Letter Agreement re: Proposed Equity Investments - Global Crossing Ltd., Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte Ltd.


                                                              January 28, 2002


Global Crossing Ltd.
Seven Giralda Farms
Madison, NJ 07940 
U.S.A.

Attention: John J. Legere, Chief Executive Officer

Dear Mr. Legere:

         This letter agreement sets forth our understanding concerning proposed
equity investments by Hutchison Whampoa Limited ("HWL") and Singapore 
Technologies Telemedia Pte Ltd. ("STT") or their designees, respectively, in 
Global Crossing Ltd. ("GCL") pursuant to a plan of reorganization under
chapter 11, title 11 of the United States Code and related proceedings in other
jurisdictions (the "Plan") involving the restructuring of the debt and equity 
of GCL and its subsidiaries other than Asia Global Crossing Ltd. (the 
"Transaction"). This letter agreement is not intended to be a solicitation of 
any acceptance of the Plan. Any such solicitation shall be sought in accordance
with applicable law and as contemplated by the attached Annex A.

         In consideration of the mutual agreements and understandings
set forth herein, the parties hereto hereby agree as follows:

         1.    Transaction; Buyer Protection Order; Expense Reimbursement.

         (i)   GCL, HWL and STT hereby confirm their mutual intention to
continue to pursue the Transaction as contemplated by and subject to the terms
and conditions set forth in Annex A.

         (ii)  The provisions of Section 1 of the Exclusivity Letter dated
January 21, 2002 among the parties (the "Exclusivity Letter") shall continue
until the commencement by GCL of a case under Chapter 11 of the United States
Code, notwithstanding the provisions of Section 2 of the Exclusivity Letter.

         (iii) Each of the parties agrees to be bound by the provisions set
forth under the headings "Expenses", "Buyer Protection Order" and "Governing
Law" contained in Annex A.

         (iv)  Upon the date of this letter agreement and simultaneously with
the execution hereof, GCL shall pay or procure payment of US$1,900,000 to HWL
and US$1,900,000 to STT, by wire transfer to bank accounts designated by HWL
and STT, respectively, in reimbursement of actual fees and expenses reasonably
incurred by them, their 



                                                                             2


respective financial advisors, accountants and legal counsel in respect of
their work on the Transaction to date as contemplated by the provisions set
forth under the heading "Expenses" contained in Annex A. This letter agreement
shall become effective upon receipt by HWL and STT of the sums set forth
above.

         2.    Representations and Warranties. Each party represents and
warrants, severally and not jointly, to the other parties that (i) such party
has the full power and authority to enter into, execute and deliver this letter
agreement and perform the obligations contained herein; (ii) the execution and
delivery by such party of this letter agreement and the performance by such
party of its obligations contemplated in this letter agreement have been duly
authorized by all necessary corporate or other action of such party; and (iii)
the execution, delivery and performance of this letter agreement by such party
will not conflict with or result in any material breach or violation of any of
the terms and conditions of, or constitute (with notice or lapse of time or
both) a default under, any instrument, contract or other agreement to which
such party is a party or by which such party is bound.

         3.    Confidentiality. The parties agree to be bound by the 
confidentiality terms set forth in Annex A. If and to the extent that the 
confidentiality terms set forth in Annex A expressly contravene the provisions 
of the Non-Disclosure Agreements previously executed by HWL and GCL or STT 
and GCL, as the case may be, the provisions contained in Annex A shall govern.

         4.    Conditions.  Except as set forth in clauses (ii) to (iv) of 
paragraph 1 above, any obligations of the parties regarding the Transaction
shall be subject to the conditions set forth in Annex A, including without
limitation the negotiation and execution of definitive documentation concerning
the Transaction.

         5.    Miscellaneous.  The terms set forth in this letter agreement
and Annex A are a part of a comprehensive agreement, each element of which is 
an integral aspect of the Transaction and, as such, are non-severable.

         6.    Governing Law. This letter agreement shall be governed by and
construed in accordance with the internal laws of the State of New York and
any applicable provision of the Bankruptcy Code, without regard to the 
principles of conflict of laws that would provide for application of another 
law.

