<PAGE>

                                                                   EXHIBIT 10.57

                             EMPLOYMENT AGREEMENT


     THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of October 20, 2000,
                                     ---------
is by and between FirstWorld Communications, Inc., a Delaware corporation (the

"Company") and J. Thomas McGrath ("Executive") (collectively, the "Parties").
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                                   RECITALS

     The Company desires to employ Executive, effective as of November 6, 2000
(the "Commencement Date"), on the terms and conditions set forth in this
      -----------------
Agreement, and Executive desires to be so employed.


                                   AGREEMENT

     IN CONSIDERATION of the premises and the mutual covenants set forth below,
the parties hereby agree as follows:

     1.  Employment.  The Company hereby agrees to employ Executive as President
         ----------
and Chief Executive Officer of the Company, and Executive hereby accepts such
employment, on the terms and conditions hereinafter set forth. Executive
acknowledges that he may be employed by a subsidiary of the Company, however,
the Company will remain liable for all obligations contained in this Agreement.

     2.  Term.  The period of employment of Executive by the Company hereunder
         ----
(the "Employment Period") shall commence at the Commencement Date and shall
      -----------------
continue through November 6, 2002. The Employment Period may be sooner
terminated by either party in accordance with Section 5 of this Agreement.

     3.  Position and Duties.  During the Employment Period, Executive shall
         -------------------
serve as President and Chief Executive Officer, of the Company. Executive shall
devote such time, attention and energies to Company affairs as are necessary to
fully perform his duties (other than absences due to illness or vacation) for
the Company. During the Employment Period, Executive shall not, directly or
indirectly, render services to any other organization, entity or person, as an
employee, independent contractor, consultant or otherwise, with or without
compensation, without the prior written consent of the Board of Directors of the
Company (the "Board").
              -----

     4.  Compensation and Related Matters.
         --------------------------------

         (a)  Equalization Payment.  To compensate Executive for certain
benefits that he may lose or forfeit as a result of his termination of
employment with his former employer, and commencement of employment with the
Company, the Company shall pay Executive a payment in the amount of Two Hundred
Fifty Thousand and 00/Dollars ($250,000.00), less all applicable withholdings
(the "Equalization Payment") payable with Executive's first regularly
      --------------------
scheduled paycheck, provided, however, that if Company terminates Executive's
                    --------  -------
employment with Cause or if

                                      -1-
<PAGE>

Executive terminates employment without Good Reason, Executive shall, as of the
Date of Termination of employment, reimburse the Company a prorated amount of
the Equalization Payment based on the number of days employed compared to one
full year of employment. By way of example, if Executive's employment is so
terminated six months from the Commencement Date, the calculation would be as
follows: $250,000/365 = $685 x 182.5 (days Executive employed) = $125,012;
$250,000 - $125,012 = $124,988 due to Company from Executive. Executive
authorizes the Company to withhold an amount sufficient to satisfy such
reimbursement obligation from any sums otherwise due the Executive under this
Agreement or otherwise.

          (b)  Salary.  During the Employment Period, the Company shall pay
Executive an annual base salary of Three Hundred Thousand and 00/Dollars
($300,000.00) per year ("Base Salary"). Executive's Base Salary shall be paid in
                         -----------
approximately equal installments in accordance with the Company's customary
payroll schedule and practices. Executive's Base Salary shall be subject to
annual reviews commencing November 6, 2001, and each year thereafter. If
Executive's Base Salary is increased by the Company, such increased Base Salary
shall then constitute the Base Salary for all purposes of this Agreement. All
compensation paid to Executive shall be subject to withholding and other
employment taxes imposed by applicable law.

          (c)  Annual Bonus.  The Board's Compensation Committee (the
"Compensation Committee") or its delegate shall review Executive's performance
 ----------------------
at least once quarterly during each year of the Employment Period to review the
Executive's performance pursuant to the procedures and terms of Company's
Quarterly Bonus Plan ("Bonus Plan"), as in effect from time to time. The
percentage of Executive's Salary to be used for calculations under the Bonus
Plan shall be an amount equal to 100% of the Executive's Base Salary. The
Executive's Bonus shall be paid pursuant to the terms and conditions of the
Bonus Plan.

