##### Table of Contents



EXHIBIT 4.8

CONFIDENTIAL TREATMENT REQUESTED

Asterisks [ * ] denote omissions.













EXHIBIT 4.8



Supplemental and Amending Agreement





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TABLE OF CONTENTS



|                                              |                                                                  |  |  |  |  |  |  | 
|--------------------------------------------- | ---------------------------------------------------------------- |  |  |  |  |  |  | 
|1.  INTERPRETATION                           
|                                              | 1.1  Definitions                                                
|                                              | 1.2  Construction                                               
|                                              | 1.3  Amendment                                                  
|                                              | 1.4  Schedules                                                  
|                                              | 1.5  Priority of Agreements                                     
|2.  AMENDMENTS AND TRANSACTIONS              
|                                              | 2.1 US Non-FOTS Agreement                                       
|                                              | 2.2  MFN Collocation Agreement                                  
|                                              | 2.3  MFN IRU Agreement                                          
|                                              | 2.4  Canadian Non-FOTS Agreement                                
|                                              | 2.5  360 Sale Agreement and 360 IRU Agreement                   
|                                              | 2.6  Purchase Price Differential                                
|                                              | 2.7 Obligations of Parties                                      
|                                              | 2.8  Mutual Releases                                            
|                                              | 2.9  Call-Net Review                                            
|3.  ESCROW MATTERS                           
|                                              | 3.1  Escrow Agent Directions                                    
|                                              | 3.2  Outstanding Escrow Items                                   
|                                              | 3.3  Reimbursement of Lease Agreement Obligations               
|4.  WARRANTIES, REPRESENTATIONS AND COVENANTS
|                                              | 4.1  Warranties, Representations and Covenants of Call-Net Group
|                                              | 4.2  Warranties, Representations and Covenants of 360 Group     
|5.  GENERAL                                  
|                                              | 5.1  Time of the Essence                                        
|                                              | 5.2  Further Assurances                                         
|                                              | 5.3  Entire Agreement                                           
|                                              | 5.4  Reliance & Non-Waiver                                      
|                                              | 5.5  Governing Law                                              
|                                              | 5.6  Resolution of Disputes                                     
|                                              | 5.7  Assignments                                                
|                                              | 5.8  Counterparts and Facsimile                                 
|                                              | 5.9  Severability                                               
|                                              | 5.10  Good Faith                                                
|                                              | 5.11  Agreement Binding                                         
|                                              | 5.12  No Other Provisions Affected                              
|Articles of Arrangement                      
|General By-law No. 1                         
|Amended and Restated Agreement               
|Supplemental and Amending Agreement          
|Global Settlement Agreement                  
|Subsidiaries of Call-Net Enterprises Inc.    
|Glossary                                     
|Audited Consolidated Financial Statements    
|Section 906 Certification                    



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##### Table of Contents



SUPPLEMENTAL AND AMENDING AGREEMENT

among

360NETWORKS INC.

and

360NETWORKS (CDN FIBER) LTD.

and

360NETWORKS (USA) INC.

and

CALL-NET ENTERPRISES INC.

and

SPRINT CANADA INC.

and

CALL-NET TECHNOLOGY SERVICES INC.

and

CNCS INC.

June 27, 2001





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##### Table of Contents



SUPPLEMENTAL AND AMENDING AGREEMENT

Table of Contents

|   |  |  |      |  |  |                                                             |  |  |    |  |  | 
|-- |  |  | ---- |  |  | ----------------------------------------------------------- |  |  | -- |  |  | 
|1. |  |  |      |  |  | INTERPRETATION                                              |  |  | 3  | 
|   |  |  | 1.1  |  |  | Definitions                                                 |  |  | 3  | 
|   |  |  | 1.2  |  |  | Construction                                                |  |  | 6  | 
|   |  |  | 1.3  |  |  | Amendment                                                   |  |  | 7  | 
|   |  |  | 1.4  |  |  | Schedules                                                   |  |  | 7  | 
|   |  |  | 1.5  |  |  | Priority of Agreements                                      |  |  | 7  | 
|2. |  |  |      |  |  | AMENDMENTS AND TRANSACTIONS                                 |  |  | 7  | 
|   |  |  | 2.1  |  |  | US Non-FOTS Agreement                                       |  |  | 7  | 
|   |  |  | 2.2  |  |  | [ * ] Collocation Agreement                                 |  |  | 8  | 
|   |  |  | 2.3  |  |  | [ * ] IRU Agreement                                         |  |  | 8  | 
|   |  |  | 2.4  |  |  | Canadian Non-FOTS Agreement                                 |  |  | 8  | 
|   |  |  | 2.5  |  |  | 360 Sale Agreement and 360 IRU Agreement                    |  |  | 8  | 
|   |  |  | 2.6  |  |  | Purchase Price Differential                                 |  |  | 8  | 
|   |  |  | 2.7  |  |  | Obligations of Parties                                      |  |  | 8  | 
|   |  |  | 2.8  |  |  | Mutual Releases                                             |  |  | 9  | 
|   |  |  | 2.9  |  |  | Call-Net Review                                             |  |  | 9  | 
|3. |  |  |      |  |  | ESCROW MATTERS                                              |  |  | 9  | 
|   |  |  | 3.1  |  |  | Escrow Agent Directions                                     |  |  | 9  | 
|   |  |  | 3.2  |  |  | Outstanding Escrow Items                                    |  |  | 10 | 
|4. |  |  |      |  |  | WARRANTIES, REPRESENTATIONS AND COVENANTS                   |  |  | 10 | 
|   |  |  | 4.1  |  |  | Warranties, Representations and Covenants of Call-Net Group |  |  | 11 | 
|   |  |  | 4.2  |  |  | Warranties, Representations and Covenants of 360 Group      |  |  | 12 | 
|5. |  |  |      |  |  | GENERAL                                                     |  |  | 13 | 
|   |  |  | 5.1  |  |  | Time of the Essence                                         |  |  | 13 | 
|   |  |  | 5.2  |  |  | Further Assurances                                          |  |  | 13 | 
|   |  |  | 5.3  |  |  | Entire Agreement                                            |  |  | 13 | 
|   |  |  | 5.4  |  |  | Reliance & Non-Waiver                                       |  |  | 13 | 
|   |  |  | 5.5  |  |  | Governing Law                                               |  |  | 13 | 
|   |  |  | 5.6  |  |  | Resolution of Disputes                                      |  |  | 14 | 
|   |  |  | 5.7  |  |  | Assignments                                                 |  |  | 14 | 
|   |  |  | 5.8  |  |  | Counterparts and Facsimile                                  |  |  | 14 | 
|   |  |  | 5.9  |  |  | Severability                                                |  |  | 14 | 
|   |  |  | 5.10 |  |  | Good Faith                                                  |  |  | 14 | 
|   |  |  | 5.11 |  |  | Agreement Binding                                           |  |  | 14 | 
|   |  |  | 5.12 |  |  | No Other Provisions Affected                                |  |  | 14 | 