         7.    Concerning Remedies.  Each of the parties acknowledges and
agrees that no failure or delay in exercising any right, power or privilege 
hereunder will operate as a waiver thereof, nor will any single or partial 
exercise thereof preclude any other right, power or privilege hereunder.

         8.    Entire Agreement; Amendments; Counterparts. This letter 
agreement, Annex A, the Exclusivity Letter, the Non-Disclosure Agreement dated 
as of June 25, 2001 between HWL and GCL, as amended, and the Non-Disclosure
Agreement dated August 23, 2001, as amended, between STT and GCL set forth the 
entire agreement among GCL on the one hand, and HWL or STT or both, on the 
other hand, with respect to the subject matter hereof. This letter agreement 
may be amended only by the express written consent of each of the parties. 



                                                                             3


This letter agreement may be executed in counterparts, each of which when taken
together shall constitute an original of this letter agreement. Each of the 
parties agrees and acknowledges that this letter agreement does not contain 
all matters upon which agreement must be reached in order for the Transaction
to be consummated.

         9.    Third Party Beneficiaries. Except as specifically set forth or
referred to in this letter agreement, nothing herein is intended or shall be 
construed to confer upon any person or entity other than the parties hereto
and their successors and assigns, any rights or remedies under or by reason of
this letter agreement.

         10.   Notices. All notices, other communications or documents provided
for or permitted to be given hereunder shall be made in writing and shall be
given either personally by hand-delivery, by facsimile transmission, by mailing
the same in a sealed envelope, registered first-class mail, postage prepaid,
return receipt requested, or by reputable courier guaranteeing overnight
delivery:

               (a)      if to GCL, to

                        Global Crossing Ltd.
                        Seven Giralda Farms
                        Madison, NJ  07940
                        U.S.A.
                        Attention: Company Secretary
                        Fax: (1 973) 410-8583

               (b)      if to HWL, to:

                        Hutchison Whampoa Limited
                        22nd Floor
                        Hutchison House
                        10 Harcourt Road, Central
                        Hong Kong
                        Attention: The Company Secretary
                        Fax: (852) 2128-1778

               (c)      if to STT, to:

                        Singapore Technologies Telemedia Pte Ltd.
                        51 Cuppage Road
                        #10-11/17, StarHub Centre
                        Singapore 229469
                        Attention: Vice President, Legal
                        Fax: (65) 720-7277

Each party, by written notice given to each other in accordance with this
paragraph 11 may change the address to which notices, other communications or
documents are to be sent to such party. All notices, other communications or
documents shall be deemed to have been duly given: (i) at the time delivered
by hand, if personally delivered; (ii) when receipt is acknowledged



                                                                             4


orally by addressee or by machine confirmation of transmission, if by facsimile
transmission; (iii) five business days after having been deposited in the
mail, postage prepaid, if mailed by first class air mail; and (iv) on the
first business day with respect to which a reputable air courier guarantees
delivery; provided, however, that notices of a change of address shall be
effective only upon receipt.

         If this letter agreement correctly sets forth our understanding, 
please so acknowledge by signing below and returning a signed copy of the 
letter agreement to HWL at +852-2128-1778 and to STT at +65-720-7277.



                                         Very truly yours,


                                         HUTCHISON WHAMPOA LIMITED


                                         By:  /s/  Susan Chow
                                              -----------------------------
                                              Name:  Susan Chow
                                              Title: Deputy Group Managing 
                                                       Director


                                         SINGAPORE TECHNOLOGIES TELEMEDIA
                                           PTE LTD.


                                         By:  /s/ Lee Theng Kiat
                                              -----------------------------
                                              Name:   Lee Theng Kiat
                                              Title:  President and Chief 
                                                        Executive Officer


                                         Accepted and Agreed to as of the 
                                           date set forth above:


                                         GLOBAL CROSSING LTD


                                         By:  /s/ John J. Legere
                                              -----------------------------
                                              Name:   John J. Legere
                                              Title:  Chief Executive Officer





                                                                CONFIDENTIAL


                               SUMMARY OF TERMS


Company             Global Crossing Ltd. ("GCL")(all references to GCL refer
                    to GCL on a consolidated basis, including all shares of
                    Asia Global Crossing Ltd. ("AGC") held by GCL but
                    excluding the operations, assets and liabilities of AGC
                    and its subsidiaries).

