<PAGE>

                                                                 EXECUTION COPY

                            VIRTUAL TELECOM, INC.

                         INVESTORS' RIGHTS AGREEMENT


     THIS INVESTORS' RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of the 18th day of December, 1997 by and among Virtual Telecom, Inc.,
a Delaware corporation (the "Company"), and the persons identified on EXHIBIT
A attached hereto (the "Stockholders").

                                  SECTION 1

               Restrictions on Transferability of Securities;
                             REGISTRATION RIGHTS

     1.1  CERTAIN DEFINITIONS.  As used in this Agreement, the following
terms shall have the meanings set forth below:

     (a)  "Closing" shall mean the date of the initial sale of shares of the
Company's Series B Preferred Stock.

     (b)  "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.

     (c)  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to time.

     (d)  "Holder" shall mean any Investor who holds Registrable Securities
and any holder of Registrable Securities to whom the registration rights
conferred by this Agreement have been transferred in compliance with Section
1.11 hereof.

     (e)  "Initiating Holders" shall mean any Holder or Holders who in the
aggregate hold not less than fifty percent (50%) of the outstanding
Registrable Securities.

     (f)  "Investors" shall mean persons who purchased Shares pursuant to the
Series B Agreement.

     (g)  "Other Stockholders" shall mean persons other than Holders who, by
virtue of agreements with the Company, are entitled to include their
securities in certain registrations hereunder.

     (h)  "Registrable Securities" shall mean (i) shares of Common Stock
issued or issuable pursuant to the conversion of the Shares and (ii) any
Common Stock issued as a dividend or other distribution with respect to or in
exchange for or in replacement

                                    -1-
<PAGE>

of the shares referenced in (i) above, provided, however, that Registrable
Securities shall not include any shares of Common Stock which have previously
been registered or which have been sold to the public.

     (i)  The terms "register," "registered" and "registration" shall refer
to a registration effected by preparing and filing a registration statement
in compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.

     (j)  "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company,
blue sky fees and expenses, and expenses of any regular or special audits
incident to or required by any such registration, but shall not include
Selling Expenses and fees and disbursements of counsel for the Holders (but
excluding the compensation or regular employees of the Company, which shall
be paid in any event by the Company).

     (k)  "Rule 144" shall mean Rule 144 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or
any similar successor rule that may be promulgated by the Commission.

     (l)  "Rule 145" shall mean Rule 145 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or
any similar successor rule that may be promulgated by the Commission.

     (m)  "Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.

     (n)  "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and fees
and disbursements of counsel for any Holder (other than the fees and
disbursements of counsel included in Registration Expenses).

     (o)  "Series B Agreement" shall mean the Series B Preferred Stock
Purchase Agreement between the Company and the Stockholders.

     (p)  "Shares" shall mean the Company's Series B Preferred Stock.

                                    -2-
<PAGE>

     1.2  REQUESTED REGISTRATION.

     (a)  REQUEST FOR REGISTRATION.  If the Company shall receive from
Initiating Holders at any time or times not earlier than the earlier of (i)
eighteen (18) months after the date of this Agreement or (ii) three (3)
months prior to the Company's good faith estimate of the date of filing of
any registration statement covering an underwritten offering of any of the
Company's securities to the general public, a written request that the
Company effect any registration with respect to all or a part of the
Registrable Securities the aggregate proceeds of which (after deduction for
underwriter's discounts and expenses related to the issuance) exceed
$5,000,000 the Company will:

     (i)  promptly give written notice of the proposed registration to all
other Holders; and

     (ii) as soon as practicable, use its best efforts to effect such
registration (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other
state securities laws, and appropriate compliance with the Securities Act)
and as would permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder
or Holders joining in such request as are specified in a written request
received by the Company within twenty (20) days after such written notice
from the Company is mailed or delivered.

     The Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 1.2:

          (A)  In any particular jurisdiction in which the Company would be
     required to execute a general consent to service of process in effecting
     such registration, qualification, or compliance, unless the Company is
     already subject to service in such jurisdiction and except as may be
     required by the Securities Act;

          (B)  After the Company has initiated two such registrations
     pursuant to this Section 1.2(a) (counting for these purposes only
     registrations which have been declared or ordered effective and pursuant
     to which securities have been sold and registrations which have been
     withdrawn by the Holders as to which the Holders have not elected to
     bear the Registration Expenses pursuant to Section 1.4 hereof and would,
     absent such election, have been required to bear such expenses);

          (C)  During the period starting with the date sixty (60) days prior
     to the Company's good faith estimate of the date of filing of, and
     ending on a date one hundred eighty

                                    -3-
<PAGE>

     (180) days after the effective date of, a Company-initiated
     registration; provided that the Company is actively employing in good
     faith all reasonable efforts to cause such registration statement to
     become effective;

          (D)  If the Initiating Holders propose to dispose of shares of
     Registrable Securities which may be immediately registered on Form S-3
     pursuant to a request made under Section 1.5 hereof;

          (E)  If the Initiating Holders do not request that such offering be
     firmly underwritten by underwriters selected by the Initiating Holders
     (subject to the consent of the Company, which consent will not be
     unreasonably withheld); or

          (F)  If the Company and the Initiating Holders are unable to obtain
     the commitment of the underwriter described in clause (E) above to
     firmly underwrite the offer.

