<PAGE>

                                                                   Exhibit 10.14

                                 EXECUTION COPY

                                 MASTER SUPPLY,

                         SERVICES, and SYSTEM AGREEMENT

                                     BETWEEN

                                 PF.NET, L.L.C.

                                       AND

                            LUCENT TECHNOLOGIES INC.

                         CONTRACT NUMBER LNM990304DLMPTI


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                                TABLE OF CONTENTS

                                    ARTICLE I

SECTION                                                                     PAGE
                                                                            ----

1.     Definitions                                                            1

                                   ARTICLE II

SCOPE AND STRUCTURE

2.1    Term of Agreement                                                      1
2.2    Scope                                                                  1
2.3    Conflicting Terms                                                      1
2.4    Purchase Target                                                        1
2.5    Customer Responsibility                                                2
2.6    Network                                                                2
2.7    Forecasts                                                              2
2.8    Permits and Approvals                                                  2
2.9    Additional Conditions                                                  2
2.10   Agency Arrangements                                                    3

                                   ARTICLE III

GENERAL TERMS AND CONDITIONS

3.1    Orders                                                                 4
3.2    Changes In Customer's Orders                                           5
3.3    Changes in Products                                                    5
3.4    Prices                                                                 5
3.5    Invoices, Acceptance and Terms of Payment                              6
3.6    Purchase Money Security Interest                                       7
3.7    Taxes                                                                  8
3.8    Transportation and Packing                                             8
3.9    Title and Risk of Loss                                                 S
3.10   Personal Injury                                                        8
3.11   Infringement                                                           9
3.12   Customer's Remedies                                                   10
3.13   Use of Information                                                    11
3.14   Documentation                                                         12
3.15   Notices                                                               12
3.16   Force Majeure                                                         12
3.17   Assignment                                                            12


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

3.18   Termination                                                           13
3.19   Independent Contractor                                                13
3.10   Releases Void                                                         14
3.21   Publicity                                                             14
3.22   Confidentiality of Agreement                                          14
3.23   Export Control                                                        14
3.24   Amendments                                                            14
3.25   Severability                                                          14
3.26   Waiver                                                                14
3.27   Survival                                                              15
3.28   Section Headings                                                      15
3.29   Choice of Law                                                         15
3.30   Ambiguities                                                           15
3.31   Facilities Access                                                     15
3.32   Test-Based Laboratory                                                 15

                                   ARTICLE IV

PROVISIONS APPLICABLE TO LICENSED MATERIALS

4.1    License for Licensed Materials                                        16
4.2    Changes in Licensed Materials                                         16
4.3    Cancellation of License                                               16
4.4    Optional Software Features                                            16
4.5    Additional Rights in Licensed Materials                               17
4.6    Installation of Software                                              17
4.7    Vendor Item Warranty                                                  17

                                    ARTICLE V

GENERAL SERVICES PROVISIONS

5.1    Personnel                                                             17
5.2    Relocation, Modification or Improper Usage of Software                17
5.3    Services Not Covered                                                  18
5.4    Personnel & Subcontractors                                            18
5.5    Work or Services Performed by Others                                  18
5.6    Provisions for Engineering and Installation Services                  19
5.7    Provisions for Professional Services                                  25


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                                   ARTICLE VI

PROJECT MANAGEMENT

6.1    Scope                                                                 27
6.2    Seller Project Management                                             27
6.3    Customer Project Management                                           27

                                   ARTICLE VII

WARRANTY

7.1    Network Elements                                                      27
7.2    Services                                                              28
7.3    Network                                                               28
7.4    Backwards Compatibility                                               29
7.5    Year 2000 Warranty                                                    29
7.6    Bandwidth Assurance                                                   29
7.7    Disclaimer                                                            31

                                  ARTICLE VIII

GENERAL ASSURANCE                                                            31

                                   ARTICLE IX

ATTACHMENTS                                                                  32

                                    ARTICLE X

COUNTERPARTS                                                                 33

                                   ARTICLE XI

ENTIRE AGREEMENT                                                             33

EXHIBIT A                                                                    34


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                  MASTER SUPPLY, SERVICES, and SYSTEM AGREEMENT

            This Master Supply, Service, and System Agreement (Contract Number
LNM990304DLMPTI and referred to as "Agreement") is made and entered into as of
August 6, 1999, (the "Effective Date") by and between Lucent Technologies Inc.
("Seller"), a Delaware corporation operating through its Global Services
Provider group, with offices located at 600 Mountain Avenue, Murray Hill, New
Jersey 07974, and PF.Net, L.L.C., a Delaware limited liability company with
offices located at 1625 B Street, Washougal, Washington 98671 (hereinafter
"Customer").

WHEREAS, Customer desires to procure products and services from Lucent for
purposes of building and maintaining a telecommunications Network (hereafter
"Network") based on the terms and conditions set forth in this Agreement and the
terms, conditions, and Specifications set forth in any Attachment to this
Agreement.

NOW, THEREFORE, in consideration of the mutual promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties intending to be lawfully bound agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS

1.1      DEFINITIONS

         For the purpose of this Agreement, the following definitions will
         apply:

         (a)      "Affiliate" of a corporation means any Subsidiary and any
                  other entity, which is controlled directly by Customer.
                  "Control" means (i) in the case of corporate entities,
                  ownership of stock or shares entitled to vote for the election
                  of the board of directors or other governing body of the
                  entity; and (ii) in the case of non-corporate entities,
                  ownership of equity or similar interest of more than fifty
                  percent (50%).

         (b)      "Attachment" means any Exhibits, Statements of Work,
                  Schedules, or any other documents that are integral to this
                  Agreement and the performance thereof.

         (c)      "Backwards Compatible" means (i) with respect to Licensed
                  Materials, the ability of newer or more advanced versions to
                  function seamlessly with the two prior older or less advanced
                  versions of Software or other Licensed Materials and with all
                  existing in-service Seller Provided Products already installed
                  in the Network, and (ii) with respect to Seller Provided
                  Products, the interoperability and compatibility of such
                  Seller Provided Products with existing infrastructure
                  resulting in no reduction in the existing level of
                  functionality of the existing infrastructure. For the purposes
                  of this definition, any particular version of Licensed
                  Materials shall mean only a Software Upgrade or Software
                  Enhancement.

         (d)      "Bill and Hold Products" means Products, Licensed Materials,
                  and/or parts thereof, which the Customer requests and Seller
                  agrees to inventory or warehouse, at a price mutually agreed
                  to by the parties, until final delivery to the Customer.

         (e)      "Commercial Service" means, with respect to any Network
                  Elements, the use of such Network Element to bring non-trial,
                  billable services to any customer of Customer.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         (f)      "Customer" means PF.Net, L.L.C. Customer shall also have the
                  right to designate Affiliate(s) who may purchase under this
                  Agreement which may be changed by written notice from Customer
                  to Seller and prior to order placement of such Affiliate(s).
                  Affiliates may be disallowed by Seller if: (a) such affiliate
                  is a competitor of Seller engaged in the business of
                  manufacturing systems comparable to those offered to the
                  Customer hereunder, or (b) such affiliate currently has
                  another purchase agreement with Seller. By virtue of placing
                  orders with Seller, Customer hereby guarantees the performance
                  and shall bind such Affiliates to the terms and conditions of
                  the Agreement. Customer shall promptly notify Seller in
                  writing of any change in the Affiliate status and such
                  Affiliate shall immediately be disqualified from purchasing
                  under this Agreement. Any such notices shall automatically
                  append to this Agreement and require no further amendments
                  between the parties. Upon such designation as an Affiliate,
                  such Affiliate shall be deemed a "Customer" for purposes of
                  this Agreement; provided, that any such designation shall not
                  relieve PF.Net, L.L.C. from its obligations hereunder. "For
                  purposes of this definition, "Affiliate" shall include any
                  corporation, partnership, joint venture or other entity that
                  owns or plans to own or operate a telecommunications Network
                  in which Customer owns at least a 25% of the equity (or
                  equivalent).

         (g)      "Customer Price List(s)" means Seller's published "Ordering
                  and Price Guides" or other price notification releases made
                  generally available by Seller to its customers from time to
                  time for the purpose of communicating Seller's prices or
                  pricing related information to Customer; however, this does
                  not include firm price quotations.

         (h)      "Delivery Date" means the date under this Agreement by which
                  any deliverables ordered by Customer are delivered under this
                  Agreement to the F.O.B. point of origin or such other
                  destination as is mutually agreed upon.

         (i)      "Designated Processor" means the Product for which licenses to
                  Use Licensed Materials are granted.

         (j)      "Firmware" means a combination of (1) hardware and (2)
                  Software represented by a pattern of bits contained in such
                  hardware.

         (k)      "Fit" means physical size or mounting arrangement (e.g.,
                  electrical or mechanical connections).

         (l)      "Form" means physical shape.

         (m)      "Function" means the operation the Product performs.

         (n)      "Hazardous Materials" means material designated as a
                  "hazardous chemical substance or mixture" pursuant to Section
                  6 of the Toxic Substance Control Act; a "hazardous material"
                  as defined in the Hazardous Materials Transportation Act (49
                  U.S.C.1801, et seq.); "hazardous substance" as defined in the
                  Occupational Safety and Health Act Hazard Communication
                  Standard (29 CFR 1910.1200) or as defined in the
                  Comprehensive Governmental Response, Compensation and
                  Liability Act, 42 U.S.C. 9601 (14), or other pollutant or
                  contaminant.

         (o)      "Installation Complete Date" means the date on which Seller
                  has completed installation and related testing of Products or
                  Licensed Materials purchased or licensed hereunder and has, if
                  required under this Agreement, provided written notice thereof
                  to Customer ("Turnover") and said installation has been
                  accepted by Customer pursuant to Article 3.5.2.

         (p)      "Licensed Materials" means the Software and Related
                  Documentation for which Seller grants licenses under this
                  Agreement; no Source Code versions of Software are included in
                  Licensed Materials.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         (q)      "Network Elements" means the Products and Licensed Materials
                  provided by Seller to Customer under this Agreement that are
                  inherent to the Network.

         (r)      "Product" means equipment hardware, and parts thereof, and
                  various components of the Network Elements.

         (s)      "Related Documentation" means materials delivered by Seller to
                  Customer useful in connection with Software such as, but not
                  limited to, flowcharts, logic diagrams and listings, program
                  descriptions and Specifications.

         (t)      "Services" mean activities provided by Seller to Customer
                  under this Agreement, which may include but are not limited
                  to, installation, provisioning, integration testing, and
                  monitoring.

         (u)      "Software" means a computer program consisting of a set of
                  logical instructions and tables of information that guide the
                  functioning of a processor. Such program may be contained in
                  any medium whatsoever, including hardware containing a pattern
                  of bits, representing such program. However, the term
                  "Software" does not mean or include such medium.

         (v)      "Source Code" means any version of Software incorporating
                  high-level or assembly language that generally is not directly
                  executable by a processor.

         (w)      "Specifications" means Seller's or its vendor's technical
                  specifications for particular Products or Software furnished
                  hereunder.

         (x)      "Standard Interval" means the lead time for shipment for
                  Products and Licensed Materials for all purchases placed under
                  this Agreement. The Standard Interval shall be thirty (30)
                  days after the date of Seller's receipt of such purchase
                  order, unless a different Standard Interval is set forth in
                  the applicable Attachment.

         (y)      "Subsidiary" means any corporation or other entity in which
                  Customer owns more than fifty percent (50%) of the eligible
                  voting stock or equivalent voting power; such corporation or
                  entity shall be deemed to be a Subsidiary of such Customer
                  only as long as such ownership or control exists.

         (z)      "Term" means the Initial Term of this Agreement and any
                  extensions pursuant to Section 2 beyond the Initial Term.

         (aa)     "Turnover" means, with respect to Products and Software to be
                  installed by Seller, the point at which Seller has completed
                  the installation and related testing and notifies Customer
                  that the installation and related testing is completed and
                  that Seller has confirmed that the installed Product and/or
                  Software comply with Seller's Specifications.

         (bb)     "Use," with respect to Licensed Materials means loading the
                  Licensed Materials, or any portion thereof, into a Designated
                  Processor for execution of the instructions and tables
                  contained in such Licensed Materials.

         (cc)     "Vendor Items" means Network Elements sold by Seller under
                  this Agreement that are not manufactured by Seller or its
                  affiliates.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                                   ARTICLE II
                               SCOPE AND STRUCTURE

2.1      TERM OF AGREEMENT

2.1.1    The term of this Agreement shall commence on the Effective Date and
         shall continue in effect thereafter until December 31, 2004 ("Initial
         Term"). Upon written notice from Customer, no less than sixty (60) days
         prior to the expiration of the Initial Term, Customer may extend this
         Agreement for successive one (1) year terms, provided however, that
         Seller and Customer mutually agree to any new terms and conditions,
         Specifications, or pricing that may be negotiated therein.

