EXHIBIT 4.6


                      AMENDED AND RESTATED PLEDGE AGREEMENT


                  This  AMENDED AND  RESTATED  PLEDGE  AGREEMENT  (this  "PLEDGE
AGREEMENT")  is made and entered  into as of March 30, 2000 by PATHNET,  INC., a
Delaware  corporation (the "PLEDGOR"),  THE BANK OF NEW YORK, a New York banking
corporation,  having an office at 101 Barclay  Street,  Floor 21 West, New York,
New York 10286,  as trustee  (the  "TRUSTEE")  for the holders from time to time
(the "HOLDERS") of the Notes (as defined herein) issued by the Pledgor under the
Indenture referred to below and THE BANK OF NEW YORK, as securities intermediary
(the "PATHNET SECURITIES INTERMEDIARY").

                               W I T N E S S E T H

                  WHEREAS,  the Pledgor and the Trustee  have  entered into that
certain  indenture  dated as of  April  8,  1998  (the "  ORIGINAL  INDENTURE"),
pursuant to which the Pledgor issued on April 8, 1998  $350,000,000 in aggregate
principal  amount of 12 1/4 % Senior  Notes due 2008 (and  along with such notes
that may from time to time be issued in substitution therefor, the "NOTES"); and

                  WHEREAS,   the  Pledgor  agreed,   pursuant  to  the  Original
Indenture,  to (i)  purchase  or cause the  purchase of Pledged  Securities  (as
defined in the Original  Indenture) in an amount that would be  sufficient  upon
receipt of  scheduled  interest  and  principal  payments in respect  thereof to
provide for the payment of the first four scheduled interest payments due on the
Notes and (ii) place such Pledged  Securities (or cause them to be placed) in an
account maintained by the Trustee with the Pathnet  Securities  Intermediary for
the benefit of Holders of the Notes; and

                  WHEREAS, the Pledgor agreed to purchase United States Treasury
securities in an amount  sufficient,  in the opinion of a nationally  recognized
firm of independent public accountants  selected by the Pledgor and delivered to
the Trustee,  upon receipt of scheduled  interest and principal payments of such
securities,  to provide for payment in full of each of the first four  scheduled
interest  payment  due on the Notes and  interest on the Notes in the event that
the Notes become due and payable prior to such time as the first four  scheduled
interest   payments  thereon  shall  have  been  paid  in  full  (the  "ORIGINAL
OBLIGATIONS"); and

                  WHEREAS,  the Pledgor  agreed to (i) pledge to the Trustee for
its  benefit  and the  ratable  benefit  of the  Holders of the Notes a security
interest in the Pledged  Securities and related  collateral and (ii) execute and
deliver  the  Pledge  Agreement  dated as of April 8,  1998 by and  between  the
Pledgor and the Trustee in order to secure the  payment and  performance  by the
Pledgor of all the Original Obligations (the "Original Pledge Agreement"); and

                  WHEREAS, pursuant to the Original Pledge Agreement the Trustee
opened  an  account  (the  "ESCROW   ACCOUNT")   with  the  Pathnet   Securities
Intermediary,  at its office at 101 Barclay  Street,  New York,  New York 10286,
Account No.  281251,  in the name of The Bank of New York,  as Trustee,  for the
benefit of the  Holders of the 12 1/4% Senior  Notes due 2008 of  Pathnet,  Inc.
(along  with such  notes  that may from  time to time be issued in  substitution
therefor),  with respect to which the Trustee is the sole entitlement holder and
which is under the sole  dominion  and control of the Trustee but subject to the
terms of the Original Pledge Agreement.


                  WHEREAS,  the first three scheduled  interest  payments on the
Notes have been paid in accordance with the terms of the Original Indenture; and


                  WHEREAS,   Pathnet  has  entered  into  a   contribution   and
reorganization  transaction (the "TRANSACTION")  as at the date hereof, as  more
particularly    described   in   the    Registration    Statement   of   Pathnet
Telecommunications,   Inc.,  and  filed  with  the  SEC  with  Registration  No.
333-91469; and

                  WHEREAS,  in  connection  with the  Transaction,  the Original
Indenture  has been  supplemented  by that  Supplemental  Indenture of even date
herewith by and among the  Pledgor,  Pathnet  Telecommunications  Inc.,  and the
Trustee (the "SUPPLEMENTAL INDENTURE"); and

                  WHEREAS,  pursuant to the Supplemental  Indenture  Pathnet has
agreed to (i)  purchase  and  pledge to the  Trustee  additional  United  States
Treasury securities as security for the benefit of the holders of the Notes with
respect to the fifth scheduled  interest  payment on the Notes on the same terms
as the Original Pledge Agreement;  and (ii) execute and deliver this Amended and
Restated  Pledge  Agreement in order to secure the payment in full of the fourth
and fifth scheduled interest payments due on the Notes and interest on the Notes
in the event  that the Notes  become due and  payable  prior to such time as the
fourth and fifth  scheduled  interest  payments  thereon shall have been paid in
full (the "OUTSTANDING OBLIGATIONS").

                  Capitalized terms used herein and not otherwise defined herein
shall have the meanings given to them in the Indenture. References herein to the
"Indenture"  shall be deemed  to be  references  to the  Original  Indenture  as
amended by the Supplemental Indenture unless expressly stated to the contrary.



                  THEREFORE,  in  consideration  of the mutual  promises  herein
contained  and in order to induce  the  Holders  of the Notes to  consent to the
amendments to the Original  Indenture  contained in the Supplemental  Indenture,
the Pledgor  hereby agrees with the Trustee,  for the benefit of the Trustee and
for the ratable benefit of the Holders of the Notes, as follows:

SECTION 1. PLEDGE AND GRANT OF SECURITY INTEREST. As security for the prompt and
complete  payment  and  performance  when  due  of the  Outstanding  Obligations
(whether at the stated maturity or otherwise), the Pledgor hereby pledges to the
Trustee for its benefit and for the ratable benefit of the Holders of the Notes,
and grants to the Trustee  for its  benefit  and for the ratable  benefit of the
Holders of the Notes, a continuing  first priority  security  interest in and to
all of the  Pledgor's  right,  title and interest in, to and under the following
(wherever located),  whether investment  property,  general  intangibles,  other
rights,  interests,  claims and remedies or proceeds or otherwise (collectively,
the "PLEDGED COLLATERAL"):  (a) the United States Treasury securities identified
by  CUSIP  Number  in  Exhibit  A  to  this  Pledge   Agreement   (the  "PLEDGED
SECURITIES"),  (b) any and all applicable  Security  Entitlements to the Pledged
Securities,  (c) the Escrow  Account and all funds,  certificates,  instruments,
assets and properties, if any, from time to time carried therein or representing
or  evidencing  the Escrow  Account  (d) any and all  related  accounts in which
Security Entitlements to the Pledged Securities are carried and (e) all proceeds
of any  and  all of  the  Pledged  Collateral  (including,  without  limitation,
proceeds that constitute property of the types described in clauses (a) - (d) of
this Section 1).

SECTION 2.        SECURITY FOR OUTSTANDING OBLIGATION.  This Pledge Agreement
                  -----------------------------------
secures the prompt and  completepayment  and  performance  when due  (whether at
stated   maturity,   by  acceleration  or  otherwise)  of  all  the  Outstanding
Obligations.

SECTION  3. DELIVERY OF NEW PLEDGED SECURITIES;  ESCROW ACCOUNT;  INTEREST.  (a)
         The Pledged  Securities  shall, if and to the extent that they have not
         previously been pledged and transferred to the Trustee  pursuant to the
         Original Pledge Agreement (such unpledged and untransferred  securities
         being hereinafter  referred to as the "NEW PLEDGED  SECURITIES" and the
         Pledged  Collateral,  in so  far  as it  relates  to  the  New  Pledged
         Securities  being  referred  to as the  "NEW  PLEDGED  COLLATERAL")  be
         pledged and transferred to the Trustee and the Trustee shall become the
         holder of a Security  Entitlement to the New Pledged Securities through
         action by the Pathnet Securities Intermediary, as confirmed (in writing
         or  electronically  or otherwise in accordance  with standard  industry
         practice)  to the Trustee by the Pathnet  Securities  Intermediary  (i)
         indicating  by  book-entry  that  the New  Pledged  Securities  and all
         Security Entitlements thereto have been credited to the Escrow Account,
         or (ii) acquiring the New Pledged Securities or a Security  Entitlement
         thereto for the Trustee and accepting the same for credit to the Escrow
         Account.