     (b)  Subject to the foregoing clauses (A) through (F), the Company shall
file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable after receipt of the
request or requests of the Initiating Holders; provided, however, that if (i)
in the good faith judgment of the Board of Directors of the Company, such
registration would be seriously detrimental to the Company and the Board of
Directors of the Company concludes, as a result, that it is essential to
defer the filing of such registration statement at such time, and (ii) the
Company shall furnish to such Holders a certificate signed by the President
of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company
for such registration statement to be filed in the near future and that it
is, therefore, essential to defer the filing of such registration statement,
then the Company shall have the right to defer such filing for the period
during which such disclosure would be seriously detrimental, provided that
(except as provided in clause (C) above) the Company may not defer the filing
for a period of more than one hundred eighty (180) days after receipt of the
request of the Initiating Holders, and, provided further, that the Company
shall not defer its obligation in this manner more than once in any
twelve-month period.

     The registration statement filed pursuant to the request of the
Initiating Holders may, subject to the provisions of Sections 1.2(b) and 1.12
hereof, include other securities of the Company, with respect to which
registration rights have been granted, and may include securities of the
Company being sold for the account of the Company.

     (c)  UNDERWRITING.  The right of any Holder to registration pursuant to
Section 1.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such

                                    -4-
<PAGE>

Holder's Registrable Securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and such
Holder with respect to such participation and inclusion) to the extent
provided herein.  A Holder may elect to include in such underwriting all or
a part of the Registrable Securities he holds.

     (d)  PROCEDURES.  If the Company shall request inclusion in any
registration pursuant to Section 1.2 of securities being sold for its own
account, or if other persons shall request inclusion in any registration
pursuant to Section 1.2, the initiating Holders shall, on behalf of all
Holders, offer to include such securities in the underwriting and may
condition such offer on their acceptance of the further applicable provisions
of this Section 1.  The Company shall (together with all Holders and other
persons proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders, which
underwriters are reasonably acceptable to the Company.  Notwithstanding any
other provision of this Section 1.2, if the representative of the
underwriters advises the Initiating Holders in writing that marketing factors
require a limitation on the number of shares to be underwritten, the number
of shares to be included in the underwriting or registration shall be
allocated as set forth in Section 1.12 hereof.  If a person who has requested
inclusion in such registration as provided above does not agree to the terms
of any such underwriting, such person shall be excluded therefrom by written
notice from the Company, the underwriter or the Initiating Holders.  The
securities so excluded shall also be withdrawn from registration.  Any
Registrable Securities or other securities excluded shall also be withdrawn
from such registration.  If shares are so withdrawn from the registration and
if the number of shares to be included in such registration was previously
reduced as a result of marketing factors pursuant to this Section 1.2(d),
then the Company shall offer to all Holders who have retained rights to
include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the number of
shares so withdrawn, with such shares to be allocated among such Holders
requesting additional inclusion in accordance with Section 1.12.

     1.3  COMPANY REGISTRATION.

     (a)  If the Company shall determine to register any of its securities
either for its own account or the account of a security holder or holders
exercising their respective demand registration rights (other than pursuant
to Section 1.2 or 1.5 hereof), other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Rule 145
transaction, or a registration on any registration form that does not permit
secondary sales, the Company will:


                                      -5-
<PAGE>

     (i)  promptly give to each Holder written notice thereof; and

     (ii) use its best efforts to include in such registration (and any
related qualification under blue sky laws or other compliance), except as set
forth in Section 1.3(b) below, and in any underwriting involved therein, all
the Registrable Securities specified in a written request or requests, made
by any Holder and received by the Company within twenty (20) days after the
written notice from the Company described in clause (i) above is mailed or
delivered by the Company.  Such written request may specify all or a part of
a Holder's Registrable Securities.

     (b)  UNDERWRITING.  If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.3(a)(i).  In such event, the right of any Holder to
registration pursuant to this Section 1.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein.  All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders of
securities of the Company with registration rights to participate therein
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.

     Notwithstanding any other provision of this Section 1.3, if the
representative of the underwriters advises the Company in writing that
marketing factors require a limitation on the number of shares to be
underwritten, the Company may limit, to the extent so advised by the
underwriters, the amount of securities to be included in the registration by
the Company's stockholders (including the Holders); provided, however, that
the aggregate value of securities (including Registrable Securities) to be
included in such registration by the Company's stockholders (including the
Holders) may not be so reduced to less than twenty-five percent (25%) of the
total value of all securities included in such registration, and provided
further that the Company shall not be required to reduce the number of shares
of securities that it is entitled to include in the registration and
underwriting.  The Company shall so advise all holders of securities
requesting registration, and the number of shares of securities that are
entitled to be included in the registration and underwriting shall be
allocated first to the Company for securities being sold for its own account
and thereafter as set forth in Section 1.12.  If any person does not agree to
the terms of any such underwriting, he shall be excluded therefrom by written
notice from the Company or the underwriter.  Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.


                                      -6-
<PAGE>

     If shares are so withdrawn from the registration or if the number of
shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all persons who have retained the right to include securities in the
registration the right to include securities in the registration the right to
include additional securities in the registration in an aggregate amount
equal to the number of shares so withdrawn, with such shares to be allocated
among the persons requesting additional inclusion in accordance with Section
1.12 hereof.

