<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

                Qwest Confidential and Proprietary Information


                                 IRU AGREEMENT


  THIS IRU AGREEMENT (the "Agreement") is made and entered into as of this 30th
day of June, 2000 ("Effective Date"), by and between QWEST COMMUNICATIONS
CORPORATION, a Delaware corporation ("Qwest"), and PAC-WEST TELECOMM, INC., a
California corporation ("Customer").

                                   RECITALS:

WHEREAS, Qwest owns and operates a fiber optic telecommunications network
between various points in the United States;

WHEREAS, Customer desires to obtain certain indefeasible rights of use to
certain telecommunications capacity to be provided by means of Qwest's domestic
fiber optic telecommunications network; and

WHEREAS, Qwest desires to hereby grant and Customer desires to be granted
certain indefeasible rights of use to such capacity as more fully set forth
herein;

NOW THEREFORE, in consideration of the mutual promises set forth below, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

1.  DEFINITIONS

The following terms shall have the meanings set forth in this Article when used
in this Agreement, unless explicitly stated to the contrary:

1.1  "Affiliate" means any person, which directly or indirectly controls or is
controlled by, or is under common control with, a party hereto.

1.2  "Capacity" means the digital transmission capability of a given portion of
the Qwest Network designed to transmit digital signals at a stated rate and
otherwise perform in accordance with the specifications applicable to the
portion of the Qwest Network utilized to provide the Capacity. All Capacity
shall be provided by Qwest Network facilities inclusive of all electronics and
other equipment necessary for the intended operation of the Capacity; provided,
however, that interruptions, outages, or degradations in the actual transmission
capability of the Capacity may occur from time to time.

1.3  "Control" (including "controlled by" and "under common control with"), as
used with respect to any entity, means the possession, directly or indirectly,
of (i) 50% or more of its ownership interests, or (ii) the power to direct or
cause the direction of the management and policy of a particular entity, whether
through the ownership of voting securities, partnership interests, by contract
or otherwise.
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

1.4  "Cross-connect Panel" means the piece of equipment designated by Qwest in a
Qwest POP at which the IRU is terminated and at which location Customer may have
access to and interconnect with the IRU through use of Local Distribution
Facilities or other facilities reasonably acceptable to Qwest.

1.5  "Delivery" of an IRU means that the applicable IRU will be available for
use at the Cross-connect Panels designated by Qwest hereunder.

1.6  "DS-3" means a quantity of Capacity comprising a digital private line
circuit capable of transporting signals at a speed of approximately 45 Mbs per
second.

1.7  "Impositions" means all taxes, fees, levies, imposts, duties, charges or
withholdings of any nature (including, without limitation, gross receipts taxes
and franchise, license and permit fees, but excluding any taxes or fees based
upon Qwest's net income), together with any penalties, fines, or interest
thereon caused by Customer's act or failure to act arising out of the
transactions contemplated by this Agreement after the Effective Date and/or
imposed upon either party hereto by any federal, state or local government or
other public taxing authority of any country after the Effective Date.

1.8  "Indefeasible Right of Use" or "IRU" means a reserved indefeasible right of
use, "as is and where is," (subject to the IRU Specification and Acceptance
Testing, as hereinafter defined) for the purposes described herein, in the
amount of Capacity on the Qwest Network for each User Route set forth herein;
provided, that the applicable IRU(s) granted hereunder do not provide Customer
with any ownership interest in or other rights to physical access to, control
of, modification of, encumbrance in any manner of, or other use of the Qwest
Network except as expressly set forth herein.

1.9  "Local Distribution Facilities" means those telecommunications transmission
facilities which interconnect with the applicable IRU at a Cross-connect Panel
and extend each User Route of the applicable IRU to a location outside of the
Qwest POP.  Unless otherwise specified herein, such Local Distribution
Facilities shall be separately acquired by Customer and may be provided by a
local telephone company or other third party, and must comply with Qwest's
applicable reasonable engineering and operations requirements, which Customer
will receive a copy of upon request. Qwest will use commercially reasonable
efforts to assist Customer in obtaining Local Distributions Facilities where
requested by Customer. Local Distribution Facilities are not part of the IRU(s)
acquired by Customer hereunder, and Customer's acceptance of each IRU granted
hereunder may not be conditioned upon the availability of such Local
Distribution Facilities.

1.10  "OC-3" means a dedicated, point to point, high capacity, full duplex
channel along the Qwest Network with a line speed of approximately 155.52
million bits per second synchronous serial data.

                                       2
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

1.11  "OC-12" means a dedicated, point to point, high capacity, full duplex
channel along the Qwest Network with a line speed of approximately 622.08
million bits per second synchronous serial data.

1.12  "OC-48" means a dedicated, point to point, high capacity, full duplex
channel along the Qwest Network with a line speed of approximately 2488.32
million bits per second synchronous serial data.

1.13  "POP" means the Qwest terminal facility (point of presence) where the
Capacity subject to an IRU is delivered to Customer.

1.14  "Qwest Network" means the fiber optic telecommunications network operated
by Qwest in the United States, including at the election of Qwest such
telecommunications capacity as Qwest may obtain from another network provider
and integrate into its own network for purposes of providing services or
Capacity to its Customers. Although Qwest possesses telecommunications network
facilities and capacity in locations other than the United States, such network
facilities and capacity are not part of the Qwest Network for purposes of this
Agreement.

1.15  "User Route" means the route along which each digital/optical private line
circuit is placed by Qwest on the Qwest Network, as more particularly described
in Exhibit A hereto. For operational and maintenance purposes only, Qwest
reserves the right to alter temporarily each applicable User Route, provided
that such alterations do not result in changes to the endpoints (POPs) of the
applicable User Route, interruption of or material interference with Customer's
ability to use the Capacity or degradation of the quality of the capacity.

1.16  "V&H Miles" is a measurement of the length in miles between the
termination points of a User Route using airline miles and determined based on
the vertical and horizontal geographic coordinates of the locations of the
termination points.

2.  GRANT OF IRU(S) IN QWEST NETWORK

2.1  For each of the User Routes set forth in Exhibit A hereto, Qwest hereby
grants to Customer an IRU to OC-48 Capacity.