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##### Table of Contents



SUPPLEMENTAL AND AMENDING AGREEMENT

THIS SUPPLEMENTAL AND AMENDING AGREEMENTdated as of June 27, 2001

A M O N G:



| | 360NETWORKS INC., a corporation continued under
the laws of the Province of Nova Scotia,
| | ----------------------------------------------------------------------------------------



| | 
| | 



| | (hereinafter referred to as
360)
| | ----------------------------------



| | 
| | 



| | - and -
| | -------



| | 
| | 



| | 360NETWORKS (CDN FIBER) LTD.,a corporation
amalgamated under the laws of the Province of Alberta
(the resulting corporation from the amalgamation
between 360networks (Cdn.) ltd. (formerly
360networks (CN) ltd.), 360networks (fiber
1) ltd., 360networks (fiber 2) ltd. and
360networks (fiber 3) ltd.), (hereinafter
referred to as 360 Cdn),
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 
| | 



| | - and -
| | -------



| | 
| | 



| | 360NETWORKS (USA) INC., a corporation merged
under the laws of the State of Nevada (the
resulting corporation from the merger between
360networks (USA) inc., 360networks services inc.
and 360 fiber (USA 1) inc.)
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 
| | 



| | (hereinafter referred to as 360 USA)
| | --------------------------------------



| | 
| | 



| | - and -
| | -------



| | 
| | 



| | CALL-NET ENTERPRISES INC., a corporation
amalgamated under the federal laws of Canada,
| | --------------------------------------------------------------------------------------



| | 
| | 



| | (hereinafter referred to as Call-Net)
| | ---------------------------------------



| | 
| | 



| | - and -
| | -------



| | 
| | 



| | SPRINT CANADA INC., a corporation amalgamated
under the federal laws of Canada,
| | -------------------------------------------------------------------------------



| | 
| | 



| | (hereinafter referred to as Sprint Canada)
| | --------------------------------------------



| | 
| | 



| | - and -
| | -------





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##### Table of Contents





| | 
| | 



| | CALL-NET TECHNOLOGY SERVICES INC., a
corporation amalgamated under the federal
laws of Canada,
| | ----------------------------------------------------------------------------------------------



| | (hereinafter referred to as CNTS)
| | -----------------------------------



| | 
| | 



| | - and -
| | -------



| | 
| | 



| | CNCS INC., a corporation incorporated
under the laws of the State of Delaware
(as successor in interest to CNE FIBER
DEVELOPMENT INC.),
| | ---------------------------------------------------------------------------------------------------------------------------------------



| | 
| | 



| | (hereinafter referred to as CNCS)
| | -----------------------------------

WHEREAS:

A.   Call-Net and 360 negotiated and completed on August 25, 2000 a transaction
involving the purchase and sale of certain fibre optic assets and such
transaction consisted of, inter alia, (i) the sale of and/or the assignment of
indefeasible rights of use and/or the granting of sub-indefeasible rights of
use relating to certain fibre optic assets from Call-Net and its Affiliates to
360 and its Affiliates, (ii) the sale of and/or the assignment of indefeasible
rights of use and/or the granting of sub-indefeasible rights of use relating to
certain fibre optic assets from 360 and its Affiliates to Call-Net and its
Affiliates, and (iii) certain related transactions and such transaction was
evidenced by the Transaction Documents;

B.   Pursuant to the Canadian Non-FOTS Agreement, Sprint Canada agreed to sell,
grant and deliver and 360networks (CN) ltd. (now 360 Cdn) agreed to purchase
and accept, upon and subject to the terms of the Canadian Non-FOTS Agreement,
inter alia, the Purchaser Assets (as defined in the Canadian Non-FOTS
Agreement) relating to Routes 6, 15 and 17.

C.   Pursuant to the 360 Sale Agreement, 360networks (CN) ltd. (now 360 Cdn)
agreed to sell , grant and deliver and CNTS agreed to purchase and accept, upon
and subject to the terms of the 360 Sale Agreement, inter alia, the Purchaser
Assets (as defined in the 360 Sale Agreement) relating to Route 360-3.

D.   Pursuant to the 360 IRU Agreement, 360networks (USA) inc. (now 360 USA)
agreed to sell, grant and deliver and CNE Fiber (predecessor in interest to
CNCS) agreed to receive, upon and subject to the terms of the 360 IRU
Agreement, inter alia, the IRU (as defined in the 360 IRU Agreement) in the
Purchaser Fiber Assets (as defined in the 360 IRU Agreement) relating to Route
360-3.