     1.4  EXPENSES OF REGISTRATION.  All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 1.3 and 1.5 hereof, and the first two registrations pursuant to
Section 1.2 hereof and reasonable fees of one counsel for the selling
stockholders in the case of registrations pursuant to Section 1.2 which have
been declared or ordered effective and pursuant to which securities have been
sold shall be borne by the Company; provided, however, that if the Holders
bear the Registration Expenses for any registration proceeding begun pursuant
to Section 1.2 and subsequently withdrawn by the Holders registering shares
therein, such registration proceeding shall not be counted as a requested
registration pursuant to Section 1.2 hereof, except in the event that such
withdrawal is based upon material adverse information relating to the Company
that is different from the information known or available (upon request from
the Company or otherwise) to the Holders requesting registration at the time
of their request for registration under Section 1.2, in which event such
registration shall not be treated as a counted registration for purposes of
Section 1.2 hereof, even though the Holders do not bear the Registration
Expenses for such registration.  All Selling Expenses relating to securities
so registered shall be borne by the holders of such securities pro rata on
the basis of the number of shares of securities so registered on their behalf.

     1.5  REGISTRATION ON FORM S-3.

     (a)  The Company shall use its best efforts to qualify for registration
on Form S-3 or any comparable or successor form or forms.  After the Company
has qualified for the use of Form S-3, in addition to the rights contained in
the foregoing provisions of this Section 1, the Holders of Registrable
Securities shall have the right to request registrations of Form S-3 (such
requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended methods of
disposition of such shares by such Holder or Holders), provided, however,
that the Company shall not be obligated to effect any such registration if
(i) the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) on Form S-3 at an
aggregate price to the public of less than $1,000,000, or (ii) in the event
that the Company shall furnish the certification described in paragraph
1.2(b)(ii) (but subject to the limitations


                                      -7-
<PAGE>

set forth therein) or (iii) in a given twelve-month period, after the Company
has effected one (1) such registration in any such period or (iv) it is to be
effected less than six (6) months, or more than five (5) years, after the
date of this Agreement.

     (b)  If a request complying with the requirements of section 1.5(a)
hereof is delivered to the Company, the provisions of Sections 1.2(a)(i) and
(ii) (including subsections 1.2(a)(ii)(A) through 1.2(a)(ii)(F)) and Section
1.2(b) hereof shall apply to such registration.  If the registration is for
an underwritten offering, the provisions of Sections 1.2(c) and 1.2(d) hereof
shall apply to such registration.

     1.6  REGISTRATION PROCEDURES.  In the case of each registration effected
by the Company pursuant to Section 1, the Company will keep each Holder
advised in writing as to the initiation of each registration and as to the
completion thereof.  At its expense, the Company will use its best efforts to:

     (a)  Keep such registration effective for a period of ninety (90) days
or until the Holder or Holders have completed the distribution described in
the registration statement relating thereto, whichever first occurs;
provided, however, that (i) such 90-day period shall be extended for a period
of time equal to the period the Holder refrains from selling any securities
included in such registration at the request of an underwriter of Common
Stock (or other securities) of the Company; and (ii) in the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 90-day period shall be
extended, if necessary, to keep the registration statement effective until
all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a continuous
or delayed basis, and provided further that applicable rules under the
Securities Act governing the obligation to file a post-effective amendment
permit, in lieu of filing a post-effective amendment that (I) includes any
prospectus required by Section 10(a)(3) of the Securities Act or (II)
reflects facts or events representing a material or fundamental change in the
information set forth in the registration statement, the incorporation by
reference of information required to be included in (I) and (II) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Exchange Act in the registration statement;

     (b)  Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement;


                                      -8-
<PAGE>

     (c)  Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as a
Holder from time to time may reasonably request;

     (d)  Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or incomplete in the light of
the circumstances then existing, and at the request of any such seller,
prepare and furnish to such seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such shares, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing;

     (e)  Cause all such Registrable Securities registered pursuant hereunder
to be listed on each securities exchange on which similar securities issued
by the Company are then listed;

     (f)  Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP
number for all such Registrable Securities, in each case not later than the
effective date of such registration;

     (g)  Otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months, but not more than eighteen months,
beginning with the first month after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act; and

     (h)  In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 1.2 hereof, the Company will
enter into an underwriting agreement reasonably necessary to effect the offer
and sale of Common Stock, provided such underwriting agreement contains
customary underwriting provisions and provided further that if the
underwriter so requests the underwriting agreement will contain customary
contribution provisions.

                                      -9-
<PAGE>

     1.7  INDEMNIFICATION.

     (a)  The Company will indemnify each Holder, each of its officers,
directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 15 of the Securities
Act, with respect to which registration, qualification, or compliance has
been effected pursuant to this Section 1, and each underwriter, if any, and
each person who controls within the meaning of Section 15 of the Securities
Act any underwriter, against all expenses, claims, losses, damages, and
liabilities (or actions, proceedings, or settlements in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering circular, or other
document (including any related registration statement, notification, or the
like) incident to any such registration, qualification, or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule
or regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification, or compliance, and will reimburse each such Holder, each of
its officers, directors, partners, legal counsel, and accountants and each
person controlling such Holder, each such underwriter, and each person who
controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability, or action, provided that
the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability, or expense arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Company by such Holder or underwriter and stated to be specifically for use
therein.  It is agreed that the indemnity agreement contained in this Section
1.7(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without
the consent of the Company (which consent has not been unreasonably withheld).

