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                          FiberNet Telecom Group, Inc.

                      Employee Equity Participation Program

                                  Plan Summary

      This Plan is designed to advance the Company's interests by encouraging
employees to acquire a proprietary interest in the Company. It provides that an
aggregate of 1,500,000 of the aggregate outstanding shares (the "Shares") of
common stock of the Company (the "Common Stock") may be optioned to Employees.
Options granted under this Plan may be either Incentive Stock Options, which
qualify for favorable federal income tax treatment or Nonstatutory Stock
Options. All Employees are eligible to receive Incentive Stock Options or
Nonstatutory Stock Options, but the Administrator is entitled to select the
individuals to whom such options actually will be granted and to determine
whether the options will be Incentive Stock Options or Nonstatutory Stock
Options.

      To meet the statutory requirements for Incentive Stock Options under
Internal Revenue Code Section 422, this Plan provides that the purchase price of
the optioned stock must be fixed at no less than the fair market value of the
Common Stock as of the time the Option is granted (or in the case of an Optionee
who beneficially owns more than Ten Percent (10%) of the Company's outstanding
shares of Common Stock, no less than One Hundred Ten Percent (110%) of the fair
market value of the Common Stock as of the time the Option is granted). To the
extent that the aggregate fair market value of the Common Stock with respect to
which Incentive Stock Options are exercisable by an Optionee for the first time
in any one (1) calendar year exceeds One Hundred Thousand Dollars ($100,000),
options for such shares of Common Stock shall not be considered Incentive Stock
Options. Incentive Stock Options granted under this Plan are nontransferable
(other than by will or the laws of descent and distribution) and Incentive Stock
Options may not be exercised more than ten (10) years (five (5) years in the
case of an Optionee who beneficially owns more than Ten Percent (10%) of the
Company's outstanding shares of the Common Stock) after the date they are
granted.

      The Company will receive no cash consideration for granting Options under
this Plan. However, when an Option is exercised, the holder is required to pay
the Option Price for the number of shares of the Common Stock to be issued under
the exercised Option.

      This Plan will be administered by the Administrator and will terminate
five (5) years after the earlier of the date it is adopted by the Board of
Directors or the date it is approved by the Company's stockholders, unless
earlier terminated by the Administrator.

                                 1. Definitions

      As used herein, the following terms have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:
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      (a) "Act" means the Securities Act of 1933, as amended.

      (b) "Administrator" means the Board or the Committee, whichever shall be
administering this Plan from time to time in the discretion of the Board, as
described in Section 3 of this Plan.

      (c) "Board" means the Board of Directors of the Company.

      (d) "Code" means the Internal Revenue Code of 1986, as amended.

      (e) "Committee" means the committee appointed by the Board in accordance
with Section 3 of this Plan.

      (f) "Common Stock" means the common stock of the Company.

      (g) "Company" means FiberNet Telecom Group, Inc., a Nevada corporation.

      (h) "Disinterested Person" shall have the meaning assigned to this phrase
in Rule 16b-3 of the Securities and Exchange Commission adopted under the
Exchange Act.

      (i) "Employee" means an individual who is employed (within the meaning of
Section 3401 of the Code and the regulations thereunder) by the Company or a
Subsidiary.

      (j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      (k) "Fair Market Value" of Shares shall mean (i) if the Shares are not
publicly traded on the day in question, the fair market value of the Shares on
the day in question as determined and set forth in writing by the Administrator
(who, in making such determination, shall make a good faith effort to establish
the true fair market value of the Shares as of such date using such methods as
the Administrator may deem appropriate and taking into consideration any
requirements set forth in the Code or the regulations thereunder and whose
determination shall be conclusive and binding on all Optionees) or (ii) if the
Shares are publicly traded on the day in question, the closing price of the
Shares on the day in question. The closing price shall be the last reported sale
price on the New York Stock Exchange or, if the Shares are not listed or
admitted to trading on such Exchange, on the principal national securities
exchange on which the Shares are listed or admitted to trading or, if not listed
or admitted to trading on any national securities exchange, the average of the
highest closing bid and asked prices as reported by NASDAQ's National Market
System.

