Portions  of this exhibit have been  omitted and filed  separately  with
           the Securities and Exchange Commission. These portions are
                             designated "[ * * * ]."


                                                                    Exhibit 10.3

                          FIBER OPTIC ACCESS AGREEMENT
                                     BETWEEN
                        PATHNET TELECOMMUNICATIONS, INC.
                                       AND
              THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY


            This fiber optic access  agreement  ("Agreement") is entered into as
of this 30th day of  March, 2000  between  Pathnet  Telecommunications,  Inc., a
Delaware  corporation  ("Pathnet")  and The  Burlington  Northern  and  Santa Fe
Railway Company, a Delaware corporation ("BNSF").

            WHEREAS, BNSF has certain ownership interests in certain of its rail
corridors covering the western United States,  BNSF's rail network consisting of
over 30,000 route miles in 28 states and two Canadian provinces;

            WHEREAS, Pathnet desires to obtain from BNSF the right to lease from
BNSF,  on  specified   terms  and  conditions,   strips  of  land   constituting
approximately [ * * * ] route miles, in the aggregate,  within any rail corridor
in BNSF's  existing  rail corridor  network (or within the  Auburn-Yakima-Pasco,
Washington  rail  corridor,  or the  Ortonville,  Minnesota-Terry,  Montana rail
corridor)(collectively,   "Rail  Corridors"  and  any  one  individually,  "Rail
Corridor"),  to the  extent of BNSF's  ownership  rights,  so that  Pathnet  can
construct,  install,  operate,  maintain,  replace,  reconstruct,  remove and/or
relocate    (collectively,    "Construct    and    Operate")   a   fiber   optic
telecommunications  transmission  system and certain  appurtenant  equipment and
structures (collectively, "Fiber Optic Facilities");

            WHEREAS, Pathnet intends to construct and operate a network of Fiber
Optic Facilities over many BNSF Rail Corridors, and to construct or acquire, and
then operate, a network of Fiber Optic Facilities over many corridors throughout
the eastern United States;

            WHEREAS,   Pathnet  and  BNSF  have  entered  into  a   Contribution
Agreement,  dated  November 2,  1999,  by  which  BNSF has agreed to  contribute
certain  property  interests  into  Pathnet  and to  execute  and  deliver  this
Agreement and,  subject to the terms,  conditions and  obligations  set forth in
this Agreement, perform the duties set forth herein; and

            WHEREAS,  BNSF is willing,  on the terms and conditions set forth in
this Agreement,  to enter into various specific leases with Pathnet, in the form
of the Lease attached hereto as Exhibit A, with respect to approximately [ * * *
] route miles of Rail  Corridors of BNSF's  existing Rail Corridor  network,  as
specified  by Pathnet  and as shown on  Exhibits B and C attached  hereto,  each
Lease to grant to  Pathnet  the  right to  Construct  and  Operate  Fiber  Optic
Facilities on a specific BNSF Rail Corridor,  to the extent of BNSF's  ownership
rights therein;




                                       -1-
<PAGE>

            NOW, THEREFORE, Pathnet and BNSF agree as follows:

            1.    Condition Precedent to Commencement of Pathnet's Rights.

                  Pathnet and BNSF have  closed the  transaction  described  and
governed  by  the  Contribution  Agreement,  on  the  terms  set  forth  in  the
Contribution Agreement.

            2.    Right to Lease.

                  For a period of 15 years following the date of this Agreement,
on each rail corridor within BNSF's existing Rail Corridor  network,  subject to
the limitations of BNSF's ownership interest in each Rail Corridor, as set forth
in  Section  11 hereof,  and to the  restrictions  set forth in Section 3 hereof
concerning  BNSF's  overriding  rail  operations,  safety  concerns and property
marketing rights, Pathnet shall have the right to enter into a fiber optic lease
with  BNSF on the  terms set  forth in the form of Fiber  Optic  Lease  attached
hereto as Exhibit A and made a part hereof (hereinafter,  "Lease"). (Where, with
respect to a particular  Rail  Corridor  BNSF is subject to a limitation  on its
ability  to grant a  Lease,  but has a right  to  grant a fiber  optic  easement
instead,  BNSF  shall  grant to Pathnet  such a fiber  optic  easement  on terms
otherwise  identical to the Lease,  and any such easement also shall be included
in references  hereinafter  to the term  "Lease.")  Pathnet  acknowledges  that,
subject only to certain  restrictions  set forth in Section 4 hereof,  BNSF will
continue to convey to other parties, or may abandon,  various Rail Corridors, or
portions thereof,  throughout the term of this Agreement,  and that such actions
will  affect  the Rail  Corridor  network  subject  to leasing to Pathnet at any
particular  time. Each Lease shall permit Pathnet to Construct and Operate Fiber
Optic  Facilities  on the specific  Rail  Corridor  premises to which each Lease
applies,  subject to the procedures and terms of each Lease. Each Lease shall be
for a term of 35 years unless the Lease is terminated earlier in accordance with
the terms of each Lease.

            3.    Procedure to Obtain a Lease.

                  Pathnet  may  request a Lease in the form of Exhibit A, to the
extent of BNSF's ownership  interest in the Rail Corridor,  by providing to BNSF
prior  written  notice of its desire to enter into a Lease,  which  notice shall
specify  the end  points of the  particular  BNSF Rail  Corridor  where  Pathnet
desires a Lease.  BNSF shall  grant such  request,  and BNSF and  Pathnet  shall
execute a Lease in the form of  Exhibit A, as soon as  practicable  but no later
than thirty  (30) days after the date BNSF  receives  such notice from  Pathnet,
unless BNSF cannot allow a Lease in the Rail Corridor  because  either:  (i) the
Construction  and Operation of Fiber Optic  Facilities under the Lease in BNSF's
judgment would materially interfere with, or create a safety hazard to BNSF with
respect  to,  BNSF's  existing  or  then  reasonably   foreseeable  future  rail
operations on a segment of the Rail Corridor,  as determined by a BNSF operating
or  engineering  Vice  President  or  Assistant  Vice  President;  or  (ii)  the
Construction  and Operation of Fiber Optic  Facilities under the Lease in BNSF's
judgment  would  materially  interfere with BNSF's  existing or then  reasonably
foreseeable  future plans to market or develop a  particular  parcel of land for
the benefit of a rail  customer or as a real  estate  development  (but not as a
fiber optic venture) on a



                                       -2-
<PAGE>

segment  of the Rail  Corridor,  as  reasonably  determined  by a BNSF  property
management Vice President or Assistant Vice President. Where BNSF cannot allow a
Lease in the Rail  Corridor  for one of the reasons  just set forth,  BNSF shall
cooperate with Pathnet in good faith to seek a solution that will enable Pathnet
to install  its Fiber  Optic  Facilities  on the  requested  portion of the Rail
Corridor  and,  if BNSF is unable to do so, to allow  Pathnet to  Construct  and
Operate  its  Fiber  Optic  Facilities  over  as much of the  Rail  Corridor  as
possible,  consistent  with the terms of (i) and (ii) above,  and, if Pathnet so
desires, BNSF shall execute a Lease with Pathnet over those portions of the Rail
Corridor where the Lease would not violate the terms of (i) or (ii) above.

            4.    Restrictions on BNSF's Right to Grant Future Fiber Optic
                  Rights Along Certain Corridors.

                  Pathnet  acknowledges that the rights to Construct and Operate
Fiber Optic  Facilities to be granted to Pathnet in the Lease are  nonexclusive,
except to the extent set forth in this  Section 4, and that other  parties  have
rights under their existing  agreements with,  and/or  conveyances from, BNSF to
Construct  and Operate Fiber Optic  Facilities  on various BNSF rail  corridors.
Subject to the  existing  rights of other  parties  under  existing  fiber optic
agreements, BNSF agrees as follows:

                  (a) Immediate  Exclusivity  Rights:  Commencing on the date of
this  Agreement,  and  continuing  until  December 31, 2004, for all of the Rail
Corridors  set  forth on  Exhibit  B  attached  hereto  and made a part  hereof,
constituting an aggregate of no more than approximately  4,052 miles ("Exclusive
Corridors"), BNSF shall not grant any rights to any other party to Construct and
Operate any Fiber Optic Facilities on any Exclusive Corridor,  except where: (i)
such Fiber Optic  Facilities  only cross the  Exclusive  Corridor,  and (ii) the
construction  and operation of such Fiber Optic  Facilities  does not materially
disrupt  Pathnet's  ability to utilize the Fiber Optic  Facilities  covered by a
Lease.  This  exclusivity  period  shall  terminate  earlier on all routes where
Commencement  of Construction  (as defined herein) has not occurred,  on either:
(x) the dates  specified in Section 7 hereof if on such date Pathnet has not met
the applicable fiber optic network development  milestone specified in Section 7
with respect to such date; or (y) on one of the dates specified below if:

                      (I) As of  April  30,  2001,  Pathnet  has  not  completed
                  construction,   which  in  this   Section   4(a)   shall  mean
                  installation  of a  conduit  and at least [* * *] fiber  optic
                  fibers in the  conduit,  of at least 800 miles of Fiber  Optic
                  Facilities along the Exclusive Corridors;

                      (II)  As of [* * *], a Liquidity Event (as hereinafter
                  defined) has not occurred;

                      (III) As of April  30,  2002,  Pathnet  has not  completed
                  construction of at least 1,600 miles of Fiber Optic Facilities
                  along the Exclusive Corridors;



                                       -3-
<PAGE>
                      (IV) As of  April  30,  2003,  Pathnet  has not  completed
                  construction of at least 2,400 miles of Fiber Optic Facilities
                  along the Exclusive Corridors;

                      (V) As of  April  30,  2004,  Pathnet  has  not  completed
                  construction of at least 3,200 miles of Fiber Optic Facilities
                  along the Exclusive Corridors; or

                      (VI) As of  April  30,  2005,  Pathnet  has not  completed
                  construction of at least 4,000 miles of Fiber Optic Facilities
                  along the Exclusive Corridors.

                  Termination  of  Pathnet's  exclusivity  rights on all  routes
where  Commencement  of  Construction  has not  then  occurred  will be the sole
consequence  of  Pathnet's  failure  to reach  any  milestone  set forth in this
Section 4(a). In this Agreement, a "Liquidity Event" shall mean the earliest of:
(aa) a Qualified  IPO, as defined in the  Stockholders'  Agreement,  dated on or
about the date hereof, among Pathnet, the current holders of Pathnet's Preferred
Stock, BNSF, CSX Railway Company and Colonial Pipeline Company; or (bb) the date
on which the common stock or any successor  security of Pathnet either is listed
for trading on a national  securities exchange registered under the Exchange Act
of 1934,  as amended  ("Exchange  Act"),  or is traded in an  over-the-  counter
market and quoted in an automated  quotation system of the National  Association
of Securities  Dealers,  Inc.; or (cc) there has been a transaction in which all
stockholders of Pathnet have received  ownership  interests which are listed for
trading on a national  securities exchange registered under the Exchange Act, or
is traded in an  over-the-counter  market and quoted in an  automated  quotation
system of the National Association of Securities Dealers, Inc.

                  (b) Exclusive Right to Negotiate after Commencement of
Construction:

                      (1) Definitions. In this Agreement, the term "Commencement
                    of Construction" shall mean the date of award of the primary
                    construction contract for any segment of a Rail Corridor. In
                    this Agreement,  the term "Restricted  Corridors" shall mean
                    those Rail Corridors set forth on Exhibit C, which is made a
                    part  hereof,  the  initial  version  of which  is  attached
                    hereto, which Exhibit C may be modified by Pathnet from time
                    to time by Pathnet delivering notice of such modification to
                    BNSF;  provided  that  the  aggregate  route  miles  of  the
                    Exclusive Corridors plus the Restricted Corridors during the
                    term of this Agreement shall not exceed  approximately [ * *
                    *] route miles.  In the event that Pathnet revises Exhibit C
                    to include all or any  portion of the  Auburn-Yakiman-Pasko,
                    Washington Rail Corridor or the Ortonville, Minnesota-Terry,
                    Montana Rail  Corridor,  BNSF,  within 30 days following its
                    receipt of notice of such  revision,  shall acquire from its
                    affiliate now owning  certain  property  rights in each Rail
                    Corridor that  affiliate's  rights in the Rail Corridor land
                    (possibly  exclusive of a rail service  easement in the case
                    of the Auburn-Yakima-Pasko rail corridor).



                                       -4-
<PAGE>
                      (2) Exclusive  Right to Negotiate.  Until  Commencement of
                    Construction  occurs on a Rail Corridor,  Pathnet shall have
                    no exclusive  right to  negotiate  and execute a fiber optic
                    agreement  on such  Rail  Corridor  with  any  third  party.
                    Beginning on the date of Commencement of  Construction,  and
                    continuing  for  up  to  five  years   thereafter  for  each
                    Exclusive  Corridor  to the  extent  Pathnet  no longer  has
                    exclusive  rights under 4(a) on such Rail Corridor,  and for
                    up to three years  thereafter for each Restricted  Corridor,
                    but in no event beyond the  termination of the Lease related
                    to such Exclusive Corridor or Restricted  Corridor,  Pathnet
                    shall have an exclusive  right to negotiate  and execute any
                    fiber optic agreement on such Rail Corridor,  except for any
                    agreement related to Fiber Optic Facilities which only cross
                    the  Restricted  Corridor or Exclusive  Corridor,  where the
                    construction  and  operation of such Fiber Optic  Facilities
                    does not materially disrupt Pathnet's ability to utilize the
                    Fiber Optic  Facilities  covered by a Lease;  provided  that
                    this  exclusive  right to  negotiate  and  execute any fiber
                    optic  agreement with respect to any particular  party shall
                    continue  for a period of [* * *] (and BNSF  thereafter  may
                    negotiate a fiber optic  agreement with such party if by the
                    end of such [* * *] Pathnet does not have an executed  fiber
                    optic agreement with such party).  The periods for exclusive
                    rights to  negotiate as specified in this Section 4(b) shall
                    terminate  earlier,  as  to  all  Rail  Corridors  and  Rail
                    Corridor  segments on which  Pathnet has not yet reached the
                    stage  Commencement of  Construction if Pathnet either:  (i)
                    does not meet the applicable development milestone specified
                    in Section 7 hereof,  (ii) as of [* * *], a Liquidity  Event
                    has not  occurred,  or (iii)  has not met the  schedule  for
                    constructing   Fiber  Optic   Facilities   along   Exclusive
                    Corridors,  as  set  forth  in  Section  4(a)  hereof  .  In
                    addition, Pathnet's exclusive right to negotiate and execute
                    any  fiber  optic  agreement  shall  terminate  on any  Rail
                    Corridor  on the date  that  Pathnet's  Lease  on such  Rail
                    Corridor is terminated  pursuant to the terms of such Lease.
                    In  addition,  at any time prior to the end of the period in
                    which  Pathnet  has an  exclusive  right  to  negotiate  and
                    execute  any  fiber  optic   agreement  on  any   Restricted
                    Corridor,  BNSF may not enter into any fiber optic agreement
                    with another party with respect to such Restricted  Corridor
                    except  where such  agreement  requires  such other party to
                    reach   Commencement  of  Construction  on  such  Restricted
                    Corridor  within one year  following the  effective  date of
                    such agreement.

            5.    Limitation on Pathnet's Right to Lease.

                  If  Pathnet  enters  into a Lease  with  BNSF,  and such Lease
subsequently is terminated for any reason  specified in such Lease, for a period
of three (3) years  following  the date of any such  termination,  Pathnet shall
have no right to enter  into a Lease on any  portion  of the BNSF Rail  Corridor
that was subject to such Lease.



                                       -5-
<PAGE>

            6.    Contribution to Pathnet.

                  This  Agreement  is  being  contributed  by  BNSF  to  Pathnet
pursuant to the terms of the Contribution Agreement.

