<SUBMISSION>
<ACCESSION-NUMBER>0000950133-02-000969
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20020409
<FILING-DATE>20020319
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ADVANCED SWITCHING COMMUNICATIONS INC
<CIK>0001095583
<ASSIGNED-SIC>3661
<IRS-NUMBER>541865834
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>000-31529
<FILM-NUMBER>02578196
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>8330 BOONE BLVD 5TH FL
<CITY>VIENNA
<STATE>VA
<ZIP>22182
<PHONE>7034485540
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>8330 BOONE BOULEVARD 5TH FL
<CITY>VIENNA
<STATE>VA
<ZIP>22182
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>w57592bdef14a.txt
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<PAGE>
                           SCHEDULE 14A INFORMATION

               PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:


[ ]      Preliminary Proxy Statement



[ ]      Confidential, for Use of the Commission Only (as permitted by Rule
         14a-6(e)(2))

[ ]      Definitive Proxy Statement



[X]      Definitive Additional Materials



[ ]      Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12


                   ADVANCED SWITCHING COMMUNICATIONS, INC.
               (Name of Registrant as Specified in Its Charter)

   (Name of Person(s) Filing Proxy Statement, if other than the Registrant)


Payment of Filing Fee (Check the appropriate box):


[ ]      No fee required.


[ ]      Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
         0-11.


         (1)  Title of each class of securities to which transaction applies:

         (2)  Aggregate number of securities to which transaction applies:

         (3)  Per unit price or other underlying value of transaction computed
              pursuant to Exchange Act Rule 0-11 (set forth the amount on
              which the filing fee is calculated and state how it was
              determined):

         (4)  Proposed maximum aggregate value of transaction:

         (5)  Total fee paid:

<PAGE>

[X]           Fee paid previously with preliminary materials.

[ ]           Check box if any part of the fee is offset as provided by
              Exchange Act Rule 0-11(a)(2) and identify the filing for which
              the offsetting fee was paid previously. Identify the previous
              filing by registration statement number, or the Form or Schedule
              and the date of its filing.

              (1) Amount Previously Paid:  Not applicable
              (2) Form, Schedule or Registration Statement No.:  Not applicable
              (3) Filing Party:  Not applicable
              (4) Date Filed:  Not applicable


                                      2

<PAGE>

                                  [ASC Logo]
                                March 20, 2002


Dear Fellow Stockholder:

            On behalf of the Board of Directors and management of Advanced
Switching Communications, Inc., we cordially invite you to attend a special
meeting of stockholders at the Company's headquarters located at 8330 Boone
Boulevard, Vienna, Virginia. The meeting will be held at 10:00 a.m. Eastern
Standard Time on Tuesday, April 9, 2002. At the meeting we will:

            -     consider and vote on a proposal to approve a plan of
                  complete liquidation and dissolution of the company; and

            -     transact any other business that properly comes before the
                  meeting.

            Our board of directors carefully reviewed and considered the terms
and conditions of the plan of liquidation and the transactions contemplated by
the plan of liquidation as well as other alternatives available to us. Based
on its review, our board of directors determined that the plan of liquidation
is in the best interests of our stockholders.

            The enclosed proxy statement contains a discussion of our proposed
plan of liquidation. Our board of directors recommends that you consider the
enclosed materials carefully. After carefully weighing the facts and
circumstances associated with our liquidation as well as alternative courses
of action, our board of directors has concluded that our proposed plan of
liquidation is the best available alternative to maximize value for our
stockholders.

            Our board of directors has voted to approve the proposed plan of
liquidation and recommends that stockholders vote for the plan of liquidation
by marking the enclosed proxy card 'FOR' the proposal and returning the proxy
card in the accompanying postage-paid envelope. The affirmative vote of the
holders of a majority of the shares of our common stock outstanding and
entitled to vote will be required to complete our liquidation and dissolution.
Your participation is extremely important, and your early response will be
greatly appreciated.

            Whether or not you plan to attend the special meeting, please read
the enclosed proxy statement and then complete, sign and date the enclosed
proxy card and return it in the enclosed envelope as soon as possible. Your
stock will be voted in accordance with the instructions you have given in your
proxy card.

                                        Sincerely,

                                        /s/ ASGHAR D. MOSTAFA
                                        Asghar D. Mostafa
                                        Chairman and Chief Executive Officer


<PAGE>


                   ADVANCED SWITCHING COMMUNICATIONS, INC.
                             8330 BOONE BOULEVARD
                               VIENNA, VA 22182

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

                  NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
                         TO BE HELD ON APRIL 9, 2002


         NOTICE IS HEREBY GIVEN that a special meeting of stockholders of
Advanced Switching Communications, Inc., a Delaware corporation, will be held
on Tuesday, April 9, 2002, at 10:00 a.m. Eastern Standard Time, at the
Company's headquarters located at 8330 Boone Boulevard, Vienna, Virginia, to
consider and vote upon the following proposals:

         1.  To authorize and approve the Plan of Complete Liquidation and
             Dissolution of the Company, substantially in the form of Exhibit
             A attached to the accompanying proxy statement.

         2.  To transact such other business as may properly come before the
             meeting and any adjournments thereof.

         The Board of Directors has fixed the close of business on Thursday,
February 28, 2002 as the record date for determining stockholders entitled to
receive notice of and to vote at the Special Meeting (or any adjournment or
postponement of the meeting). Only stockholders of record at the close of
business on that date are entitled to notice of and to vote at the Special
Meeting.

         WE INVITE YOU TO ATTEND THE SPECIAL MEETING IN PERSON, BUT WHETHER OR
NOT YOU EXPECT TO ATTEND, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
PROXY CARD AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PAID ENVELOPE PROVIDED.

                                 By Order of the Board of Directors,

                                 /s/ SHERRY L. RHODES
                                 Sherry L. Rhodes
                                 Secretary

Vienna, Virginia


March 20, 2002


                                      1

<PAGE>


                              TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                Page
                                                                                                ----
<S>                                                                                          <C>
General Information..............................................................................3

Risk Factors Relating to the Plan of Liquidation.................................................10

Proposal - Approval of the Plan of Liquidation...................................................14
     General.....................................................................................14
     Background and Reasons for the Plan.........................................................15
         Company Background......................................................................15
         Review of Alternatives..................................................................16
         Conclusion of the Board of Directors....................................................27
     No Estimate of Liquidation Proceeds.........................................................27
     Interests of Directors and Officers in the Plan of Liquidation..............................28
     The Plan of Complete Liquidation and Dissolution............................................30
         Dissolution Under Delaware Law..........................................................30
         Description of the Plan of Liquidation..................................................31
         Abandonment; Amendment..................................................................33
         Liquidating Distributions; Nature; Amount; Timing.......................................33
         Sales of Our Assets.....................................................................34
         Our Activities Following Adoption of the Plan of Liquidation............................35
         Reporting Requirements..................................................................35
         Contingent Liabilities; Contingency Reserve; Liquidating Trust..........................35
         Final Record Date.......................................................................38
         Listing and Trading of Common Stock and Interests in the
            Liquidating Trust or Trusts..........................................................38
     Absence of Appraisal Rights.................................................................39
     Regulatory Approvals........................................................................39
     Certain Federal Income Tax Consequences.....................................................40
         Federal Income Taxation of the Company..................................................40
         Federal Income Taxation of Stockholders.................................................41
         Liquidating Trusts......................................................................42
         State and Local Tax.....................................................................42
         Backup Withholding......................................................................42
     Vote Required & Board Recommendation........................................................43

Selected Consolidated Financial and Operating Data...............................................43

Stock Ownership..................................................................................43

Other Matters....................................................................................46

Special Note Regarding Forward-Looking Information...............................................46

Where You Can Find More Information..............................................................46

Exhibit A - Plan of Complete Liquidation and Dissolution........................................A-1
</TABLE>


                                     -2-
<PAGE>


                   ADVANCED SWITCHING COMMUNICATIONS, INC.
                             8330 BOONE BOULEVARD
                               VIENNA, VA 22182

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

                               PROXY STATEMENT

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

                       SPECIAL MEETING OF STOCKHOLDERS
                         TO BE HELD ON APRIL 9, 2002

         This proxy statement is furnished in connection with the solicitation
on behalf of our board of directors of proxies to be used at a special meeting
of our stockholders, to be held at the Company's headquarters located at 8330
Boone Boulevard, Vienna, Virginia, on Tuesday, April 9, 2002, at 10:00 a.m.
Eastern Standard Time, and all adjournments of the meeting.


         Our headquarters are located at 8330 Boone Boulevard, Eighth Floor,
Vienna, Virginia 22182. The accompanying Notice of Meeting and this proxy
statement are first being mailed to our stockholders on or about March 20,
2002.



                             GENERAL INFORMATION

WHAT IS THE PURPOSE OF THE SPECIAL MEETING?

         -        At the special meeting stockholders will consider and vote
                  on a proposal to approve the Plan of Complete Liquidation
                  and Dissolution attached as Exhibit A.

WHO IS ENTITLED TO VOTE?

         -        The record date for the special meeting is February 28,
                  2002. Only stockholders of record at the close of business
                  on that date are entitled to notice of and to vote at the
                  special meeting. At the close of business on the record date
                  there were 42,808,568 shares of common stock outstanding.
                  Except as otherwise required by law, the holders of shares
                  of our common stock vote together as a single class on all
                  matters presented to the stockholders. Each registered
                  holder of common stock of record on February 28, 2002 is
                  entitled to one vote per share on each matter to be voted on
                  at the special meeting.


         -        The authorization and approval of the plan of liquidation
                  requires the affirmative vote of the holders of a majority of
                  the outstanding shares of our common stock. Members of our
                  board of directors and our executive officers who hold (or are
                  deemed to hold) as of February 28, 2002 an aggregate of
                  24,869,304 shares of common stock (approximately 58% of the
                  outstanding shares of common stock as of February 28, 2002)
                  have indicated that they will vote in favor of the proposal.



                                      -3-



<PAGE>

WHAT IF MY SHARES ARE HELD IN "STREET NAME" BY A BROKER?

         -        If you are the beneficial owner of shares held in "street
                  name" by a broker, your broker, as the record holder of the
                  shares, is required to vote those shares in accordance with
                  your instructions. If you do not give instructions to your
                  broker, your broker will not be permitted to vote your
                  shares with respect to the plan of liquidation.

HOW MANY SHARES MUST BE PRESENT TO HOLD THE MEETING?

         -        A quorum must be present at the meeting for any business to
                  be conducted. The presence at the meeting, in person or by
                  proxy, of the holders of a majority of the shares of common
                  stock outstanding on the record date will constitute a
                  quorum. Proxies received but marked as abstentions or broker
                  non-votes will be included in the calculation of the number
                  of shares considered to be present at the meeting.

WHAT IF A QUORUM IS NOT PRESENT AT THE MEETING?

         -        If a quorum is not present at the scheduled time of the
                  meeting, the stockholders who are represented may adjourn
                  the meeting until a quorum is present. The time and place of
                  the adjourned meeting will be announced at the time the
                  adjournment is taken, and no other notice will be given. An
                  adjournment will have no effect on the business that may be
                  conducted at the meeting.

HOW DO I VOTE?

         -        You may vote by mail. If you properly complete and sign the
                  accompanying proxy card and return it in the enclosed
                  envelope, it will be voted in accordance with your
                  instructions. The enclosed envelope requires no additional
                  postage if mailed in the United States. If your shares are
                  held in "street name" by a broker or other nominee, you
                  should check the voting form used by that firm to determine
                  whether you will be able to vote by telephone or on the
                  Internet.

         -        You may vote in person at the meeting. If you plan to attend
                  the annual meeting and wish to vote in person, we will give
                  you a ballot at the annual meeting. However, if your shares
                  are held in the name of your broker, bank or other nominee,
                  you will need to obtain a proxy form from the institution
                  that holds your shares indicating that you were the
                  beneficial owner of our common stock on February 28, 2002,
                  the record date for voting at the special meeting.

                                     -4-

<PAGE>

CAN I CHANGE MY VOTE AFTER I SUBMIT MY PROXY?

         -        Yes, you may revoke your proxy and change your vote at any
                  time before the polls close at the meeting by:

                  -        signing another proxy with a later date;

                  -        giving written notice of the revocation of your
                           proxy to our Secretary prior to the annual meeting;
                           or

                  -        voting in person at the special meeting.

WHAT IF I DO NOT SPECIFY HOW MY SHARES ARE TO BE VOTED?

         -        If you submit an executed proxy but do not indicate any
                  voting instructions, your shares will be voted FOR the
                  proposal to authorize and approve the plan of liquidation.

WILL ANY OTHER BUSINESS BE CONDUCTED AT THE SPECIAL MEETING?

         -        Our Board of Directors knows of no other business that will
                  be presented at the meeting. If any other proposal properly
                  comes before the stockholders for a vote at the meeting,
                  however, the proxy holders will vote your shares in
                  accordance with their best judgment.

HOW MANY VOTES ARE REQUIRED TO AUTHORIZE AND APPROVE THE PLAN OF LIQUIDATION?


         -        The authorization and approval of the plan of liquidation
                  requires the affirmative vote of the holders of a majority
                  of the outstanding shares of common stock. Members of our
                  board of directors and our executive officers who hold (or
                  are deemed to hold) as of February 28, 2002 an aggregate of
                  24,869,304 shares of common stock (approximately 58% of the
                  outstanding shares of common stock as of the record date) have
                  indicated that they will vote in favor of the proposal.


HOW DOES THE BOARD OF DIRECTORS RECOMMEND I VOTE ON THE PROPOSAL?

         -        Our board of directors recommends that you vote "FOR" the
                  authorization and approval of the plan of liquidation (see
                  page 43).

WHAT WILL HAPPEN IF THE PLAN OF LIQUIDATION IS APPROVED?

         -        If the plan of liquidation is approved, we will liquidate
                  our remaining assets, satisfy our remaining obligations and
                  make distributions to our stockholders of any available
                  liquidation proceeds.

                                     -5-

<PAGE>

WHAT WILL HAPPEN IF THE PLAN OF LIQUIDATION IS NOT APPROVED?

         -        If the plan of liquidation is not authorized and approved by
                  the stockholders, our board of directors will continue to
                  manage the company as a publicly owned entity and will
                  explore what, if any, alternatives are then available for
                  the future of our business.

WHEN WILL STOCKHOLDERS RECEIVE PAYMENT OF ANY AVAILABLE LIQUIDATION PROCEEDS?


         -        We are currently unable to predict the precise timing of any
                  distributions pursuant to the plan of liquidation. The timing
                  of any distributions will be determined by our board of
                  directors and will depend in part upon our ability to convert
                  our remaining assets into cash and pay and settle our
                  significant remaining liabilities and obligations, including
                  contingent claims.



         -        In addition, the existence of contingent claims could delay
                  the making of any distributions in connection with the plan
                  of liquidation.


WHAT WILL STOCKHOLDERS RECEIVE IN THE LIQUIDATION?


         -        At this time, we cannot predict the amount of any liquidating
                  distributions to our stockholders, which could be made over a
                  substantial period of time.


         -        As of the end of December 2001, we had approximately $77
                  million in cash and marketable securities and expect to use
                  cash of approximately $2.0 million to satisfy liabilities on
                  our unaudited balance sheet. In addition to converting our
                  remaining assets to cash, pursuing any claims we may have
                  against third parties and satisfying the liabilities
                  currently on our balance sheet, we anticipate using cash in
                  the next several months for a number of items, including but
                  not limited to:

                  -        ongoing operating costs of at least $1.3 million;

                  -        employee severance and related costs of at least
                           $4.0 million;

                  -        payments to our contract manufacturer of at least
                           $2.3 million; and

                  -        other costs, including costs incurred to close out
                           existing leases, of at least $3.2 million.


         -        In addition, we may incur additional liabilities arising out
                  of contingent claims, such as the shareholder class action
                  suits and the claim by Qwest Communications Corporation
                  described below, that are not yet reflected as liabilities on
                  our balance sheet.  We are unable at this time to predict what
                  amount, if any, may be paid on these contingent claims.  We
                  are unable at this time to predict the precise nature, amount
                  and timing of any distributions, due in part to our inability
                  to predict the net value of our non-cash assets and the
                  ultimate amount of our liabilities, many of which have not
                  been settled. See "Proposal to Approve the Plan of Liquidation
                  -- The Plan of Complete Liquidation -- Contingent Liabilities;
                  Contingency Reserve; Liquidating Trust." The sale of our
                  non-cash assets could yield less than we expect, we may incur
                  additional liabilities or the settlement of our existing
                  liabilities (including contingent claims) could cost


                                     -6-

<PAGE>

                  more than we anticipate, any of which could result in a
                  substantially lower distribution to our stockholders.

DO DIRECTORS AND OFFICERS HAVE INTERESTS IN THE PLAN OF LIQUIDATION THAT
DIFFER FROM MINE?

         -        In considering the board of directors' recommendation to
                  approve the plan of liquidation, you should be aware that
                  some of the directors and officers may have interests that
                  are different from or in addition to your interests as a
                  stockholder. These interests include:

                  -        our executive officers will receive an aggregate of
                           approximately $1.6 million in severance payments in
                           connection with the termination of their
                           employment; and


                  -        our directors and executive officers hold
                           in-the-money options to purchase an aggregate of
                           140,000 shares of common stock at a weighted average
                           exercise price of $1.00 per share.