      (l) "Incentive Stock Option" means an Option for Shares which qualifies
for treatment pursuant to Section 422 of the Code.

      (m) "Incentive Stock Option Agreement" means the agreement described in
Section 6.1 hereof between the Company and any Optionee under which the Optionee
may purchase Shares hereunder.
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      (n) "Nonstatutory Stock Option" shall mean an option not described in
Section 422(b), 423(b) or 424(c)(3)(B) of the Code.

      (o) "Nonstatutory Stock Option Agreement" means the agreement described in
Section 6.1 hereof between the Company and any Optionee under which the Optionee
may purchase Shares.

      (p) "Option" means an option to purchase a Share pursuant to the
provisions of this Plan.

      (q) "Optionee" means an officer or Employee to whom an Option has been
granted hereunder.

      (r) "Option Price" means the price per share of the Shares subject to each
Option as provided in Section 6.3 hereof.

      (s) "Option Term" means the period of time during which an Option may be
exercised.

      (t) "Outstanding Stock" shall have the meaning assigned to it in Section
4.2(b) hereof.

      (u) "Plan" means this FiberNet Telecom Group, Inc. Employee Equity
Participation Program, the terms of which are set forth herein.

      (v) "Share" or "Shares" means shares of Common Stock.

      (w) "Total and Permanent Disability" means the inability of an Employee or
officer to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which (i) can be expected to result
in death or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months and (ii) the Administrator, based upon
medical evidence, has expressly determined is a Total and Permanent Disability.

                                   2. The Plan

      2.1 Name. This Plan shall be known as the "FiberNet Telecom Group, Inc.
Employee Equity Participation Program".

      2.2 Purpose. The purpose of this Plan is to advance the interests of the
Company and its stockholders by affording Employees of the Company an
opportunity to acquire or increase their proprietary interest in the Company by
the grant to such individuals of Options under the terms set forth herein. By
encouraging such individuals to acquire or increase their proprietary interest
in the Company, the Company seeks to attract, motivate and retain those highly
competent individuals upon whose judgment, initiative, leadership, and continued
efforts the success of the Company in large measure depends.
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      2.3 Intention. It is intended that the Options issued under this Plan may
qualify as Incentive Stock Options and the terms of this Plan shall be
interpreted in accordance with such intention if they are issued in accordance
with the rules set forth herein applicable to Incentive Stock Options.

                                3. Administration

      3.1 Administration. This Plan shall be administered, in the discretion of
the Board from time to time, by the Board or by the Committee, acting as the
Administrator. The Committee shall be appointed by the Board, in a manner
consistent with the Company's By-Laws, and shall consist of not less than two
(2) members of the Board. The Board may from time to time remove members from,
or add members to, the Committee. Vacancies on the Committee, however caused,
shall be filled by the Board. The Board may appoint one (1) of the members of
the Committee as Chairman. The Administrator shall hold meetings at such times
and places as it may determine. Acts of a majority of the Administrator at which
a quorum is present, or acts reduced to or approved in writing by the unanimous
consent of the members of the Administrator, shall be the valid acts of the
Administrator.

      3.2 Duties. Subject to Section 3.4 hereof, the Administrator shall from
time to time at its discretion select the Employees who are to be granted
Options, determine the number of Shares subject to Options to be granted to each
Optionee and designate such Options either as Incentive Stock Options or
Nonstatutory Stock Options. The interpretation and construction by the
Administrator of any provisions of this Plan or of any Option granted thereunder
shall be final. No member of the Administrator shall be liable for any action or
determination made in good faith with respect to this Plan or any Option granted
hereunder.

      3.3 Registered Shares. If any Shares are registered under Section 12 of
the Exchange Act, then notwithstanding the first or second sentence of Section
3.2 hereof, after such registration the grant of any Option under this Plan to
any person who shall be an officer or director (as defined in Section 16 of the
Exchange Act) of the Company at the time of such grant shall only be made either
(i) with the approval of the Board if all of its members are Disinterested
Persons or (ii) with the approval of the Committee if all of the members of the
Committee are Disinterested Persons.