            7.    Fiber Optic Network Development Schedule.

                  Pathnet  shall  develop  a  Fiber  Optic  Facilities   network
throughout the United States,  utilizing  BNSF's rail corridors and longitudinal
corridors of one or more other parties in the United States,  in accordance with
the following schedule of fiber optic network development milestones:

                        (a) By  June  30,  2001,  Pathnet  must  have  completed
                        construction   of,  or  have   acquired,   Fiber   Optic
                        Facilities  over at  least  3,000  Route  Miles,  in the
                        aggregate.  As used in this  Section,  each "Route Mile"
                        shall consist of either one mile of at least [* * *], or
                        one mile of [* * *] plus [* * *]

                        (b) By  June  30,  2002,  Pathnet  must  have  completed
                        construction   of,  or  have   acquired,   Fiber   Optic
                        Facilities  over at  least  6,000  Route  Miles,  in the
                        aggregate.

                        (c) By  June  30,  2003,  Pathnet  must  have  completed
                        construction   of,  or  have   acquired,   Fiber   Optic
                        Facilities  over at  least  9,500  Route  Miles,  in the
                        aggregate.

                        (d) By  June  30,  2004,  Pathnet  must  have  completed
                        construction   of,  or  have   acquired,   Fiber   Optic
                        Facilities  over at least  12,000  Route  Miles,  in the
                        aggregate.

                        (e) By  June  30,  2005,  Pathnet  must  have  completed
                        construction   of,  or  have   acquired,   Fiber   Optic
                        Facilities  over at least  12,500  Route  Miles,  in the
                        aggregate.

Termination of Pathnet's  exclusivity rights on all routes where Commencement of
Construction  has not then  occurred will be the sole  consequence  of Pathnet's
failure to reach any milestone set forth in this Section 7.




                                       -6-
<PAGE>



            8.    Reporting Relative to Fiber Optic Network Development
                  Schedule.

                  Forty days before each deadline specified in Section 7 hereof,
Pathnet shall deliver to BNSF a report  reasonably  satisfactory to BNSF showing
Pathnet's  progress,  as  of  the  date  of  the  report,  toward  meeting  each
appropriate  level of development  specified in Section 7, and its plans to meet
or exceed each such level by the appropriate deadline. Seven (7) days after each
deadline  specified  in Section 7,  Pathnet  shall  deliver to BNSF a  certified
report showing  whether  Pathnet has met or exceeded each  appropriate  level of
development  specified  in that  Section.  BNSF  shall  have the  right to audit
Pathnet's  records in order to verify the  contents of each  report  required by
this Section 8.

            9.    Time is of the Essence; Post-Termination Liability.

                  Time  is of the  essence  in  performing  this  Agreement.  No
termination  of this  Agreement  shall  release  Pathnet  from any  liability or
obligation of Pathnet under the terms of this  Agreement,  resulting from events
happening prior to the date of termination.

            10.   Compliance with Laws.

                  In exercising  any and all of its right under this  Agreement,
Pathnet shall comply with all applicable laws, regulations,  ordinances,  rules,
decisions and orders of any court or governmental  body with  jurisdiction,  and
shall  have  the  sole   responsibility  for  all  costs  associated  with  such
compliance.  Pathnet,  at its sole cost, shall secure and maintain in effect all
federal,  state and local permits licenses and/or zoning  approvals  required to
Construct and Operate the Fiber Optic Facilities,  and shall satisfy any and all
conditions that must be met in order to obtain any required  permit,  license or
zoning approval.

            11.   Limitations on BNSF's Ownership Rights.

                  Pathnet   acknowledges   that  one  or  more  other   parties,
including, but not limited to, various native American nations, may have, or may
claim to have,  ownership  rights in certain  segments of certain of BNSF's rail
corridors,  and may claim that Pathnet also must obtain rights from it (or them)
in order to occupy, or access, the Premises, as defined in each Lease, and that,
in some  cases,  such  claims may be valid.  Pathnet  acknowledges  that  BNSF's
ownership  interest  in many of its Rail  Corridors  is a  determinable  fee,  a
railroad  right of way or a rail service  easement,  which shall  terminate when
BNSF either:  (i) ceases to use those Rail Corridors for railroad  purposes;  or
(ii) uses such Rail Corridors for purposes found to be inconsistent  with use of
the corridors for railroad purposes,  and that in such circumstances,  Pathnet's
right to Lease any such Rail Corridor, or its rights under any Lease of any such
Rail Corridor,  may be subject to  termination as of the date the  circumstances
set forth in either (i) or (ii), above, first arise (unless Pathnet improves the
quality of title to the Lease  property  by  obtaining a patent or deed from the
federal government,  if appropriate,  or acquiring additional property interests
from third parties).  Pathnet also acknowledges that BNSF's ownership rights may
terminate for other reasons, such



                                       -7-
<PAGE>
as termination  of franchise  rights,  and that certain  segments of BNSF's Rail
Corridors  consist only of a trackage  rights  license to BNSF to enable BNSF to
provide rail service,  or shared ownership with other  railroads,  and that BNSF
may not have rights to include those  segments in any Lease to Pathnet.  Pathnet
further  acknowledges  that  Pathnet's  rights to enter into a Lease on any BNSF
Rail  Corridor,  and its rights under any Lease of any BNSF Rail  Corridor,  are
subject and subordinate to all outstanding and/or future rights and encumbrances
on BNSF's Rail Corridors  (including liens,  security  interests and mortgages),
and any and all easements,  other leases, licenses,  permits or agreements which
now or in the future relate to BNSF's Rail Corridors,  except BNSF in the future
shall not place any  encumbrance  upon any BNSF Rail  Corridor then subject to a
Lease to  Pathnet,  or enter  into  any  easement,  lease,  license,  permit  or
agreement,  which would  materially  disrupt  Pathnet's  ability to exercise its
rights under this Agreement or to utilize the Fiber Optic Facilities  covered by
a Lease (and Pathnet  acknowledges that its ability to exercise its rights under
this Agreement or to utilize such Fiber Optic Facilities would not be materially
disrupted if either:  (x) Pathnet is relocated  to another  location  within the
applicable  BNSF Rail Corridor in accordance with the terms of Section 14 of the
applicable  Lease,  or could be located  elsewhere in the Rail Corridor;  or (y)
BNSF preserves fiber optic rights and makes those rights available to Pathnet at
no charge  payable  by Pathnet  to the  holder of the land  interest  where such
rights are located and changes following any conveyance by BNSF of its ownership
interest in such a parcel have not caused a significant  physical  limitation on
constructing Fiber Optic Facilities through such parcel (and Pathnet agrees that
any cost of enforcing such rights shall be the responsibility of Pathnet).  BNSF
therefore  conveys to  Pathnet  no more  right,  title or  interest  in any Rail
Corridor  than BNSF holds in such Rail Corridor at the time of  conveyance,  and
Pathnet hereby releases BNSF from any and all liability,  cost, loss,  damage or
expense in connection with any claims that BNSF lacked sufficient legal title to
convey the rights  described  herein.  Pathnet shall have the right, at its sole
cost and  expense,  to acquire or attempt  to acquire  from other  parties  such
rights in BNSF Rail Corridors that Pathnet deems necessary or appropriate.

            12.   Confidentiality.

                  The parties hereto shall keep  confidential  all terms of this
Agreement,  except to the extent that  disclosure  thereof is required by law or
agreed by the parties in writing.  In the event  either party hereto is required
to disclose any terms of this  agreement  pursuant to  applicable  law, at least
three days prior to  disclosing  the same (or such shorter  period  permitted by
law),  such party  shall  notify the other  party  hereto in writing and provide
copies of the terms that the party  intends to  disclose.  The  language  of the
press  release  announcing  this deal shall be mutually  agreed upon between the
parties hereto.

            13.   No Assignment.

                  Neither  this  Agreement,  nor any of the rights to lease that
are  granted to Pathnet by the terms of this  Agreement,  shall be  assigned  by
Pathnet without BNSF's prior written  consent,  which may be granted or withheld
in BNSF's sole discretion.  BNSF acknowledges  that Pathnet,  without consent of
BNSF may sublease to one or more parties the right to use other


                                       -8-
<PAGE>


Fiber Optic  Facilities  under a Lease,  may sell to one or more other parties a
partial  ownership in such Fiber Optic  Facilities,  may sublease or assign this
Agreement or any Lease to a subsidiary,  affiliate or parent company  controlled
by, under common control with, or  controlling,  either  indirectly or directly,
Pathnet,  but only where,  and to the  extent,  that such  transaction  does not
violate the terms of the  Contribution  Agreement,  or, for  financing  purposes
only,  Pathnet may assign this  Agreement to Lucent  Technologies,  Inc.  and/or
Nortel Networks, Inc., or an affiliate of either company, or to some other third
party following the written  concurrence of BNSF which shall not be unreasonably
withheld or delayed, or may assign any Lease to a third party,  provided that in
any such case Pathnet shall remain fully responsible to BNSF for compliance with
all terms of this Agreement and the Lease. (In the foregoing  sentence the terms
"control",  "controlled", and "controlling" shall mean ownership of more than 50
percent of the equity  interest in a company.)  Nothing  herein  shall  prohibit
Pathnet:  (i)  from  involving  contractors,   or  strategic  or  co-development
partners,  in Construction and Operation of the Fiber Optic Facilities,  on such
terms as Pathnet may  determine in its sole  discretion,  provided that all such
activities  are conducted in accordance  with the terms of this Lease,  and that
Pathnet  remains  fully  liable  for all  obligations  hereunder;  and (ii) from
granting  liens or other  security  interests in the Fiber Optic  Facilities  or
Pathnet's  rights under this Lease in connection  with  financing or investments
made available to Pathnet, which agreements may permit Pathnet's lenders to take
possession,  sell,  assign or  otherwise  transfer  the Fiber Optic  Facilities,
including the right to operate,  or permit a third-party  to operate,  the Fiber
Optic  Facilities,  provided that any party taking possession of the Fiber Optic
Facilities  shall be  subject  to all  terms of the  Lease,  and that  continued
operation  of the Fiber  Optic  Facilities  shall be subject to all terms of the
Lease.

            14.   Limitation on Damages for Breach of this Agreement.

                  Damages  that may be  recovered  for breach of this  Agreement
shall not include any indirect,  consequential,  special or punitive damages, or
lost  profits,  or the cost of Pathnet  building  Fiber Optic  Facilities on any
alternative route.

            15.   Taxes and Other Charges.

                  (a)      Pathnet shall pay, and shall indemnify BNSF against
                           the liability for, any and all taxes, levies,
                           excises, charges and assessments (including any
                           penalties and interest related thereto)
                           (collectively, "Taxes") attributable to the
                           execution, delivery, recording or filing of this
                           Agreement, including without limitation any ad
                           valorem taxes assessed against the properties of BNSF
                           to the extent such ad valorem taxes are attributable
                           to Pathnet's rights hereunder, but only to the extent
                           that the ad valorem taxes attributable to the value
                           of Pathnet's rights have increased due to assessments
                           levied after the date hereof.
                  (b)      In the case of amounts described in Section 15(a) to
                           be paid by Pathnet, BNSF shall determine the amount
                           of such Taxes to be paid by Pathnet by reference to
                           information provided by the relevant taxing authority
                           that demonstrates or establishes the increase in such
                           Taxes after the date hereof. If the information
                           provided by the relevant taxing authority
                           demonstrates or establishes that Taxes are
                           attributable to fiber optic development value, but
                           the information does not demonstrate or establish the
                           amount of the Taxes that are so




                                       -9-
<PAGE>




               (c)
                  attributable,  such amount shall be determined by reference to
                  a formula that is consistently  applied and that allocates any
                  such  Taxes  among all of  BNSF's  Rail  Corridors  (including
                  similar  agreements)  subject to such  Taxes in a manner  that
                  reasonably  reflects  both the basis  upon which the Taxes are
                  imposed and the relative  proportion of such Rail Corridors in
                  respect of which  Pathnet has been granted  rights  hereunder.
                  The amount of Taxes  attributable  to fiber optic  development
                  value shall be fairly allocated between Pathnet and BNSF based
                  upon the relative value of Pathnet's  rights and the rights of
                  others to whom BNSF has  granted,  or in the future may grant,
                  fiber optic rights with respect to the same  property.  In all
                  cases, BNSF promptly shall provide to Pathnet information that
                  establishes  the manner in which any such Taxes were allocated
                  and  the  basis  for   establishing   that  such  amounts  are
                  attributable to the execution of this  Agreement.  The parties
                  shall resolve any dispute  regarding the liability for payment
                  of Taxes  hereunder  pursuant  to the dispute  resolution  and
                  arbitration procedures set forth in Section 21 of the Lease.

                  (d)    Notwithstanding  the  foregoing,  Pathnet  shall not be
                         responsible  for any  Taxes  for  which it would not be
                         responsible pursuant to the provisions of Section 24(d)
                         or (e) of the form of Lease attached  hereto or for any
                         Taxes on Rail Corridors for periods in respect of which
                         Pathnet no longer has rights hereunder.

                  (e)    BNSF agrees to reasonably cooperate with Pathnet in the
                         refund, rebate,  reduction,  abatement,  mitigation and
                         contest of any Taxes for which  Pathnet is obligated to
                         pay hereunder.

            16.   Notices.

                  Unless  otherwise  provided  herein,  all  notices  and  other
communications  required by or concerning this Agreement shall be in writing and
shall be deemed to have been duly given when delivered in person, or on the next
business day when sent by a nationally  recognized  overnight courier, or on the
second  succeeding  business day when sent by  registered  or  certified  United
States Mail (postage  prepaid,  return receipt  requested),  or, if postal claim
notice  is  given , on the  date of its  return  marked  "unclaimed"  (provided,
however, that upon receipt of a returned notice marked "unclaimed",  the sending
party hereto shall make reasonable  effort to contact and notify the other party
hereto by telephone) and each respective party hereto at the following addresses
(or at such  other  address  for a party  hereto as shall be  specified  by like
notice):

                  (1)      if to Pathnet:

                           Pathnet, Inc.
                             11720 Sunrise Valley Drive
                           Reston, Virginia 20191
                              Attn: General Counsel

                                      -10-
<PAGE>

                  (2)      if to BNSF:

                           Assistant Vice President, Telecommunications
                           The Burlington Northern and Santa Fe Railway Company
                           2600 Lou Menk Drive
                          Forth Worth, Texas 76131-2830

                           and to:

                           Vice President - Law
                           The Burlington Northern and Santa Fe Railway Company
                           2500 Lou Menk Drive, AOB-3
                          Fort Worth, Texas 76131-2830

            18.   Brokers and Agents.

                  BNSF and  Pathnet  represent  and  warrant  to each other that
neither  has  employed  any  broker,  agent or  finder in  connection  with this
Agreement or the Purchase  Agreement,  and each  indemnifies  and agrees to hold
harmless the other from and against any commission or fee claimed by any broker,
agent or finder in connection with this transaction.


            19.   Force Majeure.

                  Except  as may be  elsewhere  specifically  provided  in  this
Agreement,  any  failure or delay in the  performance  by a party  hereto of its
obligations  hereunder  shall not  constitute a breach of this Agreement if such
failure or delay results from causes beyond that party's control,  including but
not limited to acts of God,  governmental  action  (whether in its  sovereign or
contractual  capacity),  fire, flood, or other catastrophe,  national emergency,
insurrection,  riot, and war. The phrase "beyond that party's control" shall not
include  any  failure  to reach  agreement  with a party  with whom  Pathnet  is
negotiating  pursuant to the  exclusive  right to negotiate  provided in Section
4(b).

