Document:

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                                                                   Exhibit 10.5

              PARTNERS AGREEMENT BETWEEN THE PARTNERS OF FIRSTMARK
                          COMUNICACIONES ESPANA, S.L.

In Madrid, on 18 November, 1999

                                     BETWEEN

A)    THE ONE PARTY,

      FIRSTMARK COMMUNICATIONS EUROPE, S.C.A., a Company validly incorporated
      and existing under and pursuant to the laws of Luxembourg, with registered
      address in Rue de Jean Monet, 6, L-2180, Luxembourg, and entered in the
      Companies Register under number B65610 (hereinafter, "FMCE").

      FMCE is represented in this act by Mr Keith Arthur Cornell, of legal age,
      with Passport number 054773566, with professional address in Russell
      Square House, 10-12, Russell Square, London WC1B 5HB, United Kingdom, in
      his capacity as attorney of the same.

B)    THE OTHER PARTY,

      PROMOTORA DE INFORMACIONES, S.A., a Spanish Company incorporated for an
      indefinite period by means of a public deed executed before Felipe
      Gomez-Acebo Santos, Notary of Madrid, on 18 January 1972 with number 119
      of his protocol, with registered address in Madrid-28013, Gran Via, 32 and
      with C.I.F. (Tax Identification Licence) number A-28297059 (hereinafter,
      "PRISA").

      PRISA is represented in this act by Mr Ignacio Santillana del Barrio, of
      legal age, with D.N.I number 15160375-V, with professional address in
      Madrid, Gran Via 32, in his capacity as attorney of the same.

C)    THE OTHER PARTY,

      INMOBILIARIA AZTLAN, S.A. DE C.V., a company incorporated for an definite
      period by means of a public deed executed before Francisco de P. Morales
      Junior, Notary 19 of Mexico City, on 14 October 1954, with number 26.543
      of his protocol, with registered address in Mexico City (hereinafter,
      "AZTLAN"). AZTLAN is a Party to this Agreement in its capacity as wholly
      and indirectly owned subsidiary of TELEFONOS DE MEXICO, S.A. DE C.V.

      AZTLAN is represented in this act by Mr Keith Arthur Cornell, of legal
      age, in his capacity as attorney of the same.

D)    THE OTHER PARTY,

      INFORMATICA EL CORTE INGLES, S.A, Spanish Company incorporated for an
      indefinite period under the name of INFOSPA, S.A. by means of a public
      deed executed before Mr Aurelio Escribano Gozalo, Notary of Madrid, on 12
      July 1983 with number

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      1,500 of his protocol, with registered address in Madrid, c/Hermosilla 112
      and with C.I.F. number A-28/855260 (hereinafter, "CORTE INGLES").

      CORTE INGLES is represented in this act by Mr Florencio Lasaga Munarriz,
      of legal age, with D.N.I number 15.820.025-G, with address for the
      purposes of this agreement in Madrid, c/Nunez de Balboa 73, in his
      capacity as Managing Director of the same.

      For the purposes of this agreement, FMCE, PRISA, AZTLAN and CORTE INGLES
      may be referred to jointly as the "FOUNDING PARTNERS".

E)    THE OTHER PARTY,

      OMEGA CAPITAL, S.L., Spanish Company incorporated for an indefinite period
      by means of a public deed executed before Mr Carlos Gascon Huidobro,
      Notary of Madrid, on 27 May 1994, with registered address in P(0) de la
      Castellana, 31, 28046 Madrid and with C.I.F. number B-80932445
      (hereinafter, "OMEGA ").

      OMEGA is represented in this act by Mr Mario Fernandez Pena, of legal age,
      with D.N.I number 105525-R, with address for the purposes of this
      agreement at P(0) de la Castellana, 31, 28046 Madrid, in his capacity as
      attorney of the same.

F)    THE OTHER PARTY,

      DIARIO DE BURGOS, S.A., Spanish Company incorporated by means of a public
      deed executed before Mr Ursino Vitoria Burgoa, who was Notary of Burgos,
      on 14 September 1959, with registered address in c/ San Pedro de Cardena
      34, 09002 Burgos, and with C.I.F. number A-09002387 (hereinafter, "DIARIO
      DE BURGOS").

      DIARIO DE BURGOS is represented in this act by Mr Jesus Angel Bueno
      Ordonez, of legal age, with D.N.I number 13.094.464-N, with address for
      the purposes of this agreement at c/ San Pedro de Cardena 34, 09002
      Burgos, in his capacity as attorney of the same.

G)    THE OTHER PARTY,

      CAJA DE AHORROS DE SALAMANCA Y SORIA (GRUPO DUERO), Spanish Company
      incorporated by means of a public deed executed before Mr Julio Rodriguez
      Garcia, Notary of Salamanca, on 11 May 1991 with number 1619 of his
      protocol, with registered address in Plaza de los Bandos, 15-17, Salamanca
      and with C.I.F. number G 37244191 (hereinafter, "CAJA DUERO").

      CAJA DUERO is represented in this act by Mr Dativo Martin Jimenez, of
      legal age, with D.N.I number 6.490.013, with address for the purposes of
      this agreement at Paseo de la Castellana, 167, 28046 Madrid, in his
      capacity as attorney of the same.

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H)    THE OTHER PARTY,

      CAJA DE AHORROS Y MONTE DE PIEDAD DE ZARAGOZA, ARAGON Y RIOJA (IBERCAJA),
      incorporated by the REAL SOCIEDAD ECONOMICA ARAGONESA DE AMIGOS DEL PAIS,
      approved by Royal Order of 28 January 1873. It began its activities on 28
      May 1876 and is registered in the REGISTRO ESPECIAL DE CAJAS DE AHORRO
      POPULAR, with number 51 in folio 31, by Royal Order of 13 December 1930,
      with registered address in Zaragoza, Plaza Basilio Paraiso, 2 and with
      C.I.F. number G 50000652 (hereinafter, "IBERCAJA").

      IBERCAJA is represented in this act by Mr Miguel Angel Navarro Garcia, of
      legal age, with D.N.I number 17.818.887, with address for the purposes of
      this agreement at Zaragoza, Plaza Basilio Paraiso, 2, in his capacity as
      attorney of the same.

I)    THE OTHER PARTY,

      CAJA DE AHORROS PROVINCIAL SAN FERNANDO DE SEVILLA Y JEREZ, Spanish
      Company incorporated for an indefinite period by means of a public deed
      executed before Mr Antonio Ojeda Escobar, Notary of Sevilla, on 23 April
      1993 with number 1142 of his protocol, with registered address in Sevilla,
      Plaza de San Francisco 1, and with C.I.F. number G-41/000167 (hereinafter,
      "CAJA SAN FERNANDO").

      CAJA SAN FERNANDO is represented in this act by Mr Manuel Pinar Parias, of
      legal age, with D.N.I number 27.884.219-P, with address for the purposes
      of this agreement at Plaza de San Francisco 1, Sevilla, in his capacity as
      attorney of the same.

J)    THE OTHER PARTY,

      MONTE DE PIEDAD Y CAJA DE AHORROS DE HUELVA Y SEVILLA, Spanish Company
      incorporated for an indefinite period by means of a public deed executed
      before Mr Rafael Lena Fernandez, Notary of Sevilla, on 25 June 1990, with
      registered address in Sevilla, Plaza de Villasis 2, and with C.I.F. number
      G-41/402819 (hereinafter, "EL MONTE").

      EL MONTE is represented in this act by Mr Juan Jose Garcia Munoz, of legal
      age, with D.N.I number 50.822.922, with address for the purposes of this
      agreement at Plaza de Villasis 2, Sevilla in his capacity as attorney of
      the same.

CAJA DUERO, IBERCAJA, CAJA SAN FERNANDO, EL MONTE shall together be referred to
hereinafter as the "CAJAS".

FMCE, PRISA, AZTLAN, CORTE INGLES, OMEGA , DIARIO DE BURGOS, CAJA DUERO,
IBERCAJA, CAJA SAN FERNANDO and EL MONTE may likewise be referred to
individually herein as the "PARTY" and jointly as the "PARTIES".

                                  THEY DECLARE

I.       That up to the date of this agreement FMCE and PRISA were the sole
         partners of the company FIRSTMARK COMUNICACIONES ESPANA, S.L., a
         Spanish Company

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         incorporated for an indefinite period by means of a public deed
         executed by Mr Xavier Roca Ferrer, Notary of Barcelona, on 3 March
         1999, with number 655 of his protocol, with registered address in
         Madrid-28046, Paseo de la Castellana, 110, planta 12, and with C.I.F.
         number B-61912069 (hereinafter, "FMCS").

II.      The business purpose of FMCS is (i) the construction, deployment,
         marketing and operation of telecommunications local-loop access systems
         in Spain, including, without limitation, broadband wireless local loop
         technology; (ii) the application for and obtaining of all necessary
         licenses, approvals and permits in relation to the foregoing; (iii) the
         leasing of sites for the operation of the business described in (i)
         above; (iv) the training and development of employees and consultants
         in relation to the foregoing; and (v) the development and exploitation
         of content in Spain (hereinafter, the "BUSINESS OF FMCS").

III.     That as part of its strategy of implementation of the Business of FMCS,
         FMCS:

         (i)      Presented to the Secretariat General of Communications of the
                  Ministry of Development ("MINISTERIO DE FOMENTO"), last 12
                  August 1999:

                  (i.1)  an application for a type C2 individual licence for the
                         implementation and operation of a public network for
                         broadband radio access (26 GHz) and the concession of
                         radio-electric public domain annexed to it by virtue of
                         the Resolution of the Secretary General of
                         Communications, the announcement of which was published
                         in the "BOLETIN OFICIAL DEL ESTADO" (STATE OFFICIAL
                         GAZETTE) number 166, dated 13 July 1999; along with

                  (i.2)  an application relating to type C general
                         authorisations for the rendering of interconnection
                         services for local area networks, "FRAME RELAY", access
                         to the Internet and service for lines suitable for
                         leasing both to operators and to end users.

         (ii)     It likewise presented to the Secretariat General of
                  Communications of the Ministry of Development, last 13
                  September 1999:

                  (ii.1) an application for a type C2 individual licence for the
                         implementation and operation of a public network in the
                         band from 3.4 to 3.6 GHz and the concession of
                         radio-electric public domain annexed to it by virtue of
                         the Resolution of the Secretary General of
                         Communications, the announcement of which was published
                         in the "BOLETIN OFICIAL DEL ESTADO" (STATE OFFICIAL
                         GAZETTE) number 166, dated 13 July 1999; along with

                  (ii.2) an application relating to type C general
                         authorisations for the rendering of interconnection
                         services for local area networks, "FRAME RELAY", access
                         to the Internet and service for lines suitable for
                         leasing both to operators and to end users.

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IV.      That the Spanish Administration have decided on 9 October 1999 to hold
         separate public tender competitions for awarding the licences described
         in declarations III.(i.1) and III.(ii.1) and the concession of
         radio-electric public domain annexed to them, and consequently the
         Founding Partners have the firm intention that FMCS should formulate
         the appropriate tenders and present whatsoever documents that might be
         necessary and/or required by the relevant bidding conditions, with the
         aim of it being awarded one of the said licences in either or in both
         of the competitions (hereinafter, the "TENDERS") This notwithstanding,
         the Founding Partners, pursuant to Clause II.5 (x) hereunder, shall be
         entitled to decide from time to time to withdraw FMCS from either of
         the competitions for the awarding of the Licences (as defined below),
         should they deem it beneficial for the best interest of FMCS.

V.       That the Parties acknowledge the possibilities for expansion of their
         own businesses and of the Business of FMCS in Spain that any future
         collaboration between them could entail, and in this regard they agree
         that their respective activities could be strengthened by sharing their
         infrastructures, technology, business experience, human potential and
         other resources.

VI.      That the Parties are interested in actively participating in the
         Spanish telecommunications sector and in this regard they wish to enter
         into the capital of FMCS in the terms and conditions set out in this
         Partners Agreement and that FMCE and PRISA are likewise interested in
         inviting the Parties to enter into the capital of FMCS under the terms
         to be stated hereinafter, and that all of the Parties are interested in
         implementing and developing the Business Plan of FMCS as defined in
         Clause 5(xii) a) below, a sample summary of which is attached hereto as
         Schedule 1. The entire Business Plan will be available should the
         Parties so desire.

VII.     That the Parties intend to transform FMCS into limited liability
         company ("SOCIEDAD ANONIMA") as soon as possible.

VIII.    The Parties reciprocally acknowledge the sufficient capacity of the
         others in this act and they agree to enter into the capital of FMCS in
         accordance with the following

                                     CLAUSES

I.       OBJECT OF THIS AGREEMENT

The object of this Agreement consists of establishing:

(i)      the terms and conditions under which each of the Parties hereby enters
         into the capital of FMCS; and

(ii)     the bases and scope of collaboration by the Parties so that FMCS might
         successfully:

         (ii.1)   achieve its immediate objective of being awarded:

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                  -    a licence for the implementation and operation of a
                       public network for broadband radio access (26 GHz) and
                       the concession of public domain annexed to it; and/or of

                  -    a licence for the implementation and operation of a
                       public network for radio access in the band from 3.4 to
                       3.6 GHz and the concession of public domain annexed to
                       it,

                  hereinafter, the "LICENCES"; and

         (ii.2)   develop its strategy of implementation in Spain and achieve
                  its immediate aim of becoming a leading company in the sector.

II.      INCORPORATION OF THE PARTIES INTO THE CAPITAL OF FMCS

1.       SUBSCRIPTION OF CAPITAL INCREASE OF FMCS

         On the date hereof, FMCE and PRISA have agreed in a Partners' Meeting
         resolution to increase the capital of FMCS up to 2,484,960 EUROS, and
         simultaneously have waived their preferential subscription right to
         such capital increase, in order for the rest of the Parties to
         subscribe for it. On the date hereof, the Parties have subscribed for
         and totally paid up the capital in FMCS in the following proportions:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
          PARTNER      N(0) OF PARTICIPATIONS          NOMINAL VALUE          % OF CAPITAL IN FMCS
                                                         EUROS                 AFTER INCREASE
----------------------------------------------------------------------------------------------------
<S>                             <C>                     <C>                          <C>
FMCE                            748                     749,496                      35%
----------------------------------------------------------------------------------------------------
PRISA                           404                     404,808                     17.5%
----------------------------------------------------------------------------------------------------
AZTLAN                          434                     434,868                     17.5%
----------------------------------------------------------------------------------------------------
CORTE INGLES                    298                     298,596                    12.02%
----------------------------------------------------------------------------------------------------
OMEGA                           124                     124,248                      5%
----------------------------------------------------------------------------------------------------
CAJA DUERO                      99                       99,198                     3.99%
----------------------------------------------------------------------------------------------------
IBERCAJA                        62                       62,124                     2.5%
----------------------------------------------------------------------------------------------------
CAJA SAN                        62                       62,124                     2.5%
FERNANDO
----------------------------------------------------------------------------------------------------
EL MONTE                        62                       62,124                     2.5%
----------------------------------------------------------------------------------------------------
DIARIO DE BURGOS                37                       37,074                     1.49%
----------------------------------------------------------------------------------------------------
</TABLE>

2.       ADDITIONAL FUNDING

         The Parties acknowledge that, in order to finance the Business of FMCS,
         additional funding of FMCS to the capital subscribed by each Party will
         be required. Accordingly, the Parties agree that to the extent that
         FMCS determines that the Business of FMCS should be financed through
         capital contributions, the Parties will contribute such capital pro
         rata with their respective holdings in FMCS, subject to the following:

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         (i)  such a resolution being agreed in Partners Meeting in accordance
              with the provisions of Clause 4.(vii) below; and

         (ii) in an aggregate amount not to exceed 240 million EUROS.

         The Parties agree that they will take all actions required under
         Spanish law to reflect such contributions as additional equity
         contributions to FMCS.

         If any Party fails to make its required additional contributions, its
         holding in FMCS will be diluted accordingly (i.e., the percentage of
         capital in FMCS held by the non-contributing Party prior to the
         additional capital call shall be reduced as a consequence of such
         Party's decision not to subscribe for the additional capital
         contribution agreed). Should a dilution occur in the context of the
         Partners meeting having approved a capital increase and having excluded
         the Parties from their preferential subscription right, such additional
         capital contribution will be made at a value per participation not less
         than the real value as provided for in article 159 of the Spanish
         Companies Act ("LEY DE SOCIEDADES ANONIMAS").

3.       PREFERENTIAL SUBSCRIPTION RIGHTS

         Each Partner shall have a preferential subscription right to purchase
         such new participations as FMCS may from time to time issue. The
         Parties agree to waive such preferential rights and therefore allow the
         entrance in the capital of FMCS of a new Partner, in the event of the
         issuance of participations or rights, options or securities exercisable
         for, exchangeable for or convertible into participations in the
         circumstances set out below and provided the Partners Meeting, in
         accordance with the provisions of Clause 4.(vii) below, approves a
         resolution in this sense and provided that article 159 of the Spanish
         Companies Act ("LEY DE SOCIEDADES ANONIMAS") is complied with and all
         the Founding Partners have agreed:

         (i)      as compensation to employees or consultants, provided, such
                  compensation does not exceed 15% of the issued and outstanding
                  participations after giving effect to such issuance;

         (ii)     in connection with any BONA FIDE financing transactions with
                  FMCS' lessors, lenders or customers, in the aggregate not to
                  exceed 5 million EUROS if such transactions have previously
                  been approved by the Board of Directors;

         (iii)    in connection with a public offering of FMCS or of FMCE, once
                  the voluntary conversion has been made pursuant to Clause 11;

         (iv)     in payment of the purchase price of any assets or business; or

         (v)      upon exercise or conversion of any right, option or security
                  exercisable for, exchangeable for or convertible into
                  participations which is referred to in paragraphs (i) through
                  (iv) above.

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         Such preferential subscription right shall be exercisable in the
         respective ratio which the number of fully diluted participations held
         by each Party at the time of such issue bears to the total number of
         participations held by all Parties at such time on a fully diluted
         basis.

4.       PARTNERS MEETINGS: QUORA AND MAJORITIES

(i)               The quorum to validly hold any Meeting of Partners shall be
                  not less than 75% in first call and 70% in second call of the
                  issued participations.

(ii)              Notice for Meetings of Partners, procedures for resolutions at
                  such meetings and any other necessary rules with respect
                  thereto shall be as prescribed in FMCS' Charter or in the law
                  ("LEY DE SOCIEDADES DE RESPONSABILIDAD LIMITADA"),
                  (hereinafter, the "LAW").

(iii)             Partners shall be entitled to exercise their rights to vote by
                  proxy at Meetings of Partners as provided by the Law.

(iv)              Whenever FMCS, the Meeting of Partners, or the Board of
                  Directors is required to take or refrain from taking an action
                  under this Agreement, the Parties hereby undertake to cause
                  the relevant corporate body of FMCS to cause FMCS to take or
                  refrain from taking all such actions.

(v)               Except for the majorities set forth below, Resolutions of the
                  Meetings of Partners shall be as adopted by the majority of
                  votes present or represented in the Meeting.

(vi)              The Meeting of Partners shall not take any of the following
                  actions without the prior approval of FMCE, PRISA, AZTLAN and
                  CORTE INGLES for so long as such Parties each own at least 5%
                  of the participations in FMCS:

                  a)     any change in the Business of FMCS as described in
                         Declaration II herein;

                  b)     any public financing of debt securities through the
                         Spanish securities markets or any other debt financing
                         in excess of 50 million EUROS other than loans from the
                         Parties;

                  c)     the issuance of any participations or preferred stock
                         including without limitation those for employee stock
                         option plans or similar benefits, either bonus or
                         phantom stock;

                  d)     the amendment or repeal of any provision of FMCS'
                         Charter;

                  e)     the entering, transporting, modifying, cancelling or
                         finishing any agreement in which FMCS is a party
                         together with, directly or indirectly, its directors,
                         officers, employees, inspectors or Parties, including
                         without limitation, agreements between FMCS directly or
                         indirectly with

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                         relatives of the Parties or any other company in
                         which directly or indirectly such Parties, directors,
                         officers, employees, inspectors or relatives
                         participate;

                  f)     the granting of credits, loans or any other financing
                         to third parties, that exceeds the limits or amounts
                         previously established and approved by the Board;

                  g)     the entering into any act or operation that has as an
                         objective the guarantee of debts or liabilities in
                         charge of any person or assume the obligation to
                         indemnify any other person of any liability or
                         obligation in which it may incur;

                  h)     the purchase, sale, lease or encumbrance of real estate
                         through sale agreements or in any other manner, or the
                         entering into, altering or modifying the terms or any
                         lease or other contract concerning real estate and that
                         such amount exceeds the limits previously established
                         and approved by the Board;

                  i)     the entering into, transferring, modifying, cancelling
                         or termination of any license agreement, technical
                         assistance agreement, technical or administrative
                         services agreement or any other similar agreements in
                         which FMCS is a party;

                  j)     the incorporation of a new subsidiary of FMCS or the
                         acquisition, disposition or closing of any regular
                         operation establishment of FMCS or the formation,
                         acquisition, dissolution or sale of or participation in
                         whatever form in any interest in any other enterprise
                         including the increase or decrease in the capital of
                         any other company and the resolution of any other
                         matters that affect the interest or participation of
                         FMCS in other companies;

                  k)     any action by FMCS which is beyond the scope of the
                         Business of FMCS or beyond what has previously been
                         authorised by the Board;

                  l)     the incurring by FMCS of any borrowing or any other
                         indebtedness or liability in the nature of borrowing
                         which in aggregate exceed 5 million EUROS in any one
                         year provided always that such indebtedness or
                         liability is outside the scope of the Business Plan (as
                         defined in Clause 5 (xii) a) below);

                  m)     the creation of any mortgage, charge or other
                         encumbrance over any asset of FMCS and the giving of
                         any guarantee by FMCS other than in the ordinary course
                         of business;

                  n)     the appointment of new auditors of FMCS different from
                         Arthur Andersen;

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<PAGE>

                  o)     any proposal related to Clause 3 of this Agreement.

(vii)             Additionally to the provisions of paragraph (vi) above, the
                  Meeting of Partners shall not take any of the following
                  actions without the favourable vote of 70% of capital in first
                  call and 67% of capital in second call:

                  a)     waiver by the Parties of the preferential subscription
                         right for the purposes of the circumstances referred to
                         in Clause 3 above;

                  b)     the variation of FMCS' Charter including but no limited
                         to the increase of capital stock of FMCS;

                  c)     the declaration or distribution of any dividend or
                         other payment out of the distributable profits of FMCS;

                  d)     the disposal (including the lease to a third party) or
                         acquisition or capital expenditure by FMCS in any
                         financial year of assets with a book value, market
                         value or sale value in excess of 5 million EUROS,
                         provided always that such disposal or acquisition is
                         outside the scope of the Business Plan (as defined in
                         Clause 5 (xii) a) below);

                  e)     the taking of steps to wind up or dissolve FMCS;

                  f)     the incurring by FMCS of any borrowing or any other
                         indebtedness or liability in the nature of borrowing
                         which in aggregate exceed 5 million EUROS in any one
                         year provided always that such indebtedness or
                         liability is outside the scope of the Business Plan (as
                         defined in Clause 5 (xii) a) below);

                  g)     the creation of any mortgage, charge or other
                         encumbrance over any asset of FMCS and the giving of
                         any guarantee by FMCS other than in the ordinary course
                         of business;

                  h)     the entering into by FMCS of any contract or
                         arrangement outside the ordinary course of trading or
                         otherwise than at arm's length (which includes any
                         contract or arrangement with a Party's manager or
                         employee, or a connected person);

                  i)     the listing or the taking of steps to list FMCS or the
                         public offering of equity securities of FMCS; the
                         Partners Meeting may only approve this action with the
                         majorities required pursuant to this paragraph (vii) if
                         such 70% or 67% favourable vote (as the case may be)
                         include the positive vote of FMCE, so long as FMCE owns
                         at least 5% of the participations in FMCS;

                  j)     the transfer by any Party of any or all of its
                         participations to an Affiliate as described in Clause
                         10.6 below;

                  k)     any action by FMCS which is beyond the scope of the
                         Business of FMCS or beyond what has previously been
                         authorised by the Board;

         The foregoing restrictions of paragraphs (vi) and (vii) shall terminate
         upon an initial public offering of equity securities of FMCS or any
         successors thereto or upon an

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          initial public offering of equity securities of FMCE or any successors
          thereto, provided always that all Parties have exercised their
          voluntary conversion rights referred to in Clause 11 below. If this is
          not the case, the restrictions of paragraphs (vi) and (vii) shall
          remain in force upon an initial public offering of equity securities
          of FMCE.

5.       BOARD OF DIRECTORS: APPOINTMENT OF MEMBERS, QUORA AND MAJORITIES

(i)      FMCS shall have a Board of Directors (hereinafter, the "BOARD")
         consisting of twelve (12) directors (hereinafter each individually, the
         "DIRECTOR" and collectively, the "DIRECTORS").

(ii)     Directors shall be elected at the Meeting of Parties in accordance with
         the provisions of Clause 4 (vii) above, from candidates nominated by
         the Partners. For so long as FMCE, PRISA, AZTLAN and CORTE INGLES each
         own at least 5% of the participations, FMCE shall be entitled to
         nominate four (4) candidates for the position of Director, PRISA shall
         be entitled to nominate two (2) candidates for the position of
         Director, AZTLAN shall be entitled to nominate two (2) candidates for
         the position of Director. CORTE INGLES shall be entitled to nominate
         one (1) candidate for the position of Director, OMEGA shall be entitled
         to nominate one (1) candidate for the position of Director and the
         Cajas shall together be entitled to nominate a total of two (2)
         candidates for the position of Director. The Parties agree to vote
         their respective participations at each Meeting of Partners for the
         purpose of electing Directors to elect the respective nominees of the
         Parties. Directors may at any time be removed, without compensation,
         with or without cause, by the Meeting of Partners provided that the
         Directors appointed to replace the removed Directors shall be
         designated by the Party that nominated the removed Director or its
         successor.

(iii)    Upon transformation of FMCS into a limited liability company ("SOCIEDAD
         ANONIMA"), FMCS shall have a new Board of Directors (hereinafter, the
         "NEW BOARD") consisting of fifteen (15) directors (hereinafter each
         individually, the "NEW DIRECTOR" and collectively, the "NEW
         DIRECTORS").

         New Directors shall be elected at the Meeting of Shareholders in
         accordance with the provisions of Clause II.4 (vii) above, from
         candidates nominated by the Partners. For so long as FMCE, PRISA,
         AZTLAN, and CORTE INGLES each own at least 5% of the shares, FMCE shall
         be entitled to nominate five (5) candidates for the position of New
         Director, PRISA shall be entitled to nominate three (3) candidates for
         the position of New Director, AZTLAN shall be entitled to nominate two
         (2) candidates for the position of New Director. CORTE INGLES shall be
         entitled to nominate two (2) candidates for the position of New
         Director, OMEGA shall be entitled to nominate one (1) candidate for the
         position of New Director and the Cajas shall together be entitled to
         nominate a total of two (2) candidates for the position of New
         Director. The Parties agree to vote their respective shares at each
         Meeting of Shareholders for the purpose of electing New Directors to
         elect the respective nominees of the Parties. New Directors may at any
         time be removed, without compensation, with or without cause, by the
         Meeting of Shareholders provided that the New Directors appointed to
         replace the

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         removed New Directors shall be designated by the Party that nominated
         the removed New Director or its successor.

         References in this agreement to the Board, the Director or Directors,
         shall be deemed to also be referred to the New Board, the New Director
         or New Directors, as appropriate.

(iv)     The term of office of a Director shall be three (3) years. Directors
         shall be eligible to serve successive terms.

(v)      The Board shall select one Director as President who shall act as such
         at meetings of the Board and Meetings of Partners, and a Company
         Secretary, who shall also act as such at meetings of the Board and
         Meetings of Partners and who will not need to be a Director. A Vice
         President and a Vice-Secretary may also be selected by the Board in the
         same form as the selection for President and Secretary, respectively,
         for the purposes of substituting them in their absence.

(vi)     Meetings of the Board shall take place at such times as may be required
         by Law or as requested by the President or three (3) Directors, with a
         minimum of twice a year, at such place, within or out of Spain, as
         shall be specified by the President. Unless otherwise agreed in writing
         by all the Directors, at least five (5) day's prior notice in writing
         shall be given of each meeting of the Board, which notice shall
         indicate the agenda to be considered at the meeting.

(vii)    In order to have a quorum at meetings of the Board the following will
         be required:

         -        If the Board is composed of an even number of Directors, the
                  quorum will be that number of Directors divided by 2, plus 1;

         -        If the Board is composed by an odd number of Directors, the
                  quorum will be that number of Directors divided by 2, and
                  rounded up to the nearest integer number.

(viii)   Directors shall be entitled to participate and exercise their rights to
         vote in the meetings of the Board, either by attending the meetings in
         person or by proxy to another Director. Each Director, including the
         President, shall have one vote.

(ix)     Any action by the Board may be taken by written consent IN LIEU of a
         meeting, provided such consent is signed by half plus one of the total
         number of Directors and provided that all Directors have received prior
         notice of such action by written consent and agreed to hold the meeting
         in writing.

(x)      Subject to paragraphs (xi) and (xii) below, any questions arising at
         any meeting of the Board shall be decided by a majority of votes of the
         Directors present or represented.

(xi)     The Board shall not take any of the following actions or pass
         resolutions in respect of the same without the prior approval of the
         Directors appointed by FMCE, PRISA, AZTLAN and CORTE INGLES for so long
         as such Parties each own at least 5% of the participations:

                                      -12-
<PAGE>

         a)       any fundamental change in the Business of FMCS;

         b)       the execution of any agreement with a third party to provide
               content over FMCS' network on terms better than those offered to
               any of the Parties wherever such Party also provides
               substantially similar content;

         c)       the execution, amendment, termination or waiver of any
               provision of any agreement with an affiliate of FMCE or of any of
               the execution of any transaction with an affiliate of FMCE or of
               any of the Parties (other than all such agreements and
               transactions done at arms length and approved by the Board);

         d)       the entering, transporting, modifying, cancelling or finishing
               any agreement in which FMCS is a party together with, directly or
               indirectly, its directors, officers, employees, inspectors or
               Parties, including without limitation, agreements between FMCS
               directly or indirectly with relatives of the Parties or any other
               company in which directly or indirectly such Parties, directors,
               officers, employees, inspectors or relatives participate;

         e)       the granting of credits, loans or any other financing to third
               parties, that exceeds the limits or amounts previously
               established and approved by the Board;

         f)       the entering into any act or operation that has as an
               objective the guarantee of debts or liabilities in charge of any
               person or assume the obligation to indemnify any other person of
               any liability or obligation in which it may incur;

         g)       the purchase, sale, lease or encumbrance of real estate
               through sale agreements or in any other manner, or the entering
               into, altering or modifying the terms or any lease or other
               contract concerning real estate and that such amount exceeds the
               limits previously established and approved by the Board;

         h)       the entering into, transferring, modifying, cancelling or
               termination of any license agreement, technical assistance
               agreement, technical or administrative services agreement or any
               other similar agreements in which FMCS is a party;

         i)       the incorporation of a new subsidiary of FMCS or the
               acquisition, disposition or closing of any regular operation
               establishment of FMCS or the formation, acquisition, dissolution
               or sale of or participation in whatever form in any interest in
               any other enterprise including the increase or decrease in the
               capital of any other company and the resolution of any other
               matters that affect the interest or participation of FMCS in
               other companies;

         j)       the incurring by FMCS of any borrowing or any other
               indebtedness or liability in the nature of borrowing which in
               aggregate exceed 10 million EUROS in any one year provided always
               that such indebtedness or liability is outside the scope of the
               Business Plan or exceeds the limits previously established by the
               Board;

                                      -13-
<PAGE>

         k)       the creation of any mortgage, charge or other encumbrance over
               any asset of FMCS and the giving of any guarantee by FMCS other
               than in the ordinary course of business;

         l)       any action by FMCS which is beyond the scope of the Business
               of FMCS or beyond what has previously been authorised by the
               Board;

         m)       any proposal related to Clause 3 of this Agreement.

(xii)    Additionally to the provisions of paragraph (xi) above, the Board shall
         not take any actions or pass resolutions in respect of the same without
         the prior approval of eight (8) of the twelve (12) Directors of FMCS
         unless the Board is composed at the moment of passing any of the
         resolutions referred to below, of a number of Directors below twelve
         (12), in which case the percentage of votes required for the Board to
         take the following actions or to pass the following resolutions shall
         be 66% of the total number of Directors composing the Board at the time
         of taking the following actions or passing the following resolutions:

         a)       the approval of FMCS' business plan (as approved by the Board
               on the date hereof and that will be presented for each of the
               Licences, the "BUSINESS PLAN"). For the purposes of this
               Agreement, Business Plan shall mean FMCS' 5-year base financial
               model as agreed and approved by the Parties and to be reviewed
               annually or as required by material and unforeseen changes in the
               Business of FMCS. A sample summary of the Business Plan is
               attached hereto as Schedule 1. The entire Business Plan will be
               available should the Parties so desire. Such Business Plan shall
               comprise a financial plan setting out cash flow charts, income
               and expenses statements, balance sheet, profit and loss forecasts
               and financing proposals using capital or borrowings;

         b)       the declaration or distribution of any dividend or other
               payment out of the distributable profits of FMCS;

         c)       the disposal (including the lease to a third party) or
               acquisition or capital expenditure FMCS in any financial year of
               assets with a book value, market value or sale value in excess of
               5 million EUROS, provided always that such disposal or
               acquisition is outside the scope of the Business Plan;

         d)       the incurring by FMCS of any borrowing or any other
               indebtedness or liability in the nature of borrowing which in
               aggregate exceed 10 million EUROS in any one year provided always
               that such indebtedness or liability is outside the scope of the
               Business Plan or exceeds the limits previously established by the
               Board;

         e)       the creation of any mortgage, charge or other encumbrance over
               any asset of FMCS and the giving of any guarantee by FMCS other
               than in the ordinary course of business;

         f)       the entering into by FMCS of any contract or arrangement
               outside the ordinary course of trading or otherwise than at arm's
               length (which includes any contract or arrangement with a Party's
               manager or employee or a connected person);

                                      -14-
<PAGE>

         g)       the instigation or settlement of any litigation or arbitration
               proceedings by FMCS when the amount claimed exceeds 1 million
               EUROS;

         h)       the execution and delivery to the government of Spain of any
               license application to provide wireless local loop services as
               well as the withdrawal from any license application process;

         i)       the execution of any agreement with a third party to provide
               content over FMCS' network on terms better than those offered to
               any of the Parties wherever such Party also provides
               substantially similar content;

         j)       the execution, amendment, termination or waiver of any
               provision of any agreement with an affiliate of FMCE or of any of
               the execution of any transaction with an affiliate of FMCE or of
               any of the Parties;

         k)       the provision of guarantees by each of the Parties as may be
               required or necessary in order for FMCS to obtain the Licences.

Upon transformation of FMCS into a limited liability company ("SOCIEDAD
ANONIMA"), additionally to the provisions of paragraph (xii) above, the New
Board shall not take any actions or pass resolutions in respect of the same
without the prior approval of ten (10) of the fifteen (15) New Directors of FMCS
unless the New Board is composed at the moment of passing any of the resolutions
referred to in (a) to (k) above, of a number of New Directors below fifteen
(15), in which case the percentage of votes required for the New Board to take
the actions or pass the resolutions mentioned in (a) to (k) above shall be 66%
of the total number of New Directors composing the New Board at the time of
taking said actions or passing said resolutions.

The foregoing restrictions shall terminate upon an initial public offering of
equity securities of FMCS or any successors thereto or upon an initial public
offering of equity securities of FMCE or any successors thereto, provided always
that all Parties have exercised their voluntary conversion rights referred to in
Clause 11 below. If this is not the case, the restrictions of paragraphs (xi)
and (xii) shall remain in force upon an initial public offering of equity
securities of FMCE.

6.       BOARD COMMITTEES

         The Board shall form from their members the following subcommittees:

6.1      EXECUTIVE COMMITTEE

         (i)      Except for those actions expressly reserved to the Audit
                  Committee pursuant to Clause 6.3(i) below, the Executive
                  Committee shall have full powers delegated from the Board and
                  will be responsible for the day to day running of FMCS.