      3.4 Program Parameters. In exercising his discretion to select the
Employees who are to be granted Options, as set forth in Section 3.4 hereof, the
Administrator may take into account the following factors:

            (a) Personnel level, including, without limitation, designation of
an Employee as Chief Financial Officer, Vice President of Sales and Marketing or
as Vice President of Operations; and

            (b) Other factors, including, without limitation (i) total base
salary during the Employee's tenure with the Company, (ii) discretionary signing
bonuses awarded to the Employee at the inception of employment, (iii)
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discretionary annual bonuses awarded to the Employee for significant
contributions to the Company.

                                4. Participation

      4.1 Eligibility. The Optionees shall be such persons as the Administrator
may select from among the Employees (who may be officers) of the Company or of a
Subsidiary subject to the terms and conditions of Section 4.2 below.

      4.2 Ten-Percent Stockholders. An Optionee who beneficially owns more than
ten percent (10%) of the total combined voting power of all classes of
Outstanding Stock of the Company shall not be eligible to receive an Incentive
Stock Option unless (i) the Option Price of the Shares subject to such Option is
at least one hundred ten percent (110%) of the Fair Market Value of such Shares
on the date of grant and (ii) such Option by its terms is not exercisable after
the expiration of five (5) years from the date of grant.

            (a) For purposes of this Section 4.2, in determining stock
ownership, an Optionee's beneficial ownership of any class of Outstanding Stock
of the Company shall be determined as provided in Rule 16a-1(a) of the
Securities and Exchange Commission adopted under the Exchange Act, and in any
event (i) such Optionee shall be considered as owning the stock owned, directly
or indirectly, by or for his or her brothers and sisters, spouse, ancestors and
lineal descendants, (ii) stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be considered as being owned
proportionately by or for its shareholders, partners or beneficiaries and (iii)
stock with respect to which such Optionee holds an Option shall not be counted.

            (b) For purposes of this Section 4.2, "Outstanding Stock" shall
include all Shares actually issued and outstanding immediately after the grant
of the Option to the Optionee. "Outstanding Stock" shall not include Shares
authorized for issue under outstanding Options held by the Optionee or by any
other person.

                            5. Shares Subject to Plan

      5.1 Shares Available for Options. Subject to adjustment pursuant to the
provisions of Section 5.2 hereof, the total number of Shares which may be issued
upon the exercise of all Options shall not exceed 1,500,000 of the aggregate
outstanding Shares. Such Shares may be either authorized and unissued Shares or
issued Shares which have been reacquired by the Company. If any Option shall
expire or terminate for any reason without having been exercised in full, new
Options may be granted covering Shares originally set aside for the exercise of
such expired or terminated Option.

      5.2 Adjustments.

            (a) Subject to any required action by the Board and/or stockholders,
the number of Shares covered by this Plan as provided in Section
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5.1 hereof, the number of Shares covered by each outstanding Option and the
Option Price thereof shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a subdivision or
consolidation of Shares or the payment of a stock dividend (but only if paid in
Shares), a stock split or any other increase or decrease in the number of issued
Shares effected without receipt of consideration by the Company.

            (b) Subject to any required action by the Board and/or stockholders,
if the Company shall merge with another corporation and the Company is the
surviving corporation in such merger and under the terms of such merger the
Shares outstanding immediately prior to the merger remain outstanding and
unchanged, each outstanding Option shall continue to apply to the Shares subject
thereto and shall also pertain and apply to any additional securities and other
property, if any, to which a holder of the number of Shares subject to the
Option would have been entitled as a result of the merger.

            (c) To the extent that the foregoing adjustments relate to
securities of the Company, such adjustments shall be made by the Administrator,
whose determination shall be conclusive and binding on all persons. In computing
any adjustment under this Section 5.2, any fractional Share which might
otherwise become subject to an Option shall be eliminated.