(b)      The Trustee has pursuant to the Original Pledge Agreement,  established
         with the  Pathnet  Securities  Intermediary  the Escrow  Account on the
         books of the Pathnet  Securities  Intermediary as a Securities  Account
         segregated from all other custodial or collateral accounts, such Escrow
         Account  to be  maintained  at the  offices of the  Pathnet  Securities
         Intermediary at 101 Barclay  Street,  Floor 21 West, New York, New York
         10286,  and the Pathnet  Securities  Intermediary  has  established and
         maintained a Securities Account at the Federal Reserve Bank of New York
         ("FRBNY").  Upon transfer of the New Pledged  Securities to the Pathnet
         Securities  Intermediary  (or  the  Pathnet  Securities  Intermediary's
         acquisition of the Security Entitlements  thereto), as confirmed to the
         Pathnet   Securities   Intermediary  by  FRBNY  or  another  securities
         intermediary,   the   Pathnet   Securities   Intermediary   shall  make
         appropriate  book entries  indicating  that the New Pledged  Securities
         and/or such Security  Entitlement have been credited to the Trustee and
         the Escrow Account and that all of the Pledged Securities are therefore
         credited to the Trustee  and the Escrow  Account.  Subject to the other
         terms  and  conditions  of this  Pledge  Agreement,  all funds or other
         property held by the Trustee  pursuant to this Pledge Agreement and the
         Original  Pledge  Agreement shall be held in the Escrow Account subject
         (except as expressly  provided in Section 4(a),  (b) and (c) hereof) to
         the  exclusive  dominion  and control  (including  "control" as defined
         inss.9-115(l)(e)  of the UCC) of the  Trustee and  exclusively  for the
         benefit of the Trustee  and for the  ratable  benefit of the Holders of
         the  Notes  and  segregated  from all  other  funds  or other  property
         otherwise held by the Trustee.

(c)      The Trustee shall,  in accordance  with all applicable  laws, have sole
         dominion  and  control  (including  "control"  as  defined  in UCC  ss.
         9-115(l)(e))  over  the  Escrow  Account,  and it  shall  be a term and
         condition of the Escrow Account and the Pledgor  irrevocably  instructs
         the  Trustee,  notwithstanding  any  other  term  or  condition  to the
         contrary in any other  agreement,  that no Pledged  Collateral shall be
         released to or for the account of, or  withdrawn  by or for the account
         of, the Pledgor or any other  Person  except as  expressly  provided in
         this Pledge Agreement.

(d)      The Trustee  shall,  in accordance  with and subject to all  applicable
         laws,  be the sole  entitlement  holder  of, and have the sole power to
         originate  "ENTITLEMENT ORDERS" (as defined in UCCss.8-102(a)(8))  with
         respect  to,  the  Escrow  Account  and  all  United  States   Treasury
         securities  held  therein,  and it shall be a term and condition of the
         Escrow  Account  that the  Trustee  shall  have the right to issue such
         Entitlement  Orders with  respect to the Escrow  Account and all assets
         and  properties  from  time  to time  carried  in the  Escrow  Account,
         including such securities,  Security  Entitlements and other "FINANCIAL
         ASSETS" (as defined in  UCCss.8-102(a)(9))  without  further consent of
         the Pledgor or any other Person  (except,  to the extent required under
         the Indenture, of the Holders), and that no Pledged Collateral shall be
         released to or for the account of, or  withdrawn  by or for the account
         of, the Pledgor or any other  Person  except as  expressly  provided in
         this Pledge Agreement.

(e)      All Pledged  Collateral shall be retained in the Escrow Account pending
         disbursement pursuant to the terms hereof.

(f)      Concurrently  with the execution and delivery of this Pledge  Agreement
         the Trustee and the Pathnet  Securities  Intermediary are delivering to
         the  Pledgor  a duly  executed  certificate,  in the form of  Exhibit A
         hereto, of an officer of the Trustee,  confirming the Trustee's receipt
         and holding of the Pledged Securities or a Security Entitlement thereto
         and  the   crediting  of  the  Pledged   Securities  or  such  Security
         Entitlement to the Escrow  Account,  all in accordance with this Pledge
         Agreement.

(g)      Concurrently  with the execution and delivery of this Pledge Agreement,
         the  Pledgor  shall  deliver to the Trustee  acknowledgement  copies or
         stamped receipt copies of proper financing statements, duly filed under
         the UCC of the State of New York,  covering the New Pledged  Collateral
         described in this Pledge Agreement.

(h)      Concurrently  with the execution and delivery of this Pledge Agreement,
         the Pledgor  shall  deliver to the  Trustee an opinion of a  nationally
         recognized  firm of  independent  public  accountants,  selected by the
         Pledgor, substantially in the form of Exhibit B hereto.

SECTION 4.        DISBURSEMENTS.
                  -------------

                  (a) At least three Business Days prior to the due date of each
         of the fourth or the fifth  scheduled  interest  payments on the Notes,
         the Pledgor may, pursuant to written  instructions given by the Pledgor
         to the Trustee (a "COMPANY ORDER"),  direct the Trustee to release from
         the Escrow Account and pay to the Holders of the Notes on behalf of the
         Issuer  proceeds  sufficient  to  provide  for  payment in full of such
         interest then due on the Notes.  Upon receipt of a Company  Order,  the
         Trustee  will take any action  necessary  to provide for the payment of
         the interest on the Notes in accordance  with the Company Order and the
         payment  provisions  of the  Indenture to the Holders of the Notes from
         (and to the extent of) proceeds of the Pledged Securities in the Escrow
         Account. Nothing in this Section 4 shall affect the Trustee's rights to
         apply the  Pledged  Collateral  to the  payments  of amounts due on the
         Notes upon acceleration thereof.

(b)      If the  Pledgor  makes any  interest  payment or portion of an interest
         payment for which the Pledged  Collateral  is security from a source of
         funds other than the Escrow Account ("OTHER  FUNDS"),  the Pledgor may,
         after  payment in full of such  interest  payment,  direct the  Trustee
         pursuant  to a Company  Order to release  to the  Pledgor or to another
         party  at the  direction  of the  Pledgor  (the  "PLEDGOR'S  DESIGNEE")
         proceeds from the Escrow Account in an amount less than or equal to the
         amount of Other Funds applied to such interest payment. Upon receipt by
         the Trustee of such Company Order and provided the Trustee has received
         such interest payment, if no Default or Event of Default (as defined in
         the Indenture) shall have occurred and be continuing, the Trustee shall
         pay over to the Pledgor or the Pledgor's Designee,  as the case may be,
         the  requested  amount from  proceeds in the Escrow  Account as soon as
         practicable.  Concurrently  with any  release  of funds to the  Pledgor
         pursuant to this Section 4(b), the Pledgor shall deliver to the Trustee
         a  certificate  signed by an officer of the  Pledgor  stating  that the
         Pledgor has made the interest payment from a source of funds other than
         the Escrow  Account,  and that such release has been duly authorized by
         the Pledgor and will not  contravene any provision of applicable law or
         the Certificate of  Incorporation  or the By-laws of the Pledgor or any
         material  agreement  or  other  material  instrument  binding  upon the
         Pledgor or any of its subsidiaries or any judgment,  order or decree of
         any governmental  body,  agency or court having  jurisdiction  over the
         Pledgor  or  any of its  subsidiaries  or  result  in the  creation  or
         imposition  of any Lien on any  assets of the  Pledgor,  except for the
         security interest granted under the Pledge Agreement.

(c)      If at any time the principal of and interest on the Pledged  Securities
         exceeds  100% of the amount  sufficient,  in the  written  opinion of a
         nationally  recognized firm of independent  accountants selected by the
         Pledgor and delivered to the Trustee, to provide for payment in full of
         the remaining fourth and fifth scheduled  interest  payments due on all
         of the outstanding Notes, the Pledgor may direct the Trustee to release
         any such  excess  amount to the Pledgor or to any  Pledgor's  Designee.
         Upon receipt of a Company Order (which shall include a certificate from
         such nationally recognized firm of independent  accountants stating the
         amount by which the Pledged Securities exceed the amount required to be
         held in the Escrow  Account),  if no  Default  or Event of Default  (as
         defined in the Indenture)  shall have occurred and be  continuing,  the
         Trustee shall pay over to the Pledgor or the Pledgor's Designee, as the
         case may be, any such excess amount.

