Exhibit 10.11

                       ASSIGNMENT AND ACCEPTANCE AGREEMENT

         THIS ASSIGNMENT  AND  ACCEPTANCE  AGREEMENT (this  "Agreement"),  dated
March 30, 2000, is by and between Pathnet Fiber Optics,  LLC, a Delaware limited
liability  corporation (the "Seller") and Pathnet,  Inc., a Delaware corporation
(the "Purchaser").

                                   WITNESSETH:

         WHEREAS,  Seller  currently  holds  certain  fiber optic  cable  assets
purchased  pursuant  to the  Amended and  Restated  Fiber  Optic Cable  Purchase
Agreement between Seller and Lucent  Technologies, Inc., dated October 14, 1999,
as  amended  by  that  certain   Amendment  No.1,   between  Seller  and  Lucent
Technologies, Inc., dated February 24, 2000 (the "Lucent Agreement");

         WHEREAS,  Purchaser  desires to purchase,  and Seller  desires to sell,
such assets,  and, as part of such purchase and sale,  Seller desires to assign,
and the Purchaser  desires to assume,  all of the  obligations  and  liabilities
relating to such assets,  subject,  in each case, to the  exemptions,  terms and
conditions set forth herein;

         NOW  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
representations,  warranties and covenants and agreements hereinafter set forth,
and upon the terms and subject to the conditions  hereinafter set forth,  Seller
and Purchaser hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         1.1 Certain Definitions. As used in this Agreement, the following terms
shall have the respective  meanings set forth below (such meanings to be equally
applicable to both the singular and the plural forms of the terms defined).

         (a) Affiliate: As defined in Section 8.1.

         (b) Agreement: As defined in the preamble.

         (c) Closing: As defined in Article VII.

         (d)   Colonial   Contribution   Agreement:   Shall  mean  that  certain
Contribution  Agreement,  dated as of  November 2, 1999,  by and among PTI,  the
Purchaser and Colonial Pipeline Company, a Delaware and Virginia corporation.

         (e) Contribution  Agreements:  Shall mean (i) that certain Contribution
Agreement, dated as of November 2, 1999, by and among PTI, the Purchaser and The
Burlington Northern Santa Fe Railway Company, a Delaware corporation,  (ii) that
certain Contribution Agreement,  dated as of November 2, 1999, by and among PTI,
the Purchaser and CSX Transportation,  Inc., a Virginia corporation,  (iii) that
certain Contribution Agreement,  dated as of November 2, 1999, by and among PTI,
the

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Purchaser and the preferred  stockholders  of the  Purchaser,  (iv) that certain
Contribution  Agreement,  dated as of  November 2, 1999,  by and among PTI,  the
Purchaser and certain common stockholders of the Purchaser, and (v) that certain
Contribution Agreement,  dated November 4, 1999, by and among PTI, the Purchaser
and David Schaeffer.

         (f) Contribution Agreement Closing: As defined in Section 6.1(d).

         (g) Fiber Assets: As defined in Section 2.1.

         (h) Indemnified Persons: As defined in Section 8.1

         (i) Indemnifying Persons: As defined in Section 8.1.

         (j) Lucent Agreement: As defined in the preamble.

         (k) PTI: Shall mean Pathnet Telecommunications, Inc., a Delaware
corporation.

         (l) Purchaser: As defined in the preamble.

         (m) Purchase Price: As defined in Section 4.1.

         (n) Seller: As defined in the preamble.

         (o) Survival Date: As defined in Section 8.4.

                                   ARTICLE II
                              ASSETS TO BE ACQUIRED

         2.1 Acquisition and Transfer of Assets.  At the Closing (as hereinafter
defined),  upon the terms and subject to the conditions  hereinafter  set forth,
Seller  shall  sell,  assign,  transfer,  convey and deliver to  Purchaser,  and
Purchaser  shall purchase,  acquire and accept from Seller (i) all right,  title
and interest of Seller in and to all the fiber optic cable  purchased  under the
Lucent  Agreement,  and (ii) all  rights of Seller  in, to and under  the Lucent
Agreement (collectively referred to herein as the "Fiber Assets").