          (d)  Stock Options.

               (i)  Stock Option Agreement:

                    a.  Executive shall be awarded a stock option (the "Stock
                                                                        -----
     Option") effective as of November 6, 2000 ("Option Grant Date") to purchase
     ------                                      -----------------
     One Million (1,000,000) shares of the Company's Series B Common Stock, par
     value $.0001 per share (the "Common Stock"). The shares of Common Stock
                                  ------------
     subject to the Stock Option shall vest in increments of Four Hundred
     Thousand (400,000) shares on the first anniversary of the Option Grant
     Date; Three Hundred Thousand (300,000) shares on the second anniversary of
     the Option Grant Date; and Three Hundred Thousand (300,000) shares on the
     third anniversary of the Option Grant Date. The Purchase Price for the
     Common Stock covered by the Option shall be equal to the fair market value
     of the Common Stock as measured by the closing price of a share of Common
     Stock on NASDAQ on the Option Grant Date. The Stock Option will be granted
     under the 1999 Equity Incentive Plan of FirstWorld Communications, Inc.
     (the "Plan") and the terms and conditions of the Stock Option will be
           ----
     determined in accordance with the Plan; provided however, to the extent
     such terms of the Plan or the Stock Option agreement conflict with the
     terms of the Employment Agreement, the terms of the Employment Agreement
     will control. To the extent permissible under applicable law and the Plan,
     the Stock Option granted will be granted as incentive stock options.

                                      -2-
<PAGE>

                    b.  the Option Agreement shall contain a provision relating
     to the expiration of the right to exercise vested Stock Options, which
     shall read as follows:

          If the Optionee's employment is terminated by the Company without
          Cause or by the Optionee for Good Reason, pursuant to Optionee's
          Employment Agreement, the Executive shall have the right to exercise
          the Options vested at the time of such termination upon the later to
          occur of: (i) November 6, 2002, or (ii) ninety (90) days from the Date
          of Termination of Employment.

                    c.  The Option Agreement shall contain a provision related
     to Change of Control and Accelerated Vesting as follows:

          Notwithstanding any terms in the Plan to the contrary, this Option
          Agreement, the Employment Agreement, or otherwise, all of the Options
          granted hereunder shall become vested and exercisable immediately
          prior to such transaction in the event of the sale of all or
          substantially all of the Company's assets or a merger or consolidation
          in which the Company is not the surviving entity, or the Company's
          stockholders prior to the transaction own less than 50% of the voting
          power of the Company's outstanding securities immediately following
          the transaction. In addition, upon termination of Executive's
          employment by the Company without Cause or by the Executive for Good
          Reason prior to the expiration of the Employment Period, those Options
          granted hereunder that would otherwise become vested on or before
          November 6, 2002, shall become vested and exercisable.

          (e)  Expenses.  The Company shall promptly reimburse Executive for all
reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company.

          (f)  Relocation Expenses.  The Company requires Executive to relocate
to the Denver, Colorado metropolitan area and Executive agrees that he will so
relocate. The Company will reimburse Executive 100% of reasonable relocation
expenses (e.g., temporary living expenses, house-hunting trips, transport of
household goods, temporary storage of household goods, and any costs incurred as
a result of selling a home in your current location and buying a home in your
new location) ("Relocation Payment") upon the presentation of itemized
                ------------------
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company, provided, however, that
                                                         -----------------
if Company terminates Executive's employment with Cause or if Executive
terminates employment without Good Reason, Executive shall, as of the Date of
Termination of employment, reimburse the Company a prorated amount of the
Relocation Payment based on the number of days employed compared to one full
year of employment. By way of example, if Executive's employment is so
terminated six months from the Commencement Date and the Relocation Payment was
$5,000, the calculation would be as follows: $5,000/365 = $14 x 182.5 (days
Executive employed) = $2,555; $5,000 - $2,555 = $2,445 due to Company from
Executive. Executive

                                      -3-
<PAGE>

authorizes the Company to withhold an amount sufficient to satisfy such
reimbursement obligation from any sums otherwise due the Executive under this
Agreement or otherwise.