2.2  The IRU(s) described above shall be delivered to Customer at a Cross-
connect Panel located in each of the Qwest POPs in the cities identified in
Exhibit A. Unless Customer has separately arranged for collocation space in any
such Qwest POP (as evidenced by a separate Qwest collocation agreement executed
by both parties to this Agreement), it shall be the responsibility of Customer
to obtain any required Local Distribution Facilities to interconnect with each
of the IRU(s) granted herein. [**].

3.  CONSIDERATION FOR GRANT OF THE IRU(S)

                                       3
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

3.1  In consideration of the grant of each IRU described in Section 2.1 above by
Qwest to Customer, Customer agrees to pay to Qwest a total IRU fee of Twenty Two
Million Nine Hundred Eighty Sixty Thousand Four Hundred Fifty Five and 00/100
U.S. Dollars (U.S. $22,986,455.00) (the total "IRU Fee") as follows:

     (a)  [**]; and

     (b)  [**].

4.  DELIVERY AND ACCEPTANCE TESTING OF CUSTOMER CAPACITY

4.1.  Qwest will use commercially reasonable efforts to Deliver each User Route
of the granted IRU(s) within ninety (90) days following the Effective Date.

4.2  At Delivery, each applicable IRU shall comply with the specifications set
forth in Exhibit B hereto (the "IRU Specifications and Acceptance Testing").
Qwest shall test each IRU in accordance with the procedures specified in Exhibit
B to verify that the applicable IRU is operating in accordance with the IRU
Specifications and Acceptance Testing. Qwest shall provide Customer with
reasonable advance notice of the date and time of each applicable IRU acceptance
test (each of which shall take place during normal business hours) such that
Customer shall have the right, but not the obligation, to have a person or
persons present to observe the tests. During such testing period, Qwest shall
use commercially reasonable efforts not to interfere with Customer's use and
operation of the Capacity reasonably necessary for its own verification of the
tests conducted by Qwest hereunder.

4.3.  In the event the results of any applicable IRU acceptance test shows that
the granted IRU is not operating within the parameters of the applicable IRU
Specifications and Acceptance Testing, Qwest shall expeditiously take such
action as shall be commercially reasonably necessary, with respect to such
portion of the IRU as does not operate within the parameters of the applicable
IRU Specifications and Acceptance Testing, to bring the operating standards of
such portion of the applicable IRU within such parameters. So long as Qwest
expeditiously and diligently pursues efforts to bring such IRU portion up to
operating standards, then the unavailability, incompatibility, delay in
installation, or other impairment of any of Customer's (including Customer's
suppliers (e.g., a local access telephone service provider)) interconnection
facilities shall not be used as a basis for rejecting any Capacity or IRU
provided hereunder.

4.4  If and when Qwest notifies Customer that the test results of an IRU
acceptance test are within the parameters of the IRU Specifications and
Acceptance Testing with respect to the tested IRU User Route, Customer shall
provide Qwest with a written notice accepting each IRU test results. Such
written notice shall specify the Qwest "Circuit ID" number associated with each
specific IRU granted hereunder. If Customer fails to notify Qwest of its
acceptance or rejection of the final test results with respect to the tested IRU
within ten (10) days after its

                                       4
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Exchange Commission. Asterisks denote omissions.

receipt of notice of such test results, Customer shall be deemed to have
accepted the tested IRU. The date of such notice of acceptance (or deemed
acceptance) of the Capacity shall be the "Acceptance Date" for that particular
IRU.

5.  TERM

5.1  Subject to the option rights set forth in Section 5.3 below, the term of
this Agreement (the "Term") shall begin on the Effective Date (provided that the
grant of each IRU hereunder shall not become effective until the Acceptance Date
for that particular IRU, and shall continue, unless expressly stated to the
contrary herein, until the earlier of:

     (a)  Twenty (20) years from the Acceptance Date of the last IRU User Route
          granted hereunder; or

     (b)  the date on which Customer notifies Qwest in writing that all IRU(s)
          subject to this Agreement have, in Customer's determination, reached
          the end of their economically useful life and that Customer desires to
          not retain its Indefeasible Right of Use in such IRU(s).

5.2  Subject to the option rights set forth in Section 5.3 below, upon the
expiration of the Term hereof, all of Customer's rights to the use of each of
the granted IRU(s) described herein shall revert to Qwest without reimbursement
by Qwest of any fees or other payments previously made with respect thereto, and
from and after such time Customer shall have no further rights or obligations
(excepting such rights or obligations as shall have arisen prior to the date of
expiration of the Term) with respect to the granted IRU(s). Customer shall have
sixty (60) days at the end of the Term to remove any electronics, equipment or
other property owned or leased by Customer and located on Qwest's premises.

5.3  Upon written notice from Customer to Qwest given no later than thirty (30)
calendar days prior to the expiration of the applicable IRU Term, Customer may
elect to purchase, effective as of the expiration of the applicable IRU Term, an
undivided interest in the fiber associated with the Capacity granted hereunder
for One Dollar (US $1.00) per IRU User Route (the "Purchase Option"), provided
that: (i) the undivided ownership interest to such fiber shall be granted to
Customer on an "as-is, where-is" basis, without warranty, express or implied,
and (ii) Customer shall thereafter be subject to pay a monthly recurring
operation and maintenance charge ("O&M Charge") at the then fair market value
rate as determined by Qwest upon acceptance of the Purchase Option by the
Customer. Upon request by Customer, prior to Customer exercising its Purchase
Option hereunder, Qwest shall notify Customer of the applicable O&M charge. If
Customer exercises the Purchase Option and thereafter fails to pay the O&M
Charge when it is due on a monthly basis, then, upon written notice by Qwest to
Customer, Qwest shall have the right, upon Customer's failure to cure such
monetary default within ten (10) days of its receipt of written notice of such
monetary default, to cease provisioning without liability any and all O&M
Services, equipment, and any other ancillary services applicable to the fiber,
regardless of the effect such discontinuation may have on Customer's ability to
continue using the purchased fiber thereafter. The Purchase Option shall expire,
if not exercised, at the expiration of the applicable IRU Term for each IRU User
Route. The Purchase Option shall not: (1) include any ownership

                                       5
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Exchange Commission. Asterisks denote omissions.

rights to or possessory interest in any conduit, real property, equipment,
tangible or other physical assets used by Qwest in connection with or necessary
to provision the IRU(s) granted hereunder (other than the fiber component
Purchase Option granted hereunder) (the "Physical Assets"); (2) be construed as
encumbering in any way the Qwest Network or Qwest's ability to modify,
reconfigure, sell, or decommission any or all of the Physical Assets; and (3)
confer any rights or benefits upon Customer as a result of any changes or
improvements in technology, including without limitation any changes in
technology which would increase the capacity of the IRU that is subject to the
Purchase Option.