            20.   Severability.

                  If any provision of this Agreement or the application thereof,
shall be held  invalid,  illegal  or  unenforceable  in  whole  or in part,  the
remainder of this Agreement and the  application  thereof shall not be affected,
and shall be  enforceable  to the full extent  permitted by law, and the portion
hereof found to be invalid shall be enforced to the fullest extent  permitted by
law,  and, if  possible,  shall be reformed to carry out as much as possible the
intent of the parties as expressed herein.



                                      -11-
<PAGE>


            21.   Amendment.

                  This  Agreement  may be amended  only by a written  instrument
executed  by both  parties  hereto.  No  failure  to  exercise  and no  delay in
exercising,  on the  part of a party  hereto,  any  right,  power  or  privilege
hereunder shall operate as a waiver of any other provision of this Agreement, or
as a waiver of that right,  power or  privilege  either  before,  or after,  the
period of waiver.

            22.   Entire Agreement.

                  This Agreement and all Exhibits  attached hereto,  constitutes
the entire  agreement of the parties hereto with respect to the subject  matters
hereof,  and  supersede  any  and all  prior  negotiations,  understandings  and
agreements, whether oral or written, with respect hereto.

            23.   Applicable Law.

                  This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Texas.  Venue for any legal action to interpret or
enforce this Agreement shall lie exclusively in the United States District Court
for the Northern  District of Texas,  or if  jurisdiction  cannot be obtained in
federal  court,  then venue shall be in a Texas  state court in Tarrant  County,
Texas.

            24.   Counterparts.

                  This  Agreement  may be executed in one or more  counterparts,
each of which  shall be  deemed an  original,  but all of which  together  shall
constitute but one and the same instrument.


            IN WITNESS WHEREOF,  authorized  representatives of BNSF and Pathnet
have executed this Agreement as of the date first set forth herein.


THE BURLINGTON NORTHERN AND                     PATHNET TELECOMMUNICATIONS,
SANTA FE RAILWAY COMPANY                        INC.

By:   /s/ illegible                              By: /s/ W.R. Smedberg V
     ------------------------------                   --------------------------
     Name:                                            Name:
           ------------------------                         --------------------
Title:                                          Title:
        ---------------------------                   --------------------------



                                      -12-
<PAGE>


                                    EXHIBIT A

                                  FORM OF LEASE

      Portions of this exhibit have been omitted and filed separately with
           the Securities and Exchange Commission. Those portions are
                             designated "[ * * * ]."

                                                                       EXHIBIT B


                            FORM OF FIBER OPTIC LEASE


            THIS  FIBER  OPTIC  LEASE  ("Lease")  is made as of this ____ day of
______________,  200__  between  Pathnet  Telecommunications,  Inc.,  a Delaware
corporation  ("Pathnet")  and The  Burlington  Northern  and  Santa  Fe  Railway
Company,  a Delaware  corporation  ("BNSF").  This Lease is being  entered  into
pursuant to the terms of that certain fiber optic access agreement  between BNSF
and Pathnet dated November __, 1999 ("Fiber Optic Access Agreement"), which sets
forth the terms upon which BNSF granted to Pathnet the right to enter into fiber
optic leases,  on the terms of this Lease,  on specified  rail  corridors in the
BNSF rail transportation network and subject to all limitations on the ownership
interest of BNSF, to Construct and Operate  Fiber Optic  Facilities  (as defined
below).

            WHEREAS,  BNSF has certain  ownership  interests in a rail  corridor
consisting    of   ___   route    miles    between    ___________________    and
______________________ ("Rail Corridor");

            WHEREAS,  Pathnet  desires  to lease  from  BNSF,  on the  terms and
conditions  set forth  herein,  a  portion  of the Rail  Corridor,  in order for
Pathnet to construct, install, operate, maintain, replace,  reconstruct,  remove
and/or   relocate   (collectively,   "Construct  and  Operate")  a  fiber  optic
telecommunications  transmission  system and certain  appurtenant  equipment and
structures (collectively, "Fiber Optic Facilities"); and

            WHEREAS,  BNSF is willing,  on the terms and conditions set forth in
this Lease,  to lease a portion of the Rail  Corridor  to Pathnet,  for the sole
purpose  of  allowing  Pathnet,  subject  to all  limitations  on the  ownership
interest of BNSF, to Construct  and Operate  Fiber Optic  Facilities on the Rail
Corridor.

            NOW THEREFORE, Pathnet and BNSF agree as follows:

            1. Lease  Rights.  Pursuant to the terms of this Lease and the Fiber
Optic Access Agreement,  Pathnet shall have the right to enter upon a portion of
the Rail Corridor,  which portion  generally shall be a three foot wide strip of
land, or such larger  portion  required to Construct and Operate the Fiber Optic
Facilities,  as  specified  in the Final  Construction  Plans (as defined  later
herein) but at each repeater  station or other required  Fiber Optic  Facilities
structure  occupying  more land,  the portion  shall  extend one foot beyond the
perimeter of the  structure or equipment,  or, where a perimeter  fence is built
around the structure or  equipment,  one foot beyond the  perimeter  fence,  the
specific  portion of the Rail Corridor leased  ("Premises")  being identified in
Exhibit A attached  hereto and made a part hereof.  All structures may be fenced
by Pathnet,  at its sole cost and  expense,  and may be multiple  stories to the
extent  approved by BNSF,  provided that the height and other  dimensions of any
such structure do not interfere with railroad operations or clearance, or create
a safety hazard. Any such structures may exceed 3,500



                                        1
<PAGE>

square  feet only:  (i)  subject to space  availability;  (ii)  following  prior
written approval of BNSF, not to be unreasonably  withheld; and (iii) where such
structures are not buildings where people  regularly  report to work.  Pathnet's
right to enter the Premises shall  commence on the ___ day of  ________________,
200__,  and shall be for the sole  purpose of  allowing  Pathnet,  or any of its
permitted assignees,  sublessees of capacity, agents, contractors,  strategic or
co-development  partners,  customers  or  invitees,  or any of  their  employees
(collectively,   "Pathnet   Parties")  to  Construct  and  Operate  Fiber  Optic
Facilities on the Premises, subject to BNSF's rights as set forth herein and all
contract and/or property rights of others in the Premises.  Pathnet,  and any of
the Pathnet Parties,  also shall have the right to cross other property in which
BNSF has a  sufficient  ownership  interest as required to access the  Premises,
subject to BNSF's  rights as set forth herein and all contract  and/or  property
rights of others in the  Premises,  so long as such  access  shall not cross any
active  railroad  track,  or come within 25 feet of such track,  without  BNSF's
prior written consent,  which will not be unreasonably  withheld or delayed. Any
of the Pathnet  Parties  entering  onto the Rail  Corridor must first execute an
agreement with BNSF in the form of Exhibit "C-1" attached hereto and made a part
hereof, by which such party agrees to comply with BNSF's Contractor Requirements
set forth as Exhibit "C"  attached  hereto and made a part  hereof (and  Pathnet
acknowledges  that any such  Pathnet  Party's  execution  of the  Exhibit  "C-1"
agreement shall not relieve Pathnet of its full responsibility hereunder for any
actions,  omissions or the  presence of such  Pathnet  Party on or near the Rail
Corridor).  Pathnet may install as much fiber optic  capacity  (which term shall
include  conduits,  whether installed empty or with fiber) on the Premises as it
determines to be  appropriate,  and may add further fiber optic capacity  during
the term of this Lease.  Pathnet's  rights under this Lease are granted  without
covenant of title or quiet enjoyment and Pathnet  acknowledges  that one or more
other  parties  may  have,  or may claim to have,  ownership  rights in the Rail
Corridor,  and may claim that Pathnet also must obtain  rights from it (or them)
in order to occupy or access the Premises,  and that, in some cases, such claims
may be valid.  Pathnet  acknowledges  that  segments  of the Rail  Corridor  may
consist  only of a trackage  rights  licensed  to BNSF to enable BNSF to provide
rail service,  or shared ownership with other  railroads,  and that BNSF may not
have rights to include  these  segments  in any Lease to Pathnet.  BNSF will use
reasonable  efforts  to make  available  to  Pathnet  all  documents  reasonably
requested  by Pathnet  that could be located in a  reasonable  search  (and,  at
BNSF's  option,  BNSF can require that Pathnet or  Pathnet's  agent  conduct the
search,  at Pathnet's  cost),  which  documents  concern BNSF's rights,  and the
rights of others,  which in BNSF's  judgment  affects the Premises and Pathnet's
rights under this Lease or which Pathnet may identify which  reasonably  relates
to its rights  under this  Lease.  Pathnet  acknowledges  that BNSF shall not be
liable for any nondisclosure of any document other than nondisclosure  resulting
from  gross  negligence  or  wilfull  misconduct  of BNSF.  Pathnet  shall  keep
confidential  all confidential and proprietary data contained in these documents
and shall not use it for any purposes other than as set forth herein. BNSF shall
have the right,  without  causing  undue  delay,  to review  documents  prior to
permitting  Pathnet  or its  agent to  review  those  documents,  and to  redact
confidential   and   proprietary    information    contained   therein.    Where
confidentiality  provisions  apply to contracts  requested by Pathnet under this
Section 1, BNSF shall  describe for Pathnet the  restrictions  and  interference
with  Pathnet's  rights  that such  contracts  permit,  and or the  fiber  optic
capacity that such  contracts  permit to be built in the Rail  Corridor,  to the
extent that BNSF  determines that it can do so consistent with the terms of each
applicable   confidentiality   provision.  If  Pathnet  determines  that  BNSF's
description in such


                                        2
<PAGE>

circumstances is  insufficient,  Pathnet shall so inform BNSF and BNSF shall use
good faith  efforts to obtain  promptly  from the other party to the contract at
issue a waiver of the  confidentiality  provision.  Pathnet's rights are subject
and subordinate to all outstanding  rights and encumbrances on the Rail Corridor
(including,  but not limited to, BNSF's  mortgages) which BNSF has placed, or in
the future will place,  on the Rail Corridor,  and any and all easements,  other
leases, licenses, permits or agreements which now or in the future relate to the
Rail  Corridor,  except that BNSF in the future shall not place any  encumbrance
upon the  Premises,  or enter  into any  easement,  lease,  license,  permit  or
agreement  covering any portion of the Premises,  which would materially disrupt
Pathnet's  ability to utilize the Fiber Optic  Facilities  under this Lease (and
Pathnet  acknowledges  that its ability to utilize  such Fiber Optic  Facilities
would not be  materially  disrupted if Pathnet is relocated to another  location
within the Rail Corridor in accordance  with the terms of Section 14 hereof,  or
BNSF makes available to Pathnet the fiber optic rights that BNSF has reserved at
no charge  payable  by Pathnet  to the  holder of the land  interest  where such
rights are located  (and Pathnet  agrees that any cost of enforcing  such rights
shall be the  responsibility  of Pathnet).  Pathnet accepts the condition of the
Premises  "AS IS, WHERE IS" and "WITH ALL FAULTS".  BNSF  DISCLAIMS  ANY AND ALL
WARRANTIES,  EXPRESS OR IMPLIED,  THAT ARE NOT  SPECIFICALLY SET FORTH HEREIN IN
SECTION 22 HEREOF.

            2.  Limitations on Lease Rights.  Pathnet's  rights under this Lease
also shall be subject and subordinate to the prior and continuing rights: (i) of
BNSF  (and/or any other party with rights from BNSF) to use and  maintain all or
any portion of its Rail Corridor in operating,  maintaining,  reconstructing  or
relocating railroad tracks, signals, communications, electric lines or any other
improvements,   equipment  or  facilities  related  to  providing  rail  service
(collectively,  "Rail Facilities");  (ii) of BNSF to use, and to allow others to
use, all and any portion of the Rail  Corridor  for any purpose  (subject to the
terms of  Section  4 of the  Fiber  Optic  Access  Agreement),  which  would not
materially disrupt Pathnet's ability to utilize the Fiber Optic Facilities under
this  Lease;  (iii) of BNSF to market  and/or  develop all or any portion of the
Rail  Corridor  or  other  BNSF  property  to  rail  transportation   customers,
utilities,  municipalities  and other  third  parties  except as  restricted  by
Section 4 of the Fiber Optic Access Agreement; and (iv) of BNSF to convey to any
party all or any portion of the Rail Corridor, any improvements owned by BNSF on
its Rail Corridor,  and any air rights above,  or subsurface  rights below,  the
surface of the Rail Corridor,  except that any such conveyance by BNSF after the
date of this Lease shall be subject to this Lease,  to the extent  permitted  by
applicable laws and agreements entered into prior to the date of this Lease. The
provisions  of this  paragraph  shall be subject to the  provisions of the Fiber
Optic Access Agreement.

            3. Railroad  Control.  BNSF (and/or any other party with rights from
BNSF) shall have full  control at all times over the  operation  of its railroad
and all Rail Facilities in the Rail Corridor.  Pathnet's rights under this Lease
do not authorize Pathnet, or any of the Pathnet Parties, to interfere in any way
with any aspect of BNSF's (and/or such other party's) rail  operations,  or with
any Rail Facilities,  on or near the Rail Corridor, or BNSF's (and/or such other
party) ability to maintain,  reconstruct  or relocate any Rail  Facilities on or
near the Rail Corridor.  Pathnet understands that various activities of BNSF, or
parties with rights  through  BNSF,  could have the  potential  of  interrupting
service provided by Pathnet's Fiber Optic Facilities. BNSF



                                        3
<PAGE>

understands that  uninterrupted  service via Pathnet's Fiber Optic Facilities is
of critical  importance  to Pathnet.  Where BNSF knows about  future  activities
which,  in BNSF's  opinion,  would have a reasonable  potential of  interrupting
service via Pathnet's Fiber Optic Facilities or otherwise materially interfering
with the  Construction and Operation of the Fiber Optic  Facilities,  BNSF shall
provide  notice  thereof to Pathnet as far in advance as is practical  under the
circumstances,  and shall  cooperate  with  Pathnet to attempt to avoid any such
service interruption.  Any failure by BNSF to provide such notice or cooperation
shall not subject BNSF to any liability,  costs,  expenses,  damages,  losses or
claims to Pathnet or any of the Pathnet Parties, except where the failure is due
to the gross negligence or willful misconduct of BNSF.

            4. Fiber Optics Rights are Nonexclusive. The fiber optics rights
granted to Pathnet are nonexclusive, except to the extent set forth in Section 4
of the Fiber Optic Access Agreement.

