<PAGE>
                                                                     EXHIBIT 2.1



                      IN THE UNITED STATES BANKRUPTCY COURT

                          FOR THE DISTRICT OF DELAWARE




---------------------------------------------
                                             )
In re:                                       )     Chapter 11
                                             )
AXISTEL COMMUNICATIONS, INC.,                )     Case No. 01-10005 (RJN)
NOVO NETWORKS GLOBAL SERVICES, INC.,         )
NOVO NETWORKS INTERNATIONAL SERVICES, INC.,  )     Jointly Administered
E.VOLVE TECHNOLOGY GROUP, INC.,              )
NOVO NETWORKS OPERATING CORP.,               )
NOVO NETWORKS METRO SERVICES, INC.           )
                                             )
         Debtors.                            )
                                             )
---------------------------------------------



--------------------------------------------------------------------------------

                   FIRST AMENDED PROPOSED DISCLOSURE STATEMENT
                 PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE
               WITH RESPECT TO THE FIRST AMENDED JOINT CHAPTER 11
                    PLAN BY AXISTEL COMMUNICATIONS, INC., ITS
                   AFFILIATED DEBTORS AND NOVO NETWORKS, INC.

--------------------------------------------------------------------------------



THE BAYARD FIRM                              CONNOLLY BOVE LODGE & HUTZ LLP
222 Delaware Avenue                          1220 Market Street
Wilmington, DE 19801                         Wilmington, DE 19801
(302) 655-5000                               (302) 658-9141

ATTORNEYS FOR THE DEBTORS AND                         -and-
DEBTORS IN POSSESSION
                                             WHITE & CASE LLP
                                             First Union Financial Center
                                             200 South Biscayne Boulevard
                                             Miami, FL 33131-2352
                                             (305) 371-2700

                                             ATTORNEYS FOR NOVO NETWORKS, INC.
Dated:   January 15, 2002

<PAGE>




                                TABLE OF CONTENTS


<Table>
<Caption>
                                                                                              Page
<S>                                                                                           <C>
I. INTRODUCTION ............................................................................    1

II.    NOTICE TO HOLDERS OF CLAIMS AND EQUITY INTERESTS ....................................    2

III.  EXPLANATION OF CHAPTER 11 ............................................................    3

       A.      Overview of Chapter 11 ......................................................    3
       B.      Chapter 11 Plan .............................................................    4

IV.   OVERVIEW OF THE PLAN .................................................................    6

       A.      General .....................................................................    6
       B.      Summary of Classification and Treatment Under the Plan ......................    8
               1.   Classified Claims and Interests Against e.Volve ........................    9
               2.   Classified Claims and Interests Against the
                    AxisTel Debtors (Other Than NNISI) .....................................   10
               3.   Classified Claims and Interests Against NNISI ..........................   12
               4.   Classified Claims and Interests Against NNOC ...........................   13
       C.      Unclassified Claims Against the Debtors .....................................   15
       D.      Distributions to Classes of Creditors Pursuant to the Plan ..................   16

V.    BACKGROUND OF DEBTORS ................................................................   18

       A.      Operations ..................................................................   18
       B.      Competition .................................................................   18
       C.      History of Debtors ..........................................................   19
               1.   Acquisition by NNI .....................................................   19
               2.   Initial Business Plan ..................................................   19
               3.   Events Precipitating Chapter 11 Filings ................................   19
       D.      Recent Financial Performance, Condition of Debtors ..........................   20

VI.   PREPETITION LITIGATION ...............................................................   20

       A.      Wholesale Telecom Corporation v. Novo Networks International Services,
               Inc .........................................................................   20
       B.      Eltrax Systems, Inc. v. Orix Systems, Inc.,
               Orix Global Communications, Inc., and Kerry Rogers ..........................   21

VII.  THE CHAPTER 11 CASES .................................................................   21

       A.      Commencement of the Chapter 11 Cases ........................................   21
       B.      Continuation of Business After the Petition Date ............................   21
</Table>


<PAGE>

<Table>
<S>                                                                                           <C>
                 1.       DIP Credit Facility ..............................................   22
                 2.       Employee Matters .................................................   22
                 3.       Maintenance of Utility Services ..................................   23
                 4.       Retention of Professionals .......................................   23
                 5.       Critical Trade Vendors and Suppliers .............................   23
                 6.       Other First Day Orders ...........................................   24
        C.       Formation Meeting for Statutory Creditors' Committee ......................   24
        D.       Case Administration .......................................................   24
                 1.       Rejection of Executory Contracts and Unexpired Leases ............   24
                 2.       Extension of Time to Assume or Reject ............................   25
                 3.       The Debtors' Schedules; Establishing a Bar Date and Claims
                          Objection Procedures .............................................   25
                 4.       Exclusivity ......................................................   26
        E.       Significant Claims and Postpetition Disputes ..............................   26
                 1.       RSL ..............................................................   26
                 2.       Unsecured Claims .................................................   27
                 3.       Turnover Actions .................................................   28
        F.       Termination of Prepaid Calling Card Business ..............................   28
        G.       Indefeasible Right of Use ("IRU") .........................................   29
        H.       Disputes with Qwest; Litigation Claim .....................................   29
        I.       Jersey City Operations ....................................................   29
        J.       Siemens Switch ............................................................   30
        K.       Asset Sales ...............................................................   30
        L.       Causes of Action Against Third Parties, Including Creditors ...............   31

VIII. SUMMARY OF THE PLAN ..................................................................   31

        A.       Classification and Treatment of Claims and Equity Interests ...............   31
                 1.       Unclassified Claims ..............................................   32
                 2.       Classified Claims ................................................   33
        B.       Implementation of Plan ....................................................   35
                 1.       The Qwest Litigation .............................................   35
                 2.       The Auction ......................................................   35
                 3.       The Trust ........................................................   36
        C.       Conditions to Confirmation ................................................   36
        D.       Conditions Precedent to the Effective Date under the Plan .................   36
        E.       Executory Contracts and Unexpired Leases ..................................   37
        F.       Fractional Distributions ..................................................   37
        G.       Provisions for Treatment of Contested Claims ..............................   37
        H.       New Charters and By-Laws ..................................................   38
        I.       Satisfaction of Claims ....................................................   38
        J.       Modification of the Plan ..................................................   39
        K.       Revocation or Withdrawal of the Plan ......................................   39
        L.       Vesting of Rights of Action ...............................................   39
        M.       Third Party Agreements; Subordination .....................................   40
        N.       Exculpation ...............................................................   40
</Table>


                                       ii

<PAGE>
<Table>
<S>                                                                                           <C>
        O.       Injunctions ...............................................................   41
        P.       Supplemental Documents ....................................................   41
        Q.       Retention of Jurisdiction .................................................   41

IX.   CONFIRMATION AND CONSUMMATION PROCEDURE ..............................................   43

         A.      Solicitation of Votes .....................................................   43
         B.      The Confirmation Hearing ..................................................   44
         C.      Confirmation ..............................................................   45
                 1.       Acceptance .......................................................   45
                 2.       Cramdown -- Unfair Discrimination and Fair and Equitable Tests ...   45
                 3.       Feasibility ......................................................   46
                 4.       Best Interests of Creditors Test .................................   46
         D.      Consummation ..............................................................   48

X.    MANAGEMENT OF THE REORGANIZED DEBTORS ................................................   48

XI.   RISK FACTORS .........................................................................   48

         A.      Financial Information; Disclaimer .........................................   48
         B.      Litigation Outcomes .......................................................   48
         C.      Certain Bankruptcy Considerations .........................................   49
                 1.       Risk of Non-Confirmation of the Plan .............................   49
                 2.       Nonconsensual Confirmation .......................................   49
                 3.       Delays of Confirmation and/or Effective Date .....................   49
         D.      Certain Regulatory Considerations .........................................   50

XII.  CERTAIN MATERIAL INCOME TAX CONSEQUENCES OF THE PLAN .................................   50

         A.      U.S. Federal Income Tax Consequences to Holders
                 of Allowed Claims and Equity Interests ....................................   50
                 1.       Tax Consequences by Class ........................................   51
         B.      Certain Other U.S. Federal Income Tax Considerations for Holders of
                 Allowed Claims ............................................................   53
                 1.       Accrued Interest and Accrued Dividends ...........................   53
                 2.       Market Discount ..................................................   53
         C.      U.S. Federal Income Tax Consequences to the Debtor ........................   53
                 1.       Discharge of Indebtedness Income .................................   53
                 2.       Gain or Loss on Sale of Assets and Exchange of Contingent
                          Payment Rights ...................................................   54
                 3.       Accrued Interest .................................................   54
                 4.       Alternative Minimum Tax ..........................................   55

XIII.  ALTERNATIVES TO THE PLAN ............................................................   55

        A.       Liquidation Under Chapter 7 of the Bankruptcy Code ........................   56
        B.       Alternatives to Chapter 11 Plan ...........................................   56
</Table>

                                       iii

<PAGE>
<Table>
<S>                                                                                           <C>
XIV. CONCLUSION AND RECOMMENDATION .........................................................   56


EXHIBITS

 Exhibit A........... First Amended Joint Chapter 11 Plan by AxisTel Communications, Inc,
                      Its Affiliated Debtors and Novo Networks, Inc.

 Exhibit B........... Order of the Bankruptcy Court, dated on or about January 15, 2002
                      (the "Approval Order"), (i) Approving Form of Ballot and Proposed
                      Solicitation and Tabulation Procedures, (ii) Fixing the Date, Time
                      and Place for Voting on Chapter 11 Plan, (iii) Prescribing the Forms
                      and Manner of Notice thereof, (iv) Fixing the Last Date for Filing
                      Objections to Chapter 11 Plan; and (v) Scheduling a Hearing to Consider
                      Confirmation of Chapter 11 Plan

 Exhibit C........... Ballot Tabulation and Solicitation Procedures, as approved by the Approval
                      Order (the "Voting Procedures")

 Exhibit D........... The Liquidation Analysis

</Table>




                                       iv
<PAGE>
                                 I. INTRODUCTION


         AxisTel Communications, Inc. ("AxisTel"), Novo Networks Global
Services, Inc. ("NNGSI"), Novo Networks International Services, Inc. ("NNISI"),
e.Volve Technology Group, Inc., ("e.Volve"), Novo Networks Operating Corp.
("NNOC") and Novo Networks Metro Services, Inc. ("NNMSI," and together with
AxisTel, NNGSI, NNISI, e.Volve and NNOC, the "Debtors"), as debtors and debtors
in possession in the above-referenced chapter 11 cases (the "Chapter 11 Cases")
and Novo Networks, Inc. ("NNI," and together with the Debtors, the "Proponents")
submit this amended disclosure statement (the "Disclosure Statement") pursuant
to Section 1125 of title 11 of the United States Code (11 U.S.C. sections 101 et
seq., the "Bankruptcy Code") with respect to the First Amended Joint Chapter 11
Plan by AxisTel Communications, Inc., its Affiliated Debtors and Novo Networks,
Inc. (the "Plan"). (1) This Disclosure Statement is to be used in connection
with the solicitation of acceptances of the Plan, filed by the Proponents with
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). A copy of the Plan is attached hereto as Exhibit "A." UNLESS OTHERWISE
DEFINED HEREIN, TERMS USED HEREIN HAVE THE MEANING ASCRIBED THERETO IN THE PLAN
(SEE ARTICLE I OF THE PLAN ENTITLED "DEFINITIONS AND INTERPRETATIONS").

         Attached as Exhibits to this Disclosure Statement are the following
documents:

         o       The Plan (Exhibit "A").

         o       Order of the Bankruptcy Court, dated on or about January 15,
                 2002 (the "Approval Order"), (i) Approving Form of Ballot and
                 Proposed Solicitation and Tabulation Procedures, (ii) Fixing
                 the Date, Time and Place for Voting on Chapter 11 Plan, (iii)
                 Prescribing the Forms and Manner of Notice thereof, (iv) Fixing
                 the Last Date for Filing Objections to Chapter 11 Plan; and (v)
                 Scheduling a Hearing to Consider Confirmation of Chapter 11
                 Plan (Exhibit "B").

         o       Ballot Tabulation and Solicitation Procedures, as approved by
                 the Approval Order (the "Voting Procedures") (Exhibit "C").

         o       The Liquidation Analysis (Exhibit "D").

         In addition, the ballot (the "Ballot") for acceptance or rejection of
the Plan is enclosed with this Disclosure Statement if you are entitled to vote
to accept or reject the Plan.


----------
(1)  In filing this proposed Disclosure Statement and the Plan jointly with NNI,
     the Debtors do not waive, and fully reserve, their rights to exclusivity
     under 11 U.S.C. section 1121.


<PAGE>


              II. NOTICE TO HOLDERS OF CLAIMS AND EQUITY INTERESTS

         The purpose of this Disclosure Statement is to enable you, as a
creditor whose Claim is impaired under the Plan, to make an informed decision in
exercising your right to vote to accept or reject the Plan. See "Confirmation
and Consummation Procedure -- Solicitation of Votes."

         THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED
HEREIN.

         THIS DISCLOSURE STATEMENT CONTAINS IMPORTANT INFORMATION THAT MAY BEAR
UPON YOUR DECISION TO ACCEPT OR REJECT THE PLAN. PLEASE READ THIS DOCUMENT WITH
CARE.

         On or about January 14, 2002, after notice and a hearing, the
Bankruptcy Court entered an order pursuant to Section 1125 of the Bankruptcy
Code, approving this Disclosure Statement (the "Approval Order") as containing
adequate information of a kind, and in sufficient detail, to enable a
hypothetical, reasonable investor typical of the solicited classes of Claims
against the Debtors to make an informed judgment with respect to the acceptance
or rejection of the Plan. A true and correct copy of the Approval Order is
attached hereto as Exhibit "B," and should be referred to for details regarding
the procedures for the solicitation of votes on the Plan.

         APPROVAL OF THIS DISCLOSURE STATEMENT BY THE BANKRUPTCY COURT DOES NOT
CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT OF THE FAIRNESS OR MERITS OF
THE PLAN OR THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS
DISCLOSURE STATEMENT.

         Each holder of a Claim entitled to vote to accept or reject the Plan
should read this Disclosure Statement and the Plan in their entirety before
voting. No solicitation of votes to accept or reject the Plan may be made except
pursuant to this Disclosure Statement and Section 1125 of the Bankruptcy Code.
Except for the Proponents and their professionals, no person has been authorized
to use or promulgate any information concerning the Debtors, their businesses or
the Plan, other than the information contained in this Disclosure Statement. You
should not rely on any information relating to the Debtors, their businesses or
the Plan other than that contained in this Disclosure Statement and the Plan and
the exhibits hereto and thereto.

         After carefully reviewing this Disclosure Statement, including the
attached exhibits, please indicate your acceptance or rejection of the Plan by
voting in favor of or against the Plan on the enclosed Ballot and returning the
same to the address set forth on the ballot, in the enclosed return envelope so
that it will be actually received by the Debtors' balloting agent, Logan &
Company, Inc., 546 Valley Road, Upper Montclair, NJ 07043, no later than 4:00
p.m., Prevailing Eastern Time, on February 20, 2002 (the "Voting Deadline").





                                        2


<PAGE>



         You may be bound by the Plan if it is accepted by the requisite holders
of Claims, even if you do not vote to accept the Plan. See "Confirmation and
Consummation Procedure -- Solicitation of Votes; Confirmation -- Acceptance."

         TO BE SURE YOUR BALLOT IS COUNTED, YOUR BALLOT MUST BE ACTUALLY
RECEIVED NO LATER THAN 4:00 P.M., PREVAILING EASTERN TIME ON FEBRUARY 20, 2002.
For a general description of the voting instructions and the name, address and
phone number of the person you may contact if you have questions regarding the
voting procedures, see "Confirmation and Consummation Procedures -- Solicitation
of Votes."

         Pursuant to Section 1128 of the Bankruptcy Code, the Bankruptcy Court
has scheduled a hearing to consider confirmation of the Plan (the "Confirmation
Hearing") on March 1, 2002 at 9:30 a.m., Prevailing Eastern Time, before the
Honorable Randall J. Newsome, United States Bankruptcy Judge, 844 King Street,
2nd Floor, Wilmington, Delaware. The Bankruptcy Court has directed that
objections, if any, to confirmation of the Plan be filed and served on or before
February 20, 2002 at 4:00 p.m., Prevailing Eastern Time, in the manner described
under the caption, "Confirmation and Consummation Procedure -- The Confirmation
Hearing."

         THE PROPONENTS BELIEVE THAT THE PLAN MAXIMIZES CREDITOR RECOVERIES AND
URGE ALL HOLDERS OF IMPAIRED CLAIMS TO VOTE TO ACCEPT THE PLAN.


                         III. EXPLANATION OF CHAPTER 11



 A.      OVERVIEW OF CHAPTER 11.


         Chapter 11 is the principal reorganization chapter of the Bankruptcy
code. Pursuant to Chapter 11, a debtor in possession attempts to reorganize its
business for the benefit of the debtor, its creditors and other parties in
interest. All debtors except NNMSI commenced their Chapter 11 cases with the
Bankruptcy Court by filing voluntary petitions for relief under Chapter 11 of
the Bankruptcy Code on July 30, 2001 (the "Petition Date"). NNMSI commenced its
Chapter 11 case on September 14, 2001 (The "NNMSI Petition Date"). The Chapter
11 Cases for each of AxisTel, NNGSI, NNISI, e.Volve, NNOC and NNMSI are being
jointly administered under Case No. 01-10005 (RJN). See "The Chapter 11 Cases --
Commencement of the Chapter 11 Cases."

         The commencement of a chapter 11 case creates an estate comprised of
all the legal and equitable interests of the debtor in property as of the date
the petition is filed. Sections 1101, 1107 and 1108 of the Bankruptcy Code
provide that a debtor may continue to operate its business and remain in
possession of its property as a "debtor in possession" unless the bankruptcy
court orders the appointment of a trustee. In the present Chapter 11 Cases, the
Debtors have remained in possession of their property and continue to manage
their businesses as debtors in possession. See "The Chapter II Cases --
Continuation of Business After the Petition Date."

         The filing of a chapter 11 petition also triggers the automatic stay
provisions of the Bankruptcy Code. Section 362 of the Bankruptcy Code provides,
among other things, for an


                                        3


<PAGE>




automatic stay of all attempts to collect or recover prepetition claims from the
debtor or to otherwise interfere with, or exercise control over, the debtor's
property or business. Except as otherwise ordered by the Bankruptcy Court, the
automatic stay remains in full force and effect until the effective date of a
confirmed chapter 11 plan. In the present Chapter 11 Cases no creditor or party
in interest has obtained relief from the automatic stay as of the date of this
Disclosure Statement.

         The formulation of a chapter 11 plan is the principal purpose of a
chapter 11 case. The plan sets forth the means for satisfying claims against and
interests in the debtor. Unless a trustee is appointed, only the debtor may file
a plan during the first 120 days of a chapter 11 case (the "Exclusive Filing
Period"). Section 1121(d) of the Bankruptcy Code, however, permits the court to
extend or reduce the Exclusive Filing Period upon a showing of "cause." After
the Exclusive Filing Period has expired, a creditor or other party in interest
may file a plan, unless the debtor has filed a plan within the Exclusive Filing
Period, in which case, the debtor is given 60 additional days pursuant to
Section 1121(d) of the Bankruptcy Code (the "Exclusive Solicitation Period" and,
collectively, with the Exclusive Filing Period, the "Exclusive Periods") during
which it may solicit acceptances of its plan. The Exclusive Periods may also be
extended or reduced by the court upon a showing of "cause." In the present
Chapter 11 Cases, the Debtors' original Exclusive Filing Period and Exclusive
Solicitation Period were scheduled to expire on November 27, 2001 and January
26, 2002, respectively. By Order dated December 6, 2001, such periods were
extended to January 31, 2002 and March 31, 2002, respectively.


B.       CHAPTER 11 PLAN.


         A chapter 11 plan may provide for anything from a complex restructuring
of a debtor's business and its related obligations to a simple liquidation of
the debtor's assets. In either event, upon confirmation of the plan, it becomes
binding on the debtor and all of its creditors and equity holders, and the
obligations owed by the debtor to such parties are compromised and exchanged for
the obligations specified in the plan.

         After a chapter 11 plan has been filed, the holders of impaired claims
against and interests in a debtor are permitted to vote to accept or reject the
plan, provided such holders are to receive distributions under the plan. Before
soliciting acceptances to the proposed plan, Section 1125 of the Bankruptcy Code
requires the debtor to prepare a disclosure statement containing adequate
information of a kind, and in sufficient detail, to enable a hypothetical
reasonable investor to make an informed judgment about the plan. THIS DISCLOSURE
STATEMENT IS PRESENTED TO HOLDERS OF CLAIMS AGAINST THE DEBTORS TO SATISFY THE
REQUIREMENTS OF SECTION 1125 OF THE BANKRUPTCY CODE IN CONNECTION WITH THE
PROPONENTS' SOLICITATION OF VOTES ON THE PLAN.

         If all classes of claims and interests accept a chapter 11 plan, the
bankruptcy court may confirm the plan if the court independently determines that
the requirements of Section 1129 of the Bankruptcy Code have been satisfied. See
"Confirmation and Consummation Procedure." Section 1129 of the Bankruptcy Code
sets forth the requirements for confirmation of a plan and, among other things,
requires that a plan meet the "best interests" of creditors test and be
"feasible." The "best interests" test generally requires that the value of the
consideration to be


                                        4


<PAGE>



distributed to the holders of claims or equity interests under a plan is not
less than those parties would receive if the debtor were liquidated pursuant to
a hypothetical liquidation occurring under chapter 7 of the Bankruptcy Code.
Under the "feasibility" requirement, the court generally must find that there is
a reasonable probability that the debtor will be able to meet its obligations
under its plan without the need for further financial reorganization. WITH THE
EXCEPTION OF APPROVAL OF THE PLAN BY ALL IMPAIRED CLASSES, THE PROPONENTS
BELIEVE THAT THE PLAN SATISFIES ALL THE APPLICABLE REQUIREMENTS OF SECTION
1129(a) OF THE BANKRUPTCY CODE, INCLUDING, IN PARTICULAR, THE BEST INTERESTS OF
CREDITORS TEST AND THE FEASIBILITY REQUIREMENT.

         Chapter 11 does not require that each holder of a claim or interest in
a particular class vote in favor of a chapter 11 plan in order for the
bankruptcy court to determine that the class has accepted the plan. See
"Confirmation and Consummation Procedure -- Solicitation of Votes." Rather, a
class of claims will be determined to have accepted the plan if the court
determines that the plan has been accepted by a majority in number and
two-thirds in amount of those claims actually voting in such class. IN THE
PRESENT CASES, ONLY THE HOLDERS OF CLAIMS WHO ACTUALLY VOTE WILL BE COUNTED AS
EITHER ACCEPTING OR REJECTING THE PLAN.

         In addition, classes of claims or equity interests that are not
"impaired" under a chapter 11 plan are conclusively presumed to have accepted
the plan and thus are not entitled to vote. See "Confirmation and Consummation
Procedure -- Solicitation of Votes." Accordingly, acceptances of a plan will
generally be solicited only from those persons who hold claims or equity
interests in an impaired class. A class is "impaired" if the legal, equitable,
or contractual rights associated with the claims or equity interests of that
class are modified in any way under the plan. Modification for purposes of
determining impairment, however, does not include curing defaults and
reinstating maturity or payment in full in cash on the effective date of the
plan. CLASS 1 (PRIORITY CLAIMS) AND CLASS 2 (SECURED CLAIMS) ARE UNIMPAIRED
UNDER THE PLAN, WHILE CLASS 3 (UNSECURED CLAIMS) AND CLASS 4 (EQUITY INTERESTS)
ARE IMPAIRED. CLASS 3 AND CLASS 4 ARE ENTITLED TO VOTE ON THE PLAN. CLASS 1 AND
CLASS 2 ARE DEEMED TO HAVE ACCEPTED THE PLAN.

         The bankruptcy court may also confirm a chapter 11 plan even though
fewer than all classes of impaired claims and equity interests accept it. For a
chapter 11 plan to be confirmed despite its rejection by a class of impaired
claims or equity interests, the proponent of the plan must show, among other
things, that the plan does not "discriminate unfairly" and that the plan is
"fair and equitable" with respect to each impaired class of claims or equity
interests that has not accepted the plan. See "Confirmation and Consummation
Procedure."

         Under Section 1129(b) of the Bankruptcy Code, a plan is "fair and
equitable" as to a rejecting class of claims or equity interests if, among other
things, the plan provides: (a) with respect to secured claims, that each such
holder will receive or retain on account of its claim property that has a value,
as of the effective date of the plan, an amount equal to the allowed amount of
such claim or such other treatment as accepted by the holder of such claim; and
(b) with respect to unsecured claims and equity interests, that the holder of
any claim or equity interest that is junior to the claims or equity interests of
such class will not receive or retain on account of such junior claim or equity
interest any property at all unless the senior class is paid in full.


