Document:

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                                                                    Exhibit 10.1

                          FIBER OPTIC SYSTEM AGREEMENT

      THIS FIBER OPTIC SYSTEM AGREEMENT (this "Contract") is made as of the 29th
day of October, 1999 (the "Effective Date"), by and between PF.Net, Corp., a
Delaware corporation (hereinafter referred to as "Builder") and AT&T Corp., a
New York corporation ("AT&T").

                                    RECITALS

      WHEREAS, AT&T is seeking the design, engineering and construction of
System(s) and Route(s) (collectively referred to as "Links") as set forth fully
in ARTICLE 3: Statement of Work for the Supply of Link(s) below, along with
certain marketing arrangements.

      WHEREAS, Builder has secured, is securing and will secure on behalf of
AT&T Perfected Rights of Way, comprising Route(s) as shown in Exhibit A: Route
Maps attached hereto.

      WHEREAS, Builder will construct, is constructing or has constructed
System(s) on Route(s) as further set forth in Exhibit A.

      WHEREAS, Builder will assign to AT&T certain Perfected Rights of Way (ROW)
("Perfected ROW") without restriction along all Routes of the System, except
where the Builder's underlying rights restrict conveyance of rights to AT&T, in
which case Builder will provide AT&T an indefeasible license or right to use
("IRU") for the AT&T Conduit, First Conduit and AT&T Fiber for those Route
Segments.

      WHEREAS, AT&T has secured certain other Rights of Way ("ROW") along the
Route(s) and has perfected, is perfecting or will perfect Selected AT&T ROW and
will permit or license the Builder to use Selected AT&T ROWs for the purpose of
accessing, constructing, installing, upgrading, operating and maintaining the
System to the extent of Builder's ownership interest therein.

      WHEREAS, Builder will provide to AT&T two (2) empty conduits ("AT&T
Conduit") and one (1) First Conduit which will contain one (1) The Cable.

      WHEREAS, AT&T and Builder have decided to outline the payment terms in
ARTICLE 10 and Exhibit B.

      WHEREAS, the capitalized terms used herein shall have the respective
meanings specified or referred to in ARTICLE 1: Definitions.

      NOW, THEREFORE, in consideration of the mutual promises and considerations
set forth below, AT&T and Builder agree as follows:

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ARTICLE 1: Definitions

The following terms have the definitions set forth below, unless the context
indicates otherwise:

1.1 Acceptance: AT&T written acceptance of a completed Link from the Builder,
specifying that in AT&T's judgement the Link meets AT&T's requirements as set
forth herein including the attached exhibits.

1.2 AT&T Conduit: Two (2) conduits which AT&T owns and has the right to use,
transfer, assign or license.

1.3 AT&T Fibers: Fibers in The Cable which AT&T owns and has the right to use or
transfer or assign, through IRU or license or any other form of conveyance
mutually agreed upon by the parties, such agreement not to be unreasonably
withheld. AT&T Fibers are identified in Exhibit B.

1.4 AT&T ROW: Right of way secured by or for AT&T which may be licensed to a
third party on private property, other than Builder ROW and Builder Affiliate
ROW. This will include all AT&T ROW traversing land held in private ownership
reflected in AT&T right of way records supplied to the Builder as of the
Contract date in the form of line lists and as built drawings to the extent that
such ROW is along the Route except underlying rights acquired in conjunction
with land licensed by a railroad.

1.5 AT&T Sites: Land and/or Sites which AT&T owns or has the right to use
through easement, license, lease or permit.

1.6 AT&T System: AT&T Conduits, AT&T Fibers, the AT&T Sites, the First Conduit,
The Cable and all necessary manholes, handholes and associated items required
for the above.

1.7 Builder Affiliate ROW: ROW acquired by Builder from any of the Builder's
affiliate companies used in connection with this Contract, including without
limitation ROW acquired from Sea Breeze Communication Company.

1.8 [INTENTIONALLY OMITTED]

1.9 Builder Completion Date: With respect to each Link, when all Conduit, AT&T
Fibers and Builder Fibers and Site placement and installation including final
restoration and ROW conveyance is complete. Builder Completion Date occurs at
written acceptance by AT&T.

1.10 Builder Conduit: Conduits, not to exceed three (3) in number on AT&T ROW,
which the Builder owns and has the right to use, transfer, assign or license.
The number of Builder Conduits and specifics are identified in Exhibit B.

1.11 Builder Fibers: Fibers in The Cable which Builder owns and has the right to
use or transfer or assign, through IRU or license or any other form of
conveyance mutually

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agreed upon by the parties, such agreement not to be unreasonably withheld.
Builder Fibers are identified in Exhibit B.

1.12 Builder ROW: Private Right of Way other than Builder Affiliate ROW secured
by Builder on behalf of AT&T. AT&T shall then license the use of such ROW to
Builder.

1.13 Builder Sites: Land and/or sites which Builder owns or has the right to use
through easement, license, lease or permit.

1.14 Builder Substantially Complete Date: The date set forth in Exhibit B by
which Builder shall have completed placement of AT&T System, including ROW
restoration to render the system usable, and shall have conveyed all the rights
documents to AT&T, for a Link. The remaining activities after the Builder
Substantially Complete Date may consist of splicing, terminating, and testing of
The Cable by AT&T, and final restoration and contractor cleanup by the Builder.

1.15 Builder System: Builder Conduit, Builder Fibers in The Cable, the Builder
Sites and all necessary manholes, hand-holes and associated items required for
the above.

1.16 Certification: The date that AT&T certifies that the Builder Substantially
Complete Date has been met for a Link.

1.17 Conduit: A tube especially constructed for the purpose of placing and
enclosing fiber optic cable.

1.18 Disposition: Sale, lease, license or grant of title or Indefeasible Right
to Use.

1.19 Effective Date: The date referred to in the first paragraph of this
Contract.

1.20 Environmental, Health and Safety Laws: Any federal, state, or local
statute, regulation, rule, ordinance or applicable governmental order,
decree, or settlement agreement, or principle or requirement of common law,
regulating or protecting the environment or human health or safety, including
without limitation the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. ss.9601 et seq.), as amended, the Resource
Conservation and Recovery Act (42 U.S.C. ss.6901 et seq.), as amended, and
the Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.), as
amended, and regulations promulgated thereunder.

1.21 Fibers: Filaments of dielectric material designed for the purpose of
light-wave transmission.

1.22 Final Acceptance: AT&T's written acceptance of a completed Link from the
Builder, specifying that in AT&T's judgement the Link meets AT&T's requirements.
If the Link meets AT&T's requirements, Final Acceptance shall promptly follow
the expiration of the Performance Period which shall occur twelve (12) months
after the Builder Substantially Complete Date. The Performance Period is defined
in Section 1.32. In the event a Link does not perform in accordance with
Exhibits D and E and other applicable provisions of this Contract during the
Performance Period, then with respect only to such Link(s), the Final Acceptance
Date therefor shall be extended for a period of

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time equal to the period of time during which said Link was not performing in
accordance with such exhibits. Such non-performance must be corrected according
to AT&T specifications.

1.23 First Conduit: The first Conduit in which The Cable is installed during the
initial construction of the System.

1.24 Disposition Fibers: Fibers intended for sale, lease or exchange owned by
AT&T or Builder as described in Exhibit G and in quantities set forth in Exhibit
B.

1.25 Intermediate Cities: Cities which determine the intermediate points of the
Link, more specifically, the address of the AT&T POP within the city. The
Intermediate Cities are identified provided in Exhibit B.

1.26 IRU: Indefeasible Right to Use property of another for a period of time.

1.27 Link: The total of a Route and the System constructed on the Route. Links
are listed in ARTICLE 3: Statement of Work for the Supply of Link(s) and further
described in Exhibit B.

1.28 Maintenance Cable: Maintenance restoration reels for The Cable will be
provided to the maintaining party. Maintenance Cable is to equal two (2%)
percent of the Link cable mileage.

1.29 Maintenance Responsibility: Obligation to perform maintenance on the Links
as described in Exhibit C. The Maintenance Responsibility for the Route Segments
using AT&T ROW is AT&T. The Maintenance Responsibility for other Route Segments
is to be designated.

1.30 Marketing Agreement: Those terms and conditions contained in Exhibit G with
respect to the marketing of Disposition Fibers and/or related matters.

1.31 Perfected Rights of Way: ROW that is legally sufficient to permit the use
and assignment, conveyance or transfer of the property rights required under
this Contract, including without limitation the placement, installation,
operation, repair, maintenance, and replacement of multiple cables by multiple
parties.

1.32 Performance Period: A twelve (12) month period of time starting on the
Builder Substantially Complete Date during which the Link will be monitored for
compliance with the AT&T requirements.

1.33 Primary Cities: Cities which determine the start and end point of a Link
which may include Intermediate Cities. Cities are identified by the address of
the AT&T POP within the city.

1.34 Public ROW: Rights of Way in the public domain belonging to neither AT&T
nor Builder, but used for the construction of the System, by permission granted
by the governing authority. Public ROW is the surface, the air space above the
surface, and the area below the surface of any public street, highway, lane,
path, alley, sidewalk,

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boulevard, drive, bridge, tunnel, parkway, easement, or other similar property
in which a public or governmental entity now or hereafter holds any property
interest, which was dedicated as rights-of-way.

1.35 Right of Way (ROW): Privilege or right to pass over, under, upon, or
through another's land, for the purpose of accessing, constructing, upgrading,
operating, replacing and maintaining the System.

1.36 Route: Selected path between AT&T Points of Presence ("POP") locations in
Primary and Intermediate Cities, consisting of contiguous land and/or structures
for which the rights to access, construct, upgrade, operate and maintain the
System have been secured and perfected.

1.37 Route Section: The part of a Route which connects either a terminal of the
optical amplifiers and/or regenerator sites to another such device.

1.38 Route Segment: The part of a Route which is defined by a specific ROW.

1.39 ROW Due Diligence: A detailed review of Right of Way documents upon which
the Route is based to ensure that rights are as represented and are current and
valid and adequate.

1.40 Selected AT&T Rights of Way: AT&T Rights of Way which are chosen to
construct the System.

1.41 (INTENTIONALLY OMITTED]

1.42 Site: Land acquired and prepared for the purpose of constructing buildings
which house light-wave transmission equipment. The Site includes vehicle access
(driveways) from public roadways, parking, commercial power, ground fields,
landscaping and permitting agency requirements.

1.43 Substantially Complete: The point where an activity is sufficiently
complete in AT&T's judgement so that related activities can begin or the System
can be utilized for purposes for which it is intended.

1.44 System: Fiber optic telecommunication facility comprised of the AT&T
Conduit, the AT&T Fibers, the Builder Conduit, the Builder Fibers, the First
Conduit, The Cable, the AT&T Sites and the Builder Sites which are to be
constructed pursuant to this Contract.

1.45 The Cable: Fiber optic cable placed in the First Conduit which contains
both AT&T Fibers and Builder Fibers.

1.46 The Cable Useful Life: Term that The Cable is capable of carrying
light-wave transmission at quality levels acceptable to both AT&T and the
Builder.

ARTICLE 2: Contract Price and Link Mileage

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2.1   This is a fixed price contract. Builder's price to AT&T for each Link is
      described in Exhibit B.

2.2   It is understood that the prices set forth in Exhibit B are based on
      nominal mileage also set forth therein and are to be adjusted to measured
      mileage verified by AT&T and Builder. Accordingly, AT&T's price paid to
      Builder, on a Link by Link basis, will be adjusted to reflect payment for
      the actual mileage, but the price paid by AT&T will in no case be based on
      more than 103% or less than 97% of the nominal mileage shown for each
      Link.

ARTICLE 3: Statement of Work for Supply of Link(s)

3.1 The City Link(s) Table below lists the Primary Cities for each Link and is
more fully detailed in Exhibit BCITY LINKS TABLE.

                                    PRIMARY CITIES
 LINK    MILEAGE         Termination A              Termination Z
  1         517        Arlington                 Greensboro
  2         390        Atlanta                   Jacksonville
  3         172        Jacksonville              Orlando
  7         563        Ellisville                New Orleans
  7A         75        Ellisville                Jacksonville
  8         415        New Orleans               Houston
  9         240        Houston                   San Antonio
 10         105        San Antonio               Austin
 11         230        Austin                    Ft. Worth
 12        1129        Ft. Worth                 Phoenix
 13         208        Phoenix                   Blythe
 13A        250        Blythe                    San Diego
 14         147        San Diego                 Los Angeles
 19         265        Tulsa                     Kansas City
 20         283        Kansas City               St. Louis
TOTAL      4989

3.2 Supply of Links:

      3.2.A Builder warrants and represents to AT&T with respect to each Link
      that: (a) Builder shall have completed the obligations referred to in the
      definition of "Builder Substantially Complete Date" for such Link by the
      respective Builder Substantially Complete Dates set forth on Exhibit B or
      as otherwise set forth in this Contract; (b) Builder shall have completed
      the obligations referred to in the definition of "Builder Complete Date"
      for such Link by the respective Builder Complete Dates set forth on
      Exhibit B or as otherwise set forth in this Contract; and (c) the AT&T
      System shall have been designed, engineered, installed and constructed (i)
      in compliance with any and all applicable building, construction and
      safety codes for such construction and installation including all state
      One-Call laws, as well as any and all other applicable governmental laws,
      codes, ordinances, statutes and regulations, including Environmental,
      Health, and Safety Laws; and (ii) in

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      accordance with AT&T's engineering and construction specifications as set
      forth herein in Exhibit E: Standard Engineering, Construction and Fiber
      Specifications attached hereto.

      3.2.B Builder and AT&T will cooperatively review the available ROW and
      will select the best route based on terrain, sufficiency of grantor's
      title, assignability, constructability, cost, security, and schedule but
      final responsibility and control for route and ROW selection lies with the
      Builder, provided, however, Builder must meet AT&T's requirements for
      routing of each Link as set forth in Exhibit B. In addition, all ROW
      conveyances shall be of a type and quality reasonably acceptable to AT&T.

     3.2.C For all ROW to be acquired by Builder (on behalf of AT&T pursuant to
     Section 10.3 below), other than Builder Affiliate ROW and Public ROW, which
     either (i) is used in a completed Link or (ii) if not used in a completed
     Link, represents not more than an additional three percent (3%) of the
     total ROW acquired by Builder (other than Builder Affiliate ROW and Public
     ROW) which is used in all completed Links, AT&T will contribute 50% of the
     costs (determined pursuant to Section 10.3 below) of such ROW, up to a
     maximum share for AT&T of twelve thousand five hundred dollars ($12,500)
     per mile averaged for all such ROW pursuant to the procedures in Section
     10.3 below. Ownership of such ROW, as well as Public ROW, shall be vested
     in AT&T subject to Sections 3.2.D.1 and 3.2.D.2 below, and shall be
     conveyed using AT&T's standard easement form document attached as Exhibit
     K. Any changes to the aforementioned document will be submitted to AT&T for
     approval which will not be unreasonably withheld.

     3.2.D Except as expressly set forth below, for Builder ROW, Builder has or
     will secure in perpetuity, on behalf of AT&T, any and all necessary
     rights-of-way, encroachment permits, private easements and/or other
     agreements or approvals required for AT&T to access, install, operate,
     upgrade, replace, and maintain the System(s) for all Links from all
     necessary parties except with respect to affiliates of the Builder. With
     respect to affiliates of Builder, Builder will secure such rights for a
     minimum period of forty (40) years. If any third party granting such rights
     requires a joint application, Builder will notify AT&T and AT&T and Builder
     will coordinate any such joint application process.

     If Builder cannot obtain Builder ROW in perpetuity, Builder shall be
     responsible for ensuring ROW have renewable terms for a minimum of 40
     years. Builder shall be responsible for any legal fees, including damages
     and settlements, for defending, negotiating or entering into alternative
     dispute resolution methods to resolve or litigate disputes with respect to
     all permits, right-of-way authorizations and approvals it acquires.

            3.2.D.1 EXCEPTIONS TO BUILDER RIGHT-OF-WAY ACQUISITIONS In the event
            Public, State and/or Federal Agencies require a license and/or
            franchise, Builder will notify AT&T and AT&T and Builder shall
            separately negotiate and secure their own license or franchise. AT&T
            and Builder shall be responsible for any fees assessed for their
            separate occupancy in the right-of-way. AT&T and Builder shall each
            negotiate the conditions (including

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            term) for their respective franchise and/or license, but shall not
            negotiate any term which restricts the other party's use of their
            part of the System in the ROW. Builder is not responsible for
            securing rights on AT&T ROW.

            3.2.D.2 In the event Builder is unable to obtain permits or other
            approvals from any governmental entity or agencies for renewable
            terms for a minimum of 40 years, and obtain such renewals for 40
            years, then Builder will obtain the maximum term available by law or
            regulation.

      3.2.E Except as expressly set forth below, for AT&T ROW, AT&T has secured
      or will secure in perpetuity any and all necessary rights-of-way, and/or
      other agreements or approvals required to access, install, operate,
      upgrade, replace, and maintain the System(s). If any third party granting
      such rights requires a joint application, AT&T will notify Builder and
      Builder and AT&T will coordinate any such joint application process.

      If AT&T cannot obtain AT&T ROW in perpetuity, AT&T shall be responsible
      for ensuring ROW have renewable terms for a minimum of 40 years. AT&T
      shall be responsible for any legal fees, including damages and
      settlements, for defending, negotiating or entering into alternative
      dispute resolution methods to resolve or litigate disputes with respect to
      all existing and acquired AT&T ROW, but not Builder ROW or Builder
      Affiliate ROW.