                                   6. Options

      6.1 Option Grant and Agreement. Each Option grant shall be evidenced by a
written Incentive Stock Option Agreement or Nonstatutory Stock Option Agreement
dated as of the date of grant and executed by the Company and the Optionee,
which Agreement shall set forth the number of Options granted, the Option Price,
the Option Term and such other terms and conditions as may be determined
appropriate by the Administrator; provided that such terms and conditions are
consistent with this Plan. The Incentive Stock Option Agreement and Nonstatutory
Stock Option Agreement shall incorporate this Plan by reference and provide that
any inconsistencies or disputes shall be resolved in favor of this Plan
language.

      6.2 Option Conditions. Each Incentive Stock Option shall be subject to the
following conditions, which conditions shall be stated within the applicable
Incentive Stock Option Agreement. Any Option which does not comply with these
provisions shall not be considered an Incentive Stock Option and shall not be
considered as issued under this Plan unless it is a Nonstatutory Stock Option:

            (a) To the extent that the aggregate Fair Market Value of Shares
(determined as of the time an Option is granted) exercisable for the first time
by an Optionee during any calendar year under this Plan and all similar plans
maintained by the Company exceeds One Hundred Thousand Dollars ($100,000),
options for such Shares shall be treated as options that are not Incentive Stock
Options. For purposes of this provision, Incentive Stock Options shall be taken
into account in the order in which they were granted.
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            (b) Incentive Stock Options granted to an Optionee may be exercised
in any Order, so that an Optionee may exercise an Incentive Stock Option if
another Incentive Stock Option, granted to him at an earlier time, remains
outstanding.

            (c) No Incentive Stock Option may be assigned or transferred by an
Optionee other than by will or by the laws of descent and distribution. During
the lifetime of an Optionee, the Incentive Stock Option may be exercised only by
the Optionee. Transfer of an Incentive Stock Option by will or by the laws of
descent and distribution shall not be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and an
authenticated copy of the will or such other evidence as the Board may deem
necessary to establish the validity of the transfer and the acceptance by the
transferee of the terms and conditions of such Option.

      6.3 Option Price. The Option Price shall be determined by the
Administrator, subject to any limitations imposed by this Plan, but shall not be
less than the Fair Market Value of Shares on the date the Option is granted and,
in the case of an Incentive Stock Option granted to an Optionee described in
Section 4.2 hereof, the Option Price shall not be less than One Hundred Ten
Percent (110%) of the Fair Market Value on the date of grant.

      6.4 Option Term. The Option Term shall be determined by the Administrator,
subject to any limitations imposed by this Plan, but with respect to Incentive
Stock Options shall not be more than ten (10) years from the date such Option is
granted and, in the case of an Option granted to an Optionee described in
Section 4.2 hereof, shall not be more than [five (5)] years from the date such
Option is granted. Options may be subject to earlier termination as provided in
this Plan.

      6.5 Limitations on Exercise of Options. Notwithstanding anything contained
in this Plan to the contrary:

            (a) Options may not be exercised until this Plan has been ratified
by the stockholders as provided in Section 9.5 hereof.

            (b) Options shall be exercised in full or in such equal or unequal
installments as the Administrator shall determine; provided that if an Optionee
does not purchase all of the Shares which the Optionee is entitled to purchase
on a certain date or within an established installment period, the Optionee's
right to purchase any unpurchased Shares shall continue during the Option Term
(taking into account any early termination of such Option Term which may be
provided for under this Plan).

            (c) If any Shares are registered under Section 12 of the Exchange
Act, all Options granted thereafter to an officer or director (as defined in
Section 16 of the Exchange Act) of the Company shall be subject to the
limitation that such Options shall not be exercised within six (6) months from
the date of grant.
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            (d) Except as otherwise provided in such Incentive Stock Option
Agreement or Nonstatutory Stock Option Agreement, as applicable, the Options
shall vest and become exercisable by the Optionee at the rate of Twenty Percent
(20%) per year for five (5) years, according to the following schedule:

            (i) Commencing on the date one (1) year after the date of the grant
      of the Option, the Option may be exercised to the extent of Twenty Percent
      (20%) of the Shares subject to the Option.