                    (g)  Welfare and Other Plans.  In addition to Executive's
Base Salary and any incentive compensation and bonuses awarded to Executive
hereunder, he (and his family) shall be entitled to participate, to the extent
that he is (and they are) eligible under the terms and conditions thereof, in
any 401k plan, retirement, hospitalization, insurance, disability or medical
service plan generally available to the executive officers of the Company that
may be in effect from time to time during the Employment Period. The Company
shall be under no obligation to institute or continue the existence of any such
employee benefit plan. Executive is entitled to four (4) weeks vacation per
calendar year.

                    (h)  Additional Options: On or about early January 2002, the
Compensation Committee or its delegate(s) shall meet with the Executive and
discuss whether to grant Executive additional stock options.

     5.  Termination.  Executive's employment hereunder may be terminated during
         -----------
the Employment Period under the following circumstances:

         (a)  Death.  Executive's employment hereunder shall terminate upon his
death.

         (b)  Disability.  If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an entire period of thirty (30) consecutive
days, and within thirty (30) days after written Notice of Termination (as
defined in Section 6(a)) is given after such thirty (30) day period, Executive
shall not have returned to the substantial performance of his duties on a full-
time basis, the Company shall have the right to terminate Executive's employment
hereunder for "Disability," and such termination in and of itself shall not be,
nor shall it be deemed to be, a breach of this Agreement.

         (c)  Cause.  The Company shall have the right to terminate Executive's
employment for Cause (as defined), and such termination in and of itself shall
not be, nor shall it be deemed to be, a breach of this Agreement. For purposes
of this Agreement, the Company shall have "Cause" to terminate Executive's
employment upon Executive's:

              (i)   conviction of, or plea of guilty or nolo contendere to, any
     crime constituting a felony;

              (ii)  commission of a material act of dishonesty, fraud,
     misrepresentation or other act of moral turpitude that would, in the
     Board's reasonable judgment, prevent the effective performance of his
     duties hereunder;

              (iii) continued failure to substantially perform his duties
     hereunder to the reasonable satisfaction of the Board (other than such
     failure resulting from Executive's incapacity due to physical or mental
     illness) after demand for substantial performance is delivered by the Board
     in writing that specifically identifies the manner in which the Board
     believes Executive has not used reasonable best efforts to substantially
     perform his duties; or

                                      -4-
<PAGE>

              (iv) willful misconduct (including, but not limited to, a willful
     breach of the provisions of Section 8) that is, in the Board's reasonable
     judgment, injurious to the Company or to any entity in control of,
     controlled by or under common control with the Company ("Affiliate").
                                                              ---------

     For purposes of this Section 5(c), no act, or failure to act, by Executive
shall be considered "willful" unless committed in bad faith and without a
reasonable belief that the act or omission was in the best interests of the
Company or any Affiliates thereof; provided, however, that the requirements
                                   --------  -------
outlined in paragraphs (iii) or (iv) above shall be deemed to have occurred if
Executive's action or non-action continues for more than ten (10) days after
Executive has received written notice of the inappropriate action or non-action.
This Section 5(c) shall not prevent Executive from challenging the Board's
determination that Cause exists or that Executive has failed to cure any act (or
failure to act) that purportedly formed the basis for the Board's determination,
under the arbitration procedures set forth in Section 10 below.