      3.2.F AT&T ROW: AT&T will provide Builder with copies of AT&T's Line
      Lists, Issues and Concerns Reports (where available) and as built drawings
      for each Link awarded. The ROW information will be provided in CD format,
      if available. A floppy disk showing AT&T Links will be provided for use
      with Precision Mapping 4.0.

      AT&T hereby grants to Builder the right to utilize the Selected AT&T ROW
      solely for the construction of the System subject to the terms and
      conditions thereof and subject to the provisions of Section 3.2.L. It is
      understood that upon the granting of a license to Builder for the use of
      Selected AT&T ROW, the terms and conditions of such license will supersede
      the rights granted herein with respect to the Selected AT&T ROW so
      licensed.

      3.2.G For Builder ROW, Builder warrants and represents that, by the
      agreed-to construction start date included in the construction plan to be
      provided pursuant to Section 4.2 below for each defined Route Segment,
      Builder will have obtained perfected ROW, and performed all necessary
      actions regarding the acquisition of land, structure, and easements for
      the Route Segment, including, without limitation:

      (i.)  title searches to ascertain the validity and sufficiency of title in
            present landowners for private easements, railroads, pipelines or
            utilities acquired along the route;

      (ii.) for any railroad ROW acquired other than perpendicular crossings,
            verify the rail is active and there are no current plans for
            railroad to abandon the lines; however, Builder should ensure its
            contract with the railroad will relieve Builder, and subsequent
            third parties, of any prospective

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            obligation for payment of license fees for continued occupancy and
            use of the ROW (unless licensor demonstrates to Builder's
            satisfaction, it has fee simple title to the property);

      (iii.) verify that rights acquired from railroads, pipelines and/or
            utilities and other grantors allow Builder to convey occupancy
            rights to third parties;

      (iv.) acquired and transferred to AT&T acceptable easements, IRUs,
            licenses, rights, conduit or other leases, fee interests and other
            rights which are recorded (as applicable and to the extent deemed
            necessary by the obtaining party) in the office of the Recorder of
            Deeds of the appropriate county or in such other offices as may be
            appropriate; and

      (v.)  secured permits for highway, railroad and waterway crossings as well
            as secured any and all other permits (including environmental)
            necessary and requisite to the construction of the Route Segment and
            to enable the Builder to assign rights or grant the IRU contemplated
            by this Contract, without restriction to AT&T.

      3.2.H Builder shall provide to AT&T preliminary route drawings for the
      Link prior to the beginning of construction for any Link. Builder shall
      also provide all ROW documents to AT&T to perform a due diligence review.
      Documents shall include, but are not limited to, title documents, to
      determine whether grantor has fee simple title or sufficient title to
      grant occupancy and use rights to AT&T.

      3.2.I During engineering and construction, AT&T and/or designees shall
      have the right, but not the obligation, to inspect and/or observe all
      installations of the System and any other work performed by personnel of
      the Builder or any subcontractor of Builder and any documents related
      thereto. Builder shall notify AT&T in writing at least fourteen (14)
      calendar days prior to the start of construction of each Route Section.
      Builder will reasonably accommodate AT&T's involvement during engineering
      and construction, including but not limited to, granting AT&T access to
      all engineering, design and other related work product and techniques.
      AT&T or Builder will have the authority to stop all such installation
      related work, which in its sole opinion threatens or potentially threatens
      to disrupt or damage either party's existing assets. Any inspection by
      AT&T or its designees shall be in compliance with and subject to all ROW
      agreements.

      3.2.J If Builder requests in writing the assistance of AT&T in the
      construction and if AT&T agrees to do so then AT&T's cost and expenses
      shall be fully offset to AT&T's price.

      3.2.K Builder warrants to the best of its knowledge that there is no
      litigation pending or threatened regarding any of the acquired easements,
      IRUs, rights, conduits or other leases, fee interests or other such rights
      of the Builder necessary and requisite prior to the construction and for
      the continuous use of the System except with respect to case No. 99-12725
      in the 22nd JUDICIAL DISTRICT COURT FOR THE PARISH OF ST. TAMMANY, STATE
      OF LOUISIANA, DIVISION A, styled LAS CONCHAS VERSUS P.F.NET, L.L.C. f/k/a
      PacWEST FIBER.NET, L.L.C., LEVEL 3 COMMUNICATIONS, L.L.C., PARSON
      BRINKERHOFF (PB), AND SeaBREEZE COMMUNICATIONS COMPANY.

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      3.2.L For AT&T ROW, AT&T warrants and represents that, by the agreed-to
      construction start date included in the construction plan to be provided
      pursuant to Section 4.2 for each defined Route Segment, AT&T will have
      obtained perfected ROW, and performed all necessary actions regarding the
      acquisition of land, structure, and easements for the Route Segment,
      including, without limitation:

      (i.)  title searches to ascertain the validity and sufficiency of title in
            present landowners for private easements, railroads, pipelines or
            utilities acquired along the route;

      (ii.) for any railroad ROW acquired other than perpendicular crossings,
            verify the rail is active and there are no current plans for
            railroad to abandon the lines; however, AT&T should ensure its
            contract with the railroad will relieve AT&T, and subsequent third
            parties, of any prospective obligation for payment of license fees
            for continued occupancy and use of the ROW (unless licensor
            demonstrates to AT&T's satisfaction, it has fee simple title to the
            property);

      (iii.) verify that rights acquired from railroads, pipelines and/or
            utilities and other grantors allow Builder to convey occupancy
            rights to third parties;

      (iv.) acquired and transferred to Builder acceptable, easements, IRUs,
            licenses, rights, conduit or other leases, fee interests and other
            rights which are recorded (as applicable and to the extent deemed
            necessary by the obtaining party) in the office of the Recorder of
            Deeds of the appropriate county or in such other offices as may be
            appropriate; and

      (v.)  secured permits for highway, railroad and waterway crossings as well
            as secured any and all other permits (including environmental)
            necessary and requisite to the construction of the Route Segment and
            to enable AT&T to assign rights or grant the IRU contemplated by
            this Contract, without restriction to Builder.

      3.2.M AT&T or Builder may make available ROW for additional Conduit(s)
      under terms to be agreed upon.

      3.2.N AT&T warrants that to the best of its knowledge there is no
      litigation pending or threatened regarding any of the acquired easements,
      IRUs, rights, conduits or other leases, fee interests or other such rights
      of AT&T necessary and requisite prior to the construction and continuous
      use of the System.

      3.2.0 Where AT&T ROW is utilized, AT&T will make available to Builder all
      relevant engineering drawings and records in AT&T's possession or
      accessible by AT&T without incurring unreasonable expense to AT&T. In the
      event that AT&T is occupying private property with existing cable along
      the agreed upon Route without proper documentation, AT&T will acquire such
      rights as may be necessary.

      3.2.P Where Builder ROW is utilized, Builder will make available to AT&T
      all relevant engineering drawings and records in Builder's possession or
      accessible by Builder without incurring unreasonable expense to Builder.
      In the event that Builder is occupying private property with existing
      cable along the agreed upon Route without proper documentation, Builder
      will acquire such rights as may be necessary.

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      3.2.Q Except as otherwise provided herein, AT&T shall license to Builder
      all Selected AT&T ROW and all Builder ROW and Public ROW conveyed to AT&T
      pursuant to Section 3.2.C and Builder shall license to AT&T all Builder
      Affiliate ROW for the maximum term permitted by such ROW. AT&T will only
      license in perpetuity to Builder an amount of Selected AT&T ROW equivalent
      in terms of mileage to Builder ROW, Builder Affiliate ROW and Public ROW
      acquired in perpetuity. To the extent reasonably practicable, the
      equivalent mileage of Selected AT&T ROW so licensed, and the Builder ROW
      and Builder Affiliate ROW and Public ROW acquired by Builder for AT&T
      furnished or licensed hereunder, will be contiguous and allocated among
      Links so as to endeavor to allow for the highest percentage of perpetual
      ROW and licenses as possible in individual Links as chosen by Builder. The
      remaining Selected AT&T ROW will be licensed to Builder for a term of
      forty (40) years. With respect to any Selected AT&T ROW licensed to
      Builder for a forty (40) year term, if AT&T has or reasonably can obtain
      the legal right to do so, AT&T will extend such license(s) to the extent
      that and for such period of time as Builder is able to extend the term of
      any forty (40) year term Builder ROW and Builder Affiliate ROW to enable
      the continued use of the Links for both AT&T and Builder beyond the
      initial forty (40) year term.

      3.2.R The licensing referred to in Section 3.2.Q above will occur with
      respect to ROW licensed by AT&T to Builder as follows:

      (i)   the licensing of Builder ROW acquired in the name of or on behalf of
            AT&T will occur at the same time as, and such licenses will be
            delivered to Builder with, the payment by AT&T of the sums owed to
            Builder for such ROW pursuant to Sections 10.3 or 10.4.A, as
            applicable;

      (ii)  the licensing of Public ROW acquired by Builder in the name of or on
            behalf of AT&T will occur and be delivered to Builder concurrently
            with Builder's delivery and/or assignment of such ROW to AT&T; and

      (iii) concurrently with the licensing and delivery of such Builder ROW and
            Public ROW by AT&T to Builder referred to in (i) and (ii) above,
            AT&T will license to Builder in perpetuity an amount of Selected
            AT&T ROW equivalent in terms of mileage to such Builder ROW and
            Public ROW acquired in perpetuity, to the extent such Selected AT&T
            ROW in perpetuity is available. AT&T will license the remaining
            Selected AT&T ROW to Builder for a forty (40) year term.

      3.2.S The licensing referred to in Section 3.2.Q above will occur with
      respect to Builder Affiliate ROW licensed by Builder to AT&T concurrent
      with the payment by AT&T pursuant to ARTICLE 1O.2.B for the mileage to
      which such Builder Affiliate ROW is applicable. Concurrently therewith,
      AT&T will license to Builder an amount of AT&T ROW equivalent in terms of
      mileage and length of term of such Builder license.

      3.2.T The parties agree that upon the completion of the last Link they
      will take such action as may be required to ensure that the provisions of
      Section 3.2.Q are carried out with respect to the licensing of equivalent
      amounts of perpetual and forty (40) year term ROW and to ensure that each
      party has sufficient rights for the uses of its respective portions of the
      System as contemplated by this Contract.

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      The parties further agree that upon the completion of the last Link they
      will take such action as may be required to ensure, to the extent
      reasonably practicable, that the AT&T ROW licensed in perpetuity to
      Builder, and the Builder ROW and Builder Affiliate ROW and Public ROW
      acquired by Builder or AT&T furnished or licensed hereunder, is contiguous
      and allocated among Links so as to endeavor to allow for the highest
      percentage of perpetual ROW as possible in individual Links as chosen by
      Builder pursuant to Section 3.2.Q.

3.3 Supply of the System or any part thereof:

      3.3.A Prior to construction of each Link of the System, Builder will
      provide AT&T notice of and permit AT&T to participate in Builder's
      pre-construction meeting(s) or the equivalent. Such meeting(s) will occur
      at least fourteen (14) calendar days prior to commencement of the
      construction of the System if reasonably practical, but no less than three
      (3) days from receipt of notice by AT&T, and will include Builder's
      employees and subcontractors, if appropriate. If upon execution of the
      Contract construction of the System has commenced, Builder's employees and
      its subcontractors, if appropriate, will meet with AT&T within fourteen
      calendar (14) days of said Effective Date to discuss the construction.

      3.3.B Builder shall, at Builder's sole cost and expense, be responsible
      for and shall effect the design, engineering, installation and
      construction of the System and the installation of The Cable, as well as
      restoration of properties, settlement of damages and/or other claims in
      conjunction with construction except claims caused by AT&T or its
      contractors.

      3.3.C In the event construction activity occurs in the vicinity of an
      active AT&T cable, whether on AT&T ROW or Public ROW, the Builder is not
      to perform any excavation activity, including but not limited to, digging,
      plowing, and boring, without the presence of AT&T personnel or designee or
      AT&T's written authorization to proceed. AT&T personnel have the right, at
      its option, to be present during all excavation operations to assure
      active cable is not disrupted. In the event AT&T fails to provide a
      representative to observe construction or other activity after having
      received forty-eight (48) hours notice, Builder may commence with its
      proposed excavation activity.

      3.3.D AT&T will be responsible for the perfecting of AT&T Private ROW and
      the splicing of and testing of AT&T and Builder Fibers.

      3.3.E AT&T's requirements in regard to the design, engineering,
      installation and construction of the AT&T System are set forth in Exhibit
      E: Standard Engineering, Construction and Fiber Specifications attached
      hereto.

      3.3.F The AT&T System shall consist of the AT&T Conduits, the AT&T Sites,
      the First Conduit, and The Cable. The System also includes, but is not
      limited to, associated manholes, handholes, buried warning tape, above
      ground markers, and cable terminations and the additional requirements
      contained in Exhibit E.

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      3.3.G Ownership of System. Upon completion, the System shall be owned as
      follows:

      (i) AT&T shall own the following facilities:

          o  AT&T Conduit
          o  AT&T Fibers
          o  AT&T Sites
          o  The First Conduit and The Cable (provided that such ownership of
             The Cable does not affect the rights of the parties and their
             respective transferees with respect to the use of, and access to
             Fibers owned, leased or licensed by such persons which are
             contained within The Cable, subject to the provisions of this
             Contract, including without limitation Sections 3.7 and 3.8,
             ARTICLE 11 and Exhibit C)

    (ii)  Builder shall own the following facilities:
          o  Builder Conduit
          o  Builder Fibers which shall not be greater in number than AT&T
             Fibers in any given Link
          o  Builder Sites

   (iii) AT&T shall own all necessary manholes, handholes and associated items
         required for the:
         o  AT&T Conduit,
         o  AT&T Fibers and
         o  AT&T Sites

   (iv)  Builder shall own all necessary manholes, handholes and associated
         items required for the:
         o  Builder Conduit,
         o  Builder Fibers and
         o  Builder Sites

   (v)   The parties shall each own Disposition Fibers in the quantities set
         forth in Exhibit B.

   (vi)  Ownership of right of way easements other than Builder Affiliate
         ROW shall be vested in AT&T. Builder shall be granted a license in
         the form attached as Exhibit L1 or L2, as applicable, for a term
         co-equal to the duration of AT&T's ownership interest, to utilize
         the ROW for the installation, operation, maintenance, repair, and
         replacement of telecommunication facilities.

3.4 Supply of the AT&T Conduit, Builder Conduit and the First Conduit

      3.4.A The Builder will be responsible for all engineering, design, route
      survey, construction, procurement, right-of-way acquisition and permitting
      (except ROW perfection along Route Segments built on AT&T ROW) which are
      required to construct the System, according to standards acceptable to
      AT&T as set forth in Exhibit E.

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      3.4.B Placement of Conduit, handholes, manholes, above ground signs,
      buried warning tape, and installation of The Cable in the First Conduit
      will be carried out by Builder in adherence to Exhibit E unless there is a
      specific written agreement to the contrary with AT&T. The AT&T Conduit and
      the First Conduit shall be constructed with handhole and manhole
      structures which are separate and distinct from the Builder Conduit. The
      handhole and manhole structures for the AT&T Conduit and First Conduit
      will be connected to the adjacent manhole and handhole structure for the
      Builder Conduit system with a single Conduit at each splice handhole or
      manhole for the purpose of conveying Builder Fibers into the Builder
      Conduit.

      3.4.C Supply of the Conduit: Builder will be responsible to procure and
      place Conduit governed by this Contract and associated items required.

3.5 Supply of The Cable:

      3.5.A Supply of The Cable: Builder will act as AT&T's agent for the
      purpose of ordering the AT&T Fibers from AT&T's vendor under the terms and
      conditions of AT&T's contract with AT&T's vendor. Builder will order the
      Builder Fibers from Builder's vendor under the terms and conditions of the
      Builder's contract with Builder's vendor. With respect to Fibers included
      in The Cable, the AT&T Fibers and the Builder Fibers will be compatible
      and will be included in the same sheath. Builder will also act as AT&T's
      agent for the purpose of ordering the Maintenance Cable as defined in
      Section 1.28 of this Contract.

      3.5.B Builder, acting as agent for AT&T and on its own behalf, will order
      the cable for the length of each Link and an additional two percent (2%)
      for the purpose of establishing restoration reels for maintenance
      purposes. The cost of these maintenance reels will be shared on a prorated
      basis according to the split of fibers in The Cable.

      3.5.C Splicing and Testing. AT&T shall retain the sole right to splice and
      test its own fiber cable, and will splice and test any non-AT&T fibers in
      The Cable at the price set forth in Exhibit B. This will not preclude
      AT&T's right to assign this work to a third party, if the third party is
      reasonably acceptable to the Builder. Splicing and testing parameters are
      set forth in Exhibit D: Fiber Cable Splicing, Testing and Acceptance
      Procedures attached hereto. Builder will notify AT&T at least fourteen
      (14) calendar days prior to placement of The Cable, to allow AT&T to
      schedule splicing activity. Builder will place The Cable in the First
      Conduit.