2.2      SCOPE

2.2.1    Under the terms and conditions and prices set forth in this Agreement
         and set forth in any Attachments to this Agreement, Seller will provide
         Products, Licensed Materials and Services to Customer for Customer's
         telecommunications Network and sell to Customer such Network Elements
         that include, but are not limited to switching, access, transmission,
         data communications, EP products, fiber optic cable, power and related
         equipment for Customer's Network. Customer understands and agrees that
         all Products, Licensed Materials, or Services furnished by Seller to
         Customer pursuant to this Agreement shall be for Customer's own
         internal use in the United States, Canada, Mexico, and any other
         countries which join the North American Free Trade Agreement

2.2.2    In consideration of Seller's providing the financing referred to below,
         Customer agrees to purchase no less than 87% of its requirements for
         each of Seller's Data Networking Products, Optical Networking Products
         and Network Products Group products and for fiber optic products the
         percentage of Customer requirements set forth in Attachment A; provided
         that such products shall (i) be priced competitively as compared to
         comparable product sold by third party vendors and (ii) possess the
         functionality required by Customer. Customer's obligation under this
         paragraph shall terminate and be of no further effect on the date that
         Lucent is no longer a lender to Customer and has no commitment to
         provide financing to Customer.

2.3      CONFLICTING TERMS

         Any firm price quotes made by Seller to Customer during the term of
         this Agreement shall incorporate the terms and conditions of this
         Agreement. Any conflicting terms and conditions of a firm price quote
         signed by an authorized representative of Seller and Customer and dated
         after the effective date of this Agreement, will supersede the
         comparable terms of this Agreement.

         In the event of any conflict between the Agreement and an Attachment,
         the terms and conditions of the Attachment shall prevail or the
         non-conflicting terms and conditions of the Agreement shall prevail.

2.4      PURCHASE TARGET

         Under the terms and conditions and prices set forth herein and set
         forth in any Attachments to this Agreement, Customer's intent is to
         purchase from Seller at least five hundred seventy four ($547) million
         dollars ("Purchase Target") of Products, Licensed Materials, and
         Services (including purchases made on behalf of AT&T pursuant to
         Section 2.10.1).


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

        Purchase Period                               Cumulative Purchase Orders

        Year 1                                        $150 million dollars
        (Effective Date through December 31, 2000)

        Year 2                                        $200 million dollars

        Year 3                                        $75 million dollars

        Year 4                                        $70 million dollars

        Year 5                                        $55 million dollars

         No less than thirty (30) days prior to the end of Purchase Periods Year
         2, Year 3, Year 4, and Year 5, Seller and Customer will review
         Customer's purchases for the previous periods to determine if Customer
         has met the Cumulative Purchase Target. The Purchase Target represents
         Customer's current intent and does not constitute a binding obligation
         on its part.

2.5      CUSTOMER RESPONSIBILITY

         Customer shall, at no charge to Seller, provide Seller with such
         technical information, data, technical support or assistance as may
         reasonably be required by Seller to fulfill its obligations under this
         Agreement, any subordinate agreement or order. If Customer fails to
         provide the technical information, data, support or assistance, Seller
         shall be discharged from any such obligation.

2.6      NETWORK

         Seller will provide Products and Licensed Materials and Services, which
         include but are not limited to those listed in the Attachments to this
         Agreement to help build and monitor Customer's telecommunications
         Network in accordance with the terms and conditions contained herein,
         in accordance with the Specifications set forth in the Attachments.
         Seller agrees to install and perform integration testing on all
         essential Network Elements as mutually agreed to by the parties.

2.7      FORECASTS

         Customer hereby agrees that within one (1) month after the Effective
         Date of this Agreement, Customer shall provide Seller an initial
         forecast of the portions of the Network to be implemented during the
         first year of this Agreement. Customer shall, on a quarterly basis
         thereafter, provide Seller a twelve (12) month forecast of the portions
         of the Network that will be implemented.

2.8      PERMITS AND APPROVALS

         Any applicable permits, in connection with the implementation and
         operation of the Network that may be required by any government entity
         will be the sole responsibility of the Customer.

2.9      ADDITIONAL CONDITIONS

2.9.1    Customer's obligations under this Agreement are contingent on Seller
         entering into a definitive financing agreement to provide financing
         subject to terms and conditions to be mutually agreed . If such
         definitive financing agreement is not executed by September 30, 1999,
         Customer shall have the right to terminate this Agreement. Seller
         retains the right to all the architecture and other intellectual
         property incorporated in the Initial Plan issued pursuant to Attachment
         B in the event the parties hereto cancel this Agreement for any reason.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

2.9.2    Seller shall have the right, at its expense, to perform quarterly
         audits of Customer's progress in implementing its business plan,
         strategies, and the procurement of Seller's Products, Licensed
         Materials, and Services.

2.10     AGENCY ARRANGEMENTS

2.10.1   The parties contemplate that Customer will act as purchasing agent for
         AT&T in respect of Seller's Fiber Optic Cable and associated equipment
         (Attachment A) for certain construction routes to be agreed by Customer
         and AT&T. On receipt of written authorization from AT&T, Seller agrees
         that such purchases can be made pursuant to a purchase order issued
         under this Agreement, but utilizing the prices provided for in this
         Agreement or the price levels including Fiber Optic Cable price
         discounts contained in Seller's contract with AT&T. Seller shall issue
         separate invoices to Customer and AT&T based on the quantity of Fiber
         Products purchased by each company as set forth in the applicable
         purchase order.

2.10.2   It is also contemplated that Customer will act as purchasing agent
         within the United States for (i) its partners (other than AT&T
         participating in the build-out of Customer's network and (ii) its ISP
         customers in respect of Seller's Products covered by Attachments A, C
         and D. Customer shall provide a list of such partners and Customers to
         Seller for its prior approval, which shall not be unreasonably
         withheld. On receipt of written authorization from any such third
         party, Seller agrees that such purchases may be made pursuant to an
         order issued under this Agreement applying the terms contained in this
         Agreement. Prices shall be as agreed to between Customer and the third
         party purchaser for which it is serving as purchasing agent (which
         prices shall not be less than the applicable prices under this
         Agreement). Seller shall review the pricing offered by Customer to the
         third party purchaser prior to agreeing to the sale for the sole
         purpose of determining whether said prices trigger any price protection
         clauses in other contracts to which Seller is a party. If the proposed
         pricing offered by Customer triggers such clause, Customer will change
         its prices so as to correct the situation. Seller shall issue the
         applicable invoices to the third party purchaser. Within 30 days after
         receipt of payment for each invoice, Seller shall remit to Customer an
         agents fee in an amount equal to the amount that (A) the price paid by
         the third party customer exceeds (B) the amount that would have been
         payable by Customer for the products purchased by the third party
         purchaser if Customer had purchased such products for itself pursuant
         to the pricing provided in this Agreement.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                                   ARTICLE III
                          GENERAL TERMS AND CONDITIONS

3.1      ORDERS

         All orders submitted by Customer for Products, Licensed Materials, and
         Services shall incorporate and be subject to the terms and conditions
         of this Agreement. Any order submitted pursuant to a firm price
         quotation shall include such firm price quotation number. All orders,
         including electronic orders, shall contain the information as detailed
         below:

         (a)      Complete and correct ship to and bill to address;

         (b)      The quantity and type of Products, Licensed Materials, and
                  Services being ordered;

         (c)      The price;

         (d)      The requested Delivery Date in accordance with Seller's
                  Standard Interval for the Products, Licensed Materials, and
                  Services being ordered. In the event a non standard interval
                  has been mutually agreed to by the parties, reference to the
                  specific document agreeing to the interval needs to be
                  included;

         (e)      The requested completion date in accordance with Seller's
                  Standard Interval for the Products, Licensed Materials, and
                  Services being ordered;

         (f)      Reference to this Agreement;

         (g)      If an order is for Bill and Hold Products, the phrase "Bill
                  and Hold" must be clearly and conspicuously stated in the
                  order.

         Seller shall make any delivery on the Delivery Date set forth in the
         applicable order, provided that such Delivery Date is in accordance
         with Seller's published Standard Intervals in effect on the date of
         receipt of the applicable order by Seller. Seller will not make
         deliveries earlier than the Delivery Date in accordance with Seller's
         published Standard Intervals unless mutually agreed to by the Customer
         and Seller in writing. Seller reserves the right to change such
         standard order intervals without notification to Customer but only with
         respect to future orders. Such change shall not affect orders accepted
         by Seller prior to the change to the standard order intervals.
         Electronic orders shall be binding on Customer notwithstanding the
         absence of a signature. All orders are subject to acceptance by Seller.
         Seller reserves the right to place any order on hold, delay shipment,
         and/or reject any order upon the material breach or default by Customer
         of its obligations under this Agreement or if Customer has failed to
         make timely payments under this Agreement. Terms and conditions on
         Customer's purchase order which are inconsistent with the provisions of
         this Agreement and any pre-printed terms and conditions on Customer's
         purchase order shall be ineffective, void and of no force and effect.
         Orders shall be sent to the following address:

            Lucent Technologies Inc.
            Customer Service
            6701 Roswell Road
            Building D - 3rd Floor
            Atlanta, GA 30328-2501

         If an order is for Bill and Hold Products, the phrase "Bill and Hold"
         must be indicated on the order. In the event Customer orders such
         Products, Seller will defer final shipment of Product(s) until the
         final ship date that is indicated on Order, or, if no ship date is
         indicated on the Order, then Seller will ship Products upon a date that
         is mutually agreed to between the parties. In no event shall Seller be
         obligated to hold Bill and Hold Products longer than one (1) year from
         the date of the applicable Order. Customer agrees to pay Seller a
         monthly stocking


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         fee of 15% of the applicable purchase Price for any Bill and Hold
         Products held beyond the final ship date indicated on the purchase
         order or as otherwise mutually agreed to.

3.2      CHANGES IN CUSTOMER'S ORDERS

         With respect to each Order for Network Elements or Services, Customer
         may make a written request at least ninety (90) days prior to the
         scheduled Delivery Date of such Network Elements or the scheduled start
         date for such Services, as the case may be, for a change ("Change")
         consisting of certain addition(s) or deletion(s) to such order. After
         receipt of such request, Seller shall submit a Job Change Order ("JCO")
         to Customer for Customer's approval with respect to the requested
         Change. Each JCO shall state whether the requested Change shall
         increase or decrease the applicable price (in accordance with the
         pricing applicable under this Agreement) and/or the time required by
         Seller for any aspect of its performance under the Agreement with
         respect to such order. Customer shall accept or reject the JCO in
         writing within ten (10) days of receipt thereof. Failure of Customer to
         accept or reject the JCO in writing as described above shall be deemed
         a rejection of the JCO by Customer. In the event an accepted JCO
         involves the return to Seller of any Product which shall have been
         previously delivered to Customer, Seller may invoice and Customer shall
         pay a 15% restocking fee and the transportation costs, plus a
         cancellation fee equal to Seller's direct out-of-pocket expenses
         incurred for any design, engineering or other related services.

         If Customer rejects a proposed JCO, then the rights and obligations of
         the parties with respect to the applicable order shall not be subject
         to Customer's requested Change, except that Customer shall promptly pay
         Seller's customary engineering charges that may have been incurred in
         connection with preparation of the Change and Seller shall be entitled
         to an extension of the dates for performance of its obligations with
         respect to the applicable order as a result of any delays in such
         performance which result from the foregoing.

         Customer may by written notice delivered to Seller cancel without
         charge any order for Network Elements or Services prior to the Delivery
         Date of the applicable Network Elements forth in such order or the
         agreed date for the commencement by Seller of the applicable Services.
         However, if Customer cancels such order within six (6) weeks or less of
         any such date, a cancellation fee equal to Seller's direct
         out-of-pocket expenses incurred for design, engineering or other
         related services shall be payable by Customer. Seller may invoice such
         amount upon receipt of Customer's notice of cancellation of the
         applicable order.

3.3      CHANGES IN PRODUCTS

         Prior to shipment, Seller may at any time make changes in Products.
         Seller may modify the Product(s) drawings and Specifications or
         substitute Products of later design. Seller agrees that such
         modifications or substitutions will not impact upon Form, Fit, or
         Function under normal and proper use of the ordered Product as provided
         in Seller's Specifications. With respect to changes, modifications, and
         substitutions that do impact the Form, Fit, or Function of the ordered
         Product, Seller shall notify Customer in writing at least four (4)
         months prior to the date the changes become effective, except in those
         cases where the change is the result of legal mandate or changes in
         recognized industry standards for which the notice period to Customer
         shall be at least thirty (30) days. During such four (4) month period,
         Customer may order and Seller shall sell to Customer as much of such
         Product as Customer desires that Seller is reasonably able to deliver
         at the applicable prices under this Agreement.

3.4      PRICES

3.4.1    Prices for Network Elements and Services are set forth in the
         Attachments to this Agreement. Except as expressly stated in this
         Agreement, in any Attachments, or in any firm price quote all


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         other Prices shall be those contained in Seller's Customer Price Lists
         after deductions for all applicable discounts as provided in the
         applicable Attachments. To the extent Customer's order is subject to a
         firm price quotation made by Seller, prices, fees and charges shall be
         as set forth in Seller's firm price quotation.

         The applicable Customer Price List shall be the issue that is in effect
         on the date of Seller's receipt of the order. The requested Delivery
         Date of such order must be in accordance with Seller's Standard
         Interval. Prices for Products and license fees for Licensed Materials
         to be shipped, or Services to be performed beyond the published
         shipping interval will be based upon the date required for order entry
         by Seller in accordance with Customer's requested date and applying the
         Price from the Customer Price List as of that date.