            (ii) Commencing on the date two (2) years after the date of the
      grant of the Option, the Option may be exercised to the extent of Forty
      Percent (40%) of the Shares subject to the Option.

            (iii) Commencing on the date three (3) years after the date of the
      grant of the Option, the Option may be exercised to the extent of Sixty
      Percent (60%) of the Shares subject to the Option.

            (iv) Commencing on the date four (4) years after the date of the
      grant of the Option, the Option may be exercised to the extent of Eighty
      Percent (80%) of the Shares subject to the Option.

            (v) Commencing on the date five (5) years after the date of the
      grant of the Option, the entire Option may be exercised to the extent it
      has not previously been exercised.

      6.6. Method of Exercising Options; Withholding Tax.

            (a) Options shall be exercised by a written notice, delivered to the
Company at its principal office in New York, New York, specifying the number of
Shares to be purchased and tendering payment in full for such Shares. Payment
may be tendered in cash or by certified, bank cashier's or teller's check or by
Shares (valued at Fair Market Value as of the date of tender), or some
combination of the foregoing. In the event all or part of the Option Price is
paid in Shares, any excess of the value of such Shares over the Option Price
will be returned to the Optionee as follows: (i) any whole Share remaining in
excess of the Option Price will be returned in kind, and may be represented by
one or more share certificates; and (ii) any partial Shares remaining in excess
of the Option Price will be returned in cash.

            (b) In the event the Company determines that it is required to
withhold state or Federal income tax as a result of the exercise of an Option,
as a condition to the exercise thereof, the Optionee may be required to make
arrangements satisfactory to the Company to enable it to satisfy such
withholding requirements. Payment of such withholding requirements may be made,
in the discretion of the Administrator, (i) in cash, (ii) by delivery of Shares
registered in the name of the Optionee, (iii) by the Company not issuing such
number of Shares subject to the Option as have a Fair Market Value at the time
of exercise equal to the amount to be withheld or (iv) any combination of (i),
(ii) and (iii) above. If (A) any Shares are registered under Section 12 of the
Exchange Act, (B) the Optionee is an officer or director (as defined in Section
16 of the Exchange Act) of the Company subject to Section 16(b) of the Exchange
Act and
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(C) such payment is made with Shares acquired by the Optionee upon the exercise
which gives rise to such withholding, an election under the preceding sentence
(1) must be irrevocable and with respect to all Shares covered by the Option
subject to the election, provided that such election may be changed through
another irrevocable election that takes effect at least six (6) months after the
prior election or (2) may be made during the period beginning on the third
business day following the date of release of quarterly and annual summary
statements of sales and earnings as provided by Rule 16b-3(e)(3) of the
Securities and Exchange Commission and ending on the [twelfth (12th)] business
day following such date and only if such period occurs before the date the
Company requires payment of the withholding tax. The election need not be made
during the [ten (10)] day window period if counsel to the Company determines
that compliance with such requirement is unnecessary.

      6.7 Rights in the Event of Sale, Merger or Other Reorganization. Except as
expressly provided in Section 5.2 hereof and this Section 6.7, the Optionee
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation, and any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, including,
without limitation, pursuant to an initial public offering, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number or
Option Price of Shares subject to an Option. The grant of an Option pursuant to
this Plan shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure, to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets. In any such event (other
than a merger of the type described in Section 5.2(b) hereof), all rights of the
Optionee with respect to the unexercised portion of any Option shall wholly and
completely terminate and all Options shall be canceled at the time of any
merger, consolidation, sale or transfer of assets, liquidation or dissolution,
except to the extent that any agreement or undertaking of any party to any such
merger, consolidation, or sale or transfer of assets, or any plan pursuant to
which such liquidation or dissolution is effected, shall make specific provision
with respect to the Plan and the rights of Optionees with respect to Options
granted thereunder. Notwithstanding the foregoing, the holder of any such Option
or right theretofore granted and still outstanding shall have the right
immediately prior to the effective date of such merger, consolidation, sale or
transfer of assets, liquidation or dissolution to exercise such Option in whole
or in part (without regard to any installment provision as set forth in Section
6.5(d) that may have been made a part of the terms and conditions of such Option
or right). In no event, however, may any Incentive Stock Option which becomes
exercisable pursuant to this Section 6.7 be exercised, in whole or in part,
later than the date preceding the tenth anniversary date of the grant thereof.

