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[LETTERHEAD OF LATHAM & WATKINS]
July 17, 2000
PF.Net Communications, Inc.
600 Kenrick Street, Suite A5
Houston, Texas 77060
Re: Registration Statement on Form S-4
PF.Net Communications, Inc.
File No. 333-39646
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Ladies and Gentlemen:
In connection with the registration of $225,000,000 in aggregate
principal amount of its 13.75% Senior Notes due 2010 (the "Exchange Notes")
by PF.Net Communications, Inc., a Delaware corporation (the "Company'),
under the Securities Act of 1933, as amended (the "Act"), on Form S-4 (the
"Registration Statement") filed with the Securities and Exchange Commission
(the "Commission") on June 19, 2000 (File No. 333-39646), you have requested
our opinion with respect to the matters set forth below. The Exchange Notes
will be issued pursuant to an indenture (the "Indenture"), dated as of May
10, 2000, among the Company and United States Trust Company of New York, as
trustee (the "Trustee"). The Exchange Notes will be issued in exchange for
the Company's outstanding 13.75% Senior Notes due 2010 (the "Old Notes") on
the terms set forth in the prospectus contained in the Registration
Statement and the Letter of Transmittal filed as an exhibit thereto (the
"Exchange Offer").
In our capacity as your special counsel in connection with such
registration, we are familiar with the proceedings taken by the Company in
connection with the authorization and issuance of the Exchange Notes. In
addition, we have made such legal and factual examinations
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LATHAM & WATKINS
July 17, 2000
Page 2
and inquiries, including an examination of originals or copies certified or
otherwise identified to our satisfaction of such documents, corporate
records and instruments, as we have deemed necessary or appropriate for
purposes of this opinion.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals
and the conformity to authentic original documents of all documents
submitted to us as copies. As to facts material to the opinions, statements
and assumptions expressed herein, we have, with your consent, relied upon
oral or written statements and representations of officers and other
representatives of the Company and others.
We are opining herein as to the effect on the subject transaction
only of the federal laws of the United States, the internal laws of the
State of New York (other than communications laws) and the General
Corporation Law of the State of Delaware (the "Delaware GCL"), and we
express no opinion with respect to the applicability thereto, or the effect
thereon, of the laws of any other jurisdiction or, in the case of Delaware,
any other laws, or as to any matters of municipal law or the laws of any
local agencies within any state.
Subject to the foregoing and the other matters set forth herein,
it is our opinion that, as of the date hereof:
When the Exchange Notes to be exchanged for the Old Notes pursuant
to the Exchange Offer have been duly executed, issued and authenticated in
accordance with the terms of the Exchange Offer and Indenture, the Exchange
Notes will be legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
The opinion rendered in the foregoing paragraph relating to the
enforceability of the Exchange Notes is subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights and remedies of creditors, (ii) the
effect of general principles of equity, whether enforcement is considered in
a proceeding in equity or at law, and the discretion of the court before
which any proceeding therefor may be brought, (iii) we express no opinion
concerning the enforceability of the waiver of rights or defenses contained
in Section 4.06 of the Indenture, and (iv) we express no opinion with
respect to whether acceleration of the Exchange Notes may affect the
collectibility of that portion of the stated principal amount thereof that
might be determined to constitute unearned interest thereon.
We have not been requested to express, and with your knowledge and
consent, do not render any opinion as to the applicability to the
obligations of the Company under the Indenture and the Exchange Notes of
Section 548 of the United States Bankruptcy Code or applicable state law
(including, without limitation, Article 10 of the New York Debtor and
Creditor Law) relating to fraudulent transfers and obligations.
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LATHAM & WATKINS
July 17, 2000
Page 3
To the extent that the obligations of the Company under the
Indenture and the Exchange Notes may be dependent upon such matters, we
assume for purposes of this opinion that the Trustee is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization; that the Trustee is duly qualified to engage in the activities
contemplated by the Indenture; that the Indenture has been duly authorized,
executed and delivered by the Trustee and constitutes the legally valid,
binding and enforceable obligation of the Trustee enforceable against the
Trustee in accordance with its terms; that the Trustee is in compliance,
generally and with respect to acting as a trustee under the Indenture, with
all applicable laws and regulations; and that the Trustee has the requisite
organizational and legal power and authority to perform its obligations
under the Indenture.
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm contained under the
heading "Legal Matters."
Very truly yours,
/s/ Latham & Watkins
