Document:

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                                                                    Exhibit 10.7

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                                 TRUST AGREEMENT

                                      among

                                  PF.NET CORP.

                       STATE STREET BANK AND TRUST COMPANY

                              as Corporate Trustee

                                       and

                                 PATRICK THEBADO

                              as Individual Trustee

                          Dated as of October 29, 1999

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                                TABLE OF CONTENTS

SECTION 1 DEFINITIONS........................................................2

      1.1   DEFINED TERMS....................................................2

      1.2   OTHER DEFINITIONAL PROVISIONS....................................8

SECTION 2 ENFORCEMENT OF SECURITY INTERESTS AND GUARANTEES...................8

      2.1   NOTICE OF ENFORCEMENT............................................8

      2.2   GENERAL AUTHORITY OF THE TRUSTEES OVER THE COLLATERAL AND
            GUARANTEES.......................................................9

      2.3   RIGHT TO INITIATE JUDICIAL PROCEEDINGS...........................9

      2.4   RIGHT TO APPOINT A RECEIVER.....................................10

      2.5   EXERCISE OF POWERS; INSTRUCTIONS OF REQUIRED SECURED PARTIES....10

      2.6   REMEDIES NOT EXCLUSIVE..........................................11

      2.7   WAIVER AND ESTOPPEL.............................................12

      2.8   LIMITATION ON TRUSTEES' DUTY IN RESPECT OF COLLATERAL...........12

      2.9   LIMITATION BY LAW...............................................12

      2.10  RIGHTS OF SECURED PARTIES UNDER SECURED INSTRUMENTS.............13

      2.11  RECORDS.........................................................13

      2.12  NOTICES.........................................................13

SECTION 3      13

COLLATERAL ACCOUNT; DISTRIBUTIONS...........................................13

      3.1   THE COLLATERAL ACCOUNT..........................................13

      3.2   CONTROL OF COLLATERAL ACCOUNT...................................14

      3.3   INVESTMENT OF FUNDS DEPOSITED IN COLLATERAL ACCOUNT.............14

      3.4   APPLICATION OF MONEYS...........................................15

      3.5   AMOUNTS HELD FOR CONTINGENT OBLIGATIONS.........................16

      3.6   APPLICATION OF MONEYS DISTRIBUTABLE TO THE ADMINISTRATIVE
            AGENT...........................................................17

      3.7   TRUSTEES' CALCULATIONS..........................................17

SECTION 4      18

ADDITIONAL OBLIGATIONS; ADDITIONAL COLLATERAL; ADDITIONAL GUARANTEES;
               CERTAIN DOCUMENTATION REQUIREMENTS...........................18

      4.1   Delivery of Initial Secured Instruments, Initial Security
            Documents and Initial Guarantee.................................18

      4.2   ADDITIONAL OBLIGATIONS..........................................18

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      4.3   NOTICE TO SECURED PARTIES OF ADDITIONAL OBLIGATIONS.............19

      4.4   ADDITIONAL COLLATERAL...........................................19

      4.5   NOTICE TO SECURED PARTIES OF ADDITIONAL COLLATERAL..............19

      4.6   ADDITIONAL GUARANTEES...........................................19

      4.7   NOTICE TO SECURED PARTIES OF ADDITIONAL GUARANTEE...............19

      4.8   ACTIONS REQUIRED WITH RESPECT TO INITIAL OBLIGATIONS AND
            ADDITIONAL OBLIGATIONS..........................................19

      4.9   ACTIONS REQUIRED WITH RESPECT TO SECURITY DOCUMENTS AND
            COLLATERAL......................................................20

      4.10  ACTIONS REQUIRED WITH RESPECT TO GUARANTEES.....................22

      4.11  POSSESSORY COLLATERAL...........................................22

SECTION 5      23

AGREEMENTS WITH TRUSTEES....................................................23

      5.1   DELIVERY OF AMENDMENTS TO SECURED INSTRUMENTS...................23

      5.2   INFORMATION AS TO SECURED PARTIES, ETC..........................23

      5.3   COMPENSATION AND EXPENSES.......................................24

      5.4   STAMP AND OTHER SIMILAR TAXES...................................24

      5.5   FILING FEES, EXCISE TAXES, ETC..................................24

      5.6   INDEMNIFICATION.................................................25

      5.7   TRUSTEES' LIEN..................................................25

      5.8   FURTHER ASSURANCES..............................................25

SECTION 6      26

POSSESSION AND USE OF COLLATERAL; PARTIAL RELEASES..........................26

      6.1   USE PRIOR TO NOTICE OF ENFORCEMENT..............................26

      6.2   RELEASES; SUBORDINATION.........................................26

      6.3   INSURANCE AND CONDEMNATION PROCEEDS; LIQUIDATING DIVIDENDS......28

      6.4   PURCHASE OF COLLATERAL..........................................28

SECTION 7      28

THE TRUSTEES   28

      7.1   ACCEPTANCE OF TRUST.............................................28

      7.2   EXCULPATORY PROVISIONS..........................................28

      7.3   DELEGATION OF DUTIES............................................30

      7.4   RELIANCE BY TRUSTEES............................................30

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      7.5   Limitations on Duties of Trustees; Relationship between
            Corporate Trustee and Individual Trustee........................31

      7.6   MONEYS TO BE HELD IN TRUST......................................32

      7.7   RESIGNATION AND REMOVAL OF THE TRUSTEES.........................32

      7.8   STATUS OF SUCCESSOR CORPORATE TRUSTEE...........................34

      7.9   MERGER OF THE CORPORATE TRUSTEE.................................34

      7.10  CO-TRUSTEE; SEPARATE TRUSTEES...................................35

      7.11  TREATMENT OF PAYEE OR INDORSEE BY TRUSTEES; REPRESENTATIVES
            OF SECURED PARTIES..............................................36

      7.12  NOTICES TO CORPORATE TRUSTEE UNDER SECURITY DOCUMENTS...........37

SECTION 8      37

REPRESENTATIONS AND WARRANTIES..............................................37

      8.1   REPRESENTATIONS AND WARRANTIES OF THE CORPORATE TRUSTEE.........37

      8.2   REPRESENTATIONS AND WARRANTIES OF THE BORROWER..................37

SECTION 9      38

MISCELLANEOUS  38

      9.1   NOTICES.........................................................38

      9.2   NO WAIVERS......................................................39

      9.3   AMENDMENTS, SUPPLEMENTS, WAIVERS AND RELEASES...................39

      9.4   HEADINGS........................................................40

      9.5   SEVERABILITY....................................................40

      9.6   SUCCESSORS AND ASSIGNS..........................................40

      9.7   CURRENCY CONVERSIONS............................................40

      9.8   GOVERNING LAW...................................................41

      9.9   NO RECOURSE.....................................................41

      9.10  SUBMISSION TO JURISDICTION; WAIVERS.............................41

      9.11  COUNTERPARTS....................................................41

      9.12  RELEASE OF LIENS; GUARANTEES....................................42

      9.13  COMPLETE AGREEMENT..............................................42

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      This TRUST AGREEMENT, dated as of October 29, 1999 (this "Trust
Agreement"), among, PF.Net Corp. a Delaware corporation (the "Borrower"), State
Street Bank and Trust Company, a Massachusetts trust company, as corporate
trustee (as hereinafter defined, the "Corporate Trustee"), and Patrick Thebado,
as individual trustee (as hereinafter defined, the "Individual Trustee").

                              W I T N E S S E T H :

      WHEREAS, the Borrower has entered into a Credit Agreement, dated as of
October 29, 1999, as amended, among the Borrower, the lenders from time to time
parties thereto and First Union National Bank, as administrative agent (as
amended, modified, supplemented, extended or restated from time to time, the
"Credit Facility");

      WHEREAS, the Borrower wishes to cause its obligations under the Credit
Facility to become Payment Obligations hereunder by causing such obligations to
be secured by the Collateral pursuant to the Security Documents and guaranteed
pursuant to the Guarantees, all in the manner described in this Trust Agreement;
and

      WHEREAS, the Borrower and certain of its Subsidiaries may, from time to
time, execute and deliver to the Corporate Trustee certain Additional Guarantees
and Additional Security Documents and, pursuant to such Additional Security
Documents, create in favor of the Trustees a security interest in Additional
Collateral, all in the manner described in this Trust Agreement.

                              DECLARATION OF TRUST

      NOW, THEREFORE, to secure the payment of the Payment Obligations and in
consideration of the premises and the mutual agreements set forth herein, the
Trustees do hereby declare that they hold and will hold as trustees in trust
under this Trust Agreement all of their right, title and interest in, to and
under all of the Collateral, the Guarantees and the Security Documents, whether
now existing or hereafter arising (and the Borrower does hereby consent
thereto);

      TO HAVE AND TO HOLD the Security Documents, the Guarantees and the
Collateral (the right, title and interest of the Trustees in the Security
Documents, the Guarantees and the Collateral being hereinafter referred to as
the "Trust Estate") unto the Trustees and their respective successors in trust
under this Trust Agreement and their respective assigns forever;

      IN TRUST NEVERTHELESS, under and subject to the conditions herein set
forth and for the benefit of the Secured Parties, for the enforcement of the
payment and performance of all Obligations, and as security for the performance
of and compliance with the covenants and conditions of this Trust Agreement, the
Secured Instruments, the Guarantees and the Security Documents;

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      PROVIDED, HOWEVER, that these presents are upon the condition that, when
the events set forth in subsection 9.12(d) shall have occurred, this Trust
Agreement, and the estates and rights hereby assigned, shall cease, determine
and be void except as otherwise provided in subsection 9.12(d); otherwise they
shall remain and be in full force and effect.

      IT IS HEREBY FURTHER COVENANTED AND DECLARED, that the Trust Estate is to
be held and applied by the Trustees, subject to the further covenants,
conditions and trusts hereinafter set forth.

                               SECTION 1
                              DEFINITIONS

      1.1   DEFINED TERMS.

      As used herein, the following terms shall have the following meanings:

            "Additional  Collateral":  all  Collateral  other than the Initial
      Collateral.

            "Additional  Collateral  Designation":  each Additional Collateral
      Designation,  substantially in the form of Exhibit A, duly completed and
      executed by a Responsible  Officer and delivered  pursuant to subsection
      4.4.

            "Additional Guarantee": each guarantee in favor of the Trustees made
      effective by the execution and delivery to them of an instrument in the
      form of Annex 1 to the Initial Guarantee and designated as an Additional
      Guarantee hereunder in the manner provided in subsection 4.6, as amended,
      supplemented or otherwise modified from time to time in accordance with
      this Trust Agreement.

            "Additional  Guarantee  Designation":  each  Additional  Guarantee
      Designation,  substantially in the form of Exhibit B, duly completed and
      executed by a Responsible  Officer and delivered  pursuant to subsection
      4.6.

            "Additional  Obligations":  any Permitted  Additional  Obligations
      that become Obligations in the manner provided in subsection 4.2.

            "Additional  Payment  Obligations  Designation":  each  additional
      payment  obligations  designation,  substantially in the form of Exhibit
      C, duly  completed and executed by a  Responsible  Officer and delivered
      pursuant to subsection 4.2.

            "Additional Security Document": each agreement or instrument (other
      than the Initial Security Documents) creating or evidencing a security
      interest of the Trustees in, or a Lien in favor of the Trustees on, any
      Collateral, as amended, supplemented or otherwise modified from time to
      time in accordance with this Trust Agreement.

            "Administrative   Agent":   First  Union   National  Bank  or  any
      successor  administrative  agent appointed  pursuant to the terms of the
      Credit Agreement.

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            "Affiliate": as to any Person, any other Person which, directly or
      indirectly, is in control of, is controlled by, or is under common control
      with, such Person. For purposes of this definition, "control" of a Person
      means the power, directly or indirectly, to direct or cause the direction
      of the management and policies of such Person, whether through the
      ownership of voting interests, by contract or otherwise.

            "Asset Sale": any sale, transfer or other disposition (including by
      way of merger, consolidation or sale-leaseback transactions) in one
      transaction or a series of related transactions by the Borrower or its
      Subsidiaries to any Person other than the Borrower or any of its
      Subsidiaries of (i) all or any of the capital stock of any Subsidiary,
      (ii) all or substantially all of the property and assets of an operating
      unit or business of the Borrower or any of the Subsidiaries or (iii) any
      other property or assets of the Borrower or any of the Subsidiaries other
      than in the ordinary course of business of the Borrower or such
      Subsidiary; PROVIDED that sales or other dispositions of equipment that
      has become worn out, obsolete or damaged, or otherwise unsuitable for use
      in connection with the business of the Borrower or the Subsidiaries, shall
      not be included within the meaning of "Asset Sale".

            "Business  Day":  any day  other  than a day on  which  banks  are
      authorized  or  required  by law to close in New  York  City or  Boston,
      Massachusetts.

            "Code":  the  Uniform  Commercial  Code as in effect  from time to
      time in the State of New York.

            "Collateral": all the properties and assets of whatever nature,
      tangible or intangible, now owned or existing or hereafter acquired or
      arising, in which the Trustees have been granted a Lien or security
      interest pursuant to any of the Security Documents and all Proceeds
      thereof.

            "Collateral Account":  as defined in subsection 3.1(a).

            "Corporate Trustee": State Street Bank and Trust Company, in its
      capacity as corporate trustee under this Trust Agreement, and any
      successor corporate trustee appointed hereunder.

            "Credit Agreement": the Credit Agreement, dated as of October 29,
      1999, among the Borrower, the lenders named therein and First Union
      National Bank, as Administrative Agent, as amended, modified,
      supplemented, extended or restated from time to time.

            "Credit  Facility":  the  Initial  Credit  Facility,  as  amended,
      modified, supplemented, extended or restated from time to time.

            "Default":  any event or condition  which  constitutes an Event of
      Default or which upon notice,  or lapse of time, or both would become an
      Event of Default.

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            "Distribution Date": each date fixed by the Corporate Trustee or the
      Required Secured Parties for a distribution to the Secured Parties of
      funds held in the Collateral Account, the first of which shall be within
      120 days after a Notice of Enforcement is effective as provided in
      subsection 2.1(b), and the remainder of which shall occur (x) monthly
      thereafter on the day of the month corresponding to the first Distribution
      Date (or, if there be no such corresponding day, the last day of such
      month), PROVIDED that if any such day is not a Business Day, such
      Distribution Date shall be the next Business Day and (y) on such other
      dates fixed by the Corporate Trustee at the written direction of the
      Required Secured Parties.

            "Dollars" and "$": lawful currency of the United States of America.

            "Effective Date":  October 29, 1999.

            "Event of  Default":  any  "event of  default"  under any  Secured
      Instrument.

            "Facility Obligations": at any time, the sum (without duplication)
      of (a) the aggregate principal or face amount of the loans and other
      extensions of credit outstanding at such time under the Credit Facility
      and the aggregate amount of accrued and unpaid interest thereon at such
      time (including interest accrued at the then applicable rate provided in
      the Credit Agreement after the maturity of the loans thereunder and
      interest accrued at the then applicable rate provided in the Credit
      Agreement after the filing of any petition in bankruptcy, or the
      commencement of any insolvency, reorganization or like proceeding,
      relating to any obligor whether or not a claim for post-filing or
      post-petition interest is allowed in such proceeding), (b) the aggregate
      amount of accrued and unpaid fees payable by the Borrower under or in
      connection with the Credit Facility at such time, and (c) the aggregate
      amount of all other monetary obligations of the Borrower that are accrued
      and owing at such time to any Secured Party under the Credit Facility,
      including, without limitation, indemnification and expense reimbursement
      obligations.

            "Guarantee  Obligations":  at any time,  the  aggregate  amount of
      all  monetary  obligations  of any  guarantor  under a Guarantee  to any
      Secured  Party that are accrued and unpaid at such time under any one or
      more Guarantees.

            "Guarantees":   the   Initial   Guarantee   and   the   Additional
      Guarantees.

            "Hedging Agreement": any interest rate swap, currency swap or other
      interest rate or currency hedge arrangement (other than any interest rate
      cap or other similar agreement or arrangement under which the Borrower has
      no continuing payment obligations) (a) provided by a Lender or an
      Affiliate of a Lender, (b) to or under which the Borrower is a party or a
      beneficiary and (c) which is designated as a Hedging Agreement in the
      Additional Payment Obligations Designation pursuant to which the Hedging
      Agreement Obligations under such Hedging Agreement become Obligations
      hereunder.

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            "Hedging  Agreement  Obligations":  at  any  time,  the  aggregate
      amount of all monetary  obligations of the Borrower to any Secured Party
      that are accrued  and unpaid at such time under any one or more  Hedging
      Agreements.

            "Hedging  Agreement  Secured  Party":  any  Secured  Party  to the
      extent it is a Holder of Hedging Agreement Obligations.

            "Holder":  any holder of, or creditor in respect of, Obligations.

            "Individual   Trustee":   Patrick  Thebado,  in  his  capacity  as
      individual  trustee  under  this  Trust  Agreement,  and  any  successor
      individual trustee appointed hereunder.

            "Initial   Collateral":   the   Collateral  in  which  a  security
      interest is created under the Initial Security Documents.

            "Initial Credit  Facility":  the credit facility provided pursuant
      to the Credit Agreement and the other Loan Documents.

            "Initial Guarantee": the Guarantee Agreement dated October 29, 1999,
      by the Parent and the Subsidiaries of the Borrower in favor of the
      Trustees, as amended, supplemented or otherwise modified from time to time
      in accordance with this Trust Agreement.

            "Initial  Obligations":  the  Obligations  under and in respect of
      the Initial Credit Facility.

            "Initial  Secured  Instruments":  the  Credit  Agreement  and  the
      other Loan Documents.

            "Initial Security Documents": the documents described in Schedule I
      (and attached hereto as exhibits), as amended, supplemented or otherwise
      modified from time to time in accordance with this Trust Agreement and the
      Secured Instruments.

            "Lenders":  the  lenders  from  time to time  party to the  Credit
      Agreement.

            "Lien": means, with respect to any asset, (a) any mortgage, deed of
      trust, lien, pledge, hypothecation, encumbrance, charge or security
      interest in, on or of such asset, (b) the interest of a vendor or a lessor
      under any conditional sale agreement, capital lease or title retention
      agreement (or any financing lease having substantially the same economic
      effect as any of the foregoing) relating to such asset and (c) in the case
      of securities, any purchase option, call or similar right of a third party
      with respect to such securities.

            "Loan  Documents":  has  the  meaning  set  forth  in  the  Credit
      Agreement.

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            "Notice of Cancellation of Enforcement": with respect to any Notice
      of Enforcement, a notice or notices (a) delivered to the Corporate Trustee
      by the Administrative Agent on behalf of the Required Securities Parties,
      canceling such Notice of Enforcement and (b) requesting the Corporate
      Trustee not to commence or, as the case may be, to cease, enforcement
      actions in respect of the Collateral and the Guarantees.

            "Notice of Enforcement": a notice or notices delivered to the
      Corporate Trustee by the Administrative Agent on behalf of the Required
      Secured Parties (a) stating that the Facility Obligations have become due
      and payable at or prior to the stated maturity thereof and remain unpaid
      and (b) requesting the Corporate Trustee to commence enforcement actions
      in respect of the Collateral and the Guarantees as directed by the
      Required Secured Parties; PROVIDED that a Notice of Enforcement shall be
      deemed to have been delivered and to be effective upon the occurrence of
      an Event of Default pursuant to Sections 7.01(h) or Section 7.01(i) of the
      Credit Agreement without notice or other action by the Administrative
      Agent or the Required Secured Parties.

            "Obligations":  at any  time,  Borrower's  obligation  to pay  the
      Payment  Obligations  and all  other  obligations  of  Borrower  and its
      Subsidiaries hereunder and under the other Operative Documents.

            "Operative  Documents":  the Secured Instruments,  the Guarantees,
      the Security Documents and the Trust Agreement.

            "Opinion of Counsel": an opinion in writing signed by legal counsel
      reasonably satisfactory to the Corporate Trustee and the Administrative
      Agent, who may be an employee of the Corporate Trustee or of the Borrower
      or counsel regularly retained by the Borrower or by the Corporate Trustee.
      Any Opinion of Counsel may contain customary exceptions, assumptions and
      qualifications and may rely, as to factual matters, on certificates of
      public officials or representatives of the Borrower.

            "Parent":  PF.Net Holdings, Limited, a Delaware corporation.

            "Payment  Obligations":  (a)  the  Facility  Obligations,  (b) the
      Hedging Agreement Obligations and (c) the Guarantee Obligations.

            "Permitted Additional Obligations": at any time, any indebtedness or
      other obligations that the Borrower may incur as Facility Obligations or
      Hedging Agreement Obligations, as the case may be, without violating this
      Trust Agreement or any Loan Document in effect at such time.

            "Person": an individual, a corporation,  a partnership,  a limited
      liability  company,  an  association,  a trust or any  other  entity  or
      organization,  including a  government  or political  subdivision  or an
      agency or instrumentality thereof.

            "Pledged  Equity  Securities":   any  portion  of  the  Collateral
      consisting of stock of, partnership  interests in, or other evidences of
      equity ownership in, any Person.

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<PAGE>

            "Possessory Collateral": Collateral in which the Trustees' security
      interest may be, in accordance with the Code, perfected only by means of
      possession of such Collateral by the Trustees or an agent or bailee on
      their behalf.

            "Proceeds":  all proceeds within the meaning of the Code.

            "Required  Secured  Parties":  the Required Lenders (as defined in
      the Credit Agreement).

            "Responsible   Officer":  any  of  the  chief  executive  officer,
      president, chief financial officer or treasurer of the Borrower.

            "Responsible Trustee Officer": any officer of the Corporate Trustee
      with direct responsibility for the administration of this Trust Agreement,
      and with respect to a particular corporate trust matter, any other officer
      of the Corporate Trustee to whom such matter is referred because of his
      knowledge of and familiarity with the particular subject.

            "Secured  Instruments":  the  Credit  Agreement,  the  other  Loan
      Documents  (other than the  Guarantees  and the Security  Documents) and
      the Hedging Agreements.

            "Secured Parties":  the Administrative  Agent, the Lenders and the
      Holders of Hedging Agreement Obligations.

            "Security  Documents":  (a) the Initial Security Documents and (b)
      the Additional Security Documents.

            "Subsidiary": as to any Person, a corporation, partnership, limited
      liability company or other entity of which shares of stock or other
      ownership interests having ordinary voting power (other than stock or such
      other ownership interests having such power only by reason of the
      happening of a contingency) to elect a majority of the board of directors
      or other managers of such corporation, partnership, limited liability
      company or other entity are at the time owned, or the management of which
      is otherwise controlled, directly or indirectly through one or more
      intermediaries, or both, by such Person. Unless otherwise qualified, all
      references to a "Subsidiary" or to "Subsidiaries" in this Trust Agreement
      shall refer to a Subsidiary or Subsidiaries of the Borrower.

            "Trust Agreement":  this Trust Agreement,  dated as of October 29,
      1999,  among the  Borrower,  the  Corporate  Trustee and the  Individual
      Trustee, as amended,  supplemented,  restated or otherwise modified from
      time to time.

            "Trust  Estate":  as defined in the  Declaration  of Trust in this
      Trust Agreement.

            "Trustee Fees": all fees, costs,  expenses of and  indemnification
      amounts  payable to the Trustees of the types  described in  subsections
      5.3, 5.4, 5.5 and 5.6.

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<PAGE>

            "Trustees":   collectively,   the   Corporate   Trustee   and  the
      Individual Trustee.

            "Voting Obligations": all Obligations other than (i) those held by
      an Affiliate of the Borrower, (ii) Hedging Agreement Obligations and (iii)
      those outstanding under Secured Instruments that provide that the Holders
      of such Obligations will not be included in any determination of Required
      Secured Parties.

      1.2   OTHER DEFINITIONAL PROVISIONS.

      The words "hereof", "herein" and "hereunder" and words of similar import
when used in this Trust Agreement shall refer to this Trust Agreement as a whole
and not to any particular provision of this Trust Agreement, the words
"include", "includes" and "including" when used in this Trust Agreement shall be
deemed to be followed by the phrase "without limitation", and Schedule, section
and subsection references are to this Trust Agreement unless otherwise
specified.

                               SECTION 2
            ENFORCEMENT OF SECURITY INTERESTS AND GUARANTEES

      2.1   NOTICE OF ENFORCEMENT.

            (a) Upon receipt by the Corporate Trustee of a Notice of
      Enforcement, the Corporate Trustee promptly shall notify the Borrower of
      the receipt and contents thereof. So long as such Notice of Enforcement is
      in effect, the Trustees shall exercise the rights and remedies provided in
      this Trust Agreement and in the Guarantees and the Security Documents in
      accordance with the direction of the Required Secured Parties as provided
      herein. The Trustees are not empowered to exercise any remedy hereunder or
      thereunder relating to the foreclosure of Collateral or enforcement of any
      Guarantee unless a Notice of Enforcement is in effect; PROVIDED that for
      the avoidance of doubt, this subsection 2.1(a) shall in no event limit the
      right of either Trustee to exercise any and all such other rights and
      remedies as it may have hereunder and under the Security Documents to
      preserve and protect the Collateral and the rights of the Trustees and the
      Secured Parties therein.

            (b) A Notice of Enforcement shall become effective upon receipt
      thereof by the Corporate Trustee and, once effective, shall remain in
      effect unless and until cancelled as provided in subsection 2.1(c).

            (c) A Notice of Enforcement may be cancelled by the delivery to the
      Corporate Trustee of a Notice of Cancellation of Enforcement (i) before
      the Trustees take any action to exercise any remedy with respect to the
      Collateral or the Guarantees or (ii) thereafter, if the Corporate Trustee
      believes that all actions theretofore taken by the Trustees to exercise
      any remedy or remedies with respect to the Collateral or the Guarantees
      can be reversed without undue difficulty. The Corporate Trustee shall
      immediately notify the Borrower as to the receipt of any such Notice of
      Cancellation of

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<PAGE>

      Enforcement and shall promptly notify the Borrower as to the cancellation
      of the related Notice of Enforcement.

      2.2   GENERAL  AUTHORITY OF THE TRUSTEES OVER THE  COLLATERAL AND
GUARANTEES.

      The Borrower hereby irrevocably constitutes and appoints the Trustees and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorneys-in-fact with full power and authority in the name of the
Borrower or in its or his own name, from time to time in the Trustees'
discretion, so long as any Notice of Enforcement is in effect, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to carry out the terms of this Trust
Agreement, the Guarantees and the Security Documents and accomplish the purposes
hereof and thereof, and, without limiting the generality of the foregoing, the
Borrower hereby gives the Trustees the power and right on behalf of the
Borrower, without notice to or further assent by the Borrower, to do the
following so long as a Notice of Enforcement is in effect (and, in the case of
clause (e) (i) below, whether or not a Notice of Enforcement is in effect):

            (a) to ask for, demand, sue for, collect, receive and give
      acquittance for any and all moneys due or to become due upon, or in
      connection with, the Guarantees, the Security Documents or the Collateral;

            (b) to receive, take, endorse, assign and deliver any and all
      checks, notes, drafts, acceptances, documents and other negotiable and
      non-negotiable instruments taken or received by the Trustees as Collateral
      or in connection with the Guarantees or any Security Document;

            (c) to commence, prosecute, defend, settle, compromise or adjust any
      claim, suit, action or proceeding with respect to, or in connection with,
      the Guarantees or the Collateral or the interests, rights, powers or
      duties of the Trustees or any Secured Party therein, whether brought by or
      against the Borrower, the Trustees or any Secured Party;

            (d) to sell, transfer, assign or otherwise deal in or with the
      Collateral or any part thereof as fully and effectively as if the Trustees
      were the absolute owner thereof; and

            (e) to do, at their option and at the expense and for the account of
      the Borrower, at any time or from time to time, all acts and things which
      the Trustees deem necessary (i) to protect or preserve the Collateral and
      the rights of the Trustees and the Secured Parties therein and (ii) to
      realize upon the Guarantees or the Collateral or any part thereof.

      2.3   RIGHT TO INITIATE JUDICIAL PROCEEDINGS.

      If a Notice of Enforcement is in effect, the Trustees, subject to the
provisions of subsection 2.5(b), (a) shall have the right and power to institute
and maintain such suits and

                                       9
<PAGE>

proceedings as they may deem appropriate to protect and enforce the rights
vested in them by this Trust Agreement, the Guarantees and the Security
Documents and (b) may proceed by suit or suits at law or in equity to enforce
such rights and to foreclose upon the Collateral and to sell all or, from time
to time, any of the Collateral under the judgment or decree of a court of
competent jurisdiction.

      2.4   RIGHT TO APPOINT A RECEIVER.

      If a Notice of Enforcement is in effect, upon the filing of a bill in
equity or other commencement of judicial proceedings to enforce the rights of
the Trustees under this Trust Agreement, any Guarantee or any Security Document,
the Trustees shall, to the extent permitted by applicable law, without notice to
the Borrower or any party claiming through the Borrower, without regard to the
solvency or insolvency at the time of any Person then liable for the payment or
performance of any of the Obligations, without regard to the then value of the
Trust Estate, and without requiring any bond from any complainant in such
proceedings, be entitled as a matter of right to the appointment of a receiver
or receivers (who may be a Trustee) of the Trust Estate, or any part thereof,
and of the rents, issues, tolls, profits, royalties, revenues and other income
thereof, pending such proceedings, with such powers as the court making such
appointment shall confer, and to the entry of an order directing that the rents,
issues, tolls, profits, royalties, revenues and other income of the property
constituting the whole or any part of the Trust Estate be segregated,
sequestered and impounded for the benefit of the Trustees and the Secured
Parties, and the Borrower irrevocably consents to the appointment of such
receiver or receivers and to the entry of such order; PROVIDED that
notwithstanding the appointment of any receiver, the Corporate Trustee shall be
entitled to retain possession and control, pursuant to the terms of the Trust
Agreement, of all cash held by or deposited with it pursuant to this Trust
Agreement or any Security Document.

      2.5   EXERCISE OF POWERS; INSTRUCTIONS OF REQUIRED SECURED PARTIES

            (a) All of the powers, remedies and rights of the Trustees as set
      forth in this Trust Agreement may be exercised by the Trustees in respect
      of any Guarantee or any Security Document as though set forth in full
      therein, and all of the powers, remedies and rights of the Trustees as set
      forth in any Guarantee or any Security Document may be exercised from time
      to time as herein and therein provided.

            (b) The Required Secured Parties shall (subject to the last sentence
      of subsection 2.1(a)) have the right, by one or more instruments in
      writing executed and delivered to the Corporate Trustee, to direct the
      time, method and place of conducting any proceeding for any right or
      remedy available to the Trustees, or of exercising any trust or power
      conferred on the Trustees, or for the appointment of a receiver, or to
      direct the taking or the refraining from taking of any action authorized
      by this Trust Agreement, any Guarantee or any Security Document, and the
      Trustees shall act in accordance with any such direction; PROVIDED that
      such direction shall not conflict with any provision of applicable law or
      of this Trust Agreement, any Guarantee or any Security Document and the
      Trustees shall be adequately secured and indemnified as provided in
      subsection

                                       10
<PAGE>

      7.4(d). In the absence of direction from the Required Secured Parties, (i)
      the Trustees shall have no duty to take or refrain from taking any action
      unless explicitly required herein or in the Security Documents or the
      Guarantees and (ii) the Trustees may (but in the absence of a direction
      from the Required Secured Parties shall not be required to) take any and
      all such actions under this Trust Agreement, the Security Documents and
      the Guarantees or any of them or otherwise as the Corporate Trustee shall
      deem to be in the best interests of the Secured Parties to maintain the
      Collateral and protect and preserve the Collateral and the rights of the
      Secured Parties; PROVIDED, HOWEVER, that in the absence of direction
      (which may relate to the exercise of specific remedies or to the exercise
      of remedies in general) from the Required Secured Parties while a Notice
      of Enforcement is in effect, the Trustees shall not foreclose any Lien on
      the Collateral or take any enforcement action under any Guarantee.