E.   Pursuant to the US FOTS Escrow Agreement, 360fiber (USA 1) inc. (now 360
USA) deposited with the Escrow Agent [ * ] of the purchase price payable
to the applicable members of the Call-Net Group under the US FOTS Agreement to
be dealt with in accordance with the terms of the US FOTS Escrow Agreement.

F.   Pursuant to the General Escrow Agreement, the applicable members of the 360
Group, as purchasers under the applicable Fibre Sale Agreements (as defined in
the General Escrow Agreement) deposited with the Escrow Agent from time to time
portions of the purchase price payable to the applicable members of the
Call-Net Group under such Fibre Sale Agreements (as defined in the General
Escrow Agreement) to be dealt with in accordance with the terms of the General
Escrow Agreement.

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NOW THEREFORE IN CONSIDERATIONof the premises and mutual covenants and
agreements set forth in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties covenant and agree as follows:




1.   INTERPRETATION




1.1   Definitions

Unless otherwise defined or provided for herein, capitalized terms used in this
Agreement shall have the respective meanings attributed to such terms in the
Canadian Non-FOTS Agreement. In this Agreement, the following terms shall have
the following meanings:

Agreement means this Agreement, including the recitals and the Schedules to
this Agreement, as it may from time to time be supplemented or amended.

Call-Net Group means collectively Call-Net, Sprint Canada, CNTS and CNCS, or
any one or more of them as the context requires.

Canadian Non-FOTS Agreement means the Fibre Sale Agreement (Canadian
Non-FOTS) dated August 25, 2000, among 360, 360networks (CN) ltd. (now 360
Cdn), Call-Net and Sprint Canada.

Canadian Non-FOTS Notice of Claim means the Notice of Claim dated November
22, 2000 by 360 Cdn to the Escrow Agent and Sprint Canada.

Closing means the completion of the transactions contemplated herein.

Closing Date means June 27, 2001, or such earlier or later date as may be
mutually agreed upon by the parties hereto.

CNE Fiber means CNE Fiber Development Inc., the predecessor in interest to
CNCS.

Escrow Agent means The Trust Company of Bank of Montreal.

General Escrow Agreement means the Escrow Agreement dated August 25, 2000,
among 360, Call-Net, CNTS, Sprint Canada, 360fiber (USA 1) inc. (now 360 USA),
360networks (CN) ltd. (now 360 Cdn), CNE Fiber Development Inc. (predecessor in
interest to CNCS), 360networks (USA) inc. (now 360 USA) and Escrow Agent.

Landlord means [ * ] , including its
successors and assigns.

Lease Agreement means the Lease dated as of November 1, 2000 between the
Landlord and 360networks (USA) inc. (now 360 USA).

Lease Commencement Date means December 1, 2000.

Lease Year means each twelve (12) month period commencing on December 1 and
ending on November 30 of the following year.

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##### Table of Contents



[ * ] Collocation Agreement means the Collocation Licence Agreement dated as of
August 25, 2000 between CNE Fiber (predecessor in interest to CNCS), CNTS and
360 fiber (USA 1) inc. (now 360 USA).

[ * ] IRU Agreement means the Fibre Asset Transfer and IRU Agreement
( [ * ] ) dated as of August 25, 2000 between 360fiber (USA 1) inc. (now 360
USA), CNE Fiber (predecessor in interest to CNCS) and CNTS.

Non-FOTS Purchase Price means the sum of [ * ] on account of
the purchase and sale of Routes 6, 15 and 17 under the Canadian Non-FOTS
Agreement.

Person means a natural person, corporation, firm, limited or unlimited
liability company, partnership or other form of legal entity.

Purchase Price Differential means the sum of [ * ] being the
difference between the Route 360-3 Purchase Price and the Non-FOTS Purchase
Price.

Reimbursement Amount has the meaning ascribed to such term in Section 3.3
hereof.

Routes 6, 15 and 17 means the Purchaser Assets (as defined in the Canadian
Non-FOTS Agreement) relating to the Segments (Completed) To Be Transferred (as
defined in the Canadian Non-FOTS Agreement) to be sold, granted and delivered
pursuant to the Canadian Non-FOTS Agreement.

Route 360-3 means the Purchaser Assets (as defined in the 360 Sale Agreement)
and the Purchaser Fibre Assets (as defined in the 360 IRU Agreement) relating
to Segment No. (number) (as defined in the 360 Sale Agreement and the 360 IRU
Agreement) 360-3 (Detroit to London to Toronto) to be sold, granted and
delivered pursuant to the 360 Sale Agreement and the 360 Fibre Agreement.

Route 360-3 Purchase Price means the sum of [ * ] on account
of the purchase and sale of Route 360-3 under the 360 Sale Agreement and the
360 IRU Agreement.

Segment Transfer Documents has the corresponding meaning provided in each of
the Transaction Documents, as applicable.