New Investors       Hutchison Whampoa Ltd. ("HWL") and Singapore Technologies
                    Telemedia Pte Ltd ("STT") and such other entities as HWL
                    and STT may designate in accordance with the provisions
                    set forth under the heading "New Investors Designations
                    and Determinations".

Form of Investment  A combination of newly issued GCL common shares and
                    convertible preferred stock ("Senior Convertible Preferred
                    Stock"), such that the New Investors shall own 79% of the
                    equity of GCL pro forma for the GCL Restructuring (as
                    defined below), assuming conversion of the Senior
                    Convertible Preferred Stock but subject to pro rata
                    dilution for the exercise of all options authorized under
                    the Management Plan (as defined below under "GCL
                    Restructuring") as of the closing date of the GCL
                    Restructuring (the "Closing Date").

Aggregate
 Investment Amount  US$750 million in cash. See "GCL Restructuring" below for
                    other terms.

Use of Proceeds     Proceeds from the transaction will be utilized by GCL to
                    fund its business on an ongoing basis and the GCL
                    Restructuring.

Terms of Senior Convertible Preferred Stock
-------------------------------------------

Dividends           8.0% cumulative, payable at GCL's option either in cash
                    and/or in kind. Cash payments may be accrued if required
                    by New Exit Financing covenants.

Ranking             The Senior Convertible Preferred Stock will rank senior to
                    all other capital stock of GCL.

Conversion          The Senior Convertible Preferred Stock may be converted,
                    in whole or in part, at the option of the holder at any
                    time and from time to time, into such number of common
                    shares as will result in ownership by the New Investors,
                    when combined with the New Investors' purchase of shares
                    hereunder, of 79% of the equity of GCL as of the Closing
                    Date (assuming conversion of the Senior Convertible
                    Preferred Stock but subject to pro rata dilution for the
                    exercise of all options authorized under the Management
                    Plan as of the Closing Date). The conversion price of the
                    Senior Convertible Preferred Stock will be subject to
                    customary anti-dilution adjustments.

Optional 
Redemption          None





Optional Change 
of Control 
Redemption          None

Change in Control   If GCL becomes subject to a change of control, each holder
Put                 of the Senior Convertible Preferred Stock will have the
                    right to require GCL to purchase all or a part of such
                    securities at 101% of the liquidation preference of an
                    amount to be agreed, plus any accrued and unpaid dividends
                    to the date of repurchase.

Voting Rights       The Senior Convertible Preferred Stock will vote on an
                    as-converted basis with the common stock.

                    The holders of the Senior Convertible Preferred Stock will
                    have a class voting right with respect to any amendment to
                    the terms of the Senior Convertible Preferred Stock.

                    So long as a New Investor beneficially owns a specified
                    minimum percentage (to be agreed) of GCL's outstanding
                    common shares (for the avoidance of doubt the common
                    shares issuable upon conversion of any shares of Senior
                    Convertible Preferred Stock owned by such New Investor
                    shall be deemed for this purpose only to be beneficially
                    owned by such New Investor), the approval of such New
                    Investor holding Senior Convertible Preferred Stock shall
                    be required for certain major corporate actions of GCL or
                    actions of GCL in respect of major corporate actions of
                    AGC, including any of the following: (i) appointing or
                    replacing GCL's chief executive officer; (ii) any material
                    acquisitions or dispositions; (iii) any mergers,
                    consolidations or reorganizations; (iv) any issuances of
                    equity securities (other than enumerated exceptions); (v)
                    incurrence of indebtedness in excess of specified amounts;
                    (vi) capital expenditures in excess of specified amounts;
                    (vii) commencement of bankruptcy or other insolvency
                    proceedings; and (viii) certain affiliate transactions.