3.6   Regeneration Buildings and Sites. Except as otherwise provided in Section
      3.3.G(vi) of this Contract, Builder agrees to acquire the necessary land
      for the Sites. The cost of such land is part of Builders' price as
      described in Exhibit B. The Builder shall acquire land for sites of
      sufficient size to accommodate the regeneration or optical amplifier
      (OP/AMP) building needs of each party. AT&T requires a minimum of 10,000
      square feet of land for OP/AMP Sites, and a minimum of 20,000 square feet
      of land for regeneration or junction sites for AT&T's exclusive use.
      Regeneration or junction-sized sites are expected to be required for

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      every fifth or sixth site. The minimum square footage does not include
      land necessary for vehicle access (driveways) from public roadways,
      parking, commercial power, ground fields, landscaping and permitting
      agency requirements. Each party shall designate the type and size of
      regeneration building for its facilities and separately bear the cost of
      such buildings unless agreement is made for construction of partitioned
      buildings with separate access. The Builder will work with AT&T to develop
      these Sites to ensure they meet all the requirements and specifications of
      AT&T. The spacing shall be forty-eight (48) to fifty-two (52) miles or as
      mutually agreed upon by the parties.

3.7   Marketing of Fiber: The parties' rights and obligations with respect to
      marketing of Disposition Fiber and other property exchanges, and
      maintenance of marketed Fibers are set forth in Exhibit G attached.

3.8   Route Maintenance:

      3.8.A [INTENTIONALLY OMITTED]

      3.8.B AT&T will be solely responsible for operations and maintenance on
      AT&T ROW and property except as may be specified by separate agreement.

      3.8.C During the term hereof, maintenance of the System will be performed
      in accordance with Exhibit C hereof. In the event the maintaining party
      fails to perform its maintenance obligations with respect thereto, to the
      maximum extent the underlying ROW rights permit the non-maintaining party
      may assume the duties of the maintaining party upon thirty (30) days
      written notice with respect to such obligation and perform such
      maintenance as may be necessary at the expense of the maintaining party.

      3.8.D Access to ROW. Either party may require access to the other's ROW.
      The party requiring access will contact the other party and seek its
      reasonable approval to access such ROWs or easements, and will provide
      sufficient notice (in no case less than forty-eight (48) hours) of what it
      actually intends to do on such ROWs or easements, except in the event of
      emergencies (in which case notification will be made as soon as possible,
      but in any event prior to entry). With respect to ROW acquired following
      the Effective Date of this Contract both parties will use commercially
      reasonable efforts and due diligence to avoid access restrictions imposed
      by third parties that would prevent access by either party to their
      respective systems.

ARTICLE 4: Delivery of Link

4.1   For AT&T and Builder, delivery of the respective deed, IRU or other
      instrument, as the case may be, shall occur on a date no later than the
      Builder Completion Date. Said Acceptance shall be reflected in a document
      executed by the parties to be attached hereto as Exhibit F: Acceptance
      Letter by AT&T.

4.2   Construction Plan

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      4.2.A. Within sixty (60) days after the Effective Date of this Contract,
      Builder shall submit to AT&T a construction plan for each Link subject to
      this Contract, detailing Builder's plan to construct the Links, including
      the dates at which the Builder plans to start the specific parts of the
      work (including but not limited to ROW acquisition, engineering, securing
      permits, construction and cable placement) necessary to construct the
      Links by the respective Builder Completion Date for the Link as set forth
      in Exhibit B.

      4.2.B. After Builder has submitted the construction plan, Builder shall
      provide a monthly progress report to AT&T detailing implementation of the
      construction plan which shall include, among other things, Gantt Charts or
      the like, projections of work required to complete project and notice of
      any anticipated events that may materially delay completion of any Link.
      On a monthly basis, Builder will provide AT&T an annual fiber cable
      ordering forecast broken down by month. In addition, Builder shall
      promptly notify AT&T in the event that actual cable purchases in any month
      are less than 90%, or more than 110%, if projected fiber cable purchases
      for such month to insure that cycle time and pricing is not affected. AT&T
      and Builder may hold monthly progress meetings to review and discuss the
      construction plan.

      4.2.C [INTENTIONALLY OMITTED]

      4.2.D. If the actual measured progress for any particular Link is delayed
      from the baseline construction plan provided by Builder by a period of
      time greater than the sum of the applicable cure period plus the
      applicable liquidated damages period for reaching the Builder
      Substantially Complete Date as set forth in ARTICLE 5, and it is probable
      that Builder will be unable to complete its obligations referred to in the
      definition of Builder Substantially Complete Date by the applicable
      Builder Substantially Complete Date set forth in Exhibit B plus the
      applicable cure period and applicable liquidated damages period, then AT&T
      may at its option (i) deliver a notice of default pursuant to Section 21.1
      (but only with respect to that particular Link); (ii) grant Builder one or
      more extensions to eliminate the delay without prejudice to AT&T's right
      after such extension period to exercise its option under either clause (i)
      or clause (iii) of this sentence; or (iii) assume authority over the
      construction and finish the construction of the Link by whatever method
      AT&T deems expedient. If AT&T opts to assume construction authority,
      Builder will be responsible for the difference between the total costs
      AT&T incurs less the contract price for the particular Link. AT&T will
      make commercially reasonable efforts to mitigate such difference in order
      to keep the total construction costs consistent with the Builder's
      estimates for the construction costs of the particular Link. The
      underlying facts giving rise to AT&T's exercise of one or more of its
      options under this Section 4.2.D shall not, in and of themselves,
      constitute a material default with respect to this Contract as a whole;
      provided that nothing in this Section 4.2.D amends or alters the rights or
      obligations of the parties under any other provision of this Contract.

ARTICLE 5: Completion of Links

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5.1   The Builder Substantially Complete Date for all ROW conveyance,
      engineering, construction, and installation of each Link of the AT&T
      System shall be as set forth in Exhibit B. Builder shall complete all
      engineering, construction and installation obligations by the Builder
      Substantially Complete Date for each Link. If Builder anticipates that
      Builder will not be able to complete such obligations with respect to any
      Link by the Builder Substantially Complete Date, Builder shall promptly
      provide written notification to AT&T and shall designate representatives
      to meet and review the status of the Builder's construction schedule.

5.2   For the following Links, Arlington, VA to Greensboro, NC, Fort Worth, TX
      to Phoenix, AZ, Phoenix, AZ to Blythe, CA., Blythe, CA. to San Diego, CA
      and San Diego, CA to Los Angeles, CA: if Builder fails to perform its
      obligations under Section 5.1 with respect to any of the aforementioned
      Links by the respective Builder Substantially Complete Dates as set forth
      in Exhibit B, Builder will be deemed as having missed the delivery date
      and must notify AT&T and perform its obligations under Section 5.1 with
      respect to the Link as soon as possible. After having missed the Builder
      Substantially Complete Date, Builder will be granted a cure period of up
      to ninety (90) days after the Builder Substantially Complete Date. If
      delay exceeds ninety (90) days, AT&T shall be entitled to deduct as
      liquidated damages from the price of the Link an amount equal to $10,000
      per day beginning on the ninety-first (91st) day through the one hundred
      twentieth (120th) day of delay, $15,000 per day beginning on the one
      hundred twenty-first (121st) day through the one hundred fiftieth (150th)
      day of delay, and $20,000 per day beginning on the one hundred fifty-first
      (151st) day through the one hundred eightieth (180th) day of delay until
      the Builder performs its obligations under Section 5.1 with respect to
      such Link, up to a maximum of three percent (3%) of the total price of the
      Link. If Builder is not able to deliver before the one hundred
      eighty-first (181st) day of delay is reached, AT&T at its sole discretion
      may (i) deliver a notice of default pursuant to Section 21.1 or (ii) grant
      Builder one or more extensions to perform its obligations under Section
      5.1 with respect to such Link for a period or periods to be specified by
      AT&T without prejudice to AT&T's right to thereafter exercise its option
      under clause (i) if the Link has not been delivered. If the amount owed by
      Builder exceeds remaining AT&T payments, Builder shall promptly pay such
      amount to AT&T.

5.3   For the following Links, Atlanta, GA to Jacksonville, FL, Ellisville, FL
      to New Orleans, LA, Ellisville, FL to Jacksonville, FL, New Orleans, LA to
      Houston, TX, Tulsa, OK to Kansas City, MO and Kansas City, MO to St.
      Louis, MO with delivery dates as set forth in Exhibit B, if Builder fails
      to perform its obligations under Section 5.1 with respect to any of the
      aforementioned Links by the respective Builder Substantially Complete
      Dates, Builder will be deemed as having missed the delivery date and must
      notify AT&T and perform its obligations under Section 5.1 with respect to
      the Link as soon as possible. After having missed the Builder
      Substantially Complete Date, Builder will be granted a cure period of up
      to forty-five (45) days after the Builder Substantially Complete Date. If
      delay exceeds forty-five (45) days, AT&T shall be entitled to deduct as
      liquidated damages from the price of the Link, an amount equal to $10,000
      per day beginning on the forty-sixth (46th) day through the seventy-fifth
      (75th) day of delay, $15,000 per day beginning on the seventy-sixth (76th)
      day through the one hundred and fifth (105th) day of delay, and $20,000
      per

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      day beginning on the one hundred and sixth (106th) day through the one
      hundred thirty-fifth (135th) day of delay until the Builder perform its
      obligations under Section 5.1 with respect to such Link, up to a maximum
      of three percent (3%) of the total price of the Link. If Builder is not
      able to deliver before the one hundred thirty-sixth (136th) day of delay
      is reached, AT&T at its sole discretion may (i) deliver a notice of
      default pursuant to Section 21.1 or (ii) grant Builder one or more
      extensions to perform its obligations under Section 5.1 with respect to
      such Link for a period or periods to be specified by AT&T without
      prejudice to AT&T's right to thereafter exercise its option under clause
      (i) if the Link has not been delivered. If the amount owed by Builder
      exceeds remaining AT&T payments, Builder shall promptly pay such amount to
      AT&T.

5.4   For the following Links with delivery dates in year 2001, Jacksonville, FL
      to Orlando, FL, Houston, TX to San Antonio, TX, San Antonio, TX to Austin,
      TX and Austin, TX to Ft. Worth, TX as set forth in Exhibit B: if Builder
      fails to perform its obligations under Section 5.1 with respect to any of
      the aforementioned Links by the respective Builder Substantially Complete
      Dates, Builder will be deemed as having missed the delivery date and must
      notify AT&T and perform its obligations under Section 5.1 with respect to
      such Link as soon as possible. After having missed the Builder
      Substantially Complete Date, Builder will be granted a cure period of up
      to thirty (30) days after the Builder Substantially Complete Date. If
      delay exceeds thirty (30) days, AT&T shall be entitled to deduct as
      liquidated damages from the price of the Link an amount equal to $10,000
      per day beginning on the thirty-first (31st) day through the sixtieth
      (6Oth) day of delay, $15,000 per day beginning on the sixty-first (61st)
      day through the ninetieth (9Oth) day of delay, and $20,000 per day
      beginning on the ninety-first (91st) day through the one hundred twentieth
      (120th) day of delay until the Builder performs its obligations under
      Section 5.1 with respect to such Link, up to a maximum of five percent
      (5%) of the total price of the Link. If Builder is not able to deliver
      before the one hundred twenty-first (121st) day of delay is reached, AT&T
      at its sole discretion may (i) deliver a notice of default pursuant to
      Section 21.1 or (ii) grant Builder one or more extensions to perform its
      obligations under Section 5.1 with respect to the Link for a period or
      periods to be specified by AT&T without prejudice to AT&T's right to
      thereafter exercise its option under clause (i) if the Link has not been
      delivered. If the amount owed by Builder exceeds remaining AT&T payments,
      Builder shall promptly pay such amount to AT&T.

5.5   If Builder completes a Link at least thirty (30) days prior to the Builder
      Substantially Complete Date, the Builder shall be entitled to an amount
      equal to one percent (1%) of the contract price of that Link per each
      thirty (30) day period for which that Link is early, not to exceed two
      percent (2%) as an incentive to Builder.

5.6   Testing and Acceptance of The Cable:

      5.6.A. Except as provided below, AT&T shall test and verify the AT&T
      Fibers and Builder Fibers in accordance with the procedures specified in
      Exhibit D and Exhibit E. AT&T shall provide the Builder with five (5)
      business days written notice prior to the first day of testing. Fiber
      acceptance testing shall progress along each Route as cable splicing by
      AT&T progresses, so that test results may be

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      reviewed in a timely manner. Within fourteen (14) calendar days of the
      conclusion of the fiber acceptance testing of AT&T Fibers and Builder
      Fibers, AT&T shall provide the Builder with a copy of the test results.
      Builder shall have the right to observe all testing activity and the right
      to retain a third party to perform testing for its own behalf. In the
      event of a discrepancy between AT&T and Builder testing results, the
      parties shall mutually agree upon a disinterested third party whose
      decision shall be binding. The party whose test results are found to be
      inaccurate shall bear the costs of the disinterested third party testing.

      5.6.B AT&T shall notify Builder within seven (7) calendar days in the
      event the fiber acceptance testing results show that The Cable is not
      installed or operating within the parameters of the applicable
      specifications for a Route Section. The Builder shall within fourteen (14)
      calendar days take such action as shall be reasonably necessary with
      respect to such portions of The Cable that are not installed or do not
      operate within the parameters of the applicable specifications contained
      in Exhibits D and E due to cable damage (not occurring as the result of
      splicing or testing of the splices) to bring operating standards of such
      portions of The Cable that affect the AT&T Fibers and Builder Fibers
      within such parameters. The Builder shall notify AT&T upon completion to
      allow for re-testing of the Route Section. After taking such actions, AT&T
      shall provide Builder with a copy of the new test results within fourteen
      (14) calendar days of the conclusion of the fiber acceptance testing. The
      cycle described above of testing, taking corrective action and re-testing
      shall take place as many times as necessary to ensure that the AT&T Fibers
      and Builder Fibers operate within the parameters of the applicable
      specifications. Any non-conformity to applicable specifications resulting
      from splicing or testing of the splices will be remedied by AT&T within
      fourteen (14) calendar days of AT&T's receipt of the results of the fiber
      testing indicating such non-conformity.

      5.6.C In the event The Cable is damaged during construction, Builder shall
      replace the damaged section of The Cable.

      5.6.D If the fiber acceptance testing results are within the parameters of
      the specifications in Exhibit D and the final restoration of the Route is
      complete to the satisfaction of AT&T and all permitting or granting
      parties, AT&T shall, within seven (7) calendar days provide the Builder
      with a written notice accepting the AT&T Fibers and Builder Fibers. Upon
      the receipt of AT&T's written approval of such test results, the Builder
      shall have seven (7) calendar days to provide written notice stating the
      reasons the test results are unacceptable for use by Builder. In the case
      of such written notice by Builder rejecting the fiber acceptance testing,
      AT&T shall retest up to two (2) additional tests on AT&T Fibers and
      Builder Fibers in the manner set forth in Exhibit D.

      5.6.E. After the approval by AT&T and Builder of the test results referred
      to in Section 5.6.D above, the sole rights and remedies of the Builder and
      AT&T, respectively, with respect to any defect in or failure of AT&T's and
      Builder Fibers respectively to perform in accordance with the applicable
      vendor's or manufacturer's specifications shall be limited to the
      particular vendor's or

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      manufacturer's warranty with respect thereto, which warranty, to the
      extent permitted by the terms thereof with respect to Builder Fibers, is
      hereby assigned to the Builder. Notwithstanding the foregoing, Builder
      will comply with its obligations pursuant to Section 22.1 below and AT&T
      will comply with its obligations pursuant to Section 22.2 below.

      5.6.F As-Built Drawings. Within one hundred twenty (120) days after
      Certification, Builder shall provide AT&T with as-built drawings and
      graphic guidelines for AT&T Cable Route Engineering Drawings provided to
      Builder as set forth in Exhibit E. Builder shall provide AT&T with
      construction drawings within thirty (30) days of the Builder Substantially
      Complete Date.

      5.6.G Performance Period. The Performance Period of a Link will begin on
      that date that AT&T certifies the Builder is Substantially Complete for
      said Link. AT&T will certify the Builder Substantially Complete Date when
      Builder has placed all the conduit, placed all the manholes / hand-holes,
      placed all the cable, acquired the site land for regenerator and Op/Amps
      locations, conveyed all ROW documents and other rights to AT&T and, after
      said performance, all splicing and testing work can be completed. During
      the Performance Period, AT&T will validate that all the work by the
      Builder has been completed to the satisfaction of AT&T and that the AT&T
      System within said Link performs in accordance with Exhibits D and E
      during the Performance Period.

      5.6.H Final Acceptance. The Final Acceptance of a Link by AT&T will occur
      when said Link has performed to the satisfaction of AT&T completed to the
      standards set forth in Exhibits C, D and E and the other requirements of
      this Contract. AT&T will by written notification to Builder acknowledge
      that Final Acceptance has occurred and that final payment for the Link
      will be sent to the Builder as set forth in ARTICLE 10.

      5.6.I Title And Risk Of Loss To Material. Title to any and all material
      furnished by Builder shall vest in AT&T when the same is actually
      installed or incorporated in the AT&T System. Builder shall retain risk of
      loss and damage to such material until each Link is completed and accepted
      by AT&T.

      5.6.J Use Of Completed Portions. AT&T shall have the right to take
      possession of and use any completed or partially completed portions of any
      Link, even though the time for completing the entire Link or such portions
      may not have expired. Such taking of possession and use shall not be
      deemed an acceptance of any completed or partially completed portions of
      the Link not done in accordance with Exhibit E and the other requirements
      of this Contract.

5.7   It is understood and agreed that Builder will not be in default nor be
      subject to the payment of liquidated damages for any delays or failures in
      its performance of its obligations hereunder to the extent that such
      delays or failures are solely attributable to the failure of AT&T to
      perform any acts or furnish any materials or supplies which AT&T is
      obligated to perform or supply pursuant to the terms of this Contract, it
      being understood that the time for Builder's performance shall be

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      extended only for a period of time equivalent to the time lost, but no
      extension shall be made unless written request for the same is made by
      Builder within fourteen (14) days of the date Builder commences to suffer
      such delay or failure.