Transaction Documents means



| | (a) |  | this Agreement;                                                                                                                                                                     
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | all Segment Transfer Documents;                                                                                                                                                     
|
| | (c) |  | all other agreements executed or to be executed and delivered
pursuant to the terms of this Agreement;                                                                              
|
| | (d) |  | the Fibre Sale Agreement (Canadian Fibre) dated as of August
25, 2000 among 360, 360networks (CN) ltd. (now 360 Cdn), Call-Net
and CNTS;                                            
|
| | (e) |  | the Fibre IRU Agreement (United States Fibre) dated as of
August 25, 2000 among 360, 360networks (USA) inc. (now 360 USA),
Call-Net and CNE Fiber (predecessor in interest to CNCS);

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##### Table of Contents





| | (f) |  | the Fibre Sale Agreement (Canadian Non-FOTS) dated as of
August 25, 2000 among 360, 360networks (CN) ltd. (now 360Cdn),
Call-Net and Sprint Canada;                                                                                                     
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (g) |  | the Fibre Sale Agreement (U.S. Non-FOTS) dated as of August
25, 2000 among 360, 360fiber (USA 1) inc. (now 360 USA), Call-Net
and CNE Fiber (predecessor in interest to CNCS);                                                                          
|
| | (h) |  | the Fibre Sale Agreement (U.S. FOTS) dated as of August 25,
2000 among 360, 360fiber (USA 1) inc. (now 360 USA), Call-Net and
CNE Fiber (predecessor in interest to CNCS);                                                                              
|
| | (i) |  | the Fibre Swap Agreement dated as of August 25, 2000 among
360, 360networks (CN) ltd. (now 360 Cdn), 360networks (USA) inc.
(now 360 USA), Call-Net and Sprint Canada;                                                                                  
|
| | (j) |  | the Fibre Exchange Agreement (Canadian Non-FOTS) dated as of
August 25, 2000 among 360, 360networks (CN) ltd. (now 360 Cdn),
Call-Net and Sprint Canada;                                                                                                
|
| | (k) |  | the Fibre IRU Agreement dated as of August 25, 2000 among
360, 360networks (USA) inc. (now 360 USA), Call-Net and Sprint
Canada;                                                                                                                        
|
| | (l) |  | the Escrow Agreement dated as of August 25, 2000 among 360,
Call-Net, CNTS, Vendor, 360fiber (USA 1) inc. (now 360 USA), CNE
Fiber (predecessor in interest to CNCS), 360networks (USA) inc. (now
360 USA) and the Escrow Agent;                        
|
| | (m) |  | the Escrow Agreement (US FOTS) dated as of August 25, 2000
among 360, Call-Net, 360fiber (USA 1) inc. (now 360 USA), CNE Fiber
(predecessor in interest to CNCS) and the Escrow Agent;                                                                  
|
| | (n) |  | the Fibre Swap Agreement dated as of August 25, 2000 among
360, 360networks (USA) inc. (now 360 USA), 360networks (CN) ltd.
(now 360 Cdn), 360fiber (USA 1) inc. (now 360 USA), Call-Net, Sprint
Canada and CNE Fiber (predecessor in interest to CNCS);
|
| | (o) |  | the Fibre Exchange Agreement (Canadian FOTS) dated as of
August 25, 2000 among 360, 360networks (CN) ltd. (now 360 Cdn),
Call-Net and Sprint Canada;                                                                                                    
|
| | (p) |  | the Fibre Exchange Agreement (United States FOTS) dated as of
August 25, 2000 among 360, 360fibre (USA 1) inc. (now 360 USA) and
CNE Fiber (predecessor in interest to CNCS);                                                                           
|
| | (q) |  | the Fibre IRU Agreement dated as of August 25, 2000 among
360, 360networks (USA) inc. (now 360 USA), Call-Net and Sprint
Canada; and                                                                                                                    
|
| | (r) |  | all other agreements executed or to be executed and delivered
pursuant to the terms of such agreements.                                                                                                                                                 

US FOTS Agreement means the Fibre Sale Agreement (US FOTS) dated August 25,
2000, among 360, 360fiber (USA 1) inc. (now 360 USA), Call-Net and CNE Fiber
(predecessor in interest to CNCS).

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##### Table of Contents



US FOTS Escrow Agreement means the Escrow Agreement (US FOTS) dated August
25, 2000, among 360, Call-Net, 360 fiber (USA 1) inc. (now 360 USA), CNE Fiber
(predecessor in interest to CNCS) and Escrow Agent;

US Non-FOTS Agreement means the Fibre Sale Agreement (United States Non-FOTS)
dated as of August 25, 2000 between 360, 360networks (USA) inc. (now 360 USA),
Call-Net and CNE Fiber (predecessor in interest to CNCS).

US Non-FOTS Notice of Claim means the Notice of Claim dated November 22, 2000
by 360fiber (USA 1) inc. (now 360 USA) to the Escrow Agent and CNE Fiber
(predecessor in interest to CNCS).

360 Group means collectively, 360, 360 Cdn and 360 USA or any one or more of
them, as the context requires.

360 IRU Agreement means the Fibre IRU Agreement dated August 25, 2000, among
360, 360networks (USA) inc. (now 360 USA), Call-Net and CNE Fiber (predecessor
in interest to CNCS) (Route 360-1  Albany to Boston; Route 360-2  Seattle to
Vancouver; Route 360-3  Detroit to London to Toronto);

360 Sale Agreement means the Canadian Fibre Sale Agreement (including
agreement for purchase of products and services) dated August 25, 2000, among
360, Call-Net, 360networks (CN) ltd. (now 360 Cdn) and CNTS (Route 360-1 -
Albany to Boston; Route 360-2  Seattle to Vancouver; Route 360-3  Detroit to
London to Toronto);




1.2   Construction

In this Agreement, except as otherwise expressly provided or as the context
otherwise requires:



|(a) |  | all references to a designated Article, Section, Subsection or
other subdivision or to a Schedule are to the designated article,
section, subsection or other subdivision of, or schedule to, this
Agreement;                                                                                                                                                                                              
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | the words herein, hereof and hereunder and other words of similar
import refer to this Agreement as a whole and not to any particular
Article, Section, Subsection or other subdivision or Schedule;                                                                                                                                                                                                         
|   
|(c) |  | the headings and captions are for convenience only and do not form a part
of this Agreement and are not intended to interpret, define, or limit the
scope, extent or intent of this Agreement or any provision hereof;                                                                                                                                                                                             
|   
|(d) |  | the singular of any term includes the plural, and vice versa, the use of
any term is equally applicable to any gender and, where applicable, any
Person that is not a human being; the word or is not exclusive and the
word including is not limiting (whether or not non-limiting language,
such as without limitation or but not limited to or words of similar
import, is used with reference thereto);
|   
|(e) |  | any accounting term not otherwise defined has the meaning assigned to it
by GAAP and all accounting matters will be determined in accordance with
GAAP, applied on a consistent basis;                                                                                                                                                                                                                             