         Seller may amend its Customer Price Lists, other than those subject to
         firm price quotations and those discounts set forth in the applicable
         Attachments. Seller agrees to provide thirty (30) days written notice
         of any increase in Prices contained in Seller's Customer Price Lists.
         When Prices contained in Seller's Customer Price Lists are adjusted for
         changes in raw material prices, Seller's new Prices will be revised
         effective the first day of any given month. The basis for raw material
         adjustments will be provided to Customer upon request and shall be
         applied to pricing adjustments for all of Seller's customers buying the
         same Products.

3.4.2    Notwithstanding anything to the contrary contained in this Agreement or
         in any Attachment, starting six months after the Effective Date, Seller
         and Customer shall meet every six months during the Term to review
         pricing and discount levels for Products and Licensed Materials
         purchased or licensed by Customer under Attachment D of this Agreement.
         At such meeting, Seller shall provide Customer with a summary analysis
         of the pricing by product type for Products and Licensed Materials sold
         or licensed to two (2) of Seller's customers (without identifying the
         specific Customer) of size and/or purchase history equivalent to
         Customer, taking into account all relevant material terms and
         conditions of the respective contracts. If the prices paid for
         comparable products by Customer exceeds one hundred five percent (105%)
         of the average of the prices provided to these two (2) customers.
         Seller shall prospectively reduce its prices to meet the lower price.
         This paragraph shall supplement (and not replace) the provisions of
         Sections 3.3 of Attachment A.

3.5      INVOICES, ACCEPTANCE AND TERMS OF PAYMENT

3.5.1    (a) For Products, Licensed Materials and Services (including
         transportation charges and taxes, if applicable) (a) Seller will
         invoice Customer, all amounts due for Products and Licensed Materials
         only upon shipment, such shipment not to occur earlier than the planned
         Delivery Date without written approval of Customer. (B) Seller will
         invoice Customer for Engineering and Installation Services upon
         Installation Complete, (c) for all other Services, Seller will invoice
         Customer either upon completion of the Service, on a monthly basis, as
         Services are performed or as set forth in the applicable Attachment.
         Customer shall pay such invoiced amounts for receipt by Seller within
         thirty (30) days of the invoice date. Seller will invoice Bill and Hold
         Products upon the earlier of (i) completion of assembly at Seller's
         facility or (ii) upon stocking at Customer's designated location. Such
         invoice will serve as Seller's notification that Bill and Hold Products
         are complete and ready to be released by Customer for final shipment.

         (b) Seller shall send all invoices to Customer by e-mail with a copy
         also sent by U.S. Mail as follows: clintwarta@pf.net. Customer may
         change the recipient of the invoices using the provisions of Section
         3.15.

3.5.2    Customer shall pay all amounts due Seller hereunder using Electronic
         Funds Transfer ("EFT") whether amounts have been invoiced by Seller or
         are due as advance payments. EFT payments by Customer shall be made to
         the following account of Seller or such other account as is


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         subsequently designated by Seller in writing and, concurrent with the
         EFT payment, Customer shall fax a copy of the remittal to Seller's
         Manager Cash Operations at 770-750-4288.

            Chase Manhattan Bank
            New York, New York
            Account Name: Lucent Technologies Inc.
            ACCT. 910144-9099
            ABA 021000021

         If customer pays any invoice amount within ten (10) days of the date of
         invoice, it shall receive a credit of one-half of one percent (0.5%) of
         the amount of said invoice. This credit can be applied against any
         future invoices.

3.5.3    For Products or Licensed Materials to be installed by Seller, Seller
         shall perform the installation acceptance test for the Product or
         Licensed Materials being installed pursuant to a mutually agreed
         installation and testing process ("Installation Test Plan"). Pending
         such agreement the Installation Test Plan shall be the test plan
         contained in the Specifications for the applicable Products or Licensed
         Materials. After completion of the Installation Test, Seller shall
         determine whether the test results are satisfactory and in conformance
         with the Installation Test Plan. If Seller advises Customer that such
         test results are satisfactory, Seller shall issue a Notice of
         Turnover. The Installation shall be deemed accepted unless Customer
         provides notification to the contrary no later than thirty (30) days
         from Turnover.

3.5.4    If Customer fails to pay any invoiced amount not in dispute when due,
         the invoiced amount will be subject to a late payment charge at the
         rate of one and one half percent (1-1/2%) per month, or portion
         thereof, of the amount due (but not to exceed the maximum lawful rate).
         Customer agrees to pay Seller's attorneys' fees and other costs
         incurred by Seller in the collection of any delinquent amounts invoiced
         hereunder, provided there was no genuine dispute concerning the
         invoiced amounts.

         Customer agrees to review all invoices furnished by Seller hereunder
         upon receipt and, notify Seller of any billing discrepancies or
         disputed amounts within ten (10) business days of receipt of the
         applicable invoice. Such inquiries can be directed to Seller in writing
         or by telephone. Inquiries shall be made to the telephone number or, if
         in writing, to the address identified on the invoice.

3.6      PURCHASE MONEY SECURITY INTEREST

         Seller reserves and Customer agrees that Seller shall have a purchase
         money security interest in all Products and Licensed Materials
         heretofore supplied or hereafter supplied to Customer by Seller under
         this Agreement until any and all payments and charges due Seller under
         this Agreement including, without limitation, shipping and installation
         charges, are paid in full. Seller shall have the right, at any time
         during the Term, to file in any state or local jurisdiction such
         financing statements (e.g., UCC-1 financing statements) as Seller deems
         necessary to perfect its purchase money security interest hereunder.
         Upon such filing of any financing statement, Seller shall provide
         Customer with notice and a copy of such filing. Upon request by Seller,
         Customer hereby agrees to execute all documents necessary to secure
         Seller's purchase money security interest including without limitation,
         UCC-1 or such other documents Seller deems reasonably necessary to
         perfect such security interest. Notwithstanding the foregoing
         obligation of Customer to execute, Customer hereby irrevocably appoints
         Seller as its attorney-in-fact for purposes of executing and filing
         such financing statements and such other documents prepared by Seller
         or its designated agent for purposes of perfecting Seller's security
         interest hereunder.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         In addition to any other remedy available to Seller as provided herein,
         by common law and by statute, Seller may exercise its right to reclaim
         all Products and Licensed Materials sold to Customer pursuant to
         UCC-2-702 or such other applicable provision as it may exist from state
         to state, upon discovery of Customer's insolvency, provided Seller
         demands in writing reclamation of such goods before ten (10) days after
         receipt of such goods by Customer, or if such ten (10) day period
         expires after the commencement of a bankruptcy case, before twenty (20)
         days after receipt of such goods by the Customer.

3.7      TAXES

         Customer shall be liable for and shall reimburse Seller for all taxes,
         duties, import fees, and related charges, however designated, imposed
         upon or based upon the provision of Services sale, license or Use of
         Products, Licensed Materials levied upon the sale, excluding taxes
         based on Seller's net income, unless Customer provides Seller with a
         valid tax exempt certificate. Seller's failure to collect taxes in
         accordance herewith shall not be deemed to be an authorization to
         resell Products or Services or sublicense Licensed Materials.

3.8      TRANSPORTATION AND PACKING

         Seller, in accordance with its normal practices, shall arrange for
         prepaid transportation to destinations in the contiguous United States
         and shall invoice transportation charges to Customer. Premium
         transportation will be used only at Customer's request. Seller shall
         pack Products for delivery in the contiguous United States, in
         accordance with its standard practices for domestic shipments. Where,
         in order to meet Customer's requests, Seller packs Products in other
         than its normal manner or for destinations outside the contiguous
         United States, Customer shall pay the additional charges for such
         packing and transportation. Notwithstanding the foregoing, all
         transportation and packing charges for a single purchase order which
         results in full truck load being shipped to a Customer location will be
         paid by Seller. Customer agree to pay for any shipping charges related
         to pre-fab concrete huts.

3.9      TITLE AND RISK OF LOSS

         Title to Products only and risk of loss to Products and Licensed
         Materials shall pass to Customer upon delivery to the Customer at the
         F.O.B. point of origin. Title to all Licensed Materials (whether or not
         part of Firmware) furnished by Seller, and all copies thereof made by
         Customer, including translations, compilations and partial copies are,
         and shall remain, the property of Seller. Title to Products only and
         risk of loss for Products and Licensed Material for Bill and Hold
         Products shall pass to Customer upon stocking at Seller's facility or
         Customer's designated location, whichever occurs earlier. For purposes
         of this section, "delivery" shall mean the point at which Seller or
         Seller's Seller or agent turns over possession of the Product or
         Licensed Materials to Customer, Customer's employee, Customer's
         designated carrier, Customer's warehouse, or other Customer's agent and
         not necessarily the final destination shown on the order.

3.10     PERSONAL INJURY

         Each party hereto shall indemnify and hold harmless the other party and
         its officers, directors, employees and affiliates against costs and
         expenses arising from suits, claims or proceedings brought against the
         other party for direct damages due to personal injuries (including
         death) which allegedly results from the negligence or willful
         misconduct of the defending party in the performance of this Agreement.
         The indemnifying party shall pay all litigation costs, reasonable
         attorney's fees, settlement payments and such direct damages awarded or
         resulting from any such suite, claim or proceeding.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

3.10     A INDEMNIFICATION PROCEDURES

         Any party that proposes to assert the right to be indemnified under
         Section 3.10 (Personal Injury) will, promptly after receipt of notice
         of commencement of any action against such party in respect of which a
         claim is to be made against an indemnifying party or parties under
         either of such Sections, notify the indemnifying party of the
         commencement of such action, enclosing a copy of all papers served, but
         the omission so to notify such indemnifying party will not relieve it
         from any liability that it may have to any indemnified party under the
         foregoing provisions of Section 3.10 unless, and only to the extent
         that, such omission results in the forfeiture of substantive rights or
         defenses by the indemnifying party. If any such action is brought
         against any indemnified party and it notifies the indemnifying party of
         its commencement, the indemnifying party will be entitled to
         participate in, and to the extent that it elects by delivering written
         notice to the indemnified party promptly after receiving notice of the
         commencement of the action from the indemnified party, to assume the
         defense of the action, with counsel reasonably satisfactory to the
         indemnified party of its election to assume the defense, the
         indemnifying party will not be liable to the indemnified party for any
         legal or other expenses except as provided below and except for the
         reasonable costs of investigation subsequently incurred by the
         indemnified party in connection with the defense. An indemnified party
         will have the right under Section 3.10 to employ its own counsel in any
         such action, but the fees, expenses and other charges of such counsel
         will be at the expense of such indemnified party unless (1) the
         employment of counsel by the indemnified party has been authorized in
         writing by the indemnifying party, (2) the indemnified party has
         reasonably concluded (based on advice of counsel) that there may be
         legal defenses available to it that are different from or in addition
         to those available to the indemnifying party, (3) a conflict or
         potential conflict exists (based on advice of counsel to the
         indemnified party) between the indemnified part and the indemnifying
         party (in which case the indemnifying party will not have the right to
         direct the defense of such action on behalf of the indemnified party),
         or (4) the indemnifying party has not in fact employed counsel to
         assume the defense of such action within a reasonable time after
         receiving notice of the commencement of the action, in each of which
         cases the reasonable fees, disbursements and other charges of counsel
         will be at the expense of the indemnifying party. An indemnifying party
         will not be liable under Section 3.10 for any settlement of any action
         or claim effected without its written consent (which consent will not
         be unreasonably withheld).

3.11     INFRINGEMENT

         In the event of any claim, action, proceeding or suit by a third party
         against Customer, any affiliate of Customer or any of their respective
         officers, directors, employees or agents ("indemnified persons"),
         alleging an infringement of any United States patent, United States
         copyright, or United States trademark, or a violation in the United
         States of any trade secret or proprietary rights by reason of the use,
         in accordance with Seller's Specifications, of any Product or Licensed
         Materials furnished by Seller to Customer under this Agreement, Seller,
         at its expense, will defend and hold harmless Customer and the
         indemnified parties, subject to the conditions and exceptions stated
         below. Seller will reimburse Customer and the indemnified parties for
         any cost, expense or attorneys' fees, incurred at Seller's written
         request or authorization, and will indemnify Customer and the
         indemnified parties against any liability assessed against Customer and
         the indemnified parties by final judgment on account of such
         infringement or violation arising out of such use.

         If Customer's use shall be enjoined or in Seller's opinion is likely to
         be enjoined, Seller will, at its expense and at its option, either
         promptly (1) replace the enjoined Product or Licensed Materials
         furnished pursuant to this Agreement with a suitable substitute free of
         any


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         infringement; (2) modify it so that it will be free of the
         infringement; or (3) procure for Customer a license or other right to
         use it. If none of the foregoing options can be accomplished, Seller
         will remove the enjoined Product or Licensed Materials and refund to
         Customer any amounts paid to Seller therefor less a reasonable charge
         for any actual period of use by Customer.

