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                                                                   Exhibit 10.26

                          INCOME TAX SHARING AGREEMENT

            THIS INCOME TAX SHARING AGREEMENT ("Agreement"), made this 29th day
of October 1999, by and among PF.NET HOLDINGS, LIMITED, a Delaware corporation
("Holdings") and PF.NET CORP., a Delaware corporation ("Intermediate Holdings").

            WHEREAS, Intermediate Holdings is a wholly-owned subsidiary of
Holdings;

            WHEREAS, Holdings and Intermediate Holdings are members of an
affiliated group of corporations within the meaning of Section 1504(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), of which Holdings is the
common parent corporation (the "PF.Net Group"); and

            WHEREAS, Holdings and Intermediate Holdings desire to provide for
the sharing and allocation of income taxes in accordance with this Agreement.

            NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:

            1.    FILING OF RETURNS.

                  Intermediate Holdings, on behalf of itself and each of its
      subsidiaries, consents to the filing by Holdings of consolidated federal
      income tax returns for all taxable periods in which it is eligible to be a
      member of the PF.Net Group. Holdings agrees to file such consents,
      elections, tax returns and other documents, and to take such other actions
      as may be necessary or appropriate to file a consolidated federal income
      tax return for each taxable period for which the PF.Net Group is required
      or permitted to file a consolidated federal income tax return. Any taxable
      period ending after the date of this Agreement for which Intermediate
      Holdings is included in a consolidated federal income tax return filed by
      the PF.Net Group is referred to herein as a "Consolidated Return Year."

            2.    PAYMENT OF CONSOLIDATED TAX LIABILITY.

                  Holdings shall pay the consolidated Federal income tax
      liability of the PF.Net Group for each taxable year for which it files
      consolidated returns for the PF.Net Group at such time and in such manner
      as such payments may be required. Holdings shall indemnify and hold
      Intermediate Holdings and each of it subsidiaries harmless from and
      against any claims of liability for Federal income tax, interest and
      penalties thereon (other than interest and penalties attributable to
      information supplied by Intermediate Holdings or any of its subsidiaries)
      with respect to all Consolidated Return Years, except to the extent that
      Intermediate Holdings or any of its subsidiaries has failed to make a
      payment in respect of such liability that it is obligated to make under
      the provisions of this Agreement.


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            3.    SHARING AND SETTLEMENT OF U.S. FEDERAL CONSOLIDATED INCOME
                  TAXES.

                  For each Consolidated Return Year, (a) Intermediate Holdings
      shall pay to Holdings an amount equal to the separate return liability of
      Intermediate Holdings for the taxable year, if any; and (b) Holdings shall
      pay to Intermediate Holdings an amount equal to the excess for the taxable
      year of the separate return liability of Holdings, if any, over the
      consolidated Federal income tax liability of the PF.Net Group, if any.

                  The separate return liability of Intermediate Holdings and the
      separate return liability of Holdings for a taxable year shall be the
      Federal income tax liability such corporation would have had for such year
      had it filed a separate Federal income tax return or, if it has any
      subsidiaries, had it filed a consolidated Federal income tax return as the
      common parent of an affiliated group of corporations that included each
      corporation eligible to be included therein except, in the case of the
      Holdings, for Intermediate Holdings and any subsidiary of Intermediate
      Holdings. The separate return liability of Intermediate Holdings and the
      separate return liability of Holdings for a taxable year shall be computed
      (i) to the extent permitted by law, as though such corporation and its
      subsidiaries had used such accounting methods and principles and made such
      tax elections as were used or made by Holdings in determining the federal
      income tax liability of the PF.Net Group, (ii) without regard to any
      carryovers to such taxable year that were utilized in determining the
      consolidated Federal income tax liability of the PF.Net Group in another
      year and (iii) by eliminating from taxable income any payments from
      Holdings or Intermediate Holdings under this agreement and, in the case of
      Holdings, any dividends from Intermediate Holdings.

            4.    SUBSEQUENT RETURN ADJUSTMENTS

                  In the event a consolidated federal income tax return for a
      Consolidated Return Year is amended or adjusted (whether by reason of the
      filing of an amended return, a claim for refund, an audit adjustment or
      otherwise), the tax liabilities and benefits of Holdings and Intermediate
      Holdings will be redetermined, adjusted and settled on a basis consistent
      with Sections 2 and 3 of this Agreement. Payments reflecting such
      redeterminations or adjustments shall be made at the time the amended
      return or refund claim is filed or, in the case of an audit adjustment,
      upon the earlier to occur of (a) the date a settlement is entered into
      with the taxing authority, (b) the date a decision of a court having
      jurisdiction in the matter becomes final and is not subject to appeal, or
      (c) the date a tax payment is made with respect to the adjustment.

            5.    INTEREST RECEIVED FROM THE IRS.

                  If any interest is received from the United Sates with respect
      any Consolidated Return Year, such interest shall be paid by paid by
      Holdings to the corporation(s) included with the PF.Net Group to which the
      interest is fairly attributable.


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            6.    BILLING.

                  The monetary obligations of Holdings and Intermediate Holdings
      under this Agreement shall be paid at least ten (10) days prior to the
      date the related taxes are payable, whether for estimated taxes or
      otherwise (or, if no taxes are payable, the date of filing by Holdings of
      the consolidated Federal income tax return for the PF.Net Group), and upon
      execution of this Agreement for taxes due prior to the date of this
      Agreement ("Execution Payment"). Late payments (if any) shall bear an
      annual rate of interest equal to the statutory rate of interest for the
      underpayment of taxes then in effect from the date such payments are due.

