Providence and Worcester Railroad Company announces telecommunications agreement with Vitreum Networks

Feb. 20, 2001
Feb. 20, 2001--Providence and Worcester Railroad Company announced that it has entered into a twenty-five year agreement with Vitreum Networks to install, maintain and operate a dark fiber backbone (conduits and fiber optic cable) on the Railroad Company's system.

Providence and Worcester Railroad Company (AMEX: "PWX") announced that it has entered into a twenty-five year, system-wide license agreement with Vitreum Networks, LLC, which requires Vitreum, at no cost to the Railroad Company, to install, maintain and operate a dark fiber backbone (conduits and fiber optic cable) on the Railroad Company's system. As consideration for the use of the right-of-way, Vitreum will pay the Railroad Company an annual license fee equal to the greater of a certain minimum annual payment or a certain percentage of the revenues from the lease of rights to use the fiber and conduits, net of certain permitted expenses.

In addition, the Railroad Company has the exclusive use and benefit of twelve strands of fiber for railroad purposes. The agreement further provides that Vitreum may prepay the license fee, based upon an appraisal of the Railroad Company's interest in the system, in the event another company seeks to acquire Vitreum's interest. The telecommunications transmission system will be installed over a three-year period, beginning with installation along the Railroad Company's Main Line, Washington Secondary and Middletown Branch, continuing with the Norwich Branch and East Providence Secondary, and ending with the Gardner Branch.

Vitreum Networks, LLC, a Rhode Island company, plans on building a +400 mile all optical network in New England. This network will connect the major cities in New England including Boston, Providence, Hartford, New Haven, and Groton to New York City. Vitreum plans on starting construction of this network in June 2001.

The Railroad Company is a regional freight railroad operating in the states of Massachusetts, Rhode Island, Connecticut and New York. It transports a wide variety of commodities, including construction aggregate, iron and steel products, chemicals, lumber, scrap metals, plastic resins, cement, processed foods and edible food stuffs. By agreement with a private operator, the Railroad Company also operates two approved custom bonded intermodal yards in Worcester, MA, primarily for the movement of container traffic from the Far East destined for points in New England.