Document:

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                                                                   Exhibit 10.38

                                  SECOND WAIVER

                  SECOND WAIVER, dated as of April 15, 2002 (this "WAIVER"), to
the Credit Agreement dated as of October 29, 1999 (as heretofore amended,
supplemented or otherwise modified, the "CREDIT AGREEMENT"), among PF.Net Corp.,
a Delaware corporation (the "BORROWER"), the lenders and financial institutions
from time to time party thereto (collectively, the "LENDERS") and Wachovia Bank,
National Association (formerly known as First Union National Bank), in its
capacity as the administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") for the Lenders.

                              W I T N E S S E T H :

                  WHEREAS, pursuant to the Credit Agreement, the Lenders have
made certain loans and other extensions of credit to the Borrower;

                  WHEREAS, pursuant to and subject to the terms of a Waiver
dated as of March 20, 2002, the Lenders agreed to waive, but only until April
15, 2002, the occurrence and continuance of certain Defaults and Events of
Default under the Credit Agreement;

                  WHEREAS, the Borrower has requested that the Lenders continue
to waive any Defaults or Events of Default that have occurred and are continuing
under the Credit Agreement through April 30, 2002; and

                  WHEREAS, the Lenders are willing to agree to the requested
waiver, subject to the terms and conditions set forth herein;

                  NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration the receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:

                  1. DEFINED TERMS. Unless otherwise defined herein, capitalized
terms are used herein as defined in the Credit Agreement.

                  2. WAIVER. The Lenders hereby waive, but only until the
expiration of the Waiver Period (as defined below), any Default or Event of
Default under Sections 7.01(c), (d) or (e) of the Credit Agreement arising by
reason of (a) any failure by the Borrower to comply with Section 6.14 (Minimum
Cumulative Dark Fiber/Conduit Revenue/Proceeds), Section 6.15 (Minimum
Consolidated Operating Revenues) and Section 6.16 (Consolidated EBITDA) of the
Credit Agreement for the period ending March 31, 2002, (b) any failure by the
Borrower to comply with Sections 5.01(a) or (d) (Financial Statements and Other
Information) or Section 5.02(a) (Notice of Material Events) of the Credit
Agreement; PROVIDED that the Borrower shall deliver to the Administrative Agent
and the Lenders as soon as available financial statements in respect of the 2001
fiscal year of the Borrower, (c) any failure by the Borrower to comply with
Section 5.05 (Payment of Obligations) of the Credit Agreement, (d) any failure
by the Borrower to comply with Section 6.02(ii) (Liens) of the Credit Agreement
as a result of the creation of any
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Lien not permitted under clause (b) of the definition of Permitted Encumbrances
or (e) any failure of any representation or warranty made or deemed made by or
on behalf of any Loan Party in connection with any extension of credit under the
Credit Agreement to have been true and correct in all respects (or, in the case
of any representation or warranty that is not qualified as to materiality, in
all material respects) as of the date made or deemed made. The term "WAIVER
PERIOD" shall mean the period from the date hereof until the earliest to occur
of (i) the occurrence of any Default or Event of Default not expressly waived
pursuant to this Waiver, (ii) April 30, 2002 or (iii) any failure by the
Borrower to comply with Section 3 of this Waiver.

                  3. LIMITATION ON BORROWING AND RESTRICTED PAYMENTS. (a) The
Borrower hereby acknowledges and agrees that the Borrower shall not have the
right to, and shall not, make a Borrowing Request or request the issuance of any
Letter of Credit, and that the Lenders shall have no obligation to honor any
such Borrowing Request or issue any such Letter of Credit.

         (b) The Borrower hereby agrees that during the Waiver Period it shall
not have the right, and shall not, make any Restricted Payment, except on
account of Permitted Parent Expenses, otherwise permitted under Section 6.06(iv)
(Restricted Payments) of the Credit Agreement.

                  4. REPRESENTATIONS AND WARRANTIES. After giving effect to this
Waiver, the Borrower hereby confirms, reaffirms and restates in all respects the
representations and warranties set forth in Article 3 (other than Section
3.04(c)) of the Credit Agreement MUTATIS MUTANDIS, except that where such
representations and warranties relate to an earlier date, such representations
and warranties shall have been true and correct in all material respects as of
such earlier date.