                  For a more detailed description of the interests of
                  directors and officers that differ from yours, see page 28
                  of this proxy statement.

CAN I STILL SELL MY SHARES?

         -        Yes, you may sell your shares at this time. However, our
                  common stock is currently listed on the Nasdaq National
                  Market.  Thus, we are subject to financial and
                  market-related tests and other qualitative standards
                  established by Nasdaq to maintain our listing.  On September
                  10, 2001, Nasdaq notified us that we had failed to maintain
                  the $1.00 minimum bid price requirement for continued
                  listing.  We had been given until December 10, 2001 to come
                  into compliance with this requirement.  However, Nasdaq had
                  temporarily waived the enforcement of this requirement until
                  January 2002, which gave us additional time to come into
                  compliance.  Since December 31, 2001, we have met the
                  minimum bid requirement, but we cannot predict whether we
                  will be able to maintain compliance with the minimum bid
                  requirement or Nasdaq's other requirements for continued
                  listing.  Even if we are able to comply with the $1.00
                  minimum bid requirement for continued listing, if the plan
                  of liquidation is approved by our stockholders, it is likely
                  that we will not be able to maintain compliance with
                  Nasdaq's other listing requirements or that Nasdaq will take
                  action to delist our securities from their National Market
                  System.  If our common stock were delisted from Nasdaq for
                  any reason:

                  -        trading, if any, would thereafter be conducted on
                           the over-the-counter market in the so-called "pink
                           sheets" or on the "Electronic

                                     -7-

<PAGE>

                           Bulletin Board" of the National Association of
                           Securities Dealers, Inc.;

                  -        stockholders may find it more difficult to dispose
                           of, or to obtain accurate quotations as to the
                           price of, our common stock;

                  -        the liquidity of our stock may be reduced, making
                           it difficult for a stockholder to buy or sell our
                           stock at competitive market prices, or at all; and

                  -        we may lose support from institutional investors,
                           brokerage firms and market makers that currently
                           buy and sell our stock and provide information to
                           investors about us.

                  -        Delisting could also cause the price of our stock
                           to decrease further. In addition, it is likely that
                           we will close our stock transfer books and restrict
                           transfers of our common stock after filing the
                           certificate of dissolution with the State of
                           Delaware.

WHAT ARE THE TAX CONSEQUENCES OF THE LIQUIDATION?

         -        As a result of our liquidation, for federal income tax
                  purposes stockholders will recognize gain or loss equal to
                  the difference between (i) the sum of the amount of cash
                  distributed to them and the aggregate fair market value (at
                  the time of distribution) of any property distributed to
                  them, and (ii) their tax basis for their shares of our
                  capital stock.  A stockholder's tax basis in his or her
                  shares will depend upon various factors, including the
                  stockholder's cost and the amount and nature of any
                  distributions received with respect thereto.  Any loss will
                  generally be recognized only when the final distribution
                  from us has been received, which may be as long as three
                  years after the date that the plan of liquidation is
                  adopted.

         -        A brief summary of the material federal income tax
                  consequences of the plan of liquidation appears on page 40
                  of this proxy statement. Tax consequences to stockholders
                  may differ depending on their circumstances. You should
                  consult your tax advisor as to the tax effect of your
                  particular circumstances.

DO I HAVE DISSENTERS' APPRAISAL RIGHTS?

         -        No. Under Delaware law, stockholders will not have
                  dissenters' appraisal rights in connection with the plan of
                  liquidation.

WHAT DO STOCKHOLDERS NEED TO DO NOW?

                                     -8-

<PAGE>

         -        After carefully reading and considering the information
                  contained in this proxy statement, each stockholder should
                  complete and sign his or her proxy and return it in the
                  enclosed return envelope as soon as possible so that his or
                  her shares may be represented at the meeting. A majority of
                  shares entitled to vote must be represented at the meeting
                  to enable us to conduct business at the meeting.

WHO CAN HELP ANSWER QUESTIONS?

         -        If you have any additional questions about the proposed plan
                  of liquidation or if you need additional copies of this
                  proxy statement or any public filings referred to in this
                  proxy statement, you should contact our corporate secretary
                  at (703) 448-5540. Our public filings can also be accessed
                  at the SEC's web site at www.sec.gov.


                                     -9-

<PAGE>


               RISK FACTORS RELATING TO THE PLAN OF LIQUIDATION

         There are many factors that stockholders should consider when
deciding whether to vote to approve the plan of liquidation. These factors
include those set forth in our SEC filings, as well as those factors set forth
below.


                                     -10-

<PAGE>
STOCKHOLDERS COULD BE LIABLE TO THE EXTENT OF LIQUIDATING DISTRIBUTIONS
RECEIVED IF CONTINGENT RESERVES ARE INSUFFICIENT TO SATISFY THE COMPANY'S
LIABILITIES.

         If we fail to create an adequate contingency reserve for payment of our
expenses and liabilities, or if we transfer our assets to a liquidating trust
and the contingency reserve and the assets held by the liquidating trust are
less than the amount ultimately found payable in respect of expenses and
liabilities, each stockholder could be held liable for the payment to creditors
of such stockholder's pro rata portion of the excess, limited to the amounts
previously received by the stockholder in distributions from us or the
liquidating trust.

         If a court holds at any time that we have failed to make adequate
provision for our expenses and liabilities or if the amount ultimately
required to be paid in respect of such liabilities exceeds the amount
available from the contingency reserve and the assets of the liquidating
trust, our creditors could seek an injunction against the making of
distributions under the plan of liquidation on the grounds that the amounts to
be distributed are needed to provide for the payment of our expenses and
liabilities. Any such action could delay or substantially diminish the cash
distributions to be made to stockholders and/or holders of beneficial
interests of the liquidating trust under the plan of liquidation. See "Proposal
to Approve the Plan of Liquidation -- The Plan of Complete Liquidation and
Dissolution -- Contingent Liabilities; Contingency Reserve; Liquidating Trust."

SECURITIES CLASS ACTION CLAIMS HAVE BEEN FILED AGAINST US AND CERTAIN OF OUR
CURRENT AND FORMER OFFICERS AND DIRECTORS. THESE CLAIMS COULD DELAY THE MAKING
OF ANY DISTRIBUTIONS TO OUR STOCKHOLDERS OR DEPLETE THE PROCEEDS THAT MIGHT
OTHERWISE BE AVAILABLE TO BE DISTRIBUTED TO OUR STOCKHOLDERS.

         On February 21, 2002, a complaint was filed in the United States
District Court for the Eastern District of Virginia against us and certain of
our current and former officers and directors. The plaintiffs in this action
claim to own a total of 100 shares and purport to act on behalf of a class of
other stockholders. The complaint alleges violations of the federal securities
laws in connection with our initial public offering and subsequent public
statements. Thereafter, substantially similar complaints were filed in the same
court. We believe the claims asserted in the complaints are without merit and
intend to contest these claims vigorously. However, the outcome of the suits
cannot be predicted. The existence of these claims could delay the making of
any distributions to our stockholders or reduce the amount available for
distribution in connection with the proposed plan of liquidation.

ANTICIPATED TIMING OF LIQUIDATION MAY NOT BE ACHIEVED.

         Immediately after the special meeting, if the plan of liquidation is
approved by stockholders, we intend to proceed with the orderly sale of our
assets and file a certificate of dissolution with the Secretary of State of
the State of Delaware. Although we anticipate that we will substantially
complete the sale of our assets within a 12 month period, our board of
directors may determine that it is in the best interests of our stockholders
that some assets be placed into a liquidating trust, which could delay the
receipt by stockholders of the final proceeds of the liquidation.

THE LIQUIDATION MAY NOT RESULT IN GREATER RETURNS TO STOCKHOLDERS THAN OUR
CONTINUING AS A GOING CONCERN.

         We cannot assure you that the plan of liquidation will result in
greater returns to stockholders than our continuing as a going concern or
through a business combination or other transaction with a third party. If the
plan of liquidation is not authorized and approved by the stockholders, our
board of directors will continue to manage the company as a publicly

                                     -11-

<PAGE>

owned entity and will explore what, if any, alternatives are then available for
the future of our business.

STOCKHOLDERS MAY NOT BE ABLE TO RECOGNIZE A LOSS FOR FEDERAL INCOME TAX
PURPOSES UNTIL THEY RECEIVE A FINAL DISTRIBUTION FROM US, WHICH MAY BE AS LONG
AS THREE YEARS.

         As a result of our liquidation, for federal income tax purposes
stockholders will recognize gain or loss equal to the difference between (i)
the sum of the amount of cash distributed to them and the aggregate fair
market value (at the time of distribution) of any property distributed to
them, and (ii) their tax basis for their shares of our capital stock. A
stockholder's tax basis in his or her shares will depend upon various factors,
including the stockholder's cost and the amount and nature of any
distributions received with respect thereto. Any loss will generally be
recognized only when the final distribution from us has been received, which
may be as long as three years after the date that the plan of liquidation is
adopted.

OUR STOCK TRANSFER BOOKS WILL CLOSE ON THE FINAL RECORD DATE, AFTER WHICH IT
WILL NOT BE POSSIBLE FOR STOCKHOLDERS TO PUBLICLY TRADE IN OUR STOCK.

         We intend to close our stock transfer books and discontinue recording
transfers of common stock at the close of business on the final record date,
the date fixed by our board of directors for filing the certificate of
dissolution. Thereafter, certificates representing the common stock shall not
be assignable or transferable on our books except by will, intestate
succession or operation of law. The proportionate interests of all of our
stockholders shall be fixed on the basis of their respective stock holdings at
the close of business on the final record date, and, after the final record
date, any distributions made by us shall be made solely to the stockholders of
record at the close of business on the final record date, except as may be
necessary to reflect subsequent transfers recorded on our books as a result of
any assignments by will, intestate succession or operation of law.

WE EXPECT THAT OUR STOCK WILL BE DELISTED FROM THE NASDAQ NATIONAL MARKET.

         Our common stock is currently listed on Nasdaq National Market. Thus,
we are subject to financial and market-related tests and other qualitative
standards established by Nasdaq to maintain our listing. On September 10,
2001, Nasdaq notified us that we had failed to maintain the $1.00 minimum bid
price requirement for continued listing. We had been given until December 10,
2001 to come into compliance with this requirement.

                                     -12-

<PAGE>

However, the Nasdaq had temporarily waived the enforcement of this requirement
until January 2002, which gave us additional time to come into compliance.
Since December 31, 2001, we have met the minimum bid requirement, but we
cannot predict whether we will be able to maintain compliance with the minimum
bid requirement or Nasdaq's other requirements for continued listing. Even if
we are able to comply with the $1.00 minimum bid requirement for continued
listing, if the plan of liquidation is approved by the stockholders, it is
likely that we will not be able to maintain compliance with Nasdaq's other
listing requirements or that Nasdaq will take action to delist our securities
from their National Market System. If our common stock were delisted from
Nasdaq for either of these reasons, trading, if any, would thereafter be
conducted on the over-the-counter market in the so-called "pink sheets" or on
the "Electronic Bulletin Board" of the National Association of Securities
Dealers, Inc. Consequently, stockholders may find it more difficult to dispose
of, or to obtain accurate quotations as to the price of our common stock
thereby reducing the liquidity of our stock, making it difficult for a
stockholder to buy or sell our stock at competitive market prices, or at all,
and we may lose support from institutional investors, brokerage firms and
market makers that currently buy and sell our stock and provide information to
investors about us. Delisting could also cause the price of our stock to
decrease further. In addition, it is likely that we will close our stock
transfer books and restrict transfers of our common stock after filing the
certificate of dissolution with the State of Delaware.

OUR DIRECTORS AND OFFICERS MAY HAVE INTERESTS IN OUR LIQUIDATION AND
DISSOLUTION THAT ARE DIFFERENT FROM THE INTERESTS OF OTHER STOCKHOLDERS.

         Members of our board of directors may be deemed to have a potential
conflict of interest in recommending authorization and approval of the plan of
liquidation. See "Proposal to Approve the Plan of Liquidation -- Interests of
Directors and Officers in the Plan of Liquidation."

NO FURTHER STOCKHOLDER APPROVAL WILL BE REQUIRED.

         The approval of the plan of liquidation requires the affirmative vote
of the holders of a majority of all shares of our common stock outstanding and
entitled to vote. If our stockholders approve the plan of liquidation, we will
be authorized to dispose of our assets without further approval of our
stockholders.


         The authorization and approval of the plan of liquidation requires the
affirmative vote of the holders of a majority of the outstanding shares of our
common stock. Members of our board of directors and our executive officers who
hold (or are deemed to hold) as of February 28, 2002 an aggregate of 24,869,304
shares of common stock (approximately 58% of the outstanding shares of common
stock as of February 28, 2002) have indicated that they will vote in favor of
the proposal.


                                     -13-


<PAGE>


                 PROPOSAL TO APPROVE THE PLAN OF LIQUIDATION

GENERAL

         Our board of directors is proposing the Plan of Complete Liquidation
and Dissolution for authorization and approval by our stockholders at the
special meeting. The plan of liquidation was approved by our board of
directors, subject to stockholder approval, on February 4, 2002. A copy of the
plan of liquidation is attached as Exhibit A to this proxy statement. Certain
material features of the plan of liquidation are summarized below.
STOCKHOLDERS SHOULD READ THE PLAN OF LIQUIDATION IN ITS ENTIRETY.

         Our board of directors adopted resolutions on February 4, 2002 which
authorized, subject to stockholder approval, the orderly liquidation of our
assets pursuant to the plan of liquidation. The plan of liquidation provides
that, if the requisite approval of our stockholders is received, our officers
and directors will undertake our complete liquidation and dissolution. After
the date the plan of liquidation is adopted by our stockholders, we will not
engage in any business activities except for the purpose of preserving the
value of our assets, prosecuting and defending lawsuits by or against us,
adjusting and winding up our business and affairs, selling and liquidating our
properties and assets, including our intellectual property and other
intangible assets, paying our creditors, terminating commercial agreements and
relationships and preparing to make distributions to stockholders, in
accordance with the plan of liquidation. If the plan of liquidation is
approved by our stockholders, we will file a certificate of dissolution with
the Secretary of State of the State of Delaware.

         Our board of directors may, at any time, retain a third party to
complete the liquidation of our remaining assets and distribute proceeds from
the sale of assets to our stockholders pursuant to the plan of liquidation.
This third-party management may involve a liquidating trust, which, if
created, would succeed to all of our assets, liabilities and obligations. Our
board of directors may appoint one or more of our directors or officers or a
third party to act as trustee or trustees of such liquidating trust. If,
however, all of our assets are not distributed within three years after the
date our certificate of dissolution is filed with the State of Delaware, we
will transfer our remaining assets to a liquidating trust if we have not
already done so. Your authorization and approval of the plan of liquidation
will also constitute your approval of any appointment and compensation of such
trustees.

         During the liquidation of our assets, we may pay to our officers,
directors, employees, and agents, or any of them, compensation for services
rendered in connection with the implementation of the plan of liquidation.
Your authorization and approval of the plan of liquidation will constitute
your approval of the payment of any such compensation.

                                     -14-

<PAGE>

BACKGROUND AND REASONS FOR THE PLAN

         COMPANY BACKGROUND


         We developed, manufactured and marketed network technology and
equipment that enabled communications companies to quickly and economically
deliver the power of the Internet and advanced broadband services to their
customers around the world. We created solutions that were evolutionary,
enabling communications companies to take advantage of their investment in
existing network equipment and facilities while gradually moving to
next-generation technology.


         From our inception in September 1997 through the fourth quarter of
1998, we were a development stage company, had no revenue and our operating
activities related primarily to research and development, developing and testing
prototype products, building our technical support infrastructure, staffing our
marketing, sales and customer service organizations, and establishing
relationships with suppliers, manufacturers and potential customers. We
commenced shipments of our products in the first quarter of 1999. Since our
inception through December 31, 2001, we had sold approximately $57.2 million
of our product cumulatively and incurred significant losses and, as of December
31, 2001, we had an accumulated deficit of $87.4 million.


         We marketed and sold our products primarily through a direct sales and
marketing organization and, to a lesser extent through resellers and original
equipment manufacturers. We depended on a relatively small number of customers
for a large percentage of our revenue in any particular quarter. For the year
ended December 31, 2001, we had two customers who accounted for more than 10% of
the total revenue. For the year ended December 31, 2000, we had one of the same
customers from 2001 as well as one other customer who accounted for more
than 10% of the total revenue. In the fourth quarter of 2000, we saw a shift in
the mix of our customers toward more established carriers, a trend that
continued into the first quarter of 2001. However, that trend did not continue
for the last three quarters of 2001 as we were unsuccessful in generating any
revenue from established carriers in any of those quarters. For example, we were
unable to reach agreement with a major customer on a large purchase order and
also we were affected by the continuing general weakness in the global
telecommunications equipment market.



         Demand for our products was also negatively affected by a decline in
our emerging carriers' capital spending due to abrupt changes in their
competitive market and their limited access to capital and deteriorating
financial performance. These unanticipated reductions in our emerging carriers'
capital spending plans, combined with our difficulties in penetrating the more
established carriers, had a material adverse effect on our business.


         On July 2, 2001, we announced the implementation of certain
cost-cutting efforts pursuant to our restructuring plan, including a 20
percent reduction in our workforce.

                                     -15-

<PAGE>


On October 16, 2001, we announced the implementation of further cost-cutting
efforts pursuant to our restructuring plan, including a 36 percent reduction
in our workforce.