          (d)  Good Reason.  Executive may terminate his employment for "Good
Reason" within thirty (30) days after Executive has actual knowledge of the
occurrence, without the written consent of Executive, of one of the following
events that has not been cured within thirty (30) days after written notice
thereof has been given by Executive to the Company (provided, that with
                                                    --------
respect to this Section 5(d), the Company shall have the right to challenge
Executive's determination that he has the right to terminate his employment for
"Good Reason" under the arbitration procedures set forth in Section 10 below):

               (i)   a reduction by the Company in Executive's Base Salary or a
     failure by the Company to pay any such amounts when due;

               (ii)  the Company's failure to provide the Stock Option
     referenced in paragraph 4(d)1, or the Company's material breach of one or
     more of the stock option agreements pursuant to which the Stock Option was
     issued to Executive;

               (iii) the Company's failure to substantially provide any material
     employee benefits due to be provided to Executive; or

               (iv)  the Company's failure to provide in all material respects
     the indemnification set forth in the agreement referenced in Section 9 of
     this Agreement.

     Executive's continued employment during the thirty (30) day period referred
to above in this paragraph (d) shall not constitute Executive's consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.

          (e)  Without Good Reason or Cause. Executive shall have the right to
terminate his employment hereunder without Good Reason and the Company shall
have the right to terminate Executive's employment hereunder without Cause by
providing the other with a Notice of Termination, and such termination shall not
in and of itself be, nor shall it be deemed to be, a breach of this Agreement.

                                      -5-
<PAGE>

     6.  Termination Procedure.
         ---------------------

         (a)  Notice of Termination.  Any termination of Executive's employment
by the Company or by Executive during the Employment Period (other than
termination pursuant to Section 5(a)) shall be communicated by written Notice of
Termination (as defined below) to the other party hereto in accordance with
Section 12 below. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.

         (b)  Date of Termination.  "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 5(b), thirty (30)
days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period) and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.

     7.  Compensation upon Termination or During Disability.  In the event
         --------------------------------------------------
Executive is disabled or his employment terminates during the Employment Period,
the Company shall provide Executive with the payments and benefits set forth
below. Executive acknowledges and agrees that the payments set forth in this
Section 7 constitute liquidated damages for termination of his employment during
the Employment Period.

         (a)  Termination by Company without Cause or by Executive for Good
Reason. If Executive's employment is terminated by the Company without Cause or
by Executive for Good Reason:

              (i)   Within thirty (30) days following the Date of Termination,
     the Company shall pay to Executive a severance payment equal to the greater
     of the amount of Base Salary Executive would have received under the
     Agreement if Executive had remained employed throughout the Employment
     Period stated in Section 2, or the amount of Base Salary Executive is
     entitled to receive for twelve (12) months, plus accrued vacation;

              (ii)  Within thirty (30) days following the Date of Termination,
     the Company shall reimburse Executive pursuant to Section 4(e) for
     reasonable expenses incurred, but not paid prior to such termination of
     employment; and

              (iii) Executive shall be entitled to any other rights,
     compensation and/or benefits as may be due to Executive as of the Date of
     Termination, in accordance with the terms and provisions of any agreements,
     plans or programs of the Company.

          (b) Termination by Company for Cause or by Executive without Good
Reason. If Executive's employment is terminated by the Company for Cause or by
Executive (other than for Good Reason):

                                      -6-
<PAGE>

               (i)   the Company shall pay Executive his Base Salary and, to the
     extent required by law or the Company's vacation policy, his accrued
     vacation pay through the Date of Termination, as soon as practicable
     following the Date of Termination;

               (ii)  the Company shall reimburse Executive pursuant to Section
     4(e) for reasonable expenses incurred, but not paid prior to such
     termination of employment, unless such termination resulted from a
     misappropriation of Company funds; and

               (iii) Executive shall be entitled to any other rights,
     compensation and/or benefits as may be due to Executive as of the Date of
     Termination in accordance with the terms and provisions of any agreements,
     plans or programs of the Company.

          (c)  Disability.  During any period that Executive fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness, Executive shall continue to receive his full Base Salary set forth in
Section 4(b) until his employment is terminated pursuant to Section 5(b). In the
event Executive's employment is terminated for Disability pursuant to Section
5(b):

               (i)   Within 30 days following the Date of Termination, the
     Company shall pay to Executive his Base Salary and accrued vacation pay
     through the Date of Termination;

               (ii)  the Company shall reimburse Executive pursuant to Section
     4(e) for reasonable expenses incurred, but not paid prior to such
     termination of employment; and

               (iii) Executive shall be entitled to any other rights,
     compensation and/or benefits as may be due to Executive as of the Date of
     Termination, in accordance with the terms and provisions of any agreements,
     plans or programs of the Company.