     (b)  Each Holder will, if Registrable Securities held by him are
included in the securities as to which such registration, qualification, or
compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if
any, of the Company's securities covered by such a registration statement,
each person who controls the Company or such underwriter within the meaning
of Section 15 of the Securities Act, each other such Holder and Other
Stockholder, and each of their officers, directors, and partners, and each
person controlling such Holder or Other Stockholder, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out
of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement,


                                      -10-
<PAGE>

prospectus, offering circular, or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
the Company and such Holders, Other Stockholders, directors, officers,
partners, legal counsel, and accountants, persons, underwriters, or control
persons for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus,
offering circular, or other document in reliance upon and in conformity with
written information furnished to the Company by such Holder and stated to be
specifically for use therein provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if
such settlement is effected without the consent of such Holder (which consent
shall not be unreasonably withheld).

     (c)  Each party entitled to indemnification under this Section 1.7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of such claim
or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 1, to the extent such failure is not prejudicial. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the
claim in question as an Indemnifying Party may reasonably request in writing
and as shall be reasonably required in connection with defense of such claim
and litigation resulting therefrom.

     (d)  If the indemnification provided for in this Section 1.7 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable
by such

                                     -11-

<PAGE>

Indemnified Party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the
other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission.

     (e)  Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.

     1.8  INFORMATION BY HOLDER.  Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any
registration, qualification, or compliance referred to in this Section 1.

     1.9  LIMITATIONS ON REGISTRATION OF ISSUES OF SECURITIES.  From and
after the date of this Agreement, the Company shall not, without the prior
written consent of a majority in interest of the Holders, enter into any
agreement with any holder or prospective holder of any securities of the
Company giving such holder or prospective holder any registration rights the
terms of which are more favorable than the registration rights granted to the
Holders hereunder.

     1.10 RULE 144 REPORTING.  With a view to making available the benefits
of certain rules and regulations of the Commission that may permit the sale
of the Restricted Securities to the public without registration, the Company
agrees to use its best efforts to:

     (a)  Make and keep public information regarding the Company available as
those terms are understood and defined in Rule 144 under the Securities Act;

     (b)  File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act at any time after it has become subject to such reporting requirements;

                                     -12-

<PAGE>

     (c)  So long as a Holder owns any Restricted Securities, furnish to the
Holder forthwith upon written request a written statement by the Company as
to its compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.

     1.11 TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS.  The rights to cause
the Company to register securities granted to a Holder by the Company under
this Section 1 may be transferred or assigned by a Holder only to a
transferee or assignee of not less than 250,000 shares of Registrable
Securities (as presently constituted and subject to subsequent adjustments
for stock splits, stock dividends, reverse stock splits, and the like),
provided that the Company is given written notice at the time of or within a
reasonable time after such transfer or assignment, stating the name and
address of the transferee or assignee and identifying the securities with
respect to which such registration rights are being transferred or assigned,
and, provided further, that the transferee or assignee of such rights assumes
the obligations of such Holder under this Section 1.

     1.12 ALLOCATION OF REGISTRATION OPPORTUNITIES.  In any circumstance in
which all of the Registrable Securities and other shares of Common Stock of
the Company (including shares of Common Stock issued or issuable upon
conversion of shares of any currently unissued series of Preferred Stock of
the Company) with registration rights (the "Other Shares") requested to be
included in a registration on behalf of the Holders or other selling
stockholders cannot be so included as a result of limitations of the
aggregate number of shares of Registrable Securities and Other Shares that
may be so included, the number of shares of Registrable Securities and Other
Shares that may be so included shall be allocated among the Holders and other
selling stockholders requesting inclusion of shares pro rata on the basis of
the number of shares of Registrable Securities and Other Shares that would be
held by such Holders and other selling stockholders, assuming conversion;
provided, however, so that such allocation shall not operate to reduce the
aggregate number of Registrable Securities and Other Shares to be included in
such registration, if any Holder or other selling stockholder does not
request inclusion of the maximum number of shares of Registrable Securities
and Other Shares allocated to him pursuant to the above-described procedure,
the remaining portion of his allocation shall be reallocated among those
requesting Holders and other selling stockholders whose allocations did not
satisfy their requests pro rata on the basis of the number of shares of
Registrable Securities and Other Shares which would be held by such Holders
and other selling stockholders, assuming conversion, and this procedure shall
be repeated until all of the shares of

                                     -13-

<PAGE>

Registrable Securities and Other Shares which may be included in the
registration on behalf of the Holders and other selling stockholders have
been so allocated. The Company shall not limit the number of Registrable
Securities to be included in a registration pursuant to this Agreement in
order to include shares held by stockholders with no registration rights or
to include founder's stock or any other shares of stock issued to employees,
officers, directors, or consultants, or with respect to registrations under
Sections 1.5 or 1.8 hereof, in order to include in such registration
securities registered for the Company's own account.

     1.13 DELAY OF REGISTRATION.  No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.

     1.14 TERMINATION OF REGISTRATION RIGHTS.  The right of any Holder to
request registration or inclusion in any registration pursuant to Section
1.2, 1.3 or 1.5 shall terminate five (5) years after the date of this
Agreement.

                                   SECTION 2

                             COVENANTS OF THE COMPANY

     The Company hereby covenants and agrees, so long as any Holder owns any
Registrable Securities, as follows:

     2.1  BASIC FINANCIAL INFORMATION.  The Company will furnish to each
Holder copies of its annual reports on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K, in each case within two (2) business
days of filing.

