe, they are only beginning to have a similar impact in Asia.

Although there have been several new trans-Atlantic subsea cables completed
in the past few years, there has been a lack of trans-Pacific and intra-Asian
cables. Pacific Crossing-1 is the only significant trans-Pacific cable to begin
operations in the past few years. We believe that any demand and supply
imbalance for international bandwidth in Asia over the next few years will
create an attractive market opportunity for selling our services.

POTENTIAL FOR SIGNIFICANT GROWTH IN DEMAND FOR TELECOMMUNICATIONS AND DATA
SERVICES

We believe that the expected strong economic growth of our target markets,
the relatively underdeveloped infrastructure in those markets and the trend
toward deregulation and increasing competition will result in significant growth
in demand for telecommunications and data services. We also believe that the
introduction of alternative telecommunication technologies, such as mobile
telephony, Internet-based telephony and fixed wireless services, will advance
the penetration of telecommunications services in Asia at a rate which will
surpass those in the United States and European markets.

While Internet penetration in Asia is behind that of the United States, it
is expected to grow at a faster rate. Factors supporting this growth rate
include a heightened awareness of the Internet, incremental demand for new
sources for information and entertainment, the growing availability of local
language content and an expected decline in the cost of access. The
International Data Corporation anticipates that the number of Internet users in
our target markets will grow from 1999 to 2004 at an annual compounded growth
rate of approximately 33%.

OUR STRATEGY

Our goal is to become a leading pan-Asian telecommunications carrier that
provides Internet, data, voice and data center and Internet infrastructure
services to telecommunications carriers and multinational business customers. We
believe that no one else offers a range of services comparable to ours in scope
or quality. We intend to use our competitive position, including our
connectivity to the Global Crossing network, to exploit the rapidly growing
market for bandwidth, Internet services and other advanced communications
services. To accomplish this goal, we are pursuing a strategy built on the
following initiatives:

PROVIDE SERVICES ON A GLOBAL BASIS THROUGH OUR SEAMLESS CONNECTIVITY WITH
GLOBAL CROSSING'S NETWORK

We believe that our relationship with our parent company, Global Crossing,
and the integration of our network with Global Crossing's network will give us a
distinct advantage over our competitors. In Asia we will offer our customers
seamless connectivity to all cities served by Global Crossing. Thus, our service
offerings will be significantly broader than those of our competitors that have
only regional assets. Furthermore, Global Crossing will be an important sales
channel for our services and we expect its sales force to generate significant
incremental sales.

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Key elements of our network will be fully integrated into the Global
Crossing network and Global Crossing's Network Operations Center will have
visibility into key elements of our network. Some of our competitors do not
control their networks on an end-to-end basis as we do. Instead, they lease or
purchase circuits on other carriers' networks. As a result, we believe that we
will be able to offer customers service of scope and quality that some of our
competitors cannot offer.

BUILD THE PREMIER PAN-ASIAN NETWORK FOR PROVIDING INTEGRATED COMMUNICATIONS
SERVICES

Through direct ownership and interests in joint ventures, we plan to build
the premier pan-Asian telecommunications network. Our assets will include subsea
cables, terrestrial networks, city fiber networks, telehouses and, in
conjunction with Exodus, data centers. By integrating and centrally managing
these network and other assets, we expect to provide seamless city-to-city and
business-to-business connectivity to the principal commercial and financial
centers in Asia. In most cases, we intend to maintain a controlling interest in
the key elements of our network, which should give us a cost advantage over our
competitors. We use advanced fiber optic technology, network structures that
eliminate service interruptions by automatically rerouting traffic, dense
wavelength division multiplexing and redundant facilities to provide
state-of-the art, reliable communications services. We deploy our fiber in
network structures which, if there is a break in the fiber, rapidly reroute
telecommunications traffic in the opposite direction thereby bypassing the break
in the fiber. We intend to provision our high quality services to customers more
rapidly than any of our competitors.

CAPITALIZE ON OUR EARLY-MOVER ADVANTAGE -- KEY ELEMENTS OF OUR NETWORK ARE
ALREADY OPERATIONAL

We have an operational network with significant revenue today. In contrast,
many of our competitors have merely announced an intention to build or otherwise
acquire network capacity in Asia. We operate one of the first independently
developed trans-Pacific cables. In addition, our network consists of terrestrial
fiber networks that are operational and provide service to customers in both
Japan and Hong Kong. Furthermore, by the end of 2000, we expect to connect Japan
to Hong Kong and, in the first half of 2001, to Taiwan and Korea. We expect to
extend our connectivity to Malaysia, the Philippines, Singapore and, if and when
regulations permit, China. Moreover, we, on our own or through our joint
ventures, hold licenses to provide telecommunications services in Japan, Hong
Kong and Taiwan.

We believe that this early-mover advantage will allow us to form strong
relationships with telecommunications carriers and leading multinational
companies in Asia, securing a large base of customers and network traffic in
advance of the market entry of our competitors. We also believe that our
early-to-market advantage will allow us to form strategic relationships with
local partners in advance of our competitors.

EXPAND OUR PORTFOLIO OF SERVICES TO MEET OUR CUSTOMER'S NEEDS

In addition to sales of wholesale circuits, we currently offer
international private lines, data transport and fiber without any equipment
attached, commonly referred to in the telecommunications industry as dark fiber,
on Pacific Crossing-1 and the Global Access Limited network in Japan, Internet
services and data center and Internet infrastructure services. We anticipate
expanding our portfolio of services to include certain advanced Internet
services, advanced voice and data services, switched services, voice over
Internet protocol and virtual private networks. We also intend to provide high-
bandwidth applications and emerging broadband technologies. We believe that our
broad range of services will permit us to attract multinational business
customers, as well as wholesale customers, such as network providers. Our
wholesale customers consist of other telecommunications companies which use our
network capacity to provide telecommunications services to their customers in
Asia. These wholesale customers may choose to use our services rather than build
their own network or may use our services to supplement their own network
capacity. Our customers include AboveNet,
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KDD and Qwest. In addition to providing services to network providers, we intend
to sell aggressively to multinational business customers. We believe that our
focus on network providers at the wholesale level and multinational business
customers maximizes the potential market for our services and leverages our
unique network footprint in Asia.

LEVERAGE OUR RELATIONSHIPS WITH OUR FOUNDING SHAREHOLDERS

We plan to leverage our relationships with our founding shareholders:

- GLOBAL CROSSING RELATIONSHIP: We intend to leverage our relationship
with Global Crossing to provide a wide range of broadband
telecommunications solutions on a global basis. We will coordinate our
network, sales and marketing strategies with those of Global Crossing to
offer our services to telecommunications and multinational business
customers. We will also benefit from Global Crossing's
telecommunications, sales and marketing expertise.

- MICROSOFT AND SOFTBANK RELATIONSHIPS: Microsoft is a worldwide leader in
software, services and Internet technologies for personal and business
computing. Softbank is one of the world's Internet leaders, with
ownership positions in more than 300 Internet companies. We believe that
having Microsoft and Softbank as our founding shareholders will allow us
to benefit from the expanding involvement of these companies in
Internet-related businesses and their expertise in that field. Microsoft
and Softbank have each invested $175 million in us and have agreed to
purchase an aggregate of $200 million of capacity on Pacific Crossing-1,
Global Access Limited or the Global Crossing network over a period of
three years following our formation. They have also agreed, subject to a
number of conditions, to use our network to satisfy a portion of their
and some of their affiliates' telecommunications needs in Asia. See
"Transactions with Related Parties -- Relationships Among Ourselves and
Our Founding Shareholders" on page 100.

FORM STRATEGIC ALLIANCES AND JOINT VENTURES WITH STRONG LOCAL PARTNERS

In order to exploit first-mover advantages, more readily penetrate local
markets, overcome regulatory barriers and develop exclusive relationships with
leading telecommunications providers in given markets, our strategy is to form
strategic alliances or joint ventures in key markets. We intend to select
partners in these markets based on potential partners' existing assets, such as
networks, existing customer relationships, licenses, technical expertise and
market prominence. Our joint ventures with Vectant, Inc., formerly Global
Bandwidth Solutions, and Internet Research Institute in Japan and Hutchison
Whampoa in Hong Kong are examples of the strategic alliances we intend to pursue
in other markets. We also intend to use our network capacity in strategic
partnerships with bandwidth-intensive users in Asia to drive traffic onto our
network.

CAPITALIZE ON EXTENSIVE MANAGEMENT EXPERIENCE

We have assembled and continue to build a strong management team with
communications expertise and extensive experience in international business and
the Asian telecommunications market. Many of our senior executives have held
senior management positions with market leaders, such as Dell Corporation, AT&T
and its affiliates, Teledyne Technologies, ICL PLC, KPN Royal Dutch Telecom and
Global Crossing. In addition, a number of those senior executives have held
senior positions in the Asian operations of those market leaders.

OUR NETWORK AND OPERATIONS

We are designing our network to provide Asia with unprecedented seamless,
broadband, global city-to-city and business-to-business connectivity through a
combination of subsea cables, national networks and city fiber networks with
connections to our telehouses and Web-hosting centers. As currently planned, our
network will extend approximately 45,000 route kilometers from the west coast

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of the United States and across the Pacific to eight Asian countries, including
China. In addition, our network provides seamless connectivity to the Global
Crossing network in the Americas and Europe.

The following table contains information regarding the initial ready for
service date and expected completion date of our currently planned systems,
telehouses and Web-hosting centers:

<TABLE>
<CAPTION>
ACTUAL OR EXPECTED
INITIAL READY FOR SERVICE
NETWORK ELEMENT/ DATE OR CONNECT DATE/ EXPECTED OR ACTUAL
MARKET OPERATIONS INITIAL LAUNCH DATE COMPLETION DATE
------ ---------------------------------------- ------------------------- -------------------
<S> <C> <C> <C>
Trans-Pacific Pacific Crossing-1 December 1999 December 2000
East Asia East Asia Crossing January 2001 First half of 2002*
Japan Global Access Limited fixed-line network December 1999 Ongoing
Global Access Limited telehouse July 2000 Not applicable
GlobalCenter Japan April 2000 Before year end
Hong Kong Hutchison Global Crossing network December 1996 Ongoing
Data center June 2000 Ongoing
</TABLE>

---------------
* This will include connecting Hong Kong, Taiwan, Korea, Singapore, Malaysia,
and the Philippines.

We plan to continue to expand both our subsea and terrestrial networks to
address current and future opportunities throughout principal commercial and
financial centers of Asia. Directly and through joint ventures, we intend to
replicate the capabilities that we are currently offering in Japan and Hong Kong
in each market to which we extend our undersea network.

TRANS-PACIFIC

Pacific Crossing-1 is an approximately 21,000 kilometer four-fiber undersea
cable that connects Japan and the United States. Pacific Crossing-1 uses
technology that automatically reroutes telecommunications traffic to avoid
service interruptions. Pacific Crossing-1 connects Grover Beach, California and
Harbour Pointe, Washington with two landing sites in Ajigaura and Shima, Japan.
The landing points in Washington and Ajigaura were completed in December 1999
and those in California and Shima were completed in December 2000. We expect
Pacific Crossing-1 to connect directly to:

- Global Access Limited's terrestrial fiber links from a cable landing
station to a point of presence or telehouse, commonly referred to in the
telecommunication industry as backhaul, and Tokyo and Osaka city fiber
rings at the cable stations in Ajigaura and Shima, Japan, as well as
landing stations for other cable systems;

- East Asia Crossing at the cable stations in Ajigaura and Shima, Japan,
providing access to Hutchison Global Crossing's network and other
countries connected to East Asia Crossing in the future;

- Global Crossing's Pan American Crossing at the cable station in Grover
Beach, providing connectivity to Mexico, Central and South America and
the Caribbean; and

- Global Crossing's North American Crossing at the cable stations in Grover
Beach and Harbour Pointe, providing connectivity to North America and
further connectivity to Europe through Atlantic Crossing-1 and Pan
European Crossing.

Pacific Crossing-1 operates at 80 Gbps of service capacity, upgradeable to
a minimum of 640 Gbps, using dense wavelength division multiplexing technology.
Pacific Crossing-1 is one of the first independently developed, privately owned
and operated cable systems to cross the Pacific Ocean. The first segment of
Pacific Crossing-1 commenced service in December 1999 and the full ring was
completed in December 2000.

Effective April 1998, we became party to a supply contract that Global
Crossing had entered into with Tyco Submarine Systems Ltd. for the construction
of Pacific Crossing-1. This contract

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contemplates that the system will be completed in December 2000 at an aggregate
cost of approximately $1.1 billion, of which we had paid $964.9 million as of
September 30, 2000. In August 2000, we placed an order with Tycom an affiliate
of Tyco Submarine Systems Ltd., to increase the capacity on Pacific Crossing-1
from 80 Gbps to 240 Gbps. We expect that Pacific Crossing-1 will operate at 60
Gbps of service capacity by the end of the first quarter in 2000. We expect that
the upgrades will cost approximately $100 million.

We own a 64.5% controlling interest in Pacific Crossing Ltd., the company
that owns Pacific Crossing-1. Vectant, Inc., formerly Global Bandwidth
Solutions, a subsidiary of Marubeni Corporation, owns the remaining interest in
Pacific Crossing Ltd.

EAST ASIA

East Asia Crossing will be a wholly owned, approximately 19,500 kilometer
undersea cable in East Asia. We expect that East Asia Crossing will connect
Pacific Crossing-1 from Japan with landing sites in Hong Kong in January 2001
and Taiwan and Korea by the first half of 2001. We also expect East Asia
Crossing to connect Malaysia, the Philippines, Singapore and, if and when
regulations permit, China. We have designed and constructed East Asia Crossing
so that it can be rapidly extended to a landing station in China. East Asia
Crossing will use four fiber pairs and state-of-the-art dense wave division
multiplexing technology. East Asia Crossing will operate initially at 80 Gbps of
service capacity, upgradeable to a minimum of 2.56 Tbps, the highest capacity
introduced to date in Asia. East Asia Crossing will provide internal restoration
capability in the event of a link outage.

In Hong Kong, through a local subsidiary, on December 22, 2000 we received
an external fixed telecommunications network services license. The license
permits us to land East Asia Crossing in Hong Kong and provide international
telecommunications facilities and services. In addition, Hutchison Global
Crossing holds a fixed telecommunications network services license that permits
us to construct and operate domestic telecommunications networks in Hong Kong,
including the construction of terrestrial capacity, or backhaul, from the East
Asia Crossing cable landing station, and to provide domestic and international
telecommunications services.

Through a local subsidiary, we hold a Type I telecommunications license in
Japan. This license is necessary to obtain many of the other permits and
licenses needed to land the East Asia Crossing cable, construct and operate
telecommunications facilities, including backhaul, in Japan and provide
facilities-based services. We have obtained or are in the process of obtaining
those other permits and licences. Another local subsidiary has obtained a
Special Type II telecommunications license, which permits us to provide a
variety of telecommunications services on a resale basis.

We expect to apply for similar licenses in the remaining East Asia Crossing
countries. In most countries, we will be required to obtain facilities-based
telecommunications licenses; in some, however, we may need only a license to
land East Asia Crossing and construct a cable landing station.

In December 1999, we awarded KDD-SCS the construction contract for a
portion of East Asia Crossing which will connect Hong Kong, Taiwan and Korea. In
October 13, 2000, we awarded NEC Corporation the construction contract for the
remaining portion of East Asia Crossing which will add Singapore, Malaysia and
the Philippines to our network.

JAPAN

GLOBAL ACCESS LIMITED. The Global Access Limited network will connect the
cable landing stations for Pacific Crossing-1, East Asia Crossing and other
competing cables to Global Access Limited's city fiber rings and telehouses and
our GlobalCenter data center facilities in Japan. Upon completion, Global Access
Limited's network will be an approximately 1,560 route kilometer terrestrial
system in Japan that we expect to connect Pacific Crossing-1 and East Asia
Crossing with Tokyo, Osaka and Nagoya. In December 1999, Global Access Limited
completed the 187 kilometer segment

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of its backhaul system connecting the Pacific Crossing-1 landing station in
Ajigaura to Tokyo. We expect the rest of the network to become operational by
the end of March 2001, which will connect a second Pacific Crossing-1 landing
station in Shima with Nagoya and Osaka (the connection between Nagoya and Osaka
is already complete) and, together with a subsea link between Shima and
Ajigaura, will serve as a backup for the first segment into Tokyo, as well as
provide terrestrial capacity into Osaka and Nagoya metropolitan areas.

Global Access Limited's network will also include a domestic backbone
connected to high capacity city fiber networks, in Tokyo and Osaka, to be
operational by April 2001. The Tokyo city network, connecting major buildings in
the Tokyo metropolitan area to Global Access Limited's network, commenced
operations in June 2000 and is currently being expanded. Global Access Limited
is also establishing telehouses to provide carrier collocation and
interconnection services in Tokyo and Osaka. The first of these telehouses in
Tokyo became operational in April 2000 and the second became operational in July
2000.

Global Access Limited has constructed and completely sold out 26,490 square
feet of leased space in its first telehouse in Tokyo. These centers are of
strategic importance because they are integrated with the Global Access Limited
network and have the potential to drive significant traffic onto our network.

As a Type I carrier, Global Access Limited is authorized to operate and
provide services using its own telecommunications facilities. Global Access
Limited provides us with building-to-building, last-mile connectivity and,
through its sales force, is also expected to generate capacity sales on Pacific
Crossing-1 and other Global Crossing systems.

We own a 49% interest in Global Access Limited. Vectant, Inc., formerly
Global Bandwidth Solutions, a subsidiary of Marubeni, owns the remaining
interest in Global Access Limited. See "Formation Transactions" on page 94.

GLOBALCENTER JAPAN. In January 2000, we formed a joint venture,
GlobalCenter Japan, with Internet Research Institute in order to build the
leading data center and Internet infrastructure services provider in Japan. In
December 2000, we sold a 38% interest in GlobalCenter Japan to Softbank Corp.
GlobalCenter Japan launched its advanced Web-hosting operations in Tokyo in
April 2000. In July 2000, GlobalCenter Japan opened a 30,000 square foot data
center space leased in a special purpose telecommunications building owned by
NTT Data in central Tokyo and has pre-sold space at this site. GlobalCenter
Japan plans to add a third data center, with up to 100,000 square feet, by the
end of 2001 and is also considering expanding into Osaka. These data centers
will be located on Global Access Limited's intracity fiber network and
interconnect directly with the two public peering points, JPIX and NXPIXP2,
which we believe carry the majority of Japan's Internet traffic. These peering
points are administered by Internet Research Institute. GlobalCenter Japan
expects that each of these data centers will be connected to our other
facilities worldwide.

We own 51% of GlobalCenter Japan, Internet Research Institute owns an 11%
interest and Softbank owns the remaining 38%. We intend to contribute our
remaining interest in GlobalCenter Japan to our joint venture with Exodus
described under "Relationships between Us and Exodus -- Joint Venture Agreement"
on page 97. In that case, we will have an indirect interest in GlobalCenter of
approximately 16.8%.

HONG KONG

Hutchison Global Crossing is a leading provider of a wide range of
telecommunications and Internet services in Hong Kong, including data, voice,
e-commerce and Internet access services. Hutchison Global Crossing's network is
an approximately 795 kilometer terrestrial network that began operating in key
commercial and residential areas of Hong Kong in December 1996 and is the
largest fully-fiber building-to-building network in Hong Kong. Hutchison Global
Crossing's backbone network

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supports high-speed Internet and data applications as well as local and
international voice services. The network spans Hong Kong along a number of
major fiber routes, including:

- a fiber route inside the tunnels of Hong Kong's Mass Transit Railway;

- fiber routes along major roads and expressways in Hong Kong;

- a fiber link to the new Hong Kong International Airport at Chek Lap Kok;
and

- a fiber ring linking major districts in the New Territories.

Hutchison Global Crossing's backbone network currently provides
transmission speeds of up to 2.5 Gbps and can be upgraded for increased volumes
of traffic.

Since June 1995, Hutchison Global Crossing has laid two-way ducts for cable
routing, installed direct connections to over 700 buildings and has block wired
over 400 buildings. In addition, Hutchison Global Crossing has connected its
network to 13 local exchanges of Cable & Wireless Hong Kong Telecom. Hutchison
Global Crossing has also commenced construction of the backhaul necessary to
connect its network with East Asia Crossing's cable landing station in Hong
Kong.

Hutchison Global Crossing is, through a subsidiary, one of four licensed
fixed telecommunications network services or carriers to provide
telecommunications services in Hong Kong. Hutchison Global Crossing currently
offers three main services:

- local services, including local public switched telephone network and
non-public switched telephone network services, such as high-speed
switched and non-switched data;

- international services, including international direct dial, calling
cards and pre-paid phone cards; and

- Internet-related services, including Internet access to consumers, as
well as other services offered to carrier and corporate customers, such
as leased-line Internet access and Web-hosting.

In November 1999, Hutchison Global Crossing, through an 85%-owned joint
venture with Compaq Computer, bid for and won a major contract to supply the
Hong Kong Government with its electronic service delivery system to deliver
government and commercial services through a common on-line platform. This
system was the first of its kind in Asia.

Hutchison Global Crossing has developed a GlobalCenter data center, which
commenced operations in June 2000. We expect that the Web-hosting business of
Hutchison Global Crossing will be contributed to our joint venture with Exodus.
Hutchison Global Crossing has already leased and begun constructing
approximately 35,000 square feet of space for an additional data center.
Hutchison Global Crossing launched in August 2000 eCyberPay, an Internet payment
system for online shopping, which we believe is the first of its kind in Asia.
In September 2000, Hutchison Global Crossing signed an agreement with China
United Telecommunications Corp. to link their external telecommunications
facilities and exchange intercommunications traffic between Hong Kong and China.

We own 50% of Hutchison Global Crossing, and Hutchison Whampoa owns the
remaining interest in Hutchison Global Crossing. See "Formation Transactions" on
page 94.

REGIONAL CENTERS

We have two main regional offices, one in Tokyo focusing on the Japanese
market and the other in Hong Kong, focusing on the other Asian markets.

JAPAN. We formed our regional office in Tokyo to market capacity on Pacific
Crossing-1 and other Global Crossing systems to multinational corporations. With
the completion of its ring architecture, Pacific Crossing-1 has full redundancy.
We have begun and will continue to market and sell value-

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added services, such as Internet protocol transit, international private line,
voice-over Internet protocol and telehousing services on Pacific Crossing-1 and
other Global Crossing systems.

ASIA PACIFIC. We have established our Asia Pacific regional office, based
in Hong Kong, to market capacity on East Asia Crossing and to coordinate
business development activities in Asia. We have established a sales and
marketing office in Korea and are in the process of establishing sales and
marketing offices in Taiwan, Singapore and the Philippines.

OPERATIONS CENTERS

Our systems are monitored 24 hours a day, seven days a week by a
combination of Global Crossing's global network operations center and our
regional operating centers in Japan and Hong Kong. The global network operations
center is located in London, United Kingdom and performs worldwide monitoring
and network management for our network and the Global Crossing network.
Management and control for all subsea cable, including both terrestrial and
subsea maintenance responsibilities, is directed from the global network
operations center. We currently have two regional operating centers which manage
our terrestrial networks. At this time, the Global Access Limited regional
operating center is integrated with Global Crossing's global network operations
center. We intend to integrate Hutchison Global Crossing's network operations
center with Global Crossing's global network operations center in the first
quarter of 2001. Network monitoring and management capabilities will be extended
to the global network operations center in order to assure a global quality
standard for both network performance and services management. The operating
center structure combined with a common operating support system provides the
capability for fast and reliable service provisioning and customer care.

Initially, our customer care services will be provided by Global Crossing's
customer care center. The customer care center performs the primary interface
for customer order receipt, order management and billing. This center is the
entry point for launching work orders that result in the activation of customer
service via work centers throughout our network and the Global Crossing network
worldwide. Regional development of similar customer care centers is now underway
and will establish a regional focus for our customer care. We plan to deploy
regional customer care centers in Asia that will interface with Global
Crossing's global network operations center and customer care center.

THE GLOBAL CROSSING NETWORK

We provide our customers worldwide services through Global Crossing's
network. The Global Crossing network consists of the following systems which are
currently in service:

- Atlantic Crossing-1, an undersea system connecting the United States and
Europe;

- North American Crossing, formerly part of Frontier Corporation, a
terrestrial system connecting major cities in the United States;

- Pan European Crossing, a primarily terrestrial system connecting major
European cities to Atlantic Crossing-1;

- Racal Telecom Network, a terrestrial network in the United Kingdom to be
operated in conjunction with Pan European Crossing; and

- Mid-Atlantic Crossing, an undersea system connecting the eastern United
States and the Caribbean.

The following systems of the Global Crossing network are in varying stages
of development:

- Atlantic Crossing-2, an additional undersea system to be integrated with
Atlantic Crossing-1 to provide additional capacity that will connect the
United States and Europe;

- Pan American Crossing, a primarily undersea system that will connect the
western United States, Mexico, Panama, Venezuela and the Caribbean; and

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- South American Crossing, an undersea and terrestrial system that will
connect the major cities of South America to Mid-Atlantic Crossing, Pan
American Crossing and the rest of the Global Crossing network.

SERVICE OFFERINGS

We provide a variety of telecommunications and Internet-based services
designed to meet the needs of telecommunications and Internet companies and
multinational corporations.

OFFERINGS TO TELECOMMUNICATION AND INTERNET COMPANIES

Currently, our primary offering is managed bandwidth capacity on our
network. To provide this capacity to our customers, we generally enter into
contracts for the sale, lease or grant of indefeasible rights of use. Under
these arrangements, the customer purchases a unit of point-to-point capacity for
the expected economic life of the system, typically in increments of 155
megabits per second, or Mbps, a unit known in the industry as an STM-1. An
indefeasible right of use is a long-term right of use, usually of 25 years which
is generally paid in full in advance of activation. Indefeasible rights of use
sales also typically involve the payment by customers of ongoing maintenance
charges over the term of the indefeasible rights of use.

OFFERINGS TO MULTINATIONAL CORPORATIONS

We target multinational corporations with bandwidth-intensive applications
and demand for global end-to-end solutions. We believe we are well-positioned to
address this market due to the scope of our network.

Directly and through our joint ventures, we currently offer the following
services:

- Internet transit: Dedicated Internet access.

- Domestic and International private line: We currently provide private
line services within Japan on certain routes and have the ability to
provide international private line services between Japan and major
cities on the Global Crossing network.

- Data center and Internet infrastructure services: A combination of
digital distribution services, server collocation and professional
expertise with plans to include equipment sales, consulting services
aimed at supporting customers' mission critical Internet operations and
other Internet infrastructure services.

We, on our own as well as through our joint ventures, intend to offer the
following services:

- Data transport: Point-to-point data services in a number of products
with plans to provide asynchronous transfer mode and frame relay with
varying bandwidth sizes, from T-1 to OC-192.

- Integrated voice and data services: These services combine traditional
voice or data services with additional features. Products include
multimedia services, such as video conferencing and e-commerce
enablement.

- Voice over Internet protocol: Switched and dedicated outbound voice
services for local, domestic, and international traffic.

- Virtual private network: Customizable network solutions which allow our
customers to create a private network by using our network without
purchasing dedicated facilities. In addition, this allows customers the
flexibility to change capacity requirements between points over time and
reconfigure their virtual private networks to meet changing requirements.

- Advanced Internet services: Products to be provided include Web-based
applications, such as e-mail hosting, unified messaging and storage.

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MARKETING AND SALES

We market through a combination of our own dedicated sales force, Global
Crossing's sales forces and the local sales teams of Hutchison Global Crossing
and Global Access Limited. As of September 30, 2000, Hutchison Global Crossing's
local sales team consisted of 115 individuals, and as of September 30, 2000
Global Access Limited's sales team consisted of 12 individuals. Because our
target customers will generally be new and incumbent telecommunications
carriers, Internet service providers and multinational business customers, we
expect that our sales and marketing departments will be smaller and more focused
than those of our competitors that have a broader retail strategy.

We compensate our sales teams on a competitive basis within the market in
which they operate. We will seek to leverage our existing service platforms to
expand the suite of services we offer, increasing the range and level of
value-added services that we provide to meet the growing bandwidth demands of
our customers. For example, we currently sell international private line
services to our customers and see an opportunity to migrate these customers to
other services, such as voice-over Internet protocol, frame relay, asynchronous
transfer mode and complex Web-hosting.

To support our sales efforts and actively promote the Asia Global Crossing
brand name, we intend to conduct comprehensive marketing programs. Our marketing
strategies include an active public relations campaign, print and electronic
advertisements, online advertisements, trade shows, strategic partnerships and
on-going customer communications programs. We will focus our marketing efforts
on business and trade publications, online media outlets, industry and regional
events and sponsored activities. We will also participate in a variety of
Internet, telecommunications, computer and financial industry conferences and
encourage our officers and employees to pursue speaking engagements at these
conferences.

PRINCIPAL CUSTOMERS

As of September 30, 2000, our customers included AboveNet, KDD and Qwest.
For the nine months ended September 30, 2000, Qwest accounted for 44.9% of our
supplemental consolidated revenue, KDD accounted for 13.3% of our supplemental
consolidated revenue, Teleglobe accounted for 10.9% of our supplemental
consolidated revenue, and AboveNet accounted for 8.3% of our supplemental
consolidated revenue. Global Crossing customers accounted for 69% of our
supplemental revenue for sales of our capacity.

In addition, since we began offering Internet protocol services in Japan in
April 2000, we have achieved sales to a number of customers, including So-Net,
Sony Corporation Internet service provider, Fujitsu, a significant Internet
service provider in Japan, and Titus Communications.

In the future, we expect to use the Global Access Limited network as a
sales vehicle for sales of indefeasible rights of use in Japan. For this reason,
in June 2000, Global Access Limited purchased from us $10.4 million worth of
capacity, which Global Access Limited intends to resell to customers in Japan.

PRINCIPAL SUPPLIERS

Our principal suppliers are the companies that are constructing the various
cable systems that comprise our network and design and construct our optical
networking system. Tyco Submarine Systems Ltd. and KDD-SCS are responsible for
the design and construction of Pacific Crossing-1. KDD-SCS is also responsible
for the design and construction of the first phase of East Asia Crossing. Lucent
Technologies is supplying the optical networking system. In October 2000, we
entered into a construction contract with NEC Corporation to design and
construct the second phase of East Asia Crossing which will connect Singapore,
Malaysia and the Philippines.

COMPETITION

The telecommunications industry is extremely competitive, particularly in
Asia, and our success in Asia will depend on our ability to compete against a
variety of other telecommunications providers,

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including locally-based operators as well as global operators. We compete
primarily on the basis of price, scope of operations and quality of services
against telecommunications companies that provide competing network access and
Internet connectivity and value-added services. We believe that none of our
competitors has progressed as far as we have towards becoming a pan-Asian
telecommunications carrier providing Internet, data, voice and Web-hosting
services over one global network. In sales of indefeasible rights of use, we
come into competition with customers such as Qwest, which purchase from us in
bulk. Our principal competitors and potential competitors include:

ESTABLISHED, NATIONAL TELECOMMUNICATIONS COMPANIES. In most Asian countries
where we compete or intend to compete, established, national telecommunications
carriers traditionally had a monopolistic or dominant presence. For instance,
the NTT group of companies, Singapore Telecom and Hong Kong Telecom each have
dominant market shares for services within their respective territories. Such
dominance has typically enabled these companies to be the principal or sole
providers of access to domestic and international telecommunications networks.

TRANS-PACIFIC AND PAN-ASIAN UNDERSEA CABLE OPERATORS. In the wholesale,
longhaul capacity market, we compete or will eventually compete with a number of
undersea cable operators, both consortium-based and independent. These operators
include SEA-ME-WE-3, Tycom, 360networks, Level 3, APCN-2, Flag Europe-Asia Cable
System, China-U.S. Cable Network, Japan-U.S. Cable Network and C2C AsiaPac Pte.
Ltd.

GLOBAL TELECOMMUNICATIONS COMPANIES THAT ARE FOCUSING THEIR BUSINESS
DEVELOPMENT EFFORTS IN ASIA. We also currently compete with various other global
telecommunications companies, including MCI WorldCom, AT&T and British
Telecommunications, each of which have announced plans to construct, have begun
to construct or are currently operating global fiber optic networks. We also
compete or will eventually compete with other telecommunications companies that
provide Web-hosting services, including Level 3, PSINet, Genuity and AboveNet.

NEW AND DEVELOPING TELECOMMUNICATIONS COMPANIES. We believe that other
companies are planning networks that, if constructed, could employ advanced
technology similar to that of our own network and may compete directly with us
for customers. We also expect that the changing regulatory environment in Asian
telecommunications markets will attract new entrants to these markets and
increase the intensity of competition.

EMPLOYEES

As of December 2000, we had approximately 150 employees. We consider our
relations with our employees to be good.

PROPERTIES

Our principal offices are located in leased premises in Hamilton, Bermuda,
with corporate offices under lease in Beverly Hills, California. We have our
major regional offices under lease in Tokyo and Hong Kong, with an office in
Korea, as well. In addition, we own 64.5% of Pacific Crossing-1 and are
developing an undersea cable in East Asia, East Asia Crossing. We also have
ownership interests in terrestrial cable systems through Global Access Limited
and Hutchison Global Crossing. We also own or lease 10 cable landing stations in
the United States and East Asia. See "Formation Transactions" on page 94.

We believe that substantially all of our existing properties are in good
condition and are suitable for the conduct of our business. We have granted or
may grant security interests in undersea cables to lenders providing financing
for those cables under non-recourse facilities.

LEGAL PROCEEDINGS

We are not presently subject to any legal claims or proceedings.

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MANAGEMENT

DIRECTORS

The following table presents the names and positions of our directors and
their ages, as of December 31, 1999.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Gary Winnick................................. 52 Chairman of the board and director
Lodwrick M. Cook............................. 72 Co-Chairman of the board and director
John J. Legere............................... 41 Chief Executive Officer and director
John M. Scanlon.............................. 58 Vice Chairman of the board and director
Thomas J. Casey.............................. 48 Vice Chairman of the board and director
Joseph P. Clayton............................ 50 Director
Eric Hippeau................................. 48 Director
Thomas U. Koll............................... 44 Director
Norman Brownstein............................ 56 Director
William E. Conway, Jr. ...................... 50 Director
Geoffrey J.W. Kent........................... 57 Director
</TABLE>

EXECUTIVE OFFICERS

The following table presents the names and positions of our executive
officers and their ages, as of December 31, 1999.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Gary Winnick................................. 52 Chairman
Lodwrick M. Cook............................. 72 Co-Chairman
John J. Legere............................... 41 Chief Executive Officer
John M. Scanlon.............................. 58 Vice Chairman
Thomas J. Casey.............................. 48 Vice Chairman
Stefan C. Riesenfeld......................... 51 Chief Financial Officer
Darryl E. Green.............................. 39 President -- Japan
Charles F. Carroll........................... 41 General Counsel
Joseph P. Perrone............................ 51 Chief Accounting Officer
Alex Ng...................................... 46 Chief Operating Officer -- North Asia/
Greater China
Anthony Christie............................. 39 Vice President, Strategy and Business
Development
David Milroy................................. 36 Managing Director -- Network
Infrastructure Development
</TABLE>

GARY WINNICK -- Mr. Winnick is the Chairman of our board of directors. He
is also the founder and Chairman of Global Crossing Ltd., which was founded in
March 1997. Mr. Winnick is the founder and has been the Chairman and Chief
Executive Officer of Pacific Capital Group, Inc., a leading merchant bank
specializing in telecommunications, media and technology, which has a
substantial equity investment in Global Crossing Ltd., since 1985. Mr. Winnick
serves on numerous boards, including the Board of Trustees of the Museum of
Modern Art.

LODWRICK M. COOK -- Mr. Cook has been Co-Chairman of our board of directors
since April 2000. Mr. Cook has been the Co-Chairman of the Global Crossing board
of directors since April 1998 and Vice Chairman and Managing Director of Pacific
Capital Group since 1997. Mr. Cook became Chairman of Global Marine Systems, a
wholly-owned subsidiary of Global Crossing, in June 2000. Before joining Pacific
Capital Group, Mr. Cook spent 39 years at Atlantic Richfield Co. He was Chairman
of its board of directors from 1986 to 1995, when he became Chairman Emeritus.
Mr. Cook is also a member of the board of directors of Castle & Cooke, Inc.,
Litex, Inc. and 911Notify.com.

JOHN J. LEGERE -- Mr. Legere has been a member of our board of directors
since April 2000 and our Chief Executive Officer since February 2000. Before
joining us, Mr. Legere had been Senior Vice President of Dell Computer
Corporation and President for Dell's operations in Europe, the Middle East

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and Africa and President, Asia-Pacific for Dell from 1998 until April 2000. From
April 1994 to November 1997, Mr. Legere was President and Chief Executive
Officer of AT&T Asia/Pacific and spent time also as head of AT&T Global Strategy
and Business Development. From 1997 to 1998, Mr. Legere was President of
worldwide outsourcing of AT&T Solutions. Mr. Legere received a bachelor's degree
in business administration from the University of Massachusetts, a master of
business administration degree from Fairleigh Dickinson University and a
master's degree in science from the Massachusetts Institute of Technology. Mr.
Legere also attended the Program for Management Development at the Harvard
Graduate School of Business.

JOHN M. SCANLON -- Mr. Scanlon has been Vice Chairman of our board of
directors since November 1999 and was our Chief Executive Officer from November
1999 to February 2000. Mr. Scanlon has been a director of Global Crossing since
April 1998 and was its Chief Executive Officer from April 1998 to February 1999.
Mr. Scanlon was President and General Manager of the Cellular Networks and Space
Sector of Motorola, Inc. and had been affiliated with Motorola since 1990. Mr.
Scanlon was Chief Operating Officer of Cambridge Technology Group from 1988 to
1990 and, before taking this position, had spent 24 years with AT&T Corp. and
Bell Laboratories, becoming Group Vice President at AT&T Corp. Mr. Scanlon has
served on the board of directors of Hutchison Global Crossing since January
2000. Mr. Scanlon received a bachelor's degree in science from the University of
Toronto and a master's degree in electrical engineering from Cornell University.

THOMAS J. CASEY -- Mr. Casey has been Vice Chairman of our board of
directors since May 2000 and director -- strategy and business development since
November 1999. Mr. Casey is the Chief Executive Officer of Global Crossing and
has been a Vice Chairman of the Global Crossing board of directors since
December 1998. Mr. Casey was co-head of Merrill Lynch & Co.'s Global
Communications Investment Banking Group for three years before joining Global
Crossing. From 1990 to 1995, Mr. Casey was a partner and co-head of the
telecommunications and media group of the law firm of Skadden, Arps, Slate,
Meagher & Flom.

JOSEPH P. CLAYTON -- Mr. Clayton has been a member of our board of
directors since November 1999. Mr. Clayton has been a member of the Global
Crossing board of directors since September 1999. Mr. Clayton was Chief
Executive Officer of Frontier Corporation from August 1997 to September 1999,
served as Frontier's President from June 1997 to March 1999, as Frontier's Chief
Operating Officer from June 1997 to August 1999 and as a director of Frontier
since 1997. From March 1992 until December 1996, Mr. Clayton was Executive Vice
President, Marketing and Sales -- Americas and Asia at Thomson Consumer
Electronics, a worldwide leader in the consumer electronics industry. Mr.
Clayton is also a member of the board of directors of The Good Guys.

ERIC HIPPEAU -- Mr. Hippeau has been a member of our board of directors
since November 1999. Mr. Hippeau has been a director of Global Crossing since
September 1999. Mr. Hippeau is the President and Executive Managing Director of
Softbank International Ventures. Mr. Hippeau is also the Chairman and Chief
Executive Officer of Ziff-Davis Inc., a publicly listed company whose majority
shareholder is Softbank. Mr. Hippeau has held this position since 1993. Mr.
Hippeau is also a director of ZDNet, Yahoo!, Inc., Herring Communications, Inc.
and Starwood Hotels and Resorts Worldwide, Inc.

THOMAS U. KOLL -- Mr. Koll has been a member of our board of directors
since April 2000. Mr. Koll is a vice president of Microsoft's Network Solutions
Group. Mr. Koll joined Microsoft in 1988 and has held a number of senior
positions, including general manager of World Wide Business Strategy and general
manager of the Dedicated System Group. Before his transfer to the Microsoft
headquarters, Mr. Koll held a number of senior sales positions at Microsoft.
Before joining Microsoft, Mr. Koll was an assistant professor of International
Politics at the Free University of Berlin for seven years. Mr. Koll received a
master's degree in political science from the Free University of Berlin.

NORMAN BROWNSTEIN -- Mr. Brownstein has been a member of our board of
directors since August 2000. Mr. Brownstein has been a member of the Global
Crossing board of directors since May 2000. Since 1986, Mr. Brownstein has
served as Chairman of the Board of the law firm of Brownstein Hyatt & Farber,
P.C. Mr. Brownstein is a Presidential appointee of the U.S. Holocaust Memorial

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Council, a director of the National Jewish Center for Immunology and Respiratory
Medicine, a Trustee of the Simon Wiesenthal Center, and a Vice President of the
American Israel Public Affairs Committee. Mr. Brownstein is also a member of the
board of directors of Wyndham International.

WILLIAM E. CONWAY, JR. -- Mr. Conway has been a member of our board of
directors since August 2000. Mr. Conway has been a member of the Global Crossing
board of directors since April 1998. Mr. Conway has been a managing director of
The Carlyle Group, a global investment firm since 1987. From 1984 to 1987, Mr.
Conway was the Senior Vice President and Chief Financial Officer of MCI
Communications Corporation. Mr. Conway is also a member of the board of
directors of Nextel Communications, Inc.

GEOFFREY J.W. KENT -- Mr. Kent has been a member of our board of directors
since August 2000. Mr. Kent has been a member of the Global Crossing board of
directors since August 1998. Mr. Kent is the Chairman and Chief Executive
Officer of the Abercrombie & Kent group of companies in the travel-related
services industry. Mr. Kent has served in various positions with these companies
since 1967.

STEFAN C. RIESENFELD -- Mr. Riesenfeld has been our Chief Financial Officer
since June 2000. From 1999 to 2000, Mr. Riesenfeld was Executive Vice President
and Chief Financial Officer of Teledyne Technologies. From 1996 to 1999, Mr.
Riesenfeld was the Director of Finance and Business Planning (Chief Financial
Officer) of ICL PLC. From 1983 to 1996, Mr. Riesenfeld served in various
positions at the Unisys Corporation, including Vice President and Corporate
Treasurer and Vice President/Corporate Development. Mr. Riesenfeld received a
master of business administration degree and a master of arts in economics both
from Stanford University and a Bachelor of Science in physics from the
California Institute of Technology.

DARRYL E. GREEN -- Mr. Green has been our President -- Japan since November
1999 and President of our subsidiary, Global Crossing Japan K.K., since August
1999. Mr. Green is Executive Director of Global Access Limited and previously
served on the board of directors of Hutchison Global Crossing. Mr. Green was
President and Chief Executive Officer of AT&T Japan Ltd. from May 1998 and AT&T
Jens from September 1995. Mr. Green is a member of key study committees of the
Ministry of Posts and Telecommunications in Japan. Mr. Green is fluent in
Japanese and writes frequently for major Japanese business publications. Mr.
Green received a master of business administration degree from the Tuck School
at Dartmouth College.

CHARLES F. CARROLL -- Mr. Carroll has been our General Counsel since March
2000. From 1992 to 2000, Mr. Carroll was a partner in the New York law firm of
Simpson Thacher & Bartlett. Mr. Carroll received a juris doctor degree from the
New York University School of Law.

JOSEPH P. PERRONE -- Mr. Perrone has been our Chief Accounting Officer
since May 2000. Before joining us, Mr. Perrone was a senior partner in Arthur
Andersen's Communications, Media, and Entertainment Practice, having been a
partner at Arthur Andersen since 1981. Mr. Perrone is also the Senior Vice
President -- Finance for Global Crossing.

ALEX NG -- Mr. Ng has been our Chief Operating Officer -- North
Asia/Greater China and Chief Operating Officer of our subsidiary Asia Global
Crossing, Asia Pacific Ltd., since April 2000. Before joining us, Mr. Ng was the
President and Chief Executive Officer of AT&T Asia Pacific Group from August
1999 to April 2000 and, before that, Chief Financial Officer and Vice President
of AT&T in Asia Pacific from February 1992 to August 1999. Since February 1992,
Mr. Ng was also on the board of directors of certain joint ventures in which
AT&T invested. Mr. Ng received a master of business administration degree from
Open University of Hong Kong and is a member of the Hong Kong Society of
Accountants and also member of other accounting bodies in the United Kingdom and
Canada.

ANTHONY D. CHRISTIE -- Mr. Christie has been our Vice President of Strategy
and Business Development since March 2000. From 1984 to 2000, Mr. Christie held
numerous management and executive positions at AT&T in the United States and
Asia. Most recently, Mr. Christie held positions as a Regional Managing Director
in Asia, Global Sales Vice President, Network Vice President and
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<PAGE> 87

General Manager at AT&T Solutions. Mr. Christie received a bachelor's degree
from Drexel University, a master's degree of business administration from the
University of New Haven and a master's degree in science from the Massachusetts
Institute of Technology.

DAVID MILROY -- Mr. Milroy has been our Managing Director -- Network
Infrastructure Development since September 25, 2000 and President of our
subsidiary, Asia Global Crossing -- Asia Pacific Ltd., since December 1999. Mr.
Milroy has served on the board of directors of Hutchison Global Crossing since
January 2000. Mr. Milroy was Senior Vice President, Network Development for
Global Crossing from April 1999 to December 1999. From December 1997 to April
1999, he was Vice President, International Network Services for KPN (Royal Dutch
Telecom) in the Netherlands, where he was responsible for all of KPN's
international infrastructure construction. Before KPN, Mr. Milroy was a member
of the senior management team at Unisource Satellite Services based in the
Netherlands from April 1993 to December 1997. Mr. Milroy received a bachelor's
degree in commerce and a master's degree in marketing from the University of New
South Wales, Australia.

BOARD COMMITTEES

Our board of directors has standing audit and compensation committees and
an Office of the Chairman.

Audit Committee. The purpose of the audit committee is to:

- make recommendations concerning the engagement of independent public
accountants;

- review with our management and the independent public accountants the
plans for, and scope of, the audit procedures to be utilized and results
of audits;

- approve the professional services provided by the independent public
accountants;

- review the adequacy and effectiveness of our internal accounting
controls;

- review our insurance program; and

- perform any other duties and functions required by any organization under
which our securities may be listed.

The current members of the audit committee are Mr. Conway and Mr. Kent.

Compensation Committee. The purpose of the compensation committee is to
establish and submit to our board of directors recommendations with respect to:

- compensation of officers and other key employees; and

- awards to be made under the stock incentive plan.

The current members of the compensation committee are Mr. Conway and Mr.
Kent.

Office of the Chairman. The purpose of the Office of the Chairman is to
facilitate and support our management generally and in our dealings with Global
Crossing. The current members of the Office of the Chairman are Mr. Winnick, Mr.
Cook, Mr. Legere, Mr. Scanlon and Mr. Casey.

OUTSIDE DIRECTOR COMPENSATION

We have not yet paid any compensation to non-employee directors. We have
granted both Mr. Kent and Mr. Conway options to acquire 180,000 shares of our
Class A common stock. We anticipate that in the future, non-employee directors
may receive annual fees, meeting fees and periodic option grants.

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<PAGE> 88

EXECUTIVE COMPENSATION

We have paid Mr. Scanlon cash compensation of $65,625 during the fiscal
year ended December 31, 1999. Total compensation paid or accrued to our other
executive officers as a group during the fiscal year ended December 31, 1999 was
$43,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM ALL OTHER
NAME AND PRINCIPAL POSITION TIME PERIOD SALARY BONUS COMPENSATION COMPENSATION
--------------------------- ----------- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
John M. Scanlon...................... 11/99 to $65,625 -- -- --
Chief Executive Officer 12/99
</TABLE>

In 2000, John Legere, our Chief Executive Officer, received minimum
compensation of $1,000,000. This amount does not include a $15 million
interest-free loan which Mr. Legere has received from us. If Mr. Legere is
employed by us for three years, he will not be required to repay the $15 million
loan.

In 2000, John M. Scanlon, our Vice Chairman, received minimum compensation
of $1,134,000.

In 2000, Stefan Reisenfeld, our Chief Financial Officer, received minimum
compensation of $525,000, plus a signing bonus of $250,000.

In 2000, Charles F. Carroll, our General Counsel, received minimum
compensation of $525,000.

In 2000, Darryl Green, our President -- Japan, received minimum
compensation of $331,500.

The following table presents certain information regarding stock options
granted under our stock incentive plan to our Chief Executive Officer and the
four other executive officers that we anticipate to be the highest compensated
executive officers in 2000. The options for Mssrs. Legere, Riesenfeld, Carroll
and Green are at an exercise price equal to $7.00.

In reading the information in the table below, please note the following:

- Mr. Legere received options to acquire 17,500,000 shares of Class A
common stock at an exercise price equal to $7.00.

- Mr. Scanlon received options to acquire 1,500,000 shares of Class A
common stock at an exercise price equal to $7.00.

- Mr. Riesenfeld received options to acquire 750,000 shares of Class A
common stock at an exercise price equal to $7.00.

- Mr. Carroll received options to acquire 1,350,000 shares of Class A
common stock at an exercise price equal to $7.00.

- Mr. Green received options to acquire 1,500,000 shares of Class A common
stock at an exercise price equal to $7.00. In addition, Mr. Green
received options to acquire 116,666 shares of common stock of Global
Crossing Ltd. at an exercise price equal to $49.75.

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<PAGE> 89

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED
ANNUAL RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
---------------------------------------------------------------------- -----------------------------
NUMBER OF
SECURITIES % OF FAIR MARKET
UNDERLYING TOTAL OPTIONS EXERCISE PRICE VALUE ON
OPTIONS GRANTED TO PER SHARE GRANT DATE EXPIRATION
NAME GRANTED EMPLOYEES ($/SH) ($/SH) DATE 5%($) 10%($)
---- ---------- ------------- -------------- ----------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
John J. Legere 17,500,000 45.11 $7.00 $7.00 2010 110,056,560 278,904,931
John M. Scanlon 1,500,000 3.87 $7.00 $7.00 2010 9,433,419 23,906,137
Stefan C. Riesenfeld 750,000 1.93 $7.00 $7.00 2010 4,716,710 11,953,068
Charles F. Carroll 1,350,000 3.48 $7.00 $7.00 2010 8,490,077 21,515,523
Darryl Green 1,500,000 3.87 $7.00 $7.00 2010 11,217,132 28,426,416
</TABLE>

The following table presents certain information as of the date of our
initial public offering concerning exercises of stock options by the named
executive officers for the current year and the value of those individuals'
unexercised options based upon a price of $7.00 per share.

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS ON THE DATE OF THIS IN-THE-MONEY OPTIONS ON THE
PROSPECTUS DATE OF THIS PROSPECTUS
NUMBER OF --------------------------- ---------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE ($) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John J. Legere -- -- 4,375,000 13,125,000 -- --
John M. Scanlon -- -- 500,000 1,000,000 -- --
Stefan C. Riesenfeld -- -- 187,500 562,500 -- --
Charles F. Carroll -- -- 337,500 1,012,500 -- --
Darryl Green -- -- 500,000 1,000,000 -- --
</TABLE>

EMPLOYMENT CONTRACTS

We have entered into an employment agreement with John Legere, our Chief
Executive Officer. The term of Mr. Legere's employment agreement began on
February 12, 2000 and expires on February 12, 2003. Under his employment
agreement, Mr. Legere is entitled to receive a base salary of not less than
$500,000 and a guaranteed annual bonus in each of 2000 and 2001 of not less than
$500,000.

Mr. Legere received options to acquire 17,500,000 shares of Class A common
stock at an exercise price equal to $7.00. Of Mr. Legere's options:

- 25% have vested and were exercisable on October 12, 2000; and

- an additional 25% will vest and become exercisable on February 12, 2001,
2002 and 2003.

These options could, however, vest and become exercisable under certain
circumstances upon a change of control, as defined in our stock incentive plan,
or upon a termination of Mr. Legere's employment agreement in specified
circumstances.

Under his employment agreement and a promissory note dated February 12,
2000, Mr. Legere also received a $15 million interest-free loan from us. Mr.
Legere has agreed to repay the loan in full on January 31, 2004 or 30 days after
a termination for cause, whichever is earlier. In addition, $5,000,000 or 1/3 of
our loan to Mr. Legere will be forgiven on each of February 12, 2001, February
12, 2002 and February 11, 2003, so long as Mr. Legere is employed by us on that
date.

Under his employment agreement, if Mr. Legere is terminated for cause, he
is entitled to receive accrued but unpaid base salary and bonus and forfeits any
unvested options. In addition, Mr. Legere will be required to repay the
remaining balance of the loan to us. If Mr. Legere's employment is terminated by
us for any reason other than for cause or he resigns under some circumstances,
Mr. Legere is entitled to receive his base salary and a guaranteed minimum
annual bonus for the

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<PAGE> 90

remainder of the term of the employment contract. In addition, Mr. Legere's
outstanding balance on the loan will be forgiven and all of his options will
vest immediately.

John M. Scanlon serves as our Vice Chairman under an employment contract
with Global Crossing. The contract provides that, if Global Crossing becomes
subject to a change of control, Mr. Scanlon's stock options will vest and become
exercisable consistent with company policy. In addition, the contract provides
that, if Mr. Scanlon is terminated without cause or elects to terminate his
employment under specified circumstances, Mr. Scanlon will receive a severance
payment equal to two years' salary and bonus.

We have also entered into an employment contract with Stefan C. Riesenfeld.
This contract provides that, if we become subject to a change in control or Mr.
Riesenfeld is terminated without cause or resigns under specified circumstances,
Mr. Riesenfeld will receive a severance payment equal to two years' salary and
bonus. In addition, the contract provides that, if we become subject to a change
of control, Mr. Riesenfeld will be granted the same terms and conditions as
other comparable corporate officers.

We have also entered into an employment contract with Charles F. Carroll.
This contract provides that, if we become subject to a change of control, Mr.
Carroll's options will vest and become exercisable. In addition, the contract
provides that, if Mr. Carroll is terminated without cause within one year after
a change of control, he will receive a payment equal to twice his annual salary.

In addition, our Chief Executive Officer, the four other executive officers
that we anticipate to be the highest compensated executive officers in 2000 and
we have entered into a change of control agreement. Under the agreement, if we
or Global Crossing become subject to a change of control and any of the
executive officers party to the agreement are terminated under specified
circumstances during the 24-month period immediately following the month in
which the change of control occurs, we will agree to make the following payments
to that executive officer:

- an amount equal to in the case of Messrs. Legere, Scanlon, Riesenfeld,
Carroll and Green three times the sum of:

- the higher of the executive officer's annual base salary in effect
immediately before (1) the occurrence of the change of control or (1)
the executive officer's termination in connection with the change of
control; and

- the higher of the executive officer's target annual bonus for (1) the
fiscal year before the fiscal year in which the change of control
occurs or (2) the fiscal year in which the executive officer is
terminated in connection with the change of control;

and reduced by any cash severance benefit otherwise paid to the executive
officer under any applicable severance plan or other severance
arrangement;

- an amount in cash equal to the amount of any incentive compensation
that has been allocated or awarded to the executive officer for a
completed fiscal year preceding the occurrence of the change of
control and the executive officer's termination under any incentive
compensation plan but has not yet been paid to the executive officer;
and

- a proportionate bonus equal to the number of calendar days elapsed
during the fiscal year before the date of termination of the executive
officer, divided by the total number of days in that fiscal year and
multiplied by the target bonus payable for that period.

In addition, under the agreement, we will agree to continue to provide
health and life insurance coverage for 12 months from the date the executive
officer is terminated, at the same cost to the executive officer and at the same
coverage level as in effect on the date of termination.

We will gross up payments under the agreement to compensate the executive
officers for specified taxes.

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<PAGE> 91

STOCK INCENTIVE PLAN

The 2000 Asia Global Crossing Ltd. Stock Incentive Plan, which we refer to
as our stock incentive plan, is administered by our board of directors, which
may delegate its duties in whole or in part to any subcommittee solely
consisting of at least two individuals who are non-employee directors within the
meaning of Rule 16b-3 under the Exchange Act and outside directors within the
meaning of Section 162(m) of the Internal Revenue Code. Our stock incentive plan
allows the board of directors to make awards of stock options, stock
appreciation rights, which can be granted either in conjunction with, or
independent of, stock options, and other stock based awards to any individual
who is selected by the board of directors to participate in the stock incentive
plan.

The board of directors has the authority to interpret our stock incentive
plan, to establish, amend and rescind any rules and regulations relating to our
stock incentive plan and to make any other determinations that the board of
directors deems necessary or desirable for the administration of our stock
incentive plan. The board of directors may also correct any defect or supply any
omission or reconcile any inconsistency in our stock incentive plan in the
manner and to the extent the board of directors deems necessary or desirable.
Any decision of the board of directors in the interpretation and administration
of our stock incentive plan lies within its sole and absolute discretion and is
final, conclusive and binding on all parties concerned, including participants
in our stock incentive plan and their beneficiaries or successors.

A total of 15% of the total shares outstanding of our common stock as of
the completion of our initial public offering of common stock is currently
authorized for issuance under our stock incentive plan. As of the date hereof,
no shares of our common stock will have been issued under our stock incentive
plan, 38.8 million shares will be subject to outstanding options granted under
our stock incentive plan and 44.4 million shares will be available for
additional stock option grants or other stock-based awards.

The maximum number of shares for which options and stock appreciation
rights may be granted during each calendar year to any participant is 5,000,000
shares. No award may be granted under our stock incentive plan after the tenth
anniversary of its effective date, but awards granted before that date may
extend beyond that date.

Stock options. Stock options granted under our stock incentive plan may be
non-qualified or incentive stock options for federal income tax purposes. The
board of directors will set option exercise prices and terms and will determine
the time at which stock options will be exercisable. However, the term of a
stock option may not exceed 10 years.

Our board of directors may also grant options that are intended to be
incentive stock options, which comply with Section 422 of the Internal Revenue
Code. Fair market value is defined as the closing price of the shares as
reported on that grant date as quoted on the principal national securities
exchange on which the shares are listed. However, for awards granted which will
become effective on our initial public offering the fair market value is equal
to $7.00.

Stock appreciation rights. Stock appreciation rights may be granted by the
board of directors to participants as a right in conjunction with the number of
shares underlying stock options granted to participants under our stock
incentive plan or on a stand-alone basis with respect to a number of shares for
which a stock option has not been granted.

Stock appreciation rights constitute the right to receive payment for each
share of the stock appreciation rights exercised in stock or in cash equal to
the excess of that share's fair market value on the date of exercise over the
exercise price per share, multiplied by the number of shares covered:

- in the case of a stock appreciation right independent of an option, by the
stock appreciation right; and

- in the case of a stock appreciation right granted in conjunction with an
option, by the option.

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<PAGE> 92

Our board of directors will determine the exercise price per share of stock
appreciation rights; however, that price may not be less than the greater of:

- the fair market value, in the case of a stock appreciation right independent
of an option, of a share of common stock on the grant date and, in the case of
an applicable stock appreciation right granted in conjunction with an option,
of the price of that option; and

- an amount permitted by applicable laws, rules, bye-laws or policies of
regulatory authorities or stock exchanges. Our board of directors may also
impose, in its discretion, conditions on the exercisability or transferability
of stock appreciation rights.

Our board of directors may also grant limited stock appreciation rights
that are exercisable upon the occurrence of special contingent events. Limited
stock appreciation rights may provide for a different method of determining
appreciation, may specify that payment will be made only in cash and may provide
that any related awards are not exercisable while the limited stock appreciation
rights are exercisable.

Other stock-based awards. Our board of directors has the authority to
grant other stock-based awards, which may consist of awards of common stock,
restricted stock and awards that are valued in whole or in part by reference to,
or are otherwise based on the fair market value of, shares of common stock.
Other stock-based awards may be granted on a stand-alone basis or in addition to
any other awards granted under our stock incentive plan. The board of directors
will determine the form of other stock-based awards and the conditions on which
they may be dependent. The conditions may include the right to receive one or
more shares of common stock or the equivalent value in cash upon the completion
of a specified period of service or the occurrence of an event or the attainment
of performance objectives. Our board of directors will also determine the
participants to whom other stock-based awards may be made, the timing of those
awards, the number of shares to be awarded, whether those other stock-based
awards will be settled in cash, stock or a combination of cash and stock and all
other terms of those awards.

General. Stock options, stock appreciation rights and restricted stock
awards are not transferable or assignable, except for estate planning purposes.
We may deduct sufficient sums to pay withholding required for federal, state and
local taxes or other taxes as a result of the exercise of a stock award.

In the event of any stock dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination or exchange of
stock or other corporate exchange or any distribution to shareholders other than
regular cash dividends, our board of directors may, in its sole discretion, make
a substitution or adjustment, as the board of directors deems to be equitable,
to the number or kind of stock issued or reserved for issuance under our stock
incentive plan under outstanding awards and the term, including option price, of
those awards.

Except as otherwise provided in a stock award agreement, in the event of
our change in control, our board of directors may, in its sole discretion,
accelerate a stock award, cause us to make a cash payment in exchange for a
stock award or require the issuance of a substitute stock award.

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<PAGE> 93

PRINCIPAL SHAREHOLDERS

OUR BENEFICIAL OWNERSHIP

Before our initial public offering of common stock, all our outstanding
shares of common stock were held by Asia Global Crossing Holdings. The
shareholders of that entity consisted of our founding shareholders and The
Goldman Sachs Group, Inc. Before the private offering of our outstanding notes,
through Asia Global Crossing Holdings:

- Global Crossing beneficially owned 1,115,978 shares of our common stock,
representing a 93% interest in us; and

- each of Microsoft and Softbank beneficially owned 41,999 shares of our
common stock, giving each a 3.5% interest in us; and

- The Goldman Sachs Group beneficially owned 24 shares of our common stock,
representing a 0.002% interest in us. The Goldman Sachs Group received
its ownership interest in us in consideration for its financial advisory
services in connection with the formation of Asia Global Crossing
Holdings and structuring our ownership and the ownership of Asia Global
Crossing Holdings.

Upon consummation of our initial public offering of common stock, The
Goldman Sachs Group transferred its shares in Asia Global Crossing Holdings to
Global Crossing. In addition, Asia Global Crossing Holdings distributed to each
of Global Crossing and Microsoft its proportionate share of the total number of
shares of common stock we issued to Asia Global Crossing Holdings and Asia
Global Crossing Holdings remains a wholly owned subsidiary of Softbank under a
different name. The columns under the caption "Before the Initial Public
Offering" in the following table present information regarding beneficial
ownership of our common stock prior to any such distribution.

Our bye-laws as in effect before our initial public offering of common
stock and the shareholders agreement among our founding shareholders as in
effect before our initial public offering of common stock included a
reallocation mechanism for the beneficial ownership of our founding
shareholders. In connection with our initial public offering of common stock,
our founding shareholders agreed to reallocate Softbank and Microsoft the
maximum amount of equity they would be entitled to under the reallocation
mechanism. As a consequence, the ownership percentages of our founding
shareholders in us were reallocated simultaneously with the completion of that
offering as follows:

- Global Crossing owns beneficially 315.6 million shares of our Class B
common stock, representing a 56.9% interest in us; and

- each of Microsoft and Softbank owns beneficially 85.5 million shares of
our Class B common stock, representing a 15.4% interest in us.

The ownership percentages of our founding shareholders mentioned above give
effect to the completion of the transactions described under "Formation
Transactions" on page 94.