      2.6   REMEDIES NOT EXCLUSIVE.

            (a) No remedy conferred upon or reserved to the Trustees herein or
      in any Guarantee or Security Document is intended to be exclusive of any
      other remedy or remedies, but every such remedy shall be cumulative and
      shall be in addition to every other remedy conferred herein, in any
      Guarantee or in any Security Document or now or hereafter existing at law
      or in equity or by statute.

            (b) No delay by the Trustees in exercising or failure by the
      Trustees to exercise any right, remedy or power hereunder or under any
      Guarantee or Security Document shall impair any such right, remedy or
      power or shall be construed to be a waiver thereof, and every right, power
      and remedy given to the Trustees under this Trust Agreement, any Guarantee
      or any Security Document may be exercised from time to time and as often
      as may be deemed expedient by the Trustees or the Required Secured
      Parties.

            (c) If the Trustees shall have proceeded to enforce any right,
      remedy or power under this Trust Agreement, any Guarantee or any Security
      Document and the proceeding for the enforcement thereof shall have been
      discontinued or abandoned for any reason or shall have been determined
      adversely to the Trustees, then the Borrower, the Trustees and the Secured
      Parties shall, subject to any determination in such proceeding, severally
      and respectively be restored to their former positions and rights
      hereunder or thereunder with respect to the Trust Estate and in all other
      respects, and thereafter all rights, remedies and powers of the Trustees
      shall continue as though no such proceeding had been taken.

            (d) All rights of action and of asserting claims upon or under this
      Trust Agreement, the Guarantees and the Security Documents may be enforced
      by the Trustees without the possession of any Secured Instrument,
      Guarantee, Security Document or instrument evidencing any Obligation or
      the production thereof at any trial or other proceeding relative thereto,
      and any suit or proceeding instituted by the Trustees shall be, subject to
      subsections 7.5(c), 7.5(d) and 7.10(b)(ii), brought in their name as
      Trustees and any recovery of judgment shall be held as part of the Trust
      Estate.

                                       11
<PAGE>

      2.7   WAIVER AND ESTOPPEL

            (a) The Borrower hereby agrees, to the extent it may do so lawfully,
      that it will not at any time in any manner whatsoever claim, or take the
      benefit or advantage of, any appraisement, valuation, stay, extension,
      moratorium, turnover or redemption law, or any law permitting it to direct
      the order in which the Collateral shall be sold, now or at any time
      hereafter in force, which may delay, prevent or otherwise affect the
      performance or enforcement of this Trust Agreement, any Guarantee or any
      Security Document and waives all benefit or advantage of all such laws,
      and the Borrower hereby covenants that it will not hinder, delay or impede
      the execution of any power granted to the Trustees in this Trust
      Agreement, any Guarantee or any Security Document but will suffer and
      permit the execution of every such power as though no such law were in
      force.

            (b) The Borrower, to the extent it may lawfully do so, on behalf of
      itself and all who may claim through or under it, including, without
      limitation, any and all subsequent creditors, vendees, assignees and
      Lienors, waives and releases all rights to demand or to have any
      marshalling of the Collateral upon any sale, whether made under any power
      of sale granted herein or in any Security Document or pursuant to judicial
      proceedings or upon any foreclosure or any enforcement of this Trust
      Agreement or any Security Document and consents and agrees that all the
      Collateral may at any such sale be offered and sold as an entirety.

            (c) The Borrower waives, to the extent permitted by applicable law,
      presentment, demand, protest and any notice of any kind (except notices
      explicitly required hereunder or under any Secured Instrument, any
      Guarantee or any Security Document) in connection with this Trust
      Agreement, the Guarantees and the Security Documents, and any action taken
      by the Trustees with respect to the Collateral.

      2.8   LIMITATION ON TRUSTEES' DUTY IN RESPECT OF COLLATERAL.

      Beyond their duties as to the custody thereof expressly provided herein or
in any Security Document and to account to the Secured Parties and the Borrower
for moneys and other property received by them hereunder or under any Security
Document, the Trustees shall not have any duty to the Borrower or to the Secured
Parties as to any Collateral in their possession or control or in the possession
or control of any of their agents or nominees, or any income thereon or as to
the preservation of rights against prior parties or any other rights pertaining
thereto.

      2.9   LIMITATION BY LAW.

      All rights, remedies and powers provided herein may be exercised only to
the extent that the exercise thereof does not violate any applicable provision
of law, and all the provisions hereof are intended to be subject to all
applicable provisions of law which may be controlling and to be limited to the
extent necessary so that they will not render this Trust Agreement invalid,
unenforceable in whole or in part or not entitled to be recorded, registered or
filed under the provisions of any applicable law.

                                       12
<PAGE>

      2.10  RIGHTS OF SECURED PARTIES UNDER SECURED INSTRUMENTS.

      Notwithstanding any other provision of this Trust Agreement, any Guarantee
or any Security Document, the right of each Secured Party to receive payment of
or performance in respect of the Obligations held by such Secured Party when due
(whether at the stated maturity thereof, by acceleration or otherwise) as
expressed in the related Secured Instrument or other instrument evidencing or
agreement governing such Obligation or to institute suit or to obtain a judgment
for the collection or performance of such Obligations or to enforce any such
judgment on or after such due date, and to otherwise exercise the rights and
remedies as a general creditor in accordance with the Secured Instruments to
which it is a party, and the obligation of the Borrower to pay and perform such
Obligations when due, shall not be impaired or affected except as provided in
such Secured Instrument.

      2.11  RECORDS.

      The Corporate Trustee shall maintain records regarding instructions of the
Required Secured Parties, the identity of the Administrative Agent and the other
Secured Parties, determinations of the types and amounts of the Payment
Obligations for any purpose and the allocation of deposits to the Collateral
Account and any distributions therefrom. The information contained in such
records shall be made available to any Secured Party upon request.

      2.12  NOTICES.

      The Corporate Trustee shall promptly notify the Administrative Agent and
each Holder of Hedging Agreement Obligations in the event it shall receive, and
shall deliver to each such person a copy of, (a) any Notice of Enforcement, (b)
any instructions by the Required Secured Parties to take any action under this
Trust Agreement or any Security Document or Guarantee, including any instruction
to commence any exercise of remedies with respect to the Collateral or
Guarantees, (c) any request by the Borrower or any Secured Party for any
consent, waiver, amendment, supplement, modification or release with respect to
this Agreement, any Security Document, any Collateral or any Guarantee, or (d)
any other material instruction, notice, request, demand, certificate, opinion of
counsel or other communications from any person which is related to the
Collateral, the Security Documents or the Guarantees. The Corporate Trustee
shall also deliver a reasonably detailed notice to the Administrative Agent and
each Holder of Hedging Agreement Obligations regarding the taking of any
enforcement action or the exercise of any remedies by any of the Trustees with
respect to the Security Documents, the Collateral or the Guarantees which notice
shall be delivered promptly after the occurrence of any such event.

                               SECTION 3

                   COLLATERAL ACCOUNT; DISTRIBUTIONS

      3.1   THE COLLATERAL ACCOUNT.

            (a) On the Effective Date there shall be established and, at all
      times thereafter until the trusts created by this Trust Agreement shall
      have terminated, there shall be maintained with the Corporate Trustee at
      the office of the Corporate Trustee's corporate

                                       13
<PAGE>

      trust division, a collateral account, which shall be entitled the "PF.Net
      Corp. Collateral Account" (the "COLLATERAL ACCOUNT").

            (b) All moneys which are required by this Trust Agreement or any
      Security Document to be delivered to the Trustees while a Notice of
      Enforcement is in effect or which are received by the Trustees or any
      agent or nominee of the Trustees in respect of the Collateral or the
      Guarantees, whether in connection with the exercise of the remedies
      provided in this Trust Agreement, any Guarantee or any Security Document
      or otherwise, while a Notice of Enforcement is in effect shall be
      deposited in the Collateral Account and, in each case, held by the
      Corporate Trustee as part of the Trust Estate and applied in accordance
      with the terms of this Trust Agreement. Upon the cancellation of each
      effective Notice of Enforcement pursuant to subsection 2.1(c) the
      Corporate Trustee shall (subject to the first sentence of subsection
      3.4(a)) cause all funds on deposit in the Collateral Account to be paid
      over to the Borrower.

      3.2   CONTROL OF COLLATERAL ACCOUNT.

      All right, title and interest in and to the Collateral Account shall vest
in the Corporate Trustee on behalf of the Secured Parties, and funds on deposit
in the Collateral Account shall constitute part of the Trust Estate. The
Collateral Account shall be subject to the sole and exclusive dominion and
control of the Corporate Trustee.

      3.3   INVESTMENT OF FUNDS DEPOSITED IN COLLATERAL ACCOUNT.

      The Corporate Trustee shall invest and reinvest moneys on deposit in the
Collateral Account at the written direction of the Borrower or the Required
Secured Parties, as provided below, at any time in:

            (a)   marketable   obligations  of  the  United  States  having  a
      maturity of not more than one year from the date of acquisition;

            (b) marketable obligations directly and fully guaranteed by the
      United States having a maturity of not more than one year from the date of
      acquisition;

            (c) bankers' acceptances and certificates of deposit and other
      interest-bearing obligations issued by any bank organized under the laws
      of the United States or any state thereof with capital, surplus and
      undivided profits aggregating at least $500,000,000, in each case having a
      maturity of not more than one year from the date of acquisition;

            (d) repurchase obligations with a term of not more than one day for
      underlying securities of the types described in clauses (a), (b) and (c)
      above entered into with any bank meeting the qualifications specified in
      clause (c) above;

            (e) commercial paper rated at least A-2 or the equivalent thereof by
      Standard & Poor's Ratings Group or at least P-2 or the equivalent thereof
      by Moody's Investors Service, Inc. and maturing within six months after
      the date of acquisition; and

                                       14
<PAGE>

            (f) shares of open end money market mutual or similar funds which
      invest exclusively in assets satisfying the requirements of clauses (a)
      through (e) above;

PROVIDED that (i) the aggregate amount invested in obligations of the types
described in clauses (c), (d) and (e) above of any one issuer shall not exceed
$50,000,000 at any time and (ii) the Borrower or the Required Secured Parties
shall, to the extent that the timing of distributions to be made from the
Collateral Account is known or can be reasonably anticipated, select investments
for amounts equal to such distributions that mature prior to the anticipated
dates of such distributions. All such investments of funds in the Collateral
Account, the interest and income received thereon and the net proceeds realized
on the sale or redemption thereof shall be held in Collateral Account as part of
the Trust Estate. All such investments shall be subject to availability
(including any time of day limitations) and the Trustees shall not be liable for
any losses with respect thereto, except losses incurred as a result of Trustee's
willful misconduct or gross negligence.

      3.4   APPLICATION OF MONEYS.

            (a) The Corporate Trustee shall have the right (pursuant to
      subsection 5.7) at any time to apply moneys held by it in the Collateral
      Account to the payment of due and unpaid Trustee Fees. All remaining
      moneys held by the Corporate Trustee in the Collateral Account or received
      by the Trustees while a Notice of Enforcement is in effect shall, to the
      extent available for distribution (it being understood that the Corporate
      Trustee may liquidate investments prior to maturity to make a distribution
      pursuant to this subsection 3.4), be distributed (subject to the
      provisions of subsection 3.5) by the Corporate Trustee on each
      Distribution Date as follows:

            FIRST: to the Trustees, an amount equal to any unpaid Trustee Fees,
      and then to any Secured Party which has theretofore advanced or paid any
      Trustee Fees constituting administrative expenses allowable under 11
      U.S.C. ss. 503(b), an amount equal to the amount thereof so advanced or
      paid by such Secured Party and for which such Secured Party has not been
      reimbursed prior to such Distribution Date;

            SECOND: to any Secured Party which has theretofore advanced or paid
      any Trustee Fees other than such administrative expenses, an amount equal
      to the amount thereof so advanced or paid by such Secured Party and for
      which such Secured Party has not been reimbursed prior to such
      Distribution Date;

            THIRD: to the Administrative Agent in an amount equal to all unpaid
      fees and other amounts payable to the Administrative Agent pursuant to the
      terms of the Credit Facility;

            FOURTH: to the Administrative Agent in an amount equal to all unpaid
      sums payable in respect of Facility Obligations then held by the Lenders,
      including without limitation the unpaid principal or face amount of, and
      unpaid interest on and other charges, if any, in respect of, the Facility
      Obligations then outstanding whether or not due and payable and the costs
      and expenses of the Administrative Agent and the Lenders and

                                       15
<PAGE>

      their representatives which are due and payable under the Loan Documents
      and which constitute Facility Obligations as of such Distribution Date,
      such moneys to be applied in accordance with the terms of the Credit
      Agreement;

            FIFTH: to the Hedging Agreement Secured Parties in an amount equal
      to all unpaid sums payable in respect of Hedging Agreement Obligations
      then held by such Hedging Agreement Secured Parties, including without
      limitation the unpaid principal or face amount of, and unpaid interest on
      and other charges, if any, in respect of, the Hedging Agreement
      Obligations then outstanding whether or not due and payable and the costs
      and expenses of the Hedging Agreement Secured Parties and their
      representatives which are due and payable under the Hedging Agreements and
      which constitute Hedging Agreement Obligations as of such Distribution
      Date, and, if such moneys shall be insufficient to pay such sums in full,
      then ratably to the Hedging Agreement Secured Parties in proportion to
      such sums; and

            SIXTH: any surplus then remaining shall be paid to the Borrower or
      its successors or assigns or to whomsoever may be lawfully entitled to
      receive the same or as a court of competent jurisdiction may direct.

            (b)   The term "unpaid" as used in subsection 3.4(a) refers:

                  (i)   in  the  absence  of  a  bankruptcy   proceeding  with
            respect  to the  Borrower,  to all  amounts  payable in respect of
            Obligations outstanding as of a Distribution Date, and

                  (ii) during the pendency of a bankruptcy proceeding with
            respect to the Borrower, to all amounts allowed by the bankruptcy
            court in respect of the Obligations as a basis for distribution
            (including estimated amounts, if any, allowed in respect of
            contingent claims),

      to the extent that prior distributions (whether actually distributed or
      set aside pursuant to subsection 3.5) have not been made in respect
      thereof.

            (c) The Corporate Trustee shall make all payments and distributions
      under this subsection 3.4: (i) on account of the Credit Facility to the
      Administrative Agent for redistribution or application in accordance with
      the provisions of the Credit Agreement and (ii) on account of any Hedging
      Agreement Obligations, directly to the Holder of such Hedging Agreement
      Obligations.

      3.5   AMOUNTS HELD FOR CONTINGENT OBLIGATIONS.

      In the event the Administrative Agent or any Holder shall receive any
moneys pursuant to subsection 3.4 in respect of the contingent portion of the
outstanding Obligations, then the Administrative Agent or such Holder, as the
case may be, shall invest such moneys in obligations of the kinds referred to in
clauses (a) and (b) of subsection 3.3 maturing within 90 days after they are
acquired by the Administrative Agent or such Holder and shall hold all such

                                       16
<PAGE>

amounts so distributable, and all such investments and the net proceeds thereof,
in trust until (i) all or part of such contingent claim shall have become fixed,
in which case the Administrative Agent or such Holder, as the case may be, shall
apply to the payment of such fixed claim from such investments and the proceeds
thereof an amount equal to such fixed claim, and shall promptly give notice
thereof to the Borrower and the Corporate Trustee or (ii) all or part of such
contingent claim shall have been extinguished, whether as the result of an
expiration without drawing of any letter of credit, payment of amounts secured
or covered by any letter of credit other than by drawing thereunder, payment of
amounts covered by any guarantee or otherwise, in which case the Administrative
Agent or such Holder, as the case may be, shall, as soon as practicable
thereafter, notify the Borrower and the Corporate Trustee and shall distribute
from such investments, and the proceeds thereof, an amount equal to the portion
of the contingent claim which has been extinguished together with interest
earned thereon from the date first invested until so distributed, to the
Corporate Trustee for deposit in the Collateral Account and application in
accordance with the provisions of subsection 3.4.

      3.6   APPLICATION OF MONEYS  DISTRIBUTABLE TO THE  ADMINISTRATIVE
AGENT.

      If at any time any moneys collected or received by the Trustees pursuant
hereto are distributable pursuant to subsection 3.4 to the Administrative Agent,
and if the Administrative Agent shall notify the Corporate Trustee in writing
that no provision is made under the Credit Agreement for the application by the
Administrative Agent of moneys (whether because the Payment Obligations issued
under the Credit Agreement have not become due and payable or otherwise) and
that the Credit Agreement does not effectively provide for the receipt and the
holding by the Administrative Agent of such moneys pending the application
thereof, then the Corporate Trustee, after receipt of such notification, shall
invest such amounts at the written direction of the Administrative Agent in
obligations of the kinds referred to in clauses (a) and (b) of subsection 3.3
maturing within 90 days after they are acquired by the Corporate Trustee and
shall hold all such amounts so distributable and all such investments and the
net proceeds thereof in trust solely for the Administrative Agent (in its
capacity as such) and for no other purpose until such time as the Administrative
Agent shall request in writing the delivery thereof by the Corporate Trustee for
application pursuant to the Credit Agreement.

      3.7   TRUSTEES' CALCULATIONS.

      In making the determinations and allocations required by subsection 3.4,
the Corporate Trustee may, unless a Responsible Trustee Officer has actual
knowledge to the contrary, rely upon a certificate executed and supplied by the
Administrative Agent or (in the case of Hedging Agreement Obligations) the
Holders, as the case may be, as to the amounts payable with respect to Payment
Obligations, all in accordance with subsection 7.2(b), and the Trustees shall
have no liability to any of the Secured Parties for actions taken in reliance on
such information; PROVIDED, HOWEVER, that if any Secured Party receives on any
Distribution Date an amount pursuant to subsection 3.4(a) in excess of the
amount to which it was entitled to receive on such Distribution Date pursuant to
such subsection 3.4(a) as a result of any such certificate overstating the
amount of the Payment Obligations held by such Secured Party (or, with respect
to the Credit Facility, the Payment Obligations held by all the Secured Parties
under the Credit Facility), then such Secured Party (by becoming a Holder of
Obligations and accepting the benefits of this Trust

                                       17
<PAGE>

Agreement) shall pay such excess to the Corporate Trustee for application in
accordance with subsection 3.4(a) as soon as practicable after the existence of
such overstatement shall have been determined. All distributions made by the
Corporate Trustee pursuant to subsection 3.4 shall be (subject to any decree of
any court of competent jurisdiction and to the proviso in the preceding
sentence) final, and the Trustees shall have no duty to inquire as to the
application by any Holder or the Administrative Agent of any amounts distributed
to them. By accepting the benefits of this Agreement, the Security Documents and
the Guarantees, each Secured Party and the Administrative Agent agrees to act in
accordance with this Trust Agreement and not take any action inconsistent
herewith.

                               SECTION 4

                        ADDITIONAL OBLIGATIONS;
                   ADDITIONAL COLLATERAL; ADDITIONAL
             GUARANTEES; CERTAIN DOCUMENTATION REQUIREMENTS

      4.1   DELIVERY OF INITIAL SECURED  INSTRUMENTS,  INITIAL  SECURITY
DOCUMENTS AND INITIAL GUARANTEE.

      On or before the Effective Date, the Borrower shall deliver to the
Corporate Trustee copies, certified by a Responsible Officer to be true and
complete, of all Initial Secured Instruments, and executed originals of the
Initial Security Documents and Initial Guarantee.

      4.2   ADDITIONAL OBLIGATIONS.

      The Borrower may from time to time designate Permitted Additional
Obligations as Obligations hereunder (provided that the terms thereof, if any,
affecting the rights and obligations of the Trustees hereunder are reasonably
acceptable to the Trustees) by (a) delivering to the Corporate Trustee an
Additional Payment Obligations Designation in respect of such Permitted
Additional Obligations describing such Permitted Additional Obligations and
specifying whether such Permitted Additional Obligations shall constitute
Facility Obligations or Hedging Agreement Obligations, and attaching thereto a
true and complete copy of all agreements (together with all schedules, exhibits,
annexes, appendices and other attachments thereto), including but not limited to
the applicable Secured Instruments, relating to such Permitted Additional
Obligations to which the Borrower or any Affiliate thereof is a party, and (b)
fulfilling the requirements of subsection 4.8(b) in respect of such Additional
Payment Obligations Designation. Upon completion of the actions described
clauses (a) and (b) of the preceding sentence, but subject to the following
sentence, the Permitted Additional Obligations designated by such Additional
Payment Obligations Designation shall constitute Obligations. Notwithstanding
anything herein to the contrary, in no event shall any indebtedness or other
obligations of the Borrower constitute Additional Obligations hereunder if the
designation of such indebtedness or other obligations as Additional Obligations
would be in contravention of any Secured Instrument in connection with the
Credit Facility (including, without limitation, the Credit Agreement), and any
purported designation of any such indebtedness or other obligations of the
Borrower as in violation of any Secured Instrument in connection with the Credit
Facility shall be null and void and of no force or effect.

                                       18
<PAGE>

      4.3   NOTICE TO SECURED PARTIES OF ADDITIONAL OBLIGATIONS.

      Promptly after the designation of Permitted Additional Obligations as
Payment Obligations pursuant to subsection 4.2, the Corporate Trustee will
deliver a copy of the related Additional Payment Obligations Designation
together with all attachments thereto to the Administrative Agent and each
Holder of Hedging Agreement Obligations.

      4.4   ADDITIONAL COLLATERAL.

      The Borrower may from time to time provide Additional Collateral to the
Trustees by (a) delivering to the Corporate Trustee an Additional Collateral
Designation in respect of such Additional Collateral and (b) fulfilling the
requirements of subsection 4.9(b) in respect of such Additional Collateral
Designation. Upon completion of the actions described in clauses (a) and (b) of
the preceding sentence, the Additional Collateral designated by such Additional
Collateral Designation shall constitute Collateral for the Obligations.

      4.5   NOTICE TO SECURED PARTIES OF ADDITIONAL COLLATERAL.

      Promptly after the delivery of Additional Collateral pursuant to
subsection 4.4, the Corporate Trustee will deliver a copy of the related
Additional Collateral Designation to the Administrative Agent and each Holder of
Hedging Agreement Obligations.

      4.6   ADDITIONAL GUARANTEES.

      The Borrower may from time to time cause a Subsidiary thereof to provide
an Additional Guarantee to the Trustees by (a) delivering to the Corporate
Trustee an Additional Guarantee Designation in respect of each such Additional
Guarantee and (b) fulfilling the requirements of subsection 4.10(b) in respect
of such Additional Guarantee Designation. Upon completion of the actions
described in clauses (a) and (b) of the preceding sentence, the Additional
Guarantee designated by such Additional Guarantee Designation shall constitute a
Guarantee of the Obligations.

      4.7   NOTICE TO SECURED PARTIES OF ADDITIONAL GUARANTEE.

      Promptly after the delivery of any Additional Guarantee pursuant to
subsection 4.6, the Corporate Trustee will deliver a copy of the related
Additional Guarantee Designation to the Administrative Agent and each Holder of
Hedging Agreement Obligations.

      4.8   ACTIONS  REQUIRED WITH RESPECT TO INITIAL  OBLIGATIONS  AND
ADDITIONAL OBLIGATIONS.

            (a) Simultaneously with its delivery to the Corporate Trustee of the
      Initial Secured Instruments pursuant to subsection 4.1, the Borrower
      shall:

                  (i) deliver to the Corporate Trustee a certificate of the
            secretary or an assistant secretary of the Borrower (A) as to the
            names and signatures of the

                                       19
<PAGE>

            officers of the Borrower who are authorized to execute this Trust
            Agreement on behalf of the Borrower and (B) attaching copies of
            resolutions of the Board of Directors of the Borrower authorizing
            the execution and delivery by the Borrower of this Trust Agreement,
            and certifying that such resolutions are in full force and effect;
            and

                  (ii) cause to be delivered to the Corporate Trustee, addressed
            to the Trustees and each Secured Party, an Opinion of Counsel
            substantially in the form of Exhibit D-1.

            (b) Simultaneously with its delivery to the Corporate Trustee of any
      Additional Payment Obligation Designation pursuant to subsection 4.2, the
      Borrower shall:

                  (i) deliver to the Corporate Trustee copies, certified by a
            Responsible Officer to be true and complete, of all Secured
            Instruments described in such Additional Payment Obligation
            Designation; and

                  (ii) cause to be delivered to the Corporate Trustee, addressed
            to the Trustees and each Secured Party, an Opinion of Counsel
            substantially in the form of Exhibit D-2.

Promptly after receipt by the Corporate Trustee of any such documents delivered
by the Borrower pursuant to this paragraph (b), the Corporate Trustee shall at
the expense of the Borrower deliver copies thereof to the Administrative Agent
and each Holder of Hedging Agreement Obligations.

      4.9   ACTIONS  REQUIRED  WITH RESPECT TO SECURITY  DOCUMENTS  AND
COLLATERAL.

            (a) Simultaneously with its delivery to the Corporate Trustee of the
      Initial Security Documents pursuant to subsection 4.1, the Borrower shall:

                  (i) deliver to the Corporate Trustee certificates of the
            secretary or an assistant secretary of each grantor party to any
            Initial Security Document (A) as to the names and signatures of the
            officers of such grantor who are authorized to execute the Initial
            Security Documents on behalf of such grantor and (B) attaching
            copies of resolutions of the Boards of Directors of such grantor
            authorizing the execution and delivery of the Initial Security
            Documents by such grantor, and certifying that such resolutions are
            in full force and effect;

                  (ii) cause to be delivered to the Corporate Trustee, addressed
            to the Trustees and each Secured Party, an Opinion of Counsel
            substantially in the form of Exhibit D-1.

                  (iii) deliver to the Corporate Trustee (or its bailee or agent
            as designated by the Corporate Trustee) possession of any Possessory
            Collateral covered by the Initial Security Documents; and

                                       20
<PAGE>

                  (iv) cause to be filed or recorded in all required filing or
            recording offices all financing statements, mortgages and other
            instruments necessary to perfect the Lien of the Trustees created by
            such Initial Security Documents, and deliver to the Corporate
            Trustee evidence reasonably satisfactory to it of each such filing
            and recording.

            (b) Simultaneously with its delivery to the Corporate Trustee of any
      Additional Collateral Designation pursuant to subsection 4.4, the Borrower
      shall:

                  (i) deliver to the Corporate Trustee copies, duly executed by
            the grantor parties thereto, of all Additional Security Documents
            described in such Additional Collateral Designation; PROVIDED that
            each such Additional Security Document shall be in form and
            substance reasonably satisfactory to the Administrative Agent;

                  (ii) deliver to the Corporate Trustee a certificate of the
            secretary or an assistant secretary of each grantor party thereto
            (A) as to the names and signatures of the officers of such grantor
            who are authorized to execute such Additional Security Documents on
            behalf of such grantor and (B) attaching copies of resolutions of
            the Board of Directors of each grantor party thereto authorizing the
            execution and delivery by the Borrower of such Additional Security
            Document by such grantor, and certifying that such resolutions are
            in full force and effect;

                  (iii) deliver to the Corporate Trustee (or the Administrative
            Agent or any bailee or agent as designated by the Corporate Trustee)
            possession of any Possessory Collateral covered by such Additional
            Security Documents;

                  (iv) cause to be filed or recorded in all required filing or
            recording offices all financing statements, mortgages and other
            instruments necessary to perfect the security interest of the
            Trustees created by such Additional Security Documents, and deliver
            to the Corporate Trustee customary evidence of each such filing and
            recording; and

                  (v) deliver to the Corporate Trustee, addressed to the
            Trustees and each Secured Party, an Opinion of Counsel in form and
            substance satisfactory to the Administrative Agent.

Promptly after receipt by the Corporate Trustee of any such documents delivered
by the Borrower pursuant to this paragraph (b), the Corporate Trustee shall at
the expense of the Borrower deliver copies thereof to the Administrative Agent
and each Holder of Hedging Agreement Obligations.

                                       21
<PAGE>

      4.10  ACTIONS REQUIRED WITH RESPECT TO GUARANTEES.

            (a) Simultaneously with its delivery to the Corporate Trustee of the
      Initial Guarantee pursuant to subsection 4.1, the Borrower shall:

                  (i) deliver to the Corporate Trustee a certificate of a
            secretary or assistant secretary of each guarantor party thereto (A)
            as to the names and signatures of the officers of such guarantor who
            are authorized to execute the Initial Guarantee and (B) attaching
            copies of resolutions of the Board of Directors of such guarantor
            authorizing the execution and delivery by such guarantor of the
            Initial Guarantee, and certifying that such resolutions are in full
            force and effect; and

                  (ii) cause to be delivered to the Corporate Trustee, and
            addressed to the Trustees and each Secured Party, an Opinion of
            Counsel substantially in the form of Exhibit D-1.

            (b) Simultaneously with its delivery to the Corporate Trustee of any
      Additional Guarantee Designation pursuant to subsection 4.6, the Borrower
      shall:

                  (i) deliver to the Corporate Trustee copies, duly executed by
            the guarantor parties thereto, of all Additional Guarantees
            described in such Additional Guarantee Designation; PROVIDED that
            each such Additional Guarantee shall be in the form of Annex I to
            the Initial Guarantee; and

                  (ii) deliver to the Corporate Trustee a certificate of the
            secretary or an assistant secretary of each guarantor party thereto
            (A) as to the names and signatures of the officers of such guarantor
            who are authorized to execute the Additional Guarantees and (B)
            attaching copies of resolutions of the Board of Directors of such
            guarantor authorizing the execution and delivery by such guarantor
            of the Additional Guarantee to which it is a party, and certifying
            that such resolutions are in full force and effect; and

                  (iii) deliver to the Corporate Trustee, addressed to the
            Trustees and each Secured Party, an Opinion of Counsel in the form
            of Exhibit D-3.

Promptly after receipt by the Corporate Trustee of any such documents delivered
by the Borrower pursuant to this Section 4.10, the Corporate Trustee shall at
the expense of the Borrower deliver copies thereof to the Administrative Agent
and each Holder of Hedging Agreement Obligations.

      4.11  POSSESSORY COLLATERAL.

      The Borrower shall immediately deliver to the Corporate Trustee (or the
Administrative Agent or any agent or bailee designated by the Corporate Trustee
at the sole cost and expense of the Borrower) all Possessory Collateral that is
or may be in the possession of the Borrower or any of its Subsidiaries, to the
extent the Borrower is required to do so by any Secured

                                       22
<PAGE>

Instrument. At any time and from time to time, upon receipt of the notice from
the Administrative Agent, the Corporate Trustee and the Borrower shall deliver
all Possessory Collateral that is or may be in the possession of the Corporate
Trustee and the Borrower or any of its Subsidiaries, respectively, to the
Administrative Agent (to be held on behalf of the Secured Parties) at the
address specified in such notice and, thereafter, if the Corporate Trustee or
the Borrower or any of its Subsidiaries obtains possession of any Possessory
Collateral, the Corporate Trustee or the Borrower and its Subsidiaries, as
applicable, shall promptly deliver such Possessory Collateral to the
Administrative Agent (to be held on behalf of the Secured Parties) at any
address specified by the Administrative Agent. The Borrower and the Trustees
hereby authorize the Administrative Agent to exercise any right or remedy of the
Trustees hereunder or under any Security Document with respect to any Possessory
Collateral in its possession, subject to the terms and conditions of this
Agreement and the other Security Documents. The Administrative Agent shall be
entitled at any time to delivery any Possessory Collateral in its possession to
the Corporate Trustee, and to direct the Borrower to thereafter deliver to the
Corporate Trustee any Possessory Collateral that is or may be in the possession
of the Borrower or any of its Subsidiaries, to be held in accordance with the
terms of this Trust Agreement.