         Despite our actions to scale down our operations and implement cost
reduction measures, we have continued to incur significant net losses. For the
year ended December 31, 2001, our net loss was approximately $56.4 million. We
have never achieved profitability and management believes that we can expect to
incur operating losses for the foreseeable future.


         In October 2001, we announced that we had received notice from Qwest
Communications Corporation purporting to terminate our procurement agreement
with it. From the third quarter of 2000 through the first quarter of 2001, Qwest
made equipment purchases from us totaling over $15.7 million ($13.8 million
under the procurement agreement) and was our largest customer during this period
representing approximately 28% of our total sales. In its purported notice of
termination, Qwest asserted that we were in material breach of our procurement
agreement. In a letter dated October 23, 2001, we responded to Qwest's earlier
letter, rejecting any breach on our part and reiterating our rights under the
procurement agreement. On November 19, 2001, we received another letter from
Qwest purporting to detail the actions and inactions that constituted breach on
our part and requesting us to accept a return of, and reimburse Qwest for, all
products purchased from us less a ten percent discount in exchange for a release
of claims. In a letter dated December 5, 2001, we refuted the claims contained
in Qwest's November 19 letter, reiterated our rights to additional purchase
orders from Qwest in excess of $10 million and suggested that we attempt to
negotiate a mutually acceptable resolution of our dispute. On January 25, 2002,
Qwest responded to our December 5 letter and among other things, asserted that
it had revoked acceptance of equipment previously purchased and requested a
refund of the amounts paid. In addition, however, Qwest also suggested that we
attempt to negotitate a mutually acceptable resolution of our dispute. As a
result, the parties had discussions but were unable to reach an agreement to
resolve their competing claims. Subsequently, the parties have exchanged letters
reiterating their respective positions. We intend to vigorously defend any
claims asserted by Qwest.


         REVIEW OF ALTERNATIVES

         In late July 2001, our board of directors instructed our management to
assess our business plan in light of the weakness in the telecommunications
equipment market and the downturn in our revenue. On September 28, 2001 and
October 5, 2001, our board of directors and our management discussed potential
alternatives for the future, including our ability to achieve each alternative
and the associated merits and risks. The possible alternatives reviewed included
pursuing the existing business plan, modifying our business plan to pursue
different markets, changing our product focus, scaling down our operations,
reducing the number of employees and attempting to aggressively pursue
cost-reduction measures in an effort to accelerate cash-flow positive
operations, exploring business combinations with other companies and liquidating
our business.

         In October 2001, our board of directors instructed our management to
assess our business plan and the alternatives that might be available to us. On
October 18, 2001, our board of directors discussed our continuing financial
losses and our deteriorating financial condition, business and operations. Our
board of directors determined that the prospects for our business were likely to
continue to deteriorate due to continuing weakness in the global
telecommunications equipment market and the financial markets. Our board of
directors then discussed potential alternatives for the future, including our
ability to achieve each alternative and the associated merits and risks. The
possible business alternatives reviewed included those previously discussed on
September 28, 2001 and on October 5, 2001 and the liquidation of our business.
Following this discussion, our board of directors authorized us to retain an
investment banking firm to explore and advise us as to our strategic business
alternatives.

                                     -16-

<PAGE>

         On October 24, 2001, we retained Morgan Stanley & Co. Incorporated to
act as our exclusive financial advisor to explore strategic alternatives and
solicit proposals from parties with an interest in pursuing a business
combination with us.

         On October 25, 2001, we publicly announced that we had retained
Morgan Stanley to assist us in identifying and evaluating various strategic
alternatives with the goal of maximizing shareholder value. We also announced
our third quarter earnings, and that we had received from Qwest a notice of
termination for cause relating to our procurement agreement with Qwest.

         From October 2001 through December 20, 2001, Morgan Stanley and our
management contacted more than 60 domestic and international strategic and
financial prospects on our behalf. Throughout the process, members of our
management team, members of our special committee and representatives of
Morgan Stanley assisted each party, who so desired, with their due diligence
review of our business and operations and provided access to non-public
information about our business and operations to each of the interested
parties. We participated in numerous telephonic and in-person business and
financial overview presentations and made ourselves available for a number of
question and answer sessions for these interested parties. During the process
of identifying and evaluating various strategic alternatives, seventeen
interested parties executed confidentiality agreements and received non-public
evaluation materials. We received ten preliminary proposals, and our
management reviewed five of the potential acquisition and merger opportunities
in depth, which included financial due diligence and meetings with management
of the potential partners. Upon completion of the interested parties'
financial due diligence, only one party submitted a written final proposal,
which was at a substantial discount to management's liquidation analysis.

         From October 2001 through February 4, 2002, our board of directors
and various special committees established by our board of directors convened
numerous telephonic meetings to discuss the strategic alternatives process.

         On October 31, 2001, Morgan Stanley presented an update of the
strategic alternative process to our board of directors, including the status
of the first stage of the process. Our board of directors instructed Morgan
Stanley to request preliminary proposals from interested parties by November
26, 2001. Members of our management team and representatives from Fried,
Frank, Harris, Shriver & Jacobson also attended this meeting.

         On November 7, 2001, Morgan Stanley presented a status update of the
first phase of the strategic alternative process. Members of our management
team and representatives from Fried Frank also attended this meeting.

         On November 14, 2001, our board of directors convened a meeting to
discuss the strategic alternatives process and to appoint a special committee.
Members of our management team and representatives from Morgan Stanley and
Fried Frank also attended the meeting. Our board of directors appointed a
special committee to act on

                                     -17-

<PAGE>

behalf of the board of directors in reviewing, negotiating and recommending to
the board of directors what action should be taken with respect to any request
made to the board of directors to consider a possible transaction with any
person who may be subject to a potential conflict of interest. The special
committee was comprised of all of the directors other than Edward W. Scott and
Richard H. Kimball. Messrs. Scott and Kimball initially were excluded from the
special committee because of their relationships with other companies that
were considering possible business combinations with us at that time.

         The special committee and Morgan Stanley discussed the status of
discussions with an interested company that had submitted its initial proposal
to us. Based on the preliminary nature of the proposal and the issues
surrounding a business combination with the interested party such as value to
our stockholders, form of consideration and the financial and strategic
prospects of the combined company, certainty of consummation and the required
timetable, the special committee requested that Morgan Stanley continue to
review the potential business combination and assess the value of the
potential business combination for our stockholders.

         On November 19, 2001, our board of directors and the special
committee met to discuss the strategic alternatives process. Members of our
management team and representatives from Morgan Stanley and Fried Frank also
attended these meetings. Morgan Stanley presented a status update of the
strategic alternative process to our board of directors, including the status
of discussions with an interested company that had submitted its initial
proposal to us. The special committee determined that it would be in the best
interests of our stockholders to continue to solicit and consider this and
other alternative proposals under the contemplated timetable of November 26,
2001.

         On November 21, 2001, our board of directors met again to discuss the
status of the strategic alternatives process. Members of our management team
and representatives from Morgan Stanley and Fried Frank also participated in
this meeting. Morgan Stanley updated our board of directors on the strategic
alternatives available to us. Our special committee determined it was in the
best interests of our stockholders to continue to solicit and consider
alternative proposals under the contemplated timetable. Our special committee
and Morgan Stanley also discussed the need to make a decision regarding our
liquidation and strategic alternatives in a timely manner to maximize
shareholder value.

         On November 27, 2001, Morgan Stanley informed our special committee
that the interested company with whom Mr. Kimball had a relationship was no
longer interested in pursuing a business combination with us. As a result, Mr.
Kimball was invited to join the special committee. Members of our management
team and representatives from Fried Frank also attended this meeting.

         On November 28, 2001, the board of directors convened a meeting to
discuss the strategic alternatives process. Members of our management team and
representatives from Morgan Stanley and Fried Frank also attended this meeting
and the special committee meeting that immediately followed the board of
directors meeting. Morgan Stanley updated our board of directors on the
results of the first phase of the strategic


                                     -18-

<PAGE>

alternatives process and the strategic alternatives available to us. As of
November 28, 2001, Morgan Stanley had contacted sixty-two parties and six
interested parties responded to Morgan Stanley's request to submit preliminary
proposals by November 26, 2001. In the days immediately subsequent to November
28, 2001, four additional parties responded to Morgan Stanley's request to
submit preliminary proposals.


         Following this update, Morgan Stanley reviewed with the special
committee the preliminary proposals submitted by the interested parties. Each
preliminary proposal was structured in one of the following ways:


     -   merger with an early stage company that has very little or no
         revenue;


     -   merger with a small company; or


     -   a cash tender offer by a third party.

In addition, the special committee and Morgan Stanley compared each of the
preliminary proposals to the liquidation alternative.


         On November 30, 2001, the special committee and the board of directors
convened to discuss the strategic alternatives process. Members of our
management team and representatives from Morgan Stanley and Fried Frank attended
the special committee meeting, the board of directors meeting that immediately
followed the special committee meeting, and the reconvened special committee
meeting. Morgan Stanley updated the special committee on the results of the
strategic alternatives process and the strategic alternatives available to us.
Following this update, Morgan Stanley reviewed with the special committee the
ten preliminary proposals we had received as of November 30, 2001. The special
committee and Morgan Stanley extensively discussed and evaluated the ten
proposals we had received. The special committee and Morgan Stanley evaluated
the ten proposals based on value, timing and certainty of consummation of each
of the transactions in comparison to the estimated liquidation of our company.
In evaluating the proposals, Morgan Stanley noted that only one of the ten
proposals surpassed management's estimated liquidation value.


         The special committee determined that there was a potential strategic
fit with five of the interested parties, and the special committee requested
that Morgan Stanley contact the five interested parties to further improve,
refine and clarify their respective preliminary proposals in an effort to
maximize stockholder value and to move to more detailed due diligence with the
five interested parties. The special committee decided to move forward with
these five interested parties conditioned upon the ability of the interested
parties to complete their due diligence, improve their preliminary proposals
and proceed according to the timetable contemplated by the special committee.

         From December 1, 2001 through December 19, 2001, our management
participated in numerous telephonic and in-person due diligence sessions with
the interested parties.

                                     -19-

<PAGE>

         On December 5, 2001, our board of directors and special committee met
again to discuss the strategic alternatives process in connection with the
special committee's evaluation of our strategic alternatives. Members of our
management team and representatives from Morgan Stanley and Fried Frank
attended the board of directors meeting and the special committee meeting that
immediately followed the board of directors meeting. Morgan Stanley briefly
updated the board of directors on the status of our request to the five
interested parties to improve and clarify their preliminary proposals and
discussed an additional preliminary proposal we had received.

         On December 6, 2001, our special committee met to further evaluate
the proposal we had received from the interested party with whom Mr. Scott had
a relationship. Members of our management team and representatives from Morgan
Stanley and Fried Frank also attended this meeting. Morgan Stanley presented
to our special committee a detailed analysis of this proposal, including the
valuation implications, the investment opportunities, a comparison of the
proposal to other proposals received as well as management's analysis of the
liquidation alternative, and the next steps to be taken with respect to the
proposal.

         On December 12, 2001, our special committee met to evaluate the
strategic business alternatives available to us. Members of our management
team and representatives from Morgan Stanley and Fried Frank attended this
meeting. Morgan Stanley presented to our special committee the status of our
request to the six interested parties to improve and clarify their preliminary
proposals. Morgan Stanley discussed the difficulty in receiving responses from
the interested parties due to their lack of interest following their due
diligence, timing constraints, and concerns with the ability to consummate the
proposed transactions under the timeframe contemplated for final offers. Our
special committee determined that we should continue discussions with only
three of the six interested parties because the other three interested parties
were unlikely to consummate a transaction under the required timetable.

         On December 13, 2001, the interested party with whom Mr. Scott had a
relationship informed our special committee and Morgan Stanley that it would not
pursue a business combination with us because of its financial circumstances. As
a result, the need for a special committee to consider a possible transaction
with any person who may be subject to a potential conflict of interest was
eliminated. Members of our management team and representatives from Morgan
Stanley and Fried Frank also attended this discussion.

         On December 19, 2001, our board of directors met again to discuss the
strategic alternatives process in connection with the board of directors'
evaluation of our strategic alternatives. Members of our management team and
representatives from Morgan Stanley and Fried Frank also attended this meeting.
Morgan Stanley updated the board of directors on the strategic alternatives
process and discussed and reviewed the one written, final proposal we had
received and a verbal indication of continued interest subject to the completion
of due diligence and management's analysis of the liquidation alternative. Our
board of directors determined that neither of the acquisition proposals was in
the best interests of our stockholders due

                                     -20-

<PAGE>

to the lack of superior value to our stockholders relative to management's
liquidation analysis and the financial and strategic prospects of the combined
business.

         On December 21, 2001, our board of directors convened a meeting to
discuss the timeline for our liquidation in the event of a recommended
liquidation of our business. Members of our management team and representatives
from Morgan Stanley and Fried Frank also participated in this meeting.
Management presented an analysis of cash available for distribution to
stockholders in the event of a liquidation. Based on the facts and circumstances
at the time, this analysis reflected a range of cumulative cash distributions of
$1.17 to $1.55 per share, of which a portion of the distribution would be
received up-front and the remainder, if available subject to contingencies,
would be distributed from a contingency reserve over a three year period.

         On December 27, 2001, in a letter to our board of directors, Asghar
D. Mostafa, our chairman and chief executive officer and beneficial owner of
approximately 25% of our outstanding common stock, indicated that he was
prepared to offer to acquire all of our outstanding shares of common stock. On
December 27, 2001, the closing sales price of our common stock as reported by
the Nasdaq National Market was $0.92 per share. The material economic and
other terms proposed by Mr. Mostafa included:

     -   the transaction would be structured as a merger in which all of our
         outstanding shares of common stock (other than the shares of our
         common stock held by Mr. Mostafa) would be converted into the right
         to receive cash at a total equity value of $51 million (which we
         estimated to be approximately $1.18 per share);

     -   our board of directors would establish a special committee of
         disinterested directors to consider Mr. Mostafa's proposal;

     -   the special committee would retain its own independent legal counsel
         and financial advisors, which could include Morgan Stanley;

     -   the special committee would consent to Mr. Mostafa's retention of
         Fried, Frank, Harris, Shriver & Jacobson as his legal counsel in
         connection with the proposal and waive any potential conflicts of
         interest; and

     -   we would, with the approval of the special committee, agree to
         reimburse Mr. Mostafa for reasonable fees and expenses, not to exceed
         $150,000, incurred by Mr. Mostafa prior to the execution of a
         definitive merger agreement.

         On January 2, 2002, Mr. Mostafa submitted a revised proposal to our
board of directors. On January 2, 2002, the closing sales price of our common
stock as reported by the Nasdaq National Market was $1.08 per share. Mr.
Mostafa's revised proposal was consistent with the proposal he submitted to us
on December 27, 2001, except that the equity valuation was increased to $54
million (which we estimated to represent approximately $1.25 per share).

                                     -21-

<PAGE>

         On January 3, 2002, Mr. Mostafa presented his proposal at a meeting
of our board of directors.  Members of our management team, representatives
from Fried Frank and representatives from Morgan Stanley also attended this
meeting.  Following Mr. Mostafa's presentation, we established a special
committee of disinterested directors to consider Mr. Mostafa's proposal.  The
special committee included all of the directors other than Mr. Mostafa.

         On January 4, 2002, the special committee retained Hale and Dorr LLP
as independent legal counsel to advise it in connection with this review. The
special committee also agreed to Mr. Mostafa's request that he be permitted to
engage as his counsel Fried, Frank, Harris, Shriver & Jacobson, which, up to
this point in the process, had been acting as counsel to our company.

         The special committee reviewed and considered Mr. Mostafa's proposal
and the fiduciary duties and responsibilities of the special committee to our
stockholders. Representatives from Hale and Dorr and Morgan Stanley participated
in this discussion. Morgan Stanley presented an analysis of management's
liquidation alternative, which calculated the present value of the cash
distributions based on management's assumptions and the present value of cash
distributions from the contingency reserve by applying sensitivities to such
factors as pending breach of contract claims and other liabilities that may
arise as a result of liquidation. Based on the facts and circumstances at the
time, the range of liquidation values under this present value analysis was
$1.00 to $1.46 per share, depending on the amount distributed initially and the
amount distributed from the contingency reserve over a three-year period. The
special committee compared the estimated range of liquidation values to the per
share amounts available to stockholders if a transaction with Mr. Mostafa was
completed. The special committee also discussed the material economic and other
terms under which the special committee would pursue Mr. Mostafa's alternative
proposal to liquidation.

