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                     ADVANCED SWITCHING COMMUNICATIONS, INC.

                       1999 NONQUALIFIED STOCK OPTION PLAN

A.       PURPOSE AND SCOPE

         The purposes of this Plan are to encourage stock ownership by key
         employees of the Advanced Switching Communications, Inc. (herein called
         the "Company") and other third parties who provide valuable services to
         the Company, to provide an incentive for such persons to expand and
         improve the profits and prosperity of the Company, and to assist the
         Company in attracting and retaining key personnel through the grant of
         Options to purchase shares of the Company's common stock.

B.       DEFINITIONS

         Unless otherwise required by the context:

         1.       "Board" shall mean the Board of Directors of the Company.

         2.       "Committee" shall mean the Stock Option Plan Committee, which
            is appointed by the Board, and which shall be composed of three
            members of the Board.

         3.       "Company" shall mean Advanced Switching Communications, Inc.,
            a Delaware corporation.

         4.       "Code" shall mean the Internal Revenue Code of 1986, as
            amended.

         5.       "Option" shall mean a right to purchase Stock, granted
            pursuant to the Plan.

         6.       "Exercise Price" shall mean the purchase price for Stock under
            an Option, as determined in Section F below.

         7.       "Participant" shall mean an employee or a key personnel
            associated with the Company, or to whom an Option is granted under
            the Plan.

         8.       "Plan" shall mean this Advanced Switching Communications, Inc.
            Nonqualified Stock Option Plan.

         9.       "Stock" shall mean the common stock of the Company, par value
            $0.005.


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         10.      "Vesting Event" shall mean (i) such event as may be determined
            by the Committee, upon the occurrence of which, an Option will
            automatically vest, all upon such terms and conditions as may be
            provided for by the Committee, and (ii) the liquidation or
            dissolution of the Company.

C.       STOCK TO BE OPTIONED

         Subject to the provisions of Section L of the Plan, the maximum number
         of shares of Stock that may be optioned or sold under the Plan is
         4,498,000 shares. Such shares may be treasury, or authorized, but
         unissued, shares of Stock of the Company.

D.       ADMINISTRATION

         The Plan shall be administered by the Committee. Two members of the
         Committee shall constitute a quorum for the transaction of business.
         The Committee shall be responsible to the Board for the operation of
         the Plan, and shall make recommendations to the Board with respect to
         participation in the Plan by employees, officers, and directors of the
         Company, and with respect to the extent of that participation. The
         interpretation and construction of any provision of the Plan by the
         Committee shall be final, unless otherwise determined by the Board. No
         member of the Board or the Committee shall be liable for any action or
         determination made by him in good faith.

E.       ELIGIBILITY

         The Board, upon recommendation of the Committee, may grant Options to
         any key personnel (including a director or an officer) of the Company.
         Options may be awarded by the Board at any time and from time to time
         to new Participants, or to then Participants, or to a greater or lesser
         number of Participants, and may include or exclude previous
         Participants, as the Board, upon recommendation by the Committee shall
         determine. Options granted at different times need not contain similar
         provisions.

F.       EXERCISE PRICE

         The Board of Directors of Company shall determine the purchase price
         for Stock under each Option at the time the Option is granted.

G.       TERMS AND CONDITIONS OF OPTIONS

         Options granted to the Plan shall be authorized by the Board and shall
         be evidenced by agreements in such form as the Board, upon
         recommendation of the


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         Committee, shall from time to time approve. Such agreements shall
         comply with and be subject to the following terms and conditions:

         1.       Stockholder's Agreement. The Board will include in any Option
            granted under the Plan a condition that a Participant will purchase
            any shares pursuant to the Plan subject to the terms of the
            Company's Stockholders' Agreement and as hereinafter may be amended.
            The Board will also require that the Participant sign said
            Stockholders' Agreement prior to the exercise of any option and
            issuance of any shares.