(d)      Upon payment in full of the Outstanding Obligations,  or if the Company
         shall  become  obligated  under  the  Indenture  to  redeem  all of the
         outstanding Notes and such Notes shall have been redeemed,  then, if no
         Default or Event of Default  (as defined in the  Indenture)  shall have
         occurred  and be  continuing,  the  security  interest  in the  Pledged
         Collateral  evidenced  by  this  Pledge  Agreement  will  automatically
         terminate  and be of no  further  force  and  effect  and  the  Pledged
         Collateral  shall promptly be paid over and transferred to the Pledgor.
         Furthermore, upon the release of any Pledged Collateral from the Escrow
         Account in accordance with the terms of this Pledge Agreement,  whether
         upon release of Pledged Collateral to Holders as payment of interest or
         otherwise,  the security interest evidenced by this Pledge Agreement in
         such released Pledged Collateral will automatically terminate and be of
         no further force and effect.

(e)      At  least  three  Business  Days  prior  to the due date of each of the
         fourth and fifth scheduled  interest payments on the Notes, the Pledgor
         shall give the  Trustee  notice (by Company  Order) as to whether  such
         interest  payment will be made pursuant to Section 4(a) or 4(b) and the
         respective  amounts  of  interest  that  will be paid  from the  Escrow
         Account  and from Other  Funds.  Any Other Funds to be used to make any
         interest  payment  shall be delivered to the  Trustee,  in  immediately
         available  funds,  prior to 10:00  a.m.  (New York  City  time) on such
         interest  payment  date. If no such notice is given or such Other Funds
         have not been so  delivered,  the Trustee  will act pursuant to Section
         4(a) as if it had  received a Company  Order  pursuant  thereto for the
         payment in full of the interest then due from the Escrow Account.

(f)      The Trustee shall  liquidate  Pledged  Collateral in the Escrow Account
         (pursuant to written  instructions  from  Pledgor) in order to make any
         scheduled  payment of interest unless there are sufficient funds in the
         Escrow Account on such interest payment date.

(g)      Nothing  contained  in Section 1, Section 3, this Section 4, Section 11
         or any other  provision of this Pledge  Agreement  shall (i) afford the
         Pledgor  any right to issue  Entitlement  Orders  with  respect  to any
         Security  Entitlement  to the  Pledged  Securities  or  any  Securities
         Account  in which any such  Security  Entitlement  may be  carried,  or
         otherwise afford the Pledgor rights to of any such Security Entitlement
         or (ii) except as otherwise specified under this Agreement (or required
         by  applicable  law) give rise to any other  rights of the Pledgor with
         respect to the Pledged Securities,  any Security Entitlement thereto or
         any Securities  Account in which any such Security  Entitlement  may be
         carried  (except as expressly  provided in Sections  4(a),  (b) and (c)
         hereof) of the Trustee in its capacity as such (and not as a securities
         intermediary).

SECTION 5.        REPRESENTATIONS AND WARRANTIES.  The Pledgor hereby represents
                  ------------------------------
 and warrants that, as of the date hereof.

(a)      The  execution and delivery by the Pledgor of, and the  performance  by
         the Pledgor of its obligations  under,  this Pledge  Agreement will not
         contravene   any  provision  of  applicable   law  or  statute  or  the
         organization  documents  of the Pledgor or any  material  agreement  or
         other  material  instrument  binding  upon  the  Pledgor  or any of its
         subsidiaries or any judgment, order or decree of any governmental body,
         agency or court  having  jurisdiction  over the  Pledgor  or any of its
         subsidiaries,  or result in the creation or  imposition  of any Lien on
         any assets of the Pledgor,  except for the security  interests  granted
         under this Pledge  Agreement;  no consent,  approval,  authorization or
         order of, or  qualification  with, or other action by, any governmental
         or regulatory body or agency or any third party is required (i) for the
         execution,  delivery  or  performance  by the  Pledgor  of this  Pledge
         Agreement,  (ii) for the grant by the Pledgor of the security  interest
         granted hereby, for the pledge by the Pledgor of the Pledged Collateral
         pursuant  to  this  Pledge  Agreement,  (iii)  for the  perfection  and
         maintenance  of  the  pledge  and  security   interest  created  hereby
         (including  the  first-priority  nature  of such  pledge  and  security
         interest,  assuming  compliance by the Pathnet Securities  Intermediary
         with all obligations  contained in this Pledge Agreement or (iv) except
         for any such consents, approvals,  authorizations or orders required to
         be obtained by the Trustee (or the Holders) for reasons  other than the
         consummation  of this  transaction,  for the exercise by the Trustee of
         the rights  provided  for in this Pledge  Agreement  or the remedies in
         respect of the Pledged Collateral pursuant to this Pledge Agreement.

(b)      Immediately  before the depositing the New Pledged  Securities into the
         Escrow  Account,  the Pledgor is the legal and beneficial  owner of the
         New  Pledged  Collateral  free and  clear of any Lien or  claims of any
         person or entity (except for the security  interests granted under this
         Pledge Agreement).  No financing  statement or other instrument similar
         in effect covering the Pledgor's  interest in the Pledged Securities is
         on file in any public office, other than any financing statements filed
         pursuant to this Pledge Agreement.

(c)      This Pledge  Agreement has been duly  authorized,  validly executed and
         delivered by the Pledgor and assuming the due authorization,  execution
         and delivery  thereof by the Trustee,  constitutes  a valid and binding
         agreement of the Pledgor, enforceable against the Pledgor in accordance
         with its terms, except as (i) the enforceability  hereof may be limited
         by   bankruptcy,   insolvency,   fraudulent   conveyance,   preference,
         reorganization,  moratorium  or similar laws now or hereafter in effect
         relating to or affecting creditors' rights or remedies generally,  (ii)
         the  availability  of  equitable  remedies  may be limited by equitable
         principles of general  applicability,  (iii) the exculpation provisions
         and rights to indemnification  hereunder may be limited by U.S. federal
         and state securities laws and public policy considerations and (iv) the
         waiver of rights and defenses contained in Section 11(b), Section 15.11
         and Section 15.15 hereof may be limited by applicable law.

(d)      Upon the transfer to the Trustee of the New Pledged  Securities and the
         acquisition  by  the  Trustee  of a  Security  Entitlement  thereto  in
         accordance with Section 3, and the compliance by the Pathnet Securities
         Intermediary with the provisions of this Pledge  Agreement,  the pledge
         of and grant of a security interest in the Pledged Collateral  securing
         the  payment  of the  Outstanding  Obligations  for the  benefit of the
         Trustee  and the  Holders of the Notes will  constitute  a valid  first
         priority  perfected  security  interest  in  such  Pledged  Collateral,
         enforceable  as such  against all  creditors  of the  Pledgor  (and any
         persons  purporting to purchase any of the Pledged  Collateral from the
         Pledgor)  and all filings and actions  (other than the  transfer to the
         Trustee of the Pledged  Securities)  necessary  or desirable to perfect
         and protect such security interest have been duly taken.

(e)      There are no legal or governmental  proceedings pending or, to the best
         of the Pledgor's  knowledge,  threatened to which the Pledgor or any of
         its  subsidiaries  is a party or to which any of the  properties of the
         Pledgor  or any  such  subsidiary  is  subject  that  would  materially
         adversely  affect the power or ability  of the  Pledgor to perform  its
         obligations   under  this  Pledge   Agreement  or  to  consummate   the
         transactions contemplated hereby.

(f)      The pledge of the Pledged Collateral  pursuant to this Pledge Agreement
         is not prohibited by law or governmental regulation (including, without
         limitation,  Regulations G, T, U and X of the Board of Governors of the
         Federal Reserve System) applicable to the Pledgor.

(g)      No Event of Default (as defined herein) exists.