         2.2 Instrument of Conveyance and Transfer,  Etc. At the Closing, Seller
shall deliver (or cause to be delivered) to Purchaser such deeds, bills of sale,
endorsements,  assignments  and other  instruments  of transfer,  conveyance and
assignment as shall be necessary to transfer, convey and assign the Fiber Assets
to the Purchaser.  Simultaneously therewith,  Seller shall take all steps as may
be required to put the Purchaser in possession of the Fiber Assets.

         2.3      Right of Endorsement, Etc. Effective upon the Closing, Seller
hereby constitutes and appoints Purchaser, its successors and assigns, the true
and lawful attorney of the Seller with full power of substitution, in the name
of Purchaser, or the

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name of Seller,  on behalf of and for the benefit of  Purchaser,  to collect all
accounts and notes  receivable and other items being  transferred,  conveyed and
assigned to Purchaser as provided herein, to endorse, without recourse,  checks,
notes and other  instruments in the name of Seller,  to institute and prosecute,
in the name of Seller or otherwise,  all  proceedings  which  Purchaser may deem
proper in order to collect,  assert or enforce any claim,  right or title of any
kind in or to the Fiber Assets,  to defend and  compromise  any and all actions,
suits or proceedings  in respect of any of the Fiber Assets,  and to do all such
acts and things in relation  thereto as  Purchaser  may deem  advisable.  Seller
agrees  that the  foregoing  powers are coupled  with an  interest  and shall be
irrevocable  by Seller,  directly or indirectly,  whether by the  dissolution of
Seller or in any manner or for any reason.

         2.4 Further Assurances; Etc. Seller shall pay to Purchaser promptly any
amounts  which shall be received by Seller  after the Closing  which are, or are
received in connection with,  Fiber Assets.  Seller at any time and from time to
time after the  Closing,  upon the  request of  Purchaser  and at the expense of
Seller, shall do, execute,  acknowledge,  deliver and file, or shall cause to be
done, executed, acknowledged,  delivered or filed, all such further acts, deeds,
transfers,  conveyances,  assignments  or  assurance  as may be required for the
better  transferring,  conveying,  assigning and assuring to  Purchaser,  or for
aiding  and  assisting  in  the  collection  of or  reducing  to  possession  by
Purchaser, any of the assets, properties or rights being purchased hereunder.

         2.5 Assignment of Contracts,  Rights,  Etc. Anything  contained in this
Agreement to the contrary  notwithstanding,  this Agreement shall not constitute
an  agreement  or  attempted  agreement  to  transfer,  sublease  or assign  any
contract,  license, lease, sales order, purchase order or other agreement or any
claim or right of any benefit arising  thereunder or resulting  therefrom or any
permit or operating authority if an attempted  transfer,  sublease or assignment
thereof,  without the consent of any other party  thereto,  would  constitute  a
breach thereof or in any way affect the rights of Purchaser  thereunder.  Seller
and Purchaser shall use their respective best efforts,  and shall cooperate with
each other, to obtain the consent of such third party to any of the foregoing to
the  assignment  or  transfer  thereof to  Purchaser  in all cases in which such
consent is required for assignment or transfer. If such consent is not obtained,
Seller shall cooperate with Purchaser in any arrangements necessary or desirable
to provide for Purchaser the benefits thereunder, including without, limitation,
enforcement for the benefit of Purchaser of any and all rights of Seller thereof
against the other party thereto  arising out of the  cancellation  by such other
party or otherwise.

                                   ARTICLE III
                            ASSUMPTION OF LIABILITIES

         On  the  terms  and  subject  to  the  conditions  of  this  Agreement,
simultaneously with the transfer,  conveyance and assignment to Purchaser of the
Fiber Assets,  Purchaser  shall assume all of the  liabilities  and  obligations
relating to the Fiber Assets as such  liabilities  and  obligations  shall exist
immediately prior to the Closing.