         2.       Employment/Service Agreement. The Board, may in its
            discretion, include in any Option granted under the Plan a condition
            that the Participant, if the Participant is an employee of the
            Company, shall agree to remain the employ of, and to render services
            to, the Company for a period of time (specified in the agreement)
            following the date the Option is granted. No such agreement shall
            impose upon the Company, however, any obligation to employ the
            Participant for any period of time. The Board, may also in its
            discretion, include in any Option granted under the Plan a condition
            that the Participant, if the Participant is a third party Board
            member or a Board advisor of the Company, shall agree to render
            services to the Company for a period of time (specified in the
            agreement) following the date the Option is granted. No such
            agreement shall impose upon the Company, however, any obligation to
            employ the Participant's services for any period of time.

         3.       Time and Method of Payment. The Exercise Price shall be paid
            in full in cash at the time an Option is exercised under the Plan.
            Otherwise, an exercise of any Option granted under the Plan shall be
            invalid and of no effect. Promptly after the exercise of an Option
            and the payment of the full Exercise Price, the Participant shall be
            entitled to the issuance of a stock certificate evidencing his
            ownership of such Stock. A Participant shall have none of the rights
            of a shareholder until shares are issued to him, and no adjustment
            will be made for dividends or other rights for which the record date
            is prior to the date such stock certificate is issued.

         4.       Number of Shares. Each Option shall state the total number of
            shares of Stock to which it pertains.

         5.       Option Period and limitations on Exercise of Options. The
            Board may, in its discretion, provide that an Option may not be
            exercised in whole or in part for any period or periods of time
            specified in the Option agreement. Except as provided in the Option
            agreement, an Option may be exercised in whole or in part at any
            time during its term. No Option may be exercised after the
            expiration of ten years from the date it is granted. No Option may
            be exercised for a fractional share of Stock.

H.       TERMINATION OF EMPLOYMENT


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         Except as provided in Section I below, if a Participant is an employee
         of the Company and ceases to be employed by the Company or if
         Participant is not an employee but is an officer or director and ceases
         to be an officer or director, his or her Options shall terminate
         immediately; provided, however, that if a Participant's cessation of
         employment with the Company is due to his retirement with the consent
         of the Company, the Participant may, at any time within three months
         after such cessation of employment, exercise his Options to the extent
         that he was entitled to exercise them on the date of cessation of
         employment, but in no event shall any Option be exercisable more than
         ten years from the date it was granted. The Committee may cancel an
         Option during the three-month period referred to in this paragraph, if
         the Participant engages in employment or activities contrary, in the
         opinion of the Committee, to the best interests of the Company. The
         Committee shall determine in each case whether a termination of
         employment shall be considered a retirement with the consent of the
         Company, and, subject to applicable law, whether a leave of absence
         shall constitute a termination of employment. Any such determination of
         the Committee shall be final and conclusive, unless overruled by the
         Board.

         Notwithstanding the foregoing, in the event the Participant is an
         employee of the Company and, within twelve (12) months following a
         Change in Control, either (i) is terminated other than With Cause or
         (ii) terminates for a Good Reason, as defined hereinafter, then all
         Options granted to such Participant under the Plan as of the date of
         the Change of Control shall immediately vest. Provided, however, that
         in order to obtain the rights described in this paragraph with respect
         to a termination for a Good Reason, the Participant shall provide the
         notice required below following the occurrence of the Change of
         Control. With Cause, shall have the same meaning as set forth in the
         written employment agreement of such Participant. Good Reason shall
         have the same meaning as defined below.

         "Change of Control" shall mean the acquisition by a person (other than
         a person or group of persons that beneficially own an equity interest
         in Company on the date hereof, or any person controlled thereby), of
         more than 50% control of the voting securities (which shall include any
         securities entitled to vote as if such securities were common shares of
         Company) of Company as a result of a sale of voting securities after
         the date hereof by the persons who, on the date hereof, have a
         beneficial interest in such voting securities (other than as a result
         of a public offering by Company), or (ii) the approval by the
         shareholders of Company of a reorganization, merger or consolidation,
         sale or other disposition of all or substantially all of the assets of
         Company (other than a merger (A) in which Company is the surviving
         Company, or (B) which involves only a change in Company's state of
         incorporation).