         Customer shall give Seller prompt written notice of all such claims,
         actions, proceedings or suits alleging infringement or violation and
         Seller shall have full and complete authority to assume the sole
         defense thereof, including appeals, and to settle same. Customer shall,
         upon Seller's request and at Seller's expense, furnish all information
         and assistance available to Customer and cooperate in every reasonable
         way to facilitate the defense and/or settlement of any such claim,
         action, proceeding or suit.

         An indemnified party will have the right under this Section to employ
         its own counsel in any such action, but the fees, expenses and other
         charges of such counsel will be at the expense of such indemnified
         party unless (1) the employment of counsel by the indemnified party has
         been authorized in writing by the indemnifying party, (2) the
         indemnified party has reasonably concluded (based on advice of counsel)
         that there may be legal defenses available to it that are different
         from or in addition to those available to the indemnifying party, (3) a
         conflict or potential conflict exists (based on advice of counsel to
         the indemnified party) between the indemnified part and the
         indemnifying party (in which case the indemnifying party will not have
         the right to direct the defense of such action on behalf of the
         indemnified party), or (4) the indemnifying party has not in fact
         employed counsel to assume the defense of such action within a
         reasonable time after receiving notice of the commencement of the
         action, in each of which cases the reasonable fees, disbursements and
         other charges of counsel will be at the expense of the indemnifying
         party. An indemnifying party will not be liable under this Section for
         any settlement of any action or claim effected without its written
         consent (which consent will not be unreasonably withheld).

         No undertaking of Seller under this section shall extend to any such
         alleged infringement or violation to the extent that it: (1) arises
         from adherence to design modifications, specifications, drawings, or
         written instructions which Seller is directed by Customer to follow,
         but only if such alleged infringement or violation does not reside in
         corresponding commercial Product or Licensed Materials of Seller's
         design or selection; or (2) arises from adherence to instructions to
         apply Customer's trademark, trade name or other company identification;
         or (3) resides in a product or licensed materials which are Vendor
         Items and which are furnished by Customer to Seller for use under this
         Agreement; or (4) relates to uses of Product or Licensed Materials
         provided by Seller in combinations with other Product or Licensed
         Materials, furnished either by Seller or others, which combination was
         not installed, recommended or otherwise approved by Seller. In the
         foregoing cases numbered (1) through (4), Customer will defend and save
         Seller harmless, subject to the same terms and conditions and
         exceptions stated above, with respect to the Seller's rights and
         obligations under this section.

         The liability of Seller and Customer with respect to any and all
         claims, actions, proceedings or suits by third parties alleging
         infringement of patents, trademarks or copyrights or violation of trade
         secrets or proprietary rights because of, or in connection with, any
         Products or Licensed Materials furnished pursuant to this Agreement
         shall be limited to the specific undertakings contained in this
         section.

3.12     CUSTOMER'S REMEDIES

         CUSTOMER'S EXCLUSIVE REMEDIES AND THE ENTIRE LIABILITY OF SELLER, ITS
         AFFILIATES AND THEIR EMPLOYEES, AND AGENTS, AND ITS SELLERS FOR


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         ANY CLAIM, LOSS, DAMAGE OR EXPENSE OF CUSTOMER OR ANY OTHER ENTITY
         ARISING OUT OF THIS AGREEMENT, OR THE USE, PERFORMANCE, OR
         NON-PERFORMANCE OF ANY PRODUCT, LICENSED MATERIALS, OR SERVICES,
         WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF CONTRACT, TORT,
         INCLUDING NEGLIGENCE, INDEMNITY, OR STRICT LIABILITY, SHALL BE AS
         FOLLOWS:

         1.       FOR INFRINGEMENT - THE REMEDY SET FORTH IN SECTION 3.11;

         2.       FOR THE NON-PERFORMANCE OF PRODUCTS AND SOFTWARE, AND FOR THE
                  PERFORMANCE OR NON-PERFORMANCE OF SERVICES DURING THE WARRANTY
                  PERIOD - THE REMEDY SET FORTH IN THE APPLICABLE "WARRANTY"
                  SECTION OF ARTICLE VII;

         3.       FOR TANGIBLE PROPERTY DAMAGE TO CUSTOMER'S PROPERTY AND
                  PERSONAL INJURY CAUSED BY SELLER'S NEGLIGENCE AND WILLFUL
                  MISCONDUCT - THE AMOUNT OF THE PROVEN DIRECT DAMAGES; AND FOR
                  THE REMEDY SET FORTH IN SECTION 3.10A.

         4.       FOR EVERYTHING OTHER THAN AS SET FORTH ABOVE - THE AMOUNT OF
                  THE PROVEN DIRECT DAMAGES NOT TO EXCEED $250,000 PER
                  OCCURRENCE, INCLUDING AWARDED COUNSEL FEES AND COSTS.
                  PROVIDED HOWEVER THAT THIS SECTION 3.12.4 SHALL NOT APPLY TO
                  THE REMEDY SET FORTH IN SECTION 7.1 RELATING TO REMOVAL AND
                  REINSTALLATION EXPENSES ARISING FROM A DEFECT IN SELLER'S
                  FIBER OPTIC PRODUCTS.

         NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, SELLER, ITS
         AFFILIATES AND THEIR EMPLOYEES, AND AGENTS, AND ITS SELLERS SHALL NOT
         BE LIABLE FOR ANY INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES OR
         LOST PROFITS, REVENUES OR SAVINGS ARISING OUT OF THIS AGREEMENT, OR THE
         USE OR PERFORMANCE OF ANY PRODUCT, LICENSED MATERIALS, OR THE PROVISION
         OF SERVICES, WHETHER IN AN ACTION FOR OR ARISING OUT OF BREACH OF
         CONTRACT, TORT, INCLUDING NEGLIGENCE, OR STRICT LIABILITY. THIS SECTION
         SHALL SURVIVE FAILURE OF AN EXCLUSIVE OR LIMITED REMEDY.

         CUSTOMER SHALL GIVE SELLER PROMPT WRITTEN NOTICE OF ANY CLAIM. ANY
         ACTION OR PROCEEDING AGAINST SELLER MUST BE BROUGHT WITHIN TWENTY-FOUR
         (24) MONTHS AFTER THE CAUSE OF ACTION ACCRUES.

         SELLER'S ENTIRE LIABILITY FOR ANY CLAIM OR LOSS, DAMAGE OR EXPENSE FROM
         ANY CAUSE WHATSOEVER (OTHER THAN SECTION 3.11) SHALL IN NO EVENT EXCEED
         THE TOTAL MONIES ACTUALLY PAID TO SELLER FOR PRODUCTS, LICENSED
         MATERIALS AND/OR SERVICES COVERED BY THE APPLICABLE ATTACHMENT(S) UNDER
         WHICH THE SPECIFIC PRODUCTS, LICENSED MATERIALS, OR SERVICES COVERED BY
         THE APPLICABLE ATTACHMENT THAT GIVE RISE TO THE CLAIM WERE PURCHASED.
         NO ACTION OR PROCEEDING AGAINST SELLER MAY BE COMMENCED MORE THAN TWO
         YEARS AFTER THE SERVICES ARE RENDERED. THIS CLAUSE SHALL SURVIVE
         FAILURE OF AN EXCLUSIVE REMEDY

3.13     USE OF INFORMATION

         All technical and business information in whatever form recorded which
         bears a legend or notice restricting its use, copying, or dissemination
         or, if not in tangible form, is described as being proprietary or
         confidential at the time of disclosure and is subsequently summarized
         in a writing so marked and delivered to the receiving party within
         thirty (30) days of disclosure to


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         the receiving party (all hereinafter designated "Information") shall
         remain the property of the furnishing party. The furnishing party
         grants the receiving party the right to use such Information only for
         purposes expressly permitted in this section. Such Information (1)
         shall not be reproduced or copied, in whole or part, except for use as
         authorized in this Agreement; and (2) shall, together with any full or
         partial copies thereof, be returned or destroyed when no longer needed.
         Moreover, when Seller is the receiving party, Seller shall use such
         Information only for the purpose of performing under this Agreement,
         and when Customer is the receiving party, Customer shall use such
         Information only (1) to order; (2) to evaluate Seller's Products,
         Licensed Materials and Services; or (3) to install, operate and
         maintain the particular Products and Licensed Materials for which it
         was originally furnished. Unless the furnishing party consents in
         writing, such Information, except for that part, if any, which is known
         to the receiving party free of any confidential obligation, or which
         becomes generally known to the public through acts not attributable to
         the receiving party, shall be held in confidence by the receiving
         party. The receiving party may disclose such Information to other
         persons, upon the furnishing party's prior written authorization, but
         solely to perform acts which this section expressly authorizes the
         receiving party to perform itself and further provided such other
         person agrees in writing (a copy of which writing will be provided to
         the furnishing party at its request) to the same conditions respecting
         use of Information contained in this section and to any other
         reasonable conditions requested by the furnishing party.

3.14     DOCUMENTATION

         Seller shall furnish to Customer, at no additional charge; one (1) copy
         of the documentation for Products and/or one (1) copy of the Related
         Documentation for Software licensed to Customer. Such documentation
         shall be that which is customarily provided by Seller to its Customers
         at no additional charge. Such documentation shall be sufficient to
         enable Customer to operate and maintain such Products and Software in
         accordance with Seller's Specifications. Such documentation shall be
         provided either prior to, included with, or shortly after shipment of
         Products and/or Software from Seller to Customer. Additional copies of
         such documentation are available at prices set forth in Seller's
         Customer Price Lists.

3.15     NOTICES

         Any notice, demand or other communication (other than an order)
         required, or which may be given, under this Agreement shall, unless
         specifically otherwise provided in this Agreement, be in writing and
         shall be given or made by nationally recognized overnight courier
         service, confirmed facsimile, or certified mail, return receipt
         requested and shall be addressed to the respective parties as follows:

         If to Seller:

            ATTN: Contract Manager
            Lucent Technologies Inc.
            Global Service Provider
            4851 LBJ Freeway, Suite 900
            Dallas, Texas 75244
            Phone: 972-858-4956
            Facsimile: 972-858-4798

         If to Customer:

            Mr. John Warta, Chairman and Chief Executive Officer
            PF.Net, L.L.C.
            1625 B Street
            Washougal, Washington 98671


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         Any such notice shall be effective upon receipt. Each party may change
         its designated representative or address for receipt of communications
         and notices by giving written notice to the furnishing party.

3.16     FORCE MAJEURE

         Except for payment obligations, neither party shall be held responsible
         for any delay or failure in performance to the extent that such delay
         or failure is caused by fires, strikes, embargoes, explosions,
         earthquakes, floods, wars, water, the elements, labor disputes,
         government requirements, civil or military authorities, acts of God or
         by the public enemy, unavailability of raw materials or transportation
         facilities, acts or omissions of carriers or Sellers, or other causes
         beyond its control whether or not similar to the foregoing.

3.17     ASSIGNMENT

         Except as provided in this section, neither party shall assign this
         Agreement or any right or interest under this Agreement, nor delegate
         any work or obligation to be performed under this Agreement, (an
         "assignment") without the other party's prior written consent. Any
         attempted assignment in contravention of this shall be void and
         ineffective. Nothing in this subsection shall preclude a party from
         employing a subcontractor in carrying out its obligations under this
         Agreement. A party's use of such subcontractor shall not release the
         party from its obligations under this Agreement. In the event Customer
         notifies Seller in writing that the use of a specific subcontractor by
         Seller is unacceptable to Customer and Customer provides reasonable
         justification as to why Seller should not continue using such
         subcontractor, Seller shall make every reasonable effort to secure an
         acceptable, alternative subcontractor. Notwithstanding the foregoing,
         Seller has the right to assign this Agreement and to assign its rights
         and delegate its duties under this Agreement, in whole or in part, at
         any time and without Customer's consent, to any present or future
         subsidiary or "Affiliate" of Seller or to any combination of the
         foregoing. Such assignment or delegation shall release Seller from any
         further obligation or liability thereon. Seller shall give Customer
         prompt written notice of the assignment. In addition, Customer shall
         have the right to assign any of its rights and obligations under this
         Agreement, upon thirty (30) days written notice to Seller to (i) the
         purchaser of 100% of the business or ownership interests of PF.Net,
         (ii) any wholly-owned subsidiary of Customer and (iii) any joint
         venture of which Customer or any wholly-owned subsidiary holds a 25% or
         greater ownership interest, provided in the case of an assigned
         described in clauses (i) and (iii) above; (A) any such party agrees to
         be bound in writing to the terms and conditions of this Agreement, (B)
         such party's credit standing is at least as favorable as that of
         Customer, and (C) such party is not deemed by Seller, in its sole
         discretion, to be a direct competitor of Seller's business. If all of
         the preceding conditions have not been met, Customer shall have no
         right to assign any of its rights hereunder. For the purposes of this
         section, the term "Agreement" includes this Agreement, any subordinate
         agreement placed under this Agreement, including Attachments, and any
         Order placed under this Agreement or subordinate agreement.