In connection with the formation of Asia Global Crossing Holdings, The
Goldman Sachs Group was entitled to receive from Global Crossing a part of its
interest in us at the time of the reallocation of interests among our founding
shareholders. In connection with our initial public offering, the period during
which The Goldman Sachs Group may exercise that right was extended to December
31, 2001. If that right is exercised, The Goldman Sachs Group may receive from
Global Crossing a number of shares equal to 3% of the excess of our market value
over $5 billion up to $7.5 billion, divided by the market value per share of our
common stock, subject to dilution in certain circumstances. We expect that,
based on this transfer mechanism, Goldman Sachs may obtain an interest in us
which will not exceed 1.0%

89
<PAGE> 94

The columns under the caption "After the Initial Public Offering" in the
following table presents information regarding beneficial ownership of our
common stock, as of the date of our initial public offering, as adjusted to
reflect:

- the reallocation of the beneficial ownership percentages of our founding
shareholders and The Goldman Sachs Group as described above;

- the sale of shares of our Class A common stock in our initial public
offering, and the exercise of 500,000 shares of the underwriters' option
to purchase additional shares from us; and

- the completion of the transactions described under "Formation
Transactions" on page 94.

by:

- each of the individuals listed on the "Summary Compensation Table"
above;

- each of our directors;

- each person, or group of affiliated persons, who is known by us to own
beneficially 5% or more of our common stock; and

- all current directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of the date of our initial public
offering are deemed issued and outstanding. These shares, however, are not
deemed outstanding for purposes of computing percentage ownership of each other
shareholder.

Percentage of ownership is based on 1.2 million shares of common stock
outstanding immediately before our initial public offering and 555.1 million
shares outstanding after completion of that offering. The percentage of common
stock outstanding is calculated in accordance with the rules of the Securities
and Exchange Commission. Unless otherwise indicated, the address of each of the
individuals named below is: c/o Asia Global Crossing Ltd., 360 North Crescent
Drive, Beverly Hills, California 90210.

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<PAGE> 95

<TABLE>
<CAPTION>
BEFORE THE AFTER THE
INITIAL PUBLIC OFFERING INITIAL PUBLIC OFFERING
------------------------- ---------------------------
NUMBER OF PERCENTAGE OF NUMBER OF PERCENTAGE OF
SHARES ALL SHARES SHARES ALL SHARES
--------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Global Crossing (Class B common
stock)(1)................................ 1,115,978 93.0% 315,625,125 56.9%
Wessex House,
45 Reid Street,
Hamilton HM12, Bermuda
Microsoft (Class B common stock)........... 41,999 3.5 85,500,000 15.4
One Microsoft Way
Redmond, WA 98052
Softbank (Class B common stock)............ 41,999 3.5 85,500,000 15.4
24-1 Nihonbashi-Hakozaki-cho, Chuo-ku,
Tokyo 103 Japan
Gary Winnick(2)............................ 1,115,978 93.0 316,958,458 57.5
Lodwrick M. Cook(3)........................ 1,115,978 93.0 316,591,792 57.0
John J. Legere............................. -- -- 4,375,000 *
John M. Scanlon............................ -- -- 495,000 *
Thomas J. Casey(4)......................... 1,115,978 93.0 316,291,792 56.9
Joseph P. Clayton(5)....................... 1,115,978 93.0 315,765,125 56.9
Eric Hippeau(6)............................ 1,157,978 96.5 401,125,625 72.3
Thomas U. Koll(7).......................... 41,999 3.5 85,500,000 15.4
Norman Brownstein.......................... -- -- 75,000 *
William E. Conway, Jr. .................... -- -- 40,000 *
Geoffrey J.W. Kent......................... -- -- -- --
Stefan C. Riesenfeld....................... -- -- 187,500 *
Darryl E. Green............................ -- -- 500,000 *
Charles F. Carroll......................... -- -- 338,500 *
Joseph P. Perrone.......................... -- -- -- --
Alex Ng.................................... -- -- -- --
Anthony D. Christie........................ -- -- 1,000 *
David Milroy............................... -- -- 104,334 *
Directors and executive officers as a group
(19 persons) (Class A common stock)...... 1,199,976 99.9% 497,848,625 89.7%
--------- ----- ----------- -----
Total............................ 1,200,000 100.0% 555,125,125 100.0%
</TABLE>

---------------
* Percentage of shares beneficially owned does not exceed one percent.

(1) In connection with the transfer mechanism relating to The Goldman Sachs
Group described on page 89. Global Crossing's percentage ownership in us
would decrease by up to 1.0%.

(2) Includes all shares of common stock beneficially owned by Global Crossing.
Mr. Winnick is also a director of Global Crossing. Mr. Winnick disclaims
beneficial ownership of these shares owned by Global Crossing.

(3) Includes all shares of common stock beneficially owned by Global Crossing.
Mr. Cook is also a director of Global Crossing. Mr. Cook disclaims
beneficial ownership of these shares owned by Global Crossing.

(4) Includes all shares of common stock beneficially owned by Global Crossing.
Mr. Casey is the Chief Executive Officer of Global Crossing and also a
director of Global Crossing. Mr. Casey disclaims beneficial ownership of
these shares owned by Global Crossing.

(5) Includes all shares of common stock beneficially owned by Global Crossing.
Mr. Clayton is also a director of Global Crossing. Mr. Clayton disclaims
beneficial ownership of these shares owned by Global Crossing.

(6) Includes all shares of common stock beneficially owned by Global Crossing
and Softbank. Mr. Hippeau is also a director of Global Crossing and
Softbank. Mr. Hippeau disclaims beneficial ownership of these shares owned
by Global Crossing and Softbank.

(7) Includes all shares of common stock beneficially owned by Microsoft. Mr.
Koll is a vice president of Microsoft's Network Solutions Group. Mr. Koll
disclaims beneficial ownership of these shares owned by Microsoft.

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DESCRIPTION OF CAPITAL STOCK

The following summary is a description of the material terms of our capital
stock. However, we refer you to our memorandum of association and bye-laws,
which we have filed with the SEC as an exhibit to the registration statement of
which this prospectus forms a part.

GENERAL

Immediately before our initial public offering of common stock, we amended
our memorandum of association to increase our authorized share capital, which
was then divided into:

- 1,200,000,000 shares of Class A common stock, par value $0.01 per share;

- 1,200,000,000 shares of Class B common stock, par value $0.01 per share;
and

- 120,000,000 shares of preferred stock, par value $0.01 per share.

COMMON STOCK

We have 555.1 million shares of our common stock outstanding.

VOTING. Holders of our Class A common stock are entitled to one vote per
share held of record on all matters submitted to a vote of shareholders. Holders
of our Class B common stock are entitled to 10 votes per share held of record in
all matters submitted to a vote of shareholders. All shares of our common stock
vote together on all matters presented at a shareholders meeting.

CONVERSION. Each share of our Class B common stock is convertible at any
time at the option of the holder into one share of our Class A common stock.
Shares of our Class B common stock will be mandatorily convertible into shares
of our Class A common stock if they are transferred to any person other than
Global Crossing and its affiliates, Microsoft and its affiliates or Softbank and
its affiliates.

OTHER RIGHTS. Except with respect to voting and conversion rights, shares
of our Class A common stock and Class B common stock are identical in all other
respects. For example:

- DIVIDENDS. Each share of our common stock is entitled to the same amount
of dividend if one is declared. Accordingly, we may not pay a dividend to
holders of our Class B common stock without paying the same per share
dividend to holders of our Class A common stock.

- LIQUIDATION RIGHTS. Each share of our common stock is entitled to be paid
the same amount upon liquidation. Accordingly, we may not make a payment
upon liquidation to holders of our Class B common stock without paying
the same per share amount to holders of our Class A common stock.

ELECTION OF DIRECTORS. The election of our directors is determined by a
simple majority of votes cast, except as otherwise required by law. Our
shareholders do not have cumulative voting rights. Accordingly, holders of a
majority of the shares of common stock entitled to vote in any election of
directors may elect all directors. After this offering, our founding
shareholders will collectively control approximately 98.6% of our outstanding
voting power and will have the power to elect all of our directors.

RIGHTS OF DIRECTORS NOMINATED BY MICROSOFT AND SOFTBANK. Under our
bye-laws, there are a number of actions that we may not undertake without the
approval of our directors that have been nominated by Microsoft and Softbank. We
describe those actions under "Transactions with Related Parties -- Relationships
Among Ourselves and Our Founding Shareholders -- Shareholders
Agreement -- Actions requiring the approval of our directors appointed by
Microsoft and Softbank" on page 101.

NO PRE-EMPTIVE RIGHTS. Holders of our common stock have no preemptive
rights.

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REGISTRATION RIGHTS AGREEMENT. Global Crossing, Microsoft, Softbank, The
Goldman Sachs Group, Inc. and ourselves have entered into a registration rights
agreement, dated November 24, 1999. Under the registration rights agreement,
each of Global Crossing, Microsoft and Softbank and a number of their
transferees have demand and piggy-back registration rights with respect to
shares of our common stock. In addition, under the registration rights
agreement, The Goldman Sachs Group and a number of its transferees have
piggy-back registration rights with respect to shares of our common stock.
Global Crossing, Microsoft, Softbank and The Goldman Sachs Group receive under
the registration rights agreement indemnification and, in some circumstances,
reimbursement from us of expenses in connection with an applicable registration.

PREFERRED STOCK

Authorized shares of our preferred stock may be issued at the discretion of
our board of directors without any further action by the shareholders, except as
required by applicable law or regulation. Our board of directors is authorized,
from time to time, to divide the preferred stock into classes or series, to
designate each class or series and to determine for each class or series its
respective rights and preferences, including, without limitation, any of the
following:

- the rate of dividends and whether dividends were cumulative or had a
preference over the common stock in right of payment;

- the terms and conditions upon which shares may be redeemed and the
redemption price;

- sinking fund provisions for the redemption of shares;

- the amount payable in respect of each share upon a voluntary or
involuntary liquidation of us;

- the terms and conditions upon which shares may be converted into other
securities of ours, including common stock;

- limitations and restrictions on payment of dividends or other
distributions on, or redemptions of, other classes of our capital stock
junior to that series, including the common stock;

- conditions and restrictions on the creation of indebtedness or issuance
of other senior classes of capital stock;

- the terms on which shares may be redeemed, if any; and

- voting rights.

Any series or class of preferred stock could, as determined by our board of
directors at the time of issuance, rank senior to our common stock with respect
to dividends, voting rights, redemption and liquidation rights. The preferred
stock to be authorized is of the type commonly known as blank-check preferred
stock.

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FORMATION TRANSACTIONS

Concurrently with our initial public offering of common stock, Global
Crossing contributed to us:

- its interest in Hutchison Global Crossing; and

- its interest in Global Access Limited.

CONTRIBUTION OF GLOBAL CROSSING'S 50% INTEREST IN HUTCHISON GLOBAL CROSSING

We and our founding shareholders entered into an agreement providing for
the contribution by Global Crossing to us of its 50% interest in Hutchison
Global Crossing. Under the agreement, the contribution was conditioned upon the
completion of our initial public offering of common stock. Immediately after the
completion of our initial public offering of common stock, under the agreement:

- Global Crossing sold to each of Microsoft and Softbank 19% of its 50%
interest in Hutchison Global Crossing for $153,875,029 (and accrued
interest thereon) in cash or a short-term note. After this sale, Global
Crossing owned 31% of Hutchison Global Crossing, and each of Microsoft
and Softbank owned 9.5% of Hutchison Global Crossing;

- following the sale, each of Global Crossing, Microsoft and Softbank
contributed its entire interest in Hutchison Global Crossing to us as a
capital contribution and we now own 50% of Hutchison Global Crossing;
there was no consideration from us to any of Global Crossing, Microsoft
or Softbank for its contribution;

- we then purchased Global Crossing's interest in any outstanding
shareholder loans to Hutchison Global Crossing;

- we assumed Global Crossing's rights and obligations under the
shareholders agreement with Hutchison Whampoa. See "Transactions with
Related Parties -- Relationships Among Ourselves and Hutchison Whampoa"
on page 108; and

- we indemnified Global Crossing against certain losses and taxes described
under "Transactions with Related Parties -- Relationships Between
Ourselves and Global Crossing -- Agreement Relating to the Contribution
of Global Crossing's Interest in Hutchison Global Crossing to Us" on page
96.

CONTRIBUTION OF GLOBAL CROSSING'S 49% INTEREST IN GLOBAL ACCESS LIMITED

We and our founding shareholders entered into an agreement providing for
the contribution by Global Crossing to us of its 49% interest in Global Access
Limited. Under the agreement, the contribution was conditioned upon the
completion of our initial public offering of common stock. Immediately after the
completion of our initial public offering of common stock, under the agreement:

- Global Crossing contributed its 49% interest in Global Access Limited to
us;

- in consideration for its contribution, Global Crossing obtained 36.6
million additional shares of our Class B common stock having an aggregate
value of approximately $256.2 million, and the beneficial ownerships of
each of Microsoft, Softbank and Goldman Sachs in us was diluted
proportionately, in the case of Microsoft and Softbank up to a maximum of
1.43% each, to give effect to those additional shares that will be issued
to Global Crossing; and

- we then purchased Global Crossing's interest in any outstanding
shareholder loans to Global Access Limited.

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TRANSACTIONS WITH RELATED PARTIES

RELATIONSHIPS BETWEEN OURSELVES AND GLOBAL CROSSING

The following description of the terms of the agreement between Global
Crossing and ourselves is materially complete. However, we refer you to the
actual agreement, which we intend to file with the SEC as an exhibit to the
registration statement of which this prospectus forms a part.

AGREEMENT WITH GLOBAL CROSSING

Global Crossing and we intend to enter into an agreement that governs the
relationship between the companies and their respective subsidiaries and
affiliates, including provision of network services, coordination and use of
bundled service offerings, marketing, pricing of service offerings and
strategies, branding, rights with respect to intellectual property and other
shared technology and operational, maintenance and administrative services.
However, this agreement does not grant us priority or preemptive rights for the
use of the Global Crossing network. We cannot assure you when or even that we
will reach a definite agreement with Global Crossing or, if we do reach a
definitive agreement, what the terms of that agreement will be. This section
summarizes the important provisions of that agreement as if the agreement were
complete.

TERRITORIES

Under the agreement, our territory is the territory in which we are
permitted to conduct business under our corporate governance documents. We list
the countries which comprise our territory on page 100 under "-- Relationships
Among Ourselves and our Founding Shareholders -- Shareholders
Agreement -- Territory".

Under the agreement, as between ourselves and Global Crossing, we have the
exclusive right within Asia to market and sell capacity and specified services
on the Global Crossing network as well as on our network, and Global Crossing
has the exclusive right outside of Asia to market and sell capacity and
specified services on the Global Crossing network as well as on our network. The
specified services comprise our and Global Crossing's current and future service
offerings other than data center services in Asia, which we expect to provide
through our joint venture with Exodus and, in many cases, local partners. The
agreement also governs provision of connectivity and services not available on
our network or the Global Crossing network, as well as the right to pursue new
business opportunities, in our respective territories. We and Global Crossing
have granted each other a right of first refusal to provide connectivity,
services and related items not available on our respective networks.

To ensure maintenance of a seamless global network, Global Crossing will
provide customer care, cable maintenance and related services and network
management on a worldwide basis. The agreement allows us, with the cooperation
of Global Crossing, to establish regional network operations centers to provide
management and support services for our network.

MARKETING AND FUTURE OPPORTUNITIES

The agreement provides that, within our respective territories, we and
Global Crossing will develop and market our products and services, subject to
the obligation to coordinate with one another as provided in the next paragraph.
The agreement also provides that neither we nor Global Crossing may undertake
these activities in each other's territory. Each of us, however, will have the
obligation to market the other's products and services in our respective
territories to the exclusion of competing products and services offered by
others.

We and Global Crossing have agreed to coordinate our respective network
expansion, acquisition, deployment, procurement, marketing and sales plans. If
an acquisition or investment opportunity involves assets or operations in the
territories of the other company, we and Global Crossing will consider a joint
bid and strategic apportionment of the assets or operations. If we cannot reach
agreement on a joint strategy, then either company may pursue that acquisition
or investment. The company that did not make the acquisition or investment will
have a right of first offer in connection

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with any sale of the acquired assets to a third party. See "Shareholders
Agreement -- Non-competition Arrangements" on page 102.

INTELLECTUAL PROPERTY

Under the agreement, we will operate under the Global Crossing service mark
and follow Global Crossing's corporate brand strategies and policies.

Through a royalty-free cross-licensing arrangement, we and Global Crossing
will share use of all technology and intellectual property developed or
possessed by each other, to the extent permitted by third-party contractual
restrictions. However, following joint consultation, we may pursue the
development of intellectual property independently from each other.

PRICING

The agreement provides that, whenever a sale to one of our customers would
involve the provision of services in Global Crossing's territory, we will
purchase those services from Global Crossing. Conversely, whenever a sale to one
of Global Crossing's customers would involve the provision of services in our
territory, Global Crossing will purchase those services from us. We and Global
Crossing will charge each other for such products and services market-based
prices established by a joint pricing committee. We also intend to purchase
certain administrative and corporate services from Global Crossing on a
cost-plus basis.

AGREEMENT RELATING TO THE CONTRIBUTION OF GLOBAL CROSSING'S INTEREST IN
HUTCHISON GLOBAL CROSSING TO US

We and Global Crossing, among others, entered into an agreement under which
Global Crossing contributed to us its 50% interest in Hutchison Global Crossing
upon completion of our initial public offering of common stock. See "Formation
Transactions" on page 94. Under the agreement, we agreed to purchase shareholder
loans made by Global Crossing to Hutchison Global Crossing for cash at par plus
accrued and unpaid interest, on the closing date of the transaction.

In addition, under the agreement, we agreed to indemnify Global Crossing
against:

- any losses that Global Crossing or any of its subsidiaries may incur as a
result of its guarantee in favor of the Hong Kong government of the
performance by Hutchison Global Crossing or its subsidiaries under:

- the fixed telecommunications network services license; and

- a contract to supply the Hong Kong Government with government and
commercial services through a common on-line platform;

- any Hong Kong withholding tax that Global Crossing or any of its
subsidiaries may incur in connection with Global Crossing entering into
certain services and license agreements with respect to Hutchison Global
Crossing's data centers; and

- any taxes or losses that Global Crossing or any of its subsidiaries may
incur in connection with Global Crossing entering into those certain
services and license agreements with respect to Hutchison Global
Crossing's data centers.

GLOBAL CROSSING CREDIT FACILITY

We entered into a credit facility with Global Crossing, which we describe
under "Description of Other Indebtedness -- Global Crossing Credit Facility" on
page 119.

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RELATIONSHIP BETWEEN US AND GLOBAL CROSSING DEVELOPMENT CORPORATION

The following description of the terms of the agreement between Global
Crossing Development Corporation, a wholly owned subsidiary of Global Crossing,
and ourselves is materially complete. However, we refer you to the actual
agreement, which we have filed with the SEC as an exhibit to the registration
statement of which this prospectus forms a part.

PROJECT MANAGEMENT AGREEMENT

Global Crossing Development Corporation and we entered into an agreement in
which Global Crossing Development will provide project management services to us
in connection with the construction of East Asia Crossing. These services will
consist of, among others:

- assisting us in finalizing the configuration and design of East Asia
Crossing;

- creating the preliminary pricing and cost analysis;

- managing the procurement for East Asia Crossing;

- assisting in the preparation of profit and loss figures and cash flow
analysis for East Asia Crossing;

- conducting traffic analysis;

- assisting in obtaining licenses required to land and operate submarine
cables;

- supervising contractors' management of training and documentation;

- assisting in managing test and commissions of East Asia Crossing; and

- coordinating plans for operations and management for East Asia Crossing.

The term of the agreement will be through the ready-for-service date of
East Asia Crossing. Subject to the approval of Microsoft Corporation and
Softbank Corp., we expect to pay Global Crossing Development a fee which will
equal approximately 1% of the total construction cost, which we expect will be
approximately $13 million.

In addition, we will be required to indemnify Global Crossing Development
against certain losses in respect of this agreement for East Asia Crossing.

RELATIONSHIPS BETWEEN US AND EXODUS

The following description of the terms of the joint venture agreement and
the network services, marketing and cooperation agreement between ourselves and
Exodus Communications, Inc. is materially complete. However, we refer you to the
actual joint venture agreement, which we have filed with the SEC as an exhibit
to the registration statement of which this prospectus forms a part.

JOINT VENTURE AGREEMENT

This agreement provides for the creation of a joint venture company to be
owned 33% by ourselves and 67% by Exodus. The company, to be known as Exodus
Asia-Pacific, will offer a full suite of Internet operations outsourcing
services to customers in Asia, including Web-hosting services, managed service
offerings, professional services and content distribution.

IN-KIND CONTRIBUTIONS. Under the agreement, we and Exodus have agreed to
contribute to the joint venture all our respective Web-hosting and related
assets in the joint venture's territory. Among other things, we have agreed to
contribute to the joint venture our interest in GlobalCenter Japan and we have
agreed to use our commercially reasonable best efforts to conform our existing
relationship with Hutchison Whampoa so that the Internet Web-hosting data center
services business in Hong

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Kong currently being conducted through Hutchison Global Crossing can be
contributed to the joint venture. Exodus has agreed to contribute to the joint
venture its operations in Japan.

FUNDING. Upon formation of the joint venture, we will be required to
contribute $33 million in cash and Exodus will be obligated to contribute $67
million. Depending upon the needs of the business and the availability of
capital from other sources, the board of directors of the joint venture may
require the shareholders to make additional capital contributions of up to $500
million to the joint venture over a three-year period following formation, with
these contributions made in proportion to our respective ownership interests in
the joint venture. We and Exodus have agreed that the joint venture will provide
additional financing as far as reasonably practicable in order to reduce the
need for capital contributions. In the event that we or Exodus fail to make a
capital contribution as required under the agreement, then the non-defaulting
party has the right, as its remedy, to exclude the defaulting party from making
additional capital contributions and the defaulting party's interest in the
joint venture will be diluted accordingly upon any further contributions made by
the non-defaulting party.

EXCLUSIVITY. Under the agreement, the joint venture will be the exclusive
vehicle for us and Exodus to pursue the Internet Web-hosting business in Asia,
referred to as the restricted business.

The exclusivity referred to above terminates with respect to a shareholder
on the date that is the earlier of:

- the date that is two years following an underwritten offering of the
joint venture's securities on a national exchange;

- the date on which that shareholder ceases to own beneficially at least 10
percent in the joint venture, subject to limited exceptions; and

- with respect only to us, the date on which the joint venture is no longer
obligated to purchase capacity on our network pursuant to the Network
Services, Marketing and Cooperation Agreement described below.

The exclusivity provisions referred to above are subject to various
exceptions with respect to each shareholder.

BOARD OF DIRECTORS. Under the joint venture agreement, the board of
directors of the joint venture will consist of six members, four of whom will be
appointed by Exodus and two of whom will be appointed by us. Except as otherwise
provided in the joint venture agreement, an action or decision of the board of
directors will require the consent or vote of a simple majority of the board of
directors. In most circumstances, for action to be taken by the board of
directors, a quorum consisting of a majority of directors and including at least
one director appointed by Exodus and one director appointed by us will be
required to be present.

ACTIONS REQUIRING UNANIMOUS APPROVAL OF SHAREHOLDERS. Unanimous
shareholder approval is required for certain extraordinary corporate
transactions.

RESTRICTIONS ON TRANSFERS OF INTERESTS. We and Exodus have agreed not to
transfer any of our interests in the joint venture for the first five years
after the joint venture's formation, unless the transfer is to an affiliate or
otherwise unanimously approved by the board of directors. In addition, any
transfer of interests by a shareholder to a third party will be subject to the
other shareholder's right of first refusal. In addition, each shareholder has
tag-along rights if the other shareholder proposes to transfer any shares held
by it and its affiliates to a person other than an affiliate.

Under the joint venture agreement, the transfer restrictions outlined in
the paragraph above terminate upon the consummation of an underwritten initial
public offering of shares in the joint venture approved by the board of
directors in which the joint venture receives cash proceeds of at least $35
million, net of underwriting discounts and commissions.

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INITIAL PUBLIC OFFERING. We have the right to request at any time after
the third anniversary of the formation of the joint venture that the joint
venture consummate as soon as practicable an underwritten initial public
offering in which the joint venture receives cash proceeds of at least $35
million, net of underwriting discounts and commissions. The offering may be
delayed for up to one year if reasonably prudent as a result of market
conditions at the time. We and Exodus will receive customary registration rights
in connection with the offering.

EXODUS LICENSING AGREEMENT. At formation of the joint venture, Exodus and
the joint venture will enter into a licensing agreement granting to the joint
venture an exclusive right in the joint venture's territory to all intellectual
property rights of Exodus necessary for the joint venture to pursue its business
and for the use of all trademarks owned by Exodus in connection with the joint
venture's business in consideration for the payment by joint venture of a
reasonable royalty, not less favorable than that granted to unaffiliated third
parties, which royalty shall begin to accrue and be payable as measured from the
first fiscal quarter that the joint venture becomes profitable.

TERMINATION OF THE JOINT VENTURE. The joint venture can be terminated in
the following circumstances:

- the agreement of all the shareholders;

- if the merger agreement among Global Crossing, Exodus, GlobalCenter Inc.
and the other parties named in that agreement is terminated;

- a resolution of all the shareholders or a court with jurisdiction over
the joint venture to wind-up the joint venture; or

- if Exodus no longer is entitled to appoint a majority of the directors of
the joint venture, the joint venture takes specified types of injurious
actions regarding Exodus' intellectual property.

If the joint venture is terminated prior to the second anniversary of the
closing of the merger agreement described in the second bullet point above, we
will remain subject to the exclusivity provisions of the joint venture agreement
until the end of that two year period.

NETWORK SERVICES, MARKETING AND COOPERATION AGREEMENT

WE AS PRIMARY PROVIDER OF NETWORK SERVICES IN ASIA, IN THE
TERRITORY. Under the agreement and subject to limited exceptions, we and Exodus
have agreed that we will be the primary provider of network services to the
joint venture in Asia. The minimum purchase commitment for network services is
as follows:

- 50% from the date of the agreement until the formation of the joint
venture and closing of the related transactions;

- 60% for the period from closing of the transactions to December 31, 2002;
and

- after that date, 60% per calendar year.

The Exodus group may resell our network services under specified
circumstances.

JOINT VENTURE AS EXCLUSIVE PROVIDER OF WEB-HOSTING SERVICES IN ASIA. Under
the agreement and subject to limited exceptions, we have agreed to use the joint
venture, its subsidiaries and affiliates as our and our subsidiaries' and some
of our affiliates' exclusive provider for Internet Web-hosting services from the
date of formation of our joint venture with Exodus and closing of related
transactions to the second anniversary of that date. We are also permitted to
re-sell these services to our customers or refer our customers to the joint
venture in return for sale commissions in amounts to be agreed upon.

NETWORK ARRANGEMENTS. The agreement provides that we will extend our
metropolitan and intra-regional systems to provide connectivity between the data
centers of our joint venture with Exodus and our network.
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In addition, under the agreement, we and Exodus will establish a preferred
peering relationship, which will allow our Internet-protocol users to have
direct access to Exodus data centers.

COOPERATION AND DEVELOPMENT COMMITTEE. We and Exodus will establish a
cooperation and development committee to promote our cooperation in the
marketing, technical support and product management areas, among others.

TERM. The agreement will terminate on September 27, 2010 and may terminate
earlier under certain circumstances.

RELATIONSHIPS AMONG OURSELVES AND OUR FOUNDING SHAREHOLDERS

The following description of the terms of the shareholders agreement and
related agreements among our founding shareholders is materially complete.
However, we refer you to the actual agreements, which we have filed with the SEC
as exhibits to the registration statement of which this prospectus forms a part.

Global Crossing, Microsoft and Softbank, our founding shareholders, are
parties to a shareholders agreement, which contains important provisions
relating to, among other things, our governance and our business. In addition,
our founding shareholders and we have entered into a registration rights
agreement regarding sales of our common stock by our founding shareholders. Our
founding shareholders have also entered into a capacity commitment agreement
relating to Pacific Crossing-1.

SHAREHOLDERS AGREEMENT

The shareholders agreement details, among other things:

- the composition of our board of directors;

- actions requiring the approval of our directors appointed by Microsoft
and Softbank;

- the preparation of strategic plans;

- activities in which our founding shareholders are prohibited from
engaging in our territory without each other's consent;

- additional obligations of Microsoft and Softbank toward us;

- our obligation to purchase certain technology from Microsoft; and

- transfer restrictions on our shares of common stock.

TERRITORY. The shareholders agreement provides that we will conduct our
business in a specified territory. That territory consists of Brunei, Burma,
Cambodia, China (including Hong Kong), Fiji, Indonesia, Japan, Kiribati, Laos,
Macau, Malaysia, Marshall Islands, Federated States of Micronesia, Mongolia,
Nauru, North Korea, Palau, Papua New Guinea, the Philippines, Samoa, Singapore,
Solomon Islands, South Korea, Taiwan, Thailand, Tonga, Tuvalu, Vanuatu and
Vietnam. See " -- Relationship Between Ourselves and Hutchison
Whampoa -- Non-competition provisions" regarding restrictions on our ability to
conduct business in China, including Hong Kong.

COMPOSITION OF OUR BOARD OF DIRECTORS. Each of Microsoft and Softbank are
entitled to appoint a number of our directors that is proportionate to its
beneficial interest in us. Microsoft and Softbank will each have the right to
appoint at least one of our directors for so long as each beneficially owns 5%
of our outstanding shares of common stock.

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ACTIONS REQUIRING THE APPROVAL OF OUR DIRECTORS APPOINTED BY MICROSOFT AND
SOFTBANK. The shareholders agreement and our bye-laws provide that the
following actions require the approval of our directors that have been nominated
by Microsoft and Softbank:

- our amalgamation, merger or consolidation or the amalgamation, merger or
consolidation of any of our majority-owned subsidiaries;

- any acquisition or investment by us or any of our majority-owned
subsidiaries:

- involving aggregate consideration paid by us and our majority-owned
subsidiaries of in excess of $1.0 billion; or

- if the aggregate consideration paid by us or any of our majority-owned
subsidiaries in any fiscal year for acquisitions or investments after
that acquisition or investment exceeds $2.0 billion;

- any sale, transfer or other disposition of our material assets or of the
material assets of our majority-owned subsidiaries in one or more related
transactions, other than dispositions of worn-out or obsolete assets in
the ordinary course of our business;

- any material change in our purposes as described in our bye-laws;

- any amendment to our memorandum of association or bye-laws that
materially affects the right of Microsoft and Softbank to nominate
directors to our board;

- the adoption of our initial strategic plan;

- the incurrence by us or any of our majority-owned subsidiaries of
indebtedness in excess of $1.0 billion in the aggregate at any one time
outstanding, excluding indebtedness incurred:

- to finance expenditures incurred in accordance with our initial
strategic plan;

- to finance capital expenditures approved by our board of directors under
the bullet point immediately following; or

- under the Pacific Crossing-1 credit facility and certain refinancings of
that credit facility;

- capital expenditures by us or any of our majority-owned subsidiaries in
excess of $1.0 billion on a project by project basis or in excess of $2.0
billion in any fiscal year;

- the issuance of additional equity by us or any of our majority-owned
subsidiaries, other than in connection with stock option plans, benefit
and pension plans, other employee compensation plans or director
compensation plans;

- the commencement of any proceeding for our voluntary bankruptcy or the
voluntary bankruptcy of any of our majority-owned subsidiaries;

- any transaction between Global Crossing or any of its majority-owned
subsidiaries and us or any of our majority-owned subsidiaries for
consideration having a value in excess of $5.0 million and to be entered
into on terms less favorable to us than those that could have been
obtained at the time of that transaction in an arms' length transaction
with an unrelated third party, other than:

- transactions between us or any of our majority-owned subsidiaries and
Global Crossing or any of its affiliates entered into on an arms' length
basis involving the provision of services and/or capacity to a customer
in regions both within and outside of our territory; and

- a number of other transactions identified in a schedule to our
shareholders agreement;

- our discontinuance as a Bermuda company; and

- our dissolution upon the occurrence of specified events.

These approval rights will terminate if and when Microsoft and Softbank
lose their right to nominate members to our board of directors. See
"-- Composition of Our Board of Directors" on page 100.

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PREPARATION OF STRATEGIC PLANS. Under the shareholders agreement, we are
required to deliver to each of our founding shareholders and any other person or
entity that is a party to the shareholders agreement drafts of a multi-year
strategic plan, or updates of a previous strategic plan, and an annual budget as
soon as practicable before the beginning of each succeeding year.

NON-COMPETITION ARRANGEMENTS. In the shareholders agreement, our founding
shareholders have agreed not to:

- engage in any service or activity within the scope of our business in our
territory;

- form, enter into any agreement or other arrangement with any third party
for an investment in or otherwise invest in any entity engaged or, in the
case of an entity with no significant operations or operating history,
expressly intending to engage, primarily, in any service or activity
within the scope of our business in our territory; and

- develop, construct or invest in any undersea cable system in, into or
within our territory until December 31, 2000.

The following exceptions apply to the foregoing non-competition provisions:

- Global Crossing may invest in Global Access Limited.

- Each of Global Crossing, Microsoft and Softbank may invest in any entity
that competes with us in our territory so long as the consolidated
revenues of that entity from any competing service or activity do not in
the aggregate exceed 33 1/3% of the total consolidated revenues of that
entity.

- Each of Global Crossing, Microsoft and Softbank may invest in up to 15%
of the outstanding capital stock or voting stock of any competing entity
whose consolidated revenues from any competing service or activity exceed
33 1/3% of the total consolidated revenues of that entity.

- Each of Global Crossing, Microsoft and Softbank may maintain any
competing investment it had made up to the date of the shareholders
agreement.

- With respect to Web-hosting, the non-competition provisions would prevent
each of Global Crossing, Microsoft and Softbank from engaging solely in
complex Web-hosting services and server farms. Each of Global Crossing,
Microsoft and Softbank may, therefore, engage in, or invest in any entity
that is engaged in Web-hosting services in or in connection with a data
center facility, including information technology consulting services,
data security services, managed solutions, day-to-day operational
management, distribution of Web content, electronic commerce support,
application hosting and related Internet infrastructure products and
services.

- KOREA. Our founding shareholders may use a different entity to conduct
activities relating to intracity terrestrial networks in Korea. Microsoft
and Softbank will own in the aggregate 62% and Global Crossing will own
38% of the capital stock of that entity that is not owned by local
partners.

- CHINA. Our founding shareholders may pursue business opportunities in
China, including Hong Kong, free from the non-competition provisions
outlined above.

- If we do not engage or invest in a competing service or activity as a
result of our failure to obtain the requisite approval of our directors
appointed by Microsoft and Softbank, Global Crossing would then be able
to engage and invest in that competing service or activity.

PACIFIC CROSSING-1. If Global Crossing acquires any additional equity in
Pacific Crossing-1, under our shareholders agreement, we will have the option to
purchase that equity from Global Crossing for cash at Global Crossing's
reacquisition cost. The term of that option will extend for one year from the
date of Global Crossing's acquisition.

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Our founding shareholders can suspend the operation of or terminate any of
the non-competition arrangements in the shareholders agreement at any time by
mutual agreement. Our consent is not required to suspend or terminate any of
those arrangements. The non-competition obligations of our founding shareholders
terminate on September 8, 2004. However, Microsoft's non-competition obligations
will terminate earlier, if Microsoft ceases to own an interest in us.

ADDITIONAL OBLIGATIONS OF MICROSOFT AND SOFTBANK TOWARD US -- SOFTWARE. In
the shareholders' agreement, Microsoft has agreed to make available to us any
software which it or any of its majority-owned subsidiaries has made available
to any of our competitors on terms, including price, features and functionality,
which are consistent with other strategic partners of Microsoft, recognizing
factors such as the class of customer utilizing the software, the type of
software, volume discounts and distribution channels.

USE OF OUR NETWORK. In the shareholders agreement, Microsoft has agreed to
use our facilities and assets for all of its and its controlled subsidiaries'
Layer 1 transmission systems services in our territory, which is a term not
defined in the shareholder agreement. Layer 1 transmission systems services is a
term used in the telecommunications industry to describe an element of raw
bandwidth requirements. Raw bandwidth is the physical means of sending data over
cable lines. Microsoft has also agreed to use its commercially reasonable
efforts to cause its majority-owned subsidiaries, other than controlled
subsidiaries, to use our facilities and assets for the procurement distribution
of those services in our territory.

In the shareholders agreement, Softbank has agreed to use and agreed to use
its best efforts to cause its controlled subsidiaries to use, our facilities and
assets for its and its controlled subsidiaries' capacity and service needs in
our territory. Softbank has also agreed to use its commercially reasonable
efforts to cause its majority-owned subsidiaries, other than controlled
subsidiaries, to use our facilities and assets for their capacity and service
needs in our territory.

The obligations of Microsoft and Softbank outlined in the two paragraphs
immediately above are subject to reasonable availability, compatibility and
quality specifications, cost considerations and the fiduciary obligations of
Microsoft and Softbank.

Our founding shareholders can suspend the operation of or terminate any of
the obligations of Microsoft and Softbank outlined in this section at any time
by mutual agreement. Our consent is not required to suspend or terminate any of
those obligations. These obligations of Microsoft and Softbank terminate on
September 8, 2004. However, Microsoft's obligations will terminate earlier, if
Microsoft ceases to own an interest in us.

OUR OBLIGATION TO PURCHASE CERTAIN TECHNOLOGY FROM MICROSOFT. Under the
shareholders agreement, we are required to use our commercially reasonable
efforts to purchase products and services provided by Microsoft and Microsoft
solution partners. Our obligation applies to products and services used only in
our territory and is subject to specified network operating and maintenance
objectives and pricing considerations.

REGISTRATION RIGHTS AGREEMENT

We have entered into a registration rights agreement with our founding
shareholders and with The Goldman Sachs Group. See "Description of Capital
Stock -- Registration Rights Agreement" on page 93. The registration rights
agreement provides for demand registration rights, subject to a number of
conditions and limitations, to each of our founding shareholders after our
initial public offering. In accordance with these demand registration rights,
our founding shareholders, or their permitted transferees, may require us to
file a registration statement under the Securities Act to register the sale of
shares of our common stock held by them. Each of Microsoft and Softbank may
require us to file up to two registration statements. Global Crossing has
unlimited demand registration rights, and The Goldman Sachs Group has no demand
registration rights. The registration rights agreement also provides, subject to
a number of conditions and limitations, our founding shareholders,

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The Goldman Sachs Group and their transferees with so-called piggy-back
registration rights, which allow them to participate in registered offerings of
our shares of common stock which we initiate.

Under the registration rights agreement, we are required to pay all
expenses, other than underwriting discounts and commissions, in connection with
any registered offering covered by the agreement. In addition, we are required
to indemnify our founding shareholders and The Goldman Sachs Group, and they are
in turn required to indemnify us, against certain liabilities in respect of any
registration statement or offering covered by the registration rights agreement.

CAPACITY COMMITMENT AGREEMENT

In connection with their investment in us, Global Crossing through an
affiliate, on the one hand, and Microsoft and Softbank, on the other hand,
entered into a capacity commitment agreement, dated November 24, 1999. Under the
capacity commitment agreement, each of Microsoft and Softbank agreed to purchase
capacity on Pacific Crossing-1, Global Access Limited or any other Japanese
intercity network controlled by Global Crossing or any of its subsidiaries
(including us) in an aggregate amount of $200,000,000 over a three-year period
from the date when Pacific Crossing-1 is able to carry trans-Pacific traffic.
Each of Microsoft and Softbank is severally liable for 50% of the capacity
commitment.

Under the capacity commitment agreement, Microsoft and Softbank agreed to
purchase:

- $20,000,000 of capacity no later than the date when Pacific Crossing-1 is
able to carry trans-Pacific traffic, which has occurred and for which we
have recorded a sale;

- an additional $20,000,000 of capacity during the period from the date
when Pacific Crossing-1 is able to carry trans-Pacific traffic to
December 31, 2000; and

- the balance of the $200,000,000 aggregate commitment, i.e., $160,000,000,
during the three-year period from the date when Pacific Crossing-1 is
able to carry trans-Pacific traffic.

The capacity commitment agreement provides that, except with respect to
their initial $20,000,000 commitment, Microsoft and Softbank may utilize the
remaining $180,000,000 aggregate capacity commitment on other systems of the
Global Crossing network, rather than on Pacific Crossing-1, Global Access
Limited or any other Japanese intercity network, as long as they use
commercially reasonable efforts to use their capacity commitment on Pacific
Crossing-1.

Under the capacity commitment agreement, use by Microsoft and Softbank or
any of their affiliates of our network as provided in the shareholders agreement
among our founding shareholders may be credited against the $200,000,000
aggregate capacity commitment of Microsoft and Softbank.

If at any time Microsoft or Softbank determines that it has not used and
could not reasonably be expected to use any capacity purchased under the
capacity commitment agreement, then Microsoft or Softbank will use Global
Crossing exclusively as a marketing agent to market the unused capacity. In that
case, Global Crossing will use commercially reasonable efforts to market the
unused capacity. In consideration for its marketing services, Global Crossing
will be entitled to receive a fee in an amount equal to 5% of the consideration
received from Global Crossing for the unused capacity. If Global Crossing fails
to sell successfully unused capacity within three months from the written
request by Microsoft or Softbank, Microsoft or Softbank will have the right to
replace Global Crossing as marketing agent.

Our founding shareholders can amend or terminate the capacity commitment
agreement at any time by mutual agreement without our consent.

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RELATIONSHIPS AMONG OURSELVES AND THE OTHER PACIFIC CROSSING LTD. SHAREHOLDER

The following description of the terms of the Pacific Crossing Ltd.
shareholders agreement is materially complete. However, we refer you to the
actual agreement which we have filed with the SEC as an exhibit to the
registration statement of which this prospectus forms a part.

We have entered into a shareholders agreement relating to Pacific Crossing
Ltd. with Marubeni. The Pacific Crossing Ltd. shareholders agreement details,
among other things:

- the composition of the Pacific Crossing Ltd. board of directors;

- actions requiring the supermajority consent of the Pacific Crossing Ltd.
board of directors;

- actions requiring the supermajority consent of the Pacific Crossing Ltd.
shareholders;

- shareholder rights to subscribe for new capital;

- restrictions on the transfer of shares of common stock in Pacific
Crossing Ltd.;

- the consequences of a deadlock over the annual budget; and

- exit rights of SCS.

COMPOSITION OF THE PACIFIC CROSSING LTD. BOARD OF DIRECTORS. The Pacific
Crossing Ltd. shareholders agreement provides that each shareholder party to
that agreement will have the right to nominate a number of directors to the
Pacific Crossing Ltd. board that is proportionate to that shareholder's
beneficial interest in Pacific Crossing Ltd. Today, the Pacific Crossing Ltd.
board of directors consists of six members, four of which we nominate and two of
which Marubeni nominates.

Under the first Pacific Crossing Ltd. shareholders agreement, we have the
right to designate the Chairman of the board of directors of Pacific Crossing
Ltd. for so long as we are the largest shareholder in Pacific Crossing Ltd.
Marubeni has the right to designate the Deputy Chairman of the board of
directors of Pacific Crossing Ltd. for so long as Marubeni is the second largest
shareholder in Pacific Crossing Ltd.

ACTIONS REQUIRING THE SUPERMAJORITY VOTE OF THE PACIFIC CROSSING LTD.
DIRECTORS. The Pacific Crossing Ltd. shareholders agreement provides that the
following actions require the approval of 75% of the Pacific Crossing Ltd.
directors:

- the merger or consolidation of Pacific Crossing Ltd., the sale of all or
substantially all of the assets of Pacific Crossing Ltd. or any material
majority-owned subsidiary of Pacific Crossing Ltd., the dissolution,
liquidation, reorganization or recapitalization of Pacific Crossing Ltd.
or any similar extraordinary corporate action or transaction involving
Pacific Crossing Ltd., subject to limited exceptions;

- the incurrence of indebtedness by Pacific Crossing Ltd. or any of its
majority-owned subsidiaries in excess of $100 million in aggregate
principal amount, other than indebtedness incurred in connection with
specified third party construction financing;

- refinancing of any indebtedness of Pacific Crossing Ltd. or any of its
majority-owned subsidiaries in excess of $100 million in outstanding
principal amount;

- approval of a fundamental change to the Pacific Crossing Ltd. business
plan or construction budget or a change in the Pacific Crossing Ltd.
marketing plan if the change would result in a plan that is not a
market-based, arm's length pricing plan;

- approval of any operating budget for any operating year in which the
aggregate amount of costs budgeted to be incurred by Pacific Crossing
Ltd. is greater than 30% or more than the aggregate amount of costs
budgeted to be incurred by Pacific Crossing Ltd. in the operating budget
for the preceding operating year;

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- the execution, material amendment or termination of any material system
contract, other than a capacity purchase agreement, or any other
agreement or agreements involving more than $50 million, which is not an
intercompany agreement or a capacity purchase agreement, or the material
amendment or material extension of those agreements before the end of
their stated terms;

- sales of assets by Pacific Crossing Ltd. and its majority-owned
subsidiaries, other than in the ordinary course of business or under the
Pacific Crossing-1 construction budget or then current operating budget,
with a purchase price or fair market value in excess of $25 million per
year in the aggregate or which are otherwise material to the business of
Pacific Crossing Ltd. and its majority-owned subsidiaries;

- the execution of any intercompany agreement, or the amendment or
extension of any intercompany agreement, or the approval of any
transaction or series of related transactions between Pacific Crossing
Ltd. or any of its majority-owned subsidiaries and a shareholder,
affiliate of a shareholder or related party, subject to limited
exceptions;

- the making of capital expenditures in excess of the current construction
budget or operating budget to the extent those capital expenditures are
not permitted to be made under the construction financing, as amended,
supplemented or otherwise modified from time to time;

- the issuance of a notice soliciting new capital or the incurrence of any
indebtedness to any shareholder or any affiliate of a shareholder or any
related party;

- with respect to any intercompany agreement that by its terms allows
Pacific Crossing Ltd. to elect to renew or terminate that agreement upon
the occurrence of some specified event or circumstance, any election by
Pacific Crossing Ltd. to terminate or not renew that intercompany
agreement and any determination of whether a default has occurred and
whether and what actions should be taken in respect of that default;

- the transfer of any ownership interest in a majority-owned subsidiary of
Pacific Crossing Ltd. to any person other than a wholly-owned subsidiary
of Pacific Crossing Ltd.;

- the undertaking of any system upgrade to enhance the system beyond its
current design capability of 640 Gbps;

- the adoption of or change in Pacific Crossing Ltd.'s dividend policy;

- any amendment or other modification of the memorandum of association and
bye-laws of Pacific Crossing Ltd., subject to limited exceptions;

- the expansion of the Pacific Crossing-1 system by means of a material
geographical addition to the configuration of the system or a material
geographical reconfiguration of the system, if that reconfiguration would
cost in excess of $100 million; and

- a fundamental change in the business of Pacific Crossing Ltd.

ACTIONS REQUIRING SHAREHOLDER VOTE. The Pacific Crossing Ltd. shareholders
agreement provides that the following actions require the approval of
shareholders holding at least 75% of the outstanding shares of common stock of
Pacific Crossing Ltd.:

- any action which results in the dilution of a shareholder's ownership
percentage;

- any issuance, purchase or redemption by Pacific Crossing Ltd. of any
securities of Pacific Crossing Ltd. or any change, increase or reduction
in the capitalization of Pacific Crossing Ltd.;

- any merger or consolidation of Pacific Crossing Ltd. or any material
majority-owned subsidiary of Pacific Crossing Ltd., or acquisition of all
or substantially all of the assets or capital stock of Pacific Crossing
Ltd. or any material majority-owned subsidiary of Pacific Crossing Ltd.
by

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another entity or other business combination or any dissolution,
liquidation or winding up of Pacific Crossing Ltd. or any material
majority-owned subsidiary of Pacific Crossing Ltd.;

- any amendment to the memorandum of association of Pacific Crossing Ltd.;
and

- any filing of a voluntary petition in bankruptcy or for reorganization or
for the adoption of an arrangement or an admission seeking the relief in
bankruptcy or reorganization provided under any existing or future law of
any jurisdiction.

In addition, the approval of shareholders holding 100% of the outstanding
shares of common stock of Pacific Crossing Ltd. is required to approve any
material change in the business of Pacific Crossing Ltd.

SHAREHOLDER RIGHTS TO SUBSCRIBE FOR NEW CAPITAL. The Pacific Crossing Ltd.
shareholders agreement provides that each shareholder party to that agreement
will have the preferential right to subscribe for any new capital raised for
Pacific Crossing Ltd. in proportion to that shareholder's beneficial interest in
Pacific Crossing Ltd. This provision applies whether the new capital takes the
form of debt or equity.

RESTRICTIONS ON THE TRANSFER OF SHARES OF COMMON STOCK IN PACIFIC CROSSING
LTD.. The Pacific Crossing Ltd. shareholders agreement prohibits all transfers
of shares of Pacific Crossing Ltd. common stock before construction of Pacific
Crossing-1 is complete and Pacific Crossing-1 is ready for use. At all other
times, Pacific Crossing Ltd. shareholders may transfer their shares in Pacific
Crossing Ltd. to:

- affiliates; or

- third parties subject to the other shareholders' rights of first refusal.

However, Pacific Crossing Ltd. shareholders are not allowed to transfer their
shares to common carriers or persons or entities whose creditworthiness is not
reasonably satisfactory to a majority of the other shareholders.

The Pacific Crossing Ltd. shareholders agreement includes tag-along and
drag-along provisions. If a shareholder agrees to sell its interest in Pacific
Crossing Ltd., the tag-along provisions allow the other shareholders to
participate in that sale by selling their interests on the same terms. If
shareholders holding 75% or more of the outstanding shares of common stock of
Pacific Crossing Ltd. agree to sell those shares to a non-affiliated party, the
drag-along provisions allow those shareholders to cause any remaining
shareholders to sell their interests in Pacific Crossing Ltd. on the same terms.

CONSEQUENCES OF A DEADLOCK OVER THE ANNUAL BUDGET. If the Pacific Crossing
Ltd. board of directors fails to agree on an annual budget for three consecutive
operating years and the shareholders fail to solve that deadlock after using
their reasonable efforts, then any shareholder may initiate a sale of Pacific
Crossing-1.

RELATIONSHIPS AMONG GLOBAL CROSSING SUBSIDIARIES AND PACIFIC CROSSING LTD.

MAINTENANCE AGREEMENTS

Pacific Crossing Ltd. has entered into operations, administration and
maintenance agreements with Global Access Limited and Global Crossing Network
Center Ltd., a Global Crossing subsidiary. Under those agreements, Global Access
Limited and Global Crossing Network Center are obligated to provide operating,
administration and maintenance services for Pacific Crossing-1. The term of the
agreement with Global Crossing Network Center is for an initial term of eight
years with two renewal periods of five years each at our option. The agreement
with Global Access Limited is for an initial term of eight years with two
renewal periods of eight and one-half years each at our option. Pacific Crossing
Ltd. recorded expenses of $4.5 million and $32.3 million for the nine months
ended September 30, 2000 under the agreement with Global Access Limited and
Global Crossing Network Center, respectively.

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We believe that the fees between Pacific Crossing Ltd., on the one hand,
and Global Access Limited and Global Crossing Network Center, on the other hand,
are on terms no less favorable to Pacific Crossing Ltd. than the terms that
would be available to Pacific Crossing Ltd. in transactions with a
non-affiliated third party.

FINANCIAL SERVICES AGREEMENT

In 1998, Pacific Crossing Ltd. entered into a financial services agreement
with Global Crossing Development Corporation, a subsidiary of Global Access
Limited, to arrange the Pacific Crossing-1 credit facility. In consideration for
its services, Global Crossing Development received a fee in the amount of 1.5%
of the $850 million credit facility, equal to $12.8 million. In a further
agreement between Global Crossing Development and Marubeni Pacific Cable
Limited, Vectant, Inc., formerly Global Bandwidth Solutions, a subsidiary of
Marubeni, Marubeni Pacific Cable received from Global Crossing Development 33.3%
of the $12.8 million, equal to $4.3 million, in consideration for its
participation in arranging the credit facility.

We believe that the fees between Pacific Crossing Ltd. and Global Crossing
Development are on terms no less favorable to Pacific Crossing Ltd. than the
terms that would be available to Pacific Crossing Ltd. in transactions with a
non-affiliated third party.

MANAGEMENT SERVICES

A number of indirect wholly owned subsidiaries of Global Crossing provide
Pacific Crossing Ltd. with marketing, management and administrative services in
respect of the development, implementation and operations of Pacific Crossing
Ltd. For the year ended December 31, 1999, Global Crossing charged Pacific
Crossing Ltd. approximately $4 million in marketing, management and
administrative services fees and $2.5 million in professional fees pertaining to
legal and advocacy issued before governmental authorities. For the nine months
ended September 30, 2000, Global Crossing charged Pacific Crossing Ltd. $318,000
for general corporate services. In addition, for the nine months ended September
30, 2000, we charged Pacific Crossing Ltd. $725,000 for general corporate
services.

We believe that the fees between Pacific Crossing Ltd. and the Global
Crossing subsidiaries are on terms no less favorable to Pacific Crossing Ltd.
than the terms that would be available to Pacific Crossing Ltd. in transactions
with a non-affiliated third party.

LOAN FACILITY

During 1999, Pacific Crossing Ltd. entered into a loan facility with Global
Crossing Holdings Ltd., a wholly owned subsidiary of Global Crossing, for
approximately $9 million. The interest rate of the loan is LIBOR plus 2%. The
outstanding principal plus accrued interest is due one year after the Pacific
Crossing-1 credit facility is paid in full.

We believe that the fees among Global Crossing subsidiaries and Pacific
Crossing Ltd. are on terms no less favorable to us than the terms that would be
available to us in transactions with a non-affiliated third party.

RELATIONSHIPS BETWEEN OURSELVES AND HUTCHISON WHAMPOA

The following description of the terms of the shareholders agreement
between Hutchison Whampoa and ourselves is materially complete. However, we
refer you to the actual shareholders agreement which we have filed with the SEC
as an exhibit to the registration statement of which this prospectus forms a
part.

Global Crossing and Hutchison Whampoa have entered into a shareholders
agreement relating to Hutchison Global Crossing. Upon completion of our initial
public offering of common stock and Global Crossing's contribution to us of its
50% interest in Hutchison Global Crossing, we became party to that shareholders
agreement and assumed Global Crossing's obligations under that agreement. The
following sections summarize the important provisions of the shareholders
agreement.

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AGREEMENT TO USE EACH OTHER'S SERVICES. Hutchison Whampoa has agreed,
subject to some limitations, and has agreed to cause, and in some cases to use
its reasonable commercial efforts to cause, its subsidiaries located outside
Hong Kong and China to use capacity, services and telehouse and media center
services from Global Crossing and its subsidiaries. This agreement is subject to
Global Crossing's services being reasonably competitive as to price,
availability, quality and other terms material to the competitiveness of
Hutchison Whampoa. In addition, Hutchison Whampoa will not be obligated to
comply with these provisions if the services sought are otherwise provided by
Hutchison Whampoa or any of its subsidiaries.

Hutchison Global Crossing has agreed, on behalf of itself and its
subsidiaries, to substantially similar provisions regarding the use of Global
Crossing's capacity and services as the ones outlined in the paragraph
immediately above. Global Crossing has agreed, and has agreed to cause its
subsidiaries, to provide capacity on the Global Crossing network to Hutchison
Global Crossing at a price equal to the lowest price of any sale on the
applicable Global Crossing network during the preceding calendar quarter to a
non-affiliated entity activating a similar amount of capacity on the applicable
system, excluding discounts given in respect of future commitments and past
purchases unless comparable circumstances apply in the case of the proposed
purchaser and having regard to timing of commitments, purchase and activation,
less 5%. However, this price may not be below Global Crossing's cost.

We have agreed, and agreed to cause our subsidiaries, to use Hutchison
Whampoa's and its subsidiaries' networks for paging, mobile and call center
services. Our obligation to do so is subject to those services being reasonably
competitive as to price, availability, quality and other terms material to its
competitiveness and that those services are not being provided by Global
Crossing or any of its subsidiaries or Hutchison Global Crossing or any of its
subsidiaries.

PRICE OF HUTCHISON GLOBAL CROSSING SERVICES TO US AND HUTCHISON
WHAMPOA. Hutchison Global Crossing has agreed to provide capacity to us and
Hutchison Whampoa and each of our subsidiaries at a price equal to the lowest
price of any sale on the Hutchison Global Crossing network during the preceding
calendar quarter to a non-affiliated entity activating similar amount and type
of capacity, excluding discounts given in respect of future commitments and past
purchases unless comparable circumstances apply in the case of the proposed
purchaser and having regard to timing of commitments, purchases and activation,
less 5%. However, the price of the services may not be below Hutchison Global
Crossing's cost.

NON-COMPETITION PROVISIONS. Each of Global Crossing, Hutchison Whampoa and
us has agreed not to pursue any opportunity in fixed services and Internet
access and transport services in China other than through Hutchison Global
Crossing and its subsidiaries. If any of us, Global Crossing, Hutchison Whampoa
or us wishes to pursue such an opportunity, that party will give prompt notice
to the board of directors of Hutchison Global Crossing, specifying the
opportunity in reasonable detail. If Hutchison Global Crossing is not permitted
by law or published policy, regulation or decree to pursue the opportunity, then
that party will be permitted to pursue the opportunity, subject to some
limitations.

In addition, each of Global Crossing, Hutchison Whampoa and us has agreed
not to, and has agreed to cause our subsidiaries not to, engage in the business
of Hutchison Global Crossing or form, enter into an agreement or other
arrangement with any third party for an investment in or otherwise make any
investment in any entity engaged in or intending to engage in the business of
Hutchison Global Crossing in:

- China, with respect to fixed services;

- Hong Kong and China, with respect to Internet access and transport
services; and

- Hong Kong, with respect to fixed services and Internet enablement
services.

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The agreements provides exceptions to these non-competition provisions,
including:

- investments in a competing business is permitted so long as the
consolidated revenues of our business do not exceed 15% of the total
consolidated revenues of our business at the date of the investment and
that business will not use the names "Hutchison", "Whampoa" or "Global
Crossing" as part of its name;

- ownership for investment purposes of the shares or other securities of
any corporation which carries on a competing business, subject to some
conditions;

- provision of Internet enablement services solely within our, the Global
Crossing or Hutchison Whampoa's group of subsidiaries to meet the needs
of a business that is not a competing business and provision of those
services if they are incidental to a business solution which, but for
these Internet enablement services, would not be within the scope of
Internet enablement services;

- engagement or investment in any competing service or activity if the
Hutchison Global Crossing board of directors considered and rejected that
service, activity or investment, subject to some conditions;

- development, construction, ownership, operation, maintenance and use by
us, Global Crossing or our subsidiaries of cable landing stations and the
sale of capacity on those stations, subject to some limitations; and

- development, construction, operation, maintenance, ownership, lease or
other provision by us, Global Crossing or our subsidiaries of backhaul
facilities in Hong Kong and China to connect cable stations owned and
operated by us, Global Crossing or any of our subsidiaries in Hong Kong
and China with related point-of-presence in Hong Kong and China, subject
to some limitations.

INTELLECTUAL PROPERTY. The agreement provides that any license for
intellectual property by Hutchison Global Crossing to us, Global Crossing or
Hutchison Whampoa must be first approved by the Hutchison Global Crossing board
of directors.

CABLE LANDING STATIONS. The agreement provides that neither Hutchison
Global Crossing nor any of its subsidiaries will make any capital expenditure or
equity contribution in relation to a submarine landing station in Hong Kong or
China or own cable stations or submarine cable systems which land in Hong Kong
or China or participate in consortia or similar arrangements. However, Hutchison
Global Crossing and its subsidiaries may facilitate the establishment of cable
landing stations to the extent desirable to enable the group to compete as a
provider of backhaul facilities and domestic services in Hong Kong and China.

BOARD OF DIRECTORS. The agreement provides that the board of directors of
Hutchison Global Crossing will consist of six members and that we and Hutchison
Whampoa will each nominate three directors. We will have the exclusive right to
remove the directors we nominated. The agreement provides that the Chairman of
the Hutchison Global Crossing board of directors will initially be nominated by
Hutchison Whampoa and will serve for 18 months. We will then have the right to
nominate the Chairman for the next 18 months, and that right will continue
alternating between us and Hutchison Whampoa.

Under the agreement, each matter submitted to the board of directors must
be approved by a simple majority of the members, including at least one director
nominated by each of us and Hutchison Global Crossing for so long as the
transfer restrictions described below are in place. A number of action matters
may not be undertaken without the approval of the board of directors, including:

- any amendment to the articles of association of Hutchison Global Crossing
or any of its subsidiaries;

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- the creation, allotment or issue of any shares of capital stock of
Hutchison Global Crossing or any of its subsidiaries or the grant or
agreement to grant any option over shares or the issue of any obligations
convertible into shares of Hutchison Global Crossing or any of its
subsidiaries;

- the redemption or purchase of any shares of Hutchison Global Crossing or
any of its subsidiaries;

- any change in the nature or scope of the business of Hutchison Global
Crossing or any modification to its business plan or operation budget;

- the giving of any guarantee, indemnity or other security to any person by
Hutchison Global Crossing or any of its subsidiaries or the borrowing by
Hutchison Global Crossing or any of its subsidiaries in excess of limits
from time to time contained in the business plan or otherwise not in
excess of HK$7,500,000 or any refinancing of or material amendments to
that borrowing;

- the acquisition or the disposal by Hutchison Global Crossing or any of
its subsidiaries of any shares or other interests in any other entity,
any business or assets formerly used in the conduct of any business or
any assets, other than in the ordinary course of business;

- the approval of the business plan;

- the amalgamation or merger of Hutchison Global Crossing or any of its
subsidiaries;

- any change in the name of Hutchison Global Crossing or any of its
subsidiaries;

- the declaration or payment of dividends;

- the commencement of the defense or conduct of litigation by Hutchison
Global Crossing or any of its subsidiaries concerning a material claim by
a third party against Hutchison Global Crossing or any of its
subsidiaries;

- any changes in the accounting policies of Hutchison Global Crossing or
any of its subsidiaries;

- the commencement of a winding up or similar proceeding, or the sale of
all or substantially all of the assets, of Hutchison Global Crossing or
any of its subsidiaries;

- the purchase of any freehold property by, or the grant or assignment of
any leasehold property to, Hutchison Global Crossing or any of its
subsidiaries;

- the provision by Hutchison Global Crossing of backhaul services at other
than market rates if not expressly permitted by the agreement;

- the disposition of capacity on the Hutchison Global Crossing network for
non-cash consideration;

- any transaction or agreement between Hutchison Global Crossing or any of
its subsidiaries and us or Hutchison Whampoa or our affiliates, or any
amendment to those agreements;

- capital expenditures in excess of HK$7,500,000, unless specifically
contemplated by the operating budget;

- execution or material amendment or termination of material contracts;

- election, appointment or removal of senior management;

- creation, grant or issue of, or agreement to create, grant or issue, any
mortgage, charge or other lien on any assets or shares of Hutchison
Global Crossing;

- execution of any individual contract or commitment which is outside the
ordinary course of business or has a value in excess of HK$7,500,000 or
has a duration of greater than 18 months;

- disposition of any asset having a net book value in excess of
HK$7,500,000;

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- changing the independent accountants of Hutchison Global Crossing and its
subsidiaries;

- a number of matters relating to the taxation of Hutchison Global Crossing
and its subsidiaries;

- the acquisition of or investment in any company;

- any reorganization, recapitalization or similar extraordinary corporate
action or transaction involving Hutchison Global Crossing or any of its
subsidiaries; and

- establishment of any new subsidiary.