                               SECTION 5

                        AGREEMENTS WITH TRUSTEES

      5.1   DELIVERY OF AMENDMENTS TO SECURED INSTRUMENTS.

      The Borrower shall deliver to the Corporate Trustee (and the Corporate
Trustee shall thereupon promptly deliver to the Administrative Agent and any
Holder of Hedging Agreement Obligations), promptly upon the execution thereof, a
true and complete copy of all amendments, supplements or other modifications to
any Secured Instrument entered into after the Effective Date.

      5.2   INFORMATION AS TO SECURED PARTIES, ETC.

      The Borrower shall deliver to the Corporate Trustee (and the Corporate
Trustee shall thereupon promptly deliver to the Administrative Agent and each
Holder of Hedging Agreement Obligations), within 30 days after the Effective
Date, and between May 1 and May 15 and between November 1 and November 15 in
each year, and from time to time as may be reasonably requested by the Corporate
Trustee (which request shall be made by the Corporate Trustee at the reasonable
direction of any Secured Party), (i) with respect to Facility Obligations, a
list, setting forth as of a specified date not more than 30 days prior to the
date of such delivery, of the aggregate unpaid principal or face amount of
Facility Obligations outstanding and the name and address of the Administrative
Agent and (ii) with respect to Hedging Agreement Obligations, a list specifying
for each Hedging Agreement the notional amount covered thereby and the payment
terms thereof. The Borrower shall deliver to the Corporate Trustee, within 30
days after the Effective Date, and between May 1 and May 15 and between November
1 and November 15 in each year, and from time to time as may be reasonably
requested by the Corporate Trustee (which request shall be made by the Corporate
Trustee at the reasonable direction of any Secured Party), a list, as of a date
not more than 30 days prior to the date of such

                                       23
<PAGE>

list, (i) naming each Secured Party, (ii) setting forth the amount of Voting
Obligations held by each Secured Party and the amount of commitments to provide
credit by such Secured Party that would constitute Voting Obligations when
provided and (iii) specifying whether any Secured Party or any Person known by
the Borrower to be an Affiliate of any Secured Party is a party to any contract,
the rights under which constitute Collateral. The Trustees may conclusively rely
on the most recent lists so provided as to all matters set forth therein for all
purposes hereunder.

      5.3   COMPENSATION AND EXPENSES.

      The Borrower agrees to pay to the Trustees, from time to time upon demand,
(i) reasonable compensation (which shall not be limited by any provision of law
in regard to compensation of fiduciaries or of a trustee of an express trust)
for their services hereunder and under the Guarantees and Security Documents and
for administering the Trust Estate and (ii) all of the fees, costs and expenses
of the Trustees (including, without limitation, the reasonable fees and
disbursements of their counsel and such special counsel as the Trustees shall
reasonably elect to retain) (A) arising in connection with the preparation,
execution, delivery, modification, and termination of or performance under this
Trust Agreement, the Guarantees and the Security Documents or the enforcement of
any of the provisions hereof or thereof, (B) incurred or required to be advanced
in connection with the administration of the Trust Estate, the sale or other
disposition of Collateral pursuant to any Security Document and the
preservation, protection, enforcement or defense of the Trustees' rights under
this Trust Agreement, the Guarantees and the Security Documents and in and to
the Collateral and the Trust Estate or (C) incurred by the Trustees in
connection with the removal of either or both of the Trustees pursuant to
subsection 7.7(a). The obligations of the Borrower under this subsection shall
survive the termination of the other provisions of this Trust Agreement and the
resignation or removal of the Trustees.

      5.4   STAMP AND OTHER SIMILAR TAXES.

      The Borrower agrees to indemnify and hold harmless the Trustees and each
Secured Party from any present or future claim for liability for any stamp or
any other similar tax and any penalties or interest with respect thereto, which
may be assessed, levied or collected by any jurisdiction in connection with this
Trust Agreement, any Security Document, any Guarantee, the Trust Estate or any
Collateral. The obligations of the Borrower under this subsection shall survive
the termination of the other provisions of this Trust Agreement and the
resignation or removal of the Trustees.

      5.5   FILING FEES, EXCISE TAXES, ETC.

      The Borrower agrees to pay or to reimburse the Trustees for any and all
payments made by the Trustees in respect of all search, filing, recording and
registration fees, taxes, excise taxes and other similar imposts which may be
payable or determined to be payable in respect of the execution and delivery of
this Trust Agreement, the Guarantees and the Security Documents. The obligations
of the Borrower under this subsection shall survive the termination of the other
provisions of this Trust Agreement and the resignation or removal of the
Trustees.

                                       24
<PAGE>

      5.6   INDEMNIFICATION.

      The Borrower agrees to pay, indemnify, and hold the Trustees harmless from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation, the
reasonable fees of counsel) or disbursements of any kind or nature whatsoever
with respect to the execution, delivery, enforcement, performance and
administration of this Trust Agreement, the Guarantees and the Security
Documents, unless arising from the gross negligence or willful misconduct of the
indemnified party, including, without limitation, indemnification of the
respective Trustees for liabilities of the respective Trustees for the net
amount of taxes (after taking account of any deduction, credit or other tax
reduction or benefit available by reason of the imposition of any such tax) in
any jurisdiction in which the respective Trustees would not otherwise be subject
to tax except by reason of their acting under this Trust Agreement, any
Guarantee or any Security Document (directly or through agents, separate
trustees or co-trustees), PROVIDED that such indemnification for taxes (a) shall
apply only (i) in respect of taxes attributable to the performance of the
respective Trustees' obligations as Trustee hereunder or under any Guarantee or
Security Document and (ii) to the extent that the respective Trustees, using
reasonable efforts, shall have been unable to avoid or minimize the same as
contemplated by subsection 7.10 and (b) shall in no event cover any taxes
imposed upon the respective Trustees with respect to or measured by their net
income or profits. In any suit, proceeding or action brought by the Trustees
under or with respect to any contract, agreement, interest or obligation
constituting part of the Collateral for any sum owing thereunder, or to enforce
any provisions thereof, the Borrower will save, indemnify and keep the Trustees
harmless from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction of liability whatsoever
of the obligor thereunder, arising out of a breach by the Borrower of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such obligor or its successors
from the Borrower, and all such obligations of the Borrower shall be and remain
enforceable against and only against the Borrower and shall not be enforceable
against the Trustees. The agreements in this subsection shall survive the
termination of the other provisions of this Trust Agreement and the resignation
or removal of the Trustees.

      5.7   TRUSTEES' LIEN.

      Notwithstanding anything to the contrary in this Trust Agreement, as
security for the payment of Trustee Fees (i) the Trustees are hereby granted a
first priority Lien upon all Collateral and (ii) the Trustees shall have the
right to use and apply any of the funds held by the Corporate Trustee in the
Collateral Account to cover such Trustee Fees.

      5.8   FURTHER ASSURANCES.

      At any time and from time to time, whether or not a Notice of Enforcement
shall be in effect, upon the written request of the Corporate Trustee (which
shall be made only upon the written direction of the Required Secured Parties),
and at the expense of the Borrower, the Borrower will promptly execute and
deliver any and all such further instruments and documents and take such further
action as the Corporate Trustee has been so directed is necessary or reasonably
requested to obtain the full benefits of this Trust Agreement and the Security

                                       25
<PAGE>

Documents and of the rights and powers herein and therein granted or to cause
any assets required under a Secured Instrument to be subject to a perfected
security interest of the Trustees to be so subject, including, without
limitation, the filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with respect to the Liens
and security interests granted under the Security Documents. The Borrower also
hereby authorizes the Corporate Trustee to sign and to file any such documents,
instruments or financing or continuation statements without the signature of the
Borrower to the extent permitted by applicable law, but in no way is the
Corporate Trustee obligated to do so.

                               SECTION 6

           POSSESSION AND USE OF COLLATERAL; PARTIAL RELEASES

      6.1   USE PRIOR TO NOTICE OF ENFORCEMENT.

      So long as no Notice of Enforcement is in effect, the Borrower shall have
the right (subject to compliance with subsection 6.1(b)): (i) to remain in
possession and retain exclusive control of the Collateral (except any Possessory
Collateral) with power freely and without hindrance on the part of the Trustees
or the Secured Parties to operate, manage, develop, use and enjoy the Collateral
and to receive the rents, issues, tolls, profits, royalties, revenues and other
income thereof, and (ii) to sell or otherwise dispose of, free and clear of the
Lien and security interest created by subsection 5.7 and by the Security
Documents, any Collateral if such sale or other disposition is not prohibited by
the terms of the Credit Agreement and the Security Document and so long as the
proceeds (in the percentage required) from such sale are applied to the Facility
Obligations in accordance with Section 2.09 of the Credit Agreement. The
Trustees shall have no duty to monitor the exercise by the Borrower of its
rights under this subsection.

      6.2   RELEASES; SUBORDINATION.

            (a) Asset Sales in respect of Collateral which are permitted by
      Section 6.1 shall not require any written or oral release or consent of
      the Trustees. Nevertheless, the Borrower may, upon the delivery to the
      Corporate Trustee and the Administrative Agent of a certificate of a
      Responsible Officer, together with such other evidence as the Corporate
      Trustee shall reasonably require, to the effect that such sale, transfer
      or disposition is in compliance with the requirements of such subsection
      6.1, that the proceeds (in the percentage required) of such transaction
      have been or will be applied to the Facility Obligations as set forth in
      Section 2.09 of the Credit Agreement and that subsection 6.2(b) has been
      complied with in full, request that the Trustees execute and deliver to
      the Borrower or any purchaser of Collateral a written release, disclaimer
      or quitclaim of the Trustees' interest in any Collateral under subsection
      5.7 and under the Security Documents, and such purchaser shall be entitled
      to rely conclusively on such release, disclaimer or quitclaim. Such
      request shall be in writing, shall describe the property to be released in
      reasonable detail, and shall state that such release is or will be in
      accordance with the terms of the Credit Agreement and the Security
      Documents and shall be accompanied by a written certificate of a
      Responsible Officer of the Borrower directing the Trustees to execute and
      deliver such release, disclaimer or quitclaim.

                                       26
<PAGE>

            (b) If it is a condition of the release of any Collateral from the
      security interest under subsection 5.7 or under any Security Document or
      Secured Instrument that the Trustees be granted a first priority Lien or
      security interest in additional property to be held as Collateral pursuant
      to this Trust Agreement, then the Trustees shall be granted such Lien or
      security interest prior to or concurrently with the delivery to the
      Borrower of any such Collateral or any release, disclaimer or quitclaim in
      connection therewith. The grant of such Lien or security interest shall be
      effected by (i) delivery to the Corporate Trustee of an Additional
      Collateral Designation pursuant to subsection 4.4 and (ii) fulfilling the
      requirements of subsection 4.9(b) with respect thereto.

            (c) If any Collateral which is being sold or otherwise disposed of
      pursuant to this Section 6 is in the possession of the Trustees or any
      agent or nominee thereof, the Trustees or such agent or nominee shall upon
      the delivery to the Corporate Trustee and the Administrative Agent of a
      certificate of a Responsible Officer, together with such other evidence as
      the Corporate Trustee shall reasonably require, to the effect that such
      sale, transfer or disposition is in compliance with the requirements of
      such subsection 6.1, that the proceeds of such transaction have been or
      will be applied as set forth in the relevant provisions, if any, of each
      Secured Instrument and that subsection 6.2(b) has been complied with in
      full, release such Collateral to the Borrower in connection with such
      Asset Sale.

            (d) Purchase money Liens which are permitted by Section 6.02(iv) of
      the Credit Agreement (each a "Permitted Purchase Money Lien") shall not
      require any written or oral subordination agreement or release or consent
      of the Trustees. Nevertheless, the Borrower may, upon the delivery to the
      Corporate Trustee and the Administrative Agent of a certificate of a
      Responsible Officer, together with such other evidence as the Corporate
      Trustee or the Administrative Agent shall reasonably require, to the
      effect that such Permitted Purchase Money Lien is in compliance with the
      requirements of Section 6.02(iv) of the Credit Agreement, request that the
      Trustees execute and deliver to the Borrower or any beneficiary of such
      Permitted Purchase Money Lien a written Lien subordination agreement
      stating that the Trustees' Liens are and shall be subject and subordinate
      in all respects and in all contingencies to such Permitted Purchase Money
      Lien with respect to the Collateral or other property subject to such
      Permitted Purchase Money Lien and the proceeds thereof, and such
      beneficiary shall be entitled to rely conclusively on such subordination
      agreement. In the alternative, it is further agreed that the Borrower may,
      by the submission to the Administrative Agent of a certificate of a
      Responsible Officer in accordance with the requirements of Section
      6.02(iv) of the Credit Agreement, request that the Trustees execute and
      deliver to the Borrower or any beneficiary of such Permitted Purchase
      Money Lien a written U.C.C.-3 termination statement or other necessary
      evidence of termination releasing the Trustees' Liens with respect to the
      Collateral or other property subject to such Permitted Purchase Money Lien
      and the proceeds thereof. Each of such requests shall be in writing, shall
      describe the property subject to such Permitted Purchase Money Lien, in
      reasonable detail, and shall state that such subordination agreement or
      Lien termination, as applicable, is or will be in accordance with the
      terms of the Credit Agreement and the Security Documents and shall be
      accompanied by a written certificate of a Responsible

                                       27
<PAGE>

      Officer of the Borrower directing the Trustees to execute and deliver such
      subordination agreement or evidence of Lien termination, as appropriate.

            (e) The notices, statements, directions, evidence and certificates
      requested under or required by this subsection (together with any required
      certificate of a Responsible Officer under subsection 7.4(e)) shall be
      full authority for and direction to the Trustees to execute and deliver
      the releases, disclaimers, quitclaims, subordination agreements and other
      instruments referred to in this subsection, and the Trustees shall
      promptly do so, subject to the terms of this subsection 6.2, upon a
      request therefor. The Trustees in so doing shall have no liability to any
      Person other than for its willful misconduct or gross negligence.

      6.3   INSURANCE AND CONDEMNATION PROCEEDS; LIQUIDATING DIVIDENDS.

      Any insurance proceeds, any Proceeds from the exercise of rights of
eminent domain or condemnation and any liquidating dividends paid in respect of
Pledged Equity Securities received by the Borrower or the Trustees in respect of
Collateral shall be treated as cash Proceeds received pursuant to subsection
6.1(b) and shall, if a Notice of Enforcement is in effect, be deposited in the
Collateral Account, and if no Notice of Enforcement is in effect, such amounts
shall be delivered to the Borrower unless otherwise required by any Secured
Instrument.

      6.4   PURCHASE OF COLLATERAL.

      Any Secured Party may purchase Collateral at any public sale of such
Collateral pursuant to any of the Security Documents and, with the consent of
the Required Secured Parties and if permitted by the Secured Instrument
governing such Payment Obligation, may make payment on account of such purchase
by using any Payment Obligation then due and payable to such Secured Party as a
credit (up to the amount of such Payment Obligation) against the purchase price;
PROVIDED that in determining the Required Secured Parties for purposes of this
subsection, all Voting Obligations held by such purchasing Secured Party shall
be excluded.

                               SECTION 7

                              THE TRUSTEES

      7.1   ACCEPTANCE OF TRUST.

      The Trustees, for themselves and their respective successors, hereby
accept the trusts created by this Trust Agreement upon the terms and conditions
hereof.

      7.2   EXCULPATORY PROVISIONS.

            (a) The Trustees shall not be responsible in any manner whatsoever
      for the correctness of any recitals, statements, representations or
      warranties herein, all of which are made solely by the Borrower. The
      Trustees make no representations as to the value or condition of the Trust
      Estate or any part thereof, or as to the title of the Borrower thereto or
      as to the security afforded by this Trust Agreement or any Security
      Document, or as to the validity, execution (except their own execution),
      enforceability, legality or sufficiency

                                       28
<PAGE>

      of this Trust Agreement, Guarantee, any Security Document or Obligation,
      and the Trustees shall incur no liability or responsibility in respect of
      any such matters. The Trustees shall not be responsible for insuring the
      Collateral or for the payment of taxes, charges or assessments or
      discharging of Liens upon the Collateral or otherwise as to the
      maintenance of the Collateral, except that if the Trustees take possession
      of any Collateral, the Trustees shall use the same care in the
      preservation of the Collateral in their possession as they would use for
      their own property.

            (b) The Trustees shall not be required to ascertain or inquire as to
      the performance by the Borrower or any of its Subsidiaries of any of the
      covenants or agreements contained herein or in any Security Document, any
      Guarantee or any Secured Instrument. Whenever it is necessary, or in the
      opinion of the Trustees advisable, for the Trustees to ascertain the
      amount or nature of Obligations then held by Secured Parties, the Trustees
      may rely, absent actual knowledge of a Responsible Trustee Officer to the
      contrary, on a certificate of the Administrative Agent or any Holder of
      Hedging Agreement Obligations, as the case may be, and, if the
      Administrative Agent or such Holder of Hedging Agreement Obligations shall
      not give such information to the Corporate Trustee, it shall not be
      entitled to receive distributions hereunder (in which case distributions
      to those Persons who have supplied such information to the Corporate
      Trustee shall be calculated by the Corporate Trustee using, for those
      Persons who have not supplied such information, the list then most
      recently delivered by the Borrower pursuant to subsection 5.2), and the
      amount so calculated to be distributed to the Person who fails to give
      such information shall be held in trust for such Person until such Person
      does supply such information to the Corporate Trustee, whereupon on the
      next Distribution Date the amount distributable to such Person shall be
      recalculated using such information and distributed to it.

            (c) The Trustees shall be under no obligation or duty to take any
      action under this Trust Agreement, any Guarantee or any Security Document
      if taking such action (i) would subject the Trustees to a tax in any
      jurisdiction where they are not then subject to a tax or (ii) would
      require the Corporate Trustee to qualify to do business in any
      jurisdiction where it is not then so qualified, unless the Trustees
      receive security or indemnity satisfactory to them against such tax (or
      equivalent liability), or any liability resulting from such qualification,
      in each case as results from the taking of such action under this Trust
      Agreement, any Guarantee or any Security Document.

            (d) Notwithstanding any other provision of this Trust Agreement,
      neither the Corporate Trustee nor the Individual Trustee, in its or his
      individual capacity, shall be personally liable for any action taken or
      omitted to be taken by it or him in accordance with this Trust Agreement,
      any Guarantee or any Security Document except for its or his own gross
      negligence or willful misconduct.

            (e) The Corporate Trustee shall have the same rights with respect to
      any Obligation held by it as any other Secured Party and may exercise such
      rights as though it were not the Corporate Trustee hereunder, and may
      accept deposits from, lend money to,

                                       29
<PAGE>

      and generally engage in any kind of banking or trust business with the
      Borrower and its affiliates as if it were not the Corporate Trustee.

      7.3   DELEGATION OF DUTIES.

      The Trustees may execute any of the trusts or powers hereof and perform
any duty hereunder either directly or by or through agents or attorneys-in-fact.
The Trustees shall be entitled to advice of counsel concerning all matters
pertaining to such trusts, powers and duties. The Trustees shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by them with reasonable care.

      7.4   RELIANCE BY TRUSTEES.

            (a) Whenever in the administration of this Trust Agreement, the
      Guarantees or the Security Documents the Trustees shall deem it necessary
      or desirable that a factual matter be proved or established in connection
      with the Trustees taking, suffering or omitting any action hereunder or
      thereunder, such matter (unless other evidence in respect thereof is
      herein specifically prescribed) may be deemed in the absence of actual
      knowledge of a Responsible Trustee Officer to the contrary to be
      conclusively proved or established by a certificate of a Responsible
      Officer delivered to the Corporate Trustee, and such certificate shall be
      full warrant to the Trustees for any action taken, suffered or omitted in
      reliance thereon, subject, however, to the provisions of subsection 7.5.

            (b) The Trustees may consult with counsel, and any Opinion of
      Counsel shall be full and complete authorization and protection in respect
      of any action taken or suffered by them hereunder or under any Guarantee
      or Security Document in accordance therewith. The Trustees shall have the
      right at any time to seek instructions concerning the administration of
      this Trust Agreement, the Guarantees and the Security Documents from any
      court of competent jurisdiction.

            (c) The Trustees may rely, and shall be fully protected in acting,
      upon any resolution, statement, certificate, instrument, opinion, report,
      notice, request, consent, order, bond or other paper or document which
      they in good faith believe to be genuine and to have been signed or
      presented by the proper party or parties or, in the case of cables,
      telecopies and telexes, to have been sent by the proper party or parties.
      In the absence of their gross negligence or willful misconduct, the
      Trustees may conclusively rely, as to the truth of the statements and the
      correctness of the opinions expressed therein, upon any certificates or
      opinions furnished to the Trustees and conforming to the requirements of
      this Trust Agreement.

            (d) The Trustees shall not be under any obligation to exercise any
      of the rights or powers vested in the Trustees by this Trust Agreement,
      the Guarantees and the Security Documents, at the request or direction of
      the Required Secured Parties pursuant to this Trust Agreement or
      otherwise, unless the Trustees shall have been provided adequate security
      and indemnity against the costs, expenses and liabilities which may be

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<PAGE>

      incurred by them in compliance with such request or direction, including
      such reasonable advances as may be requested by the Trustees.

            (e) Upon any application or demand by the Borrower (except any such
      application or demand which is expressly permitted to be made orally) to
      the Trustees to take or permit any action under any of the provisions of
      this Trust Agreement, any Guarantee or any Security Document, the Borrower
      shall furnish to the Corporate Trustee a certificate of a Responsible
      Officer stating that all conditions precedent, if any, provided for in
      this Trust Agreement, in any relevant Guarantee, Security Document or
      Secured Instrument relating to the proposed action have been complied
      with, and in the case of any such application or demand as to which the
      furnishing of any document is specifically required by any provision of
      this Trust Agreement, any Guarantee or any Security Document relating to
      such particular application or demand, such additional document shall also
      be furnished.

      7.5   LIMITATIONS  ON DUTIES  OF  TRUSTEES;  RELATIONSHIP  BETWEEN
CORPORATE TRUSTEE AND INDIVIDUAL TRUSTEE.

            (a) Unless a Notice of Enforcement is in effect, the Trustees shall
      be obligated to perform such duties and only such duties as are
      specifically set forth in this Trust Agreement, the Guarantees and the
      Security Documents, and no implied covenants or obligations shall be read
      into this Trust Agreement, any Guarantee or any Security Document against
      the Trustees. If and so long as a Notice of Enforcement is in effect, the
      Trustees shall, subject to the provisions of subsection 2.5(b), exercise
      the rights and powers vested in them by this Trust Agreement, the
      Guarantees and the Security Documents, and shall not be liable with
      respect to any action taken by them, or omitted to be taken by them, in
      accordance with the direction of the Required Secured Parties.

            (b) Except as herein otherwise expressly provided, the Trustees
      shall not be under any obligation to take any action which is
      discretionary with the Trustees under the provisions hereof or of any
      Guarantee or any Security Document except upon the written request of the
      Required Secured Parties. The Corporate Trustee shall make available for
      inspection and copying by the Administrative Agent and each Holder of
      Hedging Agreement Obligations each certificate or other paper furnished to
      the Corporate Trustee by the Borrower under or in respect of this Trust
      Agreement, any Guarantee or any Security Document or any of the
      Collateral.

            (c) The Individual Trustee has been joined as such so that if, by
      any present or future law in any jurisdiction in which it may be necessary
      to perform any act in the execution of the trust hereby created, the
      Corporate Trustee, or its successor or successors, may be incompetent or
      unqualified to act as such Trustee, or would be subject to a tax that
      would not otherwise be imposed except for such act, then all the acts
      required to be performed in such jurisdiction in the execution of the
      trusts hereby created, shall and will be performed by the Individual
      Trustee, or his successor or successors, acting alone. Except as it may be
      deemed necessary for the Individual Trustee solely or jointly with the
      Corporate Trustee to execute the trusts hereby created, the Corporate

                                       31
<PAGE>

      Trustee, notwithstanding any other provision of this Trust Agreement, any
      Guarantee or any Security Document to the contrary, shall solely have and
      exercise the powers, and shall be solely charged with the performance of
      the duties, of the Trustees provided for herein, in any Guarantee or any
      Security Document.

            (d) No provision of this Trust Agreement, any Guarantee or any
      Security Document shall be deemed to impose any duty or obligation on the
      Corporate Trustee to perform any act or acts or exercise any right, power,
      duty or obligation conferred or imposed on it, in any jurisdiction in
      which it shall be illegal, or in which the Corporate Trustee shall be
      unqualified or incompetent, to perform any such act or acts or to exercise
      any such right, power, duty or obligation or if such performance or
      exercise would constitute doing business by the Corporate Trustee in such
      jurisdiction or impose a tax on the Corporate Trustee by reason thereof.
      The Individual Trustee, to the extent that he may lawfully so delegate and
      that the Corporate Trustee is permitted by law to exercise the power so
      delegated, and to the extent that such delegation is not inconsistent with
      the preceding sentence and does not impair the right, title and interest
      of the Individual Trustee under, or the validity of the Lien of, this
      Trust Agreement and the Security Documents, (i) may delegate to the
      Corporate Trustee the exercise of any power, discretionary or otherwise,
      conferred by the provisions of this Trust Agreement, any Guarantee or any
      Security Document, and (ii) hereby makes, constitutes and appoints the
      Corporate Trustee, his true and lawful attorney for him and in his name,
      or in the name of the Corporate Trustee, to do and perform all acts
      necessary or proper in the execution and prosecution of the duties of the
      Trustees hereunder in as full and ample a manner as he might do
      personally.

      7.6   MONEYS TO BE HELD IN TRUST.

      All moneys received by the Trustees under or pursuant to any provision of
this Trust Agreement, any Guarantee or any Security Document (except Trustee
Fees) shall be held in trust for the purposes for which they were paid or are
held.

      7.7   RESIGNATION AND REMOVAL OF THE TRUSTEES.

            (a) The Trustees or either of them may at any time, by giving
      written notice of resignation to the Borrower, the Administrative Agent
      and each Holder of Hedging Agreement Obligations, be discharged of the
      responsibilities hereby created, such resignation to become effective upon
      (i) the appointment of a successor Corporate Trustee and/or Individual
      Trustee, as the case may be, (ii) the acceptance of such appointment by
      such successor Trustee, (iii) the approval of such successor Trustee
      evidenced by one or more instruments signed by the Required Secured
      Parties and (iv) in the case of the appointment of a successor Individual
      Trustee, the approval of such successor by the Corporate Trustee. If no
      successor Trustee shall be appointed and shall have accepted such
      appointment within 90 days after the Corporate Trustee or the Individual
      Trustee gives the aforesaid notice of resignation, the Corporate Trustee
      or the resigning Individual Trustee, as the case may be, or any Secured
      Party, may apply to any court of competent jurisdiction to appoint a
      successor Corporate Trustee or Individual

                                       32
<PAGE>

      Trustee, as the case may be, to act until such time, if any, as a
      successor Corporate Trustee or Individual Trustee, as the case may be,
      shall have been appointed as provided in this subsection. Any successor so
      appointed by such court shall immediately and without further act be
      superseded by any successor Corporate Trustee or Individual Trustee, as
      the case may be, appointed as provided in this subsection.

            The Required Secured Parties may, at any time, remove the Trustees
      or either of them and appoint a successor Corporate Trustee or Individual
      Trustee, as the case may be, such removal to be effective upon (i) the
      acceptance of such appointment by the successor, (ii) unless a Notice of
      Enforcement is in effect, the written approval of such successor by the
      Borrower, such approval not to be unreasonably withheld and (iii) in the
      case of the removal of the Individual Trustee, the written approval of the
      appointment of the successor Individual Trustee by the Corporate Trustee.
      The Borrower may, at any time after the merger of the Corporate Trustee as
      contemplated by subsection 7.9, unless a Notice of Enforcement is in
      effect or the Corporate Trustee is the Administrative Agent, remove the
      successor Corporate Trustee and appoint another successor Corporate
      Trustee, such removal to be effective upon (i) the acceptance of such
      appointment by the successor and (ii) the written approval of such
      successor by the Required Secured Parties, such approval not to be
      unreasonably withheld. The Corporate Trustee may, at any time by giving
      written notice to the Borrower, the Administrative Agent, each Holder of
      Hedging Agreement Obligations and the Individual Trustee, remove the
      Individual Trustee and appoint a successor Individual Trustee, such
      removal to be effective upon the acceptance of such appointment by the
      successor Individual Trustee and the receipt by the Corporate Trustee of
      the written approval of such appointment by the Required Secured Parties.
      Any Trustee shall be entitled to Trustee Fees to the extent incurred or
      arising, or relating to events occurring, before such resignation or
      removal.

            (b) If at any time the Corporate Trustee or the Individual Trustee
      shall resign or be removed or otherwise become incapable of acting, or if
      at any time a vacancy shall occur in the office of the Corporate Trustee
      or the Individual Trustee for any other cause, a successor Corporate
      Trustee or Individual Trustee, as the case may be, may be appointed by the
      Required Secured Parties; PROVIDED that the appointment of an Individual
      Trustee shall not be effective until written approval of such appointment
      by the Corporate Trustee. If at any time the Individual Trustee shall
      resign or be removed or otherwise become incapable of acting or if at any
      time a vacancy shall occur in the office of the Individual Trustee for any
      other cause, a successor Individual Trustee may be appointed by the
      Corporate Trustee; PROVIDED that such appointment shall not be effective
      until receipt by the Corporate Trustee of written approval of such
      appointment by the Required Secured Parties. In either case, the powers,
      duties, authority and title of the predecessor Corporate Trustee or
      Individual Trustee, as the case may be, shall be terminated and cancelled
      without procuring the resignation of such predecessor and without any
      other formality (except as may be required by applicable law) than
      appointment and designation of a successor in writing duly acknowledged
      and delivered to the predecessor and the Borrower. Such appointment and
      designation shall be full evidence of the right and authority to make the
      same and of all the facts therein recited, and this Trust Agreement, the
      Guarantees and the Security Documents shall vest in such

                                       33
<PAGE>

      successor, without any further act, deed or conveyance, all the estates,
      properties, rights, powers, trusts, duties, authority and title of its
      predecessor (subject to the Lien of such predecessor pursuant to
      subsection 5.7); but such predecessor shall, nevertheless, on the written
      request of the Required Secured Parties, the Borrower, or the successor
      execute and deliver an instrument transferring to such successor all the
      estates, properties, rights, powers, trusts, duties, authority and title
      of such predecessor hereunder and under the Security Documents and shall
      deliver all Collateral held by it or his agents to such successor (subject
      to the Lien of such predecessor pursuant to subsection 5.7). Should any
      deed, conveyance or other instrument in writing from the Borrower be
      required by any successor Corporate Trustee or Individual Trustee for more
      fully and certainly vesting in such successor the estates, properties,
      rights, powers, trusts, duties, authority and title vested or intended to
      be vested in the predecessor Corporate Trustee or Individual Trustee, as
      the case may be, any and all such deeds, conveyances and other instruments
      in writing shall, on request of such successor, be executed, acknowledged
      and delivered by the Borrower. If the Borrower shall not have executed and
      delivered any such deed, conveyance or other instrument within 10 days
      after it received a written request from the successor Corporate Trustee
      or Individual Trustee, as the case may be, to do so, or if a Notice of
      Enforcement is in effect, the predecessor Corporate Trustee or Individual
      Trustee, as the case may be, may execute the same on behalf of the
      Borrower. The Borrower hereby appoints any predecessor Corporate Trustee
      or Individual Trustee, as the case may be, as its agent and attorney to
      act for it as provided in the next preceding sentence.