6.  OPERATIONS AND MAINTENANCE OF CUSTOMER CAPACITY AND OUTAGE CREDITS

6.1  The granted IRU(s) do not provide Customer with any right to control any
network or service configuration or design, routing configuration, regrooming,
rearrangement or consolidation of channels or circuits or any similar or related
functions with regard to the Qwest Network. The granted IRU(s) are subject to
and shall be implemented in accordance with Qwest's network operations and
maintenance procedures and policies, as these may be modified from time to time
by Qwest (which Customer will be provided a copy of upon request).

6.2  Qwest will use commercially reasonable efforts to provide the maintenance
services described in this Article. [**]. Such maintenance, however, does not
ensure that each IRU granted hereunder will perform during the Term continuously
in accordance with the IRU Specifications and Acceptance Testing.

6.3  Customer acknowledges the possibility of an unscheduled, continuous and/or
interrupted period of time when any IRU, or a portion thereof, is not
"Available" (as defined in the IRU Specifications and Acceptance Testing)
(hereafter an "Outage"). In the event of an Outage, Customer shall be entitled
to a credit (the "Outage Credit") against those charges set forth in Section
6.3.4 below determined in accordance with the following formula:

Outage Credit  =        Hours of Outage - 2 hours
               x Equivalent Monthly Price of Affected Capacity
               -----------------------------------------------
                                   720 hours

  6.3.1   The "Equivalent Monthly Price of Affected Capacity" shall be the IRU
Fee applicable to all of the IRU User Routes set forth in Exhibit A, including
the IRU User Route affected by the Outage, divided by 240.

  6.3.2   The length of each Outage shall be calculated in hours and shall
include fractional portions thereof. An Outage shall be deemed to have commenced
upon verifiable notification thereof by Customer to Qwest, or, when indicated by
network control information actually known to Qwest network personnel operating
the Network at the time of the Outage, whichever is earlier. Each Outage shall
be deemed to terminate upon restoration of the affected IRU User Route, as
evidenced by appropriate network tests by Qwest and Customer has accepted the
applicable IRU User Route in accordance with the procedures set forth in Article
4. Qwest shall give notice to Customer of any scheduled or planned maintenance
that will result in an outage as early as is practicable, and any such scheduled
or planned maintenance shall under no

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Exchange Commission. Asterisks denote omissions.

circumstance be viewed as an Outage hereunder, so long as any such scheduled or
planned outage takes place at such time so as to minimize the impact on
Customers use of the Capacity.

  6.3.3    No Outage Credit shall be granted if the malfunction of any end-to-
end capacity or circuit is due to an Outage or other Defect occurring solely in
Customer's Local Distribution Facilities.

  6.3.4    Subject to the terms and conditions in this Article 6, all Outage
Credits shall be credited towards any future invoice from Qwest to Customer
whether or not such invoice is made pursuant to this Agreement, or in any other
agreement between Customer and Qwest.

6.4  The Outage Credit described in this Article 6 is the sole and exclusive
remedy of Customer in the event of any Outage, and under no circumstance shall
an Outage be deemed a default under this Agreement; provided, however, that this
Outage Credit remedy is not intended to preclude Customer's right to seek
equitable relief under Section 17.3.

7.   ACCESS TO QWEST POPS

7.1  Customer and its designees (such as local telecommunications providers)
shall have access to each of the Qwest POPs specified in Exhibit A, and the
right to interconnect with, each granted IRU, according to the access and
interconnection standards and procedures regularly established by Qwest, as
these may be modified by it from time to time. [**].

8.   USE OF CUSTOMER CAPACITY

8.1  Customer represents and warrants that its use of each IRU granted hereunder
shall comply with all applicable laws, ordinances, rules, regulations and
restrictions.

8.2  Customer agrees and acknowledges that this Agreement grants no right to use
any element of the Qwest Network other than the IRU(s) granted herein. Customer
shall keep any and all of the Qwest Network, other than the IRU(s), free from
any liens, rights or claims of any third party attributable to Customer.

8.3  Customer shall be responsible for configuration of its own network and use
of each IRU; including the provisioning of all Local Distribution Facilities,
interconnection facilities, network equipment, testing equipment and procedures,
maintenance, and other facilities or actions necessary to utilize each IRU.
Customer shall conduct all such operations and use of the IRU(s) in manner which
does not materially interfere with the operations of the Qwest Network or the
use thereof by any other customer of Qwest. Customer shall comply at all times
with the reasonable operating procedures and interconnection requirements of
Qwest of which it has notice.

                                       7
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

8.4  Customer and Qwest each agree to cooperate with and support the other in
complying with any requirements applicable to their respective rights and
obligations hereunder imposed by any governmental or regulatory agency or
authority.

9.   INDEMNIFICATION

9.1  Each party (the "Indemnifying Party") hereby releases and agrees to
indemnify, defend, protect and hold harmless the other party, its employees,
officers, directors, agents, shareholders and Affiliates (the "Indemnified
Party"), from and against any and all claims, actions, damages, liabilities,
reasonable costs, judgments, reasonable expenses, reasonable costs of
litigation, investigation or proceeding (including reasonable attorneys' fees)
(the "Losses"), arising out of or in connection with:

     (a) [**]; or

     (b) [**].