ARTICLE 6: Term

6.1   Subject to the provisions of ARTICLE 6: Termination, the term of this
      Contract ("Term") will begin upon the Effective Date of this Contract and
      end upon the expiration of the useful life of the last Link which shall
      not be less than forty (40) years. By mutual agreement, the parties may
      extend the term of this Contract.

ARTICLE 7: Termination

7.1.  Either party may terminate this Contract in whole or with respect to any
      affected Link, for the other party's material default not cured pursuant
      to ARTICLE 21: Default.

7.2   In the case of termination by Builder, AT&T's liability shall be limited
      to (i) payment of the amount due from AT&T to Builder pursuant to this
      Contract for work performed and materials purchased up to and including
      the date of termination, plus (ii) up to three percent (3%) of the
      applicable contract price set forth in Exhibit B for any terminated Link
      for the reasonable and actual costs incurred by Builder solely in
      performance of construction activities on behalf of AT&T under this
      Contract (not usable in Builder's other operations or salable to Builder's
      other customers), in process at the date of notice of termination, less
      any salvage value for material, provided Builder substantiates such cost
      with proof satisfactory to AT&T; and (iii) if Builder has completed the
      installation of a minimum of ten percent (10%) of the total conduit to be
      constructed between any two adjacent AT&T POPs as listed in Exhibit B on
      any affected Link, AT&T will work with Builder to complete all incomplete
      Route Sections between such adjacent AT&T POPs based upon the construction
      schedule in place at the time of default, subject to the conveyance by
      each party to the other of the rights contemplated in ARTICLE 8.

7.3   In the case of termination by AT&T, subject to such rights of set off,
      counterclaim or recoupment as AT&T may have, AT&T will pay (i) the amount
      due to Builder for work performed and materials purchased up to and
      including the date of termination, plus (ii) up to three percent (3%) of
      the applicable contract price set forth in Exhibit B for any terminated
      Link for the reasonable and actual costs incurred by Builder solely in
      performance of construction activities on behalf of AT&T under this
      Contract (not usable in Builder's other operations or salable to Builder's
      other customers), in process at the date of notice of termination, less
      any salvage value for material, provided Builder substantiates such cost
      with proof satisfactory to AT&T; and (iii) if Builder has completed the
      installation of a minimum of ten percent (10%) of the total conduit to be
      constructed between any two adjacent AT&T POPs as listed in Exhibit B on
      any affected Link, at AT&T's option AT&T shall have the right to work with
      Builder to complete all incomplete Route Sections between such adjacent
      AT&T POPs based upon the construction schedule in place at the time of
      default, subject to the conveyance by each party to the other of the
      rights contemplated in ARTICLE 8.

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7.4   In the event of the termination of any Link, all designs, drawings, plan,
      models, studies, computer programs, engineering data, specifications, test
      results, reports and other data prepared by Builder hereunder or in
      contemplation hereof with respect to any such incomplete Link shall become
      the joint property of Builder and AT&T, upon payment due for the work
      performed. Each party shall execute and deliver at the other party's
      request all documents necessary to establish and maintain such rights and
      property.

7.5   Notwithstanding the foregoing, no termination of this Contract shall
      affect the rights or obligations of any party hereto with respect to the
      granting of all ROW or IRU rights, licenses or easements, as well as any
      other rights, licenses or authorizations necessary for any construction
      and continuous use of any ROW for not less than forty (40) years to the
      other party where Route Segment construction has been completed prior to
      the effective date of termination or with respect to any payment hereunder
      for services rendered prior to the date of termination. For purposes of
      this Section 7.5, "Route Segment construction" will be deemed to be
      "completed" when the required AT&T Conduit has been placed in the
      applicable ROW. With respect to any Link that has not been completed at
      the time of termination: (a) the non-defaulting party shall have the right
      to (i) continued utilization of ROW of the defaulting party, and the
      defaulting party will assign the appropriate ownership interest in such
      ROW (together with IRU rights or easements, as well as any other rights,
      licenses or necessary authorizations) to the extent necessary to permit
      the non-defaulting party to construct and operate its respective System,
      (ii) complete those Links with third parties to replace the defaulting
      party and (iii) construct 6 conduits on the defaulting party's ROW for its
      own (and/or such third parties) use on Links that remain unfinished; and
      (b) in the event that either party (whether or not the defaulting party)
      has completed at least 80% of total conduit to be constructed with respect
      to any Link, such party shall continue to have the right to access Rights
      of Way of the other party for purposes of completing each such Link. The
      obligations of the parties under this Contract which by their nature would
      continue beyond the termination of this Contract including, by way of
      illustration only and not limitation, this ARTICLE 7 and the Articles
      entitled Indemnification, Insurance, Taxes, Confidentiality and
      Arbitration (ARTICLES 13, 14,15,19 and 23) shall survive termination of
      this Contract.

7.6   In the case of termination or otherwise, neither party will be liable
      hereunder to the other for consequential damages in the nature of harm to
      business, loss of use, lost revenues or lost profits; provided however,
      this Section 7.6 shall not apply to either party's obligations under
      ARTICLES 19 and 20 or to the Indemnifying Party's obligation under ARTICLE
      13 to indemnify, defend and hold harmless the Indemnified Party from and
      against claims, demands, actions or liabilities asserted by or incurred to
      third parties.

ARTICLE 8: Permits, Physical Plant and Required Rights

8.1   As of the commencement of construction of the applicable Route Segment,
      Builder will have obtained and transferred to AT&T and will cause to
      remain effective in

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      perpetuity all rights, including without limitation, licenses, IRUs,
      easements, authorizations, and other agreements on private ROW necessary
      for the use of conduit, cable, wire or other physical plant facilities, as
      well as any other such rights, licenses, authorizations, rights-of-way and
      other agreements necessary for the installation and use of the System
      except those to be provided by AT&T under Section 8.2. If Builder cannot
      obtain such private ROW in perpetuity, Builder shall be responsible for
      ensuring such private ROW have renewal terms for a minimum of 40 years.
      For right of way not acquired by means of private easement (including but
      not limited to any necessary state, federal, or tribal authorization or
      environmental permits) Builder shall, at its sole cost, exercise any
      renewal right thereunder, or otherwise acquire such extension, additions
      and/or replacements as may be necessary, in order to cause the stated term
      thereof to be continued until a date that is not earlier than forty (40)
      years from the Effective Date of this Contract. The minimum Term shall be
      the period from the date of this Contract until the fortieth (40th)
      anniversary of the Effective Date.

8.2   As of the commencement of construction of the applicable Route Segment on
      AT&T ROW, AT&T will have obtained and will cause to remain effective in
      perpetuity all rights, including without limitation, licenses, IRUs,
      easements, authorizations, and other agreements on private right of way
      necessary for the use of conduit, cable, wire or other physical plant
      facilities, as well as any other such rights, licenses, authorizations
      (including but not limited to any necessary state, federal or tribal
      authorizations or environmental, permits), rights-of-way and other
      agreements necessary for the installation and use of the System. If AT&T
      cannot obtain such private ROW in perpetuity, AT&T shall be responsible
      for ensuring such private ROW have renewed terms for a minimum of 40
      years. For right of way not acquired by means of private easement
      (including but not limited to any necessary state, federal, or tribal
      authorization or environmental permits) AT&T shall, at its sole cost,
      exercise any renewal right thereunder, or acquire such extension,
      additions and/or replacements as may be necessary, in order to cause the
      stated term thereof to be continued until a date that is not earlier than
      forty (40) years from the Effective Date of this Contract. The minimum
      Term shall be the period from the date of this Contract until the fortieth
      (40th) anniversary of the Effective Date.

8.3   In the event of either party's refusal or claimed inability to take the
      steps described in this ARTICLE 8, Sections 8.1 and 8.2, as applicable,
      such circumstances shall be communicated to the other party in writing and
      unless such circumstance is due to acts or omissions of the other party,
      the other party shall be entitled to obtain specific performance from the
      non-compliant party in addition to any other remedies available to the
      other party pursuant to this Contract, including but not limited to, the
      ownership or assignability right of ROW already obtained by the
      non-compliant party.

ARTICLE 9: Relocation of Cable, Conduit, Manholes or Buildings

9.1   In the event all or part of the Route Section is to be relocated, the
      party designated as the Service Provider (SP) for the applicable Route
      Section pursuant to Exhibit C is responsible for performing any
      relocation. Any such relocation: (i) shall be

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      constructed and tested in accordance with the specifications and
      requirements set forth in Exhibits D and E and (ii) shall not result in a
      material change to the performance of the system as set forth in Exhibits
      D and E unless otherwise agreed by the parties.

9.2 If a relocation is required

      a)    by a third party with the legal requisite authority (including,
            without limitation, the grantor of a right to either of the parties
            and including a party exercising condemnation authority) or

      b)    by either of the parties hereto:

            The SP is required to provide the party designated as the Service
            Recipient (SR) for the applicable Route Section pursuant to Exhibit
            C sixty (60) days prior notice of any such relocation, whenever
            possible, and shall have the obligation to proceed with such
            relocation, including, but not limited to, the right to determine
            the extent of, the timing of, and methods to use for such
            relocation.

      c)    by one of the parties for its own convenience, the other party may
            choose to exclude its portion of the System from the proposed
            relocation.

      d)    In the case of Section 9.2.C above, where one of the parties
            establishes a different route, maintenance arrangements for the
            newly established route will be agreed mutually subsequently.

9.3   If one of the parties to this contract relocates; i) at the option of that
      party or ii) as a result of a breach or a failure of that party's
      obligations under this Contract, the party requiring the relocation is
      responsible for the total cost of the relocation. If the relocation is
      required for reasons other than those set forth in i) & ii), above then
      both parties shall reimburse the SP for their proportionate share of all
      relocation costs. The relocation costs shall include, but are not limited
      to Conduits, cables and Fibers spliced and tested based on the
      proportionate number of each party's Conduits, cables and Fibers, as the
      case may be, present in the Route Section.

9.4   In the event that a third unrelated party, including without limitation
      third parties contracted under Exhibit J reimburses the SP for all of or
      any portion of the cost to relocate the System, then this reimbursement
      amount shall be distributed on the basis of the procedure set forth in
      Section 9.4.A. The SP agrees that no request for reimbursement from the
      other party shall be made unless the other party's proportional amount of
      the relocation costs for such project exceeds Five Thousand Dollars
      ($5,000.00). The SP shall deliver to the parties updated as-built drawings
      as set forth in Exhibit E and ARTICLE 5 of this Contract with respect to
      any relocated portion of the System not later than ninety (90) days
      following the completion of such relocation.

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      9.4.A. Any reimbursement received pursuant to Section 9.4 will be
      distributed by the SP as follows:

            First, the SP will be reimbursed for any expenses not provided for
            by the parties.

            Secondly, any remaining sums that pertain to expenses associated
            with the relocation of the Fiber(s), cables or Conduits will be
            split between the parties based on the proportionate number of each
            party's Conduits, cables and Fibers, as the case may be, present in
            the Route Section or part being relocated.

9.5   Should the proportionate amount of relocation costs exceed Five Thousand
      Dollars ($5,000.00), the SP must provide the SR with invoices for actual
      charges for engineering, construction and material. Each party agrees to
      pay for any and all of those actual expenses attributable to any unique
      work, supplies or material required solely for that party's System. Each
      party will absorb its respective normal corporate overhead charges and
      internal labor charges on all material, engineering and construction
      expense and for any processing expenses incurred in the administration of
      the relocation.

9.6   The SP's invoice for the other party's proportional amount of the
      relocation costs shall be paid within thirty (30) days after receipt of
      the invoice by such party. Upon request by such party, the SP will
      promptly provide the necessary substantiating information, which will
      allow the other party to verify the accuracy and reasonableness of the
      invoice. The SR shall have the right of reasonable access to audit the
      SP's substantiating information upon ten-(10) days written notice to the
      SP.

9.7   The SR has the right to review and approve the SP's relocation plans
      fourteen (14) days prior to any relocation activity.

ARTICLE 10: Payment Terms

10.1  Fiber Cable. The parties are responsible to pay their respective fiber
      vendor separately.

      10.1A Invoices. Except with respect to the advance payment set forth in
      Section 10.2.A below, the right of Builder to receive any payments for
      construction-related activities under this Contract shall be conditioned
      upon (1) Builder's compliance with the provisions of Section 10.1.B: Liens
      and (2) an invoice establishing the dollar value, as based on the mileage
      or other applicable basis of each Link of the AT&T System completed in the
      preceding month or period which such invoice purports to cover, and
      presented to AT&T before the amount so invoiced shall be payable. Such
      invoices or payments shall not be construed as an acceptance of any part
      of a Link, nor shall such payments, including final payment, or acceptance

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      of any Link lessen the responsibility of Builder as provided in ARTICLE
      22: Warranty or any other Article of this Contract.

      10.1 B Liens. Each Link of the AT&T System called for by this Contract
      shall be performed, constructed, finished and delivered to AT&T free from
      all claims, liens and charges whatsoever. Except with respect to the
      advance payment set forth in Section 1O.2.A below, for each Link the
      invoice which would complete billing for any calendar quarter (e.g., the
      third, sixth, and ninth invoice in the case of monthly billing) (the
      "Quarterly Invoice") shall be accompanied by (1) Builder's sworn statement
      listing all persons Builder has caused to deliver or furnish labor or
      materials in the performance of the work (including but not limited to the
      Builder, laborers, architects, engineers, designers, craftsmen,
      materialmen, other subcontractors and subcontractors' subcontractors at
      all tiers), stating each such person's full name and address, the original
      agreement sum, the amount previously paid, being paid currently, and
      remaining to be paid currently, and remaining to be paid under each such
      contract and stating that Builder has inspected all such labor and
      material (except as may be otherwise set forth in Section 5.6 above) and
      found it to comply with this Contract and all applicable codes and
      specifications; and (2) a waiver of lien properly executed by each such
      person to cover the amount and date of the payment to that person
      reflected in the invoice. Such waiver shall be in the form of Exhibit M,
      annexed to this Contract. For example, a Quarterly Invoice dated in March
      may cover work performed and material supplied in February; the sworn
      statement and lien waiver shall acknowledge receipt of payment for labor
      performed and material supplied in February and also the preceding
      December and January.

      As a condition precedent to the payments described in Sections 1O.2.D and
      1O.2.E below for each Link under this Contract, AT&T shall require Builder
      to provide AT&T the Builder's sworn statement and full waivers of liens
      properly executed by Builder and all persons Builder has caused to deliver
      or furnish labor or materials in the construction of such Link, as set
      forth above in this Article.

      At the written request of AT&T, Builder shall, by bonding or otherwise,
      secure discharge of all liens within 30 (thirty) days. If any liens remain
      unsatisfied after all payments are made, Builder shall reimburse AT&T for
      all monies that the latter may be compelled to pay in discharging all
      liens, including all costs and reasonable attorneys' fees.

10.2  Supply of Links. AT&T will pay Builder the amounts and in the time frames
      as set forth on Exhibit B for services to be rendered to AT&T under the
      Contract as follows:

      10.2.A Ten percent (10%) of the total for all Links as set forth in
      Exhibit B, within 10 days of the execution of this Contract.

      10.2.B On the last business day of each month, Builder will provide an
      invoice to AT&T, specifying the number and location of miles completed.
      Without prejudice to AT&T's right to dispute the number of miles
      subsequently, AT&T will pay Builder for the actually completed miles
      within thirty (30) days of receipt of the invoice at

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      the rate of eighty-percent (80%) of the total price divided by the total
      miles times the number of miles completed, described in Exhibit B. Builder
      will provide AT&T a credit against amounts owed Builder for miles
      completed until such credit together with the credit to which reference is
      made in Sections 1O.2.C and 1O.2.D equals the ten percent (10%) payment
      described in Section 1O.2.A. For purposes of this Section 1O.2.B a mile
      will be deemed to be completed when the required AT&T conduit has been
      placed in the applicable ROW in the manner permitted by such ROW, and is
      ready for placement of cable.

      10.2.C Upon Builder notification to AT&T that Builder has achieved Builder
      Substantially Complete for an entire Link, AT&T shall have thirty (30)
      days to certify that a specific Link is complete. Upon Certification, AT&T
      will pay Builder an amount equal to fifteen percent (15%) of the total
      price of the Link within thirty (30) days of receipt of the invoice. If
      AT&T determines in its sole discretion that the Link fails to meet AT&T's
      requirements, the provisions of ARTICLE 5: Completion of Links will be
      followed. Builder will provide AT&T a credit together with the credit to
      which reference is made in Sections 1O.2.B and 1O.2.D against amounts owed
      Builder for Link completed until such credit equals the ten percent (10%)
      payment described in Section 1O.2.A.

      10.2.D Upon Builder notification to AT&T that Builder has achieved Builder
      Complete for an entire Link, AT&T shall have thirty (30) days to accept
      that a specific Link is complete. Upon Acceptance by AT&T that a specific
      Link as described in Exhibit B is Complete, AT&T will pay Builder an
      amount equal to two and one-half (2.5%) percent of the total price of the
      Link within thirty (30) days of receipt of the invoice. If AT&T determines
      in its sole discretion that the Link fails to meet AT&T's requirements,
      the provisions of ARTICLE 5: Completion of Links will be followed. Builder
      will provide AT&T a credit together with the credit to which reference is
      made in Sections 1O.2.B and 1O.2.C against amounts owed Builder for Link
      completed until such credit equals the ten percent payment described in
      Section 1O.2.A.