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                                   ARTICLE IV
                           PURCHASE PRICE OF PURCHASED
                               ASSETS; ALLOCATION

         4.1 Purchase  Price.  The aggregate  purchase  price to be paid for the
Fiber  Assets  shall  be  equal  to all  purchase  orders  submitted  to  Lucent
Technologies,  Inc.  under the  Lucent  One  Million  Dollars  ($1,000,000))(the
"Purchase  Price").  At  the  Closing,  against  delivery  to the  Purchaser  of
appropriate  instruments of transfer,  conveyance and assignment with respect to
the Fiber Assets,  the Purchaser shall deliver to the Seller,  a Promissory Note
in the form attached hereto as Exhibit A in the principal amount of $1,000,000.

                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

         5.1      Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Purchaser as follows:

                  (a) Organization,  Standing and Power. The Seller is a limited
         liability company duly organized, validly existing and in good standing
         under the laws of the State of Delaware and has all requisite corporate
         power and  authority to own,  lease and operate its  properties  and to
         carry on its  business as now being  conducted;  and the Seller has all
         requisite  corporate  power  and  authority  and  to  enter  into  this
         Agreement,  to perform its obligations  hereunder and to consummate the
         transactions  contemplated hereby. Seller is duly qualified and in good
         standing  to  do  business   in  every   jurisdiction   in  which  such
         qualification is necessary.

                  (b)  Authority.  The execution and delivery of this  Agreement
         and the consummation of the transactions  contemplated hereby have been
         duly and validly  authorized by all necessary  corporate  action and on
         the part of the  Seller  and this  Agreement  constitutes  a valid  and
         binding  obligation of the Seller  enforceable  in accordance  with its
         terms.  Neither  the  execution,   delivery  and  performance  of  this
         Agreement  nor  the  consummation  by the  Seller  of the  transactions
         contemplated  hereby  nor  compliance  by the  Seller  with  any of the
         provisions  hereof will (i) conflict  with or result in a breach of any
         provision of the organizational  documents of the Seller,  (ii) cause a
         default  (or give rise to any  right of  termination,  cancellation  or
         acceleration)  under any of the terms,  conditions or provisions of any
         note, bond, lease, mortgage,  indenture, license or other instrument or
         agreement  to which the Seller,  or by which the Seller,  or any of its
         properties  or  assets  is or may be bound or  (iii)  violate  any law,
         statute,  rule or regulation or order,  writ,  judgment,  injunction or
         decree applicable to the Seller, or any of its properties or assets.

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<PAGE>
         5.2      Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Seller as follows:

                  (a)  Organization,  Standing  and Power.  The  Purchaser  is a
         corporation duly organized, validly existing and in good standing under
         the laws of the State of Delaware and has all requisite corporate power
         and authority to own, lease and operate its properties, to carry on its
         business  as now being  conducted,  to enter  into this  Agreement,  to
         perform its  obligations  hereunder and to consummate the  transactions
         contemplated hereby.

                  (b)  Authority.  The execution and delivery of this  Agreement
         and the consummation of the transactions  contemplated hereby have been
         duly and validly  authorized by all necessary  corporate  action on the
         part of the  Purchaser  and  this  Agreement  constitutes  a valid  and
         binding obligation of the Purchaser, enforceable in accordance with its
         terms.  Neither  the  execution,   delivery  and  performance  of  this
         Agreement nor the consummation of the transactions  contemplated hereby
         nor compliance by the Purchaser with any of the provisions  hereof will
         (i)  conflict  with or  result  in a  breach  of any  provision  of its
         Certificate of Incorporation  or Bylaws,  (ii) cause a default (or give
         rise to any right of termination,  cancellation or acceleration)  under
         any of the terms,  conditions or provisions of any note,  bond,  lease,
         mortgage,  indenture, license or other instrument or agreement to which
         the  Purchaser is a party,  or by which it or its  properties or assets
         may be bound, or (iii) violate any law, statute,  rule or regulation or
         order, writ, injunction or decree applicable to the Purchaser or any of
         its properties or assets.


