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LETTER TO REGISTERED HOLDERS AND DTC PARTICIPANTS
REGARDING THE OFFER TO EXCHANGE
$225,000,000 PRINCIPAL AMOUNT OF
13.75% SENIOR NOTES DUE 2010
OF
PF.NET COMMUNICATIONS, INC.
To Registered Holders and The Depository Trust Company Participants:
We are enclosing herewith the materials listed below relating to the offer
by PF.Net Communications, Inc. (the "Company") to exchange the Company's new
13.75% Senior Notes due 2010 (the "New Notes"), pursuant to an offering
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for a like principal amount of the Company's issued and outstanding 13.75%
Senior Notes due 2010 (the "Old Notes") upon the terms and subject to the
conditions set forth in the Company's Prospectus, dated , 2000, and the
related Letter of Transmittal (which together constitute the "Exchange Offer").
Enclosed herewith are copies of the following documents:
1. Prospectus dated , 2000;
2. Letter of Transmittal;
3. Notice of Guaranteed Delivery;
4. Instructions to Registered Holder or DTC Participant from Beneficial
Owner; and
5. Letter which may be sent to your clients for whose account you hold
definitive registered notes or book-entry interests representing Old Notes
in your name or in the name of your nominee, to accompany the instruction
form referred to above, for obtaining such client's instruction with regard
to the Exchange Offer.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE EXCHANGE
OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000, UNLESS
EXTENDED.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered.
To participate in the Exchange Offer, a beneficial holder must either
(i) cause to be delivered to United States Trust Company of New York (the
"Exchange Agent"), at the address set forth in the Letter of Transmittal,
definitive registered notes representing Old Notes in proper form for transfer
together with a properly executed Letter of Transmittal or (ii) cause a DTC
Participant to tender such holder's Old Notes to the Exchange Agent's account
maintained at the Depository Trust Company ("DTC") for the benefit of the
Exchange Agent through DTC's Automated Tender Offer Program ("ATOP"), including
transmission of a computer-generated message that acknowledges and agrees to be
bound by the terms of the Letter of Transmittal. By complying with DTC's ATOP
procedures with respect to the Exchange Offer, the DTC Participant confirms on
behalf of itself and the beneficial owners of tendered Old Notes all provisions
of the Letter of Transmittal applicable to it and such beneficial owners as
fully as if it completed, executed and returned the Letter of Transmittal to the
Exchange Agent. You will need to contact those of your clients for whose account
you hold definitive registered notes or book-entry interests representing Old
Notes and seek their instructions regarding the Exchange Offer.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that: (i) the New Notes or book-entry interests therein
to be acquired by such holder and any beneficial owner(s) of such Old Notes or
interests therein ("Beneficial Owner(s)") in connection with the Exchange Offer
are being acquired by such holder and any Beneficial Owner(s) in the ordinary
course of business of the holder and any Beneficial Owner(s), (ii) the holder
and each Beneficial Owner are not participating, do not intend to participate,
and have no arrangement or understanding with any person to participate, in the
distribution of the New Notes, (iii) if the holder or Beneficial Owner is a
resident of the State of
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California, it falls under the self-executing institutional investor exemption
set forth under Section 25102(i) of the Corporate Securities Law of 1968 and
Rules 260.102.10 and 260.105.14 of the California Blue Sky Regulations, (iv) if
the holder or Beneficial Owner is a resident of the Commonwealth of
Pennsylvania, it falls under the self-executing institutional investor exemption
set forth under Sections 203(c), 102(d) and (k) of the Pennsylvania Securities
Act of 1972, Section 102.111 of the Pennsylvania Blue Sky Regulations and an
interpretive opinion dated November 16, 1985, (v) the holder and each Beneficial
Owner acknowledge and agree that any person who is a broker-dealer registered
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") or is
participating in the Exchange Offer for the purpose of distributing the New
Notes must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction of the New
Notes or interests therein acquired by such person and cannot rely on the
position of the staff of the Commission set forth in certain no-action letters,
(vi) the holder and each Beneficial Owner understand that a secondary resale
transaction described in clause (v) above and any resales of New Notes or
interests therein obtained by such holder in exchange for Old Notes or interests
therein originally acquired by such holder directly from the Company should be
covered by an effective registration statement containing the selling security
holder information required by Item 507 or Item 508, as applicable, of
Regulation S-K of the Commission and (vii) neither the holder nor any Beneficial
Owner(s) is an "affiliate," as defined in Rule 405 under the Securities Act, of
the Company. Upon a request by the Company, a holder or beneficial owner will
deliver to the Company a legal opinion confirming its representation made in
clause (vii) above. If the tendering holder of Old Notes is a broker-dealer
(whether or not it is also an "affiliate") or any Beneficial Owner(s) that will
receive New Notes for its own or their account pursuant to the Exchange Offer,
the tendering holder will represent on behalf of itself and the Beneficial
Owner(s) that the Old Notes to be exchanged for the New Notes were acquired as a
result of market-making activities or other trading activities, and acknowledge
on its own behalf and on the behalf of such Beneficial Owner(s) that it or they
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering a prospectus, such tendering holder will not be deemed to admit
that it or any Beneficial Owner is an "underwriter" within the meaning of the
Securities Act.
The enclosed "Instructions to Registered Holder or DTC Participant from
Beneficial Owner" form contains an authorization by the beneficial owners of Old
Notes for you to make the foregoing representations. You should forward this
form to your clients and ask them to complete it and return it to you. You will
then need to tender Old Notes on behalf of those of your clients who ask you to
do so.
The Company will not pay any fee or commission to any broker or dealer or to
any other persons (other than the Exchange Agent) in connection with the
solicitation of tenders of Old Notes pursuant to the Exchange Offer. The Company
will pay or cause to be paid any transfer taxes payable on the transfer of Old
Notes to it, except as otherwise provided in the section "The Exchange
Offer--Transfer Taxes" of the enclosed Prospectus.
Additional copies of the enclosed material may be obtained from the Exchange
Agent.
Very truly yours,
PF.NET COMMUNICATIONS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY OR THE EXCHANGE AGENT OR AUTHORIZE YOU TO USE ANY
DOCUMENT OR MAKE ANY STATEMENT ON THEIR BEHALF IN CONNECTION WITH THE EXCHANGE
OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED
THEREIN.
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