            7.    PROCEDURAL MATTERS.

                  So long as any party to this Agreement remains part of the
      PF.Net Group for federal income tax purposes, Holdings will prepare and
      file the consolidated returns, along with any other documents or
      statements that are required to be filed with the taxing authorities for
      U.S. federal income tax purposes related to consolidated returns. The
      parties hereto acknowledge that, with respect to consolidated tax returns
      which they have filed or will file, Holdings has the right, in its sole
      discretion, to:

            (a)   determine:

                  (i) the manner in which such returns, documents or statements
            are prepared and filed including, without limitation, the manner in
            which any item of income gain, loss, deduction or credit shall be
            reported;

                  (ii) the manner in which the consolidated tax liability will
            be allocated for the purpose of determining the taxable earnings and
            profits of each corporation;

                  (iii) whether any extensions may be requested; and

                  (iv)  the elections that are made by any corporation
            included in PF.Net Group's consolidated returns;

            (b) contest, compromise or settle any adjustment or deficiency
      proposed, asserted or assessed as a result of any audit of such returns by
      the taxing authorities;

            (c)   file, prosecute, compromise or settle any claim for
      refund; and

            (d) determine whether any refunds to which Holdings or its
      subsidiaries may be entitled are paid by way of refund or credited against
      the tax liability of PF.Net Group.

      Without limiting its rights and obligations, Intermediate Holdings hereby
      irrevocably appoints Holdings as its agent and attorney-in-fact to take
      such action (including the


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      execution of documents) as Holdings may deem appropriate to effect the
      foregoing.

            8.    STATE, LOCAL OR FOREIGN INCOME TAXES.

                  In the event Holdings files combined, unitary or consolidated
      state, local or foreign income tax returns with Intermediate Holdings and
      any of its subsidiaries, the provisions of this Agreement shall be
      applicable, mutatis mutandis, as if such combined, unitary or consolidated
      income tax returns filed were consolidated federal income tax returns.

            9.    NO OTHER TAX SHARING OBLIGATIONS.

                  No tax sharing obligations between the parties to this
      Agreement shall arise out of any taxes other than those taxes referred to
      in this Agreement.

            10.   MISCELLANEOUS PROVISIONS.

            (a) NOTICES. Notices and other communications with respect to this
      Agreement shall be in writing and shall be delivered by hand or overnight
      courier service, or sent by telecopy. Unless other addresses or telecopy
      numbers are specified in writing pursuant to this Section 10(a) to each
      party to this Agreement, such notices or other communications shall be
      sent to the following addresses or telecopy numbers, as the case may be:

            (i)   if to Holdings, to it at:

                  PF.Net Holdings, Limited
                  1625 B. Street
                  Washugal, Washington 98671
                  Attn.: John Warta
                  Telephone: 360-835-9170
                  Telecopy: 360-835-8050
            (ii)  if to Intermediate Holdings, to it at:

                  PF.Net Corp.
                  1625 B. Street
                  Washugal, Washington 98671
                  Attn.: John Warta
                  Telephone: 360-835-9170
                  Telecopy: 360-835-8050

            (b) BINDING EFFECT. This Agreement shall be binding upon and inure
      to the benefit of the parties hereto and their respective successors and
      permitted assigns. Each of Holdings and Intermediate Holdings shall cause
      their respective affiliates to carry out any obligation of such affiliate
      specified herein.


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            (c) GOVERNING LAW. The parties hereto hereby agree that this
      Agreement shall be construed in accordance with and governed by the laws
      of the State of New York, without regard to any other applicable conflict
      of law provision.

            (d) WAIVERS; AMENDMENT; MODIFICATION. Neither this Agreement nor any
      provision hereof may be waived, amended or modified, except pursuant to an
      agreement or agreements in writing entered into by all the parties hereto.

            (e) ENTIRE AGREEMENT. This Agreement constitutes the entire
      agreement among the parties hereto with respect to the subject matter
      hereof.

            (f) SEVERABILITY. In the event any one or more of the provisions
      contained in this Agreement should be held invalid, illegal or
      unenforceable in any respect, the validity, legality and enforceability of
      the remaining provisions contained herein shall not in any way be affected
      or impaired thereby.

            (g) COUNTERPARTS. This Agreement may be executed in two or more
      counterparts, each of which shall constitute an original but all of which,
      when taken together, shall constitute but one contract.

            (h) FURTHER ACTIONS. The parties will execute and deliver such
      further instruments and do such further acts and things (including,
      without limitation, by causing their subsidiaries, if any, to do such acts
      and things) as may be required to carry out the intent and purposes of
      this Agreement.

                        [SIGNATURE PAGE FOLLOWS]


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            IN WITNESS WHEREOF, the undersigned parties have caused this
Agreement to be executed as of the date first above written.

                             PF.NET HOLDINGS, LIMITED


                             By  /s/  Stephen Irwin
                                -----------------------------------------------
                             Name: Stephen Irwin
                             Title: Vice Chairman and Executive Vice President



                             PF.NET CORP.


                             By  /s/  Stephen Irwin
                                -----------------------------------------------
                             Name: Stephen Irwin
                             Title: Vice Chairman and Executive Vice President


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