                                   ARTICLE VI
                              CONDITIONS OF CLOSING

         6.1 Conditions of Obligations of the Purchaser.  The obligations of the
Purchaser  to perform  this  Agreement  are subject to the  satisfaction  of the
following conditions unless waived by the Purchaser:

                  (a)  Representations  and Warranties.  The representations and
         warranties  of the Seller set forth in Section 5.1 hereof shall be true
         and correct in all material  respects as of the date of this  Agreement
         and as of the Closing Date (as  hereinafter  defined) as though made on
         and as of the Closing Date.

                  (b)  Authorization.  All action  necessary to  authorized  the
         execution, delivery and performance of this Agreement by the Seller and
         the  consummation of the  transactions  contemplated  hereby shall have
         been duly and validly taken.

                  (c)      Instruments of Transfer, Conveyance and Assignment.
         The Purchaser shall have received duly executed instruments of
         transfer, conveyance and assignment as contemplated by Section 2.2
         hereof.

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<PAGE>
                  (d) Closing  under  Contribution  Agreements.  The Closing (as
         defined in the  Contribution  Agreements)  and the Initial  Closing (as
         defined in the Colonial  Contribution  Agreement)  shall have  occurred
         (together, such occurrences, the "Contribution Agreement Closing").

         6.2  Conditions of Obligations  of the Seller.  The  obligations of the
Seller  to  perform  this  Agreement  are  subject  to the  satisfaction  of the
following conditions unless waived by the Seller:

                  (a)  Representations  and Warranties.  The representations and
         warranties  of the  Purchaser  set forth in Section 5.2 hereof shall be
         true  and  correct  in all  material  respects  as of the  date of this
         Agreement  and as of the  Closing  Date as though made on and as of the
         Closing Date.

                  (b)  Authorization.  All action  necessary  to  authorize  the
         execution,  delivery and performance of this Agreement by the Purchaser
         and the consummation of the transactions contemplated hereby shall have
         been duly and validly taken by the Board of Directors of the Purchaser.

                  (c)      Closing under Contribution Agreements. The
         Contribution Agreement Closing shall have occurred.

                                   ARTICLE VII
                                     CLOSING

         The closing (the "Closing") for the  consummation  of the  transactions
contemplated  by  this  Agreement  shall  take  place   immediately   after  the
Contribution Agreement Closing shall have occurred.


                                  ARTICLE VIII
                                 INDEMNIFICATION

         8.1     Definitions. As used in this Article VIII, the following terms
shall have the following respective meanings:

                  (a)  "Affiliate"  shall mean a person or entity that directly,
         or  indirectly  through  one or more  intermediaries,  controls,  or is
         controlled  by, or is under common  control  with,  any other person or
         entity.

                  (b)      "Indemnified Persons" shall mean and include the
         Purchaser, all Affiliates of the Purchaser, and the successors and
         assigns of the foregoing; and

                  (c)      "Indemnifying Persons" shall mean the Seller and its
         successors and assigns.


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         8.2  Indemnification.  The  Indemnifying  Persons  shall,  jointly  and
severally,  indemnify  and  save  the  Indemnified  Persons,  and  each of them,
harmless from, against, for and in respect of the following:

                  (a)      any and all liabilities and obligations of the Seller
         not assumed by the Purchaser pursuant to this Agreement;

                  (b)  any  liabilities  and  obligations  of  the  Indemnifying
         Persons for fees, costs and expenses  relating to or arising out of the
         execution,   delivery  and   performance  of  this  Agreement  and  the
         consummation  of  the  transactions   contemplated  hereby,  including,
         without  limitation,  legal and accounting  fees and expenses and taxes
         incurred by the Indemnifying Persons;