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|(f) |  | any reference to a statute includes and is a reference to that statute
and to the regulations made pursuant thereto, with all amendments made
thereto and in force from time to time, and to any statute or regulation
that may be passed which has the effect of supplementing or superseding
that statute or regulation;
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(g) |  | unless indicated otherwise, all references to currency mean Canadian
currency and all sums of money are expressed in Canadian currency;                                                                                                                                                                                   
|   
|(h) |  | any other term defined within the text of this Agreement has the meaning
so ascribed;                                                                                                                                                                                                                                     
|   
|(i) |  | a reference to a time or date is to the local time or date at Toronto,
Ontario;                                                                                                                                                                                                                                           
|   
|(j) |  | a reference to an approval, authorization, consent, designation, waiver
or notice means written approval, authorization, consent, designation,
waiver or notice; and                                                                                                                                                      
|   
|(k) |  | a capitalized cognate of a defined term has a meaning corresponding to
that of the defined term.                                                                                                                                                                                                                          




1.3   Amendment

No amendment, waiver, termination or variation of the terms, conditions,
warranties, covenants, agreements and undertakings set out herein will be of
any force or effect unless the same is reduced to writing duly executed by all
parties hereto in the same manner and with the same formality as this Agreement
is executed, except that, as between any two parties solely, such may be
binding on such parties if executed by them, and a waiver in writing executed
by one party shall be binding on such party.




1.4   Schedules

The following Schedules to this Agreement are an integral part of this
Agreement:

|                |  |                                                                                                                                                                                                                                  
|--------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Schedule        |  | Description                                                                                                                                                                                                                      
|                |  |                                                                                                                                                                                                                                  
|A
B
C
D |  | Revised Schedule B and Exhibit B-1 to the US Non-FOTS Agreement
Revised Schedule 1 to the [ * ] Collocation Agreement
Revised Schedule A to the [ * ] IRU Agreement
List of Claimed Deficiencies and Proposed Resolutions




1.5   Priority of Agreements

In the event of any inconsistency or other conflict between the terms of the
main body of this Agreement and the terms of any Schedule, the terms of the
main body of this Agreement shall prevail and have priority over the terms of
such Schedule.




2.     AMENDMENTS AND TRANSACTIONS




2.1   US Non-FOTS Agreement

Schedule B and Exhibit B-1 to the US Non-FOTS Agreement are hereby deleted
in their entirety and are replaced with Schedule Aattached hereto.

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##### Table of Contents






2.2   [ * ] Collocation Agreement

Schedule 1 to the [ * ] Collocation Agreement is hereby deleted in its entirety
and is replaced with Schedule Battached hereto.




2.3   [ * ] IRU Agreement

Schedule A to the [ * ] IRU Agreement is hereby deleted in its entirety and is
replaced with Schedule Cattached hereto.




2.4   Canadian Non-FOTS Agreement

The 360 Group hereby acknowledges and agrees that the applicable members of the
Call-Net Group are no longer obligated to sell, grant and deliver Routes 6, 15
and 17 pursuant to the provisions of the Canadian Non-FOTS Agreement and that
all of the obligations, liabilities and responsibilities of such applicable
members of the Call-Net Group pursuant to, arising under or in connection with
the sale, grant and delivery of Routes 6, 15 and 17 pursuant to the Canadian
Non-FOTS Agreement are hereby terminated. The Call-Net Group hereby
acknowledges and agrees that the applicable members of the 360 Group shall no
longer be required to purchase and accept Routes 6, 15 and 17 pursuant to the
provisions of the Canadian Non-FOTS Agreement or to pay the Non-FOTS Purchase
Price and that all of the obligations, liabilities and responsibilities of the
applicable members of the 360 Group pursuant to, arising under or in connection
with the purchase and acceptance of Routes 6, 15 and 17 pursuant to the
Canadian Non-FOTS Agreement, including, the obligation to pay such Non-FOTS
Purchase Price, are hereby terminated.




2.5   360 Sale Agreement and 360 IRU Agreement

The Call-Net Group hereby acknowledges and agrees that the applicable members
of the 360 Group are no longer obligated to sell, grant or deliver Route 360-3
pursuant to the provisions of the 360 Sale Agreement and the 360 IRU Agreement,
respectively, and that all of the obligations, liabilities and responsibilities
of the applicable members of the 360 Group pursuant to, arising under or in
connection with the sale, grant and delivery of Route 360-3 pursuant to the
provisions of the 360 Sale Agreement and the 360 IRU Agreement are hereby
terminated. The 360 Group hereby acknowledges and agrees that the applicable
members of the Call-Net Group shall no longer be required to purchase and
accept Route 360-3 pursuant to the provisions of the 360 Sale Agreement and the
360 IRU Agreement or to pay the Route 360-3 Purchase Price and that all of the
obligations, liabilities and responsibilities of the applicable members of the
Call-Net Group pursuant to, arising under or in connection with the purchase
and acceptance of Route 360-3 pursuant to the 360 Sale Agreement and the 360
IRU Agreement, including, the obligation to pay such Route 360-3 Purchase Price
are hereby terminated.