RESTRICTIONS ON TRANSFER OF SHARES. In general, neither we nor Hutchison
Whampoa may transfer our interest in Hutchison Global Crossing without the
other's consent, except to our wholly owned subsidiaries.

INITIAL PUBLIC OFFERING. The agreement provides that each of ourselves and
Hutchison Whampoa may cause the initial public offering of Hutchison Global
Crossing's shares of common stock and the listing of those shares on an
internationally recognized securities exchange.

TERMINATION OF SHAREHOLDERS AGREEMENT. The agreement automatically
terminates 180 days from the date when Global Crossing will cease to own,
directly or indirectly, at least 35% of our outstanding voting stock and in
other circumstances described in the agreement.

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REGULATION

In the ordinary course of the development, construction and operation of
our telecommunications networks, including East Asia Crossing, and the provision
by us of telecommunications services, we will be required to obtain various
telecommunications and other permits, licenses and authorizations in the
ordinary course of business and will become subject to regulatory oversight and
control by various government authorities. In particular, in many countries, we
will be required to obtain licenses to construct, land and operate East Asia
Crossing.

The regulation of the telecommunications sectors of the countries in which
we currently plan to operate is developing rapidly and varies widely. Some
countries, like Hong Kong, allow full competition in the telecommunications
sector, while others, like the People's Republic of China, currently limit
competition for most services. All of the countries in which we currently plan
to have operations, with the exception of China and Taiwan, are signatories to
the World Trade Organization, Agreement on Basic Telecommunications and, as a
result, have committed to liberalizing their telecommunications regimes and
opening their telecommunications markets to foreign investment. Taiwan also has
begun to liberalize its telecommunications market, and China has committed to
opening its telecommunications markets to additional competition if it is
admitted to the World Trade Organization. We cannot be certain whether this
regional liberalizing trend will continue or accurately predict the pace and
scope of future liberalization.

UNITED STATES

Our ownership and operation of Pacific Crossing-1, which connects the
United States and Japan, subjects us to regulation by the Federal Communications
Commission. Our subsidiary, PC Landing Corp., has obtained a cable landing
license from the Federal Communications Commission, which permits us to land
Pacific Crossing-1 in Harbour Pointe, Washington, and Grover Beach, California,
and to operate Pacific Crossing-1 in the United States. This landing license
allows us to operate Pacific Crossing-1 on a non-common carrier basis. The
license is valid for 25 years from the date it was granted, but it is revocable
earlier if we fail to comply with the terms and conditions of the license. Our
operation of Pacific Crossing-1 is subject to regulatory oversight by the
Federal Communications Commission and requires us to file periodic regulatory
reports and pay regulatory fees.

WE DO NOT HOLD AUTHORITY TO PROVIDE INTERNATIONAL TELECOMMUNICATIONS
SERVICES IN THE UNITED STATES; HOWEVER, WE MAY OBTAIN THE AUTHORITY TO DO SO IN
THE FUTURE. IF WE OBTAIN THAT AUTHORITY, WE WILL BECOME SUBJECT TO ADDITIONAL
REGULATION IN THE UNITED STATES.

JAPAN

The Japanese government has incrementally liberalized the
telecommunications sector over the past several years. All facilities-based
telecommunications services are open to competition. However, new entrants face
practical problems, including complex and non-transparent licensing
requirements, difficulty in obtaining interconnection on fair and
non-discriminatory terms and conditions and obtaining access to rights of way
and the continuing dominance of the NTT group of companies. The
telecommunications sector is regulated primarily by the Ministry of Post and
Telecommunications. Japan does not impose foreign ownership restrictions on
competitive providers of telecommunications services.

Facilities-based carriers in Japan must obtain a Type I telecommunications
license from the Ministry of Post and Telecommunications. Service providers who
do not own or control transmission facilities must obtain a General Type II or
Special Type II telecommunications license depending on the specific services
they intend to provide. Our wholly-owned subsidiary, Global Crossing Japan K.K.,
holds a Special Type II license granted by the Ministry of Post and
Telecommunications on February 18, 2000, which permits us to provide a variety
of services on a resale basis. GlobalCenter Japan holds a General Type II
license. We applied for and were granted on June 1, 2000 a Type I
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license through another wholly-owned subsidiary, Asia Global Crossing Japan
Corporation. Global Access Limited also holds a Type I license that enables it
to be the landing party for Pacific Crossing-1 in Japan and to operate its
backhaul network and to provide facilities-based telecommunications services.

Our current and proposed operations in Japan make us subject to oversight
by the Ministry of Post and Telecommunications and other Japanese governmental
agencies and impose various regulatory obligations on us. For example, as
licensed carriers in Japan, our subsidiaries are required to file regulatory
reports, pay regulatory fees and seek amendments to their existing licenses,
perform notifications, obtain approvals and comply with other procedures in
connection with changes to their network configuration, offered services,
tariffs and other aspects of their businesses. A failure to file required
reports or make required regulatory payments may result in the imposition of
sanctions on us, up to and including the revocation of our licenses.

HONG KONG

The Hong Kong telecommunications market is one of the most liberalized in
Asia and is open to competition for all domestic and international services. The
Office of the Telecommunications Authority is an independent agency of the Hong
Kong government. Hong Kong does not impose foreign ownership restrictions on
telecommunications carriers, although all providers must be incorporated or
registered in Hong Kong.

On December 12, 2000, we, through our subsidiary, Asia Global Crossing Hong
Kong Ltd., were issued an external fixed telecommunications network services
license from The Office of the Telecommunications Authority. The external fixed
telecommunications network services license permits us to land East Asia
Crossing in Hong Kong and to provide international telecommunications facilities
and services in Hong Kong. Our subsidiary, Asia Global Crossing Asia Pacific
Ltd., also has obtained a Public Non-exclusive Telecommunications License that
authorizes it to provide international telecommunications services on a resale
basis. In addition, Hutchison Global Crossing holds one of four fixed
telecommunications network services licenses which permits Hutchison Global
Crossing to construct and operate domestic and international telecommunications
networks in Hong Kong and to provide all internal and external
telecommunications services, including providing backhaul transmission capacity
from the East Asia Crossing cable landing station. As the range of services that
we provide in Hong Kong expands, we may be required to obtain additional
telecommunications licenses. In addition, in connection with the construction
and operation of East Asia Crossing in Hong Kong, we may be required to obtain
various non-telecommunications governmental permits and authorizations in the
ordinary course of business, including zoning approvals and construction
permits.

As a result of our current and proposed operations in Hong Kong, we are
subject to regulation by The Office of the Telecommunications Authority and
other governmental agencies. In addition, we are required to file regulatory
reports and pay regulatory fees in connection with our existing licenses. The
failure to file required reports or make required regulatory payments may result
in the imposition of sanctions on us, which could include the revocation of our
licenses.

TAIWAN

The Taiwanese telecommunications sector is in the process of being
liberalized. Basic voice telephony services, including local, domestic and
international services, are open to limited competition on a resale basis. In
addition, data transmission services, closed user group services and value-added
services may be provided competitively. Taiwan at this time continues to impose
foreign ownership limitations on facilities-based providers.

Taiwan's telecommunications law divides telecommunications service
providers into two categories: Type I and Type II enterprises. Type I
enterprises are businesses that install telecommunications switching equipment
and line facilities of any kind (including wireline and wireless networks) and

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provide basic telecommunications services such as local, long distance and
international voice telephony services. Type II enterprises provide
telecommunications services other than those provided by Type I enterprises,
such as value-added network services, data transmission, Internet access,
information storage, retrieval and processing and closed user group services.
The Directorate General Telecommunications is responsible for issuing licenses
and supervising the telecommunications sector.

The Directorate General Telecommunications recently issued three integrated
fixed-line services Type I licenses, a subcategory of the broader Type I
license. These licenses will permit holders to construct and operate domestic
and international wireline telecommunications networks in Taiwan and offer a
full range of domestic and international telecommunications services. The
licenses allow holders to begin offering services in competition with the
incumbent, Chunghwa Telecom, in July 2001. In addition, in August 2000, the
Directorate General Telecommunications issued regulations for a new
international ocean cable circuit leasing license. This license will allow
holders to construct, land and operate international submarine cables in
Taiwan's territorial waters and to construct landing stations and a telehouse in
Taiwan. Licensees are required to obtain backhaul transmission facilities from
integrated fixed-line services licensees or Chunghwa Telecom. If backhaul cannot
be obtained on a commercially reasonable basis within three months of a request,
licensees may request authority to construct their own backhaul facilities.
Licensees will be permitted to sell or lease transmission capacity on their
cables to the three integrated fixed-line service licensees and Chunghwa
Telecom, as well as international facilities-based carriers who acquire at least
5 Gbps of capacity and have a correspondent relationship with Chunghwa Telecom
or one of the integrated fixed-line services licensees. On December 18, 2000,
our subsidiary, Asia Global Crossing Taiwan Inc., became the first
telecommunications company to be awarded an international ocean cable circuit
leasing license, subject to certain conditions. This license will allow us to
land the East Asia Crossing cable in Taiwan and sell and lease transmission
capacity.

On January 31, 2000, Taiwan raised the foreign ownership limits imposed on
Type I enterprises. Currently, Type I carriers may have a maximum of 20% foreign
direct investment and a total of 60% combined direct and indirect foreign
investment. The proposed international ocean cable circuit leasing license is
subject to these limits. There are currently no foreign ownership restrictions
on Type II enterprises. Taiwan has recently proposed to raise the direct
investment limit to 40% and to eliminate the limit on indirect ownership of Type
I carriers.

KOREA

The Korean telecommunications market, which is supervised by the Ministry
of Information Communications, has been substantially liberalized. All
facilities-based or resale telecommunications services are open to competition.
However, Korea continues to impose foreign ownership restrictions on most
providers of telecommunications services and there are substantial practical
barriers to entry into the Korean telecommunications market.

Under Korean law, facilities-based carriers, including operators of
submarine cable systems, must obtain a Network Service Provider license. Network
Service Provider licensees may provide local long-distance and international
voice services, paging services, leased lines and wireless services, as well as
sell transmission capacity to other carriers. To provide services on a resale
basis or to lease transmission facilities, providers must obtain a Specific
Service Provider license. Specific Service Provider licensees may provide the
same services as an Network Service Provider licensee, but they may offer
services only to end-users. Most other services provided over leased lines,
including data transmission and Internet access services, are considered
value-added network services, which can be provided upon notification to the
regulator.

Currently, Network Service Provider licensees are limited to a maximum of
49% direct foreign ownership, although foreign investors can legally obtain
management control and have indirect ownership interests. The Korean government
did not make any commitment to lift the limit on Network Service Provider
licensees under the terms of its World Trade Organization commitment. It is
unclear

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whether or when the existing limit will be raised. Switch-based resellers also
are limited to 49% foreign ownership until January 2001, at which time 100%
foreign ownership is to be permitted. There are no foreign ownership
restrictions on switchless resellers or value-added network service providers.

SINGAPORE

Singapore is rapidly becoming one of the most liberalized
telecommunications markets in Asia. On January 21, 2000, the Government of
Singapore announced that the full liberalization of Singapore's
telecommunications market would be effective April 1, 2000, two years earlier
than previously announced. As a result of this announcement, all
telecommunications networks and services are open to competition in Singapore.
In addition, the Singapore regulator has issued fairly pro-competitive
interconnection and dominant operator regulations. Moreover, Singapore does not
impose foreign ownership limits on competitive telecommunications providers.

The Info-Communication Development Authority of Singapore is responsible
for issuing telecommunications licenses and overseeing the telecommunications
sector. In connection with its liberalization of the market, Singapore
instituted a new licensing regime which differentiates between facilities-based
operators and service-based operators. Providers intending to deploy any form of
telecommunications network, system or facility, including submarine cables, for
the provision of telecommunication services to other licensed telecommunications
operators or end-users must obtain a facilities-based operator license. A
service-based operator license is required to provide services that do not
require the installation of transmission facilities. On October 11, 2000, our
subsidiary, East Asia Crossing Singapore Pte. Ltd., was granted a facilities
based operator license to construct, land, and operate the EAC cable, as well as
associated terrestrial facilities in Singapore.

As a result of holding a facilities-based operator license, we are subject
to regulation by the Singapore regulator and must pay annual licensing and other
regulatory fees. The Singapore regulator also is currently conducting a number
of public consultations on various issues related to the implementation of a
competitive telecommunications market that may affect our planned operations. We
cannot accurately predict the outcome of these proceedings or their effect on
our planned operations.

CHINA

At present, competition in the Chinese telecommunications market is
limited. Provision of most telecommunications services, including basic voice
telephony, data transmission, mobile services and Internet services, is limited
to several state-owned telecommunications carriers. Some services, including
value-added services and paging, are open to limited competition. China does not
have a published national telecommunications law, although it recently issued
draft regulations addressing interconnection and other issues. As a result, many
governmental and regulatory decisions that may have an impact on our business
are made on an ad hoc basis and without public proceedings or scrutiny. The
telecommunications sector is supervised by the Ministry of Information Industry
which is an independent agency of the Chinese government.

China currently prohibits foreign ownership of telecommunications
providers. That policy is likely to change if China is permitted to join the
World Trade Organization, which may occur as early as this year. In November
1999, the United States and China signed an Agreement on Market Access, which
outlined the terms by which the United States will support China's bid for
admission to the World Trade Organization. As part of the agreement, China
agreed to be bound by the World Trade Organization's Reference Paper for
Telecommunications when it is admitted to the World Trade Organization.
Specifically, China committed to establishing an independent telecommunications
regulator, requiring cost-based interconnection, implementing a transparent
regulatory regime and establishing safeguards against anti-competitive behavior
by dominant providers of telecommunications services. In addition, China agreed
to permit foreign ownership of certain telecommunications providers.
Specifically, China agreed to allow up to 50% foreign ownership in providers of
value-added

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services and paging within two years of China's accession to the World Trade
Organization. China also agreed to permit 49% foreign ownership of mobile
services providers within five years of accession, and 25% after one year, and
49% foreign ownership of resellers of domestic and international wireline
services within six years of accession, and 25% after two years. Ownership of
telecommunications facilities, including submarine cables and landing station
equipment, is not addressed in the U.S.-China agreement, and it is unclear at
present whether China will permit foreign ownership of facilities-based
carriers.

On May 22, 2000, the U.S. House of Representatives passed bill H.R. 4444
that will grant permanent normal trade relations to China upon China's accession
to the World Trade Organization. Once passed by the Senate and signed by the
President, this bill will eliminate the need of the United States to grant China
normal trade relations on an annual basis and clarify the longer term trade
relationship between the United States and China. This bill, together with the
Agreement on Market Access, makes it appear more likely that the United States
will support China's accession to the World Trade Organization.

China also has concluded bilateral agreements for World Trade Organization
admission with Japan, Canada, Malaysia and, most recently, with the European
Union. The China European Union agreement accelerated by two years the timetable
established in the United States-China agreement for opening the mobile
telephony market to foreign investment. Specifically, China agreed to allow
foreign ownership of mobile operators of up to 25% upon accession to the World
Trade Organization, 35% after one year and 49% after three years. China also
agreed to allow foreign-owned companies, within three years of World Trade
Organization accession, to lease capacity from Chinese network operators and
resell it for the provision of domestic and international private leased circuit
and closed user group services. In addition, competitive providers, including
those with foreign investors, will be able to provide inter-city and local
services in China. Under the World Trade Organization, the improved terms of the
European Union-China agreement will apply to United States and other foreign
investors.

While we cannot accurately predict when China will be permitted to join the
World Trade Organization, the United States and European Union agreements make
it more likely that accession will occur in early 2001. Should China not accede
to the World Trade Organization, it is unclear whether it will implement the
provisions of the U.S.-China or China-European Union agreements. The failure of
China to open its telecommunications market to additional competition or to
allow foreign ownership of telecommunications providers or telecommunications
facilities, including international submarine cables, may limit or prevent us
from conducting our business in China as currently planned and may have a
material adverse effect on our operations.

We have agreed with Hutchison Whampoa that any fixed-line
telecommunications business and any Internet access and transport business
undertaken by us in China will be carried out through Hutchison Global Crossing.
At present, China treats Hong Kong-based telecommunications companies like other
foreign investors. As a result, they may not invest in Chinese
telecommunications companies or operate telecommunications businesses in China.
We cannot accurately predict whether Hong Kong companies will be permitted to
invest in Chinese telecommunications providers before other foreign investors or
at all.

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DESCRIPTION OF OTHER INDEBTEDNESS

PACIFIC CROSSING-1 CREDIT FACILITY

Pacific Crossing Ltd. is the borrower under the $850.0 million senior
secured Pacific Crossing-1 credit facility, comprised of a $840.0 million term
loan facility and a $10.0 million working capital facility, with a number of
commercial lending institutions and Deutsche Bank AG, New York Branch, an
affiliate of Deutsche Bank, CIBC Inc. and Goldman, Sachs Credit Partners L.P.,
as lead agents for the lenders. The Pacific Crossing-1 credit facility is
secured by pledges of the stock of Pacific Crossing Ltd. and its subsidiaries
and security interests in some of the assets and revenues of Pacific Crossing
Ltd. and its subsidiaries and is being used to provide financing for a portion
of Pacific Crossing-1. The subsidiaries of Pacific Crossing Ltd. also guaranteed
Pacific Crossing Ltd.'s obligations under the Pacific Crossing-1 credit
facility. A portion of the Pacific Crossing-1 credit facility is available only
to pay interest on the loans before the Pacific Crossing-1 ready for service
date. The term loans under the Pacific Crossing-1 credit facility will amortize
over 10 semi-annual installments, scheduled to commence approximately 165 days
after the commercial operation date. Borrowings bear interest at an adjustable
rate based on the adjusted base rate or LIBOR plus an applicable margin. The
facility also requires mandatory repayments to be made from, among other things,
50% of excess cash flow, 50% of the net cash proceeds of any equity offering of
Pacific Crossing Ltd. and 100% of net cash proceeds of any permitted debt
offering of Pacific Crossing Ltd., permitted asset sale and insurance proceeds.
As of September 30, 2000, a total of $750 million was outstanding under the
Pacific Crossing-1 credit facility.

The Pacific Crossing-1 credit facility contains covenants that, among other
things, restrict Pacific Crossing Ltd.'s ability to incur indebtedness, make
investments, guarantees or acquisitions and make dividends or distributions. The
facility generally only permits dividends or distributions by Pacific Crossing
Ltd. out of a portion of excess cash flow and securely restricts the payment of
other dividends or other distributions. The Pacific Crossing-1 credit facility
contains certain financial covenants relating to revenues and the ratio of
system revenues to interest expense, the failure to comply with which would
cause all excess cash flow to be applied to the lenders under the Pacific
Crossing-1 credit facility. The Pacific Crossing-1 credit facility contains
events of default, including among other things, failure to pay amounts when
due, failure to comply with certain covenants and insolvency. An event of
default will also occur upon the occurrence of certain failures in connection
with Pacific Crossing-1. Upon the occurrence of an event of default, the Pacific
Crossing-1 credit facility permits the lenders to:

- declare the loans then outstanding to be immediately due and payable;

- demand that any equity commitments not funded be immediately funded; and

- proceed against the collateral.

In addition, the Pacific Crossing-1 credit facility prescribes the order by
which proceeds from the sale of Pacific Crossing-1 capacity will be applied,
both before and after the commencement of commercial operation and requires
Pacific Crossing Ltd. to maintain certain reserve warrants. As a result of the
above, the ability of Pacific Crossing Ltd. to use and distribute revenue is
severely restricted so long as the Pacific Crossing-1 credit facility remains in
existence.

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SHAREHOLDER LOANS

Upon completion of our initial public offering of common stock, we
purchased from Global Crossing the following shareholder loans:

HUTCHISON GLOBAL CROSSING SHAREHOLDER LOAN

On May 4, 2000, Global Crossing Holdings Ltd., a wholly owned subsidiary of
Global Crossing, entered into a loan agreement with Hutchison Global Crossing to
provide a loan of up to HK$305,000,000 to be made available in disbursements as
follows:

- HK$80,000,000 on May 10, 2000;

- HK$50,000,000 on June 1, 2000; and

- up to HK$175,000,000 in the aggregate on August 1, 2000, September 1,
2000 and/or October 1, 2000.

In each case, the interest rate will be reset monthly and will be equal to
the Hong Kong Dollar Interbank Offered Rate, or HIBOR, on the second business
day before the applicable disbursement or reset date. Under the terms of the
loan agreement, interest payments accrue on a monthly basis and are paid to
Global Crossing Holdings on the repayment date of the loan. The loan agreement
further provides that the loan repayment date will be determined by the board of
directors of Hutchison Global Crossing. However, Hutchison Global Crossing is
obligated to repay the loan with 50% of the amount by which any proceeds
received by Hutchison Global Crossing from third party financings or from a
public offering exceed Hutchison Global Crossing's then current capital and
operating expenditure requirements. As of September 30, 2000, HK$205,000,000 is
outstanding under the loan agreement.

GLOBAL ACCESS LIMITED SHAREHOLDER LOAN

On September 20, 1999, Global Crossing Services Europe, Ltd., a wholly
owned subsidiary of Global Crossing, entered into a loan agreement with Global
Access Limited to provide a loan of up to Y4,214,000,000.

The interest rate will be reset quarterly and will be equal to 1.5% above
the long-term prime lending rate quoted by the Industrial Bank of Japan on the
first disbursement date or the reset date, as applicable. Under the terms of the
loan agreement, interest payments will be made quarterly until the loan
repayment date of August 31, 2001. Currently, Y2,940,000,000 is outstanding
under the loan agreement.

GLOBAL CROSSING CREDIT FACILITY

Concurrently with the closing of the private offering of our outstanding
notes, we entered into a subordinated standby credit facility with Global
Crossing. Under the credit facility, Global Crossing has agreed to lend us up to
$400 million on a subordinated basis; provided the amount of this commitment may
be reduced by an amount equal to the gross proceeds we receive from the exercise
by the underwriters of our initial public offering of their overallotment option
in connection with such offering. Global Crossing has committed to keep half of
this facility available for borrowings until December 31, 2002 and has committed
to keep the remainder of this facility available for borrowings until we achieve
certain performance targets. We are permitted to use the proceeds of the credit
facility to pay a portion of the costs of building out our network, operating
expenses, interest on the credit facility and other indebtedness and for general
corporate purposes. Borrowings under the credit facility will bear interest
(which will be capitalized for the first five years) at a rate equal to the
interest rate on the notes plus 150 basis points. The credit facility will
mature six months after the maturity date of the notes, and no principal will be
payable on the standby credit facility until maturity.

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DESCRIPTION OF NOTES

GENERAL

For purposes of this section, the term "Company" refers only to Asia Global
Crossing Ltd. and not to any of its Subsidiaries. For purposes of this section,
the term "Notes" includes both the exchange notes and the outstanding notes,
unless otherwise indicated. We define other capitalized terms under "-- Certain
Definitions" beginning on page 142.

The outstanding notes were issued pursuant to an Indenture, dated as of
October 15, 2000 (the "Indenture"), between the Company and the United States
Trust Company of New York, as trustee (the "Trustee"). The exchange notes will
also be issued pursuant to the Indenture, which will be qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), upon
effectiveness of the registration statement of which this prospectus is a part.
The exchange notes will evidence the same indebtedness as the outstanding notes
(which they replace) and will be entitled to the benefits of the Indenture. A
copy of the Indenture is filed as an exhibit to the registration statement of
which this prospectus is a part. The terms of the exchange notes will include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act. The exchange notes will be subject to all those
terms, and we refer holders of exchange notes to the Indenture and the Trust
Indenture Act for a statement of those terms.

The following summary of the material provisions of the Indenture does not
purport to be complete and is qualified in its entirety by reference to the
Indenture, including the definitions in the Indenture of certain terms used
below. Copies of the Indenture are available as provided below under
"-- Additional Information" on page 142 and will be made available for
inspection at the office of the Luxembourg Paying Agent, Kredietbank S.A.
Luxembourgeoise.

As of the date of the Indenture, all of the Company's Subsidiaries will be
Restricted Subsidiaries, except for Pacific Crossing Ltd. and its Subsidiaries,
Global Access Limited and its Subsidiaries and Hutchison Global Crossing
Holdings Limited and its Subsidiaries, which will be Unrestricted Subsidiaries.
Under certain circumstances, the Company will be able to designate existing or
future Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries will
not be subject to many of the restrictive covenants contained in the Indenture.
The Company at its election may also designate any Subsidiary a Restricted
Subsidiary.

Application has been made to list the exchange notes on the Luxembourg
Stock Exchange.

TERMS OF NOTES

The Notes will be general unsecured obligations of the Company and will
rank pari passu in right of payment with all existing and future unsecured
senior Indebtedness of the Company. The Notes will rank senior in right of
payment to all existing and future subordinated Indebtedness of the Company, if
any.

The Company conducts substantially all of its operations through its
Subsidiaries and, therefore, the Company is dependent on the cash flow of its
Subsidiaries to meet its obligations, including its obligations with respect to
the Notes. The Notes will be effectively subordinated to all Indebtedness and
other liabilities and commitments (including trade payables and lease
obligations) of the Company's Subsidiaries. Any right of the Company to receive
assets of any of its Subsidiaries upon the latter's liquidation or
reorganization (and the consequent right of the Holders of the Notes to
participate in those assets) will be effectively subordinated to the claims of
that Subsidiary's creditors, except to the extent that the Company itself is
recognized as a creditor of such Subsidiary, in which case the claims of the
Company would still be subordinate to any security in the assets of such
Subsidiary and any indebtedness of such Subsidiary that is senior to that held
by the Company. As of September 30, 2000, on a pro forma basis after giving
effect to the private offering of our outstanding notes, our initial public
offering of our common stock and the application of the net

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proceeds therefrom, the Company's Subsidiaries would have had approximately
$1,178.1 million of Indebtedness and other liabilities (including trade payables
and lease obligations) outstanding, to which the Notes would have been
effectively subordinated. See "Risk Factors Relating to the Notes".

PRINCIPAL, MATURITY AND INTEREST

On the maturity date, the Notes will be repayable at par. The Notes will
mature on October 15, 2010. Interest on the Notes will accrue at the rate of
13.375% per annum and will be payable semi-annually in arrears on April 15 and
October 15, commencing on April 15, 2001, to Holders of record on the
immediately preceding May 31 and September 30. Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the date of original issuance. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.

Principal, premium, if any, and interest on the Notes will be payable at
the office or agency of the Company maintained for such purpose within the City
and State of New York or, at the option of the Company, payment of interest on
the Notes may be made by check mailed to the Holders of the Notes at their
respective addresses set forth in the register of Holders of Notes; provided
that all payments of principal, premium, if any, and interest on Notes of the
Holders which have given wire transfer instructions to the Company will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Until otherwise designated by the
Company, the Company's office or agency in New York will be the office of the
Trustee maintained for such purpose. The Notes will be issued in denominations
of $1,000 and integral multiples thereof. The Trustee initially will be Paying
Agent and Registrar under the Indenture, and the Company may act as Paying Agent
or Registrar under the Indenture. If Certificated Notes are issued, we will
appoint Kredietbank S.A. Luxembourgeoise, or such other person located in
Luxembourg and reasonably acceptable to the Trustee, as an additional paying and
transfer agent. Upon the issuance of Certificated Notes, Holders will be able to
receive principal, premium, if any, and interest with respect to the Notes and
will be able to transfer Certificated Notes at the Luxembourg office of such
paying and transfer agent, subject to our right to mail payments in accordance
with the terms of the Indenture.

The Indenture will provide that additional notes may be issued thereunder
from time to time, subject to the provisions of the Indenture described below
under "-- Certain Covenants" and applicable law.

GUARANTEES

The Company's payment obligations with respect to the Notes may be jointly
and severally guaranteed (the "Guarantees") by each Person from time to time
required to be a Guarantor, if any. See "-- Covenants -- Future Guarantees."
Each of the Guarantors will receive a fee from the Company as consideration for
its Guarantee, and the obligations of each Guarantor under its Guarantee will be
limited so as not to constitute a fraudulent conveyance under applicable law.
See "Risk Factors -- Risk Factors Relating to the Notes -- Fraudulent Conveyance
Considerations".

The Indenture will provide that no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
Person (whether or not affiliated with such Guarantor) unless: (i) subject to
the provisions of the following paragraph, the Person formed by or surviving any
such consolidation or merger (if other than such Guarantor) assumes all of the
obligations of such Guarantor (pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee) under the Notes, the Indenture
and the Registration Rights Agreement; and (ii) immediately after giving effect
to such transaction, no Default or Event of Default exists. The provisions of
this covenant will not be applicable to a sale, assignment, transfer, conveyance
or other disposition of assets between or among such Guarantor and any other
Guarantor or the Company or any of its Restricted Subsidiaries.

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The Indenture will provide that (i) in the event of a sale or other
disposition of all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the capital
stock of any Guarantor, then such Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
capital stock of such Guarantor) or the Person acquiring the property (in the
event of a sale or other disposition of all of the assets of such Guarantor)
will be automatically and unconditionally released and relieved of any
obligations under its Guarantee; provided that the Net Proceeds of such sale or
other disposition are applied in accordance with the applicable provisions of
the Indenture and (ii) any Guarantee by a Restricted Subsidiary of the Notes
shall provide by its terms that it shall be automatically and unconditionally
released and discharged upon the release or discharge of all guarantees which
required it to become a Guarantor under the Indenture. See "-- Repurchase at the
Option of Holders -- Asset Sales".

OPTIONAL REDEMPTION

So long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of such Stock Exchange shall so require, notice of any optional redemption
of the Notes by the Company shall be published within the time periods specified
below in a daily leading newspaper with general circulation in Luxembourg (which
is expected to be the Luxemburger Wort). Except as set forth below under
"-- Equity Offering Redemption," "-- Change of Control Redemption" and
"-- Optional Tax Redemption", the Notes are not redeemable at the Company's
option prior to October 15, 2005. Thereafter, the Notes are subject to
redemption at any time at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on October 15 of the years indicated below:

<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2005........................................................ 106.688%
2006........................................................ 104.458%
2007........................................................ 102.229%
2008 and thereafter......................................... 100.000%
</TABLE>

EQUITY OFFERING REDEMPTION

Notwithstanding the foregoing, at any time prior to October 15, 2003, the
Company may, on any one or more occasions, redeem up to 35% of the aggregate
principal amount of the Notes originally issued pursuant to the Indenture at a
redemption price of 113.375% of the principal amount thereof, plus accrued and
unpaid interest thereon to the redemption date, with the net cash proceeds
received from one or more Equity Offerings made by the Company after the date of
the Indenture; provided that at least 65% of the aggregate principal amount of
Notes originally issued pursuant to the Indenture remain outstanding immediately
after the occurrence of any such redemption. The Company may make any such
redemption upon not less than 30 nor more than 60 days' notice (but in no event
more than 90 days after the closing of the related Equity Offering). Any such
notice may be given prior to the completion of the related Equity Offering and
any such redemption may, at the Company's discretion, be subject to the
satisfaction of one or more conditions precedent, including, but not limited to,
the completion of the related Equity Offering.

CHANGE OF CONTROL REDEMPTION

In addition, at any time prior to October 15, 2005, the Notes may be
redeemed at the option of the Company in whole but not in part, upon the
occurrence of a Change of Control, upon not less than 30 nor more than 60 days'
prior notice (but in no event may any such redemption occur more than 90 days
after the occurrence of such Change of Control) mailed by first-class mail to
each Holder's registered address, at a redemption price equal to 100% of the
principal amount thereof plus

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the Applicable Premium (as defined below) as of, and accrued and unpaid
interest, if any, to the date of redemption (the "Redemption Date").

"Applicable Premium" means, on any Redemption Date the greater of (i) 1.0%
of the principal amount of such Note or (ii) the excess of (A) the present value
at such Redemption Date of (1) the redemption price of such Note at October 15,
2005 (such redemption price being set forth in the table above) plus (2) all
required interest payments due on such Note through October 15, 2005 (excluding
accrued but unpaid interest), computed using a discount rate equal to the
relevant Treasury Rate (as defined below) plus 50 basis points over (B) the
principal amount of such Note, if greater.

"Treasury Rate" means, as of any Redemption Date, the yield to maturity as
of such Redemption Date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) that has become publicly available at least two
Business Days prior to the Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Redemption Date to October 15, 2005;
provided, however, that if the period from the Redemption Date to October 15,
2005 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year shall be
used.

OPTIONAL TAX REDEMPTION

The Notes are subject to redemption at the option of the Company or a
successor corporation at any time, in whole but not in part, upon not less than
30 nor more than 60 days' notice, at a redemption price equal to the principal
amount thereof, plus accrued and unpaid interest thereon to the redemption date
if, as a result of any change in or amendment to the laws or any regulations or
ruling promulgated thereunder of (x) Bermuda or any political subdivision or
governmental authority thereof or therein having the power to tax, (y) any
jurisdiction, other than the United States, from or through which payment on the
Notes is made by the Company or successor corporation, or its paying agent in
its capacity as such or any political subdivision or governmental authority
thereof or therein having the power to tax or (z) any other jurisdiction, other
than the United States, in which the Company or a successor corporation is
organized, or any political subdivision or governmental authority thereof or
therein having the power to tax, or any change in the official application or
interpretation of such laws, regulations or rulings, or any change in the
official application or interpretation of, or any execution of or amendment to,
any treaty or treaties affecting taxation to which such jurisdiction (or such
political subdivision or taxing authority) is a party (a "Change in Tax Law"),
which becomes effective on or after the date of the offering memorandum issued
in connection with the offering of the outstanding notes, the Company or a
successor corporation is or would be required on the next succeeding interest
payment date to pay Additional Amounts with respect to the Notes (as described
under "-- Payment of Additional Amounts"), and the payment of such Additional
Amounts cannot be avoided by the use of any reasonable measures available to the
Company or a successor corporation.

In addition, the Notes are subject to redemption at the option of the
Company at any time, in whole but not in part, upon not less than 30 nor more
than 60 days' notice, at a redemption price equal to the principal amount
thereof, plus accrued and unpaid interest thereon to the redemption date, if the
Person formed by a consolidation or amalgamation of the Company or into which
the Company is merged or to which the Company conveys, transfers or leases its
properties and assets substantially as an entirety is required, as a consequence
of such consolidation, amalgamation, merger, conveyance, transfer or lease and
as a consequence of a Change in Tax Law occurring after the date of such
consolidation, amalgamation, merger, conveyance, transfer or lease, to pay
Additional Amounts in respect of any tax, assessment or governmental charge
imposed on any Holder of Notes.

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PAYMENT OF ADDITIONAL AMOUNTS

If any deduction or withholding for any present or future taxes,
assessments or other governmental charges of (x) Bermuda or any political
subdivision or governmental authority thereof or therein having power to tax,
(y) any jurisdiction, other than the United States, from or through which
payment on the Notes is made by the Company or a successor corporation, or its
paying agent in its capacity as such or any political subdivision or
governmental authority thereof or therein having the power to tax or (z) any
other jurisdiction, other than the United States, in which the Company or a
successor corporation is organized, or any political subdivision or governmental
authority thereof or therein having the power to tax shall at any time be
required by such jurisdiction (or any such political subdivision or taxing
authority) in respect of any amounts to be paid by the Company or a successor
corporation under the Notes, the Company or a successor corporation will pay to
each Holder of Notes as additional interest, such additional amounts
("Additional Amounts") as may be necessary in order that the net amounts paid to
such holder of such Notes who, with respect to any such tax, assessment or other
governmental charge, is not resident in, or a citizen of, such jurisdiction,
after such deduction or withholding shall not be less than the amount specified
in such Notes to which such Holder is entitled; provided, however, that the
Company or a successor corporation shall not be required to make any payment of
Additional Amounts for or on account of:

(i) Any tax, assessment or other governmental charge that would not
have been imposed but for (a) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of a power over, such
Holder, if such Holder is an estate, trust, partnership, limited liability
company or corporation) and the taxing jurisdiction or any political
subdivision or territory or possession thereof or area subject to its
jurisdiction, including, without limitation, such Holder (or such
fiduciary, settlor, beneficiary, member, shareholder or possessor) being or
having been a citizen or resident thereof or being or having been present
or engaged in a trade or business therein or having or having had a
permanent establishment therein, (b) the presentation of a Note (where
presentation is required) for payment on a date more than 30 days after (x)
the date on which such payment became due and payable or (y) the date on
which payment thereof is duly provided for, whichever occurs later, or (c)
the presentation of a Note for payment in Bermuda or any political
subdivision thereof or therein, unless such Note could not have been
presented for payment elsewhere;

(ii) Any estate, inheritance, gift, sales, transfer, personal property
or similar tax, assessment or other governmental charge;

(iii) Any tax, assessment or other governmental charge that is payable
otherwise than by withholding from payment of principal of, premium, if
any, or any interest on the Notes;

(iv) Any tax, assessment or other governmental charge that is imposed
or withheld by reason of the failure by the Holder or the beneficial owner
of the Note to comply with a request of the Company addressed to the Holder
(a) to provide information, documents or other evidence concerning the
nationality, residence or identity of the Holder or such beneficial owner
or (b) to make and deliver any declaration or other similar claim (other
than a claim for refund of tax, assessment or other governmental charge
withheld by the Company) or satisfy any information or reporting
requirements, which, in the case of (a) or (b), is required or imposed by a
statute, treaty, regulation or administrative practice of the taxing
jurisdiction as a precondition to exemption from all or part of such tax,
assessment or other governmental charge; or

(v) Any combination of items (i), (ii), (iii) and (iv) above;

nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any premium or interest on, any Note to any Holder who is a
fiduciary or partnership or limited liability company or other than the sole
beneficial owner of such payment to the extent such payment would be required by
the laws of (x) Bermuda or any political subdivision or governmental authority
thereof or therein

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having the power to tax, (y) any jurisdiction, other than the United States,
from or through which payment on the Notes is made by the Company or a successor
corporation, or its paying agent in its capacity as such or any political
subdivision or governmental authority thereof or therein having the power to tax
or (z) any other jurisdiction, other than the United States, in which the
Company or a successor corporation is organized, or any political subdivision or
governmental authority thereof or therein having the power to tax to be included
in the income for tax purposes of a beneficiary or settlor with respect to such
fiduciary or a member of such partnership, limited liability company or
beneficial owner who would not have been entitled to such Additional Amounts had
it been the Holder of such Note.

The Company shall provide the Trustee with the official acknowledgment of
the relevant taxing authority (or, if such acknowledgment is not available, a
certified copy thereof) evidencing the payment of the withholding taxes, if any,
by the Company. Copies of such documentation shall be made available to the
Holders of the Notes or the Paying Agent, as applicable, upon request therefor.

All references in this prospectus to principal of, premium, if any, and
interest on the Notes shall include any Additional Amounts payable by the
Company in respect of such principal, such premium, if any, and such interest.

SELECTION AND NOTICE

If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are then listed, or, if the Notes are not so then listed, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days prior to the redemption date to each Holder of Notes to be redeemed at its
registered address. Notices of redemption may not be conditional except as
provided for under "-- Equity Offering Redemption." If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Note. Notes called
for redemption will become due on the date fixed for redemption. On and after
the redemption date, interest will cease to accrue on Notes or portions thereof
called for redemption.

So long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of such Stock Exchange shall so require, the Company shall promptly inform
the Luxembourg Stock Exchange of the outstanding principal amount of Notes after
completion of a redemption of the Notes, in whole or in part, prior to their
stated maturity.

MANDATORY REDEMPTION

Except as set forth below under "-- Repurchase at the Option of Holders,"
the Company will not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.

REPURCHASE AT THE OPTION OF HOLDERS

Change of Control

Upon the occurrence of a Change of Control, each Holder of Notes will have
the right to require the Company to purchase all or any part (equal to $1,000 or
an integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at a purchase price in cash (the
"Change of Control Payment") equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that the Company shall not be obligated to repurchase Notes pursuant to

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this covenant in the event that it has exercised its rights to redeem all of the
Notes as described above under "-- Optional Redemption," "-- Change of Control
Redemption" or "-- Optional Tax Redemption." Within 30 days following any Change
of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to purchase Notes on the date specified in such notice, which date shall be no
earlier than 30 and no later than 60 days from the date such notice is mailed
(the "Change of Control Payment Date"), in accordance with the procedures
required by the Indenture and described in such notice. So long as the Notes are
listed on the Luxembourg Stock Exchange and the rules of such Stock Exchange
shall so require, the Company shall publish all notices given to Holders in a
daily leading newspaper with general circulation in Luxembourg (which is
expected to be the Luxemburger Wort).

The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations to the extent such
laws and regulations are applicable in connection with the purchase of Notes as
a result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with any of the provisions of this
covenant, the Company will comply with the applicable securities laws and
regulations and will be deemed not to have breached its obligations under this
covenant by virtue thereof.

On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail or deliver to each Holder of Notes
so tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail or deliver (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of Notes surrendered, if any; provided that each such new Note will be
in a principal amount of $1,000 or an integral multiple thereof. The Company
will publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.

Except as described above, the Change of Control provisions described above
will be applicable whether or not any other provisions of the Indenture are
applicable. Except as described above with respect to a Change of Control, the
Indenture will not contain provisions that permit the Holders of the Notes to
require that the Company purchase or redeem the Notes in the event of a
takeover, recapitalization or similar transaction. The Company's ability to
purchase Notes upon a Change of Control may be limited by the Company's then
existing financial resources and the covenants contained in its debt
instruments.

There can be no assurance that sufficient funds will be available when
necessary to make any such required purchases. See "Risk Factors -- Risk Factors
Relating to the Notes -- We may not be able to fund a change of control offer".

The Company will not be required to make a Change of Control Offer upon the
occurrence of a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in the Indenture applicable to a Change of Control Offer
made by the Company, and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.

Asset Sales

The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate any Asset Sale, unless (i)
the Company (or such Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by the Board of Directors (including as to
the value of all noncash consideration) and set forth in an Officers'
Certificate delivered to the Trustee) of the assets
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or Equity Interests issued or sold or otherwise disposed of and (ii) at least
75% of the consideration therefor is in the form of cash and/or Cash
Equivalents, and (iii) the Net Proceeds received by the Company (or such
Restricted Subsidiary, as the case may be) from such Asset Sale are applied
within 360 days following the receipt of such Net Proceeds (a) to repay, redeem
or repurchase outstanding pari passu Indebtedness of the Company or Indebtedness
of any Restricted Subsidiary; provided that in the event that such Restricted
Subsidiary is a Guarantor, the Indebtedness to be redeemed or repurchased ranks
at least pari passu to the Guarantee given by such Restricted Subsidiary, (b) to
reinvest, or enter into a legally binding agreement to reinvest, such Net
Proceeds (or any portion thereof) in assets that are used or useful in a
Permitted Business or in the Capital Stock of a Person engaged in a Permitted
Business that is or immediately thereafter becomes a Restricted Subsidiary or
(c) in any combination permitted by clauses (a) and (b). Pending the final
application of any such Net Proceeds, the Company or such Restricted Subsidiary
may invest such Net Proceeds in Cash Equivalents. The balance of such Net
Proceeds, after the application of such Net Proceeds as described in the
immediately preceding clauses (a) and (b), shall constitute "Excess Proceeds."

When the aggregate amount of Excess Proceeds equals or exceeds $15.0
million, the Company will be required to and, at the election of the Company, at
any earlier time, the Company, may make an offer to all Holders of Notes and
pari passu Indebtedness (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes and pari passu Indebtedness that may be purchased out
of the Excess Proceeds, at a purchase price in cash in an amount equal to 100%
of the principal amount thereof, plus accrued and unpaid interest thereon to the
date of purchase, in accordance with the procedures set forth in the Indenture
and the agreements governing such pari passu Indebtedness. To the extent that
any Excess Proceeds remain after the consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by
the Indenture. If the aggregate principal amount of Notes and pari passu
Indebtedness tendered into such Asset Sale Offer by holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and pari passu
Indebtedness to be purchased on a pro rata basis. Upon completion of such Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero for purposes of
the first sentence of this paragraph.

The amount of (i) any liabilities (as shown on the Company's (or such
Restricted Subsidiary's, as the case may be) most recent balance sheet) of the
Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any guarantee
thereof) that are assumed by the transferee of any such assets pursuant to an
agreement that releases the Company or any Restricted Subsidiary from all
liability in respect thereof, (ii) Indebtedness of any Restricted Subsidiary
that is no longer a Restricted Subsidiary as a result of such Asset Sale, to the
extent that the Company and each other Restricted Subsidiary are released from
any guarantee of payment of the principal amount of such Indebtedness in
connection with such Asset Sale, (iii) any securities, notes or other
obligations received by the Company (or such Restricted Subsidiary, as the case
may be) from such transferee that are converted by the Company (or such
Restricted Subsidiary, as the case may be) into cash and/or Cash Equivalents (to
the extent of the cash and/or Cash Equivalents received) within 180 days
following the receipt thereof, (iv) the Fair Market Value of any assets used or
useful in a Permitted Business received in such Asset Sale and (v) any
Designated Noncash Consideration received by the Company or any or its
Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market
Value, taken together with all other Designated Noncash Consideration received
pursuant to this clause (v) that is at that time outstanding, not to exceed 10%
of Consolidated Tangible Assets at the time of receipt of such Designated
Noncash Consideration, will be deemed to be cash and/or Cash Equivalents for
purposes of this provision.

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provisions of any securities laws or regulations conflict with any of the
provisions of this covenant, the Company will comply with the applicable
securities laws and regulations and will be deemed not to have breached its
obligations under this covenant by virtue thereof.

COVENANTS

Restricted Payments

The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests (other than
dividends or distributions by the Company payable in Equity Interests (other
than Disqualified Stock) of the Company, or dividends or distributions by a
Restricted Subsidiary made only to the Company or a Restricted Subsidiary of the
Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company (other than any such
Equity Interests owned by the Company or any Restricted Subsidiary of the
Company); (iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes, except, in each case, a payment of interest or
principal at Stated Maturity; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless:

(a) at the time of and after giving effect to such Restricted Payment,
no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;

(b) in the case of clauses (i), (ii) and (iii) above, and, in the case
of any Restricted Investment that is not an Investment in a Permitted
Business, the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the first paragraph of the covenant described below under the caption
"-- Incurrence of Indebtedness and Issuance of Preferred Stock"; and

(c) the aggregate amount (if not made in cash, the fair market value
as determined in good faith by the Board of Directors) of such Restricted
Payment and all other Restricted Payments made by the Company and its
Restricted Subsidiaries (excluding Restricted Payments permitted by clauses
(ii), (iii), (iv), (x) and (xiii) (but, in the case of clause (xiii), only
to the extent that such Restricted Payments are reflected as an expense on
the income statements of the Company) of the next succeeding paragraph), is
less than the sum, without duplication, of (i) the remainder of (x) 100% of
cumulative Consolidated Cash Flow (or, in the case Consolidated Cash Flow
shall be negative, less 100% of such deficit) for the period (taken as one
accounting period) beginning on the date of the Indenture and ending on the
last day of the last full fiscal quarter immediately preceding the date of
such Restricted Payment minus (y) the product of 1.5 times the cumulative
Consolidated Interest Expense of the Company from the date of the Indenture
through the last day of the last full fiscal quarter immediately preceding
the date of such Restricted Payment, plus (ii) 100% of the aggregate net
cash proceeds and the Fair Market Value of property or assets received by
the Company since the date of the Indenture as a contribution to its common
equity capital or from the issue or sale of Equity Interests of the Company
(other than Disqualified Stock) or from the issue or sale of Disqualified
Stock or Indebtedness of the Company that have been converted into such
Equity Interests (other than Equity Interests (or Disqualified Stock or
convertible debt securities) sold to a Subsidiary of the Company), plus the
amount of cash or the Fair Market Value of property or assets received by

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the Company or any Restricted Subsidiary upon such conversion or exchange,
plus (iii) the aggregate amount equal to the net reduction in Investments
in Unrestricted Subsidiaries resulting from (x) dividends, distributions,
interest payments, return of capital, repayments of Investments or other
transfers of assets to the Company or any Restricted Subsidiary from any
Unrestricted Subsidiary, (y) proceeds realized by the Company or any
Restricted Subsidiary upon the sale of such Investment to a Person other
than the Company or any Subsidiary of the Company, or (z) the redesignation
of any Unrestricted Subsidiary as a Restricted Subsidiary, not to exceed in
the case of any of the immediately preceding clauses (x), (y) or (z) the
aggregate amount of Restricted Investments made by the Company or any
Restricted Subsidiary in such Unrestricted Subsidiary after the date of the
Indenture, plus (iv) to the extent that any Restricted Investment that was
made after the date of the Indenture is sold, the amount of cash or Fair
Market Value of assets received therefrom (net of any cost of disposition)
not to exceed the aggregate amount of such Restricted Investment.

The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the foregoing provisions; (ii)
the redemption, repurchase, retirement, defeasance or other acquisition of any
subordinated Indebtedness or Equity Interests of the Company in exchange for, or
out of the net cash proceeds of the substantially concurrent sale (other than to
a Subsidiary of the Company) of, other Equity Interests of the Company (other
than any Disqualified Stock) after the date of the Indenture; provided that the
amount of any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (c)(ii) of the preceding paragraph; (iii) the defeasance, redemption,
retirement, repurchase or other acquisition of Indebtedness that is subordinated
to the Notes with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; (iv) the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a pro rata
basis; (v) the purchase of any subordinated Indebtedness at a purchase price not
greater than 101% of the principal amount thereof following a Change of Control
pursuant to an obligation in the instruments governing such subordinated
Indebtedness to purchase or redeem such subordinated Indebtedness as a result of
such Change of Control; provided, however, that no such purchase or redemption
shall be permitted until the Company has completely discharged its obligations
described under "-- Repurchase at the Option of Holders -- Change of Control"
(including the purchase of all Notes tendered for purchase by holders) arising
as a result of such Change of Control; (vi) payments or distributions, to
dissenting stockholders pursuant to applicable law, pursuant to or in connection
with a consolidation, merger or transfer of assets that complies with the
provisions of the Indenture applicable to mergers, consolidations and transfers
of all or substantially all of the property and assets of the Company and its
Restricted Subsidiaries; (vii) the repurchase, redemption or other acquisition
or retirement for value of any Equity Interests of the Company determined to be
necessary or advisable by the Board of Directors in good faith in connection
with a merger or acquisition of assets by the Company or a Restricted Subsidiary
or of a Person that is or immediately thereafter becomes a Restricted Subsidiary
otherwise permitted pursuant to the Indenture in which at least 80% of the
consideration issued or paid by the Company and its Restricted Subsidiaries is
Equity Interests of the Company; provided that the aggregate amount of such
repurchases, redemptions or other acquisitions or retirements for value in
connection with any merger or acquisition shall not exceed the lesser of (x)
7.5% of the Consolidated Tangible Assets of the Company and its Restricted
Subsidiaries prior to the transaction and (y) 7.5% of the Equity Interests to be
issued by the Company in the transaction (provided that the amount of such
purchases shall reduce the amount available for Restricted Payments under clause
(c) (ii) of the immediately preceding paragraph); (viii) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Company or any of its Restricted Subsidiaries held by any director,
officer, employee or consultant of the Company or any Restricted Subsidiary;
provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $10.0 million in any
twelve-month period (with unused amounts being carried over to succeeding
twelve-month periods, subject to a maximum of

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$15.0 million in any twelve-month period); provided further, that such amount in
any twelve-month period may be increased by an amount (to the extent not
previously applied) not to exceed (A) the cash proceeds received by the Company
or any of its Restricted Subsidiaries from the sale of Equity Interests (other
than Disqualified Stock) of the Company (to the extent contributed to the
Company) to directors, officers, employees or consultants of the Company and its
Restricted Subsidiaries that occurs after the Issue Date (provided that the
amount of such cash proceeds utilized for any such repurchase, retirement, other
acquisition or retirement for value will not increase the amount available for
Restricted Payments under clause (c)(ii) of the immediately preceding paragraph)
plus (B) the cash proceeds of key man life insurance policies received by the
Company and its Restricted Subsidiaries after the Issue Date (provided that the
Company may elect to apply all or any portion of the aggregate increase
contemplated by clauses (A) and (B) above in any single twelve-month period);
(ix) repurchases of Equity Interests deemed to occur upon exercise of stock
options if such Equity Interests represent a portion of the exercise price of
such options; (x) Investments acquired in exchange for Equity Interests (other
than Disqualified Stock), or in an amount not to exceed the net cash proceeds
received from an Equity Offering made by the Company after June 30, 2000,
(provided that the amount of any such Equity Interests or net cash proceeds that
are utilized for any such Investment shall be excluded from clause (c)(ii) of
the preceding paragraph) plus the net gain realized in cash and not otherwise
included in Consolidated Cash Flow from the sale of Restricted Investments; (xi)
the declaration and payment of dividends or distributions to holders of any
class or series of Disqualified Stock of the Company or any of its Restricted
Subsidiaries issued or incurred in accordance with the covenant entitled
"Incurrence of Indebtedness and Issuance of Preferred Stock" on the date on
which such dividend or distribution was scheduled to be paid in the original
documentation governing such Disqualified Stock, not including any contingent
obligation to pay such dividend or distribution prior to the date originally
scheduled for the payment thereof; (xii) the declaration and payment of
dividends or distributions to holders of any class or series of Designated
Preferred Stock, not in excess of $50.0 million per year; and (xiii) other
Restricted Payments in an aggregate amount not to exceed $25.0 million.

The Board of Directors may not designate any Subsidiary of the Company
(other than a newly created Subsidiary in which no Investment has been made
(other than the amount required to capitalize such Subsidiary in connection with
its organization)) as an Unrestricted Subsidiary (a "Designation") unless: (i)
no Default or Event of Default shall have occurred and be continuing at the time
of or after giving effect to such Designation; (ii) the Company would,
immediately after giving effect to such Designation, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the first paragraph
of the covenant described below under the caption "-- Incurrence of Indebtedness
and Issuance of Preferred Stock"; and (iii) the Company would not be prohibited
under the Indenture from making an Investment at the time of such Designation
(assuming the effectiveness of such Designation for purposes of clauses (a) and
(b) of the first paragraph of this covenant) in an amount equal to the fair
market value of the net Investment of the Company or any other Restricted
Subsidiary in such Subsidiary on such date.

In the event of any such Designation, all outstanding Investments owned by
the Company and its Restricted Subsidiaries in the Subsidiary so designated will
be deemed to be an Investment made as of the time of such Designation and will
reduce the amount available for Restricted Payments under the first paragraph or
second paragraph of this covenant, as applicable, or Permitted Investments, as
applicable. All such outstanding Investments will be deemed to constitute
Restricted Payments in an amount equal to the fair market value of such
Investments at the time of such Designation.

The Indenture will further provide that a Designation may be revoked (a
"Revocation") by a resolution of the Board of Directors delivered to the
Trustee, provided that the Company will not make any Revocation unless: (i) no
Default or Event of Default shall have occurred and be continuing at the time of
or after giving effect to such Revocation; and (ii) all Liens and Indebtedness
of such Unrestricted Subsidiary outstanding immediately following such
Revocation would, if incurred at such time, have been permitted to be incurred
at such time for all purposes under the Indenture.

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Incurrence of Indebtedness and Issuance of Preferred Stock

The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and will not permit
any of its Restricted Subsidiaries to issue any Disqualified Stock or Preferred
Stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock and its Restricted
Subsidiaries may incur Indebtedness or issue Disqualified Stock or Preferred
Stock if either:

(i) the Consolidated Leverage Ratio is less than 6.0 to 1.0 prior to
December 31, 2002, or 5.5 to 1.0 thereafter; or

(ii) the Consolidated Capital Ratio is less than 2.25 to 1.0.

Notwithstanding the foregoing, the provisions of the paragraph set forth
above will not apply to the incurrence of any of the following items of
Indebtedness (collectively, "Permitted Indebtedness"):

(a) The incurrence by the Company of Indebtedness represented by
the Notes and any Guarantees thereof;

(b) The incurrence by the Company or any of its Restricted
Subsidiaries of Existing Indebtedness;

(c) The incurrence of Indebtedness by the Company to any Restricted
Subsidiary or Indebtedness of any Restricted Subsidiary to the Company
or any other Restricted Subsidiary or the issuance of shares of
Preferred Stock by a Restricted Subsidiary to the Company or any other
Restricted Subsidiary (but only for so long as such Indebtedness or
shares of Preferred Stock are held by the Company or such Restricted
Subsidiary);

(d) The incurrence by the Company or any of its Restricted
Subsidiaries of Capital Lease Obligations (other than leases of backhaul
services) incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property, plant
or equipment used in the business of the Company or such Restricted
Subsidiary, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this
clause (d), in an aggregate principal amount not to exceed $25.0 million
at any time outstanding;

(e) The incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness pursuant to acquisitions of capacity made
in the ordinary course of business;

(f) The incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest or foreign currency exchange rate risk with
respect to any floating rate Indebtedness that is permitted by the terms
of this Indenture to be outstanding;

(g) The incurrence by the Company or any of its Restricted
Subsidiaries of Acquired Debt;

(h) The incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted
by the Indenture to be incurred pursuant to the immediately preceding
paragraph hereof or clauses (a), (b), (d), (e), (g), (h), (i), (k), (m),
(n) or (o) of this paragraph;

(i) The incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness not otherwise permitted to be
incurred pursuant to this paragraph in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding,

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including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(i), not to exceed $100.0 million;

(j) The incurrence of Indebtedness by a Receivables Entity in a
Qualified Receivables Transaction, provided that the proceeds thereof
are applied in accordance with the covenant described above under the
caption" -- Repurchase at the Option of Holders -- Asset Sales";

(k) The incurrence by the Company or any Restricted Subsidiary of
Purchase Money Indebtedness;

(l) Letters of Credit that are cash collateralized and Indebtedness
(A) in respect of performance, surety or appeal bonds or letters of
credit supporting Trade Payables, in each case provided in the ordinary
course of business, and (B) arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or
from guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Company or any of its Restricted
Subsidiaries pursuant to such agreements, in any case incurred in
connection with the disposition of any business, assets or Restricted
Subsidiary of the Company (other than guarantees of Indebtedness
incurred for the purpose of financing such acquisition by the Person
acquiring all or any portion of such business, assets or Restricted
Subsidiary), in a principal amount not to exceed the gross proceeds
actually received by the Company or any Restricted Subsidiary in
connection with such disposition;

(m) Indebtedness of the Company that by its terms or by the terms
of any agreement or instrument pursuant to which such Indebtedness is
incurred (x) is expressly made subordinate in right of payment to the
Notes and (y) provides that no payment with respect thereto other than
interest may be made prior to the payment in full of all of the
Company's obligations under the Notes except with the proceeds of a
capital contribution, the sale of Capital Stock (other than Disqualified
Stock) of the Company or other Indebtedness incurred pursuant to this
clause (m) or Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(m), not in excess of $200.0 million at any time outstanding except to
the extent such Indebtedness in excess thereof also provides that no
payment of interest may be made prior to the payment in full of all of
the Company's obligations under the Notes except as provided above;

(n) The incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness under one or more Credit Facilities or
Letters of Credit, in an aggregate principal amount at any one time
outstanding not to exceed the greater of (x) $200 million and (y) 85.0%
of Eligible Accounts Receivable not sold or pledged for Indebtedness
incurred under clause (j), including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (n);

(o) The guarantee by the Company or any Restricted Subsidiary of
Indebtedness of the Company or any Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this covenant;
and

(p) Indebtedness arising from the honoring by a bank or other
financing institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business, provided
that such Indebtedness is extinguished within two business days of its
incurrence.

The Company will not, and will not permit any of its Restricted
Subsidiaries to, incur any Indebtedness (including Permitted Indebtedness) that
is contractually subordinated in right of payment to any other Indebtedness of
the Company or such Restricted Subsidiary unless such Indebtedness is also
contractually subordinated in right of payment to the Notes on substantially
identical terms; provided, however, that no Indebtedness of the Company shall be
deemed to be

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contractually subordinated in right of payment to any other Indebtedness of the
Company solely by virtue of being unsecured.

Notwithstanding any other provision of this "Incurrence of Indebtedness and
Issuance of Preferred Stock" covenant, the maximum amount of Indebtedness that
the Company or any Restricted Subsidiary may incur pursuant to this covenant
shall not be deemed to be exceeded with respect to any outstanding Indebtedness
solely as a result of fluctuations in the exchange rate of currencies.

For purposes of determining any particular amount of Indebtedness under
this "Incurrence of Indebtedness and Issuance of Preferred Stock" covenant,
guarantees, Liens or obligations with respect to letters of credit supporting
Indebtedness otherwise included in the determination of such particular amount
shall not be included. For purposes of determining any particular amount of
Indebtedness under this covenant, if any such Indebtedness denominated in a
foreign currency is subject to a Currency Agreement with respect to U.S. dollars
covering all principal of, premium, if any, and interest payable on such
Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be
as provided in such Currency Agreement. For purposes of determining compliance
with this covenant, (A) in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the above
clauses, the Company, in its sole discretion, shall classify (and from time to
time may reclassify) such item of Indebtedness and only be required to include
the amount and type of such Indebtedness in one of such clauses and (B) the
principal amount of Indebtedness issued at a price that is less than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in conformity with GAAP.

Liens

The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under the Indenture and the Notes are secured on an equal and ratable basis
with the obligations so secured until such time as such obligations are no
longer secured by a Lien.

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries (1) on
its Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits, or (b) pay any indebtedness owed to the Company or
any of its Restricted Subsidiaries, (ii) make loans or advances to the Company
or any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries. However, the
foregoing restrictions will not apply to encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the date of the
Indenture, (b) agreements as in effect as of the date of the Indenture, (c)
Indebtedness, or any agreement pursuant to which such Indebtedness was issued,
incurred in accordance with clause (g), (h), (i), (k) or (n) of the second
paragraph of the covenant described above under the caption "-- Incurrence of
Indebtedness and Issuance of Preferred Stock", provided that (A) such
encumbrances or restrictions are customary with respect to such types of
Indebtedness (as determined in good faith by the Chief Financial Officer of the
Company), (B) the encumbrance or restriction applies only in the event of a
payment default or a default with respect to a financial covenant contained in
such Indebtedness or agreement and (C) the Board of Directors determines that
any such encumbrance or restriction will not materially affect the Company's
ability to pay principal, premium, interest and Additional Amounts pursuant to
the terms of the Notes and the Indenture, (d) the Indenture, the Notes and the
Exchange Notes, (e) applicable law, (f) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition
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(except to the extent such Indebtedness was incurred or Capital Stock was issued
in connection with or in contemplation of such acquisition), which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person or its Subsidiaries, or the property or assets
of the Person or its Subsidiaries, so acquired, provided, that in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Indenture to
be incurred, (g) in the case of clause (iii) of the first paragraph of this
"Dividend and Other Payment Restrictions Affecting Restricting Subsidiaries"
covenant, (A) existing by virtue of any transfer of, agreement to transfer,
option or right to transfer with respect to, or Lien on, any property or assets
of the Company or any Restricted Subsidiary not otherwise prohibited by the
Indenture or (B) arising or agreed in the ordinary course of business, not
relating to any Indebtedness, and that do not, individually or in the aggregate,
materially detract from the value of property or assets of the Company or
Restricted Subsidiary to the Company or any Restricted Subsidiary, and that the
Board of Directors determines will not materially affect the Company's ability
to pay principal, premium, interest and Additional Amounts pursuant to the terms
of the Notes and the Indenture, (h) customary non-assignment provisions entered
into in the ordinary course of business in leases, licenses and other contracts
to the extent the provisions restrict the transfer, sublicensing or any license
or subletting of any lease or the assignment of rights under such contract, (i)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (iii) above
on the property so acquired, (j) any agreement for the sale or other disposition
of a Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition, (k) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive, taken
as a whole, than those contained in the agreements governing the Indebtedness
being refinanced, (l) Liens securing Indebtedness otherwise permitted to be
incurred pursuant to the provisions of the covenant described above under the
caption "-- Liens" that limit the right of the Company or any of its Restricted
Subsidiaries to dispose of the assets subject to such Lien, (m) provisions with
respect to the disposition or distribution of assets or property in joint
venture agreements and other similar agreements entered into in the ordinary
course of business, (n) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course of
business, (o) restrictions created in connection with any Receivables Facility
that, in the good faith determination of the Board of Directors are necessary or
advisable to effect such Receivables Facility; provided, however, that such
restrictions apply only to such Receivables Entity; or (p) any encumbrances or
restrictions of the type referred to in clauses (i), (ii) and (iii) above
imposed by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (a) through (o) above,
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are, in the good faith
judgment of the Board of Directors, no more restrictive with respect to such
dividend and other payment restrictions than those contained in the dividend or
other payment restrictions prior to such amendments, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.