         (ii)     The Executive Committee shall be comprised of seven (7)
                  Directors, two (2) appointed by FMCE, two (2) appointed by
                  PRISA, one (1) appointed by AZTLAN, one (1) appointed by CORTE
                  INGLES and one (1) appointed jointly by the Cajas. On the
                  second year from the execution of this Agreement and during
                  the term of such second year, AZTLAN shall be entitled to
                  request that

                                      -15-
<PAGE>

                  one (1) additional Director of AZTLAN is appointed to the
                  Executive Committee in which case PRISA shall reduce the
                  number of Directors to one (1). After the elapse of the second
                  year PRISA will appoint two (2) Directors for the term of such
                  third year, after which AZTLAN will be again entitled to make
                  the same request of two (2) Directors which will imply PRISA
                  reducing the number of Directors to one (1). This mechanism
                  will be a right for AZTLAN on every alternate year while this
                  Agreement is in force and AZTLAN holds at least 5% of the
                  capital in FMCS.

         (iii)    The Executive Committee shall be entitled to vote on all types
                  of resolutions relating to the day to day Business of FMCS,
                  and expressly on the appointment and removal of the General
                  Manager and the Chief Operating Officer, and on the approval
                  of the annual budget of FMCS. Notwithstanding the above, the
                  Executive Committee will not be entitled to vote on all those
                  actions or resolutions relating to the same and defined in
                  Clause 5(xi) and 5(xii) above, which shall be reserved
                  exclusively to the meetings of the Board of Directors.

         (iv)     Resolutions of the Executive Committee shall be approved by a
                  majority of votes of the Executive Committee Members present
                  or represented by proxy by another Executive Committee Member.

         (v)      In all that has not been expressly referred to in this Clause
                  6.1, the Executive Committee shall be governed by the rules
                  set forth for the Board in Clause 5 above and in FMCS'
                  Charter.

6.2      RESOURCE COMMITTEE

         (i)      The Resource Committee shall be responsible for providing
                  recommendations to the Board for all significant finance,
                  human resources and budgetary activities, and shall be
                  consulted by the General Manager (as defined in Clause 7
                  below) in the terms stated in such Clause, including without
                  limitation any proposal to the Board in connection with
                  compensation to employees or consultants through stock or
                  other form of equity or participation.

         (ii)     The Resource Committee shall be comprised of five (5)
                  Directors, one (1) appointed by FMCE, one (1) appointed by
                  PRISA, one (1) appointed by AZTLAN, one (1) appointed by CORTE
                  INGLES and one (1) appointed jointly by the Cajas.

         (iii)    Resolutions of the Resource Committee shall be approved by a
                  majority of votes of the Resource Committee Members present or
                  represented by proxy by another Resource Committee Member.

         (iv)     In all that has not been expressly referred to in this Clause
                  6.2, the Resource Committee shall be governed by the rules set
                  forth for the Board in Clause 5 above and in FMCS' Charter.

                                      -16-
<PAGE>

6.3      AUDIT COMMITTEE

         (i)      The Audit Committee shall be responsible for:

                  -    authorising any contract to be entered into by FMCS for
                       an amount exceeding 5 million EUROS;

                  -    authorising the formalisation, ratification, variation,
                       termination, repudiation or performance of (or the
                       setting of consideration or issuing of approvals under)
                       any contract between FMCS and any Party or any Party's
                       related party;

                  -    carrying out and/or reviewing the results of internal
                       audits;

                  -    reviewing the quarterly reports before presentation to
                       the Parties;

                  -    proposing to the Partners Meetings or Board, whichever
                       is competent, INTER ALIA:

                       *    the appointment of external auditors which initially
                            the Parties agree to be Arthur Andersen;

                       *    a change of the tax year;

                       *    the distribution of dividends or amounts on account
                            of dividends;

                       *    the fixing of the Directors' remuneration, as the
                            case may be, together with the remuneration of the
                            senior executives and of any employee of FMCS whose
                            emoluments exceed 100,000 EUROS;

                       *    the application by FMCS for suspension of payments
                            or bankruptcy, and the proposal for the approval of
                            arrangements in the course of such proceedings;

                       *    the taking of any action, transaction or event which
                            differs materially from or conflicts materially with
                            the Business Plan;

                       *    the taking of any action, transaction or event or
                            series of similar actions, transactions or events
                            different from or in conflict with FMCS' budget in a
                            total amount, over a financial year, of or in excess
                            of 5% of the budget;

                       *    the taking of any action, transaction or event which
                            may have a materially adverse effect on the
                            financial performance, or which would cause
                            unreasonable detriment to the public standing and
                            reputation of FMCS;

                  -    proposing any variation to FMCS' annual budget (or the
                       adoption of a new budget), FMCS' Business Plan (or the
                       adoption of a any new Business Plan, or the renewal of
                       the Business Plan);

                  -    carrying out any other task which the Board might from
                       time to time consider appropriate to have delegated to
                       the Audit Committee.

                                      -17-
<PAGE>

         (ii)     The Audit Committee shall be represented by five (5)
                  Directors, three (3) of which can not be members of the
                  Executive Committee. One (1) member shall be appointed by
                  FMCE, one (1) by PRISA, one (1) by AZTLAN, one (1) by CORTE
                  INGLES and one (1) appointed jointly by the Cajas.

         (iii)    Resolutions of the Audit Committee shall be approved by a
                  majority of votes of the Audit Committee Members present or
                  represented by proxy by another Audit Committee Member.

         (iv)     In all that has not been expressly referred to in this Clause
                  6.3, the Audit Committee shall be governed by the rules set
                  forth for the Board in Clause 5 above and in FMCS' Charter.

7.       GENERAL MANAGER

         (i)      FMCS shall be managed on a day to day basis by the General
                  Manager, who will receive instructions directly from the Board
                  and the Executive Committee, and who will consult his business
                  decisions with the Resource Committee.

         (ii)     The General Manager shall be elected by the Executive
                  Committee, by a majority of the votes in accordance with
                  Clause 5.(xii). The General Manager may at any time be removed
                  and replaced, with or without cause, by the Executive
                  Committee.

         (iii)    The period of employment of the General Manager shall be
                  determined by the Executive Committee. The period of
                  employment of the General Manager shall not exceed five (5)
                  years and shall expire when his successor is elected, provided
                  that if no period is fixed by the Executive Committee, the
                  period of employment of the General Manager shall
                  automatically be five (5) years. The General Manager shall be
                  eligible to serve successive periods.

         (iv)     The General Manager will act as a senior executive employee of
                  FMCS with limited powers of attorney as decided by the
                  Executive Committee from time to time and pursuant to a senior
                  executive agreement.

8.       ACCOUNTING

         (i)      The accounting period of FMCS shall be the twelve-month period
                  commencing the 1st day of January and ending on the 31st day
                  of December. However, FMCS' first fiscal year commenced on the
                  day of its incorporation and shall end on December 31, 1999.

         (ii)     A balance sheet and a profit and loss statement shall be
                  submitted by FMCS to each Party on an annual basis, with
                  enough time for the Parties to review them and in any event
                  within ninety (90) days after the end of each fiscal year.
                  Such statements shall be audited at the expense of FMCS by
                  Arthur Andersen which has been agreed by the Parties that will
                  be designated as FMCS auditors, or

                                      -18-
<PAGE>

                  another accounting firm designated by the Meeting of Partners
                  in accordance with international accounting standards.

         (iii)    FMCS shall deliver to each Party quarterly unaudited financial
                  statements within thirty (30) days after the end of each
                  period with comparisons to the prior year and budget for that
                  period.

         (iv)     FMCS shall submit to each Party quarterly and annual
                  management projections, the 5-year Business Plan and annual
                  budgets prior to the start of each calendar year.

         (v)      The Founding Partners shall have the right to inspect or
                  arrange for audits to be carried out in respect of the books
                  and records of FMCS upon reasonable notice and during the
                  regular business hours of FMCS.

         The balance sheet and the profit & loss account as of 30 October 1999
         of FMCS is attached as Schedule 2.

         The provisions of paragraphs (ii), (iii) and (iv) shall terminate with
         respect to each of the Parties upon the earlier of (i) a conversion of
         their respective participations into FMCE participations or (ii) such
         time when such Party ceases to own at least 1% of the participations,
         provided that thereafter such Party shall receive copies of publicly
         filed periodic reports and financial statements of FMCS.

9.       REIMBURSEMENT OF EXPENSES

         (i)      All expenses incurred by FMCS in the preparation of the
                  applications indicated in Declarations III (i.1) and III
                  (ii.1) herein as well as in the Tenders will be paid by the
                  Parties pro rata with their respective holdings in FMCS, prior
                  to FMCS filing the applications to obtain the Licences
                  provided however that such expenses may not exceed in any case
                  2,484,460 Euros. For such purposes among others, the Parties
                  will fund FMCS pursuant to Clause II.1 above.

         (ii)     The Parties agree to cause FMCS to reimburse each Party for
                  all reasonable and documented costs and expenses incurred by
                  such Party or any of its affiliates in respect of works
                  carried out in relation to the business and operations of FMCS
                  provided such costs and expenses have been budgeted and
                  expressly approved by the Executive Committee of FMCS prior to
                  incurring in the same and are determined on a arm's length
                  basis. Each Party shall submit quarterly statements to FMCS
                  for reimbursement, and such reimbursement shall be made by
                  FMCS within thirty (30) days after receipt of such quarterly
                  statements so long as such statements do not exceed the
                  initially approved budget.

         (iii)    FMCS shall not reimburse to the Parties any other costs or
                  expenses different to those expressly referred to in 9 (ii)
                  above. Consequently, each Party shall support all costs and
                  expenses in which it incurs except for those referred to in
                  9(ii) above.

                                      -19-
<PAGE>

         The budget summary and the undertakings assumed by FMCS are attached as
Annex 3.

10.      TRANSFER OF PARTICIPATIONS

         The Parties agree, as a personal and binding obligation, that they will
         take any and all actions required under corporate or contractual rules
         to allow for timely and strict compliance with the terms of this
         Clause. The Parties similarly agree that anything to the contrary in
         FMCS' Charter will be amended and that in any event, the provisions of
         this Clause shall prevail.

10.1     RESTRICTIONS ON THE TRANSFER OF PARTICIPATIONS

         (i)      Unless otherwise expressly approved by all of the other
                  Parties, no Party may Transfer (as defined below) any
                  participations or any interest or right therein prior to the
                  obtention by FMCS of either or both of the Licenses, and
                  thereafter except in compliance with the terms and conditions
                  of this Agreement, including without limitation, satisfaction
                  of the following conditions:

                  a)       no Transfer shall be made other than pursuant to a
                        written BONA FIDE offer by a third party to acquire any
                        or all of the participations by means of a Transfer from
                        a Party (hereinafter, the "THIRD PARTY OFFER");

                  b)       no Transfer shall be made where the transferring
                        Party and transferee agree in connection therewith that
                        the transferor shall exercise any residual powers in the
                        participations so transferred; and

                  c)       the transferee must agree to become subject to, and
                        bound by, the obligations of the transferring Party
                        under this Agreement, including, but not limited to, all
                        of the restrictions on transferability of such
                        participations.

         (ii)     Any Transfer in contravention of any of the provisions of this
                  Clause shall be void and of no effect, and the Parties agree
                  that they shall always cause their representatives in the
                  governing bodies of FMCS to take any action conducive to
                  reject or not recognise said Transfer.

         (iii)    In any event and as from the date of submission of the
                  application for the Licences, no Party may transfer any
                  participations of FMCS or any interest or right therein during
                  the period of one (1) year from the date of awarding of any of
                  the Licences and for the subsequent period of three (3) years,
                  no Party may transfer any participations of FMCS or any
                  interest or right therein unless such transfer is to another
                  of the Parties and for a total percentage for such two Parties
                  below 15% of FMCS capital. The Parties agree that in order to
                  carry out any transfer between two Parties which exceed 15% of
                  the capital of FMCS during such three (3) year period, they
                  shall obtain prior authorisation from the relevant Spanish
                  authorities.

                                      -20-
<PAGE>

         For the purpose of this Agreement, Transfer means, in respect of a
         participation, any actual, attempted or purported sale, conveyance,
         assignment or other transfer of a participation, whether voluntary or
         involuntary, including any indirect sale or transfer pursuant to a
         merger or consolidation of or sale of a majority or more of the equity
         interests in a Party, but only if the primary purpose of such merger,
         consolidation or sale of equity interests is to circumvent the
         restrictions of this Clause.

10.2     RIGHT OF FIRST REFUSAL

         (i)      Except in the case of a transfer pursuant to Clause 10.4
                  below, if a Party (hereinafter the "TRANSFERRING PARTNER")
                  desires to Transfer any or all of its participations to any
                  person (a "THIRD PARTY"), it shall promptly give to FMCE
                  written notice thereof. Such notice shall be accompanied by a
                  true and complete copy of the Third Party Offer and an offer
                  in writing from the Transferring Partner first to sell such
                  participations to FMCE (hereinafter the "PARTNER OFFER"). FMCE
                  shall have a thirty (30) day period to accept or reject the
                  Partner Offer. In case of acceptance of the Partner Offer the
                  Parties hereby undertake to perform any and all actions
                  required to allow FMCE to acquire the participations included
                  in the Partner Offer, including, without limitation waiving
                  any first refusal right to which, pursuant to Spanish law or
                  FMCS's by-laws, they might be entitled. Should FMCE reject the
                  Partner Offer, it shall give written notice of such rejection
                  to the Transferring Partner and to FMCS so that the
                  Transferring Partner may offer the Partner Offer to the rest
                  of the Parties, including FMCE, in proportion to their stake
                  in the capital of FMCS.

         (ii)     FMCS shall immediately inform the rest of the Parties of the
                  Partner Offer and the rest of the Parties may accept, in
                  proportion to their stake in FMCS, or reject the Partner Offer
                  within thirty (30) days from the receipt thereof. If the
                  Partner Offer is not accepted by a notice in writing delivered
                  to the Transferring Partner within the aforementioned period,
                  it shall be deemed to have been rejected, in which case the
                  Transferring Partner shall inform in writing the rest of the
                  Parties who have accepted the Partner Offer who shall have the
                  right to accept to increase the amount of participations to
                  which they were entitled by another notice in writing
                  delivered to the Transferring Partner within a new thirty (30)
                  day period from receipt of such notice from the Transferring
                  Partner.

         (iii)    Acceptance of the Partner Offer:

                  a)       If any or all of the Parties (other than the
                        Transferring Partner) accept the Partner Offer, they
                        shall pay a purchase price per participation subject to
                        the Partner Offer equal to the purchase price per
                        participation (or cash equivalent thereof) set forth in
                        the Third Party Offer.

                  b)       Purchase by the Parties and Transfer by the
                        Transferring Partner of the participations shall occur
                        on a mutually agreeable date, time and place within
                        thirty (30) days following acceptance of the Partner
                        Offer by

                                      -21-
<PAGE>

                        the relevant Parties, or such later date on which any
                        governmental approvals required for such purchase and
                        Transfer have been obtained, it being understood that
                        the Transferring Partner shall take all actions and make
                        all filings necessary in connection with any required
                        governmental approvals.

                  c)       The Parties shall, at their election, pay for the
                        participations at the time of purchase or pursuant to
                        the same terms and conditions contained in the Third
                        Party Offer.

         (iv)     Following expiration of the periods mentioned in paragraph
                  (ii), if the Partner Offer has not been totally accepted, the
                  Transferring Partner may Transfer the participations not
                  purchased by the rest of the Parties to the Third Party,
                  provided that if the Transfer does not occur on the terms and
                  conditions contained in the Third Party Offer or within thirty
                  (30) days after the expiration of the periods referred to in
                  paragraph (ii), the Transferring Partner shall follow the
                  procedure set out in paragraphs (i) to (iv) of this Clause
                  10.2 prior to any Transfer thereof.

10.3     EFFECT OF TRANSFER

         In the event of a Transfer of participations, the transferee shall be
         subject to, and bound by, the obligations of the Transferring Partner
         under this Agreement, including, but not limited to, all of the
         restrictions on transferability of such participations, and upon the
         execution and delivery by such transferee of a written adhesion to this
         Agreement, such transferee shall have and assume all of the rights of
         the Transferring Partner relating to the participations so transferred.
         Should a Transfer take place without the transferee having executed a
         written adhesion to this Agreement, the Transferring Partner shall
         remain liable for any breach by the transferee of the terms and
         conditions and obligations set forth in this Agreement

10.4     INTRA-GROUP TRANSFER OF PARTICIPATIONS

         Subject to the commitment to permanency in the capital of FMCS set
         forth in Clause 10.1 (iii) above, any Party shall be entitled to
         propose to the rest of the Parties the transfer of any or all of the
         participations held by it to any affiliate as described below
         (hereinafter an "AFFILIATE") provided that the following conditions are
         met:

         (i)      the transferee must be an Affiliate that is wholly owned and
                  controlled by the Transferring Partner or which wholly owns
                  and controls the Transferring Partner;

         (ii)     the transferee must be an Affiliate over which the
                  Transferring Partner undertakes to retain full ownership and
                  control for as long as this Agreement shall remain in force,
                  or an Affiliate which undertakes to retain full ownership and
                  control over the Transferring Partner for as long as this
                  Agreement shall remain in force;

                                      -22-
<PAGE>

         (iii)    the Transferring Partner assumes joint and several liability
                  with the transferee vis-a-vis the rest of the Parties for the
                  strict compliance by the said transferee of this Agreement;

         (iv)     the proposed transfer is notified by the Transferring Partner
                  in writing to the rest of the Parties prior to its execution
                  and said transfer is approved by Parties in a Partners Meeting
                  with the majorities set forth in Clause 4(vii) above;

         (v)      the transferee signs an adhesion contract to this Agreement
                  undertaking to be bound by it to the same extent as the
                  Transferring Partner would have been bound had the transfer
                  not been effected.

10.5     NO OTHER RESTRICTIONS

         Provided that all applicable conditions set forth in this Clause have
         been complied with, no Party shall oppose or in any other way obstruct,
         any Transfer of another Partner's participations.

         11.      VOLUNTARY CONVERSION

         Prior to filing in the United States of America a registration
         statement under the Securities Act of 1933 of the United States of
         America, as amended (or similar document under the laws of another
         jurisdiction), for an initial public offering of common equity
         securities (hereinafter, an "IPO") of FMCE or its successor or any
         holding company for shares of FMCE or such successor (hereinafter, the
         "ISSUER"), the Issuer will deliver to the Parties a notice
         (hereinafter, the "IPO NOTICE") of its intention to effect an IPO. The
         IPO Notice will include the Issuer's good faith estimate of the
         anticipated gross proceeds to the Issuer and the anticipated per share
         offering price for the IPO.

         Upon execution of an agreement for the sale (hereinafter, a "SALE") of
         more than 50% of the outstanding common stock of the Issuer
         (hereinafter, a "SALE AGREEMENT"), the Issuer shall deliver to the
         Parties a notice (hereinafter, the "SALE NOTICE") of its execution of
         the Sale Agreement. The Sale Notice will include the consideration per
         share to be received by the Issuer pursuant to the Sale Agreement and
         other material terms of the Sale Agreement.

         Subject to the terms of this Clause 11, (i) upon receipt by the Parties
         of an IPO Notice, (ii) upon receipt by the Parties of a Sale Notice or
         (iii) if no IPO Notice or Sale Notice has previously been delivered to
         the Parties, by notice in writing to the Issuer at any time within 30
         days after the fifth anniversary of the date of this Agreement
         (hereinafter, the "FIVE YEAR OPTION"), the Parties shall have the
         option to exchange (hereinafter, the "CONVERSION OPTION") all, but not
         less than all, of their respective participations for a number of
         shares of common equity securities of the Issuer computed per the
         Conversion Formula set forth in subparagraph (b) and subject to the
         provisions of subparagraph (c) below. Each of the Parties may exercise
         the Conversion Option for their respective participations at any time
         within the above referred period

                                      -23-
<PAGE>

         of thirty (30) days, independently whether the rest of the Parties
         exercise the Conversion Option for their participations.

         The only Parties that may exercise the Conversion Option will be those
         in respect of which the Issuer receives written notice of the intention
         of each of them to exercise (hereinafter, a "CONVERSION NOTICE") within
         15 days of receipt of an IPO Notice or Sale Notice or within 30 days
         after the fifth anniversary of the date of this Agreement (hereinafter,
         the "CONVERTING PARTIES"). An election to exercise the Conversion
         Option by any Party shall be irrevocable, provided that any of the
         Converting Parties may revoke their Conversion Notice (i) in the case
         of an IPO, if the IPO is not consummated within 4 months from the date
         of the IPO Notice, or the gross proceeds to the Issuer and the price
         per common share are not at least 80% of the respective minimum amounts
         referenced in the IPO Notice and (ii) in the case of a Sale, if the
         Sale is not consummated within nine months from the date of the Sale
         Notice.

         (i)      the Parties hereby agree that the common shares received by
                  the Parties pursuant to the exercise of the Conversion Option
                  will be subject to the same restrictions (including
                  restrictions on transfer), as are applicable to FirstMark
                  Holdings L.L.C. (hereinafter, "HOLDINGS") and any subsidiaries
                  of Holdings which own shares of capital stock of the Issuer
                  (whether such restrictions are imposed by the Issuer, its
                  underwriters or applicable law); provided that nothing in this
                  Agreement is intended to restrict the Parties ability to sell
                  common shares of the Issuer following the date that is two
                  years after the consummation of the IPO or Sale unless a
                  subsequent public offering constrains Holdings' ability to
                  sell common shares of the Issuer, in which event the Parties
                  will agree to such further restrictions for up to six months.

         (ii)     The number of shares of the Issuer which shall be issued to
                  each of the Parties shall be computed in accordance with the
                  formula (hereinafter, the "CONVERSION FORMULA") given below.
                  Such formula assumes that the Issuer is engaged solely in the
                  wireless local loop business. In the event that the Issuer is
                  not engaged solely in the wireless local loop business, the
                  Parties agree to adjust the Conversion Formula as appropriate:

                                  ES= S% X ((VR X RS)+ (VP X PS) - (DS - CS))
                                      ---------------------------------------
                                                         PPS

                                         Where VR = 0.6 X EVE
                                                    ---------
                                                         RE

                                         and      VP = 0.4 X EVE
                                                    ------------
                                                         PE

                  ES:      Number of shares of the Issuer to be received by each
                           of the Parties as a result of exercise of the
                           Conversion Option in exchange for their
                           participations in FMCS.

                                      -24-
<PAGE>

                  S%:      Each of the Parties' Ownership Percentage of FMCS at
                           the time of exercise.

                  VR:      Value of Revenue (as defined in the formula above).

                  RS:      Either (i) in the event that any of the Issuer's
                           subsidiaries has negative EBITDA for the fiscal year
                           prior to the delivery of the Conversion Notice,
                           revenue of FMCS based upon the latest audited
                           financial statements prepared prior to the date on
                           which the Parties notify the Issuer of their
                           intention to exercise the Conversion Option, or (ii)
                           in the event all of the Issuer's subsidiaries have
                           positive EBITDA for the fiscal year prior to the
                           delivery of the Conversion Notice, EBITDA of FMCS
                           based upon the latest audited financial statements
                           prepared prior to the date on which the Parties
                           notify the Issuer of their intention to exercise the
                           Conversion Option.

                  VP:      Value of Population (as defined in the formula
                           above).

                  PS:      40 million (i.e., current population of Spain
                           -39,669,394- rounded up to the nearest million).

                  DS:      Amount of outstanding indebtedness of FMCS for
                           borrowed money (including capitalised lease
                           obligations) and the aggregate liquidation preference
                           of outstanding preferred equity interests of FMCS at
                           the date of the Conversion.

                  CS:      Cash and cash equivalents of FMCS at the date of the
                           Conversion.

                  EVE:     Enterprise value of FMCE calculated as: EE + DE - CE.

                  PPS:     Price per common share of the Issuer (i) in the IPO,
                           (ii) in the Sale or (iii) valued at Fair Market Value
                           as determined by the valuation procedure in paragraph
                           d. below in the case of an exercise of the Five Year
                           Option, whichever of (i), (ii) and (iii) is
                           applicable.

                  RE:      Either (i) in the event that any of the Issuer's
                           subsidiaries has negative EBITDA for the fiscal year
                           prior to the delivery of the Conversion Notice,
                           revenue of the Issuer based upon the latest audited
                           financial statements prepared prior to the date on
                           which each of the Parties notify the Issuer of their
                           intention to exercise the Conversion Option, or (ii)
                           in the event all of the Issuer's subsidiaries have
                           positive EBITDA for the fiscal year prior to the
                           delivery of the Conversion Notice, EBITDA of the
                           Issuer based upon the latest audited financial
                           statements prepared prior to the date on which each
                           of the Parties notify the Issuer of their intention
                           to exercise the Conversion Option.

                  PE:      Population of the geographic area covered by the
                           Issuer's licenses, or licenses held by any operating
                           subsidiaries of the Issuer in which the

                                      -25-
<PAGE>

                           Issuer has an equity stake multiplied by the Issuer's
                           percentage equity interest, as per the latest
                           censuses conducted by each of the governments of
                           jurisdictions in which the Issuer or its subsidiaries
                           have a license at the date on which each of the
                           Parties notify the Issuer of their intention to
                           exercise the Conversion Option. For the purposes of
                           the Spanish population, the figure referred to in
                           paragraph PS above shall apply.

                  EE:      Equity value of the Issuer based upon the PPS in the
                           IPO or Sale or the Fair Market Value on a pro forma
                           basis, including any outstanding stock options,
                           warrants and convertible securities, the exercise or
                           conversion price of which is less than the PPS,
                           excluding shares issuable upon exercise of the
                           Conversion Option.)

                  DE:      Outstanding indebtedness for borrowed money
                           (including capitalised lease obligations) and the
                           aggregate liquidation preference of outstanding
                           preferred stock of the Issuer and its subsidiaries
                           (excluding convertible preferred stock of the Issuer
                           the conversion price of which is less than the PPS)
                           at the date of the Conversion.

                  CE:      Cash and cash equivalents of the Issuer at the date
                           of the Conversion (including the Issuer's
                           proportionate share of intercompany advances to FMCS
                           and its subsidiaries and the aggregate exercise price
                           of any outstanding stock options and warrants, the
                           exercise price of which is less than the PPS) it
                           being understood that the proceeds of the IPO, if
                           applicable, do not constitute cash or cash
                           equivalents.

                  All calculations for the Issuer include the Issuer's
                  proportionate share of revenues, EBITDA (earnings before
                  interest, taxes, depreciation and amortisation), population,
                  indebtedness for borrowed money, preferred stock obligations
                  and cash and cash equivalents of non-wholly owned
                  subsidiaries, before giving effect to the exercise of the
                  Conversion Option.

              (iii)      (a) The conversion contemplated by the Conversion
                         Option shall take place as applicable (x)
                         simultaneously with the consummation of the IPO, (y)
                         simultaneously with the Closing of the transactions
                         contemplated by the Issuer Sale Agreement or (z) in
                         the case of the Five Year Option, within 30 days of
                         agreement upon or determination of the Fair Market
                         Value, as the case may be.

                  (b)    Each of the Parties shall expressly represent and
                         warrant that the Participations are duly authorised,
                         validly issued, fully paid and non-assessable
                         Participations of FMCS and that they are free and clear
                         of any contractual lien, charge, pledge, encumbrance or
                         other contractual security interest.

                                      -26-
<PAGE>

              (iv)       (a) In the event any of the Parties exercise the Five
                         Year Option, and the Issuer and such Party cannot
                         within thirty (30) days agrees upon the Fair Market
                         Value, the Fair Market Value shall be determined in
                         accordance with the procedure provided below based
                         upon the hypothetical trading value of FMCE assuming
                         that the Shares of FMCE were publicly traded.

                  (b)    Within thirty (30) days after the delivery by the last
                         of the Parties of the Conversion Notice, (i) the
                         Converting Parties shall jointly select one appraiser
                         and (ii) the Issuer shall appoint another (hereinafter,
                         the "APPRAISERS").

                  (c)    Within sixty (60) days after the delivery by each of
                         the Parties of the Conversion Notice, the Converting
                         Parties shall deliver to the Issuer, their Appraiser's
                         written estimate of the Fair Market Value and the
                         Issuer shall deliver to the Converting Parties its
                         Appraiser's written estimate of the Fair Market Value.

                  (d)    The Fair Market Value shall be determined in
                         accordance with the following rules:

                         -        should the estimates of both Appraisers be
                                  the same figure, such figure shall be
                                  selected as the Fair Market Value;

                         -        should the estimates of both Appraisers
                                  differ in no more than 10%, the average
                                  figure of such two estimates shall be
                                  selected as the Fair Market Value;

                         -        should the estimates of both Appraisers
                                  differ in more than 10%, a third appraiser
                                  (hereinafter, the "THIRD APPRAISER") shall
                                  be jointly appointed by the Appraisers. The
                                  Third Appraiser shall, within thirty (30)
                                  days after its appointment, deliver to the
                                  Converting Parties, the Issuer and the
                                  Appraisers its written estimate of the Fair
                                  Market Value;

                         -        should the estimate of the Third Appraiser
                                  exceed the higher of the estimates of the
                                  Appraisers, such higher estimate of the
                                  Appraisers shall be selected as the Fair
                                  Market Value;

                         -        should the estimate of the Third Appraiser
                                  be lower than the lowest of the estimates of
                                  the Appraisers, such lower estimate of the
                                  Appraisers shall be selected as the Fair
                                  Market Value; or

                         -        should the estimate of the Third Appraiser
                                  be a figure between those of the estimates
                                  of the Appraisers, the estimate of the Third
                                  Appraiser shall be selected as the Fair
                                  Market Value.

                  (e)    The Converting Parties shall be deemed to have hereby
                         engaged and agreed to pay equally the fees and expenses
                         of the Appraiser appointed jointly by them. The Issuer
                         shall pay the fees and expenses of its

                                      -27-
<PAGE>

                         Appraiser and the Converting Parties and the Issuer
                         shall pay equally (50-50) the fees and expenses of
                         the Third Appraiser.

                  (f)    The failure by the Converting Parties or by the Issuer
                         to appoint their respective Appraisers, or the failure
                         by any of the Appraisers to deliver their written
                         estimates of the Fair Market Value on the periods
                         referred to in (d) above, shall imply that the estimate
                         delivered by the other Appraiser shall be selected as
                         the Fair Market Value.

                  (g)    The failure by any of the Appraisers to appoint the
                         Third Appraiser on the period referred to in (d) above,
                         shall imply that the estimate delivered by the other
                         Appraiser shall be selected as the Fair Market Value

         The Fair Market Value determined in accordance with the foregoing
         procedure shall be binding on the Parties in all events and for all
         purposes.

         (v)      After the later of (i) the date of exercise and consummation
                  of each of the Parties' Conversion Option and (ii) the
                  expiration of nine months from the date of an IPO and subject
                  to the restriction contemplated by paragraph a. above, the
                  Issuer shall, if requested by any of the Converting Parties in
                  writing, as expeditiously as possible prepare and file up to
                  one registration statement under the Securities Act of the
                  United States of America (or other applicable securities laws)
                  if such registration is necessary in order to permit the sale
                  or other disposition of any or all securities that have been
                  acquired by any of the Converting Parties pursuant to the
                  Conversion Option; and the Issuer shall use commercially
                  reasonable efforts to qualify such securities under applicable
                  securities laws. Each of the Parties agree to use reasonable
                  best efforts to cause, and to cause any underwriters of any
                  sale or other disposition to cause, any sale or other
                  disposition pursuant to such registration statement to be
                  effected on a widely distributed basis. The Issuer shall use
                  reasonable best efforts to cause such registration statement
                  to become effective, to obtain all consents or waivers of
                  other parties which are required therefor, and to keep such
                  registration statement effective for such period not in excess
                  of 90 calendar days from the day such registration statement
                  first becomes effective as may be reasonably necessary to
                  effect such sale or other disposition. The obligations of the
                  Issuer to file a registration statement and to maintain its
                  effectiveness may be (i) postponed until the expiration of a
                  period of 180 days from the effective date of the most recent
                  registration of common equity securities of the Issuer (other
                  than a registration relating to employee benefit plans or any
                  merger or acquisition transaction), or (ii) suspended for one
                  or more periods of time not exceeding 180 calendar days with
                  respect to any registration statement if the Board of
                  Directors of the Issuer shall have determined that the filing
                  of such registration statement or the maintenance of its
                  effectiveness would require disclosure of non-public
                  information that would materially and adversely affect the
                  Issuer or would interfere with a planned merger, sale of
                  material assets, recapitalisation or other significant
                  corporate

                                      -28-
<PAGE>

                  action (other than the issuance of equity securities). Any
                  registration postponed or suspended under this paragraph shall
                  not be counted for purposes of the rights of the Parties under
                  this paragraph unless and until such registration statement
                  has become effective and remained effective for the lesser of
                  90 days and the period necessary for the Parties to effect the
                  sale of all shares covered thereto. Any registration statement
                  prepared and filed under this paragraph, and any sale covered
                  thereby, shall be at the Issuer's expense except for
                  underwriting discounts or commissions and brokers' fees and
                  fees of legal counsel to each of the Converting Parties, which
                  shall be borne solely by each of them, respectively. The
                  Parties undertake to provide in writing all information
                  reasonably requested by FMCE for inclusion in any registration
                  statement to be filed hereunder. If, during the time periods
                  referred to in the first sentence of this Clause, FMCE effects
                  a registration under the Securities Act of the United States
                  of America or any other applicable legislation, of FMCE's
                  equity securities for its own account or for any other of its
                  stockholders (other than on a registration relating to
                  employee benefit plans or any merger or acquisition
                  transaction), it shall allow each of the Parties the right to
                  participate in such registration; provided that, if the
                  managing underwriters of such offering advise FMCE that in
                  their opinion the number of securities requested to be
                  included in such registration exceeds the number which can be
                  sold in such offering on a commercially reasonable basis,
                  priority shall be given, first, to the securities intended to
                  be included therein by FMCE for its own account or for the
                  account of the stockholders requesting such registration and,
                  thereafter, second, FMCE shall include the securities
                  requested to be included therein by each of the Converting
                  Parties pro rata with any other securities included in such
                  registration. In connection with any registration pursuant to
                  this Clause, the Parties and FMCE shall provide each other and
                  any underwriter of the offering with customary
                  representations, warranties, covenants, indemnification, and
                  contribution in connection with such registration.

         (vi)     Should an IPO occur prior to the elapse of the first year
                  period from the date on which FMCS submits the applications of
                  both Licences the number of shares to be converted pursuant to
                  this Clause shall be determined in accordance with the
                  conversion formula calculated at the time on which the IPO is
                  effectively carried out. However, the Parties shall not be
                  entitled to convert their shares in FMCS until such one (1)
                  year period has elapsed.

III.     SCOPE OF COLLABORATION OF THE PARTIES

12.      SUPPORT FOR FMCS

         The Parties undertake to collaborate in the bidding procedures that
         FMCS might take part in, playing an active role in the preparation of
         the tenders to be presented therein and in the monitoring of them until
         the award is made and, very particularly, in everything to do with the
         Tenders and the obtaining of either or both of the Licences.

                                      -29-
<PAGE>

13.      PHASE PRIOR TO THE AWARDING OF THE LICENCES

         From the date of this Agreement up to the date on which each of the
         Licences is awarded, and notwithstanding the general collaboration
         commitment set down in Clause 12 above, the Parties undertake in
         particular, though without this constituting any limitation, to:

         (i)      collaborate actively with FMCS and with its advisers in
               preparing the Tenders and in gathering together and producing
               whatsoever documents and/or material that might be required by
               the Spanish Administration;

         (ii)     provide their assistance and support in whatsoever steps that
               FMCS might need to carry out before the competent authorities for
               the obtaining of the Licences;

         (iii)    place at the disposal of FMCS the technical and human means,
               infrastructure, technology and other resources required by FMCS
               so that it might attain its immediate objective of being awarded
               the Licences;

         (iv)     to provide as Partners of FMCS, in a due form and time, all
               the documentation that will be necessary to obtain the Licenses
               and which is listed in Schedule 4 to this Agreement.