SECTION 6. FURTHER  ASSURANCES.  The Pledgor will,  promptly upon request by the
Trustee,  execute and deliver or cause to be executed and delivered,  or use its
reasonable  best  efforts to procure,  all  assignments,  instruments  and other
documents,  all in form and substance  reasonably  satisfactory  to the Trustee,
execute and deliver any  instruments  to the Trustee and take any other  actions
that are  necessary or desirable,  to perfect,  continue the  perfection  of, or
protect the first  priority  of the  Trustee's  security  interest in and to the
Pledged  Collateral,  to protect  the  Pledged  Collateral  against  the rights,
claims,  or interests of third  persons  (other than any such rights,  claims or
interests  created by or arising through the Trustee),  to enable the Trustee to
enforce its rights and  remedies  hereunder,  or to effect the  purposes of this
Pledge  Agreement.  A photocopy or other  reproduction  of this Agreement or any
financing statement covering the Pledged Collateral or any part thereof shall be
sufficient  as a financing  statement  where  permitted by law. The Pledgor will
promptly  pay all  reasonable  costs  incurred  in  connection  with  any of the
foregoing.  The Pledgor  also agrees to take all actions  that are  necessary to
perfect or continue the  perfection of, or to protect the first priority of, the
Trustee's  security  interest in and to the Pledged  Collateral,  including  the
filing of all necessary  financing and continuation  statements,  and to protect
the Pledged Collateral against the rights,  claims or interests of third persons
(other than any such rights,  claims or interests  created by or arising through
the Trustee).

SECTION 7.        COVENANTS.  The Pledgor covenants and agrees with the Trustee
                  ---------
and the  Holders  of the  Notes  that  from and  after  the date of this  Pledge
Agreement until the payment in full in cash of the Outstanding Obligations:

(a)      that (i) it will  not  (and  will  not  purport  to) sell or  otherwise
         dispose of, or grant any option or warrant  with respect to, any of the
         Pledged Collateral or its beneficial interest therein, and (ii) it will
         not create or permit to exist any Lien or other adverse  interest in or
         with  respect  to  its  beneficial  interest  in  any  of  the  Pledged
         Collateral (except for the security interests granted under this Pledge
         Agreement)  and at all times will be the sole  beneficial  owner of the
         Pledged Collateral; and

(b)      that it will not (i) enter into any  agreement  or  understanding  that
         restricts or inhibits or purports to restrict or inhibit the  Trustee's
         rights  or  remedies  hereunder,  including,  without  limitation,  the
         Trustee's right to sell or otherwise dispose of the Pledged  Collateral
         or (ii) fail to pay or  discharge  any tax,  assessment  or levy of any
         nature  with  respect  to  its  beneficial   interest  in  the  Pledged
         Collateral  not later than five days prior to the date of any  proposed
         sale under any judgment,  writ or warrant of attachment with respect to
         such beneficial interest.

SECTION 8. POWER OF ATTORNEY.  Upon the  occurrence  of an Event of Default,  in
addition to all of the powers granted to the Trustee  pursuant to the Indenture,
the  Pledgor  hereby  appoints  and  constitutes  the  Trustee as the  Pledgor's
attorney-in-fact,  with full authority in the place and stead of the Pledgor and
in the name of the  Pledgor  or  otherwise,  from time to time in the  Trustee's
discretion,  to take any action and to execute any  instrument  that the Trustee
may deem  necessary  or  advisable  to  accomplish  the  purposes of this Pledge
Agreement,  including,  without limitation, the following powers: (a) collection
of proceeds of any Pledged  Collateral;  (b)  conveyance  of any item of Pledged
Collateral to any purchaser  thereof;  (c) giving of any notices or recording of
any Liens under Section 6 hereof;  and (d) paying or discharging  taxes or Liens
levied or placed upon the Pledged  Collateral,  the legality or validity thereof
and the amounts  necessary to discharge the same to be determined by the Trustee
in its sole  reasonable  discretion,  and such  payments  made by the Trustee to
become part of the  Outstanding  Obligations of the Pledgor to the Trustee,  due
and payable  immediately upon demand. The Trustee's authority under this Section
8 shall include, without limitation,  the authority to endorse and negotiate any
checks or instruments representing proceeds of Pledged Collateral in the name of
the Pledgor,  execute and give receipt for any  certificate  of ownership or any
document constituting Pledged Collateral,  transfer title to any item of Pledged
Collateral,  sign the Pledgor's name on all financing  statements (to the extent
permitted  by  applicable  law)  or any  other  documents  deemed  necessary  or
appropriate by the Trustee to preserve, protect or perfect the security interest
in the  Pledged  Collateral  and to file the  same,  prepare,  file and sign the
Pledgor's name on any notice of Lien, and to take any other actions arising from
or incident to the powers granted to the Trustee in this Pledge Agreement.  This
power of attorney is coupled with an interest and is irrevocable by the Pledgor.
Notwithstanding  anything to the contrary stated herein, the Trustee has no duty
or obligation to exercise any of the powers stated in this Section 8.

SECTION 9. NO  ASSUMPTION  OF  DUTIES:  REASONABLE  CARE.  The rights and powers
granted to the Trustee  hereunder  are being  granted in order to  preserve  and
protect the security interest of the Trustee and the Holders of the Notes in and
to the Pledged  Collateral  granted hereby and shall not be interpreted  to, and
shall not impose any duties on the Trustee in  connection  therewith  other than
those  expressly  provided  herein or imposed under  applicable  law.  Except as
provided by applicable law or by the  Indenture,  the Trustee shall be deemed to
have exercised  reasonable  care in the custody and  preservation of the Pledged
Collateral  in its  possession if the Pledged  Collateral is accorded  treatment
substantially  equal to that which the Trustee accords similar  property held by
the Trustee for similar  accounts,  it being  understood that the Trustee in its
capacity  as such  shall not have any  responsibility  for (a)  ascertaining  or
taking action with respect to calls, conversions, exchanges, maturities or other
matters relative to any Pledged Collateral, whether or not the Trustee has or is
deemed to have knowledge of such matters or (b) investing or reinvesting  any of
the Pledged Collateral or any loss on any investment;  PROVIDED,  HOWEVER,  that
nothing  contained  in this Pledge  Agreement  shall  relieve the Trustee of any
responsibilities as a securities intermediary under applicable law.

SECTION 10. INDEMNITY. The Pledgor shall indemnify, hold harmless and defend the
Trustee and its directors,  officers,  agents and employees from and against any
and all  claims,  actions,  obligations,  liabilities  and  expenses,  including
reasonable defense costs, reasonable investigative fees and costs and reasonable
legal fees and expenses and damages  arising from the Trustee's  performance  as
Trustee  under this  Pledge  Agreement,  except to the extent  that such  claim,
action,  obligation,  liability or expense is directly attributable to the gross
negligence or wilful misconduct of such indemnified person.

SECTION 11.  REMEDIES  UPON EVENT OF DEFAULT.  If any Event of Default under the
Indenture (any such Event of Default being referred to in this Pledge  Agreement
as an "EVENT OF DEFAULT") shall have occurred and be continuing:

(a)      The Trustee and the Holders of the Notes shall have, in addition to all
         other rights given by law or by this Pledge Agreement or the Indenture,
         all of the rights and remedies  with respect to the Pledged  Collateral
         of a secured  party under the UCC.  In  addition,  with  respect to any
         Pledged  Collateral that shall then be in or shall thereafter come into
         the possession or custody of the Trustee, the Trustee may sell or cause
         the same to be sold at any broker's board or at public or private sale,
         in one or more sales or lots,  at such  price or prices as the  Trustee
         may deem best,  for cash or on credit or for future  delivery,  without
         assumption  of any credit  risk.  The  purchaser  of any or all Pledged
         Collateral so sold shall thereafter hold the same absolutely, free from
         any claim,  encumbrance or right of any kind  whatsoever  created by or
         through the Pledgor. Unless any of the Pledged Collateral threatens, in
         the reasonable judgment of the Trustee, to decline speedily in value or
         is or becomes of a type sold on a recognized  market,  the Trustee will
         give the Pledgor  reasonable notice of the time and place of any public
         sale  thereof,  or of the time after  which any  private  sale or other
         intended  disposition  is  to be  made.  To  the  extent  permitted  by
         applicable  law,  any  sale  of the  Pledged  Collateral  conducted  in
         conformity with  reasonable  commercial  practices of banks,  insurance
         companies,   commercial   finance   companies,   or   other   financial
         institutions  disposing of property  similar to the Pledged  Collateral
         shall be deemed to be  commercially  reasonable.  Any  requirements  of
         reasonable  notice shall be met if such notice is mailed to the Pledgor
         as provided in Section  15.1 hereof at least 10 days before the time of
         the sale or disposition. The Trustee or any Holder of Notes may, in its
         own  name  or in the  name of a  designee  or  nominee,  buy any of the
         Pledged  Collateral  at any public sale and, if permitted by applicable
         law, at any  private  sale.  All  expenses  (including  court costs and
         reasonable attorneys' fees, expenses and disbursements) of, or incident
         to,  the  enforcement  of  any  of  the  provisions   hereof  shall  be
         recoverable  from the proceeds of the sale or other  disposition of the
         Pledged Collateral.