Other Terms of Investment
-------------------------

Transferability     No contractual restrictions on the transferability of the
                    common shares or Senior Convertible Preferred Stock.

Board 
Representation      GCL's board of directors (the "Board") shall be
                    restructured to include no more than 10 members. The New
                    Investors shall designate at least 8 members of the Board,
                    including the Chairman. The New Investors' designees shall
                    be appointed Chairman of each of the Executive Committee,
                    Nominating Committee, Compensation Committee and Audit
                    Committee, subject to applicable stock exchange
                    regulations.

New Investors'
Conditions to 
Closing             The several obligations of each New Investor to complete
                    the transaction contemplated hereby will be subject to the
                    fulfillment to the satisfaction, in the reasonable
                    judgment of such New Investor, of conditions customary for
                    transactions of this nature and other agreed conditions,
                    including: (i) the concurrent completion of the GCL
                    Restructuring (excluding clauses (vii) and (viii)
                    thereof); (ii) financial status and business prospects of
                    AGC,

                                      2




                    including status with respect to a restructuring of the
                    debt of AGC and its subsidiaries if deemed necessary by
                    the New Investors, to be cceptable to the New Investors;
                    (iii) approvals shall have been obtained from all U.S. and
                    non-U.S. government entities, including the U.S. Federal
                    Communications Commission, the U.S. Department of Justice
                    and the U.S. Federal Trade Commission (or applicable
                    waiting periods shall have expired); (iv) the absence of
                    any material adverse change in the business, prospects,
                    properties, assets, liabilities, operations or conditions
                    (financial or otherwise) of GCL from and after a date to
                    be specified in the Purchase Agreement, other than as
                    previously disclosed to and accepted by the New Investors
                    as of the date the Purchase Agreement is executed; (v) to
                    the extent the New Investors determine it is necessary,
                    the amendment of any applicable "change of control"
                    provisions in any agreements or arrangements of GCL which
                    would otherwise be triggered by this transaction; (vi) as
                    of the last day of each of GCL's first three fiscal
                    quarters of 2002, GCL shall have satisfied the minimum
                    Service Revenues and Service EBITDA performance targets
                    set forth on Schedule 1 for such quarter and as of the
                    last day of GCL's 2002 third quarter, GCL shall have (A)
                    satisfied the minimum cumulative IRU revenue performance
                    target set forth on Schedule 1 for such 9 month period and
                    (B) not exceeded the maximum cumulative Cash Capital
                    Expenditure performance target (as adjusted) set forth on
                    Schedule 1 for such 9 month period; (vii) management
                    employment arrangements on terms satisfactory to the New
                    Investors, including equity-based compensation and
                    retention packages, to be structured and agreed with key
                    management personnel consistent with the Management Plan
                    (defined herein); (viii) the requisite amendment of
                    certain contracts of GCL and its affiliates (to be
                    identified by the New Investors to GCL as of the date of
                    the Purchase Agreement) to eliminate the application of
                    the non-compete provisions therein to the New Investors
                    and their affiliates to the satisfaction of the New
                    Investors; (ix) GCL having complied with all covenants and
                    conditions set forth in the documentation relating to the
                    DIP Financing (as defined below), except to the extent
                    noncompliance with respect thereto is either cured by GCL
                    or waived by the DIP lender(s); (x) GCL having taken all
                    such action as may be necessary or appropriate to
                    facilitate the listing of the new equity issued in
                    connection with the GCL Restructuring on a US national
                    stock exchange promptly after the Closing Date provided
                    that this condition shall be deemed satisfied if a listing
                    cannot be effected because the New Investors do not
                    consent to any modification to any of the terms set forth
                    herein needed to effect such listing; (xi) GCL having made
                    each of the filings with respect to the GCL Restructuring
                    specified in Schedule 2 hereto in accordance with the
                    timetable set forth therein (the "Restructuring
                    Timetable") and the events specified in Schedule 2 hereto
                    having occurred substantially in accordance with the
                    Restructuring Timetable and (xii) GCL having complied with
                    all other applicable pre-closing covenants and customary
                    representations and warranties.