     2.2  ADDITIONAL INFORMATION AND RIGHTS.

     (a)  The Company will permit any Holder, so long as such Holder (or its
representative) owns at least 250,000 Shares, or such number of shares of
Common Stock issued upon conversion of 250,000 or more Shares, or any
combination thereof (as presently constituted and subject to subsequent
adjustment for stock splits, stock dividends, reverse stock splits,
recapitalizations and the like) and to each Holder which represents that it
is a "venture capital operating company" for purposes of Department of Labor
Regulation Section 2510.3-101, who requests them (a Significant Holder'') (or
a representative of any Significant Holder) to visit and inspect any of the
properties of the Company, including its books of account and other records
(and make copies thereof and take extracts therefrom), and to discuss its
affairs, finances and accounts with the Company's officers and its
independent public accountants, all at such reasonable times and as often as
any such person may reasonably request.

                                     -14-

<PAGE>

     (b)  The Company will deliver the reports described below in this
Section 2.2 to each Significant Holder:

     (i)  As soon as practical after the end of each month and in any event
within thirty (30) days thereafter a consolidated balance sheet of the
Company and its subsidiaries, if any, as at the end of such month and
consolidated statements of income and cash flows of the Company and its
subsidiaries, for each month and for the current fiscal year of the Company
to date, all subject to normal year-end audit adjustments, prepared in
accordance with generally accepted accounting principles consistently applied
and certified by the principal financial or accounting officer of the
Company, together with a comparison of such statements to the corresponding
periods of the prior fiscal year and to the Company's operating plan then in
effect and approved by its Board of Directors.

     (ii) Annually (but in any event within forty-five (45) days after the
commencement of fiscal year 1998 and at least thirty (30) days prior to the
commencement of each fiscal year of the Company thereafter) the financial
plan of the Company, in such manner and form as approved by the Board of
Directors of the Company, which financial plan shall include a projection of
income and a projected cash flow statement for such fiscal year and a
projected balance sheet as of the end of such fiscal year. Any material
changes in such business plan shall be submitted as promptly as practicable
after such changes have been approved by the Board of Directors of the
Company.

     (iii) With reasonable promptness, such other information and data with
respect to the Company and its subsidiaries as any such person may from time
to time reasonably request, provided that the Company possesses such
information or may obtain such information without unreasonable expense.

     (iv) As soon as practicable after the end of each fiscal year and in any
event within ninety (90) days thereafter, (i) a report from the Company
reporting on compliance with the terms and conditions of this Agreement and
any other agreement pursuant to which the Company has borrowed money or sold
its securities and (ii) a copy of the annual management review letter of the
Company's independent public accountants.

     (v)  As soon as practicable after transmission or occurrence and in any
event within ten (10) days thereof, copies of any reports or communications
delivered to any class of the Company's security holders or broadly to the
financial community, including any filings by the Company with any securities
exchange, the Securities and Exchange Commission or the National Association
of Securities Dealers, Inc.

     (c)  The provisions of Section 2.1 and this Section 2.2 shall not be in
limitation of any rights which any Holder or Significant Holder may have with
respect to the books and records

                                     -15-

<PAGE>

of the Company and its subsidiaries, or to inspect their properties or
discuss their affairs, finances and accounts, under the laws of the
jurisdictions in which they are incorporated.

     (d)  Anything in Section 2 to the contrary notwithstanding, no Holder or
Significant Holder by reason of this Agreement shall have access to any trade
secrets or classified information of the Company. Each Significant Holder
hereby agrees to hold in confidence and trust and not to misuse or disclose
any confidential information provided pursuant to this Section 2.2. The
Company shall not be required to comply with this Section 2.2 in respect of
any Holder whom the Company reasonably determines to be a competitor or an
officer, employee, director or greater than 10% shareholder of a competitor.

     (e)  Each Holder who represents to the Company that it is a "venture
capital operating company" for purposes of Department of Labor Regulation
Section 2510.3-101 shall in addition have the right to consult with and
advise the officers of the Company as to the management of the Company.

     2.3  RIGHT OF FIRST REFUSAL.  The Company hereby grants to each Holder
who owns any Shares or any shares of Common Stock issued upon conversion of
the Shares the right of first refusal to purchase a pro rata share of New
Securities (as defined in this Section 2.3) which the Company may, from time
to time, propose to sell and issue. A Holder's pro rata share, for purposes
of this right of first refusal, is the ratio of the number of shares of
Common Stock issued or issuable upon conversion of all Shares owned by such
Holder immediately prior to the issuance of New Securities, assuming full
conversion of the Shares held by such Holder, to the total number of shares
of Common Stock outstanding immediately prior to the issuance of New
Securities, assuming full conversion of the Shares and exercise of all
outstanding rights, options and warrants to acquire Common Stock of the
Company. Each Holder shall have a right of over-allotment such that if any
Holder fails to exercise its right hereunder to purchase its pro rata share
of New Securities, the other Holders may purchase the non-purchasing Holder's
portion on a pro rata basis within ten (10) days from the date such
non-purchasing Holder fails to exercise its right hereunder to purchase its
pro rata share of New Securities. This right of first refusal shall be
subject to the following provisions:

     (a)  "New Securities" shall mean any capital stock (including Common
Stock and/or Preferred Stock) of the Company whether now authorized or not,
and rights, options or warrants to purchase such capital stock, and
securities of any type whatsoever that are, or may become, convertible into
capital stock; provided that the term "New Securities" does not include (i)
securities purchased under the Series B Agreement; (ii) securities issued
upon conversion of the Shares; (iii) securities issued pursuant to the
acquisition of another business entity or business segment of any such entity
by the Company by merger