                                        5


<PAGE>
         A plan does not "discriminate unfairly" against a rejecting class of
claims or equity interests if (a) the relative value of the recovery of such
class under the plan does not differ materially from that of any class (or
classes) of similarly situated claims or equity interests, and (b) no senior
class of claims or equity interests is to receive more than 100% of the amount
of the claims or equity interests in such class. THE PROPONENTS BELIEVE THAT THE
PLAN HAS BEEN STRUCTURED SO THAT IT WILL SATISFY THE FOREGOING REQUIREMENTS AS
TO ANY REJECTING CLASS OF CLAIMS OR EQUITY INTERESTS, AND CAN THEREFORE BE
CONFIRMED DESPITE A REJECTION BY HOLDERS OF UNSECURED CLAIMS IN CLASS 3 OR
EQUITY INTERESTS IN CLASS 4.


                            IV. OVERVIEW OF THE PLAN



 A.      GENERAL.

         The Plan effectuates an orderly liquidation through (i) the auction of
the debtor e.Volve's core telecommunications assets, (ii) the liquidation of the
Debtors' other telecommunication assets, and (iii) the prosecution of causes of
action against third parties, including without limitation, Qwest Communications
Corporation ("Qwest"). The Plan also incorporates a global settlement of all
Claims and Causes of Action as between each of the respective Proponents as of
the Effective Date of the Plan.

         The Plan preserves the business of e.Volve during an auction process
and maximizes the value realized from the other non-operating assets of e.Volve
and other Debtors through an orderly sale or disposition of such assets. During
the Chapter 11 Cases, to prevent the continued incurrence of significant
operating losses, the Debtors terminated substantially all operations of the
AxisTel Debtors. The remaining assets of the AxisTel Debtors are miscellaneous
telecommunications equipment and related assets, an IRU (an indefeasible right
of use for fiber optic transport between New York and Los Angeles) and possibly
a "Siemens Switch" (an ESWD telecommunications switch "leased" from
Telecommunications Finance Group of Siemens Carriers Networks LLC).(2) The
AxisTel Debtors anticipate the completion of the sale or disposition of these
business-related assets before confirmation of the Plan. They have sought
approval of the retention of an auctioneer, Dove Bid, Inc. ("Dove Bid"), to
assist in that process.



----------

(2)  There may be an issue whether the transaction with Siemens involved a
     "lease" rather than a secured financing. In any event, to ensure that the
     estates were relieved of any unnecessary administrative expenses, on
     December 21, 2001, the Debtors filed a motion pursuant to section 365 to
     reject such "lease," which was pending as of the date of this Disclosure
     Statement. A further description of the Siemens Switch and potential claims
     against Siemens is set forth in Section VII.J.


                                        6
<PAGE>






         Historically, e.Volve was a provider of packet-based telecommunications
services, delivering lost-cost, high quality network transport for the United
States to Mexico market. Prior to the Petition Date a substantial portion of
e.Volve's revenue for that business was derived from Qwest. Following the
Petition Date virtually all of e.Volve's revenues were generated from Qwest
traffic. During the first 60 days of these cases, e.Volve developed a business
plan centered on a long-term relationship with Qwest. That plan, however, was
dependent upon obtaining certain commitments and/or definitive agreements from
Qwest. The Debtors' initial chapter 11 plan filed in early October, 2001,
contemplated such a relationship.

         Unfortunately, e.Volve did not receive the definite agreements or
commitments from Qwest. To the contrary, Qwest would terminate the relationship
in November 2001, leaving e.Volve without any revenue-generating customers. The
Debtors were unable to revive the relationship, despite intense efforts to do
so. The Proponents believe they have various causes of action against Qwest, as
described more fully in Section VII.H. A centerpiece of the Plan is the
prosecution of such actions.

         Despite a concentrated effort by e.Volve, it was unable to develop new
customer relationships with alternative providers. Accordingly, in December 2001
the Debtors decided to change their strategic direction in these cases by
preserving their core assets for a sale, commencing an auction process for such
sale, and eliminating any unnecessary obligations to minimize additional
administrative expenses. The Plan contemplates that strategy, while preserving
the Debtors' ability to commence causes of action against Qwest and other third
parties. The Plan also reflects the continued effort of the AxisTel Debtors to
sell or dispose of substantially all of their assets through the assistance of
an auctioneer.

         In accordance with section 1123(b)(3) of the Bankruptcy Code and
Bankruptcy Rule 9019, in consideration of, among other things (a) the settlement
of any and all intercompany claims by or against each of the Proponents as of
the Effective Date (except as otherwise provided in the Plan), (b) the payment
of the Settlement Proceeds to the AxisTel Debtors, (c) the release of the
e.Volve Claim against the AxisTel Debtors in the approximate amount of $1.5
million (which is a prepetition unsecured claim), (d) the retention of the
AxisTel Equity Interests by NNOC pursuant to the Plan, (e) the DIP Financing by
NNI necessary for administration of the Chapter 11 Cases and consummation of the
Plan, (f) funding by NNI of the prosecution of the Qwest Litigation Claim as
provided by Section 7.1 of the Plan, and (g) other good and valuable
consideration, without which this Plan could not be confirmed and consummated,
on the Effective Date, Section 7.10 of the Plan provides that each Proponent
shall be conclusively and irrevocably deemed to have released any and all Claims
and Causes of Action of such Proponent, on the one hand, against each other
Proponent and each of their respective subsidiaries, officers, directors,
employees, agents, representatives, advisors, attorneys, successors and assigns,
on the other hand, based in whole or in part on any act, omission, event,
circumstance, condition or thing that occurred or existed prior to the Effective
Date; provided however, Claims and Causes of Action of the Debtors against the
directors, officers and employees of the Debtors who did not serve in such
capacities after the Petition Date or were terminated by the Debtors after the
Petition Date shall be preserved in accordance with Section 7.9 of the Plan. As
set forth in


                                        7



<PAGE>



Section 13.22 of the Plan, on the Effective Date, all Persons who have been,
are, or may be holders of Claims against or Equity Interests in the Debtors and
their subsidiaries shall be enjoined from taking any action against or affecting
the Proponents, the Estates, or the Assets with respect to such Claims or Equity
Interests (other than to enforce provisions of the Plan). Entry of the
Confirmation Order shall constitute approval of the Settlement and authorize the
parties to take all actions that are necessary or appropriate to implement and
give effect to the Settlement.


B.       SUMMARY OF CLASSIFICATION AND TREATMENT UNDER THE PLAN.


         The following table provides a summary of the classification and
treatment under the Plan of all Claims and Equity Interests and is intended only
to highlight information contained elsewhere in this Disclosure Statement. The
summary is qualified in its entirety by the more detailed information in the
Plan, the financial statements, including the notes thereto, the pro forma
information appearing elsewhere in this Disclosure Statement, the Exhibits
hereto, and the other documents referenced herein. The Administrative Claims and
Tax Claims shown below constitute the Debtors' estimate of the amount of such
Claims to be paid in cash on the Effective Date, taking into account amounts
paid or projected to be paid prior to that date. The total amount of Allowed
Priority Claims, Allowed Secured Claims and Allowed Unsecured Claims shown below
reflects the Debtors' current estimate, based upon the Debtors' schedules, books
and records, and the informed opinion of the Debtors' financial advisors and
other professionals, of the likely amount of such Claims, after the resolution
by settlement or litigation of Claims that the Debtors believe are subject to
disallowance or reduction. However, because no assurances can be provided
regarding the amount of Claims that will ultimately be disallowed or reduced,
and because numerous Claims have been filed that exceed the amounts reflected
for such Claims in the Debtors' schedules, distributions under the Plan to
certain classes of claims may differ substantially from the projected ultimate
recoveries reflected below. Reference should be made to the entire Disclosure
Statement and to the Plan for a complete description of the classification and
treatment of Claims and Equity Interests.

         THE PLAN CLASSIFIES CLAIMS AGAINST AND EQUITY INTERESTS IN EACH DEBTOR
AS FOLLOWS: EXCEPT FOR THE AXISTEL DEBTORS (OTHER THAN NNISI), THE CLAIMS
AGAINST AND EQUITY INTERESTS IN EACH DEBTOR SHALL BE TREATED SEPARATELY FOR ALL
PURPOSES UNDER THE PLAN (INCLUDING, BUT NOT LIMITED TO, DISTRIBUTIONS AND
VOTING). WITH RESPECT TO THE AXISTEL DEBTORS (OTHER THAN NNISI), THEIR ESTATES
SHALL BE SUBSTANTIVELY CONSOLIDATED UNDER THE PLAN AND CLAIMS AGAINST AND EQUITY
INTERESTS IN SUCH DEBTORS SHALL BE TREATED AS ONE FOR PURPOSES OF VOTING AND
DISTRIBUTIONS. WITH RESPECT TO VOTING, SUBSTANTIVE CONSOLIDATION MEANS THAT IN
TABULATING THE VOTES OF EACH VOTING CLASS, THE BALLOTS CAST BY THE HOLDERS OF
CLAIMS AGAINST OR EQUITY INTERESTS IN AXISTEL, NNGSI AND NNMSI SHALL BE
COMBINED. WITH RESPECT TO DISTRIBUTIONS, SUBSTANTIVE CONSOLIDATION MEANS (i) ALL
ASSETS OF AXISTEL, NNGSI AND NNMSI SHALL BE POOLED TOGETHER AND AVAILABLE FOR
DISTRIBUTION TO CREDITORS AND EQUITYHOLDERS OF SUCH DEBTORS, AND (ii) EACH CLAIM
AGAINST AXISTEL, NNGSI AND NNMSI SHALL BE DEEMED A SINGLE CLAIM AGAINST SUCH
DEBTORS.




                                        8
<PAGE>
      1.    CLASSIFIED CLAIMS AND INTERESTS AGAINST E.VOLVE.(3)

Class 1                    Unimpaired.
Priority Claims            Each holder of an Allowed Priority Claim shall be
                           unimpaired under the Plan and, pursuant to Section
                           1124 of the Bankruptcy Code, all of the legal,
                           equitable and contractual rights of each holder of an
                           Allowed Priority Claim in respect of such Claim shall
                           be fully reinstated and retained as though the
                           Chapter 11 Cases had not been filed, except as
                           provided in Section 1124(2)(A)-(C) of the Bankruptcy
                           Code, and the holders of such Allowed Priority Claims
                           shall be paid in full.

Total Scheduled Claims:    $0
Total Filed Claims:        $780.00

Total Estimated Claims:    $0
                           Estimated Recovery: 100%

Class 2                    Unimpaired.
Secured Claims             Each holder of an Allowed Secured Claim shall be
                           unimpaired under the Plan and, pursuant to Section
                           1124 of the Bankruptcy Code, all of the legal,
                           equitable and contractual rights of each holder of an
                           Allowed Secured Claim in respect of such Claim shall
                           be fully reinstated and retained as though the
                           Chapter 11 Cases had not been filed, except as
                           provided in Section 1124(2)(A)-(C) of the Bankruptcy
                           Code, and the holder of such Allowed Secured Claims
                           shall be paid in full.

Total Scheduled Claims:    $1,148,604
Total Filed Claims:        $1,619,999.50

Total Estimated Claims:    $200,000
                           Estimated Recovery: 100% of Allowed Claim

----------

(3)   The following tables are only summaries of the classification and
      treatment of Claims and Equity Interests under the Plan. Reference should
      be made to the entire Disclosure Statement and the Plan for a complete
      description of such classification and treatment. The estimates for
      recoveries to Class 3 unsecured creditors do not factor in potential
      recoveries from litigation.


                                       9
<PAGE>


Class 3                    Impaired.
Unsecured Claims           Each holder of an Allowed Unsecured Claim against
                           e.Volve shall receive on the Distribution Date, a Pro
                           Rata Share of e.Volve's Available Proceeds, until
                           such Allowed Claim has been paid in full.

Total Scheduled Claims:    $1,109,091.12
Total Filed Claims:        $1,851,962.79

Total Estimated Claims:    $1,600,000
                           Estimated Recovery: 28%(4) of Allowed Claim

Class 4                    Impaired.
Equity Interests           NNOC as the holder of 100% of the Allowed Equity
                           Interests in e.Volve will receive the e.Volve
                           Residual Consideration on the Distribution Date on
                           account of such Equity Interests and shall retain its
                           ownership interests under the Plan.


      2.    CLASSIFIED CLAIMS AND INTERESTS AGAINST THE AXISTEL DEBTORS (OTHER
            THAN NNISI).

Class 1                    Unimpaired.
Priority Claims            Each holder of an Allowed Priority Claim shall be
                           unimpaired under the Plan and, pursuant to Section
                           1124 of the Bankruptcy Code, all of the legal,
                           equitable and contractual rights of each holder of an
                           Allowed Priority Claim in respect of such Claim shall
                           be fully reinstated and retained as though the
                           Chapter 11 Cases had not been filed, except as
                           provided in Section 1124(2)(A)-(C) of the
                           Bankruptcy Code, and the holders of such Allowed
                           Priority Claims shall be paid in full.

Total Scheduled Claims:    $0
Total Filed Claims:        $1,342,573.16

----------

(4)   Estimate does not include the "core enterprise" value of e.Volve. That
      value is uncertain at this stage of the auction process.


                                       10


<PAGE>


Total Estimated Claims:    $0
                           Estimated Recovery: 100%

Class 2                    Unimpaired.
Secured Claims             Each holder of an Allowed Secured Claim shall be
                           unimpaired under the Plan and, pursuant to Section
                           1124 of the Bankruptcy Code, all of the legal,
                           equitable and contractual rights of each holder of an
                           Allowed Secured Claim in respect of such Claim shall
                           be fully reinstated and retained as though the
                           Chapter 11 Cases had not been filed, except as
                           provided in Section 1124(2)(A)-(C) of the Bankruptcy
                           Code, and the holders of such Allowed Secured Claims
                           shall be paid in full.

Total Scheduled Claims:    $5,771,710.00
Total Filed Claims:        $3,492,947.15

Total Estimated Claims:    $1,100,000
                           Estimated Recovery: 100% of Allowed Claim

Class 3                    Impaired.
Unsecured Claims           Each holder of an Allowed Unsecured Claim against the
                           AxisTel Debtors (other than NNISI) shall receive on
                           the Distribution Date, a Pro Rata Share of (A) the
                           Available Proceeds of the AxisTel Debtors (other than
                           NNISI) and (B) the Settlement Proceeds of the AxisTel
                           Debtors (other than NNISI), until such Allowed Claim
                           has been paid in full.

Total Scheduled Claims:    $8,404.00
Total Filed Claims:        $59,546,732.42

Total Estimated Claims:    $4,700,000
                           Estimated Recovery: 7% of Allowed Claim

Class 4                    Impaired.
Equity Interests           AxisTel, as the holder of 100% of the Allowed Equity
                           Interests in NNGSI and NNMSI, shall retain its
                           ownership interests under the Plan. Pursuant to the
                           Settlement, NNOC, as the holder of 100% of the
                           Allowed Equity Interests in AxisTel, shall retain its
                           ownership interests under the Plan.



                                       11


<PAGE>

Total Estimated Holders:   As described above, AxisTel is a wholly-owned
                           subsidiary of NNOC. NNGSI and NNMSI are wholly-owned
                           subsidiaries of AxisTel.


      3.    CLASSIFIED CLAIMS AND INTERESTS AGAINST NNISI.

Class 1                    Unimpaired.

Priority Claims            Each holder of an Allowed Priority Claim shall be
                           unimpaired under the Plan and, pursuant to Section
                           1124 of the Bankruptcy Code, all of the legal,
                           equitable and contractual rights of each holder of an
                           Allowed Priority Claim in respect of such Claim shall
                           be fully reinstated and retained as though the
                           Chapter 11 Cases had not been filed, except as
                           provided in Section 1124(2)(A)-(C) of the
                           Bankruptcy Code, and the holders of such Allowed
                           Priority Claims shall be paid in full.

Total Scheduled Claims:    $1,830.00
Total Filed Claims:        $5,005.00

Total Estimated Claims:    $0
                           Estimated Recovery: 100%

Class 2                    Unimpaired.
Secured Claims             Each holder of an Allowed Secured Claim shall be
                           unimpaired under the Plan and, pursuant to Section
                           1124 of the Bankruptcy Code, all of the legal,
                           equitable and contractual rights of each holder of an
                           Allowed Secured Claim in respect of such Claim shall
                           be fully reinstated and retained as though the
                           Chapter 11 Cases had not been filed, except as
                           provided in Section 1124(2)(A)-(C) of the Bankruptcy
                           Code, and the holder of such Allowed Secured Claims
                           shall be paid in full.

Total Scheduled Claims:    $1,283,454.00
Total Filed Claims:        $63,301.00

Total Estimated Claims:    $300,000
                           Estimated Recovery: 100% of Allowed Claim



                                       12

<PAGE>


Class 3                    Impaired.
Unsecured Claims           Each holder of an Allowed Unsecured Claim against
                           NNISI shall receive on the Distribution Date, a Pro
                           Rata Share of (A) the Available Proceeds of NNISI and
                           (B) the Settlement Proceeds of NNISI, until such
                           Allowed Claim has been paid in full.

Total Scheduled Claims:    $9,290,781.01
Total Filed Claims:        $4,442,770.51

Total Estimated Claims:    $4,900,000
                           Estimated Recovery: 6% of Allowed Claim

Class 4                    Impaired.
Equity Interests           AxisTel, as the holder of 100% of the Allowed Equity
                           Interests in NNISI shall retain its ownership
                           interests under the Plan.

Total Estimated Holders:   As described above, NNISI is a wholly-owned
                           subsidiary of AxisTel.


      4.    CLASSIFIED CLAIMS AND INTERESTS AGAINST NNOC.

Class 1                    Unimpaired.
Priority Claims            Each holder of an Allowed Priority Claim shall be
                           unimpaired under the Plan and, pursuant to Section
                           1124 of the Bankruptcy Code, all of the legal,
                           equitable and contractual rights of each holder of an
                           Allowed Priority Claim in respect of such Claim shall
                           be fully reinstated and retained as though the
                           Chapter 11 Cases had not been filed, except as
                           provided in Section 1124(2)(A)-(C) of the
                           Bankruptcy Code, and the holders of such Allowed
                           Priority Claims shall be paid in full.

Total Scheduled Claims:    $51,877.25
Total Filed Claims:        $72,887.79

Total Estimated Claims:    $70,000
                           Estimated Recovery: 100%

Class 2                    Unimpaired.


                                       13


<PAGE>


Secured Claims             Each holder of an Allowed Secured Claim shall be
                           unimpaired under the Plan and, pursuant to Section
                           1124 of the Bankruptcy Code, all of the legal,
                           equitable and contractual rights of each holder of an
                           Allowed Secured Claim in respect of such Claim shall
                           be fully reinstated and retained as though the
                           Chapter 11 Cases had not been filed, except as
                           provided in Section 1124(2)(A)-(C) of the Bankruptcy
                           Code, and the holder of such Allowed Secured Claims
                           shall be paid in full.

Total Scheduled Claims:    $0
Total Filed Claims:        $0

Total Estimated Claims:    $0
                           Estimated Recovery: 100% of Allowed Claim

Class 3                    Impaired.
Unsecured Claims           Each holder of an Allowed Unsecured Claim against
                           NNOC shall receive on the Distribution Date, a Pro
                           Rata Share of (A) NNOC's Available Proceeds, and (B)
                           the e.Volve Residual Consideration, until such
                           Allowed Claims has been paid in full.

Total Scheduled Claims:    $7,612.36
Total Filed Claims:        $910,034.20

Total Estimated Claims:    $400,000
                           Estimated Recovery: 0% of Allowed Claim

Class 4                    Impaired.
Equity Interests           NNI, as the holder of 100% of the Allowed Equity
                           Interests in NNOC, shall retain its ownership
                           interests under the Plan.

Total Estimated Holders:   As described above, NNOC is the wholly-owned
                           subsidiary of NNI.


                                       14

<PAGE>


C. UNCLASSIFIED CLAIMS AGAINST THE DEBTORS.


Administrative Claims(5)   Unimpaired.
                           The Plan provides that all Allowed Administrative
                           Claims shall receive (i) the amount of such holder's
                           Allowed Claim in one Cash payment, or (ii) such other
                           treatment as may be agreed upon in writing by the
                           Debtors and such holder; provided, that an
                           Administrative Claim representing a liability
                           incurred in the ordinary course of business of the
                           Debtors may be paid at the Debtors' election in the
                           ordinary course of business. All Allowed
                           Administrative Claims shall be paid by, and shall be
                           the sole responsibility of, the Debtors and the
                           Disbursing Agent as that term is defined in the Plan.
                           As provided in Section 1123(a)(1) of the Bankruptcy
                           Code, Administrative Claims and Tax Claims shall not
                           be classified for purposes of voting or receiving
                           distributions under the Plan. Rather, all such Claims
                           shall be treated separately as unclassified Claims.

Total Estimated Claims:    $1.2 million
                           Estimated Recovery: 100% of Allowed Claim.

----------

(5)   The Administrative Claims category includes the estimated amount of those
      Claims which will be paid as of the Effective Date. This category does not
      include Administrative Claims that will be paid in the normal course of
      business by the Debtors, such as postpetition trade payables, Fee Claims
      that have been paid on an interim basis pursuant to orders of the
      Bankruptcy Court prior to the Effective Date, or any Administrative Claim
      that will be settled on other terms. The Debtors will request an initial
      bar date for Administrative Claims accruing through February 1, 2002. Such
      bar date is anticipated to be a date prior to the confirmation hearing.


                                       15

<PAGE>


Tax Claims                 Unimpaired.
                           At the election of the Debtors, each holder of an
                           Allowed Tax Claim shall receive in full satisfaction
                           of such holder's Allowed Tax Claim, (a) the amount of
                           such holder's Allowed Tax Claim, with
                           Post-Confirmation Interest thereon, in equal annual
                           Cash payments on each anniversary of the Effective
                           Date, until the sixth anniversary of the date of
                           assessment of such Tax Claim (provided that the
                           Disbursing Agent may prepay the balance of any such
                           Allowed Tax Claim at any time without penalty); (b) a
                           lesser amount in one Cash payment as may be agreed
                           upon in writing by such holder; or (c) such other
                           treatment as may be agreed upon in writing by such
                           holder. The Confirmation Order shall constitute and
                           provide for an injunction by the Bankruptcy Court as
                           of the Effective Date against any holder of a Tax
                           Claim from commencing or continuing any action or
                           proceeding against any responsible person or officer
                           or director of the Debtors that otherwise would be
                           liable to such holder for payment of a Tax Claim so
                           long as no default has occurred with respect to such
                           Tax Claim under the Plan.

Total Estimated Claims:    $0
                           Estimated Recovery: 100% of Allowed Claim


D. DISTRIBUTIONS TO CLASSES OF CREDITORS PURSUANT TO THE PLAN.

         The Plan provides that the Disbursing Agent shall make all
Distributions required under the Plan. Except as otherwise provided in the Plan,
any Distribution to be made pursuant to the Plan shall be deemed to have been
timely made if made within ten (10) days after the time therefor specified in
the Plan. Whenever any Distribution to be made under this Plan shall be due on a
day other than a Business Day, such Distribution shall instead be made, without
interest, on the immediately succeeding Business Day, but shall be deemed to
have been made on the date due. For federal income tax purposes, a Distribution
will be allocated to the principal amount of a Claim first and then, to the
extent the Distribution exceeds the principal amount of the Claim, to the
portion of the Claim representing accrued but unpaid interest.

         Pursuant to the Plan, all Cash necessary for the Disbursing Agent to
make payments and Distributions shall be obtained from, as to any Debtor, the
Available Proceeds. No Distribution of less than twenty-five dollars ($25.00) in
value shall be made by the Disbursing Agent to the holder of any Claim unless a
request therefor is made in writing to the Disbursing Agent. Subject to
Bankruptcy Rule 9010, any Distribution or delivery to a holder of an Allowed
Claim or Equity Interest shall be made at the address of such holder as set
forth on the proof of Claim


                                       16


<PAGE>

filed by such holder (or at the last known address of such holder if no proof of
claim is filed or if the Disbursing Agent or the Debtors, as the case may be,
have been notified of a change of address). If any holder's Distribution or
payment is returned to the Disbursing Agent as undeliverable, no further
Distributions or payments to such holder shall be made unless and until the
Disbursing Agent is notified of such holder's then current address within three
months after such Distribution or payment was returned, at which time any missed
Distribution or payment shall be made to such holder without interest.

         Checks issued in respect of Allowed Claims shall be null and void if
not negotiated within one hundred and eighty (180) days after the date of
issuance thereof. Requests for reissuance of any check shall be made directly to
the Disbursing Agent by the holder of the Allowed Claim with respect to which
such check originally was issued. Any claim in respect of such a voided check
shall be made on or before the later of (a) the first anniversary of the date on
which such Distribution was made and (b) one hundred and eighty (180) days after
the date of the issuance of such check. After such date, all claims in respect
of void checks shall be discharged and forever barred. All unclaimed
Distributions shall revert to the applicable Debtor or the Trust.