      10.2.E On Final Acceptance, as described in Section 5.6.H, an amount of
      money equal to two and one-half percent (2.5%) of the total price of the
      Link.

10.3  ROW Payments. For each perfected Route Segment acquired by Builder on
      behalf of AT&T as described in Section 3.2.C; other than Route Segments
      which form portions of Link 14, San Diego Ca. to Los Angeles Ca. referred
      to in Section 10.4, Builder will invoice monthly and AT&T will initially
      pay within thirty (30) days of receipt of invoice and appropriate
      documentation supporting such conveyance to AT&T, a standard sum of twelve
      thousand five hundred dollars ($12,500) per mile (the "Initial ROW
      Payments"). On or before each May 1 and November 1 during the construction
      period, Builder shall send a written notice to AT&T (a "Builder Cost
      Notice") specifying in reasonable detail the Builder's calculation of the
      ROW Costs incurred and the amount of the Initial ROW Payments actually
      paid to Builder by AT&T with respect thereto on all Links during the six
      months ended on the preceding March 31 and September 30, respectively
      (each such period, a "Measurement Period"). For purposes of this Section
      10.3, "ROW Costs" shall mean those reasonable and allocable (as defined
      below) net costs necessarily

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      incurred by Builder at rates not higher than those customarily paid at the
      place of such activities. ROW Costs shall only include out-of-pocket costs
      which are actually incurred by Builder and which are reasonable and
      allocable to this Contract: (i) a cost is reasonable if its nature is
      generally recognized as ordinary and necessary for the conduct of
      Builder's business or the performance of this Contract, and the amount of
      such cost does not exceed that which would be incurred by an ordinarily
      prudent person in the conduct of a competitive business; (ii) a cost is
      allocable only if it is (a) incurred specifically for this Contract or (b)
      benefits both this Contract and other work of Builder, and then only in
      such amount as can be apportioned between this Contract and Builder's
      other work in reasonable proportion to the benefits received.
      Notwithstanding the provisions of the preceding two sentences, Builder's
      payments to ROW grantors shall not be subject thereto, but shall be
      subject to Section 3.2.C. If AT&T gives written notice within 30 days to
      Builder of its objection to the Builder Cost Notice, Builder and AT&T
      shall, within 15 days following such notice, attempt to resolve their
      differences and any resolution by them as to any disputed amounts shall be
      final, binding and conclusive. AT&T and its accountants shall have
      reasonable access during normal business hours to all relevant books and
      records and employees of Builder, without disrupting the business of
      Builder, to the extent required to complete resolution of any dispute
      regarding the Builder Cost Notice, and shall be permitted to review the
      work papers, if any, of Builder or its accountants relating thereto,
      subject to the execution of reasonable confidentiality agreements in
      connection therewith. If at the conclusion of such 15 day period, the ROW
      Costs remains in dispute, the matter shall be submitted, as soon as
      practicable, to a firm of independent public accountants of recognized
      national standing that is not the regular accounting firm of either
      Builder or AT&T (the "Neutral Auditors"), reasonably acceptable to Builder
      and AT&T. The Neutral Auditors shall act as an arbitrator to determine
      only those issues in dispute. The Neutral Auditors' determination shall be
      made within 15 days after their selection, shall be set forth in a written
      statement delivered to both AT&T and Builder and shall be final, binding
      and conclusive and enforceable in any court of competent jurisdiction. The
      fees of the Neutral Auditors shall be borne equally by AT&T and Builder.
      Not later than 30 days after the latest Builder Substantially Complete
      Date set forth on Exhibit B, Builder shall provide AT&T with a final
      written notice (the "Final Builder Cost Notice") specifying in reasonable
      detail Builder's calculation of the ROW Costs and the amount of Initial
      ROW Payments actually paid by AT&T, in each case, with respect to the
      acquisition of ROW during the term of this Contract pursuant to this
      Section 10.3. AT&T shall have the right to object to Builder's calculation
      in the manner set forth above; provided that unless AT&T gives written
      notice to Builder on or before the 45th day after AT&T's receipt of the
      Final Builder Cost Notice specifying in reasonable detail all disputed
      items and the basis therefor, AT&T shall be deemed to have accepted and
      agreed to Builder's calculation of the ROW Costs and amount actually paid
      by AT&T referred to above. In the event that the amount actually paid to
      Builder by AT&T with respect to the acquisition of ROW during the term of
      this Contract exceeds 50% of the total ROW Costs incurred by Builder
      during the term of this Contract, then Builder shall be obligated to
      refund to AT&T such excess amount, if any (the "AT&T Refund"). Upon a
      final determination of any AT&T Refund, Builder shall promptly pay to AT&T
      such AT&T Refund, if any, by means of cash payment.

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10.4  Special Payment Terms. For the Link from San Diego ("SD") to Los Angeles
      ("LA"), the terms for the construction, payment and marketing and revenue
      sharing of this Link are as follows:

      10.4.A All costs of the construction of this Link will be shared equally
      except that AT&T's share of the costs to construct this Link is not to
      exceed twenty-two million dollars ($22,000,000) including ROW perfection.
      For each perfected Route Segment acquired by Builder on behalf of AT&T as
      described in Section 3.2.C, Builder will invoice monthly and AT&T will pay
      within thirty (30) days of receipt of invoice and appropriate
      documentation supporting such conveyance to AT&T, Twelve thousand five
      hundred dollars ($12,500) per mile (the "Link 14 ROW Payments"). Such
      costs to acquire ROW for this Link shall not be subject to the
      restrictions as to reasonableness included in the definition of "ROW
      Costs" set forth in Section 10.3 but shall instead be the actual costs
      incurred by Builder in acquiring such ROW. In addition, AT&T will
      initially pay the stipulated construction price per mile for this Link
      using the payment schedule and data contained in Section 10.2 and Exhibit
      B. The portion of the total costs incurred to construct the Link from San
      Diego to Los Angeles exclusive of those costs payable by AT&T pursuant to
      this Section 1O.4.A will be borne by Builder and are referred to in this
      Section 10.4 as "Builder's Costs".

      10.4.B Builder will receive all revenues from the Disposition of Surplus
      Fibers (as defined in Exhibit G) and Conduit (other than Builder Conduit
      and AT&T Conduit) on Link 14 (said Conduit being hereafter referred to as
      the "Link 14 Additional Conduits" and said Surplus Fibers being referred
      to hereafter as the "Link 14 Surplus Fibers"), so long as Builder's Costs,
      less the amount of such revenues, exceed the amounts paid by AT&T to
      Builder pursuant to Section 10.4.A.

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     10.4.C So long as Builder's Costs, less the amount of revenues from the
     Disposition of Link 14 Surplus Fibers and Link 14 Additional Conduits
     allocated to Builder pursuant to Section 1O.4.B, are less than or equal to
     the amounts paid by AT&T to Builder pursuant to Section 1O.4.A., AT&T and
     Builder will share all revenues from the Disposition of the Link 14 Surplus
     Fibers and the Link 14 Additional Conduits subject to Section 1O.4.D using
     the terms and conditions of Exhibit G, mutatis mutandis, as though such
     terms and conditions were set forth herein with the following modifications
     in recognition of the broad sharing of costs on such Link and in order to
     defray such costs through the Disposition of Link 14 Surplus Fibers and
     Link 14 Additional Conduits:

      (i)   AT&T and Builder may make Disposition of any of the Link 14
            Additional Conduits at any time without restriction on the use to be
            made of such Conduit by the recipient thereof including, for
            emphasis only, its right to permit the use by or the conveyance to
            third parties of any Fibers that may be installed therein;

      (ii)  the term will be the shorter of twelve (12) months from the Builder
            Completion Date or upon the complete Disposition of the Link 14
            Surplus Fibers and the Link 14 Additional Conduits (hereafter the
            "Link 14 Disposition Term");

      (iii) neither AT&T nor Builder may make a Disposition of AT&T Conduits or
            Builder Conduits, as may be applicable, until the Disposition of all
            Link 14 Additional Conduits or the expiration of the Link 14
            Disposition Term as set out in (ii) above, whichever occurs first,
            except that either party may make a Disposition of up to twelve (12)
            of its respective Fibers on such Link at any time without sharing
            the proceeds with the other party;

      (iv)  any Link 14 Surplus Fibers and Link 14 Additional Conduits remaining
            upon the expiration of the Link 14 Disposition Term will be
            distributed evenly between Builder and AT&T; and

      (v)   any lease of Link 14 Surplus Fibers or Link 14 Additional Conduits
            will be for not less than ten (10) years, except as otherwise agreed
            in writing.

     10.4.D True-Up Provision. After Builder has accumulated its actual costs of
     construction, inclusive of ROW perfection, for the Link but in no event
     later than six (6) months after Builder Completion Date, Builder will send
     a written notice to AT&T (a "Builder SD/LA Cost Notice") specifying in
     reasonable detail the Builder's proof of its costs (determined using the
     standards included in the definition of ROW Costs, mutatis mutandis as
     though such standards were set forth herein) for the construction of this
     Link and revenues from Disposition of Link 14 Surplus Fibers and Link 14
     Additional Conduits pursuant to Section 1O.4.C If AT&T gives written notice
     within 90 days to Builder of its objection to the Builder SD/LA Cost
     Notice, Builder and AT&T shall, within 15 days following such notice,
     attempt to resolve their differences and any resolution by them as to any
     disputed amounts shall be final, binding and conclusive. AT&T and its
     accountants shall have reasonable access during normal business hours to
     all relevant books and records and employees of Builder, without disrupting
     the business of Builder, to the extent

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      required to complete resolution of any dispute regarding the Builder SD/LA
      Cost Notice, and shall be permitted to review the work papers, if any, of
      Builder or its accountants relating thereto, subject to the execution of
      reasonable confidentiality agreements in connection therewith. If at the
      conclusion of such 15 day period, the Builder SD/LA Cost Notice remains in
      dispute, the matter shall be submitted, as soon as practicable, to a firm
      of independent public accountants of recognized national standing that is
      not the regular accounting firm of either Builder or AT&T (the "Neutral
      Auditors"), reasonably acceptable to Builder and AT&T. The Neutral
      Auditors shall act as an arbitrator to determine only those issues in
      dispute. The Neutral Auditors' determination shall be made within 15 days
      after their selection, shall be set forth in a written statement delivered
      to both AT&T and Builder and shall be final, binding and conclusive and
      enforceable in any court of competent jurisdiction. The fees of the
      Neutral Auditors shall be borne equally by AT&T and Builder. Unless AT&T
      gives written notice to Builder on or before the ninetieth (90th) day
      after AT&T's receipt of the Builder SD/LA Cost Notice specifying in
      reasonable detail all disputed items and the basis therefor, AT&T shall be
      deemed to have accepted Builder's proof of the actual cost for
      construction and revenues from Disposition referred to above. In the event
      this actual cost is less than forty-four million dollars ($44,000,000),
      Builder will refund to AT&T an amount equal to the amount by which the
      actual payments made by AT&T to Builder under this Section 10.4 exceed 50%
      of the actual costs. In the event the actual cost of the construction is
      less than forty-four million dollars ($44,000,000), AT&T and Builder will
      share the revenues from the Disposition of the Link 14 Surplus Fibers and
      the Link 14 Additional Conduits as set forth in Section 10.4.C. In the
      event the actual cost of the construction is more than $44 million,
      Builder will receive 100% of the revenues from the Disposition of the Link
      14 Surplus Fibers and the Link 14 Additional Conduits until such revenue
      is equal to the amount by which the actual cost of construction exceeded
      $44 million. Thereafter, the revenue from Disposition of Link 14 Fibers
      and Link 14 Additional Conduits will be shared between Builder and AT&T
      pursuant to Section 1O.4.C.

10.5  Builder will remit payment for AT&T splicing and testing of Builder Fibers
      30 days after receipt of invoice following the Fiber acceptance for each
      Link. AT&T's price to Builder for Fiber splicing and testing described in
      Section 5.6 above is listed in Exhibit B.

10.6  Any changes to the scope of work not required to complete the Links as
      defined in Exhibit B shall be considered outside the scope of work of this
      Contract. If AT&T proposes additional requirements to connect fiber optic
      links other than those described in Exhibit B for which it desires to
      contract with Builder, Builder and AT&T shall agree on price, terms and
      conditions.

10.7  Maintenance pricing shall be as set forth in Exhibits C and G.

ARTICLE 11: Interconnection to The Cable

11.1  Prior to the issuance of engineering drawings, AT&T and Builder shall
      designate in

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      writing all access locations (places where Fiber can be spliced to other
      Fibers or connected to other Fibers via Fiber connectors) to The Cable
      other than POPs or AT&T Sites.

11.2  In the event either party requires future connections to The Cable, the
      number of points of access requested by either party will be mutually
      agreed upon prior to permitting such access. The total number of access
      points in a Route Section will be limited based on fiber optic loss
      criteria and the number of splice points and slack loops left in The Cable
      or by sound engineering judgement.

11.3  Third party access to The Cable will be performed by the maintaining
      party.

11.4  Access may be as mutually agreed to by the parties in selected other
      party's locations at the fiber distribution panel.

11.5  The requesting party can access Fibers in The Cable to be provided along a
      ROW where the requesting party does not possess its own rights of access.
      The controlling party will provide access to the requesting party's Fibers
      in The Cable at designated locations in the ROW.

11.6  For any future connections required in The Cable by either party, the
      requesting party shall notify the other party in writing not less than
      ninety (90) days in advance of the date the connection is requested to be
      completed. Work activities will be coordinated by the parties.

11.7  It is the responsibility of the requesting party to obtain any
      governmental or other authority necessary for the delivery of the Fibers
      in The Cable.

11.8  Costs for such connections shall be paid by the requesting party within
      thirty (30) days of the date of receipt for the invoice provided by the
      performing party.

ARTICLE 12: Use of Conduit and Use of Fibers

12.1  AT&T and Builder each warrant that its use of the AT&T and Builder Conduit
      systems and the AT&T and Builder Fibers, respectively, in The Cable shall
      comply with all applicable governmental codes, ordinances, laws, rules,
      regulations and/or restrictions.

12.2  Builder shall have the right to abandon its ownership of the Builder's
      Fibers in the First Conduit (in which event the right to the use thereof
      would revert to AT&T), at which time Builder shall have no further rights
      or obligations with respect to its Fibers in The Cable. Such abandonment
      shall not reduce or otherwise affect the Builder's obligations hereunder,
      especially as it relates to Builder ROW obligations.

12.3  Each of AT&T and Builder may use its Fibers in The Cable for any lawful
      purpose. Each party agrees and acknowledges that it has no right to use
      the other party's Fibers in The Cable.

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12.4  Neither AT&T nor Builder shall use their Fibers in The Cable in a way
      which interferes in any way with or adversely affects the use of the
      Fibers of the other party. It is understood, however, that each party may
      engage in competitive marketing with each other with respect to their
      respective Fibers and facilities.

12.5  AT&T and Builder each agree to cooperate with and support the other in
      complying with any requirements applicable to the fiber by any
      governmental or regulatory agency or authority.

ARTICLE 13: Indemnification

13.1  The parties will cooperate with each other in every reasonable way to
      facilitate either party's defense or settlement of any third party claims,
      lawsuits, or demands that relate to or arise out of either party's
      performance of its obligations under this Contract. Each party will
      provide the other with notice of any such claim within fourteen (14)
      calendar days of the date upon which that party first becomes aware of the
      claim.

13.2  Each party (the "Indemnifying Party") shall indemnify, defend, and hold
      the other party (the "Indemnified Party") (including all officers,
      directors, employees, agents and affiliates, successors and assigns of the
      Indemnified Party) harmless from and against any and all claims, demands,
      actions, losses, damages, assessments, charges, liabilities, settlements,
      costs and expenses (including without limitation, interest, penalties, and
      attorney's fees and disbursements) which may from time to time be suffered
      or incurred by, or asserted against, the Indemnified Party, directly or
      indirectly, on account of or in connection with:

      13.2.A the Indemnifying Party's breach of any provision of this Contract,
      or failure in any way by the Indemnifying Party to perform any obligation
      under this Contract; or

      13.2.B a claim for bodily injury (including death) to, or damage to
      property of, any person (including without limitation any employee of
      either party and any third person), and any damage to or loss of use of
      any property, arising out of or relating to the services or pursuant,
      directly or indirectly, to this Contract and which result from the
      Indemnifying Party's acts or omissions; or

      13.2.C subject to Sections 13.2.A and 13.2.B above, a claim rendered by a
      third party for trespass or tort arising out of or relating to the
      occupancy, or abandonment by a grantor of (i) the AT&T ROW, in the case of
      AT&T or (ii) the Builder ROW or the Builder Affiliate ROW in the case of
      Builder; except if caused by the Indemnified Party's negligence or
      misconduct.

13.3  The Indemnified Party's right to indemnity under this ARTICLE 13 is
      expressly contingent upon the Indemnified Party's providing notice to the
      Indemnifying Party as required by Section 13.1.

13.4  Notwithstanding any other provisions of this Contract, with respect to the
      performance, non-performance or interruption of any services provided by
      the

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      Indemnified Party through or with respect to the System, the Indemnifying
      Party will not be liable for any special, consequential or indirect
      damages (including without limitation, damages for harm to business, loss
      of use, lost revenues, lost savings or lost profits) claimed by the
      Indemnified Party or its end customers or those with whom the Indemnified
      Party has entered into leases or to whom it has otherwise sold, conveyed
      or assigned any portion of the System, occasioned by any cause whatsoever,
      including, without limitation, breach of contract, breach of warranty,
      negligence or strict liability of the Indemnifying Party.