                                     -16-

<PAGE>

purchase of substantially all the assets or other reorganization whereby the
Company will own more than fifty percent (50%) of the voting power of such
business entity or business segment of any such entity; (iv) any borrowings,
direct or indirect, from financial institutions or other persons by the
Company, whether or not presently authorized, including any type of loan or
payment evidenced by any type of debt instrument, provided such borrowings do
not have any equity features including warrants, convertible into capital
stock of the Company; (v) securities issued to employees, consultants,
officers or directors of the Company pursuant to any stock option, stock
purchase or stock bonus plan, agreement or arrangement approved by the Board
of Directors; (vi) securities issued to vendors or customers or to other
persons in similar commercial situations with the Company if such issuance is
approved by the Board of Directors; (vii) securities issued in connection
with obtaining lease financing, whether issued to a lessor, guarantor or
other person; (viii) securities issued in a public offering pursuant to a
registration under the Securities Act with an aggregate offering price to the
public of at least $5,000,000; (ix) securities issued in connection with any
stock split, stock dividend or recapitalization of the Company; and (x) any
right, option or warrant to acquire any security convertible into the
securities excluded from the definition of New Securities pursuant to
subsections (i) through (ix) above.

     (b)  In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Holder written notice of its intention,
describing the type of New Securities, and their price and the general terms
upon which the Company proposes to issue the same. Each Holder shall have
twenty (20) days after any such notice is mailed or delivered to agree to
purchase such Holder's pro rata share of such New Securities for the price
and upon the terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased.

     (c)  In the event the Holders fail to exercise fully the right of first
refusal within such twenty (20) day period and after the expiration of the
ten-day period for the exercise of the over-allotment provisions of this
Section 2.3, the Company shall have one hundred twenty (120) days thereafter
to sell or enter into an agreement (pursuant to which the sale of New
Securities covered thereby shall be closed, if at all, within one hundred
twenty (120) days from the date of such agreement) to sell the New Securities
respecting which the Holders' right of first refusal option set forth in this
Section 2.3 was not exercised, at a price and upon terms no more favorable to
the purchasers thereof than specified in the Company's notice to Holders
pursuant to Section 2.3(b). In the event the Company has not sold within such
120-day period or entered into an agreement to sell the New Securities in
accordance with the foregoing within one hundred twenty (120) days from the
date of such

                                     -17-

<PAGE>

agreement, the Company shall not thereafter issue or sell any New Securities,
without first again offering such securities to the Holders in the manner
provided in Section 2.3(b) above.

     (d)  The right of first refusal granted under this Agreement shall
expire seven (7) years from the date of this Agreement.

     (e)  The right of first refusal set forth in this Section 2.3 may not be
assigned or transferred, except that (i) such right is assignable by each
Holder to any wholly owned subsidiary or parent of, or to any corporation or
entity that is, within the meaning of the Securities Act, controlling,
controlled by or under common control with, any such Holder, and (ii) such
right is assignable between and among any of the Holders.

     2.4  INDEPENDENT ACCOUNTANTS.  The Company will retain independent
public accountants of recognized national standing who shall certify the
Company's financial statements at the end of each fiscal year. In the event
the services of the independent public accountants so selected, or any firm
of independent public accountants hereafter employed by the Company, are
terminated, the Company will promptly thereafter notify the Holders and will
request the firm of independent public accountants whose services are
terminated to deliver to the Holders a letter from such firm setting forth
the reasons for the termination of their services. In the event of such
termination, the Company will promptly thereafter engage another firm of
independent public accountants of recognized national standing. In its notice
to the Holders the Company shall state whether the change of accountants was
recommended or approved by the Board of Directors of the Company or any
committee thereof.

     2.5  ATTENDANCE AT BOARD MEETINGS.  Each Significant Holder (or its
representative) shall have the right to attend all meetings of the Board of
Directors, which shall be held on a quarterly basis, in a non-voting observer
capacity, to receive notice of such meetings and to receive the information
provided by the Company to the Board of Directors; provided, however, that
the Company may require as a condition precedent to any Holder's rights under
this Section 2.5 that each person proposing to attend any meeting of the
Board of Directors and each person to have access to any of the information
provided by the Company to the Board of Directors shall agree to hold in
confidence and trust and to act in a fiduciary manner with respect to all
information so received during such meetings or otherwise; and, provided
further, that the Company reserves the right not to provide information and
to exclude such significant Holder (or its representative) from any meeting
or portion thereof if delivery of such information or attendance at such
meeting by such Significant Holder (or its representatives) would result in
disclosure of trade secrets to such holder or its representative or would
adversely affect the attorney-client privilege between the Company and its
counsel or if such Significant Holder or its representative is a direct
competitor of the Company.

                                     -18-

<PAGE>

     2.6  KEY PERSON LIFE INSURANCE.  The Company has as of the date hereof
or shall within 90 days of the date hereof use its best efforts to obtain
from financially sound and reputable insurers term life insurance on the
lives of Neil Gibbons and Daniel Huber in the amount of $1,500,000 each,
except as otherwise decided in accordance with policies adopted by the
Company's Board of Directors. The Company will cause to be maintained the
term life insurance required by this Section 2.6 hereof, except as otherwise
decided in accordance with policies adopted by the Company's Board of
Directors. Such policies shall name the Company as loss payee and shall not
be cancelable by the Company without prior approval of the Board of Directors.