      6.8. Rights in the Event of Death. If an Optionee's employment or service
with the Company is terminated on account of death, the person or persons who
shall have acquired the right, by will or by the laws of descent and
distribution, to exercise the Optionee's Options shall continue to have (subject
to Sections 6.2 and 6.5 above) the right, for a period which shall not exceed
the
<PAGE>   10

earlier of the remaining Option Term (taking into account any earlier
termination date provided by this Plan) or one (1) year from the date of such
Optionee's death, to exercise any Options which such Optionee would have been
entitled to exercise on the date of such Optionee's death. At the expiration of
such one (1) year period, or such earlier time as may be applicable, any such
Options which remain unexercised shall expire. In no event may any Options be
exercised that could not have been exercised by an Optionee on the date of such
Optionee's death.

      6.9. Rights in the Event of Total and Permanent Disability. If an
Optionee's employment or service with the Company is terminated on account of
Total and Permanent Disability, the Optionee shall have (subject to Sections 6.2
and 6.5 above) the right, for a period which shall not exceed the earlier of the
remaining Option Term (taking into account any earlier termination date provided
by this Plan) or one (1) year from the date of such Optionee's Total and
Permanent Disability, to exercise any Options which such Optionee would have
been entitled to exercise on the date of such Optionee's Total and Permanent
Disability. At the expiration of such one (1) year period, or such earlier time
as may be applicable, any such Options which remain unexercised shall expire. In
no event may any Options be exercised that could not have been exercised by an
Optionee on the date of such Optionee's Total and Permanent Disability.

      6.10. Rights in the Event of Termination of Service or Employment. In the
event that an Optionee's service or employment with the Company terminates,
other than by reason of death or Total and Permanent Disability or termination
for cause, the Optionee shall have (subject to Sections 6.2 and 6.5 above) the
right, for a period which shall not exceed the earlier of the remaining Option
Term (taking into account any earlier termination date provided by this Plan) or
three (3) months from such termination of service or employment, to exercise any
Options which such Optionee would have been entitled to exercise on the date of
such Optionee's termination. At the expiration of such three (3) month period,
or such earlier time as may be applicable, any such Options which remain
unexercised shall expire. In no event may any Options be exercised that could
not have been exercised by an Optionee on the date of such Optionee's
termination of service or employment. Notwithstanding the foregoing, if an
Optionee's service or employment is terminated for cause, the Company may notify
the Optionee that any Options not exercised prior to such termination are
canceled. For purposes hereof, a termination of service or employment for cause
shall include, but not be limited to, dismissal as a result of (i) Optionee's
conviction of any crime or offense involving money or other property of the
Company or its subsidiaries or affiliates or which constitutes a felony in the
jurisdiction involved (ii) Optionee's gross negligence, gross incompetence or
willful misconduct in the performance of his or her duties or (iii) Optionee's
willful failure or refusal to perform his or her duties.

                     7. Shares Issued Pursuant to an Option

      7.1 Issuance of Certificates. The Company shall not be required to issue
or deliver any certificate for Shares purchased upon the exercise of any Option,
or any portion thereof, prior to fulfillment of all of the following applicable
conditions:
<PAGE>   11

            (a) The admission of such Shares to listing on all stock exchanges
or markets on which the Shares are then listed to the extent such admission is
necessary.

            (b) The completion of any registration or other qualification of
such Shares under any federal or state securities laws or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body, which the Board shall in its sole discretion deem necessary or
advisable, or the determination by the Board in its sole discretion that no such
registration or qualification is required.

            (c) The obtaining of any approval or other clearance from any
federal or state governmental agency which the Board shall, in its sole
discretion, determine to be necessary or advisable.