9.2  Customer hereby releases and agrees to indemnify, defend, protect and
hold harmless Qwest, its employees, officers, directors, agents, shareholders
and Affiliates harmless, from and against any and all claims, actions, damages,
liabilities, reasonable costs, judgments, reasonable expenses, reasonable costs
of litigation, investigation or proceeding (including reasonable attorneys'
fees) arising out of or in connection with the use, resale, sharing or
modification of the Capacity by Customer.

9.3  [**].

                                       8
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

9.4  [**].

10.  LIMITATION OF LIABILITY; DISCLAIMER OF WARRANTIES

10.1  With the exception of the indemnification obligation set forth in Article
9 and where caused or contributed to by the other party's gross negligence or
willful misconduct hereunder, neither party shall be liable to the other party
for any special, incidental, indirect, punitive or consequential damages
(whether or not such damages were foreseeable or a party was notified of the
possibility thereof) arising out of, or in connection with such party's failure
to perform its respective obligations hereunder, including, but not limited to,
damage or loss of property or equipment, loss of profits or revenue (whether
arising out of Outages, transmission interruptions or problems, any interruption
or degradation of the functioning of the granted IRU(s) or otherwise), cost of
capital, cost of replacement services, or claims of customers, whether
occasioned by any construction, reconstruction, relocation, repair or
maintenance performed by, or failed to be performed by, the other party or any
other cause whatsoever, including, without limitation, breach of contract,
breach of warranty, negligence, or strict liability, all claims for which
damages are hereby specifically waived.

10.2  EXCEPT AS EXPRESSLY SET FORTH HEREIN, QWEST DISCLAIMS ANY AND ALL
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE CUSTOMER CAPACITY AND THE
GRANTED IRU(s), INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.

11.  INSURANCE

11.1  During the term of this Agreement, each party shall obtain and maintain,
at its expense, an appropriate insurance policy with terms and coverage
thresholds equal to or greater than [**] and provide the other party with a copy
of the certificate of insurance evidencing such policy upon reasonable request
but no more than once each twelve (12) month period.

12.  PAYMENT

12.1  Other than the payment of the IRU Fee, all other undisputed payments due
hereunder, if any, shall be due thirty (30) days after the date of receipt of
Qwest's invoice. If any undisputed amount due under this Agreement is not
received by its respective due date, in addition to its other available
remedies, Qwest may in its sole discretion impose a late payment charge pursuant
to Section 12.2. All disputes or requests for billing adjustments must be
submitted in writing by the due date and submitted with payment of undisputed
amounts due in order to withhold bona fide disputed sums, or alternatively,
within ninety (90) days of the invoice date in the event that Customer has paid
said invoice in full. Any amounts which are determined by Qwest to be in error
or not in compliance with Agreement shall be adjusted on the next month's
invoice or promptly paid to Customer if no further invoices will be issued under
this Agreement. Any disputed amounts which are deemed by Qwest to be correct as
billed and in compliance with this

                                       9
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Exchange Commission. Asterisks denote omissions.

Agreement, shall be due and payable by Customer, within three (3) business days
of notification and demand by Qwest, along with any late payment charges which
Qwest may impose pursuant to Section 12.2. Disputes shall not be cause for
Customer to delay payment of the undisputed balance to Qwest according to the
terms outlined in this Article.

12.2  In the event a party shall fail to make any undisputed payment under this
Agreement when due, such amounts shall accrue interest, from the date such
undisputed payment is due until paid, including accrued interest, at an annual
rate equal to one hundred fifty percent (150%) of the prime rate of interest
published by The Wall Street Journal or, if lower, the highest percentage
allowed by law. In addition, Qwest may offset any amounts not paid when due from
any amounts that Qwest owes to Customer under any other agreements between the
parties.

13.  CHARACTERIZATION OF TRANSACTION

13.1  Subject to Section 5.3 above, the parties intend that each IRU granted in
this Agreement does not provide Customer with any ownership or other possessory
interests in any real property, conduit, fiber, or equipment in or on the Qwest
Network or along the User Route of the Qwest Network (the "Physical Assets").
Further, it is not the intention of the parties to create a loan or other
financing arrangement between the parties. In the event that any amount of the
IRU Fee remains due to Qwest and Customer is in default under the payment terms
of this Agreement, then Customer hereby agrees that Qwest shall have the
additional right to (x) immediately thereafter cease provisioning any or all of
the Capacity granted hereunder; and (y) if said payment default continues beyond
thirty (30) days after Qwest has ceased provisioning Capacity pursuant to (x)
above, then all rights to use the IRU User Routes granted hereunder shall revert
to Qwest.


14.  TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS

14.1  After the Effective Date, Customer shall be independently responsible for
any Impositions properly payable with respect to the granted IRU(s). The parties
agree that they will reasonably cooperate with each other and coordinate their
mutual efforts concerning audits, or other such inquiries, filings, reports,
etc., as may relate solely to the activities or transactions arising from or
under this Agreement, which may be required or initiated from or by any duly
authorized governmental tax authority.

14.2  The parties agree that the payment(s) set forth in Article 3 will be
allocated to rental periods as detailed in the Payment Allocation Schedule,
Exhibit C, attached hereto. It is understood and agreed between Qwest and
Customer that the grant of the IRU in the Qwest Capacity hereunder shall be
treated for federal, state, and local tax purposes as the lease of the Qwest
Capacity hereto pursuant to (S)467 of the Internal Revenue Code of 1986 and
according to the schedule set forth on Exhibit C. The parties further agree to
file their respective income and other tax returns and reports on such basis
and, except as otherwise required by law, not to take any positions inconsistent
therewith.