2.6   Purchase Price Differential

On the Closing Date, the applicable members of the Call-Net Group shall pay to
the applicable members of the 360 Group the Purchase Price Differential.




2.7   Obligations of Parties

In the event that any member of the Call-Net Group or any member of the 360
Group executed and delivered any Segment Transfer Documents (as such term is
defined in the Canadian Non-FOTS Agreement, the 360 Sale Agreement and the 360
IRU Agreement, as the case may be) or any other agreements, documents or
instruments in favour of any third parties which create any obligations and/or

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liabilities on any such members of the Call-Net Group or such members of the
360 Group in respect of Route 360-3 or Routes 6, 15 and 17, respectively, then
on the Closing Date the parties shall deliver mutually acceptable releases duly
executed by such third parties in favour of such members of the Call-
Net Group or such members of the 360 Group, as applicable, therein fully
releasing and discharging such parties from any such obligations and/or
liabilities.




2.8   Mutual Releases

Save and except for the obligations imposed by the provisions of this
Agreement, including, without limitation, the obligations set out in Section
2.7hereof, the parties hereto hereby irrevocably release and forever discharge
each other of and from any and all obligations arising under, pursuant to or in
connection with the grant, sale and delivery of Routes 6, 15 and 17 and the
grant, sale and delivery of Route 360-3, as applicable, pursuant to the
provisions of the Canadian Non-FOTS Agreement and the provisions of the 360
Sale Agreement and 360 IRU Agreement, respectively.




2.9   Call-Net Review

[ * ]




3.   ESCROW MATTERS




3.1   Escrow Agent Directions

On the Closing Date, the applicable members of the 360 Group and to the
applicable members of the Call-Net Group shall execute and deliver the
following directions to the Escrow Agent in respect of the amounts set out


below (each such direction to be in form and substance in accordance with the
applicable provisions of the General Escrow Agreement and the US FOTS Escrow
Agreement):



|(a) |  | a direction to the Escrow Agent directing the Escrow Agent to release to
the applicable members of the Call-Net Group the sum of [ * ] , together with interest thereon, from
the Escrow Fund (United States Non-FOTS) (as defined in the General Escrow
Agreement) representing funds being released from escrow in respect of
item numbers 1, 3, 4, 5 and 6 set out in the US Non-FOTS Notice of Claim;
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | a direction to the Escrow Agent directing the Escrow Agent to release to
the applicable members of the Call-Net Group the sum of [ * ] , together
with interest thereon, from the Escrow Fund (Canadian Non-FOTS) (as
defined in the General Escrow Agreement) representing funds being released
from escrow in respect of item number 3 set out in the Canadian Non-FOTS
Notice of Claim;               

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|(c) |  | a direction to the Escrow Agent directing the Escrow Agent to release to
the applicable members of the Call-Net Group the sum of [ * ] , together
with interest thereon, from the Escrow Fund (as defined in the US FOTS
Escrow Agreement) representing funds being released from escrow pursuant
to the provisions of the US FOTS Escrow Agreement; and
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




3.2   Outstanding Escrow Items

The parties hereby acknowledge and agree that the sole claimed deficiencies by
the 360 Group including, without limitation, any deficiencies claimed pursuant
to the Canadian Non-FOTS Notice of Claim and the US Non-FOTS Notice of Claim,
which relate to the remaining funds being held by the Escrow Agent pursuant to
the General Escrow Agreement and the US FOTS Escrow Agreement after the release
of the funds contemplated by Section 3.1hereof, are set out on Schedule D
attached hereto. Nothing contained in this Agreement shall be interpreted, or
deemed to interpreted, as the Call-Net Group having agreed that the amounts set
out on Schedule Dare correct and/or being validly claimed by the applicable
members of the 360 Group and the Call-Net Group does not waive any rights it
may have to challenge the validity to such amounts all in accordance with the
provisions of the General Escrow Agreement or the US FOTS Escrow Agreement.
Schedule Dattached hereto also sets out the proposed resolutions to rectify
such claimed deficiencies. The parties acknowledge and agree that upon the
applicable members of the Call-Net Group resolving, to the mutual satisfaction
of the parties, any of the claimed deficiencies set out on Schedule D
attached hereto, the applicable members of the 360 Group shall forthwith
execute and deliver the necessary and appropriate directions to the Escrow
Agent directing the Escrow Agent to release the applicable remaining funds
being held by the Escrow Agent pursuant to the General Escrow Agreement and the
US FOTS Escrow Agreement to the applicable members of the Call-Net Group. It is
the intention of the parties that such claimed deficiencies and the directions
to the Escrow Agent referred to in this Section 3.2are to be completed on or
before July 11, 2001. However, for greater certainty, in the event that the
Call-Net Group is unable to resolve such deficiencies prior to July 11, 2001,
the parties acknowledge and agree that a commercially reasonable time, as such
phrase is used in the General Escrow Agreement and the US FOTS Escrow
Agreement, has not lapsed or expired and the Call-Net Group will continue to
use commercially reasonable efforts to resolve the deficiencies as soon as
possible after July 11, 2001.