13.5  Any sale, lease or exchange, though IRU, license or otherwise, by AT&T or
      Builder of the right to the use of any Fibers or Conduits located within
      the System shall contain a written limitation of liability that is binding
      on the transferee and all transferee's grantees, licensees, lessees,
      customers and other third party users in all material respects at least as
      restrictive as the limitations set forth in this Section 13.5.

      13.5.A The transferee's exclusive remedy, and the sole liability of the
      conveying party hereto or its employees, agents or contractors, for any
      loss, damage or destruction of the Fibers or Conduits transferred or of
      any property of Licensee which may be installed within the System, shall
      be repair or replacement of the transferee's affected Fibers, Conduit or
      property by the party causing any such damages.

      13.5.B In no event shall the conveying party hereto, or its employees,
      agents or contractors be liable to the transferee or the transferee's
      customers for incidental, consequential, special, indirect, punitive or
      exemplary damages, whether foreseeable or not, including lost revenues and
      lost profits.

      13.5.C The transferee in any contract or tariff offering of service,
      capacity, or rights of use that involve the use of its facilities will
      include in such contract or tariff a written limitation of liability that
      is binding on its customers or third party users that is in all material
      respects at least as restrictive as the limitations set forth herein.

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ARTICLE 14: Insurance

14.1  During the Term of this Contract, Builder shall obtain and maintain and
      shall require any of its permitted subcontractors to obtain and maintain
      not less than the following insurance:

<TABLE>
<CAPTION>
===============================================================================================
            Type of Coverage                      Amount of Coverage
===============================================================================================
<S>                                             <C>
Worker's Compensation Insurance                 Statutory Amount
-----------------------------------------------------------------------------------------------
Employer's Liability Occupational Disease and   $10 million each accident
Bodily Injury Insurance                         $10 million disease each employee
                                                $10 million disease-policy limit
-----------------------------------------------------------------------------------------------
Commercial General Liability Insurance,         Combined single limit personal injury and
including premises-operations,                  property damage on an occurrence policy
products/completed operations, independent      form with policy amounts of (i) not less than
contractors, contractual (blanket), broad form  $10 million per occurrence (without a
property damage, with umbrella excess           limitation on aggregate amount); or (ii) not
liability (collectively, "Comprehensive         less than $10 million per occurrence with an
Coverage")                                      aggregate annual amount of not less than $10
                                                million
-----------------------------------------------------------------------------------------------
Automobile Liability Insurance for owned,       $10 million
hired and non-owned autos ("Automobile          combined single limit bodily injury/property
Liability Coverage")                            damage
===============================================================================================
</TABLE>

      For non-premises (away from the construction site) administrative
      activities, Builder shall obtain and maintain and shall require any of its
      permitted subcontractors to obtain and maintain not less than minimum
      $1,000,000 for each coverage set forth above in this Section 14.1. The
      limits set forth above are minimum limits and will not be construed to
      limit either party's liability.

14.2  This insurance shall cover the amounts and types of liability listed above
      with respect to each party's obligations under this Contract.

14.3  Each policy evidencing the insurance described in this ARTICLE 14 must
      contain a provision that the insurance policy, and the coverage it
      provides, shall be primary and noncontributing with respect to any
      policies carried by the party and its affiliates, and that any policies
      carried by the party and its affiliates shall be excess insurance.

14.4  The comprehensive general liability policies and umbrella excess liability
      policies of Builder and its subcontractors each shall contain a provision
      including AT&T, its parent, subsidiaries and affiliates, and each of their
      respective officers, directors, employees, agents, contractors, and
      suppliers and any other parties in interest designated by the party, as
      additional insureds.

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14.5  Prior to commencement of any work under this Contract, Builder must
      furnish the other certificates of insurance stating that the insurer will
      notify the other party at least thirty (30) calendar days prior to
      cancellation of, or any material change in, the coverage provided.

14.6  Environmental Impairment Liability (EIL) or Pollution Liability: Builder
      and the Builder's subcontractors shall maintain in force for the full
      period of this Contract insurance covering losses caused by pollution
      conditions that arise from the operations of the Builder described under
      the scope of services of this Contract. This insurance shall apply to
      bodily injury; property damage, including loss of use of damaged property
      or of property that has not been physically injured; cleanup costs; and
      defense, including costs and expenses incurred in the investigation,
      defense, or settlement of claims. The policy of insurance affording these
      required coverages shall be written in an amount of at least $5,000,000
      per loss with an annual aggregate of at least $10,000,000.

      If the scope of services as defined in this Contract includes the disposal
      of any hazardous or nonhazardous materials from the job site, the Builder
      must furnish to AT&T evidence of Pollution Legal Liability insurance
      maintained by the disposal site operator for losses arising from the
      insured facility accepting waste under this contract. Said insurance shall
      be in an amount not less than $5,000,000 per loss with an annual aggregate
      of at least $10,000,000.

      All insurance shall be written by insurers with an A. M. Best rating of A-
      VII, or as otherwise acceptable to AT&T and, shall name AT&T Corp., and
      all their respective subsidiaries, affiliates, officers, directors,
      employees, and any other party so specified by AT&T, as an additional
      insured under this policy of insurance. The Builder warrants that any
      retroactive date applicable to coverage under the policy precedes the
      Effective Date of this Contract and that continuous coverage will be
      maintained for a period of two years beginning from the time that work
      under the Contract is completed. All such insurance should be primary and
      non-contributory, and is required to respond and pay prior to any other
      insurance or self-insurance available to AT&T. Any other coverage
      available to AT&T applies on a contingent and excess basis. In the event
      that the pollution liability policy is written on a project-specific
      basis, Builder will furnish AT&T with a copy of the endorsement adding the
      project site(s) covered by this Contract to the policy prior to the
      commencement of work under this Contract. The Builder shall provide AT&T
      with a duly executed certificate of insurance evidencing the existence of
      coverage required herein prior to the commencement of work under this
      contract and within 30 days of the renewal of such policy of insurance.
      AT&T shall be provided with thirty days prior written notice in the event
      of cancellation or material change to the policy.

ARTICLE 15: Taxes and Franchise, License and Permit Fees

15.1  As used in this ARTICLE 15, "Tax" or "Taxes" shall mean any and all taxes,
      fees, franchise fees, assessments, charges, levies, together with any
      penalties, fines or interest thereon, imposed by any authority having the
      power to tax, including any city, county, state or federal governmental or
      quasi-governmental agency or taxing

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      district. For accounting purposes, and for federal and for all applicable
      state and local income tax purposes, AT&T shall be treated as the owner,
      by title or IRU as the case may be, of the AT&T System and of the AT&T
      Fibers in The Cable. Builder will be treated as the owner, by title or IRU
      as the case may be, of the Builder System and the Builder Fibers in The
      Cable.

15.2  Any income Tax consequence arising from the transaction described herein
      shall be the financial responsibility of the party upon which such
      incident falls. The parties agree to file their respective Tax returns on
      such basis and, except as otherwise required by law, not to take any
      positions inconsistent with Section 15.1.

15.3  Once AT&T accepts delivery of the AT&T System, AT&T shall be responsible
      for any and all sales, use, income, gross receipts or other Tax assessed
      on the basis of revenues received by AT&T pursuant to its use of the AT&T
      System. Once Builder accepts delivery of the Builder System, Builder shall
      be responsible for any and all sales, use, income, gross receipts or other
      Tax assessed on the basis of revenues received by Builder pursuant to its
      use of the Builder System.

15.4  Each party respectively shall be solely responsible for any real or
      personal property Taxes arising from the use and/or ownership of the AT&T
      System or the Builder System, as the case may be.

15.5  If a party possesses rights that would exempt it from any taxation, the
      parties shall cooperate in good faith so as to allow such party the
      opportunity to benefit from any such exemption from Taxes. Nothing herein
      is intended to serve as evidence that any Taxes are due or arise as a
      matter of course from this transaction.

15.6  To the extent that future Tax payments are required with respect to the
      AT&T ROW or Builder ROW, the party on whose ROW the Tax payment is
      required will make the required Tax payment. The other party shall
      reimburse the remitting party for the reimbursing party's proportionate
      share of the Tax payment based on the reimbursing party's ownership
      interest in any Conduit in said ROW, except for franchise fees for which
      each party shall pay their respective fees separately.

ARTICLE 16: Labor Relations

16.1  AT&T and Builder each shall be responsible for labor relations with its
      own employees.

16.2  Each party agrees to notify the other immediately whenever it has
      knowledge that a labor dispute concerning the notifying party's employees,
      agents, delegates and their employees, contractors and their employees,
      and subcontractors and their employees is delaying or threatens to delay
      its timely performance of its obligations under this Contract.

ARTICLE 17: DISCLAIMER OF WARRANTY

17.1  EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THIS CONTRACT, NEITHER PARTY
      MAKES ANY WARRANTY TO THE OTHER PARTY OR ANY

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      OTHER PERSON OR ENTITY, WHETHER EXPRESS, IMPLIED OR STATUTORY, AS TO THE
      DESCRIPTION, QUALITY, MERCHANTABILITY, COMPLETENESS OR FITNESS FOR ANY
      PURPOSE OF ANY FIBERS, OR CABLE, ALL OF WHICH WARRANTIES ARE HEREBY
      EXCLUDED AND DISCLAIMED.

ARTICLE 18: NOTICE

18.1  Unless otherwise provided herein, all notices and communications
      concerning this Contract shall be in writing and addressed to the other
      party as follows:

      If to AT&T:       AT&T Corp.
                        Attention:  Gregory T. Smith
                        Address: 900 Route 202/206 North, Room 4B231
                        Bedminster, NJ 07921
                        Telephone:  908-234-6815
                        Fax: 908-234-8087
                        E-Mail:     greg@att.com

     with a copy to     AT&T Corp.
                        Attention:  Procurement Specialist
                        Address:    1200 Peachtree Room 9E30
                        Atlanta, GA 30309
                        Telephone:  404-810-3841
                        Fax: 404-810-4781
                        E-Mail:     lopardue@att.com

     with a copy to:    AT&T Corp.
                        Attention:  General Attorney
                        Address: 131 Morristown Rd., B2070
                        City, State, Zip Code: Basking Ridge, NJ 07920-1650
                        Telephone:  908-204-8700
                        Fax: 908-204-8565
                        E-Mail:     kfcarroll@att.com

     If to Builder:     PF.Net,
                        Attention:  John Warta
                        Address: 1625 B Street
                        City, State, Zip Code: Washougal, Wa. 98671
                        Telephone: 360-835-4700
                        Fax: 360-835-4789
                        E-Mail:     p68wa@aol.com
    with a copy to:
                        PF. Net,
                        Attention:  Stephen Irwin
                        Address: 505 Park Ave.
                        City, State, Zip Code: New York, New York 10022

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<PAGE>

                        Telephone:212-753-7200
                        Fax: 212-755-1467
                        E-Mail: sicornell@aol.com

            or at such other address as may be designated in writing to the
            other party.

18.2  Unless otherwise provided herein, notices shall be sent by registered or
      certified U.S. Mail, postage prepaid, facsimile, e-mail or by commercial
      overnight delivery service, and shall be deemed served or delivered to the
      addressee or its office and the receiving party notifies the sending party
      it is in possession of the notice, or, if postal claim notices are given,
      on the date of its return marked "unclaimed" or received; provided,
      however, that upon receipt of a returned notice marked "unclaimed," the
      sending party shall make reasonable effort to contact and notify the other
      party by telephone.

ARTICLE 19: Confidentiality and Proprietary Information

19.1  In connection with this Contract, either party may furnish to the other
      certain information that is proprietary to the furnishing party or its
      licensor and that is marked or otherwise specifically identified as
      proprietary or confidential ("Confidential Information"). This
      Confidential Information may include, among other things, documentation,
      data, drawings, specifications, plans, and other technical or business
      information. Confidential Information also includes the existence of this
      Contract, the facts and contents of this Contract, including its terms and
      conditions, and all information that may be disclosed to a party
      pertaining to the identities, locations, and requirements of such party's
      customers. For purposes of this ARTICLE 19, the party that discloses
      Confidential Information is referred to as the "Disclosing Party", and the
      party that receives Confidential Information is referred to as the
      "Receiving Party".

19.2  When Confidential Information is furnished in tangible form, the
      Disclosing Party shall mark it as proprietary or confidential. When
      Confidential Information is provided orally, the Disclosing Party shall,
      at the time of disclosure, identify the Confidential Information as being
      proprietary or confidential. Within ten (10) business days after the oral
      disclosure, the Disclosing Party shall reduce the Confidential Information
      disclosed to a writing that shall specifically reference the date of
      disclosure, and shall provide a summary of the oral disclosure.

19.3  With respect to Confidential Information disclosed under this Contract,
      the Receiving Party, its employees and agents shall:

      19.3.A. hold the Confidential Information in confidence, exercising a
      degree of care not less than the care used by the Receiving Party to
      protect its own proprietary or confidential information that it does not
      wish to place in the public domain. In no event shall such degree of care
      be less than reasonable.

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<PAGE>

      19.3.B restrict disclosure of the Confidential Information solely to those
      of its employees, up to fifty (50) of its non-public stockholders and
      agents who have a need to know in connection with their performance under
      this Contract,

      19.3.C not disclose the Confidential Information to any other person or
      entity without the prior written consent of the Disclosing Party, which
      consent shall not be unreasonably withheld. Notwithstanding the provisions
      of the preceding sentence, both parties agree that Builder may, upon
      receiving the written consent of AT&T disclose to Financial Parties (as
      defined below) a limited subset of AT&T's Confidential Information
      provided that such disclosure is made solely to the extent necessary for
      such Financial Parties to assess a) the scope of Builder's duties and
      obligations under this Contract, and b) the potential benefits to be
      derived by Builder from this Contract. As a pre-condition for Builder to
      disclose any portion of AT&T's Confidential Information to any Financial
      Party, such Financial Party and Builder shall execute a Third Party
      Non-Disclosure Agreement (NDA) in which AT&T is named as a third party
      beneficiary. Such NDA shall have terms and conditions no less restrictive
      than the ones set forth in this Contract with respect to disclosure of
      Confidential Information. As used herein, the term "Financial Parties"
      refer to either i) banks or other financial institutions from which
      Builder is seeking funds in an amount of money of no less than ten (10)
      million dollars to meet its obligations hereunder, or ii) investors who
      have committed or will commit funds in an amount of money of no less than
      ten (10) million dollars to facilitate Builder's performance hereunder.

      Subject to the terms of this Section 19.3.C, AT&T shall have one business
      day (i.e., any day excluding Saturday and Sunday) to grant or deny, as
      appropriate, its consent after receiving a request from Builder to
      disclose any portion of AT&T's Confidential Information to a Financial
      Party. Such request for consent along with a copy of the Non-Disclosure
      Agreement to be signed by the Financial Party shall be sent to

                        AT&T
                        900 Route 202/206N
                        Bedminster, NJ 07921-0752 Room 4B231
                        Attn : Gregory T. Smith
                        Fax: +1 908 234-8087
                        Internet Email: greg@att.com

      Consent to a request for disclosure under this Section 19.3.C only shall
      be deemed to be granted if and only if AT&T fails to respond to such
      request within one business day after receiving the request

      In no event will AT&T be liable to any Financial Party for any costs or
      expenses or any consequential or incidental or exemplary damages or loss
      of prospective profits incurred by any Financial Party who relied on
      AT&T's Confidential Information. Builder agrees to hold harmless and
      indemnify AT&T, its officers, directors, successors and assigns from and
      against any costs, expenses, (including attorney's fees) damages, fines,
      penalties incurred by AT&T as a result

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      of a bona fide claim that is asserted by any Financial Party and that is
      related to AT&T's Confidential Information disclosed to such Financial
      Party.

      19.3.D advise those employees, agents and non-public stockholders of their
      obligations with respect to the Confidential Information and require such
      employees, agents and non-public stockholders to honor such obligations;
      and

      19.3.E use the Confidential Information only in connection with the
      Receiving Party's performance under this Contract, except as the
      Disclosing Party may otherwise agree in writing.

19.4  Confidential Information shall be deemed the property of the Disclosing
      Party. Upon request of the Disclosing Party, the Receiving Party shall
      return all Confidential Information (including copies thereof) received in
      tangible form, or shall destroy such Confidential Information and provide
      written certification of destruction to the Disclosing Party. Such
      destruction of Confidential Information shall include without limitation,
      erasure of any information that may have been recorded in any computer's
      memory or hard disk.

19.5  Notwithstanding the foregoing, the Receiving Party shall not be subject to
      any restriction hereunder with respect to any part of such Confidential
      Information which

      19.5.A was previously known to the Receiving Party free of any obligation
      to keep it confidential; or

      19.5.B is or becomes publicly available by means other than unauthorized
      disclosure by the Receiving Party; or

      19.5.C is developed by or on behalf of the Receiving Party independently
      of any Confidential Information furnished under this Contract; or

      19.5.D is received from a third party whose disclosure does not violate
      any confidentiality obligation.

19.6  Each party agrees that the Disclosing Party would be irreparably injured
      by a breach of this ARTICLE 19 by the Receiving Party or its
      representatives and that the Disclosing Party may be entitled to equitable
      relief, including injunctive relief and specific performance, in the event
      of any breach of the provisions of this ARTICLE 19. Such remedies shall
      not be deemed to be the exclusive remedies for a breach of this ARTICLE
      19, but shall be in addition to all other remedies available at law or in
      equity.