         On January 7, 2002, the special committee met to review and consider
Mr. Mostafa's proposal. Representatives from Hale and Dorr and Morgan Stanley
participated in this discussion. The special committee compared the estimated
range of liquidation values to the per share amounts available to stockholders
if a transaction with Mr. Mostafa was completed. The special committee also
discussed the material economic and other terms under which the special
committee would pursue Mr. Mostafa's alternative proposal to liquidation. The
special committee instructed Morgan Stanley to prepare a summary term sheet of
material economic and other terms under which the special committee would
pursue Mr. Mostafa's acquisition of our business. Later that day, the special
committee presented to Mr. Mostafa a summary of material economic and other
terms under which the special committee would pursue Mr. Mostafa's acquisition
of our business. The material economic and other terms proposed by the special
committee included:

     -   payment to stockholders of $1.40 per share in cash at closing;

                                     -22-

<PAGE>

     -   as a condition to signing the merger agreement, Mr. Mostafa would be
         required to secure an external financing commitment from a financial
         institution for the aggregate purchase price;

     -   if Mr. Mostafa liquidated our business within 12 months after the
         merger at a liquidation value per share greater than the $1.40 per
         share in cash our stockholders would receive at the time of closing,
         Mr. Mostafa would have to pay each of our stockholders an amount
         equal to the difference between the liquidation value per share and
         the amount our stockholders received per share at the time the merger
         closed; and

     -   Mr. Mostafa would be required to pay us a termination fee in the
         amount of the cash burn-rate of our business during the period between
         signing the merger agreement and termination in the event the merger
         did not close.

         On January 9, 2002, Mr. Mostafa submitted to the special committee a
revised proposal, which proposed a structure for the merger that allowed
immediate payment in cash. The material economic and other terms proposed by
Mr. Mostafa included:

     -   payment to stockholders of $1.25 per share in cash;

     -   the transaction would involve two steps:

         -   our commencement of a self-tender offer to purchase our
             outstanding common stock from all of our stockholders except Mr.
             Mostafa, followed by

         -   a second-step cash merger following the tender offer; and

     -   Mr. Mostafa would agree to pay us a termination fee of $20,000 per
         day, subject to a maximum of $1,500,000, if the tender offer was not
         completed.

         Following the receipt of this revised proposal, our special committee
discussed the revised proposal. Representatives from Hale and Dorr and Morgan
Stanley participated in this discussion. At this meeting, representatives of
Hale and Dorr reviewed with the special committee members their fiduciary
duties in connection with the transactions that were available to us. The
special committee compared the estimated range of liquidation values to the
per share amounts available to stockholders if a transaction with Mr. Mostafa
was completed. The present value of the range of liquidation values under this
analysis was $1.00 to $1.46 per share. After consideration of the revised
proposal presented to the special committee, the special committee decided not
to pursue Mr. Mostafa's proposal.

         On January 10, 2002, Mr. Mostafa presented to our special committee a
revised proposal increasing the payment to tendering stockholders from $1.25
to $1.30 per share and a higher termination fee. Members of our management
team, advisors from Hale and Dorr, Morgan Stanley, and Mr. Mostafa's legal
advisors from Fried Frank also participated in this presentation.

                                     -23-

<PAGE>

         On January 11, 2002, the special committee responded to Mr. Mostafa's
proposal, identifying key terms to be resolved in order to proceed with the
proposed transaction, including a price per share of $1.35 and specific
provisions in the merger agreement relating to representations and warranties,
conditions to closing and the termination fee. Later that day, Mr. Mostafa
advised the special committee that its proposed terms were not acceptable to
him, and he withdrew his earlier offers.

         On January 14, 2002, our board of directors convened a meeting to
discuss our potential liquidation and alternative business strategies. Members
of our management team, representatives from Hale and Dorr, and
representatives from Fried Frank and Morgan Stanley also attended this
meeting. Our board of directors discussed our probable liquidation in light of
our lack of potential business combinations.

         Following the board of directors meeting on January 14, 2002, Mr.
Marks and Mr. Enloe, two of the members of the special committee appointed to
review Mr. Mostafa's acquisition proposal, contacted Mr. Mostafa and asked if
Mr. Mostafa would reconsider his decision to withdraw his proposal to acquire
our business.

         On January 16, 2002, Mr. Mostafa presented to the special committee
his revised proposal increasing the payment to tendering stockholders from
$1.30 to $1.31 per share. Members of our management team, representatives from
Hale and Dorr, Fried Frank and Morgan Stanley attended this meeting.

         Following Mr. Mostafa's presentation, Mr. Mostafa and representatives
from Fried Frank left the meeting and the special committee discussed Mr.
Mostafa's revised acquisition proposal. Representatives from Hale and Dorr and
Morgan Stanley participated in this discussion. At this meeting,
representatives of Hale and Dorr reviewed with the special committee members
their fiduciary duties in connection with the transactions that may be
available to us. Morgan Stanley presented an analysis of management's
liquidation alternative and calculated the present value of the cash
distribution based on management's assumptions and applying sensitivities to
such factors as pending breach of contract claims and other liabilities that
may arise as a result of the liquidation. The range of liquidation values
under this analysis was $1.00 to $1.42 per share. The special committee
compared the estimated range of liquidation values and per share amounts
available to our stockholders if a transaction with Mr. Mostafa was completed.
The special committee decided to accept Mr. Mostafa's latest proposal, subject
to negotiation of the merger agreement, resolution of the terms of the
transaction and preparation of documents satisfactory to the special
committee.

         On January 18, 2002, Fried Frank circulated initial drafts of the
merger agreement and stockholders agreement to Hale and Dorr.

         On January 21, 2002, Hale and Dorr responded with initial comments on
the merger agreement.

                                     -24-

<PAGE>

         From January 21, 2002 through January 25, 2002, management,
representatives from Hale and Dorr and Morgan Stanley engaged in negotiations
with Mr. Mostafa and representatives from Fried Frank regarding the terms of
the proposed merger agreement.

         On January 24, 2002, the special committee met to discuss the status
of negotiations and documents for Mr. Mostafa's proposed transactions.
Representatives from Hale and Dorr attended this meeting. The special
committee also discussed the nature and extent of the liability, if any, to
Qwest under the terminated agreement and the amount proposed to be reserved
for all known claims and potential claims against us. The special committee
decided to compare the estimated range of liquidation values and per share
amounts available to stockholders at the special committee meeting scheduled
for January 25, 2002 if a transaction with Mr. Mostafa was completed.

         On January 25, 2002, the special committee, other than Mr. Scott, met
to discuss the proposed terms of the merger agreement. Members of our
management and representatives of Morgan Stanley and Hale and Dorr also
participated in this conference call. On the call, representatives of Hale and
Dorr gave a presentation to our independent directors regarding their
fiduciary duties to stockholders in the context of the proposed transaction.
Representatives of Hale and Dorr also summarized the terms of the proposed
merger agreement and stockholders agreement that had been negotiated with Mr.
Mostafa. Following this presentation, our independent directors discussed, and
asked questions of the representatives of Hale and Dorr regarding the terms of
the merger agreement.

         Following the discussion among members of the special committee and
representatives of Hale and Dorr, representatives of Morgan Stanley gave a
presentation to our independent directors regarding Morgan Stanley's analysis of
the valuations of us and our alternatives to the proposed transaction, including
liquidation. Following the Morgan Stanley presentation, at the request of the
special committee, representatives of Morgan Stanley delivered an oral opinion
of Morgan Stanley to our special committee that, as of January 25, 2002, subject
to the final negotiation of the merger agreement and resolution of final terms
of the transaction, the merger consideration to be received by the holders of
our common stock in the proposed merger pursuant to the merger agreement was
fair from a financial point of view to such stockholders, other than Mr. Mostafa
and his affiliates.

         On January 26, 2002, the special committee met to discuss the
proposed terms of the merger agreement with Mr. Mostafa. Members of our
management and representatives from Morgan Stanley, Hale and Dorr and Fried
Frank also participated in this conference call. Mr. Mostafa advised our board
of directors that, based on a recent insurance quote, the premium for
extending the company's directors' and officers' insurance would be $1.25
million more than expected. Mr. Mostafa indicated that he was unwilling to
bear this additional cost and that his $1.31 per share purchase price would
have to be reduced to $1.27 per share to reflect the additional insurance
cost.

                                     -25-

<PAGE>

         Following the discussion with Mr. Mostafa, Mr. Mostafa and
representatives from Fried Frank left the meeting, and the special committee
discussed and compared the effect of the unexpected directors' and officers'
insurance expense on Mr. Mostafa's offer and the liquidation alternative. The
special committee decided to reexamine the liquidation alternative in light of
the additional insurance expense and to initiate discussions for the
settlement of the dispute with Qwest under the terminated agreement. As a
result, the special committee decided to advise Mr. Mostafa that it had
elected to defer any action on Mr. Mostafa's proposal while it requested that
we commence settlement discussions with Qwest.

         On January 29, 2002, our board of directors and the special committee
convened a meeting to discuss a letter we had received from Qwest on January
25, 2002, which invited us to negotiate a settlement of the existing dispute
with Qwest. Members of our management and representatives from Hale and Dorr
and Fried Frank attended this meeting. Mr. Mostafa indicated that he would not
hold his offer open if we pursued settlement negotiations with Qwest.

         Following the discussion of the letter we had received from Qwest,
the special committee and Mr. Mostafa reviewed the cost of the directors' and
officers' insurance policy. The special committee was advised that management
had received a lower estimate of $800,000 to $850,000 for the additional
insurance cost. Mr. Mostafa indicated again that he was unwilling to bear the
cost of the directors' and officers' insurance. Mr. Mostafa stated that his
$1.31 per share purchase price would have to be reduced to $1.29 per share to
reflect the insurance cost.

         Following the discussion with Mr. Mostafa, Mr. Mostafa and
representatives from Fried Frank left the meeting, and the special committee
reviewed and considered Mr. Mostafa's proposal. Representatives from Hale and
Dorr participated in this discussion. The special committee decided to
commence settlement negotiations with Qwest and to defer any decision
regarding the alternatives available to us.

         On January 31, 2002, our board of directors and the special committee
convened a meeting to discuss our potential liquidation and Mr. Mostafa's
proposal. Members of our management and representatives from Hale and Dorr and
Fried Frank attended this meeting. At the request of the special committee, Mr.
Mostafa resubmitted his proposal, which included his latest offer price of $1.31
per share. Mr. Mostafa's proposed purchase price, however, was conditioned upon
the agreement of the other two principal stockholders, Baker Communications
Fund, L.P. and entities affiliated with Technology Crossover Ventures, to share
a portion of the additional insurance cost with Mr. Mostafa.

         Following Mr. Mostafa's presentation, Mr. Mostafa and representatives
from Fried Frank left the meeting, and the special committee discussed Mr.
Mostafa's proposal. The special committee decided to pursue settlement
negotiations with Qwest and to reject Mr. Mostafa's proposal. The special
committee also decided to recommend the liquidation of our business and begin
the wind down of our operations, which the special committee believed would
maximize stockholder value.

                                     -26-

<PAGE>

         On February 1, 2002, our board of directors convened a meeting to
discuss our liquidation. Members of our management team and representatives
from Hale and Dorr and Fried Frank also attended this meeting. The special
committee unanimously agreed to recommend the liquidation of our business to
our board of directors.

         On February 4, 2002, our board of directors determined that liquidation
was the best available alternative to maximize stockholder value and approved
the orderly wind down of our operations, including the layoff of all of our
eighty-seven employees effective April 6, 2002 and April 20, 2002. However, five
employees have termination dates that range from May to August 2002 as these
individuals are needed to wind down the business affairs. Our board of directors
also authorized management to immediately commence efforts to sell our assets
subject to stockholder approval, including inventory and our intellectual
property, terminate commercial agreements and relationships, exit our commercial
obligations, and generally wind down our business and operations.

         On February 21, 2002, a complaint was filed in the United States
District Court for the Eastern District of Virginia against us and certain of
our current and former officers and directors. The plaintiffs in this action
claim to own a total of 100 shares and purport to act on behalf of a class of
other stockholders. The complaint alleges violations of the federal securities
laws in connection with our initial public offering and subsequent public
statements. Thereafter, substantially similar complaints were filed in the same
court. We believe the claims asserted in the complaints are without merit and
intend to contest these claims vigorously. However, the outcome of the suits
cannot be predicted. The existence of these claims could delay the making of any
distributions to our stockholders or reduce the amount available for
distribution in connection with the proposed plan of liquidation.

         CONCLUSION OF THE BOARD OF DIRECTORS

         On February 4, 2002, our board of directors, with Mr. Mostafa
abstaining, adopted the plan of liquidation. In arriving at this conclusion,
our board of directors considered a number of factors, including alternatives
to the liquidation and the future prospects of our business. Prior to the
meeting of our board of directors on February 4, 2002, our board of directors
analyzed the results of management's investigation of various acquisition and
strategic partnering opportunities. Our board of directors had been informed
continuously of our business affairs and financial condition, and has convened
at numerous separate meetings to consider these issues. Our board of directors
has been apprised by Morgan Stanley of the market values of comparable
companies and the lack of prospects for our business. Accordingly, our board
of directors determined that it would not be advisable to continue to operate
on an independent basis indefinitely if the potential for growth was so
limited. Further, after significant effort, we had not been successful in
identifying a buyer or strategic alliance partner acceptable to us. Based on
this information, our board of directors determined that distribution to the
stockholders of cash proceeds from the sale of our assets would return the
greatest value to our stockholders as compared to other alternatives and that
liquidation would prevent further erosion of stockholders' equity through
continuing net losses and market declines. There can be no assurance that the
liquidation value per share of common stock in the hands of the stockholders
will equal or exceed the price or prices at which the common stock has
recently traded or may trade in the future, or that the liquidation value will
exceed zero. However, our board of directors believes that it is in the best
interests of our business and our stockholders to distribute to the
stockholders our net assets, if any, pursuant to the plan of liquidation. If
the plan of liquidation is not authorized and approved by the stockholders,
our board of directors will continue to manage the company as a publicly owned
entity and will explore what, if any, alternatives are then available for the
future of our business.

NO ESTIMATE OF LIQUIDATION PROCEEDS

         At this time, we cannot predict the amount of any liquidating
distributions to our stockholders, which could be made over a substantial period
of time.

                                     -27-

<PAGE>

         As of the end of December 2001, we had approximately $77 million in
cash and marketable securities and expect to use cash of approximately $2.0
million to satisfy liabilities on our unaudited balance sheet. In addition to
converting our remaining assets to cash, pursuing any claims we may have
against third parties and satisfying the liabilities currently on our balance
sheet, we anticipate using cash in the next several months for a number of
items, including but not limited to:

     -   ongoing operating costs of at least $1.3 million;

     -   employee severance and related costs of at least $4.0 million;

     -   payments to our contract manufacturer of at least $2.3 million; and

     -   other costs, including costs incurred to close out existing leases,
         of at least $3.2 million.


         In addition, we may incur additional liabilities arising out of
contingent claims, such as the shareholder class action suits and the claim by
Qwest described above, that are not yet reflected as liabilities on our balance
sheet. We are unable at this time to predict what amount, if any, may be paid on
these contingent claims. We are unable at this time to predict the precise
nature, amount and timing of any distributions, due in part to our inability to
predict the net value of our non-cash assets and the ultimate amount of our
liabilities, many of which have not been settled. The sale of our non-cash
assets could yield less than we expect, we may incur additional liabilities or
the settlement of our existing liabilities could cost more than we anticipate,
any of which could result in a substantially lower distribution to our
stockholders.


         The amount per share that stockholders will receive in the liquidation
will depend on the total number of shares outstanding at the time we make the
distribution. At the close of business on February 28, 2002, there were
42,808,568 shares of common stock outstanding. The number of shares outstanding
will increase as optionholders exercise their options. The following table
summarizes information about stock options outstanding at December 31, 2001.

<TABLE>
<CAPTION>


                                 OPTIONS OUTSTANDING                    VESTED OPTIONS EXERCISABLE
                            ------------------------------              --------------------------
                                              WEIGHTED
                                               AVERAGE      WEIGHTED
                               NUMBER OF      REMAINING      AVERAGE                   WEIGHTED
                                SHARES       CONTRACTUAL    EXERCISE      NUMBER        AVERAGE
 RANGE OF EXERCISE PRICES     OUTSTANDING        LIFE         PRICE     EXERCISABLE  EXERCISE PRICE
                                             (in years)

<S>           <C>          <C>              <C>           <C>          <C>          <C>
 $0.4000-        $0.4000      1,053,500          9.77         $0.4000       90,086     $0.4000
 $0.6000-        $0.6000        240,000          6.15         $0.6000      240,000     $0.6000
 $0.6300-        $0.7000        120,000          9.76         $0.6708        2,917     $0.7000
 $1.0000-        $1.5000      2,283,850          8.17         $1.2483      804,200     $1.1991
 $1.5500-        $2.0000        590,806          8.11         $1.9476      263,968     $1.9761
 $2.4000-        $3.6000        786,388          9.15         $3.0789      199,152     $3.0569
 $3.7000-        $5.1875        505,057          8.91         $4.4465       96,897     $3.9535
 $5.7500-        $7.5000        328,958          8.60         $6.9681      102,111     $6.9755
 $8.9688-       $13.0000        349,044          8.63        $10.1361      161,264    $10.0759
$15.0000-       $16.3750         30,563          8.76        $15.0225       12,145    $15.0566
                              ---------         -----        --------    ---------    --------
 $0.4000-       $16.3750      6,288,166          8.62         $2.4814    1,972,740     $2.6251
                              =========         =====        ========    =========    ========
</TABLE>

         THE METHODS USED BY OUR BOARD OF DIRECTORS AND MANAGEMENT IN
ESTIMATING THE VALUES OF OUR ASSETS ARE INEXACT AND MAY NOT APPROXIMATE VALUES
ACTUALLY REALIZED. OUR BOARD OF DIRECTORS' ASSESSMENT ASSUMES THAT ESTIMATES
OF OUR LIABILITIES AND OPERATING COSTS ARE ACCURATE, BUT THOSE ESTIMATES ARE
SUBJECT TO NUMEROUS UNCERTAINTIES BEYOND OUR CONTROL AND ALSO DO NOT REFLECT
ANY CONTINGENT LIABILITIES THAT MAY MATERIALIZE. MOREOVER, NO ASSURANCE CAN BE
GIVEN THAT ANY AMOUNTS TO BE RECEIVED BY OUR STOCKHOLDERS IN LIQUIDATION WILL
EQUAL OR EXCEED THE PRICE OR PRICES AT WHICH THE COMMON STOCK HAS RECENTLY
TRADED OR MAY TRADE IN THE FUTURE.