            5. Term of Lease. The term of this Lease shall be for 35 years years
from the date set forth in Section 1,  except  this  Lease  shall be  terminated
earlier,  if any of the  following  circumstances  occur,  on the specific  date
related to those circumstances, as follows:

               (a)      If Pathnet fails to deliver Proposed  Construction Plans
                        (as defined herein) within one hundred twenty (120) days
                        after the date of this Lease,  or such longer  period as
                        may  be  reasonably  necessary  to  cure  such  failure,
                        provided  that  Pathnet  already  has begun to cure such
                        failure,   and   continues   diligently  to  cure  until
                        completion;

               (b)      If Pathnet fails to reach Commencement of Construction
                        (which is defined herein as the date of award of the
                        primary construction contract for the segment of the
                        Rail Corridor covered by the Proposed Construction
                        Plans), within either: (i) sixty (60) days from the date
                        that the Proposed Construction Plans become Final
                        Construction Plans for that segment of the Rail
                        Corridor, or such longer period as may be reasonably
                        necessary to cure such failure, provided that Pathnet
                        already has begun to cure such failure, and continues
                        diligently to cure until completion; or (ii) thirty (30)
                        days from a later date agreed to in writing by BNSF;

               (c)      Upon Pathnet's submission of the Proposed Construction
                        Plans, Pathnet also will submit to BNSF a construction
                        schedule ("Construction Schedule") for BNSF's approval,
                        such approval not to be unreasonably withheld. Pathnet
                        acknowledges that BNSF desires that construction be
                        completed as promptly as possible and will take this
                        into account in preparing the Construction Schedule. The
                        Construction Schedule shall contemplate completion of
                        construction of Fiber Optic Facilities on the segment of
                        the Rail Corridor covered by the Proposed Construction
                        Plans as promptly after BNSF's final approval of the
                        Proposed Construction Plans as is commercially feasible,
                        taking into account issues of weather and season, and
                        time to complete title due diligence or respond as



                                        4
<PAGE>

                        reasonably  required to any title  problems  that likely
                        would materially  affect Pathnet's  ability to Construct
                        and Operate the Fiber Optic  Facilities,  and to acquire
                        any necessary  construction and operating permits.  Upon
                        approval  of  the   Proposed   Construction   Plans  and
                        Construction Schedule,  Pathnet will construct the Fiber
                        Optic  Facilities  in accordance  with the  Construction
                        Schedule  and  otherwise  with  all  promptness  and due
                        diligence, it being understood that modifications in the
                        Construction  Schedule  may be  required  due to  issues
                        arising  during  construction.   If  at  any  time  BNSF
                        believes  that Pathnet has failed to construct the Fiber
                        Optic  Facilities as promptly as commercially  feasibly,
                        subject to Pathnet's  right to suspend  construction  as
                        provided in this  Subsection,  BNSF may provide  Pathnet
                        with  written  notice of this fact.  If Pathnet does not
                        cure  such  failure   within   thirty  (30)  days  after
                        receiving such written notice,  then upon written notice
                        to  Pathnet,  BNSF may  terminate  the Lease,  effective
                        immediately.  Notwithstanding the foregoing, Pathnet may
                        suspend  construction  for up to  two  (2)  years,  upon
                        receiving   BNSF's   written   approval,   not   to   be
                        unreasonably   withheld,  if  market  considerations  or
                        financial  issues warrant such a suspension.  During any
                        such suspension,  Pathnet's exclusive right to negotiate
                        fiber  optic   agreements   with  respect  to  the  Rail
                        Corridor,  as set forth in Section  4(b)(2) of the Fiber
                        Optic Access Agreement, also shall be suspended.

               (d)      If Pathnet  fails to provide  the  capacity  required by
                        Section  8  hereof,  and such  failure  continues  for a
                        period  of  thirty  (30)  days  after  Pathnet  receives
                        written  notice of such failure,  or such longer time as
                        may  be  reasonably  necessary,  provided  that  Pathnet
                        commences a cure within  thirty (30) days and  continues
                        diligently to cure until such cure is completed.

               (e)      If BNSF has required that Pathnet  suspend  construction
                        activities  on the  Premises  for  Pathnet's  failure to
                        comply with any BNSF safety requirements,  or on account
                        of Pathnet's interference with BNSF's rail operations or
                        maintenance  activities,  and  within  twenty  four (24)
                        hours after written notice requiring suspension, Pathnet
                        has not suspended such activities.

            6. Effect of Termination of Lease.  Immediately  upon termination of
this Lease, or if Pathnet  abandons any Fiber Optic  Facilities under this Lease
for a period of three years (which term shall mean the failure either to have in
use or to dedicate  commercially  reasonable  marketing efforts to sell conduit,
dark fibers or capacity  on the  Premises),  Pathnet  shall  relinquish  to BNSF
possession of the Premises,  provided  that,  for one hundred  eighty (180) days
following  such date Pathnet shall have the  obligation  to, and may continue to
enter the  Premises  for,  the sole  purposes  of: (i) removing all above ground
Fiber Optic  Facilities,  (ii) removing  below ground fiber Optic  Facilities as
desired  by Pathnet or to the extent  reasonably  requested  by BNSF,  and (iii)
restoring  the  Premises  substantially  to their  condition on the date of this
Lease,  reasonable wear and tear and casualty excepted,  or as approved by BNSF.
Failure by Pathnet to



                                        5
<PAGE>

comply with the foregoing  sentence by one hundred  eighty (180) days  following
the date of  termination  shall entitle BNSF to treat all remaining  Fiber Optic
Facilities as abandoned, and as the property of BNSF.

            7.  BNSF's  Right to  Suspend  Pathnet  Construction  and  Operating
Activities.  In the event that  Pathnet or a Pathnet  Party fails to comply with
BNSF safety or operational regulations, or interferes or is reasonably likely to
interfere with BNSF rail operations,  BNSF may require that Pathnet  immediately
suspend all construction  and/or operating  activities on the Rail Corridor.  In
such  event,  BNSF  shall  make  a  good  faith  effort  to  make  available  by
teleconference to discuss with Pathnet,  within four (4) hours after suspension,
an  individual  with  sufficient  authority  to resolve the issue,  who shall be
prepared to discuss the reason(s) for such  suspension and to attempt to resolve
the issue.  If the parties  are unable to resolve the issue in such  discussion,
then  BNSF and  Pathnet  will  escalate  the issue to the next  higher  level of
management,  and shall attempt to meet, at a mutually  agreeable  location,  or,
failing that, will have a telephonic  meeting,  within twenty four (24) hours of
the work suspension,  with the goal of resolving the issue at that meeting.  The
parties will  negotiate  in good faith to resolve the issue,  and to prevent the
occurrence of similar situations in the future.

            8. Fiber Optic Capacity for BNSF.

               (a) BNSF  has  retained  the  right  to use the  Premises  leased
hereunder  to the extent of retaining  the right to use fiber optic  capacity as
described  in this  Section 8,  either as located  on the Rail  Corridor  or, at
BNSF's option,  on an alternative  portion of Pathnet's fiber optic network,  to
the extent that BNSF's  desired  point of  termination  on Pathnet's  network is
within [***] miles of BNSF's  current rail network (which in this sentence shall
include the two rail corridors  included as "Rail  Corridors" in the Fiber Optic
Access Agreement and the rail corridors where rail service operating rights were
sold to shortline railroads by BNSF or one of its predecessors and BNSF retained
fiber optic rights in the shortline rail corridor,  as such current rail network
is shown on the map identified on Exhibit B). A map generally  depicting  BNSF's
current rail network is attached as Exhibit B.  Accordingly,  Pathnet shall make
available  to BNSF,  on an annual basis each year during the term of this Lease,
at BNSF's  request and at no charge to BNSF (except as set forth in Section 8(e)
or (g)),  commencing  on the later of: (i) the date of completion of the Initial
Construction,  or (ii) the date when capacity  becomes  available at the desired
location,  and continuing for the entire term of this Lease, the following fiber
optic capacity, either over the entire length of the Premises, or over any other
Fiber Optic Facilities that are part of Pathnet's fiber optic network within the
area  described in this Section 8(a), as specified by BNSF,  whether or not they
are located on any of BNSF's Rail Corridors:

                    (1)  Each  year  during  the  first  [***]  years  following
completion  of  Initial  Construction  (and  each  anniversary  of the  date  of
completion of Initial  Construction  shall be referenced  herein as "Anniversary
Date"),  [***], or its  equivalent,  of digital  transmission  capacity for each
route mile of Pathnet's Fiber Optic Facilities constructed under this Lease;

                    (2) Each year,  commencing  on the [***]  Anniversary  Date,
until  the  [***]  Anniversary  Date,  [***],  or  its  equivalent,  of  digital
transmission  capacity for each route mile of Pathnet's  Fiber Optic  Facilities
constructed under this Lease;

                    (3) Each year,  commencing  on the [***]  Anniversary  Date,
until  the  [***]  Anniversary  Date,  [***],  or  its  equivalent,  of  digital
transmission  capacity for each route mile of Pathnet's  Fiber Optic  Facilities
constructed under this Lease;

                    (4) Each year,  commencing  on the [***]  Anniversary  Date,
until  the  [***]  Anniversary  Date,  [***],  or  its  equivalent,  of  digital
transmission  capacity for each route mile of Pathnet's  Fiber Optic  Facilities
constructed under this Lease;


                                        6

<PAGE>
                    (5) Each year,  commencing  on the [***]  Anniversary  Date,
until  the  [***]  Anniversary  Date,  [***],  or  its  equivalent,  of  digital
transmission  capacity for each route mile of Pathnet's  Fiber Optic  Facilities
constructed under this Lease;

                    (6) Each year,  commencing  on the [***]  Anniversary  Date,
until  the  [***]  Anniversary  Date,  [***],  or  its  equivalent,  of  digital
transmission  capacity for each route mile of Pathnet's  Fiber Optic  Facilities
constructed under this Lease; and

                    (7) Each year,  commencing  on the [***]  Anniversary  Date,
until  the  [***]  Anniversary  Date,  [***],  or  its  equivalent,  of  digital
transmission  capacity for each route mile of Pathnet's  Fiber Optic  Facilities
constructed under this Lease; and

                    (8) Each year,  commencing  on the [***]  Anniversary  Date,
until the [***]  Anniversary  Date,  [***] miles, or its equivalent,  of digital
transmission  capacity for each route mile of Pathnet's  Fiber Optic  Facilities
constructed under this Lease.

          (b) The  fiber  optic  capacity  described  in this  Section  8 may be
specified  by BNSF in any  format  then being  provided  by Pathnet on the Fiber
Optic Facilities on which BNSF requests fiber optic capacity.  BNSF shall not be
entitled to the  increases in capacity as set forth in Section  8(a) until,  and
only to the extent that,  the fiber optic  capacity  increases  are required for
BNSF's uses,  either on the  Premises or on some other route in Pathnet's  fiber
optic network  within the area  described in the first  sentence of this Section
8(a). In addition,  the miles of digital transmission  capacity to which BNSF is
entitled may be  specified  by BNSF in its  equivalent  capacity,  so that,  for
example,  if BNSF were entitled to [***] over a 2,000 mile route,  this could be
[***]  over  [***]  miles  [***]  each over  [***],  [***]  over  [***],  or any
combination  of the above  totaling  the  capacity  to which  BNSF is  entitled,
provided that the maximum cross-section at any point shall not exceed the lesser
of [***] of the  then-available  capacity on the Fiber Optic  Facilities at that
location;  or (ii) (I) prior to the [***]  Anniversary  Date,  the equivalent of
[***]; (II) after the [***] Anniversary Date, and prior to the [***] Anniversary
Date, the equivalent of [***]; (III) after the [***] Anniversary Date, and prior
to the [***]  Anniversary  Date, the  equivalent of [***];  (IV) after the [***]
[***]  Anniversary Date, and prior to the [***] Anniversary Date, the equivalent
[***], and after the [***]  Anniversary Date, and prior to the [***] Anniversary
Date,  the  equivalent of [***].  Pathnet shall have no obligation to install or
upgrade any of its digital telecommunications transmission facilities to provide
to BNSF  any  fiber  optic  capacity  which  at that  time is not  available  on
Pathnet's Fiber Optic  Facilities  network.  Pathnet shall have no obligation to
provide  capacity  at  any  multiplexed  level  below  [***].  Pathnet  will  be
responsible  for  all  costs  associated  with  the  creating,  maintaining  and
transporting  the fiber optic  capacity to be  provided,  including  all optical
amplification and regeneration,  and terminating the capacity at the multiplexor
or other optronic equipment at which the capacity is to be terminated, including
the cost of such terminating equipment.  BNSF shall be responsible for all costs
of transport of the fiber optic  capacity from the point of  termination  in the
shelter used by Pathnet to BNSF's desired point of termination.


                                        7

<PAGE>
     (c) The fiber optic capacity  described in this Section 8 (including use of
the fibers addressed in Section 8(e)) may be utilized by BNSF and its Affiliates
(excluding any such Affiliate that competes in the telecommunications  business)
for their respective internal  communications  only. The capacity made available
to BNSF by the  terms  of this  Section  8 may not be  sold,  assigned,  leased,
licensed,  or otherwise made available to  third-parties,  or used in connection
with any  telecommunications  business.  Notwithstanding the foregoing,  BNSF is
discussing an agreement with a cellular  telecommunications carrier that gathers
BNSF  operational  data,  aggregates  the  BNSF  operational  data  with its own
commercial  cellular  traffic,  and delivers the BNSF  operational  data to BNSF
facilities.   BNSF  may  allow  the  cellular   telecommunications   carrier  or
partnership  to use a  portion  of  BNSF's  retained  fiber  optic  capacity  as
described in this  Section 8 in  connection  with the  foregoing  agreement.  In
addition, BNSF may permit this one or other cellular telecommunications carriers
or  partnerships  to use any  amount  of  additional  fiber  optic  capacity  as
described in this Section 8 for similar arrangements in the future. Any cellular
telecommunications  carrier or partnership  who utilizes  BNSF's  retained fiber
optic  capacity in this way shall pay to Pathnet a charge  equal to [***] of the
charge  that  Pathnet  then is  offering  for  sales  of like  capacity  in like
markets."

     (c) In the event that Pathnet permanently  discontinues  telecommunications
services  or  capacity of which BNSF is using a portion,  Pathnet  will  provide
sixty (60) days  prior  written  notice to BNSF to permit  BNSF to try to obtain
replacement capacity.

     (e)(1) Subject to the  conditions set forth in this Section 8(e),  BNSF may
require,  in  addition  to the fiber optic  capacity  detailed  in Section  8(b)
through 8(d), by notice in writing delivered to Pathnet no later than forty-five
(45) days after Pathnet's  submission of Proposed  Construction Plans respecting
any portion of the Fiber Optic Facilities,  that Pathnet install [***] fibers in
those Fiber Optic  Facilities,  at Pathnet's sole cost, which [***] fibers shall
be an  improvement  to property of BNSF,  from the Pathnet  node site to a point
along   the   route  of  the   Fiber   Optic   Facilities   closest   to  BNSF's
telecommunications  facility  (hereinafter  referenced as an "End Link").  These
[***] fibers shall be the same fiber type as that then being  installed in those
Fiber Optic  Facilities  for  Pathnet's own use, or to lease or sell capacity to
others,  and, at Pathnet's  sole  discretion,  may be contained  within the same
cable  sheath as Pathnet's  fibers or within a separate  cable  sheath.  Pathnet
shall be responsible  for the maintenance of, and repair of these fibers for the
term of this  Lease,  so long as some fibers on the  Premises,  other than these
[***] fibers, are being maintained.  Each End Link shall include a separate BNSF
handhole or manhole to be provided to BNSF, at Pathnet's sole cost,  which shall
be an improvement to property of BNSF, to terminate and/or provide connection to
BNSF's  telecommunications  facility.  Pathnet shall not be obligated to provide
fibers  to BNSF in any End Link  that is  longer  than  [***]  miles,  nor shall
Pathnet be obligated to alter the planned  route of the Fiber Optic  Facilities,
except where BNSF has agreed in writing in advance to pay Pathnet's  incremental
costs,  including  overhead,  of  extending  any fibers more than [***] miles or
altering the planned route of

                                        8
<PAGE>
the Fiber Optic Facilities. If BNSF first required Pathnet to extend an End Link
after  Commencement of  Construction on the Rail Corridor  segment where the End
Link is located,  BNSF shall reimburse  Pathnet for all such incremental  costs,
including overhead. Pathnet shall perform such installation unless, in Pathnet's
reasonable  judgment,  performance thereof would materially adversely affect the
Fiber  Optic  Facilities  or  Pathnet's   schedule  for  completion  of  Initial
Construction.

     (e)(2) Where BNSF  requests an End Link on any  corridor in BNSF's  current
rail  network,  as defined in Section  8(a),  Pathnet  shall provide two 23-inch
racks, and space  therefore,  and adequate  supporting  electrical  service,  in
equipment  shelters at terminal  and junction  sites on any BNSF Rail  Corridor.
Where BNSF  requests  fiber optic  capacity off of a corridor in BNSF's  current
rail  network,  as defined  in Section  8(a),  Pathnet  will make the  requested
capacity  available to BNSF at no charge,  and BNSF shall be  responsible to pay
the local exchange company to obtain the space, equipment and connection service
that BNSF requires.