Merger, Consolidation or Sale of Assets

The Company may not, directly or indirectly, consolidate or merge with or
into (whether or not the Company is the surviving corporation), or sell, assign,
transfer, convey or otherwise dispose of all or substantially all of its
properties and assets, in one or more related transactions, to another Person
unless: (i) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia, or Bermuda; (ii)
the Person formed by or surviving any such consolidation or merger (if other
than the Company) or the Person to which such sale, assignment, transfer,
conveyance or other disposition shall have been made assumes all the obligations
of the Company under the Registration Rights Agreement, the Notes, the

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Exchange Notes and the Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; (iii) immediately after such transaction
no Default or Event of Default exists; and (iv) except in the case of a merger
of the Company with or into a Restricted Subsidiary of the Company, the Company
or the Person formed by or surviving any such consolidation or merger (if other
than the Company), or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made will, immediately after such transaction
and after giving pro forma effect thereto and any related financing transactions
as if the same had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness pursuant
to the first paragraph of the covenant described above under the caption
"-- Incurrence of Indebtedness and Issuance of Preferred Stock" or the
Consolidated Leverage Ratio would be no greater than such ratio immediately
prior to such transaction if the ratio prior to such transaction is positive or
greater than or equal to such ratio if the ratio prior to such transaction is
negative. The Indenture will also provide that the Company may not, directly or
indirectly, lease all or substantially all of its properties or assets, in one
or more related transactions, to any other Person. The provisions of this
covenant will not be applicable to a sale, assignment, transfer, conveyance or
other disposition of assets between or among the Company and its Restricted
Subsidiaries.

Transactions with Affiliates

The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are not materially less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable arm's-length transaction by the Company
or such Restricted Subsidiary with an unrelated Person and (ii) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $ 25.0 million, the Company delivers to the
Trustee a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause (i)
above and that such Affiliate Transaction is approved by a majority of the
Disinterested Directors and (iii) with respect to any Affiliate Transaction or
series of related Affiliate Transactions (other than with Microsoft Corporation,
Softbank Corp. or any of their respective Affiliates), involving aggregate
consideration in excess of $50.0 million, the Company delivers to the Trustee an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view obtained from an accounting, appraisal or investment
banking firm of national standing.

Notwithstanding the foregoing, the following items shall not be deemed to
be Affiliate Transactions: (i) (a) the entering into, maintaining or performance
of any employment contract, collective bargaining agreement, Plan, related trust
agreement or any other similar arrangement for or with any employee, officer,
consultant or director heretofore or hereafter entered into in the ordinary
course of business, (b) the payment of compensation, performance of
indemnification or contribution obligations, or an issuance, grant or award of
stock, options, or other equity-related interests or other securities to
employees, officers, consultants or directors in the ordinary course of
business, (c) any transaction in the ordinary course of business not involving
more than $250,000 in any one case, or (d) Management Advances and payments in
respect thereof, (ii) transactions between or among the Company and/or its
Restricted Subsidiaries or any Receivables Entity, (iii) payment of reasonable
directors' fees, (iv) any sale or other issuance of Equity Interests (other than
Disqualified Stock) of the Company, (v) Affiliate Transactions in effect or
approved by the Board of Directors on the date of the Indenture, including any
amendments thereto (provided that the terms of such amendments are not
materially less favorable to the Company or the relevant Restricted Subsidiary
than the terms of such agreement prior to such amendment), (vi) any transaction
between the Company or any Restricted Subsidiary, on the one hand, and any
Affiliate of the Company engaged primarily in a Permitted Business, on the other
hand, (A) in the ordinary course of business and consistent with
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commercially reasonable practices or (B) approved by a majority of the
Disinterested Directors; (vii) any payment pursuant to any tax sharing agreement
between the Company and any other Person with which the Company files a
consolidated tax return or with which the Company is part of a consolidated
group for tax purposes, provided that such payment is not greater than that
which the Company would be required to pay as a stand-alone taxpayer, (viii) the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of its obligations under the terms of any stockholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party as of the Issue Date and any similar agreements
which it may enter into thereafter that are otherwise permitted by the
Indenture; provided, however, that the existence of, or the performance by the
Company or any of its Restricted Subsidiaries of obligations under any future
amendment to any such existing agreement or under any similar agreement entered
into after the Issue Date shall only be permitted by this clause (viii) to the
extent that the terms of any such amendment or new agreement are not otherwise
materially adverse to the interests of the Holders, and (ix) Restricted Payments
that are permitted by the covenant described above under the caption
"-- Restricted Payments".

Issuances and Sales of Equity Interests in Wholly Owned Restricted
Subsidiaries

The Company (i) will not, and will not permit any of its Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in East Asia Crossing Ltd. and its Wholly Owned Restricted
Subsidiaries or any Wholly Owned Restricted Subsidiary of the Company that
directly or indirectly owns such Subsidiaries to any Person (other than the
Company or a Wholly Owned Restricted Subsidiary of the Company) and (ii) will
not permit East Asia Crossing Ltd. and its Wholly Owned Restricted Subsidiaries
or any Wholly Owned Restricted Subsidiary of the Company that directly or
indirectly owns such Subsidiaries to issue any of its Equity Interests (other
than, if necessary, shares of its Capital Stock constituting directors'
qualifying shares) to any Person other than to the Company or a Wholly Owned
Restricted Subsidiary of the Company, except in the case (a) such transfer,
conveyance, sale, lease or other disposition, together with all prior transfers,
conveyances, sales, leases or other dispositions, does not exceed 20% of the
Equity Interests in East Asia Crossing Ltd. and its Wholly Owned Restricted
Subsidiaries or such Wholly Owned Restricted Subsidiary of the Company and (b)
the Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied either (A) to repay outstanding Indebtedness permanently
under the Credit Facilities of the Company or its Restricted Subsidiaries or (B)
to make an offer to all Holders of Notes to purchase all or any part of such
Holders' Notes at a purchase price in cash in an amount equal to 113.375% of the
principal amount thereof plus accrued and unpaid interest thereon to the date of
purchase, in accordance with the procedures set forth under the caption
"-- Repurchase at the Option of Holders -- Asset Sales."

Future Guarantees

If any Restricted Subsidiary guarantees any Debt Securities issued by the
Company, then (i) the Company shall promptly notify the Trustee of such
guarantee, (ii) the Trustee shall, in turn, notify each Holder and (iii) the
Company shall cause the Indenture to be amended to make such Restricted
Subsidiary a Guarantor under the Indenture. Prior to the execution of such
amendment, each such Restricted Subsidiary required to become a Guarantor
pursuant to the provisions of this covenant shall be deemed a Guarantor under
the Indenture for purposes of determining the rights and obligations thereunder.

So long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of such Stock Exchange shall so require, the Company shall promptly inform
the Luxembourg Stock Exchange of the creation of the Guarantee of the Notes by
such Guarantor and shall publish notice of the same in a newspaper having a
general circulation in Luxembourg (which is expected to be the Luxemburger
Wort).

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Business Activities

The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than a Permitted Business, and
will not become an investment company subject to regulation under the Investment
Company Act of 1940.

Payments for Consent

Neither the Company nor any of its Restricted Subsidiaries will, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of the
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend such
terms or provisions of the Indenture or the Notes in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.

Reports

Whether or not required by the rules and regulations of the Commission, so
long as any Notes are outstanding, the Company will furnish to the Trustee and
the Holders of the Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company was required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Company and its consolidated Subsidiaries and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants, and (ii) all current reports that would be required to be filed
with the Commission on Form 8-K if the Company were required to file such
reports, in each case within the time periods specified in the Commission's
rules and regulations. In addition, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of all such
information and reports with the Commission for public availability within the
time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing). Furthermore, the Company will agree
that, for so long as any Notes remain outstanding (and regardless of the
immediately preceding sentence), it will furnish to the Holders of the Notes and
to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act. So long as the Notes are listed on the Luxembourg Stock Exchange
and the rules of such Stock Exchange shall so require, copies of such reports
will be made available free of charge at the office of the Luxembourg Paying
Agent, which is expected to be Kredietbank S.A. Luxembourgeoise.

Events of Default and Remedies

The Indenture will provide that each of the following will constitute an
Event of Default with respect to the Notes of each series: (i) default for 30
days in the payment when due of interest on the Notes; (ii) default in the
payment when due of the principal of, or premium, if any, on, the Notes; (iii)
default in the payment of principal and interest on any Notes required to be
purchased pursuant to the provisions described above under the captions
"-- Change of Control" and "-- Asset Sales", or the failure by the Company or
any of its Restricted Subsidiaries to comply with the provision described under
the caption "-- Merger, Consolidation or Sale of Assets"; (iv) failure by the
Company or any of its Restricted Subsidiaries for 60 days after written notice
from the Trustee or holders of 25% or more of the aggregate principal amount of
the Notes to comply with any of its other agreements in the Indenture or the
Notes; (v) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is created
after the date of the Indenture, which default shall constitute failure to pay
the principal of such Indebtedness at Stated Maturity (after giving effect to
any
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applicable grace periods and any extensions thereof) or results in the
acceleration of such Indebtedness prior to its Stated Maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any such other Indebtedness which has not been paid or the maturity of
which has been so accelerated, aggregates $25.0 million or more; (vi) failure by
the Company or any of its Restricted Subsidiaries to pay final judgments not
subject to appeal aggregating in excess of $25.0 million (net of applicable
insurance coverage which is acknowledged in writing by the insurer), which
judgments are not paid, discharged or stayed for a period of 60 days following
the entry of the final judgment or order that causes the aggregate amount for
all such final judgments or orders outstanding and not paid, discharged or
stayed to exceed $25.0 million; (vii) except as provided by the Indenture, any
Guarantee by a Significant Subsidiary or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Guarantor that is a Significant
Subsidiary or any group of Guarantors that, taken together, would constitute a
Significant Subsidiary, or any Person acting on behalf of such Guarantor or
Guarantors, shall deny or disaffirm its obligations under its Guarantee; and
(viii) certain events of bankruptcy or insolvency with respect to the Company or
any Restricted Subsidiary that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary.

If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes, by
written notice to the Company, may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to the
Company, any Restricted Subsidiary that is a Significant Subsidiary or any group
of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes of any
series may direct the Trustee in its exercise of any trust or power affecting
the Notes. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal of, premium, if any, or interest on, the
Notes) if it determines that withholding notice is in their interest.

In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium also will
become immediately due and payable, to the extent permitted by law, upon the
acceleration of the Notes. If an Event of Default occurs prior to October 15,
2005 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to October 15, 2005, then the premium specified in
the Indenture also will become immediately due and payable, to the extent
permitted by law, upon the acceleration of the Notes.

The Holders of a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
under the Indenture, except a continuing Default or Event of Default in the
payment of principal of, premium, if any, or interest on, the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount thereof and a waiver of the payment default that
resulted from such acceleration).

The Company will be required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company will be required upon
becoming aware of any Default or Event of Default to deliver to the Trustee a
statement specifying such Default or Event of Default.
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NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, INCORPORATORS OR
SHAREHOLDERS.

Subject to the Companies Act of 1981 of Bermuda, no director, officer,
employee, incorporator or shareholder of the Company, as such, will have any
liability for any obligations of the Company with respect to the Notes or the
Indenture, or for any claim based on, or in respect or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note will
waive and release any and all such liability. Such waiver and release are part
of the consideration for issuance of the Notes. Such waiver may not be effective
to waive liabilities under federal securities laws and it is the view of the
Commission that such a waiver is against public policy.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

The obligations of the Company in the Indenture as they relate to the Notes
will be discharged and cancelled upon the delivery by the Company to the Trustee
for cancellation of all the Notes or upon irrevocable deposit with the Trustee,
within not more than one year prior to the redemption of the Notes, or when the
Notes are to be called for redemption within one year under arrangements
satisfactory to the Trustee, of funds sufficient for the payment or redemption
of all the Notes. In addition, the Indenture will provide that the Company may,
at its option and at any time, elect to have all of its obligations discharged
with respect to the outstanding Notes ("Legal Defeasance"). Such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the outstanding Notes and cure all then
existing Events of Default except for: (i) the rights of Holders of outstanding
Notes to receive payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due from the trust created
pursuant to the Indenture; (ii) the Company's obligations with respect to the
Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust; (iii) the rights, powers,
trusts, duties and immunities of the Trustee, and the Company's obligations in
connection therewith; and (iv) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have its
obligations released with respect to certain covenants that are contained in the
Indenture ("Covenant Defeasance") and, thereafter, any omission to comply with
such obligations will not constitute a Default or Event of Default. In the event
Covenant Defeasance occurs, certain events (but not including non-payment,
bankruptcy, receivership, rehabilitation or insolvency events) described under
"-- Events of Default" will no longer constitute an Event of Default.

In order to exercise either Legal Defeasance or Covenant Defeasance in
respect of the Notes, (i) the Company must irrevocably deposit, or cause to be
deposited, with the Trustee, in trust, for the benefit of the Holders of the
Notes, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest due on the outstanding Notes on the
Stated Maturity thereof or on the applicable redemption date, as the case may
be, and the Company must specify whether such Notes are being defeased to
maturity or to a particular redemption date; (ii) in the case of Legal
Defeasance, the Company must deliver to the Trustee an opinion of counsel (which
may be subject to customary assumptions and exclusions) in the United States
reasonably acceptable to the Trustee confirming that the Company has received
from, or there has been published by, the Internal Revenue Service a ruling, or
since the date of the Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such opinion of counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance, and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred; (iii) in the case of
Covenant Defeasance, the Company must deliver to the Trustee an opinion of
counsel in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax

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purposes as a result of such Covenant Defeasance, and such Holders will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred; (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or insofar
as Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit; (v) such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under, any material agreement or instrument (other
than the Indenture) to which the Company or any of its Restricted Subsidiaries
is a party or by which the Company or any of its Restricted Subsidiaries is
bound; (vi) the Company must deliver to the Trustee an opinion of counsel (which
may be subject to customary assumptions and exclusions) in the United States
reasonably acceptable to the Trustee to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights and remedies generally; (vii) the Company must deliver to the
Trustee an Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of the Notes over other
creditors of the Company, or with the intent of defeating, hindering, delaying
or defrauding creditors of the Company or others; (viii) the Company must
deliver to the Trustee an opinion of counsel in Bermuda reasonably acceptable to
the Trustee to the effect that the Holders of the outstanding Notes will not be
adversely affected under Bermuda law; and (ix) the Company must deliver to the
Trustee an Officers' Certificate and an opinion of counsel in the United States
reasonably acceptable to the Trustee, each stating that all conditions precedent
provided for or relating to Legal Defeasance or Covenant Defeasance, as
applicable, have been complied with.

TRANSFER AND EXCHANGE

A Holder may transfer or exchange Notes in accordance with the procedures
set forth in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents,
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company will not be required to transfer or
exchange any Note selected for redemption. Also, the Company will not be
required to transfer or exchange any Note for a period of 15 days before (i) a
selection of Notes to be redeemed, (ii) an interest payment date or (iii) the
mailing of notice of a Change of Control Offer or Asset Sale Offer.

If Certificated Notes are issued, the Issuer will appoint and maintain a
transfer agent (the "Transfer Agent") in Luxembourg for so long as the Notes are
listed on the Luxembourg Stock Exchange, at which office a holder of a
Certificated Note will be able to surrender its Note for registration of
transfer. The Issuer will be able to at any time terminate the appointment of a
Transfer Agent and appoint additional or other Transfer Agents. Notice of such
termination or appointment and of any change in the specified office of a
Transfer Agent will be provided in the manner described below in "-- Notices."

The registered Holder of a Note will be treated as the owner of the Note
for all purposes.

AMENDMENT, SUPPLEMENT AND WAIVER

Except as provided in the next two succeeding paragraphs, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the then outstanding Notes (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Notes) and any existing default (other than
a default in the payment of principal of, premium, if any, or interest on, the
Notes) or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes).
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Without the consent of each Holder affected, such an amendment or waiver
may not (with respect to any Notes held by a non-consenting Holder): (i) reduce
the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver; (ii) reduce the principal or change the fixed maturity of
any Note, or alter the redemption provisions of the Notes (other than redemption
provisions relating to the covenants described above under the caption
"-- Repurchase at the Option of Holders"); (iii) reduce the rate of, or change
the time for, payment of interest on any Note; (iv) waive a Default or Event of
Default in the payment of principal of, premium, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount thereof and a waiver of the
payment default that resulted from such acceleration); (v) make any Note payable
in money other than that stated in the Notes; (vi) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the rights
of Holders of the Notes to receive payments of principal of, premium, if any, or
interest on the Notes; (vii) waive a redemption payment with respect to any Note
(other than a payment required by one of the covenants described above under the
caption "-- Repurchase at the Option of Holders"); or (viii) make any change in
the foregoing amendment and waiver provisions.

Notwithstanding the foregoing, without the consent of any Holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of Notes in the case of a
merger or consolidation or sale of all or substantially all of the Company's
assets, to make any change that would provide any additional rights or benefits
to the Holders of Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, in the good faith judgment of the Board of
Directors, or to comply with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act.

The consent of the Holders is not necessary under the Indenture to approve
the particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.

NOTICES

So long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of such stock exchange shall so require, notices regarding the Notes will
be (i) published in a newspaper having a general circulation in Luxembourg
(which is expected to be the Luxemburger Wort) or (ii) if Certificated Notes are
issued, mailed to Holders by first-class mail at their respective addresses as
they appear on the registration books of the Registrar (and, so long as the
Notes are listed on the Luxembourg Stock Exchange and the rules of such stock
exchange shall so require, published in a newspaper having a general circulation
in Luxembourg (which is expected to be the Luxemburger Wort)). Notices given by
publication will be deemed given on the first date on which publication is made
and notices given by first-class mail, postage prepaid, will be deemed given
five calendar days after mailing.

CONCERNING THE TRUSTEE

The Indenture will contain certain limitations on the rights of the
Trustee, should it become a creditor of the Company, to obtain payment of claims
in certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage in
other transactions; however, if it acquires any conflicting interest, it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue, or resign.

The Holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee regarding the
Notes, subject to certain exceptions. In case an Event of Default shall occur
(which shall not be cured), the Trustee will be required, in the exercise of its
power, to use the

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degree of care of a prudent person in the conduct of their own affairs. Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request of any Holder of Notes,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.

GOVERNING LAW

The Indenture will provide that it and the Notes will be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

The Company and the Guarantors will submit to the jurisdiction of the U.S.
federal and New York state courts located in the Borough of Manhattan, City and
State of New York for purposes of all legal actions and proceedings instituted
in connection with the Notes and the Indenture. The Company has appointed CT
Corporation System as its authorized agent upon which process may be served in
any such action. See "Service of Process and Enforcement of Liabilities."

CURRENCY INDEMNITY

U.S. dollars are the sole currency of account and payment for all sums
payable by the Company and the Guarantors under or in connection with the Notes,
including damages. Any account received or recovered in a currency other than
dollars (whether as a result of, or the enforcement of, a judgment or order of a
court of any jurisdiction, in the liquidation, dissolution or other winding-up
of the affairs of the Company or the Guarantors or otherwise) by any Holder of a
Note in respect of any sum expressed to be due to it from the Company or the
Guarantors shall only constitute a discharge to the Company and the Guarantors
to the extent of the dollar amount which the recipient is able to purchase with
the amount so received or recovered in that other currency on the date of that
receipt or recovery (or, if it is not practicable to make that purchase on that
date, on the first date on which it is practicable to do so). If that dollar
amount is less than the dollar amount expressed to be due to the recipient under
any Note, the Company and the Guarantors shall indemnify it against any loss
sustained by it as a result. In any event, the Company and the Guarantors shall
indemnify the recipient against the cost of making any such purchase. For the
purposes of this paragraph, it will be sufficient for the Holder of a Note to
certify in a satisfactory manner (indicating the sources of information used)
that it would have suffered a loss had an actual purchase of dollars been made
with the amount so received in that other currency on the date of receipt or
recovery (or, if a purchase of dollars on such date had not been practicable, on
the first date on which it would have been practicable, it being required that
the need for a change of date be certified in the manner mentioned above). These
indemnities constitute a separate and independent obligation from the Company's
and the Guarantors' other obligations, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted
by any Holder of a Note and shall remain in full force and effect despite any
other judgment, order, claim or proof for a liquidated amount in respect of any
sum due under any Note.

ADDITIONAL INFORMATION

Anyone who receives this prospectus may obtain a copy of the Indenture and
Registration Rights Agreement, without charge, by writing to Asia Global
Crossing Ltd. at the address provided under "Where You Can Find More
Information" on page 164.

CERTAIN DEFINITIONS

Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full definition of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.

"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person and not
incurred in connection with, or in contemplation of, such other Person

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merging with or into or becoming a Subsidiary of such specified Person, and (ii)
Indebtedness secured by a Lien encumbering any asset acquired by such specified
Person; provided such Indebtedness is existing at the time such asset is
acquired and is not incurred in connection with, or in contemplation of, such
acquisition; provided, further, that Indebtedness of such Person which is
redeemed, defeased, retired or otherwise repaid at the time of or immediately
upon the consummation of the transactions by which such Person becomes a
Restricted Subsidiary or is merged or consolidated with or into the Company or
any Restricted Subsidiary or such asset is acquired shall not be Indebtedness.

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.

"Asset Sale" means (i) the sale, lease, transfer, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) by the Company or any of its Restricted Subsidiaries other
than sales of inventory in the ordinary course of business and other than any
sale, lease, transfer, conveyance or other disposition of capacity, co-location
space, dark fiber, rights of way or other access rights on any cable system
owned, controlled or operated by the Company or any Restricted Subsidiary or of
telecommunications capacity or transmission rights held by the Company or any
Restricted Subsidiary (provided that the sale, lease, transfer, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by the provisions
of the Indenture described above under the caption "-- Repurchase at the Option
of Holders -- Change of Control" and/or the provisions described above under the
caption "-- Covenants -- Merger, Consolidation or Sale of Assets" and not by the
provisions of the Asset Sale covenant), and (ii) the issue or sale by the
Company or any of its Restricted Subsidiaries of Equity Interests of its
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $25.0 million or (b) for Net Proceeds in excess of $25.0
million. Notwithstanding the foregoing, the following items shall not be deemed
to be Asset Sales: (i) a transfer of assets by the Company to a Restricted
Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted
Subsidiary, (ii) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary, (iii) a Restricted Payment that
is permitted by the covenant described above under the caption
"-- Covenants -- Restricted Payments", (iv) a transfer of assets by the Company
or a Restricted Subsidiary in connection with a Qualified Receivables
Transaction, (v) a disposition of obsolete, damaged or worn out property or
equipment that is no longer useful in the conduct of the business of the Company
or any of its Restricted Subsidiaries, (vi) a disposition of Cash Equivalents or
investment grade securities, (vii) transfers constituting the grant of a
Permitted Lien and (viii) the lease or sub-lease of any real or personal
property in the ordinary course of business.

"Board of Directors" means the board of directors or other governing body
of the Company or, if the Company is owned or managed by a single entity, the
board of directors or other governing body of such entity, or, in either case,
any committee thereof duly authorized to act on behalf of such board or
governing body.

"Board Resolution" means a duly authorized resolution of the Board of
Directors.

"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized and reflected as a liability on a
balance sheet in accordance with GAAP.

"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
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company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.

"Cash Equivalents" means (i) United States dollars, Japanese Yen, Euros and
British Pounds Sterling (and foreign currency exchanged into such currencies
within 180 days), (ii) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than twelve months from the date
of acquisition, (iii) certificates of deposit and eurodollar time deposits with
maturities of twelve months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding twelve months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million, (iv) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clauses (ii) and (iii) above entered into with any financial institution meeting
the qualifications specified in clause (iii) above, (v) commercial paper having
one of the two highest ratings obtainable from Moody's Investors Service, Inc.
or Standard & Poor's Corporation and in each case maturing within twelve months
after the date of acquisition and (vi) money market funds at least 95% of the
assets of which constitute Cash Equivalents of the kinds described in clauses
(i)-(v) of this definition.

"Change of Control" means the occurrence of any of the following: (i) any
"person" (as such term is used in Section 13(d)(3) of the Exchange Act), other
than a Permitted Holder, is or becomes the beneficial owner, directly or
indirectly, of more than 50% of the Voting Stock (measured by voting power
rather than number of shares) of the Company, and the Permitted Holders do not
have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of the Company (for
the purposes of this clause, such other person shall be deemed to "beneficially
own" any Voting Stock of a specified corporation held by a parent corporation if
such other person beneficially owns, directly or indirectly, more than 50% of
the Voting Stock (measured by voting power rather than by number of shares) of
such parent corporation and the Permitted Holders beneficially own, directly or
indirectly, in the aggregate a lesser percentage of Voting Stock (measured by
voting power rather than by number of shares) of such parent corporation and do
not have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such parent
corporation), (ii) during any period of two consecutive years, Continuing
Directors cease for any reason to constitute a majority of the Board of
Directors of the Company, (iii) the Company consolidates or merges with or into
any other Person, other than a consolidation or merger (a) of the Company into a
Restricted Subsidiary of the Company or (b) pursuant to a transaction in which
the outstanding Voting Stock of the Company is changed into or exchanged for
cash, securities or other property with the effect that no person, other than a
Permitted Holder, owns more than 50% of the Voting Stock (measured by voting
power rather than number of shares) of the surviving corporation immediately
following such transaction or (iv) the sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any Person of which
more than 50% of its Voting Stock (measured by voting power rather than by
number of shares) is owned, directly or indirectly, following such transaction
or transactions by a person other than the Permitted Holders; provided, however,
that sales, transfers, conveyances or other dispositions in the ordinary course
of business of capacity, co-location space, dark fiber, rights of way or other
access rights on cable systems owned, controlled or operated by the Company or
any Restricted Subsidiary or of telecommunications capacity or transmission
rights acquired by the Company or any Restricted Subsidiary for use in its
business, including, without limitation, for sale, lease, transfer, conveyance
or other disposition to any customer of the Company or any Restricted Subsidiary
shall not be deemed a disposition of assets for purposes of this clause (iv).

The definition of a Change of Control includes a phrase relating to the
sale, lease, transfer, conveyance or other disposition of "all or substantially
all" of the assets of the Company and its
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Restricted Subsidiaries taken as a whole. Although there is a developing body of
case law interpreting the phrase "substantially all," there is no precise
established definition of such phrase under applicable law. Accordingly, the
ability of a Holder of Notes to require the Company to purchase such Notes as a
result of a sale, lease, transfer, conveyance or other disposition of less than
all of the assets of the Company and its Restricted Subsidiaries taken as a
whole to another Person or group may be uncertain.

"Consolidated Capital Ratio" means, with respect to the Company or any of
its Restricted Subsidiaries, as of the date of any incurrence of Indebtedness or
issuance of Disqualified Stock or Preferred Stock, the ratio of (i) the
aggregate consolidated principal amount of Indebtedness outstanding and the
liquidation preference of Disqualified Stock as of the most recent quarterly or
annual balance sheet date, after giving pro forma effect to the incurrence of
such Indebtedness or the issuance of such Disqualified Stock and any other
Indebtedness incurred and Disqualified Stock issued since such balance sheet
date, and the receipt and application of the proceeds therefrom to (ii)
Consolidated Net Worth as of such balance sheet date after giving pro forma
effect to the issuance or sale of Equity Interests (other than Disqualified
Stock) (including Equity Interests (other than Disqualified Stock) that have
been issued upon conversion or exchange of any Indebtedness of the Company or
any Restricted Subsidiary), since the balance sheet date and the receipt and
application of the proceeds therefrom.

"Consolidated Cash Flow" means, with respect to the Company for any period,
the Consolidated Net Income of the Company and its Restricted Subsidiaries for
such period plus, to the extent that any of the following items were deducted or
added (without duplication) in computing such Consolidated Net Income, (i) an
amount equal to any extraordinary loss (less any extraordinary gain) plus any
net loss (less any gain) realized in connection with any Asset Sale, plus (ii)
provision for taxes based on income or profits of the Company and its Restricted
Subsidiaries for such period, plus (iii) Consolidated Interest Expense of the
Company and its Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized, plus (iv) any fees, expenses or charges related
to any Equity Offering, Permitted Investment, acquisition or recapitalization or
Indebtedness permitted to be incurred under the Indenture (whether or not
successful), plus (v) the amount of any non-cash restructuring charge (excluding
any such non-cash charge to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period), plus (vi) depreciation, amortization
(including amortization of goodwill and other intangibles and the amount of
capacity available for sale charged to cost of sales, but excluding amortization
of prepaid cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it represents
an accrual of or reserve for cash expenses in any future period or amortization
of a prepaid cash expense that was paid in a prior period) of the Company and
its Restricted Subsidiaries for such period, minus (vii) non-cash items
increasing such Consolidated Net Income of the Company and its Restricted
Subsidiaries for such period (other than items that were accrued in the ordinary
course of business or that represent the reversal of any accrual of, or cash
reserve for, anticipated cash charges in any prior period), plus (viii) any
change in Deferred Revenue, in each case, on a consolidated basis and determined
in accordance with GAAP. Notwithstanding the foregoing, the provision for taxes
on the income or profits of, and the depreciation and amortization and other
non-cash expenses of, a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements (excluding agreements evidencing Indebtedness incurred in accordance
with clause (k) of the covenant described above under the caption "-- Incurrence
of Indebtedness and Issuance of Preferred Stock.", to which this provision shall
not apply), instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
shareholders, unless such restriction with respect to the payment of dividends
or similar distributions has been legally waived.

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"Consolidated Interest Expense" for any Person means for any period the
consolidated interest expense included in a consolidated income statement
(without deduction of interest income) of such Person and its Restricted
Subsidiaries for such period, including without limitation or duplication (or,
to the extent not so included, with the addition of), (i) amortization of debt
issuance costs and original issue discount, (ii) non-cash interest payments,
(iii) the interest component of any deferred payment obligations, (iv) the
interest component of all payments associated with Capital Lease Obligations,
(v) commissions, discounts and other fees and charges incurred in respect of
Letter of Credit or bankers' acceptance financings and (vi) net payments (if
any) pursuant to Hedging Obligations.

"Consolidated Leverage Ratio" means, with respect to the Company or any of
its Restricted Subsidiaries, as of the date of any incurrence of Indebtedness or
issuance of Disqualified Stock or Preferred Stock, the ratio of (i) the
aggregate consolidated principal amount of Indebtedness outstanding and the
liquidation preference of Disqualified Stock as of the most recent quarterly or
annual balance sheet date, after giving pro forma effect to the incurrence of
such Indebtedness or the issuance of such Disqualified Stock and any other
Indebtedness incurred and Disqualified Stock issued since such balance sheet
date, and the receipt and application of the proceeds therefrom to (ii)
Consolidated Cash Flow for the four full fiscal quarters ending on or prior to
the date of incurrence of such Indebtedness or issuance of such Disqualified
Stock for which consolidated financial statements are available.

"Consolidated Net Income" means, with respect to the Company for any
period, the aggregate of the net income of the Company and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP, plus, to the extent that any of the following items were deducted in
computing such Consolidated Net Income, (a) non-recurring, non-cash charges
(other than charges arising from write-downs of assets) and (b) non-cash
compensation charges arising from stock options or other similar employee
benefit or compensation Plans; provided that (i) the net income (but not loss)
of any Restricted Subsidiary that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash (or if not in cash, to the extent actually converted
into cash) to the Company or a Restricted Subsidiary thereof by such Restricted
Subsidiary, (ii) the net income (or loss) of any Person that is not a Restricted
Subsidiary or Unrestricted Subsidiary shall be included only to the extent of
the amount of dividends or other distributions actually paid to the Company or a
Restricted Subsidiary by such Person during such period, (iii) for purposes of
clause (c) of the covenant described above under the caption "Restricted
Payments", the net income of any Restricted Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that net income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
shareholders, unless such restriction with respect to the payment of dividends
or similar distributions has been legally waived and except that the Company's
equity in the net income of any such Restricted Subsidiary for such period shall
be included in such Consolidated Net Income up to the aggregate amount of cash
that could have been distributed by such Restricted Subsidiary during such
period to the Company or another Restricted Subsidiary as a dividend, (iv) the
net income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, (v) the equity
of the Company or any Restricted Subsidiary in the net income of any
Unrestricted Subsidiary shall be included in such Consolidated Net Income up to
the aggregate amount of cash (or if not in cash, to the extent actually
converted into cash) actually distributed by such Unrestricted Subsidiary during
such period to the Company or a Restricted Subsidiary as a dividend or other
distribution (but not in excess of the amount of the net income of such
Unrestricted Subsidiary for such period) and (vi) the cumulative effect of a
change in accounting principles shall be excluded.

"Consolidated Net Worth" means, with respect to the Company as of any date,
without duplication, the sum of (i) the consolidated equity of the common
shareholders of the Company and
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its consolidated Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on the Company's balance sheet as of such date with
respect to any series of Preferred Stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by the
Company upon issuance of such Preferred Stock, less (x) all write ups (other
than write ups resulting from foreign currency translations and write ups of
tangible assets of a going concern business made within 12 months after the
acquisition of such business) subsequent to the date of the Indenture in the
book value of any asset owned by the Company or a consolidated Restricted
Subsidiary of the Company, (y) all investments as of such date in unconsolidated
Restricted Subsidiaries and in Persons that are not Restricted Subsidiaries, and
(z) all unamortized debt discount and expense and unamortized deferred charges
as of such date, all of the foregoing determined in accordance with GAAP.

"Consolidated Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) which under GAAP would
be included on a consolidated balance sheet of the Company and its Restricted
Subsidiaries after deducting therefrom all Investments, goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, which in each case under GAAP would be included on such
consolidated balance sheet; provided that with respect to a Restricted
Subsidiary that is not a Wholly Owned Restricted Subsidiary, its assets shall
only be included to the extent of the Company's percentage ownership of such
Restricted Subsidiary.

"Continuing Directors" means individuals who at the beginning of the period
of determination constituted the Board of Directors of the Company, together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company, was approved by a
vote of at least a majority of the directors of the Company then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved or is a designee of any one
of the Permitted Holders or any combination thereof or was nominated or elected
by any such Permitted Holder(s) or any of their designees.

"Credit Facilities" is defined to mean one or more senior credit
agreements, senior loan agreements or similar senior facilities with banks or
other institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or Letters of Credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.

"Currency Agreement" means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or beneficiary.

"Debt Securities" means any bonds, notes, debentures or other similar
instruments (excluding, in any event, (i) any Capital Lease Obligations and (ii)
any notes, bankers' acceptances or other instruments evidencing commercial loans
or equipment financing made by, and bills of exchange drawn on, banks, other
financial lending institutions or equipment vendors) issued by the Company or by
any Restricted Subsidiary (including by means of any Guarantee of the Company or
of any Restricted Subsidiary of securities of another Person), whether in a
public offering or private placement; provided, however, that in no event shall
"Debt Securities' mean Indebtedness in the form of a bank credit facility.

"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

"Deferred Revenue" means amounts appearing as a liability on the financial
statements of the Company and its Restricted Subsidiaries as prepared in
accordance with GAAP classified as deferred revenue to the extent of cash
received in connection therewith.

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"Designated Noncash Consideration" means the noncash consideration received
by the Company or any of its Restricted Subsidiaries in connection with an Asset
Sale that is so designated in an Officers' Certificate, less the amount of cash
or Cash Equivalents received in connection with a subsequent sale of such
Designated Noncash Consideration.

"Designated Preferred Stock" means Preferred Stock of the Company (other
than Disqualified Stock) that is issued for cash (other than to a Restricted
Subsidiary) and is so designated as Designated Preferred Stock, pursuant to an
Officers' Certificate, on the issuance date thereof.

"Disinterested Directors" means the non-management members of the Board of
Directors who have no relationship or interest in a particular transaction other
than their position as a director or shareholder of the Company.

"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the Holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature; provided, however, that any Capital Stock which
would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require the Company to repurchase or redeem such
Capital Stock upon the occurrence of a Change of Control or an Asset Sale
occurring prior to the final Stated Maturity of the Notes shall not constitute
Disqualified Stock if the change of control and asset sale provisions applicable
to such Capital Stock are no more favorable to the holders of such Capital Stock
than the provisions applicable to the Notes contained in the covenants described
above under the caption "-- Asset Sales" and "-- Offer to Purchase on Change of
Control", respectively, and such Capital Stock specifically provides that the
Company will not repurchase or redeem any such stock pursuant to such provisions
prior to the Company's repurchase of such Notes as are required to be
repurchased pursuant to such covenants; provided further, however, that if such
Capital Stock is issued to any employee or to any Plan for the benefit of
employees of the Company or its Subsidiaries or by any such Plan to such
employees, such Capital Stock shall not constitute Disqualified Stock solely
because it may be required to be repurchased by the Company in order to satisfy
applicable statutory or regulatory obligations or as a result of such employee's
death or disability.

"Eligible Accounts Receivable" means the accounts receivables (net of any
reserves and allowances for doubtful accounts in accordance with GAAP) of any
Person and its Restricted Subsidiaries (determined on a consolidated basis) that
are not more than 90 days past their due date and that were entered into in the
ordinary course of business on normal payment terms as shown on the most recent
consolidated balance sheet of such Person filed with the Commission, all in
accordance with GAAP.

"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

"Equity Offering" means an offering for cash by the Company of its common
stock or Preferred Stock (other than Disqualified Stock), or options, warrants
or rights to acquire such common stock or Preferred Stock.

"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the date of the Indenture, until such
amounts are repaid.

"Fair Market Value" means, with respect to any Property, the price that
could be negotiated in an arm's length transaction between a willing seller and
a willing buyer, neither of whom is under pressure or compulsion to complete the
transaction. Unless otherwise specified in the indenture, Fair Market Value
shall be determined by the board of directors of the Company acting in good
faith, shall be evidenced by a resolution of the board of directors of the
Company delivered to the trustee, and shall be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if such value exceeds $50.0 million.

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"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indenture.

"Government Securities" means securities that are (a) direct obligations
(or certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) of
the payment of which the full faith and credit of the United States of America
is pledged, (b) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or (c) obligations of a Person the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in each case, are not callable or redeemable at the
issuer's option, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such Government Securities or a specific payment of principal of or
interest on any such Government Securities held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the Government Securities or the specific payment
of principal of or interest on the Government Securities evidenced by such
depository receipt.

"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.

"Guarantors" means each person that from time to time executes a Guarantee
in accordance with the provisions of the Indenture, and their respective
successors and assigns.

"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under any Interest Rate Agreement or Currency Agreement.

"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers' acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all Indebtedness of others secured
by a Lien on any asset of such Person (whether or not such Indebtedness is
assumed by such Person) and, to the extent not otherwise included the guarantee
by such Person of any indebtedness of any other Person. The amount of any
Indebtedness outstanding as of any date shall be (i) the accreted value thereof,
in the case of any Indebtedness issued with original issue discount, and (ii)
the principal amount thereof, together with any interest thereon that is more
than 30 days past due, in the case of any other Indebtedness.

"Interest Rate Agreement" means, with respect to any Person, any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement to which such Person is a party or beneficiary.

"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding accounts receivable,

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trade credit and commission, travel and similar advances to directors, officers
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any of its Restricted Subsidiaries sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary such that, after
giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary of the Company or such Restricted Subsidiary, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value (or if the sale or disposition is
other than for cash, the Fair Market Value) of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of the covenant described above under the
caption "-- Covenants -- Restricted Payments".

"Issue Date" means October 12, 2000.

"Letters of Credit" means one or more irrevocable direct pay letters of
credit issued by a bank or other financial institution to support the payment of
obligations of the Company.

"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in, and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction);
provided that in no event shall an operating lease be deemed to constitute a
Lien.

"Management Advances" means loans or advances made to directors, officers
or employees of the Company or any Restricted Subsidiary (i) in respect of
travel, entertainment or moving-related expenses incurred in the ordinary course
of business, (ii) in respect of moving-related expenses incurred in connection
with any closing or consolidation of any facility, or (iii) in the ordinary
course of business not exceeding $2.5 million in the aggregate at any time
outstanding.

"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale or any sale of Equity
Interests in accordance with the provisions set forth under the caption
"Issuances and Sales of Equity Interests in Wholly Owned Restricted
Subsidiaries"), net of the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.

"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any Restricted Subsidiary (a) provides any guarantee or credit support of
any kind (including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or (b) is directly or indirectly
liable (as a guarantor or otherwise) and (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default under such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its Stated
Maturity.

"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

"Officer" means the President, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, any Senior Vice President, any
Vice President, the Treasurer or the Secretary of the Company.

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"Officers' Certificate" means a certificate signed by two Officers.

"Pari Passu Debt Securities" means any Debt Securities of the Company or
of any Guarantor which ranks pari passu in right of payment with the Notes and
any Guarantees, as applicable.

"Permitted Business" means any business that is the same as or related,
ancillary or complementary to any of the businesses of the Company or any of its
Restricted Subsidiaries on the date of the Indenture.

"Permitted Holder" means Global Crossing Ltd., Microsoft Corporation,
Softbank Corp. and their respective Affiliates.

"Permitted Investments" means (a) any Investment in the Company or in any
Restricted Subsidiary that is engaged in a Permitted Business; (b) any
Investment in Cash Equivalents; (c) any Investment by the Company or any of its
Restricted Subsidiaries in a Person, if as a result of such Investment (i) such
Person becomes a Restricted Subsidiary of the Company that is engaged in a
Permitted Business or (ii) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company that is
engaged in a Permitted Business; (d) any Investment that is non-cash
consideration received from an Asset Sale that was made pursuant to and in
compliance with the covenant set forth above under "Asset Sales"; (e) any
Investment made in a Receivables Entity in a Qualified Receivables Transaction;
(f) loans, advances or extensions of credit to employees in the ordinary course
of business; (g) obligations under Hedging Agreements; (h) any Investment made
prior to the Issue Date; (i) stock, obligations or securities received in
satisfaction of judgments in connection with any bankruptcy proceeding or
otherwise; and (j) additional Investments in an aggregate amount not to exceed
$150 million.

"Permitted Liens" means (i) Liens to secure Indebtedness (other than Pari
Passu Debt Securities or Subordinated Indebtedness) permitted to be incurred
under the Indenture; (ii) Liens in favor of the Company or any Restricted
Subsidiary; (iii) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any of its Restricted
Subsidiaries; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company or
such Restricted Subsidiary; (iv) Liens on property existing at the time of
acquisition thereof by the Company or any of its Restricted Subsidiaries,
provided that such Liens were in existence prior to the contemplation of such
acquisition; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vi) Liens existing on the date of
the Indenture; (vii) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded, provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (viii) Liens incurred in the
ordinary course of business of the Company or any of its Restricted Subsidiaries
with respect to obligations that do not exceed $5.0 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary; (ix) Liens
with respect to assets of a Restricted Subsidiary granted by such Restricted
Subsidiary to the Company or a Restricted Subsidiary to secure Indebtedness
owing to the Company or such Restricted Subsidiary; (x) Liens, pledges and
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of statutory obligations;
(xi) Liens, pledges or deposits made to secure the performance of tenders, bids,
leases, public or statutory obligations, sureties, stays appeals, indemnities,
performance or other similar bonds and other obligations of like nature incurred
in the ordinary course of business (exclusive of obligations for the payment of
borrowed money); (xii) zoning restrictions, servitudes, easements,
rights-of-way, restrictions and other similar charges or encumbrances incurred
in the ordinary course of business which, in the aggregate, do not materially
detract from the value of the

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property subject thereto or materially interfere with the ordinary conduct of
the business of the Company or its Restricted Subsidiaries; (xiii) Liens arising
out of judgments or awards against or other court proceedings concerning the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary is prosecuting an appeal or proceeding for review and the
Company or such Restricted Subsidiary is maintaining adequate reserves in
accordance with GAAP; (xiv) any interest or title of a lessor in the property
subject to any lease other than a capital lease; (xv) Liens (including
extensions and renewals thereof) upon real or personal property purchased or
leased after the Issue Date; provided that (a) such Lien is created solely for
the purpose of securing Indebtedness incurred in compliance with the "Incurrence
of Indebtedness and Issuance of Preferred Stock" covenant (1) to finance the
cost of the item of property or assets subject thereto and such Lien is created
prior to, at the time of or within six months after the later of the acquisition
and the incurrence of such Indebtedness or (2) to refinance any Indebtedness
previously so secured, (b) the principal amount of the Indebtedness secured by
such Lien does not exceed 100% of such cost and (c) any such Lien shall not
extend to or cover any property or assets other than such item of property or
assets; (xvi) any interest or title of a lessor in the property subject to any
Capitalized Lease or operating lease of a Restricted Subsidiary which, in each
case, is permitted under the Indenture; (xvii) Liens encumbering customary
initial deposits and margin deposits and other Liens that are either within the
general parameters customary in the industry or incurred in the ordinary course
of business, in each case, securing Indebtedness under Hedging Agreements; and
(xviii) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business.

"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is expressly subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of the Notes
as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; provided that in
no event may Indebtedness of the Company be refinanced by means of any
Indebtedness of any Restricted Subsidiary.

"Person" means any individual, corporation, partnership, joint venture,
limited liability company, incorporated or unincorporated association,
joint-stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.

"Plan" means any employee benefit plan, retirement plan, deferred
compensation plan, restricted stock plan, health, life, disability or other
insurance plan or program, employee stock purchase plan, employee stock
ownership plan, vacation, savings, retirement, pension, stock option or similar
plan or arrangement of the Company or any Restricted Subsidiary, or any
successor plan thereof, and "Plans" shall have a correlative meaning.

"Preferred Stock" of any Person means Capital Stock of such Person of any
class or classes, however designated, that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding-up of such Person, to shares of Capital
Stock of any other class of such Person.

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"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including Capital Stock in, and other securities of, any other
Person.

"Purchase Money Indebtedness" means Indebtedness (including Acquired Debt
and Capital Lease Obligations, mortgage financings and purchase money
obligations) incurred for the purpose of financing all or any part of the cost
of construction, financing, installation, acquisition, lease, development,
design, engineering, financing, testing, start-up, upgrade, completion or
improvement of any assets (including licenses) used or useful in a Permitted
Business (including acquisitions of the Capital Stock of a Person that becomes a
Restricted Subsidiary to the extent of the Fair Market Value of the assets used
or useful in a Permitted Business so acquired), including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified or
restated from time to time, provided that the amount of such Purchase Money
Indebtedness does not exceed 100% of the cost of construction, installation,
acquisition, lease, development, design, engineering, financing, testing,
start-up, upgrade, completion or improvement of the assets or Capital Stock
(together with related costs and expenses).

"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or any of its Subsidiaries
pursuant to which the Company or any of its Subsidiaries may sell, convey or
otherwise transfer to (a) a Receivables Entity (in the case of a transfer by the
Company or any of its Subsidiaries) and (b) any other Person (in the case of a
transfer by a Receivables Entity), or may grant a security interest in, any
receivables (whether now existing or arising in the future) of the Company or
any of its Subsidiaries, and any assets related thereto including, without
limitation, all collateral securing such receivables, all contracts and all
guarantees or other obligations in respect of such receivables, and the proceeds
of such receivables.

"Receivables Entity" means a wholly owned Subsidiary of the Company (or
another Person in which the Company or any Subsidiary of the Company may make an
Investment and to which the Company or any Subsidiary of the Company transfers
receivables and related assets) which engages in no activities other than in
connection with the financing of receivables and which is designated by the
Board of Directors (as provided below) as a Receivables Entity, (a) no portion
of the Indebtedness or any other Obligations (contingent or otherwise) of which
(i) is guaranteed by the Company or any Subsidiary of the Company (excluding
guarantees of Obligations (other than the principal of, and interest on,
Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates the Company or any Subsidiary of the Company in any way
other than pursuant to Standard Securitization Undertakings or (iii) subjects
any property or asset of the Company or any Subsidiary of the Company, directly
or indirectly, contingently or otherwise, to the satisfaction thereof, other
than pursuant to Standard Securitization Undertakings, (b) with which neither
the Company nor any Subsidiary of the Company has any material contract,
agreement, arrangement or understanding other than on terms no less favorable to
the Company or such Subsidiary than those that might be obtained at the time
from Persons that are not Affiliates of the Company, other than fees payable in
the ordinary course of business in connection with servicing receivables, and
(c) to which neither the Company nor any Subsidiary of the Company has any
obligation to maintain or preserve such entity's financial condition of cause
such entity to achieve certain levels of operating results. Any such designation
by the Board of Directors shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolution of the Board of Directors giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions.

"Related Taxes" means any taxes, charges or assessments, including, but not
limited to, sales, use, transfer, rental, ad valorem, value-added, stamp,
property, consumption, franchise, license, capital, net worth, gross receipts,
excise, occupancy, intangibles or similar taxes, charges or assessments.

"Restricted Investment" means any Investment other than a Permitted
Investment.

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"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary; provided, however, that the
Company at its election may also designate any of its Unrestricted Subsidiaries
as a Restricted Subsidiary hereunder.

"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X
promulgated pursuant to the Act, as such Regulation is in effect on the Issue
Date, of the Company and its Restricted Subsidiaries.

"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by the Company or any Subsidiary of the
Company which are reasonably customary in the securitization of receivables
transactions.

"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership, joint venture, limited liability company or
similar entity of which more than 50% of the capital accounts, distribution
rights, total equity and voting interests or general or limited partnership
interests, as applicable, are owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof whether in the form of membership, general, special or
limited partnership or otherwise.

"Trade Payables" is defined to mean any accounts payable or any other
indebtedness or monetary obligation to trade creditors created, assumed or
guaranteed by the Company or any of its Restricted Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods and
services.

"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution; but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt and (b) is a Person with respect to
which neither the Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation to maintain or preserve such Person's financial condition
or to cause such Person to achieve any specified levels of operating results and
(c) has not guaranteed or otherwise directly or indirectly provided credit
support for any Debt Securities of the Company or any of its Restricted
Subsidiaries; provided that the Company or a Restricted Subsidiary may pledge
Capital Stock or Indebtedness of any Unrestricted Subsidiary on a nonrecourse
basis for equivalent value such that the pledgee has no claim whatsoever against
the Company or any Restricted Subsidiary other than to obtain such Capital Stock
or Indebtedness. Any such designation by the Board of Directors shall be
evidenced by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions and was permitted by the
covenant described above under the caption "-- Covenants -- Restricted
Payments". If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under the covenant described under the
caption "-- Incurrence of Indebtedness and Issuance of Preferred Stock", the
Company shall be in default of such covenant). The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
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Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under the covenant described
under the caption "-- Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock", calculated on a pro forma basis as if such designation had
occurred at the beginning of the four-quarter reference period, and (ii) no
Default or Event of Default would be in existence following such designation.

"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.

"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries
of such Person.

BOOK-ENTRY, DELIVERY AND FORM

All Notes will be represented by permanent global notes in fully registered
form without coupons (the "Global Notes"), which will be deposited with the
Trustee as custodian for DTC and registered in the name of DTC or of a nominee
of DTC. See "Book-Entry Procedures and Settlement" on page 156.

CERTIFICATED NOTES

If (i) the Company notifies the Trustee in writing that DTC is no longer
willing or able to act as a depositary or DTC ceases to be registered as a
clearing agency under the Exchange Act and a successor depositary is not
appointed within 90 days of such notice or cessation, (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
Notes in definitive form under the Indenture or (iii) upon the occurrence of
certain other events as provided in the Indenture, then, upon surrender by DTC
of the Global Notes, certificated Notes will be issued to each person that DTC
identifies as the beneficial owner of the Notes represented by the Global Notes.
Upon any such issuance, the Trustee is required to register such certificated
Notes in the name of such person or persons (or the nominee of any thereof) and
cause the same to be delivered thereto.

Neither the Company nor the Trustee shall be liable for any delay by DTC or
any Participant or Indirect Participant in identifying the beneficial owners of
the related Notes and each such person may conclusively rely on, and shall be
protected in relying on, instructions from DTC for all purposes (including with
respect to the registration and delivery, and the respective principal amounts,
of the Notes to be issued).

So long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of such exchange so require, we will maintain a Paying Agent with offices
in Luxembourg where holders of Certificated Notes will be able to present their
Notes for exchange, registration of transfer and redemption.

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BOOK-ENTRY PROCEDURES AND SETTLEMENT

Upon issuance, all book-entry exchange notes will be represented by one or
more fully registered global notes, without coupons. Each global note will be
deposited with, or on behalf of, DTC, a securities depositary, and will be
registered in the name of DTC or a nominee of DTC. DTC will thus be the only
registered holder of the notes.

Purchasers of the exchange notes may only hold interests in the global
notes through DTC if they are participants in DTC system. Purchasers may also
hold interests through a securities intermediary -- banks, brokerage houses and
other institutions that maintain securities accounts for customers -- that has
an account with DTC or its nominee. DTC will maintain accounts showing the
security holdings of its participants, and these participants will in turn
maintain accounts showing the security holdings of their customers. Some of
these customers may themselves be securities intermediaries holding securities
for their customers. Thus, each beneficial owner of a book-entry exchange note
will hold that note indirectly through a hierarchy of intermediaries, with DTC
at the "top" and the beneficial owner's own securities intermediary at the
"bottom".

The exchange notes of each beneficial owner of a book-entry exchange note
will be evidenced solely by entries on the books of the beneficial owner's
securities intermediary. The actual purchaser of exchange notes will generally
not be entitled to have the exchange notes represented by the global notes
registered in its name and will not be considered the owner under our charter or
bye-laws. In most cases, a beneficial owner will also not be able to obtain a
paper certificate evidencing the holder's ownership of exchange notes. The
book-entry system for holding securities eliminates the need for physical
movement of certificates and is the system through which most publicly traded
stock is held in the United States. However, the laws of some jurisdictions
require some purchasers of securities to take physical delivery of their
securities in definitive form. These laws may impair the ability of a beneficial
owner to transfer book-entry exchange notes.

A beneficial owner of book-entry exchange notes represented by a global
note may exchange the exchange notes for definitive (paper) exchange notes only
if:

- DTC is unwilling or unable to continue as depositary for that global note
and we do not appoint a qualified replacement for DTC within 90 days; or

- we, in our sole discretion, decide to allow some or all book-entry notes
to be exchangeable for definitive exchange notes in registered form.

Any global note that is so exchanged will be exchanged in whole for
definitive exchange notes in registered form, with the same terms and of an
equal aggregate principal amount. Definitive exchange notes will be registered
in the name or names of the person or persons specified by DTC in a written
instruction to the registrar of the exchange notes. DTC may base its written
instruction upon directions that it receives from its participants.

In this prospectus, references to actions taken by holders of exchange
notes will mean actions taken by DTC upon instructions from its participants,
and references to payments and notices of redemption to holders of exchange
notes will mean payments and notices of redemption to DTC as the registered
holder of the exchange notes for distribution to participants in accordance with
DTC's procedures.

DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under section 17A of the Exchange Act. The rules
applicable to DTC and its participants are on file with the SEC.

We will not have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the book-entry securities or for maintaining, supervising or
reviewing any records relating to beneficial ownership interests.

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DTC may discontinue providing its services as securities depositary at any
time by giving reasonable notice. Under those circumstances, in the event that a
successor securities depositary is not appointed, securities certificates are
required to be printed and delivered. Additionally, we may decide to discontinue
use of the system of book-entry transfers through DTC or any successor
depositary with respect to the exchange notes. In that event, certificates for
the exchange notes will be printed and delivered.

The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable, but we do not
take responsibility for the accuracy of that information.

CERTIFICATED NOTES

If (i) the Company notifies the Trustee in writing that DTC is no longer
willing or able to act as a depositary or DTC ceases to be registered as a
clearing agency under the Exchange Act and a successor depositary is not
appointed within 90 days of such notice or cessation, (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
Notes in definitive form under the Indenture or (iii) upon the occurrence of
certain other events as provided in the Indenture, then, upon surrender by DTC
of the Global Notes, Certificated Notes will be issued to each person that DTC
identifies as the beneficial owner of the Notes represented by the Global Notes.
Upon any such issuance, the Trustee is required to register such Certificated
Notes in the name of such person or persons (or the nominee of any thereof) and
cause the same to be delivered thereto.

If Certificated Notes are issued, the Company will appoint Kredietbank S.A.
Luxembourgeoise, or such other person located in Luxembourg and reasonably
acceptable to the Trustee, as an additional paying and transfer agent. Upon the
issuance of Certificated Notes, Holders will be able to transfer and exchange
Certificated Notes at the Luxembourg office of such paying and transfer agent,
provided that all transfers and exchanges must be effected in accordance with
the terms of the Indenture and, among other things, be recorded in the register
maintained by the registrar.

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CERTAIN INCOME TAX CONSEQUENCES

TAXATION OF ASIA GLOBAL CROSSING

We believe that a significant portion of the income derived from our subsea
systems will not be subject to tax in Bermuda, which currently has no corporate
income tax, or other countries in which we or our affiliates conduct activities
or in which our customers are located, including the United States. However,
this belief is based upon the anticipated nature and conduct of our business,
which may change, and upon our understanding of our position under the tax laws
of the various countries in which we have assets or conduct activities, which
position is subject to review and possible challenge by taxing authorities and
to possible changes in law, which may have retroactive effect. The extent to
which certain taxing jurisdictions may require us to pay tax or to make payments
in lieu of tax cannot be determined in advance. In addition, our operations and
payments due to us may be affected by changes in taxation, including retroactive
tax claims or assessments of withholding on amounts payable to us or other taxes
assessed at the source, in excess of the taxation we anticipate based on
business contacts and practices and the current tax regimes. We cannot assure
you that these factors will not have a material adverse effect on us.

BERMUDA TAX CONSIDERATIONS

Under current Bermuda law, we are not subject to tax in Bermuda on income
or capital gains. Furthermore, we have obtained from the Minister of Finance of
Bermuda under The Exempted Undertakings Tax Protection Act 1966, an undertaking
that, in the event that Bermuda enacts any legislation imposing tax computed on
profits, income, any capital asset, gain or appreciation, then the imposition of
that tax will not be applicable to us or to any of our operations, neither will
that tax, or any tax in the nature of estate duty or inheritance tax, become
applicable to us or our shares, debentures or other obligations, until March 28,
2016. This undertaking does not, however, prevent the imposition of any tax or
duty on persons ordinarily resident in Bermuda or any property tax on any
company, including ourselves, owning real property or leasehold interests in
Bermuda in accordance with the Land Tax Act 1967.

UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

We and our non-United States subsidiaries will be subject to United States
federal income tax at regular corporate rates, and to United States branch
profits tax, on our income, if any, that is effectively connected with the
conduct of a trade or business within the United States, and will be required to
file federal income tax returns reflecting that income. We intend to conduct our
operations so as to reduce the amount of our effectively connected income.
However, we cannot assure you that the Internal Revenue Service will agree with
the positions we take in this regard. Moreover, our United States subsidiaries
will be subject to United States federal income tax on their worldwide income
regardless of its source, subject to reduction by allowable foreign tax credits,
and distributions by our United States subsidiaries to us or to our non-United
States subsidiaries generally will be subject to United States withholding tax.

TAXATION OF NOTEHOLDERS

BERMUDA TAX CONSIDERATIONS

Under current Bermuda law, no income, withholding or other taxes or stamp
or other duties are imposed upon the issue, transfer or sale of the notes or on
any payments thereunder. See "Taxation of Asia Global Crossing -- Bermuda Tax
Considerations" above for a description of the undertaking on taxes obtained by
us from the Minister of Finance of Bermuda.

UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain United States federal income tax
consequences for beneficial owners of exchange notes that hold the outstanding
notes as capital assets as of the date

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of this Exchange Offer and that are United States persons under the Internal
Revenue Code. Under the Internal Revenue Code, you are a United States person if
you are:

- a citizen or resident of the United States;

- a corporation or partnership created or organized in or under the laws of
the United States or any political subdivision of the United States;

- an estate the income of which is subject to United States federal income
taxation regardless of its source;

- a trust that is subject to the supervision of a court within the United
States and the control of one or more United States persons; or

- a trust that has a valid election in effect under applicable United
States Treasury regulations to be treated as a United States person.

This summary is based on current law, which is subject to change, perhaps
retroactively, is for general purposes only and should not be considered tax
advice. This summary does not represent a detailed description of the federal
income tax consequences to you in light of your particular circumstances. In
addition, it does not present a description of the United States federal income
tax consequences applicable to you if you are subject to special treatment under
the United States federal income tax laws, including if you are:

- a dealer in securities or currencies;

- a trader in securities if you elect to use a mark-to-market method of
accounting for your securities holdings;

- a financial institution;

- an insurance company;

- a tax-exempt organization;

- a person liable for alternative minimum tax;

- a person holding exchange notes as part of a hedging, integrated or
conversion transaction, constructive sale or straddle; or

- a United States person whose "functional currency" is not the United
States dollar.

We cannot assure you that a later change in law will not alter
significantly the tax considerations that we describe in this summary.

If a partnership holds our exchange notes, the tax treatment of a partner
will generally depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding our exchange notes,
you should consult your tax advisor.

YOU SHOULD CONSULT YOUR OWN TAX ADVISOR CONCERNING THE PARTICULAR UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES TO YOU OF THE OWNERSHIP AND DISPOSITION
OF THE EXCHANGE NOTES, AS WELL AS THE CONSEQUENCES TO YOU ARISING UNDER THE LAWS
OF ANY OTHER TAXING JURISDICTION.

CONSEQUENCES OF THE EXCHANGE

The exchange of the outstanding notes for the exchange notes in the
Exchange Offer, see "The Exchange Offer" on page 29, will not constitute a
taxable event to you. Consequently, (1) you will not realize any gain or loss
upon receipt of an exchange note; (2) the holding period of the exchange note
will include the holding period of the outstanding note exchanged for the
exchange note; and (3) the adjusted tax basis of the exchange note will be the
same as the adjusted tax basis of the outstanding note exchanged for the
exchange note immediately before the exchange.

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PAYMENT OF INTEREST

You will be taxed on the interest on an exchange note as ordinary income at
the time you receive the interest or when it accrues in accordance with the
method of accounting that you use for United States federal income tax purposes.
Interest income on an exchange note generally will constitute foreign source
income and generally will be considered "passive income" or "financial services
income" for purposes of computing the foreign tax credit.