14.      PHASE SUBSEQUENT TO THE AWARDING OF THE LICENCES

         If FMCS is finally awarded either of the Licences, or both, and
         notwithstanding the general collaboration commitment set down in Clause
         12 above, the Parties undertake in particular, though without this
         constituting any limitation, to:

         (i)      collaborate actively in the "TIME TO MARKET" strategies of
               FMCS, that is, the launching on the market of the various
               products and services of FMCS in order to accelerate and cut down
               as much as possible the time for the proper implementation of
               those products and services and the start-up of the Business of
               FMCS;

         (ii)     collaborate actively in the strategies of operation, marketing
               and distribution of the wireless local-loop products and services
               provided by FMCS at any moment.

                                      -30-
<PAGE>

15.      INCORPORATION OF FUTURE PARTNERS

         The Parties hereby declare that if they consider it beneficial for
         their own interests and for those of FMCS, the Parties shall study the
         possible incorporation of other Partners into the capital of FMCS
         (hereinafter, the "FUTURE PARTNERS") which shall be materialised if
         approved by the Partners Meeting with the majorities set forth in
         Clause 4 (vii) above, in which majorities should be included the vote
         of all of the Founding Partners, only if the future Partner is to
         subscribe for new participations, by means of signing:

         (i)      an adhesion contract binding the Future Partners to the
               present Agreement; and

         (ii)     whatsoever public and/or private documents that might be
               necessary for formalising the taking of a stake by the Future
               Partners in the capital of FMCS by the percentages that are
               agreed.

16.      EXCLUSIVITY AND NON-COMPETITION

         For the purposes of this Clause, "Permitted Activities" shall mean any
         specific action not prohibited pursuant to this Clause 16.
         Additionally, for the purposes of this Clause "Wireless Local-Loop"
         shall refer to any fixed communication local loop access network
         utilising radio frequency falling in 3.5, 26 and 28 frequency bands.

16.1     EXCLUSIVITY AND NON-COMPETITION

         (i)      Except for Permitted Activities, each of the Parties
                  undertakes for so long as each of them hold, directly or
                  indirectly, participations in FMCS, and for one (1) year after
                  the date in which each of them ceases to hold such
                  participations, not to, directly or indirectly, enter into or
                  hold conversations, negotiations or agreements for acquiring
                  any equity shareholding in persons or bodies that render or
                  might be interested in rendering Wireless Local-Loop services
                  in Spain, or which might frustrate the purpose of this present
                  Agreement or the obtention by FMCS of either or both of the
                  Licences, unless it is with the express prior agreement of the
                  remaining Parties or allowed pursuant to Clause 16.1 (iii) e).

         (ii)     In particular, during the life of this Agreement, the Parties
                  are obliged not to participate, whether directly or
                  indirectly, in any consortium or any other form of business
                  collaboration that might be interested in presenting a
                  competing tender to any of the Wireless Local-Loop Tenders.

         (iii)    Additionally, each of the Parties undertake, for so long as
                  each of them hold directly or indirectly participations in
                  FMCS, and for one (1) year after the date in which each of
                  them ceases to hold such participations:

                  a)       not to be engaged in any other Wireless Local-Loop
                        activities in Spain in competition with those conducted
                        by FMCS; or

                                      -31-
<PAGE>

                  b)       not to induce or attempt to induce any supplier or
                        customer of FMCS to terminate or vary the terms of its
                        business relationship with FMCS in a manner adverse to
                        FMCS; or

                  c)       not to induce, or attempt to induce, any officer or
                        employee of FMCS to leave his employment with FMCS, with
                        a detrimental result to FMCS; or

                  d)       not to be engaged in any activity which implies a
                        direct holding of any amount in the capital of any
                        company that owns or has applied to a wireless
                        local-loop licence in Spain, including but not limited
                        to licences relating to 26, 3.5 and 28 GHz; or

                  e)       not to be engaged in any activity which implies an
                        indirect holding of a stake over 5% in the capital of
                        any company competing in wireless local-loop in Spain.

         (iv)     Notwithstanding the provisions of this Clause 16.1, any of the
                  Parties will be entitled to be engaged, participate or acquire
                  an interest in, or become connected with any business
                  opportunity that could otherwise fall within the scope of the
                  prohibitions of this Clause 16, provided always that such
                  Party shall have made such business opportunity available to
                  the Board of FMCS by written notice describing the business
                  opportunity in reasonable detail and the Board shall have
                  notified such Party in writing within thirty (30) business
                  days of receipt of such notice that it does not wish to pursue
                  such business opportunity, or having notified to such Party
                  its interest in pursuing such business opportunity, does not
                  effectively take any action for these purposes in the term of
                  six (6) months from the date of such notification to the
                  relevant Party.

         (v)      Should any of the Parties perform any of the prohibited
                  activities referred to in paragraph (iv) above without
                  fulfilling the conditions referred to therein or should any of
                  the Parties breach in any way the non competition undertakings
                  included in this Clause 16, the relevant Party shall be
                  obliged to sell its participations in FMCS to the rest of the
                  Parties in accordance with the provisions of Clause 10 at the
                  Fair Market Value calculated in accordance with Clause 11 (iv)
                  above.

                  Additionally the Parties hereby agree that the breach by any
                  Party of any of the undertakings contained in this Clause
                  shall imply the assumption and payment by such breaching Party
                  of all costs that may be derived from the negotiation with the
                  relevant Spanish authorities and from the execution of the
                  guarantees that the Spanish authorities may require as well as
                  to the enforcement of the same in order to make effective the
                  transfer of the participations of the breaching Party to the
                  rest of the Parties.

                                      -32-
<PAGE>

                  Moreover, breach by any Party of the undertakings assumed in
                  this Clause shall entail a penalty consisting of payment to
                  the remaining Parties of a sum up to 100 million EUROS, but in
                  any event not higher than the value of the equity interest of
                  each Party in FMCS. This sum shall be distributed amongst the
                  non-breaching Parties in proportion to the number of
                  participations in FMCS owned by each. The penalty referred to
                  above shall be applied for each breach committed by a Party of
                  the obligations assumed in this Clause.

                  Notwithstanding the foregoing, should a breach of the
                  Agreement by any Party cause loss to any Party or several
                  Parties greater than the part of the penalty payable to it or
                  them, such Party or Parties shall be entitled to require from
                  the Party in breach indemnity for the damages directly and
                  actually suffered by it or them.

         (vi)     Each of the Parties acknowledges that the provisions of this
                  Clause are no more extensive than is reasonable to protect
                  FMCS' legitimate interests. If any court shall determine that
                  the scope of this Clause is broader than is enforceable, the
                  Parties agree that this Clause shall be deemed modified to be
                  only so broad as shall be enforceable.

         (vii)    For the purposes of this Clause, the Parties agree that the
                  non-competition undertakings shall bind each of them and the
                  companies within the group of companies to which each them
                  belong.

16.2     INDEPENDENT CONTRACTORS

         None of the Parties shall create obligations, accept commitments, act
         as a representative, contractor or agent of the remaining Parties or of
         FMCS, nor shall it operate on behalf of the former or of the latter,
         without written consent from the remaining Parties or from FMCS giving
         confirmation of such an agreement.

IV.      MISCELLANEOUS

17.      CONFIDENTIALITY

17.1     CONFIDENTIAL INFORMATION

         For the purposes of this Agreement, Confidential Information means any
         information relating to the Business of FMCE or any of its affiliates
         including FMCS disclosed to the Parties or their representatives
         orally, in writing or other tangible or intangible form including,
         without limitation, discoveries, ideas, concepts, know-how, techniques,
         designs, specifications, drawings, blueprints, diagrams, models,
         samples, flow charts, computer programs, diskettes, marketing plans,
         financial plans, business plans, names of customers or suppliers and
         other technical, financial or business information.

         Confidential Information shall not include any information that:

                                      -33-
<PAGE>

         (i)      was known by the Parties free of any obligation to keep it
                  confidential prior to its disclosure by FMCE, its affiliates
                  or representatives;

         (ii)     is independently developed by the Parties other than in
                  connection with this Agreement and the transactions
                  contemplated hereby;

         (iii)    is publicly available when received or which later becomes so
                  available through no fault of the Parties, but only from the
                  date that such information becomes so available; or

         (iv)     was disclosed to the Parties by a third party who, to the
                  Parties' knowledge after due inquiry, is not prohibited from
                  disclosing such information by virtue of a nondisclosure
                  obligation to FMCE or any of its affiliates.

17.2     CONFIDENTIALITY

         Each of the Parties shall use any Confidential Information obtained by
         it only in connection with its investment in FMCS. Each of the Parties
         shall hold the Confidential Information in confidence and shall
         disclose the Confidential Information only to their respective
         employees, agents and contractors who have a need to know such
         information to accomplish this purpose and who have agreed to be bound
         by the terms and conditions of this Clause. None of the Parties shall
         disclose the Confidential Information to any other person without the
         Founding Partners' prior written consent. Each of the Parties shall
         require their employees, agents and contractors to use the same degree
         of care to protect the confidentiality of the Confidential Information
         as they use with respect to similar information of the respective
         Party.

         Any disclosure of Confidential Information of direct relevance to FMCE
         such as business plans, operations, strategies (including but not
         limited to marketing, pricing or financing strategies) relating to FMCE
         wireless local-loop and other related activities shall require the
         prior written consent of FMCE.

17.3     UNAUTHORISED DISCLOSURE

         If any of the Parties becomes aware of any unauthorised disclosure,
         loss or misuse of the Confidential Information, they shall promptly
         notify the Founding Partners.

17.4     DISCLOSURE REQUIRED BY LAW

         If any of the Parties is required to disclose the Confidential
         Information (as defined in Clause 17.1 above) by a competent judicial
         or administrative body pursuant to applicable law or regulation, they
         shall promptly notify the Founding Partners or FMCE if it is
         Confidential Information relating to FMCE as described in 17.2 above,
         so that the Founding Partners or FMCE, as the case may be, may seek a
         protective order or other appropriate remedy. In the event that no such
         protective order or other remedy is obtained, the relevant Party shall
         furnish only that portion of the Confidential Information that it is
         advised by counsel is legally required and shall exercise all

                                      -34-
<PAGE>

         reasonable efforts to obtain reliable assurance that confidential
         treatment will be accorded to the Confidential Information.

17.5     NO RIGHTS OR LICENSES

         This Agreement does not give any of the Parties any rights by license
         or otherwise to any of the Confidential Information.

17.6     DURATION AND TERMINATION

         The Parties' obligations under this Clause shall remain in full force
         and effect for a period of three (3) years after the date of
         termination of this Agreement.

17.7     RETURN OR DESTRUCTION OF CONFIDENTIAL INFORMATION

         On a written request from any of the Founding Partners or from FMCE
         should it be in relation to Confidential Information relating to FMCE
         as described in 17.2 above, and, in any event, on termination of this
         Agreement, each of the Parties shall promptly and at their own expense
         either return to FMCS or to FMCE as instructed, or destroy the
         Confidential Information (including all copies thereof), depending on
         the instructions of the Founding Partners or FMCE, as the case may be,
         except as otherwise required by applicable law.

17.8     REMEDIES

         Each of the Parties acknowledges that the breach or threatened breach
         of this Clause may result in irreparable injury to FMCS and/or FMCE and
         that, in addition to its other remedies, FMCS and/or FMCE shall be
         entitled to injunctive relief to restrain any actual or threatened
         breach of this Agreement. Each of the Parties hereby waives any
         requirement for the posting of a bond or other security in connection
         with the granting to FMCS or FMCE of such injunctive relief.

18.      REPRESENTATIONS AND WARRANTIES

         Each Party represents and warrants as follows:

         (i)      the Party is a company duly organised and validly existing
                  under the laws of its jurisdiction of incorporation, with full
                  powers to carry out the business which it carries out and
                  proposes to carry out for the purposes of this Agreement;

         (ii)     the Party has the full legal right, power and authority to
                  execute and deliver this Agreement and to perform all of its
                  obligations hereunder;

         (iii)    this Agreement has been duly authorised, executed and
                  delivered by the Party and the obligations of the Party
                  contained therein constitute valid and legally binding
                  obligations of the Party, enforceable against the Party in
                  accordance with their terms;

                                      -35-
<PAGE>

         (iv)     the execution, delivery and performance of this Agreement and
                  the compliance with its terms does not, and shall not result
                  in a violation of the Party's charter or of any provision
                  contained in any other agreement or instrument to which the
                  Party is a party or by which the Party or any of its assets
                  are affected or any statute, law, rule, regulation, judgement,
                  award, decree or order applicable to the Party or any of its
                  assets; and

         (v)      no consent, approval or authorisation of, or declaration,
                  filing or registration with, any governmental or regulatory
                  authority, or any other person or entity, is required to be
                  made or obtained by the Party, in connection with the
                  execution, delivery and performance of this Agreement and
                  consummation of the transactions contemplated hereby, save for
                  the declarations to be filed by the non-Spanish resident
                  Parties with the relevant Spanish foreign investment
                  authorities.

         Each Party warrants to the other Parties that each of such
         representations is true and correct in all material respects as of the
         date of this Agreement and that none of them omits any matter the
         omission of which makes any of such representations misleading.

         FMCE represents and warrants that as of the date hereof, Holdings is
         not subject to any restrictions on the transfer of Participations it
         holds indirectly in FMCS.

19.      TERM AND TERMINATION

19.1     TERM

         This Agreement shall continue in effect until:

         (i)      the agreement of 70% of the equity interest in FMCS to
                  terminate;

         (ii)     the termination by any Party, if none of the Licenses has been
                  awarded to FMCS by December 31, 2000, in which case the
                  Agreement shall terminate for that Party and shall continue to
                  be valid and binding between the remaining Parties; or

         (iii)    automatically in respect of that Party (or its affiliate)
                  which ceases to own any participations, in which case the
                  Agreement shall continue to be valid and binding between the
                  remaining Parties.

         Notwithstanding the foregoing, the provisions relating to
         Confidentiality (Clause 17), Exclusivity and Non-competition (Clause
         16) and those of Clause 19.3 below, shall remain in effect for the term
         specified therein.

19.2     EFFECT OF TERMINATION

         The termination of this Agreement shall not in any way operate to
         impair or destroy any of the rights or remedies of any Party, or to
         relieve any Party of its obligations to

                                      -36-
<PAGE>

         comply with any of the provisions of this Agreement, which shall have
         accrued prior to the effective date of termination.

19.3     LIQUIDATION

         Upon termination pursuant to Clause 19.1 (i) above, the Partners will
         take the necessary actions to cause FMCS to be dissolved and
         liquidated.

20.      INDEMNIFICATION

20.1     LIMITATION ON PARTIES' LIABILITY

         Except as required by applicable law, the debts, obligations and
         liabilities of FMCS, whether arising in contract, tort or otherwise,
         shall be solely the debts, obligations and liabilities of FMCS, and
         none of the Parties, Directors or officers of FMCS shall be obligated
         personally for any such debt, obligation or liability of FMCS solely by
         reason of being a partner, director, officer or participating in the
         management of FMCS. The failure of FMCS to observe any formalities or
         requirements relating to the exercise of its powers or management of
         its business or affairs under applicable law or this Agreement shall
         not be grounds for imposing personal liability on the Parties for
         liabilities of FMCS.

20.2     SURVIVAL

         The provisions of this Clause 20 shall survive the termination of this
         Agreement and the dissolution and liquidation of FMCS.

21.      ASSIGNMENT

         This Agreement shall be binding and shall operate for the benefit of
         the Parties and their respective beneficiaries and assignees.

         Notwithstanding the above, except as provided for in section 10.4
         above, the contractual position (rights and obligations) of each of the
         signatory Parties to this Agreement shall not be able to be assigned to
         a third party without prior express consent in writing from the
         signatory Parties to it that are not affected by the assignment of
         contractual position that it is wished to carry out.

         An exception to the above is made for the case of assignments of
         contractual position made by signatory Parties to this Agreement in
         favour of Affiliates, according to the definition of this contained in
         Clause 10.4 above.

         The efficacy of assignments of contractual position made by the
         signatory Parties to this Agreement in conformity with the provisions
         contained in this Clause shall in all cases be subject to the express
         written acceptance from the assignee of the terms and conditions set
         down herein.

22.      ENTIRE AGREEMENT

                                      -37-
<PAGE>

         This Agreement, together with the documents referred to herein and the
         Schedules hereto, constitutes the entire agreement of the Parties with
         respect to the subject matter contained herein and supersedes all prior
         understandings and negotiations between them, whether written or oral.

23.      PARTIAL NULLITY

         If any provision of this Agreement shall be invalid, illegal or
         unenforceable in any respect, the validity, legality and enforceability
         of the remaining provisions set forth herein shall not in any way be
         affected or impaired; provided, however, that in such case the Parties
         agree to use their best efforts to achieve the purpose of the invalid
         provision through a new, legally valid and enforceable provision.

24.      NOTICES

         Any notice, instruction or other communication to be given under this
         Agreement to a Party shall be in writing. Such notice, instruction or
         communication shall be deemed to have been duly given when it shall be
         delivered by hand or sent by airmail, telex or facsimile to the Party
         to which it is required or permitted to be given at such Party's
         address specified below or at such other address as such Party shall
         have designated by notice to the Party giving such notice, instruction
         or other communication.

         For FMCE:

         To the attention of:  General Counsel
         6, rue Jean Monnet
         L-1218 Luxembourg

         FAX: +(352) 22 99 99 54 99

         To FirstMark Communications International LLC
         660 Madison  Avenue, 22nd Floor
         New York, NY 10021
         FAX: (212) 699-4301

         For PRISA:

         To the attention of:  Eduardo Diez Hochleitner
         Promotora de Informaciones, S.A.
         Gran Via 32
         28013 Madrid
         FAX:     34 91 330 1036

         For AZTLAN:

         To the attention of: Adolfo Cerezo Perez
         Inmobiliaria Aztlan, S.A. de C.V.
         Parque Via n(0) 190, piso 10

                                      -38-
<PAGE>

         Colonia Cuahutemoc
         Mexico 06599, Distrito Federal
         Fax: (525) 255 15 76

         For CORTE INGLES:

         To the attention of: Lorenzo Lasaga Munarriz
         C/ Hermosilla, 112
         28009 Madrid
         FAX: 91 309 11 67

         For OMEGA:

         To the attention of: D. Mario Fernandez Pena
         C/ P(0) de la Castellana, 31
         280046 Madrid
         FAX: 91 319 57 33

         For DIARIO DE BURGOS

         To the attention of: Antonio Mendez Pozo
         C/ San Pedro de Cardena, 34
         09002 Burgos
         FAX: 947 27 55 33

         For CAJA DUERO:
         To the attention of: Dativo Martin Jimenez
         C/ Plaza de los Bandos, 15-17
         37002 Salamanca
         FAX: 91 571 24 23

         For IBERCAJA:

         To the attention of: Miguel Angel Navarro Garcia
         C/ Plaza Basilio Paraiso, 2
         50008 Zaragoza
         FAX: 976 21 76 03

         For CAJA SAN FERNANDO:

         To the attention of: D. Manuel Pinar Parias
         C/ Plaza de San Francisco, 1
         41004 Sevilla
         FAX: 95 459 72 31

                                      -39-
<PAGE>

         For EL MONTE:

         To the attention of:  Juan Jose Garcia Munoz
         C/ Plaza de Villasis, 2
         41003 Sevilla
         FAX: 95 450 24 58

25.      HEADINGS

         The headings to the covenants and Clauses of this Agreement have been
         included strictly for reasons of convenience and they in no way affect
         or prejudice the interpretation of the content of them.

26.      ENGLISH LANGUAGE

         This Agreement has been executed in English language. A translation
         into Spanish is attached hereto as Schedule 5 only for information and
         clarification purposes as the Parties expressly agree that the English
         version shall always prevail.

         All documents to be furnished or communications to be given or made
         under this Agreement shall be in the English language or, if in another
         language, shall be accompanied by a translation into English duly
         certified, which translation shall be the governing version between the
         Parties.

27.      GOVERNING LAW AND RESOLUTION OF DISPUTES

         This Agreement will be governed by the laws of Spain without giving
         effect to principles of conflicts of laws that would result in
         application of the law of another jurisdiction.

         Any dispute, controversy or claim arising out of or relating to this
         Agreement or the breach, termination or invalidity thereof, shall be
         settled by the Parties within the thirty (30) day period following the
         receipt by the last one of parties of a written notice pointing out the
         existence of such dispute, controversy, claim, breach, termination or
         invalidity. Should the parties not reach an agreement in the thirty
         (30) day period referred to above, the Parties agree to submit the
         relevant issue to arbitration. The arbitration shall be in accordance
         with the Rules of Conciliation and Arbitration of the International
         Chamber of Commerce, except that in the event of any conflict between
         those rules and any arbitration provisions of this Agreement, the
         provisions of this Agreement shall govern.

         There shall be three arbitrators appointed by the Geneva, Switzerland
         office of the International Chamber of Commerce in accordance with said
         Rules. The arbitration, including the making of the award, shall take
         place in Geneva, Switzerland. The arbitration shall be conducted in the
         English language and the award, and the reasons supporting it, shall be
         written in English.

                                      -40-
<PAGE>

         All decisions of the arbitral tribunal shall be final and binding on
         the Parties and may be entered against them in a court of competent
         jurisdiction. When affixing the cost of arbitration in its award, any
         costs, fees or taxes incidental to enforcing the arbitral award shall,
         to the maximum extent permitted by law, be borne by the Party resisting
         such enforcement.

AND AS PROOF OF CONFORMITY with the foregoing, the Parties sign this agreement
along with its Schedules, in nine originals and for a sole effect, in the place
and on the date stated in the heading.

FIRSTMARK COMMUNICATIONS EUROPE, S.C.A.
BY:

/s/ Keith Arthur Cornell
-----------------------------
SIGNED: MR KEITH ARTHUR CORNELL

PROMOTORA DE INFORMACIONES, S.A.
BY:

/s/ Ignacio Santillana
--------------------------
SIGNED: MR IGNACIO SANTILLANA

AZTLAN                                      CAJA DUERO
BY:                                         BY:

/s/ Keith Arthur Cornell                    /s/ Dativo Martin Jimenez
-----------------------------               -------------------------------
SIGNED: MR KEITH ARTHUR CORNELL             SIGNED: MR. DATIVO MARTIN JIMENEZ

INFORMATICA EL CORTE INGLES                 IBERCAJA
BY:                                         BY:

/s/ Florencio Lasaga Munarriz               /s/ Miguel A. Navarro Garcia
----------------------------------          ---------------------------------
SIGNED: MR FLORENCIO LASAGA MUNARRIZ        SIGNED: MR. MIGUEL A. NAVARRO GARCIA

OMEGA CAPITAL, S.L.                         CAJA SAN FERNANDO
BY:                                         BY:

                                      -41-
<PAGE>

/s/ Mario Fernandez Pena                    /s/ Manuel Pinar Parias
------------------------------              -------------------------------
SIGNED: MR MARIO FERNANDEZ PENA             SIGNED: MR. MANUEL PINAR PARIAS

DIARIO DE BURGOS                               EL MONTE
BY:                                            BY:

/s/ Jesus Angel Bueno Ordonez                 /s/ Juan Jose Garcia Munoz
---------------------------------             -------------------------------
SIGNED: JESUS ANGEL BUENO ORDONEZ             SIGNED: MR JUAN JOSE GARCIA MUNOZ

                                      -42-
<PAGE>

                                   SCHEDULE 1

                          SUMMARY OF FMCS BUSINESS PLAN

<PAGE>

                                   SCHEDULE 2

           BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF FMCS AS OF 30
                                  OCTOBER 1999

<PAGE>

                                   SCHEDULE 3

               SUMMARY OF BUDGETS AND UNDERTAKINGS ASSUMED BY FMCS

<PAGE>

                                   SCHEDULE 4

            DOCUMENTATION TO BE SUBMITTED BY FIRSTMARK COMUNICACIONES
                            ESPANA, S.L.'S PARTNERS

1.       Copy of the passport or identity card pertaining to the representative
         of the partner which must be duly legitimated by a Spanish Notary
         Public.

2.       Formal commitment undertaken by the partner for the purpose of
         accrediting the economic, financial, technical or professional solvency
         of FirstMark Comunicaciones Espana, S.L. which must be duly legitimated
         by a Spanish Notary Public.

         2.1    Power of attorney accrediting the capacity of the signatory of
                the commitment referred to in point 2 above. Should the power of
                attorney not be granted before a Spanish Notary Public, the
                power will have to be translated into Spanish and notarised and
                apostilled to be effective in Spain.

3.       Financial Statements, should its publication be mandatory in the
         country where the company is incorporated.

4.       Report issued by a financial entity evidencing the economic and
         financial solvency of the shareholder, which must be duly legitimated
         by a Notary Public.

         4.1    Power of attorney accrediting the capacity of the signatory of
                the Report referred to in point 4 above. Should the power of
                attorney not be granted before a Spanish Notary Public, the
                power will have to be translated into Spanish and notarised and
                apostilled to be effective in Spain.

5.       Declaration about the global volume of business and services carried
         out by the partner for the last three fiscal years, which must be duly
         legitimated by a Notary Public.

         5.1    Power of attorney accrediting the capacity of the signatory of
                the declaration referred to in point 5 above. Should the power
                of attorney not be granted before a Spanish Notary Public, the
                power will have to be translated into Spanish and notarised and
                apostilled to be effective in Spain.

6.       Evidence of technical and professional solvency.

         Evidence should be provided by means of submitting the following
documents:

         a)       Professional and academic certificates of the company's
                  directors and management staff and, in particular, those
                  pertaining to the employees responsible for the implementation
                  and development of the service.

         b)       A statement indicating the average number of employees and
                  management staff per annum, for the last three years.

         c)       A list of the main services carried out in the last three
                  years, including the amounts and beneficiaries thereof.

<PAGE>

         d)       A statement regarding the research and development resources
                  available to the company.

         Please note that the signature of the person executing the
         documentation listed in this point 6 must be duly notarised before a
         Notary Public, and the power of attorney setting forth the signatory's
         capacity (if a foreign power of attorney is entailed, this power must
         be translated into Spanish, legalised and apostilled) should be
         attached thereto.

    ALL OF THESE DOCUMENTS MUST BE SUBMITTED IN DUPLICATE COPIES, BEARING IN
    MIND THAT ANY DOCUMENT DRAFTED IN A FOREIGN LANGUAGE MUST BE ACCOMPANIED BY
    A SWORN TRANSLATION INTO SPANISH.<PAGE>
                                                                   Exhibit 10.6

                       THE BASIC PROJECT CREDIT AGREEMENT

              - hereinafter referred to as the "CREDIT AGREEMENT" -

                             dated January 21, 2000

                                     between

                     LAMBDANET COMMUNICATIONS GMBH, HANNOVER

            - hereinafter referred to as "LAMBDANET" or "BORROWER" -

                                       and

           BAYERISCHE HYPO- UND VEREINSBANK AKTIENGESELLSCHAFT, MUNICH

                     DRESDNER BANK AG, FRANKFURT AM MAIN AND

                KREDITANSTALT FUR WIEDERAUFBAU, FRANKFURT AM MAIN

            - hereinafter referred to as "the ARRANGERS" or "BANKS",
          each individual one referred to as "the ARRANGER" or "BANK",

            Dresdner Bank AG also referred to as "the HANDLING BANK"

             Bayerische Hypo- und Vereinsbank AG also referred to as
                       "the LEADER OF THE COLLATERAL POOL"

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 2 of the agreement dated January 21, 2000

<TABLE>

<CAPTION>

TABLE OF CONTENTS:

<S>                                                          <C>
Preamble                                                       4

Definitions                                                    7
1.       Extending Credit                                     11
2.       Its Purpose                                          12
3.       Using the Loans and Their Availability               13
4.       The Conditions                                       18
5.       Outlays                                              21
6.       Remunerations                                        22
7.       Term                                                 23
8.       Repayment                                            24
9.       Delay in Performance                                 27
10.      Collateral                                           28
11.      The Project Account                                  30
12.      Imposed Conditions                                   31
13.      The Prerequisites for Paying Out                     39
14.      Possibilities for Termination / Withdrawal           41
15.      Subparticipation/Transfer (Syndication)              44
16.      Final Provisions                                     45
Signatures                                                    48
Appendix 1: An Example of a Calculation                       50
Appendix 2: The Business Plan                                 54

</TABLE>

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 3 of the agreement dated January 21, 2000

<TABLE>

<CAPTION>

<S>                                                          <C>
Appendix 3: Guaranty                                         56
Appendix 4: The Formal Obligation of the Shareholders        57
Appendix 5: The Requirements for Payment                     58

</TABLE>

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 4 of the agreement dated January 21, 2000

PREAMBLE

     LAMBDANET is a German telecommunications company that was recently set up
on April 21, 1999 under the name "Carriers' Carrier Gesellschaft GmbH" and that
has its headquarters in 30177 Hannover, Gunther-Wagner-Alle 13, registered at
the Hannover Commercial Register under HRB 57818. This company changed its name
to LambdaNet Communications GmbH on October 1, 1999. The shareholders are

-    FirstMark Communications Europe S.A., 6 rue St. Jean Monnet, 2180 Luxemburg
     (that is primarily held by FirstMark Communications International LLC with
     its headquarters in 660 Madison Avenue, 10021 New York, United States) and
     that acquired the business shares from the original shareholder FirstMark
     Fiber Holdings, L.L.C., Corporate Trust Center, 1209 Orange Street,
     Wilmington, Delaware 19801, United States pursuant to the transfer
     agreement of the notary public Dr. Gerhard Pilger, Frankfurt am Main, dated
     January 19, 2000
-    Dieter Finke, engineer, born on January 28, 1954, residing in Neuer Kamp
     20, 29336 Nienhagen,
-    Dr. Bernd Jager, born on June 10, 1963, residing in
     Wilhelm-Levensen-Strasse 18, 53115 Bonn,
-    Dr. Stefan Sattler, born on June 20, 1965, residing in Heideweg 41, 53332
     Bornheim and
-    LambdaNet Communications Mitarbeiter GbR

LAMBDANET has been furnished with equity capital amounting to 32,200,000 Euros
since November 1, 1999.

     In the framework of the liberalisation of the European telecommunications
market, LAMBDANET is planning to build up a pan-European network for furnishing
telecommunications services. In the first stage, LAMBDANET will be building and
operating up a glass-fibre network in Germany measuring 3,200 kilometres where
21 cities will be connected with one another. For this purpose, already laid
blank fibre capacities (what are known as "dark fibres") of Gasline GmbH & Co.
KG ("GASLINE"), Huttropstrasse 60 in Essen will be rented on long-term basis for
10 years (with an option for Lambdanet to extend the agreement for another 8
years) pursuant to the "Agreement on Using Waveguides and System Equipment
Spaces" between Lambdanet and Gasline dated July 14, 1999. The optical and
electronic components of the network shall be supplied by NORTEL DASA pursuant
to the turnkey general contractor agreement dated September 21, 1999 between
Lambdanet and Nortel DASA Network Systems GmbH & Co. KG with its headquarters in
Hahnstrasse 37 - 39, 60528 Frankfurt am Main (hereinafter referred to as "NORTEL
DASA") for 46,539,974 German Marks. Lambdanet shall undertake configuring the
network itself. The network is planned for operation by January 1, 2000.

     In this process, we are primarily intending to offer these products and
services to other telephone companies and Internet service providers ("Carriers'
Carrier" business) that do not have their own infrastructure or that would like
to extend their capacities in this fashion. LAMBDANET is offering the following
products at the moment:

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 5 of the agreement dated January 21, 2000

-    "managed bandwidth", meaning that the customer purchases a certain
     transmission capacity (generally STM-1 (this is the standard for bit-rate
     transmissions of 155 megabits per second) or higher) between two or several
     connecting points (what are known as "points of presence") between his
     network and Lambdanet's network. Here, Lambdanet guarantees the
     availability of this capacity on these routers based upon certain service
     level agreements (SLA's). The customer's transmission is brought up to the
     point of presence with Lambdanet and fed into the transportation network
     with Lambdanet's equipment.

-    "wavelengths", meaning that the customer purchases the exclusive right of
     using a certain wavelength on certain routes. The carrier only provides the
     photonic equipment such as laser equipment, amplifier units or other
     hardware required for transporting data. All of the routers (SDH component
     parts) come from the purchaser of the wavelength. This means that the
     customer will have its "own" exclusive virtual fibre branch de-facto at
     significantly lower costs than "genuine" blank fibre capacities.

-    "co-location", meaning providing areas for installing / operating the
     customer's component parts at each of Lambdanet's point of presence. These
     areas are generally standardised in "racks" (standardised sizes for
     switchboxes). The customer is provided with the power supply, air
     conditioning, 24-hour access and being in the immediate area of the points
     of presence.

     The following loan serves the purpose of financing the project of LAMBDANET
described above. The banks shall make the availability of portions of the
overall loan dependant upon LAMBDANET's initial success. There is agreement on
quantifying this initial market success by means of purchase contracts. The
total loan shall be paid back from the cash flow earned from the project. The
cash flow shall be forecast in the Business Plan dated November 12, 1999
(Version 6.9) as per Appendix 2 of the Credit Agreement.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 6 of the agreement dated January 21, 2000

DEFINITIONS

ANNUALISED EBITA means EBITA multiplied by 2

GUARANTOR is NORTEL DASA and/or a third party that the ARRANGERS accept

BUSINESS PLAN means the 5-year projections for the PROJECT passed by the
management in each case and submitted to the lenders including the profit and
loss account, the balance sheet, the cash flow forecast and strategic planning
with an appropriate degree of details for implementing these projects.

CASH FLOW AVAILABLE FOR SERVICING THE DEBT means the consolidated profit for the
year/not loss for the year (the net income) of the BORROWER in the last 6-month
period of time plus

(i)   lowering the working capital without taking the liquid funds into
      consideration during this period of time
(ii)  interest and other financial expenditures payable towards the TOTAL DEBT
      during this period of time
(iii) depreciation during this period of time, and
(iv)  drawing on the equity-like contribution during this period of time.

minus

(i)  increases in the working capital without including the liquid funds during
     this period of time and
(ii) investment expenditures that were made during this period of time.

EBITA (EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION) means the
net turnover for the last 6-month period of time in each case minus the working
capital before the BORROWER's extraordinary income/expenditures, interest
income/expenditures, taxes and depreciation.

EQUITY-LIKE CONTRIBUTIONS are calculated as the total of the capital paid in
(subscribed capital plus capital reserves), secondary partner's loans and/or
other secondary loans and deferred payments under the GASLINE LOAN AGREEMENT,
presuming that the former is unambiguously of a secondary nature. The
capitalised amount shall be included up to a maximum 12.3 thousand million
German Marks until the convertible bond is exercised.

EXCESS CASH FLOW means the CASH FLOW AVAILABLE FOR SERVICING THE DEBT minus the
SENIOR DEBT SERVICE for the last 6-month period of time in each case.

FIELD ACCEPTANCE means that the liquidating bank has a confirmation from the
BORROWER (FIELD ACCEPTANCE CERTIFICATE) on field acceptance as settled in the
additional agreement dated December 12, 1999 on the NORTEL DASA AGREEMENT.

GASLINE means GasLINE Telekommunikationsgesellschaft deutscher
Gasversorgungs-unternehmen mbH & Co. KG, Huttropstrasse 60, Essen.

GASLINE LOAN AGREEMENT means the loan agreement and convertible bond dated July
14, 1999, notary's document register 99/00147 of the notary public
Hans-Friedrich Kreyer in Bochum between Lambdanet and GasLINE.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 7 of the agreement dated January 21, 2000

GASLINE LIGHTWAVE AGREEMENT means the agreement on using the optical waveguides
and system equipment rooms dated July 14, 1999 between LAMBDANET and GASLINE.

GASLINE AGREEMENTS means the GASLINE LIGHTWAVE AGREEMENT and the GASLINE LOAN
AGREEMENT.

GROUP means FirstMark Fiber Holdings LLC or FirstMark Communications Europe S.A.
if the business shares are effectively transferred pursuant to the contract
dated January 19, 2000 before the notary public Dr. Pilger, including associated
companies in the intendment of Sections 15 ff. of Aktiengesetz (the German Stock
Corporation Act) and LAMBDANET.

ACCUMULATED TURNOVER means the total accumulated net turnover of the BORROWER
from usual business activities from the time of setting up the company to each
test date less the expenditures for the capacity in the local loop area
purchased on behalf of the customer.