            (c) Each of the Trustees agree that, upon the resignation or removal
      of such Trustee pursuant to the terms of this Section 7.7, such Trustee
      shall continue to act as the agent of the Administrative Agent with
      respect to all Uniform Commercial Code financing statements filed in
      connection with any Security Document and shall promptly forward any
      document or request for information received in connection with any such
      financing statement to the Administrative Agent. The Borrower agrees to
      pay all fees of the Trustees, and to reimburse the Trustees for any
      expenses they incur, in accordance with the terms of this Section 7.7.

      7.8   STATUS OF SUCCESSOR CORPORATE TRUSTEE.

      Every successor Corporate Trustee appointed pursuant to subsection 7.7
shall be a bank or trust company in good standing and having power to act as
Corporate Trustee hereunder, incorporated under the laws of the United States of
America or any State thereof or the District of Columbia and having its
principal corporate trust office within the United States and shall also have
capital, surplus and undivided profits of not less than $500,000,000, if there
be such an institution with such capital, surplus and undivided profits willing,
qualified and able to accept the trust hereunder upon reasonable or customary
terms.

      7.9   MERGER OF THE CORPORATE TRUSTEE.

      Any corporation into which the Corporate Trustee may be merged, or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the

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<PAGE>

Corporate Trustee shall be a party, or any person who shall acquire
substantially all of the corporate trust business of the Corporate Trustee shall
be Corporate Trustee under this Trust Agreement and the Security Documents
without the execution or filing of any paper or any further act on the part of
the parties hereto.

      7.10  CO-TRUSTEE; SEPARATE TRUSTEES.

            (a) If at any time or times it shall be necessary or prudent in
      order to conform to any law of any jurisdiction in which any of the
      Collateral shall be located, or to avoid any violation of law or
      imposition on the Trustees of taxes by such jurisdiction not otherwise
      imposed on the Trustees, or the Corporate Trustee shall be advised by
      counsel, satisfactory to it, that it is necessary or prudent in the
      interest of the Secured Parties, or the Required Secured Parties shall in
      writing so request the Corporate Trustee and the Borrower, or the
      Corporate Trustee shall deem it desirable for its own protection in the
      performance of its duties hereunder or under any Security Document, the
      Corporate Trustee and, unless a Notice of Enforcement is in effect, the
      Borrower shall execute and deliver all instruments and agreements
      necessary or proper to constitute another bank or trust company, or one or
      more persons approved by the Corporate Trustee and, unless a Notice of
      Enforcement is in effect, the Borrower, either to act as co-trustee or
      co-trustees of all or any of the Collateral under this Trust Agreement or
      under any of the Security Documents, jointly with the Trustees originally
      named herein or therein or any successor Trustees, or to act as separate
      trustee or trustees of any of the Collateral. If the Borrower shall not
      have joined in the execution of such instruments and agreements within 10
      days after it receives a written request from the Corporate Trustee to do
      so, or if a Notice of Enforcement is in effect, the Corporate Trustee may
      act under the foregoing provisions of this subsection without the
      concurrence of the Borrower and execute and deliver such instruments and
      agreements on behalf of the Borrower. The Borrower hereby appoints the
      Corporate Trustee as its agent and attorney to act for it under the
      foregoing provisions of this subsection in either of such contingencies.

            (b) Every separate trustee and every co-trustee, other than any
      successor Corporate Trustee or Individual Trustee appointed pursuant to
      subsection 7.7, shall, to the extent permitted by law, be appointed and
      act and be such, subject to the following provisions and conditions:

                  (i) all rights, powers, duties and obligations conferred upon
            the Corporate Trustee in respect of the custody, control and
            management of moneys, papers or securities shall be exercised solely
            by the Corporate Trustee or any agent appointed by the Corporate
            Trustee;

                  (ii) all rights, powers, duties and obligations conferred or
            imposed upon the Corporate Trustee hereunder and under the relevant
            Guarantee or Security Document shall be conferred or imposed and
            exercised or performed by the Corporate Trustee and such separate
            trustee or separate trustees or co-trustee or co-trustees, jointly,
            as shall be provided in the instrument appointing such separate
            trustee or separate trustees or co-trustee or co-trustees, except to
            the

                                       35
<PAGE>

            extent that under any law of any jurisdiction in which any
            particular act or acts are to be performed the Corporate Trustee
            shall be incompetent or unqualified to perform such act or acts, or
            unless the performance of such act or acts would result in the
            imposition of any tax on the Trustees which would not be imposed
            absent such joint act or acts, in which event such rights, powers,
            duties and obligations shall be exercised and performed by such
            separate trustee or separate trustees or co-trustee or co-trustees;

                  (iii) no power given hereby or by the relevant Guarantee or
            Security Documents to, or which it is provided herein or therein may
            be exercised by, any such co-trustee or co-trustees or separate
            trustee or separate trustees, shall be exercised hereunder or
            thereunder by such co-trustee or co-trustees or separate trustee or
            separate trustees except jointly with, or with the consent in
            writing of, the Corporate Trustee, anything contained herein to the
            contrary notwithstanding;

                  (iv)  no trustee  hereunder  shall be  personally  liable by
            reason of any act or omission of any other trustee hereunder; and

                  (v) the Borrower and the Corporate Trustee, at any time by an
            instrument in writing executed by them jointly, may (and, at the
            direction of the Required Secured Parties, shall) accept the
            resignation of or remove any such separate trustee or co-trustee
            and, in that case by an instrument in writing executed by them
            jointly, may appoint a successor to such separate trustee or
            co-trustee, as the case may be, anything contained herein to the
            contrary notwithstanding. If the Borrower shall not have joined in
            the execution of any such instrument within 10 days after it
            receives a written request from the Corporate Trustee to do so, or
            if a Notice of Enforcement is in effect, the Corporate Trustee shall
            have the power to (and, at the direction of the Required Secured
            Parties, shall) accept the resignation of or remove any such
            separate trustee or co-trustee and to appoint a successor without
            the concurrence of the Borrower, the Borrower hereby appointing the
            Corporate Trustee its agent and attorney to act for it in such
            connection in such contingency. If the Corporate Trustee shall have
            appointed a separate trustee or separate trustees or co-trustee or
            co-trustees as above provided, the Corporate Trustee may at any
            time, by an instrument in writing, accept the resignation of or
            remove any such separate trustee or co-trustee and the successor to
            any such separate trustee or co-trustee shall be appointed by the
            Borrower and the Corporate Trustee, or by the Corporate Trustee
            alone pursuant to this subsection.

      7.11  TREATMENT OF PAYEE OR INDORSEE BY TRUSTEES; REPRESENTATIVES
OF SECURED PARTIES.

            (a) The Trustees may treat the registered holder or, if none, the
      payee or indorsee of any promissory note or debenture evidencing an
      Obligation as the absolute owner thereof for all purposes and shall not be
      affected by any notice to the contrary, whether such promissory note or
      debenture shall be past due or not.

                                       36
<PAGE>

            (b) Any Person which shall be designated as the duly authorized
      representative of one or more Secured Parties to act as such in connection
      with any matters pertaining to this Trust Agreement or the Collateral
      shall present to the Corporate Trustee such documents, including, without
      limitation, Opinions of Counsel, as the Corporate Trustee may reasonably
      require, to demonstrate to the Corporate Trustee the authority of such
      Person to act as the representative of such Secured Parties (it being
      understood that the authority of the Administrative Agent shall be
      demonstrated by its inclusion as such in the lists from time to time
      delivered pursuant to subsection 5.2.).

            (c) Whenever this Trust Agreement requires or permits any Secured
      Party or the Required Secured Parties to sign any instrument, give any
      notice or take any action, the Administrative Agent on behalf of such
      Secured Party or Required Secured Parties may sign such instrument, give
      such notice or take such action with the same effect as if done directly
      by such Secured Party or Required Secured Parties.

      7.12  NOTICES TO CORPORATE TRUSTEE UNDER SECURITY DOCUMENTS.

      In the event that the Corporate Trustee receives any notice from the
grantor under any Security Document, the Corporate Trustee shall promptly
transmit a copy thereof to the Borrower, the Administrative Agent and each
Hedging Agreement Secured Party, and the Corporate Trustee shall take such
action in respect of such notice which is permitted by this Trust Agreement as
shall be directed by the Required Secured Parties.

                               SECTION 8

                     REPRESENTATIONS AND WARRANTIES

      8.1   REPRESENTATIONS AND WARRANTIES OF THE CORPORATE TRUSTEE.

      The Corporate Trustee hereby represents and warrants that:

            (a) it is a Massachusetts trust company duly organized, validly
      existing and in good standing under the laws of the United States and has
      the corporate power and authority and the legal right to execute and
      deliver, and to perform its obligations under, this Trust Agreement and
      has taken all necessary corporate action to authorize the execution,
      delivery and performance of this Trust Agreement; and

            (b) this Trust Agreement has been duly executed by the Corporate
      Trustee and constitutes a legal, valid and binding obligation of the
      Corporate Trustee, enforceable in accordance with its terms, subject to
      the effects of insolvency, reorganization, moratorium and other similar
      laws relating to or affecting the enforcement of creditors' rights
      generally and general equitable principles.

      8.2   REPRESENTATIONS AND WARRANTIES OF THE BORROWER.

      The Borrower hereby represents and warrants that:

                                       37
<PAGE>

            (a) it is a corporation duly organized, validly existing and in good
      standing under the laws of the State of Delaware and has all requisite
      power and authority and the legal right to execute and deliver, and to
      perform its obligations under, this Trust Agreement and has taken all
      necessary corporate action to authorize the execution, delivery and
      performance of this Trust Agreement;

            (b) this Trust Agreement has been duly executed and delivered by the
      Borrower and constitutes a legal, valid and binding obligation of the
      Borrower, enforceable in accordance with its terms, except as the
      enforceability hereof may be limited by bankruptcy, insolvency,
      reorganization or moratorium or other similar laws relating to the
      enforcement of creditors' rights generally and by general equitable
      principles.;

            (c) neither the execution and delivery by the Borrower of this Trust
      Agreement nor compliance with the terms and provisions hereof by the
      Borrower will conflict with or result in a breach of or Default under, or
      require any consent under, or give rise to any acceleration, prepayment,
      repurchase or redemption obligation of the Borrower, the Parent or any
      Subsidiary under the respective certificates of incorporation or by-laws
      (or other organizational documents) of the Borrower, the Parent or any
      Subsidiary, or any applicable law or regulation, or any order, writ,
      injunction or decree of any court or governmental authority or agency, or
      any agreement or instrument to which the Borrower, the Parent or any
      Subsidiary is a party or by which it is bound or to which it is subject,
      or result in the creation or imposition of any Lien upon any of the
      revenues or assets of the Borrower or any Subsidiary (except for the Liens
      created pursuant to the Security Documents) pursuant to the terms of any
      such agreement or instrument; and

            (d) the Borrower has obtained all authorizations, approvals and
      consents of, and has made all filings and registrations with, any
      governmental or regulatory authority or agency and any third party
      necessary for the execution, delivery and performance by it of this Trust
      Agreement and for the validity or enforceability hereof.

                               SECTION 9
                             MISCELLANEOUS

      9.1   NOTICES.

      Unless otherwise specified herein, all notices, requests, demands or other
communications given to the Borrower, the Trustees, the Administrative Agent or
any Hedging Agreement Secured Party shall be given in writing or by facsimile
transmission and shall be deemed to have been duly given when personally
delivered or when duly deposited in the mails, registered or certified mail
postage prepaid, or if transmitted by facsimile transmission, when received in
legible form, addressed (i) if to the Borrower or the Trustees, to such party at
its address specified on the signature pages hereof or any other address which
such party shall have specified as its address for the purpose of communications
hereunder, by notice given in accordance with this subsection 9.1 to the party
sending such communication or (ii) if to the

                                       38
<PAGE>

Administrative Agent or any Hedging Agreement Secured Party, to it at its
address specified from time to time in the list provided by the Borrower to the
Corporate Trustee pursuant to subsection 5.2; PROVIDED that any notice, request
or demand to the Trustees shall not be effective until received by the Corporate
Trustee in the corporate trust division at the office designated by it pursuant
to this subsection 9.1.

      9.2   NO WAIVERS.

      No failure on the part of the Trustees, any co-trustee, any separate
trustee, or any Secured Party to exercise, no course of dealing with respect to,
and no delay in exercising, any right, power or privilege under this Trust
Agreement, any Guarantee or any Security Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.

      9.3   AMENDMENTS, SUPPLEMENTS, WAIVERS AND RELEASES.

            (a) With the written consent of the Required Secured Parties, the
      Trustees and the Borrower may, from time to time, enter into written
      agreements supplemental hereto or to any Guarantee or Security Document
      for the purpose of adding to, or waiving any provisions of, this Trust
      Agreement, any Guarantee or any Security Document or changing in any
      manner the rights of the Trustees, the Secured Parties or the Borrower
      hereunder or thereunder or releasing any of the Collateral or any
      Guarantee; PROVIDED that no such supplemental agreement shall (i) (A)
      amend, modify or waive any provision of this subsection 9.3, (B) amend,
      modify or waive any provision of subsections 2.10 or 3.4, or the
      definitions of Obligations, Payment Obligations, Voting Obligations,
      Facility Obligations, Hedging Agreement Obligations, Secured Parties or
      Required Secured Parties, or (C) release any Guarantee, terminate any
      Security Document or release all or any material part of the Collateral,
      unless the Corporate Trustee has received a certificate of a Responsible
      Officer of the Borrower, and an Opinion of Counsel, addressed to the
      Trustees and each Secured Party, in each case to the effect that such
      action does not violate any Secured Instrument or (ii) amend, modify or
      waive any provision of Section 5 or 7 or alter the duties, rights or
      obligations of the Trustees hereunder or under the Guarantees or the
      Security Documents without the written consent of the Trustees. Any such
      supplemental agreement shall be binding upon the Borrower, the
      Administrative Agent, the Secured Parties and the Trustees and their
      respective successors and assigns.

            (b) Without the consent of the Administrative Agent or any Secured
      Party, the Trustees and the Borrower and, in the case of any modification
      of any Guarantee, the guarantor party to such Guarantee, at any time and
      from time to time, may enter into one or more agreements supplemental
      hereto, to any Guarantee or to any Security Document, in form satisfactory
      to the Corporate Trustee, (i) to add to the covenants of the Borrower, any
      guarantor party to any Guarantee or any grantor party to any Security
      Document, for the benefit of the Secured Parties or to surrender any right
      or power herein conferred upon the Borrower, or (ii) to cure any
      ambiguity, to correct or supplement any provision herein or in any
      Guarantee or Security Document which may be defective or inconsistent

                                       39
<PAGE>

      with any other provision herein or therein, or to make any other provision
      with respect to matters or questions arising hereunder which shall not be
      inconsistent with any provision hereof; PROVIDED that any such action
      contemplated by this clause (ii) shall not, and could not reasonably be
      expected to, adversely affect the interests of any Secured Party (as
      certified by a Responsible Officer pursuant to paragraph (c) below).

            (c) The Trustees shall not enter into any agreement supplemental
      hereto pursuant to subsection 9.3(a) or (b) unless the Corporate Trustee
      has received a certificate of a Responsible Officer, and an Opinion of
      Counsel, addressed to the Trustees and each Secured Party, in each case to
      the effect that such action does not violate this Trust Agreement.

            (d) The Corporate Trustee shall at the expense of the Borrower
      promptly deliver to the Administrative Agent and each Hedging Agreement
      Secured Party copies of all amendments, waivers or supplements to this
      Trust Agreement, any Guarantee or any Security Document that may be
      entered into pursuant to subsection 9.3(a) or (b).

      9.4   HEADINGS.

      The table of contents and the headings of Sections and subsections have
been included herein for convenience only and should not be considered in
interpreting this Trust Agreement.

      9.5   SEVERABILITY.

      Any provision of this Trust Agreement which is prohibited or unenforceable
in any jurisdiction shall not invalidate the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

      9.6   SUCCESSORS AND ASSIGNS.

      This Trust Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and shall inure to the benefit of each of the Secured
Parties and their respective successors and assigns, and nothing herein is
intended or shall be construed to give any other Person any right, remedy or
claim under, to or in respect of this Trust Agreement, any Guarantee or any
Collateral.

      9.7   CURRENCY CONVERSIONS.

      In calculating the amount of Payment Obligations for any purpose
hereunder, including, without limitation, voting or distribution purposes, the
amount of any Payment Obligation which is denominated in a currency other than
Dollars shall be converted into Dollars at the spot rate for purchasing Dollars
with such currency determined by the Corporate Trustee to be in effect in the
New York foreign exchange market at the close of business on the Business Day
prior to the date on which such calculation is to be made.

                                       40
<PAGE>

      9.8   GOVERNING LAW.

      THIS TRUST AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

      9.9   NO RECOURSE.

      No claim may be made under this Trust Agreement against any of the direct
or indirect partners or equity holders of the Borrower for any obligations of
the Borrower hereunder; PROVIDED that this subsection 9.9 shall not in any way
limit the Trustees' right to make any claim against any such direct or indirect
partner or equity holder under any contract that any such Person may have
entered into with the Borrower to the extent that the rights under such contract
constitute Collateral.

      9.10  SUBMISSION TO JURISDICTION; WAIVERS.

            The Borrower and each Trustee hereby irrevocably and
      unconditionally:

            (a) submits for itself and its property in any legal action or
      proceeding relating to this Agreement, or for recognition and enforcement
      of any judgment in respect thereof, to the non-exclusive general
      jurisdiction of the Supreme Court of the State of New York sitting in New
      York County, the courts of the United States of America for the Southern
      District of New York, and appellate courts from any thereof;

            (b) consents that any such action or proceeding may be brought in
      such courts and waives any objection that it may now or hereafter have to
      the venue of any such action or proceeding in any such court or that such
      action or proceeding was brought in an inconvenient court and agrees not
      to plead or claim the same;

            (c) agrees that service of process in any such action or proceeding
      may be effected by mailing a copy thereof by registered or certified mail
      (or any substantially similar form of mail), postage prepaid, to such
      party at its address set forth on the signature pages hereof or at such
      other address of which the parties hereto shall have been notified
      pursuant hereto; and

            (d) agrees that nothing herein shall affect the right to effect
      service of process in any other manner permitted by law or shall limit the
      right to sue in any other jurisdiction.

      9.11  COUNTERPARTS.

      This Trust Agreement may be signed in any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.

                                       41
<PAGE>

      9.12  RELEASE OF LIENS; GUARANTEES.

            (a) Upon (i) receipt by the Corporate Trustee of a request by the
      Borrower to release the Liens created by subsection 5.7 and by the
      Security Documents in respect of any Collateral, together with a
      certificate of a Responsible Officer, an Opinion of Counsel, addressed to
      the Trustees and each Secured Party, and a letter of consent from the
      Administrative Agent, in each case to the effect that such release will
      not violate any Secured Instrument and (ii) in the case of a release of
      all the Collateral, payment in full of all Trustee Fees, the security
      interests created by subsection 5.7 and by the Security Documents shall
      terminate forthwith, and all right, title and interest of the Trustees in
      and to such Collateral shall revert to the Borrower, its successors and
      assigns.

            (b) Upon receipt by the Corporate Trustee of a request by the
      Borrower to release any Guarantee, together with a certificate of a
      Responsible Officer, an Opinion of Counsel, addressed to the Trustees and
      each Secured Party, and a letter of consent from the Administrative Agent,
      in each case to the effect that such release will not violate any Secured
      Instrument, such Guarantee shall be immediately released.

            (c) Upon the termination of the Trustees' security interest and the
      release of any Collateral in accordance with subsection 9.12(a), the
      Trustees will promptly, at the Borrower's written request and expense, (i)
      execute and deliver to the Borrower such documents as the Borrower shall
      reasonably request to evidence the termination of such security interest
      or the release of such Collateral and (ii) in the case of a release of all
      Collateral, deliver or cause to be delivered to the Borrower all property
      of the Borrower then held by the Trustees or any agent thereof.

            (d) This Trust Agreement shall terminate when (i) the Liens and
      security interests granted under the Security Documents have terminated
      and the Collateral has been released and (ii) the Obligations and all
      other amounts (other than contingent and indemnity obligations which by
      their terms survive the termination of this Credit Agreement) to be paid
      pursuant to the Loan Documents have been paid in full and all commitments
      to extend credit under any Secured Instrument that when extended would
      constitute Obligations shall have been terminated; PROVIDED that the
      provisions of subsections 5.3, 5.4, 5.5 and 5.6 shall not be affected by
      any such termination.

            (e) The Corporate Trustee shall promptly give notice to the
      Administrative Agent and each Hedging Agreement Secured Party of any
      release of Collateral or a Guarantee pursuant to this subsection.

      9.13  COMPLETE AGREEMENT.

      This Trust Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
representations, negotiations, writings, memoranda and agreements.

                                       42
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be
duly executed (by their respective authorized officers or representatives in the
case of parties other than the Individual Trustee) as of the day and year first
written above.

                                    PF.NET CORP.

                                    By:_____________________________________
                                    Name:___________________________________
                                    Title:__________________________________

Address for Notices:

PF.Net Holdings, Limited
1625 B Street
Washougal, WA 9867

                                    STATE STREET BANK AND TRUST COMPANY, not
                                    individually but solely as Corporate
                                    Trustee

                                    By:_____________________________________
                                    Name:___________________________________
                                    Title:__________________________________

Address for Notices:

2 Avenue de Lafayette
Boston, MA 02111
Attn: Corporate Trust - Lucent/PF.Net
Collateral Trust

                                    Attest:_________________________________
                                    Name:___________________________________
                                    Title:__________________________________

                                       43
<PAGE>

                                    ________________________________________
                                    PATRICK THEBADO,
                                    as Individual Trustee

Address for Notices:

2 Avenue de Lafayette
Boston, MA 02111
Attn: Corporate Trust - Lucent/PF.Net
Collateral Trust

                                    Witness:________________________________
                                    Name:___________________________________

                                       44
<PAGE>

STATE OF NEW YORK  )
                   ) :ss:
COUNTY OF NEW YORK )

      On the ____ day of _____________ 1999, before me personally came
____________________, to me personally known and known to me to be the person
described in and who executed the foregoing instrument as _____________________
of ____________________, who, being by me duly sworn, did depose and say that he
resides at ____________________, that he is the ____________ of
__________________________, one of the corporations described in and which
executed the foregoing instrument; that said instrument was signed on behalf of
said corporation by resolution of its Board of Directors; that he signed his
name thereto by like resolution; and that he acknowledged said instrument to be
the free act and deed of said corporation.

<PAGE>

STATE STREET BANK AND TRUST COMPANY

STATE OF ___________    )
                        ):ss:
COUNTY OF _________     )

      On the ____ day of __________, 1999, before me personally came
_________________ and _________________, to me personally known and known to me
to be the persons described in and who executed the foregoing instrument as
______________ and _____________, respectively, of _______________________, by
me duly sworn, did depose and say that they reside at
____________________________ and ______________________ respectively; that they
are _______________ and _______________, respectively, of ___________________,
one of the corporations described in and which executed the foregoing
instrument; that they know the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that said instrument was signed and
sealed on behalf of said corporation in accordance with its by-laws; that they
signed their names thereto by like order; and that they acknowledged said
instrument to be the free act and deed of said corporation.

[NOTARIAL SEAL]

                                        2
<PAGE>

INDIVIDUAL TRUSTEE

STATE OF _____________  )
                        ):ss:
COUNTY OF               )

      On the ____ day of __________, 1999, before me personally came
_________________, to me personally known who, being by me duly sworn, did
depose and say that he resides in ___________________________; and that said
instrument is his free act and deed.

[NOTARIAL SEAL]

<PAGE>

                                                                    SCHEDULE I

                           INITIAL SECURITY DOCUMENTS

      1. Pledge Agreement, dated as of October 29, 1999, made by PF.Net
Holdings, Limited in favor of the Trustees, in the form of Exhibit G hereto.

      2.    Security Agreement, dated as of October 29, 1999, made by PF.Net
Corp. in favor of the Trustees, in the form of Exhibit E hereto.

      3.    Pledge Agreement, dated as of October 29, 1999, made by PF.Net
Corp. in favor of the Trustees, in the form of Exhibit H hereto.

      4.    Security Agreement, dated as of October 29, 1999, made by PF.Net
Supply Corp. in favor of the Trustees, in the form of Exhibit F hereto.

      5.    Security Agreement, dated as of October 29, 1999, made by PF.Net
Construction Corp. in favor of the Trustees, in the form of Exhibit F hereto.

      6.    Pledge Agreement, dated as of October 29, 1999, made by PF.Net
Network Services Corp. in favor of the Trustees, in the form of Exhibit H
hereto.

      7.    Patent Security Agreement, dated as of October 29, 1999, entered
into by PF.Net Corp. in favor of the Trustees.

      8.    Patent Security Agreement, dated as of October 29, 1999, entered
into by PF.Net Supply Corp. in favor of the Trustees.

      9.    Patent Security Agreement, dated as of October 29, 1999, entered
into by PF.Net Construction Corp. in favor of the Trustees.

      10.   Copyright Security Agreement, dated as of October 29, 1999,
entered into by PF.Net Corp. in favor of the Trustees.

      11.   Copyright Security Agreement, dated as of October 29, 1999,
entered into by PF.Net Supply Corp. in favor of the Trustees.

      12.   Copyright Security Agreement, dated as of October 29, 1999,
entered into by PF.Net Construction Corp. in favor of the Trustees.

      13.   Trademark Security Agreement, dated as of October 29, 1999,
entered into by PF.Net Corp. in favor of the Trustees.

      14.   Trademark Security Agreement, dated as of October 29, 1999,
entered into by PF.Net Supply Corp. in favor of the Trustees.

<PAGE>

      15.   Trademark Security Agreement, dated as of October 29, 1999,
entered into by PF.Net Construction Corp. in favor of the Trustees.

<PAGE>

                                                                       EXHIBIT A

                                     FORM OF
                        ADDITIONAL COLLATERAL DESIGNATION

                                                [Date]

To:   State Street Bank and Trust Company

Re:   Trust Agreement, dated as of October 29, 1999 among PF.Net Corp., State
      Street Bank and Trust Company, as Corporate Trustee, and Patrick
      Thebado, as Individual Trustee (the "Trust Agreement")

      Reference is hereby made to the Trust Agreement. Capitalized terms which
are defined in the Trust Agreement are used herein as therein defined.

      In accordance with subsection 4.4 of the Trust Agreement, the following
Additional Collateral is hereby added as Collateral under the Trust Agreement:

                       [DESCRIBE ADDITIONAL COLLATERAL]

                                    PF.Net Corp.

                                    By:_____________________________________
                                    Name:___________________________________
                                    Title:__________________________________

<PAGE>

                                                                       EXHIBIT B

                                     FORM OF

                        ADDITIONAL GUARANTEE DESIGNATION

                                                [Date]

To:   State Street Bank and Trust Company

Re:   Trust Agreement, dated as of October 29, 1999 among PF.Net Corp., State
      Street Bank and Trust Company, as Corporate Trustee, and Patrick
      Thebado, as Individual Trustee (the "Trust Agreement")

      Reference is hereby made to the Trust Agreement. Capitalized terms which
are defined in the Trust Agreement are used herein as therein defined.

      In accordance with subsection 4.6 of the Trust Agreement, the following
Additional Guarantee is hereby added as Guarantee under the Trust Agreement:

                       [DESCRIBE ADDITIONAL GUARANTEE]

                                    PF.Net Corp.

                                    By:_____________________________________
                                    Name:___________________________________
                                    Title:__________________________________

<PAGE>

                                                                       EXHIBIT C

                                   FORM OF
                  ADDITIONAL PAYMENT OBLIGATIONS DESIGNATION

                                                [Date]

To:   State Street Bank and Trust Company

Re:   Trust Agreement, dated as of October 29, 1999 among PF.Net Corp., State
      Street Bank and Trust Company, as Corporate Trustee, and Patrick
      Thebado, as Individual Trustee (the "Trust Agreement")

      Reference is hereby made to the Trust Agreement. Capitalized terms which
are defined in the Trust Agreement are used herein as therein defined.

      In accordance with subsection 4.2 of the Trust Agreement, the following
Permitted Additional Obligations are hereby added as Obligations under the Trust
Agreement:

                 [DESCRIBE PERMITTED ADDITIONAL OBLIGATIONS]

      The Permitted Additional Obligations described above shall constitute
[Facility] [Hedging Agreement] Obligations.

      Attached hereto is a true and complete copy of each agreement (together
with all schedules, exhibits, annexes, appendices and other attachments
thereto), including but not limited to the applicable Secured Instruments
relating to such Permitted Additional Obligations.

                                    PF.Net Corp.

                                    By:_____________________________________
                                    Name:___________________________________
                                    Title:__________________________________

<PAGE>

                                                                     EXHIBIT D-1

                                     FORM OF
           BORROWER'S OPINION REGARDING INITIAL SECURITY DOCUMENTS

      1. Each of the Obligors is duly organized, validly existing and in good
standing under the laws of the State of Delaware, has all requisite corporate
power and authority to carry on its business as now conducted and is qualified
to do business in, and is in good standing in, every jurisdiction where such
qualification is required.

      2. Each Obligor has all requisite corporate power and authority to
execute, deliver and perform the Operative Documents to which it is a party.
Each of the Operative Documents has been duly authorized by all necessary
corporate and, if required, stockholder action on the part of each Obligor that
is a party thereto.

      3. Each Operative Document has been duly executed and delivered by each
Obligor party thereto and constitutes the legal, valid and binding obligation of
such Obligor, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

      4. The execution, delivery and performance by the Obligors of the
Operative Documents (a) do not require any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except such
as have been obtained or made and are in full force and effect and except
filings necessary to perfect Liens created under the Security Documents, (b) do
not violate any applicable law or regulation or the charter, by-laws or other
organizational documents of any of the Obligors or any order of any Governmental
Authority, (c) to our knowledge, do not violate or result in a default under any
indenture, agreement or other instrument evidencing or governing any Material
Indebtedness or any other material indenture, agreement or other instrument
binding upon any of the Obligors or its assets, or give rise to a right
thereunder to require any payment to be made by any of the Obligors, and (d) to
our knowledge, do not result in the creation or imposition of any Lien on any
asset of any of the Obligors, except Liens created under the Security Documents.

      5. To our knowledge, there are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or threatened
against or affecting any of the Obligors that involve any of the Operative
Documents or the transactions contemplated therein.

      6. None of the Obligors is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended, or
(b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.