GCL's Conditions    The obligation of GCL to complete the transaction 
 to Closing         contemplated hereby will be subject to the fulfillment to 
                    the satisfaction, in the 

                                      3




                    reasonable judgment of GCL, of conditions customary for
                    transactions of this nature and other agreed conditions,
                    including the New Investors having complied with all
                    applicable pre-closing covenants and customary
                    representations and warranties.

GCL Restructuring   GCL shall conduct a restructuring and recapitalization
                    through a Chapter 11 plan of reorganization and such
                    concurrent proceedings under the laws of jurisdictions
                    outside the United States as may be necessary to give full
                    effect to such restructuring and recapitalization
                    (collectively, the "GCL Restructuring"). The terms of the
                    GCL Restructuring must be acceptable to the New Investors,
                    including:

                    (i)    US$800 million in new debt securities to be
                           distributed to existing GCL creditors;

                    (ii)   21% of the share capital of GCL (assuming
                           conversion of the Senior Convertible Preferred Stock
                           but subject to pro rata dilution for the exercise of
                           all options authorized under the Management Plan as 
                           of the Closing Date) to be distributed to existing 
                           GCL creditors;

                    (iii)  US$300 million in cash to be distributed to existing
                           GCL creditors;

                    (iv)   All of GCL's existing bank debt, bond debt and
                           claims relating to entities having filed for
                           bankruptcy protection to be eliminated in exchange 
                           for the consideration set forth above;

                    (v)    New Exit Financing (as described below) to be
                           arranged by GCL;

                    (vi)   Elimination of all existing preferred and common
                           shares and other equity interests;

                    (vii)  HWL to surrender its existing convertible preferred
                           and invest new cash of US$375 million in exchange 
                           for a combination of new Senior Convertible
                           Preferred Stock and common shares as described in 
                           the heading "Form of Investment";

                    (viii) STT to invest new cash of US$375 million to
                           subscribe for a combination of new Senior
                           Convertible Preferred Stock and common shares as 
                           described in the heading "Form of Investment";

                    (ix)   Net working capital of GCL (cash plus receivables
                           minus payables) of at least US$1.0 billion,
                           including a minimum cash balance of GCL of at least
                           US$700 million as of September 30, 2002, as
                           reflected in a pro forma balance sheet giving effect 
                           to the GCL Restructuring as of such date to be 
                           agreed (the "Pro Forma Balance Sheet"), subject to 
                           adjustments to be agreed upon if the Closing Date 
                           occurs before or after September 30, 2002;

                    (x)    Post-restructuring liabilities of GCL, including
                           taxes, not to exceed a cap to be specified in the 
                           Pro Forma Balance Sheet, subject to adjustments to
                           be agreed upon if the

                                      4



                           Closing Date occurs before or after September 30,
                           2002; and

                   (xi)    Establishment of a new GCL compensation plan (the
                           "Management Plan") providing for equity-based
                           compensation to management of GCL in an amount of 
                           up to 10% of the fully diluted common equity of GCL 
                           as of the Closing Date. At the Closing Date, an 
                           allocation shall be made under the Management Plan 
                           of a target level of 5% of the common equity as of 
                           such date at an exercise price equal to the per 
                           share buy-in price of the New Investors on the
                           Closing Date and with a vesting schedule to be 
                           determined at the time of the grant.

New Exit 
 Financing          New debt financing in an amount of not less than US$350
                    million to be arranged by GCL on terms acceptable to the
                    New Investors.

Amendments 
to Bye-Laws         Reorganized GCL's Bye-Laws shall be amended in a manner
                    acceptable to the New Investors, including amendments to:

                    (i)   The voting and transfer provisions;

                    (ii)  Provide for the rights set forth herein under Right
                          of First Offer and under Board Representation; and

                    (iii) Confer on the New Investors rights consistent with
                          those contemplated hereby.