     2.7  COMPLIANCE WITH REQUIREMENTS OF GOVERNMENT AUTHORITIES.  The
Company and all its subsidiaries shall duly observe and conform to all valid
requirements of governmental authorities relating to the conduct of their
businesses or to their properties or assets.

     2.8  MAINTENANCE OF CORPORATE EXISTENCE, ETC.  The Company shall
maintain in full force and effect its corporate existence, rights and
franchises and all licenses and other rights in or to use patents,
processes, licenses, trademarks, trade names or copyrights owned or
possessed by it or any subsidiary and deemed by the Company to be necessary
to the conduct of their business.

     2.9  SUBSTANTIAL CHANGES.  The Company shall not, without the approval
of the holders of at least a majority of the Shares, enter into any agreement
or understanding with any other person regarding the merger, liquidation or
sale of all or substantially all of the assets of the Company or engage in
any business activity which is fundamentally different from that in which it
is currently engaged.

     2.10  AMENDMENT OF CORPORATE DOCUMENTS.  The company shall not, without
the approval of the holders of at least a majority of the Shares, amend its
Certification of Incorporation, Certificate of Designations or Bylaws.

     2.11  STOCK ARRANGEMENTS.  The Company shall not, without the approval
of the holders of at least a majority of the Shares, declare or pay any
dividends to any stockholders of the Company, create any new security, issue
or repurchase any of its capital stock, or grant an option or right to
subscribe for, purchase or acquire any of its capital stock; provided,
however, that approval of the holders of the Shares shall not be required for
the Company to issue, repurchase or grant options or rights to subscribe for,
purchase or acquire shares of its capital stock if such shares would
represent less than five percent (5%) of the Company's outstanding capital
stock on a fully diluted basis immediately prior to such issuance, repurchase
or grant. Each acquisition of any shares of capital stock of the Company or
any option or right to acquire any shares of capital stock of the Company
will be conditioned upon the execution and delivery by

                                     -19-



<PAGE>

the Company and such purchaser of an agreement substantially in a form
approved by the holders of at least a majority of the Shares and the Board of
Directors of the Company.

     2.12  ACQUISITIONS.  The Company shall not, without the prior approval
of the holders of at least a majority of the Shares, acquire any assets
having an aggregate value greater than $200,000 or any capital stock of
another business entity, in each case other than as provided for in the
Company's approved budget.

     2.13  INDEBTEDNESS.  The Company shall not, without the prior approval
of the holders of at least a majority of the Shares, incur any indebtedness
in excess of amounts contained in the Company's approved budget, other than
trade credit incurred in the ordinary course of business.

     2.14  EXTENSION OF CREDIT.  The Company shall not, without the prior
approval of the holders of at least a majority of the Shares, extend credit
by any method or in any form or manner other than open account credit
extended to customers in the ordinary course of business.

     2.15  COMPENSATION OF EMPLOYEES.  The Company shall not, without the
prior approval of the holders of at least a majority of the Shares, (i) vary
the terms of employment or the compensation payable to any of its directors
or employees who are paid more than SFr 10,000 per month (other than Neil
Gibbons and Daniel Huber) except as provided for in the Company's approved
budget or (ii) vary the terms of employment or the compensation payable to
Neil Gibbons and Daniel Huber from that approved by the Board of Directors of
the Company at its most recent annual meeting.

     2.16  TRANSACTIONS WITH AFFILIATES.  The Company shall not, without the
approval of the holders of at least a majority of the Shares and the
disinterested members of the Company's Board of Directors, engage in any
loans, leases, contracts or other transactions or vary the terms of any
existing agreements with any director, officer, key employee or stockholder
of the Company, or any member of any such person's immediate family,
including the parents, spouse, children and other relatives of any such
person.

     2.17  TERMINATION OF COVENANTS.  The Covenants contained in this Section
2 shall be terminable by the Company with respect to the Stockholders in the
event, and only in such event, that the Stockholders fail to deliver to the
Company when due the full purchase price for the Shares, as set forth in
Section 1.2 of the Series R Agreement; provided, however, that if such
failure by the Stockholders to deliver the full purchase price for the Shares
is due to the breach by the Company, Neil Gibbons or Daniel Huber of any
material term of this Agreement, the Series B Agreement or that certain
Co-Sale Agreement of even date herewith among the Company, the Stockholders,
Neil Gibbons and Daniel

                                     -20-

<PAGE>

Huber, then the covenants contained herein shall not be terminable by the
Company.

                                   SECTION 3

                                 MISCELLANEOUS

     3.1  GOVERNING LAW.  This Agreement shall be governed by and construed
under the laws of the State of Delaware. If any action or proceeding shall be
brought by any party in order to enforce any right or remedy under this
Agreement, each party hereby consents to submit to the jurisdiction of any
state or federal court of competent jurisdiction sitting within the State of
California.

     3.2  SUCCESSORS AND ASSIGNS.  Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto. The Company hereby acknowledges and agrees that each
Stockholder may assign any right or rights that such Stockholder may have by
reason of this Agreement to one or more affiliates of such Stockholder or to
one or more persons or entities organized by the Stockholders for the purpose
of investing in the Company's Series B Preferred Stock, provided that any
such assignment is effected within 120 days of the Closing in connection with
a non-public sale to an accredited investor (as such terms are defined in the
Securities Act) and the Stockholders retain a majority of the Company's
Series B Preferred Stock.