<PAGE>

      7. The Pledge Agreement (Parent) creates in favor of the Trustees for the
benefit of the Secured Parties as security for the Secured Obligations, a
security interest in the Parent's rights in and to the Pledged Securities (as
defined therein; the "Parent Pledged Securities").

      8. Upon delivery of any Parent Pledged Securities to the Corporate Trustee
for the benefit of the Secured Parties in the Commonwealth of Massachusetts the
security interest of the Corporate Trustee for the benefit of the Secured
Parties in such Parent Pledged Securities will be perfected and no interest of
any other Person will be equal or prior to the security interest of the
Corporate Trustee for the benefit of the Secured Parties in such Parent Pledged
Securities.

      9. The Pledge Agreement (Borrower) creates in favor of the Trustees for
the benefit of the Secured Parties as security for the Secured Obligations, a
security interest in the Borrower's rights in and to the Pledged Securities (as
defined therein; the "Borrower Pledged Securities").

      10. Upon delivery of any Borrower Pledged Securities to the Corporate
Trustee for the benefit of the Secured Parties in the Commonwealth of
Massachusetts the security interest of the Corporate Trustee for the benefit of
the Secured Parties in such Borrower Pledged Securities will be perfected and no
interest of any other Person will be equal or prior to the security interest of
the Corporate Trustee for the benefit of the Secured Parties in such Borrower
Pledged Securities.

      11. The Security Agreement (Parent) creates in favor of the Trustees for
the benefit of the Secured Parties as security for the Secured Obligations, a
valid security interest in the rights of the Parent in the Collateral (as
defined therein; the "Parent Collateral").

      12. Each of the financing statements attached as Exhibit __ (the "Parent
Financing Statements") is in appropriate form for filing in the office in which
it is to be filed. Upon the filing of the Parent Financing Statements in the
offices identified on Schedule __ hereto, the security interests in the Parent
Collateral created under the Security Agreement (Parent) will be perfected under
the Uniform Commercial Code of each state in which such an office is located.

      13. The security interest created by the Security Agreement (Parent) in
the Parent's rights in such of the Parent Collateral as consists of a security
entitlement will be perfected under the New York Uniform Commercial Code upon
the execution and delivery by the Securities Intermediary (as defined in the
Securities Account Control Agreement (Parent)) of the Securities Account Control
Agreement (Parent). At the time of such perfection, such security interest will
be of first priority.

      14. The security interest created by the Security Agreement (Parent) in
the Parent's rights in such of the Parent Collateral as consists of certificated
securities in registered form will be perfected under the Commonwealth of
Massachusetts UCC upon either (a) delivery of such certificated securities to
the Corporate Trustee in the Commonwealth of Massachusetts, indorsed to the
Corporate Trustee or in blank by an effective endorsement, or registered in the
name of the Corporate Trustee, upon original issue or registration of transfer
by the Parent, or (b) delivery of such certificated securities to the Corporate
Trustee in the [jurisdiction where Corporate Trustee

<PAGE>

holds Parent Collateral], specially indorsed to the Corporate Trustee by an
effective endorsement. At the time of such perfection, such security interest
will be of first priority.

      15. [[If applicable] The security interest created by the Security
Agreement (Parent) in the Parent Collateral creates in favor of the Trustees for
the benefit of the Secured Parties as security for the Obligations a valid
security interest in the rights of the Borrower in all intellectual property of
the Parent under the United States Copyright Act, the United States Patent Act
and the United States Trademark Act, to the extent that a security interest
therein may be perfected thereunder.]

      16. The Security Agreement (Borrower) creates in favor of the Trustees for
the benefit of the Secured Parties as security for the Obligations (as such term
is defined in the Security Agreement (Borrower)), a valid security interest in
the rights of the Borrower in the Collateral (as defined therein; the "Borrower
Collateral").

      17. Each of the financing statements attached as Exhibit __ (the "Borrower
Financing Statements") is in appropriate form for filing in the office in which
it is to be filed. Upon the filing of the Borrower Financing Statements in the
offices identified on Schedule __ hereto, the security interests in the Borrower
Collateral created under the Security Agreement (Borrower) will be perfected
under the Uniform Commercial Code of each state in which any such office is
located.

      18. The security interest created by the Security Agreement (Borrower) in
the Borrower's rights in such of the Borrower Collateral as consists of a
security entitlement will be perfected under the New York Uniform Commercial
Code upon the execution and delivery by the Securities Intermediary (as defined
in the Securities Account Control Agreement (Borrower)) of the Securities
Account Control Agreement (Borrower). At the time of such perfection, such
security interest will be of first priority.

      19. The security interest created by the Security Agreement (Borrower) in
the Borrower's rights in such of the Borrower Collateral as consists of
certificated securities in registered form will be perfected under the
Commonwealth of Massachusetts Uniform Commercial Code upon either (a) delivery
of such certificated securities to the Corporate Trustee in the [jurisdiction
where Corporate Trustee holds the Borrower Collateral], indorsed to the
Corporate Trustee or in blank by an effective endorsement, or registered in the
name of the Corporate Trustee, upon original issue or registration of transfer
by the Borrower, or (b) delivery of such certificated securities to the
Corporate Trustee in the [jurisdiction where Corporate Trustee holds the
Borrower Collateral], specially indorsed to the Corporate Trustee by an
effective endorsement. At the time of such perfection, such security interest
will be of first priority.

      20. [[If applicable] The security interest created by the Security
Agreement (Borrower) in the Borrower Collateral the United States Copyright Act,
the United States Patent Act and the United States Trademark Act, to the extent
that a security interest therein may be perfected thereunder.]

<PAGE>

                                                                     EXHIBIT D-2

                                     FORM OF
         BORROWER'S OPINION REGARDING ADDITIONAL SECURED INSTRUMENTS

      1. The Borrower has all requisite corporate power and authority to
execute, deliver and perform the Secured Instrument[s] governing the Additional
Obligations (the "Additional Secured Instruments"). Each of the Additional
Secured Instruments has been duly authorized by all necessary corporate and, if
required, stockholder action on the part of the Borrower that is a party
thereto.

      2. Each Additional Secured Instrument has been duly executed and delivered
by the Borrower party thereto and constitutes the legal, valid and binding
obligation of such Obligor, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

      3. The execution, delivery and performance by the Borrower of the
Additional Secured Instruments (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect and
except filings necessary to perfect Liens created under the Security Documents,
(b) do not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any order of any Governmental
Authority, (c) to our knowledge, do not violate or result in a default under any
indenture, agreement or other instrument evidencing or governing any Material
Indebtedness or any other material indenture, agreement or other instrument
binding upon the Borrower or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower, and (d) to our knowledge, do not
result in the creation or imposition of any Lien on any asset of the Borrower,
except Liens created under the Security Documents.

      4. To our knowledge, there are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or threatened
against or affecting the Borrower that involve any of the Additional Secured
Instruments or the transactions contemplated therein.

<PAGE>

                                                                     EXHIBIT D-3

                                     FORM OF
              BORROWER'S OPINION REGARDING ADDITIONAL GUARANTEES

      1. Each Guarantor party to an Additional Guarantee (an "Additional
Guarantor") has all requisite corporate power and authority to execute, deliver
and perform the Additional Guarantee. Each of the Additional Guarantees has been
duly authorized by all necessary corporate and, if required, stockholder action
on the part of the Additional Guarantor party thereto.

      2. Each Additional Guarantee has been duly executed and delivered by the
Additional Guarantor party thereto and constitutes the legal, valid and binding
obligation of such Additional Guarantor, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

      3. The execution, delivery and performance by each Additional Guarantor of
the Additional Guarantee to which such Additional Guarantor is a party (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and except filings necessary to perfect
Liens created under the Security Documents, (b) do not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
the such Additional Guarantor or any order of any Governmental Authority, (c) to
our knowledge, do not violate or result in a default under any indenture,
agreement or other instrument evidencing or governing any Material Indebtedness
or any other material indenture, agreement or other instrument binding upon such
Additional Guarantor or its assets, or give rise to a right thereunder to
require any payment to be made by such Additional Guarantor, and (d) to our
knowledge, do not result in the creation or imposition of any Lien on any asset
of such Additional Guarantor, except Liens created under the Security Documents.

      4. To our knowledge, there are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or threatened
against or affecting any Additional Guarantor that involve any of the Additional
Guarantees or the transactions contemplated therein.<PAGE>

                                                                  Exhibit 10.8

                             STOCKHOLDERS AGREEMENT

     This Stockholders Agreement (this "AGREEMENT") is entered into as of
October 29, 1999 by and among PF.Net Holdings, Limited, a Delaware corporation
(the "COMPANY"), John Warta ("WARTA"), Karen Irwin, Treg Ventures LLC ("TREG"),
Koch Telecom Ventures, Inc. ("KOCH"), PF Telecom Holdings, LLC ("PF TELECOM"),
GLW Ventures LLC ("GLW"), Georgiana Warta, Odyssey Coinvestors, LLC
("COINVESTORS"), Odyssey Investment Partners Fund, LP ("ODYSSEY" and, together
with Coinvestors, the "ODYSSEY STOCKHOLDERS"), UBS Capital II LLC ("UBS
Capital"), Warburg Dillon Read LLC ("WDR"), Credit Suisse First Boston ("CSFB")
and Lucent Technologies Inc. ("LUCENT").

                                    RECITALS

     A. Upon the consummation of the transactions contemplated by that certain
Subscription Agreement, dated as of October 29, 1999, among the Company,
Odyssey, Coinvestors and UBS Capital, each of Odyssey, Coinvestors and UBS
Capital will own shares of Senior Preferred Stock (as defined below) and Dark
Fiber Warrants (as defined below), and each of Koch and PF Telecom will own
shares of Common Stock (as defined below) and Original Owners Warrants (as
defined below).

     B. The parties hereto desire to enter into this Agreement to, among other
things: (i) assure continuity in the ownership of the Company, (ii) impose
certain restrictions and obligations on the ownership, retention and disposition
of the Securities (as defined below) and (iii) provide the registration rights
set forth herein.

     C. The parties hereto acknowledge that WDR and CSFB are parties hereto
solely with respect to the Finance Warrants (as defined below) and Lucent is a
party hereto solely with respect to the Lucent Warrants (as defined below), in
each case, including any shares of Common Stock issued upon exercise thereof,
and in each case solely for purposes of setting forth certain registration
rights and other rights and restrictions related to the transfer of such
securities.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

1. CERTAIN DEFINITIONS. In addition to the terms defined elsewhere herein, the
following terms have the following meanings when used herein with initial
capital letters:

     "ACTIVELY PUBLICLY TRADED" shall mean, with respect to the Common Stock,
that an offering (or series of offerings) of the Common Stock has been
consummated pursuant to one or more registration statements following which
shares of the Common Stock representing (a) at least 10% of the outstanding
shares of the Common Stock and (b) an aggregate Current Market Price of at least
$50 million, have been sold to the public and are listed on a national
securities exchange or the Nasdaq Stock Market.

<PAGE>

     "AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control; and provided further, that without
limiting the foregoing, the following Persons shall be deemed to be "Affiliates"
of the Company: Odyssey, Koch, PF Telecom, Treg, Irwin, Karen Irwin, GLW, Warta
and Georgiana Warta.

     "AT&T HOLDERS" shall mean AT&T Corp. and all transferees of AT&T Warrants
and shares of Common Stock issued upon exercise thereof.

     "AT&T WARRANTS" shall mean the warrants to purchase 70,707,070 shares of
Common Stock, dated as of the date hereof issued to AT&T Corp.

     "BLOCK TRANSFERS" means any sale, transfer, conveyance or other disposition
of 5% or more of the Fully Diluted Common Stock, in one or a series of related
transactions, to a single purchaser or group of purchasers that would be a
"person" for purposes of Section 13(d)(3) of the Exchange Act, whether or not
pursuant to a Public Offering. Notwithstanding the foregoing, the term "Block
Transfer" shall not apply to any distribution by any Person to holders of equity
interests in such Person (whether or not such holders might otherwise
collectively be deemed a person for purposes of Section 13(d)(3) of the Exchange
Act), except to the extent that any individual acquires 5% or more of the Fully
Diluted Common Stock, and then only with respect to such individual.

     "BRIDGE LOAN AGREEMENT" shall mean the bridge loan agreement, dated as of
the date hereof, among the Company, the lenders party thereto and WDR, as Joint
Lead Arranger and Syndication Agent and CSFB, as Joint Lead Arranger and
Administrative Agent.

     "CERTIFICATE OF DESIGNATIONS" means the Certificate of Designations setting
forth the rights, preferences and privileges of the Senior Preferred Stock.

     "COMMON STOCK" shall mean the common stock, par value $0.01 per share, of
the Company and any successor(s) to such common stock.

     "CONVERTIBLE SECURITIES" shall mean any evidence of indebtedness, shares of
stock (other than Common Stock) or other securities directly or indirectly
convertible into or exchangeable or exercisable for shares of Common Stock,
including without limitation, the Senior Preferred Stock.

     "CURRENT MARKET PRICE" means, with respect to any particular security on
any date of determination, the average over the 20 trading days ending on the
date immediately preceding the date of such determination of the last reported
sale price, or, if no such sale takes place on any such day, the closing bid
price, in either case as reported for consolidated transactions on the principal
national securities exchange (including the Nasdaq Stock Market) on which such
security is listed or admitted for trading.

                                       2
<PAGE>

     "DARK FIBER WARRANTS" shall mean the warrants to purchase shares of Common
Stock issued pursuant to the Subscription Agreement.

     "DISINTERESTED DIRECTOR" means, in connection with any Affiliate
Transaction, each member of the Board who is not an officer, employee, director
or other Affiliate of the party with whom the Company is entering into such
Affiliate Transaction.

     "EQUIVALENT SHARES" shall mean: (i) as to any outstanding Options or any
outstanding Convertible Securities, the maximum number of shares of Common Stock
for which or into which such Options or Convertible Securities may then be
exercised or converted and (ii) as to any PF Telecom Shares held by any Warta
Holder or Treg Holder, the number of shares of Common Stock attributable to such
PF Telecom Shares, determined as though PF Telecom had immediately prior to such
determination distributed all of the shares of Common Stock then held by PF
Telecom pro rata to the shareholders of PF Telecom, including such Warta Holder
or Treg Holder. Notwithstanding the foregoing, clause (i) of the definition of
"Equivalent Shares" shall include, without limitation, shares of Common Stock
issuable upon exercise of the Finance Warrants.

     "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

     "EXEMPT ISSUANCE" shall mean, (i) the issuance of the Senior Preferred
Stock pursuant to the terms of the Subscription Agreement, (ii) the conversion
of the Senior Preferred Stock into Common Stock, (iii) any adjustment to the
conversion price, or the number of shares of Common Stock issuable upon
conversion, of the shares of Senior Preferred Stock in accordance with the terms
thereof (including, without limitation, as a result of the accretion of
dividends as increases in liquidation preference), (iv) the issuance of the AT&T
Warrants, the Lucent Warrants, the Dark Fiber Warrants, the Finance Warrants and
the Original Owners Warrants, (v) the issuance of Common Stock upon exercise of
warrants issued in accordance with clause (iv) and any adjustment to the
exercise price, or increase in the number of shares issuable upon exercise, of
any warrant issued pursuant to clause (iv), (vi) Common Stock, or options to
purchase Common Stock, issued to the Company's employees under bona fide
employee compensation or benefit packages or plans adopted by the Board and
approved by the holders of Common Stock when required by law, (vii) Common Stock
issued to acquire, or in the acquisition of, all or any portion of a business as
a going concern, in an arm's-length transaction between the Company and an
unaffiliated third party, whether such acquisition shall be effected by purchase
of assets, exchange of securities, merger, consolidation or otherwise, (viii)
Common Stock issued in (A) a bona fide public offering pursuant to a firm
commitment underwriting or (B) a private placement pursuant to a plan of
distribution that involves resales into a diverse market of "qualified
institutional buyers" (as such term is used in Rule 144A under the Securities
Act) that is broadly marketed by one or more nationally recognized investment
banks, or (ix) warrants (including vesting) issued to lenders or bond purchasers
that are unaffiliated third parties in any financing transaction on arm's-length
terms.

     "EXEMPT TRANSFEREES" shall mean any Initial Stockholder.

     "FINANCE WARRANTS HOLDERS" shall mean any holder of Finance Warrants or
shares of Common Stock issued upon exercise of Finance Warrants.

                                       3
<PAGE>

     "FINANCE WARRANTS" shall mean the warrants to purchase up to 6,913,580
shares of Common Stock issued as of the date hereof in escrow to a warrant agent
(as defined in the Bridge Loan Agreement) to WDR and CSFB pursuant to the terms
of the Escrow Agreement (as defined in the Bridge Loan Agreement).

     "FULLY DILUTED COMMON STOCK" means, as of any date of determination, the
total number of shares of Common Stock outstanding as of such date (calculated
assuming exercise of all outstanding Options, that as of such date are permitted
by their terms to be exercised for shares of Common Stock and conversion of all
outstanding Convertible Securities that as of such date are permitted by their
terms to be converted into shares of Common Stock). Notwithstanding the
foregoing, the definition of "Fully Diluted Common Stock" shall include, without
limitation, shares of Common Stock issuable upon exercise of the Finance
Warrants.

     "GLW HOLDER" means Georgiana Warta and all Permitted GLW Transferees that
have acquired GLW Shares and become parties hereto.

     "GLW SHARES" shall mean any equity interests in GLW.

     "HOLDING COMPANY" shall mean PF.Net Corp., a wholly-owned Subsidiary of the
Company.

     "INDEPENDENT INVESTMENT BANKING FIRM" means any nationally recognized
investment banking firm which does not hold any equity interest (including any
preferred equity interest) in the Company or in any shareholder of the Company.

     "INDIVIDUAL STOCKHOLDER" shall mean any Stockholder who is an individual.

     "INITIAL PUBLIC OFFERING" shall mean the first firm commitment underwritten
public offering pursuant to an effective registration statement under the
Securities Act covering the offer and sale of the Common Stock to the public
which is underwritten by one or more Underwriters and following which the Common
Stock is Actively Publicly Traded.

     "INITIAL STOCKHOLDER" means any of the Odyssey Stockholders, UBS Capital,
Koch, PF Telecom, Warta, GLW, Treg or Karen Irwin, individually and "INITIAL
STOCKHOLDERS" means all of them collectively.

     "IRWIN" shall mean Stephen Irwin.

     "IRWIN GROUP" shall mean Karen Irwin, Treg and all Permitted Treg
Transferees that have acquired shares of Common Stock (including Equivalent
Shares).

     "IRWIN HOLDERS" means Karen Irwin and all Permitted Irwin Transferees that
have acquired Treg Shares.

     "KOCH AGREEMENTS" shall mean the Amended and Restated Fiber Networks
Development Agreement (including all attachments, schedules and exhibits
thereto), dated as of the date hereof, by and between Sea Breeze Communication
Company and Holding Company and the related IRU Agreements between Sea Breeze
Communication Company and Holding Company.

                                       4
<PAGE>

     "KOCH HOLDERS" shall mean Koch and all Permitted Koch Transferees that have
acquired securities of the Company and become parties hereto.

     "LUCENT HOLDERS" shall mean Lucent and all Permitted Lucent Transferees
that have acquired securities of the Company and become parties hereto.

     "LUCENT SECURITIES" shall mean the Lucent Warrants and any shares of Common
Stock issued upon exercise of the Lucent Warrants

     "LUCENT WARRANTS" shall mean the warrants to purchase 1,414,141 shares of
Common Stock to be issued to Lucent by the Company.

     "ODYSSEY" shall mean Odyssey Investment Partners Fund, LP and its
successors and permitted assigns.

     "ODYSSEY CO-INVESTOR" means (a) with respect to any Odyssey Holder, any
transferee (other than another Odyssey Holder) of shares of Senior Preferred
Stock or Common Stock from such Odyssey Holder which acquires shares of Senior
Preferred Stock or Common Stock pursuant to Section 6(b) below and (b) any
Person (other than Odyssey Holders) which acquires shares of Senior Preferred
Stock from the Company pursuant to the terms and conditions of the Subscription
Agreement. The definition of "Odyssey Co-Investor" shall include, without
limitation, UBS Capital.

     "ODYSSEY CO-INVESTOR HOLDERS" shall mean the Odyssey Co-Investors and the
Permitted Odyssey Co-Investors Transferees that have acquired securities of the
Company and become parties hereto.

     "ODYSSEY HOLDERS" shall mean the Odyssey Stockholders and all Permitted
Odyssey Transferees that have acquired securities of the Company and become
parties hereto.

     "OPTIONS" shall mean any options or warrants to subscribe for, purchase or
otherwise acquire Common Stock or Convertible Securities.

     "ORIGINAL OWNERS WARRANTS" shall mean those warrants to purchase up to an
aggregate of 10,101,012 shares of Common Stock issued by the Company to Koch and
PF Telecom.

     "PERMITTED GLW TRANSFEREES" means all Permitted Warta Transferees.

     "PERMITTED IRWIN TRANSFEREES" means all Permitted Treg Transferees.

     "PERMITTED KOCH TRANSFEREE" means with respect to any Koch Holder, any
corporation, partnership, limited liability company or other entity which is a
direct or indirect Subsidiary of Koch Industries, Inc.

     "PERMITTED LUCENT TRANSFEREE" means with respect to Lucent, (i) any
Subsidiary of Lucent and (ii) any Lender (as defined in the Credit Agreement,
dated as of the date hereof, among PF.Net Corp., the Lenders party thereto and
Lucent, as Administrative Agent and Syndication Agent).

                                       5
<PAGE>

     "PERMITTED ODYSSEY CO-INVESTOR TRANSFEREE" means with respect to any
Odyssey Co-Investor, any corporation, partnership, limited liability company or
other entity which is a Subsidiary of such Odyssey Co-Investor; provided that
with respect to UBS Capital, such term shall include any corporation,
partnership, limited liability company or other entity which is a direct or
indirect Subsidiary of UBS AG.

     "PERMITTED ODYSSEY TRANSFEREE" means with respect to any Odyssey Holder,
any corporation, partnership, limited liability company or other entity which is
controlled by Odyssey Investment Partners, LLC, except with respect to any
proposed Transfer that would cause the Senior Preferred Stock holdings of the
Odyssey Stockholders, together with any unfunded Commitment (as defined in the
Subscription Agreement) of Odyssey, to be reduced below $60 million in aggregate
initial liquidation preference. For purposes of this definition, the term
"controlled by" means the power to direct or cause the direction of the
management or policies of such corporation, partnership, limited liability
company or other entity. Notwithstanding the foregoing, no Person that (a)
acquires shares of Preferred Stock or Common Stock, either from an Odyssey
Stockholder pursuant to Section 6(b) below or from the Company pursuant to the
Subscription Agreement, and (b) is identified as an "Odyssey Co-Investor" in a
written instrument delivered to the Company by Odyssey or such Odyssey
Co-Investor, shall be considered a "Permitted Odyssey Transferee" for purposes
of this Agreement.

     "PERMITTED PF TELECOM TRANSFEREE" means with respect to any PF Telecom
Holder, (a) Warta, any Permitted Warta Transferee, Treg or any Permitted Treg
Transferee, except with respect to any proposed Transfer that would cause (i)
the Warta Group to hold shares of Common Stock and Equivalent Shares in an
aggregate amount that is less than 80% of the Equivalent Shares set forth beside
the name, "WARTA GROUP" on Schedule 1 hereto or (ii) the Irwin Group to hold
shares of Common Stock (including Equivalent Shares) in an aggregate amount that
is less than 80% of the Equivalent Shares set forth beside the name "Irwin
Group" on Schedule 1 hereto and (b) any shareholder of PF Telecom in connection
with a general pro rata distribution of Common Stock to all shareholders of PF
Telecom.

     "PERMITTED TRANSFEREE" means a Permitted Odyssey Co-Investor Transferee, a
Permitted Irwin Transferee, a Permitted Koch Transferee, a Permitted Odyssey
Transferee, a Permitted PF Telecom Transferee, a Permitted Lucent Transferee or
a Permitted Warta Transferee, and "PERMITTED TRANSFEREES" means any one or more
of the foregoing.

     "PERMITTED TREG TRANSFEREE" means with respect to any Treg Holder or any PF
Telecom Holder, (A) the Company, (B) any corporation, partnership or other
entity in which at least 95% of the equity interest is owned (directly or
indirectly), beneficially and of record, collectively by Irwin or his spouse,
lineal descendants, siblings, parents or any spouse of any of his lineal
descendants (collectively, "IRWIN AFFILIATES"), (C) any spouse, lineal
descendant, sibling, parent or spouse of a lineal descendant of Irwin, or any
heir, executor, administrator, testamentary trustee, legatee or beneficiary of
Irwin or of any of the foregoing Persons referred to in this clause (C)
(collectively, "IRWIN ASSOCIATES"), and (D) any trust, the beneficiaries of
which, or any corporation, limited liability company or partnership, the
stockholders, members or general and limited partners of which, include only
Irwin, Irwin Affiliates or Irwin Associates.

                                       6
<PAGE>

     "PERMITTED WARTA TRANSFEREE" means with respect to any Warta Holder or any
PF Telecom Holder, (A) the Company, (B) any corporation, partnership or other
entity in which at least 95% of the equity interest is owned (directly or
indirectly), beneficially and of record, collectively by Warta or his spouse,
lineal descendants, siblings, parents or any spouse of any of his lineal
descendants (collectively, "WARTA AFFILIATES"), (C) any spouse, lineal
descendant, sibling, parent or spouse of a lineal descendant of Warta, or any
heir, executor, administrator, testamentary trustee, legatee or beneficiary of
Warta or of any of the foregoing Persons referred to in this clause (C)
(collectively, "WARTA ASSOCIATES"), and (D) any trust, the beneficiaries of
which, or any corporation, limited liability company or partnership, the
stockholders, members or general and limited partners of which, include only
Warta, Warta Affiliates or Warta Associates.

     "PERSON" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.

     "PF TELECOM HOLDERS" shall mean PF Telecom and any Permitted PF Telecom
Transferees that have acquired securities of the Company and become parties
hereto.

     "PF TELECOM SHARES" means any equity interests of PF Telecom.

     "PUBLIC OFFERING" shall mean a public offering and sale of Common Stock for
cash pursuant to an effective registration statement under the Securities Act.

     "REGISTRABLE SECURITIES" shall mean shares of Common Stock (including
without limitation, (i) shares of Common Stock that will be acquired upon the
exercise of any Options and (ii) shares of Common Stock that will be acquired
upon the conversion of any Convertible Securities, including, without
limitation, the Senior Preferred Stock); PROVIDED that such securities shall
cease to be Registrable Securities when (A) a registration statement relating to
such securities shall have been declared effective by the SEC and such
securities shall have been disposed of pursuant to such effective registration
statement or (B) such securities may be sold without registration pursuant to
Rule 144(k).

     "REGISTRATION EXPENSES" shall mean (i) all registration and filing fees
with the SEC, (ii) all fees and expenses of compliance with state securities or
blue sky laws (including, without limitation, reasonable fees and disbursements
of a qualified independent Underwriter, if any, counsel in connection therewith
and the reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing expenses, (iv)
all internal expenses of the Company (including, without limitation, all
salaries and expenses of officers and employees performing legal or accounting
duties), (v) the fees and expenses of counsel and independent public accountants
for the Company, (vi) the fees and expenses of any additional experts retained
by the Company in connection with such registration, (vii) all fees and expenses
of listing the Registrable Securities, if any, (viii) all rating agency fees, if
any, and (ix) the reasonable fees and expenses of one counsel for the holders of
Registrable Securities participating in an offering involving the exercise of
registration rights pursuant to Section 9 or 10 hereof, which counsel shall be
selected by the holders holding a majority of the Registrable Securities to be
offered in such offering; PROVIDED that Registration Expenses shall not include

                                       7
<PAGE>

underwriting discounts and/or commissions and transfer taxes, if any, in
connection with such registration.

     "RULE 144" shall mean Rule 144 under the Securities Act, as it may be
amended from time to time (including without limitation clause (k) thereof).

     "SEC" shall mean the Securities and Exchange Commission.

     "SECURITIES" shall mean the shares of Senior Preferred Stock, shares of
Common Stock (other than Lucent Securities), the Original Owners Warrants and
the Dark Fiber Warrants.

     "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

     "SENIOR PREFERRED STOCK" shall mean the Series A Senior Cumulative
Convertible Preferred Stock of the Company.

     "STOCKHOLDER" means any holder of Securities.

     "SUBSCRIPTION AGREEMENT" means the Subscription Agreement, dated as of the
date hereof, by and among the Company, Odyssey, UBS Capital and Coinvestors.

     "SUBSIDIARY" of an entity shall mean (i) any corporation, association or
other business entity of which more than 50% of the total voting power of shares
of the voting securities outstanding thereof is at the time owned or controlled,
directly or indirectly, by such entity or one or more of the other Subsidiaries
of that person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such person or a
Subsidiary of such person or (b) the only general partners of which are such
person or of one or more Subsidiaries of such person (or any combination
thereof).

     "TRANSFER" (or any variation thereof used herein) shall mean any direct or
indirect sale, offer, assignment, mortgage, transfer, pledge, hypothecation or
other disposal, in each case, whether voluntary or involuntary.

     "TREG HOLDERS" shall mean Treg and all Permitted Treg Transferees that have
acquired PF Telecom Shares and become parties hereto.

     "TREG SHARES" shall mean any equity interests of Treg.

     "UNDERWRITER" shall mean a securities dealer who purchases any Registrable
Securities as a principal in connection with a distribution of such Registrable
Securities and not as part of such dealer's market making activities, which
underwriter shall be selected by the Company in its sole discretion.

     "WARTA GROUP" shall mean Warta, GLW and all Permitted Warta Transferees
that have acquired shares of Common Stock (including Equivalent Shares).

     "WARTA HOLDERS" shall mean Warta, GLW and all Permitted Warta Transferees
that have acquired PF Telecom Shares and become parties hereto.

                                       8
<PAGE>

2. LEGEND.

     (a) Each party hereto acknowledges and agrees that each certificate (or
certificates) representing the securities subject to this agreement owned or
held by it shall bear the following legend:

          "The securities evidenced by this certificate have not been registered
          under the Securities Act of 1933, as amended (the "Securities Act"),
          and may not be sold or transferred unless there is an effective
          registration statement under the Securities Act covering the sale or
          transfer of such securities or such sale or transfer is exempt from
          the registration and prospectus delivery requirements of the
          Securities Act. The securities evidenced by this certificate also are
          subject to certain other restrictions on transfer, as set forth in a
          Stockholders Agreement, dated as of October 29, 1999, among the
          Company and certain stockholders named therein (the "Stockholders
          Agreement"). Accordingly, these securities may only be transferred in
          compliance with the Stockholders Agreement."

     (b) The certificates representing such securities, and each certificate
issued in transfer thereof, also will bear any legend required under any
applicable state securities laws.

     (c) Absent an effective registration statement under the Securities Act
covering the disposition of such securities which any party hereto acquires, any
such party will not sell, transfer, assign, pledge, hypothecate or otherwise
dispose of any or all of the securities (A) unless such disposition is exempt
from the registration and prospectus delivery requirements of the Securities Act
and has been registered or qualified under (or is exempt from the registration
and qualification requirements of) any applicable state securities laws and (B)
except in compliance with the terms of this Agreement.

     (d) Each of the parties hereto consents to the Company making a notation on
its records or giving instructions to any transfer agent of such securities in
order to implement the restrictions on transfer of securities set forth in this
Section 2.