INTERESTS OF DIRECTORS AND OFFICERS IN THE PLAN OF LIQUIDATION

         In considering the board of directors' recommendation to approve the
plan of liquidation, you should be aware that some of our directors and
officers may have interests that are different from or in addition to your
interests as a stockholder, including those set forth below.

                                     -28-

<PAGE>

         All of our current executive officers and directors, except for Mr.
Marks, hold shares of common stock or options to acquire shares of common
stock. The non-employee directors who voted in favor of the plan of
liquidation beneficially own an aggregate of 14,238,969 shares of common
stock (approximately 33.7% of the outstanding shares of common stock as of
February 28, 2002).

         Other than as set forth below, it is not currently anticipated that
our liquidation will result in any material benefit to any of our officers or
to directors who participated in the vote to adopt the plan of liquidation.

         The table below sets forth information relating to our officers or
directors who are parties to agreements with us providing for the payment to
them of severance in the amounts specified in the event of a change of control
or the liquidation, dissolution or winding up of our business.

<TABLE>
<CAPTION>
                                                       Months in
               Name and Position                    Severance Period        Total Severance Payment
               -----------------                    ----------------        -----------------------
<S>                                                 <C>                     <C>
Asghar D. Mostafa (1).......................               36                      $600,000
   President and Chief Executive Officer
Gary L. Wingo (2)...........................               24                       600,000
   Vice President -- Sales
Sherry L. Rhodes (3)........................               12                       220,000
   Vice President and General Counsel
Harry J. D'Andrea (4).......................               12                       187,000
   Chief Financial Officer
</TABLE>
------------------------
(1)    Mr. Mostafa's employment as an executive officer of our company will
       terminate on April 20, 2002.

(2)    Mr. Wingo's employment as an executive officer of our company will
       terminate on April 6, 2002.

(3)    Ms. Rhodes' employment as an executive officer of our company will
       terminate on April 6, 2002.

(4)    Mr. D'Andrea's employment as an executive officer of our company will
       terminate on April 6, 2002.

         The table below sets forth information relating to stock options held
by each of our officers and directors, as of February 28, 2002.

                                     -29-

<PAGE>


<TABLE>
<CAPTION>
                                    Total Options                                Total "In-the-Money"

              Name                   Outstanding        Vested Options           Options Outstanding
              ----                   -----------        --------------          ----------------------
                                                                             Shares (1)         Value(2)
                                                                             ----------         --------
<S>                                <C>                 <C>                  <C>                <C>
Asghar D. Mostafa (3)........             60,000                30,000               --       $       --
John W. Seazholtz............            140,000               140,000          140,000           11,200
Robert Ted Enloe, III........             50,000                22,917               --               --
Gary L. Wingo (4)............          1,000,000                    --               --               --
Harry J. D'Andrea(5).........            260,000               125,000               --               --
Jeffrey M. Range (6).........             11,250                11,250               --               --
Sherry L. Rhodes (7).........            180,000                12,500               --               --
Lawrence Kraft (8)...........             11,250                11,250               --               --
</TABLE>

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

(1)    Options are considered "in-the-money" if the exercise price of the
       option is less than $1.08 per share (the closing price of our common
       stock on February 28, 2002, as reported by the Nasdaq Stock Market ).


(2)    The value of in-the-money options is based on the difference between the
       exercise price and $1.08 per share (the closing price of our common
       stock on February 28, 2002, as reported by the Nasdaq Stock Market).


(3)    Mr. Mostafa's employment as an executive officer of our company will
       terminate on April 20, 2002.

(4)    Mr. Wingo's employment as an executive officer of our company will
       terminate on April 6, 2002.

(5)    Mr. D'Andrea's employment as an executive officer of our company will
       terminate on April 6, 2002.

(6)    Mr. Range resigned as an executive officer of our company effective
       February 1, 2002.

(7)    Ms. Rhodes' employment as an executive officer of our company will
       terminate on April 6, 2002.

(8)    Mr. Kraft resigned as an executive officer of our company effective
       February 1, 2002.

         Our board of directors may confer other benefits or bonuses to our
employees and our officers, including officers who are also directors, in
recognition of their services to us based on the performance of such employees
and officers, including performance during our liquidation process.

         The plan of liquidation was adopted by our board of directors. It is
not currently anticipated that our liquidation will result in any material
increase in value of the shares or options held by any directors who
participated in the vote on the plan of liquidation.

THE PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION

         DISSOLUTION UNDER DELAWARE LAW

         Section 275 of the Delaware General Corporation Law provides that a
corporation may dissolve upon either (a) a majority vote of the board of
directors of the corporation followed by a majority vote of its stockholders;
or (b) a unanimous stockholder consent. Following such approval, the
dissolution is effected by filing a certificate of dissolution

                                     -30-

<PAGE>

with the Secretary of State of the State of Delaware. Once a corporation is
dissolved, its existence is automatically continued for a term of three years,
but solely for the purpose of winding up its business. The process of winding
up includes:

     -   the prosecution and defense of lawsuits, if any;

     -   the settling and closing of any business;

     -   the disposition and conveyance of any property;

     -   the discharge of any liabilities; and

     -   the distribution of any remaining assets to the stockholders of the
         corporation.

If any action, suit or proceeding is commenced by or against the corporation
before or within the winding up period, the corporation will, solely for the
purpose of such action, suit or proceeding, automatically continue to exist
beyond the three-year period until any judgments, orders or decrees are fully
executed.

         DESCRIPTION OF THE PLAN OF LIQUIDATION

         The following is a brief summary of the plan of liquidation. It is
qualified in its entirety by reference to the full text of the plan of
liquidation attached hereto as Exhibit A and incorporated herein by reference.
You should read the plan of liquidation carefully.


         We will distribute pro rata to our stockholders, in cash or in-kind, or
sell or otherwise dispose of, all of our property and assets. Since board
approval of the plan of liquidation, all of our eighty-seven employees have been
laid off effective as of April 6, 2002 and April 20, 2002. However, five
employees have termination dates that range from May to August of 2002 as these
individuals are needed to wind down the business affairs. As of February 28,
2002, no sale of assets has been effected pursuant to the plan of liquidation
and no agreement to sell any of our assets has been reached. However, agreements
for the sale of assets may be entered into prior to the special meeting and, if
entered into, may be contingent on the approval of the plan of liquidation at
the special meeting. The sale of assets will be concluded prior to the third
anniversary of the filing of the certificate of dissolution with the Delaware
Secretary of State by a final liquidating distribution either directly to the
stockholders or to one or more liquidating trusts. Any sales of our assets have
been and will be made in private or public transactions and on such terms as are
approved by our board of directors. It is not anticipated that any further votes
of our stockholders will be solicited with respect to the approval of the
specific terms of any particular sales of assets approved by our board of
directors. See "Sales of Our Assets."


         Subject to the payment or the provision for payment of our
indebtedness and other obligations, our cash on hand, together with the cash
proceeds of any sales of our other assets, will be distributed from time to
time pro rata to the holders of the common stock. We intend to establish a
reasonable contingency reserve in an amount determined by our board of
directors to be sufficient to satisfy our liabilities, expenses and
obligations not

                                     -31-

<PAGE>

otherwise paid, provided for or discharged. The net balance, if any, of any
such contingency reserve remaining after payment, provision or discharge of
all such liabilities, expenses and obligations will also be distributed to our
stockholders pro rata. No assurances can be given that available cash and
amounts received from the sale of assets will be adequate to provide for our
obligations, liabilities, expenses and claims and to make cash distributions
to stockholders. We currently have no plans to repurchase shares of capital
stock from our stockholders. If we were to repurchase shares of capital stock
from our stockholders for cash, such repurchases would be open market
purchases and would decrease amounts distributable to other stockholders if we
were to pay amounts in excess of the per share values distributable in respect
of the shares purchased and would increase amounts distributable to other
stockholders if we were to pay amounts less than the per share values
distributable in respect of such shares. See "Liquidating Distributions;
Nature; Amount; Timing" and "Contingent Liabilities; Contingency Reserve;
Liquidating Trust" below.

         If deemed necessary by our board of directors for any reason, we may,
from time to time, transfer any of our unsold assets to one or more trusts
established for the benefit of our stockholders, which assets would thereafter
be sold or distributed on terms approved by its trustees. If all of our assets
(other than the contingency reserve) are not sold or distributed prior to the
third anniversary of the effectiveness of our dissolution, we will transfer in
final distribution such remaining assets to a trust. Our board of directors
may also elect in its discretion to transfer the contingency reserve, if any,
to such a trust. Any of such trusts are referred to in this proxy statement as
"liquidating trusts." Notwithstanding the foregoing, to the extent that a
distribution or transfer of any asset cannot be effected without the consent
of a governmental authority, no such distribution or transfer shall be
effected without such consent. In the event of a transfer of assets to a
liquidating trust, we would distribute, pro rata to the holders of our capital
stock, beneficial interests in any such liquidating trust or trusts. It is
anticipated that the interests in any such trusts will not be transferable;
therefore, although the recipients of the interests would be treated for tax
purposes as having received their pro rata share of property transferred to
the liquidating trust or trusts and will thereafter take into account for tax
purposes their allocable portion of any income, gain or loss realized by such
liquidating trust or trusts, the recipients of the interests will not receive
the value thereof unless and until such liquidating trust or trusts
distributes cash or other assets to them. The plan of liquidation authorizes
our board of directors to appoint one or more individuals or entities to act
as trustee or trustees of the liquidating trust or trusts and to cause us to
enter into a liquidating trust agreement or agreements with such trustee or
trustees on such terms and conditions as may be approved by our board of
directors. Approval and authorization of the plan of liquidation also will
constitute the approval by our stockholders of any such appointment and any
liquidating trust agreement or agreements. For further information relating to
liquidating trusts, the appointment of trustees and the liquidating trust
agreements, reference is made to "Contingent Liabilities; Contingent Reserve;
Liquidating Trust."

         We will close our stock transfer books and discontinue recording
transfers of shares of common stock on the earliest to occur of (i) the close
of business on the record

                                     -32-

<PAGE>

date fixed by our board of directors for the final liquidating distribution,
(ii) the close of business on the date on which our remaining assets are
transferred to a liquidating trust, or (iii) the final record date, the date
fixed by our board of directors for filing the certificate of dissolution,
and, thereafter, certificates representing shares of common stock will not be
assignable or transferable on our books except by will, intestate succession
or operation of law. After the final record date, we will not issue any new
stock certificates, other than replacement certificates. Any person holding
options, warrants or other rights to purchase common stock must exercise such
instruments or rights prior to the final record date. See "Listing and Trading
of the Common Stock and Interests in the Liquidating Trust or Trusts" and
"Final Record Date" below.

         Following approval of the plan of liquidation by the stockholders, a
certificate of dissolution will be filed with the State of Delaware. Our
dissolution will become effective, in accordance with Delaware law, upon
proper filing of the certificate of dissolution with the Secretary of State or
upon such later date as may be specified in the certificate of dissolution.
Pursuant to Delaware law, we will continue to exist for three years after the
dissolution becomes effective or for such longer period as the Delaware Court
of Chancery shall direct, for the purpose of prosecuting and defending suits,
whether civil, criminal or administrative, by or against us, and enabling us
gradually to settle and close our business, to dispose of and convey our
property, to discharge our liabilities and to distribute to our stockholders
any remaining assets, but not for the purpose of continuing the business for
which we were organized.

         ABANDONMENT; AMENDMENT

         Under the plan of liquidation, our board of directors may modify,
amend or abandon the plan of liquidation, notwithstanding stockholder
authorization and approval, to the extent permitted by Delaware law. We will
not amend or modify the plan of liquidation under circumstances that would
require additional stockholder approval under Delaware law or the federal
securities laws without complying with Delaware law and the federal securities
laws.

         LIQUIDATING DISTRIBUTIONS; NATURE; AMOUNT; TIMING

         Although our board of directors has not established a firm timetable
for distributions to our stockholders if the plan of liquidation is authorized
and approved by the stockholders, our board of directors intends, subject to
contingencies inherent in winding up our business, to make such distributions
as promptly as practicable. The liquidation is expected to be concluded prior
to the third anniversary of the filing of the certificate of dissolution in
Delaware by a final liquidating distribution either directly to the
stockholders or to a liquidating trust. The proportionate interests of all of
our stockholders shall be fixed on the basis of their respective stock
holdings at the close of business on the final record date, and after that
date, any distributions made by us shall be made solely to stockholders of
record on the close of business on the final record date, except for permitted
transfers. However, we are currently unable to predict the precise nature,
amount or timing of any distributions pursuant to the plan of liquidation. The

                                     -33-

<PAGE>

actual nature, amount and timing of all distributions will be determined by
our board of directors, in its sole discretion, and will depend in part upon
our ability to convert our remaining assets into cash and pay and settle our
significant remaining liabilities and obligations.

         We do not plan to satisfy all of our liabilities and obligations
prior to making distributions to stockholders, but instead will reserve assets
deemed by management and our board of directors to be adequate to provide for
these liabilities and obligations. See "Contingent Liabilities; Contingency
Reserve; Liquidating Trust." Management and our board of directors believe
that we have sufficient cash to pay our current and accrued obligations
without the sale of any of our assets.

         Uncertainties as to the precise net value of our non-cash assets and
the ultimate amount of our liabilities make it impracticable to predict the
aggregate net value ultimately distributable to stockholders. Claims,
liabilities and expenses from operations (including operating costs, salaries,
income taxes, payroll and local taxes, legal and accounting fees and
miscellaneous office expenses), although currently declining, will continue to
be incurred following stockholder authorization and approval of the plan of
liquidation. These expenses will reduce the amount of assets available for
ultimate distribution to stockholders, and, while we do not believe that a
precise estimate of those expenses can currently be made, management and our
board of directors believe that available cash and amounts received on the
sale of assets will be adequate to provide for our obligations, liabilities,
expenses and claims (including contingent liabilities) and to make cash
distributions to stockholders. However, no assurances can be given that
available cash and amounts received on the sale of assets will be adequate to
provide for our obligations, liabilities, expenses and claims and to make cash
distributions to stockholders. If available cash and amounts received on the
sale of assets are not adequate to provide for our obligations, liabilities,
expenses and claims, distributions of cash and other assets to our
stockholders will be reduced.

         SALES OF OUR ASSETS

         The plan of liquidation gives our board of directors the authority to
sell all of our assets. As of February 28, 2002, no sale of assets has been
effected pursuant to the plan of liquidation and no agreement to sell any of
our assets has been reached. However, agreements for the sale of assets may be
entered into prior to the special meeting and, if entered into, may be
contingent on approval of the plan of liquidation at the special meeting.
Authorization and approval of the plan of liquidation will constitute approval
of any such agreements and sales. Sales of our assets will be made on such
terms as are approved by our board of directors and may be conducted by either
competitive bidding, public sales or privately negotiated sales. We do not
anticipate that any further stockholder votes will be solicited with respect
to the approval of the specific terms of any particular sales of assets
approved by our board of directors. We do not anticipate amending or
supplementing the proxy statement to reflect any such agreement or sale,
unless required by applicable law. The prices at which we will be able to sell
our various assets depends largely on factors beyond our control, including,
without limitation, the

                                     -34-

<PAGE>


condition of financial markets, the availability of financing to prospective
purchasers of the assets, United States and foreign regulatory approvals,
public market perceptions, and limitations on transferability of certain
assets. In addition, we may not obtain as high a price for a particular asset
as we might secure if we were not in liquidation.

         Our sale of an appreciated asset will result in the recognition of
taxable gain by us to the extent the fair market value of such asset exceeds
our tax basis in such asset.

         OUR ACTIVITIES FOLLOWING ADOPTION OF THE PLAN OF LIQUIDATION

         Following adoption and approval of the plan of liquidation by our
stockholders, our activities will be limited to distributing our assets in
accordance with the plan of liquidation, establishing a contingency reserve
for payment of our expenses and liabilities, including liabilities incurred
but not paid or settled prior to authorization of the plan of liquidation,
selling any of our remaining assets, and terminating any of our remaining
commercial agreements, relationships or outstanding obligations.

         Following the adoption and approval of the plan of liquidation by our
stockholders, we will continue to indemnify our officers, directors, employees
and agents in accordance with our restated certificate of incorporation, as
amended, and bylaws, including for actions taken in connection with the plan
of liquidation and the winding up of our affairs. Our obligation to indemnify
these persons may be satisfied out of the assets of any liquidating trust. Our
board of directors and the trustees of any liquidating trust may obtain and
maintain insurance to cover our indemnification obligations under the plan of
liquidation.