                  5. VALIDITY OF OBLIGATIONS; RELEASE. Each Loan Party
acknowledges and agrees that (a) such Loan Party is truly and justly indebted to
the Lenders and the Administrative Agent for the Obligations, without defense,
counterclaim or offset of any kind, and such Loan Party ratifies and reaffirms
the validity, enforceability and binding nature of such Obligations and (b) such
Loan Party has no claim, right or cause of action of any kind against any
Lender, the Administrative Agent or any of such Lender's or the Administrative
Agent's present or former subsidiaries, Affiliates, officers, directors,
employees, attorneys or other representatives or agents (collectively with their
respective successors and assigns, the "LENDER PARTIES") in connection with the
Obligations, this Waiver, the Credit Agreement and the other Loan Documents, or
the transactions contemplated hereby or thereby. Each Loan Party
unconditionally, freely, voluntarily and, after consultation with counsel and
becoming fully and adequately informed as to the relevant facts, circumstances
and consequences, releases, waives and forever discharges (and further agrees
not to allege, claim or pursue) any and all claims, rights, liabilities, causes
of action, counterclaims or defenses of any kind whatsoever, in contract or in
tort, in law or in equity, whether known or unknown, direct or derivative, which
such Loan Party or any predecessor, successor or assign might otherwise have or
may have against any Lender Party on account of any conduct, condition, act,
omission, event, contract, liability, obligation, demand, covenant, promise,
indebtedness, claim, right, cause of action, suit, damage, defense, circumstance
or matter of any kind whatsoever which existed, arose or occurred at any time
prior to the Effective Date in connection with the Obligations, this Waiver, the
Credit Agreement and the other Loan Documents, or the transactions contemplated
hereby or thereby.

                                       2
<PAGE>

                  6. CONDITIONS PRECEDENT. This Waiver shall become effective on
the date of satisfaction of the following conditions precedent (the "EFFECTIVE
DATE"):

                  (a) WAIVER. The Administrative Agent shall have received
         counterparts of this Waiver, duly executed by the Borrower, the other
         Loan Parties, the Administrative Agent and the Required Lenders.

                  (b) NO DEFAULT OR EVENT OF DEFAULT. After giving effect to
         this Waiver, no Default or Event of Default shall have occurred and be
         continuing.

                  (c) FEES AND EXPENSES. The Administrative Agent and the
         Lenders shall have received payment of all fees and expenses required
         to be paid pursuant to Section 9.03 of the Credit Agreement for which
         invoices have been presented.

                  7. CONTINUING EFFECT; NO OTHER WAIVERS OR AMENDMENTS. Except
as expressly waived hereby, all of the terms and provisions of the Credit
Agreement and the other Loan Documents are and shall remain in full force and
effect. The waiver contained herein shall not constitute a waiver, amendment or
modification of any other provision of the Credit Agreement or the other Loan
Documents and does not indicate the Lenders' willingness to consent to any other
waiver, amendment or modification of the Credit Agreement or the other Loan
Documents. The Administrative Agent and the Lenders expressly reserve the right
to exercise all of their rights and remedies under the Credit Agreement, the
other Loan Documents and applicable law at any time after the expiration of the
Waiver Period in respect of the occurrence and continuance of any Default or
Event of Default waived pursuant to Section 2.

                  8. GUARANTORS. Each Loan Party party to a Guarantee and
Subordination Agreement acknowledges and consents to all of the terms and
conditions of this Waiver and agrees that this Waiver does not operate to reduce
or discharge such Loan Party's obligations under such Guarantee or the other
Loan Documents to which such Loan Party is a party.

                  9. GOVERNING LAW. THIS WAIVER AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK.

                  10. COUNTERPARTS. This Waiver may be executed by the parties
hereto in any number of separate counterparts, each of which when so executed
and delivered shall be deemed to be an original, and all of which taken together
shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Waiver by facsimile transmission shall
be as effective as delivery of a manually executed counterpart of this Waiver.

                                       3
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this Waiver
to be executed by their duly authorized representatives as of the date first
above written.

                                  PF.NET CORP.

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President

                                  VELOCITA CORP.

                                  By: /s/ KIRBY G. PICKLE, JR.
                                     ---------------------------------
                                  Name: Kirby G. Pickle, Jr.
                                  Title: Chief Executive Officer

                                  PF.NET CONSTRUCTION CORP.

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President

                                  PF.NET SUPPLY CORP.

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President
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                                  PF.NET NETWORK SERVICES CORP.

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President

                                  PF.NET PROPERTY CORP.

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President

                                  PF.NET VIRGINIA CORP.

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President

                                  PF.NET VIRGINIA, LLC

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President

                                  PF.NET NETWORK SERVICES EAST LLC

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President
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                                  PF.NET NETWORK SERVICES WEST LLC

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President

                                  PF.NET CONSTRUCTION SERVICES LLC

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President

                                  PF.NET SUPPLY LLC

                                  By: /s/ W. TERRELL WINGFIELD JR.
                                     ---------------------------------
                                  Name: W. Terrell Wingfield Jr.
                                  Title: Vice President

                                  WACHOVIA BANK, NATIONAL ASSOCIATION
                                  as Administrative Agent and as a Lender

                                  By: /s/ G. C. ULLRICH
                                     ---------------------------------
                                  Name: G. C. Ullrich
                                  Title: Senior Vice President

                                  ABN AMRO BANK N.V.