(b)      The Pledgor  further agrees to use its reasonable best efforts to do or
         cause to be done all such other acts as may be  necessary  to make such
         sale or sales of all or any portion of the Pledged Collateral  pursuant
         to this Section 11 valid and binding and in compliance with any and all
         other applicable requirements of law. The Pledgor further agrees that a
         breach of any of the covenants  contained in this Section 11 will cause
         irreparable  injury to the Trustee  and the Holders of the Notes,  that
         the Trustee and the Holders of the Notes have no adequate remedy at law
         in respect of such breach and,  as a  consequence,  that each and every
         covenant contained in this Section 11 shall be specifically enforceable
         against the Pledgor,  and the Pledgor  hereby  waives and agrees not to
         assert any defenses against an action for specific  performance of such
         covenants except for a defense that no Event of Default has occurred.

(c)      The Trustee may,  without  notice to the Pledgor  except as required by
         law and at any time or from time to time, charge, set-off and otherwise
         apply all or any part of the Outstanding Obligations against the Escrow
         Account or any part thereof.

SECTION 12. EXPENSES. The Pledgor will upon demand pay to the Trustee the amount
of  any  and  all  reasonable  expenses,   including,  without  limitation,  the
reasonable fees,  expenses and disbursements of its counsel,  experts and agents
retained by the Trustee  that the Trustee may incur in  connection  with (a) the
review, negotiation and administration of this Pledge Agreement, (b) the custody
or preservation of, or the sale of,  collection from, or other realization upon,
any of the Pledged  Collateral,  (c) the exercise or  enforcement  of any of the
rights of the Trustee and the Holders of the Notes  hereunder or (d) the failure
by the Pledgor to perform or observe any of the provisions hereof.

SECTION 13.       SECURITY INTEREST ABSOLUTE.  All rights of the Trustee and the
                  --------------------------
Holders of the Notes and security  interests  hereunder,  and all obligations of
the Pledgor hereunder, shall be absolute and unconditional irrespective of:

(a)      any lack of validity or  enforceability  of the  Indenture or any other
         agreement or instrument relating thereto;

(b)      any change in the time,  manner or place of payment of, or in any other
         term  of,  all  or any of the  Outstanding  Obligations,  or any  other
         amendment  or  waiver  of or any  consent  to any  departure  from  the
         Indenture;

(c)      any taking, exchange, surrender, release or non-perfection of any other
         collateral  or any  taking,  release or  amendment  or waiver  from any
         guaranty for all or any of the Outstanding Obligations;

(d)      any change,  restructuring or termination of the corporate structure or
         the existence of the Pledgor or any of its subsidiaries; or

(e)      to the extent permitted by applicable law, any other circumstance which
         might otherwise  constitute a defense  available to, or a discharge of,
         the Pledgor in respect of the Outstanding Obligations or of this Pledge
         Agreement.

SECTION 14. PATHNET SECURITIES  INTERMEDIARY'S  REPRESENTATIONS,  WARRANTIES AND
COVENANTS.  The Pathnet Securities  Intermediary represents and warrants that it
is as of the date  hereof,  and it agrees that for so long as it  maintains  the
Escrow  Account  and acts as  securities  intermediary  pursuant  to this Pledge
Agreement it shall be a "Securities  Intermediary" (as defined in the UCC and in
31 C.F.R.  ss. 357.2) and shall be eligible to maintain,  and does  maintain,  a
Participant's Securities Account (as defined in 31 C.F.R. ss. 357.2) in the name
of  the  Pathnet  Securities  Intermediary  with  the  FRBNY  (a  "FRBNY  Member
Securities  Account").  In furtherance of the foregoing,  the Pathnet Securities
Intermediary hereby:

(a)      represents  and warrants that it is a corporation  that in the ordinary
         course of its business maintains  Securities Accounts for others and is
         acting  in that  capacity  hereunder  and with  respect  to the  Escrow
         Account;

(b)      represents  and warrants that it maintains the FRBNY Member  Securities
         Account with the FRBNY and that the United Stated  Treasury  securities
         constituting  the  Pledged   Securities   transferred  to  the  Pathnet
         Securities  Intermediary pursuant to Section 3(b) have been credited to
         the FRBNY Member Securities Account;

(c)      agrees that the Escrow  Account shall be an account to which  Financial
         Assets  may  be  credited,  and  the  Pathnet  Securities  Intermediary
         undertakes to treat the Trustee as the sole person entitled to exercise
         rights that comprise  (and entitled to the benefits of) such  Financial
         Assets,  and entitled to exercise the rights of an  entitlement  holder
         and control in the manner  contemplated  by the UCC, and further agrees
         to  identify  the  Trustee  in the  records of the  Pathnet  Securities
         Intermediary as the sole person having a Securities Entitlement against
         the Pathnet Securities  Intermediary with respect to the Escrow Account
         and all Financial Assets credited thereto;

(d)      hereby  represents that it has not granted,  and covenants that so long
         as it acts as Pathnet  Securities  Intermediary  hereunder it shall not
         grant,  control (including without limitation,  "control" as defined in
         UCC ss.  9-115(l)(e))  over or with  respect to any Pledged  Collateral
         credited to the Escrow  Account  from time to time to any other  Person
         other than the Trustee;

(e)      covenants  that in its  capacity  as  Pathnet  Securities  Intermediary
         hereunder and with respect to the Escrow Account, it shall not take any
         action  inconsistent  with, and represents and covenants that it is not
         and so long as this Pledge Agreement  remains in effect will not become
         party to any agreement,  the terms of which are  inconsistent  with the
         provisions of this Pledge Agreement;

(f)      agrees, with the other parties to this Pledge Agreement,  that any item
         of  property  credited  to the  Escrow  Account  shall be  treated as a
         Financial Asset;

(g)      agrees, with the other parties to this Pledge Agreement,  so long as it
         serves as  Pathnet  Securities  Intermediary  pursuant  to this  Pledge
         Agreement,  to maintain the Escrow Account as a Securities  Account and
         maintain appropriate books and records in respect thereof in accordance
         with its usual  procedures  and  subject  to the  terms of this  Pledge
         Agreement;

(h)      agrees,  with the other  parties  to this  Pledge  Agreement,  that the
         Pathnet Securities Intermediary's jurisdiction, for purposes of UCC ss.
         8-1  10(e)  and 31  C.F.R.  357.11(b)  as it  pertains  to this  Pledge
         Agreement,  the  Escrow  Account  and  Security  Entitlements  relating
         thereto, shall be the State of New York.

SECTION 15.       MISCELLANEOUS PROVISIONS.
                  ------------------------

Section 15.1.  NOTICES.  Any notice or  communication  given  hereunder shall be
sufficiently  given if in  writing  and  delivered  in person or mailed by first
class mail, commercial courier service or telecopier communication, addressed as
follows:

                  IF TO THE PLEDGOR:
                  -----------------

                           PathNet, Inc.
                           1015 31st Street, N.W.
                           Washington, D.C.  20007
                           Telecopier: (202) 625-7369
                           Attention:  General Counsel

                  WITH A COPY TO:
                  --------------


                           Bruce Wilson, Esq.
                           Covington & Burling
                           1201 Pennsylvania Avenue, N.W.
                           Washington D.C. 20004
                           Telecopier: (202) 662-6291

                  IF TO THE TRUSTEE:
                  -----------------

                           The Bank of New York
                           101 Barclay Street
                           Floor 21 West
                           New York, New York 10286
                           Telecopier: (212) 815-5915
                           Attention: Corporate Trust Administration

Section  15.2.  NO  ADVERSE  INTERPRETATION  OF OTHER  AGREEMENTS.  This  Pledge
Agreement  may  not be  used  to  interpret  another  pledge,  security  or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge,  security or
debt  agreement  (other than the Indenture) may be used to interpret this Pledge
Agreement.