NETWORK ACCEPTANCE means that the liquidating bank has a confirmation from the
BORROWER (NETWORK ACCEPTANCE CERTIFICATE) that all of the PROJECT's technical
specifications are met (as agreed upon in the NORTEL DASA AGREEMENT).

NORTEL DASA AGREEMENT is the schedule-bound general contractor agreement
amounting to 46,539,974 German Marks concluded on September 21, 1999 between
NORTEL DASA and the BORROWER and each of the additional and supplementary
agreements accepted by the lenders, especially the additional agreement dated
December 31, 1999.

DEBT SERVICE COVERAGE RATIO means the CASH FLOW AVAILABLE FOR DEBT SERVICE
divided by SENIOR DEBT SERVICE for the next 6 months.

PROJECT means the BORROWER building up and operating a glass-fibre network in
Germany measuring 3,200 kilometres where 21 cities will be connected with one
another as well as providing and marketing products and services for this
purpose including the products and services mentioned in the preamble.

PROJECT AGREEMENTS include all of the essential agreements of LAMBDANET in
connection with building, installing, putting into service, operating, insuring
and maintaining the PROJECT, especially the GASLINE AGREEMENTS, the NORTEL DASA
AGREEMENT and other supply contracts with a volume of Euro 2,500,000, use
agreements for glass fibres with third parties, telecommunications licenses,
interconnection agreements, service contracts with a volume of over Euro
500,000, all of the permits required for implementing the PROJECT and the
purchasing contracts and insurance policies; the assignment agreement with
NORTEL DASA and the Fee and Undertaking Letter issued by NORTEL DASA.

QUALIFIED PURCHASING AGREEMENT: a purchasing agreement that is concluded becomes
a qualified purchasing agreement after the contracting party examines it through
bank reference with the net contractual value (including the installation fee)
and this has a positive outcome for the next 12 months after signing the
purchasing agreement, however no later than to the first possible date of
termination. Should a qualified purchasing agreement be terminated ahead of time
or the contracting party be in arrears with his obligations to pay, the
contractual value shall not be reported in the further calculation.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 8 of the agreement dated January 21, 2000

SENIOR DEBT means all of the outstanding amounts under TRANCHES A and B on each
effective date plus the BORROWER's other collateralised or non-collateralised
liabilities (indebtedness) that rank pari passu to this CREDIT AGREEMENT
including any obligations from interest and currency securing transactions.

SENIOR DEBT SERVICE means the total of interest expenditures, other financial
expenditures and obligatory amortisation for the SENIOR DEBT.

TOTAL DEBT means the total consolidated indebtedness of the BORROWER on each
effective date.

INTEREST COVER RATIO means EBITA divided by the total of interest expenditures
and financial expenditures for the TOTAL DEBT for the next 6 months.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 9 of the agreement dated January 21, 2000

1.    EXTENDING CREDIT

1.1   The BANKS extend a loan facility amounting to

      EURO 56,000,000

      (in words: FIFTY-SIX million Euros)

      to the BORROWER.

1.2   A part of this amount shall be made available amounting to as much as EURO
      10,000,000 (in words: TEN million Euros) as a revolving Euro loan
      (hereinafter referred to as "TRANCHE A")

1.3   A part of this amount shall be made available amounting to EURO 46,000,000
      (in words: FORTY-SIX million Euros) as a non-revolving Euro loan
      (hereinafter referred to as "TRANCHE B")

1.4   TRANCHE A and TRANCHE B together shall be hereinafter designated as
      "LOANS".

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 10 of the agreement dated January 21, 2000

2.    ITS PURPOSE

2.1   The amounts paid out under the LOANS shall exclusively serve the purpose
      of financing investments and the corresponding expenditures including the
      requirements for working capital in connection with the PROJECT of the
      BORROWER pursuant to the BUSINESS PLAN presented as a summary in Appendix
      2. Deviations within the individual items that are more than an
      accumulated EURO 500,000 shall require the consent in writing of the
      BANKS.

2.2   In this process, TRANCHE A shall be used for the requirements of
      intermediate financing and working capital. TRANCHE B shall serve the
      purpose of financing the initial network configuration by purchasing
      components from NORTEL DASA pursuant to the NORTEL DASA AGREEMENT, the
      operative initial losses in accordance with the BUSINESS PLAN dated
      November 12, 1999 pursuant to Appendix 2 and, if necessary, for extended
      investments in accordance with each current BUSINESS PLAN.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 11 of the agreement dated January 21, 2000

3.    USING THE LOANS AND THEIR AVAILABILITY

3.1   The BORROWER may only claim the LOANS for the first time 3 BANK WORKING
      DAYS after complying with all of the prerequisites for pay-out pursuant to
      Number 13 of the agreement hereto and pursuant to the specification of the
      subsequent conditions. The LIQUIDATING BANK shall confirm without delay
      that the prerequisites for pay-out specified in Number 13 of the agreement
      hereto have been complied with in writing.

3.2   The period of time of paying out TRANCHE A shall run until November 30,
      2006. The period of time of payments for funds drawn under TRANCHE B shall
      run to December 31, 2001 in the absence of other stipulations in the
      following. The remaining amount from TRANCHE B that is not claimed at this
      point in time shall become forfeited.

3.3   THE MAXIMUM AMOUNT AVAILABLE UNDER TRANCHE A IN EACH CASE

3.3.1 Euro 6,000,000 shall be available under TRANCHE A as long as the
      availability covered by the agreement under TRANCHE B is below Euro
      40,000,000, meaning that QUALIFIED PURCHASING AGREEMENTS amounting to
      under Euro 20,000,000 have been submitted.

3.3.2 As soon as the availability covered by the agreement under TRANCHE B
      reaches or exceeds Euro 40,000,000, meaning that QUALIFIED PURCHASING
      AGREEMENTS amounting to at least Euro 20,000,000 have been submitted, the
      availability under TRANCHE A increases to Euro 10,000,000.

3.4   THE AVAILABILITY UNDER TRANCHE B

      The amount available under TRANCHE B shall be calculated from the total of
      the available amount covered by the agreement and the available amount
      covered by the guaranty as follows:

3.4.1 THE AMOUNT AVAILABLE THAT IS COVERED BY GUARANTY UNDER TRANCHE B:

      As soon as TRANCHE A is claimed at Euro 6,000,000 for the first time and
      the maximum amount of guaranty of NORTEL DASA specified in Number 13 is
      effective, amounts up to the value of the supplies and services furnished
      based upon the NORTEL DASA AGREEMENT as the GUARANTOR and BORROWER as it
      was confirmed it in writing to the LIQUIDATING BANK shall be available to
      a maximum of Euro 23,000,000.
      Provided that NETWORK ACCEPTANCE has taken place and the NETWORK
      ACCEPTANCE CERTIFICATE was submitted to the banks, the available amount
      covered by the guaranty shall be finally reduced in accordance with the
      available amount covered by the agreement increasing as a result of
      further QUALIFIED PURCHASING AGREEMENTS being concluded as soon as the
      available amount under Trance B reaches or exceeds a total of Euro
      40,000,000 (refer to Appendix 1).

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 12 of the agreement dated January 21, 2000

3.4.2    THE AMOUNT COVERED BY AGREEMENT THAT IS AVAILABLE UNDER TRANCHE B:

3.4.2.1  A further maximum of Euro 17,000,000 beyond the amount specified under
         3.3.1, i.e. a total of Euro 40,000,000, shall be available under
         TRANCHE B as soon as it is permissible to claim Euro 15,000,000 in
         accordance with the following calculation on the pay-out date for funds
         drawn (meaning there are QUALIFIED PURCHASING AGREEMENTS amounting to
         Euro 7,500,000) at the amount resulting from the following calculation:
         (also refer to Appendix 1):

         The total of the net contractual values (including the installation
         fee) of QUALIFIED PURCHASING AGREEMENTS x a factor of 2.

3.4.2.2  A further maximum of Euro 6,000,000 shall be available under TRANCHE B
         when it is permissible to claim Euro 40,000,000 and more because
         QUALIFIED PURCHASING AGREEMENTS have been submitted in accordance with
         the calculation under Number 3.4.2.1 of the agreement hereto. The
         prerequisite of this is the fact that QUALIFIED PURCHASING AGREEMENTS
         have been submitted with a net contractual value (including the
         installation fee) of more than Euro 20,000,000.

3.4.2.3  The maximum amount available covered by the agreement under TRANCHE B
         shall be reduced after the availability of claims covered by guaranty
         under TRANCHE B expire as of June 15, 2000 by the amount of the claim
         covered by guaranty as defined in Number 4.2 of the agreement hereto.

3.4.2.4  The maximum available amount covered by the agreement under TRANCHE B
         shall be tested by the LIQUIDATING BANK within three bank working days
         after the QUALIFIED PURCHASE CONTRACTS have been submitted, however
         ascertained at a maximum of twice per calendar month. The LIQUIDATING
         BANK shall inform the BORROWER, the GUARANTOR and the BANKS of the
         result of ascertaining this and the maximum available amount covered by
         the agreement that results from this without delay in writing. The
         division of availability established by the LIQUIDATING BANK shall
         continue to apply until the next ascertainment and shall be recognised
         as binding by the BORROWER, the GUARANTOR and the BANKS subject to
         obvious errors.

3.5      The BORROWER shall submit a request for payment in writing to the
         LIQUIDATING BANK before drawing funds each time or before later
         prolongations no later than by 10 o'clock Frankfurt time on the fourth
         BANK WORKING DAY before the desired date of claiming using the sample
         made available by the BANKS and attached in Appendix 6. It has to have
         the following minimum content:

            -  the amount to be called up
            -  the desired date of claim within the period of payment pursuant
               to Numbers 3.2 and 3.4 of the agreement hereto that is on a BANK
               WORKING DAY pursuant to Number 3.11 of the agreement hereto,
            -  the desired period of locking interest and the desired partial
               amount pursuant to the specifications of Numbers 3.6 and 3.7
               of the agreement hereto that have to be chosen in such a
               fashion that the amount of obligatory amortisation due on each
               effective date pursuant to Number 8 of the agreement hereto is
               covered by the amount of one or several drawings that are due
               on this day,

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 13 of the agreement dated January 21, 2000

            -  the purpose (funds that are not intended for the requirements of
               working capital have to be documented by submitting invoices from
               amounts of Euro 100,000 upwards) and the desired tranche that it
               is supposed to be drawn under.

If the BORROWER does not provide information on the period of locking interest,
provides it late or incompletely, the further claim shall be made as a Euro loan
with a period of locking interest of 3 months reserving ourselves the right in
the regulation in Numbers 3.6 and 3.11 of the agreement hereto. However, if an
amount of obligatory amortisation was due within four months since the end of
the current interest period, it shall be made with a period of locking interest
that ends with the date of payment due of the amount of obligatory amortisation.
A request for payment may not be revoked and it shall constitute the BORROWER's
duty of acceptance.

3.6      The BORROWER may claim TRANCHE B as a Euro loan with periods of locking
         interest (hereinafter referred to as the "PERIOD OF LOCKING INTEREST")
         of 1, 2, 3 or 6 months in a maximum of 20 partial amounts. PERIODS OF
         LOCKING INTEREST that deviate from this shall only be possible with the
         consent of the LIQUIDATING BANK. The partial amounts may not fall below
         a minimum amount of Euro 2,000,000 and have to be whole-number
         multiples of Euro 500,000. At least 10 BANK WORKING DAYS have to be
         between two dates of claiming. The first PERIOD OF LOCKING INTEREST
         shall begin on the first date claiming and shall end on the last day of
         the PERIOD OF LOCKING INTEREST. Each subsequent PERIOD OF LOCKING
         INTEREST shall begin with the expiration of the previous PERIOD OF
         LOCKING INTEREST. Notwithstanding the statements above, the first
         PERIOD OF LOCKING INTEREST shall expire under TRANCHE B for all claims
         (with the exception of the first claim) on the same day as the current
         PERIOD OF LOCKING INTEREST for all of the previous claims. These claims
         shall then be consolidated on the last day of this PERIOD OF LOCKING
         INTEREST in each case and shall be treated as one claim.

3.7      The BORROWER may claim Euro loans under TRANCHE A with PERIODS OF
         LOCKING INTEREST of 1, 2, 3 and 6 months. PERIODS OF LOCKING INTEREST
         that deviate from this shall only be possible with the consent of the
         LIQUIDATING BANK. The partial amounts may not fall below a minimum
         amount of Euro 500,000 and have to be whole-number multiples of
         100,000.

3.8      Euro loans shall be extended under the proviso of the availability of
         the corresponding funds on the Euro market. If it is not possible to
         use it as a Euro loan, it shall be claimed pursuant to the
         specifications of the agreements to be made between the BORROWER and
         LIQUIDATING BANK in this case.

3.9      It shall not be possible to re-extend the borrowed funds of Tranche B.
         Tranche A may be used on a revolving basis.

3.10     The LOANS shall be posted to the account 1 024 061 (pay number of the
         BORROWER at the LIQUIDATING BANK) of the BORROWER with the LIQUIDATING
         BANK, Friedrichshafen branch office, bank code number 651 800 05. The
         LIQUIDATING BANK shall notify the BORROWER of the corresponding
         sub-accounts for TRANCHE A and TRANCHE B separately.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 14 of the agreement dated January 21, 2000

3.11     BANK WORKING DAYS in the intendment of the agreement hereto shall be
         days when banks are open in Munich and Frankfurt and when the European
         payment system TARGET is available for fulfilling payments in EUROS. If
         the last day of a PERIOD OF LOCKING INTEREST does not fall upon a BANK
         WORKING DAY, the PERIOD OF LOCKING INTEREST shall end on the subsequent
         BANK WORKING DAY. If this day fell upon the next calendar month, the
         PERIOD OF LOCKING INTEREST shall end as early as on the previous BANK
         WORKING DAY.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 15 of the agreement dated January 21, 2000

4.       THE CONDITIONS

4.1      An interest rate based upon EURIBOR shall be agreed upon for claiming
         TRANCHE A plus the applicable margin pursuant to Number 4.3 of the
         agreement hereto.

4.2      An interest rate shall be agreed upon for claims on TRANCHE B covered
         by guaranty based upon EURIBOR plus a margin of 1.00% p.a. An interest
         rate shall be agreed upon for claims on TRANCHE B covered by the
         agreement (as defined in the following) based upon EURIBOR plus the
         applicable margin pursuant to Number 4.3.

         Regardless of whether QUALIFIED PURCHASING AGREEMENTS have been
         submitted, claims under TRANCHE B to an amount of the value of the
         supplies and services from the NORTEL DASA CONTRACT confirmed by the
         GUARANTOR and BORROWER for the purpose of the agreement hereto, however
         no more than amounting to Euro 23,000,000 with the proviso of the
         regulation below, shall be deemed as claims covered by guaranty.
         Presuming that NETWORK ACCEPTANCE has taken place and a NETWORK
         ACCEPTANCE CERTIFICATE has been submitted to the banks, the amount of
         the claims covered by guaranty shall be reduced as soon as the total of
         the amounts available under TRANCHE B reach Euro 40,000,000 by the
         amount that it exceeds Euro 40,000,000 pursuant to the calculation
         presented in Number 3.4.2.1 based upon QUALIFIED PURCHASING AGREEMENTS
         being submitted on a date of ascertaining that has to be before June
         30, 2000 (hereinafter referred to as "claims covered by guaranty").

         To the extent that claims under TRANCHE B shall be not deemed as claims
         covered by guaranty, they shall be deemed as claims covered by the
         agreement (hereinafter referred to as "claims covered by the
         agreement").

         The conditions settled in Clause 4 shall also apply independent of the
         duration of each PERIOD OF LOCKING INTEREST from the next BANK WORKING
         DAY following a date of ascertaining pursuant to Number 3.4.2.4. The
         LIQUIDATING BANK shall notify the BORROWER, the GUARANTOR and the BANKS
         of the amounts of the claims covered by guaranty and covered by the
         agreement together with the notification pursuant to Number 3.4.2.4 of
         the agreement hereto.

4.3      The applicable margin (hereinafter referred to as the "applicable
         margin") for claims of TRANCHE A and claims covered by the agreement of
         TRANCHE B shall be ascertained as follows depending upon the ratio of
         the "senior debt: EBITA":

               SENIOR DEBT: EBITA                        applicable margin
               ------------------
               negative or above 6.00 x                  3.75% p.a.
               4.50 - 6.00 x                             3.50% p.a.
               3.50 - 4.49 x                             3.25% p.a.
               2.50 - 3.49 x                             2.75% p.a.
               below 2.50 x                              1.75% p.a.

         The applicable margin for claims covered by the agreement may be
         reduced up to a maximum of 0.35% points during the entire period of
         credit extension per calendar half-year. Under the proviso of the
         regulation in Number 4.2, it shall apply from the

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 15 of the agreement dated January 21, 2000

         next day of locking interest after submitting the appropriate monthly
         or quarterly report to the LIQUIDATING BANK.

4.4      EURIBOR designates the average interest rate stated as a per annum
         interest rate that is ascertained based upon listings of leading banks
         on the European Interbank EURO market for borrowing money in Euros for
         a period of time that corresponds to each PERIOD OF LOCKING INTEREST
         and that is published 2 BANK WORKING DAYS before the beginning of each
         PERIOD OF LOCKING INTEREST at about 11 o'clock Brussels time on page
         248 of the Bridge Telerate Service.

4.5      If an appropriate interbank rate is not published on this day, the
         interbank rate shall be calculated for the appropriate interest period
         as the arithmetic mean rounded to the next 1/16% of the interest rates
         per annum that is announced to the BANKS at about 11 o'clock Frankfurt
         time 2 BANK WORKING DAYS before the first day of each PERIOD OF LOCKING
         INTEREST by three large-scale banks for large-scale banks to borrow
         money at a German bank place amounting to each claim in German Marks
         for the duration of each interest period.

4.6      If the BANKS have only been submitted designations from two large-scale
         banks, the interbank rate shall be announced based upon the
         designations of these two large-scale banks. If there are not
         designations from at least two large-scale banks available, the
         interest rate for the appropriate interest period shall consist of the
         margin pursuant to Number 4.1 of the agreement hereto and the actual
         re-financing costs of the BANKS for amounts that correspond to the
         amount, currency and interest period of each claim.

4.7      The interest shall be paid at the end of a PERIOD OF LOCKING INTEREST
         with PERIODS OF LOCKING INTEREST of up to three to four months,
         otherwise quarterly retroactively. The interest and the loan commitment
         fee shall be calculated in accordance with the Euro interest method on
         the basis of a 360-day year (365/360 or 366/360 days).

4.8      The loan commitment fee for the LOANS shall be 0.875% per annum for the
         borrowed funds committed, but not claimed, beginning on the day of
         signing the credit AGREEMENT. The loan commitment fee shall be
         calculated decursively on a quarterly basis and called in from the
         project account product Number 3.10 of the LIQUIDATING BANK.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 17 of the agreement dated January 21, 2000

5.       OUTLAYS

         The BORROWER has to reimburse the BANKS all costs and other
         expenditures that they incur or are incurred (especially external
         rights, consultation and examination costs) in connection with
         negotiating, concluding, implementing and syndicating the agreement
         hereto or the claims based upon this for the BANKS because of
         consulting external offices. To the extent that costs and expenditures
         are incurred above Euro 10,000 for individual measures such as
         appointing external experts or over Euro 150,000 altogether, the prior
         consent of the BORROWER shall be obtained for this or further measures.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 18 of the agreement dated January 21, 2000

6.       REMUNERATIONS

         The BANKS shall receive a one-time remuneration for

-        structuring (a structuring fee/arranging fee)
-        underwriting (an underwriting fee) and
-        syndicating (the up-front fee).

Beyond this, an annual remuneration shall accrue for handling LOANS and
administrating collateral that shall be payable to the LIQUIDATING BANK or the
COLLATERAL POOL LEADER.

The amount of these remunerations shall be established in a separate
remuneration letter. One-time remuneration shall be payable within 30 days after
signing the agreement hereto. The annual remuneration shall also be payable
within 30 days after signing the agreement hereto for the first year and
afterwards in accordance with the remuneration letter.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 19 of the agreement dated January 21, 2000

7.       TERM

         The LOANS shall have a term to DECEMBER 31, 2006.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 20 of the agreement dated January 21, 2000

8.       REPAYMENT

8.1      OBLIGATORY AMORTISATION

         All of the amortisation specified in Number 8.1 shall be OBLIGATORY
         AMORTISATION.

8.1.1    TRANCHE B shall be amortised in 10 semi-annual rates, for the first
         time on JUNE 30, 2002. The amount of the semi-annual rates shall be
         ascertained by the repayment percentages of the outstanding amount of
         TRANCHE B as per December 31, 2001 specified in the following:

<TABLE>

<CAPTION>

<S>                                                          <C>
                    June 30, 2002                              5.00%
                    December 31, 2002                          5.00%
                    June 30, 2003                              7.50%
                    December 31, 2003                          7.50%
                    June 30, 2004                             11.25%
                    December 31, 2004                         11.25%
                    June 30, 2005                             12.50%
                    December 31, 2005                         12.50%
                    June 30, 2006                             13.75%
                    December 31, 2006                         13.75%

</TABLE>

8.1.2    Claims covered by guaranty under TRANCHE B and calculated pursuant to
         the specification of Number 4.2 of the agreement hereto shall be paid
         back on June 15, 2000 in addition to the amortisation mentioned above
         pursuant to Number 8.1.1.

8.1.3    TRANCHE A claimed shall be amortised no later than at the end of the
         term.

8.1.4    If the amount available under TRANCHE B is reduced in retrospect as a
         result of QUALIFIED PURCHASING AGREEMENTS not being applicable and if
         funds are drawn that exceed this reduced amount available, the amounts
         that exceed the available amount shall be paid back within 30 days
         after the QUALIFIED PURCHASING AGREEMENTS not being applicable unless
         the amount available is raised within the period of time mentioned
         above by submitting new QUALIFIED PURCHASING AGREEMENTS to at least the
         amount that also covers the amount exceeded.

8.2      If a day of repayment falls upon a day that is NOT a BANK WORKING DAY
         pursuant to Number 3.11 of the agreement hereto, the subsequent BANK
         WORKING DAY

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 21 of the agreement dated January 21, 2000

         shall be the day of repayment unless this day falls upon the next
         calendar month. Then the day of repayment is the next previous BANK
         WORKING DAY. The term of the LOANS shall be extended or shortened
         correspondingly.

8.3      The BORROWER shall ensure with the selection of the PERIODS OF LOCKING
         INTEREST and the amount of the claim that the last day or its amount
         agrees with the date of payment due of the OBLIGATORY AMORTISATION.
         Otherwise, he shall be owe the BANKS compensation for prepayment.

8.4      Apart from the OBLIGATORY AMORTISATION pursuant to Number 8.1,
         voluntary special amortisation shall also be possible amounting to
         whole-number multiples of Euro 1 million on TRANCHE B towards the end
         of a PERIOD OF LOCKING INTEREST. The BORROWER shall notify the
         LIQUIDATING BANK of voluntary special amortisation ten BANK WORKING
         DAYS before amortisation in writing. They shall be set off against the
         outstanding OBLIGATORY AMORTISATION of TRANCHE B that was due last.

8.5      Apart from amortisation pursuant to Number 8.1, the following
         OBLIGATORY AMORTISATION (hereinafter referred to as "OBLIGATORY SPECIAL
         AMORTISATION") shall be paid on TRANCHE B:

         a) OBLIGATORY SPECIAL AMORTISATION amounting to 100% of the income from
            a purchase of an investment or asset after June 30, 2000 over an
            accumulated value of more than Euro 500,000 that is not reinvested
            in the project again within 3 months.

         b) OBLIGATORY SPECIAL AMORTISATION amounting to 50% of the EXCESS CASH
            FLOW. The EXCESS CASH FLOW shall be used as a basis on a quarterly
            basis for the first time on December 31, 2001 to ascertain whether
            OBLIGATORY SPECIAL AMORTISATION shall be paid from EXCESS CASH FLOW.
            The OBLIGATORY SPECIAL AMORTISATION shall no longer be applicable as
            soon as the reference number of the "consolidated SENIOR DEBT to the
            consolidated ANNUALISED EBITA" falls below 1.0 to 1.0 and remains
            under this value afterwards on three consecutive quarterly effective
            dates pursuant to Number 12.4.3.

         The OBLIGATORY SPECIAL AMORTISATION shall be paid at the end of the
         current PERIOD OF LOCKING INTEREST. They shall be set off against the
         outstanding OBLIGATORY AMORTISATION due last.

         All of the OBLIGATORY SPECIAL AMORTISATION has to be made in a minimum
         amount of Euro 200,000 and make up a whole-number multiple of Euro
         100,000. To the extent that it falls below the minimum amount, the
         obligation for special amortisation shall no longer apply.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 22 of the agreement dated January 21, 2000

9.       DELAY IN PERFORMANCE

         Should the BORROWER come wholly or partly into arrears with his
         obligations to pay from the agreement hereto or the BANKS terminate
         pursuant to Number 14 of the agreement hereto because of delay in
         performance, the BANKS shall be entitled to assert an interest rate
         amounting to the interest rate settled under Number 4.1 plus 1.5% per
         annum for the period of time from the delay in performance until the
         amounts are received as damage caused by delayed performance. The claim
         to replacing further damage shall remain unaffected by this. The
         BORROWER shall be at liberty to prove that there is lesser damage.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 23 of the agreement dated January 21, 2000

10.      COLLATERAL

The LOANS shall collateralised as follows:

10.1     ASSIGNMENT OF A CLAIM FOR SECURITY

         Assigning all present and future claims from

         -  all insurance policies in connection with the project, especially
            from fire insurance, insurance against breakdown of machinery,
            liability and loss-of-profit insurance that has or is to be taken
            out (whereby these insurance policies shall be taken out with
            policies and well-known insurance companies that the BANKS approve).
            If necessary, the BANKS shall be entered as preferred recipients.

         -  all essential PROJECT CONTRACTS including the appendix, addenda,
            supplemental, modifying, additional, succeeding or other agreements,
            especially the NORTEL DASA CONTRACT, the GASLINE CONTRACTS, the Fee
            and Undertaking Letter and the Assignment Agreement with NORTEL
            DASA.

         -  all permits, approvals and concessions that are necessary for
            erecting and operating the PROJECT to the extent that they can be
            assigned. Otherwise, the authorisation for utilisation shall be
            assigned to the extent that this is legally permissible.

         -  all purchase contracts concluded or still to be concluded with third
            parties including the appendix, addenda, supplemental, modifying,
            additional, succeeding or other agreements.

         -  that Lambdanet is or will be entitled to based upon registered
            patents.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 24 of the agreement dated January 21, 2000

10.2     TRANSFER OF PROPERTY BY WAY OF RECEIPT

10.2.1   Transfer of space by way of receipt of all plants and machines on the
         rented pieces of real estate of Bayernfonds Immobiliengesellschaft mbH
         & Co. KG, the building Hannover Forum in Pelikan Viertel KG, Innere
         Wiener Strasse 17, 81667 Munich, unencumbered from the rights of third
         parties with the exception of reservations of title and landlord's
         liens.

10.2.2   Transfer of space by way of receipt of all plants in the present
         locations free of the rights of third parties with the exception of
         reservations of title and landlord's liens.

10.3     ATTACHMENT

10.3.1   Attaching all present and future claims from the project accounts
         specified in Number 11.

10.3.2   Attaching all business interests of LAMBDANET while the shareholders
         waive rights of recourse towards the company in case of utilisation.

10.4     GUARANTY

         The maximum amount guaranty on a maximum of Euro 23,800,000 from NORTEL
         DASA payable upon first demand pursuant to Appendix 4.

10.5     FORMAL OBLIGATION OF THE SHAREHOLDERS IN FAVOUR OF THE BANKS

         Sponsors undertaking pursuant to Appendix 5 of the agreement hereto by
         FirstMark Communications International, Inc. and FirstMark Fiber
         Holdings LLC or FirstMark Communications Europe S.A. if the business
         shares are effectively transferred pursuant to the contract dated
         January 19, 2000 before the notary public Dr. Pilger.

10.6     SUBORDINATION DECLARATION

         -  GASLINE giving up the position of priority with demands from the
            GASLINE LOAN AGREEMENT

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 25 of the agreement dated January 21, 2000

11.      THE PROJECT ACCOUNT

The BORROWER shall ensure that all payments to him are made to a project account
to be set up at the LIQUIDATING BANK. The BORROWER shall only issue orders for
payment in such a fashion that payment is made in the following order, whereby
the LIQUIDATING BANK does not have to carry out orders that deviate from this:

         -        current operating costs and taxes,

         -        maintenance costs that ensure current operation,

         -        interest on this loan, and

         -        amortising this loan pursuant to Number 8.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 26 of the agreement dated January 21, 2000

12.      IMPOSED CONDITIONS

12.1     INFORMATION ON CORPORATE DEVELOPMENT

The BORROWER has to submit the following documents to the LIQUIDATING BANK
during the term of the LOANS:

12.1.1   The BORROWER shall submit his annual financial statement including the
         appendix and the annual report no later than 120 days after the end of
         each fiscal year. The BORROWER shall have the annual financial
         statement audited by a balance sheet auditor acceptable to the BANKS at
         the request of the BANKS and hand over the audit report to the
         LIQUIDATING BANK. The BORROWER shall issue the BANKS appropriate amount
         of all information upon request that the BANKS consider necessary for
         assessing the economic relations of the BORROWER. The BORROWER shall
         apply the principle for corporations in accordance with commercial law
         when preparing the statements.

12.1.2   The BORROWER shall submit statements beginning with the month of
         January 2000 ON A MONTHLY BASIS and from January 2001 ON A QUARTERLY
         BASIS IN WRITING including the BORROWER's profit and loss account,
         balance sheet and cash flow statement as well as information on his
         liquidity situation (the amount of the line claimed, cash on hand)
         including a comparison of the actual figures in relation to the plan
         figures of each BUSINESS PLAN and an explanation of the deviations.
         This information shall be submitted to the LIQUIDATING BANK no later
         than 15 working days and from January 2001 no later than one month
         after the end of the month.

12.1.3   The BORROWER shall submit the signed and updated BUSINESS PLAN for the
         BORROWER for the coming 5 fiscal years 30 days before beginning a new
         fiscal year, for the first time on December 1, 2000.

12.1.4   The BORROWER shall pass on the minutes of all general meetings of
         shareholders of the BORROWER and their resolutions to the LIQUIDATING
         BANK without delay.

12.1.5   The BORROWER shall submit a short report tailor-made to the needs of
         the BANKS on the course of sales & distribution, the purchase contracts
         concluded including the contracting party, the amount payable, the
         duration and other peculiarities, the network status, technical
         availability, operational readiness, the turnover achieved, the
         operating costs and all other reference numbers pursuant to Number 12.4
         and all extraordinary business transactions of the corresponding period
         of time under report on a monthly basis until December of 2000 within
         15 working days after the end of the month and on a quarterly basis
         from January of 2001 within one month after the end of the quarter.
         Beyond this, the LIQUIDATING BANK shall be notified of all
         extraordinary business transactions and significant technical
         malfunctions within one week. Correcting the malfunctions, the costs
         involved in correcting the malfunctions, the corresponding time
         required and other consequences that this has upon the operation of the
         PROJECT shall also be presented. The BANKS shall have the right to
         demand an appropriate adjustment of the report to their needs typical
         for a bank at any time.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 27 of the agreement dated January 21, 2000

12.2     CORPORATE MEASURES REQUIRING INFORMATION

The BORROWER shall instruct the LIQUIDATING BANK in writing on the measures
listed in the following during the term of the LOANS and in this process it
shall explain whether and how these measures affect and will affect the risk
positions of the BANKS:

12.2.1   The intention to claim loans or re-borrowing loan liabilities beyond
         the existing credit line and credit lines, even of liabilities similar
         to loans, with the exception of credit rent to an amount of Euro
         300,000 and the usual supplier loans.

12.2.2   The intention of EXTENDING A LOAN or assuming guaranties or guarantees
         or ASSUMING similar OBLIGATIONS to the extent that they exceed the
         amount of Euro 300,000 altogether.

12.2.3   The intention of MAKING AVAILABLE existing or future assets as
         COLLATERAL to other creditors. The reservations of title, landlord's
         liens and General Terms and Conditions rights of lien usual for the
         industry shall be excepted.

12.2.4   The BORROWER's intention of ACQUIRING COMPANIES and STARTING UP
         BUSINESSES, directly or through subsidiaries or second-tier
         subsidiaries or third parties or transformations, no matter what type
         if they exceed a purchase price or equity capital share of Euro
         2,000,000.

12.2.5   The intention of making essentially new ASSETS and FINANCIAL
         INVESTMENTS that exceed a value of Euro 500,000 and that are not
         contained in the BUSINESS PLAN of November 12, 1999 pursuant to
         Appendix 2.

12.2.6   The intention of MAKING CHANGES IN THE GROUP OF SHAREHOLDERS of the
         BORROWER and its parent company. This shall also apply to changes in
         the interest ratios within the existing group of shareholders. This
         shall not apply to the planned consolidation of Sandler Capital at
         FirstMark International and changes based upon on the stock option plan
         for the employees of the BORROWER amounting to 15% of each nominal
         equity capital.

12.2.7   The intention of MAKING ESSENTIAL CHANGES AND/OR ESSENTIAL EXTENSIONS
         IN THE BUSINESS PURPOSE, especially building up a pan-European network.

12.2.8   All business transaction that have an essentially negative effect and
         can have an essentially negative effect on the assets, liquidity and
         earnings position.

12.2.9   The BORROWER shall additionally inform the LIQUIDATING BANK on
         extraordinary business developments currently and near time.

12.2.10  The intention of changes in the management.

If the risk assessment of the BANKS for their claims from the agreement hereto
increases as a result of these measures, the BANKS, notwithstanding further
claims to subsequent collateralisation, shall have the right to demand from the
BORROWER a strengthening of their collateral while setting a period of time of
at least 20 BANK WORKING DAYS.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 28 of the agreement dated January 21, 2000

12.3     OTHER CONDITIONS IMPOSED

         12.3.1   The BORROWER shall do everything that is in its legal power to
                  NOT TO EFFECT ANY PROFIT DISTRIBUTIONS or other payments to
                  its shareholders or under subordinated loans already extended
                  or still to be extended until June 30, 2003. Interest payments
                  under the GASLINE LOAN AGREEMENT shall be excluded from this
                  to the extent that the interest rate it is based upon does not
                  exceed 9% per annum and there is no grounds for termination
                  pursuant to Number 14. Afterwards, profit distributions or
                  payments from the EXCESS CASH FLOW according to the
                  corresponding OBLIGATORY AMORTISATION shall be possible if the
                  reference number of the consolidated SENIOR DEBT to the
                  consolidated ANNUALISED EBITA falls below 2.0:1 for at least 6
                  consecutive months and does not rise above this level again
                  after the corresponding profit distributions or payments and
                  there is no grounds for termination pursuant to Number 14. The
                  signing shareholders of the BORROWER shall not pass any
                  resolutions or the First Mark Fiber Holdings LLC or FirstMark
                  Communications Europe S.A. in the case of the business shares
                  being effectively transferred before the notary public Dr.
                  Pilger pursuant to the contract dated January 19, 2000, and
                  FirstMark Communications International, LLC shall not pass any
                  resolutions that stand in the way of these obligations. Paying
                  salaries shall be excluded from this.

         12.3.2   The signing shareholders of the BORROWER oblige themselves or
                  the First Mark Fiber Holdings LLC or FirstMark Communications
                  Europe S.A. in the case of the business shares being
                  effectively transferred before the notary public Dr. Pilger
                  pursuant to the contract dated January 19, 2000, and FirstMark
                  Communications International, LLC oblige themselves in a
                  separate support letter not to effect ANY LOWERING OF CAPITAL
                  when the lowering amount is distributed.

         12.3.3   The BORROWER shall not deal in any FUTURES that are
                  SPECULATIVE TRANSACTIONS.

         12.3.4   The BORROWER shall only effect TRANSACTIONS WITHIN THE GROUP
                  at essentially comparable conditions as with third parties
                  that do not belong to the Group, especially acceptance
                  contracts with First Mark Communications Deutschland GmbH.

         12.3.5   The BORROWER shall maintain each of the FINANCIAL COVENANTS
                  specified in Number 12.4 in accordance with the regulations
                  made there.