MARKET DISCOUNT

If you purchased an outstanding note for an amount that is less than its
stated redemption price at maturity, the amount of the difference will be
treated as "market discount" for United States federal income tax purposes,
unless that difference is less than a specified de minimis amount. Under the
market discount rules, you will be required to treat any payment, other than
stated interest, on, or any gain on the sale, exchange, retirement or other
disposition of, an exchange note as ordinary income to the extent of the market
discount that you have not previously included in income and are treated as
having accrued on the exchange note at the time of its payment or disposition.
In addition, you may be required to defer, until the maturity of the exchange
note or its earlier disposition in a taxable transaction, the deduction of all
or a portion of the interest expense on any indebtedness attributable to the
exchange note.

Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the exchange note, unless
you elect to accrue on a constant interest method. You may elect to include
market discount in income currently as it accrues, on either a ratable or
constant interest method, in which case the rule described above regarding
deferral of interest deductions will not apply. Your election to include market
discount in income currently, once made, applies to all market discount
obligations acquired by you on or after the first taxable year to which your
election applies and may not be revoked without the consent of the Internal
Revenue Service. You should consult your own tax advisor before making this
election.

AMORTIZABLE BOND PREMIUM

If you purchased an outstanding note for an amount in excess of the sum of
all amounts payable on the note after the purchase date other than stated
interest, you will be considered to have purchased the note at a "premium". You
generally may elect to amortize the premium over the remaining term of the
exchange note on a constant yield method as an offset to interest when
includible in income under your regular accounting method. If you do not elect
to amortize bond premium, that premium will decrease the gain or increase the
loss you would otherwise recognize on disposition of the exchange note. Your
election to amortize premium on a constant yield method will also apply to all
debt obligations held or subsequently acquired by you on or after the first day
of the first taxable year to which the election applies. You may not revoke the
election without the consent of the Internal Revenue Service. You should consult
your own tax advisor before making this election.

SALE, EXCHANGE OR RETIREMENT OF THE NOTES

When you sell, exchange or retire an exchange note, you will recognize gain
or loss equal to the difference between the amount you receive (less any accrued
interest you have not previously included in income, which will be taxable as
such) and your adjusted tax basis in the exchange note. Your gain or loss
realized on the sale, exchange or retirement of an exchange note will generally
be treated as United States source capital gain or loss, and, except as
described above with respect to market discount, will be long-term capital gain
or loss if at the time of the sale, exchange or retirement of an exchange note,
you have held the exchange note for more than one year. Long-term capital gains
of individuals are eligible for reduced rates of taxation. The deductibility of
capital losses is subject to limitations.

160
<PAGE> 165

INFORMATION REPORTING AND BACKUP WITHHOLDING

In general, unless you are an exempt recipient such as a corporation,
information reporting will apply to principal and interest payments that we make
to you and to the proceeds from the sale of your exchange notes. Backup
withholding at a 31% rate will apply to such payments if you fail to provide
your taxpayer identification number or certification of foreign or other exempt
status or if you are notified by the Internal Revenue Service that you have
failed to report in full dividend and interest income required to be shown on
your federal income tax returns.

Any amounts withheld under the backup withholding rules will be allowed as
a credit against your United States federal income tax liability and may entitle
you to a refund, provided that the required information is furnished to the
Internal Revenue Service.

161
<PAGE> 166

PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of those exchange notes. This prospectus, as it may be amended
or supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for outstanding notes only
where the outstanding notes were acquired as a result of market-making
activities or other trading activities. We have agreed that we will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale for a period of 180 days from the date on
which the exchange offer is consummated, or the shorter period which will
terminate when all outstanding notes acquired by broker-dealers for their own
accounts as a result of market-making activities or other trading activities
have been exchanged for exchange notes and those exchange notes have been resold
by the broker-dealers.

We will not receive any proceeds from any sales of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
in the exchange offer may be sold from time to time in one or more transactions
in the over-the-counter market, in negotiated transactions, through the writing
of options on the exchange notes or a combination of those methods of resale, at
market prices prevailing at the time of resale, at prices related to those
prevailing market prices or at negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any broker-dealer or
the purchasers of any exchange notes. Any broker-dealer that resells exchange
notes may be deemed to be an "underwriter" within the meaning of the Securities
Act and any profit on any resale of exchange notes, and any commissions or
concessions received by any of those persons, may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that by
acknowledging that it will deliver any by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

An application has also been made to list the exchange notes on the
Luxembourg Stock Exchange.

The exchange notes are a new issue of securities, and there is currently no
established trading market for the exchange notes. The initial purchasers for
the offering of the outstanding notes have advised us that they intend to make a
market in the exchange notes, but they are not obligated to do so. The initial
purchasers may discontinue any market making in the exchange notes at any time
in their sole discretion. Accordingly, we cannot assure you that a liquid
trading market will develop for the exchange notes, that you will be able to
sell your exchange notes at a particular time or that the prices that you
receive when you sell will be favorable.

We have agreed to pay all expenses incident to our performance of, or
compliance with, the Registration Rights Agreement and will indemnify the
holders of the outstanding notes (including any broker-dealers), and certain
parties related to such holders, against certain liabilities, including
liabilities under the Securities Act. In the SEC's view, indemnification of
certain liabilities arising under the Securities Act is contrary to the federal
securities laws and therefore unenforceable.

We have not entered into any arrangements or understandings with any person
to distribute the exchange notes to be received in the Exchange Offer.

162
<PAGE> 167

LEGAL MATTERS

Certain Bermuda legal matters with respect to the exchange notes will be
passed upon for us by Appleby, Spurling & Kempe. Certain legal matters will be
passed upon for us by Simpson Thacher & Bartlett as to matters of United States
and New York law. Certain partners of Simpson Thacher & Bartlett purchased
shares in our common stock offering through a directed share program in an
aggregate amount not exceeding 200,000 shares.

EXPERTS

We have included in this prospectus our audited financial statements and
our audited supplemental financial statements as of December 31, 1999 and 1998,
and for the year ended December 31, 1999 and for the period from April 1, 1998,
date of inception, to December 31, 1998 along with Arthur Andersen's audit
reports on these financial statements. Arthur Andersen issued the reports as
independent accountants as experts in auditing and accounting.

We have included in this prospectus the audited financial statements of
Pacific Crossing Ltd. and its subsidiaries as of December 31, 1999 and 1998, and
for the year ended December 31, 1999 and for the period from May 4, 1998, date
of inception, to December 31, 1998 along with Arthur Andersen's audit report on
these financial statements. Arthur Andersen issued the report as independent
accountants as experts in auditing and accounting.

The combined financial statements of Hutchison Global Crossing Holdings
Limited and subsidiaries as of December 31, 1999, 1998 and 1997 and for the
years ended, included in this prospectus, have been audited by
PricewaterhouseCoopers, independent accountants, as stated in their report
appearing herein.

We have included in this prospectus the audited financial statements of
Global Access Limited as of December 31, 1999 and 1998 and for the years ended
December 31, 1999 and 1998 and for the period from November 4, 1997, date of
inception, to December 31, 1997 along with Arthur Andersen's audit report on
these financial statements. Arthur Andersen issued the report as independent
accountants as experts in auditing and accounting.

SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES

We are organized under the laws of Bermuda. In addition, a number of our
directors and officers reside outside of the United States and a substantial
portion of our assets are located outside of the United States. As a result, it
may be difficult for you to effect service of process within the United States
upon those persons or to realize against them in courts of the United States
upon judgments of courts of the United States predicated upon civil liabilities
under the United States federal securities laws. Furthermore, our Bermuda
counsel, Appleby Spurling & Kempe, has advised us that there is doubt as to the
enforcement in Bermuda, in original actions or in actions of enforcement of
judgments of United States courts, of liabilities predicated upon United States
federal securities laws, although Bermuda courts will enforce foreign judgments
for liquidated amounts in civil matters subject to some conditions and
exceptions.

163
<PAGE> 168

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational reporting requirements of the
Securities Exchange Act of 1934 and, under that Act, we file reports, proxy
statements and other information with the SEC. You may inspect those reports,
proxy statements and other information and the registration statement and its
exhibits and schedules, without charge, and you may make copies of them at
prescribed rates at the public reference facilities of the SEC's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's
regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and 7 World Trade Center, Suite 1300, New York, New York 10048. The public may
obtain information on the operation of the SEC's public reference facilities by
calling the SEC in the United States at 1-800-SEC-0330. The SEC also maintains a
web site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete, and in each instance
reference is made to the copy of such contract or document filed as an Exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference.

So long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of such Stock Exchange so require, all information we file with the SEC
will be made available free of charge at the offices of the Luxembourg Paying
Agent, which is expected to be Kredietbank S.A. Luxembourgeoise.

You may also request a copy of those materials, free of cost, by writing or
telephoning us at the following address:

Investor Relations
Asia Global Crossing Ltd.
360 N. Crescent Drive
Beverly Hills, CA 90210
888-969-2429 (AGCX).

To obtain timely delivery of those materials, you must request the
information no later than five business days before the expiration date of the
exchange offer.

164
<PAGE> 169

LISTING AND GENERAL INFORMATION

1. Application has been made to list the exchange notes on the Luxembourg
Stock Exchange. Prior to the listing, a legal notice relating to the issue of
the exchange notes and our memorandum of association and bye-laws will be
deposited with the Greffier en Chef du Tribunal d'Arrondissement de et a
Luxembourg, where these documents may be examined or copies obtained.

2. So long as the notes are listed on the Luxembourg Stock Exchange and the
rules of that stock exchange shall require, copies of our memorandum of
association and bye-laws and the Indenture will be available at the office of
Kredietbank S.A. Luxembourgeoise, 43, Boulevard Royal, L-2955 Luxembourg. So
long as the notes are listed on the Luxembourg Stock Exchange and the rules of
that stock exchange shall require, copies of our consolidated financial
statements for the year ended December 31, 1999 and subsequent years and any and
all of our annual and quarterly reports will be available during normal business
hours on any weekday at the office of Kredietbank S.A. Luxembourgeoise, 43,
Boulevard Royal, L-2955 Luxembourg. We do not publish non-consolidated financial
statements on an annual or interim basis. So long as the notes are listed on the
Luxembourg Stock Exchange and the rules of that stock exchange shall require all
information that we file with the SEC and copies of all other material documents
referenced in this prospectus that are entered into in connection with this
offering will be available during normal business hours on any weekday at the
office of Kredietbank S.A. Luxembourgeoise, 43, Boulevard Royal, L-2955
Luxembourg.

3. We were incorporated under the laws of Bermuda on November 24, 1999. The
creation and issuance of the exchange notes was authorized by us by resolutions
adopted by our Board of Directors on September 25, 2000.

4. We accept responsibility for the information contained in this
prospectus. To the best of our knowledge, the information contained in this
prospectus is in accordance with the facts and does not omit anything likely to
affect the import of this prospectus.

5. There has been no material adverse change in our financial position
since December 31, 1999.

6. We are not a party to any litigation that, in our judgment, could be
material in the context of the issue of the notes, except as disclosed in this
prospectus.

7. Our Auditors are Arthur Andersen, Hamilton, Bermuda, who have audited
our Financial Statements for the year ended December 31, 1999 and for the period
from April 1, 1998 (Date of Inception) to December 31, 1998.

8. We will not appoint a paying and transfer agent in Luxembourg until the
time, if any, certificated notes are issued. We have appointed Kredietbank S.A.
Luxembourgeoise as our special agent to act as an intermediary between us and
the holders of the notes in Luxembourg until the time we are required to appoint
a transfer and paying agent located in Luxembourg as provided in this
prospectus. So long as the notes are listed on the Luxembourg Stock Exchange and
the rules of that stock exchange require, we shall maintain a special agent so
long as the notes are in global form and appoint and maintain a paying and
transfer agent upon the issuance of certificated notes. We reserve the right to
vary the appointment of any paying and transfer agent.

9. The notes have been accepted for clearance through the Euroclear
Operator and Clearstream Banking. The global notes have been assigned the
following CUSIP number ; a Euroclear common code number of
and an ISIN number of .

165
<PAGE> 170

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

Supplemental Consolidated Financial Statements:
Report of Independent Public Accountants.................... F-3
Supplemental Consolidated Balance Sheets as of September 30,
2000 (unaudited) and December 31, 1999 and 1998........... F-4
Supplemental Consolidated Statements of Operations for the
nine months ended September 30, 2000 and 1999 (unaudited)
and the year ended December 31, 1999 and for the period
from April 1, 1998 (Date of Inception) to December 31,
1998...................................................... F-5
Supplemental Consolidated Statements of Shareholders' Equity
for the nine months ended September 30, 2000 (unaudited)
and for the year ended December 31, 1999 and for the
period from April 1, 1998 (Date of Inception) to December
31, 1998.................................................. F-6
Supplemental Consolidated Statements of Cash Flows for the
nine months ended September 30, 2000 and 1999 (unaudited)
and the year ended December 31, 1999 and for the period
from April 1, 1998 (Date of Inception) to December 31,
1998...................................................... F-7
Supplemental Consolidated Statements of Comprehensive Income
for the nine months ended September 30, 2000 and 1999
(unaudited) and for the year ended December 31, 1999 and
for the period from April 1, 1998 (Date of Inception) to
December 31, 1998......................................... F-8
Notes to Supplemental Consolidated Financial Statements..... F-9
Historical Consolidated Financial Statements:
Report of Independent Public Accountants.................... F-25
Consolidated Balance Sheets as of September 30, 2000
(unaudited) and December 31, 1999 and 1998................ F-26
Consolidated Statements of Operations for the nine months
ended September 30, 2000 and 1999 (unaudited) and the year
ended December 31, 1999 and for the period from April 1,
1998 (Date of Inception) to December 31, 1998............. F-27
Consolidated Statements of Shareholders' Equity for the nine
months ended September 30, 2000 (unaudited) and for the
year ended December 31, 1999 and for the period from April
1, 1998 (Date of Inception) to December 31, 1998.......... F-28
Consolidated Statements of Cash Flows for the nine months
ended September 30, 2000 and 1999 (unaudited) and the year
ended December 31, 1999 and for the period from April 1,
1998 (Date of Inception) to December 31, 1998............. F-29
Consolidated Statements of Comprehensive Income for the nine
months ended September 30, 2000 and 1999 (unaudited) and
for the year ended December 31, 1999 and for the period
from April 1, 1998 (Date of Inception) to December 31,
1998...................................................... F-30
Notes to Consolidated Financial Statements.................. F-31

PACIFIC CROSSING LTD. AND SUBSIDIARIES

Report of Independent Public Accountants.................... F-47
Consolidated Balance Sheets as of June 30, 2000 (unaudited)
and December 31, 1999 and 1998............................ F-48
Consolidated Statements of Operations for the six months
ended June 30, 2000 and 1999 (unaudited), the year ended
December 31, 1999 and for the period from May 4, 1998
(Date of Inception) to December 31, 1998.................. F-49
Consolidated Statements of Shareholders' Equity for the six
months ended June 30, 2000 (unaudited), for the year ended
December 31, 1999 and for the period from May 4, 1998
(Date of Inception) to December 31, 1998.................. F-50
Consolidated Statements of Cash Flows for the six months
ended June 30, 2000 and 1999 (unaudited), for the year
ended December 31, 1999 and for the period from May 4,
1998 (Date of Inception) to December 31, 1998............. F-51
Notes to Consolidated Financial Statements.................. F-52
</TABLE>

F-1
<PAGE> 171

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

Combined Balance Sheet as of June 30, 2000 (unaudited) and
December 31, 1999......................................... F-61
Combined Statements of Operations for the six months ended
June 30, 2000 and 1999 (unaudited)........................ F-62
Combined Statement of Cash Flows for the six months ended
June 30, 2000 and 1999 (unaudited)........................ F-63
Notes to Condensed Combined Financial Statements............ F-65

Independent Auditors' Report................................ F-76
Combined Balance Sheets as of December 31, 1999, 1998 and
1997...................................................... F-77
Combined Statements of Operations for the three years ended
December 31, 1999, 1998 and 1997.......................... F-78
Combined Statement of Changes in Owner's Equity/(Deficit)
for the three years ended December 31, 1999, 1998 and
1997...................................................... F-79
Combined Statement of Cash Flows for the three years ended
December 31, 1999, 1998 and 1997.......................... F-80
Notes to Combined Financial Statements...................... F-82

GLOBAL ACCESS LIMITED

Balance Sheets as of June 30, 2000 (unaudited) and December
31, 1999.................................................. F-99
Statements of Operations and Accumulated Deficits for the
six month periods ended June 30, 2000 and 1999
(unaudited)............................................... F-100
Statements of Cash Flows for the six months periods ended
June 30, 2000 and 1999 (unaudited)........................ F-101
Notes to Financial Statements............................... F-102
Report of Independent Public Accountants.................... F-106
Balance Sheets as of December 31, 1999 and 1998............. F-107
Statements of Operations for the years ended December 31,
1999 and 1998, and for the period from November 4, 1997
(date of inception) to December 31, 1997.................. F-108
Statements of Stockholders' Equity for the years ended
December 31, 1999 and 1998, and for the period from
November 4, 1997 (date of inception) to December 31,
1999...................................................... F-109
Statements of Cash Flows for the years ended December 31,
1999 and 1998, and for the period from November 4, 1997
(date of inception) to December 31, 1999.................. F-110
Notes to Financial Statements............................... F-111

INDEX TO UNAUDITED PRO FORMA FINANCIAL INFORMATION

Unaudited Pro Forma Condensed Combined Balance Sheet as of
September 30, 2000........................................ F-116
Unaudited Pro Forma Condensed Combined Statement of
Operations for the nine months ended September 30, 2000... F-117
Unaudited Pro Forma Condensed Combined Statement of
Operations for the year ended December 31, 1999........... F-118
</TABLE>

F-2
<PAGE> 172

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Asia Global Crossing Ltd.:

We have audited the accompanying supplemental consolidated balance sheets
of Asia Global Crossing Ltd. (a Bermuda company) and its subsidiaries as of
December 31, 1999 and 1998 and the related supplemental consolidated statements
of operations, shareholder's equity, cash flows and comprehensive income for the
year ended December 31, 1999 and for the period from April 1, 1998 (Date of
Inception) to December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Asia Global Crossing Ltd.
and subsidiaries as of December 31, 1999 and 1998 and the results of their
operations and their cash flows for the year ended December 31, 1999 and for the
period from April 1, 1998 (Date of Inception) to December 31, 1998, in
conformity with accounting principles generally accepted in the United States.

/s/ Arthur Andersen

Hamilton, Bermuda
October 12, 2000

F-3
<PAGE> 173

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, -------------------
2000 1999 1998
------------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents................................. $ 103,782 $ 9,784 $ 5,378
Restricted cash and cash equivalents...................... 57,271 -- --
Accounts receivable, net.................................. 24,480 -- --
Receivable from affiliates................................ 88,561 89,735 --
Other assets.............................................. 15,423 1,170 20
---------- -------- --------
Total current assets............................... 289,517 100,689 5,398
---------- -------- --------
Restricted cash and cash equivalents........................ 18,462 138,118 231,000
Property and equipment, net................................. 1,685,272 101,598 --
Deferred finance fees, net.................................. 21,969 -- --
Other assets................................................ 39,401 -- --
Investments in affiliate.................................... 447,707 286,131 177,334
---------- -------- --------
Total assets....................................... $2,502,328 $626,536 $413,732
========== ======== ========
LIABILITIES:
Current liabilities:
Accrued construction costs................................ $ 230,699 $ -- $ --
Accounts payable and accrued liabilities.................. 16,472 1,131 --
Deferred revenue.......................................... 5,103 -- --
Payable to affiliates..................................... 21,909 101,402 --
---------- -------- --------
Total current liabilities.......................... 274,183 102,533 --
---------- -------- --------
Long-term debt.............................................. 750,000 -- --
Long-term deferred revenue.................................. 142,681 -- --
Other long-term liabilities................................. 1,421 -- --
Loan payable to affiliate................................... 9,780 -- --
---------- -------- --------
Total liabilities.................................. 1,178,065 102,533 --
---------- -------- --------
Minority interest........................................... 150,026 -- --
SHAREHOLDER'S EQUITY:
Class B common stock par value $.01, 486,625,125 shares
authorized, issued and outstanding as of September 30,
2000, December 31, 1999 and 1998.......................... 4,866 4,866 4,866
Additional paid-in capital.................................. 1,241,480 502,895 405,999
Retained earnings (accumulated deficit)..................... (72,088) 16,242 2,867
Cumulative translation adjustment........................... (21) -- --
---------- -------- --------
Total shareholder's equity......................... 1,174,237 524,003 413,732
---------- -------- --------
Total liabilities and shareholder's equity......... $2,502,328 $626,536 $413,732
========== ======== ========
</TABLE>

The accompanying notes are an integral part of these supplemental statements.
F-4
<PAGE> 174

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1998
NINE MONTHS ENDED (DATE OF
SEPTEMBER 30, YEAR ENDED INCEPTION) TO
--------------------------- DECEMBER 31, DECEMBER 31,
2000 1999 1999 1998
------------ ------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue........................ $ 130,455 $ -- $ -- $ --
Expenses:
Cost of sales................ 98,194 -- -- --
Operations, administration
and maintenance........... 36,499 -- -- --
Sales and marketing.......... 3,021 -- -- --
Network development.......... 2,497 -- -- --
General and administrative... 30,310 66 1,201 --
Depreciation and
amortization.............. 13,539 -- -- --
------------ ------------ ------------ ------------
Operating loss............ (53,605) (66) (1,201) --
Equity in income (loss) of
affiliate.................... (33,540) (7,845) 2,978 (2,507)
Minority interest.............. (9,632) -- -- --
Other income (expense):
Other expense................ (76) -- -- --
Interest income.............. 11,427 8,745 11,598 5,374
Interest expense............. (1,551) -- -- --
------------ ------------ ------------ ------------
Income (loss) before
provision for income
taxes................... (86,977) 834 13,375 2,867
Provision for income taxes..... (1,353) -- -- --
------------ ------------ ------------ ------------
Net income (loss)......... $ (88,330) $ 834 $ 13,375 $ 2,867
============ ============ ============ ============
Net income per common share:
Basic and diluted net income
(loss) per common share... $ (0.18) $ 0.01 $ 0.03 $ 0.01
============ ============ ============ ============
Shares used in computing basic
and diluted net income (loss)
per common share............. 486,625,125 486,625,125 486,625,125 451,505,142
============ ============ ============ ============
</TABLE>

The accompanying notes are an integral part of these supplemental statements.
F-5
<PAGE> 175

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
RETAINED
COMMON STOCK ADDITIONAL CUMULATIVE EARNINGS TOTAL
-------------------- PAID-IN TRANSLATION (ACCUMULATED SHAREHOLDER'S
SHARES AMOUNT CAPITAL ADJUSTMENT DEFICIT) EQUITY
----------- ------ ---------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Contribution of assets by
Global Crossing Ltd. for
common stock on April 1,
1998 (Date of Inception)... 450,000,000 $4,500 $ 389,670 $ -- $ -- $ 394,170
Issuance of common shares for
investments in Global
Access Limited............. 36,625,125 366 16,329 -- -- 16,695
Net income for the period
April 1, 1998 (Date of
Inception) to December 31,
1998....................... -- -- -- -- 2,867 2,867
----------- ------ ---------- ------ -------- ----------
BALANCE, December 31, 1998...... 486,625,125 4,866 405,999 -- 2,867 413,732
Contribution of East Asia
Crossing development rights
from Global Crossing
Ltd........................ -- -- 10,970 -- -- 10,970
Cash contribution from Asia
Global Crossing Holdings
Ltd........................ -- -- 73,013 -- -- 73,013
Capital contribution to Global
Access Limited by Global
Crossing Ltd. ............. -- -- 12,913 -- -- 12,913
Net income for the year ended
December 31, 1999.......... -- -- -- -- 13,375 13,375
----------- ------ ---------- ------ -------- ----------
BALANCE, December 31, 1999...... 486,625,125 4,866 502,895 -- 16,242 524,003
Foreign currency translation
adjustment................. -- -- -- (21) -- (21)
Cash contribution from Asia
Global Crossing Holdings
Ltd........................ -- -- 280,031 -- -- 280,031
Contribution of Hutchison
Global Crossing from Global
Crossing Ltd. ............. -- -- 458,554 -- -- 458,554
Net loss for the nine months
ended September 30, 2000... -- -- -- -- (88,330) (88,330)
----------- ------ ---------- ------ -------- ----------
BALANCE, September 30, 2000
(unaudited)................... 486,625,125 $4,866 $1,241,480 $ (21) $(72,088) $1,174,237
=========== ====== ========== ====== ======== ==========
</TABLE>

The accompanying notes are an integral part of these supplemental statements.
F-6
<PAGE> 176

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1998
NINE MONTHS ENDED (DATE OF
----------------------------- YEAR ENDED INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
2000 1999 1999 1998
------------- ------------- ------------ ----------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................... $ (88,330) $ 834 $ 13,375 $ 2,867
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization..................... 13,539 -- -- --
Provision for doubtful accounts................... 820 -- -- --
Non-cash cost of sales............................ 98,194 -- -- --
Equity in (income) loss of affiliate.............. 33,540 7,820 (2,978) 2,507
Minority interest................................. 9,632 -- -- --
Changes in operating assets and liabilities:
Accounts receivable............................. (18,901) -- -- --
Receivable from affiliates...................... 62,274 -- (89,735) --
Other assets.................................... (25,253) -- (1,150) (8)
Deferred revenue................................ 137,930 -- -- --
Accounts payable and accrued liabilities........ 8,889 -- 1,131 --
Payable to affiliates........................... (87,072) -- 101,402 --
---------- -------- -------- ---------
Net cash provided by operating activities....... 145,262 8,654 22,045 5,366
---------- -------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired from consolidating Pacific Crossing
Ltd. ............................................. 606 -- -- --
Change in restricted cash and cash equivalents...... 80,299 -- 92,882 (231,000)
Purchase of property and equipment.................. (450,870) (12,000) (90,628) --
Acquisition of minority share in affiliate.......... (20,585) -- -- --
Cash paid for investments........................... (25,000) -- (92,906) (6)
---------- -------- -------- ---------
Net cash used in investing activities........... (415,550) (12,000) (90,652) (231,006)
---------- -------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from capital contribution.................. 280,032 -- 73,013 231,018
Minority interest investment in affiliates.......... 84,275 -- -- --
---------- -------- -------- ---------
Net cash provided by financing activities....... 364,307 -- 73,013 231,018
EXCHANGE RATE EFFECT ON CASH AND CASH EQUIVALENTS..... (21) -- -- --
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS......................................... 93,998 (3,346) 4,406 5,378
CASH AND CASH EQUIVALENTS, beginning of period........ 9,784 5,378 5,378 --
---------- -------- -------- ---------
CASH AND CASH EQUIVALENTS, end of period.............. $ 103,782 $ 2,032 $ 9,784 $ 5,378
========== ======== ======== =========
SUPPLEMENTAL INFORMATION ON NONCASH INVESTING AND
FINANCING ACTIVITIES:
Decrease in accrued construction costs.............. $ 69,882 $ -- -- --
Contribution of East Asia Crossing development
rights............................................ (10,970) --
Amortization of deferred finance costs.............. 3,409 -- -- --
Costs incurred for property and equipment........... (524,161) (12,000) 101,598 --
---------- -------- -------- ---------
Cash for property and equipment..................... $ (450,870) $(12,000) $ 90,628 $ --
========== ======== ======== =========
Non-cash capital contribution....................... $ 458,554 $ -- $ 12,913 $ 179,847
========== ======== ======== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest and income taxes
Interest paid and capitalized..................... $ 50,968 $ -- $ -- $ --
========== ======== ======== =========
Interest paid (net of capitalized interest)....... $ 1,162 $ -- $ -- $ --
========== ======== ======== =========
Cash paid for taxes............................... $ -- $ -- $ -- $ --
========== ======== ======== =========
Details of consolidating Pacific Crossing Ltd.:
Assets consolidated............................... $1,124,138 $ -- $ -- $ --
Liabilities consolidated.......................... (945,903) -- -- --
---------- -------- -------- ---------
$ 178,235 $ -- $ -- $ --
========== ======== ======== =========
</TABLE>

The accompanying notes are an integral part of these supplemental statements.
F-7
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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1998
NINE MONTHS ENDED (DATE OF
SEPTEMBER 30, YEAR ENDED INCEPTION) TO
------------------ DECEMBER 31, DECEMBER 31,
2000 1999 1999 1998
--------- ----- ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET INCOME (LOSS)........................... $(88,330) $834 $13,375 $2,867
Foreign currency translation adjustment... (21) -- -- --
-------- ---- ------- ------
COMPREHENSIVE INCOME (LOSS)................. $(88,351) $834 $13,375 $2,867
======== ==== ======= ======
</TABLE>

The accompanying notes are an integral part of these supplemental statements.

F-8
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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

THROUGHOUT THESE SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS, REFERENCES TO
"DOLLARS" AND "$" ARE TO UNITED STATES DOLLARS.

1. ORGANIZATION AND BACKGROUND

Nature of Business

Asia Global Crossing Ltd. (the "Company" or "Asia Global Crossing") intends
to be the first pan-Asian telecommunications carrier to provide
telecommunications services, including Internet, data, voice and web-hosting
services to wholesale and business customers. Asia Global Crossing owns 64.5% of
Pacific Crossing-1, a 21,000 kilometer undersea cable connecting the United
States to Japan. The Company is constructing East Asia Crossing, a 17,000
kilometer undersea fiber optic cable that is expected to connect Japan to Hong
Kong by the end of 2000. The Company expects to extend East Asia Crossing to
Taiwan and Korea in the first half of 2001 and at a later time, to Malaysia, the
Philippines and Singapore, and if when regulations permit, China. Both of these
systems will be seamlessly connected to the Global Crossing network, which,
including Pacific Crossing-1 and East Asia Crossing, consists of 162,544
announced route kilometers which will serve five continents, 27 countries and
more than 200 major cities.

Formation of the Joint Venture

On September 8, 1999, Asia Global Crossing Ltd. was formed as a wholly
owned subsidiary of Asia Global Crossing Holdings Ltd., an indirect wholly owned
subsidiary of Global Crossing Ltd. ("Global Crossing"). On November 24, 1999,
Asia Global Crossing Holdings Ltd. became a joint venture owned by Global
Crossing, Softbank Corp. ("Softbank") and Microsoft Corporation ("Microsoft")
(collectively, the "Founding Shareholders") who at the time owned 93.0%, 3.5%
and 3.5% of Asia Global Crossing Holdings Ltd., respectively. In October 2000,
the Company completed its initial public offering ("IPO"). (see note 12)

Upon the formation of the joint venture, Microsoft and Softbank were each
issued 1,750,000 shares of Class B common stock of Asia Global Crossing Holdings
Ltd. for $175.0 million in cash paid by each of Microsoft and Softbank. Global
Crossing received 46,500,000 shares of Class A common stock and 1,000 shares of
Class C common stock of Asia Global Crossing Holdings Ltd. in consideration for,
among other things, (1) its entire interest in Pacific Crossing Ltd. and (2) its
development rights with respect to East Asia Crossing. The 1,000 shares of Class
C common stock were subsequently transferred to The Goldman Sachs Group, Inc.

Also, upon the formation of the joint venture, Microsoft and Softbank
entered into a capacity commitment agreement to purchase capacity on the Global
Crossing systems in an aggregate amount of $200 million over a three-year period
from the date Pacific Crossing-1 is able to carry trans-Pacific traffic.

On April 1, 1998, GCT Pacific Holdings Ltd. ("GCT Pacific") was formed as a
wholly owned subsidiary of Global Crossing to hold Global Crossing's interest in
Pacific Crossing-1. Global Crossing contributed GCT Pacific to the Company upon
formation of the joint venture. Since Asia Global Crossing and GCT Pacific are
entities under the common control of Global Crossing, Asia Global Crossing's
consolidated financial statements are presented as if it were in existence on
April 1, 1998, the date of inception of GCT Pacific, similar to a pooling of
interests. On September 28, 1999, Asia Global Crossing completed a 100 for 1
stock split. All share and per share information have been adjusted to reflect
the split retroactively.

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NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Pacific Crossing-1

At December 31, 1999, Pacific Crossing-1 was owned by Pacific Crossing
Ltd., a joint venture among GCT Pacific, SCS (Bermuda) Ltd. and Marubeni Pacific
Cable Limited, all Bermuda companies (collectively, the "Pacific Crossing-1
Shareholders"), who owned 50.0%, 14.5% and 35.5% of Pacific Crossing Ltd.,
respectively. In addition to directly and indirectly owning 57.8% of Pacific
Crossing-1 through GCT Pacific, before January 1, 2000, the Company's investment
in Pacific Crossing Ltd. was accounted for as interest in affiliates under the
equity method of accounting because it was not able to exercise effective
control over Pacific Crossing Ltd. In March 2000, the Company increased its
interest in Pacific Crossing Ltd. to 64.5% by acquiring the remaining interest
in SCS Bermuda Ltd., and the Pacific Crossing-1 Shareholder agreement was
amended, which enabled the Company to exercise effective control over Pacific
Crossing Ltd. As a result, Pacific Crossing Ltd. has been consolidated as of
January 1, 2000.

East Asia Crossing

On December 17, 1999, Asia Global Crossing awarded KDD Submarine Cable
Systems Inc. a construction contract to build East Asia Crossing, to connect
Japan, Hong Kong, Taiwan, and Korea, and will have the potential to connect into
China, if and when regulations permit. On September 22, 2000, the Company
entered into an agreement with NEC Corporation of Japan to extend East Asia
Crossing to Singapore, Malaysia and the Philippines. The contract is worth
approximately $475 million on a turnkey basis. Under the terms of the contract,
NEC will connect Hong Kong to Singapore in ready-for-service condition in the
fourth quarter of 2001. This contract with NEC is expected to add approximately
8,000 kilometers of undersea fiber optic cable to the system, bringing East Asia
Crossing to approximately 19,500 kilometers.

2. SIGNIFICANT ACCOUNTING POLICIES

These supplemental consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States.
The significant accounting policies are summarized as follows:

a) Principles of Consolidation

The supplemental consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
transactions have been eliminated.

b) Basis of Presentation

Concurrent with the IPO, the Founding Shareholders contributed their
respective interests in Hutchison Global Crossing Holdings Limited and
subsidiaries ("HGC" or "Hutchison Global Crossing"), representing 50% of the
total ownership interest in HGC, to the Company. At the same time, Global
Crossing contributed its 49% interest in Global Access Limited ("GAL") to the
Company. These contributions are accounted for by the Company similar to the
pooling-of-interests method of accounting because HGC, GAL and the Company are
entities under common control of Global Crossing. Prior to these contributions,
Global Crossing accounted for its investments in HGC and GAL under the equity
method of accounting.

The supplemental consolidated financial statements have been prepared to
give retroactive effect to the contribution of HGC and GAL to the Company by the
Founding Shareholders and Global Crossing Ltd., respectively, at the completion
of the IPO. The consolidated financial statements have been restated for all
periods presented as if HGC, GAL and the Company had been always combined under
the equity method of accounting since they were combined with Global Crossing.
These
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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

supplemental financial statements will become the historical consolidated
financial statements of the Company after financial statements covering the date
of completion of these contributions are issued.

In preparing the supplemental consolidated financial statements, GAL's
statement of operations for the period from December 5, 1998 through December
31, 1998 has been combined with the Company's consolidated statement of
operation for the period from April 1, 1998 (date of inception) to December 31,
1998 under the equity method of accounting. GAL's statements of operations for
the year ended December 31, 1999 and for the nine months ended September 30,
1999 have been combined with the Company's consolidated statements of operations
for the year ended December 31, 1999 and for the nine months ended September 30,
1999, respectively, under the equity method of accounting. GAL and HGC's
statement of operations for the nine months ended September 30, 2000 have been
combined with the Company's consolidated statement of operations for the nine
months ended September 30, 2000 under the equity method of accounting.

Hutchison Global Crossing provides fixed network services, including
international services, local fixed network services, and multimedia services,
in the Hong Kong Special Administrative Region of the People's Republic of
China. GAL provides communications network of services utilizing a network of
terrestrial digital fiber optic cable systems in Japan.

In connection with the contribution of GAL from Global Crossing Ltd., the
Company issued a total of 36,625,125 shares of Class B common stock to Global
Crossing Ltd.

c) Interim Financial Information

The supplemental consolidated financial statements of the Company as of
September 30, 2000 and for the nine months ended September 30, 2000 and 1999 are
unaudited. Adjustments, consisting of normal recurring adjustments to present
the consolidated financial position of the Company, have been made, which in the
opinion of management are necessary for a fair presentation. Results of
operations for the nine months ended September 30, 2000 are not necessarily
indicative of the results that may be expected for the full year or for any
future period.

d) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenue and expenses during the
reporting period. Actual amounts and results could differ from those estimates.

The Company's operations and ability to grow may be affected by numerous
factors, including its limited operating history, its significant indebtedness,
the delay in constructing its network, dependence on Global Crossing Ltd. and
others for capacity and services, the ability to establish customer
relationships, the growth of the Internet and other comparable markets, the
ability to integrate acquisitions, retaining key personnel, political conditions
in Asia, foreign currency exchange fluctuations, changes in tax regulations,
changes in customer requirements, new laws and governmental regulations and
policies, technological advances, entry of new competitors and changes in the
willingness of financial institutions and other lenders to finance acquisitions
and operations. The Company cannot predict which, if any, of these or other
factors might have a significant impact on the telecommunications industry in
the future, nor can it predict what impact, if any, the occurrence of these or
other events might have on the Company's operations.

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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

e) Development Stage Company

The Company was in its development stage until December 1999 when the first
segment of Pacific Crossing-1 became ready for commercial service, and Pacific
Crossing Ltd. began generating revenue.

f) Revenue Recognition

Services

Revenue from sales of capacity under operating-type leases are recognized
over the period the service is provided, net of an estimate for uncollectible
accounts. Payments received from customers before the relevant criteria for
revenue recognition is satisfied are included in deferred revenue.

Sales-Type Leases

Revenue from Capacity Purchase Agreements ("CPAs") that meet the criteria
of sales-type lease accounting are recognized in the period that the rights and
obligations of ownership transfer to the purchaser, which occurs when (1) the
purchaser obtains the right to use the capacity, which can only be suspended if
the purchaser fails to pay the full purchase price or fulfill its contractual
obligations, (2) the purchaser is obligated to pay Operations, Administration
and Maintenance ("OA&M") costs and (3) the segment of a system related to the
capacity purchased is available for service. Certain customers who have entered
into CPAs for capacity have paid deposits toward the purchase price which have
been included as deferred revenue in the accompanying consolidated balance
sheets. The Company follows the criteria set forth in Statement of Financial
Accounting Standards No. 66, "Accounting for Sales of Real Estate" ("SFAS 66")
for contracts which qualify for sales-type lease accounting.

The Company offers customers flexible bandwidth products to multiple
destinations and anticipates that many of the contracts for subsea circuits
entered into will be part of a service offering. Therefore, the Company
anticipates that many of these contracts will not meet the criteria of
sales-type lease accounting and will be accounted for as operating leases.
Consequently, the Company will defer revenue related to those circuits and
amortize that revenue over the appropriate term of the contract. Accordingly,
the Company will treat cash received, but not recognized, as deferred revenue.
In certain circumstances, should a contract meet all of the requirements of
sales-type lease accounting, the Company will recognize revenue without deferral
upon payment and activation.

The principal effect of the change in the type of contracts offered to the
Company's customers beginning on January 1, 2000 is that an increasing
percentage of capacity sales will be accounted for as operating leases rather
than sales-type leases, resulting in more revenue from such sales being deferred
into future periods than was previously the case. Accordingly, this change in
contract terms will reduce revenue recognized upon activation of circuits in
earlier periods and increase revenue recognized in later periods.

As of December 31, 1999, the Company had an aggregate backlog of
approximately $25 million in capacity sales contracts for which revenue will be
recognized using sales-type lease accounting upon activation. For the remaining
backlog as of that date, revenue will be recognized using operating lease
accounting, that is amortized over the life of the contract.

For the nine months ended September 30, 2000, sales-type lease revenue was
$122.3 million. There was no revenue for the year ended December 31, 1999.

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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

g) Cost of Sales

Services

Costs relating to capacity contracts accounted for as operating leases are
treated as fixed assets and, accordingly, are depreciated over the estimated
useful life of the capacity.

Sales-Type Leases

At the date each segment of a system becomes operational, the related
amounts included in construction in progress are reclassified (see note 2h), and
depreciation commences. For contracts that meet the criteria for sales-type
lease accounting, the Company's policy provides for recording cost of sales in
the period in which the related revenue is recognized in addition to the
depreciation charge described below. The amount charged to cost of sales is
determined by calculating the estimated net book value of the specific capacity
at the time of the sale, which includes total expected cost of the System and
the cost of the additional capacity that the Company has the intent and ability
to add through upgrades, provided the need for such upgrades is supported by a
third-party consultant's revenue forecast.

h) Cash and Cash Equivalents, Restricted Cash and Cash Equivalents

The Company considers cash in banks and short term highly liquid
investments with an original maturity of three months or less at the date of
purchase to be cash equivalents. At September 30, 2000, December 31, 1999 and
1998, $75.7 million, $138.1 million and $231.0 million, respectively, were
restricted for the construction of Pacific Crossing-1.

i) Property and Equipment

Property and equipment is stated at cost, net of depreciation and
amortization. Major enhancements are capitalized, while expenditures for repairs
and maintenance are expensed when incurred. Costs incurred prior to a segment's
completion are reflected as construction in progress in the accompanying
supplemental consolidated balance sheets and recorded as property and equipment
at the date each segment of the system becomes operational. Construction in
progress includes direct expenditures for construction of the systems and is
stated at cost. Capitalized costs include costs incurred under the construction
contract; advisory, consulting and legal fees. Once it is probable that a cable
system will be constructed, costs directly identifiable with the cable system
under development are capitalized. Costs relating to the evaluation of new
projects incurred prior to the date the development of the network system
becomes probable are expensed as incurred.

Interest incurred, which includes the amortization of deferred finance
fees, is capitalized in accordance with Statement of Financial Accounting
Standards No. 34 "Capitalization of Interest Costs".

Total interest cost incurred and interest capitalized to construction in
progress during the periods presented were:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, 2000
------------------
(UNAUDITED)
<S> <C>
Interest cost incurred.................................. $51,233
=======
Interest cost capitalized to construction in progress... $49,815
=======
</TABLE>

Depreciation is provided on a straight-line basis over the estimated useful
lives of the related property and equipment, with the exception of leasehold
improvements and assets acquired through

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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

capital leases, which are depreciated over the lesser of the estimated useful
lives or the term of the lease. Estimated useful lives are as follows:

<TABLE>
<S> <C>
Buildings................................................... 10-40 years
Leasehold improvements...................................... 2-25 years
Furniture, fixtures and equipment........................... 2-30 years
Transmission equipment...................................... 3-25 years
</TABLE>

The Company reviews the carrying value of property and equipment for
impairment whenever events and circumstances indicate that the carrying value of
an asset may not be recoverable from the estimated future cash flows expected to
result from its use and eventual disposition. In cases where undiscounted
expected future cash flows are less than the carrying value, an impairment loss
would be recognized equal to an amount by which the carrying value exceeds the
fair value of the assets. In June 2000, the Company reduced the carrying value
of certain purchased capacity held for sale from $48 million to $10 million. In
1999, when the capacity was originally purchased it was the Company's intention
to re-sell it to third party customers. Subsequent to the acquisition of this
capacity, the Company's business plan changed primarily due to the expanded
construction of its Asian networks. In June 2000, based upon the changes in its
network and business plan, the Company determined that it had no alternative use
for this capacity and entered into discussions for its sale to various third
party customers. Accordingly, the Company recognized a loss of $38 million in
respect of the excess of the carrying value of the capacity over its current
fair value of $10 million. In September 2000, all such purchase capacity was
sold and an additional loss of $2.5 million was recognized.

j) Deferred Finance Costs

Costs incurred to obtain financing through the issuance of long term debt
have been reflected as an asset in the accompanying consolidated balance sheets.
The financing costs relating to the long term debt are amortized over the lesser
of the term of the related debt agreements or the expected payment date of the
debt obligation. During the construction period, the amortized portion of
deferred financing costs relating to the long term debt are included in
construction in progress as a component of interest capitalized or recorded as
interest expense in accordance with Statement of Financial Accounting Standards
(SFAS) No. 34 "Capitalization of Interest Cost".

k) Financial Instruments

The Company uses derivative financial instruments for the purpose of
reducing its exposure to adverse fluctuations in interest rates. The
counterparties to the derivative financial instruments in effect as of September
30, 2000 are Canadian Imperial Bank of Commerce ("CIBC"), a related party to
Global Crossing Ltd., and Deutsche Bank AG. The Company is exposed to credit
loss in the event of nonperformance by these counterparties. As of September 30,
2000, the Company did not utilize derivative financial instruments for trading
or other speculative purposes.

As discussed in Note 10, Pacific Crossing Ltd. has entered into an interest
rate swap agreement to hedge its exposure to interest rates on its long-term
debt. Hedge accounting was applied in respect of these instruments; accordingly,
the net cash amounts paid or received on the agreement are accrued and
recognized as an adjustment to interest expense on the related debt.

l) Translation of Foreign Currencies

Transactions in foreign currencies are translated into United States
dollars at the rate of exchange prevailing at the date of each transaction.
Monetary assets and liabilities denominated in foreign

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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

currencies at year end are translated into United States dollars at the rate of
exchange at that date. For all periods prior to September 30, 2000, the effect
of foreign currency transactions were immaterial.

m) Income Taxes

The Company recognizes current and deferred income tax assets and
liabilities as applicable based upon all events that have been recognized in the
supplemental consolidated financial statements as measured by the enacted tax
laws.

n) Investments

Investments in which the Company does not have significant influence or in
which the Company holds an ownership interest of less than 20% are recorded
using the cost method of accounting. The equity method of accounting is applied
for investments in affiliates, if the Company owns an aggregate of 20% to 50% of
the affiliate and if the Company exercises significant influence over the
affiliate. The equity method is also applied for entities in which the Company's
ownership is in excess of 50% but over which the Company is unable to exercise
effective control, due to minority shareholders participating in significant
decisions in the ordinary course of business. If the Company holds more than 50%
of the ownership and is able to exercise effective control, the owned entity's
financial statements and the appropriate deductions for minority interest are
included in the accompanying supplemental consolidated financial statements.

o) Concentration of Credit Risk

The Company has some concentration of credit risk among its customer base.
The Company performs ongoing credit evaluations of its larger customer's
financial condition. As of September 30, 2000, the Company's receivables were
with three customers and were net of an allowance for doubtful accounts of $0.8
million.

p) Segment Reporting

The Company is a single segment operating company providing
telecommunications services. For all periods prior to September 30, 2000, the
Company's revenues have been principally derived from sales of wholesale
capacity to telecommunications carriers and business customers.

q) Recent Accounting Standards

In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities -- Deferral of the Effective Date of SFAS No.
133", which deferred SFAS No. 133's effective date to fiscal quarters beginning
after June 15, 2000. This statement standardizes the accounting for derivatives
and hedging activities and requires that all derivatives be recognized in the
statement of financial position as either assets or liabilities at fair value.
Changes in the fair value of derivatives that do not meet the hedge accounting
criteria are to be reported in earnings. The impact of the adoption of this
standard has not been quantified.

In December 1999, the SEC issued Staff Accounting Bulletin (SAB) No. 101,
"Revenue Recognition in Financial Statements," which provides additional
guidance on revenue recognition as well as criteria for when revenue is
generally realized and earned. Our supplemental financial statements reflect the
accounting guidance in SAB 101 for all periods presented.

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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------
2000 1999 1998
------------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
Terrestrial capacity.......................... $ 69,224 $ 10,795 $ --
Deposits on subsea capacity................... -- 48,000 --
Construction in progress...................... 1,287,131 42,803 --
Subsea transmission equipment................. 325,225 -- --
Leasehold improvements........................ 6,858 -- --
Furniture, fixtures and equipment............. 9,914 -- --
---------- -------- --------
Total property and equipment............. 1,698,352 101,598 --
Less: accumulated depreciation........... (13,080) -- --
---------- -------- --------
Total property and equipment, net........ $1,685,272 $101,598 $ --
========== ======== ========
</TABLE>

No depreciation and amortization expense was incurred for property and
equipment for all periods prior to December 31, 1999. Depreciation and
amortization expense for the nine months ended September 30, 2000 was $13.5
million.

4. INVESTMENTS IN AFFILIATE

The Company's investments in affiliate consist of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------
2000 1999 1998
------------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
Investment in (advances from) Pacific Crossing
Ltd. ....................................... $ $102,954 $ (2,502)
Pacific Crossing-1 development costs.......... 160,484 163,141
Investments in Global Access Limited.......... 17,120 22,693 16,695
Investments in Hutchison Global Crossing...... 430,587 -- --
-------- -------- --------
Total investments in affiliate........... $447,707 $286,131 $177,334
======== ======== ========
</TABLE>

Prior to January 21, 1998, Pacific Capital Group, Inc. and its affiliates,
a significant shareholder of Global Crossing Ltd., began development of Pacific
Crossing-1 and other fiber optic cables. Through January 21, 1998, such
development included assembling a management team, negotiating with potential
suppliers, partners, financing sources, obtaining preliminary market and
feasibility studies and developing technical requirements. During January 1998,
Global Crossing Ltd.'s Board determined that it was in its best interests to
pursue these new systems, obtain the results of the work and the employees then
within the scope of activity of Pacific Capital Group, Inc. and broaden the
goals, objectives and business plan of Global Crossing Ltd. In consideration of
Pacific Capital Group, Inc. transferring the results of its activities and
becoming limited in its future activities in fiber optic telecommunications
other than through Global Crossing Ltd., Global Crossing Ltd.'s Board approved
and the shareholders subsequently ratified a transaction whereby Pacific Capital
Group, Inc. received certain cash reimbursements and entered into a warrant
agreement ("PCG Warrants") under which Pacific Capital Group, Inc. was granted
warrants for Global Crossing Ltd.'s common stock in exchange for the rights to
continue the development of Pacific Crossing-1 and the other fiber optic cables.

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ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The PCG Warrants were accounted for pursuant to the Emerging Issues Task
Force 96-18, "Accounting for Equity Instruments with Variable Terms that are
Issued for Consideration other than Employee Services under FASB Statement No.
123" ("EITF 96-18"). Under EITF 96-18, the fair value of equity instruments
issued for consideration other than employee services should be measured using
the stock price or other measurement assumptions as of the date at which a firm
commitment for performance level has been reached. At the date of the initial
public offering of Global Crossing Ltd., the Pacific Capital Group, Inc.
Warrants attributable to Pacific Crossing-1 were valued at approximately $163.0
million and allocated to GCT Pacific.

As of January 1, 2000, Pacific Crossing Ltd. was consolidated into the
Company. As a result, the Pacific Crossing-1 development costs were reclassified
into property and equipment in the accompanying supplemental consolidated
balance sheet as of September 30, 2000, which were for the balance sheets as of
December 31, 1999 and 1998 included in investment in affiliates.

The summarized consolidated financial statements of Pacific Crossing Ltd.
are as follows as of (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ---------------
<S> <C> <C>
Current assets............................... $ 88,030 $ 8,551
Total assets................................. 1,124,138 231,677
Current liabilities.......................... 185,267 25,626
Total shareholders' equity (deficit)......... $ 178,235 $ (4,329)
</TABLE>

<TABLE>
<CAPTION>
MAY 4, 1998
(DATE OF
YEAR ENDED INCEPTION) TO
DECEMBER 31, DECEMBER 31,
1999 1998
------------ ---------------
<S> <C> <C>
Revenues..................................... $61,100 $ --
Operating income (loss)...................... 24,209 (1,627)
Net income (loss)............................ $21,729 $(4,341)
</TABLE>

5. TAXES

The Company accounts for income taxes in accordance with Statement of
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109").

Bermuda does not impose a statutory income tax and consequently no
provision for income taxes was recorded for any entities incorporated in
Bermuda. Income tax provision benefits recorded for losses incurred by certain
subsidiaries of the Company which are located in jurisdictions which impose
income taxes were offset by the establishment of valuation allowances in
accordance with SFAS 109.

6. LONG-TERM DEBT

The Company's subsidiary, Pacific Crossing Ltd. has an $850.0 million
aggregate senior secured non-recourse loan facility (the "Pacific Crossing-1
Credit Facility") with a group of banks led by CIBC, a related party of Global
Crossing Ltd., and Deutsche Bank AG, for the construction and financing costs of
Pacific Crossing-1. The Pacific Crossing-1 credit facility is comprised of an
$840.0 million multiple draw down term loan facility (the "Pacific Crossing-1
Term Facility") and a $10.0 million working capital facility (the "Pacific
Crossing-1 Working Capital Facility"). Of the $840.0 million Pacific Crossing-1
Term Facility, $50.0 million is restricted to fund the first System upgrade. The
Pacific Crossing-1 Credit Facility is secured by pledges of the stock of Pacific
Crossing Ltd. and its subsidiaries and by a security interest in its assets and
revenues. As of September 30, 2000, Pacific Crossing-1 had an outstanding
balance of $750.0 million under the Pacific Crossing-1 Credit Facility. No
amounts have been repaid to the lenders.

F-17
<PAGE> 187
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Under the Pacific Crossing-1 Credit Facility, Pacific Crossing Ltd. may
select loan arrangements as either a Eurodollar loan or an Alternative Base Rate
("ABR") loan. The Eurodollar interest rate is LIBOR plus 2.25-2.50% and the ABR
interest rate is the greater of (a) the Prime Rate and (b) the Federal Funds
Effective Rate plus 0.5%, plus 1.25-1.50%. As of September 30, 2000, all
outstanding loans were Eurodollar loans. The Pacific Crossing-1 Credit Facility
contains various covenants that (1) limit further indebtedness by Pacific
Crossing Ltd. and its subsidiaries, (2) limit the ability of Pacific Crossing
Ltd. to pay dividends, (3) require Pacific Crossing Ltd. to meet certain minimum
capacity sales levels and (4) require Pacific Crossing Ltd. to meet a minimum
interest coverage ratio for the years 2001 through to the maturity of the
Pacific Crossing-1 Credit Facility. The Pacific Crossing-1 Credit Facility is
repayable in ten semi-annual installments ("Mandatory Repayments"), commencing
135 days after the System is ready for service.

Pacific Crossing Ltd. has entered into two interest rate swap transactions
based on one month LIBOR to minimize its exposure to increases in interest rates
on its borrowings. The swap transactions fix Pacific Crossing Ltd.'s floating
interest rate at 4.985% on a notional amount of borrowings ranging between
$200.0 million and $500.0 million until January 31, 2004.

The expected maturities of long term debt are as follows:

<TABLE>
<S> <C>
Year Ending December 31, (IN THOUSANDS)
2000...................................................... $ --
2001...................................................... 83,260
2002...................................................... 93,260
2003...................................................... 113,260
2004...................................................... 118,260
Thereafter................................................ 341,960
--------
Total.............................................. $750,000
========
</TABLE>

7. RELATED PARTY TRANSACTIONS

Shareholders Agreement

The Founding Shareholders are parties to a shareholders agreement, which
contains important provisions relating to, among other things, the governance of
the Company's business. The shareholders agreement details, among other things,
the composition of the Company's Board of Directors, actions requiring the
approval of directors appointed by Microsoft and Softbank, the preparation of
strategic plans, activities in which the Founding Shareholders are prohibited
from engaging in Asia without each other's consent, additional obligations of
Microsoft and Softbank to the Company, Asia Global Crossing's obligation to
purchase certain technology from Microsoft, and restrictions on the transfer of
Asia Global Crossing's common stock.

Shared Services and Operating Agreement

Global Crossing Ltd. and the Company entered into an agreement that governs
the relationship between the companies and their respective subsidiaries and
affiliates, including provision of network services, coordination and use of
bundled service offerings, marketing, pricing of service offerings and
strategies, branding, rights with respect to intellectual property and other
shared technology and operational, maintenance and administrative services.

Affiliate Transactions for Network Capacity

During its normal course of business, Asia Global Crossing and its
subsidiaries purchase and sell network capacity from and to affiliates. The
Company, through one of its wholly owned subsidiaries,

F-18
<PAGE> 188
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

purchases terrestrial network capacity in Japan from Global Access Limited, a
49.0%-owned affiliate of the Company upon closing of the IPO, and Pacific
Crossing-1 network capacity from Pacific Crossing Ltd., a 64.5%-owned affiliate
of the Company. The prices of Global Access Limited capacity were determined by
Asia Global Crossing and Global Access Limited, and the prices of Pacific
Crossing-1 capacity were determined by Asia Global Crossing and Pacific Crossing
Ltd. Prices are reviewed and adjusted periodically based on market conditions.
The Company and its subsidiaries sell network capacity directly and indirectly
through Global Crossing Ltd. and its affiliates, to third-party customers.
Receivables and payables from/to affiliates are primarily related to these
transactions.

Revenue from the sales of capacity to Global Crossing for the nine months
ended September 30, 2000 was $89.5 million. The Company purchased approximately
$69.2 million and $10.8 million, respectively of capacity from Global Crossing
and Global Access Limited during the nine months ended September 30, 2000 and
the year ended December 31, 1999. There was no revenue or purchases with related
parties for the nine months ended September 30, 1999.

Corporate Services

Certain affiliated companies, which are indirect wholly-owned subsidiaries
of Global Crossing Ltd., provide Asia Global Crossing with general corporate
services, including accounting, legal, human resources, information systems
services and other office functions. The related charges are allocated to the
Company based on estimated usage of the common resources. The estimated usage
factors are agreed upon on a periodic basis. Management believes that the
allocation methodology is reasonable. For November 24, 1999 (inception date of
the joint venture) to December 31, 1999, the related shared service charges to
the Company were $0.5 million. For the nine months ended September 30, 2000, the
related charges totaled $4.1 million. There were no related charges for the nine
months ended September 30, 1999. Had the Company provided these management
services on a stand alone basis, there could be no assurance that these costs
would be the same.

Maintenance Agreements

Pacific Crossing Ltd. has entered into OA&M agreements with Global Access
Ltd. and with Global Crossing Network Center, Ltd. ("GCNC"), a subsidiary of
Global Crossing Ltd., whereby Global Access Limited and GCNC are obligated to
provide operating, administration and maintenance functions for Pacific
Crossing-1. The OA&M agreement with GCNC is for an initial term of eight years
with two renewal periods of five years each at the Company's option. The OA&M
agreement with Global Access Limited is for an initial term of eight years with
two renewal periods of eight and one-half years each at the Company's option.
The OA&M costs related to this agreement are expensed as incurred. Pacific
Crossing Ltd. recorded an expense of $4.5 million and $32.3 million for the nine
months ended September 30, 2000, under the agreement with Global Access Limited
and GCNC, respectively.

Notes Receivable from Employees

Certain key employees of Asia Global Crossing had interest-free loans from
the Company. On the first, second, and third anniversary of the employee's start
date, a third of the original loan will be forgiven. The Company amortizes these
notes receivable to salary and benefit expense over three years on a
straight-line basis. At September 30, 2000, the unamortized outstanding balance
was $13.0 million and is included in other assets in the accompanying
supplemental consolidated balance sheet.

F-19
<PAGE> 189
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

East Asia Crossing

A direct wholly-owned subsidiary of Global Crossing Ltd. developed East
Asia Crossing. These development rights were contributed directly to the
Company. The value of these development rights totaling $11.0 million was based
on the estimated total system costs including upgrades of East Asia Crossing and
included in property and equipment.

8. GEOGRAPHIC SEGMENTATION

<TABLE>
<CAPTION>
(IN THOUSANDS)
SEPTEMBER 30, 2000 DECEMBER 31, 1999
----------------------- -----------------------
LONG-LIVED LONG-LIVED
REVENUE(1) ASSETS(2) REVENUE(1) ASSETS(2)
---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
United States................. $ 93,815 $ 173,116 $ -- $ --
Asia.......................... 26,590 266,986 -- 19,240
Europe........................ 10,050 -- -- --
International Waters.......... -- 1,258,250 -- 82,358
-------- ---------- -------- --------
Consolidated.................. $130,455 $1,698,352 $ -- $101,598
======== ========== ======== ========
</TABLE>

---------------
(1) Revenue is classified according to the primary point of presence of the end
customer. During the nine months ended September 30, 2000, there were six
customers located in the United States that accounted for 71.9% of
consolidated revenue.

(2) Long-lived assets include capacity available for sale and construction in
progress as of September 30, 2000 and December 31, 1999.

9. COMMITMENTS

At December 31, 1999, Asia Global Crossing was committed under its
contracts with KDD-SCS for future East Asia Crossing construction cost totaling
approximately $587.0 million, over the next two years. At September 30, 2000,
the remaining committed construction cost was $494.0 million.

At September 30, 2000, Pacific Crossing Ltd. was committed under contracts
with Tyco Submarine Systems Ltd. ("TSSL") for remaining construction costs of
Pacific Crossing-1 totaling approximately $4.9 million. In August 2000, the
Company placed an order with Tycom, an affiliate of TSSL to increase the
capacity on Pacific Crossing-1 from 80 Gbps to 240 Gpbs. At September 30, 2000,
the remaining committed construction cost with Tycom was $73.2 million.

At December 31, 1999, the Company had various noncancelable operating
leases for office buildings and network operation centers. The following is a
schedule of future minimum lease payments for operating leases that had initial
or remaining noncancelable lease terms in excess of one year as of December 31,
1999 (in thousands):

F-20
<PAGE> 190
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following amounts are payable to GCNC under an OA&M agreement (see note
7):

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Year Ending December 31,
2000................................................ $43,000
2001................................................ 43,000
2002................................................ 42,200
</TABLE>

These fees will increase by 3.0% each year starting in the year ended
December 31, 2003, through the end of the agreement in 2007.

Under an additional OA&M agreement, Pacific Crossing Ltd. is committed to
paying Global Access Ltd. $5.8 million each year through 2002, increasing by
3.0% thereafter through 2007 (see note 7).

10. FINANCIAL INSTRUMENTS

The carrying amounts for cash and cash equivalents, restricted cash and
cash equivalents, accounts receivable, accrued construction costs, accounts
payable and accrued liabilities, accrued interest, obligations under capital
leases and long term debt approximate their fair value due to their short-term
or variable interest nature. At September 30, 2000, the fair value of the
interest rate swap entered into by Pacific Crossing Ltd. is $19.6 million and is
based on market quotes.

11. QUARTERLY FINANCIAL DATA (UNAUDITED)

The Company's unaudited quarterly results are as follows (in thousands):

<TABLE>
<CAPTION>
1998 QUARTER ENDED
--------------------------------------
JUNE 30 SEPTEMBER 30 DECEMBER 31
------- ------------ -----------
<S> <C> <C> <C>
Revenue...................................... $ -- $ -- $ --
Operating loss............................... $ -- $ -- $ --
Net income................................... $ -- $2,207 $ 660
</TABLE>

<TABLE>
<CAPTION>
1999 QUARTER ENDED
--------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Revenue............................. $ -- $ -- $ -- $ --
Operating loss...................... $ -- $ -- $ (66) $(1,135)
Net income.......................... $1,349 $1,696 $2,435 $14,810
</TABLE>

12. SUBSEQUENT EVENTS

On January 26, 2000, the Company announced an agreement to create
GlobalCenter Japan, a joint venture with Japan's Internet Research Institute,
Inc. ("Internet Research Institute"). GlobalCenter Japan will design, develop
and construct a data center in Japan providing connectivity worldwide through
the Global Crossing network. The joint venture will also develop and provide
complex Web-hosting services, e-commerce support and applications hosting
solutions. The Company will own 89.0% of GlobalCenter Japan, with Internet
Research Institute owning the remaining 11.0%.