Section  15.3.  SEVERABILITY.  The  provisions  of  this  Pledge  Agreement  are
severable,  and if any clause or  provision  shall be held  invalid,  illegal or
unenforceable in whole or in part in any  jurisdiction,  then such invalidity or
unenforceability   shall  affect  in  that  jurisdiction  only  such  clause  or
provision,  or part  thereof,  and shall not in any manner affect such clause or
provision  in any other  jurisdiction  or any other  clause or provision of this
Pledge Agreement in any jurisdiction.

Section 15.4.     HEADINGS.  The headings in this Pledge Agreement have been
                  --------
inserted for  convenience  of reference  only,  are not to be  considered a part
hereof and shall in no way  modify or  restrict  any of the terms or  provisions
hereof.

Section 15.5.     COUNTERPART ORIGINALS.  This Pledge Agreement may be signed in
                  ---------------------
two or more counterparts,  each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement.

Section 15.6.  BENEFITS OF PLEDGE  AGREEMENT.  Nothing in this Pledge Agreement,
express or implied,  shall give to any person, other than the parties hereto and
their  successors  hereunder,  and the Holders of the Notes,  any benefit or any
legal or equitable right, remedy or claim under this Pledge Agreement.

Section 15.7.  AMENDMENTS,  WAIVERS AND CONSENTS. Any amendment or waiver of any
provision  of this  Pledge  Agreement  and any consent to any  departure  by the
Pledgor from any provision of this Pledge  Agreement  shall be effective only if
made or duly given in  compliance  with all of the terms and  provisions  of the
Indenture,  and neither the Trustee nor any Holder of Notes shall be deemed,  by
any act, delay,  indulgence,  omission or otherwise, to have waived any right or
remedy  hereunder or to have  acquiesced  in any Default or Event of Default (as
defined  herein)  or in any  breach of any of the terms and  conditions  hereof.
Consistent  with the  foregoing,  this  Pledge  Agreement  may be  amended,  its
provisions may be waived and departures  from its provisions may be consented to
by action of the Pledgor and the Trustee, and (if applicable) the Holders of the
Notes, as provided in the Indenture,  and no such  amendment,  waiver or consent
shall require any action or approval by the Initial  Purchasers.  Failure of the
Trustee or any Holder of Notes to exercise,  or delay in exercising,  any right,
power or privilege  hereunder  shall not preclude any other or further  exercise
thereof or the exercise of any other right, power or privilege.  A waiver by the
Trustee  or any  Holder  of Notes of any right or  remedy  hereunder  on any one
occasion shall not be construed as a bar to any right or remedy that the Trustee
or such Holder of Notes would otherwise have on any future occasion.  The rights
and  remedies  herein  provided  are  cumulative,  may be  exercised  singly  or
concurrently and are not exclusive of any rights or remedies provided by law.

Section 15.8.  INTERPRETATION  OF AGREEMENT.  All terms not defined herein or in
the  Indenture  shall have the  meaning set forth in the UCC,  except  where the
context  otherwise  requires.  Acceptance  of or  acquiescence  in a  course  of
performance  rendered  under this  Pledge  Agreement  shall not be  relevant  to
determine  the meaning of this Pledge  Agreement  even though the  accepting  or
acquiescing party had knowledge of the nature of the performance and opportunity
for objection.

Section 15.9.              CONTINUING SECURITY INTEREST, TERMINATION.
                  --------------------------------------------------

(a)      This Pledge  Agreement shall create a continuing  security  interest in
         and to the Pledged  Collateral and shall,  unless otherwise provided in
         this  Pledge  Agreement,  remain  in full  force and  effect  until the
         payment in full in cash of the  Outstanding  Obligations.  This  Pledge
         Agreement  shall  be  binding  upon  the  Pledgor,   its   transferees,
         successors and assigns,  and shall inure,  together with the rights and
         remedies of the Trustee hereunder,  to the benefit of the Trustee,  the
         Holders of the Notes and their respective  successors,  transferees and
         assigns.

(b)      This Pledge  Agreement  (other  than the  Pledgor's  obligations  under
         Sections 10 and 12) shall terminate upon the payment in full in cash of
         the  Outstanding  Obligations or if the Company shall become  obligated
         under the  Indenture  to redeem all of the  outstanding  Notes and such
         Notes shall have been  redeemed,  and if no Default or Event of Default
         (as defined in the Indenture shall have occurred and be continuing.  At
         such time, the Trustee shall, pursuant to a Company Order, reassign and
         redeliver to the Pledgor all of the Pledged  Collateral  hereunder that
         has not been sold,  disposed of,  retained or applied by the Trustee in
         accordance  with the terms of this Pledge  Agreement  and the Indenture
         and take all  actions  that  are  necessary  to  release  the  security
         interest  created  by  this  Pledge  Agreement  in and  to the  Pledged
         Collateral,  including the  execution  and delivery of all  termination
         statements   necessary  to  terminate  any  financing  or  continuation
         statements  filed  with  respect  to  the  Pledged   Collateral.   Such
         reassignment and redelivery shall be without warranty by or recourse to
         the Trustee in its  capacity  as such,  except as to the absence of any
         Liens on the  Pledged  Collateral  created  by or arising  through  the
         Trustee, and shall be at the reasonable expense of the Pledgor.

Section 15.10.  SURVIVAL OF REPRESENTATIONS AND COVENANTS.  All representations,
warranties  and  covenants of the Pledgor  contained  herein  shall  survive the
execution and delivery of this Pledge  Agreement,  and shall terminate only upon
the termination of this Pledge Agreement.

Section 15.11. WAIVERS. The Pledgor waives presentment and demand for payment of
any of the  Outstanding  Obligations,  protest and notice of dishonor or default
with respect to any of the  Outstanding  Obligations,  and all other  notices to
which the Pledgor  might  otherwise be entitled,  except as otherwise  expressly
provided herein or in the Indenture.

Section 15.12.    AUTHORITY OF THE TRUSTEE.
                  ------------------------

(a)      The Trustee shall have the right to exercise all powers  hereunder that
         are specifically  granted to the Trustee by the terms hereof,  together
         with such powers as are  reasonably  incident  hereto.  The Trustee may
         perform any of its duties  hereunder or in connection  with the Pledged
         Collateral  by or through  agents or employees and shall be entitled to
         retain  counsel  and to act in  reliance  upon the  advice  of  counsel
         concerning all such matters.  Except as otherwise expressly provided in
         this Pledge  Agreement  or the  Indenture,  neither the Trustee nor any
         director,  officer, employee, attorney or agent of the Trustee shall be
         liable to the  Pledgor  for any action  taken or omitted to be taken by
         the Trustee, in its capacity as Trustee,  hereunder, except for its own
         gross  negligence or willful  misconduct,  and the Trustee shall not be
         responsible for the validity, effectiveness or sufficiency hereof or of
         any document or security furnished pursuant hereto. The Trustee and its
         directors,  officers, employees,  attorneys and agents may conclusively
         rely on any  communication,  instrument  or document  believed by it or
         them to be genuine  and  correct and to have been signed or sent by the
         proper person or persons.

(b)      The Pledgor  acknowledges that the rights and  responsibilities  of the
         Trustee under this Pledge Agreement with respect to any action taken by
         the  Trustee or the  exercise  or  non-exercise  by the  Trustee of any
         option, right, request,  judgment or other right or remedy provided for
         herein or resulting or arising out of this Pledge  Agreement  shall, as
         between the  Trustee  and the Holders of the Notes,  be governed by the
         Indenture  and by such other  agreements  with  respect  thereto as may
         exist from time to time among them, but, as between the Trustee and the
         Pledgor,  the Trustee  shall be  conclusively  presumed to be acting as
         agent for the Holders of the Notes with full and valid  authority so to
         act or refrain from acting,  and the Pledgor  shall not be obligated or
         entitled to make any inquiry respecting such authority.