          (d)  Death.  If Executive's employment is terminated by his death:

               (i)   the Company shall pay in a lump sum to Executive's
     beneficiary, legal representatives or estate, as the case may be,
     Executive's Base Salary through the Date of Termination;

               (ii)  the Company shall reimburse Executive's beneficiary, legal
     representatives, or estate, as the case may be, pursuant to Section 4(e)
     for reasonable expenses incurred, but not paid prior to such termination of
     employment; and

               (iii) Executive's beneficiary, legal representatives or estate,
     as the case may be, shall be entitled to any other rights, compensation and
     benefits as of the Date of Termination, as may be due to any such persons
     or estate in accordance with the terms and provisions of any agreements,
     plans or programs of the Company.

     8.  Confidential Information, Ownership of Documents, Non-Competition.
         -----------------------------------------------------------------

         (a)  Confidential Information.  Executive shall hold in a fiduciary
capacity for the benefit of the Company all Confidential Information (as defined
below) relating to the Company and

                                      -7-
<PAGE>

its businesses and investments, which shall have been obtained by Executive
during Executive's employment by the Company and which is not generally
available public knowledge (other than by acts of Executive in violation of this
Agreement). Except as may be required or appropriate in connection with his
carrying out his duties under this Agreement, Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law or
any legal process, or as is necessary in connection with any adversarial
proceeding against the Company (in which case Executive shall use his reasonable
best efforts in cooperating with the Company in obtaining a protective order
against disclosure by a court of competent jurisdiction), communicate or divulge
any such Confidential Information relating to the Company to anyone other than
the Company and those designated by the Company or on behalf of the Company in
the furtherance of its business or to perform duties hereunder.

     For the purposes hereof, the term "Confidential Information" means, with
respect to any person, any information concerning such person or its business,
products, financial condition, prospects and affairs that is not generally
available to the public.  The term Confidential Information shall not include
information that: (i) is already known to the recipient and was properly
obtained by the recipient prior to the date of this Agreement; (ii) is in the
public domain other than through a negligent act or omission or willful
misconduct of the recipient; (iii) is acquired in good faith from a third party
and, at the time of the acquisition, the recipient had no knowledge or reason to
believe that such information was wrongfully obtained or disclosed by the third
party; (iv) is independently developed by the recipient from information not
defined as "Confidential Information" in this Agreement, as evidenced by the
recipient's written records; (v) is disclosed to third parties by the disclosing
party without restriction; (vi) is required to be disclosed under applicable law
or by a valid subpoena or other court or governmental order, decree, regulation
or rule; provided, however, that if disclosure is required under this provision
         --------  -------
the recipient shall advise the disclosing party of the requirement to disclose
the Confidential Information prior to such disclosure and as soon as reasonably
practicable after the recipient becomes aware of such required disclosure; and

further provided that upon the request of the disclosing party, the recipient
------- -------- ----
agrees to cooperate in good faith with any reasonable and lawful actions which
the disclosing party takes to resist such disclosure, limit the information to
be disclosed or limit the extent to which the information so disclosed may be
used or made available to third parties, at the cost of the disclosing party.

          (b)  Removal of Documents; Rights to Products. All records, files,
drawings, documents, models, equipment, and the like relating to the Company's
business, which Executive has control over shall not be removed from the
Company's premises by Executive without the Board's written consent, unless such
removal is in the furtherance of the Company's business or is in connection with
Executive's carrying out his duties under this Agreement and, if so removed by
Executive, shall be returned to the Company promptly after termination of
Executive's employment hereunder, or otherwise promptly after removal if such
removal occurs following termination of employment. Executive shall assign to
the Company all rights to trade secrets and other products relating to the
Company's business developed by him alone or in conjunction with others at any
time while employed by the Company.