15.  NOTICE

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15.1  Unless otherwise provided herein, all notices and communications
concerning this Agreement shall be in writing and addressed to the other party
as follows:
<TABLE>
<CAPTION>
      <S>                   <C>
      If to Qwest:          Qwest Communications Corporation
                            Attention:  Senior Vice President - Wholesale Markets
                            555 Seventeenth Street
                            Denver, Colorado 80202
                            Telephone No.: (303) 992-1400
                            Facsimile No.: (303) 992-1724

      with a copy to:       Qwest Communications Corporation
                            Attention:  Executive Vice President & General Counsel
                            555 Seventeenth Street
                            Denver, Colorado  80202
                            Telephone No.: (303) 992-1400
                            Facsimile No.: (303) 992-1724

      If to Customer:       Pac-West Telecomm, Inc.
                            Attention: Chief Financial Officer
                            4210 Coronado Avenue
                            Stockton, California  95204
                            Telephone No.(209) 926-3086
                            Facsimile No.: (209) 926-4444
</TABLE>

or at such other address as either party may designated from time to time in
writing to the other party.

15.2  Unless otherwise provided herein, notices shall be hand delivered, sent by
registered or certified U.S. mail, postage prepaid, or by a generally recognized
commercial overnight delivery service, or transmitted by facsimile, and shall be
deemed served or delivered to the addressee or its office when received at the
address for notice specified above when hand delivered, upon confirmation of
sending when sent by fax, on the business day after being sent when sent by
overnight delivery service, if sent by priority or overnight delivery or five
(5) days after deposit in the mail when sent by U.S. mail.

16.  CONFIDENTIALITY

16.1  Qwest and Customer hereby agree that if either party (the "Disclosing
Party") provides confidential or proprietary information to the other party
("Proprietary Information") to the other party (the "Recipient Party"), such
Proprietary Information shall be held in confidence, and the Recipient Party
shall afford such Proprietary Information the same care and protection as it
affords generally to its own confidential and proprietary information (which in
any case shall be not less than reasonable care) in order to avoid disclosure to
or unauthorized use by any third party. This Agreement, including its existence
and all of the terms, conditions and provisions hereof, constitutes Proprietary
Information, and all information disclosed by either party to the other in
connection with or pursuant to this Agreement shall be deemed to be Proprietary

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Exchange Commission. Asterisks denote omissions.

Information, provided that written information is clearly marked in a
conspicuous place as confidential or proprietary, and verbal information is
indicated as being confidential or proprietary when given or promptly confirmed
in writing as such thereafter. All Proprietary Information, unless otherwise
specified in writing, shall remain the property of the Disclosing Party, shall
be used by the Recipient Party only for the intended purpose, and such written
Proprietary Information, including all copies thereof, shall be returned to the
Disclosing Party or destroyed after the Recipient Party's need for it has
expired or upon the request of the Disclosing Party. Proprietary Information
shall not be reproduced except to the extent necessary to accomplish the
purposes and intent of this Agreement, or as otherwise may be permitted in
writing by the Disclosing Party.

16.2  The foregoing provisions of Section 16.1 shall not apply to any
Proprietary Information which: (i) becomes publicly available other than through
the Recipient Party; (ii) is required to be disclosed by a governmental or
judicial law, order, rule or regulation; (iii) is independently developed by the
Recipient Party; (iv) becomes available to the Recipient Party without
restriction from a third party; or (v) becomes relevant to the settlement of any
dispute or enforcement of either party's rights under this Agreement and in
accordance with its terms and conditions. If any Proprietary Information is
required to be disclosed pursuant to the immediately preceding clause, the party
required to make such disclosure shall promptly inform the other party of the
requirements of such disclosure and take all reasonable protective measures to
preserve the confidentiality of such Proprietary Information as fully as
possible in the context of such permitted disclosure.

16.3  Notwithstanding Sections 16.1 and 16.2, either party may disclose
Proprietary Information to its employees, agents, and legal, financial, and
accounting advisors and providers (including its lenders and other financiers)
to the extent necessary or appropriate in connection with the negotiation and/or
performance of this Agreement or its obtaining of financing, provided that each
such party is notified of the confidential and proprietary nature of such
Proprietary Information and is subject to or agrees to be bound by similar
restrictions on its use and disclosure.

16.4  The provisions of this Article 16 shall survive for a period of two (2)
years from the date of the expiration or termination of this Agreement.

17.  DEFAULT

17.1  A party shall be in default under this Agreement thirty (30) days after
receipt of the non-defaulting party's written notice of such default unless the
defaulting party shall have cured such default or such default is otherwise
waived by the non-defaulting party within such thirty (30) days; provided,
however, that where any such default other than the payment of money cannot
reasonably be cured within such 30-day period, if the defaulting party shall
proceed promptly to cure the same and prosecute such cure with due diligence,
the time for curing such default shall be extended for such period of time not
to exceed ninety (90) days from the date of receipt of the notice described
above, as may be necessary to complete such cure.

                                      12
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

17.2  Events of default also shall include, but not be limited to, the
following: (i) failure to make any payment when due hereunder after receipt of
written notice of non-payment and the expiration of a 30-day cure period; (ii)
breach of any material provision hereof not cured within the applicable cure
period following receipt of written notice by the non-defaulting party; (iii)
the making by either party of a general assignment for the benefit of its
creditors; or (iv) the filing of a voluntary petition in bankruptcy or the
filing of a petition in bankruptcy or other insolvency protection against either
party which is not dismissed within ninety (90) days thereafter, or the filing
by either party of any petition or answer seeking, consenting to, or acquiescing
in reorganization, arrangement, adjustment, composition, liquidation,
dissolution, or similar relief.

17.3  In addition to the specific remedies provided hereunder, upon any non-
payment or other default by a party, after notice thereof and expiration of the
applicable cure period the non-defaulting party may: (i) take such action as it
determines, in its sole discretion, to be necessary to correct the default; and
(ii) pursue any other legal remedies it may have under applicable law or
principles of equity relating to such default that are consistent with this
Agreement, provided that appropriate notice has been given under this Section.

18.  TERMINATION

18.1  Either party may terminate this Agreement upon the failure of the other
party to cure an event of default within the applicable time period required by
Article 17, provided that Customer shall only be entitled to terminate the
entire Agreement if such non-cured default affects all or substantially all of
the User Routes. In the event Customer terminates this Agreement or any User
Route provided hereunder as a result of a default by Qwest under Article 17,
Customer's sole and exclusive remedy shall be to receive the lesser of: (i) the
fair market value of the terminated IRU User Route(s) as of the date of
termination; or (ii) a pro rata refund of any unused portion of the IRU Fee
applicable to the terminated IRU User Route(s).