(c)      The Trustee  undertakes  to perform such duties and only such duties as
         are  specifically  set forth in this Pledge  Agreement,  and no implied
         covenants  or  obligations  shall be read  into this  Pledge  Agreement
         against the Trustee or the Pathnet Securities Intermediary.

(d)      No provision of this Pledge  Agreement shall require the Trustee or the
         Pathnet  Securities  Intermediary  to  expend  or risk its own funds or
         otherwise  incur any financial  liability in the  performance of any of
         its  duties  hereunder,  or in the  exercise  of any of its  rights and
         powers.

(e)      The Trustee and the Pathnet  Securities  Intermediary  may consult with
         counsel of its  selection and the advice of such counsel or any Opinion
         of Counsel shall be full and complete  authorization  and protection in
         respect of any action  taken,  suffered or omitted by it  hereunder  in
         good faith and in reliance thereon.

(f)      The Trustee and the Pathnet Securities  Intermediary may execute any of
         the trusts or powers  hereunder or perform any duties  hereunder either
         directly or by or through  agents or attorneys  and the Trustee and the
         Pathnet  Securities  Intermediary  shall  not be  responsible  for  any
         misconduct or negligence on the part of any agent or attorney appointed
         with due care by it hereunder.

Section  15.13.  FINAL  EXPRESSION.  This Pledge  Agreement,  together  with the
Indenture and any other agreement executed in connection  herewith,  is intended
by the parties as a final expression of this Pledge Agreement and is intended as
a complete and exclusive statement of the terms and conditions thereof.

Section 15.14. RIGHTS OF HOLDERS OF THE NOTES. No Holder of Notes shall have any
independent  rights  hereunder  other than those  rights  granted to  individual
Holders of the Notes  pursuant to Section 508 of the  Indenture;  PROVIDED  that
nothing in this  subsection  shall limit any rights granted to the Trustee under
the Notes or the Indenture.

Section 15.15.  GOVERNING LAW: SUBMISSION TO JURISDICTION: WAIVER OF JURY TRIAL:
                ----------------------------------------------------------------
 WAIVER OF DAMAGES.
 ------------------

(a)      THIS PLEDGE  AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
         WITH THE LAWS OF THE STATE OF NEW YORK.  ANY  DISPUTE  ARISING  OUT OF,
         CONNECTED  WITH,   RELATED  TO,  OR  INCIDENTAL  TO,  THE  RELATIONSHIP
         ESTABLISHED  BETWEEN  THE  PLEDGOR,  THE TRUSTEE AND THE HOLDERS OF THE
         NOTES IN CONNECTION  WITH THIS PLEDGE  AGREEMENT AND WHETHER ARISING IN
         CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY AND CONSTRUED
         IN ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK.  NOTWITHSTANDING
         THE FOREGOING,  THE MATTERS  IDENTIFIED IN 31 C.F.R.  PART 357, 61 FED.
         REG.  43626  (AUG.  23,  1996)  SHALL BE  GOVERNED  SOLELY  BY THE LAWS
         SPECIFIED THEREIN.

(b)      THE PLEDGOR AGREES THAT THE TRUSTEE  SHALL,  IN ITS CAPACITY AS TRUSTEE
         OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE THE RIGHT, TO
         THE EXTENT  PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR
         OR  THE  PLEDGED  COLLATERAL  IN A  COURT  IN ANY  LOCATION  REASONABLY
         SELECTED IN GOOD FAITH (AND HAVING PERSONAL OR IN REM JURISDICTION OVER
         THE  PLEDGOR OR THE PLEDGED  COLLATERAL,  AS THE CASE MAY BE) TO ENABLE
         THE  TRUSTEE  TO REALIZE ON SUCH  PLEDGED  COLLATERAL,  OR TO ENFORCE A
         JUDGMENT  OR OTHER  COURT ORDER  ENTERED IN FAVOR OF THE  TRUSTEE.  THE
         PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY  COUNTERCLAIMS,  SET OFFS OR
         CROSSCLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH
         PROPERTY  OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
         TRUSTEE, EXCEPT FOR SUCH COUNTERCLAIMS,  SET OFFS OR CROSSCLAIMS WHICH,
         IF NOT ASSERTED IN ANY SUCH PROCEEDING,  COULD NOT OTHERWISE BE BROUGHT
         OR ASSERTED.  THE PLEDGOR  WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
         LOCATION  OF THE  COURT IN THE CITY OF NEW YORK  ONCE THE  TRUSTEE  HAS
         COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH  INCLUDING,  WITHOUT
         LIMITATION,  ANY  OBJECTION  TO THE  LAYING  OF  VENUE  OR BASED ON THE
         GROUNDS OF FORUM NON CONVENIENS.

(c)      THE  PLEDGOR  AGREES  THAT  NEITHER  ANY HOLDER OF NOTES NOR (EXCEPT AS
         OTHERWISE  PROVIDED  IN THIS PLEDGE  AGREEMENT  OR THE  INDENTURE)  THE
         TRUSTEE IN ITS  CAPACITY  AS TRUSTEE  SHALL HAVE ANY  LIABILITY  TO THE
         PLEDGOR  (WHETHER  ARISING IN TORT,  CONTRACT OR OTHERWISE)  FOR LOSSES
         SUFFERED BY THE PLEDGOR IN CONNECTION  WITH,  ARISING OUT OF, OR IN ANY
         WAY  RELATED TO, THE  TRANSACTIONS  CONTEMPLATED  AND THE  RELATIONSHIP
         ESTABLISHED  BY THIS PLEDGE  AGREEMENT,  OR ANY ACT,  OMISSION OR EVENT
         OCCURRING IN CONNECTION  THEREWITH,  UNLESS IT IS DETERMINED BY A FINAL
         AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE TRUSTEE OR
         SUCH  HOLDER OF NOTES,  AS THE CASE MAY BE,  THAT SUCH  LOSSES WERE THE
         RESULT OF ACTS OR  OMISSIONS ON THE PART OF THE TRUSTEE OR SUCH HOLDERS
         OF NOTES, AS THE CASE MAY BE,  CONSTITUTING BAD FAITH, GROSS NEGLIGENCE
         OR WILLFUL MISCONDUCT.

(d)      TO THE EXTENT  PERMITTED  BY  APPLICABLE  LAW,  THE PLEDGOR  WAIVES THE
         POSTING OF ANY BOND OTHERWISE  REQUIRED OF THE TRUSTEE OR ANY HOLDER OF
         NOTES IN CONNECTION WITH ANY JUDICIAL  PROCESS OR PROCEEDING TO ENFORCE
         ANY JUDGMENT OR OTHER COURT ORDER  PERTAINING TO THIS PLEDGE  AGREEMENT
         OR ANY RELATED AGREEMENT OR DOCUMENT ENTERED IN FAVOR OF THE TRUSTEE OR
         ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC  PERFORMANCE,  TEMPORARY
         RESTRAINING ORDER OR PRELIMINARY OR PERMANENT  INJUNCTION,  THIS PLEDGE
         AGREEMENT OR ANY RELATED  AGREEMENT OR DOCUMENT  BETWEEN THE PLEDGOR ON
         THE ONE HAND AND THE  TRUSTEE  AND/OR  THE  HOLDERS OF THE NOTES ON THE
         OTHER HAND.











                           [Intentionally Left Blank]



<PAGE>


                  IN WITNESS  WHEREOF,  the Pledgor  and the  Trustee  have each
caused this  Amended and  Restated  Pledge  Agreement  to be duly  executed  and
delivered as of the date first above written.

                           Pledgor:

                           PATHNET, INC.