          (c)  Non-Compete.  During the Employment Period and until the first
anniversary of Executive's Date of Termination, in the event Executive is
terminated by the Company for Cause, Executive terminates employment without
Good Reason, or Executive is terminated by the Company for Disability, the
Executive will not (i) engage, anywhere within the geographical areas in which
the Company or any of its controlled Affiliates (the "Designated Entities") are
                                                      -------------------
conducting their business operations or providing services as of the Date of

                                      -8-
<PAGE>

Termination, in any business which is being engaged in by the Designated
Entities as of the Date of Termination or pursue or attempt to develop any
project known to Executive and which the Designated Entities are pursuing,
developing or attempting to develop as of the Date of Termination (a "Project"),
                                                                      -------
unless such Project has been inactive for over nine (9) months, directly or
indirectly, alone, in association with or as a stockholder, principal, agent,
partner, officer, director, employee or consultant of any other organization,
(ii) divert to any entity which is engaged in any business conducted by the
Designated Entities in the same geographic area as the Designated Entities, any
Project or any customer of any of the Designated Entities or (iii) solicit any
officer, employee (other than secretarial staff) or consultant of any of the
Designated Entities to leave the employ of any of the Designated Entities.
Notwithstanding the preceding sentence, Executive shall not be prohibited from
owning less than five (5%) percent of any publicly traded corporation, whether
or not such corporation is in competition with the Company. If, at any time, the
provisions of this Section 8(c) shall be determined to be invalid or
unenforceable, by reason of being vague or unreasonable as to area, duration or
scope of activity, this Section 8(c) shall be considered divisible and shall
become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or
other body having jurisdiction over the matter; and Executive agrees that this
Section 8(c) as so amended shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.

          (d)  Continuing Operation. Except as specifically provided in this
Section 8, the termination of Executive's employment or of this Agreement shall
have no effect on the continuing operation of this Section 8.

     9.   Indemnification.
          ---------------

          (a)  Upon the Commencement Date, Executive will enter into the
Company's standard directors and officers indemnification agreement.

          (b)  Upon the Commencement Date, the Company will ensure that
Executive is added as an insured on its directors and officers liability
insurance policy. In the event that Executive's employment relationship with the
Company is severed, for any reason, the Company will provide that Executive
shall continue to be an insured under the Company's directors and officers
liability insurance policy for as long as the Company retains such coverage, and
if the Company discontinues such coverage, Executive and/or his heirs or
personal or legal representative shall be given the opportunity to purchase
continuation coverage in accordance with the terms of the applicable policy.

     10.  Arbitration.  Any controversy between Executive and the Company
          -----------
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, including, without limitation, the determination
of whether "Cause" or "Good Reason" exists under Section 5(c) or Section 5(d)
hereof and claims involving specific performance, shall on the written request
of either party served on the other in accordance with Section 12 below be
submitted to binding arbitration. EACH PARTY, BY SIGNING THIS AGREEMENT,
VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY WAIVES ANY RIGHTS SUCH PARTY MAY
OTHERWISE HAVE TO SEEK REMEDIES IN COURT OR OTHER FORUMS, INCLUDING

                                      -9-
<PAGE>

THE RIGHT TO A JURY TRIAL. Arbitration shall comply with and be governed in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA").  The arbitration will be conducted only in Denver,
                  ---
Colorado, before a single arbitrator selected by the parties or, if they are
unable to agree on an arbitrator, before an arbitrator selected by the AAA.  The
arbitrator shall have full authority to order specific performance and award
damages and other relief available under this Agreement or applicable law, but
shall have no authority to add to, detract from, change or amend the terms of
this Agreement or existing law.  All arbitration proceedings, including
settlements and awards, shall be confidential.  The decision of the arbitrator
will be final and binding, and judgment on the award by the arbitrator may be
entered in any court of competent jurisdiction.  THIS SUBMISSION AND AGREEMENT
TO ARBITRATE WILL BE SPECIFICALLY ENFORCEABLE.  The arbitrator will have no
power to award punitive or exemplary damages, to ignore or vary the terms of
this Agreement and any other agreement between Executive and the Company and
will be bound to apply controlling law.  The prevailing party in any such
arbitration shall be entitled to receive the costs of arbitration, including
reasonable attorneys' fees and costs, from the losing party.