     3.3  ENTIRE AGREEMENT; AMENDMENT; WAIVER.  This Agreement (including the
Exhibits hereto) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof. Neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated, except by a written instrument signed by the Company and the
holders of at least a majority of the Registrable Securities and any such
amendment, waiver, discharge or termination shall be binding on all the
Holders, but in no event shall be the obligation of any Holder hereunder be
materially increased, except upon the written consent of such Holder.

     3.4  NOTICES, ETC.  All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered personally by
hand or nationally recognized courier addressed (a) if to a Holder, as
indicated on the list of Stockholders attached hereto as Exhibit A, or at
such other address as such Holder or permitted assignee shall have furnished
to the Company in writing, or (b) if to the Company, at 12 Avenue Des
Morgines, 1213 Petit-Lancy 1, Geneva, Switzerland, or at such other address
as the Company shall have furnished to each Holder in writing. All such
notices and other written communications shall be effective (i) if personally
delivered, upon delivery and

                                     -21-

<PAGE>

(ii) if delivered by courier, one (1) day after being entrusted to a
reputable overnight delivery service.

     3.5  DELAYS OR OMISSIONS.  No delay or omission to exercise any right,
power or remedy accruing to any party, upon any breach or default under this
Agreement shall impair any such right, power or remedy of such party nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default therefore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of
any party of any breach or default under this Agreement or any waiver on the
part of any party of any provisions or conditions of this Agreement must be
made in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement or by law or
otherwise afforded to any party, shall be cumulative and not alternative.

     3.6  RIGHTS; SEPARABILITY.  Unless otherwise expressly provided herein,
a Holder's rights hereunder are several rights, not rights jointly held with
any of the other Holders. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

     3.7  INFORMATION CONFIDENTIAL.  Each Stockholder acknowledges that the
information received by it pursuant hereto may be confidential and for its
use only, and it will not use such confidential information in violation of
the Exchange Act or reproduce, disclose or disseminate such information to
any other person (other than its employees or agents having a need to know
the contents of such information, and its attorneys), except in connection
with the exercise of rights under this Agreement, unless the Company has made
such information available to the public generally or such Stockholder is
required to disclose such information by a governmental body.

     3.8  TITLES AND SUBTITLES.  The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.

                                     -22-



<PAGE>

     3.9  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

     IN WITNESS WHEREOF,  the parties hereto have executed this Investors
Rights Agreement effective as of the day and year first above written.

                                          VIRTUAL TELECOM, INC.




                                          By: /s/  N. Gibbons   /s/ D. Huber
                                              ------------------------------
                                               N. Gibbons           D. Huber

                                          Title:  CEO                  CFO
                                                 ---------------------------

                                          STOCKHOLDERS:

                                          ALTA-BERKELEY V, C.V.


                                          By:
                                              ---------------------------------
                                          Name:
                                                -------------------------------
                                          Title:
                                                 ------------------------------

                                          ALTA-BERKELEY V, S BY S, C.V.


                                          By:
                                              ---------------------------------
                                          Name:
                                                -------------------------------
                                          Title:
                                                 ------------------------------

                                     -23-



<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Investors
Rights Agreement effective as of the day and year first above written.

                                          VIRTUAL TELECOM, INC.



                                          By:
                                              ---------------------------------
                                          Title:
                                                 ------------------------------

                                          STOCKHOLDERS:

                                          ALTA-BERKELEY V, C.V.


                                          By: /s/
                                              ---------------------------------
                                          Name:
                                                -------------------------------
                                          Title:
                                                 ------------------------------

                                          ALTA-BERKELEY V, S BY S, C.V.


                                          By:  /s/
                                              ---------------------------------
                                          Name:
                                                -------------------------------
                                          Title:
                                                 ------------------------------

                                          ALTA-BERKELEY NORDIC PARTNERS,
                                          KY


                                          By:  /s/
                                              ---------------------------------
                                          Name:
                                                -------------------------------
                                          Title:
                                                 ------------------------------
                                     -23-



<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Investors
Rights Agreement effective as of the day and year first above written.

                                          VIRTUAL TELECOM, INC.



                                          By:
                                              ---------------------------------
                                          Title:
                                                 ------------------------------

                                          STOCKHOLDERS:

                                          ALTA-BERKELEY V, C.V.


                                          By:
                                              ---------------------------------
                                          Name:
                                                -------------------------------
                                          Title:
                                                 ------------------------------

                                          ALTA-BERKELEY V, S BY S, C.V.


                                          By:
                                              ---------------------------------
                                          Name:
                                                -------------------------------
                                          Title:
                                                 ------------------------------

                                          ALTA-BERKELEY NORDIC PARTNERS,
                                          KY

                                                      CapMan Capital Management
                                                      Oy as general partner

                                          By: /s/
                                              ---------------------------------

                                          Name:  Ari Tolppanen
                                                -------------------------------

                                          Title:  President
                                                 ------------------------------
                                     -23-



<PAGE>

                                          ALTA-BERKELEY NORDIC PARTNERS,
                                          KY

                                          By:
                                              ---------------------------------
                                          Name:
                                                -------------------------------
                                          Title:
                                                 ------------------------------

                                          By:
                                              ---------------------------------
                                          Name:
                                                -------------------------------
                                          Title:
                                                 ------------------------------
                                     -24-



<PAGE>

                                   EXHIBIT A

                             List of Stockholders

Alta-Berkeley, V, C.V.
[Address]

Alta-Berkeley V, S by S, C.V.
[Address]

Alta-Berkeley Nordic Partners, KY
[Address]

                                     -25-