         12.3.6   The BORROWER shall OPERATE the PROJECT in accordance with
                  RECOGNISED PRACTICE.

         12.3.7   The BORROWER shall do everything in his legal power to
                  maintain all of the permits and IMMATERIAL RIGHTS to the
                  extent that they are necessary for building and operating the
                  PROJECT.

         12.3.8   The BORROWER has to keep all of his buildings, machines, other
                  plants, stocks and similar things sufficiently insured against
                  the usual risks during the term of the loans and TO PROVE THE
                  INSURANCE COVERAGE to the LIQUIDATING BANK.

         12.3.9   The BORROWER shall not effect any asset sales with an
                  accumulated value of more than Euro 500,000 before June 30,
                  2000 without the consent of the BANKS.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 29 of the agreement dated January 21, 2000

12.4     FINANCIAL COVENANTS

The financial covenants refer to each BUSINESS PLAN and the BORROWER shall
comply with them as follows:

<TABLE>

<CAPTION>

12.4.1   Accumulated Minimum Turnover:

                    ON:                                       ACCUMULATED TURNOVER
<S>                 <C>                                                    <C>
                    June 30, 2000                                              8,000 German Marks
                    September 30, 2000                                        17,000 German Marks
                    December 31, 2000                                         30,000 German Marks
                    March 31, 2001                                            40,000 German Marks
                    June 30, 2001                                             55,000 German Marks
                    September 30, 2001                                        65,000 German Marks
                    December 31, 2001                                         85,000 German Marks
                    March 31, 2002                                           100,000 German Marks
                    June 30, 2002                                            125,000 German Marks
                    September 30, 2002                                       150,000 German Marks
                    December 31, 2002                                        170,000 German Marks

12.4.2   Minimum Annualised EBITA:

                    ON:                                       MINIMUM ANNUALISED EBITA

                    June 30, 2000                                       - 23,500,000 German Marks
                    September 30, 2000                                  - 10,000,000 German Marks
                    December 31, 2000                                      3,000,000 German Marks
                    March 31, 2001                                         4,000,000 German Marks
                    June 30, 2001                                          5,000,000 German Marks
                    September 30, 2001                                    10,000,000 German Marks
                    December 31, 2001                                     15,000,000 German Marks
                    March 31, 2002                                        20,000,000 German Marks
                    June 30, 2002                                         30,000,000 German Marks
                    September 30, 2002                                    35,000,000 German Marks
                    December 31, 2002                                     42,000,000 German Marks
                    March 31, 2003                                        43,000,000 German Marks
                    June 30, 2003                                         45,000,000 German Marks
                    September 30, 2003                                    48,000,000 German Marks
                    December 31, 2003                                     51,000,000 German Marks
                    March 31, 2004                                        55,000,000 German Marks
                    June 30, 2004                                         65,000,000 German Marks
                    September 30, 2004                                    70,000,000 German Marks
                    December 31, 2004                                     76,000,000 German Marks
                    March 31, 2005                                        80,000,000 German Marks
                    June 30, 2005                                         85,000,000 German Marks
                    September 30, 2005                                    88,000,000 German Marks
                    December 31, 2005                                     93,000,000 German Marks
                    March 31, 2006                                        95,000,000 German Marks
                    June 30, 2006                                        100,000,000 German Marks
                    September 30, 2006                                   100,000,000 German Marks

</TABLE>

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 30 of the agreement dated January 21, 2000

12.4.3   The maximum ratio of the "SENIOR DEBT to the consolidated ANNUALISED
         EBITA"

<TABLE>

<CAPTION>

                    AFTER:                              MINIMUM ANNUALISED EBITA
                    -----                               ------------------------
<S>                                                                     <C>
                    June 30, 2001                                      11.00
                    September 30, 2001                                  7.00
                    December 31, 2001                                   5.00
                    March 31, 2002                                      4.00
                    June 30, 2002                                       2.25
                    September 30, 2002                                  2.25
                    December 31, 2002                                   2.00
                    March 31, 2003                                      2.00
                    June 30, 2003                                       2.00
                    September 30, 2003                                  2.00
                    December 31, 2003 and afterwards                    1.50

12.4.4   The minimum DEBT SERVICING COVERING RATIO:

                  FROM:             minimum DEBT SERVICING COVERING RATIO

                    March 31, 2002 to March 30, 2004                     1.1
                    March 31, 2004 to the end of the loan term           1.5

</TABLE>

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 31 of the agreement dated January 21, 2000

13.      THE PREREQUISITES FOR PAYING OUT

The prerequisite for paying out the borrowed funds shall be that the following
documents are submitted or certified. They have to satisfy the requirements of
the content and form of this credit agreement.

13.1     Submitting a certified copy of the current articles of partnership and
         excerpts from the commercial register of the BORROWER in the version
         valid when the contract is concluded.

13.2     Submitting the PROJECT CONTRACTS

13.3     Proof of the inflow of equity capital amounting to Euro 32,200,000 and,
         to the extent that residual funds are available, payment to the account
         mentioned in Number 11

13.4     Submitting the BUSINESS PLAN accepted by the BANKS that was prepared
         based upon the overall economic data of the project contracts specified
         under Number 13.2. It shall be submitted on electronic data carriers
         whose present version of the content is a component of the agreement
         hereto in a printed version as Appendix 2. Each updated version shall
         be prepared pursuant to Number 12.1.3 and shall then be a component of
         the agreement hereto in exchange with Appendix 2.

         The economic content of the BUSINESS PLAN dated November 12, 1999 has
         to continue to be valid at the point in time of payment.

13.5     Submitting a satisfactory final report of the independent consultant of
         the banks, DDV Telecommunications & Media Consultants.

13.6     Concluding this credit agreement in a legally effective manner

13.7     Ordering the collateral agreed upon in Number 10 in a legally effective
         manner using the forms and patterns prescribed by the COLLATERAL POOL
         LEADER.

13.8     Complying with the financing covenants specified in Number 12.4 that
         also have to be complied with after each payment.

13.9     Submitting the class 3 telecommunications license and all other permits
         required for building up and operating the PROJECT

13.10    A confirmation of the BORROWER on his Year-2000 compliance.

13.11    Submitting the loan collateralisation guaranty of the GUARANTOR.

13.12    Submitting an updated form of all of the insurance policies relevant at
         the point in time of payment.

13.13    Payments for supplies and services that the BORROWER has received under
         the NORTEL DASA CONTRACT shall only be possible after FIELD ACCEPTANCE
         upon submitting the field acceptance certificate.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 32 of the agreement dated January 21, 2000

13.14    Submitting a legal opinion satisfying the form and content requirements
         of the banks on the formal obligations of FirstMark Communications
         International and the formal obligations of and declarations on
         pledging the business shares of LAMBDANET of FirstMarkFiber Holdings
         LLC or FirstMark Communications Europe S.A. in the case of the business
         shares being effectively transferred before the notary public Dr.
         Pilger pursuant to the contract dated January 19, 2000.

13.15    A confirmation from NORTEL DASA that the property of the equipment
         delivered under the NORTEL DASA CONTRACT passes over to the borrower if
         50% of the purchase price is paid.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 33 of the agreement dated January 21, 2000

14.      POSSIBILITIES FOR TERMINATION / WITHDRAWAL

14.1     The BANKS shall be entitled

         -  to terminate the LOANS extended pursuant to the AGREEMENT hereto
            wholly or partially for an important reason and to require that they
            be due for immediate payment and/or

         -  to withdraw from the agreement hereto and/or

         -  to deny payment of loans or parts of loans not yet extended

         if especially one of the following events occurs.

14.1.1   The BORROWER has made incorrect or incomplete statements in the
         preamble or elsewhere that were of significant importance for the
         decision of the BANK to extend credit.

14.1.2   The LOANS were not used pursuant to the purpose regulated in Number 2.

14.1.3   The prerequisites for pay-out pursuant to Number 13 were not complied
         with within 6 months after signing the agreement hereto or become
         subsequently ineffective.

14.1.4   The BORROWER does not comply with his obligation to order collateral
         pursuant to Number 10 or to strengthen collateral pursuant to Number
         12.2 of the agreement hereto within the appropriate period of time set
         by the LIQUIDATING BANK. The LIQUIDATING BANK shall refer to the legal
         consequences of termination if the period expires unsuccessfully.

14.1.5   The BORROWER does not comply with his obligation to reveal his economic
         relations pursuant to Number 12.1 or only insufficiently.

14.1.6   The BORROWER comes into arrears with interest or amortisation payments
         or other obligations to pay or seriously and finally refuses said
         payments.

14.1.7   The BORROWER or third parties do not comply with other obligations of
         the AGREEMENT hereto or from other obligations assumed in connection
         with the agreement hereto, especially pursuant to Numbers 12.2, 12.3
         and 12.4 within the appropriate period of time set by the LIQUIDATING
         BANK and this leads to endangering the liabilities towards the BANKS.
         The LIQUIDATING BANK shall refer to the legal consequences of
         termination if the period expires unsuccessfully.

14.1.8   Achieving the purpose pursuant to Number 2 is excluded or endangered.
         This is especially to be assumed if the PROJECT is not started by April
         1, 2000, the network management center is destroyed, essential PROJECT
         CONTRACTS do not (no longer) exist or existing PROJECT CONTRACTS are
         not complied with, the permits and other intangible rights necessary
         for building and operating the PROJECT do not (no longer) exist or the
         PROJECT is not (no longer) carried out in the planned fashion.

14.1.9   The implementation of the collateral pursuant to Number 10 is excluded
         or endangered. This is especially to be assumed if the collateral
         experiences a not

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 34 of the agreement dated January 21, 2000

         insignificant devaluation after being ordered that is outside of the
usual loss in value by use.

14.1.10  A significant worsening of the BORROWER's financial situation occurs or
         threatens to occur and leads to an endangering of the claims and rights
         of the BANKS.

14.1.11  Compulsory execution is initiated on the assets of the BORROWER and/or
         the GUARANTOR and not cancelled again within 4 weeks and the BORROWER
         and and/or the GUARANTOR have not shown the lack of justification and
         permissibility of the compulsory execution in a fashion that is
         satisfactory to the BANKS.

14.1.12  The BORROWER has stopped his payments or court insolvency proceedings
         on his assets were petitioned for and not cancelled again within 4
         weeks or said proceedings were opened.

14.1.13  Essential Project AGREEMENTS are terminated or suspended, especially
         the NORTEL DASA AGREEMENT.

14.1.14  The BORROWER does not comply with his obligations to pay amounting to
         Euro 100,000 towards other creditors when it is due or demands of other
         creditors for this amount become due before the point in time provided.

14.1.15  The amount available under TRANCHE B is reduced in retrospect as a
         result of QUALIFIED PURCHASING AGREEMENTS becoming non-applicable and
         funds were drawn that exceed this reduced amount available to the
         extent that the funds drawn exceeding the amount available are not paid
         back within 30 days after it becoming non-applicable or the amount
         available is raised at least to the amount that covers the amount
         exceeded by submitting new QUALIFIED PURCHASING AGREEMENTS. This would
         not correspond to the purpose of TRANCHE A.

14.2     The LIQUIDATING BANK shall warn the BORROWER of termination or
         withdrawal pursuant to the above Numbers 14.1.3., 14.1.5, 14.1.6 and
         14.1.14 with a period of time of 10 BANK WORKING DAYS in writing.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 35 of the agreement dated January 21, 2000

15.      SUBPARTICIPATION/TRANSFER (SYNDICATION)

With business loans to entrepreneurs, the BANKS may concede subparticipation to
members of the European System of Central Banks, banks, financial service
companies, financial companies, insurance companies, institutional investors,
funds, pension funds, company pension systems and comparable institutions while
observing the usual banking customs and effect transfers with reference to the
rights and obligations of this CREDIT AGREEMENT, especially assigning, pledging
or transferring loan demands together with the collateral belonging to them,
either wholly or in partial amounts, to the group of persons mentioned above.
The BANKS may effect said measures especially for diversifying risk, optimising
equity capital and re-financing.

The BORROWER shall exempt the BANKS from its obligation to maintain secrecy to
the extent that it is necessary for carrying out the measures described above.

The group of persons mentioned above assuming the agreement hereto shall require
the consent of the BORROWER and also the consent of the GUARANTOR if the persons
mentioned above have a rating poorer than investment grade. Consent may not be
refused without an important reason.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 36 of the agreement dated January 21, 2000

16.      FINAL PROVISIONS

16.1     CHOICE OF LAW/VENUE

The law of the Federal Republic of Germany shall apply. The venue and place of
performance shall be Frankfurt am Main.

16.2     WRITTEN FORM

Oral subsidiary agreements were not made. Modifications to the agreement hereto
shall require the written form. This shall also apply to suspending the
agreement on the written form.

16.3     SAVING CLAUSE

Should one or several of the provisions of the CONTRACT hereto be wholly or
partially invalid or prove to be unenforceable, the validity of the rest of the
agreement hereto shall otherwise not be affected by this. The parties shall
replace the wholly or partially invalid or unenforceable provisions with a valid
provision that corresponds to the economic purpose desired and that comes as
close as possible to the content of the provision to be replaced. This shall
apply accordingly if it comes to light that the CONTRACT hereto has gaps in the
regulations.

16.4     SECTION 8 OF GELDWASCHEGESETZ (GERMAN MONEY LAUNDERING LAW)

The BORROWER assures the BANKS that extend the loan to the BORROWER who acts on
own account that he is taking out the loan exclusively for his own account and
that he is therefore the sole economically authorised party in the intendment of
Section 8 of Geldwaschegesetz (German Money Laundering Law).

16.5     NOTIFICATION

All declarations of will and notifications in connection with the agreement
hereto shall be made in writing by letter or fax and shall be sent to the
addresses specified in the following:

FOR THE BORROWER:

LambdaNet Communications GmbH
Gunther-Wagner-Allee 10
30177 Hannover

fax: (0511) 879-77339

FOR THE LIQUIDATING BANK:
Dresdner Bank AG, Ulm Branch Office
Neue Strasse 80
89073 Ulm

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 37 of the agreement dated January 21, 2000

Mr. Matthias Faulhaber
telephone: (0731) 151-3170
fax: (0731) 151-3170 or 114
E-mail: matthias.faulhaber@dresdner-bank.com

Ms. Antje Engel
telephone: (0731) 151-3272
fax: (0731) 151-3170 or 114
E-mail: antje.engel@dresdner-bank.com

with a copy to
The Headquarters of the Dresdner Bank AG
Manzer Landtrasse 46, 9th floor
60301 Frankfurt

Mr. Alexander Kahland
telephone: (069) 263-10214
fax: (069) 253-11061
E-mail: alexander.kahland@dresdner-bank.com

16.6     CHANGES FOR SYNDICATION

Should one or several provisions of the agreement hereto prove to be an
impediment for the bank to syndicate the loan pursuant to Number 14 as a result
of the way they are formulated, the parties shall jointly put in their best
efforts in mutual agreement to replace these formulations with formulations that
are acceptable to the syndication partners that come as close as possible to the
original formulations.

16.7     PUBLICATIONS

Publications on this transaction shall only be made in mutual agreement.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 38 of the agreement dated January 21, 2000

SIGNATURES

Munich, January 21, 2000            /s/
                                    --------------------------------------------
                                    LambdaNet Communications GmbH

Munich, January 21, 2000            /s/
                                    --------------------------------------------
                                    Dresdner Bank AG

Munich, January 21, 2000            /s/
                                    --------------------------------------------
                                    Bayerische Hypo- und Vereinsbank AG

Munich, January 21, 2000            /s/
                                    --------------------------------------------
                                    Kreditanstalt fur Wiederaufbau

The shareholders of LambdaNet listed in the following declare that they are in
agreement with assuming the obligations resulting from Numbers 12.3.1 and 12.3.2

         (JANUARY 21, 2000)         /s/ Dr. Dieter Finke
---------------------------         -----------------------------------------
city, date                          Dr. Dieter Finke

         (JANUARY 21, 2000)         /s/ Dr. Bernd Jager
---------------------------         -----------------------------------------
city, date                          Dr. Bernd Jager

         (JANUARY 21, 2000)         /s/ Dr. Stefan Sattler
---------------------------         -----------------------------------------
city, date                          Dr. Stefan Sattler

(*) as representatives without power of representation excluding liability
pursuant to Section 199 of Burgerliches Gesetzbuch (the German Civil Code)

for the civil-law association:

      (JANUARY 21, 2000)           /s/
---------------------------        -------------------------------------------
city, date

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 39 of the agreement dated January 21, 2000

The third party providing security listed in the following, NORTEL DASA,
declares that it is in agreement with assuming the obligations resulting from
Number 10.4.

Munich, January 21, 2000        /s/
                                -------------------------------------------
                                Nortel Dasa Network Systems GmbH & Co. KG

The legitimisation of the BORROWER, the shareholders signing and the GUARANTOR
were examined pursuant to 154 of Amtsordnung (the German Official Rules) (there
is a copy of the identity card or passport of the acting organisational
members).

(*) as representatives without power of representation excluding liability
pursuant to Section 199 of Burgerliches Gesetzbuch (the German Civil Code)
<PAGE>

                                   negotiated

                             at [...] on xx xx, xxxx

                        before the notary public signing

                                      [...]

                                    in [...]

The following persons appeared before me today:

1.   Mr. ________ , not negotiating here in his own name, rather in the name of
     FirstMark Communications EUROPE S.A.,

          - hereinafter referred to as the "PARTY FURNISHING COLLATERAL" OR
          "FIRSTMARK" -

2.   Dr. Dieter Finke, born on January 28, 1954, residing in Neuer Kamp 20,
     29336 Nienhagen

3.   Mr. Bjorn Claassen, born on April 15, 1962, residing in Engenser Strasse
     14, 30938 Burgwedel

4.   Mr. Jochen Krauss, born on October 13, 1962, residing in
     Wilhem-Busch-Strasse 6, 38302 Wolfenbuttel

5.   Mr. Jorg Gimmler, born on December 24, 1964, residing in Lohfelde 3 - 5,
     30989 Lemmie

6.   Dr. Michael Klein, born on April 9, 1951, residing in Schwabenweiher 14,
     91207 Lauf an der Pegnitz

7.   Mr. Andreas Niehaus, born on July 25, 1965, residing in Schlossstrasse 53,
     40477 Dusseldorf

8.   Mr. Jan Verner, born on October 21, 1951, residing in Camberger Strasse 30,
     65597 Hunfelden

9.   Ms. Katharina Siebert, maiden name Morbach, born on June 9, 1961, residing
     in Heinrich-Jasper-Weg 20 A, 30457 Hannover

10.  Mr. Bernhard Wicht, born on October 30, 1952, residing in Welzheimer
     Strasse 29, 70736 Fellbach

11.  Mr. Peter Schlichter, born on January 30, 1966, residing in Friedensstrasse
     17, 41539 Dortmagen

12.  Mr. Frank Autenrieth, born on January 6, 1965, residing in Brahmsstrasse 7,
     31134 Hildesheim

<PAGE>

             CONTRACT OF PLEDGE FOR LIMITED-LIABILITY COMPANY SHARES
                 page 2 of the agreement dated January 21, 2000

13. Mr. Craig Shealy, born on May 13, 1975, residing in _______________

as partners in a civil-law association

-    Numbers 2 to 11 hereinafter referred to jointly as "PARTIES FURNISHING
     COLLATERAL" or "CIVIL-LAW ASSOCIATION"

Number 1 and Number 2 to 11 hereinafter referred to jointly as "PARTIES
FURNISHING COLLATERAL"

14.  [ _____________ ], not negotiating here in his or her own name, rather in
     the name of Bayerische Hypo-und Vereinsbank Aktiengesellschaft, Munich

                    - hereinafter referred to as "HVB" -

15.  [ _____________ ], not negotiating here in his or her own name, rather in
     the name of Dresdner Bank AG, under the proviso of their approval that is
     supposed to be legally valid when it is received by the officiating notary
     public.

                    - hereinafter referred to as "DREBA" -

16.  [ _____________ ], not negotiating here in his or her own name, rather in
     the name of Kreditanstalt fur Wiederaufbau, under the proviso of their
     approval that is supposed to be legally valid when it is received by the
     officiating notary public.

                    - hereinafter referred to as "KFW" -

     Hereinafter, HVB, DreBa and KfW shall be referred to individually and/or
                    jointly as the "BANKS" or "LIEN CREDITORS"

     [ _____________ ] declare the following with the request that the following
     CONTRACT OF PLEDGE be recorded:

<PAGE>

             CONTRACT OF PLEDGE FOR LIMITED-LIABILITY COMPANY SHARES
                 page 3 of the agreement dated January 21, 2000

PREAMBLE

     The PARTIES FURNISHING COLLATERAL hold 87.5% of the business shares of
LambdaNet Communications GmbH that carried on business before October 1, 1999
under the firm of CCG Carriers Carrier Gesellschaft mbH in its set-up phase,
entered in the Commercial Register of the Hannover Local Court in department B
under number HRB 57818 (hereinafter referred to as "LAMBDANET") pursuant to the
shareholder agreement dated April 21, 1999, document number 208 of notary public
Gunter Waje in the district of the Celle Higher Regional Court with his office
in Hannover, Berliner Alle 13. Its capital stock consists of total business
shares of a nominal 200,000 Euros (in words: two-hundred thousand Euros), that
is held as follows:
a)   FIRSTMARK holds a share of 160,000 Euros (in words: one-hundred sixty
     thousand Euros). FirstMark holds a share of this amounting to 10,000
     Euros in trust for the CIVIL-LAW ASSOCIATION.
b)   The CIVIL-LAW ASSOCIATION holds a share of 15,000 Euros (in words: fifteen
     thousand Euros).
c)   DR. DIETER FINKE holds a share of 11,700 Euros (in words: eleven thousand
     seven hundred Euros).
d)   DR. JAGER holds a share of 6,650 Euros (in words: six thousand six hundred
     fifty Euros).
e)   DR. SATTLER holds a share of 6,650 Euros (in words: six thousand six
     hundred fifty Euros).

The business shares have been completely paid in and there is not any liability
to make further contributions. The PARTIES FURNISHING COLLATERAL are entitled to
the right to draw a share of profits going to the business shares together with
these business shares that FirstMark also only holds in trust with reference to
the shares only held in trust.

The BANKS shall provide LAMBDANET (hereinafter also referred to as "BORROWER")
based upon a Basic Project Credit Agreement still to be concluded (hereinafter
referred to as CREDIT AGREEMENT") with a loan facility amounting to Euro
56,000,000.

<PAGE>

             CONTRACT OF PLEDGE FOR LIMITED-LIABILITY COMPANY SHARES
                 page 4 of the agreement dated January 21, 2000

1.   DECLARATION OF PLEDGE AND ORDERING A LIEN

The PARTIES FURNISHING COLLATERAL pledge the BANKS their entire business shares
specified above with equal ranking, also to the extent that they are held in
trust for third parties, and all future business shares of LambdaNet
Communications GmbH.

The entire present and future claims of the PARTIES FURNISHING COLLATERAL
resulting from the shares with equal ranking are also pledged to the BANKS,
especially the claims to have the profit shares and credit balance paid in case
of partition if they leave the company or if it is dissolved.

The other membership rights linked to the interest holdings, especially voting
rights, shall remain with the PARTIES FURNISHING COLLATERAL. The PARTIES
FURNISHING COLLATERAL shall not effect any legal transactions or actions through
which the right of lien of the BANKS would be thwarted or impaired, especially
not any legal transactions or actions that aim at lowering the value of the
business shares pledged as the pledged property.

2.   THE PURPOSE OF THE COLLATERAL

Pledging the business shares pursuant to Number 1 serves the purpose of securing
all existing, future or conditional claims that the BANKS are entitled to with
all domestic and foreign business offices and domestic and foreign subsidiaries
from extending the loan pursuant to the CREDIT AGREEMENT still to be concluded
including any addenda/supplements against LambdaNet.

3.   POWER OF DISPOSAL AND FREEDOM FROM ENCUMBRANCE

Each PARTY FURNISHING COLLATERAL assures that he or she is the unrestricted
owner of his or her business share and especially that this pledged business
share has not already been transferred to third parties or is encumbered with
the rights of third parties. Furthermore, FIRSTMARK assures that it is entitled
to pledge the share that it holds in trust and to conclude this agreement and
that it is in a position to comply with the obligations assumed in this
agreement based upon the informal trusteeship agreement.

Furthermore, each PARTY FURNISHING COLLATERAL assures that the business share
pledged by him or her has been completely paid in. Each PARTY FURNISHING
COLLATERAL shall NEITHER SELL THE WHOLE NOR PARTIAL pledged business SHARE
WITHOUT THE PRIOR WRITTEN CONSENT OF THE Banks nor dispose of it otherwise. An
exception to this shall be transfers to FirstMark Fiber Holdings, LLC or their
legal successors to the extent that the rights of the Banks from this lien are
not affected disadvantageously by that.

Should the rights and claims be pledged or impaired in any other fashion, the
PARTIES FURNISHING COLLATERAL shall inform the BANKS of this without delay and
inform the pledge creditor(s) of the security rights of the Banks in writing
without delay.

Each of the PARTIES FURNISHING COLLATERAL shall remain entitled as pledge
creditors to receive profit distributions, other payments and the liquidation
proceeds if the company is dissolved until the BANKS revoke this right. The
BANKS may revoke this right at any time.

<PAGE>

             CONTRACT OF PLEDGE FOR LIMITED-LIABILITY COMPANY SHARES
                 page 5 of the agreement dated January 21, 2000

4.   WAIVING CLAIMS FOR ADJUSTMENT TOWARDS THE COMPANY

To the extent that the PARTIES FURNISHING COLLATERAL are entitled to claims
towards LambdaNet based upon this lien, they shall herewith waive asserting
them.

5.   WAIVING PLEA

The PARTIES FURNISHING COLLATERAL waive the pleas of the contestability of the
Credit Agreement and the possibility of setting off demands from the CREDIT
AGREEMENT (Sections 770 and 1211 of Burgerliches Gesetzbuch the German Civil
Code).

6.   UTILISATION

The PLEDGE CREDITORS are entitled to utilise the pledged business shares of
LAMBDANET if LAMBDANET is in arrears with payments due on the demands
collateralsed with the agreement hereto in spite of an appropriate subsequent
period being set.

The BANKS shall threaten the PARTIES FURNISHING COLLATERAL with utilisation in
writing setting a period ahead of time. This threat may be linked to a request
for payment. The period shall be one month.

It shall not be necessary to threaten or set a period if LAMBDANET has stopped
payment or if opening court insolvency proceedings on its assets have been
petitioned for.

If the prerequisites under which the BANKS are entitled to utilise the pledged
property are complied with, they may publicly auction off the business shares
pledged to them to the highest bidder in accordance with their dutiful
discretion without an enforceable judgement. This auction may be carried out at
any place in the Federal Republic of Germany. They may be sold by way of public
auctioning that the BANKS shall threaten with a period of four weeks for cash
payment or on credit.

Furthermore, the BANKS shall be entitled to solely collect the claims also
pledged. They shall not be obliged to keep to the pledged property.

The BANKS shall take the justified concerns of the PARTIES FURNISHING COLLATERAL
into consideration in this process. The PARTIES FURNISHING COLLATERAL agree to
the business shares being transferred to third parties in the case of
utilisation when they sign this contract of pledge.

7.   ACCEPTING THE CONTRACT

The BANKS herewith accept the offer to pledge the above mentioned business
shares.

8.   APPROVAL OF THE COMPANY/SHAREHOLDERS; NOTICE/CONSENT OF THE TRUSTOR

To the extent that pledging the business shares requires the approval of the
general meeting of shareholders and/or the shareholders pursuant to the articles
of partnership, the PARTIES FURNISHING COLLATERAL oblige themselves to bring
about this approval and to submit it to the BANKS in written form through the
recording notary public. The PARTIES FURNISHING COLLATERAL herewith commission
the notary public to give notice of the lien to the company.

<PAGE>

             CONTRACT OF PLEDGE FOR LIMITED-LIABILITY COMPANY SHARES
                 page 6 of the agreement dated January 21, 2000

The CIVIL-LAW ASSOCIATION as trustor agrees to the lien of the partnership
shares held by FIRSTMARK in trust for it amounting to Euro 10,000. FIRSTMARK
herewith commissions the notary public to give notice of the lien to the
company.

9.   OBLIGATIONS TO PROVIDE INFORMATION

The PARTIES FURNISHING COLLATERAL shall provide the BANKS with all information,
proofs and documents upon request that are necessary for checking, evaluating
and asserting the demands linked to the pledged business shares.

The PARTIES FURNISHING COLLATERAL shall allow the BANKS to inspect their
documents with reference to this for checking and asserting the pledged rights
and claims.

10.  WHOLLY OR PARTIALLY ASSIGNING THE DEMANDS COLLATERALISED BY THE RIGHT OF
     LIEN

The BANKS wholly or partially assigning the demands collateralised by means of
the right of lien shall not lead to the loss of the original right of lien or to
one or several new rights of lien coming about, rather it shall leave the right
of lien unaffected.

11.  THE BANKS' OBLIGATION TO RELEASE

After satisfying their claims collateralised by this lien, the BANKS shall issue
the PARTIES FURNISHING COLLATERAL a confirmation that the lien has been disposed
of upon their request.

The BANKS are obliged to release the collateral (such as property whose
ownership has been assigned, assigned demands) wholly or partially to the
PARTIES FURNISHING COLLATERAL upon the request of the PARTIES FURNISHING
COLLATERAL at their choice even before the claims collateralised by this lien
have been completely satisfied to the extent that that the recoverable value of
all collateral exceeds 110% of the BANKS' collateralised claims not just for a
temporary period of time.

The recoverable value of the business shares shall correspond to its fair market
value, i.e. the amount that could be reached as a price in usual business
transactions through selling in accordance with the consistency of the shares.
To the extent that shares of the company were disposed of in each of the past
years, the fair market value of the shares collateralised shall correspond to
the proceeds of the shares sold to the extent that the nominal value agrees
here. Otherwise, the proceeds shall be raised or lowered at the ratio of the
nominal amounts. Each PARTY FURNISHING COLLATERAL shall be reserved the right to
prove a higher value.

12.      ADDITIONAL AGREEMENTS

Additional agreements to the agreement hereto shall require the written form to
the extent that the law does not prescribe the notarial form. The same shall
apply to suspending the agreement on the written form.

13.      COSTS

The PARTIES FURNISHING COLLATERAL shall bear the costs including taxes and
outlays that arise from ordering and utilising the right of lien and the
business shares affected by that or other rights as joint and several debtors.

<PAGE>

             CONTRACT OF PLEDGE FOR LIMITED-LIABILITY COMPANY SHARES
                 page 7 of the agreement dated January 21, 2000

14.  PLACE OF PERFORMANCE AND VENUE

The place of performance and venue for all of the obligations arising out of the
agreement hereto shall be Frankfurt am Main. The law of the Federal Republic of
Germany shall apply.

15.  SAVING CLAUSE

Should one or several of the provisions of the agreement hereto be not legally
valid or unenforceable, the validity of the rest of the content of the agreement
hereto shall not be affected by this. The parties shall replace the wholly or
partially invalid or unenforceable provisions with a valid provision that
corresponds to the economically desired purpose and that comes as close as
possible to the content of the provision to be replaced. This shall apply
accordingly if it subsequently comes to light that the agreement hereto has gaps
in the regulations.

16.  GENERAL TERMS AND CONDITIONS

The General Terms and Conditions of HVB shall apply supplementally. They are
already known to the PARTY FURNISHING COLLATERAL and they may otherwise be
inspected at any business office of HVB. HVB can also send this to him/her upon
request.

17.  COPIES

15 copies shall be made of the agreement hereto. Each contractual party and
LAMBDANET shall receive one copy.

The above record was read to the persons who appeared before the notary public,
approved by the persons who appeared and signed as follows by their own hand.

[...], (date) [...]                /s/
                                   ---------------------------------------------
                                   FIRSTMARK COMMUNICATIONS EUROPE  S.A.

[...], (date) [...]                /s/ Dr. Dieter Finke
                                   ---------------------------------------------
                                   Dr. Dieter Finke

[...], (date) [...]                /s/ Dr. Dieter Finke
                                   ---------------------------------------------
                                   Dr. Dieter Finke

[...], (date) [...]                /s/ Bjorn Claasen
                                   ---------------------------------------------
                                   Mr. Bjorn Claasen

<PAGE>

             CONTRACT OF PLEDGE FOR LIMITED-LIABILITY COMPANY SHARES
                 page 8 of the agreement dated January 21, 2000

[...], (date) [...]                /s/ Jochen Krauss
                                   ---------------------------------------------
                                   Mr. Jochen Krauss

[...], (date) [...]                /s/ Dr. Jorg Gimmler
                                   ---------------------------------------------
                                   Dr. Jorg Gimmler

[...], (date) [...]                /s/ Dr. Michael Klein
                                   ---------------------------------------------
                                   Dr. Michael Klein

[...], (date) [...]                /s/ Andreas Niehaus
                                   ---------------------------------------------
                                   Mr. Andreas Niehaus

[...], (date) [...]                /s/ Jan Verner
                                   ---------------------------------------------
                                   Mr. Jan Verner

[...], (date) [...]                /s/ Katharina Siebert
                                   ---------------------------------------------
                                   Ms. Katharina Siebert

[...], (date) [...]                /s/ Bernhard Wicht
                                   ---------------------------------------------
                                   Mr. Bernhard Wicht

[...], (date) [...]                /s/ Peter Schlichter
                                   ---------------------------------------------
                                   Mr. Peter Schlichter

<PAGE>

             CONTRACT OF PLEDGE FOR LIMITED-LIABILITY COMPANY SHARES
                 page 9 of the agreement dated January 21, 2000

[...], (date) [...]                /s/
                                   ---------------------------------------------
                                   Bayerische Hypo- und Vereinsbank AG

[...], (date) [...]                /s/
                                   ---------------------------------------------
                                   Dresdner Bank AG

[...], (date) [...]                /s/
                                   ---------------------------------------------
                                   Kreditanstalt fur Wiederaufbau

Pursuant to the specification of Article 1 of the protocol of the Brussel EWG
Treaty on the responsibility for and the execution of rulings in civil cases
and commercial causes, FirstMark Communications EUROPE S.A. expressly accepts
the venue clause contained in Article 14 of this treaty.

[...], (date) [...]
                                   ---------------------------------------------
                                   FirstMark Communications EUROPE  S.A.

<PAGE>

             CONTRACT OF PLEDGE FOR LIMITED-LIABILITY COMPANY SHARES
                 page 10 of the agreement dated January 21, 2000

THE COMPANY IS HEREWITH GIVEN NOTICE OF THE LIEN THAT TAKES NOTICE OF THE
AGREEMENT HERETO WITH CONSENT.

[...], (date) [...]                /s/
                                   ---------------------------------------------
                                   LambdaNet Communications GmbH,
                                   represented by its managing director,
                                   Dr. Dieter Finke

<PAGE>

                                   negotiated

                             at [...] on xx xx, xxxx

                        before the notary public signing

                                      [...]

                                    in [...]

The following persons appeared before me today:

1.   Dr. Dieter Finke, engineer, born on January 28, 1954, residing in Neuer
     Kamp 20, 29336 Nienhagen

2.   Dr. Bernd Jager, master's degree in economics, born on June 10, 1963,
     residing in Wilhelm-Levindon-Strasse 18, 53115 Bonn

3.   Dr. Stefan Sattler, master's degree in physics, born on June 20, 1965,
     residing in Heideweg 41, 53332 Bornheim

-    hereinafter referred to individually as the "PARTY FURNISHING COLLATERAL"
     or all jointly as "THE PARTIES

     FURNISHING COLLATERAL"

4.   [ _____________ ], not negotiating here in his own name, rather in the name
     of Bayerische Hypo- und Vereinsbank Aktiengesellschaft, Munich

                      - hereinafter referred to as "HVB" -

5.   [ _____________ ], not negotiating here in his own name, rather in the name
     of Dresdner Bank AG, under the proviso of its approval that is supposed to
     be legally valid when it is received by the officiating notary public.

                     - hereinafter referred to as "DREBA" -

6.   [ _____________ ], not negotiating here in his own name, rather in the name
     of Kreditanstalt fur Wiederaufbau, under the proviso of its approval that
     is supposed to be legally valid when it is received by the officiating
     notary public.