18.2  Notwithstanding the foregoing, no termination or expiration of this
Agreement shall affect the rights or obligations of either party hereto with
respect to any then existing defaults or the obligation to make any payment
hereunder for services rendered prior to the date of termination or expiration.

19.  FORCE MAJEURE

19.1  Neither party shall be in default under this Agreement if and to the
extent that any delay in such party's performance of one or more of its
obligations hereunder is caused by any of the following conditions, and such
party's performance of such obligation or obligations shall be excused and
extended for and during the period of any such delay: act of God; fire; flood;
fiber cut, material shortages or unavailability or other delay in delivery not
resulting from the responsible party's failure to timely place orders therefor;
lack of or delay in transportation; government codes, ordinances, laws, rules,
regulations or restrictions (collectively, "Regulations"); war or civil
disorder; failure of a third party to grant a required right-of-way permit,
easement, or other required authorization for use of the intended right-of-way
(unless such failure shall have been caused by the party), or any other cause
beyond the commercially reasonable control of such party. The party claiming
relief under this Article shall notify the

                                      13
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

other in writing of the existence of the event relied on and the cessation or
termination of said event.

20.  ARBITRATION

20.1  Any dispute or disagreement arising between Qwest and Customer in
connection with this Agreement which is not settled to the mutual satisfaction
of Qwest and Customer within thirty (30) days from the date that either party
informs the other in writing that such dispute or disagreement exists, shall be
settled by binding arbitration in Stockton, California in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
on the date that such notice is given. If the parties are unable to agree on a
single arbitrator within fifteen (15) days from the commencement of any such
arbitration, each party shall select an arbitrator and the two (2) arbitrators
shall mutually select a third arbitrator, the three of whom shall serve as an
arbitration panel. The decision of the arbitrator(s) shall be final and binding
upon the parties and shall include written findings of law and fact, and
judgment may be obtained thereon by either party in a court of competent
jurisdiction. Each party shall bear the cost of preparing and presenting its own
case. The cost of the arbitration, including the fees and expenses of the
arbitrator(s), shall be shared equally by the parties hereto unless the award
otherwise provides.

20.2  The obligation herein to arbitrate shall not be binding upon any party
with respect to requests for preliminary injunctions, temporary restraining
orders or other similar temporary procedures in a court of competent
jurisdiction to obtain interim relief when deemed necessary by such court to
preserve the status quo or prevent irreparable injury pending resolution by
arbitration of the actual dispute. It is not the intention of the parties that
such injunctive procedures shall be in lieu of, or cause substantial delay to,
any arbitration proceeding commenced under Section 20.1 above.

21.  WAIVER

21.1  The failure of either party hereto to enforce any of the provisions of
this Agreement, or the waiver thereof in any instance, shall not be construed as
a general waiver or relinquishment on its part of any such provision, but the
same shall nevertheless be and remain in full force and effect.

22.  GOVERNING LAW

22.1  This Agreement shall be governed by and construed in accordance with the
domestic law of the State of New York, without reference to its choice of law
principles.

23.  RULES OF CONSTRUCTION

23.1  The captions or headings in this Agreement are strictly for convenience
and shall not be considered in interpreting this Agreement or as amplifying or
limiting any of its content. Words in this Agreement which import the singular
connotation shall be interpreted as plural, and words

                                      14
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

which import the plural connotation shall be interpreted as singular, as the
identity of the parties or objects referred to may require.

23.2  Unless expressly defined herein, words having well known technical or
trade meanings shall be so construed. All listing of items shall not be taken to
be exclusive, but shall include other items, whether similar or dissimilar to
those listed, as the context reasonably requires.

23.3  Except as set forth to the contrary herein, any right or remedy of
Customer or Qwest shall be cumulative and without prejudice to any other right
or remedy, whether contained herein or not.

23.4  This Agreement has been fully negotiated between and jointly drafted by
the parties.

23.5  In the event of a conflict between the provisions of this Agreement and
those of any Exhibit, the provisions of such Exhibit shall prevail.

23.6  All actions, activities, consents, approvals and other undertakings of the
parties in this Agreement shall be performed in a reasonable and timely manner,
it being expressly acknowledged and understood that time is of the essence in
the performance of obligations required to be performed by a date expressly
specified herein. Except as specifically set forth herein, for the purpose of
this Article the normal standards of performance within the telecommunications
industry in the relevant market shall be the measure of whether a party's
performance is reasonable and timely.

24.  REPRESENTATIONS AND WARRANTIES

24.1  Each party represents and warrants that:

      (a) It has the full right and authority to enter into, execute, deliver
          and perform its obligations under this Agreement;

      (b) It has taken all requisite corporate action to approve the execution,
          delivery and performance of this Agreement;

      (c) This Agreement constitutes a legal, valid and binding obligation
          enforceable against such party in accordance with its terms, subject
          to bankruptcy, insolvency, creditors' rights and general equitable
          principles; and

      (d) Its execution of and performance under this Agreement shall not
          violate any applicable existing regulations, rules, statutes or court
          orders of any local, state or federal government agency, court or body
          of any country or any contract or other agreement the party is subject
          to.

25.  PUBLICITY

25.1 No publicity regarding the existence and/or terms of this Agreement may
occur without the other party's prior express written consent. The content and

                                      15
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

all other publicity regarding the subject matter of this Agreement or Customer's
relationship with Qwest, if authorized, shall be mutually agreed upon by the
parties.

26.  ASSIGNMENT

26.1  This Agreement shall be binding on the parties and their respective
Affiliates, successors, and assigns.  Neither party may assign, license, or
otherwise transfer this Agreement or any of its rights, other interests or
obligations hereunder, including delegated duties hereunder, without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld or delayed. [**].