3.18     TERMINATION

3.18.1   TERMINATION FOR BREACH

         In the event either party is in material breach or default of the terms
         of this Agreement and such breach or default continues for a period of
         ten (10) days with respect to payment obligations or thirty (30) days
         with respect to any other obligations after the receipt of written
         notice from the other party, then the party not in breach or default
         shall have the right to terminate this Agreement without any charge,
         obligation or liability except for Products or Licensed Materials
         already delivered and Services already performed. The party not in
         breach or default shall provide full cooperation to the other party in
         every reasonable way to facilitate the remedy of the breach or default
         hereunder within the applicable cure period. Notwithstanding the
         foregoing, if the nature of the material breach or default is such that
         it is


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         not a payment obligation and it is incapable of cure within the
         foregoing thirty (30) day period, then the thirty (30) day cure period
         may be extended for a reasonable period of time (in no event to exceed
         an additional thirty (30) days), provided that the party in breach or
         default is proceeding diligently and in good faith to effectuate a
         cure.

3.18.2   TERMINATION FOR OTHER CAUSES

         If Customer terminates this Agreement pursuant to Article 2.9, all of
         Customer's and Seller's rights and obligations hereunder in respect to
         Products, Licensed Materials and Services ordered prior to such
         termination shall remain in full force and effect, and Seller's
         warranty obligations for Products which have achieved Installation
         Complete shall remain in full force and effect.

3.19     INDEPENDENT CONTRACTOR

         All work performed by either party under this Agreement shall be
         performed as an independent contractor and not as an agent of the
         other, and no persons furnished by the performing party shall be
         considered the employees or agents of the other.

3.20     RELEASES VOID

         Neither party shall require releases or waivers of any personal rights
         from representatives or employees of the other in connection with
         visits to its premises, nor shall such parties plead such releases or
         waivers in any action or proceeding.

3.21     PUBLICITY

         Neither party shall issue or release for publication any articles,
         advertising, or publicity material relating to Products, Licensed
         Materials, or Services under this Agreement or mentioning or implying
         the name, trademarks, logos, trade name, service mark or other company
         identification of the other party or any of its Affiliates or any of
         its personnel without the prior written consent of the other party.

3.22     CONFIDENTIALITY OF AGREEMENT

         Notwithstanding the obligations contained in Section "Use of
         Information" of this Agreement the parties shall keep all provisions of
         this Agreement and any order submitted hereunder (including, without
         limitation, prices and pricing related information) confidential except
         as reasonably necessary for performance by the parties hereunder and
         except to the extent disclosure may be required by applicable laws or
         regulations, in which latter case, the party required to make such
         disclosure shall promptly inform the other prior to such disclosure in
         sufficient time to enable such other party to make known any objections
         it may have to such disclosure. The disclosing party shall take all
         reasonable steps and exercise all reasonable efforts directed by Seller
         to secure a protective order, seek confidential treatment, or otherwise
         assure that this Agreement and/or any order will be withheld from the
         public record.

3.23     EXPORT CONTROL

         The parties acknowledge that all Products, Licensed Materials, related
         documentation, and technical information (including, but not limited
         to, service and training) provided under this Agreement are subject to
         U.S. export laws and regulations and any use or transfer of such
         Products, Software, related documentation, and technical information
         must be authorized under those regulations. Each party agrees that it
         will not use, distribute, transfer, or transmit the Products, Software,
         related documentation, and technical information (even if incorporated
         into other products) except in compliance with US. regulations. If
         requested by Seller, Customer also agrees to sign written assurances
         and other export-related documents as may be required for Seller to
         comply with U.S. export regulations.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

3.24     AMENDMENTS

         Any supplement, modification or waiver of any provision of this
         Agreement must be in writing and signed by authorized representatives
         of both parties.

3.25     SEVERABILITY

         If any portion of this Agreement is found to be invalid or
         unenforceable, the parties agree that the remaining portions shall
         remain in effect. The parties further agree that in the event such
         invalid or unenforceable portion is an essential part of this
         Agreement, they will immediately begin negotiations for a replacement.

3.26     WAIVER

         If either party fails to enforce any right or remedy available under
         this Agreement, that failure shall not be construed as a waiver of any
         right or remedy with respect to any other breach or failure by the
         other party.

3.27     SURVIVAL

         The rights and obligations of the parties, which by their nature would
         continue beyond the termination cancellation, or expiration of this
         Agreement, shall survive such termination, cancellation or expiration.

3.28     SECTION HEADINGS

         The section headings in this Agreement are inserted for convenience
         only and are not intended to affect the meaning or interpretation of
         this Agreement.

3.29     CHOICE OF LAW

         The construction and interpretation of, and the rights and obligations
         of the parties pursuant to this Agreement, shall be governed by the
         laws of the State of New York without regard to its conflict of laws
         provision and excluding the United Nations Convention on the Sale of
         Goods.

3.30     AMBIGUITIES

         The parties represent that they are sophisticated businesses with
         access to their own legal, financial and business advisors and that
         each party has had the opportunity to consult with advisors of their
         own choosing before entering into this Agreement. The parties therefore
         acknowledge and agree that the rule of law that ambiguities are
         construed against the drafter shall not apply to the interpretation of
         this Agreement.

3.31     FACILITIES ACCESS

         Each party shall provide the other with reasonable access to its
         facilities required in connection with the performance of their
         respective obligations under this Agreement. No charge shall be made
         for such access. Reasonable prior notification will be given when
         access is required. Neither party shall require releases of any
         personal rights in connections with visits to its premises.

3.32     TEST-BED LABORATORY

         Seller shall provide, at no additional cost to the Customer, one item
         or a pair (as applicable) of each of the equipment actually purchased
         by Customer necessary for establishment of a test-bed laboratory, which
         will include the Products set forth in the Attachments to this
         Agreement. The Customer agrees it will not use the test-bed laboratory
         for in-revenue service or any purpose other than testing, provided that
         Customer may use such test bed laboratory for in-service commercial
         testing for a period not to exceed six (6) months.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         In the alternative, at Customer's option, Customer may order equipment
         for it's test bed laboratory, which equipment purchase shall be subject
         to all applicable terms of this Agreement; provided, however, that (i)
         Customer shall have 180 days from the date of invoicing to pay the
         applicable purchase price for such equipment, and (ii) Customer may
         return (at Customer's cost) any of such equipment for any reason prior
         to the end of the applicable 180 day period and shall then have no
         obligation to make payment therefor.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                                   ARTICLE IV
                   PROVISIONS APPLICABLE TO LICENSED MATERIALS

4.1      LICENSE FOR LICENSED MATERIALS

         Upon delivery of Licensed Materials pursuant to this Agreement, Seller
         grants to Customer a personal, nontransferable, and nonexclusive
         license to Use Licensed Materials on a Designated Processor in the
         United States for its own business operations. No license is granted to
         Customer to Use the Licensed Materials Mexico, Canada and other the
         countries covered by the North American Free Trade Agreement or to
         sublicense such Licensed Materials furnished by Seller. Customer shall
         not reverse engineer, decompile or disassemble Software furnished as
         object code to generate corresponding Source Code. Unless otherwise
         agreed in writing by Seller, Customer shall not modify Software
         furnished by Seller under this Agreement. If the Designated Processor
         becomes temporarily inoperative, Customer shall have the right to use
         the Licensed Materials temporarily on a backup processor until operable
         status is restored and processing on the backup processor is completed.

         Customer shall not copy Software embodied in Firmware. Customer shall
         not make any copies of any other Licensed Materials except as necessary
         in connection with the rights granted hereunder. Customer shall
         reproduce and include any Seller copyright and proprietary notice on
         all such necessary copies of the Licensed Materials. Customer shall
         also mark all media containing such copies with a warning that the
         Licensed Materials are subject to restrictions contained in an
         agreement between Seller and Customer and that such Licensed Materials
         are the property of Seller. Customer shall maintain records of the
         number and location of all copies of the Licensed Materials. Customer
         shall take appropriate action, by instruction, agreement, or otherwise,
         with the persons permitted access to the Licensed Materials so as to
         enable Customer to satisfy its obligations under this Agreement. If
         Customer's license is canceled or terminated, or when the Licensed
         Materials are no longer needed by Customer, Customer shall return all
         copies of such Licensed Materials to Seller or follow written
         disposition instructions provided by Seller.

4.2      CHANGES IN LICENSED MATERIALS

         Prior to shipment, Seller at its option may at any time modify the
         Specifications relating to its Licensed Materials, provided the
         modifications, under normal and proper Use, do not materially adversely
         affect the Use, function, or performance of the ordered Licensed
         Materials. Unless otherwise agreed in writing, such substitution shall
         not result in any additional charges to Customer with respect to
         licenses for which Seller has quoted fees to Customer.

4.3      CANCELLATION OF LICENSE

         Notwithstanding any other section in this Agreement to the contrary, if
         Customer fails to comply with any of the material terms and conditions
         of this Agreement with respect to the Use of Licensed Materials, and
         such failure is not corrected within thirty (30) days of receipt of
         written notice thereof by Customer, Seller, upon written notice to
         Customer, may cancel any affected license for Licensed Materials
         without further notification.

4.4      OPTIONAL SOFTWARE FEATURES

         Software provided to Customer under this Agreement may contain optional
         features, which are separately licensed and priced. Customer
         understands and agrees that such optional features will not be
         activated without written authorization from Seller and Customer's
         payment of the appropriate license fees. If, in spite of Customer's
         best efforts to comply with this restriction, such features are
         activated, Customer agrees to so notify Seller within five (5) business
         days from the date of Customer's knowledge that such features were
         activated and to pay Seller the


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         current license fees charged by Seller for the activated features, as
         well as the reasonable cost of money for the period in which such
         features were activated.

4.5      ADDITIONAL RIGHTS IN LICENSED MATERIALS

         Upon thirty (30) days advance written notice, Customer may relocate the
         Software permanently to a new processor of Customer. This new processor
         shall then become the Designated Processor in lieu of the former
         Designated Processor.

         Customer may retain an archival copy of the Software for as long as
         such Software is relevant to Customer's operations.

4.6      INSTALLATION OF SOFTWARE

         Where Customer is responsible for Software installation, Seller's sole
         responsibility is to deliver the Software to Customer on or before the
         scheduled Delivery Date agreed to by Seller. However, if the order
         specifies that Seller is responsible for such installation, Seller
         shall deliver the Software to Customer in sufficient time for it to be
         installed on or before the scheduled Installation Complete Date agreed
         to by Seller, and Seller shall complete its installation and associated
         testing on or before such date.

         Where Customer has assumed responsibility for the installation of newly
         licensed Software and in the event that Customer encounters
         installation difficulties, at Customer's request, Seller will, at the
         standard rate in effect at the time of the request, provide technical
         assistance.

4.7      VENDOR ITEM WARRANTY

         With respect to Licensed Materials that are Vendor Items, Seller, to
         the extent permitted, does hereby assign to Customer the Warranties
         given to Seller by its vendor of such vendor items.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                                    ARTICLE V

                           GENERAL SERVICES PROVISION

5.1      PERSONNEL

         In recognition of the fact that Seller may perform similar work from
         time to time for others, this Agreement will not prevent Seller from
         performing such similar work or restrict Seller's use of any personnel
         who may be provided to Customer under this Agreement.

5.2      RELOCATION, MODIFICATION OR IMPROPER USAGE OF SOFTWARE

         Seller shall be under no obligation to continue provision of Service
         for software under this Agreement if:

         (a)      The software program(s) has been modified without the prior
                  written approval of Seller;

         (b)      The original software program identification marks have been
                  removed or altered;

         (c)      The software program(s) is moved from the street address where
                  it was initially installed without the prior written approval
                  of Seller;

         (d)      System software (i.e., core operating system utilities and
                  libraries, drivers, etc.) are not supported by Seller;

         (e)      Host computer does not conform to the update level necessary
                  to support the software or has been modified other than by
                  Seller personnel, so as not to conform to the specifications
                  for which the software was designed; or

         (f)      Customer uses the software program in violation of Customer's
                  software license and such violation continues for ten (10)
                  days after Seller delivers notice of such violation to
                  Customer.

5.3      SERVICES NOT COVERED

         Seller will not provides services required to repair damages,
         malfunctions, or service failures caused by:

         (a)      Customer's failure to follow equipment manufacturer's relevant
                  installation, operation or maintenance instructions;

         (b)      Failure of a host computer, or other equipment or software not
                  maintained under this Agreement;

         (c)      Customer's abuse, misuse or negligent acts;

         (d)      Power failure or surges, lightning, fire, flood, pest damage,
                  accident, actions of third parties and other events outside
                  Seller's reasonable control or not arising under normal
                  operating conditions; or

         (e)      Maintenance repair by persons not authorized by Seller.

         Seller, however, may agree to perform such maintenance services on a
         time and materials basis.

5.4      PERSONNEL & SUBCONTRACTORS

         (a)      Seller reserves the right to assign, re-assign and substitute
                  its personnel with personnel having comparable qualifications
                  at any time during the term of this Agreement, with no
                  interruption of Customer's services.

         (b)      During the term of this Agreement, and for a period of one (1)
                  year from the termination of this Agreement or a Statement of
                  Work, the parties agree not to employ, make an offer of


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                  employment to, or enter into a consulting relationship with
                  any employee, subcontractor, or consultant of the other party
                  who is directly involved with the delivery of Services under
                  this Agreement, except upon the prior written consent of the
                  affected party.