     (f) In addition to the  capacity to which BNSF is entitled  under the terms
of this Section 8, BNSF shall have the right to purchase capacity on any portion
of Pathnet's  network on terms no less  favorable  than Pathnet is then offering
for sales of like capacity and product over like distances in like markets.

            9.    Construction and Operation of Fiber Optic Facilities.

                      (a) (1) BNSF  shall  make  available  for  inspection  and
                  copying by Pathnet, at Pathnet's sole cost: (i) maps of BNSF's
                  Rail Corridor, and lists and/or center diagrams indicating the
                  approximate location and nature of all bridges and


                                        9
<PAGE>

                  locations of all  tunnels,  overpasses  and other  significant
                  railroad  structures  located  on  the  Rail  Corridor;   (ii)
                  available   engineering   documents   in   BNSF's   possession
                  (including profiles,  lengths,  internal diameter, etc.), that
                  relate to bridges, overpasses or tunnels on the Rail Corridor,
                  which  Pathnet  reasonably  requests  in  connection  with its
                  activities   to   Construct   and   Operate  the  Fiber  Optic
                  Facilities;  and (iii) maps,  agreements  (redacted  to remove
                  confidential  business terms) or other  documents  showing the
                  identity,  location, rights and nature of other known users or
                  owners of portions of the Rail Corridor  whose use,  rights or
                  ownership  Pathnet and BNSF  reasonably  determine would cause
                  title,  possession or operational  problems or cost to Pathnet
                  (including, without limitation, reversion rights of underlying
                  fee owners and, exclusivity rights of third parties); and (iv)
                  other such documentation or information  reasonably  requested
                  by Pathnet to assist  Pathnet in its  activities  to Construct
                  and  Operate  the Fiber  Optic  Facilities  and which,  in the
                  opinion of BNSF, relates to or impacts upon the development of
                  Fiber  Optic  Facilities;  all to the extent  that (i) through
                  (iv) are readily and available from the records of BNSF or its
                  outside contractors  charged with retaining such records,  can
                  be  located  by  BNSF  in a  reasonable  search,  and  are not
                  confidential and proprietary to BNSF or third parties,  and if
                  they are made available to Pathnet without determining what is
                  confidential  or proprietary to BNSF,  Pathnet shall keep such
                  information  confidential and proprietary and shall not use it
                  for  any  purpose  other  than  as  set  forth   herein.   The
                  availability  of all  such  maps  or  documents  shall  not be
                  considered a guarantee or warranty that such maps or documents
                  are accurate or complete. The absence of markers, monuments or
                  maps  indicating  the  present  of  subterranean   facilities,
                  whether belonging to BNSF or otherwise, shall not constitute a
                  warranty or  representation  by BNSF that none exist.  Pathnet
                  accepts  this  Lease  with full  cognizance  of the  potential
                  presence  of the various  claims,  restrictions  and  physical
                  conditions  described  herein,  acknowledging  that  Pathnet's
                  costs to Construct and Operate the Fiber Optic  Facilities may
                  increase  by reason  thereof.  Any  failure by BNSF to provide
                  such documents shall not subject BNSF to any liability, costs,
                  expenses,  damages, losses, or claims to Pathnet or any of the
                  Pathnet Parties, except to the extent of failures due to gross
                  negligence or willful misconduct.

                      (2) Pathnet recognizes that any BNSF documents supplied by
                  BNSF were not prepared for use as real estate title maps. BNSF
                  does not represent or suggest that the property lines and Rail
                  Corridor  boundary  lines shown on such documents are accurate
                  or that any other  information  contained on such documents is
                  correct.

                      (b) Prior to commencing construction of the Fiber Optic
                  Facilities, Pathnet, at its sole cost and risk, shall submit
                  to BNSF four sets of prints showing in detail the proposed
                  initial construction of all Fiber Optic Facilities on the
                  Premises, including every proposed element, item of equipment
                  and improvement included therein that Pathnet plans to locate
                  on the Premises, which prints shall be referenced herein as
                  "Proposed Construction Plans". Where Fiber Optic Facilities


                                       10
<PAGE>

                  extend  over a route  longer  than 150  miles,  Pathnet  shall
                  submit Proposed  Construction  Plans to BNSF for each 150 mile
                  segment,  as and when they are  ready,  and shall use its best
                  efforts  to  avoid  any  single  submission  of such  Proposed
                  Construction Plans for a segment longer than 150 miles.

                      (c) (1) BNSF shall review the Proposed Construction Plans,
                  and  may  disapprove  them,  or  propose   changes,   but  any
                  disapproval  or  proposed  change  must be made in writing and
                  delivered to Pathnet  within thirty (30) days of the date BNSF
                  receives such plans.  Pathnet  acknowledges  that if BNSF does
                  not disapprove the Proposed Construction Plans, or propose any
                  changes to them, this does not constitute a  determination  by
                  BNSF that  there are no design  defects  in such plans or that
                  Fiber Optic  Facilities  built in  accordance  with such plans
                  could be built or operated  safely.  If BNSF  disapproves  the
                  Proposed   Construction   Plans  because  it  determines  that
                  construction  and/or maintenance of the Fiber Optic Facilities
                  likely would interfere with BNSF's rail operations or create a
                  safety  hazard and that the Fiber Optic  Facilities  cannot be
                  located within BNSF's Rail Corridor for a specified  distance,
                  and Pathnet  then  determines  that the cost of  locating  its
                  Fiber Optic  Facilities off of BNSF's Rail Corridors  would be
                  significantly  higher for Pathnet and so notifies  BNSF,  then
                  BNSF shall  make  reasonable  efforts to work with  Pathnet to
                  determine  if  there  is a  way  to  locate  the  Fiber  Optic
                  Facilities   somewhere   on  BNSF's  Rail   Corridor   without
                  interfering  with BNSF's rail  operations or creating a safety
                  hazard.  If BNSF  disapproves  all or any part of the Proposed
                  Construction  Plans,  BNSF,  at the time of such  disapproval,
                  shall provide to Pathnet a written  explanation of the reasons
                  for  disapproval  and suggested  cures,  if any.  Pathnet then
                  shall submit revised Proposed  Construction Plans, which shall
                  be subject to the same review procedures just described.  Once
                  the thirty  (30) day period  described  above has  expired and
                  BNSF has not  disapproved  the Proposed  Plans (or the revised
                  Proposed Plans,  if applicable),  the same shall be the "Final
                  Construction   Plans"   which  term  shall  also  include  any
                  subsequent  modifications  to the  Plans as  provided  herein.
                  Pathnet  shall not  commence  construction  of the Fiber Optic
                  Facilities  along any  portion  of the Rail  Corridor  in each
                  instance  until it has received  written notice from BNSF that
                  BNSF does not disapprove the Final Construction Plans.

                        (2) If at any time Pathnet desires to amend the Proposed
                  Construction  Plans or the Final Construction  Plans,  Pathnet
                  must submit four sets of prints showing such amendment to BNSF
                  in the same manner  described  for  submission of the Proposed
                  Construction  Plans.  If such  amendment  is not  modified  or
                  disapproved by BNSF in the manner  specified for  modification
                  or  disapproval  of  Proposed  Construction  Plans,  the Final
                  Construction   Plans  will  be  deemed  as  of  such  time  to
                  incorporate such amendment

                   (d) In  constructing  the Fiber  Optic  Facilities,  and with
                  respect to all entries  onto the Rail  Corridor by Pathnet and
                  the Pathnet Parties to Construct and




                                       11
<PAGE>

                  Operate the Fiber Optic Facilities,  or for any other purpose,
                  Pathnet shall  coordinate  with BNSF,  with the  understanding
                  that BNSF's  presence and  activities on the Rail Corridor for
                  any  purpose,  except as  limited  by the Fiber  Optic  Access
                  Agreement, shall have priority over Pathnet's activities under
                  this Lease.

                        (e) The  Construction  Schedule shall be used by Pathnet
                  and  BNSF  to  coordinate  personnel,   activities  and  train
                  movements.  Pathnet shall amend the Construction  Schedule, as
                  required,  to reflect any and all  schedule  changes and shall
                  furnish  promptly to BNSF any amended  Construction  Schedule.
                  BNSF may rely on the Construction Schedule to schedule flagmen
                  and  other  BNSF  personnel   whose  duties  require  them  to
                  accompany personnel constructing the Fiber Optic Facilities.

                        (f) If,  at any  time it  appears  to BNSF  that  BNSF's
                  tracks  may be  "Fouled"  (defined  in this  Lease to mean the
                  presence of  equipment  and/or  personnel of Pathnet or any of
                  the Pathnet Parties on a railroad track or within  twenty-five
                  (25)  feet  of  the  centerline  of  any  railroad  track)  in
                  connection  with the exercise of  Pathnet's  rights under this
                  Lease,  BNSF personnel may be provided,  at BNSF's option,  to
                  accompany  Pathnet  and/or any of the Pathnet  Parties who may
                  Foul  BNSF's  tracks.  Pathnet  shall  bear  the  entire  cost
                  associated  with such BNSF  personnel,  regardless  of whether
                  such personnel are actually utilized in a particular case, and
                  Pathnet agrees promptly to pay all invoices for such personnel
                  that are  submitted  to it by  BNSF.  The  failure  of BNSF to
                  furnish such personnel  shall not relieve  Pathnet,  or any of
                  the Pathnet  Parties,  of any obligations or liabilities it or
                  they otherwise have assumed hereunder.

                        (g) Pathnet, and all Pathnet Parties, who are or will be
                  involved in any  activities or presence  permitted  under this
                  Lease on or near  the Rail  Corridor,  shall  comply  with all
                  applicable BNSF safety rules and regulations,  as set forth in
                  Exhibits "C" and "C-1" attached hereto. BNSF shall pay for any
                  such materials or safety training personnel (but Pathnet shall
                  pay any BNSF safety  contractor's cost,  including the cost of
                  any  instructors);  Pathnet  shall pay  salaries,  any  travel
                  expenses  or other  costs  for  Pathnet,  and any and all such
                  Pathnet Parties, to receive such safety training.

                        (h) As promptly as possible,  but in no event later than
                  six months after each segment of the Fiber Optic Facilities is
                  installed,  Pathnet  shall  furnish to BNSF "As  Built"  Fiber
                  Optic Facilities drawings.

                        (i) During and in  furtherance  of completion of Initial
                  Construction,  Pathnet  and the  Pathnet  Parties,  subject to
                  BNSF's prior written approval, may use, as required, and at no
                  additional charge, available portions of the Rail Corridor, as
                  identified  by  local  BNSF  personnel,  for  the  purpose  of
                  allowing Pathnet,  or any of the Pathnet Parties, to erect, at
                  its sole cost and risk, temporary



                                       12
<PAGE>

                  structures  and  fences  to  protect  Pathnet's   material  or
                  equipment  necessary for the  construction  of the Fiber Optic
                  Facilities,  including staging of construction  activities and
                  storage  of  materials,  provided  that  such  structures  and
                  fences:  (i) shall not interfere  with, or disrupt in any way,
                  other  than in a manner  approved  in  advance  by  BNSF,  any
                  operations  conducted  by  BNSF,  or any  activities  of third
                  parties,  on  the  Rail  Corridor;  and  (ii)  to  the  extent
                  reasonably  feasible,  shall be as shown and  described in the
                  Final Construction Plans.  Pathnet shall restore any land used
                  for such structures and fences  substantially  to its previous
                  condition before Initial Construction is complete,  reasonable
                  wear and tear and casualty excepted, and shall remove all such
                  structures,  fences,  equipment and material placed thereon by
                  Pathnet,  or  any  of  the  Pathnet  Parties,  before  Initial
                  Construction is complete. In the event Pathnet does not comply
                  with  the  foregoing  sentence,   BNSF,  following  reasonable
                  advance notice to Pathnet,  may take the actions  specified in
                  that  sentence,  and Pathnet shall  reimburse to BNSF all cost
                  incurred by BNSF in taking such actions.

                        (j)  Subject to BNSF's  approval  and  execution  by the
                  applicable  utility  company of a BNSF  standard form right of
                  entry  permit,  Pathnet may bring  electrical  power and other
                  utilities to the Fiber Optic  Facilities.  Pathnet  shall make
                  its own arrangements, at its sole cost and risk, to obtain all
                  electrical power and other utilities or services  necessary to
                  Construct and Operate the Fiber Optic Facilities,  and Pathnet
                  shall  indemnify,  defend and hold BNSF  harmless  against any
                  liability  to any  utility or service  company  arising out of
                  utilities  or  services  ordered  or used by or on  behalf  of
                  Pathnet,  except to the extent caused by the gross  negligence
                  or willful misconduct of BNSF or its agents or contractors, or
                  any of their  employees.  Utilities  and  services  needed  by
                  Pathnet at each  junction or  repeater  site shall be as shown
                  and  described  in the Final  Construction  Plans and shall be
                  part of Fiber Optic  Facilities for purposes of this Lease. If
                  the location of such  utilities or services  serving the Fiber
                  Optic  Facilities must be changed because of its  interference
                  to BNSF railroad purposes or industrial development related to
                  railroad  purposes,  BNSF shall  notify  Pathnet  and  Pathnet
                  promptly shall  relocate the affected Fiber Optic  Facilities,
                  at  Pathnet's  sole cost,  in a manner  satisfactory  to BNSF.
                  Power  sources  installed  by  Pathnet  shall  be  part of the
                  Initial Construction.

                        (k) Pathnet,  at its sole cost and risk,  shall  furnish
                  all  materials,   supervision,   labor,   parts,   components,
                  equipment  and  structures  necessary to Construct and Operate
                  the Fiber Optic Facilities, or any part thereof, in accordance
                  with this Lease.  Any and all work by Pathnet and/or a Pathnet
                  Party  under the  authority  of this Lease  shall be done in a
                  good and  workmanlike  manner,  in  conformity  with the Final
                  Construction  Plans,  and  shall  comply  with all  applicable
                  engineering,  safety,  and other  statutes,  laws,  ordinance,
                  regulations,  rules,  codes,  orders or  specifications of any
                  public body or authority  having  jurisdiction  over the Fiber
                  Optic Facilities or BNSF's rail operations, including,



                                       13
<PAGE>

                  but not limited to, the Federal Communications Commission and
                  the Federal Railroad Administration.

                        (l) All  installations by Pathnet and/or a Pathnet Party
                  under  the  authority  of  this  Lease  must  meet  or  exceed
                  applicable specifications of the public authority of the state
                  in which the installation is located and must be in compliance
                  with all existing  federal,  state or local laws,  ordinances,
                  and regulations.  In no case shall any part of the Fiber Optic
                  Facilities be located in a manner that will interfere with the
                  presence or activities  of BNSF,  or any third parties  acting
                  within their rights on the Rail  Corridor as they exist on the
                  date of this  Lease.  The  manner of,  and the  equipment  and
                  devices  to be  used  for,  any  installation,  relocation  or
                  removal of the Fiber  Optic  Facilities,  shall be reviewed in
                  advance by BNSF, as set forth herein.

                        (m) Fiber Optic  Facilities may be installed by Pathnet,
                  at its sole cost and risk, on bridges or other water crossings
                  on the Rail  Corridor by attachment to BNSF's fixed or movable
                  bridges or crossing  structures,  as  available,  as agreed by
                  BNSF and Pathnet, as shown in the Final Construction Plans.

                        (n)  Installation of Fiber Optic Facilities under public
                  roadways  shall  be at  Pathnet's  sole  cost and  risk,  at a
                  location and depth as agreed to by BNSF, as shown on the Final
                  Construction Plans.