         REPORTING REQUIREMENTS

         Whether or not the plan of liquidation is authorized and approved, we
have an obligation to continue to comply with the applicable reporting
requirements of the Securities Exchange Act of 1934, as amended, even though
compliance with such reporting requirements is economically burdensome. If the
plan of liquidation is authorized and approved and, in order to curtail
expenses, we will, after filing our certificate of dissolution, seek relief
from the SEC from these reporting requirements. We anticipate that, if such
relief is granted, we would continue to file current reports on Form 8-K to
disclose material events relating to our liquidation and dissolution along
with any other reports that the SEC might require.

         CONTINGENT LIABILITIES; CONTINGENCY RESERVE; LIQUIDATING TRUST

         Under Delaware law, we are required, in connection with our
dissolution, to pay or provide for payment of all of our liabilities and
obligations. Following the authorization and approval of the plan of
liquidation by our stockholders, we will pay all expenses and fixed and other
known liabilities, or set aside as a contingency reserve cash and other assets
which we believe to be sufficient, based on factors known to us, to satisfy
such liabilities and other claims that might arise. We are currently unable to

                                     -35-

<PAGE>
estimate with precision the amount of any contingency reserve which may be
required, but that amount (in addition to any cash contributed to a
liquidating trust, if one is utilized) will be deducted before the
determination of amounts available for distribution to stockholders.

         We may incur additional liabilities arising out of contingent claims,
such as the claims described below, that are not yet reflected on our balance
sheet. We are unable at this time to predict what amount, if any, may be paid on
these contingent claims.


         In October 2001, we announced that we had received notice from Qwest
Communications Corporation purporting to terminate our procurement agreement
with it. From the third quarter of 2000 through the first quarter of 2001, Qwest
made equipment purchases from us totaling over $15.7 million ($13.8 million
under the procurement agreement) and was our largest customer during this period
representing approximately 28% of our total sales. In its purported notice of
termination, Qwest asserted that we were in material breach of our procurement
agreement. In a letter dated October 23, 2001, we responded to Qwest's earlier
letter, rejecting any breach on our part and reiterating our rights under the
procurement agreement. On November 19, 2001, we received another letter from
Qwest purporting to detail the actions and inactions that constituted breach on
our part and requesting us to accept a return of, and reimburse Qwest for, all
products purchased from us less a ten percent discount in exchange for a release
of claims. In a letter dated December 5, 2001, we refuted the claims contained
in Qwest's November 19 letter, reiterated our rights to additional purchase
orders from Qwest in excess of $10 million and suggested we attempt to negotiate
a mutually acceptable resolution of our dispute. On January 25, 2002, Qwest
responded to our December 5 letter and among other things, asserted that it had
revoked acceptance of equipment previously purchased and requested a refund of
the amounts paid. In addition, however, Qwest also suggested that we attempt to
negotiate a mutually acceptable resolution of our dispute. As a result, the
parties had discussions but were unable to reach an agreement to resolve their
competing claims. Subsequently, the parties have exchanged letters reiterating
their respective positions. We intend to vigorously defend any claims asserted
by Qwest.


        On February 21, 2002, a complaint was filed in the United States
District Court for the Eastern District of Virginia against us and certain of
our current and former officers and directors. The plaintiffs in this action
claim to own a total of 100 shares and purport to act on behalf of a class of
other stockholders. The complaint alleges violations of the federal securities
laws in connection with our initial public offering and subsequent public
statements. Thereafter, substantially similar complaints were filed in the same
court. We believe the claims asserted in the complaints are without merit and
intend to contest these claims vigorously. However, the outcome of the suits
cannot be predicted. The existence of these claims could delay the making of any
distributions to our stockholders or reduce the amount available for
distribution in connection with the proposed plan of liquidation.

         We recently received a letter from Dishnet, a customer that purchased
approximately $1 million worth of equipment from us. In that letter, Dishnet
claimed that the equipment performed unsatisfactorily and sought compensation in
the amount of $30 million in connection with damages and losses suffered as a
result of the failure of the equipment to perform. We believe that we have
fulfilled our obligations to Dishnet, that Dishnet's claims are without merit
and that Dishnet is not entitled to a refund. Nevertheless, we made a proposal
to resolve our differences with Dishnet by providing them with certain equipment
to replace equipment sent to us for repair and damaged while in transit. At this
juncture, we cannot predict whether Dishnet will pursue this matter further and,
if so, how it will be resolved.

         Electronic Instrumentation & Technology, Inc., a former manufacturer of
ours, recently filed a complaint in the Circuit Court of Loudon County,
Virginia. In the complaint, EIT claimed that we did not purchase certain
products from EIT and that we were in breach of our purchase agreement. EIT
sought compensation in the amount of $83,000, plus additional interest and
attorneys fees. We dispute the amount of EIT's claim, and we intend to contest
these claims vigorously. However, the outcome of the suit cannot be predicted.
The existence of EIT's claims could delay the making of final distributions to
our stockholders or reduce the amount available for distribution in connection
with the proposed plan of liquidation.

         We recently received a letter from Benchmark Electronics, Inc., a
former manufacturer of ours. In its letter, Benchmark asserted that we were
liable for non-cancelable, non-returnable or customized items that were procured
on our behalf based upon forecasts provided to Benchmark and for costs
associated with the termination of our relationship. Benchmark is seeking
additional compensation in the amount of $0.9 million, but we dispute the amount
of Benchmark's claim. At this time, we cannot predict whether Benchmark will
pursue this matter and, if so, how it will be resolved.

        The actual amount of the contingency reserve will be based upon
estimates and opinions of management and our board of directors and derived
from consultations with outside experts and review of our estimated operating
expenses and future estimated liabilities, including, without limitation,
anticipated compensation payments, estimated legal and accounting fees,
operating lease expenses, payroll and other taxes payable, miscellaneous
office expenses, expenses accrued in our financial statements, and reserves
for litigation expenses. There can be no assurance that the contingency
reserve in fact will be sufficient. We have not made any specific provision
for an increase in the amount of the contingency reserve. Subsequent to the
establishment of the contingency reserve, we will distribute to our
stockholders any portions of the contingency reserve which are deemed no
longer to be required. After the liabilities, expenses and obligations for
which the contingency reserve had been established have been satisfied in
full, we will distribute to our stockholders any remaining portion of the
contingency reserve.

        If deemed necessary, appropriate or desirable by our board of
directors for any reason, we may, from time to time, transfer any of our
unsold assets to one or more liquidating trusts, or other structure it deems
appropriate, established for the benefit of our stockholders, which property
would thereafter be sold or distributed on terms approved by its trustees. Our
board of directors and management may determine to transfer assets to a
liquidating trust in circumstances where the nature of an asset is not
susceptible to distribution (for example, interests in intangibles) or where
our board of directors determines that it would not be in the best interests
of our business and our stockholders for such assets to be distributed
directly to the stockholders at that time. If all of our assets (other then
the contingency reserve) are not sold or distributed prior to the third
anniversary of the effectiveness of our dissolution, we must transfer in final
distribution those remaining assets to a liquidating trust. Our board of
directors may also elect in its discretion to transfer the contingency
reserve, if any, to such a liquidating trust. The purpose of a liquidating
trust would be to distribute such property or to sell such property on terms
satisfactory to the liquidating trustees, and distribute the proceeds of such
sale after paying our liabilities, if any, assumed by the trust, to our
stockholders. Any liquidating trust acquiring all of our unsold assets will
assume all of our liabilities and obligations and will be obligated to pay any
of our expenses and liabilities which remain unsatisfied. If the contingency
reserve transferred to the liquidating trust is exhausted, such expenses and
liabilities will be satisfied out of the liquidating trust's other unsold
assets.

        The plan of liquidation authorizes our board of directors to appoint
one or more individuals or entities to act as trustee or trustees of the
liquidating trust or trusts and to cause us to enter into a liquidating trust
agreement or agreements with such trustee or trustees on such terms and
conditions as may be approved by our board of directors. It is anticipated
that our board of directors will select such trustee or trustees on the basis
of

                                     -36-

<PAGE>

the experience of such individual or entity in administering and disposing of
assets and discharging liabilities of the kind to be held by the liquidating
trust or trusts and the ability of such individual or entity to serve the best
interests of our stockholders. Approval of the plan of liquidation by the
stockholders will also constitute the approval by our stockholders of any such
appointment and any liquidating trust agreement or agreements.

         We may decide to use a liquidating trust or trusts, and our board of
directors believes the flexibility provided by the plan of liquidation with
respect to the liquidating trusts to be advisable. The trust would be
evidenced by a trust agreement between us and the trustees. The purpose of the
trust would be to serve as a temporary repository for the trust property prior
to its disposition or distribution to our stockholders. The transfer to the
trust and distribution of interests therein to our stockholders would enable
us to divest the trust property and permit our stockholders to enjoy the
economic benefits of ownership thereof. Pursuant to the trust agreement, the
trust property would be transferred to the trustees immediately prior to the
distribution of interests in the trust to our stockholders, to be held in
trust for the benefit of the stockholder beneficiaries subject to the terms of
the trust agreement. It is anticipated that the interests would be evidenced
only by the records of the trust and there would be no certificates or other
tangible evidence of such interests and that no holder of common stock would
be required to pay any cash or other consideration for the interests to be
received in the distribution or to surrender or exchange shares of common
stock in order to receive the interests. It is further anticipated that
pursuant to the trust agreements (i) a majority of the trustees would be
required to be independent of our management; (ii) approval of a majority of
the trustees would be required to take any action; and (iii) the trust would
be irrevocable and would terminate after, the earliest of (x) the trust
property having been fully distributed, or (y) a majority in interest of the
beneficiaries of the trust, or a majority of the trustees, having approved of
such termination, or (z) a specified number of years having elapsed after the
creation of the trust.

         UNDER DELAWARE LAW, IN THE EVENT WE FAIL TO CREATE AN ADEQUATE
CONTINGENCY RESERVE FOR PAYMENT OF OUR EXPENSES AND LIABILITIES, OR SHOULD
SUCH CONTINGENCY RESERVE AND THE ASSETS HELD BY THE LIQUIDATING TRUST OR
TRUSTS BE EXCEEDED BY THE AMOUNT ULTIMATELY FOUND PAYABLE IN RESPECT OF
EXPENSES AND LIABILITIES, EACH STOCKHOLDER COULD BE HELD LIABLE FOR THE
PAYMENT TO CREDITORS OF SUCH STOCKHOLDER'S PRO RATA SHARE OF SUCH EXCESS,
LIMITED TO THE AMOUNTS THERETOFORE RECEIVED BY SUCH STOCKHOLDER FROM US OR
FROM THE LIQUIDATING TRUST OR TRUSTS.

         If we were held by a court to have failed to make adequate provision
for our expenses and liabilities or if the amount ultimately required to be
paid in respect of such liabilities exceeded the amount available from the
contingency reserve and the assets of the liquidating trust or trusts, a
creditor of ours could seek an injunction against the making of distributions
under the plan of liquidation on the ground that the amounts to be distributed
were needed to provide for the payment of our expenses and liabilities. Any
such action could delay or substantially diminish the cash distributions to be
made to stockholders and/or interest holders under the plan of liquidation.

                                     -37-

<PAGE>

         FINAL RECORD DATE

         We intend to close our stock transfer books and discontinue recording
transfers of shares of common stock on the final record date, the date fixed
by our board of directors for filing the certificate of dissolution, and
thereafter certificates representing shares of common stock will not be
assignable or transferable on our books except by will, intestate succession or
operation of law. After the final record date, we will not issue any new stock
certificates, other than new stock certificates for optionholders who exercise
their options after the final record date and replacement certificates. We
anticipate that no further trading of our shares will occur on or after the
final record date. See "Listing and Trading of Common Stock and Interests in the
Liquidating Trust or Trusts" below. All liquidating distributions from us or a
liquidating trust on or after the final record date will be made to stockholders
according to their holdings of capital stock as of the final record date.
Subsequent to the final record date, we may at our election require stockholders
to surrender certificates representing their shares of the capital stock in
order to receive subsequent distributions. Stockholders should not forward their
stock certificates before receiving instructions to do so. If surrender of stock
certificates should be required, all distributions otherwise payable by us or
the liquidating trust, if any, to stockholders who have not surrendered their
stock certificates may be held in trust for those stockholders, without
interest, until the surrender of their certificates (subject to escheat pursuant
to the laws relating to unclaimed property). If a stockholder's certificate
evidencing the capital stock has been lost, stolen or destroyed, the stockholder
may be required to furnish us with satisfactory evidence of the loss, theft or
destruction thereof, together with a surety bond or other indemnity, as a
condition to the receipt of any distribution.

         LISTING AND TRADING OF COMMON STOCK AND INTERESTS IN THE LIQUIDATING
         TRUST OR TRUSTS

         We currently intend to close our stock transfer books on the final
record date and to cease recording stock transfers and issuing stock
certificates (other than replacement certificates) at that time. Accordingly,
we expect that trading in our shares will cease on and after that date.


         Our common stock is currently listed for trading on the Nasdaq National
Market. For continued listing, a company, among other things, must meet certain
minimum requirements with respect to net tangible assets, market value of our
securities held by non-affiliates, and minimum bid prices per share. In
addition, a company must maintain an operating business. We had previously
received notice that our common stock would be delisted from the Nasdaq National
Market on or about December 10, 2001. However, the Nasdaq had waived the
enforcement of this requirement until January 2002. Since December 31, 2001, we
have met the minimum bid requirement, but we cannot predict whether we will be
able to maintain compliance with the minimum bid requirement or Nasdaq's other
requirements for continued listing. We expect that, as a result of the cessation
of our operations and the anticipated decrease


                                     -38-

<PAGE>

in our assets resulting from distributions to our stockholders, our common
stock will be delisted from the Nasdaq National Market not later than shortly
after the approval of the plan of liquidation by the stockholders. Trading, if
any, in our common stock would thereafter be conducted in the over-the-
counter market in the so-called "pink sheets" or the NASD's "Electronic
Bulletin Board." As a consequence of such delisting, an investor would likely
find it more difficult to dispose of, or to obtain quotations as to, the price
of the common stock. Delisting of the common stock may result in lower prices
for the common stock than would otherwise prevail. In any event, we will close
our stock transfer books upon the filing of the certificate of dissolution.
Thereafter, the stockholders will not be able to transfer their shares. We
anticipate that the interests in a liquidating trust or trusts will not be
transferable, although no determination has yet been made. This determination
will be made by our board of directors and management prior to the transfer of
unsold assets to the liquidating trust and will be based on, among other
things, our board of directors, and management's estimate of the value of the
assets being transferred to the liquidating trust or trusts, tax matters and
the impact of compliance with applicable securities laws. Should the interests
be transferable, we plan to distribute an information statement with respect
to the liquidating trust or trusts at the time of the transfer of assets and
the liquidating trust or trusts may be required to comply with the periodic
reporting and proxy requirements of the Exchange Act. The costs of compliance
with such requirements would reduce the amount which otherwise could be
distributed to interest holders. Even if transferable, the interests are not
expected to be listed on a national securities exchange or quoted through
Nasdaq, and the extent of any trading market therein cannot be predicted.
Moreover, the interests may not be accepted by commercial lenders as security
for loans as readily as more conventional securities with established trading
markets.

         As stockholders will be deemed to have received a liquidating
distribution equal to their pro rata share of the value of the net assets
distributed to an entity which is treated as a liquidating trust for tax
purposes (see "Certain Federal Income Tax Consequences"), the distribution of
non-transferable interests could result in tax liability to the interest
holders without their being readily able to realize the value of such
interests to pay such taxes or otherwise.

ABSENCE OF APPRAISAL RIGHTS

         Under Delaware law, our stockholders are not entitled to appraisal
rights for their shares of common stock in connection with the transactions
contemplated by the plan of liquidation.

REGULATORY APPROVALS

         We have complied with the Worker Adjustment and Retraining
Notification Act. No other United States federal or state regulatory
requirements must be complied with or approvals obtained in connection with
the liquidation.

                                     -39-

<PAGE>

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

         The following discussion is a general summary of the material United
States federal income tax consequences affecting our stockholders that are
anticipated to result from our dissolution and liquidation. This discussion
does not purport to be a complete analysis of all the potential tax effects.
Moreover, the discussion does not address the tax consequences that may be
relevant to particular categories of investors subject to special treatment
under certain federal income tax laws (such as dealers in securities, banks,
insurance companies, tax-exempt organizations, mutual funds, foreign
individuals and entities, and persons who acquired their stock upon exercise
of stock options or in other compensatory transactions). It also does not
address any tax consequences arising under the laws of any state, local or
foreign jurisdiction. The discussion is based upon the Internal Revenue Code
of 1986, as amended, Treasury Regulations, rulings of the Internal Revenue
Service, or IRS, and judicial decisions now in effect, all of which are
subject to change at any time; any such changes may be applied retroactively.
Distributions pursuant to the plan of liquidation may occur at various times
and in more than one tax year. No assurance can be given that the tax
treatment described herein will remain unchanged at the time of such
distributions.

         The following discussion has no binding effect on the IRS or the
courts and assumes that we will liquidate in accordance with the plan of
liquidation in all material respects. No ruling has been requested from the
IRS with respect to the anticipated tax treatment of the plan of liquidation,
and we will not seek an opinion of counsel with respect to the anticipated tax
treatment. If any of the anticipated tax consequences described herein proves
to be incorrect, the result could be increased taxation at the corporate
and/or stockholder level, thus reducing the benefit to the stockholders and
our business from the liquidation. Tax considerations applicable to particular
stockholders may vary with and be contingent on the stockholder's individual
circumstances. This discussion does not constitute legal advice to any
stockholder.