         If Participant terminates his or her employment for Good Reason (as
         defined below), he or she shall upon written notice to Company within
         ninety (90) days after Participant knows or has reason to know of the
         occurrence of any event which would constitute Good Reason, and
         Participant's notice shall specify in reasonable detail the event which
         would constitute Good Reason. In the event the Good Reason is for
         events or circumstances described in items (a) or (b) of the next
         paragraph below, Company shall have thirty (30) days following receipt
         of


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         such written notice from Participant to effect a cure of the
         circumstance constituting Good Reason, and, upon cure thereof by
         Company (which cure shall be retroactive with respect to any monetary
         matter), such event shall no longer constitute Good Reason.

         Good Reason shall mean the following: (a) the assignment to Participant
         of any duties inconsistent in any material respect with Participant's
         position (including status, offices, titles and reporting
         requirements), authority, duties or responsibilities prior to the
         Change in Control; (b) any change in the location of the performance of
         such duties, such that Participant is required to travel or commute a
         substantially greater distance than he does prior to the change; (c)
         establishment of a base salary for Participant which is less than
         eighty percent (80%) of the amount paid to Participant prior to the
         Change in Control, or failure to pay base salary other than an
         isolated, inadvertent or insubstantial failure, not occurring in bad
         faith; or (d) any purported termination of Participant's employment by
         Company in material breach of a written employment agreement between
         the Company and Participant.

I.       RIGHTS IN EVENT OF DEATH

         If a Participant dies while employed by the Company or within three
         months after having retired with the consent of the Company and without
         having fully exercised his Options, the executors or administrators, or
         legatees or heirs, of his estate shall have the right to exercise such
         Options to the extent that such deceased Participant was entitled to
         exercise the Options on the date of his death; provided, however, that
         in no event shall the Options be exercisable more than ten years from
         the date they were granted.

J.       NO OBLIGATIONS TO EXERCISE OPTION

         The granting of an Option shall impose no obligation upon the
         Participant to exercise such Option.

K.       NONASSIGNABILITY

         Options shall not be transferable other than by will or by the laws of
         descent and distribution, and during a Participant's lifetime shall be
         exercisable only by such Participant.

L.       EFFECT OF CHANGE IN STOCK SUBJECT TO THE PLAN

         The aggregate number of shares of Stock available for Options under the
         Plan, the shares subject to any Option, and the price per share shall
         all be proportionately adjusted for any increase or decrease in the
         number of issued shares of Stock subsequent to the effective date of
         the Plan resulting from (1) a subdivision or


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         consolidation of shares or any other capital adjustment, (2) the
         payment of a stock dividend, or (3) other increase or decrease in such
         shares effected without receipt of consideration by the Company Upon
         the occurrence of a Vesting Event, all Options outstanding under the
         Plan shall fully vest immediately and become exercisable immediately
         following a Vesting Event.

M.       AMENDMENT AND TERMINATION

         The Board, by resolution, may terminate, amend, or revise the Plan with
         respect to any shares as to which options have not been granted.
         Neither the Board nor the Committee may, without the consent of the
         holder of an Option, alter or impair any Option previously granted
         under the Plan, except as authorized herein. Unless sooner terminated,
         the Plan shall remain in effect for a period of ten years from the date
         of the Plan's adoption by the Board. Termination of the Plan shall not
         affect any Option previously granted.

N.       AGREEMENT AND REPRESENTATION OF EMPLOYEE

         As a condition to the exercise of any portion of an Option, the Company
         may require the person exercising such Option to represent and warrant
         at the time of such exercise that any shares of Stock acquired at
         exercise are being acquired only for investment and without any present
         intention to sell or distribute such shares, if, in the opinion of
         counsel for the Company, such a representation is required under the
         Securities Act of 1993 or any applicable law, regulation, or rule of
         any governmental agency.

O.       RESERVATION OF SHARES OF STOCK

         The Company, during the term of this Plan, will at all times reserve
         and keep available, and will seek or obtain from any regulatory body
         having jurisdiction any requisite authority necessary to issue and to
         sell, the number of shares of Stock that shall be sufficient to satisfy
         the requirements of this Plan. The inability of the Company to obtain
         from any regulatory body having jurisdiction the authority deemed
         necessary by counsel for the Company for the lawful issuance and sale
         of its Stock hereunder shall relieve the Company of any liability in
         respect of the failure to issue or sell Stock as to which the requisite
         authority has not been obtained.

P.       EFFECTIVE DATE OF PLAN

         The Plan shall be effective from the date that the Plan is approved by
         the Board.