                                  By: /s/ WILLIAM J. TERESKY, JR.
                                     ---------------------------------
                                  Name:  William J. Teresky, Jr.
                                  Title: Group Vice President

                                  By: /s/ PARKER H. DOUGLAS
                                     ---------------------------------
                                  Name:  Parker H. Douglas
                                  Title: Group Vice President
<PAGE>

                                  BANK OF AMERICA, N.A.

                                  By: /s/ PATRICK HONEY
                                     ---------------------------------
                                  Name: Patrick Honey
                                  Title: Vice President

                                  BANKERS TRUST COMPANY

                                  By: /s/ ANCA TRIFAN
                                     ---------------------------------
                                  Name: Anca Trifan
                                  Title: Director

                                  CISCO SYSTEMS CAPITAL CORPORATION

                                  By: /s/ BRIAN P. FUKUHARA
                                     ---------------------------------
                                  Name:  Brian P. Fukuhara
                                  Title: Chief Credit Officer

                                  CREDIT LYONNAIS-NEW YORK BRANCH

                                  By: /s/ LINDA D. TULLOCH
                                     ---------------------------------
                                  Name: Linda D. Tulloch
                                  Title: Vice President

<PAGE>

                                  WESTDEUTSCHE LANDESBANK
                                  GIROZENTRALE

                                  By: /s/ RICHARD GARBARINO
                                     ---------------------------------
                                  Name:  Richard Garbarino
                                  Title: Managing Director

                                  By: /s/ CYRIL DERVELOY
                                     ---------------------------------
                                  Name:  Cyril Derveloy
                                  Title: Associate Director<Page>

                                                                   Exhibit 10.39

                        SEPARATION AND RELEASE AGREEMENT

         THIS SEPARATION AND RELEASE AGREEMENT (the "Agreement") is made and
entered into by and between Donald W. Bolar (the "Executive") and Velocita Corp.
(the "Company") (collectively, the "Parties").

         WHEREAS, the Executive's employment with the Company will terminate
effective April 29, 2002, in connection with a reduction in force.

         WHEREAS, the Company has offered the Executive valuable consideration
over and above that to which he would otherwise be entitled on termination of
employment, in exchange for the Executive's execution of this Agreement.

         NOW THEREFORE, in consideration of the mutual promises contained
herein, it is agreed as follows:

         1. The Parties acknowledge and agree that the Executive's employment
with the Company will terminate, effective April 29, 2002 (the "Termination
Date").

         2. The Company shall pay the Executive severance pay in the amount of
Two Hundred and Fifty Thousand Dollars ($250,000) less applicable deductions and
withholding, in a lump sum following the date this Agreement becomes effective.
If the Executive elects to continue his health insurance coverage under the
Company's group health insurance plan pursuant to COBRA, the Company will pay
the premiums for such continuation coverage for the six-month period following
the Termination Date.

         3. The Executive represents that he has returned or, as of the
Termination Date, he will return, all Company property, including without
limitation, all equipment, supplies, documents, files, records, reports,
memoranda, blueprints, software, credit cards, cardkey passes, door and file
keys, computer access codes, disks or instructional manuals and other physical
or personal property the Executive received, prepared or helped to prepare in
connection with his employment with the Company, and all copies, duplicates,
reproductions or excerpts thereof.

         4. The Executive agrees that he will not make any disparaging or
defamatory comments about the Company, or about any of the Company's parent
companies, subsidiaries or affiliates or any of their officers, directors,
management, or employees, nor will he authorize, encourage or participate with
anyone on his behalf to make such statements.

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         5. The Executive agrees to keep the terms, amount and fact of this
Agreement completely confidential, except as may be required by law or legal
process, and except that the Executive may reveal the terms of this Agreement
to the Executive's spouse and his legal, financial and tax advisors, provided
that each such individual agrees not to reveal such information further.

         6. The Executive agrees, upon reasonable request, to provide to the
Company and its parent companies, subsidiaries and affiliates truthful and
complete cooperation in litigation matters arising out of or related to the
Executive's activities while employed by the Company, whether or not such
matters have been commenced as of the termination of the Executive's employment.