            (d) The lapse of such reasonable period of time following the
exercise of the Option as the Board from time to time may establish for reasons
of administrative convenience.

      7.2. Compliance with Securities and Other Laws. In no event shall the
Company be required to sell, issue or deliver Shares pursuant to Options if in
the opinion of the Board the issuance thereof would constitute a violation by
either the Optionee or the Company of any provision of any law or regulation of
any governmental authority or any securities exchange. As a condition of any
sale or issuance of Shares pursuant to Options, the Company may place legends on
the Shares, issue stop-transfer orders and require such agreements or
undertakings from the Optionee as the Company may deem necessary or advisable to
assure compliance with any such law or regulation, including if the Company or
its counsel deems it appropriate, representations from the Optionee that the
Optionee is acquiring the Shares solely for investment and not with a view to
distribution and that no distribution of the Shares acquired by the Optionee
will be made unless registered pursuant to applicable federal and state
securities laws or unless, in the opinion of counsel to the Company, such
registration is unnecessary.

      7.3. Rights of First Refusal.

            (a) The Optionee shall not transfer any Shares, now or hereafter
owned by any such Optionee, whether for consideration or otherwise, except in
accordance with the provisions of this Agreement and the Act.

            (b) Upon receipt by an Optionee of a bona fide offer to purchase
Shares held by such Optionee, which such Optionee wishes to accept, such
Optionee shall promptly offer in writing to sell such Shares to the Company,
upon terms and conditions which are no less favorable to the Company than those
contained in the bona fide offer and shall attach a copy of the bona fide offer
to the reoffer. The reoffer may be accepted by the Company, at any time by
written notice to the Optionee within thirty (30) days next following the
Company's receipt of such reoffer.
<PAGE>   12

            (c) The aggregate purchase price to be paid for the Shares purchased
in accordance with the terms and provisions of this Section 7.3(c) by the
Company shall be paid in cash, marketable securities or a promissory note.

            (d) The purchase price for the Shares shall be payable by the
Company within thirty (30) days after the reoffer is accepted pursuant to
Section 7.3(b) hereof. In any case, at the closing of the sale to the Company,
the Optionee shall deliver to the Company against payment therefor, certificates
or instruments representing the Shares being purchased, duly endorsed for
transfer to the Company. In the event such closing has not occurred within such
thirty (30) day period, the reoffer shall be deemed to have expired without such
reoffer being accepted in full.

            (e) Upon the expiration of the reoffer without such reoffer being
accepted in full in accordance herewith, the Optionee shall be free to accept
the bona fide offer; provided that:

            (i) The transferee shall, prior to such acquisition, agree in
      writing with the Company and the Optionee to hold such Shares subject to
      and in accordance with all of the terms, provisions and conditions
      contained in this Agreement to the same extent as if such transferee
      originally executed this Agreement, and shall make such representations
      and warranties as are customarily made in connection with private
      placement transactions in the United States and as the Company may
      reasonably require regarding such transferee's investment intent.

            (ii) The conclusion of the transaction contemplated by the bona fide
      offer shall have been effected within thirty (30) days after the
      expiration of the reoffer, and if not so effected within such thirty (30)
      day period, then the bona fide offer shall be deemed to have terminated at
      the end of such period and the Optionee shall be required to comply with
      the terms of this Section 7.3 in respect of such proposed transfer or any
      other transfer of Shares.

            (iii) The Optionee shall not be relieved of any of his or her
      obligations hereunder arising prior to such transfer to the extent any
      such obligations are not discharged by the transferee, but the Optionee
      shall be relieved of any obligation under this Agreement arising
      subsequent to such transfer.

      7.4. Further Assurances. At any time and from time to time, upon written
request of the Company, each Optionee shall promptly and duly execute and
deliver such further instruments and documents and take such further action as
the Company may reasonably request for the purpose of obtaining or preserving
the full benefits of this Agreement and the rights and powers herein granted.