         FEDERAL INCOME TAXATION OF THE COMPANY

         After the approval of the plan of liquidation and until the
liquidation is completed, we will continue to be subject to federal income tax
on our taxable income, if any. We will recognize gain or loss on sales of our
assets pursuant to the plan of liquidation. Upon the distribution of any
property, other than cash, to stockholders pursuant to the plan of
liquidation, we will recognize gain or loss as if that property were sold to
the stockholders at our fair market value, unless certain exceptions to the
recognition of loss apply. Any losses and net operating loss carryforwards
that we have may be available to offset any gains recognized on sales or
distribution of our assets. We will be required to file Form 966 (Corporation
Dissolution or Liquidation) with the IRS within 30 days after the adoption of
the plan of liquidation.

                                     -40-

<PAGE>

         FEDERAL INCOME TAXATION OF STOCKHOLDERS

         As a result of our liquidation, for federal income tax purposes
stockholders will recognize gain or loss equal to the difference between (i)
the sum of the amount of cash distributed to them and the aggregate fair
market value (at the time of distribution) of any property distributed to
them, and (ii) their tax basis for their shares of our capital stock. A
stockholder's tax basis in his or her shares will depend upon various factors,
including the stockholder's cost and the amount and nature of any
distributions received with respect thereto.

         A stockholder's gain or loss will be computed on a "per share" basis.
We expect to make more than one liquidating distribution, each of which will
be allocated proportionately to each share of stock owned by a stockholder.
The value of each liquidating distribution will be applied against and reduce
a stockholder's tax basis in his or her shares of stock. Gain will be
recognized as a result of a liquidating distribution to the extent that the
aggregate value of the distribution and prior liquidating distributions
received by a stockholder with respect to a share exceeds his or her tax basis
for that share. Any loss will generally be recognized only when the final
distribution from us has been received and then only if the aggregate value of
all liquidating distributions with respect to a share is less than the
stockholder's tax basis for that share. Gain or loss recognized by a
stockholder will be capital gain or loss provided the shares are held as
capital assets, and will be long term capital gain or loss if the stock has
been held for more than one year. If it were to be determined that
distributions made pursuant to the plan of liquidation were not liquidating
distributions, the result could be treatment of distributions as dividends
taxable at ordinary income rates if we were to have any earnings and profits
for federal income tax purposes, determined either on an historic or a current
year basis, for the year of distribution.

         Upon any distribution of property, the stockholder's tax basis in
such property immediately after the distribution will be the fair market value
of such property at the time of distribution. The gain or loss realized upon
the stockholder's future sale of that property will be measured by the
difference between the stockholder's tax basis in the property at the time of
such sale and the proceeds of such sale.

         After the close of our taxable year, we will provide stockholders and
the IRS with a statement of the amount of cash distributed to the stockholders
and our best estimate as to the value of any property distributed to them
during that year. There is no assurance that the IRS will not challenge that
valuation. As a result of such a challenge, the amount of gain or loss
recognized by stockholders might be changed. Distributions of property other
than cash to stockholders could result in tax liability to any given
stockholder exceeding the amount of cash received, requiring the stockholder
to meet the tax obligations from other sources or by selling all or a portion
of the assets received.

         It is possible that we will have liabilities not fully covered by our
contingency reserve for which the stockholders will be liable up to the extent
of any liquidating distributions they have received. (See "Contingent
Liabilities; Contingency Reserve;

                                     -41-

<PAGE>

Liquidating Trust"). This liability could require a stockholder to satisfy a
portion of this liability out of prior liquidating distributions received from
us and the liquidating trust or trusts. Payments by stockholders in
satisfaction of these liabilities would commonly produce a capital loss,
which, in the hands of individual stockholders, could not be carried back to
prior years to offset capital gains realized from liquidating distributions in
those years. Stockholders should consult their tax advisors with respect to
the federal tax consequences of the plan of liquidation.

         LIQUIDATING TRUSTS

         If we transfer assets to a liquidating trust or trusts, we intend to
structure such trust or trusts so that stockholders will be treated for tax
purposes as having received their pro rata share of the property transferred
to the liquidating trust or trusts, reduced by the amount of known liabilities
assumed by the liquidating trust or trusts or to which the property
transferred is subject. Assuming this treatment is achieved, assets
transferred to a liquidating trust will cause the stockholder to be treated in
the same manner for federal income tax purposes as if the stockholder had
received a distribution directly from us. The liquidating trust or trusts
themselves should not be subject to federal income tax, assuming that they are
treated as liquidating trusts for federal income tax purposes. After formation
of the liquidating trust or trusts, the stockholders must take into account
for federal income tax purposes their allocable portion of any income, gain or
loss recognized by the liquidating trust or trusts. As a result of the
transfer of property to the liquidating trust or trusts and the ongoing
operations of the liquidating trust or trusts, stockholders should be aware
that they may be subject to tax, whether or not they have received any actual
distributions from the liquidating trust or trusts with which to pay such tax.
There can be no assurance that the liquidating trust or trusts described in
the plan of liquidation will be treated as a liquidating trust or trusts for
federal income tax purposes.

         STATE AND LOCAL TAX

         We may be subject to liability for state or local taxes with respect
to the sale of our assets. Stockholders may also be subject to state or local
taxes, including with respect to liquidating distributions received by them or
paid to a liquidating trust on their behalf, and with respect to any income
derived by a liquidating trust. Stockholders should consult their tax advisors
with respect to the state and local tax consequences of the plan of
liquidation.

         BACKUP WITHHOLDING

         Unless a stockholder complies with certain reporting and/or
certification procedures or is an exempt recipient under applicable provisions
of the Code and Treasury regulations promulgated under the Code, such
stockholder may be subject to a 30% backup withholding tax with respect to any
payments received pursuant to the liquidation. Backup withholding generally
will not apply to payments made to certain exempt recipients such as a
corporation or financial institution or to a stockholder who

                                     -42-

<PAGE>
furnishes a correct taxpayer identification number or provides a certificate
of foreign status and provides certain other required information. If backup
withholding applies, the amount withheld is not an additional tax, but is
credited against that stockholder's U.S. federal income tax liability.

         THE FOREGOING SUMMARY OF UNITED STATES FEDERAL, STATE AND LOCAL
INCOME TAX CONSIDERATIONS IS INCLUDED FOR GENERAL INFORMATION ONLY AND DOES
NOT CONSTITUTE LEGAL ADVICE TO ANY STOCKHOLDER. THE TAX CONSEQUENCES OF THE
PLAN MAY VARY DEPENDING UPON THE PARTICULAR CIRCUMSTANCES OF THE STOCKHOLDER.
WE RECOMMEND THAT EACH STOCKHOLDER CONSULT ITS OWN TAX ADVISOR REGARDING THE
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN AS WELL AS THE STATE, LOCAL, AND
FOREIGN TAX CONSEQUENCES.

VOTE REQUIRED AND BOARD RECOMMENDATION


         The authorization and approval of the plan of liquidation requires
the affirmative vote of the holders of a majority of the outstanding shares of
common stock. Members of our board of directors and our executive officers who
hold (or are deemed to hold) as of February 28, 2002 an aggregate of
24,869,304 shares of common stock (approximately 58% of the outstanding
shares of common stock as of February 28, 2002) have indicated that they will
vote in favor of the proposal.


         OUR BOARD OF DIRECTORS BELIEVES THAT THE PLAN OF LIQUIDATION IS IN
THE BEST INTERESTS OF OUR STOCKHOLDERS AND RECOMMENDS A VOTE FOR THIS
PROPOSAL. IT IS INTENDED THAT SHARES REPRESENTED BY THE ENCLOSED FORM OF PROXY
WILL BE VOTED IN FAVOR OF THIS PROPOSAL UNLESS OTHERWISE SPECIFIED IN SUCH
PROXY.


              SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA


<TABLE>
<CAPTION>
                                         PERIOD FROM
                                          INCEPTION
                                        (SEPTEMBER 10,
                                            1997)
                                           THROUGH               YEAR ENDED DECEMBER 31,
                                         DECEMBER 31,            -----------------------
                                            1997        1998        1999        2000        2001
                                          --------    --------    --------    --------    --------
                                                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                       <C>         <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
Revenue ...............................   $     --    $     --    $  4,278    $ 37,381    $ 15,512
Cost of revenue .......................         --          --       2,839      24,890      29,803
                                          --------    --------    --------    --------    --------
Gross profit (loss) ...................         --          --       1,439      12,491     (14,291)
Operating expenses:
  Research and development, excluding
     stock compensation amortization
     amounts(1) .......................        111       3,717       6,718      12,510      18,286
  Sales and marketing, excluding stock
     compensation amortization
     amounts(1) .......................         73         799       3,209      12,821      10,922
  General and administrative, excluding
     stock compensation amortization
     amounts(1) .......................        125         611       1,251       3,006       7,590
  Impairment of long-lived assets .....         --          --          --          --       6,384
  Restructuring charges ...............         --          --          --          --       1,496
  Amortization of stock
     compensation(1) ..................         --          --          42       1,760       2,028
                                          --------    --------    --------    --------    --------
          Total operating expenses ....        309       5,127      11,220      30,097      46,706
                                          --------    --------    --------    --------    --------
Loss from operations ..................       (309)     (5,127)     (9,781)    (17,606)    (60,997)
Other income, net .....................        (16)        (16)       (452)     (3,173)     (4,610)
                                          --------    --------    --------    --------    --------
Net loss ..............................       (293)     (5,111)     (9,329)    (14,433)    (56,387)
Accretion of transaction costs and
  accrued dividends on redeemable
  convertible preferred stock .........         --        (367)     (2,589)     (4,182)         --
                                          --------    --------    --------    --------    --------
Net loss applicable to common
  shareholders ........................   $   (293)   $ (5,478)   $(11,918)   $(18,615)    (56,387)
                                          ========    ========    ========    ========    ========
Basic and diluted net loss per share ..   $  (0.05)   $  (0.48)   $  (1.01)   $  (1.01)   $  (1.33)
                                          ========    ========    ========    ========    ========
Shares used in computing net loss per
  share ...............................      5,742      11,389      11,789      18,515      42,357
                                          ========    ========    ========    ========    ========

--------------------------------------
(1) AMORTIZATION OF STOCK COMPENSATION
    AMOUNTS:
    Research and development...........   $     --    $     --    $      5    $    786    $  1,060
    Sales and marketing................         --          --          35         779         785
    General and administrative.........         --          --           2         195         183
                                          --------    --------    --------    --------    --------
                                          $     --    $     --    $     42    $  1,760    $  2,028
                                          ========    ========    ========    ========    ========
</TABLE>


<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                          --------------------------------------------------------
                                            1997        1998        1999        2000        2001
                                          --------    --------    --------    --------    --------
                                                               (in thousands)
<S>                                       <C>         <C>         <C>         <C>         <C>
 BALANCE SHEET DATA:
 Cash and cash equivalents............... $     98    $  1,449    $ 33,012    $100,609    $ 36,848

 Marketable securities...................       --       3,481          --      11,916      40,945

 Working capital.........................       23       3,916      35,069     121,303      70,498

 Total assets............................      368       6,451      41,695     137,348      82,942

 Long-term debt, less current portion....      263         286          98           5           3

 Redeemable convertible preferred stock..       --      10,593      55,517          --          --

 Total stockholders' equity (deficit)....     (122)     (5,478)    (17,475)    128,598      74,275
</TABLE>


                                 STOCK OWNERSHIP

         The following table presents information, as of February 28, 2002,
with respect to the beneficial ownership of our common stock by:

         -   each person who is known by us to beneficially own more than 5% of
             our common stock;

         -   each of our directors;

         -   each of our named executive officers (as defined in the Securities
             Act of 1933, as amended); and

         -   all of our executive officers and directors as a group.

         Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission. Except as indicated in the footnotes
to this table, each stockholder's address is 8330 Boone Boulevard, Eighth
Floor, Vienna, Virginia 22182, and subject to applicable community property
laws, the persons named in the table have

                                     -43-

<PAGE>

sole voting and investment power with respect to all shares of our common
stock shown as beneficially owned by them. The percentage of shares
beneficially owned are based on 42,808,568 shares of common stock outstanding
as of February 28, 2002. Shares of common stock subject to options or warrants
that are currently exercisable or exercisable within 60 days of February 28,
2002 are deemed to be outstanding and beneficially owned by the person holding
the options or warrants for the purpose of computing the number of shares
beneficially owned and the percentage ownership of that person. The shares
subject to options or warrants held by a person are not deemed to be
outstanding for the purpose of computing the percentage ownership of any other
person. Entries denoted by an asterisk represent amounts less than 1%.


<TABLE>
<CAPTION>
                                                       NUMBER OF SHARES            PERCENTAGE OF SHARES
                BENEFICIAL OWNER                      BENEFICIALLY OWNED            BENEFICIALLY OWNED
                ----------------                      ------------------           --------------------
<S>                                                  <C>                          <C>
Baker Communications Fund, L.P. (1)............           10,891,528                      25.4%

Edward W. Scott (1)............................           10,891,528                      25.4%

Asghar D. Mostafa (2) (3)......................           10,651,835                      24.9%

Entities Affiliated with Technology Crossover
Ventures (4)...................................            3,177,920                       7.4%

Richard H. Kimball (4).........................            3,177,920                       7.4%

Arthur J. Marks (5)............................                    -                        *

John W. Seazholtz (6)..........................              228,943                        *

Robert Ted Enloe (7)...........................              105,578                        *

Harry J. D'Andrea (8) (9)......................              132,167                        *

Jeffrey M. Range (10) (11).....................               16,750                        *

Gary L. Wingo (12).............................                    -                        *

Sherry L. Rhodes (13)(14)......................               55,625                        *

Directors and Officers as a group (11 persons)
(15)...........................................           25,260,346                      59.0%
</TABLE>

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

(1)      Represents shares held by Baker Communications Fund, L.P. Baker
         Capital Corp. is the general partner of Baker Communications Fund,
         L.P. Edward W. Scott, a member of our board of directors, is a member
         of Baker Capital Corp. Mr. Scott disclaims beneficial ownership of
         these shares, except to the extent of his pecuniary interest therein.
         The following natural persons jointly, but not

                                     -44-

<PAGE>

         individually, exercise voting and/or dispositive power with respect
         to the shares held by Baker Communications Fund, L.P.: John C. Baker;
         Ashley Leeds; Edward W. Scott and Henry G. Baker. The address for
         Baker Communications Fund, L.P. and Mr. Scott is c/o Baker Capital
         Corp., 540 Madison Avenue, New York, New York 10022.


(2)      Includes 8,000,000 shares owned by Mostafa Investments Limited
         Partnership, an investment partnership controlled by Asghar D. Mostafa,
         and 2,621,835 shares owned by Mostafa Ventures Fund, LLC, an
         investment limited liability company controlled by Asghar D. Mostafa.
         The shares owned by Mr. Mostefa include 30,000 shares issuable upon
         the exercise of options granted under our stock option plans.
         Excludes shares owned by Mr. Mostafa's brother, Iraj Mostafa, an
         employee of ours through April 6, 2002.



(3)      Mr. Mostafa's employment as an executive officer of our company will
         terminate on April 20, 2002.


(4)      Consists of 2,913,305 shares held by TCV III (Q), L.P., 23,075 shares
         held by TCV III (GP), 109,610 shares held by TCV III, L.P., and 131,930
         shares held by TCV III Strategic Partners, L.P. (collectively, the "TCV
         Funds"). Mr. Kimball, a member of our board of directors, is a Managing
         Member of Technology Crossover Management III, L.L.C. which is the
         General Partner of each of the TCV Funds. Mr. Kimball disclaims
         beneficial ownership of such shares except to the extent of his
         pecuniary interest therein. The address for each of these persons and
         entities is c/o Technology Crossover Ventures, 528 Ramona Street, Palo
         Alto, California 94301.

(5)      The address of Mr. Marks is 10836 Pleasant Hill Drive, Potomac,
         Maryland 20854.

(6)      The address of Mr. Seazholtz is 399 Princeton Avenue, Brick, New
         Jersey 08724.

(7)      Consists of 69,078 shares held by Balquita Partners, Ltd., a limited
         partnership controlled by Mr. Enloe, 500 shares owned by Mr.
         Enloe, and 11,000 shares owned by the Enloe Descendants Trust, a
         trust of which Mr. Enloe is Trustee.  The shares owned by Mr. Enloe
         include 25,000 shares issuable upon the exercise of options granted
         under our stock option plans.  The address for Balquita Partners, Ltd.,
         Mr. Enloe and the Enloe Descendants Trust is c/o Balquita Partners.
         Ltd., 3102 Maple Avenue, Suite 200, Dallas, Texas 75201.


(8)      Includes 129,167 shares issuable upon the exercise of options granted
         under our stock option plans. Includes 2,000 shares held by other
         investors over which Mr. D'Andrea exercises voting power pursuant to
         powers of attorney.


(9)      Mr. D'Andrea's employment as an executive officer of our company will
         terminate on April 6, 2002.

(10)     Includes 11,250 shares issuable upon the exercise of options granted
         under our stock option plans.

(11)     Mr. Range resigned as an executive officer of our company effective
         as of February 1, 2002. The address for Mr. Range is 561 Walls Dairy
         Court, Great Falls, Virginia 22066.