Pre-closing 
 Covenants          GCL shall (i) continue to operate its business in the
                    ordinary course prior to the closing, (ii) make
                    information available to the New Investors, (iii) give the
                    New Investors reasonable access to GCL's management
                    personnel and premises and periodically update the New
                    Investors on material business developments and (iv)
                    consult with the New Investors on all matters outside of
                    the ordinary course of business related to its business,
                    strategy, financing and restructuring prior to closing,
                    including without limitation matters relating to the
                    restructuring of AGC.

                    GCL shall provide the New Investors with advance copies of
                    all material pleadings to be filed in the Chapter 11 cases
                    and related legal proceedings to the extent intended to
                    effectuate the Restructuring Timetable, which pleadings
                    shall be reasonably acceptable to New Investors.

                    Each of GCL and the New Investors shall cooperate with the
                    other parties hereto and take all actions and make all
                    filings necessary to obtain the consent, approval or
                    authorization of all U.S. and non-U.S. government entities
                    necessary or appropriate in connection with the GCL
                    Restructuring and with the investments in GCL of the
                    respective New Investors. In addition, the Purchase
                    Agreement shall provide that each of GCL and the New
                    Investors shall covenant and agree to use their respective
                    reasonable efforts to consummate and make effective the
                    transactions contemplated hereby (including satisfying any
                    conditions to closing which are its responsibility).

                                      5



                    After the entry of the Buyer Protection Order, the New
                    Investors will seek and promptly apply for all applicable
                    regulatory approvals (other than such regulatory approvals
                    which are not legally feasible to pursue prior to the
                    execution of binding documentation).

Registration                             
 Rights              Customary registration rights with respect to all common
                    shares owned by the New Investors in reorganized GCL,
                    including common shares acquired in this transaction and
                    issued upon conversion of the Senior Convertible Preferred
                    Stock.

Right of First 
 Offer              Subject to certain exceptions to be agreed, the New
                    Investors will have a right to invest pro rata in
                    post-restructuring equity securities offerings of
                    Reorganized GCL, whether or not for cash.

Conditions to 
Signing Definitive         
Documentation       Signing of the definitive documentation will be subject to
                    (i) negotiation of definitive documentation acceptable to
                    GCL and the New Investors, (ii) compliance by GCL and the
                    New Investors with all the pre-closing covenants and
                    conditions set forth herein (as if all such covenants and
                    conditions were binding on GCL), (iii) the terms of the
                    GCL Restructuring to be supported by the agents for the
                    banks and the statutory creditors committee by no later
                    than the Auction date (as referenced in Schedule 2); (iv)
                    availability of debtor-in-possession financing for GCL of
                    no less than US$150 million on terms satisfactory to New
                    Investors (the "DIP Financing"); (v) satisfaction of the
                    New Investors with respect to the status of AGC and the
                    status of any AGC restructuring; and (vi) the completion
                    of due diligence satisfactory to the New Investors.

Documentation       Documentation to be entered into between GCL and the New
                    Investors will include a Purchase Agreement containing
                    representations, warranties, covenants and closing
                    conditions acceptable to the parties. Attached as exhibits
                    to the Purchase Agreement will be an agreed upon form of
                    the following documents: (i) new Bye-laws, (ii) a
                    Registration Rights Agreement and (iii) a certificate of
                    designations relating to the Senior Convertible Preferred
                    Stock. The definitive documentation shall provide that all
                    decisions, approvals or designations of a party hereto may
                    be made (or withheld) in the sole and absolute discretion
                    of such party, except to the extent that another standard
                    expressly governs.

Back-End Date       If the Closing Date does not occur by September 30, 2002,
                    the New Investors and GCL shall each have the discretion
                    to terminate the transaction provided that if, on such
                    date, the only unsatisfied condition to closing is
                    obtaining a requisite regulatory approval, such date shall
                    be extended to December 31, 2002.