               8. Termination, Amendment and Modification of Plan

      8.1. Board Termination, Amendment and Modification of Plan. The Board may
at any time amend, modify or terminate this Plan; provided that no
<PAGE>   13

such action of the Board, without approval of the stockholders of the Company
(in the same manner as provided in Section 9.5 hereof), may:

            (a) Materially increase the benefits accruing to Optionees under
this Plan.

            (b) Materially increase the number of Shares which may be issued
under this Plan.

            (c) Materially modify the requirements as to eligibility for
participation in this Plan.

            (d) Change the Option Price with respect to any outstanding Option
other than to change the manner of determining the Fair Market Value of the
Shares to conform with any then applicable provisions of the Code or regulations
or rulings thereunder.

            (e) Materially amend this Section 8.1 to defeat its purpose.

            (f) Upon the registration of the Shares under Section 12 of the
Exchange Act, modify this Plan such that it fails to meet the requirements of
Rule 16b-3 of the Securities and Exchange Commission for the exemption of the
acquisition, cancellation, expiration or surrender of Options, from the
operation of Section 16(b) of the Exchange Act.

      8.2. Plan Termination. Unless terminated earlier as provided in Section
8.1 hereof, this Plan shall terminate five years from the date it is adopted by
the Board or, if earlier, [five] years from the date it is approved by
stockholders of the Company, and no Option shall be granted under this Plan
after such date.

      8.3. Effect of Termination, Amendment or Modification of Plan.
Notwithstanding Sections 8.1 and 8.2 hereof, no termination, amendment or
modification of this Plan shall in any manner affect any Option theretofore
granted under this Plan without the consent of the Optionee or a person who
shall have acquired the right to exercise the Option by will or the laws of
descent and distribution.

                                9. Miscellaneous

      9.1. No Employment Rights. Nothing in this Plan or in any Option granted
hereunder or in any Incentive Stock Option Agreement or Nonstatutory Stock
Option Agreement relating thereto shall confer upon any individual the right to
continue in the service or employ of the Company.

      9.2. Binding Effect. This Plan shall be binding upon the successors and
assigns of the Company and upon persons who acquire the right to exercise
Options issued hereunder by will or through the laws of descent and
distribution.

      9.3. Singular, Plural, Gender. Whenever used herein, except where the
context clearly indicates to the contrary, nouns in the singular shall include
the plural, and the masculine pronoun shall include the feminine gender.
<PAGE>   14

      9.4. Headings. Headings of the Sections hereof are inserted for
convenience and reference and constitute no part of this Plan.

      9.5. Effective Date; Ratification by Stockholders. This Plan shall become
effective upon its adoption by the Board but is subject to the ratification and
approval by the affirmative vote of the holders of a majority of the Company's
outstanding shares of voting capital stock within [twelve (12)] months following
such adoption. If this Plan is not so approved by the stockholders this Plan
shall become null and void and of no force or effect. Any Options granted
pursuant to this Plan may not be exercised until this Plan shall have been
ratified and approved by the stockholders pursuant to this Section 9.5.

      9.6. Rights as Stockholder. An Optionee shall have no rights as a
stockholder with respect to any Shares subject to such Option prior to the
purchase of such Shares by exercise of such Option as provided herein.

      9.7. Applicable Law. This Plan and the Options granted hereunder shall be
interpreted, administered and otherwise subject to the laws of the State of New
York (disregarding choice-of-law provisions), except to the extent that the
General Corporation Law of the State of Nevada shall govern.

      9.7. Application of Funds. The proceeds received by the Company from the
sale of Shares pursuant to the exercise of an Option will be used for general
corporate purposes.

      9.8. Information to Optionees. The Company shall provide each Optionee on
an annual or other periodic basis financial and other information regarding the
Company. The Company may provide this information to each Optionee in any
manner reasonably calculated to insure receipt of the information by each
Optionee.

                                          FIBERNET TELECOM GROUP, INC.
                                          (formerly Desert Native Designs, Inc.)


                                          By: /s/ Judy St. Clair
                                              ----------------------------------
                                              Judy St. Clair
                                              November 24, 1997