         Following confirmation of the Plan, the Plan will become effective (as
such term is used in Section 1129 of the Bankruptcy Code) on the date on which
the conditions precedent to the effectiveness of the Plan specified in Section
9.2 of the Plan have been satisfied or waived or, if a stay of the Confirmation
Order is in effect on such date, the first Business Day after the dissolution,
lifting, or expiration of such stay. For purposes of this Disclosure Statement,
the Debtors have assumed that the Effective Date will be on or before March 15,
2002. Of course, there can be no certainty that the Effective Date will occur by
such date, and the satisfaction of many of the conditions to the occurrence of
the Effective Date is beyond the control of the Debtors.

         Distributions will be made to holders of Allowed DIP Claims on the
Effective Date. The DIP Lender shall receive the New Secured Note to the extent
of any deficiency under the DIP Facility. Distributions on account of Allowed
Administrative Claims (other than Administrative Claims which will be paid in
the ordinary course of business), Allowed Priority Claims, Allowed Secured
Claims, and Allowed Unsecured Claims will be made on the Distribution Date or as
soon as practicable thereafter and such Distribution shall be deemed to have
been made timely if made within ten (10) days from the time specified in the
Plan. Distributions on account of Allowed Tax Claims shall be made, at the sole
option of the Debtors, in (a) annual Cash payments equal to such holder's
Allowed Tax Claim with Post-Confirmation Interest over a period through the
sixth anniversary of the date of assessment of such Allowed Tax Claim,
commencing on the first anniversary of the Effective Date, (b) one Cash payment
of some lesser amount agreed to in writing by the Debtors and such holder, or
(c) such other treatment as may be agreed upon in writing by such creditor.

         Notwithstanding the foregoing, a Distribution on account of a Contested
Claim will be made only when, and to the extent that, such Contested Claim
becomes Allowed. All Distributions to be made in Cash under the Plan will be
made by check drawn on a domestic



                                       17


<PAGE>

bank or wire transfer from a domestic bank. No Cash in fractions of cents will
be paid. All fractional cents shall be rounded to the nearest whole cent.


                            V. BACKGROUND OF DEBTORS


A. OPERATIONS.

         The Debtors' prepetition operational and financial history is
summarized in Section V.C. below. After the Petition Date, the Debtors reduced
operating costs and overhead substantially by terminating non-essential
employees, rejecting burdensome leases, and implementing a turnaround of the
core operations of e.Volve's facilities-based network of providing international
telecommunications services. In addition, the businesses of the AxisTel Debtors
were discontinued (see Section VII.I. below). In that regard, during the first
two months of these cases, the Debtors expanded their business relationship with
e.Volve's largest customer, Qwest. Prior to the Petition Date, e.Volve operated
at a diminished capacity and AxisTel operated at substantial losses. Qwest,
which accounted for approximately 70% of the traffic carried by e.Volve for the
twelve months ended August 31, 2001, accounted for approximately 100% of the
traffic after the Petition Date until that relationship ended in November 2001.
The circumstances surrounding the termination of that relationship and
devastating impact on e.Volve's ability to operate is discussed in Section
VII.H. below.


B. COMPETITION.

         The international communications industry is highly competitive and
significantly affected by regulatory changes, marketing and pricing decisions of
the larger industry participants, and the introduction of new services made
possible by technological advances. Long distance service providers compete on
the basis of price, customer service, product quality, and breadth of services
offered. E.Volve has a variety of competitors in the geographic market in which
it operates. As the international communications markets continue to deregulate,
competition in these markets will increase, similar to the competitive
environment that has developed in the United States following the AT&T
divestiture in 1984. Prices of long-distance calls have declined historically
and are likely to continue to decrease. A number of major competitive
international carriers, including Pacific Gateway Exchange, World Access, RSL
COM U.S.A., Inc. ("RSL"), and Star Telecom have been unable to withstand
competitive and financial pressures and have sought bankruptcy protection. In
addition, many of the surviving competitors are significantly larger, have
substantially greater financial, technical, and market resources, and larger
networks.

         Privatization and deregulation have had, and are expected to continue
to have, significant effects on competition in the industry. For example, as a
result of legislation enacted in the United States, regional Bell operating
companies have been allowed to enter certain long distance markets and cable
television companies and utilities will be allowed to enter both the local and
long distance telecommunications markets. In addition, competition has begun to
increase in the European Union communications markets in connection with the
deregulation of


                                       18


<PAGE>


telecommunications industry in most EU countries, which began in January 1998.
This increase in competition could adversely affect net revenue per minute and
gross margin as a percentage of net revenue.


C. HISTORY OF DEBTORS.


         1. ACQUISITION BY NNI.

         The Debtors are direct and indirect wholly-owned subsidiaries of NNI, a
Delaware corporation and publicly traded holding company. In the fall of 1999,
NNI completed a series of transactions whereby it acquired two wholly-owned
operating subsidiaries, e.Volve and AxisTel. In the fall of 2000, NNI
implemented a reorganization whereby (i) NNOC became a wholly-owned subsidiary
of NNI and (ii) AxisTel and e.Volve became wholly-owned subsidiaries of NNISI,
NNGSI and NNMSI are wholly-owned subsidiaries of AxisTel.


         2. INITIAL BUSINESS PLAN.

         Through August 2000, NNI's strategy, which it referred to as "building
a Communications Econet," was acquiring, developing and investing in
communications-related businesses and support services that leverage the power
of the Internet. At the center of this strategy were investments by NNI in
AxisTel, e.Volve and Internet Global Services, Inc ("iGlobal"), a wholly-owned
subsidiary of NNOC. This network buildout focused on the deployment and
operation of private, managed global communications networks. Since the initial
deployment of those networks, AxisTel and e.Volve utilized their networks
primarily to provide communications services to communications service
providers, such as Qwest, AT&T and RSL.


         3. EVENTS PRECIPITATING CHAPTER 11 FILINGS.

         The Debtors were not able to raise capital from external sources in
amounts necessary to complete the build-out of their planned global network. In
September 2000, the Debtors sought to capitalize on the expanding broadband
market by building a global network that intended to provide data transport,
Internet access and value added services to communications, Internet and
applications service providers. Implementation of this plan required that the
Debtors greatly expand their existing networks both domestically and
internationally by adding fiber optic transport capacity and sophisticated
telecommunications equipment and increasing facilities to house both the new
equipment and a greatly expanded sales staff. This network expansion plan
required that the Debtors raise substantial additional capital, which the
Debtors planned to raise from vendors and from one or more issuances of equity
by NNI.

         The Debtors began efforts to implement this plan in the fall of 2000.
They approached numerous vendors of equipment and fiber capacity, aggressively
hired industry veterans for sales and network management positions, identified
and negotiated leases and collocation agreements


                                       19


<PAGE>

and, through the efforts of NNI, attempted to raise equity in the capital
markets. During this time period, the Debtors continued to operate their
historical, telecommunications business. The Debtors pursued this plan until the
end of the first quarter of calendar 2001.

         Unfortunately, this business plan did not succeed as expected. In
addition, JP Morgan was retained to market the companies, but that effort did
not result in the consummation of a transaction. Further, the Debtors continued
to be faced with liquidity constraints. After evaluating all their restructuring
alternatives, the Debtors decided that seeking protection under chapter 11 of
the Bankruptcy Code is the most prudent option.


D. RECENT FINANCIAL PERFORMANCE, CONDITION OF DEBTORS.

         For the fiscal year ended June 30, 2000, the Debtors had gross revenues
of approximately $55 million, and their books and records reflected assets
totaling approximately $38 million, and liabilities of approximately $16
million. For the three months ending March 31, 2001, the Debtors had gross
revenues of approximately $19 million, as compared to approximately $16 million
for the three months ending March 31, 2000. At the end of that period, the
Debtors' assets totaled approximately $45 million, and their liabilities totaled
approximated $22 million.


                           VI. PREPETITION LITIGATION

         As of the Petition Date, one or more of the Debtors was a party to
various litigation in federal or state court. Some of the litigation is
described below.

A. WHOLESALE TELECOM CORPORATION V. NOVO NETWORKS INTERNATIONAL SERVICES, INC.

         On May 16, 2001, WTC filed suit against NNISI in the United States
District Court for the Southern District of Florida for fraud, breach of
contract, fraud in the inducement, and specific performance in connection with
an agreement for the provision of services by NNISI to WTC. In its complaint,
WTC seeks to recover from NNISI compensatory damages in excess of $500,000 and
punitive damages in excess of $50,000,000. WTC alleges that NNISI failed to
provide reliable and fully-protected circuits. Accordingly, WTC refused to pay
NNISI for certain services. NNISI repeatedly attempted to address WTC's
concerns. However, when WTC persisted in its refusal to pay even undisputed
amounts, NNISI suspended services. WTC responded by commencing this litigation.
NNISI has filed a motion to dismiss the federal court case based on a mandatory
arbitration provision in the agreement. NNISI intends to vigorously defend
against WTC's claims and seek all relief to which it may be entitled, including,
without limitation, the recovery of all amounts owed for services rendered,
pursuant to the applicable rules of the American Arbitration Association. As a
result of the commencement of the Chapter 11 Cases, the action has been stayed
by virtue of the automatic stay, 11 U.S.C. Section. 362.


                                       20

<PAGE>
B.       ELTRAX SYSTEMS, INC. V. ORIX SYSTEMS, INC.,
         ORIX GLOBAL COMMUNICATIONS, INC., AND KERRY ROGERS.

         On April 7, 1998, Orix Systems commenced a lawsuit in the Eighth
Judicial District Court of Clark County, Nevada, against Eltrax for allegedly
supplying faulty items of equipment to Orix Systems. In turn, Eltrax commenced a
separate lawsuit in the United States District Court for the Southern District
of Nevada against Orix Systems, Orix Global (n/k/a e.Volve Technology Group,
Inc.), and Mr. Rogers for allegedly failing to pay approximately $381,802.00 for
said equipment. Orix Systems' lawsuit was removed by Eltrax to the United States
District Court for the Southern District of Nevada, and it was ultimately
consolidated with Eltrax's lawsuit. Thereafter, the district judge took under
advisement a recommendation from the magistrate judge that a default judgment be
entered against Orix Systems, Orix Global, and Mr. Rogers for purported failures
to respond to discovery requests from Eltrax while both companies were under the
common control of Mr. Rogers. Orix Global was later acquired by Novo Networks,
Inc. Orix Global, under the guidance of a new attorney, attempted to explain the
difference between Orix Systems and Orix Global and asserted that any obligation
to Eltrax must be deemed the responsibility of Orix Systems and Mr. Rogers.
Nevertheless, on April 10, 2001, the district judge adopted the recommendation
of the magistrate judge and entered a default judgment against Orix Systems and
Orix Global and held them jointly and severally liable to Eltrax for the debt of
$381,802.00, plus pre-judgment interest at the rate of 10.5% per annum, from
February 19, 1998, through April 10, 2001, and post-judgment interest
thereafter. On May 10, 2001, Orix Global appealed the default judgment to the
United States Court of Appeals for the Ninth Circuit. Orix Global intends to
vigorously pursue its rights throughout the appellate process.

                            VII. THE CHAPTER 11 CASES


A.       COMMENCEMENT OF THE CHAPTER 11 CASES.

         On July 30, 2001, all of the Debtors except NNMSI (hereafter, the
"Initial Debtors") commenced chapter 11 cases by each filing a voluntary
petition for protection under chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware. On September 14, 2001,
NNMSI commenced its chapter 11 case by filing a voluntary petition in the
Bankruptcy Court. The Chapter 11 Cases are being jointly administered under Case
No. 00-10005 (RJN).


B.       CONTINUATION OF BUSINESS AFTER THE PETITION DATE.

         Since filing for chapter 11, the Debtors have continued to operate
their businesses and manage their property as debtors in possession pursuant to
Sections 1107(a) and 1108 of the Bankruptcy Code. At the "first day" hearing
before the Honorable Joseph J. Farnan, Jr. on August 1, 2001 (the "First Day
Hearings"), the Initial Debtors sought and obtained authority from the
Bankruptcy Court with respect to a number of matters deemed by them to be
essential to their



                                       21

<PAGE>


smooth and efficient transition into chapter 11 administration and to stabilize
their operations, including without limitation:


          1.      DIP CREDIT FACILITY.

          Prior to the Petition Date, the Initial Debtors determined that they
would require debtor in possession financing to obtain necessary goods and
services in connection with their operations, to pay their employees, to restore
confidence and support from their vendors, suppliers, customers, and employees,
and to facilitate their ability to operate their businesses in the event they
commenced cases under chapter 11 of the Bankruptcy Code.

         In that regard, prior to commencing the Chapter 11 Cases, the Initial
Debtors obtained a commitment from NNI to provide postpetition financing in an
amount not to exceed $1,600,000 in the aggregate. The commitment of NNI to
provide such financing was conditioned upon, among other things, obtaining valid
first and senior liens with superpriority status pursuant to Section 364(c)(1)
of the Bankruptcy Code on substantially all of the Debtors' assets, including
all of the Debtors' cash and bank accounts, to secure such obligations.

         By order dated August 1, 2001 (the "Interim DIP Order"), the Bankruptcy
Court approved on an interim basis postpetition secured financing to the Debtors
by NNI up to $1,200,000 in accordance with the terms of the Credit and Guaranty
Agreement dated as of July 30, 2001 (the "DIP Credit Agreement"). By final order
dated October 16, 2001 (the "Final DIP Order"), the Bankruptcy Court approved
the DIP Credit Agreement and authorized the Debtors to borrow up to $1,600,000
from NNI in accordance with the terms of the DIP Credit Agreement and the Final
DIP Order (collectively, the "DIP Financing").

         The maturity date of the DIP Credit Agreement was November 30, 2001,
subject to extensions by agreement of the DIP Lender. On November 30, 2001, the
Debtors moved to extend the maturity date to the earlier of consummation of a
plan and February 28, 2002 (subject to certain conditions). By Order dated
December 7, 2001, the Bankruptcy Court approved the extension on an interim
basis and by Order dated January 14, 2002, the Bankruptcy Court approved the
extension on a final basis.

         As of December 28, 2001, $150,000 in total borrowings had been made by
the Debtors under the DIP Financing.


         2.      EMPLOYEE MATTERS.

         The Debtors' efforts to stabilize their businesses and continue their
uninterrupted operations required their ability to maintain existing business
relationships and the continued support and cooperation of their employees.
Accordingly, at the First Day Hearings, the Initial Debtors sought and obtained
authority to (a) meet all prepetition employee obligations, including (i)
payment of wages, salaries, health insurance and disability insurance, federal,
state and local withholding taxes, and unemployment taxes, (ii) making
contributions in accordance with all employee benefit plans, such as health
insurance, vacation pay and a 401(k) plan, (iii) satisfying



                                       22




<PAGE>


all accrued but unpaid reimbursement expenses, (iv) paying for services provided
by professionals and consultants who assist the Debtors in the administration of
their employee benefits plans; (b) continue to honor all of the foregoing
employee obligations to the extent that they arise in the ordinary course of
business; and (c) transfer any postpetition funds necessary to replace any
checks dishonored or rejected as a result of the chapter 11 filings.
Furthermore, Judge Farnan authorized and directed each of the banks in which the
Debtors maintained a bank account to honor all prepetition and postpetition
checks related to such prepetition obligations to employees.

         Subsequently, the Debtors have reduced the number of their employees as
the result of the discontinuation of the AxisTel Debtors' Jersey City operations
and the termination of e.Volve's relationship with Qwest.


         3.      MAINTENANCE OF UTILITY SERVICES.

         The Initial Debtors sought and obtained an interim order dated August
1, 2001 (the "Interim 366 Order") and then a final order dated October 16, 2001
from the Bankruptcy Court, determining that the Debtors had provided adequate
assurance of future performance to their utility service providers pursuant to
Section 366(b) of the Bankruptcy Code. The Bankruptcy Court allowed the Debtors'
utilities thirty (30) days from the interim order to demand additional adequate
assurances in the form of deposits or other security. The Bankruptcy Court also
authorized the Debtors to pay their utilities in accordance with their
prepetition practices.


         4.       RETENTION OF PROFESSIONALS.

         The Initial Debtors sought approval from the Bankruptcy Court for the
retention of the following professionals pursuant to Section 327 of the
Bankruptcy Code: (a) the law firm of The Bayard Firm, P.A. ("Bayard") as counsel
representing the Debtors in these Chapter 11 Cases; and (b) Executive Sounding
Board Associates Inc. ("ESBA") as the Debtors' financial advisor and
restructuring consultant. On August 15, 2001, the Bankruptcy Court entered an
order approving the retention of Bayard. The Office of the United States Trustee
(the "UST") objected to certain terms and conditions of the retention of ESBA.
However, the UST's objection has been resolved, and ESBA's retention was
approved by order dated October 5, 2001. Additionally, on August 15, 2001 the
Bankruptcy Court approved the Initial Debtors' retention of Logan & Company,
Inc. as claims, noticing and balloting agent. On December 28, 2001, the Debtors
filed an application to retain Dove Bid as an auctioneer. The Debtors may seek
court approval of the retention of additional professionals.


         5.      CRITICAL TRADE VENDORS AND SUPPLIERS.

         In order to foster an amicable and healthy relationship with the
Debtors' most critical vendors and suppliers during the Chapter 11 Cases, at the
First Day Hearings, the Initial Debtors sought and obtained authority to pay up
to $350,000 towards the prepetition claims of certain critical trade vendors,
suppliers and service providers. The Bankruptcy Court also authorized the



                                       23


<PAGE>


Debtors to pay such vendors and suppliers for future deliveries on credit terms
and limits that are the same or better than those provided prior to the Petition
Date. As of the date of this Disclosure Statement, the Debtors had not paid any
of the critical trade vendors or suppliers for prepetition claims.


         6.      OTHER FIRST DAY ORDERS

         In addition, at the inception of these Chapter 11 Cases the Initial
Debtors sought and obtained orders authorizing (i) joint administration of the
Chapter 11 Cases; (ii) continued use of existing cash management system, bank
accounts and business forms, and waiver of investment and deposit requirements
under Section 345 of the Bankruptcy Code; (iii) retention of professionals
utilized in the ordinary course of business; (iv) additional time to file
Schedules and Statements. At the First Day Hearings this Court also entered an
order granting the Initial Debtors' motion for entry of an order enforcing 11
U.S.C. Sections 362 and 525 (the "362/525 Order").(6)


C.       FORMATION MEETING FOR STATUTORY CREDITORS' COMMITTEE.

         On or about August 13, 2001, the United States Trustee held a meeting
for the formation of a statutory creditors' committee. Due to a lack of interest
by creditors, a committee was not formed.

D.       CASE ADMINISTRATION.


         1.      REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

         After commencing these Chapter 11 Cases, the Initial Debtors filed a
motion pursuant to 11 U.S.C. Section 365(a) to reject various executory
contracts and unexpired leases, effective as of the Petition Date. Such
contracts and leases were no longer necessary to their operations, yet required
monthly payments aggregating approximately $600,000. At the First Day Hearings,
the Bankruptcy Court directed that such motion be served on ten days' "negative
notice," and that the rejection of the executory contracts and unexpired leases
of any parties not objecting on a timely basis would be effective as of the
petition date of July 30, 2001. Five parties filed written responses, three of
which objected on the grounds that they would be irreparably harmed if the
rejection were effective immediately: Verestar/General Telecom, NuLink, and
UniPlex. UniPlex


-----------------------

(6)  On September 21, 2001, the Bankruptcy Court entered an order amending the
     "first day" order approving joint administration of these Chapter 11 Cases
     to add the chapter 11 case of NNMSI.



                                       24


<PAGE>

and NuLink subsequently withdrew their objections. The objection of
Verestar/General Telecom was resolved by such parties' agreement that the
objectors would satisfy any unpaid obligations through September 2001 in
exchange for rejection of their respective executory contracts effective on
September 30, 2001. On September 21, 2001, the Bankruptcy Court entered an order
approving the rejection of all of the executory contracts and unexpired leases
set forth in the motion.

         On December 21, 2001, the Debtors filed motions to reject additional
unnecessary executory contracts and the unexpired real property leases for their
offices in Jersey City, Miami, and Dallas (Bryan Street). The Debtors may file
one or more additional motions to reject pursuant to Section 365 after further
review of their remaining contracts and leases.


         2.      EXTENSION OF TIME TO ASSUME OR REJECT.

         On September 26, 2001, in order to preserve value for the benefit of
their creditors and the estates, the Debtors filed a motion requesting entry of
an order extending the sixty-day period within which they must assume or reject
unexpired leases of nonresidential real property to December 31, 2001. Pursuant
to Section 365 of the Bankruptcy Code, all unexpired leases of nonresidential
real property that are not otherwise assumed prior to the end of the sixty-day
period following commencement of the Cases are deemed rejected by operation of
law, unless this Court extends such time for cause. On October 22, 2001, the
Bankruptcy Court entered an order extending the period to December 31, 2001. On
December 21, 2001, in order to preserve the few remaining unexpired leases for
the duration of the auction process, the Debtors filed a motion for a further
extension of time through February 28, 2002.


         3.      THE DEBTORS' SCHEDULES; ESTABLISHING A BAR DATE AND
                 CLAIMS OBJECTION PROCEDURES.

         On August 28, 2001, the Initial Debtors filed respective schedules of
assets and liabilities and statements of financial affairs (the "Schedules"). In
the aggregate, the Initial Debtors scheduled unsecured claims aggregating
$10,958,204, of which $1,651,211 are unsecured claims against e.Volve,
$9,295,962 are unsecured claims against the AxisTel Debtors, and $11,031 are
unsecured claims against NNOC. Subsequently, NNMSI filed its schedules and
statement of financial affairs. NNMSI did not schedule any claims.

         In addition to claims scheduled by the Debtors, numerous proofs of
claim have been filed against the Debtors. By order dated August 15, 2001 (the
"Bar Date Order"), the Bankruptcy Court fixed October 19, 2001 as the deadline
to file all proofs of claim against the Debtors (the "Bar Date"). As provided in
the Bar Date Order, all holders of alleged claims against the Debtors were
required to file a proof of claim form so as to actually be received by October
19, 2001 at 4:00 p.m. Prevailing Eastern Time by the Debtors' claims agent,
Logan & Company, Inc. The Bar Date Order also approved the form of the proof of
claim which was to be served on all known creditors and the form of publication
notice. The notice was ultimately published on or before September 20, 2001 in
The Wall Street Journal (National Edition), Dallas



                                       25


<PAGE>
Morning News, and the Star-Ledger (New Jersey). In addition, the Bankruptcy
Court fixed November 5, 2001, as the deadline to file proofs of claim against
NNMSI.

         Claims have been filed against the Debtors in the following aggregate
amounts: secured claims -- $5,176,247.65; priority claims -- $1,421,245.95; and
unsecured claims -- $66,751,499.92 (collectively, the "Filed Claims"). The
Debtors are currently examining all of the Filed Claims. Upon completion of this
examination, the Debtors expect that they will be filing several substantive
claims objections. Initially, the Debtors expect to file an omnibus objection to
the Filed Claims which appear to be either (i) the same claim filed multiple
times, (ii) amendments of previously filed claims, (iii) the same claim filed
against several Debtors, or (iv) claims filed after the Bar Date.


         4.      EXCLUSIVITY.

         Pursuant to 11 U.S.C. Section 1121(a) and (b), the Debtors had the
exclusive right to file a chapter 11 plan until November 27, 2001, and the
exclusive right to solicit acceptances thereof until January 26, 2002.
Subsequently, the Debtors filed a motion to extend such periods. By Order dated
December 6, 2001, the Bankruptcy Court extended such periods to January 31, 2002
and March 31, 2002, respectively.


E.       SIGNIFICANT CLAIMS AND POSTPETITION DISPUTES.


         1.      RSL.

         The Debtors were engaged in disputes with RSL COM U.S.A., Inc. ("RSL")
that began prior to these Chapter 11 Cases. RSL is a debtor in possession in a
chapter 11 case pending before the United States Bankruptcy Court for the
Southern District of New York (the "New York Bankruptcy Court"). Following an
escalation of such disputes after these Chapter 11 Cases commenced, RSL and the
Proponents reached a global settlement of all matters among them.

         Beginning in 1998, NNISI operated a prepaid calling card business.
Generally, NNISI sold to wholesale distributors prepaid calling cards which, in
turn, were widely distributed in the marketplace directly or through retail
outlets to consumers throughout the United States. A more detailed description
of this business is set forth in Section VII.F. below.