     (e) Any legend endorsed on a certificate evidencing a security and any stop
transfer instructions or notations on the Company's records with respect to such
security pursuant to Section 2(a) and 2(b) hereof shall be removed or lifted and
the Company shall issue a certificate without such legend to the holder of such
security if (a) the transfer of such security has been registered under the
Securities Act or (b) such holder provides the Company with an opinion of
counsel (which counsel and opinion are reasonably satisfactory to the Company)
stating that a public sale or transfer of such security may be made without
registration under the Securities Act and that such legend is not required under
any applicable state securities laws.

                                       9
<PAGE>

3. ELECTION OF DIRECTORS. Except that in the event that one or more of the
conditions described in Section 6(b) of the Certificate of Designations exists,
each Stockholder agrees to cast all votes in respect of Securities held by such
Stockholder entitled to vote for the election of directors, whether at any
annual or special meeting, by written consent or otherwise, as follows:

     (a) NUMBER OF DIRECTORS. Each such Stockholder will vote to fix the number
of members of the board of directors of the Company (the "BOARD") at six (6), or
such other number as may be required by this Section 3 (including without
limitation, Section 3(b)(iv) and 3(c)) or as may be unanimously agreed to by the
Initial Stockholders or as may be required to comply with the terms of the
Certificate of Designations.

     (b) ELECTION OF DIRECTORS. Each such Stockholder will vote to elect as
directors of the Company:

         (i) (A) until the first anniversary of the date hereof, and thereafter
at all times in which the Odyssey Holders hold fifty percent (50%) or more of
the aggregate shares of Common Stock and Equivalent Shares held by the Odyssey
Holders on the first anniversary of the date hereof, two (2) individuals
designated by Odyssey; (B) at all times after the first anniversary of the date
hereof in which the Odyssey Holders hold twenty-five percent (25%) or more, but
less than fifty percent (50%) of the aggregate shares of Common Stock and
Equivalent Shares held by the Odyssey Holders on the first anniversary of the
date hereof, one (1) individual designated by Odyssey; and (C) at all times
after the first anniversary of the date hereof in which the Odyssey Holders hold
less than twenty-five percent (25%) of the aggregate shares of Common Stock and
Equivalent Shares held by the Odyssey Holders on the first anniversary of the
date hereof, such Stockholders shall not be required to vote for any individual
designated by Odyssey (the director or directors nominated by the Odyssey
Holders pursuant to this Section 3(b)(i) are referred to as the "ODYSSEY
DIRECTORS");

         (ii) (A) at all times in which the Koch Holders hold fifty percent
(50%) or more of the Securities held by the Koch Holders on the date hereof, two
(2) individuals designated by Koch; (B) at all times in which the Koch Holders
hold twenty-five percent (25%) or more, but less than fifty percent (50%), of
the Securities held by the Koch Holders on the date hereof, one (1) individual
designated by Koch; and (C) at all times in which the Koch Holders hold less
than twenty-five percent (25%) of the aggregate shares of the Securities held by
the Koch Holders on the date hereof, such Stockholders shall not be required to
vote for any individual designated by Koch (the director or directors nominated
by Koch pursuant to this Section 3(b)(ii) are referred to as the "KOCH
DIRECTORS");

         (iii) (A) subject to clause (iv) below at all times in which the PF
Telecom Holders hold fifty percent (50%) or more of the Securities held by the
PF Telecom Holders on the date hereof, two (2) individuals designated by PF
Telecom; (B) at all times in which the PF Telecom Holders hold twenty-five
percent (25%) or more, but less than fifty percent (50%), of the Securities held
by the PF Telecom Holders on the date hereof, one (1) individual designated by
PF Telecom; and (C) at all times in which the PF Telecom Holders hold less than
twenty-five percent (25%) of the aggregate shares of the Securities held by the
PF Telecom Holders on the date hereof, such Stockholders shall not be required
to vote for any individual designated by PF

                                       10
<PAGE>

Telecom (the director or directors nominated by PF Telecom pursuant to this
Section 3(b)(iii) are referred to as the "PF TELECOM DIRECTORS"); and

     (iv) the chief executive officer (other than Warta), when such officer has
been employed by the Company with approval of the Board pursuant to the
provisions of Section 4 (provided that if Warta is the chief executive officer,
then Warta shall be deemed to be a designee of PF Telecom pursuant to clause
(iii) above and no separate director shall be designated pursuant to this clause
(iv)).

     (c) CO-INVESTOR DIRECTOR. Until the first anniversary of the date hereof,
Odyssey may grant the right to designate one (1) additional director (the
"CO-INVESTOR DIRECTOR") to any one Odyssey Co-Investor requiring the right to
designate such director, subject to the consent of Koch and PF Telecom, which
consent shall not be unreasonably withheld. If Odyssey grants such right to
designate an additional director and Koch continues to have the right to
designate two (2) directors pursuant to Section 3(b)(ii), Koch will have the
right to designate one (1) additional director who shall be deemed a Koch
Director. If Odyssey grants such a right to designate an additional director and
PF Telecom continues to have the right to designate two (2) directors pursuant
to Section 3(b)(iii), PF Telecom will have the right to designate one (1)
additional director who shall be deemed a PF Telecom Director. The right of the
Odyssey Co-Investor to designate the Co-Investor Director pursuant to this
Section 3(c) shall terminate on the first date on which the Odyssey Co-Investor
owns less than fifty percent (50%) of its initial holdings calculated as of the
initial date of its acquisition of Securities. Notwithstanding the foregoing,
(y) if the right of the Odyssey Co-Investor to designate the Co-Investor
Director terminates for any reason, the right of Koch and PF Telecom to
designate additional directors pursuant to this Section 3(c) shall terminate and
(z) if either the Koch Holders or the PF Telecom Holders no longer have the
right to designate two (2) directors pursuant to Section 3(b), then the right of
Koch or PF Telecom, as the case may be, to designate an additional director
pursuant to this Section 3(c) shall terminate.

     (d) REDUCTION OF BOARD AND REMOVAL OF DIRECTORS. Each holder of Securities
agrees to vote, or consent with respect to, its Securities to remove any
director(s) subject to removal pursuant to Section 3(b) and 3(c) and to decrease
the number of members of the Board by the number of director(s) actually removed
pursuant to this Section 3(d). Notwithstanding the foregoing, if the number of
directors permitted to be designated by a Stockholder is reduced and such
Stockholder so designates a specific individual or individuals of its designees
to be removed, then the other holders agree to vote for the removal of the
individual so designated.

     (e) REMOVAL.

         (i) Other than as set forth in Section 3(d) above, no Odyssey Director
may be removed without the consent of Odyssey.

         (ii) Other than as set forth in Section 3(d) above, no Koch Director
may be removed without the consent of Koch.

         (iii) Other than as set forth in Section 3(d) above, no PF Telecom
Director may be removed without the consent of PF Telecom.

                                       11
<PAGE>

         (iv) Other than set forth in Section 3(d) above, the Co-Investor
Director may not be removed without the consent of UBS Capital.

         (v) No other director at any time in office may be removed without the
unanimous consent of the Board members designated by the Stockholders having the
right to designate Board members.

         (f) Odyssey hereby irrevocably grants to UBS Capital the rights set
forth under Section 3(c), and each other party hereby acknowledges and consents
to the grant of such rights.

                           4. PROTECTIVE PROVISIONS.

     (a) Except as set forth in Section 4(c)-(j), the approval of: the Odyssey
Directors, voting as a group; the PF Telecom Directors voting as a group; and
the Koch Directors voting as a group, will be required in order for the Company
to consummate, or to cause any of its Subsidiaries to consummate, any of the
following transactions:

         (i) any increase or decrease in the number of shares of capital stock
of the Company or any of its Subsidiaries issued or authorized;

         (ii) the creation (by reclassification or otherwise) of any new class
or series of capital stock of the Company or any of its Subsidiaries;

         (iii) any amendment or waiver of the Company's or any of its
Subsidiaries' certificate of incorporation or bylaws;

         (iv) any sale, merger, acquisition or consolidation (other than
pursuant to the Company Sale Right described in Section 16 hereof) involving the
Company or any of its Subsidiaries in excess of $10 million in value;

         (v) any financing arrangement in excess of $10 million;

         (vi) the employment or termination of any member of senior management
of the Company or any of its Subsidiaries (excluding relatives and Affiliates of
the PF Telecom Holders);

         (vii) the approval of each business plan and annual budget of the
Company or any of its Subsidiaries;

         (viii) the approval of changes to the business plan or any amendments
to the annual budget of the Company or any of its Subsidiaries, in either case,
that involve increases in expenditures in excess of $10 million in the
aggregate;

         (ix) the entering into or amendment of any partnership or joint venture
arrangement or make any other debt or equity investment in any other entity or
form any new Subsidiary or Affiliate involving an investment, performance of
services or delivery of goods or materials of an amount or value in excess of
$10 million;

                                       12
<PAGE>

         (x) any other contract or any amendment to existing contracts (other
than any agreement with Koch and its Affiliates), including any contract
involving performance of services or delivery of goods or materials by the
Company or any of its Subsidiaries of an amount or value in excess of $10
million or having an effect in excess of $10 million on the value of the Company
or any of its Subsidiaries;

         (xi) any sale of assets for a price in excess of $10 million;

         (xii) any redemption, purchase or other acquisition of capital stock of
the Company;

         (xiii) the adoption or amendment of any management incentive plan,
including the granting of awards pursuant to such plan and the terms and
conditions of such awards (including, without limitation, vesting and expiration
provisions);

         (xiv) entry into any new line or type of business;

         (xv) the resolution or settlement of any third party claim in excess of
$10 million; or

         (xvi) the election of each of the members of the board of directors of
each of the Subsidiaries.

     (b) Except as set forth in Section 4(c)-(j), the approval of a majority of
the Board will be required in order for the Company to consummate, or to cause
any Subsidiary to consummate, any of the following transactions:

         (i) any sale, merger, acquisition or consolidation (other than pursuant
to the Company Sale Right described in Section 16 hereof) involving the Company
or any of its Subsidiaries that is in excess of $5 million and less than or
equal to $10 million in value;

         (ii) any financing arrangement in excess of $5 million and less than or
equal to $10 million;

         (iii) the approval of changes to the business plan or any amendments to
the annual budget of the Company or any of its Subsidiaries, in either case,
that involve increases in expenditures that are in excess of $5 million in the
aggregate and less than or equal to $10 million in the aggregate;

         (iv) enter into or amend any partnership or joint venture arrangement
or make any other debt or equity investment in any other entity or form any new
Subsidiary or Affiliate involving an investment, performance of services or
delivery of goods or materials of an amount or value in excess of $5 million and
less than or equal to $10 million;

         (v) any other contract or any amendment to existing contracts (other
than any agreement with Koch and its Affiliates), including any contract
involving performance of services or delivery of goods or materials by the
Company or any of its Subsidiaries of an amount or value in excess of $5 million
and less than or equal to $10 million

                                       13
<PAGE>

or having an effect on the value of the Company or any of its Subsidiaries in
excess of $5 million and less than or equal to $10 million;

         (vi) any sale of assets for a price in excess of $5 million and less
than or equal to $10 million; or

         (vii) the resolution or settlement of any third party claim in excess
of $5 million and less than or equal to $10 million.

     (c) If at any time any of the Odyssey Holders, the Koch Holders or the PF
Telecom Holders has the right to designate fewer than two directors to the Board
pursuant to the requirements of Section 3(b) (a "SELLING HOLDER"), then the
consent of such Selling Holder's designated director shall not be required
pursuant to Section 4(a) in order for the Company to consummate, or to cause any
of its Subsidiaries to consummate, the enumerated transactions; PROVIDED,
HOWEVER, if at any time there is more than one Selling Holder, then the
transactions enumerated in Section 4(a) may be consummated with the approval of
a majority of the Board (voting as individuals).

     (d) The approval of the Odyssey Directors (voting as a group) and the Koch
Directors (voting as a group) will be required, but will be the only Board
approval required, for the employment or termination of any position or title of
the Company or any Subsidiary (including, without limitation, any title held on
the Board of the Company or any Subsidiary of the Company) held by any Person
that is an Affiliate of or otherwise related to, or previously employed by, any
of the PF Telecom Holders.

     (e) The approval of any two of: (i) the Odyssey Directors (voting as a
group); (ii) the Koch Directors (voting as a group) and (iii) the PF Telecom
Directors (voting as a group), will be required, but will be the only Board
approval required, for the Company or any Subsidiary to voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or similar
relief under any federal, state or foreign bankruptcy, insolvency, receivership
or similar law.

     (f) The approval of the Odyssey Directors (voting as a group) and the PF
Telecom Directors (voting as a group) will be required, but will be the only
Board approval required, for (i) employment or termination by the Company or any
of its Subsidiaries of any position or title held by any Person that is an
Affiliate of or otherwise related to, or previously employed by, any of the Koch
Holders and (ii) the execution of any contract, or the amendment or extension of
any existing contract between the Company or any of its Subsidiaries and Koch or
its Affiliates, including without limitation, the Koch Agreements and all
agreements related thereto (except but any of the foregoing actions described in
subsection (i) related to Phil Wright, Steve Harris and Tom McCaleb will require
the approval of only a majority of the directors).

     (g) Any sale or lease of dark fiber or conduit by the Company or any of its
Subsidiaries that is made in accordance with, and subject to any limitations
specified in, the business plan and annual budget approved pursuant to Section
4(a) or 4(b) (but only to the extent that the quantity and location of the
assets subject to such sale, the price at which such assets shall be sold or
leased and all other material terms of such sale or lease, are specifically
identified in such

                                       14
<PAGE>

business plan and annual budget) will not require the consent of the Board. The
Company acknowledges that the business plan provided to Odyssey prior to the
date hereof does not contemplate any sales or leases by the Company of conduit.

     (h) The Company shall not, and shall not permit any of its Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an
"AFFILIATE TRANSACTION"), unless (i) such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person and (ii) a majority of the Disinterested
Directors approves such Affiliate Transaction.

     (i) The approval of the Odyssey Directors (voting as a group) will be
required, for any alteration, amendment or termination of the resolutions of the
Board, as in effect on the date hereof, relating to the authorization of the
Senior Preferred Stock and the reservation of shares of Common Stock issuable
upon the conversion of the shares of the Senior Preferred Stock.

     (j) Notwithstanding the foregoing, the provisions of this Section 4 shall
not apply, with respect to transactions contemplated by Section 4(a) or Section
4(b) during any period in which one or more of the conditions described in
Section 6(b) of the Certificate of Designations exist and as a result a majority
of the Board consists of individuals elected by the holders of the Senior
Preferred Stock; PROVIDED, HOWEVER, that such provisions shall continue to apply
with respect to each such action to the extent that any of such action is not
related to and does not adversely affect the Company's ability to cure any
condition described in Section 6(b) of the Certificate of Designations. The
exercise by the holders of the Senior Preferred Stock of the rights set forth in
Section 6(b) of the Certificate of Designations shall be accompanied by a
resolution of the holders of the Senior Preferred Stock (which may be passed at
a meeting of the holders of the Senior Preferred Stock or in writing to the
extent permitted under applicable law) instructing such additional directors to
use their good faith effort to cause the Company to cure any condition in
Section 6(b) of the Certificate of Designations as expeditiously as possible.

5. TRANSFER RESTRICTIONS.

     (a) Until the earlier of the (i) second anniversary of the date hereof and
(ii) the date on which the Company's equity is Actively Publicly Traded, no
Stockholder shall Transfer any interest in any Securities now or hereafter owned
by it except for Transfers of Securities pursuant to Section 6 hereof. Until the
earlier of (i) the second anniversary of the date hereof and (ii) 180 days after
the date on which the Company's equity is Actively Publicly Traded, no Lucent
Holder shall Transfer any interest in any Lucent Securities issued upon exercise
thereof except for Transfers of Lucent Securities pursuant to Section 6 hereof.

     (b) Each party hereto agrees and acknowledges that it will not Transfer any
securities subject to this Agreement now or hereafter owned by it unless such
Transfer complies with the terms and conditions of this Agreement and the
Transfer is in compliance with applicable federal and state securities laws. Any
attempt to Transfer any such securities not in compliance with this

                                       15
<PAGE>

Agreement shall be null and void and neither the Company nor any transfer agent
shall give any effect in the Company's stock records to such attempted Transfer.

     (c) No Stockholder shall Transfer any interest in any Securities now or
hereafter owned by it, comprising more than 15% of the Fully Diluted Common
Stock, in a single transaction or a series of related transactions, to any
Person or group of Persons that is a "person" as such term is used in Section
13(d)(3) under the Exchange Act (other than the Exempt Transferees) except for a
Transfer of Securities pursuant to, or otherwise permitted under, Sections 6, 9
or 16 hereof.

     (d) Except for Transfers of Securities pursuant to Sections 9, 10, 11 and
16 hereof, until the date on which the Common Stock is Actively Publicly Traded,
no Transfers by a Stockholder of any interest in any Securities permitted by
this Agreement shall be effective unless and until the recipient of such
Securities has delivered to the Company a written acknowledgment and agreement
in form and substance reasonably satisfactory to the Company that the Securities
to be received by such recipient are subject to all the provisions of this
Agreement and that such recipient is bound by the obligations herein as a
Stockholder.

     (e) Notwithstanding the other provisions of this Agreement, no Transfer of
any interests in PF Telecom Shares, Treg Shares, GLW Shares, Original Owners
Warrants or Dark Fiber Warrants is permitted except pursuant to Section 6(a),
6(b) and 6(d).

     (f) Notwithstanding any other provision of this Agreement, prior to any
Transfer of Securities before the Common Stock is Actively Publicly Traded, the
transferring Stockholder must notify the Company and Koch in writing of its
intention to effect such a Transfer (a "TRANSFER NOTICE"). The Stockholder shall
not be permitted to effect such a Transfer if (a) such Transfer would constitute
a Transfer to William I. Koch or Frederick Koch, any member of the immediate
family of William I. Koch or Frederick Koch (spouse, children, or
grandchildren), or any partnership (general or limited), corporation,
association, joint stock company, trust, family trust, joint venture,
unincorporated organization or other entity of any type or nature, that
directly, or indirectly through one or more intermediaries, is controlled, or is
under common control with William I. Koch or Frederick Koch, or any member of
the immediate family of William I. Koch or Frederick Koch (a "WILLIAM OR
FREDERICK KOCH TRANSFER") and (b) within 15 business days following receipt of
such Transfer Notice, the Company or Koch shall have notified such Stockholder
in writing that the proposed Transfer would constitute a William or Frederick
Koch Transfer and is therefore prohibited by this Section 5(f). For purposes of
the foregoing, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
person, whether through the ownership of voting securities, by agreement or
otherwise.

     (g) Notwithstanding the other provisions of this Agreement, prior to the
date on which the Common Stock is Actively Publicly Traded, no Transfer of any
interests in Securities by an Initial Stockholder or an Odyssey Co-Investor
aggregating less than 2.5% of such Initial Stockholder's or Odyssey
Co-Investor's interest in the Securities (including Equivalent Shares),
calculated as of the date of acquisition, shall be permitted.

                                       16
<PAGE>

6. PERMITTED TRANSFERS.

     (a) TRANSFERS TO PERMITTED TRANSFEREES. Notwithstanding any of the transfer
restrictions set forth in Section 5, 7 or 8, any of the Odyssey Holders, Koch
Holders, Warta Holders, GLW Holders, Treg Holders, Irwin Holders, PF Telecom
Holders, Lucent Holders, or the Odyssey Co-Investor Holders may, at any time and
without complying with such restrictions, Transfer any interest in any
Securities, PF Telecom Shares, Treg Shares, GLW Shares or Lucent Securities to
any of their respective Permitted Transferees; PROVIDED, HOWEVER, that no such
Transfer shall be effective until (i) such Permitted Transferee has delivered to
the Company a written acknowledgment and agreement in form and substance
reasonably satisfactory to the Company that the Securities, PF Telecom Shares,
Treg Shares or Lucent Securities to be received by such Permitted Transferee are
subject to all the provisions of this Agreement and that such Permitted
Transferee is bound hereby and a party hereto as a Stockholder and (ii) in the
case of a Transfer by any Individual Stockholder (an "INDIVIDUAL TRANSFEROR"),
the Permitted Transferee has executed and delivered an irrevocable proxy to the
Individual Transferor, in form and substance reasonably satisfactory to the
Company, whereby the voting rights with respect to such Securities are retained
by (a) Irwin (or, if Irwin shall no longer be a Stockholder as a result of
Irwin's death, the holder of the Securities that were held by Irwin immediately
prior to Irwin's death), if such Individual Transferor is a member of the Irwin
Group or (b) Warta (or, if Warta shall no longer be a Stockholder as a result of
Warta's death, the holder of the Securities that were held by Warta immediately
prior to Warta's death), if such Individual Transferor is a member of the Warta
Group.

     (b) ODYSSEY CO-INVESTOR TRANSFERS. Notwithstanding any of the transfer
restrictions set forth in Section 5, 7 or 8, the Odyssey Holders shall be
permitted to Transfer Securities to any Odyssey Co-Investor at any time on or
before the first anniversary of the date hereof without complying with such
restrictions; PROVIDED, HOWEVER, that such Transfers shall be subject to the
approval of each of Koch and PF Telecom, which consent shall not be unreasonably
withheld; and PROVIDED FURTHER, that such Transfers shall not cause the Senior
Preferred Stock holdings of the Odyssey Holders to be reduced below $75,000,000
in aggregate initial liquidation preference (not including any dividends added
thereto); and PROVIDED FURTHER, that no such Transfer shall be effective until
(i) such Odyssey Co-Investor has delivered to the Company a written
acknowledgment and agreement in form and substance reasonably satisfactory to
the Company that the Securities to be received by such Odyssey Co-Investor are
subject to all the provisions of this Agreement and that such Odyssey
Co-Investor is bound hereby and a party hereto as a Stockholder. For purposes of
this Section 6(b), each of Koch and PF Telecom consent to any one or more of the
following as Odyssey Co-Investors: UBS Capital; any Affiliate of Credit Suisse
First Boston; any Affiliate of First Union Corp.; Newcourt Capital; and General
Electric Capital Corporation.

     (c) SALES TO PUBLIC. Notwithstanding any of the transfer restrictions set
forth in Section 5, 6 (a), 7 or 8, after the date the Company's equity is
Actively Publicly Traded, any Stockholder may Transfer any or all of such
Securities in a Public Offering or to the public through a broker, dealer or
market maker pursuant to Rule 144, subject to applicable lock-ups or applicable
law without complying with such restrictions; PROVIDED that Block Transfers will
be subject to the tag-along rights set forth in Section 8.

                                       17
<PAGE>

     (d) APPROVED TRANSFERS. Notwithstanding any of the transfer restrictions
set forth in Section 5, 7 or 8, any Stockholder may Transfer any interest in any
Securities, PF Telecom Shares or Treg Shares without complying with such
restrictions with the prior written consent of each of Odyssey, Koch and PF
Telecom.

     (e) FINANCE WARRANT TRANSFERS. Notwithstanding any of the transfer
restrictions set forth in Section 5 (other than Section 5(f)), 7 or 8, WDR or
CSFB may Transfer any interest in the Finance Warrants or any shares of Common
Stock issued upon exercise thereof without complying with such restrictions;
PROVIDED that such Transfers comply with applicable federal and state securities
laws and provided further, that no such Transfer prior to the date on which the
Common Stock is Actively Publicly Traded shall be effective until the transferee
has delivered to the Company a written acknowledgment and agreement in form and
substance reasonably satisfactory to the Company that the Finance Warrants and
any such shares of Common Stock issued upon exercise thereof to be received by
such transferee are subject to all the provisions of this Agreement and that
such transferee is bound hereby and a party hereto as a Finance Warrant Holder.

     (f) LUCENT SECURITIES TRANSFER. Following the expiration of the
restrictions set forth in Section 5(a) with respect to Lucent Securities, any
Lucent Holder may Transfer any interest in the Lucent Warrants or any shares of
Common Stock issued upon exercise thereof; provided that such Transfers comply
with applicable federal and state securities laws and provided further, that no
such Transfer prior to the date on which the Common Stock is Actively Publicly
Traded shall be effective until the transferee has delivered to the Company a
written acknowledgment and agreement in form and substance reasonably
satisfactory to the Company that the Lucent Warrants and any such shares of
Common Stock issued upon exercise thereof to be received by such transferee are
subject to all the provisions of this Agreement and that such transferee is
bound hereby and a party hereto as a Lucent Holder.

7. RIGHT OF FIRST REFUSAL.

     (a) If, at any time after the second anniversary of the date hereof and
prior to the date the Company's equity is Actively Publicly Traded, any
Stockholder or group of Stockholders, or any Lucent Holder or group of Lucent
Holders (collectively, the "SELLING STOCKHOLDER") receives a bona fide offer to
purchase any or all of its Securities or Lucent Securities, as the case may be
(each, an "OFFER"), from any other Person (which may include another Stockholder
or Lucent Holder) (an "OFFEROR") which the Selling Stockholder wishes to accept,
the Selling Stockholder shall cause such Offer to be reduced to writing and such
Selling Stockholder (other than any Lucent Holder or group of Lucent Holders)
shall promptly notify each of the other Odyssey Holders, PF Telecom Holders,
Koch Holders and the Odyssey Co-Investor Holders, in each case, that are not
Offerors (the "OFFEREE STOCKHOLDERS") and such Selling Stockholder (whether or
not a Lucent Holder or Group of Lucent Holders) shall promptly notify the
Company in writing of its wish to accept such Offer (the "SELLER'S NOTICE"). The
Selling Stockholders may, for purposes of determining the recipients of the
Seller's Notice, rely upon a list of securityholders provided by the Company
(which the Company shall provide to any requesting securityholder promptly upon
request). The Seller's Notice shall contain an irrevocable offer to sell to (i)
the Offeree Stockholders, if the Selling Stockholder is any Person other than a
Lucent Holder or a group of Lucent Holders, or (ii) the Company, if the Selling
Stockholder is a Lucent Holder or a group of

                                       18
<PAGE>

Lucent Holders, in the manner set forth below such Securities or Lucent
Securities, as the case may be (the "OFFERED SECURITIES"), at a purchase price
equal to the price contained in, and on the same terms and conditions of, such
Offer (provided, that if the Offer includes any consideration other than cash,
then at the sole option of the Offeree Stockholders (or the Company, if the
Selling Stockholder is a Lucent Holder or a group of Lucent Holders), such offer
shall be deemed be made at the equivalent all-cash price, determined in good
faith by the Selling Stockholders) (the "OFFER PRICE"), and shall be accompanied
by a true copy of such Offer (which shall identify the Offeror thereof).

     (b) Upon receipt of the Seller's Notice, the Offeree Stockholders (or the
Company, if the Selling Stockholder is a Lucent Holder or group of Lucent
Holders) shall have the irrevocable and exclusive option to buy all, but not
less than all, of the Offered Securities for cash at the Offer Price on the
terms and subject to the conditions of Section 7(c).

     (c) The provisions of this Section 7(c) shall apply only if the Selling
Stockholder is a Person other than a Lucent Holder or group of Lucent Holders.

         (i) Promptly upon receipt of the Seller's Notice (but in no event later
than five business days thereafter), the Company shall deliver to each Offeree
Stockholder a notice (the "INITIAL COMPANY NOTICE") stating the number of
Offered Securities that such Offeree Stockholder would have the option to
purchase under Section 7(c), which number shall in each case be calculated as
the product of (1) the number of Offered Securities, times (2) a fraction, the
numerator of which shall be the number of Equivalent Shares represented by the
Securities owned by such Offeree Stockholder and the denominator shall be the
number of Equivalent Shares represented by the Securities owned by all Offeree
Stockholders (the "PROPORTIONATE SHARE"). Within ten (10) business days of
receipt of the Initial Company Notice, each Offeree Stockholder who elects to
participate shall deliver to the Company a written notice stating its election
to participate and the maximum number of shares (up to all the Offered
Securities) that it is willing to purchase, and such notice shall constitute an
irrevocable commitment to purchase such shares, if any, as are allocated to such
Offeree Stockholder pursuant to Section 7(c), up to such maximum number of
shares.

         (ii) To the extent that any Offeree Stockholder has indicated that it
will not fully subscribe for its Proportionate Share of the Offered Securities,
the Company shall allocate all such shares not subscribed for to the Offeree
Stockholders who have subscribed for more shares than their Proportionate Share
(the "FULLY PARTICIPATING STOCKHOLDERS") in the proportion that the number of
Equivalent Shares represented by the Securities each owns bears to the total
number of Equivalent Shares represented by the Securities owned by all such
Fully Participating Stockholders. If the number of shares so allocated to a
Fully Participating Stockholder exceeds the maximum number of shares that it has
indicated in its notice to the Company it is willing to subscribe for, then the
Company shall allocate any excess over such maximum among all Fully
Participating Stockholders who have subscribed for a maximum number of shares
which exceeds the number of shares allocated to them pursuant to the preceding
sentence, in the proportion that their respective holdings bear to the total
number of Equivalent Shares represented by the Securities owned by all such
Stockholders, and the Company shall follow this procedure, if necessary, until
all shares available for purchase by the Offeree Stockholders have been
allocated to them.

                                       19
<PAGE>

         (iii) If all of the Offered Securities have not been subscribed for
(the "EXCESS SHARES") pursuant to the procedures set forth in Section 7(c)(ii),
the Company shall deliver to each Offeree Stockholder a notice stating that all
of the Offered Securities have not been subscribed for and the additional number
of Offered Securities that such Offeree Stockholder will have the option to
purchase under this Section 7(c)(iii), which number shall in each case be
calculated as the product of (1) the number of Excess Shares, times (2) a
fraction, the numerator of which shall be the number of Equivalent Shares
represented by the Securities owned by such Offeree Stockholder and the
denominator shall be the number of Equivalent Shares represented by the
Securities owned by all Offeree Stockholders. If the number of Excess Shares so
allocated to a Offeree Stockholder exceeds the maximum number of Excess Shares
that it has indicated in its notice to the Company it is willing to subscribe
for, then the Company shall allocate any excess over such maximum among all
Offeree Stockholders who have subscribed for a maximum number of Excess Shares
which exceeds the number of Excess Shares allocated to them pursuant to the
preceding sentence, in the proportion that their respective holdings bear to the
total number of Equivalent Shares represented by the Securities owned by all
such Stockholders, and the Company shall follow this procedure, if necessary,
until all shares available for purchase by the Offeree Stockholders have been
allocated to them. If, following the completion of the procedures set forth in
this clause (iii), all of the Offered Securities have not been subscribed for,
then the Selling Stockholder shall have the rights set forth in Section 7(e).

     (d) The Company shall, within 30 days of the Seller's Notice, notify the
Selling Stockholder and each Offeree Stockholder in writing concerning the final
allocation of the Offered Securities subject to options pursuant to Section 7(c)
or, if the Selling Stockholder is a Lucent Holder or a group of Lucent Holders,
concerning whether the Company elects to exercise its rights under Section 7(b)
(the "FINAL COMPANY NOTICE"). Such notice to the Selling Stockholder shall be
deemed the irrevocable exercise of such options on behalf of each purchaser
named therein.