Expenses            GCL shall reimburse the New Investors for all their
                    actual, reasonable, documented out-of-pocket costs and
                    expenses (including, without limitation, the fees and
                    expenses of counsel, advisors and accountants) incurred in
                    connection with the transaction contemplated hereby (i) up
                    to an aggregate maximum amount of US$3.8 million
                    immediately upon the execution of the 


                                      6



                    letter of intent relating to this Term Sheet and (ii)
                    until termination of the contemplated transaction, those
                    additional reasonable, actual, documented, out of pocket
                    costs and expenses (excluding any success fees) payable as
                    follows: GCL shall pay the monthly retainer payments of
                    Goldman Sachs & Co. and Merrill Lynch (Singapore) Pte.
                    Ltd. in the amounts of US$150,000 and US$150,000,
                    respectively. In addition, each month, the attorneys and
                    accountants of the New Investors shall submit fee
                    statements to GCL, counsel for the agents for the banks,
                    The Office of the United States Trustee and counsel to any
                    statutory creditors committee. If GCL receives no
                    objection within 10 business days of receipt of such fee
                    statement, GCL shall pay the invoiced fees and expenses.
                    If an objection is so received, GCL shall only pay the
                    undisputed amount pending court resolution of such
                    dispute. The total costs and expenses payable pursuant to
                    such clause (ii) shall not exceed US$10 million in the
                    aggregate. In addition, it is contemplated that as part of
                    the GCL Restructuring success fees would be payable by
                    Reorganized GCL to advisors of HWL and STT on the Closing
                    Date.

Buyer Protection 
Order               By the relevant date specified in Schedule 2, GCL shall
                    file a motion in all applicable courts (including Bermuda
                    if necessary) seeking an order (the "Buyer Protection
                    Order") that will establish hearings and deadlines
                    consistent with the Restructuring Timetable and approve
                    (i) the expense reimbursement specified in clause (ii)
                    under "Expenses" above, (ii) a break-up fee to the New
                    Investors in an aggregate amount equal to US$40 million in
                    the event that GCL accepts or approves, or a court
                    approves or orders, any proposal (any such proposal, an
                    "Alternative Transaction") that provides for one or more
                    third parties (A) to acquire in one or a series of related
                    transactions all or substantially all of the assets of GCL
                    or (B) to make a comparable investment in GCL or sponsor
                    or be an economic co-proponent of a plan of reorganization
                    of GCL and (iii) the other binding provisions of this Term
                    Sheet. The break-up fee will be payable when the
                    Alternative Transaction closes provided that if an
                    Alternative Transaction is approved by the court but
                    ultimately does not close, the New Investors shall be
                    entitled to a break-up fee in an aggregate amount equal to
                    US$20 million, payable on the effective date of GCL's plan
                    of reorganization. No break-up fee will be owed if either
                    of the New Investors terminates the transaction for any
                    reason (other than as a result of (i) an Alternative
                    Transaction, (ii) GCL willfully fails to comply with the
                    conditions to Closing for the purposes of delaying or
                    precluding the closing of the transaction or (iii) such
                    termination results from a failure to adhere to the
                    Restructuring Timetable that is not attributable to the
                    New Investors and an Alternative Transaction is approved
                    by the court within 90 days of such missed deadline). A
                    break-up fee payable under the circumstances described in
                    clause (iii) immediately above shall only be payable out
                    of the proceeds payable at closing of such Alternative
                    Transaction.

Confidentiality     Until the date on which GCL files a motion seeking
                    approval of the Buyer Protection Order, GCL and the New
                    Investors agree to keep this Term Sheet confidential
                    pursuant to their previous

                                      7



                    confidentiality undertakings with respect to the potential
                    transaction, provided that GCL may disclose this Term
                    Sheet to its bank lenders, its bond/note holders and any
                    statutory creditors committee, and their respective
                    advisors, provided such parties have agreed to keep this
                    Term Sheet confidential, provided that GCL concurrently
                    with such disclosure informs the New Investors of the
                    identity of the person to whom this Term Sheet is being
                    disclosed. Notwithstanding the foregoing, the New
                    Investors and GCL may each issue a press release relating
                    to this Term Sheet disclosing (i) the names of the New
                    Investors and GCL, (ii) the aggregate US$750 million cash
                    investment by the New Investors and (iii) such other items
                    as may be mutually agreed by the parties.