         Historically, RSL provided services integral to the prepaid business
pursuant to a carrier services agreement with NNISI. Specifically, RSL provided
(i) inbound 800 service; (ii) outbound domestic termination services; and (iii)
outbound international termination services. The Debtors' non-debtor parent
company, NNI, executed a guaranty dated October 12, 2000 in connection with this
contractual relationship, subject to certain terms and conditions with respect
to RSL's provision of trade credit to NNISI. Approximately one month prior to
the commencement of these Chapter 11 Cases, RSL notified the Debtors that
immediately its billing terms would change from 30 to 7 days. The Debtors
responded that the above-referenced carrier services agreement required
"reasonable notice" of any such modification. In addition, the



                                       26


<PAGE>


Debtors accused RSL of intentionally backing up the Debtors' traffic (known in
the industry as "squeezing down," "choking" or "throttling"). On July 24, 2001,
the Debtors paid RSL $454,367.84 for outstanding prepetition services.

         The relationship between the Debtors and RSL deteriorated rapidly after
these Chapter 11 Cases commenced. At the First Day Hearings, the Debtors filed a
motion for a temporary restraining order against RSL (the "TRO Motion").
However, after Judge Farnan entered the 362/525 Order, the Debtors withdrew the
TRO Motion without prejudice. Unfortunately, the disputes between the parties
escalated even further. The Debtors alleged that RSL, inter alia, engaged in the
following conduct: (i) RSL continued to "squeeze down," "choke" and "throttle"
the Debtors' traffic, especially international calls, causing only a small
percentage of international calls to be successfully routed; (ii) RSL
unilaterally increased its rates three-fold (or higher); and (iii) in June 2001.
without providing any notice to the Debtors, RSL had obtained approval in its
bankruptcy case of a sale of its wholesale carrier business to an entity named
Dancris Telecom ("Dancris"), and had not disclosed this pending transaction to
the Debtors until one day before the scheduled closing date of July 31, 2001 --
the significance of that allegation being that once the deal to Dancris closed,
RSL would no longer be able to perform under the carrier services agreement.

         On August 24, 2001, the Debtors filed in the Bankruptcy Court a
verified motion for contempt against RSL. The Debtors accused RSL of, among
other things, violating Sections 362, 365 and 366 of the Bankruptcy Code and the
Interim 366 Order and 362/525 Order. A few days earlier, RSL had filed in the
Bankruptcy Court a motion for relief from the automatic stay for the purpose of
moving to reject executory contracts between the parties.

         After commencing discovery in connection with their respective motions,
RSL and the Proponents reached a global settlement (the "RSL Settlement"). On
November 21, 2001 and December 6, 2001, respectively, the Debtors and RSL each
filed motions in their respective bankruptcy courts seeking approval of the RSL
Settlement. On December 20, 2001, and December 21, 2001, respectively, the
Bankruptcy Court and the New York Bankruptcy Court approved the Settlement. In
summary, the terms of the RSL Settlement are as follows: (i) RSL shall receive a
total payment of $208,000.00, of which $158,000.00 shall come from the Debtors
and $50,000 from NNI; (ii) RSL and any of its affiliates waive any and all
rights to receive any distribution in these Cases; (iii) NNI's guarantee of the
Debtors' obligations is cancelled and all parties thereto are released by RSL;
(iv) the Proponents and RSL grant one another releases; (v) all proceedings
shall be deemed withdrawn with prejudice; (vi) the Debtors waive all claims
against RSL and its affiliates; (vii) the Debtors are authorized to transfer the
800 customer service number services to another carrier; and (viii) the Debtors
and RSL agree to a termination of all agreements between the parties and release
one another from any claims arising from the termination thereof; (ix) RSL
waives any and all claims against the Proponents.


         2.      UNSECURED CLAIMS.

         Section VII.D.3 above summarizes unsecured claims asserted against the
Debtors.



                                       27

<PAGE>
         3.      TURNOVER ACTIONS.

         Since the Petition Date, the Debtors have initiated turnover actions
pursuant to 11 U.S.C. Section 542 against the following parties: Network
Enhanced Telecom, Olympus Telecommunications LLC and Olympus Telecommunications
Ltd. The Debtors may file additional actions in respect of the collection of
prepetition accounts receivable and security deposits, if necessary. In
addition, the Debtors settled a potential turnover claim against Covista, and
the Bankruptcy Court's approval of that settlement is pending.


F.       TERMINATION OF PREPAID CALLING CARD BUSINESS.

         As described above, the Debtors -- primarily through the debtors NNISI
and NNMSI -- operated a prepaid calling card business beginning in 1998. The
prepaid calling cards were sold for a stated face value. Customers used the
calling cards by dialing a local or toll-free number (the "Dial-In-Number"),
entering a pin code printed on the cards and then dialing a telephone number.
The charges for the local and long distance calls were debited against the
calling cards. The calls were transferred to a RSL switch, after which they were
routed to an NNISI switch and terminated through vendors such as RSL. Such
services were provided pursuant to a carrier services agreement between NNISI
and RSL. As described above, RSL provided (i) inbound 800 service; (ii) outbound
domestic termination services; and (iii) outbound international termination
services.

         In the weeks preceding its bankruptcy filing, NNISI determined that its
prepaid business was no longer profitable. It believed that this was at least in
part due to the alleged actions of RSL. Accordingly, during the prepetition
period, NNISI discontinued distributing new calling cards into the marketplace.
Nevertheless, a month into the Chapter 11 Cases, there remained an estimated 1.7
million activated cards outstanding. When issued prepetition, the average face
value of each card was approximately $10.00. A few weeks into the Chapter 11
Cases, the average unused portion of each card was estimated to be only $1.00;
however, it could have taken as long as six months for all remaining minutes on
such cards to be used. Moreover, servicing the remaining cards would continue to
cost the Debtors approximately $20,000 per day, but they were receiving no
additional income (because the cards were "prepaid"). Further, the primary
service provider was RSL, with whom the Debtors were litigating (and who had
sold its wholesale business). For all of these reasons, less than a month after
the Petition Date, the Debtors decided to take steps to terminate the prepaid
calling card business.

         As a precaution, the Debtors sought, on an emergency basis, the
Bankruptcy Court's approval of the Debtors' rejection of the calling cards and
the termination of the business. Upon the Bankruptcy Court's denial of the
request for an expedited hearing, and the advent of negotiations with RSL (which
would include discussions regarding the termination of the carrier services
agreement) which led to a settlement, the Debtors decided it was in the best
interests of these Estates and creditors to immediately terminate the prepaid
calling card business. Accordingly, the expedited motion was withdrawn.



                                       28


<PAGE>

G.       INDEFEASIBLE RIGHT OF USE ("IRU").

         The IRU is the only business-related asset of the AxisTel Debtors with
potential significant value (besides possibly the Siemens Switch -- to which
there is a pending motion to reject a "lease"). This asset relates to a certain
agreement between Qwest and e.Volve effective as of September 30, 1999 (the "IRU
Agreement"), which was later assigned from e.Volve to AxisTel. Under the IRU
Agreement, Qwest provides an indefeasible right to use for fiber optic transport
between New York and Los Angeles. The Debtors' proposed retention of Dove Bid as
an auctioneer contemplates the sale of the IRU through a sealed bid auction. A
sale would require court approval as an asset sale under section 363 of the
Bankruptcy Code, or as an assumption and assignment under section 365.


H.       DISPUTES WITH QWEST; LITIGATION CLAIM.

         Historically, e.Volve provided telecommunications services to Qwest for
traffic from the U.S. to Mexico. A substantial portion of the revenues for that
business was derived from that relationship. Following the Petition Date,
e.Volve substantially increased the volume of Qwest traffic to Mexico, and
consequently virtually all of the Debtors' revenues came from Qwest. The initial
chapter 11 plan filed in early October was premised on that business
relationship continuing, albeit in a more committed fashion through the
execution of definitive agreements.

         As e.Volve increased its volume of Qwest traffic and focused its
resources on that customer relationship, it began discussions with Qwest
regarding a more committed, long term relationship. For weeks the Proponents
were in active negotiations for the purpose of obtaining definitive commitments
for e.Volve's provision of packet-based international telecommunications
services. In addition, there was a specific proposal by Qwest to acquire the
IRU.

         Unfortunately, in early October 2001, negotiations with Qwest began
deteriorating. It would become clear that not only was Qwest not going to enter
into commitments, Qwest stopped paying the Debtors and soon it would end the
business relationship entirely. The impact on the Debtors was devastating --
suddenly they had lost their primary revenue source while faced with substantial
pre- and postpetition receivables and improper offsets which Qwest refused to
rectify.

         The Proponents believe that this conduct and various other actions by
Qwest going back to the inception of the business relationship give rise to
material claims against Qwest (the "Qwest Litigation Claims"). One of the
centerpieces of the Plan is the prosecution of such claims.


I.       JERSEY CITY OPERATIONS.

         Historically, the AxisTel Debtors operated their prepaid calling card
and wholesale carrier businesses out of their office in Jersey City, New Jersey.
Before filing for bankruptcy, it became clear to the Debtors that the prepaid
business was not profitable. One available option was a sale



                                       29


<PAGE>

of the business. The Debtors began to explore that possibility prior to the
Petition Date. However, the escalating dispute with RSL diverted attention and
would ultimately, in the Debtors' view, diminish the prospects for selling this
asset. Therefore, as described above, soon after filing for bankruptcy, the
AxisTel Debtors began taking steps to terminate the calling card business.

         The other activity operated from Jersey City, the wholesale carrier
business, also was not profitable. As the Debtors were commencing these Chapter
11 Cases, they determined it was necessary to, at a minimum, scale back that
operation. Accordingly, as they entered chapter 11, the Debtors identified
contracts relating to that business, and on the Petition Date, the Initial
Debtors filed a motion to reject various executory contracts and unexpired
leases, which included such contracts. On September 21, 2001, the Bankruptcy
Court entered an order approving that motion. The vast majority of the executory
contracts were rejected as of the Petition Date. By the end of September, the
AxisTel Debtors were no longer servicing any wholesale customers out of the
Jersey City office.

         As referenced above, the Debtors filed a motion to retain an
auctioneer, Dove Bid, to sell the assets of the AxisTel Debtors. In addition,
the Debtors filed a motion for authority to sell such assets by public auction.
All assets would be sold by Dove Bid through a public auction except the IRU
(which will be sold by a sealed bid auction). Most of such assets are located at
the Jersey City office. The AxisTel Debtors anticipate completing the
liquidation of such assets by the Effective Date.

         The Debtors will continue to investigate and, if necessary, prosecute
possible claims against former directors or officers of the AxisTel Debtors
including, without limitation, claims for breach of fiduciary duty and fraud. In
addition, the Debtors will investigate and pursue claims against certain other
third parties which relate to the pre- or postpetition operations of the AxisTel
Debtors.

J.       SIEMENS SWITCH.

         As referenced previously, AxisTel and Siemens are parties to a certain
"Lease Agreement" effective as of October 1, 1999. Notwithstanding the fact that
the Debtors filed a motion to reject that agreement pursuant to section 365 of
the Bankruptcy Code (which was pending as of the date of this Disclosure
Statement), there may be an issue whether the transaction with Siemens was a
true lease or a financing transaction. In addition, the Debtors may have claims
against Siemens in connection with the transaction for damages they have
suffered, including without limitation, damages arising from defects in
equipment. The Debtors preserve such claims under the Plan.


K.       ASSET SALES.

         In addition to the liquidation of the AxisTel Debtors' assets through
the services of an auctioneer, the Plan contemplates the auction of the
operating assets of e.Volve. In December 2001, the Debtors commenced an
intensive sale process, led by management, for the sale of



                                       30

<PAGE>

e.Volve. It is anticipated that that process will conclude by mid-February 2002,
and that a request for approval of sale pursuant to section 363 of the
Bankruptcy Code or under the Plan will be put before the Court by confirmation.


L.       CAUSES OF ACTION AGAINST THIRD PARTIES, INCLUDING CREDITORS.

         In addition to claims and causes of action referenced herein against
Qwest, Siemens, and certain former directors, officers and employees of the
Debtors, the Debtors have potential claims and causes of action against other
third parties. For example, the Debtors have potential avoidance actions against
third parties pursuant to sections 544, 545, 547, 548, 549, 550, 551 and 553(b)
of the Bankruptcy Code.

         The Debtors are exploring the extent to which they may have additional
causes of action against third parties. The discussions in this Disclosure
Statement reflect only the preliminary results of the investigations to date.
Those investigations are ongoing and not yet completed. The Debtors believe that
they may also have viable claims against entities not identified herein.
AS A RESULT, PARTIES IN INTEREST, INCLUDING WITHOUT LIMITATION CREDITORS, MAY
NOT RELY ON THE ABSENCE OF A REFERENCE IN THE DISCLOSURE STATEMENT OR THE PLAN
AS ANY INDICATION THAT THE DEBTORS WILL NOT PURSUE ANY AND ALL AVAILABLE CAUSES
OF ACTION AGAINST THEM. THE DEBTORS AND THE DEBTORS' ESTATES EXPRESSLY RESERVE
ALL RIGHTS TO PROSECUTE ANY AND ALL CAUSES OF ACTION AGAINST THIRD PARTIES,
WHETHER OR NOT REFERENCED IN THE DISCLOSURE STATEMENT OR PLAN.


                            VIII. SUMMARY OF THE PLAN

         The Proponents believe that the chapter 11 process has enabled them to
maximize the value of the Debtors' Assets by effectuating the Auction, the
formation of the Trust, the Settlement and the prosecution of the Qwest
Litigation Claim. As a result of the chapter 11 process and through the Plan,
the Proponents expect that creditors will obtain a substantially greater
recovery from the Estates than the recovery that would be available if the
Assets had been liquidated under chapter 7 of the Bankruptcy Code. The Plan is
annexed hereto as Exhibit "A" and forms a part of this Disclosure Statement. The
summary of the Plan set forth below is qualified in its entirety by the more
detailed provisions set forth in the Plan.


A.       CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS.

         If the Plan is confirmed by the Bankruptcy Court, each holder of an
Allowed Claim or Equity Interest in a particular class will receive the same
treatment as the other holders in the same class of Claims or Equity Interests,
whether or not such holder voted to accept the Plan. Moreover, upon
confirmation, the Plan will be binding on all of the Debtor's creditors and
stockholders whether or not such creditors or stockholders voted to accept the
Plan. Such



                                       31


<PAGE>

treatment will be in full satisfaction, release and discharge of and in exchange
for such holder's respective Claims or Equity Interests, except as otherwise
provided in the Plan.


         1.      UNCLASSIFIED CLAIMS.

         The Bankruptcy Code does not require classification of certain priority
claims against a debtor. In the Chapter 11 Cases, these unclassified claims
include Administrative Claims.

         Administrative Claims. An Administrative Claim is any cost or expense
of administration of the Chapter 11 Case incurred by the Debtors (or their
Estates) on or after the Petition Date and before the Effective Date, and which
is entitled to and allowed priority under Sections 503(b) and 507(a)(l) of the
Bankruptcy Code, including, without limitation, Fee Claims. Subject to this
Court's fixing of an initial bar date for Administrative Claims that accrued
through a date prior to the Effective Date, an Administrative Claim with respect
to which notice has been properly filed and served pursuant to Section 5.1(a) of
the Plan shall become an Allowed Administrative Claim if no objection is filed
within 180 days after the Effective Date, or such later date as may be approved
by the Bankruptcy Court on motion of a party in interest, without notice or a
hearing. If an objection is filed within such 180-day period (or any extension
thereof), the Administrative Claim shall become an Allowed Administrative Claim
only to the extent allowed by Final Order. An Administrative Claim with respect
to which a Fee Application has been properly filed pursuant to Section 5.1(b) of
the Plan shall become an Allowed Administrative Claim only to the extent allowed
by Final Order.

         On the Distribution Date, each holder of an Allowed Administrative
Claim shall receive (i) the amount of such holder's Allowed Claim in one Cash
payment, or (ii) such other treatment as may be agreed upon in writing by the
Debtors and such holder; provided, that an Administrative Claim representing a
liability incurred in the ordinary course of business of the Debtors may be paid
at the Debtors' election in the ordinary course of business.

         Tax Claims. At the election of the Debtors, each holder of an Allowed
Tax Claim shall receive in full satisfaction of such holder's Allowed Tax Claim,
(a) the amount of such holder's Allowed Tax Claim, with Post-Confirmation
Interest thereon, in equal annual Cash payments on each anniversary of the
Effective Date, until the sixth anniversary of the date of assessment of such
Tax Claim (provided that the Disbursing Agent may prepay the balance of any such
Allowed Tax Claim at any time without penalty); (b) a lesser amount in one Cash
payment as may be agreed upon in writing by such holder; or (c) such other
treatment as may be agreed upon in writing by such holder. The Confirmation
Order shall constitute and provide for an injunction by the Bankruptcy Court as
of the Effective Date against any holder of a Tax Claim from commencing or
continuing any action or proceeding against any responsible person or officer or
director of the Debtors that otherwise would be liable to such holder for
payment of a Tax Claim so long as no default has occurred with respect to such
Tax Claim under the Plan.



                                       32
<PAGE>
         2.      CLASSIFIED CLAIMS.


         The following describes the Plan's classification of the Claims and
Equity Interests that are required to be classified under the Bankruptcy Code
and the treatment that the holders of Allowed Claims or Equity Interests will
receive for such Claims or Equity Interests:

         (a) Class 1: Priority Claims. The "Priority Claims" consist of those
Claims that are entitled to priority in accordance with Section 507(a) of the
Bankruptcy Code, other than Administrative Claims. As to each of the Debtors,
each holder of an Allowed Priority Claim shall be unimpaired under the Plan and,
pursuant to Section 1124 of the Bankruptcy Code, all of the legal, equitable and
contractual rights of each holder of an Allowed Priority Claim in respect of
such Claim shall be fully reinstated and retained as though the Chapter 11 Cases
had not been filed, except as provided in Section 1124(2)(A)-(C) of the
Bankruptcy Code, and the holders of such Allowed Priority Claims shall be paid
in full.

         The Priority Claims are unimpaired under the Plan.

         (b) Class 2: Secured Claims. "Secured Claims" are Claims secured by a
Lien on any Assets, which Lien is valid, perfected, and enforceable under
applicable law and is not subject to avoidance under the Bankruptcy Code or
applicable non-bankruptcy law, and which is duly established in the Chapter 11
Cases, but only to the extent of the value of the holder's interest in the
collateral that secures payment of the Claim; (ii) a Claim against the Debtors
that is subject to a valid right of recoupment or setoff under Section 553 of
the Bankruptcy Code, but only to the extent of the Allowed amount subject to
recoupment or setoff as provided in Section 506(a) of the Bankruptcy Code; and
(iii) a Claim allowed under the Plan as a Secured Claim. As to each of the
Debtors, each holder of an Allowed Secured Claim shall be unimpaired under the
Plan and, pursuant to Section 1124 of the Bankruptcy Code, all of the legal,
equitable and contractual rights of each holder of an Allowed Secured Claim in
respect of such Claim shall be fully reinstated and retained as though the
Chapter 11 Cases had not been filed, except as provided in Section
1124(2)(A)-(C) of the Bankruptcy Code, and the holder of such Allowed Secured
Claims shall be paid in full.

         The Secured Claims are unimpaired under the Plan.

         (c) Class 3: Unsecured Claims. "Unsecured Claims" are Claims other
than DIP Claims, Secured Claims (up to the Allowed amount subject to recoupment
or setoff as provided in Section 506(a) of the Bankruptcy Code), Administrative
Claims, Priority Claims and Tax Claims. Unsecured Claims shall be treated as
follows:

                         e.Volve Unsecured Claims. Each holder of an Allowed
                 Unsecured Claim against e.Volve shall receive on the
                 Distribution Date, a Pro Rata Share of e.Volve's Available
                 Proceeds (in the form of Cash and/or beneficial interests in
                 the Trust), until such Allowed Claim has been paid in full.




                                       33


<PAGE>


                         NNOC Unsecured Claims. Each holder of an Allowed
                 Unsecured Claim against NNOC shall receive on the Distribution
                 Date, a Pro Rata Share of (A) NNOC's Available Proceeds (in the
                 form of Cash and/or beneficial interests in the Trust), and (B)
                 the e.Volve Residual Consideration, until such Allowed Claim
                 has been paid in full.

                         AxisTel Debtors (other than NNISI) Unsecured Claims.
                 Each holder of an Allowed Unsecured Claim against the AxisTel
                 Debtors (other than NNISI) shall receive on the Distribution
                 Date, a Pro Rata share of (A) the Available Proceeds (in the
                 form of Cash and/or beneficial interests in the Trust) received
                 by AxisTel Debtors and (B) the Settlement Proceeds, until such
                 Allowed Claim has been paid in full.

                         NNISI Unsecured Claims. Each holder of an Allowed
                 Unsecured Claim against NNISI shall receive on the Distribution
                 Date, a Pro Rata share of (A) the Available Proceeds received
                 by NNISI (in the form of Cash and/or beneficial interests in
                 the Trust) and (B) the Settlement Proceeds, until such Allowed
                 Claim has been paid in full.

         (d)    Class 4: Equity Interests. Equity Interests in each of the
Debtors shall be treated as follows:

                         e.Volve Equity Interests. NNOC, as the holder of 100%
                 of the Allowed Equity Interests in e.Volve, will receive the
                 e.Volve Residual Assets on the Distribution Date on account of
                 such Equity Interests and shall retain its ownership interests
                 under the Plan.

                         NNGSI, NNISI and NNMSI Equity Interests. AxisTel, as
                 the holder of 100% of the Allowed Equity interests in NNGSI,
                 NNISI and NNMSI, shall retain its ownership interest under the
                 Plan.

                         AxisTel Equity Interests. NNOC, as the holder of 100%
                 of the Allowed Equity Interests in AxisTel, shall retain its
                 ownership interests under the Plan.

                         NNOC Equity Interests. NNI, as the holder of 100% of
                 the Allowed Equity Interests in NNOC, shall retain its
                 ownership interests under the Plan.



                                       34


<PAGE>
B.       IMPLEMENTATION OF PLAN.


         1.      THE QWEST LITIGATION.

         As stated, the Debtors believe they have substantial Claims and Causes
of Action against Qwest which, if successful, could yield substantial recoveries
to holders of Allowed Claims. The Plan provides for the establishment of a Trust
for the benefit of holders of Allowed Claims against the Debtors. On the
Effective Date, the Trustee (on behalf of the AxisTel Debtors and e.Volve) and
NNI shall jointly retain Special Counsel to prosecute the Qwest Litigation
Claim. NNI (on behalf of itself, the AxisTel Debtors and e.Volve) shall provide
funding up to $600,000 (or such other additional amount as agreed to by NNI in
writing) to fund the prosecution of the Qwest Litigation Claim. For purposes of
the Plan, the amounts advanced by NNI on behalf of the AxisTel Debtors and
e.Volve shall be advanced as contributions to the capital of NNOC by NNI and
contribution to the capital of the AxisTel Debtors and e.Volve by NNOC (or its
designee). For purposes of the Plan, (A) up to $200,000 of such funding to the
Trust shall be deemed to have been advanced by e.Volve in exchange for NNI (as
e.Volve's designee) receiving the repayment of the amount advanced by it to fund
the prosecution of e.Volve's Qwest Litigation Claim and one-third (1/3) of the
Net Qwest Litigation Proceeds and (B) up to $200,000 of such funding to the
Trust shall be deemed to have been advanced by the AxisTel Debtors in exchange
for NNI (as the AxisTel Debtors' designee) receiving repayment of the amount
advanced by it to fund the prosecution of the AxisTel Debtors' Qwest Litigation
Claim and one-third (1/3) of the Net Qwest Litigation Proceeds. Notwithstanding
anything contained herein to the contrary, the proceeds of any judgment or award
against Qwest will be distributed between NNI and the Trustee (on behalf of
e.Volve and the AxisTel Debtors) based upon the Claim or Cause of Action which
gave rise to such judgment or award; provided that to the extent any judgment or
award is unallocated or any settlement is for a lump sum amount, the net
proceeds (after reimbursement of the funding provided by NNI herein) shall be
distributed (A) one-third (1/3) to NNI, (B) one-third to the Trust in respect of
e.Volve's Qwest Litigation Claim, and (C) one-third (1/3) to the Trust in
respect of the AxisTel Debtors' Qwest Litigation Claim. Any settlement must be
approved by NNI and the Trustee, and any disputes arising under Section 7.1 of
the Plan shall be resolved by Final Order of the Bankruptcy Court.

         2.      THE AUCTION.

         In connection with the plan confirmation process, the Debtors shall
seek an order or orders from the Bankruptcy Court, which may be the Confirmation
Order, approving and authorizing the sale(s) pursuant to sections 105, 363(f),
365 and/or 1123(a) of the Bankruptcy Code of the Debtors' Assets to the
bidder(s) who submit the highest and best bids, as determined by the Debtors in
the exercise of their sound business judgment. It is contemplated that the sales
of the Assets pursuant to the Auction shall be consummated on or before the
Effective Date and the Net Consideration therefrom will be distributed pursuant
to the Plan. NNI reserves its right to credit bid at the Auction as provided by
Section 363(k) of the Bankruptcy Code.