                      - hereinafter referred to as "KFW" -

     Hereinafter, HVB, DreBa and KfW shall be referred to individually and/or
     jointly as the "BANKS" or "LIEN CREDITORS"

[ _____________ ] declared the following with the request that the following
CONTRACT OF PLEDGE be recorded:

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                    page 2 of the agreement dated xx xx, xxxx

PREAMBLE

    The PARTIES FURNISHING COLLATERAL hold 12.5% of the business shares of
LambdaNet Communications GmbH that carried on business before October 1, 1999
under the firm of CCG Carriers Carrier Gesellschaft mbH in its set-up phase,
entered in the Commercial Register of the Hannover Local Court in department
B under number HRB 57818 (hereinafter referred to as "LAMBDANET") pursuant to
the shareholder agreement dated April 21, 1999, document number 208 of notary
public Gunter Waje in the district of the Celle Higher Regional Court with
his office in Hannover, Berliner Alle 13. Its capital stock consists of total
business shares of a nominal 200,000 Euros (in words: two-hundred thousand
Euros), that is held as follows:

a)   Dr. Finke holds a share of 11,700 Euros (in words: eleven thousand seven
     hundred Euros).

b)   Dr. Jager holds a share of 6,650 Euros (in words: six thousand six hundred
     fifty Euros).

c)   Dr. Sattler holds a share of 6,650 Euros (in words: six thousand six
     hundred fifty Euros).

d)   FirstMark Communications EUROPE S.A. (FirstMark) holds a share of 160,000
     Euros (in words: one-hundred sixty thousand Euros). FirstMark holds a share
     of this amounting to 10,000 Euros in trust for the civil-law association
     mentioned under e).

e)   A civil-law association consisting of shareholders of Lambdanet holds a
     share of 15,000 Euros (in words: fifteen thousand Euros).

The business shares have been completely paid in and there is not any liability
to make further contributions. The PARTIES FURNISHING COLLATERAL are entitled to
the right to draw a share of profits going to the business shares together with
the business shares.

The BANKS shall provide LAMBDANET (hereinafter also referred to as the
"BORROWER") based upon a Basic Project Credit Agreement still to be concluded
(hereinafter referred to as CREDIT AGREEMENT") with a loan facility amounting to
Euro 56,000,000.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                    page 3 of the agreement dated xx xx, xxxx

1.       DECLARATION OF PLEDGE AND ORDERING A LIEN

The PARTIES FURNISHING COLLATERAL pledge the BANKS their entire business shares
specified above with equal ranking and all future business shares of LambdaNet
Communications GmbH.

The entire present and future claims of the PARTIES FURNISHING COLLATERAL
resulting from the shares with equal ranking are also pledged to the BANKS,
especially the claims to have the profit shares and credit balance paid in case
of partition if they leave the company or if it is dissolved.

The other membership rights linked to the interest holdings, especially voting
rights, shall remain with the PARTIES FURNISHING COLLATERAL. The PARTIES
FURNISHING COLLATERAL shall not effect any legal transactions or actions through
which the right of lien of the BANKS would be thwarted or impaired, especially
not any legal transactions or actions that aim at lowering the value of the
business shares pledged as the pledged property.

2.       THE PURPOSE OF THE COLLATERAL

Pledging the business shares pursuant to Number 1 serves the purpose of securing
all existing, future or conditional claims that the BANKS are entitled to with
all domestic and foreign business offices and domestic and foreign subsidiaries
from extending the loan pursuant to the CREDIT AGREEMENT still to be concluded
including any addenda/supplements against LambdaNet.

3.       POWER OF DISPOSAL AND FREEDOM FROM ENCUMBRANCE

Each PARTY FURNISHING COLLATERAL assures that he is the unrestricted owner of
his business share and especially that this pledged business share has not
already been transferred to third parties or is encumbered with the rights of
third parties.

Furthermore, each PARTY FURNISHING COLLATERAL assures that the business share
pledged by him has been completely paid in. Each PARTY FURNISHING COLLATERAL
shall NEITHER SELL THE WHOLE NOR PARTIAL pledged business SHARE WITHOUT THE
PRIOR WRITTEN CONSENT OF THE Banks nor dispose of it otherwise. An exception to
this shall be transfers to FirstMark Fiber Holdings, LLC or their legal
successors to the extent that the rights of the Banks from this lien are not
affected disadvantageously by that.

Should the rights and claims be pledged or impaired in any other fashion, the
PARTIES FURNISHING COLLATERAL shall inform the BANKS of this without delay and
inform the pledge creditor(s) of the security rights of the Banks in writing
without delay.

Each of the PARTIES FURNISHING COLLATERAL shall remain entitled as pledge
creditors to receive profit distributions, other payments and the liquidation
proceeds if the company is dissolved until the BANKS revoke this right. The
BANKS may revoke this right at any time.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                    page 4 of the agreement dated xx xx, xxxx

4.       WAIVING CLAIMS FOR ADJUSTMENT TOWARDS THE COMPANY

To the extent that the PARTIES FURNISHING COLLATERAL are entitled to claims
towards LambdaNet based upon this lien, the PARTIES FURNISHING COLLATERAL shall
herewith waive asserting them.

5.       WAIVING PLEA

The PARTIES FURNISHING COLLATERAL waive the pleas of the contestability of the
Credit Agreement and the possibility of setting off demands from the CREDIT
AGREEMENT (Sections 770 and 1211 of Burgerliches Gesetzbuch - the German Civil
Code).

6.       UTILISATION

The PLEDGE CREDITORS are entitled to utilise the pledged business shares of
LAMBDANET if LAMBDANET is in arrears with payments due on the demands
collateralised with the agreement hereto in spite of an appropriate subsequent
period being set.

The BANKS shall threaten each PARTY FURNISHING COLLATERAL with utilisation in
writing setting a period ahead of time. This threat may be linked to a request
for payment. The period shall be one month.

It shall not be necessary to threaten or set a period if LAMBDANET has stopped
payment or if opening court insolvency proceedings on its assets have been
petitioned for.

If the prerequisites under which the BANKS are entitled to utilise the pledged
property are complied with, they may publicly auction off the business shares
pledged to them to the highest bidder in accordance with their dutiful
discretion without an enforceable judgement. This auction may be carried out at
any place in the Federal Republic of Germany. They may be sold by way of public
auctioning that the BANKS shall threaten with a period of four weeks for cash
payment or on credit.

Furthermore, the BANKS shall be entitled to solely collect the claims also
pledged. They shall not be obliged to keep to the pledged property.

The BANKS shall take the justified concerns of the PARTIES FURNISHING COLLATERAL
into consideration in this process. The PARTIES FURNISHING COLLATERAL agree to
the business shares being transferred to third parties in the case of
utilisation when they sign this contract of pledge.

7.       ACCEPTING THE CONTRACT

The BANKS herewith accept the offer to pledge the above mentioned business
shares.

8.       APPROVAL OF THE COMPANY/SHAREHOLDERS; NOTICE/CONSENT OF THE TRUSTOR

To the extent that pledging the business shares requires the approval of the
general meeting of shareholders and/or the shareholders pursuant to the articles
of partnership to be effective, the PARTIES FURNISHING COLLATERAL oblige
themselves to bring about this approval and to submit it to the BANKS in written
form through the recording notary public. The PARTIES FURNISHING COLLATERAL
herewith commission the notary public to give notice of the lien to the company.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                    page 5 of the agreement dated xx xx, xxxx

9.       OBLIGATIONS TO PROVIDE INFORMATION

The PARTIES FURNISHING COLLATERAL shall provide the BANKS with all information,
proofs and documents upon request that are necessary for checking, evaluating
and asserting the demands linked to the pledged business shares.

The PARTIES FURNISHING COLLATERAL shall allow the BANKS to inspect their
documents with reference to this for checking and asserting the pledged rights
and claims.

10.      WHOLLY OR PARTIALLY ASSIGNING THE DEMANDS COLLATERALISED BY THE RIGHT
         OF LIEN

The BANKS wholly or partially assigning the demands collateralised by means of
the right of lien shall not lead to the loss of the original right of lien or to
one or several new rights of lien coming about, rather it shall leave the right
of lien unaffected.

11.      THE BANKS' OBLIGATION TO  RELEASE

After satisfying their claims collateralised by this lien, the BANKS shall issue
the PARTIES FURNISHING COLLATERAL a confirmation that the lien has been disposed
of upon their request.

The BANKS are obliged to release the collateral (such as property whose
ownership has been assigned, assigned demands) wholly or partially to the
PARTIES FURNISHING COLLATERAL upon the request of the PARTIES FURNISHING
COLLATERAL at their choice even before the claims collateralised by this lien
have been completely satisfied to the extent that that the recoverable value of
all collateral exceeds 110% of the BANKS' collateralised claims not just for a
temporary period of time.

The recoverable value of the business shares pledged shall correspond to their
fair market value, i.e. the amount that could be reached as a price in usual
business transactions through selling in accordance with the consistency of the
shares. To the extent that shares of the company were disposed of in each of the
past years, the fair market value of the shares collateralised shall correspond
to the proceeds of the shares sold to the extent that the nominal value agrees
here. Otherwise, the proceeds shall be raised or lowered at the ratio of the
nominal amounts. Each PARTY FURNISHING COLLATERAL shall be reserved the right to
prove a higher value.

12.      ADDITIONAL AGREEMENTS

Additional agreements to the agreement hereto shall require the written form to
the extent that the law does not prescribe the notarial form. The same shall
apply to suspending the requirement of the written form.

13.      COSTS

The PARTIES FURNISHING COLLATERAL shall bear the costs including taxes and
outlays that arise from ordering and utilising the right of lien and the
business shares affected by that or other rights as joint and several debtors.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                    page 6 of the agreement dated xx xx, xxxx

14.       PLACE OF PERFORMANCE AND VENUE

The place of performance and venue for all of the obligations arising out of the
agreement hereto shall be Frankfurt am Main. The law of the Federal Republic of
Germany shall apply.

15.      SAVING CLAUSE

Should one or several of the provisions of the agreement hereto be not legally
valid or unenforceable, the validity of the rest of the content of the agreement
hereto shall not be affected by this. The parties shall replace the wholly or
partially invalid or unenforceable provisions with a valid provision that
corresponds to the economically desired purpose and that comes as close as
possible to the content of the provision to be replaced. This shall apply
accordingly if it subsequently comes to light that the agreement hereto has gaps
in the regulations.

16.      GENERAL TERMS AND CONDITIONS

The General Terms and Conditions of HVB shall apply supplementally. They are
already known to the PARTY FURNISHING COLLATERAL and they may otherwise be
inspected at any business office of HVB. HVB can also send this to him/her upon
request.

17.      COPIES

7 copies shall be made of the agreement hereto. Each contractual party and
LAMBDANET shall receive one copy.

The above record was read to the persons who appeared before the notary public,
approved by the persons who appeared and signed as follows by their own hand.

[...], (date) [...]           /s/ Dr. Dieter Finke
                              ---------------------------------------
                              Dr. Dieter Finke

[...], (date) [...]           /s/ Dr. Bernd Jager
                              ---------------------------------------
                              Dr. Bernd Jager

[...], (date) [...]           /s/ Dr. Stefan Sattler
                              ---------------------------------------
                              Dr. Stefan Sattler

[...], (date) [...]           /s/
                              ---------------------------------------
                              Bayerische Hypo- und Vereinsbank AG

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                    page 7 of the agreement dated xx xx, xxxx

[...], (date) [...]           /s/
                              ---------------------------------------
                              Dresdner Bank AG

[...], (date) [...]           /s/
                              ---------------------------------------
                              Kreditanstalt fur Wiederaufbau

THE COMPANY IS HEREWITH GIVEN NOTICE OF THE LIEN THAT TAKES NOTICE OF THE
AGREEMENT HERETO WITH CONSENT.

[...], (date) [...]           /s/
                              ---------------------------------------
                              LambdaNet Communications GmbH,
                              represented by its managing director,
                              DR. DIETER FINKE
<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 56 of the agreement dated January 21, 2000

APPENDIX 4: GUARANTY

The limited amount guaranty of NORTEL DASA.

<PAGE>

                        ABSOLUTE LIMITED AMOUNT GUARANTY
                for Collateralising Certain Demands of the Banks

to

1)   Bayerische Hypo- und Vereinsbank AG

2)   Dresdner Bank AG (hereinafter referred to as the "Liquidating Bank" when it
     acts simultaneously for the Bayerische Hypo- und Vereinsbank AG and
     Kreditanstalt fur Wiederaufbau)

3)   Kreditanstalt fur Wiederaufbau

(hereinafter referred to together as the "Banks")

--------------------------------------------------------------------------------
name and address of the Guarantor
--------------------------------------------------------------------------------
NORTEL DASA NETWORK SYSTEMS GMBH & CO. KG
--------------------------------------------------------------------------------

PREAMBLE:

    The Banks have extended LambdaNet Communications GmbH, Hannover (hereinafter
referred to as the "Borrower" or "Principal Debtor") a credit facility dated
February 21, 2000 amounting to Euro 56,000,000 based upon the Loan Facility
Agreement that shall be extended in two tranches (Tranche A amounting to a
maximum of Euro 10,000,000 and Tranche B amounting to a maximum of Euro
46,000,000). It is possible to take advantage of Tranche B in the framework of
the availability of Loan Facility Agreement defined and covered by the
agreement. In order to make it possible for the Borrower to claim funds before
the prerequisites have been created for a claim covered by the agreement, the
Borrower was conceded the possibility of also claiming credit funds under
Tranche B until June 15, 2000 if the guarantor provides an absolute limited
amount guaranty upon the first written request under prerequisites precisely
defined in the credit agreement (availability covered by guaranty under Tranche
B) Liquidating Bank shall inform the guarantor of the amount of the claim
covered by guaranty in the intervals of time defined in the Loan Facility
Agreement. The details of the credit agreement that is attached to this guaranty
as an appendix and forms an essential component of this guaranty are known to
us.

Stating these things in advance, we (hereinafter referred to as "the Guarantor")
herewith assume the

                                ABSOLUTE GUARANTY

for all claims that the Banks are entitled to from

--------------------------------------------------------------------------------
designation of the Banks' demands
--------------------------------------------------------------------------------
the claims covered by guaranty under Tranche B in the framework of the Loan
Facility Agreement designated above and dated December 21, 2000 (hereinafter
referred to as "Loan")
--------------------------------------------------------------------------------

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 2 of the agreement dated January 21, 2000

against

--------------------------------------------------------------------------------
name and address of the Principal Debtor
--------------------------------------------------------------------------------
LAMBDANET COMMUNICATIONS GMBH, GUNTHER-WAGNER-ALLEE 13, 30177 HANNOVER,
HR NUMBER HRB 57818 AT THE HANNOVER LOCAL COURT
--------------------------------------------------------------------------------

by obliging ourselves to pay

--------------------------------------------------------------------------------
amount                         in words
--------------------------------------------------------------------------------
23,800,000 EUROS               TWENTY-THREE MILLION EIGHT HUNDRED THOUSAND EUROS
--------------------------------------------------------------------------------

including interest and costs when we receive the first written request from the
Liquidating Bank (hereinafter referred to as the "Declaration of Claim") where
it declares that the Banks' claims for payment from the loan have not been
complied with pursuant to the agreement.

1.     CLAIMS FROM THE GUARANTY, WAIVING PLEAS AND THE DUTY TO PROVIDE
       INFORMATION

1.1    If the Banks' claims to payment that are collateralised by the guaranty
       are due and if the Principal Debtor does not comply with these claims,
       the Banks may get into contact with the Guarantor who shall make payment
       within three working days after the Declaration of Claim is received upon
       the first written request from the Liquidating Banks. The Banks shall not
       be obliged to initially proceed in court against the Principal Debtor or
       to utilise collateral provided to them.

1.2    The Guarantor shall also have an obligation to pay if the Principal
       Debtor can contest the business that his obligation is based upon
       (waiving the plea of contestibility that the Guarantor is entitled to
       pursuant to Section 770, Paragraph 1 of Burgerliches Gesetzbuch - the
       German Civil Code). Furthermore, the Guarantor may not plead that the
       Banks may satisfy their claims by setting them off against a demand due
       from the Principal Debtor (waiving the plea of setting off that the
       Guarantor is entitled to pursuant to Section 770, Paragraph 2 of
       Burgerliches Gesetzbuch - the German Civil Code).

1.3    The Banks shall inform the Guarantor on the fact that the Borrower has
       not paid on time no later than three working days after the
       collateralised demand was due.

1.4    The Guarantor's obligation to pay shall expire if the Guarantor complies
       with the demands of the Banks asserted in the Declaration of Claim. This
       shall not apply if the claim is asserted against the Guarantor
       exclusively for the interest or fees accumulating for the principal debt
       (said claims shall be reduced in accordance with the maximum amount) or
       the amount of the demand asserted was not correctly calculated and/or not
       correctly stated in the Declaration of Claim without the gross negligence
       of the Liquidating Bank

2.     THE RANK OF THE PASSED OVER DEMAND AND PASSING OVER COLLATERAL

2.1    To the extent that the Guarantor satisfies the Banks, their demands
       against the Borrower shall pass onto him. The Guarantor steps back as the
       creditor of the Borrower behind all existing, future and conditional
       claims with the passed over demands that the Banks are

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 3 of the agreement dated January 21, 2000

       entitled towards the Borrower from the Loan with all of their domestic
       and foreign business shares and domestic and foreign subsidiaries.

2.2    Before the debt from the guaranty is completely fulfilled, the Guarantor
       shall not have a claim to have the collateral being transferred that was
       made available to the Banks for collateralising the claims covered by
       guaranty.

2.3    If the Guarantor has completely fulfilled the debt from the guaranty and
       if the Banks have to release the non-accessory collateral pursuant to the
       collateral agreements, they shall transfer the collateral that was made
       available to them by the Principal Debtor to the Guarantor, if necessary
       proportionally. The Banks shall re-transfer collateral that was ordered
       by third parties to each party furnishing collateral in the absence of
       another agreement with him. If the Banks' claims against the Borrower
       exceed the maximum amount from the guaranty and the collateral to be
       transferred to the Guarantor only serve the purpose of collateralising
       the portion of the Banks' claims not guarantied against the Borrower, the
       Banks shall be entitled to a higher-ranking right to be paid in relation
       to the Guarantor to the extent that the prerequisites have not been
       complied with pursuant to Number 2.7a.

2.4    To the extent that collateral passes over to the Guarantor by virtue of
       the law (such as rights of lien), it shall not go beyond the legal
       regulation. If the Banks' claims against the Borrower exceed the maximum
       amount of the guaranty and the collateral that passes over to the
       Guarantor by virtue of the law also serve the purpose of collateralising
       the non guarantied portion of the Banks' claims against the Borrower, the
       Banks shall be entitled to a higher-ranking right to be paid in relation
       to the Guarantor to the extent that the prerequisites have not been
       complied with pursuant to Number 2.7a. The Banks shall exercise their
       discretion in the framework of a contractually agreed upon obligation for
       releasing the collateral to the effect of releasing the collateral
       provided by the Borrower before releasing the rights of lien of the
       business shares of LambdaNet.

2.5    Any claims of the Guarantor for settling and assigning collateral against
       other parties furnishing collateral shall not be affected by the
       regulations above.

2.6    If the conditions under which the Banks are entitled to utilise the
       collateral designated in the following are given, the Banks shall concede
       the Guarantor or another company of the Nortel Group the right to utilise
       the collateral designated in the following in its own name, but for the
       Banks' account after the prior consent of the Liquidating Bank apart from
       the Banks' right of utilisation:

       -      the agreement on transfer of property by way of receipt dated
              January 21, 2000 for the presence locations

       -      the agreement on transfer of property by way of receipt dated
              January 21, 2000 for the Network Management Center in Hannover

       The Banks shall not deny consent with the justification that the purchase
       price is set too low if the amount of the purchase price is sufficient to
       fulfil all demands that the Banks have against the Borrower. The
       Liquidating Bank shall inform the Guarantor in writing of the occurrence
       of the case of utilisation. The Guarantor shall comply with the
       prerequisites for use contained in the individual collateral agreements.
       The costs that are

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 4 of the agreement dated January 21, 2000

       actually incurred in connection with utilisation shall be satisfied with
       a higher ranking from the proceeds from utilisation to the extent that
       the Banks have consented to carrying out the measures that produce costs.
       Consent shall not be denied for disassembly that is necessary for
       utilisation and installing the property that serves as collateral without
       an important reason. To the extent that the Guarantor is not successful
       at using the collateral within 6 months after the Liquidating Bank sent
       written information on the fact that the conditions for utilisation are
       given, the Banks may revoke the right of utilisation assigned to the
       Guarantor.

2.7    If the Guarantor has fulfilled all of his guaranty debt and if the
       demands of the Banks against the Borrower pass over to the Guarantor to
       the amount of satisfaction,

       a)     the retreat in rank pursuant to Paragraph (1) of this Section
              shall no longer be applicable and the Guarantor participates in
              the collateral existing for these demands on equal ranking at the
              ratio to the collateralised total demand if and as soon as the
              following prerequisite are given cumulatively:

              -      the Borrower fulfils all imposed conditions demanded in
                     Number 12 of the credit agreement

              -      the Borrower has already amortised 33% of the amounts
                     outstanding on December 31, 2001 under Tranche B

              -      the DEBT SERVICE COVERAGE RATIO reaches or exceeds a value
                     of 1.5 in accordance with the definition in the credit
                     agreement. When ascertaining the value (the DEBT SERVICE
                     COVERAGE RATIO), the fact that the retreat in rank shall
                     no longer be applicable shall already be taken into
                     consideration.

       Suspending the retreat in rank necessitates the fact that the Banks would
       only be able to demand interest on their still outstanding demands under
       Tranche B that would then be of equal ranking amounting to the interest
       rates calculated by the Banks and that it would only be possible to
       assert the demands that would then be of equal ranking at the dates
       specified in Article 8.1.1 of the credit agreement and only at the
       following percentages:

       % amortisation of NORTEL DASA'S DEMAND =
       (TRANCHE B on December 31, 2001 multiplied by X%) divided by TRANCHE B
       PARI PASSU.

       Here, the following means:

       -      X% or the repayment percentage specified in Article 8.1.1 of the
              Loan Facility Agreement to each amortisation date

       -      TRANCHE B on December 31, 2001: the amount outstanding as per
              December 31, 2001 under Tranche B

       -      TRANCHE B PARI PASSU: the amount still outstanding at the point in
              time of suspending the retreat in rank

       -      NORTEL DASA'S DEMAND: the demand against LambdaNet that passes
              over to the Guarantor when the guaranty debt is paid to the amount
              still existing at the point in time of suspending the retreat in
              rank

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 5 of the agreement dated January 21, 2000

       b)     if the Banks' demands against the Borrower from further pay-outs
              from the Loan Facility Agreement are of lower ranking towards the
              demands that have passed onto the Guarantor against the Borrower
              and are only collateralised in lower ranking by the existing
              collateral if and to the extent that these pay-outs are made
              without the conditions for pay-out settled in Number 13 of the
              Loan Facility Agreement being fulfilled unless the Guarantor
              consents to these pay-outs or the prerequisites under Number 7a)
              are fulfilled. This consent may not be denied without a reason.

       c)     if the Guarantor is entitled to sell the demands against the
              Borrower that have been passed from the Banks onto the Guarantor
              to third parties to the extent that this is possible pursuant to
              the regulations in the credit agreement. With reference to the
              demands specified, the Banks shall be entitled to a legal right of
              first refusal pursuant to Sections 504 ff of Burgerliches
              Gesetzbuch (the German Civil Code).

3.     CREDITING PAYMENTS INTO ACCOUNT

       The Banks may credit the proceeds from utilising the collateral that the
       Principal Debtor or another third party has ordered for them initially to
       the portion of their claims against the Borrower that exceeds the maximum
       guarantied amount specified above. In the same fashion, i.e. at a higher
       ranking with the non guarantied portion of their claims, the Banks may
       set off all payments made by the Principal Debtor or for his account.

4.     ALLOWING ADDITIONAL TIME FOR COLLATERAL AND RELEASING COLLATERAL

       The Guarantor shall not be free of his guaranty obligation if the Banks
       allow the Principal Debtor more time for interest or fees due. This shall
       also apply if the Banks release collateral in one or several steps to the
       extent that the total value does not exceed Euro 500,000 or if the Banks
       release collateral thereby fulfilling an obligation to release that
       results from other collateral agreements. The Guarantor shall also not be
       free of his guaranty obligation if disposals are allowed on the pledged
       project accounts.

5.     COMMISSION ON GUARANTY

       The commission on guaranty that LambdaNet owes to the Guarantor and the
       interest shall result from the Guarantee Facility Agreement attached as
       an appendix. Changes with reference to the amount of these fees and
       interest owed shall require the consent of the banks.

6.     GOING INTO EFFECT

       The guaranty shall be under the dilatory condition that the Borrower
       initially has drawn a minimum amount of at least Euro 6,000,000 under
       Tranche A. It shall be effective to the maximum amount that corresponds
       to the value of the supplies and services furnished by the Guarantor
       based upon the Nortel Dasa Contract (= the date-bound general contractor
       agreement amounting to Euro 46,539,974 between the Guarantor and Borrower
       dated September 21, 1999 and each additional and supplemental agreement
       accepted by the lenders, especially the additional agreement dated
       December 31, 1999) as it was confirmed towards the Liquidating Bank by
       the Guarantor and Borrower in writing.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 6 of the agreement dated January 21, 2000

7.     LIMITATION

       The guaranty shall be limited to June 30, 2000.

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 7 of the agreement dated January 21, 2000

8.     APPLICABLE LAW AND VENUE

       German law shall apply to the principal-surety relationship. The venue
       shall be Frankfurt am Main.

9.     REPRESENTATION OF THE BANKS

       The Bayerische Hypo- und Vereinsbank AG shall simultaneously accept this
       guaranty for the other banks.

Munich, January 21, 2000               /s/
                                       -----------------------------------------
                                       Nortel Dasa Network Systems GmbH & Co. KG

SHALL BE FILLED OUT BY THE BAYERISCHE HYPO- UND VEREINSBANK AG

--------------------------------------------------------------------------------
reported by
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
received and handed out by
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
submitted by the Guarantor personally
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
yes    no    on (date)
If this was not submitted by the Guarantor, letter of confirmation received from
Guarantor on:
--------------------------------------------------------------------------------

<PAGE>

                           LAMBDANET CREDIT AGREEMENT
                 page 58 of the agreement dated January 21, 2000

APPENDIX 6: DEMAND FOR PAY-OUT

                               DEMAND FOR PAY-OUT

[BORROWER'S letterhead]

to:                  Mr. Faulhaber / Ms. Engel
                     Dresdner Bank AG
                     Ulm Branch Office
                     Neue Strasse 80
                     89073 Ulm
                     fax: (0731) 151-3179

                     date: [...]

Pursuant to Article 3.5 of the Basic Credit Agreement dated [ ], 2000 between us
and the Borrowers, we herewith apply for the following pay-out under the credit
line:

[ ]      Tranche A

[ ]      Tranche B

(a)      pay-out date:                      [  ]

(b)      interest period:          [  ] months

(c)      amount of pay-out         [  ] Euros

(d)      The loan shall be used for the following special purposes:

         - Tranche A:              [  ] operating resource required

                                   [  ] project costs above Euro 100,000
                                   pursuant to the attached invoices

                                   [  ] other project costs, i.e.

                                   [  ]
                                   [  ]
                                   [  ]

<PAGE>

         - Tranche B:              [  ] Nortel Dasa supply agreement

                                   [  ] project costs above Euro 100,000
                                   pursuant to the attached invoices

                                   [  ] other project costs, i.e.

                                   [  ]
                                   [  ]
                                   [  ]

The equivalent of the loan shall be transferred to the project account
_______________ .

We herewith confirm that:

(i)      the conditions imposed in Article 12 of the basic credit agreement have
         also been complied with on the present day and immediately after paying
         out the loan, and

(ii)     there is no reason for termination pursuant to Article 14 of the basic
         credit agreement and no potential reason for termination has occurred
         or continues to exist or will occur as a result of paying out the loan,
         and

(iii)    there is not any significant deterioration in the business operation
         and in the development of the business of the Borrower.

-----------------------------
Lambdanet Communications GmbH

<PAGE>

The following agreement on the transfer of space by way of receipt is concluded

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------

                       TRANSFER OF SPACE BY WAY OF RECEIPT
------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>
BETWEEN:

the name/business name and address of the party           the name and address of the Borrower:
furnishing collateral:                                    Lambdanet Communications GmbH
Lambdanet Communications GmbH                             Gunther-Wagner-Allee 18
Gunther-Wagner-Allee 18                                   30177 Hannover
30177 Hannover

                                                          account number: 1 024 061
registered in the HRB number HRB 57818, Hannover Local    at the Dresdner Bank AG,
Court                                                     Friedrichshafen Branch Office

(HEREINAFTER REFERRED TO AS THE "PARTY FURNISHING         bank code number: 651 800 05
COLLATERAL")
------------------------------------------------------------------------------------------------------------------

AND

Bayerische Hypo- und Vereinsbank Aktiengesellschaft,
Munich

(HEREINAFTER REFERRED TO AS "BANK" OR "HVB"
------------------------------------------------------------------------------------------------------------------
</TABLE>

1.       THE SUBJECT MATTER OF THE TRANSFER OF SPACE BY WAY OF RECEIPT

1.1      The party furnishing collateral has installed transmission systems
         including network elements such as multiplexers and repeaters as well
         as the management software, appropriate computer, operating system and
         database platforms necessary for monitoring and controlling the network
         elements as well as the hardware and software necessary for connecting
         the network element in the framework of the project of building up and
         operating an optical waveguide network in Germany measuring 3,200
         kilometres in the following spaces

I.       Lech-Elektrizitatswerke AG, Schaezlerstrasse 3, 86150 Augsburg, HR
         registration number HRB 6164, Augusburg Local Court, the basement (on
         the northern side) of commercial hall Hirtenmahdweg 8, 86154 Augsburg
         (REFER TO LEASE DATED JULY 1/7, 1999), hereinafter referred to as
         Collateral Space I

II.      GfW Gesellschaft fur Wohnbesitz mbH & Co. KG, Robert-Heuser-Strasse 15,
         50968 Cologne, HR registration number HRB 61512, Charlottenburg Local
         Court, COMMERCIAL SPACE of building part A, KG, Alboinstrasse 36-42,
         12103 Berlin (REFER TO LEASE DATED JUNE 22/24, 1999), hereinafter
         referred to as Collateral Space II

III.     Immobilien-Beteiligungsgesellschaft Dr. Franz Kratz KG, HR registration
         number HRB 1629, Cologne Local Court, ADMINISTRATIVE SPACE in the
         building Jahnplatz/Niederwall 2/Renteistrasse, 33602 Bielefeld (REFER
         TO LEASE DATED JULY 20/26, 1999), hereinafter referred to as Collateral
         Space III

IV.      Georg Simon Grundbesitz Objekt Regensburg KG, Herrmann-Ritter-Strasse
         104-106, 28197 Bremen, HR registration number HRA 73208, Munich Local
         Court, UTILITY

<PAGE>

                AGREEMENT ON TRANSFER OF SPACE BY WAY OF RECEIPT
                 page 2 of the agreement dated January 21, 2000

         SPACE of the building of CIF-Vers.-B, Herrmann-Ritter-Strasse 104-106,
         28197 Bremen (REFER TO LEASE DATED JUNE 23/29, 1999), hereinafter
         referred to as Collateral Space IV

V.       TRD-Reisen Fritz Fischer GmbH & Co. KG, Im Spahenfelde 51, 44143
         Dortmund, HR registration number HRA 6661, Dortmund Local Court for the
         KG and HR registration, Dortmund Local Court for the Geschaftsfuhrungs
         GmbH Stell- und Nutzungsflachen at the tourist bus car park, Im
         Spahenfelde 51, 44143 Dortmund (REFER TO LEASE DATED JUNE 25/AUGUST 1,
         1999 INCLUDING SUBSIDIARY AGREEMENTS DATED AUGUST 1/AUGUST 30, 1999 AND
         OCTOBER 21, 1999), hereinafter referred to as Collateral Space V

VI.      ESAG Energieversorgung Sachsen Ost AG, Friedrich-List-Platz 2, 01069
         Dresden, HR registration number HRB 965, Dreseden Local Court, SPACES
         in the city centre at the Dresden MainTrain Station (REFER TO LEASE
         DATED OCTOBER 29/NOVEMBER 22, 1999), hereinafter referred to as
         Collateral Space VI

VII.     F.W. Hempel & Co. Erze und Metalle GmbH, Leopoldstrasse 16, 40211
         Dusseldorf, HR registration number HRB 10774, Dusseldorf Local Court,
         SPACE in the office building of Leopoldstrasse 16 (REFER TO TEMPORARY
         LEASE DATED JUNE 24, 1999 AND THE FINAL LEASE TO BE CONCLUDED BETWEEN
         F.W. HEMPEL & CO. ERZE UND METALLE GMBH AND THE PARTY FURNISHING
         COLLATERAL ON SPACES IN THE LEOPOLDSTRASSE 16 OFFICE BUILDING, 40211
         DUSSELDORF), hereinafter referred to as Collateral Space VII

VIII.    Commerzbank AG, Kaiserplatz, 60311 Frankfurt am Main, HR registration
         number HRB 32000, Frankfurt am Main Local Court, PIECE OF REAL ESTATE
         on Juri-Gargarin-Ring 86, 99084 Erfurt (REFER TO LEASE DATED SEPTEMBER
         13/21, 1999), hereinafter referred to as Collateral Space VIII

IX.      Deutsche Post AG, General Headquarters, Bundeskanzlerplatz 2 -10 / Bonn
         Center, 53113 Bonn, HR registration number HRB 6792, Bonn Local Court,
         PIECE OF REAL ESTATE of Deutsche Post Immobilien Essen (main post
         office), Hachestrasse 2 - 8 (REFER TO LEASE DATED JUNE 22/JULY 6,
         1999), hereinafter referred to as Collateral Space IX

X.       Frankfurter Societatsdruckerei GmbH, Frankenallee 71 - 81, 60327
         Frankfurt am Main, HR registration number HRB 7285, Frankfurt am Main
         Local Court, piece of real estate of Frankenallee 71 - 81, 60327
         Frankfurt am Main (REFER TO LEASE DATED JULY 6, 1999), hereinafter
         referred to as Collateral Space X

XI.      Immobilien GbR Hamburg, Wendenstrasse 408, 20537 Hamburg ("Luisenhof")
         (REFER TO LEASE DATED JULY 8/13, 1999), hereinafter referred to as
         Collateral Space XI

XII.     Technologiepark Karlsruhe GmbH, Albert-Nestler-Strasse 9, 76131
         Karlsruhe, HR registration number HRB 6764, Karlsruhe Local Court,
         piece of real estate of Albert-Nestler-Strasse 9, 76131 Karlsruhe,
         Building 7H (REFER TO LEASE DATED JUNE 17/21, 1999), hereinafter
         referred to as Collateral Space XII

XIII.    The husband and wife Professor Dr. Josef Campinge, former cinema,
         Theodor-Babilon-Strasse 1-3, Cologne, entered into the Land Register of
         the Deutz borough of Cologne, Volume 72, sheet 2/19, cadastral district
         235, plot 851 (REFER TO LEASE DATED JULY 15/AUGUST 4, 1999),
         hereinafter referred to as Collateral Space XIII

XIV.     Rudolf Geray / Walter Grisslich community of builder-owners,
         Zettachring 6, 70567 Stuttgart, PIECE OF REAL ESTATE of the Leipzig
         Business Park, Maximilianallee 4, 04129 Leipzig (REFER TO LEASE DATED
         JUNE 10/14, 1999), hereinafter referred to as Collateral Space XIV

XV.      GbR Magdeburg Universitatsplatz, Ziegelhuttenweg 43, 60598 Frankfurt am
         Main, PIECE OF REAL ESTATE at Erzbergerstrasse 1, 39104 Magdeburg
         (REFER TO LEASE DATED JUNE 23, 1999), hereinafter referred to as
         Collateral Space XV

<PAGE>

                AGREEMENT ON TRANSFER OF SPACE BY WAY OF RECEIPT
                 page 3 of the agreement dated January 21, 2000

XVI.     Mr. Manfred Schnitzler, Belchenstrasse 39, 68163 Mannheim, PIECE OF
         REAL ESTATE of Flossworthstrasse 16, 68199 the Neckerau borough of
         Mannheim, (REFER TO LEASE DATED JUNE 15/24, 1999), hereinafter referred
         to as Collateral Space XVI

XVII.    Simon Grundbesitz Zehnder & Partner AG & Co. KG, Enzianstrasse 10,
         82031 Grunwald, HR registration number HRA 67631, Munich Local Court,
         PIECE OF REAL ESTATE at Arnulfsstrasse 205, 80634 Munich (office
         building A) (REFER TO LEASE DATED JUNE 4/10, 1999), hereinafter
         referred to as Collateral Space XVII

XVIII.   Mr. Gerd Schmelzer, Further Strasse 212, 90429 Nuremberg, PIECE OF REAL
         ESTATE at Further Strasse 212, 90429 Nuremberg (building 76) (REFER TO
         LEASE DATED JUNE 10/JULY 10, 1999), hereinafter referred to as
         Collateral Space XVIII

XIX.     Mr. Karl-Peter Reck, Zettachring 6, 70567 Stuttgart, spaces in the
         Stuttgart Business Park at Zettachring 6, 70567 Stuttgart (REFER TO
         LEASE DATED JUNE 10/JULY 10, 1999), hereinafter referred to as
         Collateral Space XIX

XX.      Hohn Grundstucksverwaltungs GmbH & Co. KG, Hertzstrasse 2, 97076
         Wurzburg, HR registration number HRA 4677, Wurzburg Local Court, PIECE
         OF REAL ESTATE at Hertzstrasse 2, 97076 Wurzburg (REFER TO LEASE DATED
         JUNE 25, 1999), hereinafter referred to as Collateral Space XX

XXI.     Bayernfonds Immobiuliengesellschaft mbH & Co. KG, building of Hannover
         Forum in the Pelikan Viertel KG, Innere Wiener Strasse 17, 81667
         Munich, HR registration number HRB 45696, Munich Local Court, SPACES in
         Gunther-Wagner-Strasse 13, 30177 Hannover (REFER TO LEASE DATED JULY
         16, 1999), hereinafter referred to as Collateral Space XXI.