ARTICLE 20: Publicity and Advertising

20.1  Neither party shall publish or use any advertising, sales promotions, or
      other publicity materials that use the other party's logo, trademarks, or
      service marks without the prior written approval of the other party.

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20.2  Each party shall have the right to review and approve (or disapprove, at
      its sole discretion but in its reasonable judgment) any publicity
      material, press releases, or other public statements by the other party
      that refer to such other party or that describe any aspect of this
      Contract. Each party agrees not to issue any such publicity materials,
      press releases, or public statements without the prior written approval of
      the other party. Additionally, in the event Builder or AT&T desires to
      make or issue disclosures to the Securities and Exchange Commission, as
      may be required by law, the party desiring to make such disclosure shall
      request the other party's approval in writing and the party receiving such
      request shall respond within seven (7) business days after receipt
      thereof.

      Request for such written approval shall be submitted to:

                   AT&T
                   900 Route 202/206N
                   Bedminster, NJ 07921-0752 Room 4B231
                   Attn:Gregory T. Smith
                   Fax:+1 908 234-8087
                   Internet Email: greg@att.com

                   PF.Net,
                   Attention: Stephen Irwin
                   Address: 505 Park Ave.
                   City, State, Zip Code: New York, New York 10022
                   Telephone:212-753-7200
                   Fax: 212-755-1467
                   E-Mail:    sicornell@aol.com

      The failure to respond to a request for approval within seven (7) business
      days shall be deemed an approval of said request if the requesting party
      after not receiving a response to the request within three business days,
      has transmitted such request by facsimile or electronic mail to the other
      party. Evidence of such facsimile transmission shall be in the form of a
      certificate of transmission or facsimile transaction report.

20.3  Nothing in this Contract establishes a license for either party to use any
      of the other party's brands, marks, or logos without prior written
      approval of the other party.

      Nothing contained in this ARTICLE 20 will serve to prohibit a disclosure
      that would otherwise be permitted under ARTICLE 19. Notwithstanding the
      provision of the preceding sentence, the approval process for disclosure
      of confidential information to Financial Parties set forth in Section
      19.3.C, does not apply to this ARTICLE 20.

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20.4  Subject to the provisions of Section 20.3, but notwithstanding the
      provisions of Sections 20.1 and 20.2, both parties agree that any
      disclosure that either party hereto reasonably concludes, based on the
      opinion of counsel, is legally required to be made to any securities or
      other regulatory authority or to holders or prospective purchasers of such
      party's securities (including, without limitation, in a 144A offering
      memorandum or prospectus) (a) prior to the expiration of the review period
      in Section 20.2 or (b) notwithstanding the other party's disapproval of
      such disclosure shall not constitute a violation of ARTICLE 19 or ARTICLE
      20. The provisions of the preceding sentence are applicable solely to
      disclosure of the terms and conditions of this Contract and are subject to
      i) in the case of (a) that the disclosing party has given the other party
      as much prior notice and opportunity to comment as is reasonably possible
      under the circumstances and ii) in the case of both (a) and (b) that such
      disclosure does not include any untrue statements of a material fact, or
      does not omit to state any material fact required to be stated or
      necessary to make such disclosure, in light of the circumstances, not
      misleading, and iii) in the case of both (a) and (b) the disclosing party
      has attempted in good faith to accommodate all requests of the other party
      with respect to such disclosure that are not contrary to the disclosing
      party's legal obligations.

ARTICLE 21: Default

      21.1.A Except for Sections 21.1.B and 21.3 below, Builder shall not be in
      default under this Contract herein unless and until AT&T shall have given
      Builder written notice of such default and Builder shall have failed to
      cure the same within thirty (30) days after receipt of such notice;
      provided, however, that where such default cannot reasonably be cured
      within such thirty (30) day period, if Builder shall proceed promptly to
      cure the same and prosecute such curing with due diligence, the time for
      curing such default shall be extended for a period for a period reasonably
      necessary to cure the same not to exceed one hundred and twenty (120)
      days.

      21.1.B Events of default shall include, but not be limited to:

            (i)   the making by Builder of a general assignment for the benefit
                  of creditors;

            (ii)  the filing of a voluntary petition in bankruptcy or the filing
                  of a petition in bankruptcy or other insolvency protection
                  against Builder which is not dismissed within ninety (90) days
                  thereafter;

            (iii) the filing by Builder of any petition or answer seeking,
                  consenting to, or acquiescing in reorganization, arrangement,
                  adjustment, composition, liquidation, dissolution or similar
                  relief.

      Upon the occurrence of the events of default specifically referred to in
      items (i) through (iii) of this Section 21.1,B, AT&T may terminate this
      Contract upon ten (10) days written notice.

      21.1.C Any event of default by Builder may be waived under the terms of
      this Contract at AT&T's option. Upon the failure by Builder to timely cure
      any such default after notice thereof from AT&T, AT&T may (i) take such
      action as it determines, in its sole discretion, to be necessary to
      correct the default, and (ii) pursue any legal remedies it may have under
      applicable law or principles of equity

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      relating to such breach. Notwithstanding the above, if Builder certifies
      to AT&T in writing that a default has been cured, such default shall be
      deemed to be cured unless AT&T otherwise notifies Builder in writing
      within fifteen (15) days of receipt of such notice from Builder. In the
      event AT&T provides notification pursuant to the immediately preceding
      sentence that Builder's default has not been cured, such notice will set
      out in reasonable detail the grounds for which it believes said breach has
      not been cured.

      21.2.A Except for Section 21.2.B below, AT&T shall not be in default under
      this Contract herein unless and until Builder shall have given AT&T
      written notice of such default and AT&T shall have failed to cure the same
      within thirty (30) days after receipt of such notice; provided, however,
      that where such default cannot reasonably be cured within such thirty (30)
      day period, if AT&T shall proceed promptly to cure the same and prosecute
      such curing with due diligence, the time for curing such default shall be
      extended for a period reasonably necessary to cure the same not to exceed
      one hundred and twenty (120) days.

      21.2.B Events of default shall include, but not be limited to:

            (i)   the making by AT&T of a general assignment for the benefit of
                  creditors;

            (ii)  the filing of a voluntary petition in bankruptcy or the filing
                  of a petition in bankruptcy or other insolvency protection
                  against AT&T which is not dismissed within ninety (90) days
                  thereafter;

            (iii) the filing by AT&T of any petition or answer seeking,
                  consenting to, or acquiescing in reorganization, arrangement,
                  adjustment, composition, liquidation, dissolution or similar
                  relief.

      Upon the occurrence of the events of default specifically referred to in
      items (i) through (iii) of this Section 21.2.B, Builder may terminate this
      Contract upon ten (10) days written notice.

      21.2.C Any event of default by AT&T may be waived under the terms of this
      Contract at Builder's option. Upon the failure by AT&T to timely cure any
      such default after notice thereof from Builder, Builder may (i) take such
      action as it determines, in its sole discretion, to be necessary to
      correct the default, and (ii) pursue any legal remedies it may have under
      applicable law or principles of equity relating to such breach.
      Notwithstanding the above, if AT&T certifies to Builder in writing that a
      default has been cured, such default shall be deemed to be cured unless
      Builder otherwise notifies AT&T in writing within fifteen (15) days of
      receipt of such notice from AT&T. In the event Builder provides
      notification pursuant to the immediately preceding sentence that AT&T's
      default has not been cured, such notice will set out in reasonable detail
      the grounds for which it believes said breach has not been cured.

21.3  Builder shall not be in default under this Contract unless and until AT&T
      shall have given Builder written notice of a default under ARTICLE 29 and
      Builder shall have failed to cure the same within thirty (30) days after
      receipt of such notice.

ARTICLE 22: Warranty

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22.1  Builder warrants to AT&T that the work (except for work performed by AT&T)
      will be performed in a good and workmanlike manner. Builder also warrants
      to AT&T that all material furnished (except for material provided by AT&T)
      will be new, merchantable, free from defects in design, material and
      workmanship and will conform to and perform in accordance with the
      Specifications and requirements of this Contract as contained in Exhibit
      E. Builder further warrants to AT&T that all material furnished will
      perform properly for its intended purpose for eighteen (18) months from
      the Builder Completion Date ("Builder's Warranty Period") In addition, if
      material furnished contains one or more manufacturer's or supplier's
      warranties, Builder hereby assigns such warranties to AT&T to the extent
      such warranties are assignable. Builder will cooperate with AT&T to enable
      AT&T to benefit from any such warranties that are not assignable. In
      addition, in the event Builder obtains from any of its subcontractors a
      warranty for a period of time longer than Builder's Warranty Period, then
      Builder's Warranty Period will be extended to coincide with the period of
      time covered by such subcontractor's warranty but only with respect to the
      services, material, or workmanship covered thereby. All warranties shall
      survive inspection, acceptance, and payment. During the Builder's Warranty
      Period, work or materials not meeting the warranties, or any damage to
      other work or to AT&T's property caused by work or material not meeting
      the warranties, will be, at AT&T's option, reperformed, repaired, or
      replaced by Builder at no cost to AT&T with transportation costs and risk
      of loss and damage in transit borne by Builder. Prior to the Builder
      Completion Date, Builder shall deliver to AT&T copies of all guarantees
      and warranties on materials furnished by all manufacturers and suppliers
      to the Builder and all its subcontractors. Builder shall bind said copies
      of the warranties together in a single volume, grouped by trade and
      properly indexed.

22.2  AT&T warrants to Builder that all splicing and testing services performed
      by AT&T will be performed in a good and workmanlike manner. If the
      services prove to be not so performed and if Builder notifies AT&T within
      an eighteen (18) month period from the date of acceptance of fiber testing
      results referred to in Section 5.6 above, AT&T, at its option, will
      correct or re-perform the services at no charge to Builder. All warranties
      shall survive inspection, acceptance, and payment.

ARTICLE 23: Arbitration

23.1  To the extent not inconsistent with the jurisdiction and authority of any
      state or federal regulatory body that might have jurisdiction or authority
      over this Contract or any aspect or performance of this Contract, any
      dispute, disagreement, controversy or claim, whether based on contract,
      tort or other legal theory (including, but not limited to, any claim of
      fraud or misrepresentation), arising between AT&T and Builder arising out
      of or related to this Contract which is not settled to the mutual
      satisfaction of AT&T and Builder within thirty (30) days from the date
      that either party informs the other in writing that such dispute,
      disagreement, controversy or claim exists, shall be settled by arbitration
      in New York City, in the event the claim is initiated by AT&T and by
      arbitration in New York City in the event the claim is initiated by
      Builder (unless both parties agree on a different location), in accordance
      with the Commercial Arbitration Rules of the American Arbitration
      Association in effect on the date that such notice is given. The duty to
      arbitrate shall extend to any officer, employee, agent, subsidiary,

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      parent or affiliate making or defending any claim which would otherwise be
      arbitrable under this Contract. The parties, by mutual agreement, shall
      appoint a sole arbitrator who shall preside over each dispute submitted
      for arbitration under this Contract. If the parties are unable to agree on
      a single arbitrator within fifteen (15) days from the date of receipt of
      the notice notifying a party of a dispute or disagreement, each party
      shall select an arbitrator within fifteen (15) days and the two (2)
      arbitrators shall select a third arbitrator within ten (10) days. The
      decision of the arbitrator(s) shall be final and binding upon the parties
      and shall include written findings of law and fact, and judgment may be
      obtained thereon by either party in a court of competent jurisdiction.
      Each party shall bear the cost of preparing and presenting its own case.
      The cost of the arbitration, including the fees and expenses of the
      arbitrator(s), shall be shared equally by the parties hereto unless the
      award otherwise provides. The arbitrator(s) shall be instructed by the
      parties to establish procedures such that a decision can be rendered by
      the arbitrator(s) within sixty (60) days of their appointment. Issues of
      arbitrability shall be determined in accordance with the federal
      substantive and procedural laws relating to arbitration; all other aspects
      shall be interpreted in accordance with the laws of jurisdiction where the
      action is initiated. If any portion of this ARTICLE 23 is held to be
      unenforceable, it shall be severed and shall not affect either the duty to
      arbitrate under this Contract or any other part of this ARTICLE 23.

23.2  The obligation herein to arbitrate shall not be binding upon any party
      with respect to requests for preliminary injunctions, temporary
      restraining orders, specific performance or other procedures in a court of
      competent jurisdiction to obtain interim relief when deemed necessary by
      such court to preserve the status quo or prevent irreparable injury
      pending resolution by arbitration of the actual dispute.

ARTICLE 24: Waiver

24.1  The failure of either party hereto to enforce any of the provisions of
      this Contract, or the waiver thereof in any instance, shall not be
      construed as a general waiver or relinquishment on its part of any such
      provision, but the same shall nevertheless be and remain in full force and
      effect.

ARTICLE 25: Governing Law

25.1  This Contract shall be governed by and construed in accordance with the
      domestic laws of the State of New York without reference to its choice of
      law principles.

ARTICLE 26: Rules of Construction

26.1  The captions or headings in this Contract are strictly for convenience and
      shall not be considered in interpreting this Contract or as amplifying or
      limiting any of its content.

26.2  Unless expressly defined herein, words having well-known technical or
      trade meanings shall be so construed. All listing of items shall not be
      taken to be exclusive, but shall include other items, whether similar or
      dissimilar to those listed, as the context reasonably requires.

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26.3  Except as set forth to the contrary herein, any right or remedy of AT&T or
      Builder shall be cumulative and without prejudice to any other right or
      remedy, whether contained herein or not.

26.4  This Contract has been fully negotiated between and jointly drafted by the
      parties.

26.5  In the event of a conflict between the provisions of this Contract and
      those of any Exhibit, the provisions of this Contract shall prevail and
      such Exhibits shall be corrected accordingly.

26.6  All actions, activities, consents, approvals and other undertakings of the
      parties in this Contract shall be performed in a reasonable and timely
      manner. Except as specifically set forth herein, for the purpose of this
      ARTICLE 26 the normal standards of performance within the
      telecommunications industry in the relevant market shall be the measure of
      whether a party's performance is reasonable and timely.

ARTICLE 27: Assignment

27.1  Builder shall not assign, encumber or otherwise transfer this Contract or
      all or any portion of its rights or obligations hereunder to any other
      party without the prior written consent of AT&T, which consent will not be
      unreasonably withheld or delayed. Notwithstanding the foregoing, Builder
      shall have the right, without AT&T's consent, to (a) subcontract any of
      its construction or maintenance obligations hereunder, or (b) assign or
      otherwise transfer this Contract in whole or in part (1) to any parent,
      subsidiary or affiliate of Builder, (2) to any person, firm, corporation
      which shall control, be under the control of or be under common control
      with Builder, and (3) any corporation or other entity into which Builder
      may be merged or consolidated or which purchases all or substantially all
      of the stock or assets of Builder; provided that the assignee or
      transferee in any such circumstance shall continue to be subject to all of
      the provisions of this Contract, including without limitation, this
      Section 27.1 and provided further that promptly following any such
      assignment or transfer, Builder shall give AT&T written notice identifying
      the assignee or transferee. In the event of any permitted partial
      assignment of any rights hereunder, Builder shall remain the sole point of
      contact with AT&T. No permitted partial or complete assignment shall
      release or discharge Builder from its duties and obligations hereunder.

27.2  Except as provided in this Section 27.2, AT&T shall not assign, encumber
      or otherwise transfer this Contract or all or any of portion of its rights
      or obligations hereunder to any other party without the prior written
      consent of Builder, which consent will not be unreasonably withheld or
      delayed. Notwithstanding the foregoing, AT&T shall have the right, without
      Builder's consent, to (a) subcontract any of its construction or
      maintenance obligations hereunder, or (b) assign or otherwise transfer
      this Contract in whole or in part (1) to any parent, subsidiary or
      affiliate of AT&T, (2) to any person, firm or corporation which shall
      control, be under the control of or be under common control with AT&T, or
      (3) any corporation or other entity into which AT&T may be merged or
      consolidated or which

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      purchases all or substantially all of the stock or assets of AT&T;
      provided that the assignee or transferee in any such circumstance shall
      continue to be subject to all of the provisions of this Contract,
      including without limitation, this Section 27.2; and provided further that
      promptly following any such assignment or transfer, AT&T shall give
      Builder written notice identifying the assignee or transferee. In the
      event of any permitted partial assignment of any rights hereunder, AT&T
      shall remain the sole point of contact with Builder. No permitted partial
      or complete assignment shall release or discharge AT&T from its duties and
      obligations hereunder.

27.3  [INTENTIONALLY OMITTED]

27.4  [INTENTIONALLY OMITTED]

27.5  Neither party shall attempt to circumvent any of its obligations under
      this Contract, or deprive the other party of any anticipated benefit under
      this Contract, through the use of ownership changes, reorganizations,
      creation of new entities, or other artificial devices.

27.6  In the event of any merger, consolidation or sale of all or substantially
      all of the assets of Builder, or any transfer or assignment of a material
      portion of its assets to a subsidiary or affiliate of Builder, then
      Builder shall cause the surviving entity in such merger or consolidation,
      or transferee or assignee of such assets, to execute a counterpart to this
      Contract and thereby be bound by the terms and conditions, and entitled to
      the benefits, applicable to Builder pursuant to this Contract. For
      purposes of this provision the term "affiliate" will mean any person
      directly or indirectly controlling or controlled by or under common
      control with Builder.