                                       35


<PAGE>

         3.      THE TRUST.

         On the Effective Date, the Trust will be established for the benefit of
holders of Allowed Claims against the Debtors and will be settled with the Trust
Assets. The Trust Assets consist of the Debtors' Residual Assets, the Debtors'
Litigation Assets, and the Debtors' Qwest Litigation Claim. The Trustee shall be
appointed by the Debtors, and the identity of the Trustee shall be disclosed on
or before the date of the Confirmation Hearing. The Trustee shall administer the
Trust Assets and maintain a separate accounting with respect to each Debtor.
Distributions will be made to holders of Allowed Claims against the Debtors from
the Trust Assets in accordance with the Plan and the Plan Documents.

C.       CONDITIONS TO CONFIRMATION.

         The Plan will not be confirmed, and the Confirmation Order will not be
entered, until and unless certain specified "Confirmation Conditions" have been
satisfied or waived by the Debtor. These Confirmation Conditions, are as
follows:


         1. The Clerk of the Bankruptcy Court shall have entered an order or
orders, which may be the Confirmation Order, approving the Plan Documents,
authorizing the Debtors to execute, enter into, and deliver the Plan Documents
and to execute, implement, and to take all actions otherwise necessary or
appropriate to give effect to, the transactions contemplated by the Plan and the
Plan Documents, including, without limitation, consummating the sales and
transactions contemplated by the Auction and the Plan Documents.

         2.      The Confirmation Order, the Plan Documents and the Plan shall
be, in form and substance, acceptable to the Proponents.


D.       CONDITIONS PRECEDENT TO THE EFFECTIVE DATE UNDER THE PLAN.

         The "effective date of the plan," as used in Section 1129 of the
Bankruptcy Code, will not occur, and the Plan will be of no force and effect,
until the Effective Date. The "Effective Date" will occur on a date selected by
the Proponents which is no later than ten (10) business days after all of the
following conditions have been satisfied or waived:

         1. The Confirmation Order shall have been entered by the Clerk of the
Bankruptcy Court, be in full force and effect and not be subject to any stay or
injunction.

         2. All necessary consents, authorizations and approvals shall have been
given for the transfers of property and the payments provided for or
contemplated by the Plan.

         The Proponents may waive the occurrence of any of these conditions
precedent. The Proponents, for purposes of the analyses contained in this
Disclosure Statement, have assumed that the Effective Date will occur on or
before March 15, 2002. If the Proponents decide that one of the foregoing
conditions cannot be satisfied, and the occurrence of such condition is not
waived by the Proponents, then the Proponents will file a notice of such failure
of Effective Date



                                       36


<PAGE>
with the Bankruptcy Court, at which time the Plan and the Confirmation Order
will be deemed null and void.


E.       EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

         Any executory contracts or unexpired leases of any of the Debtors that
have not been approved by the Bankruptcy Court on or prior to the Confirmation
Date for assumption and assignment by any of the Debtors shall be deemed to have
been rejected by the Debtors. The Plan shall constitute a motion to reject such
executory contracts and unexpired leases, and the Debtors shall have no
liability thereunder except as is specifically provided in the Plan. The
Confirmation Order shall constitute approval of such rejections pursuant to
Section 365(a) of the Bankruptcy Code and a finding by the Bankruptcy Court that
each such rejected executory contract or unexpired lease is burdensome and that
the rejection thereof is in the best interest of the Debtors, their estates, and
all parties in interest in the Chapter 11 Cases.

         Claims created by the rejection of executory contracts or unexpired
leases or the expiration or termination of any executory contract or unexpired
lease prior to the Confirmation Date must be filed with the Bankruptcy Court and
served on the Debtors (a) in the case of an executory contract or unexpired
lease rejected by the Debtors prior to the Confirmation Date, in accordance with
the Bar Date Notice, or (b) in the case of an executory contract or unexpired
lease that (i) was terminated or expired by its terms prior to the Confirmation
Date, or (ii) is deemed rejected pursuant to Section 11.1 of the Plan, no later
than thirty (30) days after the Confirmation Date. Any Claims for which a proof
of claim is not filed and served within such time will be forever barred from
assertion and shall not be enforceable against the Debtors, their estates,
assets, properties, or interests in property. Unless otherwise ordered by the
Bankruptcy Court, all such Claims that are timely filed as provided herein shall
be treated as Unsecured Claims under the Plan subject to objection by the
Debtors.


F.       FRACTIONAL DISTRIBUTIONS.

         No Distributions in fractions of cents will be paid. Fractional cents
shall be rounded to the nearest whole cent.


G.       PROVISIONS FOR TREATMENT OF CONTESTED CLAIMS.

         As soon as practicable, but in no event later than one hundred and
eighty (180) days after the Effective Date (subject to being extended by the
Bankruptcy Court upon motion of the Disbursing Agent without notice or a
hearing), objections to Claims shall be filed with the Bankruptcy Court and
served upon the holders of each of the Claims to which objections are made. The
Disbursing Agent may object to the allowance of Claims filed with the Bankruptcy
Court with respect to which liability is disputed in whole or in part. All
objections that are filed and prosecuted as provided herein shall be litigated
to Final Order or compromised and settled in accordance with Section 8.3 of the
Plan. Notwithstanding any requirements that may be imposed pursuant to
Bankruptcy Rule 9019, from and after the Effective Date all Claims and all
claims



                                       37


<PAGE>
that any of the Debtors have asserted against other parties may be compromised
and settled according to the following procedures:

         SUBJECT TO SUBSECTION 8.3(c) OF THE PLAN, THE FOLLOWING SETTLEMENTS OR
COMPROMISES DO NOT REQUIRE THE REVIEW OR APPROVAL OF THE BANKRUPTCY COURT OR ANY
OTHER PARTY IN INTEREST:

                         The settlement or compromise of a Claim pursuant to
                 which such Claim is Allowed in an amount of $100,000 or less;
                 and

                         The settlement or compromise of a Claim where the
                 difference between the amount of the Claim listed on the
                 Debtors' Schedules and the amount of the Claim proposed to be
                 Allowed under the settlement is $100,000 or less; and

                         THE DEBTOR'S QWEST LITIGATION CLAIM MAY BE COMPROMISED
                 AND SETTLED IN ACCORDANCE WITH SECTION 7.1 OF THE PLAN.

         THE FOLLOWING SETTLEMENTS OR COMPROMISES SHALL BE SUBMITTED TO THE
BANKRUPTCY COURT FOR APPROVAL:

                         Any settlement or compromise not described in
                 subsection 8.3(a) of the Plan; and

                         Any settlement or compromise of a Claim or a claim
                 asserted by one or more of the Debtors that involves an
                 "insider," as defined in Section 101(31) of the Bankruptcy
                 Code.

H.       NEW CHARTERS AND BY-LAWS.

         Each of the Debtors shall continue to exist after the Effective Date as
separate corporate entities, with all corporate powers, in accordance with the
laws of Delaware and pursuant to the New Charters and the New By-Laws, which
shall become effective upon the occurrence of the Effective Date. All of the
Debtors' respective Assets shall be transferred, conveyed and assigned in
accordance with the terms of the Auction, the Plan Documents and the Plan, as
applicable, on the Effective Date. Except as otherwise provided in the Plan, the
Residual Assets will be retained by the Debtors and/or the Trust and liquidated,
with the Net Consideration therefrom to be distributed pursuant to the Plan. The
New Charters and By-Laws will be filed with the Bankruptcy Court as Plan
Documents.

I.       SATISFACTION OF CLAIMS.

         The rights afforded in the Plan and the treatment of all Claims and
Equity Interests herein shall be in exchange for and in complete satisfaction,
discharge, and release of all Claims and Equity Interests of any nature
whatsoever, including any interest accrued thereon from and after



                                       38


<PAGE>


the Petition Date, against the Debtors and the Debtors in Possession, or any of
their Estates, Assets, properties, or interests in property. Except as otherwise
provided herein, on the Effective Date, all Claims against and Equity Interests
in the Debtors and the Debtors in Possession shall be satisfied, discharged, and
released in full. Except as otherwise provided herein, all Persons shall be
precluded and forever barred from asserting against the Debtors, their
respective successors or assigns, or their Assets, properties, or interests in
property any other or further Claims based upon any act or omission,
transaction, or other activity of any kind or nature that occurred prior to the
Effective Date, whether or not the facts of or legal bases therefor were known
or existed prior to the Effective Date.

J.       MODIFICATION OF THE PLAN.

         Modification of the Plan may be proposed in writing by the Proponents
at any time before confirmation, provided that the Plan, as modified, meets the
requirements of Sections 1122 and 1123 of the Bankruptcy Code, and the
Proponents have complied with Section 1125 of the Bankruptcy Code. The Debtor
may modify the Plan at any time after confirmation and before substantial
consummation, provided that the Plan, as modified, meets the requirements of
Sections 1122 and 1123 of the Bankruptcy Code and the Bankruptcy Court, after
notice and a hearing, confirms the Plan as modified, under Section 1129 of the
Bankruptcy Code, and the circumstances warrant such modifications. A holder of a
Claim that has accepted or rejected the Plan shall be deemed to have accepted or
rejected, as the case may be, such plan as modified, unless, within the time
fixed by the Bankruptcy Court, such holder changes its previous acceptance or
rejection.

K.       REVOCATION OR WITHDRAWAL OF THE PLAN.

         The Proponents reserve the right to revoke and withdraw the Plan prior
to the occurrence of the Effective Date. If the Proponents revoke or withdraw
the Plan, or if the Effective Date does not occur as set forth in the Plan,
then, as to such Debtor the Plan and all settlements set forth in the Plan shall
be deemed null and void and nothing contained herein shall be deemed to
constitute a waiver or release of any Claims against or Equity Interests in the
Debtors or to prejudice in any manner the rights of the Debtors or any Person in
any other further proceedings involving the Debtors.


L.       VESTING OF RIGHTS OF ACTION.

         Under Sections 544, 545, 547, 548, 549, 550, 551, and 553 of the
Bankruptcy Code, a debtor in possession has certain powers to recover money or
other assets for the benefit of the debtor's estate, eliminate security
interests in estate property, or eliminate debt incurred by the estate. Except
as otherwise provided in the Plan, all Causes of Action assertable by any of the
Debtors, including but not limited to Avoidance Actions, shall be retained by
the Debtors and/or the Trust, shall be vested in the Debtors and/or the Trust
upon the occurrence of the Effective Date. Except as otherwise provided in the
Plan, the Debtors' rights to commence such Causes of Action (including Avoidance
Actions) shall be preserved notwithstanding consummation of the Plan. Any net
recovery realized by the Debtors on account of such Causes of Action shall be
the



                                       39


<PAGE>

property of the recovering Debtor and/or the Trust, as applicable. Upon the
occurrence of the Effective Date, all Claims and Causes of Action of the Debtors
against the directors, officers and employees of the Debtors who served in such
capacities after the Petition Date and were not terminated by the Debtors after
the Petition Date (which may be asserted by the Debtors directly for their own
benefit or derivatively for the benefit of any Person), shall be waived,
released and forever discharged.

         PARTIES IN INTEREST, INCLUDING WITHOUT LIMITATION CREDITORS, MAY NOT
RELY ON THE ABSENCE OF A REFERENCE IN THE DISCLOSURE STATEMENT OR THE PLAN AS
ANY INDICATION THAT THE DEBTORS WILL NOT PURSUE ANY AND ALL AVAILABLE CAUSES OF
ACTION AGAINST THEM. THE DEBTORS AND THE DEBTORS' ESTATES EXPRESSLY RESERVE ALL
RIGHTS TO PROSECUTE ANY AND ALL CAUSES OF ACTION AGAINST THIRD PARTIES, WHETHER
OR NOT REFERENCED IN THE DISCLOSURE STATEMENT OR PLAN.

M.       THIRD PARTY AGREEMENTS; SUBORDINATION.

         The Distributions to the various classes of Claims under the Plan shall
not affect the right of any Person to levy, garnish, attach, or employ any other
legal process with respect to such Distributions by reason of any claimed
subordination rights or otherwise. All of such rights and any agreements
relating thereto shall remain in full force and effect. Distributions under the
Plan shall be subject to and modified by any Final Order directing distributions
other than as provided in the Plan.

N.       EXCULPATION.

         None of the Proponents, or the Disbursing Agent, the Trustee, or any of
their respective officers, directors, employees, agents, representatives,
advisors, attorneys, successors and assigns for any act or omission in
connection with or arising out of the pursuit of confirmation of the Plan, the
consummation of the Plan, or the administration of the Plan or the property to
be distributed under the Plan, except for gross negligence or willful misconduct
as determined by Final Order of the Bankruptcy Court, and in all respects shall
be entitled to rely upon the advice of counsel and all information provided by
other exculpated persons herein without any duty to investigate the veracity or
accuracy of such information with respect to their duties and responsibilities
under the Plan.

         Additionally, except as otherwise provided in Section 10.3 of the Plan,
the Disbursing Agent, together with its officers, directors, employees, agents,
and representatives, shall be exculpated by all Persons, holders of Claims and
Equity Interests, and all other parties in interest, from any and all causes of
action, and other assertions of liability (including breach of fiduciary duty)
arising out of the discharge of the powers and duties conferred upon the
Disbursing Agent by the Plan, any Final Order of the Bankruptcy Court entered
pursuant to or in the furtherance of the Plan, or applicable law, except solely
for actions or omissions arising out of the Disbursing Agent's willful
misconduct or gross negligence.



                                       40


<PAGE>

O.       INJUNCTIONS.

         On the Effective Date, all Persons who have been, are, or may be
holders of Claims against or Equity Interests in the Debtors and their
subsidiaries shall be enjoined from taking any of the following actions against
or affecting the Proponents, the Estates, the Assets, the Disbursing Agent, the
Trustee, any purchaser pursuant to the Auction, or any of their respective
subsidiaries, officers, directors, employees (but only those directors, officers
or employees serving in such capacities on the Effective Date), agents,
representatives, advisors, attorneys, successors and assigns or their respective
assets and property with respect to such Claims or Equity Interests (other than
actions brought to enforce any rights or obligations under the Plan):

         (a) commencing, conducting or continuing in any manner, directly or
indirectly, any suit, action or other proceeding of any kind (including, without
limitation, all suits, actions, and proceedings that are pending as of the
Effective Date, which must be withdrawn or dismissed with prejudice);

         (b) enforcing, levying, attaching, collecting or otherwise recovering
by any manner or means whether directly or indirectly any judgment, award,
decree or order;

         (c) creating, perfecting or otherwise enforcing in any manner, directly
or indirectly, any encumbrance; and

         (d) asserting any setoff, right of subrogation or recoupment of any
kind; provided, that any defenses, offsets or counterclaims which the Debtors
may have or assert in respect of the above referenced claims are fully preserved
in accordance with the Plan.

P.       SUPPLEMENTAL DOCUMENTS.

         All appendices and exhibits to the Plan and the Plan Documents are
incorporated into the Plan by reference and are part of the Plan as if set forth
in full therein. All appendices and exhibits to the Plan and the Plan Documents
must be filed with the Bankruptcy Court on or before the confirmation hearing.
Such exhibits to the Plan and the Plan Documents may be inspected in the office
of the Clerk of the Bankruptcy Court during normal court hours. In addition,
holders of Claims and Equity Interests may obtain copies of such exhibits, once
filed, upon written request to the following address:

         The Bayard Firm, P.A.
         222 Delaware Avenue, Suite 900
         Wilmington, DE 19801
         Attn: Eric M. Sutty, Esq.

Q.       RETENTION OF JURISDICTION.

         Pursuant to Sections 105(a) and 1142 of the Bankruptcy Code, the
Bankruptcy Court shall retain and shall have exclusive jurisdiction over any
matter (a) arising under the Bankruptcy



                                       41


<PAGE>


Code, (b) arising in or related to the Chapter 11 Cases or the Plan, or (c) that
relates to the following:

         (i) To hear and determine any and all motions or applications pending
on the Confirmation Date or thereafter brought in accordance with Article XI of
the Plan for the assumption and/or assignment or rejection of executory
contracts or unexpired leases to which any of the Debtors is a party or with
respect to which any of the Debtors may be liable, and to hear and determine any
and all Claims resulting therefrom or from the expiration or termination of any
executory contract or unexpired lease;

         (ii) To determine any and all adversary proceedings, applications,
motions, and contested or litigated matters that may be pending on the Effective
Date or that, pursuant to the Plan, may be instituted by the Disbursing Agent or
the Trustee, as applicable, after the Effective Date, including, without express
or implied limitation, any application to the Bankruptcy Court relating to any
claims to avoid any preferences, fraudulent transfers, or other voidable
transfers, or otherwise to recover assets for the benefit of the Debtors;

         (iii) To hear and determine any objections to the allowance of Claims,
whether filed, asserted, or made before or after the Effective Date, including,
without express or implied limitation, to hear and determine any objections to
the classification of any Claim and to allow, disallow or estimate any Contested
Claim in whole or in part;

         (iv) To issue such orders in aid of execution of the Plan to the extent
authorized or contemplated by Section 1142 of the Bankruptcy Code;

         (v) To consider any modifications of the Plan, remedy any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including, without limitation, the Confirmation Order;

         (vi) To hear and determine all applications for allowances of
compensation and reimbursement of expenses of professionals under Sections 330
and 331 of the Bankruptcy Code and any other fees and expenses authorized to be
paid or reimbursed under the Plan or the Bankruptcy Code;

         (vii) To hear and determine all controversies, suits, and disputes that
may relate to, impact upon, or arise in connection with the Plan, the
Settlement, the Auction or the Plan Documents or their interpretation,
implementation, enforcement, or consummation;

         (viii) To hear and determine all controversies, suits, and disputes
that may relate to, impact upon, or arise in connection with the Confirmation
Order (and all exhibits to the Plan) or its interpretation, implementation,
enforcement, or consummation;

         (vix) To the extent that Bankruptcy Court approval is required, to
consider and act on the compromise and settlement of any Claim or cause of
action by or against the Debtors' estates;



                                       42
<PAGE>

         (x) To determine such other matters that may be set forth in the Plan,
or the Confirmation Order, or that may arise in connection with the Plan, or the
Confirmation Order;

         (xi) To hear and determine matters concerning state, local, and federal
taxes, fines, penalties, or additions to taxes for which the Debtors, the
Debtors in Possession, or the Disbursing Agent may be liable, directly or
indirectly, in accordance with Sections 346, 505, and 1146 of the Bankruptcy
Code;

         (xii) To hear and determine all controversies, suits, and disputes that
may relate to, impact upon, or arise in connection with any setoff and/or
recoupment rights of the Debtors or any Person;

         (xiii) To hear and determine all controversies, suits, and disputes
that may relate to, impact upon, or arise in connection with Causes of Action of
the Debtors (including Avoidance Actions) commenced by the Disbursing Agent, the
Debtors or the Trustee, as applicable, before or after the Effective Date;

         (xiv) To enter an order or final decree closing the Chapter 11 Cases;

         (xv) To determine such other matters and for such other purposes as may
be provided in the Confirmation Order;

         (xvi) To issue injunctions, enter and implement other orders or take
such other actions as may be necessary or appropriate to restrain interference
by any Person with consummation, implementation or enforcement of the Plan or
the Confirmation Order; and

         (xvii) To hear and determine any other matters related hereto and not
inconsistent with chapter 11 of the Bankruptcy Code.

                   IX. CONFIRMATION AND CONSUMMATION PROCEDURE

         Under the Bankruptcy Code, the following steps must be taken to confirm
the Plan:


A.       SOLICITATION OF VOTES.

         In accordance with Sections 1126 and 1129 of the Bankruptcy Code, the
Claims in Classes 3 and 4 are impaired, and the holders of such Claims are
entitled to vote to accept or reject the Plan in the manner and to the extent
set forth in the Voting Procedures. Pursuant to the Voting Procedures, any
Creditor holding a Claim in an impaired class under the Plan may vote on the
Plan so long as such Claim has not been disallowed and is not the subject of an
objection pending as of the Record Date. Nevertheless, if a Claim is the subject
of such an objection, the holder thereof may vote if, prior to the Voting
Deadline February __, 2002, at 4:00 p.m. Prevailing Eastern Time), such holder
obtains an order of the Bankruptcy Court, or the Bankruptcy Court approves a
stipulation between the Debtors and such holder, fully or partially allowing
such Claim, whether for all purposes or for voting purposes only. The above is a



                                       43


<PAGE>


summary only, and is subject to the voting procedures approved by the Bankruptcy
Court, which are attached hereto as Exhibit C.

         Claims in Classes 1 and 2 are unimpaired. The holders of Allowed Claims
in such classes are conclusively presumed to have accepted the Plan, and the
solicitation of acceptances with respect to each such Class is not required
under Section 1126(f) of the Bankruptcy Code.

         As to classes of claims entitled to vote on a plan, the Bankruptcy Code
defines acceptance of a plan by a class of creditors as acceptance by holders of
at least two-thirds in dollar amount and more than one-half in number of the
claims of that class that have timely voted to accept or reject a plan. The
Voting Procedures provide that, with respect to the tabulation of ballots for
all Claims, the amount to be used to tabulate acceptance or rejection of the
Plan is as follows (in order of priority): (i) if prior to the Voting Deadline,
the Bankruptcy Court enters an order or approves a stipulation between the
Debtors and the Creditor fully or partially allowing a Claim, whether for all
purposes or for voting purposes only, the amount allowed thereunder; (ii) the
liquidated amount specified in a proof of claim filed on or before the Voting
Record Date so long as such proof of claim has not been disallowed by the
Bankruptcy Court and is not the subject of an objection pending as of the Voting
Record Date; (iii) the Claim amount listed in the Schedules (as amended) as
liquidated, undisputed, and not contingent; and (iv) if a proof of claim has
been filed on or before the Voting Record Date, and such Claim is wholly
contingent or unliquidated, the Claim amount, for voting purposes only, will be
$1.00 so long as such proof of claim has not been disallowed by the Bankruptcy
Court and is not the subject of an objection pending as of the Voting Record
Date.

         A ballot will not be counted if a Claim has been disallowed or an
objection is pending to the Claim as of the Voting Record Date, and the Creditor
has not obtained, on or before the Voting Deadline, a Bankruptcy Court order
allowing such Claim, either in whole or in part, for all purposes or for voting
purposes only. A BALLOT WILL NOT BE COUNTED IF IT IS NOT ACTUALLY RECEIVED BY
LOGAN & COMPANY, INC., 546 VALLEY ROAD, UPPER MONTCLAIR, NJ 07043 THE VOTING
DEADLINE: 4:00 P.M., PREVAILING EASTERN TIME, ON FEBRUARY 20, 2002. PLEASE
FOLLOW THE INSTRUCTIONS ON YOUR BALLOT FOR RETURNING THE BALLOT. In addition, a
vote may be disregarded if the Bankruptcy Court determines, after notice and a
hearing, that such acceptance or rejection was not solicited or procured in good
faith or in accordance with the provisions of the Bankruptcy Code.

         IF YOU HAVE ANY QUESTIONS ABOUT THESE INSTRUCTIONS, PLEASE CALL THE
BALLOTING AGENT, LOGAN & COMPANY, INC., AT (973) 509-3190.


B.       THE CONFIRMATION HEARING.

         The Bankruptcy Code requires the Bankruptcy Court, after notice, to
hold a confirmation hearing. The Confirmation Hearing in respect of the Plan has
been scheduled for March 1, 2002, at 9:30 a.m., Prevailing Eastern Time, before
the Honorable Randall J. Newsome, United States Bankruptcy Judge, 844 King
Street, 2nd Floor, Wilmington, Delaware. The Confirmation



                                       44


<PAGE>

Hearing may be adjourned from time to time by the Bankruptcy Court without
further notice, except for an announcement of the adjourned date made at the
Confirmation Hearing.

         Any objection to confirmation must be made in writing and must specify
in detail the name and address of the objector, all grounds of the objection,
and the amount and class of the Claim. Any such objection must be filed with the
Bankruptcy Court and served so that it is received by the Bankruptcy Court,
counsel to the Debtors, counsel to the UST, and all other persons having filed
notices of appearance in the Chapter 11 Cases on or before February 20, 2002 at
4:00 p.m., Prevailing Eastern Time. Objections to confirmation of the Plan are
governed by Bankruptcy Rule 9014.


C.       CONFIRMATION.

         At the Confirmation Hearing, the Bankruptcy Court will confirm the Plan
only if all of the requirements of Section 1129 of the Bankruptcy Code are met.
Among the requirements for confirmation of the Plan are that the Plan is (i)
accepted by all impaired classes of claims and equity interests or, if rejected
by an impaired class, that the Plan "does not discriminate unfairly" and is
"fair and equitable" as to such class, (ii) feasible, and (iii) in the "best
interests" of creditors and stockholders that are impaired under the Plan.