         7. As a material inducement to the Company to enter into this Agreement
and in consideration for the Company's promise to pay COBRA premiums and
severance pursuant to Paragraph 2 above, the Executive, on behalf of himself,
his heirs, executors, administrators and assigns hereby irrevocably and
unconditionally releases the Company and its parent companies, subsidiaries and
affiliates, together with all of their current, former and future employees,
directors, partners, members, shareholders, officers, agents, attorneys,
representatives, predecessors, successors, assigns, and the like, and all
persons acting by, though, under or in concert with any of them (collectively,
the "Releasees") from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages or causes of action,
suits, rights, demands, costs, losses, debts and expenses (including attorneys'
fees and costs incurred) of any nature whatsoever, known or unknown, suspected
or unsuspected, arising on or before the date the Executive signs this
Agreement, including, but not limited to, any claims arising out of or related
to the termination of Executive's employment, any claims arising under or
related to any employment agreement between the Executive and the Company or any
of its predecessors, any claims under the Worker Adjustment and Retraining
Notification Act or similar laws and any claims under Federal, state or local
laws prohibiting any form of discrimination, including without limitation,
discrimination on the basis of age, as prohibited by the Age Discrimination in
Employment Act, arising on or before the date the Executive signs this
Agreement. The Executive further agrees to waive irrevocably any right to
recover under any claim that may be filed on the Executive's behalf by the EEOC
or any other federal, state or local

<Page>

government entity, or otherwise, relating to the Executive's employment with the
Company or the termination of that employment.

         8. The Executive represents and warrants that he has not filed any
complaints or charges or lawsuits against the Company or any other Releasee with
any governmental agency or court and the Executive has not assigned or
transferred, or purported to assign or transfer, to any person or entity, any
claim or any portion thereof or interest therein he has against the Company or
any other Releasee.

         9. The Executive acknowledges that the payments and benefits to be
provided to him under Paragraph 2 above exceed any compensation or benefits
which would otherwise be paid to him on termination of employment. The Executive
further acknowledges and agrees that the payments to be paid to him or on his
behalf under Paragraph 2 above shall be in lieu of and discharge any obligations
of the Company to the Executive under the terms of his April 12, 2000 Employment
Agreement with the Company, or otherwise, for any further compensation, unused
vacation, severance pay, relocation payments, or any other expectations of
remuneration or benefit on the part of the Executive, except for the
reimbursement of reasonable business expenses incurred by the Executive prior to
the Termination Date, to be paid in accordance with the Company's policy for
reimbursement of employee business expenses and except to the extent that the
Executive is entitled to any benefits following termination under the terms of
the Company's employee benefit plans.

         10. The Executive represents and acknowledges that the Executive has
been given a period of twenty-one (21) days to consider this Agreement and that
the Executive has read this Agreement, understands the terms of the Agreement
and has been given an opportunity to ask questions of the Company's
representatives. The Executive has been advised to consult with an attorney
prior to signing this Agreement.

         11. The Executive further represents that in signing this Agreement the
Executive does not rely, and has not relied, on any representation or statement
not set forth in this Agreement made by any representative of the Company or any
other Releasee with regard to the subject matter, basis or effect of this
Agreement or otherwise.

         12. This Agreement is knowingly and voluntarily entered into by all
Parties.

         13. For a period of seven (7) days after the date the Executive signs
this Agreement, the Executive has the right to revoke this Agreement by
delivering written notice of revocation to

<Page>

Anne Spartin at Velocita Corp., 2941 Fairview Park Drive, Suite 200, Falls
Church, Virginia 22042, prior to close of business (5:00 p.m.) on the seventh
day following the date on which the Executive signs this Agreement. The
Agreement shall not be effective or enforceable, and the Executive shall not
be entitled to any severance pay or payment of COBRA premiums, unless and
until seven (7) days have elapsed from the date the Executive signs this
Agreement and the Executive has not revoked the Agreement during that seven
(7) day period.

         14. This Agreement sets forth the entire agreement between the Parties
and fully supersedes any and all prior agreements, understandings or
arrangements between the Parties about the subject matter of this Agreement.

         15. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Virginia without reference to rules
regarding conflicts of law.

         16. The provisions of this Agreement are severable and if any part of
it is found to be unenforceable, the other provisions shall remain fully valid
and enforceable. This Agreement shall survive the termination of the Executive's
employment and any arrangements contained herein.

         17. This Agreement may be executed in any number of counterparts, each
of which shall, when executed, be deemed to be an original and all of which
shall be deemed to be one and the same instrument.

         18. Neither this Agreement nor any part of it may be modified, amended,
changed or terminated orally, and any modification, amendment, or termination
must be in writing signed by both Parties. Any waiver of any term or provision
of this Agreement must be in writing and signed by the Party granting the
waiver.

         19. This Agreement shall be binding on the Executive and the
Executive's heirs, administrators, representatives, executors and assigns and
shall inure to the benefit of the Company, its parent companies, subsidiaries
and affiliates and to their successors and assigns.

         IN WITNESS WHEREOF, each of the parties hereunto has executed this
Agreement this 8th day of March, 2002.

VELOCITA CORP.                                         EXECUTIVE:

By:   /s/ Anne G. Spartin                                /s/ Donald W. Bolar
   ---------------------------------                   ----------------------
                                                       Donald W. Bolar

Date     3/8/2002                                      Date    3/8/2002
     -------------------------------                        -----------------

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