ARTICLE 28: Representations and Warranties

28.1  Each party represents and warrants that:

      28.1.A. it has the full right and authority to enter into, execute,
      deliver and perform its obligations under this Contract;

      28.1.B. it has taken all requisite corporate action to approve the
      execution, delivery and performance of this Contract;

      28.1.C. this Contract constitutes a legal, valid and binding obligation
      enforceable against such party in accordance with its terms; and

      28.1 .D. its execution of and performance under this Contract shall not
      violate any applicable existing regulations, rules, statutes or court
      orders of any local, state or federal government agency, court or body.

ARTICLE 29: Other Builder Covenants, Representations and Warranties

29.1  Prior to the execution of this Contract, the documents referenced in the
      letter from Builder to AT&T dated September ____ , 1999 (the "Document
      Letter") will have

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      been previously delivered to AT&T and will have been satisfactory to AT&T
      in its sole discretion.

29.2  [INTENTIONALLY OMITTED]

29.3  Builder will provide complete financial statements (P&L, Balance Sheet,
      Statement of Cash Flows, etc.), prepared in accordance with GAAP and
      certified by the Chief Financial Officer of Builder as to accuracy,
      beginning with those of 30 June 1999, until the Builder Substantially
      Complete Date for the last Link to be constructed. Builder will provide
      these statements to AT&T on the same schedule as to Builder management,
      which will not be on less than a quarterly basis.

29.4  If John Warta ceases to exercise primary management direction and control
      of the activities associated with the construction of the AT&T System at
      any time before 31 December 2000, Builder's Board of Directors may propose
      a qualified successor candidate for whom AT&T will not unreasonably
      withhold approval. AT&T shall notify Builder of its determination within
      10 days of receipt of notice of the proposed successor. If Builder engages
      a successor who is not reasonably acceptable to AT&T, such action by
      Builder shall constitute a material breach of this Contract. The foregoing
      shall apply to any further successors to such position.

29.5  If Stephen Irwin ceases to exercise management direction and control
      regarding the activities associated with the construction of the AT&T
      System at any time before 31 December 2000, Builder's Board of Directors
      may propose a qualified successor candidate subject to AT&T's approval for
      whom AT&T will not unreasonably withhold approval. AT&T shall notify
      Builder of its determination within 10 days of receipt of notice of the
      proposed successor. If Builder engages a successor who is not reasonably
      acceptable to AT&T, such action by Builder shall constitute a material
      breach of this Contract. The foregoing shall apply to any further
      successors to such position.

29.6  Builder covenants for the duration of the construction of the AT&T System
      that it will undertake:

      29.6.A No new or foreign businesses beyond those outlined in its business
      plan referenced in the Document Letter (the "Business Plan") for the
      duration of the construction of the AT&T System.

      29.6.B No sale or transfer, individually or in the aggregate, of material
      assets, which are assets in excess of $1OM (ten million dollars) (in one
      transaction or in a series of transactions), unless of equivalent value
      and within the scope of the Business Plan and (i) the proceeds of such
      sale are reinvested in the ordinary course of business or (ii) used to pay
      down indebtedness of Builder which had been undertaken in the course of
      its business plan, without the explicit prior written consent of AT&T.

      29.6.C No guarantees, back-stops, or loans to affiliates or third parties,
      provided that Builder may undertake guarantees, back-stops, or loans to
      affiliates which are

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      100% owned and controlled by Builder so long as these activities are
      reasonably related to the Business Plan.

      29.6.D No use of AT&T deposit or progress payments other than for the
      purposes of the build, e.g., to contractors, vendors, and company
      employees.

29.7  Sales of Builder stock currently held by PF Telecom and Koch Ventures,
      Inc. prior to 1 October 2000 which lower the total interest of PF Telecom
      and Koch Ventures below 40% in total, or 15% individually, are a material
      breach of this Contract. Sales of Builder stock currently held by PF
      Telecom and Koch Ventures Inc. prior to 1 October 2001 which lower the
      total interest of PF Telecom and Koch Ventures below 15% in total, or 5%
      individually, will constitute a material breach of this Contract.
      Notwithstanding the above, Builder may issue additional shares for fair
      market value, and such shares will not count in the computation of the
      percentages specified above. This provision will expire on the date that
      AT&T certifies the Builder Substantially Complete Date for the last Link
      of the AT&T System. Any waiver by AT&T for any specific transaction shall
      apply to that transaction only and will not constitute a waiver of AT&T's
      rights under any future transactions.

29.8  Prior to the Builder Substantially Complete Date of the last Link of the
      AT&T System and the date of the initial public offering of common stock
      ("Common Stock") of the parent corporation of the Builder ("Parent"), Koch
      Ventures Inc., John Warta and Stephen Irwin will not sell Common Stock of
      Parent owned by them, directly or indirectly, if as a result of such sale
      the number of shares of Common Stock of Parent owned by each of them would
      represent less than 80% of the number of shares of Common Stock owned by
      each of them on the date hereof (after giving effect to any
      reorganization, recapitalization stock split, stock recombination or
      similar event). Prior to the Builder Substantially Complete Date of the
      last Link and after the date of an initial public offering of Common Stock
      of the Parent, Koch Ventures Inc., John Warta and Stephen Irwin will not
      sell Common Stock if at the time of such sale the market value of their
      remaining ownership of Common Stock of Parent is less than $100 million,
      $60 million or $20 million, respectively.

29.9  [INTENTIONALLY OMITTED]

29.10 [INTENTIONALLY OMITTED]

29.11 Financial Covenants

      29.11.A Any acceleration of indebtedness incurred by Builder under the
      terms of Builder's credit agreement with its dark fiber vendor pursuant to
      Section 6.14 entitled Minimum Cumulative Dark Fiber/Conduit Proceeds of
      such credit agreement shall be a material breach of this Contract.

      29.11.B Measured from the signing of the Contract and as of each quarter
      end commencing with the quarter ended March 31, 2000, Builder will not
      permit the completed cumulative route miles associated with the
      construction of the AT&T System to fall below sixty percent (60%) in any
      single quarter or eighty percent

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      (80%) in any two consecutive quarters, of that projected in the Business
      Plan. Failure to maintain such a level of completed miles will be a
      material breach of the Contract. The number of route miles completed in
      any quarter will be that number of miles reported as completed by the
      company hired as project manager by AT&T. For purposes of this Section
      29.11.B, a route mile will be deemed to be completed when the required
      AT&T Conduit and the First Conduit have been placed in the applicable ROW
      in the manner permitted by such ROW and are ready for installation of
      cable; provided that in the event that Builder takes any action that
      results in a reduction to the number of route miles that will be required
      to complete any Link, Builder shall be credited with the number of route
      miles contained in Exhibit B as to such Link. The provisions of this
      Section 29.11.B shall not apply to the completion of the route miles
      related to the Link from San Diego to Los Angeles contemplated by Section
      10.4.

      29.11.C On or before the first day of the first fiscal quarter and the
      third fiscal quarter of each Builder fiscal year during the term of this
      Contract, Builder will provide AT&T with a certificate of the Chief
      Financial Officer which states that Builder maintains cash balances, cash
      available under credit lines and projected cash flow from operations, such
      levels to be defined in a mutually acceptable manner, at least equal to
      the next six months of (i) principal and interest due under Builder's
      consolidated debt, (ii) contracted lease payments under capital leases,
      (iii) projected necessary capital expenditures, (iv) projected periodic
      operating losses of its operations and operating subsidiaries for the
      respective periods, and (v) projected periodic cash taxes. The officer's
      certificate shall also state that the projections referred to in such
      certificate are based upon assumptions which such officer believes are
      reasonable.

      29.11.D A breach of any covenant set forth in this ARTICLE 29 shall be an
      event of default subject to the provisions of Section 21.3; provided that,
      by way of clarification only and not by way of limitation, the provisions
      of Section 5.7 and ARTICLE 37 apply in determining the existence of any
      such event of default.

ARTICLE 30: Entire Contract; Amendment

30.1  This Contract constitutes the entire and final agreement and understanding
      between the parties with respect to the subject matter hereof and
      supersedes all prior agreements relating to the subject matter hereof,
      which are of no further force or effect. The Exhibits referred to herein
      are integral parts hereof and are hereby made a part of this Contract.
      This Contract may only be modified or supplemented by an instrument in
      writing executed by a duly authorized representative of each party.

ARTICLE 31: No Third Party Beneficiaries

31.1  Nothing in this Contract is intended to provide any legal rights to anyone
      not an executing party of this Contract. This Contract does not provide
      and is not intended to provide third parties with any remedy, claim,
      liability, reimbursement, cause of action, or other privilege.

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ARTICLE 32: Relationship of the Parties

32.1  The relationship between AT&T and Builder shall not be that of partners,
      agents or joint venturers for one another, and nothing contained in this
      Contract shall be deemed to constitute a partnership or agency agreement
      between them for any purposes, including, but not limited to federal
      income tax purposes. AT&T and Builder, in performing any of their
      obligations hereunder, shall be independent contractors or independent
      parties and shall discharge their contractual obligations at their own
      risk.

ARTICLE 33: Successors and Assigns

33.1  This Contract and each of the parties' respective rights and obligations
      under this Contract shall be binding upon and shall inure to the benefit
      of the parties and each of their respective permitted successors and
      assigns.

ARTICLE 34: Unenforceable Provisions

34.1  No provision of this Contract shall be interpreted to require any unlawful
      action by either party. If any section or clause of this Contract is held
      to be invalid or unenforceable, then the meaning of that section or clause
      shall be construed so as to render it enforceable to the extent feasible.
      If no feasible interpretation would save the section or clause, it shall
      be severed from this Contract with respect to the matter in question, and
      the remainder of the Contract shall remain in full force and effect.
      However, in the event such a section or clause is an essential element of
      the Contract, the parties shall promptly negotiate a replacement that will
      achieve the intent of such unenforceable section or clause to the extent
      permitted by law.

ARTICLE 35: Counterparts

35.1  This Contract may be executed in one or more counterparts, all of which
      taken together shall constitute one and the same instrument.

ARTICLE 36: Minority and Women-Owned Business Enterprises

36.1  It is AT&T's policy that minority and women-owned business enterprises
      (MWBEs) as defined in Exhibit H shall have the maximum practicable
      opportunity to participate in the performance of contracts. Builder agrees
      to use its good faith efforts to award subcontracts and/or utilize MWBEs
      to carry out this policy to the fullest extent consistent with the
      efficient performance of this Agreement and without compromise of quality
      and reliability expectations.

36.2  In addition to these general conditions for MWBE support, Builder agrees
      to (a) use its good faith efforts to utilize MWBEs in support of this
      Agreement and strive to increase the percentage of total expenditures from
      MWBEs to fulfill AT&T's purchases each successive year of this Agreement;
      (b) support AT&T's state and regional goals for MWBE and service-disabled
      veterans (SDVs) spending in California and other states/regions as may be
      defined in the future; and (c) work

Final 10/04/99                    Page 52                            Main Text
                       AT&T and Builder Proprietary

<PAGE>

      with AT&T to develop opportunities for the utilization of MWBEs for first
      tier procurement by AT&T.

36.3  Builder shall submit to AT&T quarterly reports of work with known MWBEs in
      the form of Exhibit I in such manner and at such time as AT&T's
      representative may prescribe. Such quarterly reports shall state
      separately for minority-owned business enterprises (MBEs), women-owned
      business enterprises (WBEs), and, for California, service-disabled
      veterans (SDVs), the third-party work which is attributable to AT&T. In
      instances where direct correlation cannot be determined, such MWBE
      payments may be established by Builder comparing AT&T's payments to
      Builder, in that period, to total payments to Builder from all of its
      customers, in that period, and then arriving at AT&T's apportionment of
      such MWBE payments. Nothing in this clause shall affect or diminish
      Builder's obligations as set forth in the assignment and subcontracting
      provisions or any other provisions of this Agreement. If Builder complies
      with the provisions of this clause, that will be a factor AT&T will
      consider favorably in making procurement decisions about future business
      with Builder.

ARTICLE 37: Force Majeure

37.1  A party shall not be in default, or be subject to the payment of
      liquidated damages pursuant to ARTICLE 5 hereof, provided the delay in
      performance a) occurs without fault or negligence on the part of the
      delayed party or its subcontractors, and b) is caused solely by one or
      more of the following conditions: (i) acts of God including fire, flood,
      earthquakes and hurricanes; (ii) material shortage or unavailability not
      resulting from the responsible party's failure to timely place orders or
      take other necessary actions therefor; (iii) government codes, ordinances,
      laws, rules, regulations or restrictions (collectively, "Regulations"),
      including the inability to obtain a permit (except to the extent that such
      delay results from the failure to pay sufficient funds (but not to the
      extent the delay caused by such Regulations could be avoided by rerouting
      the System if such a reroute was commercially reasonable)); (iv) war or
      civil disorder.

      If any force majeure condition occurs, the party delayed or unable to
      perform shall give written notice to the other party as soon as
      practicable, stating the nature of the force majeure condition and any
      action being taken to avoid or minimize its effect. Force majeure
      conditions shall not apply to any period prior to the delivery of such
      notice.

      In the event of the occurrence of one of the conditions identified in
      clause (i) through (iv) after Acceptance during the term of the Contract,
      which results in damage to the System and/or The Cable, both parties will
      share costs and expenses in repairing such System and/or on a
      proportionate basis (dependent on Fiber count usage or ownership).

ARTICLE 38: Exhibits

Final 10/04/99                    Page 53                         Main Text
                     AT&T and Builder Proprietary

<PAGE>

This Contract consists of the following documents, which are incorporated herein
by this reference.

Exhibit A          Route Maps
Exhibit B          Rates, Pricing, Fiber Counts and Schedule
Exhibit C          Maintenance Specifications and Procedures
Exhibit D          Fiber Cable Splicing, Testing and Acceptance Procedures
Exhibit E          Engineering and Construction Requirements
Exhibit F          AT&T Link Acceptance Letter
Exhibit G          Fiber and Conduit Disposition Agreement
Exhibit H          MWBE Definition
Exhibit I          Second Tier MWBE Reporting Form
Exhibit J          Dark Fiber IRU Agreement
Exhibit K          Grant of Communication Systems Right-of-Way Easement
                   K1: Easement a/o 7-12-96
                   K2: Cable and Regen Easement
Exhibit L          Form of Right of Way License
                   L1: 40 year License
                   L2: Perpetual License
Exhibit M          Contractor's or Subcontractor's Waiver of Lien

Final 10/04/99                Page 54                                Main Text
                   AT&T and Builder Proprietary

<PAGE>

In confirmation of their consent to the terms and conditions contained in this
Contract and intending to be legally bound hereby, the parties have executed
this Contract as of the date first above written.

             AT&T Corp.
                        By:    /s/ Debra Bell
                           -----------------------------
                        Name:  Debra Bell
                             ---------------------------
                        Title: Chief Procurement Officer
                              --------------------------
                        Date:  10/27/99
                             ---------------------------

             BUILDER
                        By:    /s/ Stephen Irwin
                           -----------------------------
                        Name:  Stephen Irwin
                             ---------------------------
                        Title: Vice Chairman & Executive
                               Vice President, PF.Net Corp.
                              --------------------------
                        Date:  October 26, 1999
                             ---------------------------

Final 10/04/99                      Page 55                          Main Text
                        AT&T and Builder Proprietary<PAGE>

                                                                Exhibit 10.2

                                 AMENDMENT NO. 1

                                       TO

                          FIBER OPTIC SYSTEM AGREEMENT
                          ----------------------------

THIS AMENDMENT (the "AMENDMENT") is entered into as of May 5, 2000, by and
between PF.Net Corp., a Delaware corporation ("BUILDER") and AT&T Corp., a New
York corporation ("AT&T").

WHEREAS, Builder and AT&T entered into a Fiber Optic System Agreement, dated as
of October 29, 1999 (the "CONTRACT"; capitalized terms used herein without
definition having the meanings given to such terms in the Contract).

WHEREAS, both Builder and AT&T desire to amend Article 29 of the Contract in
order to modify the covenants that require John Warta and Stephen Irwin
(collectively, the "MANAGERS") to exercise primary management direction and
control of the activities associated with the construction of the AT&T System.

WHEREAS, Section 30 of the Contract provides that the consent of Builder and
AT&T shall be required for any modification of the provisions of the Contract.

NOW THEREFORE, the following amendments are hereby made to the Contract:

   Section 1.   Section 29.4 of the Contract is hereby replaced in its entirety
with the following:

     "If Thomas R. McCaleb ceases to exercise primary management direction and
control of the activities associated with the construction of the AT&T System
at any time before 31 December 2001, Builder's Board of Directors may propose a
qualified successor candidate for whom AT&T will not unreasonably withhold
approval. AT&T shall notify Builder of its determination within 10 days of
receipt of notice of the proposed successor. If Builder engages a successor who
is not reasonably acceptable to AT&T, such action by Builder shall constitute a
material breach of this Contract. The foregoing shall apply to any further
successors to such position."

     Section 2.  Section 29.5 of the Contract is hereby replaced in its entirety
with the following:

         "[INTENTIONALLY OMITTED]."

<PAGE>

IN WITNESS WHEREOF, AT&T and Builder have executed this Amendment as of the date
first referenced above.

                             AT&T CORP.

                             By:      /S/ STEPHEN R. ALLEN
                              ------------------------------
                             Name:  Stephen R. Allen
                             Title:    Division Manager

                             PF.NET CORP.
                             By:      /S/  MUZZAFAR MIRZA
                             ------------------------------
                             Name:  Muzzafar Mirza
                             Title:    Chairman of the Board

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