         1.      ACCEPTANCE.

         Classes 3 and 4 of the Plan are impaired under the Plan and holders of
Claims in such Classes are entitled to vote to accept or reject the Plan.
Classes 1 and 2 Claims are unimpaired and are conclusively deemed to have voted
to accept the Plan. As to such class (any other class which may reject the
Plan), the Debtors intend to seek nonconsensual confirmation of the Plan under
Section 1129(b) of the Bankruptcy Code.


         2.      CRAMDOWN -- UNFAIR DISCRIMINATION AND FAIR AND EQUITABLE TESTS.

         To obtain nonconsensual confirmation of the Plan, at least one impaired
class must vote to accept the Plan (excluding any votes of insiders), and the
Debtors must demonstrate to the Bankruptcy Court that the Plan "does not
discriminate unfairly" and is "fair and equitable" with respect to each
impaired, nonaccepting class. The Bankruptcy Code provides the following
non-exclusive definition of the phrase "fair and equitable," as it applies to
secured creditors, unsecured creditors, and equity holders:

         (a)     Secured Creditors. Either (i) each impaired secured creditor
retains its liens securing its secured claim and receives on account of its
secured claim deferred cash payments having a present value equal to the amount
of its allowed secured claim, (ii) each impaired secured creditor realizes the
"indubitable equivalent" of its allowed secured claim, or (iii) the property
securing the claim is sold free and clear of liens with such liens to attach to
the proceeds of the sale and the treatment of such liens on proceeds is provided
in clause (i) or (ii) of this subparagraph.



                                       45


<PAGE>
         (b)     Unsecured Creditors. Either (i) each impaired unsecured
creditor receives or retains under the plan property of a value equal to the
amount of its allowed claim, or (ii) the holders of claims and interests that
are junior to the claims of the rejecting class of unsecured creditors will not
receive or retain any property under the plan.

         (c)     Equity Interests. Either (i) each holder of an equity interest
will receive or retain under the plan property of a value equal to the greatest
of the fixed liquidation preference to which such holder is entitled, the fixed
redemption price to which such holder is entitled, or the value of the interest,
or (ii) the holder of an interest that is junior to the nonaccepting class will
not receive or retain any property under the plan.

         The Proponents believe that the Plan and the treatment of all classes
of Claims and Equity Interests under the Plan satisfy the foregoing requirements
for nonconsensual confirmation of the Plan. Specifically, holders of Allowed
Secured Claims and Priority Claims shall be paid in full on the Distribution
Date. In addition, it is expected that holders of Allowed Unsecured Claims shall
receive a distribution in the form of a pro rata share of the Available Proceeds
until such Allowed Claim has been paid in full. Further, no class that is junior
to Class 3 (Unsecured Claims) will receive or retain any property under the Plan
until Class 3 is paid in full (note: under the terms of the Settlement, the
Class 4 Equity Interests in AxisTel and e.Volve, which is NNOC, will retain its
ownership interest even if Class 4 Allowed Unsecured Claims are not paid in
full). Finally, there is no class that is junior to Class 4 that will receive a
distribution under the Plan.


         3.      FEASIBILITY.

         The Bankruptcy Code requires that confirmation of a plan is not likely
to be followed by liquidation or the need for further financial reorganization.
Allowed Administrative Claims, Allowed Priority Claims and Allowed Secured
Claims will be paid in full on the Effective Date or as soon thereafter as is
practicable; provided that the DIP Lender shall receive the New Secured Note for
any deficiency in repayment of the DIP Claims. Distributions to the holders of
Allowed Unsecured Claims will be from the Available Proceeds of each Debtor on
the Distribution Date or as soon thereafter as is practicable.


         4.      BEST INTERESTS OF CREDITORS TEST.

         With respect to each impaired class of Claims and Equity Interests,
confirmation of the Plan requires that each holder of a Claim or Equity Interest
either (i) accept the Plan or (ii) receive or retain under the Plan property of
a value, as of the Effective Date, that is not less than the value such holder
would receive or retain if the Debtors were liquidated under chapter 7 of the
Bankruptcy Code. This requirement is referred to as the "best interests test."
To determine what holders of Claims and Equity Interests of each impaired class
would receive if the Debtors were liquidated under chapter 7, the Bankruptcy
Court must determine the dollar amount that would be generated from the
liquidation of the Debtors' assets and properties in the context of chapter 7
liquidation cases. The cash amount that would be available for satisfaction of
Claims (other than Secured Claims) and Equity Interests would consist of the
proceeds



                                       46


<PAGE>

resulting from the disposition of the unencumbered assets of the Debtors,
augmented by the unencumbered cash held by the Debtors at the time of the
commencement of the liquidation cases. Such cash amount would be reduced by the
amount of the costs and expenses of the liquidation and by such additional
administrative and priority claims that may result from the termination of the
Debtors' businesses and the use of chapter 7 for the purposes of liquidation.

         The Debtors' costs of liquidation under chapter 7 would include the
fees payable to a trustee in bankruptcy, as well as those that might be payable
to attorneys and other professionals that such a trustee may engage. In
addition, claims would arise by reason of the breach or rejection of obligations
incurred and leases and executory contracts assumed or entered into by the
Debtors during the pendency of the Chapter 11 Cases. The foregoing types of
claims and other claims that may arise in a liquidation case or result from the
pending Chapter 11 Cases, including any unpaid expenses incurred by the Debtors
in Possession during the Chapter 11 Cases, such as compensation for attorneys,
financial advisers, and accountants, would be paid in full from the liquidation
proceeds before the balance of those proceeds would be made available to pay
prepetition Claims. Furthermore, a lack of financing would be a substantial
impediment to a chapter 7 trustee in liquidating the remaining business assets
and prosecuting the litigation.

         To determine if the Plan is in the best interests of each impaired
class, the present value of the distributions from the proceeds of the
liquidation of the Debtors' unencumbered assets and properties are compared with
the value of the property offered to such classes of Claims and Equity Interests
under the Plan.

         After considering the effects that chapter 7 liquidations would have on
the ultimate proceeds available for distribution to Creditors in the Chapter 11
Cases, including (i) the increased costs and expenses of liquidations under
chapter 7 arising from fees payable to trustees in bankruptcy and professional
advisers to such trustees, (ii) the lack of financing to fund the sale or
disposition of valuable operating assets and the prosecution of causes of
action, (iii) the erosion in value of assets in chapter 7 cases in the context
of the expeditious liquidation required under a chapter 7 case and (iv) the
substantial increases in Claims that would be satisfied on a priority basis or
on a parity with Creditors in the Chapter 11 Cases, the Debtors have determined
that confirmation of the Plan will provide each holder of an Allowed Claim or
Equity Interest with a recovery that is not less than such holder would receive
pursuant to liquidation of the Debtors under chapter 7 of the Bankruptcy Code.

         The Liquidation Analysis is attached hereto as Exhibit "D" (the
"Liquidation Analysis"). The information set forth in Exhibit "D" provides a
summary of the liquidation values of the Debtors' assets assuming chapter 7
liquidations in which a trustee appointed by the Bankruptcy Court would
liquidate the assets of the Debtors' Estates. Reference should be made to the
Liquidation Analysis for a complete discussion and presentation of the expected
distributions to parties in interest if the Debtors' Chapter 11 cases were
converted to cases under chapter 7 of the Bankruptcy Code.

         Underlying the Liquidation Analysis are a number of estimates and
assumptions that, although considered reasonable by the Debtors, are inherently
subject to significant economic and competitive uncertainties and contingencies
beyond the control of the Debtors. The



                                       47


<PAGE>

Liquidation Analysis are also based upon assumptions with regard to liquidation
decisions that are subject to change. Accordingly, the values reflected may not
be realized if the Debtors were, in fact, to undergo such a liquidation.


D.       CONSUMMATION.

         The Plan will be consummated on the Effective Date. For a more detailed
discussion of the conditions precedent to the Plan and the impact of the failure
to meet such conditions, see "Summary of the Plan -- Conditions to Confirmation,
and Conditions Precedent to the Effective Date under the Plan."

         The Plan is to be implemented pursuant to the provisions of the
Bankruptcy Code.


                    X. MANAGEMENT OF THE REORGANIZED DEBTORS

         The members of the boards of directors who are serving as of the
Confirmation Date will continue to serve in such capacities until the Effective
Date. Entry of the Confirmation Order shall ratify and approve all actions taken
by the board of directors of the Debtors from the Petition Date through and
until the Effective Date. No later than fifteen (15) days prior to the
Confirmation Hearing, the Debtors shall designate the post-Effective Date
members of the Board of Directors of the Debtors (the "New Board"). On the
Effective Date, the existing members of the boards of directors will be deemed
to have resigned, and the New Board shall become the new members of the board of
directors of the Debtors or such successor(s). Thereafter, the selection and
replacement of members of the board of directors shall be governed by the New
Charters and the New By-Laws and applicable law. No later than fifteen (15) days
prior to the Confirmation Hearing the Debtors will designate any post-Effective
Date officers.


                                XI. RISK FACTORS


A.       FINANCIAL INFORMATION; DISCLAIMER.

         Although the Debtors have used their best efforts to ensure the
accuracy of the financial information provided in this Disclosure Statement, the
financial information contained in this Disclosure Statement has not been
audited and is based upon an analysis of data available at the time of the
preparation of the Plan and Disclosure Statement. While the Debtors believe that
such financial information fairly reflects the finances of the Debtors, the
Debtors are unable to warrant or represent that the information contained herein
and attached hereto is without inaccuracies or complete.


B.       LITIGATION OUTCOMES.

         The Debtors believe they have meritorious claims against third parties
that should result in recoveries to their estates. However, there are inherent
uncertainties associated with the



                                       48


<PAGE>

outcome of any litigation. In addition, the costs of prosecuting such claims can
be significant and unpredictable.


C.       CERTAIN BANKRUPTCY CONSIDERATIONS.


         1.      RISK OF NON-CONFIRMATION OF THE PLAN.

         Even if all impaired Classes accept or could be deemed to have accepted
the Plan, the Plan may not be confirmed by the Bankruptcy Court. Section 1129 of
the Bankruptcy Code sets forth the requirements for confirmation and requires,
among other things, (a) that the confirmation of the Plan not be followed by a
need for further financial reorganization, (b) that the value of distributions
to dissenting holders not be less than the value of distributions to such
holders if the Debtors were liquidated under chapter 7 of the Bankruptcy Code
and (c) that the Plan and the Proponents otherwise comply with the applicable
provisions of the Bankruptcy Code. Although the Proponents believe that the Plan
will meet all applicable tests, there can be no assurance that the Bankruptcy
Court will reach the same conclusion.


         2.      NONCONSENSUAL CONFIRMATION.

         Pursuant to the "cramdown" provisions of Section 1129(b) of the
Bankruptcy Code, the Bankruptcy Court can confirm the Plan at the Debtors'
request if at least one other Impaired Class has accepted the Plan (with such
acceptance being determined without including the acceptance of any "insider" in
such Class) and, as to each Impaired class which has not accepted the Plan, the
Bankruptcy Court determines that the Plan "does not discriminate unfairly" and
is "fair and equitable" with respect to Impaired Classes. In accordance with
subsection 1129(a)(8) of the Bankruptcy Code, the Debtors will be required to
request confirmation of the Plan without the acceptance of all Impaired classes
entitled to vote in accordance with subsection 1129(b) of the Bankruptcy Code.

         The Debtors reserve the right to modify the terms of the Plan as
necessary for the confirmation of the Plan without the acceptance of all
Impaired Classes. Such modification could result in a less favorable treatment
of any non-accepting Class or Classes, as well as of any Classes junior to such
non-accepting Classes, than the treatment currently provided in the Plan. Such
less favorable treatment could include a distribution of property to the Class
affected by the modification of a lesser value than that currently provided in
the Plan or no distribution of property whatsoever under the Plan.


         3.      DELAYS OF CONFIRMATION AND/OR EFFECTIVE DATE

         Any delays of either confirmation or effectiveness of the Plan could
result in, among other things, increased professional fee claims. These or any
other negative effects of delays of either confirmation or effectiveness of the
Plan could endanger the ultimate approval of the Plan by the Bankruptcy Court.



                                       49
<PAGE>
D.       CERTAIN REGULATORY CONSIDERATIONS.

         The telecommunications services the Debtors provide or formerly
provided are subject to various foreign and U.S. domestic laws and regulations.
Some of these regulations have a direct or indirect impact on the Debtors'
operations and the profitability of those operations. With respect to e.Volve's
U.S. -- Mexico operations, e.Volve does not have a license or concession to
operate in Mexico from COFETEL (the regulatory agency in Mexico) which is a
requirement prior to serving points in Mexico. Further, the FCC could determine
that e.Volve's services do not comply with the FCC's International Settlements
Policy, which, among other things, requires U.S. carriers to make certain
settlement payments to foreign carriers terminating such traffic and to
terminate a certain amount of return traffic from those carriers. The operations
of some of the Debtors are also subject to a wide variety of other regulatory
requirements, including, among other things, prior FCC and state licensing and
discontinuance requirements. In some instances, the Debtors' past or current
operations may not or do not comply with all applicable U.S. domestic or foreign
laws or regulations. If a foreign or U.S. governmental authority, such as the
FCC or a state public service commission, were to determine that such Debtor did
not comply or currently is not in compliance with applicable rules, the Debtors
could be subject to sanctions, including, but not limited to, fines and
forfeitures. Further, inherent in the telecommunications industry is the risk of
federal and state regulatory assessments for pre- or postpetition periods.


            XII. CERTAIN MATERIAL INCOME TAX CONSEQUENCES OF THE PLAN

         THE PLAN AND ITS RELATED TAX CONSEQUENCES ARE COMPLEX. MOREOVER, MANY
OF THE INTERNAL REVENUE CODE PROVISIONS DEALING WITH THE FEDERAL INCOME TAX
ISSUES ARISING FROM THE PLAN HAVE BEEN THE SUBJECT OF RECENT LEGISLATION AND, AS
A RESULT, MAY BE SUBJECT TO AS YET UNKNOWN ADMINISTRATIVE OR JUDICIAL
INTERPRETATIONS. THE DEBTOR HAS NOT REQUESTED A RULING FROM THE IRS WITH RESPECT
TO THESE MATTERS. ACCORDINGLY, NO ASSURANCE CAN BE GIVEN AS TO THE
INTERPRETATION THAT THE IRS WILL ADOPT. THERE ALSO MAY BE STATE, LOCAL OR OTHER
TAX CONSIDERATIONS APPLICABLE TO EACH CREDITOR. CREDITORS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS AS TO THE CONSEQUENCES OF THE PLAN TO THEM UNDER FEDERAL
AND APPLICABLE STATE, LOCAL AND OTHER TAX LAWS.

A.       U.S. FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS
         OF ALLOWED CLAIMS AND EQUITY INTERESTS.

         The U.S. federal income tax consequences to holders of an Allowed Claim
or Equity Interest arising from the Distributions to be made under the Plan may
vary depending upon, among other things: the type of consideration received by
the holder in exchange for its Claim or Interest; for Claims, the nature of the
indebtedness owing to the holder; whether the holder has previously claimed a
bad debt or worthless security deduction in respect of such holder's Claim



                                       50

<PAGE>

or Interest; and whether such Claim or Interest constitutes a "security" for
purposes of the reorganization provisions of the Internal Revenue Code.

         As noted above, the U.S. federal income tax consequences of the Plan
to holders of Allowed Claims will depend, in part, on whether the indebtedness
underlying their Claims constitutes securities for purposes of the
reorganization provisions of the Internal Revenue Code. Neither the Internal
Revenue Code nor the regulations thereunder define the term "securities." The
determination of whether a Claim constitutes a "security" depends upon the
nature of the indebtedness or obligation. Important factors to be considered
include, among other things, the length of time to maturity, the degree of
continuing interest in the issuer, and the purpose of the borrowing. Generally,
corporate debt instruments with maturities when issued of less than five years
are not considered securities, and corporate debt instruments with maturities
when issued of ten years or more are considered securities. Claims for accrued
interest are generally not considered securities. Allowed Claims against the
Debtors include Secured Claims, Administrative Claims, Priority Claims and
Unsecured Claims. Unsecured Claims represent primarily trade debt, and accrued
interest thereon, if any, which has been incurred by a Debtor in the ordinary
course of its business, and generally such Claims are not considered securities.
Based on these factors, Allowed Unsecured Claims generally should not be
considered securities.

         HOLDERS OF ALLOWED CLANS SHOULD EVALUATE THE U.S. FEDERAL INCOME TAX
CONSEQUENCES OF THE PLAN TO THEM BASED UPON THEIR OWN PARTICULAR CIRCUMSTANCES
AND SHOULD NOT RELY SOLELY ON THE GENERAL DISCUSSION HEREIN.


         1.      TAX CONSEQUENCES BY CLASS.

         Subject to the discussion below in "Certain Other U.S. Federal Income
Tax Considerations for Holders of Allowed Claims":

                         (a) Holders of Allowed Claims. Pursuant to the Plan,
                 holders of Allowed Claims that are not securities will receive
                 either (i) payment in full in cash (Administrative Claims and
                 Secured Claims), (ii) with respect to holders of Allowed
                 Unsecured Claims against e.Volve, (x) beneficial interests in
                 the Trust representing a contingent payment right to a portion
                 of the e.Volve proceeds of the Trust and (y) remaining Cash
                 proceeds, if any, after the sale of the e.Volve Assets (other
                 than the e.Volve Claims transferred to the Trust) and the
                 repayment of the DIP Loan, (iii) with respect to the holders of
                 Allowed Unsecured Claims against the AxisTel Debtors, (x)
                 beneficial interests in the Trust representing a contingent
                 payment right to a portion of the AxisTel proceeds of the
                 Trust, (y) the Settlement Proceeds and (z) remaining Cash
                 proceeds, if any, after the sale of the AxisTel Debtors' Assets
                 (other than the AxisTel Claims transferred to the Trust) and
                 the repayment of the DIP Loan and (iv) with respect to the
                 holders of the Allowed Unsecured Claims against NNOC, a
                 contingent payment right to NNOC's Available Proceeds.
                 Generally, a holder of an Allowed Claim that is not a security
                 will realize gain or loss on the exchange in the amount equal
                 to the



                                       51


<PAGE>


                 difference between (i) the "amount realized" in respect of such
                 Claim (other than in respect of accrued interest) and (ii) the
                 holder's tax basis in its Claim (other than any Claim in
                 respect of accrued interest). The "amount realized" will be
                 equal to the fair market value of the property received. With
                 respect to a holder of an Allowed Unsecured Claim, the "amount
                 realized" will be equal to the sum of (x) any cash or fair
                 market value of other property received and (y) the fair market
                 value of the contingent payment rights to the proceeds of the
                 Trust. The holder's tax basis in its Allowed Claim will
                 generally equal the amount paid, if any, by the holder for the
                 Claim increased by the amount of any accrued original issue
                 discount and decreased by the amount of any loss deduction
                 previously taken with respect to such Claim. A holder's tax
                 basis in the property received will be equal to the fair market
                 value of such property (i.e., with respect to holders of
                 Administrative Claims, the amount of cash received, and with
                 respect to holders of Unsecured Claims, the fair market value
                 of the contingent payment right to a portion of the proceeds of
                 the Trust and the fair market value of cash and any other
                 property received, if any) at the time of the exchange and the
                 holder's holding period with respect to such property received
                 will begin on the day after the Effective Date. The gain or
                 loss will be capital in nature if the Allowed Claim is a
                 capital asset within the meaning of Section 1221 of the
                 Internal Revenue Code; otherwise, such gain or loss will be
                 ordinary income. Any capital gain or loss would be long-term if
                 the Allowed Claim was held by the holder for more than one year
                 as of the Effective Date; otherwise, such capital gain or loss
                 will be short-term. Holders of Allowed Unsecured Claims who
                 receive contingent payment rights to the proceeds of the Trust
                 will subsequently realize gain or loss to the extent they
                 receive aggregate payments from the Trust greater than or less
                 than, respectively, the fair market value of their contingent
                 payment rights to the proceeds of the Trust on the Effective
                 Date. There is a possibility that the IRS could tax the
                 claimholders' receipt of its contingent payment right to a
                 portion of the Trust proceeds as an "open transaction." If so,
                 the claimholders would not recognize gain or loss on the
                 receipt of the contingent payment right on the Effective Date
                 but would recognize basis recovery and/or gain or loss when
                 payments, if any, under the Trust are made to such claimholder.

                         (b) Holders of Allowed Equity Interests. Holders of
                 Equity Interests in e.Volve and the AxisTel Debtors (i.e.,
                 NNOC) may receive the assets of e.Volve and the AxisTel Debtors
                 as a result of the complete post-Effective Date liquidation of
                 e.Volve and the AxisTel Debtors as provided in Section 7.5 of
                 the Plan. It is contemplated that such liquidation of e.Volve
                 and the AxisTel Debtors will be pursuant to a plan of
                 liquidation that qualifies pursuant to Section 332 of the
                 Internal Revenue Code. Accordingly, none of e.Volve, the
                 AxisTel Debtors or NNOC should recognize gain or loss on these
                 liquidations. NNOC will have a tax basis in the assets
                 distributed to it in liquidation equal to e.Volve's or the
                 AxisTel Debtors', as the case may be, tax basis in such assets
                 and will have a tacked holding period with respect to such
                 assets. NNOC will also succeed to the tax



                                    52



<PAGE>
                 attributes of e.Volve and the AxisTel Debtors, including,
                 without limitation, each company's net operating losses
                 ("NOLs").


B.       CERTAIN OTHER U.S. FEDERAL INCOME TAX
         CONSIDERATIONS FOR HOLDERS OF ALLOWED CLAIMS.


         1.      ACCRUED INTEREST AND ACCRUED DIVIDENDS.

         Notwithstanding the discussion above in "Tax Consequences by Class",
holders of Allowed Claims or Equity Interests in respect of which interest or
dividends accrue may have different tax consequences. Holders of Allowed Claims
or Equity Interests will be treated as having received ordinary income to the
extent that the contingent payment right and/or cash or other property, if any,
the holder receives is allocable to accrued but unpaid interest (including
original issue discount) or dividends, if any, on the Allowed Claims or Equity
Interests, provided that the holder has not previously included such amount in
gross income. Holders who have previously included such accrued interest or
dividends in gross income will recognize a loss equal to the extent the amount
of such previous inclusion in gross income exceeds the fair market value of the
property received by the holder that is allocable to such accrued interest or
dividends. With respect to holders of Allowed Claims or Equity Interests who do
not receive full payment of their claims (including accrued interest or
dividends), the manner in which the property received by the holders should be
allocated to accrued interest or dividends as opposed to their underlying claim
is not clear. The initial tax basis of property received that is allocable to
accrued interest or dividends is equal to the fair market value of such property
on the Effective Date. The holding period of the property received that is
allocable to accrued interest or dividends commences on the day after the
Effective Date.


         2.      MARKET DISCOUNT

         "Market discount" arises when a debt instrument is purchased or
acquired for less than its stated redemption price at maturity, unless the
discount amount is no more than a specified de minimis amount. A holder of an
Allowed Claim with "market discount," as described above, must treat any gain
recognized with respect to the principal amount of such Claim as ordinary income
to the extent of the market discount accrued during the holder's period of
ownership, unless the holder has elected to include the market discount in
income as it accrued. Any additional gain will be characterized as discussed
above.


C.       U.S. FEDERAL INCOME TAX CONSEQUENCES TO THE DEBTOR.


         1.      DISCHARGE OF INDEBTEDNESS INCOME.

         A Debtor generally will realize cancellation of indebtedness ("COD")
income to the extent a creditor receives an amount of consideration in respect
of its claim that is less than the



                                       53


<PAGE>






amount of such claim. Pursuant to the Plan, holders of Allowed Unsecured Claims
against e.Volve, holders of Allowed Unsecured Claims against the AxisTel Debtors
and holders of Allowed Unsecured Claims against NNOC will receive contingent
payment rights and potentially cash or other property in exchange for
cancellation of their respective claims. As a result, each of e.Volve, the
AxisTel Debtors and NNOC will be treated as having satisfied their respective
indebtedness with an amount of money equal to the fair market value of the
property (including, without limitation, the contingent payment right) that it
exchanged by each of them, in satisfaction of its indebtedness. The extent by
which the amount of the debt discharged exceeds the fair market value of the
consideration therefor, if any, will be COD income to e.Volve, the AxisTel
Debtors and NNOC, respectively. However, because the COD income will occur in a
proceeding under the Bankruptcy Code, e.Volve, the AxisTel Debtors and NNOC,
respectively, will exclude such COD income from gross income. As a consequence
of this exclusion (the "Bankruptcy Exclusion"), e.Volve and NNOC will reduce
certain of their respective tax attributes up to an amount equal to the amount
of the excluded COD income. Pursuant to the Internal Revenue Code, tax attribute
reduction occurs after the tax liability for the taxable year of debt discharge
is determined. Unless a debtor elects to first reduce its tax basis in
depreciable property, the amount of any COD income realized by such debtor will
first be applied against and reduce such debtor's net operating losses and NOLs,
on a dollar-for-dollar basis, and then be applied to reduce other specified tax
attributes in the order of priority specified in the Internal Revenue Code.