                  (c) any damages,  losses,  obligations,  liabilities,  claims,
         actions or causes of action  sustained  or suffered by the  Indemnified
         Persons,   or  any  of  them,   and  arising   from  a  breach  of  any
         representation,  warranty,  covenant or agreement  of the  Indemnifying
         Persons  contained  in or made  pursuant  to this  Agreement  or in any
         certificate,  instrument or agreement  delivered by any of such parties
         pursuant  hereto or in connection  with the  transactions  contemplated
         hereby, or any facts or circumstances constituting such breach;

                  (d) all damages,  losses,  obligations,  liabilities,  claims,
         actions or causes of action  sustained  or suffered by the  Indemnified
         Persons,  or any of them, as a result of  non-compliance  by the Seller
         with the  provisions of the "bulk sales laws" of any state which may be
         applicable to the transactions contemplated hereby;

                  (e) all damages,  losses,  obligations,  liabilities,  claims,
         actions or causes of action  sustained  or suffered by the  Indemnified
         Persons,  or any of them,  as a result of the  failure  to  obtain  any
         consent or provide  any benefit  under any  contract,  license,  lease,
         sales order, purchase order or other agreement, claim, right, permit or
         operating authority; and

                  (f) all  reasonable  costs and  expenses  (including,  without
         limitation reasonable  attorney's,  accountants' and other professional
         fees and expenses) incurred by the Indemnified Persons, or any of them,
         in connection with any action, suit, proceeding,  demand, assessment or
         judgment  incident  to any of the  matters  indemnified  against  under
         Section 8.2(a),  Section 8.2(b),  Section 8.2 (c),  Section 8.2 (d) and
         Section 8.2 (e) hereof.

No  claim,  demand,  suit or  cause  of  action  shall be  brought  against  the
Indemnifying   Persons  under  or  pursuant  to  this  Section  8.2  unless  the
Indemnified  Persons, or any of them, at any time prior to the Survival Date (as
defined in Section 8.4 hereof),  give the  Indemnifying  Persons written notice,
with reasonable specificity, of the existence of any such claim, demand, suit or
cause of action under this Agreement.  Upon the giving of such written notice as
aforesaid, the Indemnified Persons, or any of them, shall have the

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<PAGE>
right to commence legal  proceedings  within one year subsequent to the Survival
Date for the enforcement of its or their rights under this Agreement.

         8.3      Third Party Claims. The obligations and liabilities of the
Indemnifying Persons hereunder with respect to claims resulting from the
assertion of liability by third parties shall be subject to the following terms
and conditions:

                  (a) The  Indemnified  Persons shall give prompt written notice
         to the  Indemnifying  Persons of any  assertion of liability by a third
         party  which  might  give  rise to a claim by the  Indemnified  Persons
         against  the  Indemnified  Persons  based on the  indemnity  agreements
         contained  in Section 8.2 hereof,  stating the nature and basis of said
         assertion and the amount thereof, to the extent known.