On March 17, 2000, GCT Pacific entered into Stock Purchase Agreements with
the other shareholders of SCS (Bermuda) Ltd. to purchase their interests for
cash. Upon completion of the transactions, GCT Pacific will own 100% interest of
SCS (Bermuda) Ltd., and as a result will increase the Company's ownership
interest in Pacific Crossing Ltd. to 64.5%. In connection with this transaction,
Asia Global Crossing granted an option to Marubeni, a joint venture partner in
Pacific

F-21
<PAGE> 191
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Crossing Ltd. to purchase $7.0 million of Asia Global Crossing's Class A common
stock at the initial public offering price.

On March 24, 2000 the Pacific Crossing Ltd. Shareholder Agreement was
amended to allow the Company to exercise effective control over Pacific Crossing
Ltd. Accordingly, the Company will consolidate the operations of Pacific
Crossing Ltd. as of January 1, 2000.

On October 12, 2000, the Company completed its initial public offering
("IPO") in which it sold 68 million shares of its Class A common stock at a
price of $7.00 per share. The net proceeds of the IPO, which the Company
received on October 12, 2000, after deducting underwriting discounts,
commissions and costs were approximately $452 million. On November 8, 2000, an
additional 500,000 shares at $7.00 per share were sold in connection with the
exercise of the underwriters' over-allotment option. The additional net proceeds
were approximately $3.3 million after deducting the underwriters' discounts and
commissions.

Concurrently with the completion of the IPO, the Company reorganized its
share capital as follows:

(1) the authorized share capital of the Company increased from $12 thousand
to $25.2 million, with the authorized share capital consisting of (a)
1,200,000,000 shares of Class A common stock, (b) 1,200,000,000 shares
of Class B common stock and (c) 120,000,000 shares of preferred stock;

(2) the 1,200,000 shares of the Company's already issued and outstanding
common stock were redesignated as Class B common stock, and the Company
issued 448,800,000 shares of Class B common stock to Asia Global
Crossing Holdings Ltd.;

(3) Asia Global Crossing Holdings Ltd. repurchased its shares of Class A
common stock and Class C common stock held by Global Crossing and
shares of Class D common stock held by Microsoft;

(4) in return for the repurchase of such shares, Asia Global Crossing
Holdings Ltd. transferred to Global Crossing Ltd. 279,000,000 shares of
Class B common stock of the Company and to Microsoft 85,500,000 shares
of Class B common stock of the Company. The shares were originally held
by Asia Global Crossing Holdings Ltd., which became a wholly-owned
subsidiary of Softbank after the IPO;

(5) the Company issued to Global Crossing Ltd. 36,625,125 shares of Class B
common stock of the Company in return for the transfer of shares of
Pacific Crossing Holdings Ltd., a subsidiary of Global Crossing Ltd.,
which included the interest in Global Access Limited which was
contributed to the Company at the time of the IPO;

(6) Class A common stockholders have a right to one vote per share, while
holders of Class B common stock have a right to 10 votes per share;

(7) the Company had a 375 for 1 stock split. All share and per share
information have been adjusted to reflect the stock split
retroactively.

Concurrent with the closing of the IPO, the Company issued a series of
senior unsecured notes ("Senior Notes") at a price of 97.990%. The Senior Notes
have a face value of $408 million, mature on October 15, 2010 and bear an
interest rate of 13.375%. Interest on the Senior Notes is payable on April 15
and October 15 of each year, beginning April 15, 2001.

At the completion of the IPO, the Founding Shareholders contributed their
respective interests in Hutchison Global Crossing to the Company. Also, Global
Crossing Ltd. contributed its interest in

F-22
<PAGE> 192
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Global Access Limited to the Company. The Company indemnified Global Crossing
Ltd. for certain contingent liabilities that may arise relating to the
contribution of its interest in Hutchison Global Crossing. Additionally, the
Company purchased from Global Crossing Ltd. all outstanding shareholder loans it
made to Hutchison Global Crossing and Global Access Limited.

Concurrently with the closing of the IPO, the Company entered into two
subordinated notes ("Subordinated Notes") with Global Crossing. Under the terms
of the Subordinated Notes, Global Crossing committed to loan the Company up to
$200 million under each note which can be reduced in an amount based on any net
cash proceeds received by the Company from (a) the issuance of any shares of the
Company's capital stock subsequent to the Company's IPO (excluding any shares
sold as part of the exercise by the underwriters of their over-allotment option
in connection with the IPO) and (b) the issuance of any indebtedness which meet
certain conditions under the terms of the Subordinated Notes. One of the
Subordinated Notes is available for borrowings until certain conditions are met
and the second Subordinated Note is available for borrowings until December 31,
2002. The Subordinate Notes mature on April 15, 2011 and bear interest at a rate
of 14.875%. Interest shall be payable in cash semi-annually in arrears on April
15 and October 15 of each year, commencing on April 15, 2001. Interest due on or
before October 15, 2005 will be settled by increasing the outstanding principal
amount.

On October 12, 2000, the Asia Global Crossing Ltd. 2000 Stock Incentive
Plan (the "Plan") was made effective. The Plan is administered by the Company's
Board of Directors, which may delegate its duties in whole or in part to any
subcommittee solely consisting of at least two individuals who are non-employee
directors within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934, as amended, and outside directors within the meaning of Section 162 (m) of
the Internal Revenue Code. The Plan allows the Board of Directors to make awards
of stock options and stock appreciation rights, which can be granted either in
conjunction with, or independent of, stock options, and other stock-based awards
to any individual who is selected by the Board of Directors to participate the
Plan.

In light of the unfavorable market conditions at the time of the IPO, the
Company subsequently determined to amend the formula pursuant to which the
number of shares of its Class A common stock underlying options (the "Option
Shares") is granted to employees. Previously, the number of Option Shares the
Company authorized for each employee was calculated by dividing a specified
amount for each employee by the IPO price of its Class A common stock, $7.00 per
share. Pursuant to the amended option formula, the number of each employee's
option shares will be calculated by dividing such employee's specified option
amount by $10.00. The effect of this amendment is to decrease the percentage of
outstanding Option Shares held by (a) the Company's five most highly compensated
employees from 5.43% to 4.07% of its total outstanding shares and (b) all of the
Company's employees from 7.85% to 5.49% of its total outstanding shares.

A total of approximately 83.2 million shares are currently authorized for
issuance under the Plan. As of the date of the IPO, approximately 30.5 million
shares of options have been granted under the Plan. The maximum number of shares
for which options and stock appreciation rights may be granted during each
calendar year to any participant is 5,000,000 shares. No award may be granted
under the Plan after the tenth anniversary of its effective date, but awards
granted before that date may extend beyond that date.

13. SUPPLEMENTARY FINANCIAL INFORMATION

Upon the completion of the IPO, the Founding Shareholders contributed their
respective interests in Hutchison Global Crossing to the Company. Also, Global
Crossing contributed its interest in Global Access Limited to the Company. These
contributions will be accounted for by the Company in a
F-23
<PAGE> 193
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

manner similar to a pooling of interests. Further, as of January 1, 2000,
Pacific Crossing Ltd. has been consolidated by the Company.

The unaudited summarized consolidated statements of operations of Pacific
Crossing Ltd., Global Access Limited and Hutchison Global Crossing are as
follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
2000 1999
-------- --------
<S> <C> <C>
PACIFIC CROSSING LTD.
Revenue................................................... $125,388 $ --
======== ========
Operating income (loss)................................... $ 26,953 $ (4,425)
======== ========
Net income (loss)......................................... $ 27,875 $ (7,541)
======== ========
GLOBAL ACCESS LIMITED
Revenue................................................... $ 15,024 $ --
======== ========
Operating income (loss)................................... $(11,673) $ (7,430)
======== ========
Net income (loss)......................................... $(13,123) $ (7,457)
======== ========
HUTCHISON GLOBAL CROSSING
Revenue................................................... $ 91,987 $ 79,170
======== ========
Operating income (loss)................................... $(27,531) $(19,731)
======== ========
Net income (loss)......................................... $(27,510) $(24,518)
======== ========
</TABLE>

F-24
<PAGE> 194

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Asia Global Crossing Ltd.:

We have audited the accompanying consolidated balance sheets of Asia Global
Crossing Ltd. (a Bermuda company) and its subsidiaries as of December 31, 1999
and 1998 and the related consolidated statements of operations, shareholder's
equity, cash flows and comprehensive income for the year ended December 31, 1999
and for the period from April 1, 1998 (Date of Inception) to December 31, 1998.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

/s/ Arthur Andersen

Hamilton, Bermuda
February 23, 2000
(except the matter discussed in Note 12,
as to which the date is March 24, 2000)

F-25
<PAGE> 195

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, -------------------
2000 1999 1998
------------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents................................. $ 103,782 $ 9,784 $ 5,378
Restricted cash and cash equivalents...................... 57,271 -- --
Accounts receivable, net.................................. 24,480 -- --
Receivable from affiliates................................ 88,561 89,735 --
Other assets.............................................. 15,423 1,170 20
---------- -------- --------
Total current assets............................... 289,517 100,689 5,398
---------- -------- --------
Restricted cash and cash equivalents........................ 18,462 138,118 231,000
Property and equipment, net................................. 1,685,272 101,598 --
Deferred finance fees, net.................................. 21,969 -- --
Other assets................................................ 39,401 -- --
Investments in affiliate.................................... -- 263,438 160,639
---------- -------- --------
Total assets....................................... $2,054,621 $603,843 $397,037
========== ======== ========
LIABILITIES:
Current liabilities:
Accrued construction costs................................ $ 230,699 $ -- $ --
Accounts payable and accrued liabilities.................. 16,472 1,131 --
Deferred revenue.......................................... 5,103 -- --
Payable to affiliates..................................... 21,909 101,402 --
---------- -------- --------
Total current liabilities.......................... 274,183 102,533 --
---------- -------- --------
Long-term debt.............................................. 750,000 -- --
Long-term deferred revenue.................................. 142,681 -- --
Other long-term liabilities................................. 1,421 -- --
Loan payable to affiliate................................... 9,780 -- --
---------- -------- --------
Total liabilities.................................. 1,178,065 102,533 --
---------- -------- --------
Minority interest........................................... 150,026 -- --
SHAREHOLDER'S EQUITY:
Common stock par value $.01, 450,000,000 shares authorized,
issued and outstanding as of September 30, 2000, December
31, 1999 and 1998......................................... 4,500 4,500 4,500
Additional paid-in capital.................................. 753,684 473,653 389,670
Retained earnings (accumulated deficit)..................... (31,633) 23,157 2,867
Cumulative translation adjustment........................... (21) -- --
---------- -------- --------
Total shareholder's equity......................... 726,530 501,310 397,037
---------- -------- --------
Total liabilities and shareholder's equity......... $2,054,621 $603,843 $397,037
========== ======== ========
</TABLE>

The accompanying notes are an integral part of these statements.
F-26
<PAGE> 196

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1998
NINE MONTHS ENDED (DATE OF
SEPTEMBER 30, YEAR ENDED INCEPTION) TO
--------------------------- DECEMBER 31, DECEMBER 31,
2000 1999 1999 1998
------------ ------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue........................ $ 130,455 $ -- $ -- $ --
Expenses:
Cost of sales................ 98,194 -- -- --
Operations, administration
and maintenance........... 36,499 -- -- --
Sales and marketing.......... 3,021 -- -- --
Network development.......... 2,497 -- -- --
General and administrative... 30,310 66 1,201 --
Depreciation and
amortization.............. 13,539 -- -- --
------------ ------------ ------------ ------------
Operating loss............ (53,605) (66) (1,201) --
Equity in income (loss) of
affiliate.................... -- (3,199) 9,893 (2,507)
Minority interest.............. (9,632) -- -- --
Other income (expense):
Other expense................ (76) -- -- --
Interest income.............. 11,427 8,745 11,598 5,374
Interest expense............. (1,551) -- -- --
------------ ------------ ------------ ------------
Income (loss) before
provision for income
taxes................... (53,437) 5,480 20,290 2,867
Provision for income taxes..... (1,353) -- -- --
------------ ------------ ------------ ------------
Net income (loss)......... $ (54,790) $ 5,480 $ 20,290 $ 2,867
============ ============ ============ ============
Net income per common share:
Basic and diluted net income
(loss) per common share... $ (0.12) $ 0.01 $ 0.05 $ 0.01
============ ============ ============ ============
Shares used in computing basic
and diluted net income (loss)
per common share............. 450,000,000 450,000,000 450,000,000 450,000,000
============ ============ ============ ============
</TABLE>

The accompanying notes are an integral part of these statements.
F-27
<PAGE> 197

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
RETAINED
COMMON STOCK ADDITIONAL CUMULATIVE EARNINGS TOTAL
-------------------- PAID-IN TRANSLATION (ACCUMULATED SHAREHOLDER'S
SHARES AMOUNT CAPITAL ADJUSTMENT DEFICIT) EQUITY
----------- ------ ---------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Contribution of assets by Global
Crossing Ltd. for common
stock on April 1, 1998 (Date
of Inception)................ 450,000,000 $4,500 $389,670 $ -- $ -- $394,170
Net income for the period April
1, 1998 (Date of Inception)
to December 31, 1998......... -- -- -- -- 2,867 2,867
----------- ------ -------- ------ -------- --------
BALANCE, December 31, 1998........ 450,000,000 4,500 389,670 -- 2,867 397,037
Contribution of East Asia
Crossing development rights
from Global Crossing Ltd..... -- -- 10,970 -- -- 10,970
Cash contribution from Asia
Global Crossing Holdings
Ltd.......................... -- -- 73,013 -- -- 73,013
Net income for the year ended
December 31, 1999............ -- -- -- -- 20,290 20,290
----------- ------ -------- ------ -------- --------
BALANCE, December 31, 1999........ 450,000,000 4,500 473,653 -- 23,157 501,310
Foreign currency translation
adjustment................... -- -- -- (21) -- (21)
Cash contribution from Asia
Global Crossing Holdings
Ltd.......................... -- -- 280,031 -- -- 280,031
Net loss for the nine months
ended September 30, 2000..... -- -- -- -- (54,790) (54,790)
----------- ------ -------- ------ -------- --------
BALANCE, September 30, 2000
(unaudited)..................... 450,000,000 $4,500 $753,684 $ (21) $(31,633) $726,530
=========== ====== ======== ====== ======== ========
</TABLE>

The accompanying notes are an integral part of these statements.
F-28
<PAGE> 198

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1998
NINE MONTHS ENDED (DATE OF
----------------------------- YEAR ENDED INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
2000 1999 1999 1998
------------- ------------- ------------ ----------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................... $ (54,790) $ 5,480 $ 20,290 $ 2,867
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization..................... 13,539 -- -- --
Provision for doubtful accounts................... 820 -- -- --
Non-cash cost of sales............................ 98,194 -- -- --
Equity in (income) loss of affiliate.............. -- 3,174 (9,893) 2,507
Minority interest................................. 9,632 -- -- --
Changes in operating assets and liabilities:
Accounts receivable............................. (18,901) -- -- --
Receivable from affiliates...................... 62,274 -- (89,735) --
Other assets.................................... (25,253) -- (1,150) (8)
Deferred revenue................................ 137,930 -- -- --
Accounts payable and accrued liabilities........ 8,889 -- 1,131 --
Payable to affiliates........................... (87,072) -- 101,402 --
---------- -------- --------- ---------
Net cash provided by operating activities....... 145,262 8,654 22,045 5,366
---------- -------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired from consolidating Pacific Crossing
Ltd. ............................................. 606 -- -- --
Change in restricted cash and cash equivalents...... 80,299 -- 92,882 (231,000)
Purchase of property and equipment.................. (450,870) (12,000) (90,628) --
Acquisition of minority share in affiliate.......... (20,585) -- -- --
Cash paid for investments........................... (25,000) -- (92,906) (6)
---------- -------- --------- ---------
Net cash used in investing activities........... (415,550) (12,000) (90,652) (231,006)
---------- -------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from capital contribution.................. 280,032 -- 73,013 231,018
Minority interest investment in affiliates.......... 84,275 -- -- --
---------- -------- --------- ---------
Net cash provided by financing activities....... 364,307 -- 73,013 231,018
EXCHANGE RATE EFFECT ON CASH AND CASH EQUIVALENTS..... (21) -- -- --
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS......................................... 93,998 (3,346) 4,406 5,378
CASH AND CASH EQUIVALENTS, beginning of period........ 9,784 5,378 5,378 --
---------- -------- --------- ---------
CASH AND CASH EQUIVALENTS, end of period.............. $ 103,782 $ 2,032 $ 9,784 $ 5,378
========== ======== ========= =========
SUPPLEMENTAL INFORMATION ON NONCASH INVESTING AND
FINANCING ACTIVITIES:
Decrease in accrued construction costs.............. $ 69,882 $ -- -- --
Contribution of East Asia Crossing development
rights............................................ (10,970) --
Amortization of deferred finance costs.............. 3,409 -- -- --
Costs incurred for property and equipment........... (524,161) (12,000) 101,598 --
---------- -------- --------- ---------
Cash for property and equipment..................... $ (450,870) $(12,000) $ 90,628 $ --
========== ======== ========= =========
Non-cash capital contribution....................... $ -- $ -- $ -- $ 163,152
========== ======== ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest and income taxes
Interest paid and capitalized..................... $ 50,968 $ -- $ -- $ --
========== ======== ========= =========
Interest paid (net of capitalized interest)....... $ 1,162 $ -- $ -- $ --
========== ======== ========= =========
Cash paid for taxes............................... $ -- $ -- $ -- $ --
========== ======== ========= =========
Details of consolidating Pacific Crossing Ltd.:
Assets consolidated............................... $1,124,138 $ -- $ -- $ --
Liabilities consolidated.......................... (945,903) -- -- --
---------- -------- --------- ---------
$ 178,235 $ -- $ -- $ --
========== ======== ========= =========
</TABLE>

The accompanying notes are an integral part of these statements.
F-29
<PAGE> 199

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1998
NINE MONTHS ENDED (DATE OF
SEPTEMBER 30, YEAR ENDED INCEPTION) TO
------------------ DECEMBER 31, DECEMBER 31,
2000 1999 1999 1998
-------- ------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET INCOME (LOSS)......................... $(54,790) $5,480 $20,290 $2,867
Foreign currency translation
adjustment........................... (21) -- -- --
-------- ------ ------- ------
COMPREHENSIVE INCOME (LOSS)............... $(54,811) $5,480 $20,290 $2,867
======== ====== ======= ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-30
<PAGE> 200

ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THROUGHOUT THESE CONSOLIDATED FINANCIAL STATEMENTS, REFERENCES TO "DOLLARS" AND
"$" ARE TO UNITED STATES DOLLARS.

1. ORGANIZATION AND BACKGROUND

Nature of Business

Formation of the Joint Venture

F-31
<PAGE> 201
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Pacific Crossing-1

East Asia Crossing

Joint Venture with Exodus Communications, Inc.

On September 27, 2000, the Company entered into an agreement with Exodus
Communications, Inc. ("Exodus") that provides for the creation of a joint
venture company to be owned 33% by the Company and 67% by Exodus. The joint
venture company, to be known as Exodus Asia-Pacific, will offer a full suite of
Internet operations outsourcing services to customers in Asia, including
web-hosting services, managed service offerings, professional services and
content distribution. The Company will be the principal supplier of bandwidth to
Exodus Asia-Pacific. Under the agreement, the Company and Exodus have agreed to
contribute to the joint venture all current and future web-hosting and certain
other assets in the joint venture's territory.

2. SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States. The
significant accounting policies are summarized as follows:

a) Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany transactions
have been eliminated.

b) Interim Financial Information

The consolidated financial statements of the Company as of September 30,
2000 and for the nine months ended September 30, 2000 and 1999 are unaudited.
Adjustments, consisting of normal recurring adjustments to present the
consolidated financial position of the Company, have been made,

F-32
<PAGE> 202
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

which in the opinion of management are necessary for a fair presentation.
Results of operations for the nine months ended September 30, 2000 are not
necessarily indicative of the results that may be expected for the full year or
for any future period.

c) Use of Estimates

d) Development Stage Company

The Company was in its development stage until December 1999 when the first
segment of Pacific Crossing-1 became ready for commercial service, and Pacific
Crossing Ltd. began generating revenue.

e) Revenue Recognition

Services

Sales-Type Leases

F-33
<PAGE> 203
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

For the nine months ended September 30, 2000, sales-type lease revenue was
$122.3 million. There was no revenue for the year ended December 31, 1999.

f) Cost of Sales

Services

Costs relating to capacity contracts accounted for as operating leases are
treated as fixed assets and, accordingly, are depreciated over the estimated
useful life of the capacity.

Sales-Type Leases

g) Cash and Cash Equivalents, Restricted Cash and Cash Equivalents

F-34
<PAGE> 204
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

h) Property and Equipment

Property and equipment is stated at cost, net of depreciation and
amortization. Major enhancements are capitalized, while expenditures for repairs
and maintenance are expensed when incurred. Costs incurred prior to a segment's
completion are reflected as construction in progress in the accompanying
consolidated balance sheets and recorded as property and equipment at the date
each segment of the system becomes operational. Construction in progress
includes direct expenditures for construction of the systems and is stated at
cost. Capitalized costs include costs incurred under the construction contract;
advisory, consulting and legal fees. Once it is probable that a cable system
will be constructed, costs directly identifiable with the cable system under
development are capitalized. Costs relating to the evaluation of new projects
incurred prior to the date the development of the network system becomes
probable are expensed as incurred.

Interest incurred, which includes the amortization of deferred finance
fees, is capitalized in accordance with Statement of Financial Accounting
Standards No. 34 "Capitalization of Interest Costs".

Total interest cost incurred and interest capitalized to construction in
progress during the periods presented were:

Depreciation is provided on a straight-line basis over the estimated useful
lives of the related property and equipment, with the exception of leasehold
improvements and assets acquired through capital leases, which are depreciated
over the lesser of the estimated useful lives or the term of the lease.
Estimated useful lives are as follows:

F-35
<PAGE> 205
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

i) Deferred Finance Costs

j) Financial Instruments

k) Translation of Foreign Currencies

Transactions in foreign currencies are translated into United States
dollars at the rate of exchange prevailing at the date of each transaction.
Monetary assets and liabilities denominated in foreign currencies at year end
are translated into United States dollars at the rate of exchange at that date.
For all periods prior to September 30, 2000, the effect of foreign currency
transactions were immaterial.

l) Income Taxes

The Company recognizes current and deferred income tax assets and
liabilities as applicable based upon all events that have been recognized in the
consolidated financial statements as measured by the enacted tax laws.

m) Investments

F-36
<PAGE> 206
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

n) Concentration of Credit Risk

o) Segment Reporting

p) Recent Accounting Standards

In December 1999, the SEC issued Staff Accounting Bulletin (SAB) No. 101,
"Revenue Recognition in Financial Statements," which provides additional
guidance on revenue recognition as well as criteria for when revenue is
generally realized and earned. Our financial statements reflect the accounting
guidance in SAB 101 for all periods presented.

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):

F-37
<PAGE> 207
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. INVESTMENTS IN AFFILIATE

The Company's investments in affiliate consist of the following at December
31 (in thousands):

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Investment in (advances from) Pacific Crossing
Ltd. .............................................. $102,954 $ (2,502)
Pacific Crossing-1 development costs................. 160,484 163,141
-------- --------
Total investments in affiliate.................. $263,438 $160,639
======== ========
</TABLE>

As of January 1, 2000, Pacific Crossing Ltd. was consolidated into the
Company. As a result, the Pacific Crossing-1 development costs were reclassified
into property and equipment in the accompanying consolidated balance sheet as of
September 30, 2000, which were for the balance sheets as of December 31, 1999
and 1998 included in investment in affiliates.

The summarized consolidated financial statements of Pacific Crossing Ltd.
are as follows as of (in thousands):

F-38
<PAGE> 208
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. TAXES

The Company accounts for income taxes in accordance with Statement of
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109").

6. LONG-TERM DEBT

F-39
<PAGE> 209
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The expected maturities of long term debt are as follows:

7. RELATED PARTY TRANSACTIONS

Shareholders Agreement

Shared Services and Operating Agreement

Affiliate Transactions for Network Capacity

During its normal course of business, Asia Global Crossing and its
subsidiaries purchase and sell network capacity from and to affiliates. The
Company, through one of its wholly owned subsidiaries, purchases terrestrial
network capacity in Japan from Global Access Limited, a 49.0%-owned affiliate of
the Company upon closing of the IPO, and Pacific Crossing-1 network capacity
from Pacific Crossing Ltd., a 64.5%-owned affiliate of the Company. The prices
of Global Access Limited capacity were determined by Asia Global Crossing and
Global Access Limited, and the prices of Pacific Crossing-1 capacity were
determined by Asia Global Crossing and Pacific Crossing Ltd. Prices are reviewed
and adjusted periodically based on market conditions. The Company and its
subsidiaries sell network capacity directly and indirectly through Global
Crossing Ltd. and its affiliates, to third-party customers. Receivables and
payables from/to affiliates are primarily related to these transactions.

F-40
<PAGE> 210
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Corporate Services

Maintenance Agreements

Notes Receivable from Employees

East Asia Crossing

F-41
<PAGE> 211
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. GEOGRAPHIC SEGMENTATION

(2) Long-lived assets include capacity available for sale and construction in
progress as of September 30, 2000 and December 31, 1999.

9. COMMITMENTS

The following amounts are payable to GCNC under an OA&M agreement (see note
7):

These fees will increase by 3.0% each year starting in the year ended
December 31, 2003, through the end of the agreement in 2007.

F-42
<PAGE> 212
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Under an additional OA&M agreement, Pacific Crossing Ltd. is committed to
paying Global Access Ltd. $5.8 million each year through 2002, increasing by
3.0% thereafter through 2007 (see note 7).

10. FINANCIAL INSTRUMENTS

11. QUARTERLY FINANCIAL DATA (UNAUDITED)

The Company's unaudited quarterly results are as follows (in thousands):

12. SUBSEQUENT EVENTS

F-43
<PAGE> 213
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

commissions and costs were approximately $452 million. On November 8, 2000, an
additional 500,000 shares at $7.00 per share were sold in connection with the
exercise of the underwriters' over-allotment option. The additional net proceeds
were approximately $3.3 million after deducting the underwriters' discounts and
commissions.

Concurrently with the completion of the IPO, the Company reorganized its
share capital as follows:

(3) Asia Global Crossing Holdings Ltd. repurchased its shares of Class A
common stock and Class C common stock held by Global Crossing and
shares of Class D common stock held by Microsoft;

(6) Class A common stockholders have a right to one vote per share, while
holders of Class B common stock have a right to 10 votes per share;

(7) the Company had a 375 for 1 stock split. All share and per share
information have been adjusted to reflect the stock split
retroactively.

At the completion of the IPO, the Founding Shareholders contributed their
respective interests in Hutchison Global Crossing to the Company. Also, Global
Crossing Ltd. contributed its interest in Global Access Limited to the Company.
The Company indemnified Global Crossing Ltd. for certain contingent liabilities
that may arise relating to the contribution of its interest in Hutchison Global
Crossing. Additionally, the Company purchased from Global Crossing Ltd. all
outstanding shareholder loans it made to Hutchison Global Crossing and Global
Access Limited.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

sold as part of the exercise by the underwriters of their over-allotment option
in connection with the IPO) and (b) the issuance of any indebtedness which meet
certain conditions under the terms of the Subordinated Notes. One of the
Subordinated Notes is available for borrowings until certain conditions are met
and the second Subordinated Note is available for borrowings until December 31,
2002. The Subordinate Notes mature on April 15, 2011 and bear interest at a rate
of 14.875%. Interest shall be payable in cash semi-annually in arrears on April
15 and October 15 of each year, commencing on April 15, 2001. Interest due on or
before October 15, 2005 will be settled by increasing the outstanding principal
amount.

13. SUPPLEMENTARY FINANCIAL INFORMATION

Upon the completion of the IPO, the Founding Shareholders contributed their
respective interests in Hutchison Global Crossing to the Company. Also, Global
Crossing contributed its interest in Global Access Limited to the Company. These
contributions will be accounted for by the Company in a manner similar to a
pooling of interests. Further, as of January 1, 2000, Pacific Crossing Ltd. has
been consolidated by the Company.

F-45
<PAGE> 215
ASIA GLOBAL CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The unaudited summarized consolidated statements of operations of Pacific
Crossing Ltd., Global Access Limited and Hutchison Global Crossing are as
follows:

F-46
<PAGE> 216

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Pacific Crossing Ltd.:

We have audited the accompanying consolidated balance sheets of Pacific
Crossing Ltd. (a Bermuda company) and its subsidiaries as of December 31, 1999
and 1998 and the related consolidated statements of operations, shareholders'
equity (deficit) and cash flows for the year ended December 31, 1999 and for the
period from May 4, 1998 (Date of Inception) to December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Pacific Crossing Ltd. and
its subsidiaries as of December 31, 1999 and 1998 and the results of their
operations and their cash flows for the year ended December 31, 1999 and for the
period from May 4, 1998 (Date of Inception) to December 31, 1998, in conformity
with accounting principles generally accepted in the United States.

As explained in the Notes to the consolidated financial statements,
effective January 1, 1999, the Company changed its method of accounting for
start-up costs.

/s/ Arthur Andersen

Hamilton, Bermuda
February 23, 2000

F-47
<PAGE> 217

PACIFIC CROSSING LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)

<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, ----------------------------
2000 1999 1998
----------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents....................... $ 616 $ 606 $ 433
Restricted cash and cash equivalents............ 55,416 17,914 6,695
Receivable from affiliate....................... 170,731 61,100 --
Accounts receivable............................. -- 6,399 --
Other assets and prepaid costs.................. 1,437 2,011 1,423
---------- ---------- --------
Total current assets......................... 228,200 88,030 8,551
Property and equipment, net....................... 1,076,781 1,010,730 193,214
Deferred finance costs, net of accumulated
amortization of $8,832, $6,560 and $2,026 as of
June 30, 2000, December 31, 1999 and 1998,
respectively.................................... 23,106 25,378 29,912
---------- ---------- --------
Total assets................................. $1,328,087 $1,124,138 $231,677
========== ========== ========
LIABILITIES:
Current liabilities:
Accrued construction costs...................... $ 100,029 $ 160,817 $ 23,473
Accounts payable and accrued liabilities........ 1,057 1,219 619
Deferred revenue................................ 4,078 9,854 333
Payable to affiliate............................ 31,528 8,124 1,041
Other current liabilities....................... 120 5,253 160
---------- ---------- --------
Total current liabilities.................... 136,812 185,267 25,626
Long term debt.................................... 750,000 750,000 200,000
Long term deferred revenue........................ 39,196 -- --
Long term accrued construction costs.............. -- -- 9,134
Other long term liabilities....................... 1,308 1,401 1,246
Loan payable to affiliate......................... 9,597 9,235 --
---------- ---------- --------
Total liabilities............................ 936,913 945,903 236,006
---------- ---------- --------
SHAREHOLDERS' EQUITY (DEFICIT):
Common stock, 1,200,000 shares authorized, par
value $0.01, 1,200,000 shares issued and
outstanding at June 30, 2000 and December 31,
1999 and 1998, respectively.................. 12 12 12
Additional paid in capital...................... 339,658 160,835 --
Retained earnings (deficit)..................... 51,504 17,388 (4,341)
---------- ---------- --------
391,174 178,235 (4,329)
---------- ---------- --------
Total liabilities and shareholders' equity
(deficit).................................. $1,328,087 $1,124,138 $231,677
========== ========== ========
</TABLE>

The accompanying notes are an integral part of these statements.
F-48
<PAGE> 218

PACIFIC CROSSING LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
MAY 4, 1998
SIX MONTHS ENDED (DATE OF
JUNE 30, YEAR ENDED INCEPTION) TO
--------------------------- DECEMBER 31, DECEMBER 31,
2000 1999 1999 1998
------------ ------------ ------------ --------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue............................... $107,550 $ -- $61,100 $ --
Expenses:
Cost of sales....................... 41,552 -- 20,722 --
Operations, administration and
maintenance...................... 23,886 -- 8,000 --
Selling, general and
administrative................... 1,577 1,636 8,169 1,627
Depreciation and amortization....... 6,976 -- -- --
-------- ------- ------- -------
73,991 1,636 36,891 1,627
-------- ------- ------- -------
Operating income (loss).......... 33,559 (1,636) 24,209 (1,627)
-------- ------- ------- -------
Other income (expense):
Interest income..................... 1,676 45 464 1,032
Interest expense.................... (1,071) (1,766) (2,612) (3,746)
Other (expense) income.............. (48) -- 459 --
-------- ------- ------- -------
Income (loss) from operations
before provision for income
taxes.......................... 34,116 (3,357) 22,520 (4,341)
Provision for income taxes............ -- -- -- --
-------- ------- ------- -------
Income (loss) from operations.... 34,116 (3,357) 22,520 (4,341)
Cumulative effect of change in
accounting principle................ -- (791) (791) --
-------- ------- ------- -------
Net income (loss)................ $ 34,116 $(4,148) $21,729 $(4,341)
======== ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.
F-49
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PACIFIC CROSSING LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK ADDITIONAL RETAINED SHAREHOLDERS'
------------------ PAID IN EARNINGS EQUITY
SHARES AMOUNT CAPITAL (DEFICIT) (DEFICIT)
--------- ------ ---------- --------- -------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock for cash on
May 4, 1998 (Date of Inception) at
$0.01 per share..................... 1,200,000 $12 $ -- $ -- $ 12
Net loss for the period from May 4,
1998 (Date of Inception) to December
31, 1998............................ -- -- -- (4,341) (4,341)
--------- --- -------- ------- --------
BALANCE, December 31, 1998............... 1,200,000 12 -- (4,341) (4,329)
Capital contributions.................. -- -- 160,835 -- 160,835
Net income for the year ended December
31, 1999............................ -- -- -- 21,729 21,729
--------- --- -------- ------- --------
BALANCE, December 31, 1999............... 1,200,000 12 160,835 17,388 178,235
Capital contributions.................. -- -- 178,823 -- 178,823
Net income for the six months ended
June 30, 2000....................... -- -- -- 34,116 34,116
--------- --- -------- ------- --------
BALANCE, June 30, 2000 (unaudited)....... 1,200,000 $12 $339,658 $51,504 $391,174
========= === ======== ======= ========
</TABLE>

The accompanying notes are an integral part of these statements.
F-50
<PAGE> 220

PACIFIC CROSSING LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
MAY 4, 1998
SIX MONTHS ENDED (DATE OF
JUNE 30, YEAR ENDED INCEPTION)
--------------------- DECEMBER 31, TO DECEMBER 31,
2000 1999 1999 1998
--------- --------- ------------ ------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................... $ 34,116 $ (4,148) $ 21,729 $ (4,341)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization..................... 6,976 18
Non-cash cost of sales............................ 41,552 -- 20,722 --
Cumulative effect of change in accounting
principle...................................... -- 791 791 --
Changes in operating assets and liabilities:
Other assets and prepaid costs................. 575 (1,554) (588) (1,423)
Receivable from affiliate...................... (109,631) 323 (61,100) --
Accounts receivable............................ 6,399 -- (6,399) --
Deferred revenue............................... 33,420 3,122 9,521 333
Accounts payable & accrued liabilities......... (162) (196) 600 619
Payable to affiliate........................... 23,766 -- 16,318 1,041
Other liabilities.............................. (5,226) -- 5,248 --
--------- --------- --------- ---------
Net cash provided by (used in) operating
activities................................. 31,785 (1,644) 6,842 (3,771)
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment................ (173,096) (266,662) (706,285) (157,175)
--------- --------- --------- ---------
Net cash used in investing activities........ (173,096) (266,662) (706,285) (157,175)
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock.............. -- -- -- 12
Proceeds from long term debt........................ -- 267,960 550,000 304,000
Repayment of long term debt......................... -- -- -- (104,000)
Finance costs incurred.............................. -- -- -- (31,938)
Capital contributions............................... 178,823 -- 160,835 --
Change in restricted cash and cash equivalents...... (37,502) 662 (11,219) (6,695)
--------- --------- --------- ---------
Net cash provided by financing activities.... 141,321 268,622 699,616 161,379
--------- --------- --------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS............. 10 316 173 433
--------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, beginning of period........ 606 433 433 --
--------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of period.............. $ 616 $ 749 $ 606 $ 433
========= ========= ========= =========
SUPPLEMENTAL INFORMATION ON NON-CASH INVESTING
ACTIVITIES:
Costs incurred for property and equipment........... $ 114,580 $ 332,519 $ 839,029 $ 193,214
Decrease (increase) in accrued construction costs... 60,788 (63,759) (128,210) (32,607)
Amortization of deferred finance costs.............. (2,272) (2,262) (4,534) (2,026)
Change in other liabilities......................... -- 164 -- (1,406)
--------- --------- --------- ---------
Cash paid for property and equipment................ $ 173,096 $ 266,662 $ 706,285 $ 157,175
========= ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid and capitalized....................... $ 34,077 $ 10,498 $ 29,514 $ 6,548
========= ========= ========= =========
Interest paid (net of capitalized interest)......... $ 892 $ 1,928 $ 2,655 $ 3,414
========= ========= ========= =========
Cash paid for taxes................................. $ -- $ -- $ -- $ --
========= ========= ========= =========
</TABLE>

The accompanying notes are an integral part of these statements.
F-51
<PAGE> 221

PACIFIC CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Throughout these consolidated financial statements, references to "dollars" and
"$" are to United States dollars.

1. BACKGROUND AND ORGANIZATION

On May 4, 1998, Pacific Crossing Ltd. (the "Company") was incorporated in
Bermuda. Pacific Crossing Ltd. is a joint venture owned by GCT Pacific Holdings
Ltd., ("GCT Pacific"), SCS (Bermuda) Ltd. ("SCS (Bermuda)") and Marubeni Pacific
Cable Limited, all Bermuda companies (collectively the "Partners") who own
50.0%, 14.5% and 35.5% of Pacific Crossing Ltd., respectively. Pacific Crossing
Ltd. was incorporated to construct and operate an undersea fiber optic cable
ring with landing stations in the United States and Japan (Pacific Crossing
Ltd.'s fiber optic cable ring is referred to as "Pacific Crossing-1" or the
"System"). Pacific Crossing Ltd. has incorporated wholly-owned subsidiaries in
each of these countries in order to own the portion of the cable system located
in each country and the related territorial waters. Pacific Crossing-1 consists
of two segments joined to form a ring configuration. At December 31, 1999, the
first segment, from Harbour Pointe, Washington to Ajigaura, Japan, was completed
and placed into service.

GCT Pacific is a wholly-owned subsidiary of Asia Global Crossing Holdings
Ltd. and owns a further economic interest in Pacific Crossing Ltd. through its
100% ownership interest in SCS (Bermuda). During the periods presented in these
financial statements, Asia Global Crossing Holdings Ltd. was 93.0% owned by
Global Crossing Ltd. Global Crossing Ltd. is a provider of global broadband
telecommunications services for both wholesale and retail customers. Global
Crossing Ltd. is building a state-of-the-art fiber optic network (the "Global
Crossing Network") which includes Pacific Crossing-1.

During April 1998, Pacific Crossing Ltd. entered into a fixed price
contract with Tyco Submarine Systems Ltd. ("TSSL") to construct Pacific
Crossing-1. The estimated cost of the System is $1,100.0 million (including
capitalized interest), which is being financed through a $400.0 million equity
contribution by the Partners and an $850.0 million credit facility. The $400.0
million equity contribution by the Partners will be pro-rated according to their
respective percentage ownership of Pacific Crossing Ltd. Through either cash
collateral, letter of credit, or an equity contribution guarantee, the equity
contributions have been guaranteed by the Partners. In July 1998, the $850.0
million aggregate senior secured non-recourse loan facility (the "Pacific
Crossing-1 Credit Facility") was executed for the construction and financing
costs of Pacific Crossing-1.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Principles of Consolidation

The consolidated financial statements include the accounts of Pacific
Crossing Ltd. and its wholly-owned subsidiaries. All significant intercompany
transactions have been eliminated.

b) Interim Financial Information

The consolidated financial statements of the Company as of June 30, 2000
and for the six months ended June 30, 2000 and June 30, 1999 are unaudited.
Adjustments, consisting of normal recurring adjustments to present the
consolidated financial position of the Company, have been made which in the
opinion of management are necessary for a fair presentation. Results of
operations for the six months ended June 30, 2000 are not necessarily indicative
of the results that may be expected for the full year or for any future period.

F-52
<PAGE> 222
PACIFIC CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

c) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

The Company's operations and ability to grow may be affected by numerous
factors, including changes in customer requirements, new laws and governmental
regulations and policies, technological advances, entry of new competitors and
changes in the willingness of financial institutions and other lenders to
finance operations. The Company cannot predict which, if any, of these or other
factors might have a significant impact on the telecommunications industry in
the future, nor can it predict what impact, if any, the occurrence of these or
other events might have on the Company's operations.

d) Development Stage Company

The Company was in its development stage until December 31, 1999, when the
first segment of Pacific Crossing-1 was placed into service.

e) Revenue Recognition

Services

Sales-Type Leases

Revenue from Capacity Purchase Agreements ("CPAs") that meet the criteria
of sales-type lease accounting are recognized in the period that the rights and
obligations of ownership transfer to the purchaser, which occurs when (i) the
purchaser obtains the right to use the capacity, which can only be suspended if
the purchaser fails to pay the full purchase price or fulfill its contractual
obligations, (ii) the purchaser is obligated to pay Operations, Administration
and Maintenance ("OA&M") costs and (iii) the segment of a system related to the
capacity purchased is available for service and the related capacity is
activated. Certain customers who have entered into CPAs for capacity have paid
deposits toward the purchase price, which have been included as deferred revenue
in the accompanying consolidated balance sheets. The Company follows the
criteria set forth in Statement of Financial Accounting Standards No. 66,
"Accounting for Sales of Real Estate" ("SFAS 66") for contracts which qualify
for sales-type lease accounting.

The principal effect of the change in the type of contracts offered to the
Company's customers beginning on January 1, 2000 is that an increasing
percentage of capacity sales will be accounted for

F-53
<PAGE> 223
PACIFIC CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

as operating leases rather than sales-type leases, resulting in more revenue
from such sales being deferred into future periods than was previously the case.
Accordingly, this change in contract terms will reduce revenue recognized upon
activation of circuits in earlier periods and increase revenue recognized in
later periods.

For the six months ended June 30, 2000, sales-type leases revenue was
$104.5 million and services revenue was $3.1 million. For the year ended
December 31, 1999, all revenue was from sales-type leases.

f) Cost of Sales

Services

Costs of sales relating to capacity contracts accounted for as operating
leases are treated as fixed assets and, accordingly, are depreciated over the
estimated useful life of the capacity.

Sales-Type Leases

At the date each segment of the System becomes operational, the related
amounts included in construction in progress are reclassified (see Note 2h), and
depreciation commences. For contracts that meet the criteria for sales-type
lease accounting, the Company's policy provides for recording cost of sales in
the period in which the related revenue is recognized in addition to the
depreciation charge described below. The amount charged to cost of sales is
determined by calculating the estimated net book value of the specific capacity
at the time of the sale, which includes total expected cost of the System and
the cost of the additional capacity that the Company has the intent and ability
to add through upgrades, provided the need for such upgrades is supported by a
third-party consultant's revenue forecast.

g) Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

The Company considers cash in banks and short term highly liquid
investments with an original maturity of three months or less at the date of
purchase to be cash equivalents. The Company's restricted cash is restricted for
the payments of construction costs of Pacific Crossing-1.

h) Property and Equipment

Property and equipment, which includes transmission equipment and
construction in progress, is stated at cost, net of depreciation and
amortization. Major enhancements are capitalized, while expenditures for repairs
and maintenance are expensed when incurred. Construction in progress includes
direct expenditures for construction of the System and is stated at cost.
Capitalized costs include costs incurred under the construction contract;
advisory, consulting and legal fees; interest; and amortized finance costs
incurred during the construction phase. On the date a segment or upgrade becomes
operational, the related cost is recorded as transmission equipment and
depreciation commences.

Interest incurred, which includes the amortization of deferred finance
fees, is capitalized in accordance with Statement of Financial Accounting
Standards No. 34, "Capitalization of Interest

F-54
<PAGE> 224
PACIFIC CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Cost." Total interest cost incurred and interest capitalized to construction in
progress during the periods presented were (in thousands):

<TABLE>
<CAPTION>
PERIOD FROM
MAY 4, 1998
SIX MONTHS (DATE OF
ENDED YEAR ENDED INCEPTION) TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Interest cost incurred........................ $32,712 $41,625 $11,841
======= ======= =======
Interest cost capitalized to construction in
progress.................................... $31,630 $39,013 $ 8,095
======= ======= =======
</TABLE>

i) Deferred Finance Costs

Costs incurred to obtain financing through the issuance of long-term debt
have been reflected as an asset in the accompanying consolidated balance sheets.
The financing costs relating to the long-term debt are amortized over the lesser
of the term of the related debt agreements or the expected payment date of the
debt obligation. During the construction period, the amortized portion of
deferred financing costs relating to the long term debt are included in
construction in progress as a component of interest capitalized or recorded as
interest expense in accordance with Statement of Financial Accounting Standards
No. 34, "Capitalization of Interest Cost."

j) Financial Instruments

The Company uses derivative financial instruments to reduce its exposure to
adverse fluctuations in interest rates. The Company has established policies and
procedures for risk assessment and the approval, reporting and monitoring of
derivative financial instrument activities. The Company does not enter into
financial instruments for trading or speculative purposes. Accordingly, they are
presented on the accompanying consolidated balance sheets at their carrying
values, which approximates their fair values. Fair values are based on market
quotes, current interest rates or management estimates, as appropriate.

As discussed in Note 7, the Company has entered into an interest rate swap
agreement to hedge its exposure to interest rates on its long-term debt. Hedge
accounting was applied in respect of these instruments; accordingly, the net
cash amounts paid or received on the agreement are accrued and recognized as an
adjustment to interest expense on the related debt.

The counterparties to the derivative financial instruments in effect as of
December 31, 1999 are Canadian Imperial Bank of Commerce ("CIBC") and Deutsche
Bank AG. The Company is exposed to credit loss in the event of nonperformance by
these counterparties.

F-55
<PAGE> 225
PACIFIC CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

k) Income Taxes

l) Translation of Foreign Currencies

The functional currency of the Company's subsidiaries is the United States
dollar. Transactions in foreign currencies are translated into United States
dollars at the rate of exchange prevailing at the date of each transaction.
Monetary assets and liabilities denominated in foreign currencies at year end
are translated into United States dollars at the rate of exchange at that date.
For the six months ended June 30, 2000 and the year ended December 31, 1999,
Pacific Crossing Ltd. recognized a $0.1 million foreign transaction loss and
$0.5 million foreign transaction gain, respectively, included in other income in
the accompanying consolidated statement of operations. The effect of foreign
currency transactions for the period from May 4, 1998 (Date of Inception) to
December 31, 1998 was not material.

m) Change in Accounting Policy

The Company adopted Statement of Position 98-5, "Reporting on the Cost of
Start-Up Activities" in the first quarter of 1999. Accordingly, a one-time
charge of $0.8 million, representing start-up costs incurred and capitalized
during previous periods, was charged against net income.

n) Segment Reporting

The Company is a provider of Internet and long distance telecommunications
facilities and related services. The Company determined that it was a single
segment operating company.

o) Pending Accounting Standards

In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities -- Deferral of the Effective Date of SFAS No.
133" which deferred SFAS No. 133's effective date to fiscal quarters beginning
after June 15, 2000. This statement standardizes the accounting for derivatives
and hedging activities and requires that all derivatives be recognized in the
statement of financial position as either assets or liabilities at fair value.
Changes in the fair value of derivatives that do not meet the hedge accounting
criteria are to be reported in earnings. The impact of the adoption of this
standard has not been quantified.

p) Reclassifications

Certain prior year amounts have been reclassified in the consolidated
financial statements to conform to current year presentation.

F-56
<PAGE> 226
PACIFIC CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, ----------------------
2000 1999 1998
----------- ---------- --------
(UNAUDITED)
<S> <C> <C> <C>
Transmission equipment............... $ 197,178 $ 227,531 $ --
Construction in progress............. 886,547 783,199 193,214
---------- ---------- --------
Total property and equipment......... $1,083,725 $1,010,730 $193,214
Less: accumulated depreciation....... (6,944) -- --
---------- ---------- --------
Total property and equipment......... $1,076,781 $1,010,730 $193,214
========== ========== ========
</TABLE>

Depreciation expense was not recorded in 1999 or 1998 as the Northern
segment of Pacific Crossing-1 was placed into service on December 31, 1999.
Depreciation expense for the six months ended June 30, 2000 was $6.9 million.

4. LONG TERM DEBT

Pacific Crossing-1 Credit Facility

During 1998, Pacific Crossing Ltd. entered into an $850.0 million aggregate
senior secured non-recourse loan facility (the "Pacific Crossing-1 Credit
Facility") with a group of banks led by CIBC and Deutsche Bank AG, for the
construction and financing costs of Pacific Crossing-1. The Pacific Crossing-1
credit facility is comprised of an $840.0 million multiple draw down term loan
facility (the "Pacific Crossing-1 Term Facility") and a $10.0 million working
capital facility (the "Pacific Crossing-1 Working Capital Facility"). Of the
$840.0 million Pacific Crossing-1 Term Facility, $50.0 million is restricted to
fund the first system upgrade. The Pacific Crossing-1 Credit Facility is secured
by pledges of the stock of Pacific Crossing Ltd. and its subsidiaries and by a
security interest in its assets. As of June 30, 2000 and December 31, 1999,
Pacific Crossing Ltd. had an outstanding balance of $750.0 million under the
Credit Facility ($200.0 million at December 31, 1998). No amounts have been
repaid to the lenders.

Pacific Crossing Ltd. obtained a $104.0 million loan from CIBC to fund
construction before the Pacific Crossing-1 Credit Facility was in place. This
loan was repaid during 1998 with funds borrowed under the Pacific Crossing-1
Credit Facility.

Under the Pacific Crossing-1 Credit Facility, Pacific Crossing Ltd. may
select loan arrangements as either a Eurodollar loan or an Alternative Base Rate
("ABR") loan. The Eurodollar interest rate is LIBOR plus 2.25-2.50% and the ABR
interest rate is the greater of (a) the Prime Rate and (b) the Federal Funds
Effective Rate plus 0.5%, plus 1.25-1.50%. As of June 30, 2000 and December 31,
1999 and 1998 all outstanding loans were Eurodollar loans. The Pacific
Crossing-1 Credit Facility contains various covenants that (i) limit further
indebtedness by Pacific Crossing Ltd. and its subsidiaries, (ii) limit the
ability of Pacific Crossing Ltd. to pay dividends, (iii) require Pacific
Crossing Ltd. to meet certain minimum capacity sales levels and (iv) require
Pacific Crossing Ltd. to meet a minimum interest coverage ratio for the years
2001 through to the maturity of the Pacific Crossing-1 Credit Facility. The
Pacific Crossing-1 Credit Facility is repayable in ten semi-annual installments
("Mandatory Repayments"), commencing 135 days after the System is ready for
service.

Effective October 30, 1998, Pacific Crossing Ltd. entered into two interest
rate swap transactions based on one month LIBOR to minimize its exposure to
increases in interest rates on its borrowings. The swap transactions fix Pacific
Crossing Ltd.'s floating interest rate at 4.985% on a notional amount of
borrowings ranging between $200.0 million and $500.0 million until January 31,
2004.

F-57
<PAGE> 227
PACIFIC CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The expected maturities of long term debt are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------ (IN THOUSANDS)
<S> <C>
2000................................................ $ --
2001................................................ 83,260
2002................................................ 93,260
2003................................................ 113,260
2004................................................ 118,260
Thereafter.......................................... 341,960
--------
Total............................................ $750,000
========
</TABLE>

5. COMMITMENTS AND CONTINGENCIES

As of December 31, 1999, Pacific Crossing Ltd. was committed under
contracts with TSSL for remaining construction costs of Pacific Crossing-1
totaling approximately $240.0 million. At June 30, 2000, the remaining
commitment amount was $4.9 million.

The following amounts are payable to Global Crossing Network Center, Ltd.
("GCNC") under an OA&M agreement (see Note 8):

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------ (IN THOUSANDS)
<S> <C>
2000................................................ $ 43,000
2001................................................ 43,000
2002................................................ 42,200
</TABLE>

These fees will increase by 3.0% each year starting in the year ended
December 31, 2003, through the end of the agreement in 2007.

Under an additional OA&M agreement, Pacific Crossing Ltd. is committed to
paying Global Access Ltd. $5.8 million each year through 2002, increasing by
3.0% thereafter through 2007 (see Note 8).

6. TAXES

The Company accounts for income taxes in accordance with Statement of
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109").

7. FINANCIAL INSTRUMENTS

The carrying amounts for cash and cash equivalents, restricted cash and
cash equivalents, accounts receivable, accrued construction costs, accounts
payable and accrued liabilities, accrued interest, obligations under capital
leases and long term debt approximate their fair value. At June 30, 2000, the
fair value of the interest rate swap is $27.9 million and is based on market
quotes.

8. RELATED PARTY TRANSACTIONS

Shareholders Agreement

The Partners have entered into a shareholders agreement that details, among
other things the composition of the Company's board of directors; actions
requiring the supermajority consent of the board of directors; actions requiring
the supermajority consent of the Company's shareholders; shareholder rights to
subscribe for new capital; restrictions on the transfer of shares of the
Company's common stock; the consequences of a deadlock over the annual budget;
and exit rights of SCS (Bermuda).

F-58
<PAGE> 228
PACIFIC CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Revenue

All sales of capacity and related OA&M revenue on Pacific Crossing-1 are
with affiliates at prices determined by the respective joint venture owners.
Prices are reviewed and adjusted periodically based on market conditions.

Financial Services Agreement

During 1998, Pacific Crossing Ltd. entered into a Financial Services
Agreement with Global Crossing Development Corporation, an indirect wholly owned
subsidiary of Global Access Ltd., to arrange the Pacific Crossing-1 Credit
Facility. As consideration, Global Crossing Development Corporation received a
fee in the amount of 1.5% of the $850.0 million Pacific Crossing-1 Credit
Facility or $12.8 million. This amount has been recorded as deferred finance
costs and is being amortized over the term of the Pacific Crossing-1 Credit
Facility. In a further agreement between Global Crossing Development Corporation
and Marubeni Pacific Cable Limited, Marubeni Pacific Cable Limited received from
Global Crossing Development Corporation 33.3% of the $12.8 million or $4.3
million for their participation in arranging the Pacific Crossing-1 Credit
Facility.

Contribution of Pacific Crossing-1

Prior to January 21, 1998, Pacific Capital Group, Inc. and its affiliates,
a significant shareholder of Global Access Ltd., began development of Pacific
Crossing-1 and two other fiber optic cable systems. Through January 21, 1998,
such development included assembling a management team, negotiating with
potential suppliers, partners, financing sources, obtaining preliminary market
and feasibility studies and developing technical requirements. During January
1998, Global Access Ltd.'s Board determined that it was in its best interests to
pursue these new systems, obtain the results of the work and the employees then
within the scope of activity of Pacific Capital Group, Inc. and broaden the
goals, objectives and business plan of Global Crossing Ltd. In consideration of
Pacific Capital Group, Inc. transferring the results of its activities and
becoming limited in its future activities in fiber optic telecommunications
other than through Global Access Ltd., Global Access Ltd.'s Board approved and
their shareholders subsequently ratified a transaction whereby Pacific Capital
Group, Inc. received certain cash reimbursements and entered into a warrant
agreement ("Pacific Capital Group, Inc. Warrants") under which Pacific Capital
Group, Inc. was granted warrants for Global Access Ltd.'s common stock in
exchange for the rights to continue the development of Pacific Crossing-1 and
the two other fiber optic cable systems. Global Crossing Ltd. subsequently
contributed these development rights applicable to Pacific Crossing-1 to GCT
Pacific Holdings Ltd. Such costs have not been reflected in the financial
statements of Pacific Crossing Ltd. The value attributed to Pacific Crossing-1
was determined by allocating the value of the Pacific Capital Group, Inc.
Warrants on a pro rata basis based on the estimated cost of each system.

Management Services

Certain affiliated companies, which are indirect wholly-owned subsidiaries
of Global Crossing Ltd., provide Pacific Crossing Ltd. with marketing,
management and administrative services in respect of the development,
implementation and operations of Pacific Crossing Ltd. For the year ended
December 31, 1999 approximately $4.0 million of marketing, management and
administrative services fees were recorded as an expense by Pacific Crossing
Ltd. In addition, $2.5 million was charged by Global Crossing Ltd. and recorded
by as expense by Pacific Crossing Ltd. related to legal and professional fees
pertaining to legal and advocacy issues before governmental authorities. For the
six months ended June 30, 2000, $318,000 and $500,000 were charged by Global
Crossing Ltd. and Asia Global Crossing Holdings Ltd. respectively, for general
corporate services. Had the company provided these management services on a
stand alone basis, there could be no assurance that these fees would be the
same.

F-59
<PAGE> 229
PACIFIC CROSSING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Maintenance Agreements

The Company has entered into OA&M agreements with GCNC (a subsidiary of
Global Crossing Ltd.) and Global Access Ltd. (an affiliate of Global Crossing
Ltd.) whereby GCNC and Global Access Ltd. are obligated to provide operating,
administration and maintenance functions for Pacific Crossing-1. The OA&M
agreement with GCNC is for an initial term of eight years with two renewal
periods of five years each at the Company's option. The OA&M agreement with
Global Access Ltd. is for an initial term of eight years with two renewal
periods of eight and one-half years each at the Company's option. The OA&M costs
related to this agreement are expensed as incurred. Pacific Crossing Ltd.
recorded expense of $3.0 million for the six months ended June 30, 2000 under
the agreement with Global Access Ltd. No expense was incurred under the
agreement with Global Access Ltd. in 1999 or 1998. Pacific Crossing Ltd.
incurred and recorded expense of $21.5 million and $8.0 million in connection
with the GCNC agreement for the six months ended June 30, 2000 and for the year
ended December 31, 1999, respectively. No expense was incurred under this
agreement in 1998.

Loan Facility

During 1999, the Company entered into a loan facility with Global Crossing
Holdings Ltd. for approximately $9.0 million. The interest rate of the loan is
LIBOR plus 2.0%. The principal plus the accrued interest is included in loan
payable to affiliate in the consolidated balance sheet. The outstanding
principal plus accrued interest is due one year after the Pacific Crossing-1
Credit Facility is paid in full.

Other Transactions

In 1998, an affiliate of CIBC, a major shareholder of Global Crossing Ltd.,
was a member of the Pacific Crossing-1 Credit Facility syndicate and was paid
$5.8 million in fees during the period from May 4, 1998 (Date of Inception) to
December 31, 1998 relating to the Pacific Crossing-1 Credit Facility. This
amount is included in deferred finance costs in the accompanying consolidated
balance sheet.

9. GEOGRAPHIC SEGMENTATION

<TABLE>
<CAPTION>
(IN THOUSANDS)
JUNE 30, 2000(2) DECEMBER 31, 1999 DECEMBER 31, 1998
------------------------- ------------------------- -------------------------
LONG-LIVED LONG-LIVED LONG-LIVED
REVENUE(1) ASSETS(2) REVENUE(1) ASSETS(2) REVENUE ASSETS(2)
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
United States.......... $ 77,450 $ 139,744 $61,100 $ 115,620 $ -- $ 29,367
Japan.................. 23,300 128,203 -- 127,990 -- 22,007
United Kingdom......... 6,800 -- -- -- -- --
International Waters... -- 808,834 -- 767,120 -- 141,840
-------- ---------- ------- ---------- ------- ----------
Consolidated........... $107,550 $1,076,781 $61,100 $1,010,730 $ -- $ 193,214
======== ========== ======= ========== ======= ==========
</TABLE>

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

(1) Revenue is classified according to the primary point of presence of the end
customer.
(2) Long-lived assets include capacity available for sale and construction in
progress.

F-60
<PAGE> 230

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

COMBINED BALANCE SHEET
(IN THOUSANDS OF HONG KONG DOLLARS)

<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS:
Current assets:
Cash at bank............................................. $ 168,990 $ 256
Trade accounts receivable................................ 40,398 34,464
Due from affiliates...................................... 85,700 59,155
Other assets and prepaid costs........................... 60,490 38,343
---------- ----------
Total current assets............................. 355,578 132,218
Deferred expenditure....................................... -- 567,199
Prepaid capacity and services.............................. 2,746,928 --
Property, plant and equipment.............................. 2,867,500 2,478,444
---------- ----------
Total assets..................................... $5,970,006 $3,177,861
========== ==========
LIABILITIES:
Current liabilities:
Bank overdrafts.......................................... $ 4,576 $ 2,483
Accounts payable and accrued liabilities................. 386,264 315,049
Deferred income.......................................... 37,823 44,311
Due to affiliates........................................ 21,806 4,860
---------- ----------
Total current liabilities........................ 450,469 366,703
Long term loans from shareholders.......................... 262,279 3,377,949
Long term loans from external parties...................... 27,428 --
---------- ----------
Total liabilities................................ 740,176 3,744,652
---------- ----------
OWNERS' SURPLUS:
Share capital, 320 shares of US$1, authorized, issued and
fully paid............................................... 2 --
Share premium.............................................. 6,436,827 --
Accumulated deficit........................................ (1,206,999) (566,791)
---------- ----------
Total owners' surplus/(deficit).................. 5,299,830 (566,791)
---------- ----------
Total liabilities and owners' surplus............ $5,970,006 $3,177,861
========== ==========
</TABLE>

See accompanying notes to condensed combined financial statements
which are an integral part of these statements.

F-61
<PAGE> 231

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF HONG KONG DOLLARS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------
2000 1999
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Revenues.................................................... $465,200 $393,136
Operating expenses:
Cost of services, exclusive of depreciation shown below... 403,495 329,859
Sales, general and administrative......................... 88,925 102,391
Depreciation of property, plant and equipment............. 40,538 27,864
Provision for doubtful accounts........................... 8,002 5,231
-------- --------
Total operating expenses............................... 540,960 465,345
-------- --------
Operating loss.............................................. (75,760) (72,209)
Interest income............................................. 4,858 221
Interest expense............................................ (2,105) (23,437)
-------- --------
Net loss before tax.................................... (73,007) (95,425)
Provision for tax........................................... -- --
-------- --------
Net loss............................................... $(73,007) $(95,425)
======== ========
</TABLE>

See accompanying notes to condensed combined financial statements
which are an integral part of these statements.

F-62
<PAGE> 232

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF HONG KONG DOLLARS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------
NOTES 2000 1999
----- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Net cash outflow from operating activities................ (a) $ (23,893) $ (59,838)
--- --------- ---------
Returns on investments and servicing of finance
Interest received....................................... 4,858 221
Interest paid........................................... (2,105) (23,437)
--------- ---------
Net cash inflow/(outflow) from returns on investments and
servicing of finance.................................... 2,753 (23,216)
--------- ---------
Investing activities
Purchase of fixed assets................................ (413,878) (372,548)
Purchase of prepaid capacity............................ (24,628) --
Proceeds on disposals of fixed assets................... -- 298
--------- ---------
Net cash outflow from investing activities................ (438,506) (372,250)
--------- ---------
Net cash outflow before financing activities.............. (459,646) (455,304)
Financing activities (b)
Long term loans borrowed from shareholders/affiliates... 262,105 454,756
Repayment of long term loans to a shareholder........... (52,146) --
Consideration received for issuance of 10 shares........ 388,900 --
Long term loans borrowed from external parties.......... 27,428 --
--------- ---------
Net cash inflow from financing activities................. 626,287 454,756
--------- ---------
Increase/(decrease) in cash and cash equivalents.......... 166,641 (548)
Cash and cash equivalents at beginning of period.......... (2,227) 328
--------- ---------
Cash and cash equivalents at end of period................ $ 164,414 $ (220)
========= =========
Analysis of the balances of cash and cash equivalents:
Bank balances........................................... $ 168,990 $ 202
Bank overdrafts......................................... (4,576) (422)
--------- ---------
$ 164,414 $ (220)
========= =========
</TABLE>

See accompanying notes to condensed combined financial statements
which are an integral part of these statements.