         2.      GAIN OR LOSS ON SALE OF ASSETS AND EXCHANGE OF CONTINGENT
                 PAYMENT RIGHTS.


         E.Volve and the AxisTel Debtors will recognize gain or loss on the
sale or exchange of its assets, the character of which will depend upon various
factors including (i) whether such assets constitute "property used in a trade
or business" within the meaning of Section 1231(b) of the Internal Revenue Code
(the "1231 Assets") or constitute capital assets within the meaning of Section
1221 of the Internal Revenue Code and (ii) the aggregate amount of gain or
losses of the 1231 Assets. In addition, each of e.Volve, the AxisTel Debtors and
NNOC will recognize gain or loss to the extent its basis in the contingent
payment rights and other property, if any, given by such Debtor to its
claimholders in satisfaction of their claims is less than or greater than,
respectively, the fair market value of such contingent property rights and other
property, if any.


         3.      ACCRUED INTEREST.

         To the extent that there exists accrued but unpaid interest on the
indebtedness owing to holders of Allowed Claims and to the extent that such
accrued but unpaid interest has not previously been deducted by the applicable
Debtor, portions of payments made in consideration for the indebtedness
underlying such Allowed Claims that are allocable to accrued but unpaid interest
should be deductible by the applicable Debtor. Any such interest that is not
paid will not be deductible by the applicable Debtor and will not give rise to
COD income.



                                       54


<PAGE>

         To the extent that any Debtor has previously taken a deduction for
accrued but unpaid interest, any amounts so deducted that are paid will not give
rise to any tax consequences to such Debtor. If such amounts are not paid, they
will give rise to COD income that would be excluded from gross income pursuant
to the Bankruptcy Exclusion. As a result, the Debtor would be required to
further reduce its NOLs or other tax attributes to the extent such interest was
previously deducted and not paid.


         4.      ALTERNATIVE MINIMUM TAX.

         In general, an alternative minimum tax ("AMT") is imposed on a
corporation's alternative minimum taxable income if such tax exceeds the
corporation's regular federal income tax. In general, a corporation's AMT equals
20% of the amount by which the corporation's alternative minimum taxable income
("AMTI") exceeds an exemption amount. For purposes of computing AMTI, the
corporation's regular taxable income is the starting point; however, certain tax
deductions and other beneficial allowances are modified or eliminated. In
particular, even though a corporation otherwise might be able to offset all of
its taxable income for regular tax purposes by available NOLs, only 90% of a
corporation's AMTI may be offset by available NOLs (as recomputed for AMT
purposes).

         Any AMT that a corporation pays generally will be allowed as a
nonrefundable credit against its regular federal income tax liability in future
taxable years when the corporation is no longer subject to the AMT. Legislation
has been introduced to repeal the AMT for corporate tax purposes. However, as of
the date hereof, such legislation has not been passed.

         THE ABOVE SUMMARY HAS BEEN PROVIDED FOR INFORMATIONAL PURPOSES ONLY.
ALL HOLDERS OF ALLOWED CLAIMS AND EQUITY INTERESTS ARE URGED TO CONSULT THEIR
OWN TAX ADVISORS CONCERNING THE FEDERAL, STATE, LOCAL OR FOREIGN TAX
CONSEQUENCES OF THE PLAN.


                         XIII. ALTERNATIVES TO THE PLAN

         The Proponents have determined that the Plan is the most practical
means of providing maximum recoveries to creditors. Alternatives to the Plan
which have been considered and evaluated by the Debtors during the course of the
Chapter 11 Cases include (a) liquidation of the Debtors' assets under chapter 7
of the Bankruptcy Code, and (b) an alternative chapter 11 plan. The thorough
consideration of these alternatives to the Plan has led the Proponents to
conclude that the Plan, in comparison, provides a greater recovery to creditors
on a more expeditious timetable, and in a manner which minimizes certain
inherent risks in any other course of action available to the Debtors.



                                       55


<PAGE>
A.       LIQUIDATION UNDER CHAPTER 7 OF THE BANKRUPTCY CODE.


         If the Plan or any other chapter 11 plan for the Debtors cannot be
confirmed under Section 1129(a) of the Bankruptcy Code, the Chapter 11 Cases may
be converted to a case under chapter 7 of the Bankruptcy Code, in which case, a
trustee would be elected or appointed to liquidate any remaining assets of the
Debtors for distribution to creditors pursuant to chapter 7 of the Bankruptcy
Code. If a trustee is appointed and the remaining assets of the Debtors are
liquidated under chapter 7 of the Bankruptcy Code, all creditors holding Allowed
General Unsecured Claims may receive distributions of a lesser value on account
of their Allowed Claims and likely would have to wait a longer period of time to
receive such distributions than they would under the Plan. A chapter 7 trustee
would have to invest a considerable amount of time and effort to investigate the
facts underlying the multitude of Claims filed against the Estate, as compared
with the Debtors' existing knowledge of such affairs. A chapter 7 trustee would
be completely unfamiliar with the Debtors' business assets and causes of action,
and at a substantial disadvantage in maximizing values through the liquidation
process. Further, a lack of funding would be a significant impediment. A
liquidation analysis is annexed hereto as Exhibit D. The analysis demonstrates
that Allowed General Unsecured Creditors would receive distributions of equal or
lesser value under a chapter 7 liquidation than under the Plan.


B.       ALTERNATIVES TO CHAPTER 11 PLAN.

         If the Plan is not confirmed, the Debtors or any other party in
interest could attempt to formulate a different chapter 11 plan. Such a plan
might involve either an attempted reorganization and continuation of the
Debtors' business or a quick, "forced" liquidation of their assets. The
Proponents believe that the Plan enables the Debtors to emerge from chapter 11
successfully and expeditiously and allows creditors to realize the highest
recoveries under the circumstances.


                       XIV. CONCLUSION AND RECOMMENDATION

         THE DEBTORS BELIEVE THAT THE PLAN COMPLIES IN ALL RESPECTS WITH CHAPTER
11 OF THE BANKRUPTCY CODE AND RECOMMEND TO HOLDERS OF CLAIMS AND INTERESTS WHO
ARE ENTITLED TO VOTE ON THE PLAN THAT THEY VOTE TO ACCEPT THE PLAN. SUCH HOLDERS
ARE REMINDED THAT TO BE COUNTED, EACH BALLOT, SIGNED AND MARKED TO INDICATE THE
HOLDER'S VOTE, MUST BE RECEIVED BY THE VOTING AGENT NO LATER THAN 4:00 P.M.
(PREVAILING EASTERN TIME) ON FEBRUARY 20, 2002.



                                       56


<PAGE>

Dated: January 15, 2002


                                      Respectfully submitted,
                                      AxisTel Communications, Inc.


                                        By: /s/ STEVEN LOGLISCI
                                           -------------------------------------
                                        Name: Steven Loglisci
                                        Title: Chief Executive Officer



                                      e.Volve Technology Group, Inc.


                                        By: /s/ STEVEN LOGLISCI
                                           -------------------------------------
                                        Name: Steven Loglisci
                                        Title: Chief Executive Officer


                                      Novo Networks Global Services, Inc.


                                        By: /s/ STEVEN LOGLISCI
                                           -------------------------------------
                                        Name: Steven Loglisci
                                        Title: Chief Executive Officer


                                      Novo Networks International Services, Inc.


                                        By: /s/ STEVEN LOGLISCI
                                           -------------------------------------
                                        Name: Steven Loglisci
                                        Title: Chief Executive Officer


                                      Novo Networks Media Services, Inc.


                                        By: /s/ STEVEN LOGLISCI
                                           -------------------------------------
                                        Name: Steven Loglisci
                                        Title: Chief Executive Officer



<PAGE>

                                      Novo Networks Operating Corp.


                                        By: /s/ STEVEN LOGLISCI
                                           -------------------------------------
                                        Name: Steven Loglisci
                                        Title: Chief Executive Officer


                                      Nova Networks, Inc.


                                        By: /s/ BARRETT WISSMAN
                                           -------------------------------------
                                        Name: Barrett Wissman
                                        Title: President
<PAGE>




                                    EXHIBIT A

                              [FIRST AMENDED JOINT
                           CHAPTER 11 PLAN WAS FILED
                            AS A SEPARATE DOCUMENT]







<PAGE>







                                   EXHIBIT B


<PAGE>

                      IN THE UNITED STATES BANKRUPTCY COURT
                          FOR THE DISTRICT OF DELAWARE


-------------------------------------------
                                                )
In re:                                          )       Chapter 11
                                                )
AXISTEL COMMUNICATIONS, INC.,                   )       Case No. 01-10005 (RJN)
NOVO NETWORKS GLOBAL SERVICES, INC.,            )
NOVO NETWORKS INTERNATIONAL SERVICES, INC.,     )       Jointly Administered
E.VOLVE TECHNOLOGY GROUP, INC.,                 )
NOVO NETWORKS OPERATING CORP.,                  )
NOVO NETWORKS METRO SERVICES, INC.              )
                                                )
        Debtors.                                )
                                                )
-------------------------------------------


                ORDER (i) APPROVING FORM OF BALLOTS AND PROPOSED
           SOLICITATION AND TABULATION PROCEDURES; (ii) FIXING DATE,
               TIME AND PLACE FOR VOTING ON JOINT CHAPTER 11 PLAN;
            (iii) PRESCRIBING THE FORMS AND MANNER OF NOTICE THEREOF;
               (iv) FIXING THE LAST DATE FOR FILING OBJECTIONS TO
                    JOINT CHAPTER 11 PLAN; AND (v) SCHEDULING
           A HEARING TO CONSIDER CONFIRMATION OF JOINT CHAPTER 11 PLAN

                 Upon the record of the hearing held on January 14, 2002 to
consider approval of the First Amended Proposed Disclosure Statement Pursuant to
Section 1125 of the Bankruptcy Code With Respect to the First Amended Joint
Chapter 11 Plan By AxisTel Communications, Inc., its Affiliated Debtors and Novo
Networks, Inc.; and upon the motion dated October 16, 2001 (the "Motion")(1) of
the Debtors for entry of an order (i) approving form of ballots and proposed
solicitation and tabulation procedures; (ii) fixing date, time and place for
voting on joint chapter 11 plan; (iii) prescribing the forms and manner of
notice thereof; (iv) fixing the last date for filing objections to joint chapter
11 plan; and (v) scheduling a hearing to consider confirmation of joint chapter
11 plan;


---------------------
(1)     All capitalized terms used but not otherwise defined herein shall have
the meaning ascribed to them in the Motion.

<PAGE>
and it appearing that the Court has jurisdiction over this matter; and it
appearing that notice of the Motion was sufficient; and upon the record of the
Disclosure Statement Hearing; and after due deliberation, and sufficient cause
appearing therefor, it is hereby

         ORDERED that, in accordance with section 1125 of the Bankruptcy Code
and Rule 3017(c) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy
Rules"), the Disclosure Statement is hereby approved; and it is further

         ORDERED that the forms of ballot attached as collective Exhibit "C" to
the Motion (the "Ballots") are approved; and it is further

         ORDERED that the proposed procedures for soliciting and tabulating
votes to accept or reject the Plan attached to the Motion as Exhibit "F" (the
"Voting Procedures") are approved; and it is further

         ORDERED that, pursuant to Bankruptcy Rules 3017(c) and 3018(a), the
holders of claims in each of Classes 3 and 4 under the Plan as of January 15,
2002 (the "Record Date") who are to receive a Solicitation Package as set forth
below may vote to accept or reject the Plan by indicating their acceptance or
rejection of the Plan on the Ballots provided therefor; and it is further

         ORDERED that, in accordance with Bankruptcy Rule 3017(c), the date and
time set for voting on the Plan shall be February 20, 2002 at 4:00 p.m., Eastern
Time (the "Voting Deadline"); and it is further

         ORDERED that, in accordance with Bankruptcy Rule 3017(c), a hearing to
consider confirmation of the Plan and any objections that may be interposed (the
"Confirmation Hearing") shall be held before the Honorable Randall J. Newsome,
United States Bankruptcy Judge, United States Bankruptcy Court, 844 King Street,
2nd Floor,


                                       2

<PAGE>

Wilmington, Delaware 19801, on March 1, 2002 at 9:30 a.m., Eastern Time, or as
soon thereafter as counsel may be heard; and it is further

         ORDERED that, in accordance with Bankruptcy Rules 3017(c) and
9006(c)(1), objections, if any, to confirmation of the Plan shall be in writing
and shall (a) state the name and address of the objecting party and the nature
and amount of the claim or interest of such party, (b) state with particularity
the basis and nature of each objection or proposed modification to the Plan and
(c) be filed, together with proofs of service, with the Court and served so that
such objections are actually received by the parties listed below, no later than
February 20, 2002 at 4:00 p.m., Eastern Time (the "Confirmation Objection
Deadline"):

         (i)      AxisTel Communications, Inc., et al.
                  300 Crescent Court, Suite 1760
                  Dallas, Texas 07327
                  Attention: Steven R. Loglisci

         (ii)     The Bayard Firm
                  Attorneys for the Debtors and Debtors in Possession
                  222 Delaware Avenue
                  Suite 900
                  Wilmington, Delaware 19801
                  Attention: Jeffrey M. Schlerf, Esq.

         (iii)    White & Case LLP
                  Attorneys for the Postpetition Lender and Plan Co-Proponent
                  200 South Biscayne Boulevard
                  Miami, Florida 33131
                  Attention: John K. Cunningham, Esq.

         (iv)     The Office of the United States Trustee
                  844 King Street, Suite 2313
                  Lock Box 35
                  Wilmington, Delaware 19801-3519
                  Attention: Joseph McMahon, Esq.

and it is further


                                       3
<PAGE>

         ORDERED that, except as otherwise directed by this Court, any party
failing to file and serve an objection to the Plan in compliance with this order
shall be barred from raising any objections at the Confirmation Hearing, and it
is further

         ORDERED that the Confirmation Hearing may be adjourned from time to
time without prior notice to holders of claims, holders of equity interests, or
other parties in interest other than the announcement of the adjourned hearing
date at the Confirmation Hearing; and it is further

         ORDERED that the Debtors are hereby directed to mail or cause to be
mailed by first class United States mail, postage prepaid, on or before January
23, 2002 (a) a copy of the notice of, among other things, entry of this Order,
the Voting Deadline, the Confirmation Objection Deadline, and the Confirmation
Hearing, substantially in the form annexed to the Motion as Exhibit "D" (the
"Confirmation Notice"), which Confirmation Notice is hereby approved, (b) a copy
of the Disclosure Statement and the Plan, (c) the Ballot(s) and voting
instructions (if such entity is entitled to vote pursuant to the Voting
Procedures), and (d) a pre-addressed return envelope (if such entity is entitled
to vote pursuant to the Voting Procedures) (collectively, a "Solicitation
Package") on (i) the United States Trustee; (ii) each holder of a Claim (as such
term is defined in the Plan) in each of Classes 3 and 4 under the Plan that is
(x) listed in the Schedules as of the Record Date as liquidated, undisputed and
not contingent; or (y) represented by a proof of claim against any of the
Debtors that had been filed by the Record Date and that is not the subject of an
objection pending as of the Record Date; (iii) each party to the Debtors'
executory contracts and unexpired leases, as listed on Schedule G of the
Schedules; and (iv) each holder of an Equity Interest in the Debtors; and it is
further


                                       4

<PAGE>
         ORDERED that the Debtors are hereby directed to mail or cause to be
mailed by first class United States mail, postage prepaid, on or before January
23, 2002 a copy of the notice of, among other things, entry of this Order, the
Voting Deadline, the Confirmation Objection Deadline, and the Confirmation
Hearing, substantially in the form annexed to the Motion as Exhibit "E" (the
Unimpaired Class Notice"), which Unimpaired Class Notice is hereby approved, on
all holders of Claims (as such term is defined in the Plan) in Class 1
(Priority Claims) and Class 2 (Secured Claims) as of the Voting Record Date
that are in classes that are rendered unimpaired under the Plan; and it is
further

         ORDERED that, pursuant to Bankruptcy Rule 2002(1), the Debtors shall
cause the Confirmation Notice to be published in each of The Wall Street
Journal (National Edition), Dallas Morning News and Star-Ledger (New Jersey),
on one occasion no later than February 8, 2001, which publication is hereby
approved and which shall be deemed good and sufficient notice by publication;
and it is further

         ORDERED that the provision of notice in accordance with the procedures
set forth in this Order and the Voting Procedures shall be deemed good and
sufficient notice of the Confirmation Hearing, the Voting Deadline and the
Confirmation Objection Deadline; and it is further

         ORDERED that, pursuant to Bankruptcy Rule 3017(c), but except as
otherwise expressly provided in the Voting Procedures, in order to be
considered as acceptances or rejections of the Plan, all Ballots must be
properly completed, executed, marked and actually received via United States
mail, overnight delivery or hand delivery




                                       5
<PAGE>
by Logan & Company, Inc. (the "Balloting Agent") on or before the Voting
Deadline; and it is further

     ORDERED that any Ballot transmitted to the Balloting Agent by facsimile
transmission will not be counted; and it is further

     ORDERED that the Balloting Agent is authorized and directed to effect any
action reasonably necessary to accomplish the solicitation and tabulation
services contemplated by the Disclosure Statement and the Voting Procedures; and
it is further

     ORDERED that the Debtors are not required to mail a Solicitation Package or
Unimpaired Class Notice to any individual or entity at an address from which
notice of the Disclosure Statement Hearing was returned by the United States
Postal Office as undeliverable, unless the Debtors or the Balloting Agent is
provided with a more accurate address prior to the Voting Deadline; and it is
further

     ORDERED that any entity entitled to vote to accept or reject the Plan may
change its vote before the Voting Deadline by casting a superseding Ballot so
that such superseding Ballot is actually received by the Balloting Agent in the
manner provided in the Voting Procedures on or before the Voting Deadline; and
it is further

     ORDERED that the Debtors are authorized and empowered to take such actions
as may be necessary or appropriate to implement the terms of this Order.

Dated:  Wilmington, Delaware
        January __, 2002

                                             ---------------------------------
                                             UNITED STATES BANKRUPTCY JUDGE

                                       6
<PAGE>

























                                   EXHIBIT C



















<PAGE>




                 BALLOT SOLICITATION AND TABULATION PROCEDURES


The following procedures (these "Voting Procedures") are adopted with respect
to (a) the distribution of ballot solicitation materials with respect to the
chapter 11 plan proposed by the Debtors and the co-proponent, Nova Networks,
Inc. (as such plan may be amended from time to time, the "Plan") and (b) the
return and tabulation of ballots. All capitalized terms used but not otherwise
defined herein shall have the meaning ascribed to them in the Plan.

1.    Definitions

      (a)   "Bankruptcy Court" means the United States Bankruptcy Court for the
            District of Delaware.

      (b)   "Bar Date" means October 19, 2001 at 4:00 p.m. Eastern Time.

      (c)   "Bar Date Order" means the order of the Bankruptcy Court, dated
            August 15, 2001, which fixed the deadline for filing proofs of claim
            against the Debtors' estates.

      (d)   "Confirmation Hearing" means the hearing on the confirmation of the
            Plan, as such hearing may be adjourned from time to time.

      (e)   "Confirmation Notice" means the notice, as approved by the
            Bankruptcy Court, of the approval of the Disclosure Statement and
            the dates fixed by the Bankruptcy Court as the Voting Deadline, the
            Confirmation Objection Deadline and the date of the Confirmation
            Hearing.

      (f)   "Disclosure Statement" means the Proposed Disclosure Statement, as
            approved by the Bankruptcy Court in the Disclosure Statement Order.

      (g)   "Disclosure Statement Order" means an order of the Bankruptcy
            Court approving the Proposed Disclosure Statement.

      (h)   "Proposed Disclosure Statement" means the Proposed Disclosure
            Statement under section 1125 of the Bankruptcy Code, dated October
            4, 2001, as such document may be amended prior to the entry of the
            Disclosure Statement Order.

      (i)   "Publication Notice" means a published notice of (a) the approval of
            the Disclosure Statement and the scheduling of the Confirmation
            Hearing and (b) the procedure for holders of Claims and Equity
            Interests to obtain a Solicitation Package.

      (j)   "Record Date" means November 5, 2001.

      (k)   "Schedules" means the Debtors' schedules of liabilities previously
            flied with the Bankruptcy Court, as amended or reconstituted.



<PAGE>

      (l)   "Balloting Agent" means Logan & Company, Inc., who was retained by
            the Debtors to act as die Balloting Agent with respect to the Plan.

      (m)   "Solicitation Package" means, and will consist of, all of the
            following:

            (i)   Disclosure Statement Order.

            (ii)  Disclosure Statement (with the Plan attached as an exhibit
                  thereof).

            (iii) Confirmation Notice.

            (iv)  For entities entitled to vote, appropriate ballots and voting
                  instructions.

            (v)   For entities entitled to vote, pre-addressed, postage-paid,
                  return envelopes.

            (vi)  Any other materials ordered by the Bankruptcy Court to be
                  included as part of the Solicitation Package.

      (n)   "Unimpaired Class Notice" means, collectively, (a) notice that the
            class in which a Claim is designated in the Plan as unimpaired and
            that, upon written request by such entity to the Balloting Agent, a
            copy of the Solicitation Package shall be furnished to such entity
            at the Debtors' expense and (b) notice of the Confirmation Hearing
            and the time fixed for filing objections to confirmation of the
            Plan.

      (o)   "Voting Deadline" means the date that is established by the
            Bankruptcy Court as the deadline for the return of the ballots on
            the Plan.

Any capitalized term used but not defined herein shall have the meaning ascribed
to such term in the Plan.

2.    Publication Notice

      The Debtors will cause the Publication Notice to be published once in The
      Wall Street Journal (National Edition), Dallas Morning News, and
      Star-Ledger (New Jersey).

3.    Distribution of Solicitation Packages by the Balloting Agent

      The Balloting Agent will cause Solicitation Packages to be served as
      follows:

      (a)   Scheduled Claims:

            Upon each holder of a Claim (in a class that is not rendered
            unimpaired under the Plan) listed in the Schedules as of the Record
            Date as liquidated, undisputed, and riot contingent.


                                      -2-


<PAGE>


      (b)   Filed Claims:

            Upon each holder of a Claim (in a class that is not rendered
            unimpaired under the Plan) represented by a proof of claim against
            any of the Debtors that has been filed by the Bar Date and that has
            not been disallowed by an order entered on or before the Record Date
            nor subject to an objection.

      (c)   Parties to Executory Contracts and Unexpired Leases:

            Upon each party to any of the Debtors executory contracts and
            unexpired leases, as listed on Schedule G of the Schedules.

      (d)   Equity holders:

            Upon each party that holds an Equity Interest in the Debtors.

4.    Unimpaired Claims:

            Each entity that, as of the Record Date, has a Claim that is
            unimpaired under the Plan will receive an Unimpaired Class Notice.

5.    Determination of Holders of Claims of Record:

            The Solicitation Package or Unimpaired Class Notice, as the case may
            be, will be served upon the entity that holds a Claim or Equity
            Interest as of the Record Date, and the Debtors will have no
            obligation to cause a Solicitation Package or Unimpaired Class
            Notice, as the case may be, to be served upon any subsequent holder
            of such Claim or Equity Interest (as evidenced by any notice of
            assignment entered on the Bankruptcy Court's docket after the Record
            Date).

6. Return of Ballots:

      (a)   Claimants that are Entitled to Vote:

            Each claimant that has a Claim for which a Claim amount may be
            determined pursuant to Section 7(a) hereof and which Claim is not
            treated as unimpaired under the Plan as of the Voting Deadline and
            each holder of an Equity Interest is entitled to vote to accept
            or reject the plan.

      (b)   Place to Send Completed Ballots:

            All ballots will be accompanied by return envelopes addressed to
            AxisTel Communications, Inc. c/o the Balloting Agent, Logan &
            Company, Inc., 546 Valley Road, Upper Montclair, NJ 07043.

      (c)   Deadline for Receiving Completed Ballots:


                                       -3-



<PAGE>






            All ballots must be actually received by the Balloting Agent by 4:00
            p.m., Eastern Time, by the Voting Deadline. Such ballots may be
            received by the Balloting Agent at the address set forth on the
            return envelope. The Balloting Agent will not accept ballots
            submitted by facsimile transmission The Balloting Agent will date
            and time-stamp all ballots when it receives them. In addition, the
            Balloting Agent will make a photocopy of all such ballots it
            receives and will retain a copy of such ballots for a period of one
            (1) year after the "Effective Date" or the Plan, unless otherwise
            instructed by the Debtors, in writing.