         (c)      Seller reserves the right to subcontract any or all of the
                  Services to third parties and to use independent consultants
                  provided that (i) the use of subcontractors and/or consultants
                  will not cause any interruption of Services to Customer, (ii)
                  such subcontractors and/or consultants have recognized
                  experience and qualifications in providing the subject
                  Services, and (iii) if Customer notifies Seller in writing
                  that a particular subcontractor or consultant should be
                  removed from providing service for just cause, Seller will
                  make reasonable efforts to find an acceptable replacement
                  subcontractor and/or consultant. Services supplied by such
                  third parties shall be subject to the terms and conditions of
                  this Agreement as if supplied directly by Seller and Seller
                  shall be responsible for the Services performed.

         (d)      Customer's site representative shall exercise no supervision
                  over any personnel furnished by Seller or any subcontractor,
                  but Customer's site representative shall be available to
                  Seller for consultation and advice.

5.5      WORK OR SERVICES PERFORMED BY OTHERS

         Work or services performed at the site by Customer or Customer's other
         vendors or contractors shall not interfere with Seller's performance of
         Services. Seller shall have no responsibility or liability with respect
         to such work or services performed by any person other than its
         employees, subcontractors, consultants, or other agents. If Customer or
         its other vendors or contractors fail to timely complete the site
         readiness or if Customer's or its other vendors' or contractors' work
         interferes with Seller's performance, the scheduled completion date of
         Seller's Services under this Agreement shall be extended as necessary
         to compensate for such delay or interference.

5.6      PROVISIONS FOR ENGINEERING AND INSTALLATION SERVICES

5.6.1    SITE REQUIREMENTS

                  Customer is solely responsible for ensuring that the
                  installation site is compliant with any reasonable site
                  requirements identified in writing by Seller for the
                  installation and/or operation of any Products, Licensed
                  Materials, or Services furnished by Seller under this
                  Agreement. Such site requirements may include, without
                  limitation, those site requirements set forth herein below.
                  Seller agrees to cooperate with Customer to ensure compliance
                  with all site requirements, provided that such cooperation
                  shall not require Seller to incur any out-of-pocket costs
                  unless the parties expressly agree otherwise in writing.

                  Customer shall be solely responsible for ensuring that the
                  installation site complies with all applicable laws, orders,
                  and regulations of federal, state and local governmental
                  entities including, without limitation, those relating to
                  environmental conditions.

                  Notwithstanding anything contained in this Agreement to the
                  contrary, Seller shall have no liability to Customer, its
                  employees, agents, and customers for any delay by Seller in
                  completion of any installation or other Service to be provided
                  by Seller under this Agreement if such delay is attributable
                  to the failure by Customer to comply with any site
                  requirements or to provide any other items which are the
                  responsibility of Customer under this Article 5.6.

                  The site requirements which are solely the Customer's
                  responsibility may include the following as required by the
                  conditions of the particular installation or other on site
                  service at no cost to Seller:

                  (a)      Participate in a joint site survey with Seller


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                  (b)      Interior Space - Clears ten feet (10') from floor to
                           bottom of lowest obstruction

                  (c)      Floor Loading (minimum requirements) Structural
                           Analysis always required

                  (d)      Power Room 150 lb. per sq. ft

                  (e)      Switch Room 100 lb. per sq. ft.

                  (f)      Floor Thickness: In accordance with local seismic
                           requirements for the equipment

                  (g)      Conduit access to all floors in building

                  (h)      Local exchange carrier cable available

                  (i)      Commercial electrical current

                  (j)      Existing building grounding is 5 ohm or less metered

                  (k)      Battery room ventilation in accordance with local
                           requirements

                  (l)      Fire suppression system

                  (m)      Freight access for a 48' trailer off loading
                           equipment.

5.6.2    ADDITIONAL ITEMS TO BE PROVIDED BY CUSTOMER

         Customer will also be responsible for furnishing the items described in
         this Section 5.6.2 as required by the conditions of the particular
         installation or other on-site Service at no cost to Seller and such
         items are not included in Seller's price for the Services. Seller shall
         have the right to invoice Customer for any out-of-pocket costs or
         expenses incurred by Seller as a result of Customer's failure to
         provide any of these items described in this Section 5.6.2 and all such
         invoices shall be paid by Customer in accordance with this Agreement.

         (a)      Access to Building and Work Site Customer shall provide
                  employees of Seller and its subcontractors free access to
                  premises and facilities at all hours during the scheduled
                  Service or at such other times as are requested by Seller.
                  Customer shall obtain for Seller's employees and its
                  subcontractors' employees any identification and clearance
                  credentials, which are necessary to enable Seller and its
                  subcontractors to have access to the work site.

         (b)      Site Coordination At Seller's request Customer shall
                  coordinate with Customer's sub contractors, property managers,
                  Regional Bell Operating Company, Local Exchange Carrier and
                  any other parties and tenants having rights to the work site
                  or whose participation is necessary in order for Seller to
                  perform the applicable Services.

         (c)      Environmental Conditions Prior to the Services start date,
                  Customer shall insure that the applicable premises will be dry
                  and free from dust and Hazardous Materials, including but not
                  limited to asbestos, and that the premises are in such
                  condition as not to be injurious to Seller's or its
                  subcontractors' employees or to the Products and Licensed
                  Materials to be installed. Prior to Services start date and
                  during the performance of the Services, Customer shall, if
                  requested by Seller, provide Seller with sufficient data to
                  assist Seller and its subcontractors in evaluating the
                  environmental conditions at the work site (including without
                  limitation, the presence of Hazardous Materials). The price
                  quoted by Seller for Services does not include the cost of
                  removal or disposal of the Hazardous Materials from the work
                  site. Customer is responsible for the removal and disposal in
                  accordance with applicable laws, rules and regulation of the
                  Hazardous Materials, including but not limited to asbestos,
                  prior to commencement of Services.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         (d)      Sensitive Equipment Prior to the Services start date, Customer
                  shall inform Seller of the presence of any sensitive equipment
                  at the work site (e.g., equipment sensitive to static
                  electricity or light).

         (e)      Repairs to Buildings Prior to the Services start date,
                  Customer shall make such alterations and repairs to the work
                  site as are necessary for proper installation of Products and
                  Licensed Materials.

         (f)      Building Readiness Prior to the Services start date, Customer
                  shall provide extraordinary hauling and hoisting services such
                  as, rigging or crane services, if applicable, and shall
                  arrange for traffic control, if necessary for the delivery of
                  Products.

         (g)      Openings in Buildings - Customer shall furnish suitable
                  openings in buildings, including, without limitation,
                  elevators and windows as needed to allow Products to be placed
                  in position, and shall provide necessary openings and ducts
                  for cable and conductors in floors and walls as designated on
                  engineering drawings furnished by Seller. Customer shall
                  fireproof (with steel covers and as otherwise required by
                  applicable laws, rules, regulations, and codes) all unopened
                  paths throughout such buildings.

         (h)      Surveys Prior to the Services start date, Customer shall
                  provide to Seller (and, if requested by Seller, to Seller's
                  subcontractors) surveys (describing the physical
                  characteristics, legal limitations, and utility locations for
                  the work site) and a legal description of the site.

         (i)      Electrical Current, Heat, Light, and Water Customer shall, in
                  amounts no less than that ordinarily furnished for similar
                  purposes in a working office, provide electric power, run all
                  leads to Seller's power board; provide temperature control and
                  general illumination (regular and emergency) in rooms in which
                  services are to be performed or Products stored, provide exit
                  lights; and provide water and other necessary utilities for
                  the proper execution of Services.

         (j)      Building Evacuation Prior to the Services start date, Customer
                  shall provide building evacuation plans in case of a fire or
                  other emergency.

         (k)      Ceiling Inserts Provide ceiling inserts as required using
                  Seller's standard spacing arrangement for ceiling support
                  equipment.

         (l)      Material Furnished by Customer Unless expressly stated to the
                  contrary, Seller's prices do not include costs for any
                  Customer furnished material nor do they include any Seller
                  charges for engineering, installation, modification, or repair
                  Services relating to Customer furnished material. New or used
                  material furnished by Customer shall be in such condition that
                  it requires no repair and no adjustment or test effort in
                  excess of that normal for new equipment. Customer assumes all
                  responsibility for the proper functioning of such material.
                  Customer shall also provide the necessary technical assistance
                  and information for Seller to properly install such material.

         (m)      Floor Space and Storage Facilities Customer shall provide, for
                  the duration of Services, suitable and easily accessible floor
                  space and storage facilities to permit storing of Products and
                  other material, tools and other property of Seller and its
                  subcontractors in close proximity to where they will be used.
                  Where the Services are to be performed outside of a building
                  or in a building under construction, Customer shall, in
                  addition to the above requirements, permit or secure any
                  necessary permission for Seller and its subcontractors to
                  maintain at the work site, storage facilities for Products,
                  material, tools, and equipment needed to complete


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                  the Services. As appropriate Customer shall provide Seller's
                  and its subcontractors' personnel access to toilet facilities.

         (n)      Easements, Permits, and Rights of Way Customer shall secure
                  prior to the Services start date and shall maintain for the
                  duration of the Services all rights-of-way, easements,
                  licenses, and permits and such other rights and approvals as
                  are necessary to enable Seller to perform the Services
                  including, without limitation, all construction and building
                  permits for work to be performed at the work site and other
                  areas ancillary to the work site such as sidewalks, streets,
                  alleys, and highways.

         (o)      Security Service Customer shall provide such levels of
                  security as are reasonably necessary to prevent admission of
                  unauthorized persons to building and other areas where
                  installation Services are performed and to prevent
                  unauthorized removal of the Products and other materials.
                  Seller will inform Customer as to which storage facilities at
                  the work site Seller will keep locked. To the extent
                  practicable, such storage facilities will remain closed to
                  Customer's building surveillance.

         (p)      Access to Existing Equipment Customer shall permit Seller
                  reasonable use of such portions of the existing equipment as
                  are necessary for the proper completion of such tests as
                  require coordination with existing equipment. Such use shall
                  not interfere with the Customer's normal maintenance of
                  equipment.

         (q)      Grounds Customer shall provide access to suitable and isolated
                  building ground as required for Seller's standard grounding of
                  equipment. Where installation is performed outside or in a
                  building under construction, Customer shall also furnish
                  lightning protection ground.

         (r)      Requirements for Customer Designed Circuits Customer shall
                  furnish information covering the proper test and readjust
                  requirements for apparatus and shall furnish requirements for
                  circuit performance associated with circuits designed by
                  Customer or standard circuits modified by Customer's drawings
                  such as alarm and environmental circuits.

         (s)      Cross-Connecting Main Distributing Frames and Installing Heat
                  Coils Customer shall install such cross-connections and heat
                  coils as are necessary in connection with the Services.

         (t)      Clearing Equipment for Modifications Customer shall remove
                  cross-connections, transfer service on trunks and sundry
                  working equipment, and make other arrangements required to
                  permit Seller to modify existing equipment.

         (u)      In the event the joint site survey conducted by the parties
                  pursuant to Section 5.6.1(a) determines that the necessary
                  requirements are not met at the commencement of the
                  installation of the Products and the Customer needs to arrange
                  for alterations and/or repairs, the order will be placed on
                  hold until such time as requirements are met. During such
                  interval, Seller reserves the right to determine any schedule
                  and price impacts, to treat such product as Bill and Hold, or
                  to cancel such order.

5.6.3    ITEMS TO BE FURNISHED BY SELLER

         5.6.3.1  Engineering

                  General Review Seller will review the following items as
                  Seller deems appropriate; switching Products (Products and
                  Software); transmission Products (Products and Software);
                  power/energy equipment hardware; engineering drawings; site
                  survey; grounding of the switch; appliance outlets; front and
                  rear aisle lighting as required;


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                  timing cables; distributing frame engineering and equipment;
                  cable rack and hardware; stanchions; end guards auxiliary
                  framing; existing cable holes; fiber cable protection systems.

                  Needs Analysis Seller will perform a needs analysis of the
                  Telephone Equipment Order (TEO) and the Customer's specified
                  requirements to determine the equipment solution that meets
                  those requirements.

                  Records Upon Installation Complete, Seller will turn over to
                  Customer a complete set of records. Such records include but
                  are not limited to wiring lists, front equipment drawings,
                  assignment drawings, and interface schematics.

         5.6.3.2  Installation

                  Site Survey Prior to the commencement of installation
                  Services, Seller and Customer will perform a joint site survey
                  to determine whether the installation site meets the site
                  requirements referenced in Section 5.6.1 and whether Customer
                  has provided the items set forth herein. Should Seller
                  determine that the site does not comply with such site
                  requirements or that Customer has not provided any item
                  required under Articles 5.6.1 and 5.6.2, Seller shall specify
                  such deficiencies to Customer in writing. Seller and Customer
                  shall jointly agree on a course of action to correct such
                  deficiencies prior to the start of installation Services.
                  During the joint site survey, Seller and Customer shall also
                  jointly agree upon the layouts and arrangements for the
                  Products and Licensed Materials to be installed. Upon the
                  start of installation all changes shall be subject to
                  additional charges.

                  Method of Procedure Seller shall prepare a detailed Method of
                  Procedure ("MOP") and review with Customer before starting
                  work. Customer shall review the MOP prepared by Seller and
                  shall give Seller written acceptance of the MOP by signing a
                  copy thereof prior to the Services start date. Any changes to
                  the MOP requested by Customer shall be agreed upon subject to
                  the Change Order process.