F-63
<PAGE> 233

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS OF HONG KONG DOLLARS)

NOTES TO THE COMBINED STATEMENTS OF CASH FLOWS

(a) Reconciliation of net loss before tax to net cash outflow from operating
activities.

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------------
2000 1999
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Net loss before tax......................................... $(73,007) $(95,425)
Depreciation of property, plant and equipment............... 40,538 27,864
Loss on disposal of property, plant and equipment........... -- 3
Interest income............................................. (4,858) (221)
Interest expense............................................ 2,105 23,437
(Increase)/decrease in trade accounts receivable............ (5,934) 3,245
Increase in due from affiliates............................. (26,545) (13,013)
Increase in other assets and prepaid costs.................. (22,147) (41,358)
Increase in accounts payable and accrued liabilities........ 55,497 1,709
(Decrease)/Increase in deferred income...................... (6,488) 31,895
Increase in due to affiliates............................... 16,946 2,026
-------- --------
Net cash outflow from operating activities.................. $(23,893) $(59,838)
======== ========
</TABLE>

(b) Analysis of changes in financing during the period

<TABLE>
<CAPTION>
LONG TERM LOANS LONG TERM LOANS
FROM SHAREHOLDERS/ FROM EXTERNAL SHARE
AFFILIATES PARTIES PREMIUM
------------------ --------------- ----------
<S> <C> <C> <C>
At January 1, 2000........................... $ 3,377,949 $ -- $ --
Cash inflow/(outflow) from financing.......
Raising of new loans....................... 262,105 27,428 388,900
Repayment of loans......................... (52,146) -- --

Non-cash transactions:
Issue of 239 shares in consideration for
the capitalization of long term loan.... (3,325,629) -- 3,325,627
Issue of 70 shares in return for prepaid
capacity and services................... -- -- 2,722,300
----------- -------- ----------
At June 30, 2000............................. $ 262,279 $ 27,428 $6,436,827
=========== ======== ==========
At January 1, 1999........................... $ 2,302,074 $ -- $ --
Cash inflow from financing................. 454,756 -- --
----------- -------- ----------
At June 30, 1999............................. $ 2,756,830 $ -- $ --
=========== ======== ==========
</TABLE>

F-64
<PAGE> 234

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS

(THROUGHOUT THESE NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS, REFERENCES
TO "$" ARE TO THOUSANDS OF HONG KONG DOLLARS UNLESS OTHERWISE SPECIFIED)

1. BUSINESS, ORGANIZATION AND BASIS OF PREPARATION

Hutchison Global Crossing Holdings Limited (a company incorporated in BVI
on September 12, 1992) and its subsidiaries ("the Company") provide fixed
network services, including international services, local fixed network
services, and multimedia services, in the Hong Kong Special Administrative
Region of the People's Republic of China ("HKSAR"). At December 31, 1999, the
Company was a wholly owned subsidiary of, and was controlled by, Hutchison
Whampoa Limited, a company incorporated in Hong Kong and listed on The Stock
Exchange of Hong Kong Limited. Pursuant to an agreement entered into on November
15, 1999 ("the Agreement"), which closed on January 12, 2000 between the
Company, its holding company Hutchison Telecommunications Limited, Hutchison
Whampoa Limited, and Global Crossing Ltd. ("Global Crossing"), a company
incorporated in Bermuda and listed on NASDAQ, from January 12, 2000 onwards the
Company is a 50:50 joint venture between Hutchison Whampoa Limited and Global
Crossing.

The Company's international services business provides services to
customers using several leased international transmission circuits for direct
transmission of international calls between its switches in Hong Kong and
switches in other countries.

The Company's multimedia services business provides a package of internet
services including: internet access and dial-up services to residential and
corporate subscribers, content and e-service offerings, and will implement and
operate an Electronic Service Delivery system ("the ESD system") allowing the
public to interact with various departments of the HKSAR Government and the
private sector.

The construction and development of the Company's local fixed network fiber
optic backbone was completed in the first quarter of 1999 which enables the
Company to provide services to Hong Kong's business districts and certain high
density and private residential developments. With the extension of the HKSAR
Government's moratorium on the Issue of Further Local Fixed Telecommunications
Network Services Licenses and Licensing of Additional External
Facilities -- Based Operators to January 2003, the Company will expedite its
network rollout and has indicated to the HKSAR Government that it will invest a
total of not less than $2 billion capital expenditures for the purpose of
developing, establishing and maintaining the network for the provision of the
service from January 1, 1999 up to December 31, 2002.

Pursuant to the Agreement, the following transactions have occurred:

(a) The Company has undergone a reorganization ("the Reorganization")
involving transfers of certain businesses. These transfers were between
entities under the common control of Hutchison Whampoa Limited. The
following transfers have taken place:

(1) With effect from November 1, 1999 the business of the provision
of paging, call centers and other ancillary services and the sales of
mobile phones, pagers and accessories and certain other retailing
activities carried on and operated by a division of the Company, and
certain other inactive subsidiaries of the Company (the "Excluded
Business"), were transferred to affiliates under the common control of
Hutchison Whampoa Limited for an aggregate consideration of $1,705,220
which corresponded to the net liabilities of the Excluded Business. The
operations, assets and liabilities of the Excluded Business have not
been included in these condensed combined financial statements on the
basis that this business was operated as a separate division with
dedicated management.

F-65
<PAGE> 235
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(2) On November 24, 1999, the Company and its subsidiaries acquired
a 99.99% interest in HCL Network Partnership ("HCLNP"), a partnership
between three affiliates under the common control of Hutchison Whampoa
Limited which owns the network equipment used by the Company to provide
local fixed network services, for $2,195,361 consideration. This
consideration was satisfied by the transfer of capital and assumption of
a loan payable by HCLNP to its former partners, which are companies
under the common control of Hutchison Whampoa Limited, and has been
capitalized as described in note 1(b) below.

The operations, assets and liabilities of HCLNP have been included
in the condensed combined financial statements in a manner similar to a
pooling of interests. For the period up to November 24, 1999, the
taxable losses of HCLNP were utilized by its former partners for nil
consideration and are not available for use by the Company.

(b) In connection with the Reorganization, the Company's long term
loan from the immediate holding company amounting to $3,325,629 was
capitalized on January 12, 2000 through the issue of 239 new shares in the
Company with a par value of US$1 each, to Hutchison Telecommunications
Limited. The share premium arising on this share issue was $3,325,627.

(c) Upon closure of the Agreement on January 12, 2000, Global Crossing
acquired 80 shares in the Company from Hutchison Telecommunications Limited
and directly provided to Hutchison Whampoa Limited US$400 million in Global
Crossing convertible preferred stock. Additionally the Company has issued
80 shares with a par value of US$1 each, to Global Crossing in return for
consideration of $3,111,200 (US$400 million), which was settled by cash of
$388,900 (US$50 million) and $2,722,300 (US$350 million) worth of rights to
use Global Crossing's international capacity and technology and commercial
expertise in relation to the connection, operation and marketing of a media
distribution centre in Hong Kong. The share premium arising on this share
issue was $3,111,200.

The Company had a net loss of $73,007 and $95,425 for the six months ended
June 30, 2000 and 1999 respectively and at June 30, 2000, the Company had net
current liabilities of $94,891 and significant capital expenditure commitments
as set out in note 4(a). The Company has entered into loan agreement with the
Company's shareholders to obtain loan facilities amounting to $610,000 of which
at 30 June 2000 the Company has drawn down amounts totalling $260,000. The
Company will continue to review the availability of alternative sources of
finance so as to enable it to meet its liabilities as they fall due and to
continue in business for a period of at least twelve months from June 30, 2000.
The Company is reviewing alternative sources such as an Initial Public Offering
of equity, raising debt either by way of the capital markets and syndicated
loans or from the Company's bankers. Based on informal valuations of the Company
received from the Company's financial advisers and the Company's shareholders'
history of raising finance, the Company expects a successful outcome will result
from this review and, on that basis, the Company will be able to continue in
business for a period of at least twelve months from June 30, 2000. Consequently
the condensed combined financial statements have been prepared on a going
concern basis.

2. SIGNIFICANT ACCOUNTING POLICIES

The condensed combined financial statements included herein were prepared
by management and reflect all adjustments (consisting solely of normal recurring
items) which are, in the opinion of management, necessary to present a fair
view. The results for the six months ended June 30, 2000 are not necessarily
indicative of the results expected for the year.

F-66
<PAGE> 236
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

These condensed combined financial statements have been prepared in
accordance with accounting principles generally accepted in Hong Kong
("HKGAAP"). The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting years. Actual results could differ from those estimates. These
significant accounting policies are consistent with those set out in the
Company's combined financial statements for the year ended December 31, 1999
except that the Company has changed its accounting policy for deferred
expenditures as set out in note 2(b) below. The significant accounting policies
are summarized as follows.

(a) Basis of combination

The condensed combined financial statements include the accounts of
Hutchison Global Crossing Holdings and its wholly owned subsidiaries excluding
the Excluded Business and including HCLNP as a result of the Reorganization
described in note 1. All significant transactions within the Company have been
eliminated.

(b) Deferred expenditure

Effective January 1, 2000, the Company has changed its accounting policy
for deferred expenditures representing the pre-operating expenses, including
interest costs, of international services, local fixed network services and
multimedia services. Prior to January 1, 2000 pre-operating expenses were
capitalized and amortized over 10 years from the date of full commercial
operations of each business line. Effective January 1, 2000, pre-operating
expenditures are treated as having been expensed as incurred. As all of the
Company's businesses had commenced full commercial operations on or before
January 1, 1999, no deferred expenditures were capitalized for the six months
ended June 30, 2000 and 1999. The adjustment has been recorded retrospectively
and the expenditures previously deferred have been eliminated retrospectively
with the statement of operations for the three months ended June 30, 1999 being
adjusted.

Leases where substantially all the rewards and risks of ownership of assets
remain with the lessor are accounted for as operating leases. Rentals applicable
to such operating leases are charged to the profit and loss account on a
straight-line basis over the lease term.

(d) Prepaid capacity and services

Prepaid capacity and services totalling $2,722,300 have been recorded at
the valuation based on the amounts agreed between the parties to the Agreement
as set out in note 1. The Company has not begun to charge these prepaid capacity
and services to the profit and loss account as they have not yet been
contributed by the shareholder.

(e) Property, plant and equipment

Property, plant and equipment other than construction in progress are
stated at cost less accumulated depreciation.

Construction in progress, which includes direct expenditures for
construction of a network, is stated at cost. Capitalized costs include costs
incurred under the construction contract, consultancy fees and interest incurred
during the construction phase. Once all the activities necessary to prepare the
assets to be available for their use are substantially completed, the
construction in progress is

F-67
<PAGE> 237
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

transferred to property, plant and equipment. No depreciation is provided in
respect of construction in progress.

Leasehold land is amortized over the remaining period of the lease.
Leasehold improvements are depreciated over the unexpired period of the lease or
15%, whichever is shorter.

Customer access network is depreciated at rates of 4% to 15% per annum on
either a straight-line basis, or a proportionate straight-line basis taking into
account the number of subscribers compared to the forecasted number of
subscribers.

Exchange equipment is depreciated at rates of 6.67% per annum on either a
straight-line basis, or a proportionate straight-line basis taking into account
the number of subscribers compared to the forecasted number of subscribers.

Transmission, plant and site equipment is depreciated at rates of 4% to 20%
per annum on either a straight-line basis, or a proportionate straight-line
basis taking into account the number of subscribers compared to the forecast
number of subscribers.

Other fixed assets are depreciated to write off their costs over their
estimated useful lives on a straight line basis at the following annual rates
from the date of commencement of full commercial operations:

<TABLE>
<S> <C>
Computer equipment.......................................... 20%
Motor vehicles.............................................. 25%
Office furniture and equipment.............................. 15%
</TABLE>

Maintenance costs are expensed as incurred.

(f) Cash and cash equivalents

The Company considers cash at bank and bank overdrafts to be cash
equivalents.

(g) Revenues

Revenues in respect of international services, local fixed network services
and multimedia services are recognized when the services are rendered.

Interest income is recognized on an accrual basis.

(h) Interest costs

Interest costs incurred during the construction or acquisition of assets,
for the Company's own use, which require a period of time to bring them to their
intended use are capitalized. Other interest costs are expensed in the statement
of operations as incurred.

(i) Advertising and promotion costs

Advertising and promotion costs are expensed as incurred. Advertising and
promotion costs amounted to $43,936 and $35,413 for each of the six months ended
June 30, 2000 and 1999 respectively.

(j) Retirement benefit plans

The Company's employees are members of two pension schemes administered by
an affiliate which include the employees of the Company and of a number of
affiliates. The Company contributes

F-68
<PAGE> 238
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

to these schemes based upon notification of charges from the administering
company. The contributions are charged immediately to the statement of
operations.

The retirement contributions incurred and borne by the Company were $5,848
and $4,750 for each of the six months ended June 30, 2000 and 1999 respectively.

(k) Allowance for doubtful accounts

An allowance for doubtful accounts is provided based on an evaluation of
the recoverability of the receivables at the balance sheet date. Trade accounts
receivable are stated net of such allowance.

(l) Deferred income

Subscription income and income billed in advance are deferred and credited
to the statement of operations on a straight-line basis over the related period.

(m) Translation of foreign currencies

The functional currency of the Company's operations is the Hong Kong
dollar.

Transactions in foreign currencies are translated at exchange rates ruling
at the transaction dates. Monetary assets and liabilities expressed in foreign
currencies at the balance sheet date are translated at rates of exchange ruling
at the balance sheet date. All exchange differences arising are dealt with in
the statement of operations.

(n) Income taxes

Deferred taxation is accounted for at the current tax rate in respect of
timing differences between profit as computed for taxation purposes and profit
as stated in the accounts to the extent that a liability or asset is expected to
be payable or receivable in the foreseeable future.

(o) Incentive payments

Incentive payments to customers in respect of operating leases are deferred
and amortized based on the terms of the respective lease agreements.

3. RELATED PARTY TRANSACTIONS

The Company undertook the following transactions with related parties:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------
2000 1999
------- --------
<S> <C> <C>
Fees to affiliates for the provision of management and
treasury services (Note a)................................ $10,842 $ 17,212
------- --------
Fees to an affiliate for the provision of operating
facilities (Note b)....................................... 31,412 134,363
------- --------
Interest payable to affiliates.............................. 2,105 23,437
------- --------
Interest income receivable from a related company........... -- 172
------- --------
Shareholders loans (Note d)
Facilities................................................ 610,000 --
Amounts drawn down........................................ 260,000 --
</TABLE>

F-69
<PAGE> 239
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(a) Certain operating expenses of the Company are charged by affiliates for
providing management and treasury services on a cost reimbursement basis.
Following the Reorganisation, a similar arrangement is in place for a period of
time under a service agreement.

(b) Certain operating expenses of the Company are charged by an affiliate
for providing operating facilities on a cost reimbursement basis. Following the
Reorganisation, a similar arrangement is in place for a period of time under a
service agreement.

(c) An affiliate under the common control of Hutchison Whampoa Limited has
issued guarantees and counter indemnities in respect of facilities amounting to
$100,000 extended to the Company. The guarantee line facilities utilized by the
Company as of June 30, 2000 were $36,816. The Company is not charged for these
guarantees.

(d) In May 2000, the Company obtained loan facilities with shareholders or
affiliates under the common control of the shareholders. The shareholder loans
bear interest at Hongkong Interbank Offer Rate ("HIBOR"), the average rate of
which was approximately 6.8% during the period ended June 30, 2000 and the
Company is obligated to repay the loans with the amount by which any proceeds
received by the Company from third party financings or from a public offering
exceed the Company's then current capital and operating expenditure
requirements. These facilities and the amounts drawn down are pro-rata to the
respective shareholding of Hutchison Whampoa Limited and Global Crossing in the
Company.

During the period ended 30 June 1999, the Company had long term loans
payable to affiliates under the common control of Hutchison Whampoa Limited.
These loans, $2,577,161 of which was capitalised on January 12, 2000 comprised
balances of $711,282 and $179,669 bearing interest at HIBOR and HIBOR less 0.25%
respectively and a balance of $1,865,879 which was interest-free.

4. COMMITMENTS AND CONTINGENCIES

(a) The Company is committed under its contracts to purchase property plant
and equipment amounting to approximately $1,282,728 and $818,624 as of June 30,
2000 and 1999, respectively.

(b) The Company has performance guarantees given to:

(i) The Office of the Telecommunications Authority of Hong Kong in
respect of installation of a transmission network totalling
approximately $19,000 as of June 30, 2000.

(ii) Third party network operators in relation to the construction of
exchanges for approximately $5,496 as of June 30, 2000.

(iii) The Government of the HKSAR in respect of installation of the ESD
system amounting to approximately $12,320 of which 15% will be
counter-indemnified by Compaq Computer Limited.

5. SUMMARY OF DIFFERENCES BETWEEN HKGAAP AND USGAAP

(a) The Company's condensed combined financial statements are prepared in
accordance with accounting principles generally accepted in Hong Kong
("HKGAAP"), which differ in some respects from accounting principles generally
accepted in the United States of America ("USGAAP"). Any

F-70
<PAGE> 240
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

differences in accounting principles as they pertain to the accompanying
condensed combined financial statements were immaterial except as described
below:

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------------
NOTE 2000 1999
---- ------------ ----------
<S> <C> <C> <C>
Net loss under HKGAAP.................................... $ (73,007) $ (95,425)
USGAAP adjustments:
Capitalized interest................................... (i) 692 692
General provisions..................................... (ii) (22,845) 831
Depreciation........................................... (iii) (35,673) (20,040)
----------- ---------
Net loss under USGAAP.................................... $ (130,833) $(113,942)
=========== =========

Total owners' surplus under HKGAAP....................... $ 5,229,830
USGAAP adjustments:
Capitalized interest................................... (i) (11,765)
General provisions..................................... (ii) 19,990
Depreciation........................................... (iii) (124,659)
Prepaid capacity and services.......................... (iv) (2,722,300)
Deferred tax asset under USGAAP........................ (v) 330,083
Deferred tax liability under USGAAP.................... (v) (276,845)
Valuation allowance.................................... (v) (53,328)
-----------
Total owners' surplus under USGAAP....................... $ 2,391,096
===========
</TABLE>

Under HKGAAP, the statement of cash flows should be presented under the
following five standard headings: (a) operating activities; (b) returns on
investments and servicing of finance; (c) taxation; (d) investing activities;
and (e) financing. Under USGAAP, only three categories of cash flow activities
are presented: (a) operating; (b) investing; and (c) financing. Cash flows from
returns on investments and servicing of finance and taxation would be classified
under USGAAP as either operating, investing or financing activities based on the
nature of the specific items. For example, under USGAAP, operating activities
would include interest received, dividends received from associated companies
and operating interest and profits tax paid, while investing activities would
include capitalized interest paid, and financing activities would include
ordinary and special interim dividends paid. Additionally, HKGAAP includes bank
overdrafts within the definition of cash and cash equivalents, whereas USGAAP
classifies bank overdrafts as part of financing activities. Also, under HKGAAP
operating profit is reconciled to cash flows provided by/used in operating
activities, while under USGAAP net income is adopted in place of operating
profit. The cash flow data by operating, investing and financing activities in
accordance with USGAAP are summarized below:

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------------
2000 1999
----------- -----------
<S> <C> <C>
Net cash (used)/provided by:
Operating activities..................................... $ (21,140) $ (83,054)
Investing activities..................................... (438,506) (372,250)
Financing activities..................................... 628,380 455,178
--------- ---------
Increase/(decrease) in cash and cash equivalents......... 168,734 (126)
Cash and cash equivalents at beginning of period......... 256 328
--------- ---------
Cash and cash equivalents at end of period............... $ 168,990 $ 202
========= =========
</TABLE>

F-71
<PAGE> 241
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(i) Capitalized interest

Under HKGAAP, the Company has capitalized certain interest costs incurred
during the period from the date the assets were available for use until the date
of full commercial operations.

Under USGAAP, the interest would not qualify for capitalization in
property, plant and equipment.

(ii) General provisions

There is no prescriptive accounting standard in relation to recording
provisions in HKGAAP and provisions are recorded based on estimated liabilities.

Under the more prescriptive requirements of USGAAP certain provisions
recorded by the Company would not have been recorded.

(iii) Depreciation

The Company commences depreciation of network assets from the date of full
commercial operations and calculates depreciation on a proportionate
straight-line basis taking into account the number of subscribers compared to
the forecast capacity number of subscribers.

Under USGAAP depreciation must commence from the date the asset is
available for use and be calculated on a straight line basis.

(iv) Prepaid capacity and services

Prepaid capacity and services of $2,722,300 is to be contributed by one of
the Company's shareholders in return for shares issued by the Company on January
12, 2000. Under HKGAAP this non-cash consideration contributed in return for
shares issued has been recorded based on the valuation with reference to the
Agreement, and is recognised immediately on the issue of the shares. Under
USGAAP this non-cash consideration will be recorded when received and the
prepaid capacity and services will be capitalized and amortized or expensed to
the statement of Operations, depending on the assets or services received and
the requirements of USGAAP. Accordingly since the Company did not have the use
of the prepaid capacity and services, prior to March 31, 2000 no capital
contribution has been recorded in the condensed combined financial statements as
of June 30, 2000.

(v) Deferred tax

Under HKGAAP, deferred taxation is accounted for at the current taxation
rate in respect of timing differences between profit as computed for taxation
purposes and profit as stated in the accounts to the extent that a liability or
an asset is expected to be payable or receivable in the foreseeable future.

Under USGAAP, the Company is required to recognize deferred tax assets and
liabilities for the expected future tax consequences of all temporary
differences between the book and tax basis of assets and liabilities and tax
loss carryforwards. A valuation allowance is established for deferred tax assets
where it is considered more likely than not that the asset will not be realized.

(b) Financial instruments

(i) Financial assets and liabilities

F-72
<PAGE> 242
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

amounts due to affiliates under the control of Hutchison Whampoa Limited and
long term loans from shareholders as described in note 3(d). The fair value of
all other financial instruments approximate their carrying amounts due to the
nature or short maturity of these instruments.

(ii) Concentration of credit risk

Financial instruments which potentially subject the Company to
concentration of credit risk consist principally of cash and cash equivalents,
trade receivables and deposits, prepayments and other receivables.

Cash and cash equivalents -- substantially all the Company's cash and bank
balances are placed with a number of international banks in Hong Kong to which
the Company believes its exposure to risk is limited.

Trade receivables -- these mainly represent service fee receivables from
the Company's customers in Hong Kong.

Deposits, prepayments and other receivable -- these are spread among
numerous third parties.

The Company conducts its business in one territory, Hong Kong and has
derived its revenue principally from the provision of international services,
local fixed network services and multimedia services to customers. These are its
three operating segments. For management purposes the results of these three
operating segments are analyzed separately. Certain of the assets and
liabilities of the international services and local fixed network services
segments are shared and grouped together for management purposes. The segmental
information for identifiable assets and capital expenditures are based on the
grouping together of the assets and liabilities of international services and
local fixed network services. Segmental information in relation to revenues,
operating income/(loss), and depreciation is provided for each of the three
operating segments. Depreciation on separately identifiable property, plant and
equipment is charged to operating segments on an actual basis. Depreciation in
respect of shared assets is allocated to operating segments by reference to the
respective allocation percentages fixed in respect of each cost on the basis of
projected time consumption of services and facilities by the business operation
sharing the relevant services and facilities.

The Company is based in Hong Kong and its accounting records and management
information is based on accounting principles generally accepted in Hong Kong.
FAS 131 "Disclosures about Segments of an Enterprise and Related Information"
requires that the segmental information disclosed be based on the information
used by the Company's chief operating decision maker for evaluating segmental
performance and deciding how to allocate resources to segments. Accordingly, the
information presented below is prepared in accordance with HKGAAP.

F-73
<PAGE> 243
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Summarized financial information by business segment is as follows:

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
OPERATING
REVENUES INCOME/(LOSS) DEPRECIATION
-------- ------------- -------------
<S> <C> <C> <C>
SIX MONTHS ENDED JUNE 30, 2000
International services...................... $240,337 26,737 13,438
Local fixed network services................ 193,119 (36,652) 23,239
Multimedia services......................... 31,744 (51,066) 3,736
ESD services................................ -- (14,779) 125
-------- -------- -------
$465,200 $(75,760) $40,538
======== ======== =======
SIX MONTHS ENDED JUNE 30, 1999
International services...................... $285,119 36,276 13,500
Local fixed network services................ 98,776 (70,794) 13,372
Multimedia services......................... 9,241 (37,691) 992
-------- -------- -------
$393,136 $(72,209) $27,864
======== ======== =======
</TABLE>

<TABLE>
<CAPTION>
IDENTIFIABLE CAPITAL
ASSETS EXPENDITURE
------------ -----------
<S> <C> <C>
SIX MONTHS ENDED JUNE 30, 2000
International services and local fixed network services.... $5,892,333 $391,138
Multimedia services........................................ 60,331 21,049
ESD Services............................................... 17,342 17,408
---------- --------
$5,970,006 $429,595
========== ========
SIX MONTHS ENDED JUNE 30, 1999
International services and local fixed network services.... $333,297
Multimedia services........................................ 6,129
--------
$339,426
========
</TABLE>

Reconciliation of segment operating loss to net loss before tax

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
2000 1999
--------- ---------
<S> <C> <C>
Operating loss............................................. $ (75,760) $ (72,209)
Interest income............................................ 4,858 221
Interest expense........................................... (2,105) (23,437)
--------- ---------
Net loss before tax under HKGAAP........................... (73,007) (95,425)
Effect of USGAAP adjustments:.............................. (57,826) (18,517)
--------- ---------
Net loss under USGAAP...................................... $(130,833) $(113,942)
========= =========
</TABLE>

The Company derives revenues from customers located primarily in Hong Kong
and the Company's long lived assets are located primarily in the HKSAR.

F-74
<PAGE> 244
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(d) Recently adopted and new accounting standard in USGAAP.

SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", as amended by SFAS No. 137 "Accounting for Derivative Instruments
and Hedging Activities -- Deferral of the Effective Date of SFAS No. 133", is
effective for fiscal years beginning after June 15, 2000. This statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. It requires that an entity recognizes all derivatives as
either assets or liabilities in the statement of financial position and measures
those instruments at fair value. The Company has evaluated the requirements of
SFAS No. 133 and believes that, since it currently does not utilize derivative
instruments in its operations, the adoption of this new standard would not have
a material impact on the condensed combined financial statements.

(e) Operating lease commitments

Under HKGAAP, commitments under operating leases represent payments in the
next twelve months under non cancellable operating leases.

Under USGAAP, commitments under operating leases represent minimum future
rented payments in total and for each of the next five years for operating
leases with non-cancellable operating leases with lease terms in excess of one
year as follows:-

<TABLE>
<S> <C>
For the six months ending December 31, 2000.............. $ 13,223
2001..................................................... 28,383
2002..................................................... 15,007
2003..................................................... 7,946
2004..................................................... 6,788
Thereafter............................................... 35,361
--------
$106,708
========
</TABLE>

F-75
<PAGE> 245

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Hutchison Global Crossing Holdings Limited
(formerly known as HCL Holdings Limited)

We have audited the accompanying combined balance sheets of Hutchison
Global Crossing Holdings Limited and its subsidiaries (the "Company") as of
December 31, 1999, 1998 and 1997 and the related combined statement of
operations, owner's deficit and cash flows for each of the three years ended
December 31, 1999, all expressed in Hong Kong dollars. These combined financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in Hong Kong, which are substantially similar to those generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of the Company
as of December 31, 1999, 1998 and 1997 and the combined results of their
operations, owner's deficit and cash flows for each of the three years ended
December 31, 1999 in conformity with accounting principles generally accepted in
Hong Kong.

Accounting principles generally accepted in Hong Kong vary in some respects
from accounting principles generally accepted in the United States. The
application of the latter would have affected the determination of combined net
income expressed in Hong Kong Dollars for each of the three years ended December
31, 1999, 1998 and 1997 and the determination of owner's deficit and combined
financial position also expressed in Hong Kong Dollars at December 31, 1999,
1998 and 1997 to the extent summarized in Note 19 to the combined financial
statements.

PRICEWATERHOUSECOOPERS
Certified Public Accountants

Hong Kong
April 15, 2000

F-76
<PAGE> 246

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

COMBINED BALANCE SHEETS
(IN THOUSANDS OF HONG KONG DOLLARS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
NOTE 1999 1998 1997
---- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash at bank................................ $ 256 $ 328 $ 20,774
Trade accounts receivable................. 6 34,464 40,379 96,182
Due from affiliates....................... 7 59,155 14,724 188,217
Other assets and prepaid costs............ 38,343 15,296 16,257
---------- ---------- ----------
Total current assets.............. 132,218 70,727 321,430
Deferred expenditure........................ 4 567,199 632,849 398,801
Property, plant and equipment............... 5 2,478,444 1,678,015 889,740
---------- ---------- ----------
Total assets...................... $3,177,861 $2,381,591 $1,609,971
========== ========== ==========
LIABILITIES:
Current liabilities:
Bank overdraft............................ $ 2,483 $ -- $ 1,556
Accounts payable and accrued
liabilities............................ 8 315,049 294,568 365,788
Deferred income........................... 44,311 7,340 6,387
Short term loan from the Excluded
Business............................... 9 -- 154,567 220,538
Due to affiliates......................... 10 4,860 68,088 100
---------- ---------- ----------
Total current liabilities......... 366,703 524,563 594,369
Long term loan from an affiliate............ 11 -- 629,682 471,482
Long term loan from HCLNP's former
partners.................................. 12 174 1,517,825 840,827
Long term loan from immediate holding
company................................... 13 3,377,775 -- --
---------- ---------- ----------
Total liabilities................. $3,744,652 $2,672,070 $1,906,678
========== ========== ==========
OWNER'S DEFICIT:
Share capital, one share of US$1,
authorized, issued and fully paid......... 14 $ -- $ -- $ --
Accumulated deficit......................... (566,791) (290,479) (296,707)
---------- ---------- ----------
Total owner's deficit............. (566,791) (290,479) (296,707)
---------- ---------- ----------
Total liabilities and owner's
deficit......................... $3,177,861 $2,381,591 $1,609,971
========== ========== ==========
</TABLE>

See accompanying notes to the combined financial statements
which are an integral part of these statements.

F-77
<PAGE> 247

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF HONG KONG DOLLARS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Revenues......................................... $ 840,512 $ 950,120 $1,262,106
Operating expenses:
Cost of services, exclusive of depreciation and
amortization shown below.................... 726,948 937,639 1,377,444
Sales, general and administrative.............. 210,678 163,216 169,205
Amortization of deferred expenditure........... 65,650 7,884 7,884
Depreciation of property, plant and
equipment................................... 59,369 27,018 22,260
Provision for doubtful accounts................ 12,808 8,478 14,017
---------- ---------- ----------
Total operating expenses......................... 1,075,453 1,144,235 1,590,810
---------- ---------- ----------
Operating loss......................... (234,941) (194,115) (328,704)
Other income (expense):
Interest income................................ 779 504 658
Interest expense............................... (47,343) (52,837) (37,634)
Expenditure deferred during the year........... -- 241,932 199,278
Interest expense capitalized in property, plant
and equipment............................... -- 10,744 3,098
Long term loan waived by immediate holding
company..................................... 5,193 -- --
---------- ---------- ----------
Net (loss)/profit before tax........... (276,312) 6,228 (163,304)
Provision for tax................................ -- -- --
---------- ---------- ----------
Net (loss)/profit...................... $ (276,312) $ 6,228 $ (163,304)
========== ========== ==========
</TABLE>

See accompanying notes to the combined financial statements
which are an integral part of these statements.

F-78
<PAGE> 248

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

COMBINED STATEMENT OF CHANGES IN OWNER'S EQUITY/(DEFICIT)
(IN THOUSANDS OF HONG KONG DOLLARS)

<TABLE>
<CAPTION>
ACCUMULATED
DEFICIT
-----------
<S> <C>
Owner's deficit as of January 1, 1997....................... $(133,403)
Net loss from combined statement of operations............ (163,304)
---------
Owner's deficit as of December 31, 1997..................... (296,707)
Net profit from combined statement of operations.......... 6,228
---------
Owner's deficit as of December 31, 1998..................... (290,479)
Net loss from combined statement of operations............ (276,312)
---------
Owner's deficit as of December 31, 1999..................... $(566,791)
=========
</TABLE>

See accompanying notes to the combined financial statements
which are an integral part of these statements.

F-79
<PAGE> 249

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF HONG KONG DOLLARS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
NOTE 1999 1998 1997
---- ----------- --------- ---------
<S> <C> <C> <C> <C>
Net cash (outflow)/inflow from operating
activities................................ (a) $ (159,585) $ 244,952 $ 24,527
----------- --------- ---------
Returns on investments and servicing of
finance
Interest received......................... 779 504 658
Interest paid (including amounts
capitalized)........................... (47,343) (52,837) (37,634)
----------- --------- ---------
Net cash outflow from returns on investments
and servicing of finance.................. (46,564) (52,333) (36,976)
----------- --------- ---------
Investing activities
Payment for deferred expenditure.......... -- (224,549) (187,915)
Purchase of fixed assets.................. (887,738) (759,401) (541,878)
Proceeds on disposals of fixed assets..... 15,457 3,214 72
----------- --------- ---------
Net cash outflow from investing
activities................................ (872,281) (980,736) (729,721)
----------- --------- ---------
Net cash outflow before financing........... (1,078,430) (788,117) (742,170)
----------- --------- ---------
Financing................................... (b)
(Repayment of)/proceeds from short term
loans from the Excluded Business....... (154,567) (65,971) 113,899
Long term loan (repaid to)/borrowed from
an affiliate........................... (629,682) 158,200 56,733
Long term loan (repaid to)/borrowed from
HCLNP's former partners................ (1,517,651) 676,998 589,146
Long term loan borrowed from immediate
holding company........................ 3,377,775 -- --
----------- --------- ---------
Net cash inflow from financing.............. 1,075,875 769,227 759,778
----------- --------- ---------
(Decrease)/increase in cash and cash
equivalents............................... (2,555) (18,890) 17,608
Cash and cash equivalents at beginning of
year...................................... 328 19,218 1,610
----------- --------- ---------
Cash and cash equivalents at end of year.... $ (2,227) $ 328 $ 19,218
=========== ========= =========
Analysis of the balances of cash and cash
equivalents:
Bank balances............................. $ 256 $ 328 $ 20,774
Bank overdraft............................ (2,483) -- (1,556)
----------- --------- ---------
$ (2,227) $ 328 $ 19,218
=========== ========= =========
</TABLE>

See accompanying notes to the combined financial statements
which are an integral part of these statements.

F-80
<PAGE> 250

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

COMBINED STATEMENTS OF CASH FLOWS -- (CONTINUED)
(IN THOUSANDS OF HONG KONG DOLLARS)

NOTES TO THE COMBINED STATEMENTS OF CASH FLOWS

(a) Reconciliation of net profit/(loss) before tax to net cash inflow/(outflow)
from operating activities

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Net (loss)/profit before tax......................... $(276,312) $ 6,228 $(163,304)
Amortization of deferred expenditure................. 65,650 7,884 7,884
Depreciation of property, plant and equipment........ 59,369 27,018 22,260
Loss/(gain) on disposals of property, plant and
equipment.......................................... 710 (549) (40)
Interest income...................................... (779) (504) (658)
Interest expense..................................... 47,343 24,710 23,173
Decrease in trade accounts receivable........... 5,915 55,803 12,388
(Increase)/decrease in due from affiliates...... (44,431) 173,493 (38,365)
(Increase)/decrease in other assets and prepaid
costs......................................... (23,047) 961 (6,956)
Increase/(decrease) in accounts payable and
accrued liabilities........................... 32,254 (119,033) 161,658
Increase/(decrease) in deferred income.......... 36,971 953 6,387
(Decrease) increase in due to affiliates........ (63,228) 67,988 100
--------- --------- ---------
Net cash (outflow)/inflow from operating
activities............................... $(159,585) $ 244,952 $ 24,527
========= ========= =========
</TABLE>

(b) Analysis of changes in financing during the year

<TABLE>
<CAPTION>
LONG TERM LONG TERM
SHORT TERM LOAN FROM LOAN FROM
LOAN FROM THE LONG TERM HCLNP'S IMMEDIATE
EXCLUDED LOAN FROM AN FORMER HOLDING
BUSINESS AFFILIATE PARTNERS COMPANY
------------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
At January 1, 1997................... $ 106,639 $ 414,749 $ 251,681 $ --
Cash inflows from financing.......... 113,899 56,733 589,146 --
--------- --------- ----------- ----------
At December 31, 1997................. 220,538 471,482 840,827 --
Cash inflows/(outflows) from
financing.......................... (65,971) 158,200 676,998 --
--------- --------- ----------- ----------
At December 31, 1998................. 154,567 629,682 1,517,825 --
Cash inflows/(outflows) from
financing.......................... (154,567) (629,682) (1,517,651) 3,377,775
--------- --------- ----------- ----------
At December 31, 1999................. $ -- $ -- $ 174 $3,377,775
========= ========= =========== ==========
</TABLE>

F-81
<PAGE> 251

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS

(THROUGHOUT THESE NOTES TO COMBINED FINANCIAL STATEMENTS, REFERENCES TO "$" ARE
TO THOUSANDS OF HONG KONG DOLLARS UNLESS OTHERWISE SPECIFIED)

1. BUSINESS, ORGANIZATION AND BASIS OF PREPARATION

Under the Agreement, the following transactions have occurred:

(i) With effect from November 1, 1999 the business of the provision
of paging, call centers and other ancillary services and the sales of
mobile phones, pagers and accessories and certain other retailing
activities carried on and operated by a division of the Company, and
certain other inactive subsidiaries of the Company (the "Excluded
Business"), were transferred to affiliates under the common control of
Hutchison Whampoa Limited for an aggregate consideration of $1,705,220
which corresponded to the net liabilities of the Excluded Business. The
operation, assets and liabilities of the Excluded Business, have not
been included in these combined financial statements on the basis that
this business was operated as a separate division with dedicated
management.

F-82
<PAGE> 252
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(ii) On November 24, 1999, the Company and its subsidiaries
acquired a 99.99% interest in HCL Network Partnership ("HCLNP"), a
partnership between three affiliates under the common control of
Hutchison Whampoa Limited which owns the network equipment used by the
Company to provide local fixed network services, for $2,195,361
consideration. This consideration was satisfied by the transfer of
capital and assumption of a loan payable by HCLNP to its former
partners, which are companies under the common control of Hutchison
Whampoa Limited, and has been capitalized as described in note 1(b)
below.

The operations, assets and liabilities of HCLNP have been included in
the combined financial statements in a manner similar to a pooling of
interests. For the periods up to November 24, 1999, the taxable losses of
HCLNP were utilized by its former partners for nil consideration and are
not available for use by the Company.

(b) In connection with the Reorganization, the Company's long term
loan from immediate holding company amounting to $3,325,629 was capitalized
on January 12, 2000 through the issue of 239 new shares in the Company to
Hutchison Telecommunications Limited.

(c) Upon closure of the Agreement on January 12, 2000, Global Crossing
acquired 80 shares in the Company from Hutchison Telecommunications Limited
and directly provided to Hutchison Whampoa Limited US$400 million in Global
Crossing convertible preferred stock. Additionally the Company has issued
80 shares to Global Crossing in return for consideration of $3,111,200
(US$400 million), which was settled by cash of $388,900 (US$50 million) and
$2,722,300 (US$350 million) worth of rights to use Global Crossing's
international capacity and technology and commercial expertise in relation
to the connection, operation and marketing of a media distribution center
in Hong Kong.

Details of the Company's major subsidiaries after the Reorganization are
described in note 3 to the combined financial statements.

The Company had a net (loss)/profit of ($276,312), $6,228 and ($163,304)
for the three years ended December 31, 1999, 1998 and 1997 respectively and at
December 31, 1999, the Company had an owner's deficit of $566,791. The Company
was financed by way of intercompany loans from companies under the common
control of Hutchison Whampoa Limited. As set out in note 1(b) the loan from
immediate holding company amounting to $3,325,629 was capitalized through the
issue of new shares on January 12, 2000. The Company is reviewing the
availability of alternative sources of finance so as to enable it to meet its
liabilities as they fall due and to continue in business for a period of at
least twelve months from December 31, 1999. The Company is reviewing alternative
sources such as an Initial Public Offering of equity, raising debt either by way
of the capital markets, syndicated loans or from the Company's bankers, and
access to finance from the Company's shareholders. Based on informal valuations
of the Company received from the Company's financial advisers and the Company's
shareholders' history of raising finance, the Company expects a successful
outcome will result from this review and, on that basis, the Company will be
able to continue in business for a period of at least twelve months from
December 31, 1999. Consequently the Combined Financial Statements have been
prepared on a going concern basis.

2. SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with accounting
principles generally accepted in Hong Kong ("HKGAAP"). The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent

F-83
<PAGE> 253
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

assets and liabilities at the date of the financial statements, as well as the
reported amounts of revenues and expenses during the reporting years. Actual
results could differ from those estimates. The significant accounting policies
are summarized as follows.

(a) Basis of combination

The combined financial statements include the accounts of Hutchison Global
Crossing Holdings and its wholly owned subsidiaries excluding the Excluded
Business and including HCLNP as a result of the Reorganization described in note
1. All significant transactions within the Company have been eliminated.

(b) Deferred expenditures

Deferred expenditures represent the pre-operating expenses, including
interest costs, of international services, local fixed network services and
multimedia services. Pre-operating expenses are amortized over 10 years from the
date of full commercial operations of each business line.

Property, plant and equipment other than construction in progress are
stated at cost less accumulated depreciation.

Leasehold land is amortized over the remaining period of the lease.
Leasehold improvements are depreciated over the unexpired period of the lease or
15%, whichever is shorter.

Exchange equipment is depreciated at rates of 6.67% per annum on either a
straight-line basis, or a proportionate straight line basis taking into account
the number of subscribers compared to the forecast number of subscribers.

Transmission, plant and site equipment is depreciated at rates of 4% to 20%
per annum on either a straight-line basis, or a proportionate straight line
basis taking into account the number of subscribers compared to the forecast
number of subscribers.

Other fixed assets are depreciated to write off their costs over their
estimated useful lives on a straight-line basis at the following annual rates
from the date of commencement of full commercial operations:

Maintenance costs are expensed as incurred.

F-84
<PAGE> 254
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(d) Cash and cash equivalents

The Company considers cash at bank and bank overdrafts to be cash
equivalents.

(e) Revenues

Revenues in respect of international services, local fixed network services
and multimedia services are recognized when the services are rendered.

Interest income is recognized on an accrual basis.

(f) Interest costs

(g) Advertising and promotion costs

Advertising and promotion costs are expensed as incurred. Advertising and
promotion costs amounted to $70,256, $36,642 and $33,276 for each of the three
years ended December 31, 1999, 1998 and 1997 respectively.

(h) Retirement benefit plans

The Company's employees are members of two pension schemes administered by
an affiliate which include the employees of the Company and of a number of
affiliates. The Company contributes to these schemes based upon notification of
charges from the administering company. The contributions are charged
immediately to the statement of operations.

The retirement contributions incurred and borne by the Company were $8,980,
$12,407 and $7,226 for each of the three years ended December 31, 1999, 1998 and
1997 respectively.

(i) Allowance for doubtful accounts

An allowance for doubtful accounts is provided based on an evaluation of
the recoverability of the receivables at the balance sheet date. Trade accounts
receivable are stated net of such allowance.

(j) Deferred income

Subscription income and income billed in advance is deferred and credited
to the statement of operations on a straight-line basis over the related period.

(k) Operating leases

(l) Translation of foreign currencies

The functional currency of the Company's operations is the Hong Kong
dollar.

Transactions in foreign currencies are translated at exchange rates ruling
at the transaction dates. Monetary assets and liabilities expressed in foreign
currencies at the balance sheet date are

F-85
<PAGE> 255
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

translated at rates of exchange ruling at the balance sheet date. All exchange
differences arising are dealt with in the statement of operations.

(m) Income taxes

3. PARTICULARS OF SUBSIDIARIES

Immediately following the completion of the Reorganization described in
note 1, and for the purpose of these combined financial statements, the Company
had the following operating subsidiaries:

<TABLE>
<CAPTION>
LAW UNDER WHICH PERCENTAGE INTEREST
NAME OF PARTNERSHIP ----------------------
PARTNERSHIP ESTABLISHED PRINCIPAL ACTIVITIES DIRECTLY INDIRECTLY
----------- --------------- -------------------- -------- ----------
<S> <C> <C> <C> <C>
HCL Network Partnership Hong Kong Ownership of fixed line network -- 99.99
equipment
</TABLE>

<TABLE>
<CAPTION>
PERCENTAGE OF
ORDINARY SHARES HELD
PLACE OF ----------------------
NAME OF COMPANY INCORPORATION PRINCIPAL ACTIVITIES DIRECTLY INDIRECTLY
--------------- ------------- -------------------- -------- ----------
<S> <C> <C> <C> <C>
Hutchison Global Crossing Hong Kong Provision of fixed network and 100 --
Limited (formerly known as international services
Hutchison Communications
Limited)
Hutchison Multimedia Services Hong Kong Provision of multimedia services -- 100
Limited
ESD Services Limited (formerly Hong Kong Implementation of the operation -- 100
known as Timbo Star of the HKSAR's Electronic
Investment Limited) Service Delivery system
</TABLE>

4. DEFERRED EXPENDITURE

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
As of January 1................................. $632,849 $398,801 $207,407
Additions....................................... -- 241,932 199,278
Amortization.................................... (65,650) (7,884) (7,884)
-------- -------- --------
As of December 31............................... $567,199 $632,849 $398,801
======== ======== ========
</TABLE>

F-86
<PAGE> 256

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
OFFICE TRANSMISSION
LEASEHOLD FURNITURE AND MOTOR COMPUTER CUSTOMER EXCHANGE PLANT AND SITE
IMPROVEMENTS EQUIPMENT VEHICLES EQUIPMENT ACCESS NETWORK EQUIPMENT EQUIPMENT
------------ ------------- -------- --------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
COST
As of January 1, 1997.......... $ 1,512 $ 1,990 $ 355 $ 3,428 $ 65,879 $ 484 $ 185,966
Additions...................... 3,958 -- 2,082 36,929 130,409 125,938 80,526
Disposals...................... -- -- (81) -- -- -- --
Reclassification............... 13,377 -- -- 29,374 (64,769) 133,993 (177,854)
Transfer from construction in
progress..................... 180 -- -- 284 1,429 22,683 56,412
------- ------- ------ -------- -------- -------- ---------
As of December 31, 1997........ $19,027 $ 1,990 $2,356 $ 70,015 $132,948 $283,098 $ 145,050
======= ======= ====== ======== ======== ======== =========
As of December 31, 1997........ $19,027 $ 1,990 $2,356 $ 70,015 $132,948 $283,098 $ 145,050
Additions...................... 7,535 -- -- 16,982 164,066 127,020 122,821
Disposals...................... -- (28) -- (3,387) -- -- --
Transfer from construction in
progress..................... 1,062 -- -- 814 31,836 36,465 18,469
------- ------- ------ -------- -------- -------- ---------
As of December 31, 1998........ $27,624 $ 1,962 $2,356 $ 84,424 $328,850 $446,583 $ 286,340
======= ======= ====== ======== ======== ======== =========
As of December 31, 1998........ $27,624 $ 1,962 $2,356 $ 84,424 $328,850 $446,583 $ 286,340
Additions...................... 5,026 -- 863 33,681 140,988 150,188 80,360
Transfer from construction in
progress..................... -- -- -- 1,083 252,389 37,266 222,791
Disposals...................... (1,991) (1,962) (274) (24,177) (681) (2,676) (2)
------- ------- ------ -------- -------- -------- ---------
As of December 31, 1999........ $30,659 $ -- $2,945 $ 95,011 $721,546 $631,361 $ 589,489
======= ======= ====== ======== ======== ======== =========
ACCUMULATED DEPRECIATION
As of January 1, 1997.......... $ 39 $ 592 $ 178 $ 1,340 $ -- $ 41 $ 18,212
Depreciation for the year...... 2,188 301 75 10,463 -- 8,994 239
Disposals...................... -- -- (49) -- -- -- --
Reclassification............... 2,272 -- -- 5,654 -- 10,046 (17,972)
------- ------- ------ -------- -------- -------- ---------
As of December 31, 1997........ $ 4,499 $ 893 $ 204 $ 17,457 $ -- $ 19,081 $ 479
======= ======= ====== ======== ======== ======== =========
As of December 31, 1997........ $ 4,499 $ 893 $ 204 $ 17,457 $ -- $ 19,081 $ 479
Depreciation for the year...... 3,429 293 49 13,105 -- 9,862 280
Disposals...................... -- (21) -- (761) -- -- --
------- ------- ------ -------- -------- -------- ---------
As of December 31, 1998........ $ 7,928 $ 1,165 $ 253 $ 29,801 $ -- $ 28,943 $ 759
======= ======= ====== ======== ======== ======== =========
As of December 31, 1998........ $ 7,928 $ 1,165 $ 253 $ 29,801 $ -- $ 28,943 $ 759
Depreciation for the year...... 4,745 243 571 18,379 9,479 18,431 7,038
Disposals...................... (1,945) (1,408) (275) (12,020) -- (246) --
------- ------- ------ -------- -------- -------- ---------
As of December 31, 1999........ $10,728 $ -- $ 549 $ 36,160 $ 9,479 $ 47,128 $ 7,797
======= ======= ====== ======== ======== ======== =========

LAND & CONSTRUCTION
BUILDING IN PROGRESS TOTAL
-------- ------------ ----------
<S> <C> <C> <C>
COST
As of January 1, 1997.......... $ -- $ 88,346 $ 347,960
Additions...................... -- 204,632 584,474
Disposals...................... -- -- (81)
Reclassification............... -- 65,879 --
Transfer from construction in
progress..................... -- (80,988) --
------- --------- ----------
As of December 31, 1997........ $ -- $ 277,869 $ 932,353
======= ========= ==========
As of December 31, 1997........ $ -- $ 277,869 $ 932,353
Additions...................... -- 379,534 817,958
Disposals...................... -- (32) (3,447)
Transfer from construction in
progress..................... -- (88,646) --
------- --------- ----------
As of December 31, 1998........ $ -- $ 568,725 $1,746,864
======= ========= ==========
As of December 31, 1998........ $ -- $ 568,725 $1,746,864
Additions...................... 2,182 462,677 875,965
Transfer from construction in
progress..................... 36,766 (550,295) --
Disposals...................... -- (298) (32,061)
------- --------- ----------
As of December 31, 1999........ $38,948 $ 480,809 $2,590,768
======= ========= ==========
ACCUMULATED DEPRECIATION
As of January 1, 1997.......... $ -- $ -- $ 20,402
Depreciation for the year...... -- -- 22,260
Disposals...................... -- -- (49)
Reclassification............... -- -- --
------- --------- ----------
As of December 31, 1997........ $ -- $ -- $ 42,613
======= ========= ==========
As of December 31, 1997........ $ -- $ -- $ 42,613
Depreciation for the year...... -- -- 27,018
Disposals...................... -- -- (782)
------- --------- ----------
As of December 31, 1998........ $ -- $ -- $ 68,849
======= ========= ==========
As of December 31, 1998........ $ -- $ -- $ 68,849
Depreciation for the year...... 483 -- 59,369
Disposals...................... -- -- (15,894)
------- --------- ----------
As of December 31, 1999........ $ 483 $ -- $ 112,324
======= ========= ==========
</TABLE>

F-87
<PAGE> 257

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
OFFICE TRANSMISSION
LEASEHOLD FURNITURE AND MOTOR COMPUTER CUSTOMER EXCHANGE PLANT AND SITE
IMPROVEMENTS EQUIPMENT VEHICLES EQUIPMENT ACCESS NETWORK EQUIPMENT EQUIPMENT
------------ ------------- -------- --------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET BOOK VALUE
As of December 31, 1997........ $14,528 $ 1,097 $2,152 $ 52,558 $132,948 $264,017 $ 144,571
======= ======= ====== ======== ======== ======== =========
As of December 31, 1998........ $19,696 $ 797 $2,103 $ 54,623 $328,850 $417,640 $ 285,581
======= ======= ====== ======== ======== ======== =========
As of December 31, 1999........ $19,931 $ -- $2,396 $ 58,851 $712,067 $584,233 $ 581,692
======= ======= ====== ======== ======== ======== =========

LAND & CONSTRUCTION
BUILDING IN PROGRESS TOTAL
-------- ------------ ----------
<S> <C> <C> <C>
NET BOOK VALUE
As of December 31, 1997........ $ -- $ 277,869 $ 889,740
======= ========= ==========
As of December 31, 1998........ $ -- $ 568,725 $1,678,015
======= ========= ==========
As of December 31, 1999........ $38,465 $ 480,809 $2,478,444
======= ========= ==========
</TABLE>

F-88
<PAGE> 258

HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

6. TRADE ACCOUNTS RECEIVABLE

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Trade accounts receivable....................... $ 60,123 $ 68,084 $115,439
Less: allowance for doubtful accounts........... (25,659) (27,705) (19,257)
-------- -------- --------
$ 34,464 $ 40,379 $ 96,182
======== ======== ========
</TABLE>

Allowance for doubtful accounts is analyzed as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C>
As of January 1.................................... $ 27,705 $19,257 $ 5,713
Provision for the year............................. 11,361 8,478 14,017
Amounts written off................................ (13,407) (30) (473)
-------- ------- -------
As of December 31.................................. $ 25,659 $27,705 $19,257
======== ======= =======
</TABLE>

7. DUE FROM AFFILIATES

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
------- ------- --------
<S> <C> <C> <C>
Interest bearing................................... $59,155 $14,677 $ 3,100
Non-interest bearing............................... -- 47 185,117
------- ------- --------
$59,155 $14,724 $188,217
======= ======= ========
</TABLE>

Amounts due from affiliates are unsecured and have no fixed repayment
terms. The interest bearing amounts due from affiliated companies bear interest
at the Hong Kong Interbank Offer Rate ("HIBOR") less 0.25%.

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Payables for acquisition of property plant and
equipment............................................. $ 96,485 $108,258 $ 60,445
Other creditors......................................... 9,309 3,319 35,471
Deposits from other carriers............................ 29,418 28,080 22,702
Accrual for interconnection charges..................... 48,199 71,243 134,350
Accrual for regulation fees............................. 19,141 2,564 94,509
Accrual for professional fees........................... 38,344 34,945 --
Accrual for advertising and promotion expenses.......... 18,088 18,861 --
Other provisions........................................ 56,065 27,298 18,311
-------- -------- --------
$315,049 $294,568 $365,788
======== ======== ========
</TABLE>

9. SHORT TERM LOAN FROM THE EXCLUDED BUSINESS

The short term loan from the Excluded Business is a short term advance
which is unsecured and has no fixed repayment terms. For the period prior to May
1, 1997 and after October 31, 1999, the loan was interest free. From May 1, 1997
till October 31, 1999 the loan bore interest at HIBOR less 0.25%. The average
balance during the interest free period in 1999 was nil.

F-89
<PAGE> 259
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

10. DUE TO AFFILIATES

The amounts due to affiliates are due to companies under the common control
of Hutchison Whampoa Limited, are unsecured, and have no fixed repayment terms.
For the period prior to May 1, 1998 and after November 30, 1999, the amount due
to affiliates were interest free. From May 1, 1998 till November 30, 1999, the
amounts bore interest at HIBOR less 0.25%. The average balance during the
interest free period in 1999 was HK$106,526.

11. LONG TERM LOAN FROM AN AFFILIATE

The long term loan from an affiliate is due to a company under the common
control of Hutchison Whampoa Limited, is unsecured, and has no fixed repayment
terms. For the two years ended December 31, 1999 this loan bore interest at
HIBOR.

12. LONG TERM LOAN FROM HCL NETWORK PARTNERSHIP'S FORMER PARTNERS

Prior to November 24, 1999 the funding for HCLNP has been by way of long
term loans from HCLNP's former partners. The amount is unsecured, interest free
and has no fixed repayment terms.

13. LONG TERM LOAN FROM AN IMMEDIATE HOLDING COMPANY

The long term loan from an immediate holding company is unsecured and
interest free. In connection with the Reorganization, as set out in note 1(b)
above, HK$3,325,629 of the long term loan from an immediate holding company loan
was capitalised through the issue of new shares on January 12, 2000. The average
balance during the year was HK$1,688,888.

14. SHARE CAPITAL

The share capital of the company comprises 1 share of US$1 which is fully
paid.

15. RELATED PARTY TRANSACTIONS

The Company undertook the following transactions with related parties:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Fees to affiliates for the provision of
management and treasury services (Note a)..... $ 34,582 $ 40,272 $ 31,000
-------- -------- --------
Share of common costs allocated from an
affiliate (Note a)............................ 263,996 269,268 249,377
-------- -------- --------
Interest payable to:
-- affiliates................................. 40,451 42,751 30,095
-- the Excluded Business...................... 6,892 10,084 7,532
-------- -------- --------
Interest income receivable from a related
company....................................... 684 431 543
-------- -------- --------
</TABLE>

(a) Certain operating expenses of the Company, along with certain other
affiliates under the control of Hutchison Whampoa Limited, are incurred by a
company under the control of Hutchison Whampoa Limited which provides services
and facilities to the Company and the said other affiliates. These expenses
relate to a number of different cost centers. The Company is charged a share of
these common costs based on the allocation, by reference to the respective
allocation percentages fixed in respect of each cost center, on the basis of
projected time consumption of services and facilities used by the business
operations sharing the relevant services and facilities. Similar arrangements
will be in place, for a period of time following the Reorganization set out in
note 1, until an independent operating structure has been established. The
expenses for the period prior to the Reorganization are not necessarily
indicative of the future expenses to be incurred.

F-90
<PAGE> 260
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(b) An affiliate under the common control of Hutchison Whampoa Limited has
issued guarantees and counter indemnities in respect of guarantee line
facilities amounting to $100,000 extended to the Company. The guarantee line
facilities utilized by the Company as of December 31, 1999 was HK$36,816. The
Company is not charged for these guarantees.

16. TAXES

The company had no taxable income for each of the three years ended
December 31, 1999. The tax provision in the income statement is based on the
notional income tax expense the Company would have had on a stand alone basis.
The provision for income tax for each of the three years ended December 31,
1999, 1998 and 1997 differs from the amount of income tax determined by the
application of Hong Kong statutory income tax rate to pre-tax income as a result
of the following differences:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- ------ --------
<S> <C> <C> <C>
Income tax credit/(charge) at the Hong Kong
statutory rate................................... $ 44,210 $ (996) $ 26,129
Effect of (expenses not deductible for) and income
not chargeable to income tax..................... 1,097 (29) (1,466)
Net deferred tax (asset)/liability not accounted
for.............................................. (45,307) 1,025 (24,663)
-------- ------ --------
Combined statement of operations................... $ -- $ -- $ --
======== ====== ========
</TABLE>

The deferred tax assets and liabilities of the Company at December 31,
1999, 1998 and 1997 were affected by certain intercompany tax sharing
arrangements as follows:

(a) tax losses of HCLNP on or before November 24, 1999 were utilized
by affiliates under the control of Hutchison Whampoa Limited for nil
consideration.

(b) tax losses of the Excluded Business have been retained by the
Company and will be available for use against future profits.

Deferred income tax reflects the tax effect of timing differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and amounts used for income tax purposes and tax loss carryforwards. There is no
limitation in Hong Kong on the period in which the Company's tax loss
carryforwards can be utilized. The following is a summary of the significant
components of the Company's deferred tax assets and liabilities:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
1999 1998 1997
---------------------- ---------------------- ----------------------
ASSETS LIABILITIES ASSETS LIABILITIES ASSETS LIABILITIES
-------- ----------- -------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Tax losses................... $271,389 $ -- $165,744 $ -- $130,520 $ --
Accelerated depreciation
allowances................. -- 251,382 -- 164,155 -- 88,894
Deferred expenditure and
other temporary
differences................ 567 90,751 -- 100,688 -- 63,249
-------- -------- -------- -------- -------- --------
271,956 342,133 165,744 264,843 130,520 152,143
Amount not required to be
provided under HKGAAP...... -- (70,177) -- (99,099) -- (21,623)
-------- -------- -------- -------- -------- --------
Provided..................... $271,956 $271,956 $165,744 $165,744 $130,520 $130,520
======== ======== ======== ======== ======== ========
</TABLE>

F-91
<PAGE> 261
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

17. COMMITMENTS AND CONTINGENCIES

(a) The Company is committed under its contracts to purchase property plant
and equipment amounting to approximately $985,350, $906,790 and $711,768 as of
December 31, 1999, 1998 and 1997 respectively.

(b) The Company has commitments under various operating leases primarily
relating to land and buildings and lease lines in Hong Kong. Operating lease
expenses were $54,281, $34,430 and $27,865 for each of the three years ended
December 31, 1999, 1998 and 1997 respectively.

As of December 31, the Company had commitments to make payments in the next
twelve months under operating leases which expire as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Land and buildings
Within one year................................... $ -- $ 459 $ 459
In the second to fifth years inclusive............ 4,176 2,065 2,065
After the fifth year.............................. -- -- --
------- ------- -------
$ 4,176 $ 2,524 $ 2,524
======= ======= =======
Leased lines
Within one year................................... $ 9,983 $14,973 $ 1,549
In the second to fifth years inclusive............ 12,621 21,060 18,708
After the fifth year.............................. 263 -- --
------- ------- -------
$22,867 $36,033 $20,257
======= ======= =======
</TABLE>

(i) The Office of the Telecommunications Authority of Hong Kong in
respect of installation of a transmission network totalling approximately
$19,000 as of December 31, 1999.

(ii) Third party network operators in relation to the construction of
exchanges for approximately $5,496 as of December 31, 1999.

(iii) The Government of the HKSAR in respect of installation of the
ESD system amounting to approximately $12,320 of which 15% will be
counter-indemnitied by Compaq Computer Limited.

18. SUBSEQUENT EVENTS

(a) In connection with the Reorganisation set out in note 1(a) above, the
Company's long term loan from immediate holding company amounting to $3,325,629
was capitalized through the issue of 239 new shares issued on January 12, 2000.

As set out in note 1(c) above, upon closure of the Agreement on January 12,
2000, Global Crossing acquired 80 shares in the Company from Hutchison
Telecommunications Limited and directly provided to Hutchison Whampoa Limited
US$400 million in Global Crossing convertible preferred stock. Additionally the
Company has issued 80 shares to Global Crossing in return for consideration of
$3,111,200 (US$400 million), which was settled by cash of $388,900 (US$50
million) and $2,722,300 (US$350 million) worth of rights to use Global
Crossing's international capacity and technology and commercial expertise in
relation to the connection, operation and marketing of a media distribution
center in Hong Kong.

F-92
<PAGE> 262
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Following the completion of the above transactions, the Company is a 50:50
joint venture between Global Crossing Limited and Hutchison Whampoa Limited.

(b) ESD Services Limited, a subsidiary of Hutchison Global Crossing
Holdings has proposed to incur capital expenditure on the ESD system amounting
to approximately $80,000 and Compaq Computer Limited is obliged to acquire 15%
of the ordinary share capital of ESD Services Limited.