27.  NO PERSONAL LIABILITY

27.1  Each action or claim against any party arising under or relating to this
Agreement shall be made only against such party as a corporation, and any
liability relating thereto shall be enforceable only against the corporate
assets of such party.  No party shall seek to pierce the corporate veil or
otherwise seek to impose any liability relating to, or arising from, this
Agreement against any shareholder, employee, officer or director of the other
party.  Each of such persons is an intended beneficiary of the mutual promises
set forth in this Article and shall be entitled to enforce the obligations of
this Article.

28.  RELATIONSHIP OF THE PARTIES

28.1  The relationship between Customer and Qwest shall not be that of partners,
agents, or joint venturers for one another, and nothing contained in this
Agreement shall be deemed to constitute a partnership or agency agreement
between them for any purposes, including but not limited to federal income tax
purposes.  Customer and Qwest, in performing any of their obligations hereunder,
shall be independent contractors or independent parties and shall discharge
their contractual obligations at their own risk.

29.  SEVERABILITY

29.1  If any term, covenant or condition contained herein shall, to any extent,
be invalid or unenforceable in any respect under the law governing this
Agreement, the remainder of this

                                       16
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

Agreement shall not be affected thereby, and each term, covenant or condition of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.

30.  COUNTERPARTS

30.1  This Agreement may be executed in one or more counterparts, all of which
taken together shall constitute one and the same instrument.

31.  ENTIRE AGREEMENT; AMENDMENT

31.1  This Agreement constitutes the entire and final agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements relating to the subject matter hereof, which are
of no further force or effect.  The Appendices and Exhibits referred to herein
are integral parts hereof and are hereby made a part of this Agreement.  This
Agreement may only be modified or supplemented by an instrument in writing
executed by a duly authorized representative of each party. [**].

                                       17

<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

In confirmation of their consent and agreement to the terms and conditions
contained in this IRU Agreement and intending to be legally bound hereby, the
parties have executed this IRU Agreement as of the date first above written.


QWEST COMMUNICATIONS CORPORATION

     By:__________________________________________
     Name:  _______________________________________
     Title: _______________________________________

PAC-WEST TELECOMM, INC.

     By:__________________________________________
     Name:  _______________________________________
     Title: _______________________________________

                                       18
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

                Qwest Confidential and Proprietary Information

                                   EXHIBIT A:

                         DESCRIPTION OF CUSTOMER IRU(s)
                           AND LOCATION OF QWEST POPS


CUSTOMER IRU(s)
OC-48 CAPACITY

<TABLE>
<CAPTION>
----------------------------------------------------------
 QWEST         QWEST        V&H      IRU       IRU FEE
 POP A         POP B       MILES     RATE
----------------------------------------------------------
<S>          <C>           <C>     <C>       <C>
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
 [**],         [**],       [**]      [**]        [**]

----------------------------------------------------------
TOTAL:                                      $22,986,455.00
----------------------------------------------------------
</TABLE>
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

                Qwest Confidential and Proprietary Information

           EXHIBIT B:  TECHNICAL SPECIFICATIONS AND ACCEPTANCE TESTS


1.0  INTERCONNECT SPECIFICATIONS.

1.1  The Customer interconnection point of DS-1 & DS-3 signals at the Qwest
(SPT) location will be at an industry standard (DSX-1) & (DSX-3) digital
cross-connect panels and will be referred to as Qwest Network Interface in
this document.

1.2  The customer interconnection point of OC-N signals will be interconnected
at an industry standard Fiber Distribution Panel (FDP). An interconnection
point will be referred to as Qwest Network Interface in this document.

1.3  OC-3, OC-3c, OC-12, OC-12c, OC-48 and OC-48c signals terminating at the
Qwest FDP will meet specifications as defined by Section 3.1, Section 3.2.3,
Section 4.2, and Section 5.6 of GR-253 CORE, Synchronous Optical Network (SONET)
Transport Systems: Common Generic Criteria, Issue 2 (Bellcore, December 1995).

1.4  The optical connectors and jumper cables shall meet the performance
criteria stated in GR-326-CORE, Generic Requirements for Single-Mode Optical
Connectors and Jumper Assemblies, Issue 2 (Bellcore, December 1996).

1.5  The DS-1 & DS-3 signals terminating at the Qwest digital cross-connect
panels will meet the electrical specifications as defined in AT&T Compatibility
Bulletin (CB) No. 119, Issue 3, October, 1979.

1.6  The Qwest Digital Network will be compatible with the Bell System
hierarchical clock synchronization methods and stratum levels as described in
Bellcore Technical Advisory (GR436-Core).

1.7  Customer equipment must also meet the interconnect specifications listed
above and shall comply with jitter requirements of AT&T Technical Reference PUB
63411.

2.0  PERFORMANCE OBJECTIVES.


2.1  DS1, DS3, OC-3, OC-12, OC-48, OC-3c, OC-12c, and OC-48c circuit performance
will be measured using two parameters: Availability and Error-Free Seconds.  The
following assumptions apply to the derived data:

     (i)    The circuits originate and terminate on the SONET OC-48 backbone
     (ii)   MTTR for SONET equipment:  2 hours
     (iii)  MTTR for fiber optic cable:  12 hours (Bellcore Standard)
     (iv)   Cable cut rate:  4.39/year/1,000 sheath miles (Bellcore Standard)

2.2  Availability is a measure of the relative amount of time during which the
circuit is available for use. According to CCITT and ANSI definitions,
unavailability begins when the Bit Error Ratio (BER) in each second is worse
than 1.0 E-3 for a period of 10 consecutive seconds.

Inter Office Channel (IOC):  An Inter Office Channel refers to the Qwest
Communications network between the points of presence (POP).

Optical Carrier level 1 (OC-1):  The optical signal that results from an optical
conversion of an electrical STS-1 signal (51.840 Mb/s).  This signal forms the
basis of the interface.

OC-3:  Optical Carrier level 3 signal operating at 155.520 Mb/s.

                                       20
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

OC-12:  Optical Carrier level 12 signal transmitting at 622.080 Mb/s.

OC-48:  Optical Carrier level 48 signal transmitting at 2488.32 Mb/s.

Point of Presence (POP): A physical location where a long distance carrier
terminates lines before connecting to the local exchange carrier, another
carrier, or directly to a customer.