                  (b) In the event any  action,  suit or  proceeding  is brought
         against the Indemnified Persons, with respect to which the Indemnifying
         Persons may have liability under the indemnity  agreement  contained in
         Section 8.2 hereof,  the action,  suit or  proceeding  shall,  upon the
         written  agreement of the Indemnifying  Persons that they are obligated
         to indemnify  under the  indemnity  agreement  contained in Section 8.2
         hereof, be defended  (including all proceedings on appeal or for review
         which  counsel  for  the  defendant  shall  deem  appropriate)  by  the
         Indemnifying  Persons.  The Indemnified Persons shall have the right to
         employ  its or their own  counsel  in any such  case,  but the fees and
         expenses of such  counsel  shall be at the expense of such  Indemnified
         Persons  unless  (i) the  employment  of such  counsel  shall have been
         authorized by the  Indemnifying  Persons in connection with the defense
         of such action, suit or proceeding, (ii) the Indemnifying Persons shall
         not  have  agreed,  promptly  after  the  notice  to them  provided  in
         subsection  (a) above,  that they are obligated to indemnify  under the
         indemnity  agreement  contained  in  Section  8.2  hereof or (iii) such
         Indemnified  Person shall have  reasonably  concluded that such action,
         suit or proceeding  involves to a significant extent matters beyond the
         scope of the indemnity  agreement  contained in Section 8.2 hereof,  or
         that  there  may be  defenses  available  to it  (or  them)  which  are
         different  from or  additional to those  available to the  Indemnifying
         Persons, in any of which events the Indemnifying Persons shall not have
         the right to direct the defense of such action,  suit or  proceeding on
         behalf of the  Indemnified  Persons  and that  portion of such fees and
         expenses  reasonably  related  to  matters  covered  by  the  indemnity
         agreement  contained  in  Section  8.2  hereof  shall  be  borne by the
         Indemnifying  Persons.  The  Indemnified  Persons  shall be kept  fully
         informed  of such  action,  suit or  proceeding  at all stages  thereof
         whether or not they are so represented.  The Indemnifying Persons shall
         make  available  to the  Indemnified  Persons and their  attorneys  and
         accountants all books and records of the Indemnifying  Persons relating
         to such  proceedings  or  litigation  and the parties  hereto  agree to
         render to each other such assistance as they may reasonably  require of
         each other in order to ensure the  proper and  adequate  defense of any
         such action, suit or proceeding.

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<PAGE>
                  (c)      The Indemnifying Persons shall not make any
         settlement of any claims without the written consent of the Indemnified
         Persons.

         8.4 Survival.  All  representations  and  warranties  contained in this
Agreement shall survive the Closing hereunder until the second  anniversary (the
"Survival  Date") of the date  hereof,  at which time such  representations  and
warranties shall expire and be terminated and extinguished.

         8.5 Remedies Cumulative. The remedies provided for in this Article VIII
shall be cumulative and shall not preclude assertion by the Indemnified  Persons
of  any  other  rights  or  the  seeking  of  any  other  remedies  against  the
Indemnifying Persons.

                                   ARTICLE IX
                       AMENDMENT, MODIFICATION AND WAIVER

         This  Agreement  shall  not be  altered  or  otherwise  amended  except
pursuant  to an  instrument  in writing  signed by each of the  parties  hereto,
except that any party to this Agreement may waive any  obligation  owed to it by
another party under this  Agreement.  The waiver by any party hereto of a breach
of any  provisions  of this  Agreement  shall not operate or be  construed  as a
waiver of any subsequent breach.

                                    ARTICLE X
                                  MISCELLANEOUS

         10.1 Bulk Sales  Compliance.  Subject to Section 8.2(d),  the Purchaser
hereby waives  compliance  by the Seller with the  provisions of the "bulk sales
laws" (i.e., Article 6 of the Uniform Commercial Code) of any state which may be
applicable to the transactions contemplated hereby.

         10.2 Entire  Agreement.  This  Agreement and the Exhibits and Schedules
attached hereto contain the entire  agreement among the Purchaser and the Seller
with respect to the  transactions  contemplated  hereby and  supersede all prior
agreements or understandings among the parties with respect thereto.

         10.3     Descriptive Headings. Descriptive headings are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.

         10.4  Counterparts.  This  Agreement  may be  executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument,  but  all  such  counterparts  together  shall  constitute  but  one
agreement.

         10.5     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.

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<PAGE>
         10.6  Benefits  of  Agreements.  All the terms and  provisions  of this
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their respective  successors and assigns.  Anything  contained herein to the
contrary  notwithstanding,  this Agreement  shall not be assignable by any party
hereto without the consent of the other party hereto.

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<PAGE>
         IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as of the day and year first above written.

                                PATHNET, INC.