     (e) SELLER'S RIGHTS TO TRANSFER. If the Seller's Notice shall be duly
given, and if the option to purchase the Offered Securities at the Offered Price
as provided in Section 7(c) shall not have been exercised, or if the amount of
Securities with respect to which all options have been exercised is less than
the amount of Offered Securities, then, subject to Section 8, the Selling
Stockholder shall be free, for a period of 40 days from the earlier of (i) the
30th day following the date of the Seller's Notice, and (ii) the date the
Selling Stockholder shall have received written notice from the Company stating
the intention of the Offeree Stockholders (or the Company, if the Selling
Stockholder is a Lucent Holder) not to exercise the options granted under
Section 7 (such earlier date being the "RELEASE DATE"), to offer to sell the
Offered Securities to the proposed transferee, as long as the Offered Securities
so sold are sold at a price equal to or greater than the Offered Price and on
substantially the same terms and conditions; PROVIDED, that no such Transfer
shall be effective until the transferee has delivered to the Company a written
acknowledgment and agreement in form and substance reasonably satisfactory to
the Company that the Securities to be received by such transferee are subject to
all the provisions of this Agreement and that such transferee is bound hereby
and a party hereto as a Stockholder.

                                       20
<PAGE>

     (f) CLOSING DATE. In the case of the purchase by the Offeree Stockholders
of the Offered Securities pursuant to this Section 7, the parties to such
purchase shall close such transaction on the 30th day after the later of the
date the Final Company Notice is received and the date of receipt of any
required regulatory approvals (and if such day is not a business day, then the
following business day) at the principal executive office of the Company, or at
such other place or time as the parties may agree. If all such Offered
Securities are not duly purchased by the Offeree Stockholders (or the Company,
if the Selling Stockholder is a Lucent Holder), the Selling Stockholder shall
not be obligated to sell any of such Offered Securities to the Offeree
Stockholders (or the Company, if the Selling Stockholder is a Lucent Holder) and
the provisions of Section 7(e) shall apply in respect of such Offered
Securities.

     (g) EXCEPTIONS. The provisions of this Section 7 shall not apply to the
following:

         (i) Any Transfer of Securities pursuant to Section 6, 9, 10, 11 or 16;

         (ii) Any Transfer of Lucent Securities pursuant to Section 6, 9, 10, 11
or 16;

         (iii) Any Transfer of Securities or Lucent Securities by a Tag-Along
Offeree pursuant to Section 8; or

         (iv) Any Transfers of Securities by an Initial Stockholder or any
Odyssey Co-Investor Transferee aggregating not more than 10% of the
Stockholder's or Odyssey Co-Investor Transferee's interest in the Securities
(including Equivalent Shares) calculated as of the date of acquisition.

8. "TAG-ALONG" RIGHT.

     (a) In the event that any Stockholder or Stockholders propose to sell for
cash or any other consideration Securities owned by it or them (such Persons,
the "PROPOSED SELLERS"), in each such case, to any Person or group of Persons (a
"PROPOSED PURCHASER"), after expiration of the periods in Section 7(c) and 7(d),
if applicable, the Proposed Sellers will promptly notify each other Odyssey
Holder, Koch Holder, PF Telecom Holder, Finance Warrant Holder, Odyssey
Co-Investor Holder, Lucent Holder and AT&T Holder (collectively, the "TAG-ALONG
OFFEREES") in writing (a "TAG-ALONG NOTICE") of such proposed sale (a "PROPOSED
SALE") and the material terms of the Proposed Sale as of the date of the
Tag-Along Notice (the "MATERIAL TERMS"). The Proposed Sellers may, for purposes
of determining the recipients of the Tag-Along Notice, rely upon a list of
securityholders provided by the Company (which the Company shall provide to any
requesting securityholder promptly upon request). If within 15 days of the
receipt by the Tag-Along Offerees of the Tag-Along Notice, the Proposed Seller
receives a written request (a "TAG-ALONG REQUEST") to include shares of Common
Stock (or shares of Senior Preferred Stock if the Proposed Sellers are proposing
to sell shares of Senior Preferred Stock) (the "TAG-ALONG SECURITIES") held by
one or more Tag-Along Offerees (including without limitation, (i) shares of
Common Stock that will be acquired upon the exercise of any Options and (ii)
shares of Common Stock that will be acquired upon the conversion of any
Convertible Securities, including, without limitation, the Senior Preferred
Stock, the Original Owners Warrants, the Dark Fiber Warrants and the Finance
Warrants) in the Proposed Sale, the Tag-Along Securities so held by such
Tag-Along Offerees shall be so included as provided herein, and the Proposed

                                       21
<PAGE>

Seller shall not be permitted to complete such Proposed Sale unless such
Tag-Along Securities are so included in such Transfer; PROVIDED, HOWEVER, that
any Tag-Along Request shall be irrevocable unless (x) there shall be an adverse
change in the Material Terms or (y) otherwise mutually agreed to in writing by
such Tag-Along Offerees and the Proposed Seller.

     (b) The number of Tag-Along Securities that each Tag-Along Offeree will be
permitted to include in a Proposed Sale pursuant to a Tag-Along Request will be
the product of (i) the number of Tag-Along Securities then held by such
Tag-Along Offeree multiplied by (ii) a fraction, (A) the numerator of which is
the number of Equivalent Shares represented by the Securities which the Proposed
Seller or Proposed Sellers propose to sell in the Proposed Sale, and (B) the
denominator of which is the number of Equivalent Shares represented by all
Securities outstanding as of such date held by the Proposed Seller or Proposed
Sellers and all Tag-Along Offerees.

     (c) Except as may otherwise be provided herein, the Tag-Along Securities
will be included in a Proposed Sale pursuant hereto and to any agreements with
the Proposed Purchaser relating thereto, on the same terms and subject to the
same conditions applicable to the holders of the same type of securities
included in the Proposed Sale (assuming, in the case of the Lucent Warrants, the
Original Owners Warrants, the Dark Fiber Warrants and the Finance Warrants, the
exercise thereof). Such terms and conditions shall include, without limitation,
the sale consideration; the payment of fees, commissions and expenses; the
provision of, and representation and warranty as to, information requested of
the Proposed Seller or Proposed Sellers; and (with respect to the Odyssey
Holders, the PF Telecom Holders, the Koch Holders and any other holder of
securities of the Company (including Equivalent Shares) representing 10% or more
of the Fully Diluted Common Stock) the provision of requisite indemnifications;
PROVIDED, HOWEVER, that any indemnification provided by the Tag-Along Offerees
shall (i) be determined pro rata in proportion with the aggregate number of
Securities (including the Tag-Along Securities) to be sold in the Proposed Sale
and (ii) not be structured in a way so as to require additional contributions
from the Tag-Along Offerees; and PROVIDED FURTHER, that no holder of securities
of the Company (including Equivalent Shares) representing less than 10% of the
Fully Diluted Common Stock shall be required to make any representation or
warranty other than with respect to such holder's ownership of the Securities to
be sold in the proposed sale.

     (d) Upon delivering a Tag-Along Request, each Tag-Along Offeree will, if
requested by the Proposed Seller, execute and deliver a custody agreement and
power of attorney in form and substance satisfactory to the Proposed Seller (a
"CUSTODY AGREEMENT AND POWER OF ATTORNEY") with respect to the Tag-Along
Securities which are to be included in the Proposed Sale pursuant hereto. The
Custody Agreement and Power of Attorney will provide that the Tag-Along Offeree
will deliver to and deposit in custody with the custodian and attorney-in-fact
named therein a certificate or certificates representing such Tag-Along
Securities (duly endorsed in blank by the registered owner or owners thereof or
accompanied by duly executed stock powers in blank) and irrevocably appoint said
custodian and attorney-in-fact as such Tag-Along Offeree's agent and
attorney-in-fact with full power and authority to act under a custody agreement
and power of attorney on behalf of the such Tag-Along Offeree with respect to
the matters specified herein. Notwithstanding the provisions of this Section
8(d), a Tag-Along Offeree may, at its option and in lieu of delivering a Custody
Agreement and Power of Attorney, deliver to the Proposed Seller such other
assurance as may be reasonably acceptable to the Proposed Seller of such
Tag-Along

                                       22
<PAGE>

Offeree's ability to complete the Proposed Sale on the date selected by the
Proposed Seller for completion hereof.

     (e) Each Tag-Along Offeree agrees that he or she will execute such other
agreements as the Proposed Seller or Proposed Purchaser may reasonably request
in connection with the consummation of a Proposed Sale and Tag-Along Request and
the transactions contemplated thereby.

     (f) EXCEPTIONS. The provisions of this Section 8 shall not apply to the
following:

         (i) Any Transfer of Securities pursuant to Section 6, 10 or 11;

         (ii) Any Transfers of Securities by an Initial Stockholder or any
Odyssey Co-Investor Transferee aggregating not more than 10% of the
Stockholder's or Odyssey Co-Investor's interest in the Securities (including
Equivalent Shares) calculated as of the date of acquisition; and

         (iii) Any Transfer of Securities after the date on which the Company's
equity is Actively Publicly Traded, that is not a Block Transfer.

     (g) Notwithstanding any other provision of this Section 8, no Transfer made
pursuant to this Section 8 shall be effective until the transferee has delivered
to the Company a written acknowledgment and agreement in form and substance
reasonably satisfactory to the Company that the Securities to be received by
such transferee are subject to all the provisions of this Agreement and that
such transferee is bound hereby and a party hereto as a Stockholder.

     (h) The Company hereby acknowledges that the shares of Common Stock
issuable upon exercise of the AT&T Warrants are subject to tag-along rights
similar to those set forth in this Section 8 ("AT&T TAG-ALONG RIGHTS"). Upon any
proposed transfer of such shares of Common Stock by any AT&T Holder which is
subject to AT&T Tag-Along Rights, the Company shall notify the holders of
securities entitled to participate in such transfer pursuant to the terms of the
AT&T Tag-Along Rights and shall enforce such AT&T Tag-Along Rights on behalf of,
and at the direction of, such holders.

9. "DRAG-ALONG" RIGHT.

     (a) In the event that at any time prior to the date on which the Company's
equity is Actively Publicly Traded, (i) Odyssey or any Odyssey Holder designated
in writing by Odyssey propose to initiate a Company Sale pursuant to the Company
Sale Right contained in Section 16 hereof or (ii) there is a sale, lease,
transfer, conveyance or other disposition (including, without limitation, any
merger or consolidation), in single transaction, of all or substantially all of
the equity interests or assets of the Company and its Subsidiaries taken as a
whole, which is approved by the Board pursuant to Section 4 hereof, Odyssey or
any Odyssey Holder designated in writing by Odyssey, in the case of a
transaction pursuant to clause (i) hereof or the Company, in the case of a
transaction pursuant to clause (ii) hereof (each, a "DRAG-ALONG INITIATOR"), may
require (a "DRAG-ALONG RIGHT") all Stockholders, all Lucent Holders and all
Finance Warrant Holders (collectively, "DRAG-ALONG HOLDERS") to participate in
such transaction in accordance with the terms of this Section 9 (any transaction
involving the exercise of such Drag-Along Right

                                       23
<PAGE>

shall be referred to as a "DRAG-ALONG SALE"). The Drag-Along Initiator shall
provide the Stockholders, the Lucent Holders and the Finance Warrant Holders
written notice (a "DRAG-ALONG NOTICE") of such Drag-Along Sale and the material
terms thereof not less than 25 days prior to the proposed date of the Drag-Along
Sale (the "DRAG-ALONG SALE DATE") and each of the Drag-Along Holders hereby
agrees to sell to such Proposed Purchaser all Securities, Lucent Securities,
Options or Convertible Securities held by such Drag-Along Holder. No Drag-Along
Holder shall exercise any dissenter's rights with respect to the consummation of
any such Drag-Along Sale.

     (b) On the Drag-Along Sale Date, each Drag-Along Holder shall deliver a
certificate or certificates for its Securities, duly endorsed for transfer with
signatures guaranteed, to such Proposed Purchaser in the manner and at the
address indicated in the Drag-Along Notice against delivery of the purchase
price for such Securities, Options or Convertible Securities. The provisions of
this Section 9 shall apply regardless of the form of consideration in the
Drag-Along Sale.

     (c) Securities, Options or Convertible Securities subject to a Drag-Along
Right will be included in a Drag-Along Sale pursuant hereto and to any
agreements with the Proposed Purchaser relating thereto, on the same terms and
subject to the same conditions applicable to holders of the same type of
securities included in the Drag-Along Sale. Such terms and conditions shall
include, without limitation, the consideration; the payment of fees, commissions
and expenses; the provision of, and representation and warranty as to,
information requested of the Drag-Along Initiators; and the provision of
requisite indemnifications; PROVIDED, HOWEVER, that any indemnification provided
by the Drag-Along Holders shall (i) be determined pro rata in proportion with
the aggregate number of Securities to be sold in the Drag-Along Sale and (ii)
not be structured in a way so as to require additional contributions from the
Drag-Along Holders.

     (d) Each of the Drag-Along Holders will, if requested by the Drag-Along
Initiators, execute and deliver a Custody Agreement and Power of Attorney in
form and substance satisfactory to Drag-Along Initiators with respect to the
Securities, Options or Convertible Securities which are to be included in the
Drag-Along Sale pursuant hereto. The Custody Agreement and Power of Attorney
will provide that the Drag-Along Holder will deliver to and deposit in custody
with the custodian and attorney-in-fact named therein a certificate or
certificates representing such Securities, Options or Convertible Securities
(duly endorsed in blank by the registered owner or owners thereof or accompanied
by duly executed stock powers in blank) and irrevocably appoint said custodian
and attorney-in-fact as such Drag-Along Holders's agent and attorney-in-fact
with full power and authority to act under a custody agreement and power of
attorney on behalf of the such Drag-Along Holder with respect to the matters
specified herein.

     (e) Each Drag-Along Holder agrees that he or she will execute such other
agreements as Drag-Along Initiators or the Proposed Purchaser may reasonably
request in connection with the consummation of a Drag-Along Sale and the
transactions contemplated thereby; provided, however, that Koch shall not be
required to make any modification to the Koch Agreements.

     (f) In order to effect the provisions of this Section 9, each Drag-Along
Holder hereby irrevocably constitutes and appoints: Odyssey, in the case of a
transaction specified in Section

                                       24
<PAGE>

9(a)(i); or the Board, in case of a transaction specified in Section 9(a)(ii),
as attorney and proxy, with, subject to the consent of Odyssey or the Company,
as applicable, full power of substitution, to receive all notices, and to
represent, vote and consent, with respect to all Securities, Options or
Convertible Securities held by such Drag-Along Holder, in such manner as said
proxies may, in the exercise of their sole and absolute discretion, determine,
and without any prior notice to such Drag-Along Holder (provision of such notice
concurrently or promptly after the taking of any such action being deemed
sufficient for all purposes and any requirement for prior notice being expressly
waived by such Drag-Along Holder), whether or not said representation, vote or
consent benefits the interests of any of said proxies, but only with respect to
any and all of the matters specified in this Section 9.

10. DEMAND REGISTRATION.

     (a) Subject to Section 10(d), at any time after 180 days from the effective
date of an Initial Public Offering (or such lesser period of time as agreed
between the managing Underwriter in such Initial Public Offering and the
Company), any one or more of (i) the Odyssey Holders, (ii) the Koch Holders,
(iii) PF Telecom or a group of other PF Telecom Holders which certifies that it
represents not less than 25% of the Securities then held by the PF Telecom
Holders or (iv) UBS Capital, may make a written request (any such requesting
Person or a group of Persons, as the case may be, a "DEMAND SELLER") that the
Company effect the registration under the Securities Act of such Demand Seller's
Registrable Securities, and specifying the intended method of disposition
thereof. The Company will promptly give written notice of such requested
registration (a "DEMAND REGISTRATION") at least 25 business days prior to the
anticipated filing date of the registration statement relating to such Demand
Registration to all other holders of Registrable Securities (whether or not
pursuant to this Agreement) who have incidental or piggy-back registration
rights (each such holder having such rights is hereinafter referred to as a
"HOLDER" and collectively as the "HOLDERS"), and thereupon will use its best
efforts to effect, as expeditiously as possible, the registration under the
Securities Act of:

         (i) the Registrable Securities then held by the Demand Sellers that the
Company has been so requested to register by the Demand Sellers; and

         (ii) subject to Section 10(c), all other Registrable Securities that
any other Holder has requested the Company register by written request received
by the Company within 15 business days after the receipt by each such Holders of
such written notice given by the Company;

         all to the extent necessary to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable Securities so
to be registered.

     (b) The Company will pay all Registration Expenses in connection with any
Demand Registration. Each Holder shall be responsible for the payment of any
discounts and/or commissions of underwriters or placement agents in connection
with resales of its shares of Common Stock subject to any Demand Registration
pursuant to this Section 10.

     (c) If a Demand Registration involves an underwritten Public Offering and
the managing Underwriter shall advise the Company and the Demand Sellers that,
in its view, the number of

                                       25
<PAGE>

shares of Common Stock requested to be included in such registration, including
shares of Registrable Securities requested to be included by Holders in such
registration and Common Stock which the Company proposes to be included which
are not Registrable Securities, exceeds the largest number of shares of Common
Stock which can be sold without having a substantial adverse effect on such
offering, including, without limitation, the price at which such shares of
Common Stock can be sold (the "MAXIMUM OFFERING SIZE"), the Company will include
in such registration, in the priorities listed below, up to the Maximum Offering
Size:

         (i) first, all Registrable Securities requested to be included in such
registration by the Demand Sellers and all Registrable Securities, if any, to be
included in such registration by the Holders (allocated if necessary for the
Public Offering not to exceed the Maximum Offering Size, pro rata among the
Demand Sellers and the Holders on the basis of the relative number of
Registrable Securities requested to be included in such registration by the
Demand Sellers and the Holders); and

         (ii) second, any Common Stock proposed to be registered by the Company.

     (d) Notwithstanding the foregoing, the Company shall not be obligated to
take any action to effect any Demand Registration pursuant to this Section 10:
(i) if the Demand Seller is any Odyssey Holder and the Company has previously
effected two (2) Demand Registrations in which one or more Odyssey Holders were
Demand Sellers; (ii) if the Demand Seller is any Koch Holder and the Company has
previously effected two (2) Demand Registrations in which one or more Koch
Holders were Demand Sellers; (iii) if the Demand Seller is any PF Telecom Holder
and the Company has previously effected two (2) Demand Registrations in which
one or more PF Telecom Holders were Demand Sellers; and (iv) if the Demand
Seller is UBS Capital and the Company has previously effected one (1) Demand
Registration in which UBS Capital was a Demand Seller.

     (e) A registration of securities by the Company shall not be considered as
a Demand Registration hereunder unless (i) a registration statement filed
pursuant to this Section 10 has been declared effective by the SEC and
maintained continuously effective for a period of at least six months (or such
shorter period as will terminate when all Registrable Securities included
therein have been sold in accordance with such registration statement), and (ii)
the shares of Common Stock registered pursuant to such registration statement
include at least 70% of the Registrable Securities requested to be registered by
the Demand Seller.

     (f) Any Transfer of Registrable Securities pursuant to this Section 10
shall not be subject to the provisions of Section 7 and 8.

     11. PIGGY-BACK REGISTRATION.

     (a) If, at any time after the Initial Public Offering, the Company proposes
to register any of its Common Stock under the Securities Act (other than a
registration (i) on Form S-8 or Form S-4 or any successor or similar forms, (ii)
relating to Common Stock issuable upon exercise of employee stock options or in
connection with any employee benefit or similar plan of the Company, (iii) in
connection with a direct or indirect acquisition by the Company of another
company), whether or not for sale for its own account, it will each such time
give prompt written

                                       26
<PAGE>

notice at least 20 days prior to the anticipated filing date of the registration
statement relating to such registration to each of the Odyssey Holders, Koch
Holders, PF Telecom Holders, the Odyssey Co-Investor Holders and the Lucent
Holders (the "PIGGY-BACK STOCKHOLDERS"), which notice shall set forth such
Piggy-Back Stockholder's rights under this Section 11 and shall, subject to the
provisions of Section 11(b), offer such Piggy-Back Stockholders the opportunity
to include in such registration statement such number of Registrable Securities
as each such Piggy-Back Stockholder may request. Subject to the foregoing, upon
the written request of any Piggy-Back Stockholder made within 10 days after the
receipt of notice from the Company (which request shall specify the number of
Registrable Securities intended to be disposed of by such Piggy-Back Stockholder
and the intended method of disposition thereof), the Company will use its best
efforts to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by such
Piggy-Back Stockholders, to the extent required to permit the disposition of the
Registrable Securities so to be registered; PROVIDED that (A) if such
registration involves an underwritten Public Offering, all such Piggy-Back
Stockholders requesting to be included in the Company's registration must sell
their Registrable Securities to the Underwriters selected as provided in Section
14(a)(viii) on the same terms and conditions as apply to the Company and (B) if,
at any time after giving written notice of its intention to register any
Registrable Securities pursuant to this Section 11(a) and prior to the effective
date of the registration statement filed in connection with such registration,
the Company or, if pursuant to Section 10, the Demand Sellers, shall determine
for any reason not to register such Registrable Securities, the Company shall
give written notice to all such Piggy-Back Stockholders and, thereupon, shall be
relieved of its obligation to register any Registrable Securities pursuant to
this Section 11 in connection with such registration. No registration effected
under this Section 11 shall relieve the Company of its obligations to effect a
Demand Registration to the extent required by Section 10. The Company will pay
all Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 11. Each Piggy-Back Stockholder
shall be responsible for the payment of any discounts and/or commissions of
underwriters or placement agents in connection with resales of its shares of
Common Stock subject to any registration pursuant to this Section 11.

     (b) If a registration pursuant to this Section 11 involves an underwritten
Public Offering (other than in the case of an underwritten Public Offering
requested by any Demand Seller in a Demand Registration, in which case the
provisions with respect to priority of inclusion in such offering set forth in
Section 10(c) shall apply) and the managing Underwriter advises the Company
that, in its view, the number of shares of Common Stock that the Company, the
Piggy-Back Stockholders and the Holders (other than the Piggy-Back Stockholders)
intend to include in such registration exceeds the Maximum Offering Size, the
Company will include in such registration, in the following priority, up to the
Maximum Offering Size:

         (i) first, so much of the Common Stock proposed to be registered by the
Company as would not cause the offering to exceed the Maximum Offering Size; and

         (ii) second, all Registrable Securities requested to be included in
such registration by the Holders (allocated, if necessary for the offering not
to exceed the Maximum Offering Size, pro rata among such Holders on the basis of
the relative number of shares of Registrable Securities so requested to be
included in such registration).

                                       27
<PAGE>

     (c) Any Transfer of Registrable Securities pursuant to this Section 11
shall not be subject to the provisions of Section 7 and 8.

12. HOLDBACK AGREEMENTS.

     Each Stockholder and each Finance Warrant Holder agrees that for so long as
such Stockholder or Finance Warrant Holder owns any Registrable Securities, if
any shares of Common Stock (or securities convertible into or exchangeable or
exercisable for Common Stock) are offered pursuant to a Public Offering, such
Stockholder, or Finance Warrant Holder will not, subject to any exceptions
agreed to by the managing Underwriter and the Company, effect any sale or
distribution, including, without limitation, any sale pursuant to Rule 144 or
any successor provision under the Securities Act, of any Common Stock, and will
not effect any sale or distribution of any stock convertible into or
exchangeable or exercisable for any Common Stock of the Company (in each case,
other than as part of such Public Offering) during the 14 days prior to the
effective date of such registration statement or during the period after such
effective date equal to the lesser of (i) such period of time as agreed between
such managing Underwriter in such Public Offering and the Company and (ii) 180
days.

13. SHELF REGISTRATION RIGHTS.

     (a) The Company shall, prior to the date that is the later of (a) 180 days
after the effective date of an Initial Public Offering (or such lesser period of
time as agreed between the managing underwriter in such Initial Public Offering
and the Company) and (b) 20 days following receipt by the Company in writing of
all information regarding the Finance Warrant Holders required to be included
therein, prepare and file with the SEC a registration statement with respect to
the Registrable Securities issued upon exercise of the Finance Warrants that are
held in the aggregate by the Finance Warrant Holders (the "SHELF REGISTRATION").
The Shelf Registration shall be effected pursuant to a filing on (a) Form S-3
(or, if such form is superseded by a successor form, such successor form) or (b)
if Form S-3 is not available with respect to the registration of the Registrable
Securities, any form on which the registration of the Registrable Securities is
permitted under the Securities Act. The Company shall use all reasonable efforts
to cause such registration statement to be declared effective under the
Securities Act as promptly as practicable following such filing. Solely for
purposes of this Section 13, the term "Registrable Securities" shall mean only
the shares of Common Stock issued upon exercise of the Finance Warrants.

     (b) With respect to any registration effecting a Shelf Registration that
becomes effective under the Securities Act, the Company shall, subject to the
provisions of Section 14 hereof, prepare and file with the SEC such amendments
and post-effective amendments to the registration statement as may be necessary
to keep each such registration statement effective with respect to the
Registrable Securities subject thereto for a period ending on the second
anniversary of the date of issuance of the Finance Warrants.

14. REGISTRATION PROCEDURES.

     (a) REGISTRATION PROCEDURES. Whenever the holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to this
Agreement, the Company will use all reasonable efforts to effect the
registration and the sale of such Registrable Securities

                                       28
<PAGE>

in accordance with the intended method of disposition thereof and pursuant
thereto the Company will as expeditiously as possible:

          (i) in the case of a registration pursuant to Section 10 or 11 hereof,
     prepare and file within 90 days of such request with the SEC a registration
     statement with respect to such Registrable Securities including all
     exhibits and financial statements required by the SEC on any form for which
     the Company then qualifies and which form shall be available for the sale
     of the Registrable Securities to be registered thereunder in accordance
     with the intended method of distribution thereof, and use all reasonable
     efforts to cause such registration statement to become effective;

          (ii) prepare and file with the SEC such amendments and supplements to
     such registration statement and the prospectus and in connection therewith
     as may be necessary to comply with the provisions of the Securities Act
     with respect to the disposition of all securities covered by such
     registration statement, or any such amendment or supplement reasonably
     requested by any participating holder of Registrable Securities;

          (iii) notify each holder of Registrable Securities being so registered
     and counsel for such holders promptly and, if requested by such holder or
     such holder's counsel, confirm such advice in writing promptly (A) when a
     registration statement has become effective with respect to such
     Registrable Securities and when any post-effective amendments and
     supplements thereto become effective, (B) of any request by the SEC or any
     state securities authority for post-effective amendments and supplements to
     any such registration statement and prospectus or for additional
     information after the registration statement has become effective, (C) of
     the issuance by the SEC or any state securities authority of any stop order
     suspending the effectiveness of any such registration statement or the
     initiation of any proceedings for that purpose, (D) if, between the
     effective date of any such registration statement and the closing of any
     sale of Registrable Securities covered thereby, the representations and
     warranties of the Company contained in any underwriting agreement,
     securities sales agreement or other similar agreement, if any, relating to
     such offering cease to be true and correct in all material respects, (E) of
     the receipt by the Company of any notification with respect to the
     suspension of the qualification of any such Registrable Securities for sale
     in any jurisdiction or the initiation or threatening of any proceeding for
     such purpose, (F) of the happening of any event or the discovery of any
     facts during the period such registration statement is effective which
     makes any statement made in such registration statement or the related
     prospectus untrue in any material respect or which requires the making of
     any changes in such registration statement or prospectus in order to make
     the statements therein not misleading and (G) of any determination by the
     Company that a post-effective amendment to a registration statement would
     be appropriate;

          (iv) furnish to each seller of Registrable Securities such number of
     copies of such registration statement, each amendment and supplement
     thereto, the prospectus included in such registration statement (including
     each preliminary prospectus) and such other documents as such seller may
     reasonably request in order to facilitate the disposition of the
     Registrable Securities owned by such seller;

                                       29
<PAGE>

          (v) use its reasonable best efforts to register or qualify such
     Registrable Securities under such other securities or blue sky laws of such
     jurisdictions as any seller reasonably requests and do any and all other
     acts and things which may be reasonably necessary to enable such seller to
     consummate the disposition in such jurisdictions of the Registrable
     Securities owned by such seller (provided that the Company will not be
     required to (A) qualify generally to do business in any jurisdiction where
     it would not otherwise be required to qualify but for this subparagraph,
     (B) subject itself to taxation in any such jurisdiction or (C) consent to
     general service of process in any such jurisdiction);

          (vi) use its reasonable best efforts to cause all such Registrable
     Securities to be listed on each securities exchange on which similar
     securities issued by the Company are then listed and, if not so listed, to
     be listed on a national securities exchange or quoted on any national
     quotation system;

          (vii) provide a transfer agent and registrar for all such Registrable
     Securities not later than the effective date of such registration
     statement;

          (viii) enter into such customary agreements (including underwriting
     agreements in customary form) and take all such other actions as the
     underwriters reasonably request in order to expedite or facilitate the
     disposition of such Registrable Securities (including, without limitation,
     effecting a stock split or a combination of shares);

          (ix) make available for inspection by any seller of Registrable
     Securities, any underwriter participating in any disposition pursuant to
     such registration statement and any attorney, accountant or other agent
     retained by any such seller or underwriter, all financial and other
     records, pertinent corporate documents and properties of the Company, and
     cause the Company's officers, directors, employees and independent
     accountants to supply all information reasonably requested by any such
     seller, underwriter, attorney, accountant or agent in connection with such
     registration statement;

          (x) otherwise use its reasonable best efforts to comply with all
     applicable rules and regulations of the SEC, and make available to its
     security holders, as soon as reasonably practicable, an earnings statement
     covering the period of at least twelve months beginning with the first day
     of the Company's first full calendar quarter after the effective date of
     the registration statement, which earnings statement shall satisfy the
     provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

          (xi) in the event of the issuance of any stop order suspending the
     effectiveness of a registration statement, or of any order suspending or
     preventing the use of any related prospectus or suspending the
     qualification of any Registrable Securities included in such registration
     statement for sale in any jurisdiction, the Company will use its reasonable
     best efforts promptly to obtain the withdrawal of such order;

          (xii) use its reasonable best efforts to obtain a comfort letter from
     the Company's independent public accountants in customary form and covering
     such matters

                                       30
<PAGE>

     of the type customarily covered by cold comfort letters as the holders of a
     majority of the Registrable Securities being sold reasonably request;

          (xiii) upon the occurrence of any event or the discovery of any facts,
     each as contemplated by Section 14(a)(iii)(A), (B), (C) and (F) hereof, use
     its best efforts to prepare a supplement or post-effective amendment to a
     registration statement or the related prospectus or any document
     incorporated therein by reference or file any other required document so
     that, as thereafter delivered to the purchasers of the Registrable
     Securities, such prospectus will not contain at the time of such delivery
     any untrue statement of a material fact or omit to state a material fact
     necessary to make the statements therein, in the light of the circumstances
     under which they were made, not misleading. The Company agrees to notify
     each holder of Registrable Securities covered by such registration
     statement to suspend use of the prospectus as promptly as practicable after
     the occurrence of such an event, and each such holder hereby agrees to
     suspend use of the prospectus until the Company has amended or supplemented
     the prospectus to correct such misstatement or omission. At such time as
     such public disclosure is otherwise made or the Company determines that
     such disclosure is not necessary, in each case to correct any misstatement
     of a material fact or to include any omitted material fact, the Company
     agrees promptly to notify each such holder of such determination and to
     furnish each such holder such numbers of copies of the prospectus, as
     amended or supplemented, as such holder may reasonably request;

          (xiv) each holder of Registrable Securities covered by such
     registration statement agrees that, upon receipt of any notice from the
     Company of the happening of any event or the discovery of any facts, each
     of the kind described in Section 14(a)(iii)(B)-(F) hereof, such holder will
     forthwith discontinue disposition of Registrable Securities pursuant to
     such registration statement until such holder's receipt of the copies of
     the supplemented or amended prospectus contemplated by Section 14(a)(xiii)
     hereof;

          (xv) cause the senior executive officers of the Company to participate
     in the customary "road show" presentations that may be reasonably requested
     by the holders of Registrable Securities or the managing Underwriter and
     otherwise facilitate, cooperate with and participate in each proposed
     offering and customary selling efforts related thereto; and

          (xvi) in the event that any broker-dealer registered under the
     Exchange Act shall underwrite any Securities or participate as a member of
     an underwriting syndicate or selling group or "assist in the distribution"
     (within the meaning of the Conduct Rules (the "Rules") of the National
     Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a
     holder of such Securities or as an underwriter, a placement or sales agent
     or a broker or dealer in respect thereof, or otherwise, the Company will
     assist such broker-dealer in complying with the requirements of such Rules,
     including, without limitation, by (i) if such Rules, including Rule 2720,
     shall so require, engaging a "qualified independent underwriter" (as
     defined in Rule 2720) to participate in the preparation of the Registration
     Statement relating to such Securities, to exercise usual standards of due
     diligence in respect thereto and, if any portion of the offering
     contemplated by such Registration Statement is an underwritten offering or
     is made through a placement or

                                       31
<PAGE>

     sales agent to recommend the yield of such Securities, (ii) indemnifying
     any such qualified independent underwriter to the extent of the
     indemnification of underwriters provided in Section 14(c) hereof and (iii)
     providing such information to such broker-dealer as may be required in
     order for such broker-dealer to comply with the requirements of the Rules.