                                       21
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

2.3  The availability objective for all circuits between Qwest Network Interface
points specified above is to provide performance levels over a twelve (12) month
period as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------
V&H Miles                DS1, DS3, OC-3, OC-12, OC-48,
                          OC-3c, OC-12c, and OC-48c
-------------------------------------------------------
<S>                     <C>
0-2500                   99.999%
-------------------------------------------------------
2501-4000                99.998%
-------------------------------------------------------
</TABLE>

    This excludes any Customer provided access links to the Qwest digital
network.

2.4  Outages attributable to incidental damage to or severage of outside fiber
optic cable plant, or scheduled maintenance is excluded from the performance
objective stated above.

2.5  Error-Free Seconds (EFS) and Error Seconds (ES) are the primary measure of
error performance. An Error-Free Second is defined as any second in which no bit
errors are received. Conversely, an Error Second is any second in which one or
more bit errors are received.

3.0  SONET.

Synchronous Optical Network is a family of optical transmission rates and
interface standards allowing internetworking of products from different vendors.
Base optical rate is 51.840 Mb/s. Higher rates are direct multiples.

SONET Transport: Facilities associated with carrying OC-1 or higher level
signals.

Synchronous Transport Signal level 1 (STS-1):  The basic logical building block
electrical signal with a rate of 51.840 Mb/s.

Synchronous Transport Signal level N (STS-N): This electrical signal is obtained
by byte interleaving N STS-1 signals together. The rate of the STS-N is N times
51.840 Mb/s.

Terminating Multiplex (TM):  Provides the multiplex functions for multiplexing
and demultiplexing between the DS1 or higher signal level and the SONET OC-N
level.

4.0  ACCEPTANCE CRITERIA.

The acceptance criteria for DS1, DS3, OC-3, OC-12, OC-48, OC-3c, OC-12c, and OC-
48c circuits between Qwest Network Interface points is to provide the
performance levels shown below during a 60 minute test period. If no errors are
observed during the first 15 minutes of the test, the facility may be considered
acceptable. Access connections to customer location will be tested in accordance
with Bell Publication 62508.

The tables below are based on QCC owned fiber optic network only and on the
Bellcore Specifications of the SONET delivery of DS1, DS3, OC-3, OC-12, OC-48,
OC-3c, OC-12c, and OC-48c directly off the SONET Backbone.

If the DS1, DS3, OC-3, OC-12, OC-48, OC-3c, OC-12c, and OC-48c service is
delivered at the STS1 level then the general performance objectives fall into
the industry standard.

                                       22
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

4.1  DS1.  The table below defines the general performance objectives for DS1
service operating at 1.544 Mb/s.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
           V&H Miles                  EFS                        BER
-------------------------------------------------------------------------------
<S>                                  <C>                         <C>
             0 -  250                99.988%                     10/-12/
-------------------------------------------------------------------------------
           251 -  500                99.983%                     10/-12/
-------------------------------------------------------------------------------
           501 - 1000                99.971%                     10/-12/
-------------------------------------------------------------------------------
          1001 - 1500                99.959%                     10/-12/
-------------------------------------------------------------------------------
          1501 - 2000                99.948%                     10/-12/
-------------------------------------------------------------------------------
          2001 - 2500                99.936%                     10/-12/
-------------------------------------------------------------------------------
          2501 - 3000                99.925%                     10/-12/
-------------------------------------------------------------------------------
          3001 - 3500                99.913%                     10/-12/
-------------------------------------------------------------------------------
          3501 - 4000                99.902%                     10/-12/
-------------------------------------------------------------------------------
</TABLE>


4.2  DS3.  The table below defines the general performance objectives for DS3
service operating at 44.5 Mb/s.


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
           V&H Miles                     EFS                        BER
-------------------------------------------------------------------------------
          <S>                          <C>                         <C>
             0 -  250                  99.988%                     10/-15/
-------------------------------------------------------------------------------
           251 -  500                  99.983%                     10/-15/
-------------------------------------------------------------------------------
           501 - 1000                  99.971%                     10/-15/
-------------------------------------------------------------------------------
          1001 - 1500                  99.959%                     10/-15/
-------------------------------------------------------------------------------
          1501 - 2000                  99.948%                     10/-15/
-------------------------------------------------------------------------------
          2001 - 2500                  99.936%                     10/-15/
-------------------------------------------------------------------------------
          2501 - 3000                  99.925%                     10/-15/
-------------------------------------------------------------------------------
          3001 - 3500                  99.913%                     10/-15/
-------------------------------------------------------------------------------
          3501 - 4000                  99.902%                     10/-15/
-------------------------------------------------------------------------------
</TABLE>

                                       23
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

4.3  OC-3, 12, 48; OC-3c, 12c, 48c. The table below defines the general
performance objectives for OC-3, OC-12, OC-48, OC-3c, OC-12c, and OC-48c.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
           V&H Miles                       EFS                       BER
-------------------------------------------------------------------------------
         <S>                             <C>                         <C>
             0 -  250                    99.989%                     10/-15/
-------------------------------------------------------------------------------
           251 -  500                    99.984%                     10/-15/
-------------------------------------------------------------------------------
           501 - 1000                    99.974%                     10/-15/
-------------------------------------------------------------------------------
          1001 - 1500                    99.964%                     10/-15/
-------------------------------------------------------------------------------
          1501 - 2000                    99.954%                     10/-15/
-------------------------------------------------------------------------------
          2001 - 2500                    99.944%                     10/-15/
-------------------------------------------------------------------------------
          2501 - 3000                    99.933%                     10/-15/
-------------------------------------------------------------------------------
          3000 - 3500                    99.923%                     10/-15/
-------------------------------------------------------------------------------
          3501 - 4000                    99.913%                     10/-15/
-------------------------------------------------------------------------------
</TABLE>

                                       24
<PAGE>

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

                    EXHIBIT C:  PAYMENT ALLOCATION SCHEDULE


For tax purposes only, the IRU Fee paid hereunder shall be allocated one
twentieth (1/20) per annual period beginning with the Effective Date.



                                       25