                  The MOP shall contain the following details

                  (a)      A concise statement that covers the installation
                           Services to be performed including the equipment that
                           will be affected and the hours that such Services are
                           to be performed;

                  (b)      Specific responsibilities of Seller and Customer;

                  (c)      Service protection procedures that include, general
                           service protection rules and special service
                           precautions for the specific project;

                  (d)      A time and release schedule of the work operations
                           involving working equipment and/or circuits in
                           service and;

                  (e)      A method of identifying equipment and cabling to
                           ensure that the circuits are "cleared" before start
                           of work;

                  (f)      A detailed account of the work operations that the
                           installer will follow;

                  (g)      The methodology to be used to halt installation
                           Services if trouble occurs and a general procedure to
                           correct/resume work operations;

                  (h)      Provide environmental safety concerns, if applicable;

                  (i)      Obtain Customer signature.

                  Warehousing, Delivery, Receipt & On-site Storage of Equipment,
                  and General Cleaning Seller will stage the delivery of
                  Products. Seller's personnel will be on-site at the time the
                  Products are delivered. Such personnel will accept the


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                  Products, unpack for inventory purposes and inspect such
                  Products for damage. Seller will resolve all shipping errors
                  inventory discrepancies and damage issues. This function shall
                  be performed in an area previously designated for the storage
                  and unpacking of equipment and Product(s). Such area will be
                  selected based on a location that minimizes movement of
                  material and personnel through the work site. In the event
                  storage is limited or inadequate, as determined by Seller,
                  temporary storage facilities such as trailers or containers
                  may be required. Any fees associated with the procurement of
                  temporary storage facilities are not included in Seller's
                  quoted prices and shall be solely the responsibility of the
                  Customer. Materials such as plywood or masonite will be
                  utilized as necessary, to prevent cable reels, iron work and
                  other heavy objects from damaging floors, walls and doors.
                  Seller shall perform general cleaning of the equipment and
                  storage areas (e.g. clearing floors of debris, packing
                  material, etc.) on a regular basis throughout the installation
                  period. Rubbish shall be disposed of at Seller's expense and
                  in compliance with local requirements.

                  Hardware Assembly Hardware assemblies and overhead cable rack,
                  iron work and conduit (collectively "Components") will be
                  delivered for specific bays and cabinets as identified in the
                  firm price quote provided or in the Statement of Work. Unless
                  included in the applicable SOW, additions of these components
                  to provide access to other locations (i.e. power rooms,
                  computer rooms, distributing frames not located with Products,
                  or Products located on separate floors) will be specifically
                  excluded from the installation Services. Such additions will
                  only be included in the installation Services for an
                  additional charge. Seller will place and secure all ordered
                  Products in the location specified in the engineering
                  specifications. Such activity includes but is not limited to:

                  (a)      Mark and drill floors

                  (b)      Assemble and place floor mounted Products

                  (c)      Assemble distribution frames

                  (d)      Erect frames

                  (e)      Align and junction frames

                  (f)      Install end guards and covers

                  (g)      Assemble and install fiber protection ductwork

                  (h)      Mount units and apparatus

                  (i)      Place batteries

                  (j)      Seller will also erect supporting hardware compatible
                           with purchased Products. Such activity includes but
                           is not limited to

                  (k)      Fabricate and install cable racks, bars, rod or
                           stations as identified in the Statement of Work

                  (l)      Erect ladder rack and ladders

                  (m)      Open and close existing cable holes and slots. Any
                           new cable holes to facilitate Product(s) design are
                           the responsibility of the Customer

                  (n)      Fabricate and install framing aisle lighting conduit
                           and fittings

                  (o)      In addition, Seller will place and designate
                           connecting appliances (MDF terminal blocks, DSX
                           panels, etc.) provided with order. Such as but not
                           limited to


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                  (p)      Stamp and/or affix aisle, shelf and unit designations

                  (q)      Mount and stencil terminal strips

                  Seller will also extend lighting, AC circuits and grounding to
                  include added Products if Products are ordered in Statement of
                  Work. Such activities include but are not limited to:

                  (a)      Assemble and install lighting fixtures

                  (b)      Install switches and receptacles

                  Cable and Wire For cable and wire to be installed by Seller,
                  Seller will run, tag, and secure metallic and fiber optic
                  cables in an unobstructed environment a maximum of one hundred
                  (100) feet and power cables a maximum of fifty (50) feet for
                  the Products and apparatus (this specifically excludes primary
                  power cables, except on power equipment orders) identified in
                  the Product order or Statement of Work. Seller will wire,
                  attach, terminate and affix all cable and wire including fiber
                  optic cables supplied with purchased Products. This may
                  include but is not limited to mechanical wire wrapping,
                  soldering, crimping, plugging in of pre-terminated cables or
                  polishing of fiber optics for purchased Product. Seller will
                  run alarm cabling, terminate and test for the identified
                  equipment including Customer provided environmental scan
                  points of fire detection and door entry which are less than
                  fifty (50) feet away and pre-terminated. Seller will verify
                  all copper wiring placed by the Seller for continuity to
                  detect and analyze opens, shorts, reversals, and incorrect
                  wiring. Where pairs, quads or groupings are indicated, the
                  grouping will be verified. Seller will ensure the
                  functionality and integrity of all fiber directly associated
                  with the installed Products and the fiber optic cables
                  installed by Seller within the building structure. Seller will
                  "Dress" all cabling and wiring and provide physical
                  protection. Seller will properly protect cables at all
                  "break-off" locations, such as the vertical turns from the
                  overhead cable rack to bay frame work.

                  Testing Specific test procedures are dependent upon the type
                  of Product installed and are identified in the installation
                  guide for the particular Product. To ensure that technical
                  design and performance criteria are being met, testing shall
                  be performed by Seller to obtain an evaluation of the
                  functional, operational, electrical and mechanical integrity
                  of all Products installed by Seller. In general the following
                  tests are required for all Product types furnished and
                  installed by Seller: Seller's activities associated with
                  testing will include, but not be limited to the following:

                  (a)      Turn on and verify power to installed Products

                  (b)      Load product software and default parameters required
                           to conduct local unit loop-back testing to
                           demarcation points.

                  (c)      Run and connect test specific cross-connects. Remove
                           upon completion of test(s).

                  (d)      Perform all unit and system-level tests to ensure
                           Products pass system and technician evoked
                           diagnostics

                  (e)      Test functionality of circuit packs required by job,
                           at time of original installation, within the
                           installed unit. Testing of spares is specifically
                           excluded and will be included only for an additional
                           charge.

                  (f)      Test functionality and integrity of Seller installed
                           local alarms.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                  (g)      Resolve troubles encountered with Products purchased
                           on order. Refer to Customer any trouble found in
                           Customer provided equipment.

                  (h)      Maintain test logs and trouble reports and turn over
                           to Customer.

                  (i)      Seller will perform the following Turnover procedures
                           for all installation Services provided by Seller

                  (j)      Inform Customer of completion of installation cycle.

                  (k)      Provide Customer with all drawings, invoices, logs
                           and test results per the contract.

                  (l)      Remove from Customer premises tools and scrap
                           generated from installation effort.

                  (m)      Issue job completion notice to Customer.

5.7      PROVISIONS FOR PROFESSIONAL SERVICES

5.7.1    SCOPE

         Services to be provided hereunder are set forth in the Professional
         Consulting Services Agreement and Statement of Work, which are attached
         to and incorporated herein as Attachment F. Seller and Customer may
         enter into additional Professional Services Agreements and Statements
         of Work, and, if so, each will be automatically incorporated into this
         Agreement upon signature by an authorized representative of each party
         without further amendment. Statements of Work shall be in writing and
         properly attached to this Agreement.

5.7.2    DEFINITIONS

         For the purpose of this Section 5.7.2, the following definitions will
         apply:

                  CALL-OUT SERVICES: a) When requested by Customer, services are
                  provided on an availability basis at the then-current Call-Out
                  Hourly Rate for time and materials plus incurred travel and
                  living expenses for dispatches over fifty (50) miles; b)
                  Hourly Rates are measured from the start of remote diagnostic
                  assistance, or from time of dispatch until return to point of
                  dispatch; c) Prevailing minimum billing requirements apply.

                  CONSULTATION SERVICES: Diagnostic assistance provided from
                  product or system specialists. Charges for Consultation
                  Services are billed at the then-current Consultation Service
                  Hourly Rate for time and materials or upon payment of an
                  annual subscription fee. Charges will be: a) one hour minimum
                  for remote diagnostics (voice or modem) and b) eight hours
                  minimum plus incurred travel and living expenses for on-site
                  visitation.

                  OUT-OF-COVERAGE HOURS SERVICE: a) Maintenance services
                  rendered to Customers outside of the coverage period. Such
                  services will be provided on an availability basis at the
                  then-current Out-of-Coverage Hour Rate for time and materials,
                  plus incurred travel and living expenses for dispatches over
                  fifty (50) miles; b) Hourly Rates are measured from start of
                  remote diagnostic assistance or from time of dispatch until
                  return to point of dispatch; c) Prevailing minimum billing
                  requirements apply.

5.7.3    CUSTOMER'S RESPONSIBILITIES

         Throughout the term of this Agreement Customer agrees to:

         (a)      Follow all Seller's or other relevant equipment manufacturer's
                  applicable installation, operation, administration, and
                  maintenance instructions;


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         (b)      Provide the environment, electrical, and telecommunications
                  connections as specified by Seller or relevant equipment
                  manufacturer;

         (c)      Provide reasonable access to the equipment to enable Seller to
                  perform maintenance;

         (d)      Provide adequate communications facilities, workspace, and
                  storage space for Seller spare parts;

         (e)      Have their representative at the equipment location during any
                  Seller service activity on the premises;

         (f)      Maintain a procedure external to the software program(s) and
                  host computer for reconstruction of lost or altered files,
                  data or programs to the extent deemed necessary by the
                  Customer;

         (g)      Provide test equipment and maintenance documentation
                  sufficient for maintenance of other than Seller products that
                  are listed in this Agreement; and

         (h)      Assure that work done at the site by Customer or by others
                  shall not interfere with Seller's performance of Services.

5.7.5    HAZARDOUS MATERIALS/CONDITIONS

         The Customer has the responsibility to inform, identify, correct, mark,
         monitor, remove, and/or dispose of any hazardous materials or
         conditions that might interfere with the provision of Service prior to
         start of Service. If hazardous materials or conditions are found to
         affect provision of Services, work stoppage or delay will occur until
         the site is no longer injurious to Seller's employees. Seller's sole
         remedy for Customer's failure to comply with this Article 5.7.5 is
         limited to (a) reimbursement for additional work effort or expenses
         incurred, and (b) relief from liability for any delay or failure to
         perform a service to the extent such delay or failure is caused by the
         presence of hazardous materials or related conditions.

                                   ARTICLE VI
                               PROJECT MANAGEMENT

6.1      SCOPE

         The parties will each appoint a project management representative(s) to
         be responsible for initiating Work, coordinating all such Work,
         controlling, monitoring and progressing the Work to an acceptable
         conclusion, including the arrangement of any agreed upon review
         meetings, and communicating and cooperating with each other in all
         matters pertaining to the progress of the Work. The Project Managers
         shall also be responsible for ensuring that the Work progresses in
         accordance with the SOW and any schedules incorporated therein.

6.2      SELLER PROJECT MANAGEMENT

         Seller will provide project management as mutually agreed by the
         parties.

6.3      CUSTOMER PROJECT MANAGEMENT

         Customer will provide project management as mutually agreed by the
         parties.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                                   ARTICLE VII
                                    WARRANTY

7.1      NETWORK ELEMENTS

         Seller warrants to Customer only, that during the applicable warranty
         period specified below or in the applicable Attachment: (i) Products
         (exclusive of Software) will be free from defects in material and
         workmanship and will conform to Seller's Specifications for such
         Products; (ii) Software licensed by Seller to Customer will be free
         from those defects which materially affect performance in accordance
         with Seller's Specifications

         The warranty period for Products, unless otherwise stated in the
         applicable Attachment, and the associated Software (basic software
         acquired with the product that enables it to function) is twelve (12)
         months and for all other Software is for a period of three (3) months
         commencing on date of shipment or, if installed by Seller the earliest
         of either: (i) Installation Complete or (ii) the date Customer first
         puts Products and/or Licensed Materials into commercial service. For
         Bill and Hold Products the warranty will commence upon the date of
         stocking at Seller's facility or Customer's designated location. The
         warranty period for any Product (or part thereof) repaired or replaced
         under this section is the unexpired portion of the repaired or replaced
         Product warranty period or three (3) months, whichever is longer.