3.3   Reimbursement of Lease Agreement Obligations



|(a) |  | In consideration for the release of funds from the Escrow Fund (United
States Non-FOTS) (as defined in the General Escrow Agreement) in respect
of item number 4 set out in the US Non-FOTS Notice of Claim, CNCS hereby
agrees to reimburse 360 USA the maximum sum of [ * ] per annum
after the end of each Lease Year for a maximum of [ * ] Lease Years
commencing on the Lease Year running from the Lease Commencement Date to
November 30, 2001 on account of rent and/or other costs paid by 360 USA to
the Landlord pursuant to the provisions of the Lease Agreement (the
Reimbursement Amount). The Reimbursement Amount shall be subject to a
[ * ] increase after the end of each Lease Year, such increase to commence
after the Lease Year ending on November 30, 2001 on account of the Lease
Year commencing on December 1, 2001 and ending on November 30, 2002. In
the event that 360 USA pays an aggregate amount to the Landlord under the
Lease Agreement which is less than the Reimbursement Amount in any Lease
Year, then the Reimbursement Amount shall be reduced and shall not exceed
such lesser amount so paid by 360 USA under the Lease Agreement in such
Lease Year. Under no circumstances will the Reimbursement Amount exceed
[ * ] per annum plus the applicable [ * ] increase contemplated in
this Section 3.3(a).
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Prior to 360 USA being entitled to the Reimbursement Amount, 360 USA
shall deliver to CNCS satisfactory evidence that the amount or amounts
equal to the Reimbursement Amount has or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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|    |  | have been paid to the Landlord by
360 USA under the Lease Agreement and upon being provided such
satisfactory evidence, CNCS shall, within forty-five (45) days from the
date of receiving such satisfactory evidence, pay the Reimbursement Amount
to 360 USA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(c) |  | In the event that the Lease Agreement in in any way terminated by either
360 USA or the Landlord, or both, as the case may be, for any reason, or
is terminated by operation of law or for any other reason, or if 360 USA
is no longer bound to make payments pursuant to the Lease Agreement for
any reason, or if the Lease Agreement is assigned or transferred by 360
USA to any person in any manner, or if the Lease Agreement in any way is
modified, amended or supplemented, then the obligation of CNCS to pay the
Reimbursement Amount to 360 USA as provided by Section 3.3(a)shall
automatically and immediately terminate. 360 USA hereby covenants with
CNCS to provide CNCS with notice in respect of the Lease Agreement or in
respect of 360 USA ceasing to be bound to make payments pursuant to the
Lease Agreement.
|   
|(d) |  | Nothing contained herein shall be deemed an assignment to, or an
assumption by, CNCS of the Lease Agreement or any obligations, liabilities
or responsibilities arising under, pursuant to or in connection with the
Lease Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    




4.   WARRANTIES, REPRESENTATIONS AND COVENANTS




4.1   Warranties, Representations and Covenants of Call-Net Group

Each member of the Call-Net Group warrants and represents to, and covenants
with each member of the 360 Group that:



|(a) |  | Status. Each member of the Call-Net Group is a corporation incorporated,
existing and in good corporate standing under the laws of the jurisdiction
of its incorporation, amalgamation or continuance with respect to all
filings required under such laws.               
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Authority. Each member of the Call-Net Group has all necessary corporate
capacity, power, and authority to carry on its business, and has the
necessary corporate capacity, power and authority to enter into this
Agreement and to carry out the terms of this Agreement.
|   
|(c) |  | Compliance with Constating Documents, Agreements and Laws. The making of
this Agreement, the completion of the transactions contemplated by this
Agreement and the performance of and compliance with the terms of this
Agreement, does not and will not:                 



| | (i)  |  | conflict with or result in a breach of or violate any of the
terms, conditions or provisions of the constating documents of any
member of the Call-Net Group; or                                                                                                                                                                                                                                                                                                                                                                                          
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | conflict with or result in a breach of or violate any of the
terms, conditions or provisions of any law, judgment, order,
injunction, decree, regulation or ruling of any governmental
authority, or constitute or result in a material default under any
agreement, contract or commitment to which any member of the
Call-Net Group is a party or by which their properties or assets are
bound, which would have a material adverse effect upon the ability
of any member of the Call-Net Group to perform any of its
obligations under this Agreement;



|(d) |  | Valid, Binding and Enforceable. This Agreement constitutes a valid and
binding agreement and obligation, enforceable against each member of the
Call-Net Group in accordance with its
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|    |  | terms, subject to bankruptcy,
insolvency, reorganization, arrangement, winding-up, moratorium, and
similar laws of general application affecting the enforcement of
creditors rights generally, and subject to general equitable principles,
including the fact that the availability of equitable remedies, such as
injunctive relief or specific performance, is in the discretion of the
court.                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(e) |  | Parties and Non-Assignment. Other than
the Call-Net Group, there are no other Affiliates of Call-Net which
are party to or that can claim any interest in any of the Transaction
Documents. Each member of the Call-Net Group is and continues to be
bound and subject to the provisions of the Transaction Documents and
no member of the Call-Net Group has assigned or transferred any of its
rights and obligations arising under, pursuant to or in connection
with the Transaction Documents.




4.2   Warranties, Representations and Covenants of 360 Group

Each member of the 360 Group warrants and represents to, and covenants with
each member of the Call-Net Group that:



|(a) |  | Status. Each member of the 360 Group is a corporation incorporated,
existing and in good corporate standing under the laws of the jurisdiction
of its incorporation, amalgamation or continuance with respect to all
filings required under such laws.               
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Authority. Each member of the 360 Group has all necessary corporate
capacity, power, and authority to carry on its business, and has the
necessary corporate capacity, power and authority to enter into this
Agreement and to carry out the terms of this Agreement.
|   
|(c) |  | Compliance with Constating Documents, Agreements and Laws. The making of
this Agreement, the completion of the transactions contemplated by this
Agreement and the performance of and compliance with the terms of this
Agreement, does not and will not:            



| | (i)  |  | conflict with or result in a breach of or violate any of the
terms, conditions or provisions of the constating documents of any
member of the 360 Group; or                                                                                                                                                                                                                                                                                                                                                                                     
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | conflict with or result in a breach of or violate any of the
terms, conditions or provisions of any law, judgment, order,
injunction, decree, regulation or ruling of any governmental
authority, or constitute or result in a material default under any
agreement, contract or commitment to which any member of the 360
Group is a party or by which their properties or assets are bound,
which would have a material adverse effect upon the ability of any
member of the 360 Group to perform any of its obligations under this
Agreement;