                        (o) Installation of Fiber Optic Facilities crossing over
                  or under other existing  facilities in the Rail Corridor shall
                  be located and installed,  at Pathnet's sole cost and risk, in
                  accordance  with  conditions  set forth in this Section 9, and
                  applicable  requirements  of the owner of each such  facility.
                  If, in the course of any activity  that Pathnet is  authorized
                  to undertake under the terms of this Lease, any changes in any
                  pipelines,   sewers,   conduits,   fences,  power,  signal  or
                  communication  lines or other  utility,  facility  or Railroad
                  Facilities is necessary (either temporary or permanent),  such
                  change shall require  prior review by BNSF,  and a letter from
                  BNSF indicating  that it does not disapprove such change,  and
                  all other  necessary  approvals  from third  parties.  Pathnet
                  shall  indemnify,  defend and hold BNSF  harmless  against all
                  claims from any third party relating to any such activity.

                        (p) All  cranes,  lifts,  drilling  equipment,  or other
                  machinery  that is to be operated in the  vicinity of any Rail
                  Facilities, electric transmission lines or other facilities in
                  connection  with Initial  Construction  or any other  activity
                  that Pathnet is  authorized  to  undertake  under the terms of
                  this  Lease,  shall  be  electrically  grounded  in  a  manner
                  reviewed   by,  and  not   disapproved   by,   BNSF.   Pathnet
                  acknowledges  that if BNSF does not disapprove such plans this
                  does not constitute a determination by BNSF that such plans or
                  activities  are safe.  All personnel of Pathnet and any of the
                  Pathnet  Parties  that  are  operating  such  cranes,   lifts,
                  drilling equipment,  or other machinery shall have appropriate
                  and sufficient



                                       14
<PAGE>

                  experience  in  operating  of the  machinery  being used,  and
                  Pathnet  shall be  prepared  to  certify  the  extent  of this
                  experience upon request by BNSF.

                        (q) If Pathnet,  or any of the Pathnet  Parties,  acting
                  under the  authority  granted  by this  Lease,  discovers  any
                  scientific or historic  artifacts,  Pathnet  immediately shall
                  notify BNSF of such discovery and shall protect such artifacts
                  until  they are  identified  and  removed  by the  appropriate
                  authorities.

                        (r) BNSF shall  have the right to verify by  inspection,
                  at the sole cost of Pathnet, that the location of the work and
                  the materials  constituting the Initial Construction,  or used
                  operation  of the Fiber Optic  Facilities,  are in  compliance
                  with the Final  Construction  Plans.  BNSF shall give  Pathnet
                  reasonable  notice of such  inspections,  and Pathnet,  at its
                  option,  may designate a  representative  to accompany  BNSF's
                  representative   on  such   inspections.   If,   following  an
                  inspection,   BNSF  reasonably   determines  that  Pathnet  is
                  conducting  activities  that do not comply  with the  approved
                  Final  Construction  Plans,  the  parties  hereto  shall  meet
                  promptly  to discuss  the  situation  and  determine  a remedy
                  satisfactory to BNSF. If BNSF is not satisfied with the remedy
                  selected at such meeting,  and its subsequent  implementation,
                  Pathnet's   rights  to  Construct   and  Operate  Fiber  Optic
                  Facilities shall be suspended  entirely until the parties have
                  settled  on  a  remedy  that  is  satisfactory  to  BNSF.  The
                  provisions of Section 7 shall apply to any  suspension of work
                  pursuant to this Section.

                        (s) BNSF's expenses for any work performed for or at the
                  expense of Pathnet  pursuant  to the terms of this Lease shall
                  be paid by Pathnet  promptly  upon  Pathnet's  receipt of each
                  itemized  bill  therefor.  Expenses so billed by BNSF shall be
                  only  those  attributable  to the  work  performed  and  shall
                  include, without limitation,  cost of labor (whether performed
                  by BNSF or a contractor  of BNSF) and  supervision,  necessary
                  travel or transportation  expenses,  lodging, meals, equipment
                  rental,  materials,  and any freight and  handling  charges on
                  materials  used,  plus  standard  additives A list of standard
                  additives  then in effect will be provided to Pathnet with any
                  billing containing such activities.

                        (t) Pathnet, at its sole cost and risk: (i) shall secure
                  and maintain in effect all federal,  state, and local permits,
                  licenses, platting,  subdivisions,  and/or zoning approvals or
                  any other land use  requirement  that is required to Construct
                  and  Operate the Fiber Optic  Facilities,  including,  without
                  limitation, crossing, zoning, building, health, environmental,
                  and communication  permits and licenses,  and Pathnet,  at its
                  sole  cost and  risk,  shall  satisfy  any and all  conditions
                  required  to obtain,  maintain  and comply  with any  required
                  permit,  license  or zoning  approval  or any  other  land use
                  requirement;   and  (ii)  shall  indemnify,  defend  and  hold
                  harmless BNSF from and against  payment of the cost  therefor,
                  and  against  any fines or  penalties  that may be levied  for
                  failure  to  procure,  maintain  or to  comply  with  any such
                  permits,  licenses  and/or  zoning,  or  any  other  land  use
                  requirement  as well as any remedial costs incurred by BNSF in
                  curing any such


                                       15
<PAGE>

                  failure.  BNSF shall  cooperate  with  Pathnet in securing and
                  maintaining  any such permits or licenses,  and Pathnet  shall
                  reimburse  any  reasonable  out-of-pocket  costs  of  BNSF  in
                  providing such cooperation..

                        (u) Any environmental  impact statements required by any
                  governmental agency in connection with any activity of Pathnet
                  to Construct and Operate the Fiber Optic  Facilities  shall be
                  prepared  by  Pathnet  at  Pathnet's  sole cost and risk,  and
                  Pathnet,  at its sole cost and  risk,  shall  comply  with any
                  conditions required by any applicable  government authority in
                  connection with, or following from, any  environmental  impact
                  statement.

                        (v) BNSF shall  cooperate with Pathnet,  as requested by
                  Pathnet,  at no  out-of-pocket  cost  to  BNSF,  in  Pathnet's
                  efforts  to obtain  and  maintain  any  permits,  licenses  or
                  approvals  of  government  agencies  or  authorities,  or  any
                  approvals of any necessary  third parties,  for the use of any
                  structures or facilities (including streets,  roads or utility
                  poles) along portions of the Rail Corridor.  The provisions of
                  this  paragraph  will not be deemed to require  BNSF to expend
                  significant internal resources.

            10.   Entry Notice.

                        (a) During progress of the Initial Construction, Pathnet
                  shall  give BNSF at least  five days'  written  notice  before
                  initial entry by Pathnet, or any of the Pathnet Parties,  upon
                  any portion of the Rail Corridor.

                        (b) After completion of Initial Construction,  any entry
                  by Pathnet or any Pathnet  Party onto the Rail  Corridor  that
                  does not constitute Routine Maintenance and Operation (defined
                  later herein) of the Fiber Optic Facilities, or is not related
                  to an Emergency  (defined  later  herein) shall  require:  (i)
                  advance  written notice from Pathnet to BNSF not less than ten
                  days prior to such planned  entry,  such notice to specify the
                  purpose  of  the  entry;   (ii)  if  entry  involves  any  new
                  construction,   reconstruction,  or  removal  of  Fiber  Optic
                  Facilities,  four (4) sets of prints  showing  in detail  such
                  proposed new  construction,  reconstruction,  or removal;  and
                  (iii)   approval  by  BNSF,   which   approval  shall  not  be
                  unreasonably withheld or delayed, taking in account the nature
                  of the proposed  entry. As used herein,  "Routine  Maintenance
                  and Operation" shall mean maintenance and operation by Pathnet
                  and/or a Pathnet Party of the Fiber Optic Facilities that does
                  not require  any: (i)  excavation  of soil that could alter or
                  disturb,  or threaten  the support of, or ability to use,  any
                  Rail Facility;  (ii) use of heavy machinery  within 50 feet of
                  any  railroad  track;  or (iii) an activity or presence  which
                  results  in  a  Fouled   railroad   track.   As  used  herein,
                  "Emergency"  shall  mean  that  service  on  the  Fiber  Optic
                  Facilities has been interrupted or significantly  disrupted or
                  such  interruption  is reasonably  likely,  or that there is a
                  material  adverse  threat to the integrity of Pathnet's  fiber
                  optic network, in circumstances that make it



                                       16
<PAGE>

                  impractical  for  Pathnet  or any  Pathnet  Party to give BNSF
                  normal  advance  written  notice  of entry  onto  BNSF's  Rail
                  Corridor.

                        (c) During Routine  Maintenance  and Operation,  Pathnet
                  and/or any Pathnet Party may enter the Rail  Corridor  without
                  notice to BNSF,  for the sole  purpose of Routine  Maintenance
                  and Operation;  provided,  however, that: (i) if any entry for
                  such purpose is likely to result in a Fouled  railroad  track,
                  Pathnet shall give BNSF written notice of the places where and
                  the manner in which  entry is  required  not less than two (2)
                  days,  and not more than seven (7) days,  prior to such entry;
                  and (ii)  without  BNSF's  prior  consent,  which shall not be
                  unreasonably  withheld,  neither Pathnet nor any Pathnet Party
                  shall  enter  the  Rail  Corridor  at  any  place  where  BNSF
                  previously has disapproved entry.

                        (d) In the event of an  Emergency,  Pathnet  and/or  any
                  Pathnet  Party may enter the Rail Corridor  without  notice to
                  BNSF,  for the sole  purpose  of dealing  with the  Emergency;
                  provided,  however, that: (i) if any entry for such purpose is
                  likely to result in a Fouled  railroad  track,  Pathnet  shall
                  obtain  verbal or  written  approval  from BNSF  prior to such
                  entry,  promptly  followed  by  written  confirmation  of such
                  approval,  which may be provided within 24 hours after Pathnet
                  has  addressed  the  Emergency;  (ii) if any  entry  for  such
                  purpose is likely to require the excavation of soil that could
                  alter or  disturb,  or  threaten  the support of or ability to
                  use,  any Rail  Facility,  or would  involve  the use of heavy
                  machinery within 50 feet of any railroad track,  Pathnet shall
                  give BNSF verbal or telephonic notice of the places where, and
                  the manner in which,  entry is  required  prior to such entry,
                  promptly  followed  by  written  confirmation  which  shall be
                  obtained  within 24 hours  after  Pathnet  has  addressed  the
                  Emergency. and (iii) without BNSF's prior consent, which shall
                  not be unreasonably withheld,  neither Pathnet nor any Pathnet
                  Party  shall  enter the Rail  Corridor at any place where BNSF
                  previously has  disapproved  entry.  Both parties  acknowledge
                  that an  Emergency  involving a  derailment  or other  similar
                  situation could cause significant damage to both parties,  and
                  that  both   parties   will  need  to  respond   promptly  and
                  effectively to the  situation.  Subject to (i), (ii) and (iii)
                  above, in the event of an Emergency  involving a derailment or
                  other similar situation, BNSF agrees that it will not prohibit
                  Pathnet from  responding  to the situation as  appropriate  to
                  repair or protect the Fiber Optic  Facilities,  provided  that
                  Pathnet  does not  interfere  with BNSF's rail  operations  or
                  related  activities.  The  parties  will  cooperate  with  one
                  another  to enable  each  party to take  appropriate  response
                  action as promptly and effectively as possible.

            11.  Maintenance of Premises and Fiber Optic Facilities.  BNSF shall
not be  responsible  for  maintenance  of any  Fiber  Optic  Facilities,  or for
clearing  or removal of trees,  shrubs,  plants,  ice,  snow or debris  from the
Premises.  Pathnet  shall be  responsible  to remove from the Rail  Corridor any
debris  resulting  from any of the  activities  of Pathnet or any of the Pathnet
Parties acting under the authority of this Lease.



                                       17
<PAGE>

            12.   Track Support: Materials Storage.

                  (a) During any work by Pathnet or any of the  Pathnet  Parties
            pursuant  to this  Lease,  Pathnet  shall  ensure  that all  tracks,
            supporting  structures  and  roadbed  of BNSF is  supported  in such
            manner as is  necessary  for the safe  operation of BNSF without any
            slower  speed  or  other  train  operating  restrictions  and,  upon
            completion of such work,  Pathnet shall ensure that all such tracks,
            supporting  structures,  and  the  roadbed  are  returned  to  their
            pre-existing condition, all at Pathnet's sole cost.

                  (b) Except as  expressly  set forth in the Final  Construction
            Plans,  Pathnet  shall not  store or  temporarily  place any  goods,
            materials,  or equipment on the Rail Corridor: (i) near a highway or
            private  grade  crossing in such a manner as to  interfere  with the
            sight  distance of anyone  approaching  such  crossing;  (ii) within
            fifteen feet of the end of any tie in any railroad  track;  or (iii)
            within such greater distance as required by an applicable government
            authority.  Notwithstanding  any  other  provision  in  this  Lease,
            Pathnet shall not store or  temporarily  place fuel or any Hazardous
            Substance (as defined later herein) on the Rail Corridor, other than
            as may be  approved  in  writing  in  advance  by BNSF.  If  Pathnet
            knowingly  discovers  any  Hazardous  Substances  on  the  Premises,
            Pathnet will promptly  notify BNSF,  suspend or relocate  activities
            that would disturb the Hazardous Substance,  and permit BNSF to take
            appropriate  actions.   BNSF  will  respond  promptly  to  any  such
            situation.

            13.  Facility  Location Signs.  Pathnet,  at its sole cost and risk,
shall furnish,  erect, and thereafter maintain signs showing the location of all
underground Fiber Optic Facilities.  The size, form, color, text, location,  and
spacing of such signs shall be subject to advance review by BNSF, and such signs
shall be in conformance with standard industry practices and shall be considered
part of the Fiber Optic Facilities.

            14.   Relocations.

                  (a) If BNSF  determines  that the location of any of the Fiber
            Optic  Facilities  must be changed due to either:  (i) relocation or
            placement of any Rail Facilities;  (ii) rail operating  improvements
            for BNSF (or for any other party  offering  rail service in the Rail
            Corridor via rights granted or conveyed by BNSF);  (iii) locating or
            modifying  a  rail   customer's   facilities,   buildings  or  other
            improvements  along BNSF's rail route,  or locating or modifying any
            facilities, buildings or other improvements for railroad purposes or
            industrial  development  related to railroad  purposes;  or (iv) any
            reason beyond the control of BNSF, BNSF shall notify Pathnet of such
            plans and  shall use  reasonable  efforts  to secure an  alternative
            location for the Fiber Optic Facilities within the Rail Corridor, in
            light of BNSF's business assets, plans and activities and the rights
            of third parties in the Rail Corridor, or to provide Pathnet with an
            opportunity to protect its Fiber Optic  Facilities if Pathnet may do
            so without  interference  with the situation  requiring  relocation;
            provided however, BNSF shall not be obligated to spend any money, or
            incur any



                                       18
<PAGE>

            liabilities,  to  secure  such  an  alternative  location.  If  such
            alternative  location is found on the Rail  Corridor,  Pathnet shall
            move  the  affected  Fiber  Optic  Facilities  to  such  alternative
            location,  at Pathnet's sole cost and risk, as soon as  practicable.
            If a location for Fiber Optic Facilities cannot be found on the Rail
            Corridor, Pathnet shall move the affected Fiber Optic Facilities off
            of the Rail Corridor as soon as practicable,  at Pathnet's sole cost
            and risk.

                  (b) In the event BNSF  desires  that Pathnet also move certain
            Rail   Facilities    (excluding   tracks   and   track   structures)
            simultaneously with moving its Fiber Optic Facilities, BNSF shall so
            notify  Pathnet  in  writing,  and  Pathnet  shall  move  such  Rail
            Facilities  and  shall  invoice  BNSF  for  the  reasonable,  actual
            incremental  costs,  including  reasonable  overhead costs, that are
            incurred by Pathnet in moving such Rail Facilities.