         If, under normal and proper use, a defect or non-conformity appears in
         Products (other than Vendor Items) or Software during the applicable
         warranty period and Customer promptly notifies Seller in writing of
         such defect or non-conformance and follows Seller's instructions
         regarding return of defective or non-conforming Product or Software,
         Seller, at its option, will either promptly repair, replace or correct
         the same without charge at its manufacturing or repair facility or if
         Seller is unable to repair, replace or correct the defect, provide a
         refund or credit (at Customer's option) based on the original purchase
         price or license fee. No Product or Software will be accepted for
         repair or replacement without the written authorization of and in
         accordance with instructions of Seller. Removal and reinstallation
         expenses as well as transportation expenses associated with returning
         Product (other than fiber optic cable) and Software as well as
         transportation expenses associated with returning such Product or
         Software to Seller shall be borne by Customer (other than in respect of
         defective fiber optic cable). In the event that it is determined that
         the returned Product or Software is defective, Seller shall (i)
         reimburse Customer the cost of transportation and Customer's
         out-of-pocket costs of removal and reinstallation of the defective
         Product or Software and (ii) pay the costs of transportation. If it is
         determined that any returned Product (other than fiber optic cable) or
         Software is not defective, Customer shall reimburse all of Seller's
         out-of-pocket costs of handling, inspecting, testing and transportation
         and, if applicable, travel and related expenses incurred in respect of
         such returned Product or Software.

         With respect to defective fiber optic cable purchased under this
         Agreement, the following will apply:

                  (a) For any single defect (at a single location) in any
         segment of fiber (defined as the length of fiber between two splice
         points)(a "Fiber Segment") determined by the mutual agreement of
         Customer and Seller to be a manufacturing or product defect, Customer
         and Seller shall seek to promptly repair such defect by means of a
         splice; provided that a splice shall not be deemed a suitable remedy in
         the event that such a splice would adversely impact the performance
         specifications of such Fiber Segment. Seller agrees to reimburse
         Customer (with a credit for the future purchase of Seller's Products)
         its out-of-pocket expenses (up to


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         $20,000) of transportation, repair and reinstallation associated with
         each such individual defect.

                  (b) For multiple defects in any Fiber Segment or in the case
         described in paragraph (a) above where a splice is not a suitable
         remedy and Customer and Seller have mutually agreed that such defect is
         a manufacturing or product defect, Customer may require Seller to
         promptly replace the entire length of fiber optic cable constituting
         such Fiber Segment at no cost to Customer. All transportation costs
         associated with the return and replacement of the defective fiber optic
         cable shall be borne by Seller. In addition, Seller shall provide
         Customer with a credit for the future purchase of Seller's Products
         equal to the amount of out-of-pocket expenses incurred by Customer
         associated with the removal and reinstallation of the replacement fiber
         optic cable, which shall not exceed 25% of the actual purchase price
         paid by Customer for the replaced fiber optic cable.

         In repairing or replacing any Product (other than fiber optic cable) or
         part of Product (other than fiber optic cable) under this warranty,
         Seller may use either new, remanufactured, reconditioned, refurbished
         or functionally equivalent Products or parts. Replaced Products or
         parts shall become Seller's property.

         With respect to Products (other than Vendor Items), which Seller has
         ascertained are not readily returnable for repair, Seller, at its
         option, may elect to repair or replace the Products at Customer's site.
         Customer, at its expense, shall make the Products accessible for repair
         or replacement and shall restore the site after Seller has completed
         its repairs or replacement.

7.2      SERVICES

         Seller agrees to perform Services in a workmanlike manner and in
         accordance with good usage and industry standards using material free
         from defects except where such material is provided by Customer. If
         Services performed by Seller prove not to have been so performed, and
         if Customer notifies Seller to that effect within a thirty (30) day
         period commencing on the date of completion of the service, Seller, at
         its option, will promptly correct any defects and deficiencies or if
         Seller is unable to make such correction, render a full or pro-rated
         refund or credit (at Customer's option) based on the original charge
         for the Service.

         If engineering or installation Services only prove not to be performed
         as warranted within a three (3) month period commencing on the date of
         completion of the Services, Seller, at its option, either will correct
         the defect or non-conforming Services or render a full or pro-rated
         refund or credit (at Customer's option) based on the original charges
         for the Services.

7.3      NETWORK

         The Network Elements, if readied in accordance with the terms,
         conditions, and Specifications of this Agreement and all Attachments,
         and upon the satisfaction of any required deliverables by Seller and
         Customer specified in Attachments to this Agreement, will operate as an
         integrated network upon completion of all applicable testing for each
         span between designated locations. A span consists of any two remote op
         amp terminal sites, and/or regional sites, and/or terminal sites,
         connected by a continuous segment of fiber optic cable. All spans also
         will collectively operate as an integrated network. This warranty shall
         not apply to the extent that claims arise due to the following: (i)
         Network Elements are installed by a third party not authorized or
         certified by Seller, (ii) Customer fails to take appropriate action(s)
         as prescribed by Seller during the term of this Agreement, (iii) Vendor
         items or licensed materials not provided by Seller are defective, (iv)
         services not provided by


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         Seller are not performed as warranted or fail to perform. The
         provisions of section 7.1 will supersede the provisions of Section 7.3
         as applicable to individual Seller provided Products.

         In the event that the Network does not operate as warranted in this
         Section 7.3, Seller will promptly take such steps, without charge to
         Customer, as may be necessary to achieve Network integration.

7.4      BACKWARDS COMPATABILITY

         In addition to the warranties contained elsewhere in the Article VII,
         the Seller represents and warrants that each version of Licensed
         Materials will be Backwards Compatible with all existing in-Service
         Seller Provided Products and Software. In the event that Licensed
         Materials supplied by Seller does not provide Backwards Compatibility
         during the Term of this Agreement, then the Seller will provide,
         without charge to the Customer, the most current version of the
         Licensed Materials, and otherwise promptly take such steps as may be
         necessary to achieve Backwards Compatibility. The Customer will be
         responsible for the cost of any additional equipment necessary to
         accommodate additional capacity, memory or processing necessitated by
         any new version of Licensed Materials.

7.5      YEAR 2000 WARRANTY

         (a) Seller represents and warrants that during the period beginning on
         the warranty start date and for the warranty periods set forth in
         Section 7.1, but in no event ending prior to December 31, 2001, any
         Seller Provided Products and Licensed Materials delivered by the Seller
         to the Customer under this Contract will:

                  (i) accurately and fully record, store, present and process
         calendar dates falling on or after January 1, 2000, with substantially
         the same functionality as such products record, store, present and
         process calendar dates falling on or before December 31, 1999; and

                  (ii) provide substantially the same functionality with respect
         to the introduction of data containing dates falling on or after
         January 1, 2000, as it provides with respect to the introduction of
         data containing dates falling on or before December 31, 1999. All of
         the foregoing functionality in this paragraph (a) shall be known as
         "Year 2000 Capable."

         (b) When Customer purchases more than one version of software, if they
         are intended by Seller to interoperate, all such versions of Software
         will be compatible and interoperate in such manner as to process
         between them, as applicable, date related data correctly as described
         in paragraph (a) above.

         (c) The foregoing sets forth an additional warranty for Seller's
         Licensed Materials. The failure of the Products and Software to meet
         the foregoing requirements during the warranty period set forth in
         section 7.1 entitles Customer to the remedies set forth therein.

         (d) Nothing in the foregoing shall be deemed to make Seller responsible
         for the Year 2000 capability of any Software constituting Vendor Items
         interoperating or intending to operate with Seller's Software. Customer
         and/or the manufacturer of other supplier of such third


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         party Software shall be responsible for any Year 2000 compliance and
         assuring the ability of such Vendor Item Software to successfully
         operate while interoperating with Seller's Software.

7.6      BANDWIDTH ASSURANCE

         Seller warrants that a combination of its WaveStar OLS 400G product
         connected to Seller's True Wave Reduced Slope Fiber product will
         provide 400 GB/sec of capacity (the "Bandwidth Assurance"). If Customer
         purchases the above products (Products) and deploys the Products in
         accord with Seller's specifications and the Products fail to provide
         the Bandwidth Assurance, Seller shall promptly take all reasonable
         measures necessary to resolve the problem, including making any
         necessary repairs, replacing or adding Products, at no charge to
         Customer. Seller shall have no obligation for any failure to comply
         with the above warranty related to the use or failure of products,
         licensed materials or services which are not Seller provided Products,
         Licensed Materials or Services.

         Seller warrants that the WaveStar OLS platform will evolve to deliver
         the additional capacity as set forth in the following table:


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Transmission Rate per   Wavelength Count and Bit Rate      Optical Band       Availability Dates
      Fiber
------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------
      <S>                 <C>                               <C>                      <C>
      400 Gb/s             80 Channels @ 2.5 Gb/s             L Band                 4Q01

                           40 Channels @ 10 Gb/s
------------------------------------------------------------------------------------------------
      800 Gb/s            160 Channels @ 2.5 Gb/s           C + L Band               4Q01

                           80 Channels @ 10 Gb/s
------------------------------------------------------------------------------------------------
      1.6 Tb/s             40 Channels @ 40 Gb/s              C Band                 4Q02
------------------------------------------------------------------------------------------------
      3.2 Tb/s            160 Channels @ 10 Gb/s            C + L Band               4Q03

                           80 Channels @ 40 Gb/s
------------------------------------------------------------------------------------------------
</TABLE>

         The C Band system amplifier is designed with intrinsic WDM components
         that combine and split C and L band signals. This design allows
         in-service upgrades from the C Band (400 Gb/s) to the C + L Band (800
         Gb/s).

         If Lucent fails to deliver the WaveStar OLS products providing the
         additional bandwidth within six (6) months of the quoted availability
         dates and provided Customer's then in service system is fully utilized
         (i.e., 400 Gb/s, 800 Gb/s, 1.6 Tb/s, 3.2 Tb/s, as the case may be)
         Seller shall promptly take all reasonable measures to resolve the
         problem and to provide the additional bandwidth at a price no more than
         1.75 times the price of the then currently installed product.

         Seller also agrees that Customer will pay no more than 1.75 times the
         price of the then currently installed WaveStar product for the
         succeeding version of the WaveStar product. For example, Customer's
         price for the WaveStar 800 Gb/s will not be more than 1.75 times
         greater than the price for the WaveStar 400 Gb/s. Similarly, Customer's
         price for the 1.6 Tb/s WaveStar will not be more than 1.75 times
         greater than the price for the WaveStar 800 Gb/s.

         In addition to the foregoing, Seller and Customer agree to staff the
         Bandwidth Evaluation Teams pursuant to Exhibit A.

7.7      DISCLAIMER

         The foregoing warranties will not extend to defective conditions or
         non-conformities resulting from Customer's modifications, misuse,
         neglect, accident or abuse; improper wiring, repairing, splicing,
         alteration, installation, storage or maintenance; use in a manner not
         in accordance with Seller's or its vendor's Specifications, or
         operating instructions or failure of Customer to apply previously
         applicable Seller's modifications or corrections. In addition, Seller
         makes no warranty with respect to Products which have had their serial
         numbers or month and year of manufacture removed, altered and with
         respect to expendable items, including, without limitation, fuses,
         light bulbs, motor brushes and the like. No warranty is made that
         Software


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

         will run uninterrupted or error free, and in addition Seller makes no
         warranty with respect to defects related to Customer's data base
         errors.

         THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
         EXPRESS AND IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES
         OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CUSTOMER'S
         SOLE AND EXCLUSIVE REMEDY SHALL BE SELLER'S OBLIGATION TO REPAIR,
         REPLACE, CREDIT, OR REFUND AS SET FORTH ABOVE IN THIS WARRANTY.

                                  ARTICLE VIII
                                GENERAL ASSURANCE

         In the event that this Agreement does not address any particular terms,
         the parties agree to negotiate in good faith to reach an agreement on
         such terms, but such terms shall be no less favorable to Customer than
         comparable terms offered by Seller to any similarly situated customer
         on the date of this Agreement or in the future. Upon the written
         request of Customer, Seller shall provide Customer with any such terms,
         without identifying the specific customer.

                                   ARTICLE IX
                                  ATTACHMENTS

         All Attachments to this Agreement are incorporated herein by reference
         and constitute a part of this Agreement. Any additional Attachments
         agreed upon by the Parties subsequent to the Effective Date, and any
         Amendments to this Agreement, shall also be incorporated herein by
         reference to this Agreement.

                                    ARTICLE X
                                  COUNTERPARTS

         This Agreement may be executed in counterparts, each of which shall be
         an original, but both of which together shall constitute one
         instrument. Each counterpart may consist of a number of copies hereof,
         each signed by less than all, but together signed by all, of the
         parties hereto.


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY
<PAGE>

                                   ARTICLE XI
                                ENTIRE AGREEMENT

         The terms and conditions contained in this Agreement supersede all
         prior oral or written understandings between the parties with respect
         to the subject matter thereof and constitute the entire agreement
         between the parties with respect to such subject matter.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
         executed by their duly authorized representatives on the date(s)
         indicated.

--------------------------------------------------------------------------------
              PF.NET, LLC.                  LUCENT TECHNOLOGIES INC.
--------------------------------------------------------------------------------
By:                                   By:
--------------------------------------------------------------------------------
Signature: /s/ John Warta             Signature: /s/ James P. Goodman
--------------------------------------------------------------------------------
Name:      John Warta                 Name:      James P. Goodman
--------------------------------------------------------------------------------
Title:     Chairman & CEO             Title:     Sales V.P.
--------------------------------------------------------------------------------
Date:      August 6, 1999             Date:      August 6, 1999
--------------------------------------------------------------------------------


                     LUCENT TECHNOLOGIES/PF.NET PROPRIETARY