|(d) |  | Valid, Binding and Enforceable. This Agreement constitutes a valid and
binding agreement and obligation, enforceable against each member of the
360 Group in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, arrangement, winding-up, moratorium, and similar laws of
general application affecting the enforcement of creditors rights
generally, and subject to general equitable principles, including the fact
that the availability of equitable remedies, such as injunctive relief or
specific performance, is in the discretion of the court.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|(e) |  | Parties and Non-Assignment. Other than the 360 Group, there are no other
Affiliates of 360 which are party to or that can claim any interest in any
of the Transaction Documents. Each member of the 360 Group is and
continues to be bound and subject to the provisions of the Transaction
Documents and no member of the 360 Group has assigned or transferred any
of its rights or obligations arising under, pursuant to or in connection
with the Transaction Documents.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(f) |  | Lease Agreement. 360 USA is a party to and continues to be bound by and
subject to the provisions of the Lease Agreement and 360 USA has not
assigned or transferred any of its rights or obligations arising under,
pursuant to or in connection with the Lease Agreement.                                                                                                                                                                                                   




5.   GENERAL




5.1   Time of the Essence

Time shall be of the essence of this Agreement.




5.2   Further Assurances

Subject to the terms of this Agreement, each party shall execute and deliver
all such further documents and instruments and do all acts and things as the
other party may reasonably require to carry out the full intent and meaning of
this Agreement, including (without limitation) all documents necessary or
useful in connection with the transfer and grant of the Purchaser Assets
contemplated in this Agreement.




5.3   Entire Agreement

This Agreement, together with the other Transaction Documents, the other
agreements or instruments between the parties executed and delivered pursuant
to this Agreement and the other Transaction Documents, and the amended and
restated mutual non-disclosure and confidentiality agreement dated August 25,
2000 between 360 and Call-Net, constitute the entire agreement between the
parties hereto pertaining to the subject matter of this Agreement and the other
Transactions Documents and supersede all prior agreements, understandings,
negotiations and discussions, whether oral or written, express or implied,
statutory or otherwise between the parties.




5.4   Reliance & Non-Waiver

Each signatory to this Agreement acknowledges and agrees that the other
signatories have entered into this Agreement relying on the representations,
warranties, covenants and agreements and other terms and conditions of this
Agreement. No waiver of any condition or other provision, in whole or in part,
shall constitute a waiver of any other condition or provision (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.




5.5   Governing Law

This Agreement shall be governed by and construed in accordance with the laws
of the Province of British Columbia and the federal laws of Canada applicable
in the Province of British Columbia, without regard for the conflict of law
rules of such laws.

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5.6   Resolution of Disputes

In the event any dispute, claim, question or difference arises with respect to
this Agreement or its performance, enforcement, breach, termination or
validity, the parties shall settle such dispute, claim, question or difference
in accordance with provisions of the applicable Transaction Document to which
such dispute, claim, question or difference relates.




5.7   Assignments

This Agreement may only be assigned or transferred by any party hereto in the
event that any such party hereto assigns or transfers its interest in any
Transaction Document to which it is a party provided that such Transaction
Document is assigned or transferred in accordance with the applicable
provisions of such Transaction Document.




5.8   Counterparts and Facsimile



|(a) |  | This Agreement and any amendment, supplement, restatement or termination
of any provision of this Agreement may be executed and delivered in any
number of counterparts, each of which when executed and delivered is an
original but all of which taken together constitute one and the same
instrument.                               
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | This Agreement may be executed by facsimile and the facsimile execution
pages will be binding upon the executing party to the same extent as the
original executed pages. The executing party covenants to provide
originals of the facsimile execution pages for insertion into the original
Agreement in place of the facsimile pages.




5.9   Severability

If any clause or part of a clause in this Agreement shall be illegal, it shall
be considered separate and severable from this Agreement and the remaining
provisions shall remain in full force and effect and shall be binding upon the
parties as though the said clause or part thereof had never been included,
provided that this Agreement as thus modified remains operable.




5.10   Good Faith

Each of Purchaser, 360, Vendor and Call-Net shall have a duty to act in good
faith in the performance and enforcement of this Agreement and the other
Transaction Documents.




5.11   Agreement Binding

This Agreement will enure to the benefit of and be binding upon each of the
parties and their successors and permitted assigns.




5.12   No Other Provisions Affected

Nothing contained in this Agreement shall be deemed to be a waiver of any
covenant or agreement contained in or a waiver of any breach or default under,
any of the Transaction Documents, and each of the parties hereto agree that,
except as modified, amended and supplemented by the provisions of this
Agreement all of the covenants, agreements, obligations, liabilities and other
provisions contained in the

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Transaction Documents are hereby ratified and confirmed in all respects and
shall remain in full force and effect and unamended or modified in any way.







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IN WITNESS WHEREOFthe parties have executed this Agreement effective as of the
date specified on the first page of this Agreement.

360NETWORKS INC.



Per:

---

Signature






---

Signature




360NETWORKS (CDN FIBER) LTD.



Per:

---

Signature






---

Signature




360NETWORKS (USA) INC.



Per:

---

Signature






---

Signature




CALL-NET ENTERPRISES INC.



Per:

---

Signature






---

Signature






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SPRINT CANADA INC.



Per:

---

Signature






---

Signature






CALL-NET TECHNOLOGY SERVICES INC.



Per:

---

Signature






---

Signature






CNCS INC.



Per:

---

Signature






---

Signature






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