                  (c) If  BNSF  desires  to  relocate  any of  the  Fiber  Optic
            Facilities in order to  accommodate a third party (other than as set
            forth in Section 14(a)),  BNSF shall so notify Pathnet,  and Pathnet
            promptly  thereafter  shall submit to BNSF a  reasonable,  detailed,
            itemized estimate,  including reasonable contingencies  ("Estimate")
            of its  anticipated  reasonable  actual costs to relocate such Fiber
            Optic Facilities  (including reasonable overhead costs not to exceed
            ten percent (10%) of actual  costs).  Upon receiving from BNSF fifty
            percent of the amount of the  Estimate,  Pathnet shall  proceed,  as
            expeditiously as feasible under the circumstances, to relocate those
            Fiber  Optic  Facilities  at a cost not to exceed  one  hundred  ten
            percent (110%) of the Estimate.  Upon completion of such relocation,
            and  submission to BNSF of invoices  documenting  all costs thereof,
            BNSF promptly shall pay the balance of such costs to Pathnet.

                  (d) Pathnet  acknowledges  that BNSF's ownership rights in all
            or certain  portions of the Rail Corridor may terminate,  or revert,
            if BNSF  ceases  to use the Rail  Corridor  for rail  transportation
            purposes,  or, in some  cases if BNSF uses the Rail  Corridor  for a
            purpose inconsistent with rail transportation purposes, or for other
            reasons,  such as termination of franchise rights,  and that if this
            occurs, Pathnet might be required either to relocate its Fiber Optic
            Facilities  or  acquire  from the  appropriate  party  the  right to
            continue  to use the Fiber  Optic  Facilities.  BNSF  shall  have no
            obligation  not to abandon  rail  service over all or any portion of
            the Rail Corridor,  no obligation not to use the Rail Corridor for a
            purpose  inconsistent  with  rail  transportation  purposes,  and no
            obligation  to  extend  the  term  of  BNSF's  franchise  rights  or
            ownership rights in the Rail Corridor.

            15.  Condemnation.  In the event that any  portion  of the  Premises
becomes  the subject of  condemnation  proceedings,  BNSF shall make  reasonable
efforts to notify Pathnet promptly. Pathnet's interest in the personal property,
improvements,  and  facilities  comprising the Fiber Optic  Facilities  shall be
valued  separately from BNSF's ownership  interest in the Fiber Optic Facilities
and the  Premises,  and BNSF and  Pathnet  shall  seek to have any  condemnation
award,  or sale in lieu of  condemnation,  apportioned  between Pathnet and BNSF
based on the relative value of their specific  ownership  interests in the Fiber
Optic Facilities and the Premises.



                                       19
<PAGE>

            16.  Conveyance of Rail  Corridor.  In the event BNSF conveys all or
any portion of the Rail Corridor,  in circumstances not covered by Section 14 or
Section 15 of this  Lease,  such  conveyance  shall be  subject to any  existing
rights of Pathnet under this Lease and the Fiber Optic Access Agreement,  to the
extent  permitted by applicable  laws and  agreements  entered into prior to the
date of this Lease.

            17. Compliance with Laws.  Pathnet, in exercising any and all rights
under this Lease, shall comply with all applicable laws, regulations, ordinance,
rules,  decisions and orders  ("Laws")  applicable  to Pathnet  and/or the Fiber
Optic Facilities,  or resulting from the exercise of Pathnet's rights, and shall
have the sole  responsibility  for all  costs  and  risks  associated  with such
compliance.  Pathnet shall indemnify,  defend and hold harmless BNSF against any
claims,  damages,  costs,  fines or penalties  arising in any way from Pathnet's
breach of this Section 17.

            18.   Liability: Indemnification. PATHNET HEREBY RELEASES BNSF FROM,
AND AGREES TO INDEMNIFY, DEFEND, PROTECT, AND HOLD BNSF HARMLESS AGAINST, ANY
AND ALL CLAIMS, SUITS, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, BUT NOT
LIMITED TO, REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR RELATED TO:

            (1) ANY LOSS OF AND/OR  DAMAGE TO THE REAL OR  PERSONAL  PROPERTY OF
BNSF,  PATHNET OR THIRD  PARTIES AND ANY LOSS AND/OR DAMAGE ON ACCOUNT OF INJURY
TO, OR DEATH OF, ANYONE,  CAUSED BY OR GROWING OUT OF PATHNET'S,  OR ANY PATHNET
PARTY'S  PRESENCE OR ACTIVITIES ON OR NEAR THE RAIL CORRIDOR,  REGARDLESS OF ANY
NEGLIGENCE  OF BNSF OR ANY PARTY THEN  PERFORMING  AS A  CONTRACTOR  OR AGENT OF
BNSF,  EXCEPT TO THE EXTENT (AND ONLY TO THE EXTENT) THAT SUCH LOSS OR DAMAGE IS
PROXIMATELY CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF BNSF OR SUCH
CONTRACTOR OR AGENT OF BNSF;

            (2) (i) EXCEPT IN  CONNECTION  WITH THE FIBERS  AND  CAPACITY  TO BE
PROVIDED TO BNSF, SERVICE INTERRUPTION, CESSATION, OR UNRELIABILITY OF THE FIBER
OPTIC FACILITIES  CAUSED BY ANY PERSON,  REGARDLESS OF ANY NEGLIGENCE OF BNSF OR
ANY PARTY THEN PERFORMING AS A CONTRACTOR OR AGENT OF BNSF, EXCEPT TO THE EXTENT
(AND  ONLY  TO  THE  EXTENT)  THAT  SUCH  SERVICE  INTERRUPTION,   CESSATION  OR
UNRELIABILITY  WAS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL  MISCONDUCT OF BNSF
OR SUCH  CONTRACTOR  OR AGENT OF BNSF,  OR (ii)  EXCEPT IN  CONNECTION  WITH THE
FIBERS AND  CAPACITY TO BE PROVIDED TO BNSF,  LIBEL,  SLANDER,  INFRINGEMENT  OR
COPYRIGHT,  OR UNAUTHORIZED  USE OF ANY TRADEMARK,  TRADE NAME, OR SERVICE MARK,
ARISING OUT OF THE MATERIAL,  DATA,  INFORMATION OR OTHER CONTENT TRANSMITTED OR
RECEIVED  OVER THE FIBER OPTIC  FACILITIES,  IN EACH CASE  REGARDLESS OF WHETHER
SUCH CLAIMS, SUITS, JUDGMENTS, OR LIABILITIES ARISE FROM NEGLIGENCE, ACTIONS, OR
INACTION OF BNSF, OR ANY PARTY USING THE RAIL CORRIDOR WITH  PERMISSION OF BNSF;
AND



                                       20
<PAGE>

            (3)   ANY BREACH OF THE TERMS OF THIS LEASE BY PATHNET OR ANY OF THE
PATHNET PARTIES.

            WITHOUT LIMITATION OF ANY OF THE FOREGOING, PATHNET HEREBY AGREES TO
INDEMNIFY,  DEFEND,  PROTECT AND HOLD BNSF HARMLESS FROM AND AGAINST ANY AND ALL
LOSS,  DAMAGE,  COST AND EXPENSE SUSTAINED,  SUFFERED,  OR INCURRED BY BNSF AS A
RESULT OF THE EXISTENCE OF ANY HAZARDOUS  SUBSTANCE  WITHIN THE RAIL CORRIDOR TO
THE EXTENT CAUSED BY, CONTRIBUTED TO, EXPOSED BY OR AGGRAVATED BY PATHNET OR ANY
PATHNET  PARTY.  HAZARDOUS  SUBSTANCE  AS USED  HEREIN  SHALL MEAN  MATERIAL  OR
CONTAMINATION IN VIOLATION OF ANY APPLICABLE  ENVIRONMENTAL LAW, ORDER, DECISION
OR REGULATION.

            19.   Insurance.

                  (a) Pathnet,  prior to entering onto the Rail  Corridor  shall
            procure  the  following  insurance,  covering  all of the  work  and
            services to be performed hereunder by Pathnet, which shall remain in
            effect  for so long as such  party has any  personnel,  property  or
            facilities  on, or having a right to be on,  the Rail  Corridor,  at
            their sole cost:

                      (1)  Workers'   Compensation   and   Employers   Liability
                  Insurance  in an amount of at least  $1,000,000,  covering the
                  entire liability of Pathnet, as determined by the compensation
                  laws of the  State in  which  the  work is  performed,  but if
                  optional   under  State  law  the  insurance  must  cover  all
                  employees anyway,  or the federal workmen's  compensation laws
                  as applicable.  THE CERTIFICATE MUST CONTAIN A SPECIFIC WAIVER
                  OF THE  INSURANCE  COMPANY'S  SUBROGATION  RIGHTS  AGAINST THE
                  BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY.

                      (2) Commercial  General  Liability  insurance and umbrella
                  liability  insurance  covering  liability,  including  but not
                  limited to Public Liability, Personal Injury, Property Damage,
                  and Contractual  Liability with combined  coverage of at least
                  $21,000,000 per occurrence and a general aggregate of at least
                  $21,000,000. Where explosion, collapse, or underground hazards
                  are involved,  the X, C and U exclusions  must be removed from
                  the policy;

                      (3)  Automobile  Liability  insurance,   including  bodily
                  injury  and  property  damage,   with  coverage  of  at  least
                  $1,000,000  combined  single limit or the equivalent  covering
                  any and all vehicles owned, used or hired by Pathnet;

                      (4) All Risk Property Damage insurance covering all of the
                  property  of Pathnet  on a  replacement  cost basis  including
                  property  in their  care,  custody or control  and first party
                  pollution  clean up. The first party  pollution clean up shall
                  include, at a minimum,  debris removal and cost of clean up on
                  a named perils




                                       21
<PAGE>

                  basis. Such insurance shall contain a waiver of subrogation in
                  favor The Burlington Northern and Santa Fe Railway Company.

                      (5) Pollution  Liability coverage in an amount of not less
                  than  $2,000,000 per occurrence and in the aggregate and shall
                  include  coverage for: (a) bodily injury,  sickness,  disease,
                  mental  anguish or shock  sustained  by any person,  including
                  death;  (b) property  damage  including  physical injury to or
                  destruction of tangible property  including the resulting loss
                  of use  thereof,  clean  up  costs,  and  the  loss  of use of
                  tangible  property  that has not been  physically  injured  or
                  destroyed;  and (c) defense  including loss adjustment  costs,
                  charges and expenses incurred in the investigation  adjustment
                  or defense of claims for such compensatory damages.

                      (6) If  Pathnet  requires  disposal  of any  hazardous  or
                  non-hazardous  materials off of their property,  Pathnet shall
                  utilize only a fully licensed and qualified disposal company.

                      (7) Railroad  Protective  Liability  insurance  naming The
                  Burlington  Northern and Santa Fe Railway Company as the Named
                  Insured with coverage of at least  $5,000,000  per  occurrence
                  and $10,000,000 in the aggregate.  Coverage shall be issued on
                  a standard  ISO for CG 00 35 01 96 and endorsed to include ISO
                  for CG 28 31 10 93  and  the  Limited  Seepage  and  Pollution
                  Endorsement.

            All insurance shall be placed with insurance  companies  licensed to
            do business in the States in which the work is to be performed,  and
            with a Best's Insurance Guide Rating of A- and Class VII, or better.

            If any work is to be performed within 50 feet of railroad  property,
            then the insurance must provide for coverage of incidents  occurring
            within fifty (50) feet of railroad  property,  and any  provision to
            the contrary  (including any limitation  regarding the definition of
            an insured  contract) in the insurance  policy must be  specifically
            deleted.

            To the extent  obtainable,  with respect to any incident on or along
            the Rail  Corridor,  in all cases except for Workers'  Compensation,
            the  certificate  must  specifically   state  that  "THE  BURLINGTON
            NORTHERN AND SANTA FE RAILWAY COMPANY IS AN ADDITIONAL INSURED." The
            Additional Insured endorsement shall, at a minimum, include coverage
            for the general supervision performed by BNSF.

            Any coverage afforded BNSF, the Certificate Holder, as an Additional
            Insured  shall  apply as  primary  and not  excess to any  insurance
            issued in the name of BNSF.

                  (b)  Before  commencing  any  work  hereunder,  Pathnet  shall
            furnish to BNSF,  Certificate of Insurance on the form prescribed by
            BNSF,  evidencing  the  issuance  to  Pathnet  of  the  policies  of
            insurance  providing  the types of insurance and limits of liability
            prescribed  above, and amending the  cancellation  clause to certify
            that BNSF shall be



                                       22
<PAGE>

            given not less than 30 days'  written  notice  prior to any material
            change,  substitution  or  cancellation  prior to normal  expiration
            dates.  Cancellation  or  expiration  of any  of  said  policies  of
            insurance  shall not preclude BNSF from recovery  thereunder for any
            liability arising under this Agreement.

            If any  coverage is  purchased  on a "claims  made"  basis,  Pathnet
            hereby  agrees to maintain  coverage in force for a minimum of three
            years  after   expiration,   cancellation  or  termination  of  this
            contract.  Pathnet shall provide evidence  annually of such coverage
            as required hereunder.

                  (c) Pathnet Parties shall procure and maintain insurance as
            outlined in Exhibit C-1.

                  (d) It is mutually  understood and agreed that the purchase of
            insurance  as  herein  provided  shall  not in  any  way  limit  the
            liability of the Pathnet or Pathnet  Parties to BNSF,  as herein set
            forth.

            20.   Liens.

                  (a) In the event that any BNSF property becomes subject to any
            mechanics'  or   materialmen's   lien,  or  other   construction  or
            supplier's  lien or encumbrance  chargeable to or through Pathnet or
            any of the Pathnet Parties as a result of a failure to pay.  Pathnet
            promptly, and in any event within ten days, shall cause such lien or
            encumbrance  to be  discharged  or released  of record (by  payment,
            posting of bond,  court  deposit or other  means),  without  cost to
            BNSF,  and shall  indemnify and hold harmless BNSF against all costs
            (including  reasonable  attorneys' fees) incurred in connection with
            such lien or encumbrance.  If any such lien or encumbrance is not so
            discharged  and  released,  BNSF may pay or secure  the  release  or
            discharge  thereof,  at the expense of Pathnet,  after first  giving
            five  days'  advance  notice  of its  intention  to do  so.  Pathnet
            acknowledges  that:  (i) all or  portions of the Rail  Corridor  are
            subject to the liens of one or more of BNSF's various mortgages;(ii)
            BNSF from time to time may place  other  liens or  mortgages  on the
            Rail  Corridor  and (iii) the  discharge or release of record of the
            current or future liens and mortgages  from the Rail Corridor is not
            required by this  Section,  provided  however,  that any such future
            liens or mortgages  shall be subject to Pathnet's  rights under this
            Lease.

                  (b) Nothing herein shall preclude  either Pathnet or BNSF from
            contesting of any lien or other encumbrance.

            21.   Liaison, Dispute Resolution and Arbitration.

                  (a) Not later than  thirty  days after the date of this Lease,
            BNSF and Pathnet each shall send a letter to the other,  pursuant to
            Section 28 hereof,  designating  individuals as points of contact at
            the following levels: corporate officer for overall decision-making,
            corporate  officer  for  dispute  resolution;   contact  person  for
            day-to-day  corporate  contact  and  liaison;   contact  person  for
            engineering and project management; contact person for



                                       23
<PAGE>

            field   construction;   contact  person  for  daily  operations  and
            maintenance;  and  contact  person  for  disaster  operations  on  a
            twenty-four  (24) hour basis.  The same individual may be designated
            for one or more  of the  foregoing  positions,  and  either  BNSF or
            Pathnet  may  change the name of any  designated  officer or contact
            person at any time by so informing the other in writing.