New Investors 
Designations and 
Determinations      HWL and STT may designate other entities as New Investors
                    provided that, notwithstanding such designation (i) HWL
                    and STT acting directly or through one or more affiliates
                    shall each invest an amount that exceeds the amount
                    invested by any other New Investors and (ii) no entity
                    shall be designated that adversely effects the timing of
                    the Closing of the transaction or the ability to obtain
                    regulatory approval for the consummation of the Closing.

                    Notwithstanding anything to the contrary contained herein,
                    (i) in each case where this Term Sheet or the definitive
                    documents contemplated hereby provides for the New
                    Investors to provide a decision or their approval,
                    consent, waiver or judgment, such decision, approval,
                    consent, waiver or judgment shall be solely provided by
                    HWL and STT (and shall specifically exclude any of their
                    permitted designees), (ii) the parties further acknowledge
                    that HWL and STT shall negotiate and approve all
                    definitive agreements contemplated hereby without the
                    participation of any additional investor and (iii) if HWL
                    or STT designates any other entity to participate in the
                    transaction in accordance with the terms hereof, either
                    (A) such entity shall be financially capable of performing
                    its obligations to GCL under the definitive documents
                    (including its obligations to fund its portion of the
                    Investment Amount on the Closing Date), as reasonably
                    determined by GCL, or (B) HWL or STT, as the case may be,
                    shall remain obligated to perform any such obligations not
                    performed by such designee.

Governing
Law                 This Term Sheet shall be governed by and construed in
                    accordance with the laws of the State of New York.

Non-binding Term 
Sheet               This Term Sheet except for the provisions relating to
                    Expenses, Buyer Protection Order, Confidentiality and
                    Governing Law above (which provisions are intended and
                    agreed to be fully binding), is intended as an indication
                    of interest for discussion purposes only and is not
                    intended to be and does not constitute a legally binding
                    obligation of any party hereto. No person or entity shall
                    rely upon anything in this Term Sheet and no person or
                    entity shall have any right, benefit or remedy of any
                    nature by reason of this Term Sheet.

                                      8



                                  Schedule 1
                                  ----------

                              Performance Targets
                              -------------------

                    (US$ millions) For Quarters ended 2002

                      Q1           Q2           Q3         9 months
                      --           --           --         --------
Minimum
Service Revenue     $722         $677         $658
Service EBITDA      (105)         (68)         (49)
Cumulative IRU's                                            $65


                      Q1           Q2           Q3         9 months
                      --           --           --         --------
Maximum                                                     $242(1)
Cumulative Cash
CapEx



---------------
(1)   Plus increases for CapEx associated with Service Revenue and IRU Sales
      that are incrementally higher than projected.

                                      9





                                  Schedule 2
                                  ----------

                            Restructuring Timetable
                            -----------------------

     Time                                                     
  (Days after
commencement of 
Chapter 11 cases)                          Action
-----------------                          ------

     +7                  Filing of motion seeking approval of Buyer Protection
                         Order

     +45                 Approval of Buyer Protection Order; Application(s) for
                         regulatory approvals

     +90                 Deadline for submission of qualified bids1

     +110                Auction, if qualified bids submitted ("Auction")

     +125                Filing of draft plan and disclosure statement

     +160                Approval of draft disclosure statement, start of
                         solicitation of votes on plan

     +205                Confirmation of plan

     +230                Effective date of plan (Closing Date), subject to 
                         receipt of any consent, approval or authorization of
                         any government entity; closing of the new exit 
                         financing


--------------
1     "Qualified bids" to be defined as bids providing for (i) distributions
      to creditors of no less value than the amounts described above in 
      the GCL Restructuring after taking into account any requisite payment of 
      a break-up fee to the New Investors as a result thereof plus a customary
      bidding increment and (ii) a reasonable level of liquidity available
      to Reorganized GCL on the Closing Date. If there are no qualified bids
      submitted, the remaining timetable can be accelerated.