         (HEREINAFTER REFERRED TO INDIVIDUALLY AS "COLLATERAL SPACE" AND
         COLLECTIVELY AS "COLLATERAL SPACES").

         The individual Collateral Spaces are divided up into two levels each:
         The space above the double floor (level 1) drawn in and the space
         between the double floor drawn in and the floor below it (level 2).

1.2      It is possible to find the exact location of the installation parts in
         the base plans attached as a copy, that are an essential component of
         the agreement hereto. To the extent that the objects transferred by way
         of receipt are only within a specially marked section of the piece of
         real estate, it is also possible to find the marking in the base plans.
         If the marking is red, this designates level 1 of the Collateral Space
         and if the marking is green, this designates level 2 of the Collateral
         Space.

         It is only possible to use each lease for designating Collateral Spaces
         VI and VIII at the present time, that are an essential component of the
         agreement hereto. Each of the base plans also become an essential
         component of the agreement hereto and the party furnishing collateral
         shall submit them without delay after they have been prepared.

1.3      The real estate owners have permitted the party furnishing collateral
         the use of the piece of real estate with the leases listed under 1.1
         for preparing and operating the plant. The installation parts specified
         in Number 1.1 that the party furnishing collateral brought upon the
         piece of real estate in connection with preparing and operating the
         installation parts and will bring onto it in the future shall only be
         brought or prepared there for the duration of the lease agreement.
         Therefore, they are only linked to the piece of real estate for a
         temporary purpose (Section 95 of Burgerliches Gesetzbuch - the German
         Civil Code) and they therefore shall not pass into the property of the
         real estate owner.

<PAGE>

                AGREEMENT ON TRANSFER OF SPACE BY WAY OF RECEIPT
                 page 4 of the agreement dated January 21, 2000

1.4      The transfer by way of receipt shall extend to all objects and
         implements specified in Number 1.1 and other objects and implements in
         connection with building up and operating the optical waveguide network
         that are in the Collateral Space mentioned above presently or in the
         future including all of the stock, accessory or spare parts necessary
         for operation and the data processing units required for operation.
         Furthermore, the property of the entire system documentation prepared
         presently and in the future by Nortel Dasa pursuant to the
         specification of the basic agreement dated September 21, 1999, that is
         an essential component of the agreement hereto, shall be transferred
         including modifications or secondary agreements and the individual
         agreements that are based upon this with the party furnishing
         collateral, consisting of hardware and the software installed on it
         including all handbooks and control diagrams.

         The author Nortel Systems GmbH & Co. KG with its headquarters in
         Hahnstrasse 37 - 39, 60528 Frankfurt am Main, shall concede to the Bank
         the simple right of use and enjoyment to the extent that results from
         the date-linked general contractor agreement between the author and
         party furnishing collateral amounting to 46,539,974 German Marks
         concluded on September 21, 1999. The simple right of use especially
         includes the right to use the software of the system created in the
         framework of the agreement with the party furnishing collateral
         presently and in the future and supplied presently and in the future
         with the documentation belonging to it for the purpose of operating the
         hardware of the system as much as desired and to permit third parties
         the use of it. The author issues his consent to transferring this
         simple right of use and enjoyment in the framework of utilisation in
         favour of satisfying the demands specified in Number 3 of the agreement
         hereto. The author shall grant the rights of the Bank designated under
         Number 1.4 under the condition subsequent with the specification that
         the rights of the Banks shall automatically end when the demands
         designated in Number 3 of the agreement hereto have been completely
         satisfied. This shall not apply if satisfaction is made by the
         utilisation proceeds achieved in the framework of utilisation and the
         simple right of use and enjoyment is transferred in this process. The
         declaration of the author shall form a component of the agreement
         hereto.

  (ALL OF THE OBJECTS AND RIGHTS HEREINAFTER REFERRED TO AS "COLLATERAL GOODS")

1.5      The contractual parties are in agreement that all of the objects
         presently in the stated Collateral Space of the type mentioned shall be
         transferred when this agreement is concluded and that all of the
         objects that come there in the future of the type mentioned shall be
         transferred to the property of the Bank at the point in time of them
         being brought into the Collateral Space (expectancy, ownership,
         co-ownership). To the extent that the Bank initially only receives
         expectancy, the entire ownership shall pass over to the Bank
         immediately at the point in time of the reservation of title no longer
         being applicable.

2.       REPLACEMENT FOR THE TRANSFER

         Transferring the Collateral Goods to the Bank shall be replaced by the
         fact that the party furnishing collateral preserves it carefully for
         the Bank. To the extent that third parties come into the immediate
         possession of the Collateral Goods, the party furnishing collateral
         shall assign his existing and future claims to delivery to the Bank
         now.

<PAGE>

                AGREEMENT ON TRANSFER OF SPACE BY WAY OF RECEIPT
                 page 5 of the agreement dated January 21, 2000

3.       THE PURPOSE OF COLLATERAL

         Transferring by way of receipt shall serve the purpose of securing all
         existing, future and conditional claims that the Dresdner Bank AG, the
         Kreditanstalt fur Wiederaufbau and the HVB are entitled to against the
         party furnishing collateral with all of the domestic and foreign
         business offices and domestic and foreign subsidiaries from extending
         the loan pursuant to the basic project credit agreement dated January
         21, 2000 including any addenda/supplements.

4.       REPLACING RESERVATIONS OF TITLE

         The party furnishing collateral shall bring about the expiration of any
         reservation of title that may exist by paying the purchase price. The
         Bank shall be entitled to pay a remaining debt in respect of the
         purchase price obligation of the party furnishing collateral at his
         debit.

5.       STOCK LISTS

5.1      The party furnishing collateral has to submit a list of stock on the
         Collateral Goods transferred to the Bank no later than the 5th working
         day of every calendar half-year while referring to the agreement
         hereto. The Bank may also demand that stock lists are sent in shorter
         periods of time to preserve its justified concerns. The stock list has
         to contain information on the type, quantity, size/volume, brand and/or
         manufacturer.

5.2      The stocks actually on hand shall also be transferred if the stock
         lists are incorrect or incomplete in any fashion.

6.       THE AUTHORITY TO EXCHANGE

         The Bank shall allow the party furnishing collateral to procure
         appropriate new parts in the framework of the service necessary
         according to the specifications of proper management for
         machines/devices or components of the Collateral Goods requiring
         renewal. All measures that are not absolutely necessary for maintaining
         the functionality shall require the consent of the Bank.

7.       HANDLING AND MARKING THE COLLATERAL GOODS

7.1      The party furnishing collateral has to leave each of the Collateral
         Goods in the Collateral Space, to treat it carefully at his debit and
         not to conceal the transfer by way of receipt to third parties who are
         legally or economically interested in it.

7.2      The Bank may mark the Collateral Goods as its property in order to
         preserve its justified concerns in a fashion that appears expedient to
         it. The transfer by way of receipt shall be made noticeable in the
         documents of the party furnishing collateral with the name of the Bank.

<PAGE>

                AGREEMENT ON TRANSFER OF SPACE BY WAY OF RECEIPT
                 page 6 of the agreement dated January 21, 2000

8.       THE LEGAL RIGHTS OF LIEN OF THIRD PARTIES

         To the extent that there is a legal right of lien of third parties to
         the Collateral Goods, especially of the lessor, the party furnishing
         collateral has to prove that it has been paid at the Bank's request
         after the due date of the interest or remuneration owed from the legal
         relationship it is based upon. If this proof is not furnished, the Bank
         shall be authorised to pay the collateralised demand at the debit of
         the party furnishing collateral to avert the right of lien.

9.       THE DUTY OF THE PARTY FURNISHING COLLATERAL TO PROVIDE INFORMATION

         The party furnishing collateral shall notify the Bank without delay if
         the rights of the Bank to the Collateral Goods should be impaired or
         endangered by levy of execution or other measures of third parties or
         in another fashion.

10.      INSURING THE COLLATERAL GOODS

10.1     The party furnishing collateral shall keep the full amount of the
         Collateral Goods insured at his own debit for the entire duration of
         transfer by way of receipt against the usual hazards and against the
         hazards that insurance coverage seems necessary to the Bank when the
         risks are appropriately assessed and to prove this to the Bank upon
         request especially by submitting the insurance policy. Upon the Bank's
         request, the party furnishing collateral has to request the insurance
         company to send an insurance policy to the Bank. If the party
         furnishing collateral has not effected the insurance or not
         sufficiently, the Bank may do this at his debit.

10.2     The party furnishing collateral shall assign all of the claims to
         insurance and compensation for damage that the party furnishing
         collateral acquires because of loss and damage of the Collateral Goods
         in a separate collateral assignment agreement.

11.      THE BANK'S RIGHT TO EXAMINE

11.1     The Bank shall be entitled to examine the Collateral Goods at each
         location or to have it examined by its representatives and to inspect
         the books and documents for the purpose of examination.

11.2     To the extent that the Collateral Goods are in the immediate possession
         of third parties, the party furnishing collateral shall instruct them
         to grant the Bank access to the Collateral Goods and to give all of the
         information on the Collateral Goods desired by it.

12.      THE BANK'S RIGHT OF UTILISATION

12.1     The Bank shall be entitled to utilise the Collateral Goods if the
         Borrower is in arrears with the payments for the demands due that are
         collateralised by the agreement hereto. The Bank shall only utilise the
         Collateral Goods to the extent that this is necessary for fulfilling
         the demands in arrears.

12.2     The Bank shall threaten the party furnishing collateral with
         utilisation setting a period. If concluding this agreement is a
         commercial act for the party furnishing collateral, the period shall be
         at least one week. In all other cases, it shall be one month.

<PAGE>

                AGREEMENT ON TRANSFER OF SPACE BY WAY OF RECEIPT
                 page 7 of the agreement dated January 21, 2000

12.3     The Bank may sell the Collateral Goods by private contract in its own
         name or in the name of the party furnishing collateral. It shall take
         the justified concerns of the party furnishing collateral into
         consideration. It may also demand from the party furnishing collateral
         that he utilise the Collateral Goods on a best-efforts basis according
         to its instructions or assists in the utilisation. The party furnishing
         collateral has to issue everything received in the utilisation of the
         Collateral Goods to the Bank without delay.

13.      RECONVEYANCE, RELEASING THE COLLATERAL

13.1     After satisfying its claims collateralised by the agreement hereto, the
         Bank shall reconvey the collateral transferred with this agreement to
         the party furnishing collateral and issue any excess proceeds from
         utilisation. However, the Bank shall transfer this collateral to a
         third parties if it is obliged to do so. This is the case, for
         instance, if the party furnishing collateral is simultaneously the
         Borrower and a guarantor has satisfied the Bank.

13.2     To the extent that several objects have been transferred by way of
         receipt or other collateral has been ordered apart from this
         collateral, the Bank shall release the Collateral Goods transferred to
         it and any other collateral orders to it (such as demands assigned,
         land charges) at its choice to each party furnishing collateral wholly
         or partially before its claims collateralised by the transfer by way of
         receipt are completely satisfied to the extent that the realisable
         value of all collateral does not just exceed 110% of the Bank's
         collateralised claims temporarily.

13.3     In the absence of a deviating agreement, the realisable value of the
         Collateral Goods shall be ascertained for the purposes of Number 13 as
         follows: The fair market price at the point in time of the request for
         release shall be decisive. If that is missing

          -    the purchase price for the Collateral Goods that the party
               furnishing collateral purchased

          -    the manufacturing price for the Collateral Goods that the party
               furnishing collateral manufactured himself or processed.

          The value of the Collateral Goods that a third party has a higher
          ranking collateral right on (such as a reservation of title, right of
          lien) shall first of all be deducted from the value ascertained in
          this fashion, however only amounting to the collateralised claims of
          each creditor.

          A collateral surcharge amounting to 25% shall be effected from the
          value ascertained afterwards if the Collateral Goods are current
          assets, because of a possible deficiency in proceeds (for instance,
          with judicial sale). A collateral surcharge amounting to 30% per
          year from purchase or completion, proportionately for each
          increment of a year, shall be effected degressively from each
          previous value if the Collateral Goods are non-real estate fixed
          assets.

14.      THE INTERPRETATION OF THE AGREEMENT/CONTINGENT AGREEMENT

         This contract is concluded under the assumption on all sides that the
         Collateral Goods will not/has not become an essential component of the
         piece of real estate in spite of its connection with the grounds,
         rather remain(s) independent tangible asset(s) or has/have remained
         thus.

<PAGE>

                AGREEMENT ON TRANSFER OF SPACE BY WAY OF RECEIPT
                 page 8 of the agreement dated January 21, 2000

         Should the installation be valuated as an essential part of the grounds
         by a final and conclusive ruling and afterwards the ownership of the
         installation pass onto the real estate owner, the party furnishing
         collateral shall herewith transfer all of the rights and claims
         resulting from the loss of rights to the Bank in a fashion that the
         Bank not only acquires the claim from Section 951 Burgerliches
         Gesetzbuch (the German Civil Code), but also all rights that the party
         furnishing collateral is entitled to against the real estate owner with
         reference to the right of beneficial use of the installation.

15.      MISCELLANEOUS/FINAL PROVISIONS

15.1     The General Terms and Conditions of the Bank shall apply as a
         supplement. They are already known to the party furnishing collateral
         and may otherwise be inspected at every office of the Bank. They can
         also be sent upon request.

15.2     The law of the Federal Republic of Germany shall apply. The venue and
         place of performance shall be Frankfurt am Main.

15.3     Oral subsidiary agreements were not made. Modifications to the
         agreement hereto shall require the written form. This shall also apply
         to suspending the agreement on the written form.

15.4     Should one or several of the provisions of the CONTRACT hereto be
         wholly or partially invalid or prove to be unenforceable, the validity
         of the rest of the agreement hereto shall otherwise not be affected by
         this. The parties shall replace the wholly or partially invalid or
         unenforceable provisions with a valid provision that corresponds to the
         economic purpose desired and that comes as close as possible to the
         content of the provision to be replaced. This shall apply accordingly
         if it comes to light that the agreement hereto has gaps in the
         regulations.

<TABLE>
<S>                                     <C>
        JANUARY 21, 2000                   /s/
----------------------------------        ----------------------------------------------------
Munich, January 21, 2000                    (the signature of the party furnishing collateral)

JANUARY 21, 2000                            /s/
--------------------------                ----------------------------------------------------
Munich, January 21, 2000                   (signature of Bayerische Hypo- und Vereinsbank AG)

JANUARY 21, 2000                             /s/
--------------------------                ----------------------------------------------------
Munich, January 21, 2000                             (the signature of the author)
</TABLE>

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 1 of 10 of the Declaration from 21 January 2000

Translation from the German Language

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Contract of Transfer of Room Ownership
------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>
between:                                                  Name/company and address of the Borrower /Creditee
Name/company and address of the Mortgager:                Lambda Net Communications GmbH
Lambda Net Communications GmbH                            Gunther-Wagner-Allee 18
Gunther-Wagner-Allee 18                                   30177 Hannover
30177 Hannover                                            Germany
Germany
                                                          Account no. 1 024 061
registered in the Commercial Registry - No. 57818         at the Dresdner Bank AG, Friedrichshafen Branch,
District Court of Hannover                                Bank code: 651 800 05

(hereinafter referred to as the "Mortgager"

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

and the
Bayerische Hypo- und Vereinsbank Aktiengesellschaft
Munchen

(hereinafter referred to as the "Bank" or "HVB"
------------------------------------------------------------------------------------------------------------------
</TABLE>

the following Contract of Transfer of Room Ownership is concluded.

1.       OBJECT OF THE TRANSFER OF OWNERSHIP

1.1      On the property, Gunther-Wagner-Allee 13, 30177 Hannover, 1st Floor,
         Property Register from Klein Buchholz Volume/Page 7589 (hereinafter
         referred to as the "SECURITY ROOM") of the Bayernfonds
         Immobiliengeschaft mbH & Co Objeckt Hannover Forum im Pelikan Viertel
         KG, Innere Wiener Str. 17, 81667 Munich, Commercial Registry No. 45696,
         District Court of Munich,

         in the framework of the project "Erection and Operation of a 3,200 km
         Long Glass Fibre Network in Germany" - the Mortgager has installed

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 2 of 10 of the Declaration from 21 January 2000

         transmission systems including network elements such as multiplexers
         and repeaters as well the management software, accessory computer,
         operating system and database platforms needed for the surveillance and
         controlling of the network elements as well as any hardware otherwise
         required for the linkage of the network elements to the management
         system and the software running thereupon.

1.2      The exact location of the system parts is to be taken from the annexed
         copy of the site map that is an essential element of this contract.
         Provided that the transferred objects are only located within a
         specially marked section of the property, the marking is to be taken
         from the site map(s) as well.

1.3      The property owner has granted the Mortgager the usage of the property
         for the erection and operation of the system with the tenancy agreement
         from 16 JULY 1999.

         The system parts designated in Item 1.1, which were taken by the
         Mortgager in connection with the erection and/or operation of the
         systems/machines/equipment to the aforementioned property, and will be
         taken in the future, are only taken or erected there on the property
         for the duration of the contract of lease. Thus they are only bound to
         the property for a temporary purpose (Section 95 of the German Civil
         Code) and therefore do not pass into the possession of the property
         owner.

1.4      The conveyance extends to all objects and equipment named in Item 1.1
         as well as other which are in connection with the erection and
         operation of the glass fibre network which currently and in the future
         shall be located in the aforesaid Security Room including all
         inventory, accessories and replacement parts and EDP systems required
         for operation.

         Furthermore, the ownership of the entire current and future erected
         system documentation by Nortel Dasa, comprised of hardware and the
         software installed thereupon, including all handbooks and control
         plans, shall be transferred according to the provisions of the
         Framework Contract from the 21st of September 1999 which is an
         essential component of this contract, along with modifications or
         addendums as well as the individual contracts which are based thereupon
         with the Mortgager.

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 3 of 10 of the Declaration from 21 January 2000

         The Originator, Nortel Systems GmbH & Co. KG with its head office in
         the Hahnstrasse 37-39, 60528 Frankfurt am Main, concedes to the
         Bank the general usufruct in the scope which results from the
         schedule-bound General Business Contract between the Originator and
         the Mortgager in an amount of DM (German Marks) 46,539,974. --,
         entered into on 21 September 1999. The simple usufruct comprises in
         particular the right of freely using or allowing use by third
         parties of the currently and future erected software and currently
         and future delivered software of the system with the accompanying
         documentation in the framework of the agreement with the Mortgager
         for the purpose of operating the system hardware. The Originator
         grants the approval of transferring this simple usufruct in the
         framework of the exploitation in favour of the satisfaction of the
         stipulations named in Item 3 of this contract. The rights of the
         Bank stipulated under this Item 1.4 shall be afforded condition
         subsequent by the Originator provided that the rights of the Bank
         automatically end if the stipulations named in Item 3 of this
         contract have been completely satisfied. This is not the case if the
         satisfaction is carried out by proceeds obtained from the
         exploitation in the framework of the exploitation and thereby the
         simple usufruct is transferred.

         The declaration of the Originator forms an element of this contract.

         (ALL OBJECTS AND RIGHTS SHALL BE REFERRED TO AS THE "COLLATERAL
         GOODS" BELOW.)

1.5      The contractual parties are in agreement that all objects of the
         aforesaid kind currently situated in the designated Security Room, and
         all objects of the aforesaid kind which shall come to enter into the
         Security Room in the future, shall be transferred to the possession of
         the Bank (future interest, ownership, co-ownership), in each case at
         the time of their bringing into the Security Room. If the Bank at first
         only receives reversionary interests, the full ownership is directly
         transferred to the Bank, in each case at the time of the lapse of the
         reservation of ownership by the supplier.

2.       DELIVERY REPLACEMENT

         The delivering of the collateral goods to the Bank is replaced by the
         Mortgager safeguarding it free of charge and carefully for the Bank. As
         far as third parties acquire direct possession of the collateral goods,
         the Mortgager shall already now assign his existing and future
         surrender claims to the Bank.

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 4 of 10 of the Declaration from 21 January 2000

3.       AIMS OF SECURITY

The transfer serves the securing of all existing, future and conditional claims
against the Mortgager, to which the Dresdner Bank AG, the Kreditanstalt fur
Wiederaufbau and the HVB are entitled with all their inland and foreign offices
as well as inland and foreign subsidiaries from the granting of the credit
pursuant to the Framework Credit Agreement from the 21st January 2000 including
any eventual addendums/supplements.

4.       DISCHARGE OF RESERVATIONS OF OWNERSHIP

The Mortgager is obligated to allow any existing reservations of ownership to
lapse via payment of the purchase price. The Bank is entitled to pay a remaining
purchase price debt of the Mortgager at his own costs to the suppliers.

5.       INVENTORY LISTS

5.1      The Mortgager must submit an inventory list of the collateral goods to
         be transferred to the Bank in regard to this contract at the latest by
         the 5th workday of each 6 months of the calendar year. For the
         observance of their legitimate interests, the Bank may also demand the
         forwarding of the inventory lists at shorter time intervals. The
         inventory list must contain information concerning the type, amount
         sizes/volumes, make and/or manufacturer.

5.2      The actual available inventory shall only then be transferred if the
         inventory lists are incorrect or incomplete in any way.

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 5 of 10 of the Declaration from 21 January 2000

6.       REPLACEMENT AUTHORIZATION

The Bank allows the Mortgager, in the framework of the maintenance necessary for
the orderly operation of business, to procure the appropriate new parts for
repair-needy machines/equipment or elements of the Collateral Goods. All
measures, which are not absolutely necessary for the maintenances of the
functioning capacities, require the approval of the Bank.

7.       HANDLING AND MARKING OF THE COLLATERAL GOODS

7.1      The Mortgager must leave the Collateral Goods in each case in the
         Security Room; handle them with care at his own cost, and not conceal
         the transfer to third parties which have a legal or business interest
         therein.

7.2      For the protection of its legitimate interest, the Bank may mark the
         Collateral Good as its property in a purposeful seemingly manner. In
         the papers of the Mortgager, the transfer is to be clearly marked with
         the name of the Bank.

8.       LEGAL RIGHTS OF LIEN OF THIRD PARTIES

As far as a legal right of lien of a third party exists, in particular of a
leaser, the Mortgager must provide evidence at the request of the Bank of the
payment of the due interest or fee arising from the legal relationship in each
case after the due date. If no evidence is provided, the Bank is authorized to
pay the secured claim at the cost of the Mortgager in order to ward off the
right of lien.

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 6 of 10 of the Declaration from 21 January 2000

9.       INFORMATION OBLIGATIONS OF THE MORTGAGER

The Mortgager must inform the Bank immediately if the rights of the Bank to the
Collateral Goods are impeded or in jeopardy in any way by pledging or other
measures carried out by third parties.

10.      INSURANCE OF THE COLLATERAL GOODS

10.1     The Mortgager undertakes to keep insured, at his own cost, the
         Collateral Goods against the usual dangers and against those dangers
         which the Bank deems necessary after appropriate acknowledgement of the
         risks for the entire duration of the transfer in the full amount, and
         to provide evidence of such at the request of the Bank, in particular
         by submitting the insurance policy. At the request of the Bank, the
         Mortgager must request of the insurance company that they send the Bank
         a copy of the insurance policy. If the Mortgager has not taken out
         insurance, or not sufficient insurance, then the Bank may do so at the
         cost of the Mortgager.

10.2     The Mortgager shall assign all insurance and damage compensation
         claims, which the Mortgager acquires due to the loss and damages to the
         Collateral Goods, to the Bank in a separate security assignment
         contract.

11.      INSPECTION RIGHT OF THE BANK

11.1     The Bank is entitled to inspect the Collateral Goods at their relevant
         location, or to have them inspected by their agents, and to be able to
         examine the books and records for inspection aims.

11.2     As far as the Collateral Goods are in the direct possession of third
         parties, the Mortgager shall instruct the third parties - as long as
         this is legally feasible - to grant the Bank admittance to the
         Collateral Goods and to provide all information they request concerning
         the Collateral Goods.

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 7 of 10 of the Declaration from 21 January 2000

12.      EXPLOITATION RIGHT OF THE BANK

12.1     The Bank is entitled to exploit the Collateral Goods if the Creditee is
         in arrears with the due payments of the claims secured by this
         contract. The Bank shall only exploit the Collateral Goods in the scope
         that is necessary for the fulfilment of the claims in arrears.

12.2     The Bank will warn the Mortgager of the exploitation while setting a
         deadline. If the conclusion of this contract presents a commercial
         transaction for the Mortgager, the deadline shall be at least one week.
         In all other cases, it shall amount to one month.

12.3     The Bank may sell the Collateral Goods by freehand sales in its own
         name or in the name of the Mortgager. The Bank shall take into
         consideration the legitimate interests of the Mortgager. It can demand
         of the Mortgager that latter must exploit the Collateral Goods as best
         possible according to the instructions of the Bank, or that the
         Mortgager assists in the exploitation of said. The Mortgager must
         surrender immediately all proceeds to the Bank which were obtained from
         the exploitation of the Collateral Goods.

13.      RETRANSFER, RELEASE OF SECURITIES

13.1     After the satisfaction of the claims secured by this contract, the Bank
         must retransfer the securities transferred under this contract to the
         Mortgager and surrender any eventual extra proceeds from the
         exploitation. The Bank shall, however, transfer these securities to a
         third party if it is obligated to do so; this would be the case, for
         example, if the Mortgager is at the same time the Creditee and a
         Guarantor has satisfied the Bank.

13.2     If more than one object has been transferred, or if other securities
         have been assigned in addition to this security, the Bank is obligated
         even before its complete satisfaction of the claims secured by the
         transfer of ownership to release in part or in whole the Collateral
         Goods transferred to it as well as other securities appointed to it
         (e.g. assigned demands, encumbrances) at its choice to the relevant
         Mortgager as long as the realisable value of all securities does not
         only temporarily exceed 110% of the secured claims of the Bank.

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 8 of 10 of the Declaration from 21 January 2000

13.2     As far as no agreement to the contrary has been made, the realisable
         value of the Collateral Goods for the aims of this Item 13 shall be
         investigated as follows: The market price is decisive at the time of
         the release demand. In the event that such is lacking:

         -        the purchase price for the Collateral Goods which was bought
                  by the Mortgager;

         -        the manufacturer's price for the Collateral Goods which were
                  manufactured or processed by the Mortgager himself;

At first, the value of those Collateral Goods shall be deducted from the value
assessed in this such way to which a third party has a priority charging lien
(e.g. reservation of ownership, right of lien); however only in the amount of
the secured claims of the relevant creditor. From the value that has been
assessed so far - if the Collateral Goods are liquid assets- a security markdown
in an amount of 25% due to possible minimum profits (e.g. in the event of a
forced sale) shall be undertaken. In the event of moveable assets, decreasing
(digressive) from the relevant preceding values, a security markdown of 33% per
year after the purchase or manufacture - proportionately for each commenced
year- shall be undertaken.

14.      INTERPRETATION OF THE AGREEMENT/EVENTUAL AGREEMENT

This contract is concluded in the all-round assumption that the Collateral Goods
shall not be/have not become an essential component of the property despite the
linkage with land and property, and taking into consideration the will of all
involved parties. Rather it is assumed that it/they has/have remained
independent moveable object(s).

If the facility should nonetheless be assessed by a legally binding decision as
an essential component of the property, and the ownership of the facility has
passed to the possession of the property owner, the Mortgager has hereby already
transferred to the Bank all rights arising from

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 9 of 10 of the Declaration from 21 January 2000

the forfeiture of the right and claims in the form that the Bank not only
acquires the claim from Section 951f of the Federal German Civil Code, but all
rights against the property ownership as well to which the Mortgager is entitled
in consideration of the utilization authorization of the facility.

15.      MISCELLANEOUS/ FINAL PROVISIONS

15.1     In addition, the General Terms and Conditions of Business of the Bank
         are effect for this contract. They are already known to the Mortgager
         and may be inspected in any branch office of the Bank. At request,
         these will also be forwarded.

15.2     The laws of the Federal Republic of Germany govern this contract. Legal
         venue and place of fulfilment is Frankfurt am Main, Germany.

15.3     No collateral agreements were made by word of mouth. Modifications to
         this contract are required in written form. The same applies to the
         cancellation of the written form agreement.

15.4     If one or more of the provisions of this contract should prove to be in
         whole or in part invalid or non-executable, the validity of the
         remainder of the contract is not affected by such. The parties shall
         replace the in whole or in part invalid or non-executable provisions by
         a valid provision with relates to the desired economic intentions and
         which comes closest to the provision to be replaced. This applies
         accordingly if the contract should prove to have contractual loopholes.

21.01.2000                             /s/
----------------------------           ------------------------------------
Munich, the 21st of January 2000            (signature of the Mortgager)

<PAGE>

                   Contract of the Transfer of Room Ownership
              Page 10 of 10 of the Declaration from 21 January 2000

                                           /s/
----------------------------               -----------------------------------
Munich, the 21st of January 2000            (signature of the Bayerische Hypo-
                                           und-Vereinsbank)

                                           /s/
----------------------------               -----------------------------------
Munich, the 21st of January 2000            (signature of the Originator)

<PAGE>

             Contract of the Transfer of Non-technical Patent Rights
               Page 1 of 8 of the Agreement from 21 January 2000

Translation from the German Language

                              Contract of Transfer

                                   Between the

                     LambdaNet Communications GmbH, Hannover
           - hereinafter referred to as the "Company" or "Mortgager"-

                                     and the

           Bayerische Hypo- und Vereinsbank Aktiengesellschaft, Munich
              -hereinafter referred to as the "HVB" or the "Bank" -

PREAMBLE:

The COMPANY operates a 3,2000 km long glass fibre network in Germany and
provides telephone services primarily to other telephone companies and service
providers under the brand name "LambdaNet".

For the COMPANY the following trademarks/brands (hereinafter referred to as
"Patent Rights") are registered.

         -        in the Trademark Roll of the German Patent Office

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Registration number                Trademark/brand                International patent registration number
------------------------------------------------------------------------------------------------------------------
<S>                                <C>                            <C>
39947818.3-09                      Lambda Net on your wa-         ----
------------------------------------------------------------------------------------------------------------------
39947817.5-38                      Lambda Net on your wavelength  ----
                                   (logo, see annex)
------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

             Contract of the Transfer of Non-technical Patent Rights
               Page 2 of 8 of the Agreement from 21 January 2000

         -        at the Harmonization Office in Alicante in the Registry of
                  Joint Trademarks

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Registration number                    Trademark/brand                        International patent registration
                                                                              number
------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                                    <C>
1268549                                LambdaNet                              ------
------------------------------------------------------------------------------------------------------------------
1268515                                Lambda Net on your wavelength (logo,   ------
                                       see annex)
------------------------------------------------------------------------------------------------------------------
</TABLE>

1.       ASSIGNMENT AND TRANSFER

1.1      The COMPANY hereby transfers to the HVB all its current and future
         rights and entitlements, including all collateral rights, to which it
         is entitled or will be entitled on the basis of the aforementioned
         Patent Rights registered in the individual registries. For
         international registrations, all claimed national sections should each
         be transferred. The documents concerning the trademarks in question and
         other documents shall be transferred as well.

1.2      Furthermore, the COMPANY hereby assigns all current and future claims
         to which it is entitled, or will be entitled, from the infringement of
         these Patent Rights to the HVB.

1.3      The current rights are transferred with the conclusion of this contract
         and all future rights at the time of their origin. The surrender of the
         documents and other papers pertaining to the Patent Rights is
         compensated by the COMPANY providing fiduciary and free of charge
         safekeeping of such as the direct owner in such a way that the HVB
         acquires the direct ownership. If the papers in regard to the Patent
         Right should fall into the hands of third parties, the surrender shall
         be compensated by the COMPANY assigning its current and future
         surrender claims against these third parties to the HVB.

<PAGE>

             Contract of the Transfer of Non-technical Patent Rights
               Page 3 of 8 of the Agreement from 21 January 2000

1.4      The HVB hereby accepts the assignment.

2        REGISTRATION/SURVIVING RIGHTS OF THE MORTGAGER

2.1      The HVB gives up, for the time being, the right to the registration of
         their legal proprietorship in the decisive registers for the individual
         patent rights. The HVB is, however, entitled, in the event of the
         existence of the prerequisites for usage pursuant to Section 8 of this
         contract, to disclose the actual legal proprietorship and to apply for
         and have registered the transcription of the rights to the HVB at the
         relevant competent governmental agencies and authorities.

2.2      THE COMPANY undertakes to make all necessary declarations for a
         transcription or to act on this endeavour. The COMPANY shall, at the
         initial request of the HVB, hand out all original documents and other
         papers concerning the patent rights.

2.3      The COMPANY remains authorised, until revocation by the HVB, to use the
         rights stipulated by this agreement, and to outwardly observe all
         rights and obligations of a legal proprietor as long as such does not
         affect the claims and rights of the Bank.

2.       AIMS OF SECURITY

The assignment serves to secure all existing, future and conditional claims
against THE MORTGAGER, to which the HVB, THE Dresdner Bank AG and the
Kreditanstalt fur Wiederaufbau (hereinafter referred to as "THE BANKS"), with
all their inland and foreign offices as well as inland and foreign subsidiaries,
are entitled from the granting of the credit pursuant to the Framework Project
Credit Agreement from the 21st of January 2000.

<PAGE>

             Contract of the Transfer of Non-technical Patent Rights
               Page 4 of 8 of the Agreement from 21 January 2000

4.       INFORMATION OBLIGATIONS OF THE MORTGAGER

4.1      The COMPANY undertakes to inform the HVB immediately of future arising
         patent rights.

4.2      THE COMPANY undertakes to immediately inform the HVB of any
         modification of the patent rights, or respectively, the registrations.
         If the transferred rights should be pledged or otherwise impeded, the
         COMPANY must then inform the HVB of such immediately and report to the
         PLEDGOR immediately in writing on the charging lien of the HVB.

5.       ASSISTANCE OBLIGATIONS OF THE MORTGAGER

The COMPANY undertakes to make all declarations as well as certifications and/or
other actions, or to have such carried out, at the request of HVB, which may -
in particular pursuant to foreign laws - be necessary in order to secure and /or
facilitate the realization of these rights and claims for the HVB and/or in
regard to achieving the aims of this contract. The COMPANY authorizes the HVB to
itself make such declarations where necessary, and to even submit them in the
name of the Company and to itself undertake the appropriate actions.