7.    Tabulation of Ballots:

      (a)   Determination of Amount of Claims Voted:

            With respect to the tabulation of ballots for all Claims, for
            purposes of voting, the amount to be used to tabulate acceptance or
            rejection of the Plan is as follows (in order or priority):

            (i)   If, prior to the Voting Deadline, (i) the Bankruptcy Court
                  enters an order fully or partially allowing a Claim, whether
                  for all purposes or for voting purposes only or (ii) the
                  Debtors and the holder of a Claim agree to fully or partially
                  allow such Claim for voting purposes only and no objection to
                  such allowance is received by the Debtors within seven (7)
                  days after service by first-class mail of notice of such
                  agreement to the entities having flied a notice of appearance
                  in the Debtors' chapter 11 cases, the amount allowed
                  thereunder

            (ii)  The liquidated amount specified in a proof of claim filed by
                  the Bar Date, so long as such proof of claim has not been
                  disallowed by the Bankruptcy Court and is not the subject of
                  an objection pending as of the Record Date.

            (iii) The Claim amount listed in the Schedules as unliquidated,
                  undisputed, and not contingent.

            (iv)  If a proof of claim has been flied by the Bar Date and such
                  Claim is wholly contingent or unliquidated, the Claim amount,
                  for voting purposes only, shall be $1.00 so long as such proof
                  of claim has not been disallowed by the Court and is not the
                  subject of an objection pending as of the Record Date.

      (b)   Determination of Number of Claims Voted:

            Each ballot received will be deemed to have been voted by one and
            only one holder of Claims. Each holder of Claims in a class is
            entitled to one (1) vote on account of all such holders' Claims in
            that class. Accordingly, (a) a ballot (or multiple ballots with
            respect to multiple Claims within a single Plan class) that
            partially rejects and partially accepts the Plan will not be
            counted, (b) a claimant that has identical Claims against different
            Debtors in the same class under the


                                       -4-


<PAGE>


            Plan (i.e., a Claim under a note and a Claim under a guaranty of
            such note) will receive only one ballot with respect to such class
            and only will be entitled to one vote in the amount of one of such
            Claims, and (c) claimant that has Claims against different Debtors
            with respect to the same obligations (i.e., a Claim under a note and
            a Claim under a guaranty of such note) that are classified in
            different classes under the Plan only will receive a ballot for
            each class in which the claimant has a Claim with respect to the
            primary obligation.

(c)   Ballots Excluded:

            A ballot will not be counted if any of the following applies to such
            ballot:

            (i)   The holder submitting the ballot is not entitled to vote,
                  pursuant to Section 6(a) hereof.

            (ii)  The ballot is not signed by the holder or an individual
                  authorized to sign on behalf of the holder.

            (iii) The ballot is not actually received by the Balloting Agent
                  in the manner set forth in Section 6(c) hereof by the Voting
                  Deadline.

            (iv)  The ballot is not completed, unless the ballot is otherwise
                  complete and is only incomplete because the acceptance or
                  rejection of the Plan is not noted.

(d)   General Voting Procedures and Standard Assumptions:

            In addition, the following voting procedures and standard
            assumptions will be used in tabulating ballots:

            (i)   Each holder of Claims or Equity Interests will be deemed to
                  have voted the full amount of its Claims or Equity interests
                  in each class in which it submits a ballot.

            (ii)  If multiple ballots are received for a holder of Claims or
                  Equity Interests the last ballot received from such holder
                  prior to the Voting Deadline will be the ballot that is
                  counted.

            (iii) if multiple ballots are received from different holders
                  purporting to hold the same Claim or Equity Interest, in the
                  absence of contrary information establishing which claimant
                  held such Claim or Equity Interest as of the Voting Deadline,
                  the latest-dated ballot that is received prior to the Voting
                  Deadline will be the ballot that is counted.

            (iv)  If multiple ballots are received from a holder of a Claim or
                  Equity Interest and someone purporting to be his, her, or its
                  attorney or agent, the ballot received from the holder of the
                  Claim or Equity Interest will be the ballot


                                            -5-


<PAGE>


                  that is counted, and the vote of the purported attorney or
                  agent will not be counted.

            (v)   A ballot that is completed, but on which the claimant did not
                  vote whether to accept or reject the Plan shall not be
                  counted as a vote.




                                   -6-
<PAGE>




                                    EXHIBIT D


<PAGE>

                        NNOC, e.VOLVE, NNISI AND AXISTEL
                     NOTES TO CHAPTER 7 LIQUIDATION ANALYSIS

In conjunction with developing the First Amended Joint Chapter 11 Plan (the
"Plan") for Novo Networks Operating Corp. ("NNOC"), e.Volve Technology Group,
Inc. ("e.Volve") Novo Networks International Services, Inc ("NNISI") and AxisTel
Communications, Inc. and subsidiaries, Novo Networks Metro Services, Inc.
("NNMSI") and Nova Networks Global Services, Inc. ("NNGSI"), (together
"AxisTel"), (and collectively, the "Company" or "Debtors") as described in the
Disclosure Statement(1) to which this is an exhibit, management has prepared an
orderly Liquidation Analysis under Chapter 7, by voting class (the "Liquidation
Analysis") to assist the reader in determining if the Plan is in the best
interests or all classes of creditors, shareholders and parties-in-interest
impaired under the Plan. The Liquidation Analysis does not address the issues of
potential recoveries from avoidance actions, lease rejection damages,
post-petition obligations due to creditors of e.Volve Technology Group de Mexico
S.A. de C.V. ("e.Volve de Mexico") a non-debtor subsidiary of e.Volve,
litigation recoveries - including Qwest, the sale of leases - including Siemens
or final bankruptcy claims reconciliation.

CREDITORS SHOULD CONSULT THEIR OWN ATTORNEY AND/OR FINANCIAL ADVISOR REGARDING
THE POTENTIAL TREATMENT OF THEIR CLAIM IN LIQUIDATION.

The financial information contained herein is based on the Debtors balance sheet
as of November 30, 2001 and reflects the Debtors' judgment as to information
that is material and accurate in the circumstances through January 14, 2002 and
should be read in conjunction with the key assumptions, qualifications and
explanations set forth below.

A plan of reorganization cannot be confirmed unless the Bankruptcy Court finds
that the plan is in the "best interests" of holders of claims against, and
interests in, the Debtors subject to such a plan. The "best interests" test is
satisfied if a plan provides to each dissenting or non-voting member of each
impaired class a recovery not less than the recovery such member would receive
if all of the Debtors' assets were sold and the Debtor was liquidated by a
trustee in a hypothetical case under Chapter 7 of the Bankruptcy Code.

For purposes of this analysis, management has assumed that a Chapter 7
liquidation of the Debtors conducted by a trustee would consist of a cessation
of operations on November 30, 2001 and a forced sale of individual assets over a
period of two months. The hypothetical liquidation presented herein would, in
management's opinion (with the exception of e.Volve), result in substantial
chapter 11 administrative claim deficiencies and no recovery to chapter 11
unsecured creditors. Absent a commitment to fund the orderly liquidation of the
Debtors' businesses, as is contemplated in the Plan, the results of this
Liquidation Analysis clearly demonstrate that the "best interests" test has been
satisfied.

Underlying the Liquidation Analysis are a number of estimates amid assumptions
that, although developed and considered reasonable by management, are inherently
subject to significant economic and competitive uncertainties, exogenous factors
beyond the control of the Debtors, and variances in the sequence and timing of
decisions to liquidate. Accordingly, there can be no assurance that the values
reflected in this Liquidation Analysis would be realized if the Debtors were, in
fact, to undergo such a liquidation, and actual results could vary materially
from those shown here.


----------

(1) All capitalized terms in this exhibit are intended to have the same meanings
ascribed to them in the Disclosure Statement



                                       1
<PAGE>

                        NNOC, e.VOLVE, NNISI AND AXISTEL
                     NOTES TO CHAPTER 7 LIQUIDATION ANALYSIS

In preparing this Liquidation Analysis, the Company performed a detailed review
of its tangible assets as of November 30, 2001. The review examined an asset's
quality, age, liquidity, and likelihood for recovery under a liquidation
scenario. No value was assigned to leased equipment, intangible assets or causes
of action including avoidance actions or the Qwest litigation. All values are
estimates and subject to change.

ASSETS

NNOC

CASH & EQUIVALENTS

Recovery excludes cash balance in Debtors' payroll account, assumed to escheat
to US government. Balance presented at book value with any outstanding float
assumed to be immaterial.

PREPAID EXPENSES

Includes miscellaneous prepaid items assumed to be result in a 50% recovery
after discounting for collection fees and risk.

DEPOSITS

Limited to retainers held by bankruptcy professionals, assumed offset against
outstanding fees, resulting in no expected recovery.

Note: For purposes of this Liquidation Analysis, no value was assigned to any of
the intercompany equity interests or investments held by the Debtors.

e.VOLVE

CASH & EQUIVALENTS

Balance presented at book value with any outstanding float assumed to be
immaterial.

ACCOUNTS RECEIVABLE:

Majority of balance is due from Qwest and the subject of a dispute. Given the
recent deterioration in the business relationship between the Debtors and Qwest,
no value has been assigned to this balance in a liquidation.

PREPAID EXPENSES

Approximately half of this balance is due from Olympus, a creditor against whom
the Debtors commenced litigation post petition. Any recovery will be in
settlement of the litigation and is too speculative to estimate at this time.
Recovery will therefore he Limited to prepaid insurance.

DEPOSITS

Approximately one third of this balance is held by Olympus, a creditor against
whom the Debtors commenced litigation post petition. Any recovery will be in
settlement or the litigation and is too speculative to estimate at this time.
Substantial recoveries are anticipated from balances held with vendors Maxcom
and Bestel.

VAT TAX RECEIVABLE

Tax refund due from Mexican government for value-added taxes remitted by
Debtors. Recent political developments and policy changes suggest that these
balances may not be collectible. Based on



                                       2
<PAGE>

                        NNOC, e.VOLVE, NNISI AND AXISTEL
                     NOTES TO CHAPTER 7 LIQUIDATION ANALYSIS

management's present views, this analysis conservatively estimates no recovery
of VAT from Mexican tax authorities.

PROPERTY, FF&E

Two-thirds of this balance is leased network equipment that would be returned to
the vendor or lease company and not available to the Debtors to liquidate or
assign.

A detailed review of the other furniture, fixtures and equipment produced
liquidation recovery estimates ranging between (0% and 20%, with the vast
majority of the equipment assigned (0% because either of its age or because the
equipment is not located in the United States.

Note - Historically time Debtor has recorded advances to its non-Debtor Mexican
subsidiary, E.Volve de Mexico as an intercompany transfer and recorded proceeds
from sales in Mexico as revenue resulting in an accounting balance due to the
Debtor. Consistent with the Plan and Disclosure Statement, this analysis does
not address post-petition obligations due to E.Volve de Mexico creditors and
therefore no recovery is projected on the E.Volve de Mexico intercompany
balance.

NNISI

CASH & EQUIVALENTS

Balance presented at book value with any outstanding float assumed to be
immaterial.

ACCOUNTS RECEIVABLE

NNISI accounts receivable were generated by the Jersey City operations that were
discontinued in September 2001. Immediately, after filing for bankruptcy the
Debtors undertook a significant effort to collect all outstanding balances,
resulting in substantial recoveries that provided the Debtors with liquidity
during the pendency of these chapter 11 cases. It is unlikely to expect any
additional significant recoveries at this time and therefore a 5% recovery
estimate is provided, net of collection costs.

PREPAID EXPENSES

30% of this balance is prepaid rent for the NJ facility that is not expected to
be recovered as the Debtors are two months in arrears on post-petition rent.
Remaining assets include miscellaneous prepaid items assumed to result in a
blended recovery of 35% after discounting for collection fees and risk.

DEPOSITS

Substantially all deposits are held by either the NJ landlord that are not
expected to be recovered as the Debtors are two months in arrears on
post-petition rent or amounts held by foreign creditors. Accordingly, no
recoveries are projected from this asset category.

PROPERTY, FF&E

A detailed review of all assets yielded a blended recovery rate of approximately
5% on switch equipment, computers, satellite equipment and furniture.

COVISTA SETTLEMENT

Estimated net global settlement proceeds relating to a dispute over past due
accounts receivable. Recovery is net of lease deposits owed to AxisTel.



                                       3
<PAGE>

                        NNOC, e.VOLVE, NNISI AND AXISTEL
                     NOTES TO CHAPTER 7 LIQUIDATION ANALYSIS

AXISTEL

CASH & EQUIVALENTS

Neither AxisTel Communications, Inc., NNGSI or NNMSI have bank accounts.

PREPAID EXPENSES

Principally includes rent and is estimated to be recovered at 75% of book value
to account for outstanding property taxes, utilities or CAM charges.

DEPOSITS

Entirely comprised of a six month real estate deposit on the Miami facility
leased from Covista. This analysis assumes that the Covista settlement includes
a full recovery to AxisTel of amounts held on deposit.

PROPERTY, FF&E

Other than leased equipment the only asset belonging to AxisTel is the IRU
described in section VII.G of the Debtors Disclosure Statement. Based on recent
industry pricing, management conservatively estimates net liquidation proceeds
to total at least $250,000.

LIABILITIES

CLAIMS SUBJECT TO CARVE-OUT FROM SECURED LENDER

As per the DIP Agreement, certain professional fees are subject to a carve-out
from the secured lender. For purposes of this analysis, this amount has been
evenly divided amongst the NNISI, AxisTel and e.Volve.

SECURED CLAIMS

As of November 30, 2001 the Debtors' owed the DIP lender approximately $200,000
including outstanding principal, interest, and lender legal fees. Please refer
to the terms of the DIP loan agreement for additional information. For purposes
of this analysis, this amount has been evenly divided amongst the NNISI, AxisTel
and e.Volve.

CHAPTER 7 ADMINISTRATIVE CLAIMS

o    Chapter 7 trustee fees -- 3% of all disbursements (a simplification of
     Bankruptcy Code section 326).

o    Chapter 7 wind down expenses -- Includes estimated amounts for the trustee
     to cover two months of administrative service fees (for accounting and tax
     services) and estimated legal fees. For purposes of this analysis, this
     amount has been evenly divided amongst the NNISI, AxisTel and e.Volve.

TAX, PRIORITY AND CHAPTER 11 ADMINISTRATIVE CLAIMS

Reflects estimates presented in the Debtors' Disclosure Statement and estimated
unpaid post-petition chapter 11 administrative claims. This balance excludes
unpaid post-petition bankruptcy professional fees subject to the secured
creditor carve out and amounts due to creditors of E.Volve de Mexico, a
non-debtor Mexican subsidiary of e.Volve.

GENERAL UNSECURED CREDITORS' CLAIMS

Reflects estimates presented in the Debtors' Disclosure Statement. This balance
has not been adjusted to account for additional lease rejection damages or the
final claims reconciliation process.



                                       4
<PAGE>

NNOC
LIQUIDATION RECOVERY ANALYSIS
CHAPTER 7 PROCEEDING

<Table>
<Caption>
                                                                        ESTIMATED
                                                                        BOOK VALUE       LIQUIDATION       LIQUIDATION
                                                                        11/30/2001          FACTOR            VALUE
                                                                       ------------      ------------      ------------
<S>                                                                    <C>               <C>               <C>
SUMMARY SCHEDULE OF ASSET LIQUIDATION VALUES
ASSETS
     Cash and Equivalents                                              $      5,228               100%     $      5,225
     Prepaid Expenses                                                        12,270                50%            6,135
     Deposits                                                               155,805                 0%               --
                                                                       ------------      ------------      ------------
         Estimated Recovery on Book Value of Assets                    $    173,303                 7%           11,363
                                                                       ============      ============
                                                                                                           ------------
         Estimated Assets Available for Distribution                                                             11,363

SECURED LENDER CARVE-OUTS
     Professional Fees - See Notes                                                                                   --

ADMINISTRATIVE CLAIMS (CHAPTER 7)
     Chapter 7 Trustee                                                                                              341
     Chapter 7 Wind Down Expenses - See Notes                                                                        --
                                                                                                           ------------
         Subtotal Claims                                                                                            341
         Percentage of Claim Recovered                                                                            100.0%
                                                                                                           ------------
         Estimated Assets Available for Further Distribution                                                     11,022

SECURED CLAIMS
     DIP Facility                                                                                                    --
         Percentage of Claim Recovered                                                                            100.0%
                                                                                                           ------------
         Estimated Assets Available for Further Distribution                                                     11,022

TAX, PRIORITY AND CHAPTER 11 ADMINISTRATIVE CLAIMS
     Chapter 11 Administrative Claims Not Subject to Carve Out                                                  250,000
     Chapter 11 Tax and Priority Claims                                                                          70,000
                                                                                                           ------------
         Subtotal Claims                                                                                        320,000
         Percentage of Claim Recovered                                                                              3.4%
                                                                                                           ------------
         Estimated Assets Available for Further Distribution                                                         --

GENERAL UNSECURED CLAIMS
     Chapter 11 Pre-petition General Unsecured Claims                                                           400,000
                                                                                                           ------------
         Subtotal Claims                                                                                        400,000
         Percentage of Claim Recovered                                                                              0.0%
                                                                                                           ------------
         Estimated Assets Available for Further Distribution                                               $         --
                                                                                                           ============
</Table>



<PAGE>
e.VOLVE
LIQUIDATION RECOVERY ANALYSIS
CHAPTER 7 PROCEEDING

<Table>
<Caption>
                                                                        ESTIMATED
                                                                        BOOK VALUE       LIQUIDATION              LIQUIDATION
                                                                        11/30/2001          FACTOR                   VALUE
                                                                       ------------      ------------             ------------
<S>                                                                    <C>               <C>                      <C>
SUMMARY SCHEDULE OF ASSET LIQUIDATION VALUES
ASSETS
     Cash and Equivalents                                               $       --                  0%            $       --
     Accounts Receivable, net                                              186,324                  0%                    --
     Prepaid Expenses & Other Receivables                                  249,527                 20%                50,000
     Deposits                                                              825,170                 38%               315,750
     Property & Equipment, net                                           3,562,321                  2%                86,500
     VAT Receivable                                                      1,750,220                  0%                    --

                                                                        ----------       ------------             ----------
         Estimated Recovery on Book Value of Assets                     $6,573,562                  7%               452,250
                                                                        ==========       ============
                                                                                                                  ----------
         Estimated Assets Available for Distribution                                                                 452,250

SECURED LENDER CARVE-OUTS
     Professional Fees                                                                                                50,000

ADMINISTRATIVE CLAIMS (CHAPTER 7)                                                                                     13,568
     Chapter 7 Trustee                                                                                                40,000
     Chapter 7 Wind Down Expenses                                                                                 ----------

         Subtotal Claims                                                                                             103,568
         Percentage of Claim Recovered                                                                                 100.0%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                         348,683

SECURED CLAIMS                                                                                                        66,667
     DIP Facility                                                                                                         --
                                                                                                                  ----------
     Other

         Subtotal Claims                                                                                              66,667
         Percentage of Claim Recovered                                                                                 100.0%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                         232,016

TAX, PRIORITY AND CHAPTER 11 ADMINISTRATIVE CLAIMS
     Chapter 11 Administrative Claims Not Subject to Carve Out                                                       250,000
     Chapter 11 Tax and Priority Claims                                                                                   --
                                                                                                                  ----------
         Subtotal Claims                                                                                             250,000
         Percentage of Claim Recovered                                                                                 100.0%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                          32,016

GENERAL UNSECURED CLAIMS
     Chapter 11 Pre-petition General Unsecured Claims                                                              1,600,000
                                                                                                                  ----------
         Subtotal Claims                                                                                           1,600,000
         Percentage of Claim Recovered                                                                                   2.0%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                      $       --
                                                                                                                  ==========
</Table>



<PAGE>
NNISI
LIQUIDATION RECOVERY ANALYSIS
CHAPTER 7 PROCEEDING

<Table>
<Caption>
                                                                        ESTIMATED
                                                                        BOOK VALUE       LIQUIDATION              LIQUIDATION
                                                                        11/30/2001          FACTOR                   VALUE
                                                                       ------------      ------------             ------------
<S>                                                                    <C>               <C>                      <C>
SUMMARY SCHEDULE OF ASSET LIQUIDATION VALUES
ASSETS
     Cash and Equivalents                                               $    4,802                100%            $    4,802
     Accounts Receivable, net                                              842,367                  5%                42,118
     Prepaid Expenses & Other Receivables                                   93,355                 35%                32,834
     Deposits                                                               98,409                  0%                    --
     Property & Equipment, net                                           1,759,074                  5%                92,500

                                                                        ----------       ------------             ----------
         Estimated Recovery on Book Value of Assets                     $2,798,007                  6%               172,254
                                                                        ==========       ============
     Covista Settlement                                                                                              119,191
                                                                                                                  ----------
         Estimated Assets Available for Distribution                                                                 291,445

SECURED LENDER CARVE-OUTS
     Professional Fees                                                                                                50,000

ADMINISTRATIVE CLAIMS (CHAPTER 7)
     Chapter 7 Trustee                                                                                                 8,743
     Chapter 7 Wind Down Expenses                                                                                     40,000
                                                                                                                  ----------

         Subtotal Claims                                                                                              98,743
         Percentage of Claim Recovered                                                                                 100.0%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                         192,702

SECURED CLAIMS                                                                                                        66,667
     DIP Facility                                                                                                         --
                                                                                                                  ----------
     Other

         Subtotal Claims                                                                                              66,667
         Percentage of Claim Recovered                                                                                 100.0%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                         126,035

TAX, PRIORITY AND CHAPTER 11 ADMINISTRATIVE CLAIMS
     Chapter 11 Administrative Claims Not Subject to Carve Out                                                       400,000
     Chapter 11 Tax and Priority Claims                                                                                   --
                                                                                                                  ----------

         Subtotal Claims                                                                                             400,000
         Percentage of Claim Recovered                                                                                  31.5%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution

GENERAL UNSECURED CLAIMS
     Chapter 11 Pre-petition General Unsecured Claims                                                              4,900,000
                                                                                                                  ----------

         Subtotal Claims                                                                                           4,900,000
         Percentage of Claim Recovered                                                                                   0.0%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                      $       --
                                                                                                                  ==========
</Table>


<PAGE>



AXISTEL COMMUNICATIONS, INC., NOVO NETWORKS METRO SERVICES,
NOVO NETWORKS GLOBAL SERVICES
LIQUIDATION RECOVERY ANALYSIS
CHAPTER 7 PROCEEDING

<Table>
<Caption>
                                                                        ESTIMATED
                                                                        BOOK VALUE       LIQUIDATION              LIQUIDATION
                                                                        11/30/2001          FACTOR                   VALUE
                                                                       ------------      ------------             ------------
<S>                                                                    <C>               <C>                      <C>
SUMMARY SCHEDULE OF ASSET LIQUIDATION VALUES
ASSETS
     Cash and Equivalents                                               $       --                  0%            $       --
     Prepaid Expenses & Other Receivables                                    9,680                 75%                 7,260
     Deposits                                                               53,309                100%                53,309
     Property & Equipment                                                2,448,594                 10%               250,000

                                                                        ----------         ----------             ----------
         Estimated Recovery on Book Value of Assets                     $2,511,583                 12%               310,569
                                                                        ==========         ==========
                                                                                                                  ----------
         Estimated Assets Available for Distribution                                                                 310,569

SECURED LENDER CARVE-OUTS
     Professional Fees                                                                                                50,000

ADMINISTRATIVE CLAIMS (CHAPTER 7)
     Chapter 7 Trustee                                                                                                 9,317
     Chapter 7 Wind Down Expenses                                                                                     40,000
                                                                                                                  ----------

         Subtotal Claims                                                                                              99,317
         Percentage of Claim Recovered                                                                                 100.0%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                         211,252

SECURED CLAIMS                                                                                                        66,667
     DIP
Facility                                                                                                               100.0%
         Percentage of Claim Recovered

                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                         144,585

TAX, PRIORITY AND CHAPTER 11 ADMINISTRATIVE CLAIMS
     Chapter 11 Administrative Claims Not Subject to Carve Out                                                       300,000
     Chapter 11 Tax and Priority Claims                                                                                   --
                                                                                                                  ----------

         Subtotal Claims                                                                                             300,000
         Percentage of Claim Recovered                                                                                  48.2%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution

GENERAL UNSECURED CLAIMS
     Chapter 11 Pre-petition General Unsecured Claims                                                              4,700,000
                                                                                                                  ----------

         Subtotal Claims                                                                                           4,700,000
         Percentage of Claim Recovered                                                                                   0.0%
                                                                                                                  ----------
         Estimated Assets Available for Further Distribution                                                      $       --
                                                                                                                  ==========
</Table>