19. SUMMARY OF DIFFERENCES BETWEEN HKGAAP AND USGAAP

(a) The Company's combined financial statements are prepared in accordance
with accounting principles generally accepted in Hong Kong ("HKGAAP"), which
differ in some respects from accounting principles generally accepted in the
United States of America ("USGAAP"). Any differences in accounting principles as
they pertain to the accompanying combined financial statements were immaterial
except as described below:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
NOTE 1999 1998 1997
---- ----------- --------- ---------
<S> <C> <C> <C> <C>
Net (loss) profit under HKGAAP............. $ (276,312) $ 6,228 $(163,304)
USGAAP adjustments:
Deferred expenditure..................... (i) 65,650 (234,048) (191,394)
Capitalized interest..................... (ii) 1,384 (10,743) (3,098)
General provisions....................... (iii) 9,574 (3,595) 6,686
Depreciation............................. (iv) (45,881) (37,368) (5,737)
Long term loan waived by immediate
holding company....................... (v) (5,193) -- --
----------- --------- ---------
Net loss under USGAAP...................... $ (250,778) $(279,526) $(356,847)
=========== ========= =========

Net loss per share under USGAAP............ $ (250,778) $(279,526) $(356,847)
=========== ========= =========

Total owner's deficit under HKGAAP......... $ (566,791) $(290,479) $(296,707)
USGAAP adjustments:
Deferred expenditure..................... (i) (656,501) (656,501) (414,569)
Accumulated amortization of deferred
Expenditure........................... (i) 89,302 23,652 15,768
Capitalized interest..................... (ii) (12,457) (13,841) (3,098)
General provisions....................... (iii) 42,835 33,261 36,856
Depreciation............................. (iv) (88,986) (43,105) (5,737)
Deferred tax liability not required to be
provided under HKGAAP................. (vi) (70,177) (99,099) (21,623)
Deferred tax effect of USGAAP adjustments
-- reduction in deferred tax liability... 101,409 106,325 60,604
-- valuation allowance................... (31,232) -- --
----------- --------- ---------
Total owner's deficit under USGAAP......... $(1,192,598) $(939,787) $(628,506)
=========== ========= =========
</TABLE>

F-93
<PAGE> 263
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

either operating, investing or financing activities based on the nature of the
specific items. For example, under USGAAP, operating activities would include
interest received, dividends received from associated companies and operating
interest and profits tax paid, while investing activities would include
capitalized interest paid, and financing activities would include ordinary and
special interim dividends paid. Additionally, HKGAAP includes bank overdrafts
within the definition of cash and cash equivalents, whereas USGAAP classifies
bank overdrafts as part of financing activities. Also, under HKGAAP operating
profit is reconciled to cash flows provided by/used in operating activities,
while under USGAAP net income is adopted in place of operating profit. The cash
flow data by operating, investing and financing activities in accordance with
USGAAP are summarized below:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1999 1998 1997
---------- --------- ---------
<S> <C> <C> <C>
Net cash (used)/provided by:
Operating activities....................... $ (206,149) $ (31,928) $(200,364)
Investing activities....................... (872,281) (756,189) (541,806)
Financing activities....................... 1,078,358 767,671 761,334
---------- --------- ---------
(Decrease)/increase in cash and cash
equivalents............................. (72) (20,446) 19,164
Cash and cash equivalents at beginning of
year.................................... 328 20,774 1,610
---------- --------- ---------
Cash and cash equivalents at end of year... $ 256 $ 328 $ 20,774
========== ========= =========
</TABLE>

(i) Deferred expenditure

There is no accounting standard under HKGAAP on accounting for
pre-operating expenditure. The Company adopts the policy that pre-operating
expenses incurred prior to full commercial operations are deferred and amortized
on the straight line basis over a period of 10 years.

Under USGAAP, deferred expenditure should be charged to the statements of
operations as incurred in accordance with Statement of Position 98-5 and should
not be deferred.

(ii) Capitalized interest

The Company has capitalized certain interest costs incurred during the
course of construction of network assets and for the period from the date the
assets were available for use until the date of full commercial operations.

Under USGAAP, the interest would not qualify for capitalization in
property, plant and equipment.

(iii) General provisions

There is no prescriptive accounting standard in relation to recording
provisions in HKGAAP and provisions are recorded based on estimated liabilities.

Under the more prescriptive requirements of USGAAP certain provisions
recorded by the Company would not have been recorded.

(iv) Depreciation

F-94
<PAGE> 264
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Under USGAAP depreciation must commence from the date the asset is
available for use and be calculated on a straight line basis.

(v) Long term loan waived by immediate holding company

Under HKGAAP the long term loan waived by immediate holding company has
been recorded as a credit in the income statement.

Under USGAAP the waiver of a long term loan by a shareholder is required to
be recorded as paid in capital.

(vi) Deferred tax

Under USGAAP, the Company is required to recognize deferred tax assets and
liabilities for the expected future tax consequences of all temporary
differences between the book and tax basis of assets and liabilities and tax
loss carryforwards. A valuation allowance is established for deferred tax asset
where it is considered more likely than not that the asset will not be realized.

(b) Financial instruments

(i) Financial assets and liabilities

Financial assets of the Company include cash at bank, trade accounts
receivable, other assets, prepaid costs and amounts due from affiliates under
the control of Hutchison Whampoa Limited. Financial liabilities of the Company
include bank overdrafts, accounts payable, accrued expenses, amounts due to
affiliates under the control of Hutchison Whampoa Limited, long term loan from
an affiliate under the control of Hutchison Whampoa Limited, long term loan from
HCL Network Partnership's former partners and loan from the Excluded Business.
The fair value of all other financial instruments approximate their carrying
amounts due to the nature or short maturity of these instruments.

(ii) Concentration of credit risk

Trade receivables -- these mainly represent service fee receivables from
the Company's customers in Hong Kong.

Deposits, prepayments and other receivable -- these are spread among
numerous third parties.

The Company conducts its business in one territory, Hong Kong and has
derived its revenue principally from the provision of international services,
local fixed network services and multimedia

F-95
<PAGE> 265
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

services to customers. These are its three operating segments. For management
purposes the results of these three operating segments are analyzed separately.
Certain of the assets and liabilities of the international services and local
fixed network services segments are shared and grouped together for management
purposes. The segmental information for identifiable assets and capital
expenditures are based on the grouping together of the assets and liabilities of
international services and local fixed network services. Segmental information
in relation to revenues, operating income (loss), and depreciation and
amortization is provided for each of the three operating segments. Depreciation
and amortization on separately identifiable property, plant and equipment is
charged to operating segments on an actual basis. Depreciation in respect of
shared assets is allocated to operating segments by reference to the respective
allocation percentages fixed in respect of each cost on the basis of projected
time consumption of services and facilities by the business operation sharing
the relevant services and facilities. No depreciation was charged in respect of
local fixed network services and multimedia services for 1997 and 1998 because
these segments were considered in the pre-operating stage prior to January 1,
1999 and, accordingly, under HKGAAP and in the management accounts, no
depreciation was charged in respect of these segments.

Summarized financial information by business segment is as follows:

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
OPERATING
REVENUES INCOME (LOSS) DEPRECIATION
---------- ------------- ------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
International services..................... $ 561,498 $ 44,884 $25,508
Local fixed network services............... 251,526 (183,097) 31,075
Multimedia services........................ 27,488 (96,728) 2,786
---------- --------- -------
$ 840,512 $(234,941) $59,369
========== ========= =======
YEAR ENDED DECEMBER 31, 1998
International services..................... $ 886,157 $ 53,443 $27,018
Local fixed network services............... 62,889 (234,549) --
Multimedia services........................ 1,074 (13,009) --
---------- --------- -------
$ 950,120 $(194,115) $27,018
========== ========= =======
YEAR ENDED DECEMBER 31, 1997
International services..................... $1,259,837 $(137,181) $22,260
Local fixed network services............... 2,269 (191,523) --
---------- --------- -------
$1,262,106 $(328,704) $22,260
========== ========= =======
</TABLE>

F-96
<PAGE> 266
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
IDENTIFIABLE CAPITAL
ASSETS EXPENDITURE
------------ -----------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1999
International services and local fixed network services.... $3,120,496 $854,091
Multimedia services........................................ 57,365 21,874
---------- --------
$3,177,861 $875,965
========== ========
YEAR ENDED DECEMBER 31, 1998
International services and local fixed network services.... $2,366,348 $810,614
Multimedia services........................................ 15,243 7,344
---------- --------
$2,381,591 $817,958
========== ========
YEAR ENDED DECEMBER 31, 1997
International services and local fixed network services.... $1,609,971 $584,474
Multimedia services........................................ -- --
---------- --------
$1,609,971 $584,474
========== ========
</TABLE>

Reconciliation of segment operating loss to net (loss)/profit before tax

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Operating loss............................... $(234,941) $(194,115) $(328,704)
Interest income.............................. 779 504 658
Interest expense............................. (47,343) (52,837) (37,634)
Expenditure deferred during the year......... -- 241,932 199,278
Interest expense capitalized in property,
plant and equipment........................ -- 10,744 3,098
Long term loan waived........................ 5,193 -- --
--------- --------- ---------
Net (loss) profit before tax under HKGAAP.... (276,312) 6,228 (163,304)
Effect of USGAAP adjustments................. 25,534 (285,754) (193,543)
--------- --------- ---------
Net loss under USGAAP........................ $(250,778) $(279,526) $(356,847)
========= ========= =========
</TABLE>

The Company derives revenues from customers located primarily in Hong Kong
and the Company's long lived assets are located primarily in the HKSAR.

(d) Recently adopted and new accounting standards in USGAAP

In 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5, "Reporting on the Cost of Start-Up Activities" ("SOP
98-5"). SOP 98-5 is applicable for fiscal years beginning December 15, 1999. SOP
98-5 has been adopted in note 19(a) above for each of the three years ended
December 31, 1999.

The Financial Accounting Standards Board ("FASB") has issued certain
pronouncements which are not effective with respect to the fiscal years
presented in note 19(a) above.

SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" is effective for fiscal years beginning after June 15, 2000. This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities. It requires that an entity recognizes all
derivatives as either assets or liabilities in the statement of financial
position and measures those instruments at fair value.

F-97
<PAGE> 267
HUTCHISON GLOBAL CROSSING HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The Company has evaluated the requirements of SFAS No. 133 and believes that,
since it currently does not utilize derivative instruments in its operations,
the adoption of this new standard would not have a material impact on note 18(a)
above.

(e) Operating lease commitments

Under HKGAAP, commitments under operating leases represent payments in the
next twelve months under non cancellable operating leases.

<TABLE>
<S> <C>
For the year ending December 31, 2000..................... $27,043
2001...................................................... 17,283
2002...................................................... 5,519
2003...................................................... 661
2004...................................................... 330
Thereafter................................................ $ 1,447
-------
$52,283
=======
</TABLE>

(f) Net loss per share

Under USGAAP, historical net loss per share would be $250,778, $279,526 and
$356,847 for each of the three years ended 1999, 1998 and 1997 respectively.
This is calculated based on one ordinary share in issue throughout the three
years ended December 31, 1999. The historical capital structure is substantially
different from the capital structure expected to be in place following the
Reorganization described in note 1 above.

As set out in note 1 b and c the Company has issued 319 shares on January
12, 2000. Had this capital structure been in place throughout the three years
ended December 31, 1999 historical net loss per share would have been $784,
$873, and $1,115 for each of the three year ended December 31, 1999.

20. APPROVAL OF COMBINED FINANCIAL STATEMENTS

The combined financial statements were approved on March 23, 2000.

F-98
<PAGE> 268

GLOBAL ACCESS LIMITED

BALANCE SHEET
AS OF JUNE 30, 2000 AND DECEMBER 31, 1999
(THOUSANDS OF JAPANESE YEN)

<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, 2000 1999
------------- ------------
<S> <C> <C>
ASSETS:
Current assets:
Cash...................................................... Y 6,072,769 Y5,148,021
Accounts receivable....................................... 22,135 160
Due from affiliates....................................... 1,327,952 4,116,000
Prepaid expenses.......................................... 89,865 61,286
Refundable consumption taxes.............................. 491,274 103,515
Other current assets...................................... 15,746 18,836
----------- -----------
Total current assets................................... 8,019,741 9,447,818
----------- -----------
Property and equipment...................................... 10,316,631 3,854,110
Indefeasible Right of Use purchased......................... 1,101,915 --
Security deposits and other assets.......................... 622,005 312,524
----------- -----------
Total assets........................................... Y20,060,292 Y13,614,452
=========== ===========
LIABILITIES:
Current liabilities:
Short-term loans payable.................................. Y 6,000,000 Y6,000,000
Accounts payable.......................................... 199,747 59,422
Accrued expenses.......................................... 139,193 38,264
Deferred revenue.......................................... 759,172 261,333
Other current liabilities................................. 557,880 206,202
----------- -----------
Total current liabilities.............................. 7,655,992 6,565,221
----------- -----------
Deferred revenue............................................ 9,743,111 3,657,235
Deposits received for lease................................. 138,673 --
----------- -----------
Total liabilities...................................... 17,537,776 10,222,456
----------- -----------
Commitments

STOCKHOLDERS' EQUITY:
Common stock; par value Y50,000, authorized -- 160,000
shares outstanding -- 100,000 shares................... 5,000,000 5,000,000
Accumulated deficits...................................... (2,477,484) (1,608,004)
----------- -----------
Total stockholders' equity............................. 2,522,516 3,391,996
----------- -----------
Total liabilities and stockholders' equity............. Y20,060,292 Y13,614,452
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-99
<PAGE> 269

GLOBAL ACCESS LIMITED

STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICITS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999

(THOUSANDS OF JAPANESE YEN)

<TABLE>
<CAPTION>
2000 1999
-------------- --------------
(UNAUDITED)
<S> <C> <C>
Revenue:
Lease of capacity......................................... Y 260,790 Y --
Operations and maintenance................................ 477,581 --
Other..................................................... 126,295 --
----------- ---------
Total revenue.......................................... 864,666 --
=========== =========
Expenses:
Depreciation and amortization............................. 164,913 --
Payroll................................................... 280,538 134,289
Rent...................................................... 112,906 54,854
Service Fees.............................................. 581,680 18,553
Usage charge for facilities............................... 337,715 --
Start-up charges.......................................... -- 250,172
Miscellaneous............................................. 180,746 76,199
----------- ---------
Total cost and operating expenses...................... 1,658,498 534,067
----------- ---------
Other income (expense):
Interest income........................................... 1,080 837
Interest expense.......................................... (116,866) --
Miscellaneous -- net...................................... 40,613 240
----------- ---------
Total other (expenses) income..................... (75,173) 1,077
----------- ---------
Loss before provision for income taxes............ (869,005) (532,990)
Income taxes................................................ 475 805
----------- ---------
Net loss.......................................... (869,480) (533,795)
Accumulated loss at the beginning of the period............. (1,608,004) (244,836)
----------- ---------
Accumulated loss at the end of the period................... Y(2,477,484) Y(778,631)
=========== =========
</TABLE>

The accompanying notes are an integral part of these statements.

F-100
<PAGE> 270

GLOBAL ACCESS LIMITED

STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS OF JAPANESE YEN)

<TABLE>
<CAPTION>
2000 1999
------------ ------------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. Y (869,480) Y (533,795)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization.......................... 164,913 --
Increase (decrease) in accounts receivable........... 2,780,979 (29,042)
Increase in prepaid expenses......................... (28,579) (9,348)
Increase in refundable consumption taxes............. (387,759) 2,977
Decrease (increase) in other current assets.......... 3,090 (12,354)
Increase in accounts payable......................... 140,325 9,000
Increase in accrued expenses......................... 100,929 25,514
Increase in income taxes payable..................... (475) (123)
Increase in deferred revenue......................... 6,568,809 --
Increase in other current liabilities................ 490,826 614
----------- ----------
Net cash provided by (used in) operating
activities...................................... 8,963,578 (546,557)
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........................ (6,627,434) (1,337,151)
Purchase of Indefeasible Right of Use..................... (1,101,915) --
Security deposit and other assets......................... (309,481) (67,805)
----------- ----------
Net cash used in investing activities............. (8,038,830) (1,404,956)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issued......................... -- 3,000,000
----------- ----------
Net cash provided by financing activities......... -- 3,000,000
----------- ----------
NET INCREASE IN CASH........................................ 924,748 1,048,487
CASH, beginning of period................................... 5,148,021 1,443,494
----------- ----------
CASH, end of period......................................... Y 6,072,769 Y2,491,981
=========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid............................................. Y 81,460 Y --
=========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

F-101
<PAGE> 271

GLOBAL ACCESS LIMITED

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999 AND DECEMBER 31, 1999

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

(1) Summary of Business

Global Access Limited (the "Company") is a Japanese corporation established
on November 4, 1997 to provide global communications network services utilizing
a network of terrestrial digital fiber optic cable systems (the "Systems"). The
Company is owned by Vectant, Inc., formerly Global Bandwidth Solutions, Inc.
(51.0%), a wholly owned subsidiary of Marubeni Corporation, and by Global
Crossing (49.0%). The Company has been involved in the planning, marketing,
organization, development, design and construction of the Systems between
Pacific Crossing-1 cable landing stations and major third party communications
hubs in Japan. Pacific Crossing-1 is an undersea fiber optic cable system
connecting California, Washington and two landing sites in Japan and is owned
and operated by a joint venture, Pacific Crossing Ltd., in which Asia Global
Crossing, a subsidiary of Global Crossing, owns a 64.5% economic interest. The
first segment of Pacific Crossing-1, constructed by Pacific Crossing Ltd.,
became ready for service in December 1999. The remaining portion is scheduled to
become ready for service in 2000. The Company's Systems from Pacific Crossing-1
to Tokyo were ready for service in December 1999. The Systems are sold or leased
to the customers of Pacific Crossing-1 and others. Successful future operations
of the Company are subject to several risks, including the ability of the
Company to ensure a successful, timely and cost effective completion of the
Systems to successfully market and generate adequate revenue from the sale of
capacity of the Systems. In addition, the Company derives all of its revenues
from companies in the internet and long distance telecommunications industry and
as a result, has concentration of credit risk in this industry. The Company was
licensed to operate the facility-based carrier services in Japan from Ministry
of Posts and Telecommunications in April 1998.

(2) Accounting Policies

(a) Basis of financial statements

The accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S.
GAAP"). The Company maintains its records and prepares its statutory financial
statements in accordance with the Japanese Commercial Code by applying
accounting principles generally accepted in Japan. The accompanying financial
statements incorporate certain adjustments relating to the tax effects of
temporary differences and start-up expenses, and certain reclassifications and
other items to conform with U.S. GAAP. These adjustments were not recorded in
the statutory books of account. The statutory fiscal year-end is March 31.

The interim financial information included herein has been prepared by the
Company without audit. The financial information presented herein, while not
necessary indicative of results to be expected for the full year, reflect all
adjustments, consisting of normal recurring adjustments, which in the opinion of
the Company are necessary for a fair presentation of the results for the periods
indicated.

(b) Inland Capacity Purchase Agreement (the "Agreement")

Effective December 28, 1999, the Company entered into the Agreement with
Global Crossing Japan Corporation, a subsidiary of Asia Global Crossing, to
grant an Indefeasible Right of Use on units of capacity on the Systems between
Pacific Crossing-1 cable landing stations and major third party communications
hubs in Japan. The total selling price for capacity on the Systems is payable 30
days from the activation date and non-refundable once the applicable segment
purchased is available. The Indefeasible Right of Use granted entitles Global
Crossing Japan Corporation to all rights and obligations of the capacity for a
period of fifteen years from the date the System was put in service. The Company
also agrees to perform all operation, administration and maintenance with

F-102
<PAGE> 272
GLOBAL ACCESS LIMITED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

respect to such granted capacity. In exchange for such services, GCJ is
obligated for the term of the Indefeasible Right of Use to pay for its allocable
share of the costs for operating and maintaining the System. Maintenance cost
payments are due and payable quarterly.

The Company amortizes Indefeasible Right of Use revenues from the Agreement
over fifteen years, with amounts due or received but not yet recognized as
operating revenue, recorded in the accompanying balance sheet as deferred
revenue. Construction costs relating to such revenues are classified as a
depreciable asset and depreciated over the estimated life of the property.

In connection with the Agreement, the Company granted Indefeasible Right of
Use on the Systems between Tokyo Network Operation Center and Pacific Crossing-1
cable landing station in Ajigaura for total selling price of Y10,720,000
thousand. Revenue recognized relating to these transactions during the six month
period ended June 30, 2000 was Y260,790 thousand. Due from affiliates, including
5% consumption tax, and deferred revenue as of June 30, 2000 were Y1,176,000
thousand and Y10,457,778 thousand, respectively.

Operating and maintaining revenues recognized in connection with the
Agreement was Y177,581 thousand during the six month period ended June 30, 2000
and due from affiliates as of June 30, 2000 includes the receivable of Y116,110
thousand, including 5.0% consumption tax, relating to this revenue.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported revenues and expenses during the reported period.
Actual results could differ from those estimates.

2. CASH

Cash comprises of cash on hand and bank deposits, which approximate fair
value.

3. PROPERTY AND EQUIPMENT

Property and equipment as of June 30, 2000 are as follows:

<TABLE>
<CAPTION>
THOUSANDS OF
JAPANESE YEN
-----------------------------------
JUNE 30, 2000 DECEMBER 31, 1999
-------------- -----------------
<S> <C> <C>
Property and equipment, at cost
Buildings.................................. Y 1,632,078 Y 108,442
Fiber optical cable systems................ 3,530,095 1,249,133
Furniture and equipment.................... 14,350 1,139
Land....................................... 1,070,482 1,037,070
Construction in progress................... 4,219,969 1,459,381
----------- ----------
Total................................. 10,466,974 3,855,165
----------- ----------
Accumulated depreciation
Buildings.................................. 128,676 133
Fiber optical cable systems................ 20,236 733
Furniture and equipment.................... 1,431 189
----------- ----------
Total................................. 150,343 1,055
----------- ----------
Net property and equipment................. Y10,316,631 Y3,854,110
=========== ==========
</TABLE>

F-103
<PAGE> 273
GLOBAL ACCESS LIMITED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The Company has purchased land for the cable station. Construction in
progress includes direct expenditures for the construction of the Systems,
including the costs incurred under the advisory and consulting contracts.

Depreciation is computed over the estimated lives of assets on the
straight-line basis, with useful lives primarily as follows:

<TABLE>
<S> <C>
Buildings........................................... 38 years
Fiber optical cable system.......................... 6 - 27 years
Furniture and equipment............................. 5 years
</TABLE>

4. SHORT-TERM LOANS PAYABLE

In September and October, 1999, the Company entered into short-term loan
agreements to borrow Y2,940,000 thousand from Global Crossing and Y3,060,000
thousand from Marubeni Corporation, respectively. Those loans are due on August
31, 2000 with the interest rate based on the long term prime rate plus 1.5%.
Interest expense for the six month period ended June 30, 2000 was approximately
Y116,866 thousand. The due date of these loans will be extended to August 31,
2001.

5. INCOME TAXES

Income taxes are provided based on income (loss) recognized for financial
statement purposes and include the effects of temporary differences between such
income (loss) that was recognized for tax purposes. Current income tax for the
six months ended June 30, 2000 and 1999 represents inhabitant tax. Statuary
income tax rate was 42.0% and 47.0% for the six month periods ended June 30,
2000 and 1999, respectively. The asset and liability approach is used to
recognize deferred income taxes for the expected future tax consequence of
temporary differences between the carrying amounts and the tax basis of assets
and liabilities.

Significant components of the deferred income tax assets as of June 30,
2000 are as follows:

<TABLE>
<CAPTION>
THOUSANDS OF
JAPANESE YEN
---------------------------------
JUNE 30, 2000 DECEMBER 31, 1999
------------- -----------------
(UNAUDITED)
<S> <C> <C>
Start-up charges.............................. Y -- Y 274,022
Net operating loss carryforwards.............. 1,022,279 395,275
----------- ---------
Total deferred income tax assets.............. 1,022,279 669,297
Less valuation allowance...................... (1,022,279) (669,297)
----------- ---------
Y -- Y --
=========== =========
</TABLE>

Valuation allowance is fully provided for deferred income tax assets due to
the uncertainty of future income estimates. The amount of the valuation
allowance is reviewed periodically.

The Company has available net operating loss carryforwards of approximately
Y2,433,997 thousand as of June 30, 2000 to offset future taxable income, which
expire at various dates through 2006.

6. CONSUMPTION TAXES

The tax credit for the consumption taxes incurred (which are excluded in
the cost of goods and services) is available against consumption taxes
attributable to revenue in the same tax period.

F-104
<PAGE> 274
GLOBAL ACCESS LIMITED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. OTHER RELATED PARTY TRANSACTIONS

The Company paid service fees for the conceptual consultation and research
services of Y300,000 thousand to Marubeni Corporation during the six month
period ended June 30, 2000.

The Company has entered into a Japanese Cable Station Operations and
Maintenance agreement with Pacific Crossing Ltd. to provide the operations and
maintenance services for the cable stations at the Japanese landing sites of the
Pacific Crossing-1 where Pacific Crossing-1 interconnects to a terrestrial cable
system. The initial term of this agreement is eight years unless terminated
earlier. Annual fees shall be due and payable quarterly. Operations and
maintenance service revenue recognized during the six month period ended June
30, 2000 was Y300,000 thousand.

Effective June 29, 2000, the Company entered into Capacity Purchase
agreement with Asia Global Crossing, Asia Pacific Limited to purchase and
Indefeasible Right of Use on capacity on the Global Crossing Network between the
system interfaces at the applicable points of presence. The Indefeasible Right
of Use granted entitles the Company to all rights and obligations of the
capacity for a period of twenty-five years from the date the System was put in
service. On June 30, 2000, the Company paid total purchase price of Y1,101,915
thousand for the capacity on the Global Crossing Network and recorded them as
intangible assets on the balance sheet as of June 30, 2000. The Company intends
to sell this Indefeasible Right of Use on the Global Crossing Network capacity
to its customers.

The Company has recorded operating lease revenue for Telehouse space of
Y21,130 thousand from affiliates of Marubeni Corporation for the six months
ended June 30, 2000, which is included in other revenue in the accompanying
statements of operations and accumulated deficits.

8. COMMITMENTS

The Company has lease commitments under the non-cancelable operating lease
for the office space and network facilities. Future minimum lease payments under
such leases as of June 30, 2000 are as follows:

<TABLE>
<CAPTION>
THOUSANDS OF
JAPANESE
YEARS ENDING JUNE 30 YEN
-------------------- ------------
<S> <C>
2001...................................................... Y255,376
2002...................................................... 17,670
2003...................................................... 12,861
2004...................................................... 4,140
2005...................................................... 4,140
2006 and thereafter....................................... 41,400
</TABLE>

Rent expenses and usage charges for facilities for six month periods ended
June 30, 2000 and 1999 were approximately Y450,621 thousand, and Y54,854
thousand, respectively.

9. FORWARD CURRENCY EXCHANGE CONTRACT

On June 30, 2000, the Company has entered into forward currency exchange
contract to sell U.S. dollar of $10,470,000, from July 3, 2000 through July 31,
2000, in order to hedge future expected sales of Indefeasible Right of Use on
the Global Crossing Network capacity. The Company has extended the entire
forward currency exchange contract until August 31, 2000. The market value of
the contract as of June 30, 2000, was immaterial.

F-105
<PAGE> 275

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of
Global Access Limited:

We have audited the accompanying balance sheets of Global Access Limited (a
Japanese corporation) as of December 31, 1999 and 1998 and the related
statements of operations, stockholders' equity, and cash flows for the years
ended December 31, 1999 and 1998, and for the period from November 4, 1997 (date
of inception) to December 31, 1997, expressed in Japanese yen. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Global Access Limited as of
December 31, 1999 and 1998 and the results of its operations and its cash flows
for the years ended December 31, 1999 and 1998, and for the period from November
4, 1997 (date of inception) to December 31, 1997 in conformity with accounting
principles generally accepted in the United States of America.

/s/ ARTHUR ANDERSEN

Tokyo, Japan
March 3, 2000

F-106
<PAGE> 276

GLOBAL ACCESS LIMITED

BALANCE SHEETS
AS OF DECEMBER 31, 1999 AND 1998
(THOUSANDS OF JAPANESE YEN)

<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
ASSETS:
Current assets:
Cash...................................................... Y 5,148,021 Y1,443,494
Accounts receivable....................................... 160 63
Due from Global Crossing Japan............................ 4,116,000 --
Prepaid expenses.......................................... 61,286 5,331
Refundable consumption taxes.............................. 103,515 10,177
Other current assets...................................... 18,836 --
----------- ----------
Total current assets................................... 9,447,818 1,459,065
----------- ----------
Property and equipment...................................... 3,854,110 215,460
Security deposits and other assets.......................... 312,524 82,276
----------- ----------
Total assets........................................... Y13,614,452 Y1,756,801
=========== ==========
LIABILITIES:
Current liabilities:
Short-term loans payable.................................. Y 6,000,000 Y --
Accounts payable.......................................... 59,422 --
Accrued expenses.......................................... 38,264 --
Deferred revenue.......................................... 261,333 --
Income tax payable........................................ 475 145
Other current liabilities................................. 205,727 1,492
----------- ----------
Total current liabilities.............................. 6,565,221 1,637
----------- ----------
Deferred revenue............................................ 3,657,235 --
----------- ----------
Commitments
Total liabilities...................................... 10,222,456 1,637
----------- ----------

STOCKHOLDERS' EQUITY:
Common stock; par value Y50,000 authorized -- 160,000
shares issued and outstanding -- 100,000 shares in 1999
and 40,000 shares in 1998.............................. 5,000,000 2,000,000
Accumulated deficit....................................... (1,608,004) (244,836)
----------- ----------
Total stockholders' equity............................. 3,391,996 1,755,164
----------- ----------
Total liabilities and stockholders' equity............. Y13,614,452 Y1,756,801
=========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

F-107
<PAGE> 277

GLOBAL ACCESS LIMITED

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998,
THE PERIOD FROM NOVEMBER 4, 1997 (DATE OF INCEPTION) TO DECEMBER 31, 1997

(THOUSANDS OF JAPANESE YEN)

<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 4,
1997 (DATE
OF INCEPTION)
YEAR ENDED YEAR ENDED TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
------------ ------------ -------------
<S> <C> <C> <C>
Revenue.............................................. Y 1,432 Y -- Y --
Expenses:
Cost of capacity leased............................ 752 -- --
Payroll............................................ 339,705 38,369 --
Rent............................................... 143,732 35,021 --
Travelling......................................... 65,672 9,625 --
Duty & permits..................................... 65,630 14,669 451
Advertising expense................................ 21,428 2,946 --
Start-up charges................................... 543,268 109,165 --
Miscellaneous...................................... 134,357 34,335 378
----------- --------- -----
Operating loss.................................. (1,313,112) (244,130) (829)
----------- --------- -----
Other income (expense):
Interest income.................................... 1,639 328 --
Interest expense................................... (50,889) -- --
Miscellaneous -- net............................... 394 -- --
----------- --------- -----
Loss before provision for income taxes.......... (1,361,968) (243,802) (829)
Provision for income taxes........................... 1,200 205 --
----------- --------- -----
Net loss........................................ Y(1,363,168) Y(244,007) Y(829)
=========== ========= =====
</TABLE>

The accompanying notes are an integral part of these statements.

F-108
<PAGE> 278

GLOBAL ACCESS LIMITED

STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR
THE PERIOD FROM NOVEMBER 4, 1997 (DATE OF INCEPTION) TO DECEMBER 31, 1997
(THOUSANDS OF JAPANESE YEN)

<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK DEFICIT TOTAL
------------ ----------- -----------
<S> <C> <C> <C>
Common stock issued on November 4, 1997 (Date
of Inception).............................. Y 50,000 Y -- Y 50,000
Net loss for the period from November 4, 1997
(Date of Inception) to December 31, 1997... -- (829) (829)
---------- ----------- -----------
December 31, 1997............................... 50,000 (829) 49,171
Common stock issued........................... 1,950,000 -- 1,950,000
Net loss for the year ended December 31,
1998....................................... -- (244,007) (244,007)
---------- ----------- -----------
December 31, 1998............................... 2,000,000 (244,836) 1,755,164
Common stock issued........................... 3,000,000 -- 3,000,000
Net loss for the year ended December 31,
1999....................................... -- (1,363,168) (1,363,168)
---------- ----------- -----------
December 31, 1999............................... Y5,000,000 Y(1,608,004) Y 3,391,996
========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-109
<PAGE> 279

GLOBAL ACCESS LIMITED

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998,
AND FOR THE PERIOD FROM NOVEMBER 4, 1997 (DATE OF INCEPTION) TO DECEMBER 31,
1997
(THOUSANDS OF JAPANESE YEN)

<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 4, 1997
(DATE OF INCEPTION)
YEAR ENDED YEAR ENDED TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
------------ ------------ -------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. Y(1,363,168) Y (244,007) Y (829)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization........................... 1,535 -- --
Changes in operating assets and liabilities:
Increase in accounts receivable....................... (4,116,097) (63) --
Increase in prepaid expenses.......................... (55,955) (5,331) --
Increase in refundable consumption taxes.............. (93,338) (10,158) (19)
Increase in other current assets...................... (18,836) -- --
Increase in accounts payable.......................... 59,422 -- --
Increase in accrued expenses.......................... 38,264 -- --
Increase in income taxes payable...................... 330 145 --
Increase in deferred revenue.......................... 3,918,568 -- --
Increase in other current liabilities................. 204,235 1,478 14
----------- ---------- -------
Net cash used in operating activities.............. (1,425,040) (257,936) (834)
----------- ---------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........................ (3,640,185) (215,460) --
Security deposit and other assets......................... (230,248) (82,276) --
----------- ---------- -------
Net cash used in investing activities.............. (3,870,433) (297,736) --
----------- ---------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term loans............................ 6,000,000 -- --
Proceeds from common stock issued......................... 3,000,000 1,950,000 50,000
----------- ---------- -------
Net cash provided by financing activities.......... 9,000,000 1,950,000 50,000
----------- ---------- -------
NET INCREASE IN CASH........................................ 3,704,527 1,394,328 49,166
CASH, beginning of period................................... 1,443,494 49,166 --
----------- ---------- -------
CASH, end of period......................................... Y 5,148,021 Y1,443,494 Y49,166
=========== ========== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid............................................. Y 47,166 Y -- Y --
=========== ========== =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-110
<PAGE> 280

GLOBAL ACCESS LIMITED

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

(1) Summary of Business

Global Access Limited (the "Company") is a Japanese corporation established
on November 4, 1997 to provide communications network services utilizing a
network of terrestrial digital fiber optic cable systems (the "Systems"). The
Company is owned by Vectant, Inc., formerly Global Bandwidth Solutions, Inc.
(51.0%), a wholly owned subsidiary of Marubeni Corporation, and by Global
Crossing (49.0%). The Company has been involved in the planning, marketing,
organization, development, design and construction of the Systems between
Pacific Crossing-1 cable landing stations and major third party communications
hubs in Japan. Pacific Crossing-1 is an undersea fiber optic cable system
connecting California, Washington and two landing sites in Japan and is owned
and operated by a joint venture, Pacific Crossing Ltd., in which GC owns a 57.8%
economic interest. The first segment of Pacific Crossing-1, constructed by
Pacific Crossing Ltd., became ready for service in December 1999. The remaining
portion is scheduled to become ready for service in 2000. The Company's Systems
from Pacific Crossing-1 to Tokyo was ready for service in December 1999 and will
be sold or leased to the customers of Pacific Crossing-1 and others. Successful
future operations of the Company are subject to the several risks, including the
ability of the Company to ensure the successful, timely and cost effective
completion of the Systems to successfully market and generate adequate revenue
from the sale of capacity of the Systems. In addition, the Company will derive
all of its revenues from companies in the Internet and long distance
telecommunications industry and as a result, has concentration of credit risk in
this industry. The Company was licensed to operate the facility-based carrier
services in Japan from the Ministry of Post and Telecommunications ("MPT") in
April 1998.

(2) Accounting Policies

(a) Basis of Financial Statements

The accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America
("USGAAP"). The Company maintains its records and prepares its statutory
financial statements in accordance with the Japanese Commercial Code by applying
accounting principles generally accepted in Japan. The accompanying financial
statements incorporated certain adjustments relating to the tax effects of
temporary differences and start-up expenses, and certain reclassifications and
other items to conform with USGAAP. These adjustments were not recorded in the
statutory books of account. The statutory fiscal year-end is March 31.

(b) Development Stage Company

The Company was in its development stage until December 1999 when the
Systems were partially placed in service. Start-up charges in the statements of
operations principally contain various consulting fees or engineering charges
paid outside for the planning, development and design of the Systems before
commencing its service.

F-111
<PAGE> 281
GLOBAL ACCESS LIMITED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Indefeasible Right of Use granted entitles Global Crossing Japan Corporation to
all rights and obligations of the capacity for a period of fifteen years after
the System activation date. The Company also agrees to perform all operation,
administration and maintenance with respect to such granted capacity. In
exchange for such services, Global Crossing Japan Corporation is obligated for
the term of the Indefeasible Right of Use to pay for its allocable share of the
costs for operating and maintaining the System. Maintenance cost payments are
due and payable quarterly.

The Company amortizes Indefeasible Right of Use revenues from the Agreement
over fifteen years, with amounts due or received but not yet recognized as
operating revenue, recorded in the accompanying balance sheet as deferred
revenue. Costs relating to such revenues are classified as a depreciable asset
and depreciated over the estimated life of the property.

On December 30, in connection with the Agreement, the Company granted its
first Indefeasible Rights of Use on the Systems between Tokyo Network Operation
Center and the Pacific Crossing-1 cable landing station in Ajigaura for total
selling price of (Yen)3,920,000 thousand. Revenue recognized relating to this
transaction during 1999 was (Yen)1,432 thousand, and due from GCJ of
(Yen)4,116,000 thousand, including 5.0% consumption tax, and deferred revenue of
(Yen)3,918,568 thousand was recorded on the balance sheet as of December 31,
1999. On March 1, 2000, the entire amount from Global Crossing Japan Corporation
of (Yen)4,116,000 thousand was paid.

On January 31, 2000, the Company has also granted additional Indefeasible
Rights of Use on the Systems between Tokyo Network Operation Center and the
Pacific Crossing-1 cable landing station in Ajigaura for a total selling price
of (Yen)2,160,000 thousand in connection with the Agreement.

(d) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported revenues and expenses during the reported period.
Actual results could differ from those estimates.

2. CASH

Cash is comprised of cash on hand and bank deposits, which approximate fair
value.

F-112
<PAGE> 282
GLOBAL ACCESS LIMITED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
THOUSANDS OF JAPANESE YEN
--------------------------
1999 1998
------------ ----------
<S> <C> <C>
Property and equipment, at cost
Buildings.................................................. Y 108,442 Y --
Fiber optical cable systems................................ 1,249,133 --
Furniture and office equipment............................. 1,139 --
Land....................................................... 1,037,070 206,572
Construction in progress................................... 1,459,381 8,888
---------- --------
Total................................................. 3,855,165 215,460
---------- --------
Accumulated depreciation
Buildings.................................................. 133 --
Fiber optical cable systems................................ 733 --
Furniture and office equipment............................. 189 --
---------- --------
Total................................................. 1,055 --
---------- --------
Net property and equipment................................. Y3,854,110 Y215,460
========== ========
</TABLE>

The Company has purchased land for the landing station and the
telecommunications house. Construction in progress includes direct expenditures
for the construction of the Systems, including the costs incurred under the
advisory and consulting contracts.

Depreciation is computed over the estimated lives of assets on the
straight-line basis.

4. SHORT-TERM LOANS PAYABLE

In September and October 1999, the Company entered into short-term loan
agreements to borrow (Yen)2,940,000 thousand from GC and (Yen)3,060,000 thousand
from Marubeni Corporation, respectively. Those loans are due on August 31, 2000
with the interest rate based on the long-term prime rate plus 1.5%. Interest
expense for the year ended December 31, 1999 was approximately (Yen)50,889
thousand.

5. INCOME TAXES

Income taxes are provided based on income (loss) recognized for financial
statement purposes and include the effects of temporary differences between such
income (loss) that was recognized for tax purposes. Current income tax for the
years ended December 31, 1999 and 1998 represented inhabitant tax. The statutory
income tax rate was 42.0% for the year ended December 31, 1999, 47.0% for the
year ended December 31, 1998 and 51.0% for the period from November 4, 1997
(Date of Inception) to December 31, 1997, respectively. The asset and liability
approach is used to recognize deferred income taxes for the expected future tax
consequence of temporary differences between the carrying amounts and the tax
basis of assets and liabilities.

F-113
<PAGE> 283
GLOBAL ACCESS LIMITED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Significant components of the deferred income tax assets as of December 31,
1999 and 1998 are as follows:

<TABLE>
<CAPTION>
THOUSANDS OF JAPANESE YEN
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
Start-up charges........................................... Y 274,022 Y 51,308
Net operating loss carry forward........................... 395,275 61,846
--------- ---------
Total deferred income tax asset............................ 669,297 113,154
Less valuation allowance................................... (669,297) (113,154)
--------- ---------
Y -- Y --
========= =========
</TABLE>

A valuation allowance is fully provided for deferred income tax assets due
to the uncertainty of future income estimates. The amount of the valuation
allowance is reviewed periodically.

The Company has available net operating loss carryforwards of approximately
(Yen)941,132 thousand as of December 31, 1999 to offset future taxable income,
which expire at various dates through 2005.

6. CONSUMPTION TAXES

The tax credit for the consumption taxes incurred (which are excluded in
the cost of goods and services) is available against consumption taxes
attributable to revenue in the same tax period.

7. OTHER RELATED PARTY TRANSACTIONS

The Company paid service fees for the conceptual consultation and research
services of the Company's business start up of (Yen)72,241 thousand to Marubeni
Corporation during the year ended December 31, 1999. Such service fees to
Marubeni Corporation were not incurred for the year ended December 31, 1998 and
the period from November 4, 1997 (Date of Inception) to December 31, 1997.

8. COMMITMENTS

The Company has lease commitments under the non-cancelable operating lease
for the office space and network facilities. Future minimum lease payments under
such leases as of December 31, 1999 were as follows:

<TABLE>
<CAPTION>
THOUSANDS OF
JAPANESE
YEARS ENDING DECEMBER 31 YEN
------------------------ ------------
<S> <C>
2000........................................................ Y74,480
2001........................................................ 13,530
2002........................................................ 9,617
</TABLE>

Rent expense for the years ended December 31, 1999 and 1998 were
approximately (Yen)143,732 thousand, (Yen)35,021 thousand, respectively. There
was no rent expense for the period from November 4, 1997 (Date of Inception) to
December 31, 1997.

F-114
<PAGE> 284

UNAUDITED PRO FORMA FINANCIAL INFORMATION

We have prepared the following unaudited pro forma condensed combined
financial information based on our supplemental consolidated financial
statements which give retroactive effect to the contribution of Hutchison Global
Crossing and Global Access Limited to us. The supplemental consolidated
financial statements are adjusted to give retroactive effect to (1) the purchase
of additional interest and the related consolidation of Pacific Crossing Ltd.,
(2) our initial public offering in October, 2000 and (3) the private offering of
our outstanding notes.

The unaudited pro forma information does not include any potential
synergies relating to Pacific Crossing Ltd., Hutchison Global Crossing and
Global Access Ltd. or increased opportunities to generate additional revenues in
Asia. You should not rely on pro forma financial information as an indication of
the results that would have been achieved if these transactions had taken place
earlier or the future results that we will experience after the completion of
these transactions.

You should read these unaudited pro forma condensed combined financial
statements in conjunction with the more detailed historical financial
information which is included in this document beginning on page F-1.

F-115
<PAGE> 285

PRO FORMA ASIA GLOBAL CROSSING

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(IN THOUSANDS)

<TABLE>
<CAPTION>
INITIAL DEBT PRO FORMA
ASIA GLOBAL PUBLIC OFFERING OFFERING ASIA GLOBAL
CROSSING(1) ADJUSTMENTS(7) ADJUSTMENTS CROSSING
----------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents....................... $ 103,782 $455,300 $389,000(8) $ 948,082
Restricted cash and cash equivalents............ 57,271 -- -- 57,271
Accounts receivable............................. 24,480 -- -- 24,480
Receivable from affiliates...................... 88,561 -- -- 88,561
Other assets.................................... 15,423 -- -- 15,423
---------- -------- -------- ----------
Total current assets.......................... 289,517 455,300 389,000 1,133,817
---------- -------- -------- ----------

Restricted cash and cash equivalents.............. 18,462 -- -- 18,462
Property and equipment, net....................... 1,685,272 -- -- 1,685,272
Deferred finance fees, net........................ 21,969 -- 11,000(8) 32,969
Other assets...................................... 39,401 -- -- 39,401
Investments in affiliate.......................... 447,707 447,707
---------- -------- -------- ----------
Total assets.................................. $2,502,328 $455,300 $400,000 $3,357,628
========== ======== ======== ==========

LIABILITIES:
Current liabilities:
Accrued construction costs...................... $ 230,699 $ -- $ -- $ 230,699
Accounts payable and accrued liabilities........ 16,472 -- -- 16,472
Deferred revenue................................ 5,103 -- -- 5,103
Payable to affiliates........................... 21,909 -- -- 21,909
---------- -------- -------- ----------
Total current liabilities..................... 274,183 -- -- 274,183
---------- -------- -------- ----------

Long-term debt.................................... 750,000 -- 400,000(8) 1,150,000
Long-term deferred revenue........................ 142,681 -- -- 142,681
Other long-term liabilities....................... 1,421 -- -- 1,421
Loan payable to affiliate......................... 9,780 -- -- 9,780
---------- -------- -------- ----------
Total liabilities............................. 1,178,065 -- 400,000 1,578,065
---------- -------- -------- ----------

Minority interest................................. 150,026 -- -- 150,026
---------- -------- -------- ----------

SHAREHOLDERS' EQUITY:
Class A common stock.............................. -- 685 -- 685
Class B common stock.............................. 4,866 -- -- 4,866
Additional paid-in capital........................ 1,241,480 454,615 -- 1,696,095
Cumulative translation adjustment................. (21) -- -- (21)
Retained earnings (accumulated deficit)........... (72,088) -- -- (72,088)
---------- -------- -------- ----------
1,174,237 455,300 -- 1,629,537
---------- -------- -------- ----------
Total liabilities and shareholders' equity.... $2,502,328 $455,300 $400,000 $3,357,628
========== ======== ======== ==========
</TABLE>

F-116
<PAGE> 286

PRO FORMA ASIA GLOBAL CROSSING

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)

<TABLE>
<CAPTION>
PRO FORMA
ASIA GLOBAL DEBT OFFERING ASIA GLOBAL
CROSSING(1) ADJUSTMENTS(9) CROSSING
----------- -------------- -----------
<S> <C> <C> <C>
Revenues.................................................... $ 130,455 $ -- $ 130,455
Expenses:
Cost of sales............................................. 98,194 -- 98,194
Operations, administration and maintenance................ 36,499 -- 36,499
General and administrative................................ 35,828 -- 35,828
Depreciation and amortization............................. 13,539 -- 13,539
----------- -------- -----------
Operating income (loss)..................................... (53,605) -- (53,605)
Equity in loss of affiliate................................. (33,540) -- (33,540)
Minority interest........................................... (9,632) -- (9,632)
Other income (expense):
Other income (expense).................................... (76) -- (76)
Interest income........................................... 11,427 -- 11,427
Interest expense.......................................... (1,551) (29,040) (30,591)
----------- -------- -----------
Income (loss) before provision for income taxes............. (86,977) (29,040) (116,017)
PROVISION FOR INCOME TAXES.................................. (1,353) -- (1,353)
----------- -------- -----------
Net income (loss)........................................... $ (88,330) $(29,040) $ (117,370)
=========== ======== ===========
Net income (loss) per common share:
Basic and diluted earning per common share................ $ (0.18) $ (0.21)
=========== ===========
Shares used in computing basic and diluted net income
(loss) per common share................................. 486,625,125 555,125,125
=========== ===========
</TABLE>

F-117
<PAGE> 287

PRO FORMA ASIA GLOBAL CROSSING

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)

<TABLE>
<CAPTION>
ASIA GLOBAL PACIFIC PACIFIC PRO FORMA
CROSSING CROSSING LTD. CROSSING LTD. DEBT OFFERING ASIA GLOBAL
HISTORICAL(1) HISTORICAL(2) ADJUSTMENTS ADJUSTMENTS(9) CROSSING
------------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues........................................... $ -- $61,100 $ -- $ -- $ 61,100
Expenses:
Cost of sales.................................... -- 20,722 -- -- 20,722
Operations, administration and maintenance....... -- 8,000 -- -- 8,000
General and administrative....................... 1,201 8,169 -- -- 9,370
Depreciation and amortization.................... -- -- 3,112(5) -- 3,169
57(3)
----------- ------- -------- -------- -----------
Operating income (loss)............................ (1,201) 24,209 (3,169) -- 19,839
Equity in income (loss) of affiliate............... 2,978 -- (13,005)(4) -- (6,915)
3,112(5)
Minority interest.................................. -- -- (7,995)(6) -- (7,995)
Other income (expense):
Other income (expense)........................... -- 459 -- -- 459
Interest income.................................. 11,598 464 -- -- 12,062
Interest expense................................. -- (2,612) -- (56,084) (58,696)
----------- ------- -------- -------- -----------
Income (loss) before provision for income taxes.... 13,375 22,520 (21,057) (56,084) (41,246)
Provision for income taxes......................... -- -- -- -- --
----------- ------- -------- -------- -----------
Net income (loss).................................. $ 13,375 $22,520 $(21,057) $(56,084) $ (41,246)
=========== ======= ======== ======== ===========
Net income per common share:
=========== ======= ======== ======== ===========
Basic and diluted earning per common share....... $ 0.03 $ (0.07)
=========== ===========
Shares used in computing basic and diluted net
income per common share........................ 486,625,125 555,125,125
=========== ===========
</TABLE>

F-118
<PAGE> 288

PRO FORMA ASIA GLOBAL CROSSING

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. These columns are based on our supplemental consolidated financial
statements.

2. This column represents the historical results of operations of Pacific
Crossing Ltd. for the year ended December 31, 1999.

3. This adjustment reflects the amortization expense of the excess
consideration over the net assets acquired (goodwill) in connection with
the purchase of additional ownership interest in Pacific Crossing Ltd.,
which we have estimated to be approximately $1.4 million. We are amortizing
goodwill on the straight-line method over 25 years. The purchase price
allocation is based on current estimates.

4. This adjustment represents the reversal of historical equity in income of
affiliates for the year ended December 31, 1999.

5. These adjustments represent the reclassification of the amortization
expense associated with the PCG warrants included in the historical equity
in loss of affiliates for the year ended December 31, 1999 to depreciation
and amortization as the carrying value of the PCG warrants was reclassified
into property and equipment as of January 1, 2000.

6. This adjustment represents the 35.5% minority interest expense, as a result
of consolidating and the purchase of an additional 6.75% interest in
Pacific Crossing Ltd.

7. This column reflects the Company's initial public offering.

8. These adjustments represent this debt offering of $400 million, net of
deferred finance fees of $11 million.

9. This column represents the interest expense resulted from the Company's
private offering of its Senior Notes in October, 2000 at an effective
interest rate of 13.746%. The Company capitalized as construction in
progress only the amount of interest that would be permitted under SFAS 34
had the debt in this offering been outstanding for the entire period
covered on the actual average qualifying expenditures for such period.

The following table presents the calculations used to determine pro forma
interest expense for the period presented (dollars in thousands):

<TABLE>
<CAPTION>
FOR THE NINE FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
<S> <C> <C>
TOTAL PRO FORMA INTEREST COST INCURRED
Principal outstanding................................... $408,000 $408,000
Effective interest rate................................. 13.746% 13.746%
-------- --------
Total interest cost incurred............................ $ 42,063 $ 56,084
======== ========
TOTAL PRO FORMA INTEREST CAPITALIZED
Actual average qualifying expenditures for the period... $126,318 $ --
Effective capitalization rate........................... 13.746% 13.746%
-------- --------
Total interest capitalizable............................ $ 13,023 $ --
======== ========
TOTAL PRO FORMA INTEREST EXPENSE........................ $ 29,040 $ 56,084
======== ========
</TABLE>

F-119
<PAGE> 289

HEAD OFFICE OF ASIA GLOBAL CROSSING LTD.

Wessex House
45 Reid Street
Hamilton HM12, Bermuda

AUDITORS TO ASIA GLOBAL CROSSING LTD.

Arthur Andersen
Victoria Hall
11 Victoria Street
Hamilton HM11
Bermuda

TRUSTEE AND EXCHANGE AGENT

United States Trust Company of New York
114 West 47th Street
New York, NY 10036

LISTING AGENT AND SPECIAL LUXEMBOURG EXCHANGE AGENT

Kredietbank S.A. Luxembourgeoise
43, Boulevard Royal
L-2955 Luxembourg

LEGAL ADVISERS TO ASIA GLOBAL CROSSING LTD.

<TABLE>
<S> <C>
as to U.S. law as to Bermuda law
Simpson Thacher & Bartlett Appleby, Spurling & Kempe
425 Lexington Avenue Cedar House
New York, NY 10017 41 Cedar Avenue
Hamilton HM12, Bermuda
</TABLE>
<PAGE> 290

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

$408,000,000

13.375% SENIOR NOTES DUE 2010

ASIA GLOBAL CROSSING LOGO

JOINT BOOK-RUNNING MANAGERS
CHASE SECURITIES INC.

MERRILL LYNCH & CO.

CO-MANAGERS
DEUTSCHE BANC ALEX. BROWN

GOLDMAN, SACHS & CO.

SALOMON SMITH BARNEY

ABN AMRO INCORPORATED

BARCLAYS CAPITAL

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 291

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Bye-laws of the Registrant provide for indemnification of the
Registrant's officers and directors against all liabilities, loss, damage or
expense incurred or suffered by such party as an officer or director of the
Registrant; provided that such indemnification shall not extend to any matter
which would render it void pursuant to the Companies Act of 1981 as in effect
from time to time in Bermuda.

The Companies Act provides that a Bermuda company may indemnify its
directors in respect of any loss arising or liability attaching to them as a
result of any negligence, default, breach of duty or breach of trust of which
they may be guilty. However, the Companies Act also provides that any provision,
whether contained in the company's bye-laws or in a contract or arrangement
between the company and the director, indemnifying a director against any
liability which would attach to him in respect of his fraud or dishonesty will
be void.

The directors and officers of the Registrant are covered by directors' and
officers' insurance policies maintained by the Registrant.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:

II-1
<PAGE> 292

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.5* Project Development and Construction Contract, dated as of
April 21, 1998, among Tyco Submarine Systems Ltd. and
Pacific Crossing Ltd.
10.6* Capacity Commitment Agreement, dated as of November 24,
1999, among Global Crossing USA Inc., Softbank Corp. and
Microsoft Corporation.
10.7* Registration Rights Agreement, dated as of November 24,
1999, among Global Crossing Ltd., Softbank Corp., Microsoft
Corporation, Asia Global Crossing Ltd., and The Goldman
Sachs Group, Inc.
10.8* Employment Agreement, dated as of February 12, 2000, between
John J. Legere and the Registrant.
10.9* Employment Agreement, dated as of April 1, 1998, between
John M. Scanlon and Global Crossing Ltd.
10.10* First Amendment to Employment Agreement, dated September 27,
1999, between John M. Scanlon and Global Crossing Ltd.
10.11* Employment Agreement, dated as of May 30, 2000, between
Stefan C. Riesenfeld and Global Crossing Development
Company.
10.12* Employment Agreement, dated as of March 2, 2000, between
Charles F. Carroll and Global Crossing Development Company.
10.13* International Assignment to Japan, dated June 22, 1999,
between Darryl Green and Global Crossing Employee Services
Inc.
10.14* Asia Global Crossing 2000 Stock Incentive Plan.
10.15* Form of Change in Control Agreement between the Registrant
and the named executive officers.
10.16* Joint Venture Agreement, dated as of September 27, 2000,
between the Registrant and Exodus Communications, Inc.
21.1* Subsidiaries of the Registrant.
23.1 Consent of Arthur Andersen.
23.2 Consent of Arthur Andersen.
23.3 Consent of PricewaterhouseCoopers.
23.4 Consent of Arthur Andersen.
23.5 Consent of Arthur Andersen.
23.6 Consent of Simpson Thacher & Bartlett (included in Exhibit
5.1).
23.7 Consent of Appleby, Spurling & Kempe (included in Exhibit
5.2).
24.1 Power of Attorney (included on page II-5).
25.1 Form T-1, Statement of Eligibility of Trustee.
99.1 Form of Letter Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
</TABLE>

---------------
* Incorporated by reference to the Registrant's Registration Statement on Form
S-1 (File No. 333-37666).

** Incorporated by reference to the Registrant's 10-Q, dated November 10, 2000
(File No. 000-31689).

*** To be filed by amendment.

II-2
<PAGE> 293

ITEM 22. UNDERTAKINGS.

(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceedings) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether indemnification by them is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of that issue.

(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.

(1) To file, during any period in which offers or sales are being
made, a post-effective Amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and

(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and

(4) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.

(5) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual reports
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit
II-3
<PAGE> 294

plan's annual report pursuant to section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE> 295

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Los
Angeles, State of California, on January 10, 2001.

ASIA GLOBAL CROSSING LTD.

By: /s/ JOHN J. LEGERE
------------------------------------
Name: John J. Legere
Title: Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints John J. Legere, Stefan C.
Riesenfeld and Charles F. Carroll and each of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
re-substitution, for him in his name, place and stead, in any and all capacity,
in connection with this Registration Statement including to sign and file in the
name and on behalf of the undersigned as director or officer of the Registrant
any and all amendments or supplements (including any and all stickers and
post-effective amendments) to this Registration Statement, with all exhibits
thereto, and other documents in connection therewith, granting unto said
attorney-in-fact and agents, and each of them full power and authority to do and
perform each and every act and things requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ GARY WINNICK Chairman of the Board and January 10, 2001
-------------------------------------------------------- Director
Gary Winnick

/s/ LODWRICK M. COOK Co-Chairman of the Board January 10, 2001
-------------------------------------------------------- and Director
Lodwrick M. Cook

/s/ JOHN J. LEGERE Chief Executive Officer January 10, 2001
-------------------------------------------------------- and Director
John J. Legere

/s/ JOHN M. SCANLON Vice Chairman of the January 10, 2001
-------------------------------------------------------- Board and Director
John M. Scanlon

/s/ THOMAS J. CASEY Vice Chairman of the January 10, 2001
-------------------------------------------------------- Board and Director
Thomas J. Casey
</TABLE>

II-5
<PAGE> 296

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JOSEPH P. CLAYTON Director January 10, 2001
--------------------------------------------------------
Joseph P. Clayton

/s/ ERIC HIPPEAU Director January 10, 2001
--------------------------------------------------------
Eric Hippeau

-------------------------------------------------------- Director
Thomas U. Koll

/s/ NORMAN BROWNSTEIN Director January 10, 2001
--------------------------------------------------------
Norman Brownstein

/s/ WILLIAM E. CONWAY, JR. Director January 10, 2001
--------------------------------------------------------
William E. Conway, Jr.

-------------------------------------------------------- Director
Geoffrey J.W. Kent

/s/ STEFAN C. RIESENFELD Chief Financial Officer January 10, 2001
--------------------------------------------------------
Stefan C. Riesenfeld
</TABLE>

II-6
<PAGE> 297

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1* Form of Purchase Agreement.
3.1* Memorandum of Association of the Registrant, dated September
24, 1998.
3.2* Form of Amended and Restated Bye-laws of the Registrant,
dated October 12, 2000.
3.3* Memorandum of Increase in the Share Capital of the
Registrant.
4.1* Form of Specimen Certificate for Registrant's Class A Common
Stock.
4.2* Form of Indenture relating to the Registrant's 13.375%
senior notes due 2010.
4.3** Registration Rights Agreement, dated as of October 12, 2000,
among the Registrant and the initial purchasers named
therein.
4.4** Form of Subordinated Note-A, dated October 12, 2000.
4.5** Form of Subordinated Note-B, dated October 12, 2000.
5.1*** Opinion of Simpson Thacher & Bartlett.
5.2*** Opinion of Appleby, Spurling & Kempe.
10.1* Form of Shareholders Agreement, dated as of October 12,
2000, among Global Crossing Ltd., Softbank Corp., Microsoft
Corporation and Asia Global Crossing Ltd.
10.2* Second Amended and Restated Shareholders Agreement, dated as
of March 24, 2000, among GCT Pacific Holdings, Ltd., SCS
(Bermuda) Ltd., Marubeni Pacific Cable Limited and Pacific
Crossing Ltd.
10.3* Shareholders Agreement, dated January 12, 2000, among Global
Crossing Ltd., Hutchison Telecommunications Ltd., Hutchison
Whampoa Limited, Global Crossing Holdings Ltd. and HCL
Holdings Ltd.
10.4* East Asia Crossing-Construction Contract, dated as of
December 17, 1999, among Asia Global Crossing Ltd. and KDD
Submarine Cable Systems Inc.
10.5* Project Development and Construction Contract, dated as of
April 21, 1998, among Tyco Submarine Systems Ltd. and
Pacific Crossing Ltd.
10.6* Capacity Commitment Agreement, dated as of November 24,
1999, among Global Crossing USA Inc., Softbank Corp. and
Microsoft Corporation.
10.7* Registration Rights Agreement, dated as of November 24,
1999, among Global Crossing Ltd., Softbank Corp., Microsoft
Corporation, Asia Global Crossing Ltd., and The Goldman
Sachs Group, Inc.
10.8* Employment Agreement, dated as of February 12, 2000, between
John J. Legere and the Registrant.
10.9* Employment Agreement, dated as of April 1, 1998, between
John M. Scanlon and Global Crossing Ltd.
10.10* First Amendment to Employment Agreement, dated September 27,
1999, between John M. Scanlon and Global Crossing Ltd.
10.11* Employment Agreement, dated as of May 30, 2000, between
Stefan C. Riesenfeld and Global Crossing Development
Company.
10.12* Employment Agreement, dated as of March 2, 2000, between
Charles F. Carroll and Global Crossing Development Company.
10.13* International Assignment to Japan, dated June 22, 1999,
between Darryl Green and Global Crossing Employee Services
Inc.
10.14* Asia Global Crossing 2000 Stock Incentive Plan.
</TABLE>
<PAGE> 298

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.15* Form of Change in Control Agreement between the Registrant
and the named executive officers.
10.16* Joint Venture Agreement, dated as of September 27, 2000,
between the Registrant and Exodus Communications, Inc.
21.1* Subsidiaries of the Registrant.
23.1 Consent of Arthur Andersen.
23.2 Consent of Arthur Andersen.
23.3 Consent of PricewaterhouseCoopers.
23.4 Consent of Arthur Andersen.
23.5 Consent of Arthur Andersen.
23.6 Consent of Simpson Thacher & Bartlett (included in Exhibit
5.1).
23.7 Consent of Appleby, Spurling & Kempe (included in Exhibit
5.2).
24.1 Power of Attorney (included on page II-5).
25.1 Form T-1, Statement of Eligibility of Trustee.
99.1 Form of Letter Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
</TABLE>

---------------
* Incorporated by reference to the Registrant's Registration Statement on Form
S-1 (File No. 333-37666).

** Incorporated by reference to the Registrant's 10-Q, dated November 10, 2000
(File No. 000-31689).

*** To be filed by amendment.