     11.  Successors, Binding Agreement.
          -----------------------------

          (a)  Company's Successors.  No rights or obligations of the Company
under this Agreement may be assigned or transferred, except that the Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as herein before defined and any successor to
its business and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 11 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.

          (b)  Executive's Successors.  No rights or obligations of Executive
under this Agreement may be assigned or transferred by Executive other than his
rights to payments or benefits hereunder, which may be transferred only by will
or the laws of descent and distribution. Upon Executive's death, this Agreement
and all rights of Executive hereunder shall inure to the benefit of and be
enforceable by Executive's beneficiary or beneficiaries, personal or legal
representatives or estate, to the extent any such person succeeds to Executive's
interests under this Agreement. Executive shall be entitled to select and change
a beneficiary or beneficiaries to receive any benefit or compensation payable
hereunder following Executive's death by giving the Company written notice
thereof. In the event of Executive's death or a judicial determination of his
incompetence, reference in this Agreement to Executive shall be deemed, where
appropriate, to refer to his beneficiary(ies), estate or other legal
representative(s). If Executive should die following his Date of Termination
while any amounts would still be payable to him hereunder if he had continued to
live, all such amounts unless otherwise provided herein shall be paid in
accordance with the terms of this Agreement to such person or persons so
appointed in writing by Executive, or otherwise to his legal representatives or
estate.

     12.  Notice.  For the purposes of this Agreement, notices, demands and all
          ------
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been

                                      -10-
<PAGE>

duly given when delivered either personally or by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:

         If to Executive:     J. Thomas McGrath
                              6528 Twin Oaks Drive
                              Plano, TX 75024
                              Facsimile: (972) 625-5030


         If to the Company:   FirstWorld Communications, Inc.
                              8390 East Crescent Parkway, Suite 300
                              Greenwood Village, CO 80111
                              Attn: General Counsel
                              Facsimile: (303) 874-2461

or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

     13.  Waiver.  No provisions of this Agreement may be amended, modified, or
          ------
waived unless such amendment or modification is agreed to in a writing signed by
Executive and by a duly authorized officer of the Company, and such waiver is
set forth in writing and signed by the party to be charged.  No waiver by either
party hereto at any time of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.

     14.  Survival.  Except as otherwise expressly set forth herein, the
          --------
respective rights and obligations of the parties under this Agreement shall
survive Executive's termination of employment and the termination of this
Agreement to the extent necessary for the intended preservation of such rights
and obligations.

     15.  Choice of Law.  The validity, interpretation, construction and
          -------------
performance of this Agreement shall be governed by the laws of the State of
Colorado without regard to its conflicts of law principles.

     16.  Validity.  The invalidity or unenforceability of any provision or
          --------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

     17.  Counterparts.  This Agreement may be executed in one or more
          ------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument. Facsimile signatures will
be deemed to be effective originals hereunder.

     18.  Entire Agreement.  This Agreement sets forth the entire agreement of
          ----------------
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of such
subject matter. Any prior agreement of the parties hereto in respect of the
subject matter contained herein is hereby terminated and canceled.

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<PAGE>

     19.  Withholding.  All payments hereunder shall be subject to any required
          -----------
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.

     20.  Section Headings.  The section headings in this Agreement are for
          ---------------
convenience of reference only, and they form no part of this Agreement and shall
not affect its interpretation.


     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.


FIRSTWORLD COMMUNICATIONS, INC.,
a Delaware corporation



By:  /s/ Donald L. Sturm                     /s/ J. Thomas McGrath     10/20/00
     -------------------------               ----------------------------------
Name:  Donald L. Sturm                       J. Thomas McGrath
Title: Acting President and
       Chief Executive Officer

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