6.       OTHER OBLIGATIONS OF THE MORTGAGER

6.1      The Company ensures that they have validly acquired the above captioned
         patent rights and, in the meantime, have not disposed of these rights
         and that no obligations to relevant disposals have been lodged.

<PAGE>

             Contract of the Transfer of Non-technical Patent Rights
               Page 5 of 8 of the Agreement from 21 January 2000

6.2      The COMPANY undertakes not to dispose of the rights set forth in this
         contract as long as the aims of the security of the contract at hand
         persist.

6.3      The COMPANY undertakes further to attend to and monitor the above
         captioned rights, to maintain the rights (securing of the proper usage
         of the brands, proper extension by payment of the fees required for
         such) and that it shall waive none of the transferred rights without
         the relevant approval of the HVB.

7.       INSPECTION RIGHT OF THE BANK

The HVB may, at any time, inspect the records of the relevant patent offices or
registers concerning the transferred patent rights. The COMPANY hereby declares
its consent to such.

8.       RIGHTS OF UTILISATION OF THE BANK

8.1      In the event of the termination of the secured credit agreement and/or
         if the Company is in arrears with the due payments of the claims
         secured by this contract, has discontinued its payments, or has applied
         for commencement of court insolvency proceedings of its property, then
         the HVB is entitled to utilize the transferred patent rights including
         all collateral claims as well as the securities transferred along with
         such and their rights and claims in any legally permissible way. Before
         such, the HVB shall notify the Company of these measures - as far as is
         feasible - while observing a deadline of one month. If the HVB exploits
         its utilization right, then the usage authorization of the company
         pursuant to Section 2 of this contract expires.

8.2      The HVB may sell the patent rights taking into the consideration the
         legitimate interests of the COMPANY, in particular by freehand sales in
         their own name or in the name of the Company.

<PAGE>

             Contract of the Transfer of Non-technical Patent Rights
               Page 6 of 8 of the Agreement from 21 January 2000

HVB may demand of the COMPANY that said exploit as best possible the patent
rights according to their instructions, or that they assist in the exploitation.
The COMPANY must then surrender all proceeds from the exploitation of the patent
rights immediately to the HVB.

8.3      In the event of the exploitation of the patent rights in the framework
         of the security aims, the exploitation proceeds shall be used in the
         order designated in the separately concluded Securities Pool Contract
         from the 21st of January 2000.

9.       RETRANSFER, RELEASE OF SECURITY

9.1      After satisfaction of the claims secured by the transfer, the HVB will
         retransfer to the Company all patent rights transferred to them as well
         as the documents and other rights transferred to them so far, and shall
         surrender any possible extra proceeds from the usage. If a guarantor or
         other third party satisfies the HVB, then the latter is entitled to
         transfer their rights to the guarantor or third party.

9.2      The HVB is already obligated even before the complete satisfaction of
         the claims secured by the transfer, at the request of the COMPANY, to
         release the rights transferred to the COMPANY, documents and other
         rights as well as any other securities of their choice assigned by said
         in part or in whole to the COMPANY if the realisable value of all
         securities does not only temporarily exceed 110% of the secured claims
         of the HVB.

10.      COSTS

The costs, which arise in connection with the erection and execution of this
contract, in particular for the maintenance of the patent right holdings, are
borne by the Company.

<PAGE>

             Contract of the Transfer of Non-technical Patent Rights
               Page 7 of 8 of the Agreement from 21 January 2000

11.      SUPPLEMENTARY PROVISIONS

11.1     Frankfurt am Main is agreed as the place of fulfilment and legal venue
         for all obligations arising from this contract.

11.3     This contract is subject to the laws of the Federal Republic of
         Germany.

11.3     Modifications and supplements to this contract are required in written
         form in order to reach validity. The same is true for the waiver of
         this form requirement. Collateral agreements have not been made.

11.4     If one or more of the provisions of this contract should prove to be
         invalid or non-executable, then the validity of the remaining
         provisions is not affected by such. The contractual parties shall
         replace any such invalid or non-executable provisions with a
         regulation, which corresponds to the original economic intention, and
         which comes closes to the content of the provision to be replaced. The
         same is true if any contractual loopholes in need of amending crop up.

11.5     As for the rest, the General Terms and Conditions of Business of the
         HVB are in effect. They may be viewed at any time at the HVB AND will
         be made available at request.

Munich, 21 January 2000            /s/
                                   -----------------------------------
                                   LambdaNet Communications Gmbh

<PAGE>

             Contract of the Transfer of Non-technical Patent Rights
               Page 8 of 8 of the Agreement from 21 January 2000

Munich, January 21 2000            /s/
                                   --------------------------
                                   Bayersiche Hypo- und Vereinsbank
                                   Aktiengesellschaft

Annex: logo "'Lambda Net on your wavelength"
<PAGE>

                  CONTRACT OF HYPOTHECATION FOR ACCOUNT CREDIT
               PAGE 1 OF 5 OF THE DECLARATION FROM 21 JANUARY 2000

Translation from the German Language

<TABLE>
<S>                                                       <C>
----------------------------------------------------------------------------------------------------------
Contract of Hypothecation for Account Credit
----------------------------------------------------------------------------------------------------------
Between:                                                  Name/company and address of the Mortgager:
Name/company and address of the Mortgager:                LambdaNet Communications GmbH
LambdaNet Communications GmbH                             Gunther-Wagner-Allee 18
Gunther-Wagner-Allee 18                                   30177 Hannover
30177 Hannover
                                                          Account no.: 1 024 061
registered in the Commercial Register - No. 57818,
District Court of Hannover, Germany                       at the Dresdner Bank AG, Friedrichshafen Branch,
                                                          bank code: 651 800 05
(hereinafter referred to as the "Mortgager"
----------------------------------------------------------------------------------------------------------
and the Bayerische Hypo- und Vereinsbank
Aktiengesellschaft Munchen (hereinafter
also referred to as the "Pool Leader")

Dresdner Bank AG, Frankfurt

Kreditanstalt fur Wiederaufbau, Frankfurt
(hereinafter individually referred to as the
"Bank" or together as "the Banks")
----------------------------------------------------------------------------------------------------------
</TABLE>

the following Contract of Hypothecation for Account Credit is concluded:

The MORTGAGER maintains the following listed accounts at the below captioned
credit institutes (hereinafter referred to as the "Account Managing Credit
Institutes" in this agreement):

<PAGE>

                  CONTRACT OF HYPOTHECATION FOR ACCOUNT CREDIT
               PAGE 2 OF 5 OF THE DECLARATION FROM 21 JANUARY 2000

Dresdner Bank AG, Hannover Branch, Rathenaustr. 4, 30159 Hannover, Germany
Account number: 7 000 455, bank code: 250 800 20

Dresdner Bank AG, Friederichshafen Branch, Friedrichstr. 97, 88045
Friedrichshafen, Germany
Account number: 1 024 061, bank code: 651 800 05

Deutsche Bank AG Hannover, Georgsplatz 20, 30159 Hannover, Germany
Account number: 011 95 03, bank code: 250 700 70

       1. PLEDGING

The MORTGAGER hereby pledges to the BANKS its respective claims of equal
importance against the ACCOUNT MANAGING CREDIT INSTITUTES from the above
captioned accounts, including interest. If documents are issued beyond these
claims (e.g. bank books, savings bonds), such shall be surrendered to the POOL
LEADER.

       2. AIMS OF SECURITY

The lien serves the securing of all existing, future and conditional claims
against the MORTGAGER to which the BANKS, with all their inland and foreign
offices as well as all inland and foreign subsidiaries, are entitled from the
granting of the credit pursuant to the Framework Project Credit Agreement from
21 January 2000 including any eventual addendums/supplements.

       3. UTILIZATION RIGHT OF THE BANK

3.1 If the Borrower is in arrears with the fulfilment of the payment obligation,
the BANKS are authorized to exploit pledged objects due to the amount in
arrears.

<PAGE>

                  CONTRACT OF HYPOTHECATION FOR ACCOUNT CREDIT
               PAGE 3 OF 5 OF THE DECLARATION FROM 21 JANUARY 2000

       3.2    The BANKS shall previously issue a warning to the MORTGAGER in
              writing of the exploitation of the pledged objects while setting a
              deadline. This warning can be connected with a payment demand.
              The deadline must amount to 1 week at the least.

       4. RETURN, RELEASE OF SECURITY

4.1 After satisfaction of their claims secured by the hypothecation, the BANKS
must surrender the pledged objects and any extra proceeds to the Mortgager. The
BANKS shall, however, surrender the pledged objects to a third party, if they
are obligated to do so.

       4.2    The BANKS are obligated at request, even before the complete
              satisfaction of their claims secured by the hypothecation, to in
              whole or in part release to them the assigned securities (e.g.
              assigned claims, encumbrances) of their choice to the respective
              MORTGAGER, as long as the realizable value of all securities does
              not only temporarily exceed 110% of the secured claims of the
              BANKS.

       4.3    The BANKS shall take into consideration the legitimate interests
              of the MORTGAGER and the clients of additional securities when
              selecting the securities to be released.

       5. GENERAL RIGHT OF LIEN OF THE BANKS

A general right of lien to which the BANKS are entitled under No. 14 of their
General Terms and Conditions of Business, even to assets of the Mortgager not
affected by this hypothecation contract, remains unaffected.

<PAGE>

                  CONTRACT OF HYPOTHECATION FOR ACCOUNT CREDIT
               PAGE 4 OF 5 OF THE DECLARATION FROM 21 JANUARY 2000

       6. MISCELLANEOUS/FINAL PROVISIONS

6.1      In addition, the General Terms and Conditions of Business of the POOL
         LEADER are effective. Said is already known to the Mortgager and may be
         inspected further in any branch office of the BANK. At request, they
         shall also be forwarded by the POOL LEADER.

6.2      The laws of the Federal Republic of Germany govern the provisions of
         this contract. Legal venue and place of fulfilment is Frankfurt am
         Main, Federal Republic of Germany.

6.3      Collateral agreements by word of mouth have not been made.
         Modifications to this contract are required in writing. This is also
         true of the cancellation of such agreement in written form.

6.4      If one or more of the provisions in this contract should prove to be
         invalid, in part or in whole, or should prove to be non-executable,
         such shall not affect the validity of the remainder of the contract.
         The parties shall replace the partially or wholly invalid or
         non-executable provisions by a valid provision that comes closest to
         the intended purpose and content of the provision to be replaced. The
         same is true accordingly if the contract should prove to have
         contractual loopholes.

Munich, the 21st of January 2000            /s/
                                            ----------------------------------
                                            LambdaNet Communications GmbH

Munich, the 21st of January 2000            /s/
                                            ----------------------------------
                                            Bayerische Hypo- und Vereinsbank AG

<PAGE>

                  CONTRACT OF HYPOTHECATION FOR ACCOUNT CREDIT
               PAGE 5 OF 5 OF THE DECLARATION FROM 21 JANUARY 2000

Munich, the 21st of January 2000            /s/
                                            ----------------------------------
                                            Dresdner Bank AG

Munich, the 21st of January 2000            /s/
                                            ----------------------------------
                                            Kreditanstalt fur Wiederaufbau
<PAGE>

<TABLE>
<S>                                                   <C>
---------------------------------------------------------------------------------------------------------

                                         CONTRACT OF ASSIGNMENT

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

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

BETWEEN:                                              Name of the Loan/Credit Borrower:
Name and address of the Party furnishing the          LambdaNet Communications GmbH
Security:                                             Account No: 1 024 061
LambdaNet Communications GmbH                         at Dresdner Bank AG, Friedrichshafen Branch
Gunther Wagner Allee 18                               Bank Sort code: 651 800 05
30177 Hannover
Trade Registry No:  HRB 578818
Court of Hanover
(hereinafter referred to as the "Party furnishing
the Security")

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

AND THE
Bayersichen Hypo und Vereinsbank
Aktiengesellschaft, Munich (hereinafter referred to
as"HVB" or "Bank")
----------------------------------------------------- ---------------------------------------------------
</TABLE>

the following contract of assignment is concluded:

1.       OBJECT OF THE ASSIGNMENT

1.1      The Party furnishing the Security is the proprietor of the following
         claims:

-        All claims against the general enterprise Nortel Dasa Network Systems
         GmbH & Co KG, Hahnstr. 37-39, 60528 Frankfurt-am-Main, Trade Registry
         No: HRB 1378, Court of Friedrichshafen, in respect of the project
         [supply, installation and commissioning of the transmission systems for
         the pan-German glass fibre network of the Party furnishing the Security
         with 21 effective sites. The transmission systems include both the
         network elements such as multiplexers and repeaters as well as the
         necessary management software for the monitoring and control of the
         network elements, the computer belonging to this, the operating system
         and databank platforms as well as other necessary hardware and software
         for the connection of the network elements to the management system.

<PAGE>

                             Contract of Assignment
                   Page 2 of the declaration dated 21.01.2000

In addition the general enterprise shall supply the regular and optional
services for all the systems supplied within the framework of this contract] in
accordance with the framework agreement covering the purchase of transmission
systems and the services linked hereto dated 21.09.1999 in addition to the
addenda and supplements and the respective individual contracts in connection
with this framework agreement, in particular the claims to unrestricted usable
and operational total execution of the installations as well as all contractual
or valid statutory guarantee claims, the claim to contract penalties and the
claim to repayment of the deposit/advance payment implemented by the Party
furnishing the Security , respectively together with the securities received for
the securing of the claims as well as the claims to use of the software produced
with the Party furnishing the Security and supplied with the related
documentation as well as all claims from the fee and undertaking letter and the
assignment agreement.

-        All claims against

         -        The Bayerfonds Immobiliengesellschaft mbH & Co Object Hannover
                  Forum in the Pelikan Viertel KG, Innere Wiener Str. 17, 81667
                  Munich, Trade Registry No: HRB 45696, Court of Munich, arising
                  from the Rental Contract dated 16.07.1999 in respect of the
                  site Gunther Wagner Allee 13, 30177 Hanover, registered in the
                  Land Registry by Klein Buchholz, Sheet 7589, lot 3/18,
                  cadastral district 20.

         -        The Lech Elektrizitatswerke (Power Station) AG,
                  Schaezlerstrasse 3, 86150 Augsburg, Trade Registry No: HRB
                  6164, Court of Augsburg, arising from the Rental Contract
                  dated 01/07.07.1999 in respect of the premises in the basement
                  (North side) of the industrial hall Hirtenmahdweg 8, 86154
                  Augsburg.

         -        The GfW Gesellschaft fur Wohnsitz mbH & Co KG, Robert Heuser
                  Str. 15, 50968 Cologne represented by Rentax Gesellschaft fur
                  Grundbesitzanlagen (landed properties) mbH Rosenstr. 1-3,
                  10178 Berlin, Trade Registry No: HRB 61512, Court of Berlin
                  Charlottenburg, arising from the Rental Contract dated
                  22/24.06.1999 in respect of the industrial estate component
                  part A of the building, KG, Alboinstr. 36-42, 12103 Berlin.

         -        The Immobilien Beteiligungsgesellschaft (Real estate
                  joint-venture company) Dr Franz Kratz KG, Trade Registry No:
                  HRB 1629, Court of Cologne, arising from the Rental Contract
                  dated 20./26.07.1999 in respect of the administration area in
                  the object Jahnplatz / Niederwall 2 / Renteistrasse, 33602
                  Bielefeld.

<PAGE>

                             Contract of Assignment
                   Page 3 of the declaration dated 21.01.2000

         -        The Georg Simon Grundbesitz Objekt Regensburg KG,
                  Hermann-Ritter-Strasse 108, 28197 Bremen, Trade Registry No:
                  HRA 73208, Court of Munich, arising from the Rental Contract
                  dated 23./29.06.1999 in respect of the usable space of the
                  building CIF-Vers.-B, Hermann-Ritter-Strasse 104-106, 28197
                  Bremen.

         -        The TRD-Reisen Fritz Fischer GmbH & Co. KG, Im Spahenfelde 51,
                  44143 Dortmund, Trade Registry No: HRA 6661, Court of Dortmund
                  for the KOMMANDITGESELLSCHAFT (limited partnership) and Trade
                  Registry No: HRB 3499, Court of Dortmund for the
                  Geschaftsfuhrungs GmbH, arising from the Rental Contract dated
                  25.06./01.08.1999 inclusive of the addenda dated
                  01.08./30.08.1999 and 21.10.1999 in respect of the areas for
                  storage and use in the object Reisebuspark (Coach Park), Im
                  Spahenfelde 51, 44143 Dortmund.

         -        The ESAG Energieversorgung (Sachsen Ost AG,
                  Friedrich-List-Platz 2, 01069 Dresden, Trade Registry No: HRB
                  965, Court of Dresden, arising from the Rental Contract dated
                  29.10./22.11.1999 in respect of the premises in the city
                  centre at the main rail station in Dresden, Room D- 1.11

         -        The F.W. Hempel & Co.Erze und Metalle GmbH & Co;
                  Leopoldstrasse 16, 40211 Dusseldorf, Trade Registry No: 10774,
                  Court of Dusseldorf, arising from the interim Rental Contract
                  dated 26.06.1999 as well as the final Rental Contract yet to
                  be concluded on the premises in the office building
                  Leopoldstr. 16, 40211 Dusseldorf.

         -        The Commerzbank AG, Kaiserplatz, 60311 Frankfurt/Main, Trade
                  Registry No: HRB 32000, Court of Frankfurt am Main, arising
                  from the Rental Contract dated 13.09./21.09.1999 in respect of
                  the site Juri-Gagarin-Ring 86, 99084 Erfurt.

         -        The Deutsche Post AG, Generaldirektion, Bundeskanzlerplatz
                  2-10 / Bonn-Centre, 53113 Bonn, Trade Registry No: HRB 6792,
                  Court of Bonn, arising from the Rental Contract dated
                  22.06./06.07.1999 together with the addendum dated 28.07./
                  03.08.1999 in respect of the site Deutsche Post Immobilien
                  Essen (Hauptpost), Hachestrasse 2-8

         -        The Frankfurter Societats-Druckerei GmbH, Frankenallee 71-81,
                  60327 Frankfurt/ Main, Trade Registry No: HRB 7285, Court of
                  Frankfurt am Main, arising from the Rental Contract dated
                  07.06.1999 in respect of the site Frankenallee 71-81, 60327
                  Frankfurt/Main.

<PAGE>

                             Contract of Assignment
                   Page 4 of the declaration dated 21.01.2000

         -        The Immobilien GbR Hamburg, Wendenstrasse 408, 20537 Hamburg,
                  arising from the Rental Contract dated 08./13.07.1999 in
                  respect of the site Wendenstrasse 408, 20537 Hamburg
                  ("Luisenhof").

         -        The Technologiepark Karlsruhe GmbH, Albert-Nestler-Strasse 9,
                  76131 Karlsruhe, Trade Registry No: HRB 6764, Court of
                  Karlsruhe, arsing from the Rental Contract dated
                  17./21.06.1999 in respect of the site Albert-Nestler-Strasse
                  7, 76131 Karlsruhe, Building 7H in the Technology Park
                  Karlsruhe.

         -        The married couple Prof. Dr. Josek Campinge, represented by
                  Immobilien- und Verwaltungsgesellschaft mbH, Franzstrasse 81,
                  50935 Cologne, arising from the Rental Contract dated
                  15.07./04.08.1999 in respect of the object a former cinema,
                  Theodor-Babilon-Strasse 1-3, Cologne, recorded at the Land
                  Registry of Koln-Deutz, Volume 72, Sheet 2/19, Lot 235,
                  Cadastral District 851.

         -        The joint clients Rudolf Geray / Walter Grisslich, Zettachring
                  6, 70567 Stuttgart arising, from the Rental Contract dated
                  10./14.06.1999 in respect of the site Business Park Leipzig,
                  Maximilianallee 4, 04129 Leipzig.

         -        The GbR Magdeburg Universitatsplatz, Ziegelhuttenweg 43, 60598
                  Frankfurt/ Main arising from the Rental Contract dated
                  23.06.1999 in respect of the site Erzbergerstrasse 1, 39104
                  Magdeburg.

         -        Mr Manfred Schnitzler, Belchenstrasse 39, 68163 Mannheim,
                  arising from the Rental Contract dated 15./24.06.1999 in
                  respect of the site Flossworthstrasse 16, 681999
                  Mannheim-Neckarau

         -        The Simon Grundbesitz Zehnder & Partner AG & Co. KG,
                  Enzianstrasse 10, 82031 Grunwald, Trade Registry No: HRA
                  67361, Court of Munchen, arising from the Rental Contract
                  dated 04./10.06.1999 in respect of the site Arnulfstrasse 205,
                  80634 Munchen, (Office building A)

         -        Mr Gerd Schmelzer, Further Strasse 212, 90429 Nurnberg arising
                  from the Rental Contract dated 10.06./10.07.1999 in respect of
                  the site Further Strasse 212, 90429 Nurnberg, (Development 76)

         -        Mr Karl-Peter Reck, Zettachring 6, 70567 Stuttgart arising
                  from the Rental Contract dated 10./22.06.1999 in respect of
                  the premises in the Business Park Stuttgart, Zettachring 10,
                  70567 Stuttgart

         -        The Hohn Grundstucksverwaltungs-GmbH & Co. KG, Hertzstrasse 2,
                  97076 Wurzburg, Trade Registry No: HRA 4677, Court of Wurzburg
                  arising from the Rental Contract dated 25.06.1999 in respect
                  of the site Hertzstrasse 2, 97076 Wurzburg

<PAGE>

                             Contract of Assignment
                   Page 5 of the declaration dated 21.01.2000

         -        in particular the respective claims for contractual
                  fulfilment, the contractual or statutory guarantee claims and
                  the claims to contract penalties;

         -        all claims against the CNB Communications Netmanagement Bremen
                  GmbH, Theodor Heuss Allee 20, 28215 Bremen address, arising
                  from the RENTAL CONTRACT dated 04.10.1999 in respect of the
                  rental object: two pipes in accordance with CNB standard,
                  which run from public ground (shaft of the CNB) to the entry
                  to the house of Hermann Ritter Strasse 106, in particular the
                  claims for contractual fulfilment, the contractual or
                  statutory guarantee claims and the claims to contract
                  penalties;

         -        all claims against / the company GasLINE
                  Telekommunikationsgesellschaft deutscher
                  Gasversorgungsunternehmen mbH & Co. KG, Huttropstr. 60, Essen,
                  Trade Registry No: HRA 6624, Court of Essen and HRB 12223,
                  Court of Essen for the general partner

                  from the contract covering the use of optical wave guides and
                  system engineering rooms dated 14.07.1999, in particular the
                  claims to contractual provision and maintenance of optical
                  wave guides and system engineering rooms, the contractual or
                  statutory guarantee claims, the claims to contract penalties
                  and the claims to repayment of the deposit/advance payment
                  implemented by the party furnishing the Security, respectively
                  together with the securities received for the securing of
                  these claims;

         -        as well as from the contract before the notary Hans-Friedrich
                  Kreyer, Bochum dated 14.07.1999, Document Register No:
                  99/00142 (contract of loan and convertible bond),

         -        all claims against the company

                  -        Corporate Network Essen Gesellschaft fur
                           Telekommunication mbH, am Alfredusbad 8, 45133 Essen,
                           arising from the Rental Contract for optical wave
                           guides dated 10.09.1999,

<PAGE>

                             Contract of Assignment
                   Page 6 of the declaration dated 21.01.2000

         -        LEWTelNet GmbH, Hubnerstrasse 3, 86150 Augsburg, arising from
                  the Rental Contract for optical wave guides dated
                  32./25.08.1999

         -        BerliKomm Telekommunikationsgesellschaft mbH, Hohenzollerndamm
                  44, 10713 Berlin, arising from the Rental Contract for optical
                  wave guides dated 22.09.1999

         -        BITel Gesellschaft for Telekommunikatio, Schildescher Strasse
                  16, 30519 Hannover, arising from the Rental Contract for
                  optical wave guides dated 13./19.08.1999

         -        EWE TEL GmbH, Cloppenburger Strasse 3000, 26133 Oldenburg,
                  arising from the Rental Contract for optical wave guides dated
                  20.09.1999

         -        CNB Communications Netmanagement Bremen GmbH,
                  Theodor-Heus-Allee 20, 28215 Bremen, arising from the Rental
                  Contract for optical wave guides dated 22./23.09.1999

         -        DOKOM GmbH, Stockholmer Allee 24, 44269 Dortmund, arising from
                  the Rental Contract for optical wave guides dated
                  13./16.08.1999

         -        ESAG Energieversorgung Sachsen Ost AG, Friedrich-List-Platz 2,
                  01069 Dresden, arising from the Rental Contract For optical
                  wave guides dated 31.08./01.09.1999

         -        COLT Telecom GmbH, Uerdinger Strasse 90-92-, 40474 Dusseldorf,
                  arising from the Rental Contract for optical wave guides dated
                  20./27.09.1999

         -        Corporate Network Essen Gesellschaft fur telekommunikation
                  mbH, Am Alfredusbad 8, 45133 Essen, arising from the Rental
                  Contract for optical wave guides dated 10.09.1999

         -        COLT Telecom GmbH, Magnusstrasse 13, 50672 Koln, arising from
                  the Rental Contract for optical wave guides dated
                  07./08.10.1999

         -        Magdeburg-City-Com GmbH, Rogatzer Strasse 22-30, 39106
                  Magdeburg, arising from the Rental Contract for optical wave
                  guides dated 10.08./01.09.1999

         -        Manet GmbH Gesellschaft fur Telekommunikation ind Information,
                  Luisenring 49, 68159 Mannheim, arising from the Rental
                  Contract for optical wave guides dated 10.09./16.09.1999

         -        M"net Telekommunikations GmbH, Corneliusstrasse 10, 80496
                  Munchenn, arising from the Rental Contract for optical wave
                  guides dated 27./30.08.1999

         -        NEFkomTelekommunikations GmbH & Co. KG, Spittlertorgraben 13,
                  90429 Nurnberg, arising from the Rental Contract for optical
                  wave guides dated 13./24.08.1999

         -        Wurzburger Telekommunikationsgesellschaft mbH, Bahnhofsstrasse
                  12, 97070 Wurzburg, arising from the Rental Contract for
                  optical wave guides dated 06.08.1999

<PAGE>

                             Contract of Assignment
                   Page 7 of the declaration dated 21.01.2000

         -        in particular respective claims for the contractual provision
                  of the optical wave guides, the respective contractual or
                  valid statutory guarantee claims, the respective claim to
                  contract penalties and the respective claim to repayment of
                  the deposit/advance payment implemented by the Party
                  furnishing the Security, respectively together with the
                  securities received for the securing of these claims;

         -        the necessary PERMISSIONS, AUTHORISATIONS, CONCESSIONS etc.
                  for the setting up / execution and the operation of the
                  project enterprise insofar as legally permissible;

-        all claims against the following insurance company

         -        Generali Lloyd Versicherung AG, Humboldtstr. 31, 40237
                  Dusseldorf, Trade Registry No: HRB 90789 Court of Munich,
                  arising from the INSURANCE RELATIONSHIP in accordance with the
                  insurance contract for work travel, comprehensive insurance
                  cover No: K 3180893 dated 02.12.1999, in particular the claim
                  to payment of insurance settlements to the Party furnishing
                  the Security;

         -        Wurtembergische und Badische Versicherungs-Aktiengesellschaft,
                  Karlstrasse 68 - 72, Heibronn arising from the INSURANCE
                  RELATIONSHIP in accordance with the interim insurance contract
                  for telecommunications insurance as well as company liability
                  dated 30.12.1999, in particular the claim of payment of
                  insurance settlements due to the Party furnishing the
                  Security;

1.2 THE PARTY FURNISHING THE SECURITY assigns herewith all existing, conditional
and future claims to the BANK in accordance with Clause 1.1.

1.3 The BANK herewith accepts the afore-mentioned assignment.

<PAGE>

                             Contract of Assignment
                   Page 8 of the declaration dated 21.01.2000

2. THE TIME OF THE TRANSFER OF THE CLAIMS AND DEMANDS

The current and conditional claims and demands are transferred to the BANK with
the conclusion of this contract, all those arising in future correspondingly.

3.  PURPOSE OF THE SECURITY

The assignment serves as security for all existing, future and conditional
claims, which the HVB, the Dresdner Bank AG and the Kreditanstalt fur
Wiederaufbau [Loan Institution for Reconstruction] (hereinafter referred to as
"THE BANKS") with their total in national and foreign business sites as well as
the national and foreign subsidiaries arising from the guaranteeing of the loan
in accordance with the framework project loan contract dated 21.01.2000 against
THE PARTY FURNISHING THE SECURITY.

4.  TRANSFER OF THE RIGHTS AND SECURITIES

With the assigned claims and demands all rights arising from the basic legal
transaction are transferred to the BANK. Insofar as securities have been
reserved which are not transferred by force of law to the BANK, the BANK can
demand their assignment, in so far as this lies in the legal province of THE
PARTY FURNISHING THE SECURITY.

5. ANNOUNCEMENT OF THE ASSIGNMENT / COLLECTION IN RESPECT OF ENFORCEMENT THROUGH
THE PARTY FURNISHING THE SECURITY

5.1 THE PARTY FURNISHING THE SECURITY shall instruct the BANK, to notify (a)
third party creditor(s) of the assignment on their behalf. As a matter of
principle the Party furnishing the Security is permitted to enforce the demands
assigned to the Bank within the framework of an orderly company operation.

<PAGE>

                             Contract of Assignment
                   Page 9 of the declaration dated 21.01.2000

5.2  If the Party furnishing the Security should receive cheques or bills of
     exchange for payment of the demands, which have been assigned to the BANK,
     the Party furnishing the Security assigns all claims to the same to which
     they are entitled in advance to the BANK as a safeguard. The BANK can
     repeal or restrict the collection authority or impose conditions on the
     collection in order to preserve their rightful interests.

6.   ENFORCEMENT OF THE CLAIMS BY THE BANK

6.1  The Bank is entitled to oppose the enforcement of an authority allowed to
     the Party furnishing the Security in accordance with Clause 5.2 as well as
     the claims and rights which have been transferred to them in accordance
     with Clause 4, to enforce, if the borrower is in arrears with payments due
     on the demands which are secured by this contract, ceases their payments or
     has applied for judicial proceedings for insolvency in respect of their
     assets. The Bank shall only seize these measures to the extent that is
     necessary for the fulfilment of the overdue demands.

6.2  The Bank shall give the Party furnishing the Security 2 weeks notice in
     writing of the threat to enforce the claims. A threat and setting of a
     deadline is not however necessary if the Party furnishing the Security has
     ceased to implement payments or the opening of bankruptcy proceedings on
     their assets has been applied for.

7.   OBLIGATION OF NOTIFICATION OF THE PARTY FURNISHING THE SECURITY

In the event that the assigned demands are distrained or otherwise restricted
the Party furnishing the Security shall notify the Bank without delay and the
lienholder in writing of the Bank's security entitlement without delay.

<PAGE>

                             Contract of Assignment
                   Page 10 of the declaration dated 21.01.2000

8.  THE BANK'S RIGHTS TO INSPECT AND AUDIT

8.1 The Party furnishing the Security is obliged to provide the Bank on request
with all information, proofs and documents which are necessary for the
evaluation and enforcement of the assigned demands and claims. In the case of
the use of EDP systems the Party furnishing the Security is to print out the
necessary documentary proof; in the event that the print-out is not executed,
the necessary data-carriers and EDP programs are to be handed over to the Bank
so that they can produce the print-outs themselves.

8.2  The Party furnishing the Security permits the Bank to inspect their
     documents or to have them inspected by an authorised agent for the
     investigation and enforcement of the assigned demands and claims.

9.  BLANKET NOTIFICATION LETTERS

The Party furnishing the Security shall hand over blanket notification letters
to the Bank, on request, for the information of third party debtors of the
assignment. The Bank is entitled to polycopy blanket notification letters signed
by the Party furnishing the Security.

10.  RELEASE OF THE SECURITIES

10.1   After the satisfaction of the secured claims the Bank shall retransfer
       the assigned demands and claims and hand over any possible surplus
       arising from the liquidation thereof. The Bank shall however transfer the
       security to a third party if they are obliged to do so; i.e. in the event
       that the furnisher of the Security is at the same time the borrower and a
       guarantor has satisfied the Bank.

10.2  The Bank is already obliged on request to release the securities (e.g.
      transferred objects, land charges) secured by the assignment,

<PAGE>

                             Contract of Assignment
                   Page 11 of the declaration dated 21.01.2000

before total satisfaction of their claims, to the respective furnisher of the
Security at their discretion either partially or wholly, insofar as the
realisable value covering 110% of all the secured claims of the Bank is not only
temporarily surpassed. Insofar as possible additional contracts of security at a
lower per cent rate are laid down this lower rate shall be decisive.

11. EVALUATION OF THE CLAIMS

11.1   The starting point for the establishing of the realisable value of the
       assigned demands or claims is the nominal value or estimated value. The
       following demands shall be deducted from the assigned demands,

       -      those where the Bank has not acquired the demands by reason of a
              prohibition of assignment;

       -      those where counter demands exist which can be offset;

       -      those where the validity of the assignment in respect of the
              registered office of the third party debtors being overseas or
              where the application of foreign law on the part of the Bank with
              reasonable expenditure cannot be established;

       -      those which are afflicted with defence because the supplies and
              services on which they are based have not been fully implemented.

11.2   A deduction of 30% from the above-mentioned nominal value or estimated
       value shall be made as security.

11.3   THE PARTY FURNISHING THE SECURITY and the BANK can demand a new
       evaluation of the collateral security, if the latter's actual value
       considerably deviates from the established value as a result of ad
       interim alterations.

<PAGE>

                             Contract of Assignment
                   Page 12 of the declaration dated 21.01.2000

12.  OTHER / FINAL CONDITIONS

12.1   In addition the general conditions of business of the BANK are
       applicable. These are already known to the Party furnishing the Security
       and can in any case be seen in every branch of the BANK. On request they
       will be sent by the BANK.

       12.2 German Law is applicable. The place of performance and jurisdiction
       is Frankfurt-am-Main.

       12.3   Verbal agreements have not been made. Alterations to this contract
              must be made in writing to be legally valid. This is also
              applicable for the removal of this condition.

       12.4   Should one or several conditions of this contract be partially or
              wholly ineffective or prove to be unworkable, the effectiveness of
              the remainder of the contract shall not be affected. The parties
              shall replace the partially or wholly ineffective condition(s) by
              (an) effective condition(s) which correspond(s) to the economic
              purpose desired and the content of the condition(s) to be replaced
              as closely as possible. This is applicable correspondingly for the
              event that the contract should prove to have any gaps in the
              regulations.

Signatures:

                                              /s/
Munich, 21.01.2000                       .................................
                                        (Signature of Party furnishing
                                         the Security )
                                             /s/
Munich, 21.01.2000                       .................................
                                        (Signature of the Bayerschen Hypo-
                                        und Vereinsbank AG))

<PAGE>

To the
Bayersche Hypo- und Vereinsbank AG

                                                              Munich, 20.01.2000

Ladies and Gentlemen,

We have concluded a framework agreement with the company LambdaNet
Communications GmbH Gunther Wagner Allee 18, 30177 Hannover (hereinafter
referred to as "LambdaNet") on 21.09.1999 for the amount of DEM 46,539,974.00.
We are aware that the company LambdaNet has assigned or will assign their claims
to you. We hereby declare that we are expressly in agreement with the said
assignment.

Munich, 21.01.2000                 /s/
                                   ........................................
                                   Nortel Dasa Network Systems GmbH & Co KG

<PAGE>

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Auseinandersetzungsguthaben        credit balance in case of partition
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Ausgleichsanspruch                 claim for adjustment
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Belastungsfreiheit                 freedom from encumbrance
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Gewinnbezugsrecht                  right to draw a share of profits
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Liquidationserlos                  liquidation proceeds
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Nachschusspflicht              liability to make further contributions
------------------------------------------------------------------------------
Pfandobjekt                        pledged property
------------------------------------------------------------------------------
Pfandrechte                        (right of) lien
------------------------------------------------------------------------------
Pfandungserklarung                 declaration of pledge
------------------------------------------------------------------------------
Pfandungsvertrag                   contract of pledge
------------------------------------------------------------------------------
Sicherungsrecht                    security right
------------------------------------------------------------------------------
Verfugungsbefugnis                 power of disposal
------------------------------------------------------------------------------

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