                                 By: /s/ Mary McDermott
                                   -------------------------------------
                                Name: Mary McDermott
                                Title: Senior Vice President, General Counsel
                                        and Secretary


                                PATHNET TELECOMMUNICATIONS, INC.


                                By: /s/ Mary McDermott
                                   -------------------------------------
                                Name: Mary McDermott
                                Title: Senior Vice President, General Counsel
                                        and Secretary



                                      -11-
<PAGE>
                                                                       Exhibit A
                                     FORM OF
                                 PROMISSORY NOTE

$1,000,000                                                        March 30, 2000


         FOR VALUE RECEIVED,  PATHNET,  INC., a corporation duly organized under
the laws of the State of Delaware (the "Purchaser"),  promises to pay to Pathnet
Fiber Optics,  LLC, a Delaware limited liability  company,  at 1015 31st Street,
Washington,  DC 20007  ("Seller"),  or at such other place as the holder of this
Note may from time to time  designate in writing,  the  principal  amount of ONE
MILLION  DOLLARS  ($1,000,000),  together with interest on the unpaid  principal
amount  of this  Note  computed  from  the date of  Closing  as  defined  in the
Assignment and Acceptance  Agreement (the "Assignment and  Acceptance"),  by and
between  Purchaser  and Seller,  dated the date hereof,  as amended from time to
time,  until the  entire  indebtedness  is paid,  at the rate of twelve  and one
quarter percent  (12-1/4%) per annum. The principal amount of this Note shall be
due  and  payable  on  March  31,  2010.  Accrued  interest  calculated  on  the
outstanding  principal  amount as described above shall be payable yearly on the
last day of each year  commencing  with the year ended  December 31,  2000.  All
payments  hereunder  shall be made in  lawful  money  of the  United  States  of
America.

         The unpaid  principal amount of this Note may be prepaid in whole or in
part at any time.

         The entire  unpaid  principal  amount of this Note or any  extension or
renewal hereof,  together with accrued interest and all charges owing under this
Note or the Assignment and Acceptance,  shall immediately become due and payable
at the  option of the holder of this Note,  without  demand or notice,  upon the
occurrence of any of the following Events of Default:

         (a) Purchaser  fails to pay the principal  amount of this Note when the
same  becomes  due and  payable  (whether  on the date on which  such  principal
becomes due or upon acceleration or otherwise); or

         (b)  Purchaser  fails to pay any interest when the same becomes due and
payable  hereunder  and such failure to pay continues for ten (10) business days
after the date on which such payment of interest was due.

         If this Note, after maturity,  whether by acceleration or otherwise, is
placed in the hands of an attorney  for  collection,  whether suit is brought on
the same or not,  Purchaser  shall pay to the holder of this Note all attorneys'
fees as are incurred for the purposes of collection hereof.

         Each  Obligor  under this Note  (which  term shall  include all makers,
guarantors,  endorsers and other persons assuming  obligations  pursuant to this
Note) hereby waives

                                      -12-
<PAGE>
presentment, protest, demand, notice of dishonor, and all other notices, and all
defenses and pleas on the grounds of any  extensions  of the time of payments or
the due dates of this Note, in whole or in part, before or after maturity,  with
or without notice. No renewal or extension of this Note, no release or surrender
of any  collateral  given as security for this Note,  no release of any Obligor,
and no delay in  enforcement  of this Note or in  exercising  any right or power
hereunder, shall affect the liability of any Obligor.

         This  Note  may not be  changed  orally,  but only by an  agreement  in
writing  which is signed by the party  against whom  enforcement  of any waiver,
change, modification or discharge is sought.

         IN WITNESS WHEREOF,  Purchaser has caused this Note to be duly executed
on its behalf as of the date set forth at the beginning of this Note, as the act
and deed of Purchaser.


                               PATHNET, INC.


                               By:     ______________________________________
                                      Name:
                                     Title:




                                      -13-