                           By:     /s/ William. R. Smedberg V
                                   -----------------------------------
                                    Name: William R. Smedberg, V
                                     Title: Executive Vice President, Corporate
                                              Development


                            Trustee:

                            THE BANK OF NEW YORK, Trustee


                            By:     /s/ Terence Rawlins
                                   -----------------------------------
                                     Name:   Terence Rawlins
                                     Title:  Assistant Vice President



                            THE BANK OF NEW YORK,
                              as Pathnet Securities Intermediary


                            By:    /s/ Terence Rawlins
                                   -----------------------------------
                                     Name:   Terence Rawlins
                                     Title:  Assistant Vice President

<PAGE>


                                   CERTIFICATE


                  Pursuant to Section 3(f) of the Pledge  Agreement (the "PLEDGE
AGREEMENT") dated as of March 30, 2000 between Pathnet, Inc. (the "PLEDGOR") and
The Bank of New York,  trustee  (the  "TRUSTEE")  for the holders of the 12 `A %
Senior Notes due 2008 (the "NOTES") of the Pledgor, and The Bank of New York, as
securities intermediary (the "PATHNET SECURITIES INTERMEDIARY"), the undersigned
officer of the Trustee, on behalf of the Trustee, and the undersigned officer of
the  Pathnet  Securities  Intermediary,  on  behalf  of the  Pathnet  Securities
Intermediary,  make the following  certifications to the Pledgor and the Holders
of the  Outstanding  Notes.  Capitalized  terms  used  and not  defined  in this
Certificate have the meanings set forth or referred to in the Pledge Agreement.

1.  The  Trustee  has  previously   established  with  the  Pathnet   Securities
Intermediary,  as  Securities  Intermediary,  the Escrow  Account.  The  Pathnet
Securities Intermediary has acquired a Security Entitlement to the United States
Treasury  securities  identified  in ANNEX 1 to this  Certificate  (the "PLEDGED
SECURITIES")  from the FRBNY and holds a  Security  Entitlement  thereto  in the
FRBNY's  Security  Account.   The  Pathnet  Securities   Intermediary  has  made
appropriate book entries in its records establishing that the Pledged Securities
and the Trustee's  Securities  Entitlement thereto have been credited to and are
held in the Escrow Account.

2. The Trustee has  established  and  maintained  and will  maintain  the Escrow
Account  and all  Securities  Entitlements  and other  positions  carried in the
Escrow  Account  solely in its capacity as Trustee and has not asserted and will
not assert any claim to or interest in the Escrow Account or any such Securities
Entitlements or other positions except in such capacity.

3. The Trustee and the  Pathnet  Securities  Intermediary  have  acquired  their
Security  Entitlements to the Pledged Securities for value and without notice of
any adverse claim thereto. Without limiting the generality of the foregoing, the
Pledged  Securities are not and the Pathnet  Securities  Intermediary's  and the
Trustee's  Security  Entitlements  to the Pledged  Securities  are not, to their
knowledge,  subject  to any  Lien  granted  by  either  of them in  favor of any
Securities  Intermediary  (including,  without  limitation,  NFSC or the  FRBNY)
through  which the  Trustee  derives  its  Security  Entitlement  to the Pledged
Securities.

4.  Neither the Pathnet  Securities  Intermediary  nor the Trustee has caused or
permitted the Pledged Securities or any Security  Entitlement  thereto to become
subject to any Lien created by or arising  through  either of the Trustee or the
Pathnet Securities Intermediary.

                  IN WITNESS  WHEREOF,  the  undersigned  officers have executed
this  Certificate on behalf of The Bank of New York,  Trustee,  and on behalf of
the Pathnet Securities Intermediary, respectively, this 30th day of March, 2000.

                                   THE BANK OF NEW YORK,
                                   Trustee


                                   -----------------------------------
                                   Name:
                                   Title:


                                   THE BANK OF NEW YORK,
                                    As Pathnet Securities
                                        Intermediary


                                   ------------------------------------
                                   Name:
                                   Title:

<PAGE>


                               PLEDGED SECURITIES

<TABLE>
<CAPTION>
   <S>                      <C>              <C>                <C>                      <C>

-------------------------- ---------------- ------------------ ---------------------- -----------------------
                                                                ORIGINAL PRINCIPAL
   DESCRIPTION OF DEBT       CUSIP NO(S)     FINAL MATURITY           AMOUNT             COST OF CLOSING
   -------------------       -----------     --------------           ------             ---------------
-------------------------- ---------------- ------------------ ---------------------- -----------------------
-------------------------- ---------------- ------------------ ---------------------- -----------------------

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

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

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

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


<PAGE>



                   INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING
                             AGREED-UPON PROCEDURES

To the Board of Directors
Pathnet, Inc.
Washington, D.C,

We  understand  that  $350,000,000  12 1/4% Senior  Notes due 2008  ("NOTES") of
Pathnet,  Inc. (the "ISSUER"),  were issued on April 8, 1998. We also understand
that in connection with the payment of the fourth and fifth  scheduled  interest
payments  on the  Notes  The  Bank of New York  (the  "Trustee")  will  hold the
Securities  listed on the attached  schedule  (Schedule  11) (the  "Securities")
pursuant  to Section  3(h) of the Pledge  Agreement,  between the Issuer and the
Trustee, dated as of March 30, 2000 (the "Pledge Agreement").

We have been requested by the Issuer and the Trustee (collectively the "Intended
Users")  to prove  the  arithmetic  accuracy  of the  computations  shown on the
attached schedules, prepared by the Issuer.

We have performed the procedures  enumerated below,  which were agreed to by the
Intended Users, solely to assist you and the Trustee with respect to proving the
arithmetic  accuracy of the computations shown on the attached  schedules.  This
agreed upon  procedures  engagement  was performed in accordance  with standards
established  by the  American  Institute or Certified  Public  Accountants.  The
sufficiency  of the  procedures  is solely the  responsibility  of the specified
users of the  report.  Consequently,  we make no  representation  regarding  the
sufficiency of the procedures  described  below either for the purpose for which
this report was  requested  or for any other  purpose.  The  procedures  that we
performed and our findings are, as follows:

1.       We have  proved the  arithmetic  accuracy  of the  computations  of the
         fourth and fifth scheduled interest payments,  as shown on the attached
         Schedule (Schedule I), which was prepared by the Issuer.

2.       We have  proved  the  arithmetic  accuracy  of the  computation  of the
         scheduled  receipts of maturing  principal  and interest to be received
         from the  Securities and cash on deposit as shown on Schedule II, which
         was  prepared  by  the  Issuer.  Other  than  proving  such  arithmetic
         accuracy,  we have not confirmed or otherwise  verified the information
         on that schedule.

3.       We recomputed each amount in the net cash flow column on Schedule II by
         deducting  each amount in the interest  payment column from each amount
         in the total available column, individually and in total.

In  performing  the above  calculations,  we have relied  solely on the data set
forth in the attached  schedules  prepared and provided to us by the Issuer. The
scope of our engagement did not include the verification of any underlying data,
assumptions or definitions necessary to derive the calculations. Such underlying
data,  assumptions  and  definitions  include,  but  are  not  limited  to,  the
following:

(i)      The principal  amounts,  coupon rates,  and related  maturities for the
         Securities and

(ii)     Interest start dates,  maturity dates,  and interest  payment dates for
         the Securities and the Notes.

We were not engaged to, and did not,  perform an  examination,  the objective of
which would be the expression of an opinion on the specified elements, accounts,
or items included in the attached schedules. Accordingly, we do not express such
an opinion.  Had we performed  additional  procedures,  other matters might have
come to our attention that would have been reported to you.

This report is intended  solely for the use of the  Intended  Users listed above
and should not be used by those who have not agreed to the  procedures and taken
responsibility for the sufficiency of the procedures for their purposes.



McLean, Virginia
March 30, 2000

<PAGE>


                                   SCHEDULE I


 Interest Payment DATE ON
    THE NOTES        PRINCIPAL      ANNUAL INTEREST RATE    INTEREST PAYMENT (1)
    ---------        ---------      --------------------    --------------------







(1)      Interest  payments  for each period are  calculated  assuming a 180-day
         semi-annual period and 360-day year.

<PAGE>

<TABLE>

                                                             Coupon Interest      Total Available  Interest Payment  Net Cash Flow
        SECURITY    COUPON RATE   MATURITY DATE    PAR AMOUNT     (1)     CASH FLOW      (2)            (3)               (4)
        --------    -----------   -------------    ----------     ---     ---------      ---            ---               ---
        <S>         <C>           <C>              <C>            <C>     <C>              <C>





-----------------------------------------------------------------------------------------------------------------------------------
(1) Coupon interest is calculated assuming a 180-day semi-annual period and a
    360-day year.
(2) Total  Available  for each  period is equal to the Cash Flow for the  period
    plus Net Cash Flow from the previous period.
(3) See SCHEDULE I attached hereto.
(4) Net Cash Flow for each  period is equal to Total  Available  for the  period
    less the Interest Payment for each period.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>