                                     -45-

<PAGE>

(12)     Mr. Wingo's employment as an executive officer of our company will
         terminate on April 6, 2002.

(13)     Includes 55,625 shares issuable upon the exercise of options granted
         under our stock option plans.

(14)     Ms. Rhodes' employment as an executive officer of our company will
         terminate on April 6, 2002.

(15)     Includes 391,042 shares issuable upon the exercise of options granted
         under our stock option plans.

                                OTHER MATTERS

         We do not know of any other matters which may come before the
meeting. However, if any other matters are properly presented to the meeting,
it is the intention of the persons named in the accompanying proxy to vote, or
otherwise act, in accordance with their judgment on such matters.


              SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

         This proxy statement contains forward-looking statements with respect
to our plans and objectives, distributions resulting from the sale and
liquidation of our assets, general economic conditions and other matters.
Those statements include statements regarding our intent, belief, or current
expectations, as well as the assumptions on which such statements are based.
Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and actual results may differ materially from
those contemplated by such forward-looking statements. Important factors
currently known to us that could cause the results to differ materially from
those in forward-looking statements include, but are not limited to: (i)
general economic conditions, (ii) the fees and expenses associated with
consummating our complete liquidation and dissolution, (iii) the amount of our
liabilities which must be satisfied or reserved as part of our liquidation and
dissolution, (iv) the amount and nature of any unknown or contingent
liabilities, (v) the market value of our remaining assets and the time
required to sell such assets and (vi) the other items detailed under the
caption "Risk Factors Relating to the Plan of Liquidation" in this proxy
statement.

                     WHERE YOU CAN FIND MORE INFORMATION

         We file annual, quarterly, and current reports, proxy statements, and
other information with the Securities and Exchange Commission. You may read
and copy any reports, statements, or other information that we file at the
commission's public reference rooms in Washington, D.C., New York, New York,
and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for
further information on the public reference rooms. Our public filings are also
available to the public from commercial document retrieval services and at the
Internet World Wide Web site maintained by the commission at

                                     -46-

<PAGE>


http://www.sec.gov. Reports, proxy statements, and other information
concerning us also may be inspected at the offices of the National Association
of Securities Dealers, Inc., 1735 K Street, NW, Washington, D.C. 20006.





                                     -47-

<PAGE>



         WE ENCOURAGE STOCKHOLDERS TO ATTEND THE MEETING. WHETHER OR NOT YOU
PLAN TO ATTEND, WE URGE YOU TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL GREATLY FACILITATE
ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE APPRECIATED.
STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN
THOUGH THEY HAVE SENT IN THEIR PROXIES.

                                         By Order of the Board of Directors,

                                         /s/ SHERRY L. RHODES
                                         Sherry L. Rhodes
                                         Secretary

                                     -48-

<PAGE>

                                  EXHIBIT A

                 PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION
                                      OF
                   ADVANCED SWITCHING COMMUNICATIONS, INC.

         This Plan of Complete Liquidation and Dissolution (the "Plan") is
intended to accomplish the complete liquidation and dissolution of Advanced
Switching Communications, Inc., a Delaware corporation (the "Company"), in
accordance with the Delaware General Corporation Law and Section 331 of the
Internal Revenue Code of 1986, as amended (the "Code"), as follows:

     1.  The board of directors of the Company (the "Board of Directors") has
         adopted this Plan and called a meeting (the "Meeting") of the holders
         of the Company's common stock to approve the Plan and ratify the
         Company's actions taken to date on the Plan. If stockholders holding
         a majority of the Company's outstanding common stock, par value
         $.0025 per share (the "Common Stock"), vote for the adoption of this
         Plan at the Meeting, the Plan shall constitute the adopted Plan of
         the Company as of the date of the Meeting, or such later date on
         which the stockholders may approve the Plan if the Meeting is
         adjourned to a later date (the "Adoption Date").

     2.  After the Adoption Date, the Company shall not engage in any business
         activities except to the extent necessary to preserve the value of
         its assets, wind up its business affairs, and distribute its assets
         in accordance with this Plan. No later than thirty (30) days
         following the Adoption Date, the Company shall file Form 966 with the
         Internal Revenue Service.

     3.  From and after the Adoption Date, the Company shall complete the
         following corporate actions:

           a.     The Company shall determine whether and when to (i) transfer
                  the Company's property and assets (other than cash, cash
                  equivalents and accounts receivable) to a liquidating trust
                  (established pursuant to Section 6 hereof), or (ii) collect,
                  sell, exchange or otherwise dispose of all of its property
                  and assets in one or more transactions upon such terms and
                  conditions as the Board of Directors, in its absolute
                  discretion, deems expedient and in the best interests of the
                  Company and the stockholders, without any further vote or
                  action by the Company's stockholders.  It is understood that
                  the Company will be permitted to commence the sale and
                  disposition of its assets as soon as possible following the
                  adoption of this Plan by the Company's Board of Directors in
                  order to attain the highest value for such assets and
                  maximize value for its stockholders.  The Company's assets
                  and properties may be sold in bulk to one buyer or a small
                  number of buyers or on a piecemeal basis to numerous buyers.
                  The Company will not be required to obtain appraisals or
                  other third party

                                     A-1

<PAGE>

                  opinions as to the value of its properties and assets in
                  connection with the liquidation.  In connection with such
                  collection, sale, exchange and other disposition, the
                  Company shall collect or make provision for the collection
                  of all accounts receivable, debts and claims owing to the
                  Company.

           b.     The Company shall pay or, as determined by the Board of
                  Directors, make reasonable provision to pay, all claims and
                  obligations of the Company, including all contingent,
                  conditional or unmatured claims known to the Company and all
                  claims which are known to the Company but for which the
                  identity of the claimant is unknown.

           c.     The Company shall distribute pro rata to its stockholders,
                  all available cash including the cash proceeds of any sale,
                  exchange or disposition, except such cash, property or
                  assets as are required for paying or making reasonable
                  provision for the claims and obligations of the Company.
                  Such distribution may occur in a single distribution or in a
                  series of distributions and shall be in cash or assets, in
                  such amounts, and at such time or times, as the Board of
                  Directors or the Trustees (as defined in Section 6 hereof),
                  in their absolute discretion, may determine.  If and to the
                  extent deemed necessary, appropriate or desirable by the
                  Board of Directors or the Trustees, in their absolute
                  discretion, the Company may establish and set aside a
                  reasonable amount of cash and/or property (the "Contingency
                  Reserve") to satisfy claims against the Company, including,
                  without limitation, tax obligations, and all expenses of the
                  sale of the Company's property and assets, of the collection
                  and defense of the Company's property and assets, and the
                  liquidation and dissolution provided for in this Plan.

     4.  The distributions to the stockholders pursuant to Section 3 and 6
         hereof shall be in complete cancellation of all of the outstanding
         Common Stock of the Company. As a condition to receipt of any
         distribution to the Company's stockholders, the Board of Directors or
         the Trustees, in their absolute discretion, may require the
         stockholders to (i) surrender their certificates evidencing the
         Common Stock to the Company or its agents for recording of such
         distributions thereon or (ii) furnish the Company with evidence
         satisfactory to the Board of Directors or the Trustees of the loss,
         theft or destruction of their certificates evidencing the Common
         Stock, together with such surety bond or other security or indemnity
         as may be required by and satisfactory to the Board of Directors or
         the Trustees ("Satisfactory Evidence and Indemnity").  As a condition
         to receipt of any final distribution to the Company's stockholders,
         the Board of Directors or the Trustees, in their absolute discretion,
         may require the stockholders to (i) surrender their certificates
         evidencing the Common Stock to the Company or its agent for
         cancellation or (ii) furnish the Company with Satisfactory Evidence
         and Indemnity. The Company will finally close its stock transfer
         books and discontinue recording transfers of Common Stock on the
         earliest to occur of (i) the close of business on the record date
         fixed by the Board of Directors for the

                                     A-2

<PAGE>

         final liquidating distribution, (ii) the close of business on the
         date on which the remaining assets of the Company are transferred to
         the Trust or (iii) the date on which the Company files its
         Certificate of Dissolution under the Delaware General Corporation
         Law, and thereafter certificates representing Common Stock will not
         be assignable or transferable on the books of the Company except by
         will, intestate succession, or operation of law.

     5.  If any distribution to a stockholder cannot be made, whether because
         the stockholder cannot be located, has not surrendered its
         certificates evidencing Common Stock as required hereunder or for any
         other reason, the distribution to which such stockholder is entitled
         (unless transferred to the Trust established pursuant to Section 6
         hereof) shall be transferred, at such time as the final liquidating
         distribution is made by the Company, to the official of such state or
         other jurisdiction authorized by applicable law to receive the
         proceeds of such distribution. The proceeds of such distribution
         shall thereafter be held solely for the benefit of and for ultimate
         distribution to such stockholder as the sole equitable owner thereof
         and shall be treated as abandoned property and escheat to the
         applicable state or other jurisdiction in accordance with applicable
         law. In no event shall the proceeds of any such distribution revert
         to or become the property of the Company.

     6.  If deemed necessary, appropriate or desirable by the Board of
         Directors, in its absolute discretion, in furtherance of the
         liquidation and distribution of the Company's assets to the
         stockholders, as a final liquidating distribution or from time to
         time, the Company shall transfer to one or more liquidating trustees,
         for the benefit of its stockholders (the "Trustees"), under a
         liquidating trust (the "Trust"), any assets of the Company which are
         (i) not reasonably susceptible to distribution to the stockholders,
         including without limitation non-cash assets and assets held on
         behalf of the stockholders (a) who cannot be located or who do not
         tender their certificates evidencing the Common Stock to the Company
         or its agent as herein above required or (b) to whom distributions
         may not be made based upon restrictions under contract or law,
         including, without limitation, restrictions of the federal securities
         laws and regulations promulgated thereunder, or (ii) held as the
         Contingency Reserve.  The Board of Directors is hereby authorized to
         appoint one or more corporations, partnerships or other persons, or
         any combination thereof, including, without limitation, any one or
         more officers, directors, employees, agents or representatives of the
         Company, to act as the initial Trustee or Trustees for the benefit of
         the stockholders and to receive any assets of the Company.  Any
         Trustees appointed as provided in the preceding sentence shall
         succeed to all right, title and interest of the Company of any kind
         and character with respect to such transferred assets and, to the
         extent of the assets so transferred and solely in their capacity as
         Trustees, shall assume all of the liabilities and obligations of the
         Company, including, without limitation, any unsatisfied claims and
         unascertained or contingent liabilities.  Further, any conveyance of
         assets to the Trustees shall be deemed to be a distribution of
         property and assets by the Company to the stockholders for the
         purposes of

                                     A-3

<PAGE>

         Section 3 of this Plan.  Any such conveyance to the Trustees shall be
         in trust for the stockholders of the Company.  The Company, subject
         to this Section and as authorized by the Board of Directors, in its
         absolute discretion, may enter into a liquidating trust agreement
         with the Trustees, on such terms and conditions as the Board of
         Directors, in its absolute discretion, may deem necessary,
         appropriate or desirable.  Adoption of this Plan by a majority of the
         outstanding Common Stock shall constitute the approval of the
         stockholders of any such appointment, any such liquidating trust
         agreement and any transfer of assets by the Company to the Trust as
         their act and as a part hereof as if herein written.

     7.  After the Adoption Date, the officers of the Company shall, at such
         time as the Board of Directors, in its absolute discretion, deems
         necessary, appropriate or desirable, obtain any certificates required
         from the Delaware tax authorities and, upon obtaining such
         certificates and paying such taxes as may be owing, the Company shall
         file with the Secretary of State of the State of Delaware a
         Certificate of Dissolution (the "Certificate of Dissolution") in
         accordance with the Delaware General Corporation Law.

     8.  Adoption of this Plan by holders of a majority of the outstanding
         Common Stock shall constitute the approval of the stockholders of the
         sale, exchange or other disposition in liquidation of all of the
         property and assets of the Company, whether such sale, exchange or
         other disposition occurs in one transaction or a series of
         transactions, and shall constitute ratification of all contracts for
         sale, exchange or other disposition which are conditioned on adoption
         of this Plan.

     9.  In connection with and for the purposes of implementing and assuring
         completion of this Plan, the Company may, in the absolute discretion
         of the Board of Directors, pay any brokerage, agency, professional
         and other fees and expenses of persons rendering services to the
         Company in connection with the collection, sale, exchange or other
         disposition of the Company's property and assets and the
         implementation of this Plan.

     10. In connection with and for the purpose of implementing and assuring
         completion of this Plan, the Company may, in the absolute discretion
         of the Board of Directors, pay the Company's officers, directors,
         employees, agents and representatives, or any of them, compensation
         or additional compensation above their regular compensation, in money
         or other property, as severance, bonus, acceleration of vesting of
         stock or stock options, or in any other form, in recognition of the
         extraordinary efforts they, or any of them, will be required to
         undertake, or actually undertake, in connection with the
         implementation of this Plan. Adoption of this Plan by a majority of
         the outstanding Common Stock shall constitute the approval of the
         Company's stockholders of the payment of any such compensation.

     11. The Company shall continue to indemnify its officers, directors,
         employees, agents and representatives in accordance with its
         certificate of incorporation, as

                                     A-4

<PAGE>

         amended, and by-laws and any contractual arrangements, for the
         actions taken in connection with this Plan and the winding up of the
         affairs of the Company.  The Company's obligation to indemnify such
         persons may also be satisfied out of the assets of the Trust.  The
         Board of Directors and the Trustees, in their absolute discretion,
         are authorized to obtain and maintain insurance as may be necessary
         or appropriate to cover the Company's obligation hereunder, including
         seeking an extension in time and coverage of the Company's insurance
         policies currently in effect.

     12. Notwithstanding authorization or consent to this Plan and the
         transactions contemplated hereby by the Company's stockholders, the
         Board of Directors may modify, amend or abandon this Plan and the
         transactions contemplated hereby without further action by the
         stockholders to the extent permitted by the Delaware General
         Corporation Law.

     13. The Board of Directors of the Company is hereby authorized, without
         further action by the Company's stockholders, to do and perform or
         cause the officers of the Company, subject to approval of the Board
         of Directors, to do and perform, any and all acts, and to make,
         execute, deliver or adopt any and all agreements, resolutions,
         conveyances, certificates and other documents of every kind which are
         deemed necessary, appropriate or desirable, in the absolute
         discretion of the Board of Directors, to implement this Plan and the
         transaction contemplated hereby, including, without limiting the
         foregoing, all filings or acts required by any state or federal law
         or regulation to wind up its affairs.



                                     A-5

<PAGE>

                                    PROXY

                   ADVANCED SWITCHING COMMUNICATIONS, INC.

                   MEETING OF STOCKHOLDERS - APRIL 9, 2002

                   THIS PROXY IS SOLICITED ON BEHALF OF THE
                      BOARD OF DIRECTORS OF THE COMPANY


The undersigned stockholder of Advanced Switching Communications, Inc., a
Delaware corporation (the "Company"), hereby acknowledges receipt of the
Notice of a Special Meeting of Stockholders and Proxy Statement, each dated
March 20, 2002, hereby revokes any proxy or proxies previously given and
hereby appoints Asghar D. Mostafa, Harry J. D'Andrea and Sherry L. Rhodes, or
any of them, with full power to each of substitution on behalf and in the name
of the undersigned, as the proxies and attorneys-in-fact to vote and otherwise
represent all of the shares registered in the name of the undersigned at the
Special Meeting of Stockholders of the Company (the "Special Meeting") to be
held at the Company's headquarters located at 8330 Boone Boulevard, Vienna,
Virginia, at 10:00 a.m. Eastern Standard Time on April 9, 2002 and any
adjournment or postponement thereof, with the same effect as if the
undersigned were present and voting such shares, on the matters and in the
manner set forth on the reverse side of this Proxy card.


         (Continued and to be signed and dated on the reverse side.)


                                      1

<PAGE>



            PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY
                     USING THE ENCLOSED RETURN ENVELOPE.

                       SPECIAL MEETING OF STOCKHOLDERS
                   ADVANCED SWITCHING COMMUNICATIONS, INC.

                                APRIL 9, 2002

               Please Detach and Mail in the Envelope Provided

                [X] Please mark your votes as in this example.

                     THE BOARD OF DIRECTORS RECOMMENDS A
                           VOTE "FOR" THE PROPOSAL.


<TABLE>
---------------------------------------------------------------------------------------------
<S>      <C>
(1)      Proposal to authorize and approve the Plan of Complete Liquidation and Dissolution:

                        [ ]  FOR

                        [ ]  AGAINST

                        [ ]  ABSTAIN

---------------------------------------------------------------------------------------------
</TABLE>


                                      2

<PAGE>




  I PLAN TO ATTEND THE MEETING:    [ ]YES            [ ]NO


PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE
COMPLETE, SIGN, DATE AND RETURN EACH CARD.

SIGNATURE(s)                                                            DATE



       ----------------  ------------------   --------------------   ----------
                                              Title if Appropriate

NOTE:    Sign exactly as your name(s) appears on the stock certificate. A
         corporation should sign in its full corporate name by a duly
         authorized officer, with the office held designated. Executors,
         administrators, trustees and guardians should sign in their official
         capacity giving their full title as such. If stock is registered in
         more than one name, each person should sign. If a partnership or
         limited liability company, please sign in the partnership or limited
         liability company's name by an authorized person(s).


                                      3




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