     (b) STOCKHOLDER INFORMATION. The Company may require each holder of
Registrable Securities being registered pursuant to this Agreement to promptly
furnish in writing to the Company such information regarding the plan of
distribution of such Registrable Securities and such other information as the
Company may from time to time reasonably request in connection with such
registration.

     (c) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless (i) each holder of Registrable Securities being registered
pursuant to Section 10 or Section 11, (ii) each Person, if any, who controls
each such holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (any of the persons referred to in this clause
(ii) being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any such holder of Registrable Securities or any controlling person (any
person referred to in clause (i), (ii) or (iii) may hereinafter be referred to
as an "INDEMNIFIED PERSON") from and against any and all losses, claims,
damages, liabilities and expenses (including, without limitation and as
incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing or defending any claim or action, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to any Indemnified Person), directly or
indirectly caused by, related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus relating to such
Registrable Securities (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
furnished in writing to the Company by or on behalf of such Indemnified Person
expressly for use therein. The Company also agrees to reimburse each Indemnified
Person for any and all fees and expenses (including, without limitation, the
fees and expenses of counsel) as they are incurred in connection with enforcing
such Indemnified Person's rights under this Section 14(c). The Company also
agrees, if requested, to provide reasonable and customary indemnification to any
Underwriters of the Registrable Securities, their officers and directors and
each Person who controls such Underwriters.

     (d) INDEMNIFICATION BY HOLDERS. Each holder of Registrable Securities being
registered pursuant to Section 10 or Section 11 agrees, severally but not
jointly, to indemnify and hold harmless the Company, its officers and directors
and each Person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act and its
officers, directors, partners, employees, representatives and agents of each
such Person to the same extent as the foregoing indemnity from the Company to
such holder, but only with reference to information related to such holder
furnished in writing by or on behalf of such holder expressly for use in any
registration statement or prospectus relating to the

                                       32
<PAGE>

Registrable Securities, or any amendment or supplement thereto or any
preliminary prospectus. Each such holder of Registrable Securities also agrees
to indemnify and hold harmless any Underwriters of the Registrable Securities,
their officers and directors and each Person who controls such Underwriters on
substantially the same basis as that of the indemnification of the Company
provided in this Section 14(d). The Company and the holders of the Registrable
Securities hereby acknowledge and agree that, unless otherwise expressly agreed
to in writing by such holders to the contrary, for all purposes of this
Agreement the only information furnished or to be furnished to the Company by
such holders for use in any registration statement or prospectus relating to the
Registrable Securities, or any amendment or supplement thereto or any
preliminary prospectus are statements specifically relating to (a) transactions
between such holder and its Affiliates, on the one hand, and the Company, on the
other hand, (b) the beneficial ownership of shares of Common Stock by such
holder and its Affiliates and (c) the name and address of such holder. If any
additional information about such holder or the plan of distribution (other than
for an underwritten offering) is required by law to be disclosed in any such
document, then such holder shall not unreasonably withhold its agreement
referred in the immediately preceding sentence of this Section 14(d).
Notwithstanding the foregoing, no holder of Registrable Securities being
registered pursuant to Section 10 or Section 11 will be required to indemnify
the Company for any amount in excess of the total price at which the Registrable
Securities of such holder were sold to the public (less underwriting discounts
and commissions, if any).

     (e) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) is instituted involving any Person in
respect of which indemnity may be sought pursuant to Section 14(c) or Section
14(d), such Person will promptly notify the Person against whom such indemnity
may be sought in writing and the indemnifying party upon request of the
indemnified party will retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the indemnifying party
may designate in such proceeding and will pay the fees and disbursements of such
counsel related to the proceeding. Notwithstanding the foregoing, the failure to
give notice shall not relieve the indemnifying party of the obligation to
indemnify the indemnified party, except to the extent of actual prejudice or
damages suffered as a result thereof. In any such proceeding, any indemnified
party will have the right to retain its own counsel, but the fees and expenses
of such counsel will be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnified party and the
indemnifying party (or any Persons designated by the indemnifying party to be
represented in such proceeding by counsel selected by the indemnifying party)
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them, in which case the
fees and expenses of such counsel will be paid by the Company. It is understood
that the indemnifying party will not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel) at any time for all such indemnified parties, and that all such
fees and expenses will be reimbursed as they are incurred. In the case of the
retention of any such separate firm for the indemnified parties, such firm will
be designated in writing by the indemnified parties. The indemnifying party will
not be liable for any settlement of any proceeding effected without its consent,
but if settled with such consent, or if there be a final judgment for the
plaintiff, the

                                       33
<PAGE>

indemnifying party will indemnify and hold harmless such
indemnified parties from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment.

(f) CONTRIBUTION.

     (i) If the indemnification provided for herein is for any reason
unavailable to the indemnified parties in respect of any losses, claims, damages
or liabilities referred to herein, then each such indemnifying party, in lieu of
indemnifying such indemnified party, will contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Company, the holders of Registrable Securities being registered pursuant
to Section 10 or Section 11 and any Underwriter in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company, such holders of Registrable Securities and such
Underwriter will be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

     (ii) The Company and each holder of Registrable Securities being registered
pursuant to Section 10 or Section 11 agree that it would not be just and
equitable if contribution pursuant to this Section 14(f)(ii) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
subsection. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding subsection will be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of the
holders of Registrable Securities being registered pursuant to Section 10 or
Section 11 to contribute pursuant to this Section 14(f) are several in
proportion to the respective principal amount of Securities held by each of such
holders hereunder and not joint.

     (g) PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may participate
in any underwritten registration hereunder unless such Person (i) agrees to sell
such Person's securities on the basis provided in any underwriting arrangements
approved by the Company (in the case of any registration other than pursuant to
Section 10) or the Demand Seller (in the case of any registration pursuant to
Section 10) and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights. No underwriting agreement (or other agreement in connection
with such offering) shall require any holder of Registrable Securities to make
any representations or warranties to or agreements with the Company or the
Underwriters other than representations, warranties or agreements regarding such
holder in its capacity as a stockholder or controlling person, the ownership of
such holder's Registrable Securities and such holder's intended method or
methods of disposition and any

                                       34
<PAGE>

other representation required by law or to furnish any indemnity to any Person
which is broader than the indemnity furnished by such holder in Section 14(d).

15. PREEMPTIVE RIGHTS.

     (a) Notwithstanding any other provision hereof, for so long as the Common
Stock is not Actively Publicly Traded, the Company shall not, after the date
hereof, issue any (a) capital stock of the Company, (b) securities convertible
or exchangeable for capital stock of the Company or (c) options, warrants or
rights carrying any rights to purchase capital stock of the Company (the
securities described in clauses (a)-(c) are referred to herein collectively as
the "PARTICIPATION SECURITIES"), in each case referred to in clauses (a)-(c), to
any Affiliate of the Company without offering to each of the Odyssey Holders,
Koch Holders, PF Telecom Holders and the Odyssey Co-Investor Holders
(collectively, the "PREEMPTIVE HOLDERS"), the right to purchase or subscribe for
up to that number of additional Participation Securities (a "PRO RATA SHARE")
which represents the product of (i) the total number of Participation Securities
to be issued by the Company multiplied by (ii) a fraction, (A) the numerator of
which is the number of Equivalent Shares represented by all Securities owned by
such Preemptive Holder, and (B) the denominator of which is the number of
Equivalent Shares represented by all Securities outstanding immediately prior to
such issuance held by all Preemptive Holders and all other Persons that have
similar pre-emptive rights (it being understood and agreed that the Company will
accordingly be required to reduce the number of shares of Participation
Securities to be issued or sold to Persons other than the Preemptive Holders);
provided that the provisions of this Section 15 shall not apply to any Exempt
Issuance.

     (b) In the event the Company proposes to issue or sell any Participation
Securities in a transaction giving rise to the preemptive rights provided for in
this Section 15, the Company shall send a written notice (the "PREEMPTIVE
NOTICE") to each Preemptive Holder setting forth the number of such
Participation Securities that the Company proposes to sell or issue, the price
(before any commission or discount) at which such securities are proposed to be
issued (or, in the case of an underwritten or privately placed offering in which
the price is not known at the time the Preemptive Notice is given, the method of
determining such price and an estimate thereof), the other material terms of the
transaction and its Pro Rata Share of the Participation Securities. At any time
within 15 business days after its receipt of the Preemptive Notice, the
Preemptive Holders may exercise their preemptive rights to purchase or subscribe
for Participation Securities as provided for in this Section 15, by so informing
the Company in writing (an "EXERCISE NOTICE"). Each Exercise Notice shall state
the percentage of the proposed sale or issuance that each Preemptive Holder
elects to purchase (up to all the Participation Securities that could be
purchased by all Preemptive Holders and all other Persons that have similar
preemptive rights).

     (c) To the extent that any Preemptive Holder has indicated that it will not
fully subscribe for its Pro Rata Share of the Participation Securities, the
Company shall allocate all such Participation Securities not subscribed for to
the Preemptive Holders who have subscribed for more Participation Securities
than their Pro Rata Share (the "FULLY PARTICIPATING PREEMPTIVE HOLDERS") in the
proportion that the number of Equivalent Shares represented by the Securities
each owns bears to the total number of Equivalent Shares represented by the
Securities owned by all such Fully Participating Preemptive Holders. If the
number of Participation Securities so

                                       35
<PAGE>

allocated to a Fully Participating Preemptive Holder exceeds the maximum number
of Participation Securities that it has indicated in its notice to the Company
it is willing to subscribe for, then the Company shall allocate any excess over
such maximum among all Fully Participating Preemptive Holders who have
subscribed for a maximum number of Participation Securities which exceeds the
number of Participation Securities allocated to them pursuant to the preceding
sentence, in the proportion that their respective holdings bear to the total
number of Equivalent Shares represented by the Securities owned by all such
Fully Participating Preemptive Holders, and the Company shall follow this
procedure, if necessary, until all Participation Securities available for
purchase by the Preemptive Holders have been allocated to them.

     (d) TERMS OF SALE. The purchase or subscription by the Preemptive Holders,
pursuant to this Section 15(d) shall be on the same price and other terms and
conditions, including the date of sale or issuance, as are applicable to the
purchasers or subscribers of the additional Participation Securities whose
purchases or subscriptions give rise to the preemptive rights, which price and
other terms and conditions shall be as stated in the relevant Preemptive Notice.

     (e) TIMING OF SALE. If, with respect to any Preemptive Notice, the
Preemptive Holders fail to deliver an Exercise Notice within the requisite time
period, the Company shall have 90 days after the expiration of the time in which
the Exercise Notice is required to be delivered in which to sell not less than
90% and not more than 110% of the number of shares of Participation Securities
of the Company described in the Preemptive Notice at a price of not less than
the estimated price set forth in the Preemptive Notice. If, at the end of such
90 day period, the Company has not completed the sale or issuance of
Participation Securities of the Company in accordance with the terms described
in the Preemptive Notice, or in the event of any contemplated sale or issuance
within such 90 day period but outside such price parameters, the Company shall
again be obligated to comply with the provisions of this Section 15 with respect
to, and provide the opportunity to participate in, any proposed sale or issuance
of Participation Securities of the Company.

16. COMPANY SALE RIGHT.

     (a) At any time after the fifth anniversary of the date hereof and prior to
the date that the Company's equity is Actively Publicly Traded, and provided
that the Odyssey Holders hold in the aggregate twenty-five percent (25%) or more
of the shares of Common Stock and Equivalent Shares held in the aggregate by the
Odyssey Holders on the first anniversary of the date hereof, Odyssey or any
Odyssey Holder designated in writing by Odyssey shall have the right (the
"COMPANY SALE RIGHT") to initiate a sale or recapitalization (including, without
limitation, any merger or consolidation) (a "COMPANY SALE") of the Company
pursuant to an Initial Public Offering or an auction sale process (in any such
case, involving the services of an Independent Investment Banking Firm to assist
in structuring and completing such transaction with the intention of achieving
the best execution and the highest valuation in any such transaction and
consulting with the Koch Holders and the PF Telecom Holders concerning the
nature of such transaction, the manner and timing of its execution and related
matters) pursuant to the procedures of Section 16(b).

                                       36
<PAGE>

     (b) The Odyssey Holders shall send a written notice (the "COMPANY SALE
RIGHT NOTICE") to each of the Company, PF Telecom and Koch indicating that the
Odyssey Holders are exercising their Company Sale Right pursuant to Section
16(a). Each of PF Telecom and Koch shall have 90 days following delivery of the
Company Sale Right Notice to send a written offer (a "COMPANY SALE OFFER") to
the Odyssey Holders to purchase all of the equity interests or assets of the
Company for cash, including the Securities held by the Odyssey Holders. The
Company Sale Offer shall contain evidence satisfactory to Odyssey of the
financial ability of the offeror to complete the transaction contemplated by the
Company Sale Offer and shall state that such Company Sale Offer will be
irrevocable during the period set forth therein, which period shall not be less
than 90 days (the "IRREVOCABILITY PERIOD"). Such Company Sale Offer shall be
subject only to the conditions that (a) the consummation thereof shall not be
prohibited by applicable law and (b) there shall not occur any event which has,
or which could reasonably be expected to have, a material adverse effect on the
financial condition or results of operations of the Company (other than an
effect caused by a change in general market conditions); PROVIDED that the
occurrence of any such material adverse effect shall not be a condition to such
Company Sale Offer unless PF Telecom or Koch, as the case may be, shall have
notified Odyssey prior to the acceptance by the Odyssey Holders of such Company
Sale Offer that a material adverse effect has occurred. Upon the occurrence of a
failure of a closing condition referred to in clause (a) or (b) of the
immediately preceding sentence, the Irrevocability Period shall automatically
terminate. In the event that the Odyssey Holders desire to accept the Company
Sale Offer, Odyssey shall so notify PF Telecom or Koch, as the case may be, in
writing, which acceptance shall be irrevocable for a period of 90 days from the
date such acceptance shall have been delivered, subject only to the condition
that the consummation thereof shall not be prohibited by applicable law. If
Odyssey delivers such an acceptance prior to the termination of the
Irrevocability Period, the parties agree to use their respective best efforts to
complete the Company Sale as expeditiously as possible.

     (c) If the Company Sale Offer is not accepted by the Odyssey Holders, the
Odyssey Holders shall use their diligent efforts to commence and pursue a
Company Sale during the Irrevocability Period; PROVIDED that the Odyssey Holders
shall not effect, or enter into any definitive agreement to effect, a Company
Sale (other than an Initial Public Offering) during the Irrevocability Period
that includes an aggregate purchase price for all of the outstanding equity
interests or assets of the Company that is less than or equal to the purchase
price for all of the outstanding equity interests or assets of the Company that
is contained in the Company Sale Offer (or, in the event that each of PF Telecom
and Koch shall have delivered separate Company Sale Offers, the higher of the
two Company Sale Offers), including, for purposes of such determination, the
implied purchase price for any such equity interests that are then held by the
Person making such Company Sale Offer (or the higher of the two such Company
Sale Offers) and therefore are not included in such Company Sale Offer. In the
event that the Odyssey Holders do not effect, or enter into any definitive
agreement to effect, a Company Sale prior to the expiration of such
Irrevocability Period, Odyssey shall not be permitted to effect a Company Sale
unless it first delivers a new Company Sale Right Notice. The remaining
provisions of this Section 16(c) shall apply fully to any such new Company Sale
Right Notice.

     (d) Each of the Stockholders, the Lucent Holders, Finance Warrant Holders
and the Company agree to reasonably cooperate with the Odyssey Holders to
provide for an orderly process to effect the Company Sale and take all actions
(whether in such Stockholder's capacity

                                       37
<PAGE>

as a stockholder, director, member of a board committee or officer of the
Company or otherwise, including without limitation, attendance at meetings in
person or by proxy for purposes of obtaining a quorum, execution of written
consents in lieu of meetings and approval of amendments and/or restatements of
the Company's certificate of incorporation or bylaws) within its control to
effect a Company Sale; provided, however, that Koch shall not be required to
make any modification to the Koch Agreements.

17. RECAPITALIZATIONS, ETC.

     The provisions of this Agreement shall apply, to the full extent set forth
herein, to any and all Securities (whether owned on the date hereof or hereafter
acquired) of the Company or any capital stock, partnership units or any other
security evidencing ownership interests in any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Common
Stock, by reason of any stock dividend, split, reverse split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.

18. BINDING EFFECT.

     The provisions of this Agreement shall be binding upon and accrue to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.

19. AMENDMENT, MODIFICATION, ETC.

     This Agreement may be amended, modified, extended or terminated and the
provisions hereof may be waived, only by a written instrument signed by each of
Odyssey, PF Telecom, Koch and UBS Capital. Notwithstanding the foregoing, (a)
the consent of the holders of at least 50% of the Common Stock (including
Equivalent Shares) issued or issuable upon exercise of the Finance Warrants
shall be required for any amendment, modification, extension, termination or
waiver which has an adverse effect on the rights of Finance Warrant Holders and
(b) the consent of the holders of at least 50% of the Common Stock (including
Equivalent Shares) issued or issuable upon exercise of the Lucent Warrants shall
be required for any amendment, modification, extension, termination or waiver
which has an adverse effect on the rights of Lucent Holders. Each amendment,
modification, extension, termination and waiver pursuant to this Section 19
shall be binding upon each party hereto.

20. APPLICABLE LAW.

     The laws of the State of New York shall govern the interpretation, validity
and performance of the terms of this Agreement, regardless of the law that might
be applied under principles of conflicts of law.

21. NOTICES.

     All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or certified
mail, return receipt requested, postage prepaid, or sent by facsimile or email
to the party to whom it is directed:

                                       38
<PAGE>

     (a)  If to the Company, to:

          PF.Net Holdings, Limited
          1625 B Street
          Washougal, WA  98671
          Attn:  John Warta
          Fax: (360) 835-8050
          Email: p68wa@aol.com

          and to:

          Attn: Stephen Irwin, Esq.
          Fax:  (212) 755-1467
          Email: sicornell@aol.com

          with a copy to:

          Cleary, Gottlieb, Steen & Hamilton
          One Liberty Place, 42nd Floor
          New York, NY 10006
          Attn: Raymond Check, Esq.
          Fax: (212) 225-3999
          Email: rcheck@cgsh.com

     (b)  If to any Odyssey Holder, to:

          c/o Odyssey Investment Partners, LLC
          280 Park Avenue, 38th Floor
          New York, NY  10017
          Attn:  Brian Kwait
          Fax: (212) 351-7925
          Email: bkwait@odysseyinvestment.com

          with a copy to:
          Latham & Watkins
          885 Third Avenue
          New York, NY  10022
          Attn:  Kirk A. Davenport, Esq.
          Fax: (212) 751-4864
          Email: kirk.davenport@lw.com

                                       39
<PAGE>

     (c)  If to any Koch Holder, to:

          Koch Telecom Ventures, Inc.
          17767 N. Perimeter Drive, Suite 101
          Scottsdale, AZ  85255
          Attn:  George Damiris
          Fax: (480) 419-3606
          Email: damirisg@kochind.com

          with a copy to:

          Koch Industries, Inc.
          4111 East 37th Street North
          Wichita, KS 67220
          Attn: Tye G. Darland, Esq.
          Fax: (316) 828-3133
          Email: darlandt@kochind.com

          and to:

          Skadden, Arps, Slate, Meagher
            & Flom LLP
          333 West Wacker Drive
          Chicago, IL  60606
          Attn:  Charles W. Mulaney, Jr., Esq.
          Fax: (312) 407-0411
          Email: cmulaney@skadden.com

     (d)  If to any PF Telecom Holder, to:

          PF Telecom Holdings, LLC
          1701 Broadway Street, Suite 358
          Vancouver, WA  98663
          Attn: John Warta
          Fax: (360) 835-8050
          Email: p68wa@aol.com

          and to:

          Attn: Stephen Irwin, Esq.
          Fax: (212) 755-1467
          Email: sicornell@aol.com

                                       40
<PAGE>

          with a copy to:

          Cleary, Gottlieb, Steen & Hamilton
          One Liberty Place, 42nd Floor
          New York, NY 10006
          Attn: Raymond Check, Esq.
          Fax: (212) 225-3999
          Email: rcheck@cgsh.com

     (e)  If to any Warta Holder or GLW Holder, to:

          John Warta
          P.O. Box 2010
          Vancouver, WA 98668-2010
          Fax (360) 835-8050
          Email: p68wa@aol.com

          with a copy to:

          Cleary, Gottlieb, Steen & Hamilton
          One Liberty Place, 42nd Floor
          New York, NY 10006
          Attn: Raymond Check, Esq.
          Fax: (212) 225-3999
          Email: rcheck@cgsh.com

     (f)  If to any Treg Holder or Irwin Holder, to:

          Stephen Irwin, Esq.
          15 Eisenhower Drive
          Cresskill, NJ 07626
          Fax: (201) 568-0158
          Email: sicornell@aol.com

          with a copy to:
          Cleary, Gottlieb, Steen & Hamilton
          One Liberty Place, 42nd Floor
          New York, NY 10006

          Attn: Raymond Check, Esq.
          Fax: (212) 225-3999
          Email: rcheck@cgsh.com

     (g)  If to any Finance Warrant Holder, to:

          UBS AG, Stamford Branch

                                       41
<PAGE>

          677 Washington Blvd.
          Stamford, CT 06901
          Attn:  Kim Coley
          Fax:  (203) 719-3180
          Email:  kim.coley@wdr.com

          and

          Credit Suisse First Boston
          Eleven Madison Avenue
          New York, NY  10010
          Attn: Michael Gilligan
          Fax:  (212) 743-2115
          Email: michael.gilligan@csfb.com

          with a copy to:

          Cahill Gordon & Reindel
          80 Pine Street
          New York, NY  10005
          Attn:  James J. Clark, Esq.
          Fax: (212) 269-5420
          Email: jclark@cahill.com

     (h)  If to UBS or its Permitted Transferees, to:

          UBS Capital
          299 Park Avenue
          New York, NY  10171
          Attn: Charles W. Moore
          Fax: (212) 821-6333
          Email: charles.moore@ubs.com

          with a copy to:

          Kaye, Scholer, Fierman, Hays & Handler, LLP
          425 Park Avenue
          New York, NY  10022
          Attn: Nancy E. Fuchs, Esq.
          Fax:  (212) 836-8689
          Email: nfuchs@kayescholer.com

                                       44
<PAGE>

     (i)  If to any Lucent Holder, to:

          Lucent Technologies Inc.
          283 King George Road
          Warren, NJ  07059
          Attn: Assistant Treasurer-Project Finance
          Fax:  (908) 559-1711

          with a copy to:

          Orrick, Herrington & Sutcliffe LLP
          666 Fifth Avenue
          New York, NY  10103
          Attn:  Fred C. Byers, Jr., Esq.
          Fax:  (212) 506-5151
          Email: fbyers@orrick.com

or at such other address as the party shall have specified by notice in writing
to the other parties in accordance with this Section 21.

22. HEADINGS.

     The headings in this Agreement are for convenience of reference only and
will not control or affect the meaning or construction of any provisions hereof.

23. ENTIRE AGREEMENT.

     This Agreement constitutes the entire agreement between the parties with
respect to the subject matter of this Agreement. This Agreement supersedes all
prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter of this Agreement. This Agreement is not
intended to confer upon any Person other than the parties hereto and thereto any
rights or remedies hereunder or thereunder.

24. SEVERABILITY.

     The invalidity or unenforceability of any provisions of this Agreement in
any jurisdiction will not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder will be enforceable to the fullest extent permitted by law.

25. COUNTERPARTS.

     This Agreement may be executed in any number of counterparts, each of which
will be an original with the same effect as if the signatures thereto and hereto
were upon the same instrument.

                                       42
<PAGE>

26. REMEDIES.

     The parties hereby acknowledge that money damages would not be adequate
compensation for certain of the damages that a party would suffer by reason of a
failure of any other party to perform any of the obligations under this
Agreement. Therefore, each party hereto hereby waives the claim or defense that
any other party has an adequate remedy at law.

27. REPRESENTATIONS.

     Each of PF Telecom, Warta, GLW and Treg represents and warrants to the
other Stockholders that as of the date hereof, their respective economic and
voting interests in PF Telecom (stated as a percentage of the total of such
interests in PF Telecom outstanding as of the date hereof) are as set forth on
Schedule 1 hereto. No holder of any interests in PF Telecom, other than Warta,
GLW and Treg, holds, beneficially or of record, more than 10% of the total
economic or voting interests in PF Telecom, or otherwise has the right to direct
the actions of PF Telecom as they relate to the performance of PF Telcom's
obligations hereunder. Karen Irwin represents and warrants to the other
Stockholders that as of the date hereof, all equity interests of Treg are held,
beneficially and of record, by Karen Irwin. Georgiana Warta represents and
warrants to the other Stockholders that as of the date hereof, the equity
interests of GLW are held, beneficially and of record, by Georgiana Warta.

28. ACKNOWLEDGMENTS.

     The parties hereto acknowledge that WDR and CSFB are parties hereto solely
with respect to the Finance Warrants and Lucent is a party hereto solely with
respect to the Lucent Warrants, in each case, including any shares of Common
Stock issued upon exercise thereof, and in each case solely for purposes of
setting forth certain registration rights and other rights and restrictions
related to the transfer of such securities.

29. ASSIGNEES.

     The parties agree that any Assignee (as defined in the Subscription
Agreement) shall accede to this Agreement and become a party hereto upon the
closing of such Assignee's purchase of Senior Preferred Stock pursuant to the
Subscription Agreement.

                            [Signature Page Follows]

                                       43
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Stockholders Agreement
as of the date first above written.

                                  PF.NET HOLDINGS, LIMITED

                                  By:  /S/  STEPHEN IRWIN
                                     -------------------------------------------
                                  Name:   Stephen Irwin
                                  Title:  Vice Chairman and Executive Vice
                                          President

                                  ODYSSEY INVESTMENT PARTNERS FUND, LP

                                  By:  ODYSSEY CAPITAL PARTNERS, LLC,
                                       its general partner

                                  By:  /S/  BRIAN KWAIT
                                     -------------------------------------------
                                  Name:  Brian Kwait
                                  Title:   Managing Member

                                  ODYSSEY COINVESTORS, LLC

                                  By: ODYSSEY INVESTMENT PARTNERS, LLC,
                                      its managing member

                                  By:  /S/  BRIAN KWAIT
                                     -------------------------------------------
                                  Name:  Brian Kwait
                                  Title:   Managing Member

                                  KOCH TELECOM VENTURES, INC.

                                  By: /S/  GEORGE DAMIRIS
                                     -------------------------------------------
                                  Name:  George Damiris
                                  Title: Vice President

<PAGE>

                                  PF TELECOM HOLDINGS, LLC

                                  By: /S/  JOHN WARTA
                                     -------------------------------------------
                                  Name:    John Warta
                                  Title:   Chairman and CEO

                                  JOHN WARTA

                                      /S/  JOHN WARTA
                                  ----------------------------------------------
                                  KAREN IRWIN

                                      /S/  KAREN IRWIN
                                  ----------------------------------------------
                                  TREG VENTURES LLC

                                  By: /S/  KAREN IRWIN
                                     -------------------------------------------
                                  Name:  Karen Irwin
                                  Title:

<PAGE>

                                  WARBURG DILLON READ LLC

                                  By:  /S/  WARREN M. ECKSTEIN
                                     -------------------------------------------
                                  Name:  Warren M. Eckstein
                                  Title:    Managing Director

                                  By:  /S/  VINCENT  LU
                                     -------------------------------------------
                                  Name:  Vincent Lu
                                  Title:    Executive Director

                                  CREDIT SUISSE FIRST BOSTON

                                  By:  /S/  BILL O'DALY
                                     -------------------------------------------
                                  Name:  Bill O'Daly
                                  Title:   Vice President

                                  UBS CAPITAL II LLC

                                  By:  /S/ CHARLES MOORE
                                     -------------------------------------------
                                  Name:  Charles Moore
                                  Title:    Pricinpal

                                  By:  /S/ MARC UNGER
                                     -------------------------------------------
                                  Name:  Marc Unger
                                  Title:   Chief Financial Officer

                                  LUCENT TECHNOLOGIES INC.

                                  By:  /S/  WILLIAM N. QUINN
                                     -------------------------------------------
                                  Name:  William N. Quinn
                                  Title:    Director

<PAGE>

                                  GLW VENTURES LLC

                                  By: /S/GEORGIANA WARTA
                                     -------------------------------------------
                                  Name:  Georgiana Warta
                                  Title:

                                  GEORGIANA WARTA

                                  By: /S/  GEORGIANA WARTA
                                     -------------------------------------------

<PAGE>

                                   SCHEDULE 1

                    SHAREHOLDINGS OF PF TELECOM HOLDINGS, LLC
                    -----------------------------------------

<TABLE>

<CAPTION>

                                             Percentage of Outstanding                Number of
Holder                                           PF Telecom Shares                 Equivalent Shares
------                                       -------------------------           ---------------------
<S>                                          <C>                                 <C>
John Warta                                                48%                         9,600,000

Treg Ventures LLC                                         19%                         3,800,000

GLW Ventures LLC                                          10%                         2,000,000

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

Warta Group                                               58%                        11,600,000

Irwin Group                                               19%                         3,800,000

</TABLE>

<PAGE>

                                   SCHEDULE 2

                       SHAREHOLDINGS OF TREG VENTURES LLC
                       ----------------------------------

<TABLE>

<CAPTION>

                                              Percentage of Outstanding
Holder                                                Treg Shares
------                                        --------------------------
<S>                                           <C>
Karen Irwin                                             100.00%

</TABLE>

<PAGE>

                                   SCHEDULE 3

                        SHAREHOLDINGS OF GLW VENTURES LLC

<TABLE>

<CAPTION>

                                             Percentage of Outstanding
Holder                                                Equity Shares
------                                        --------------------------
<S>                                           <C>
Georgiana Warta                                           100.00%

</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}]]