                  (b) It is the intent of the  parties  hereto  that any dispute
            which  may  arise  between  them  be  resolved  as  quickly  and  as
            informally  as possible.  When quick and informal  resolution of any
            dispute is not possible,  the issues in dispute shall be referred to
            the  two  corporate  officers   designated  for  dispute  resolution
            pursuant to this Section 21, who shall make a reasonable  attempt to
            settle the dispute.

                  (c) The parties  hereto  agree to waive any rights that either
            may  have to a  remedy  in a court  of law or in a court  of  equity
            arising out of this Lease,  and to submit any dispute  arising under
            the Lease,  and not settled  pursuant to Section  21(b)  hereof,  to
            binding   arbitration   in   accordance   with  this   Section   21.
            Notwithstanding the foregoing,  either party shall have the right to
            pursue  preliminary  equitable relief in connection with this Lease,
            or to pursue appropriate legal or equitable remedies in support of a
            decision rendered in arbitration.

                  (d)  The  parties  hereto  agree  that  one  of  the  remedies
            available to the  arbitrator(s)  for any substantial  breach of this
            Agreement  shall  be  specific  performance,  and  that an  award of
            specific performance by an arbitrator or arbitrators may be enforced
            in a court of law or equity.

                  (e) Any arbitration under this Agreement shall be conducted in
            accordance  with the  Commercial  Rules of the American  Arbitration
            Association  and  shall  be  conducted  by an  arbitrator,  and said
            arbitration  shall be conducted by a panel of three (3) arbitrators,
            one to be selected by BNSF,  one to be selected by Pathnet,  and one
            to be selected by the two designated arbitrators. Discovery shall be
            conducted in accordance with the Federal Rules of Civil Procedure

                  (f) All costs,  fees and expense charged by the  arbitrator(s)
            and other  neutral  third  parties  retained by mutual  agreement of
            Pathnet  and  BNSF in any  arbitration  conducted  pursuant  to this
            Section  21 shall be shared  equally  by  Pathnet  and BNSF,  unless
            apportioned otherwise by the arbitrators.

            22.   Representations and Warranties.

                  (a) By executing this Lease, BNSF represents and warrants the
            following facts:

                      (1) BNSF has the full  right and  authority  to enter into
                  and perform this Lease,  and by entering  into and  performing
                  this  Lease,  BNSF  is not in  violation  of  its  charter  or
                  by-laws,  or any Laws or  agreement by which it is bound or to
                  which it is subject; it being understood,  however,  that this
                  warranty does not



                                       24
<PAGE>

                  constitute  a  warranty,  express  or  implied,  that BNSF has
                  sufficient  rights in the Rail  Corridor to permit  Pathnet to
                  Construct and Operate the Fiber Optic Facilities; and

                           (2) The execution,  delivery and  performance of this
                  Lease  by BNSF  has  been  duly  authorized  by all  requisite
                  corporate  action,  that  the  signatory  for BNSF  hereto  is
                  authorized to sign this Lease and bind BNSF to its terms.

                  (b)      By executing this Lease, Pathnet represents and
                  warrants:

                           (1) Pathnet has the full right and authority to enter
                  into  and  perform  this  Lease  and  by  entering   into  and
                  performing  this  Lease,  Pathnet is not in  violation  of its
                  charter or by-laws,  or any Laws or  agreement  by which it is
                  bound or to which it is bound or to which it is subject;

                           (2) The execution,  delivery and  performance of this
                  Lease by Pathnet  has been duly  authorized  by all  requisite
                  corporate  action,  that the signatory  for Pathnet  hereto is
                  authorized  to sign this Lease and bind  Pathnet to its terms;
                  and

                           (3) Pathnet has the financial capability to fulfill
                  all of its obligations under this Lease.


            23. Limitation on Damages for Breach of this Lease. Damages that may
be  recovered  for  breach  of  this  Lease  shall  not  include  any  indirect,
consequential,  special or punitive  damages,  or lost  profits,  or the cost of
Pathnet  building  Fiber  Optic  Facilities  at a  different  location  than  it
originally planned.


            24.   Recordings, Taxes and Other Charges.

                  (a) Except as provided in this Section 24,  Pathnet shall pay:
            (i) all transfer taxes, documentary stamps, recording costs or fees,
            or any  similar  expense in  connection  with this Lease  and/or the
            recording or filing of a  Memorandum  of Lease for this Lease (which
            memorandum shall be in a form mutually agreeable between the parties
            and the  recording  of a  Memorandum  of Lease  shall  occur only by
            mutual  agreement  by the  parties);  and  (ii)  any and  all  taxes
            (including  but not limited to  transfer,  sales,  use, and property
            taxes),  levies,  excises,  assessments  and charges  (collectively,
            "Taxes"), including any penalties and/or interest thereon, levied or
            assessed  with  respect to the Fiber Optic  Facilities  or Pathnet's
            leasehold  interest.  Pathnet shall indemnify,  defend and hold BNSF
            harmless against the payment of any Taxes referenced in this Section
            24(a).

                  (b) BNSF may pay any Taxes,  plus any penalty and/or  interest
            thereon,  imposed upon BNSF for which Pathnet is obligated  pursuant
            to this Lease, if Pathnet



                                       25
<PAGE>



            does not pay  such  Taxes  when  due,  and  Pathnet  shall  promptly
            reimburse BNSF for any such payment it makes.

                  (c) In the case of amounts  described  in  Section  24(a)(ii),
            where Taxes with  respect to Fiber  Optic  Facilities  or  Pathnet's
            leasehold interest are not separately assessed, BNSF shall determine
            the amount of Taxes  attributable to the Fiber Optic  Facilities and
            Pathnet's leasehold interest by reference to information provided by
            the relevant taxing authority that  demonstrates or establishes that
            such  Taxes  are  attributable  to the  Fiber  Optic  Facilities  or
            Pathnet's  leasehold  interest.  If the information  provided by the
            relevant taxing authority demonstrates or establishes that Taxes are
            attributable  to the fiber optic value of a Rail Corridor in respect
            of which  Pathnet has been granted  rights  hereunder,  but does not
            demonstrate or establish the value  attributable  to the Fiber Optic
            Facilities   or  Pathnet's   leasehold   interest,   the  amount  so
            attributable  shall be  determined  by reference to a formula.  Such
            formula shall be consistently applied, shall reasonably allocate any
            Taxes among all of BNSF's rail corridors and fiber optic values with
            a further  allocation of the Taxes  attributable  to the fiber optic
            value  between  the  Fiber  Optic  Facilities,  Pathnet's  leasehold
            interest  and fiber optic value  attributable  to fiber optic rights
            granted by BNSF to others. In all cases, BNSF promptly shall provide
            to Pathnet information that establishes the manner in which any such
            Taxes  were  allocated  and the  basis  for  establishing  that such
            amounts are  attributable to the Fiber Optic Facilities or Pathnet's
            leasehold interest.  The parties shall resolve any dispute regarding
            the liability of Taxes hereunder  pursuant to the dispute resolution
            and arbitration procedures set forth in Section 21 of this Lease.

                  (d) Notwithstanding anything to the contrary contained in this
            Lease,  BNSF shall pay (i) any Taxes  attributable  to rights in the
            Fiber Optic  Facilities  and other assets and  services  provided to
            BNSF  pursuant  to  Section  8 of this  Lease;  and  (ii)  property,
            franchise or similar taxes that are  attributable to a Rail Corridor
            that are not attributable to the existence or use of the Fiber Optic
            Facilities or Pathnet's  leasehold  interest.  BNSF shall indemnify,
            defend and hold  Pathnet  harmless  against the payment of any Taxes
            referenced in this Section 24(d).  Pathnet may pay any Taxes imposed
            on Pathnet for which BNSF is obligated to indemnify Pathnet pursuant
            to this  Section  24(d),  if BNSF does not pay such amounts when due
            and BNSF shall  promptly  reimburse  Pathnet for any such payment it
            makes. The provision of Section 24(c) shall apply to amounts claimed
            by Pathnet, mutatis mutandis.

                  (e) Neither BNSF nor Pathnet will be responsible for the
            income or corporate franchise tax of the other.

                  (f) Both BNSF and Pathnet agree to reasonably  cooperate  with
            each other in the refund, rebate, reduction,  abatement,  mitigation
            or  contest  of any  Taxes  for which  either  is  obligated  to pay
            hereunder.

            25.   Independent Contractor Status; No Joint Venture. BNSF reserves
no control whatsoever over the employment, discharge or compensation of
Pathnet's employees or contractors. It is the intention of the parties hereto
that Pathnet shall be and remain an independent contractor, and nothing in this
Lease shall be construed as inconsistent with



                                       26
<PAGE>



Pathnet's independent  contractor status or creating or implying any partnership
or joint venture between Pathnet and BNSF.

            26.   Confidentiality.

                        (a) The  terms  of this  Lease  shall  be  confidential.
            Either party hereto may designate as confidential certain materials,
            maps,  documents and other  information  exchanged in fulfilling the
            terms and intent of this Lease. In addition,  in connection with the
            provision  of material  and/or  services  to BNSF by Pathnet,  or to
            BNSF,  BNSF and/or  Pathnet  may  discover  or  otherwise  come into
            contact with  specifications,  drawings,  computer programs,  and/or
            technical or business  information which BNSF or Pathnet has clearly
            identified as  confidential.  All construction  plans,  drawings and
            specifications,   including,   without   limitation,   all  proposed
            Construction  Drawings,  Final  Construction  drawings  and as-built
            plans and all  information  about the  location  of the Fiber  Optic
            Facilities, will constitute confidential information.

                        (b) Unless confidential information was previously known
            free of any  obligation to keep it  confidential,  or has been or is
            subsequently  made public, it shall be handled in confidence by BNSF
            and Pathnet and shall be  disclosed  only upon a need to know basis,
            such terms and conditions as may be mutually  agreed upon in writing
            by the parties hereto, or as required by law. BNSF and Pathnet shall
            advise those employees, agents, and contractors who may have contact
            with such  information,  of the obligation to keep such  information
            confidential,  and will use their best efforts to avoid unauthorized
            disclosure  of  such  information.  Notwithstanding  the  foregoing,
            either party may  disclose  confidential  information  to the extent
            required  by  applicable  law  or  regulations,  provided  that  the
            disclosing  party has  notified  the other  party of the  disclosing
            party's obligation to disclose, and provided that the non-disclosing
            party has had an opportunity to contest such disclosure.

                        (c) In the event of an actual or  threatened  disclosure
            of such  information  by  either  party  hereto  which  might  cause
            irreparable  harm to the  other  party  hereto,  it is  agreed  that
            monetary remedies available at law may be inadequate and, therefore,
            the  aggrieved  or  threatened  party  hereto  shall be  entitled to
            receive injunctive relief as an equitable remedy.

                        (d)   Notwithstanding    anything   else   herein,   the
            obligations  of the  parties  hereto  under  this  Section  26 shall
            survive termination of this Lease for a period of three years.

            27.   Assignment.

                        (a) This Lease  shall be  binding  upon and inure to the
            benefit  of  the  parties  hereto  and  their  respective  permitted
            successors or assignees.  Pathnet shall not assign any of the rights
            granted  to Pathnet  under this  Lease,  without  the prior  written
            consent of BNSF, which may be withheld or conditioned in BNSF's sole



                                       27
<PAGE>

            discretion.  Any  assignment  made in  violation  of this Section 27
            shall be null and void,  shall  confer  no rights  upon any party as
            against BNSF,  and shall give BNSF the right to terminate this Lease
            effective immediately,  or take any other lesser action with respect
            thereto.  The above  requirement  for consent shall not apply to (i)
            any  disposition of all or  substantially  all of Pathnet's stock or
            assets; (ii) any corporate merger,  consolidation or reorganization,
            whether  voluntary or  involuntary,  involving  Pathnet;  or (iii) a
            sublease or assignment of the Lease (in whole or in part) by Pathnet
            to a subsidiary,  affiliate,  or parent company,  controlled,  under
            common control with, or controlling,  either indirectly or directly,
            Pathnet,  but only where,  and to the extent,  such transaction does
            not violate the terms of the Contribution  Agreement;  provided that
            no assignment not consented to by BNSF shall relieve  Pathnet of any
            of its obligations or liabilities  under this Lease.  Nothing herein
            shall prohibit Pathnet (i) from involving contractors,  or strategic
            or  co-development  partners in  Construction  and  Operation of the
            Fiber Optic  Facilities,  on such terms as Pathnet may  determine in
            its sole  discretion,  provided all such activities are conducted in
            accordance  with the terms of this Lease,  and that Pathnet  remains
            fully liable for all obligations  hereunder;  and (ii) from granting
            liens or other security  interests in the Fiber Optic  Facilities or
            Pathnet's  rights under this Lease in connection  with  financing or
            investments made available to Pathnet.

                        (b)  Upon  request  by  Pathnet,   BNSF  shall   execute
            reasonable documentation to be provided by Pathnet acknowledging the
            rights of Pathnet's lender(s)  ("Lender") to obtain ownership of the
            Fiber Optic  Facilities if this Lease is still in effect and Pathnet
            is in material  default under the terms of Pathnet's loan to Lender,
            provided, however, that in such case Lender shall become an assignee
            to this Lease and shall become subject to all rights and obligations
            of Pathnet  under the terms of this Lease  (and  Pathnet  also shall
            remain subject to all  obligations of Pathnet under this Lease).  In
            order to obtain the rights  specified  in this  Lease,  Lender  must
            execute  an  amendment  to this  Lease  agreeing  to be bound by the
            terms,  conditions  and  obligations  contained  in this Lease.  The
            execution of such an  amendment by Lender shall not relieve  Pathnet
            from  any  obligations  or  liabilities  contained  in  this  Lease.
            Further,  before  Lender  or any other  assignee  or  transferee  of
            Pathnet's  interest in this  Agreement  may obtain any of  Pathnet's
            rights hereunder, such Lender, assignee, or transferee must cure any
            and all outstanding  defaults by Pathnet  hereunder.  In addition to
            the rights granted to Pathnet hereunder, Pathnet's Lender shall have
            the additional right to take possession,  sell,  assign or otherwise
            transfer the Fiber Optic Facilities, including the right to operate,
            or permit a  third-party  to operate,  the Fiber  Optic  Facilities,
            provided such operation shall be subject to all terms and conditions
            of this Lease.

            28. Notices. Unless otherwise provided herein, all notices and other
communications  required  by or  concerning  this Lease  shall be in writing and
shall be deemed to have been duly given when  delivered in person or on the next
business day when sent by a nationally  recognized  overnight courier, or on the
second succeeding business day when sent by registered or certified



                                       28
<PAGE>

United States Mail (postage prepaid,  return receipt  requested),  or, if postal
claim notice is given, on the date of its return marked  "unclaimed"  (provided,
however, that upon receipt of a returned notice marked "unclaimed",  the sending
party hereto shall make reasonable  effort to contact and notify the other party
hereto by telephone) and each respective party hereto at the following addresses
(or at such  other  address  for a party  hereto as shall be  specified  by like
notice):

            (1)   if to Pathnet:

                  Pathnet, Inc.
                  1015 31st St., N.W.
                  Washington, DC 20007
                  Attn: General Counsel

                  and to:

                  Pathnet, Inc.
                  1661 Gateway Boulevard
                  Richardson, TX 75080
                  Attn:  Senior Vice President, Engineering

            (2)   if to BNSF:

                  Assistant Vice President, Telecommunications
                  The Burlington Northern and Santa Fe Railway Company
                  2600 Lou Menk Drive
                  Forth Worth, Texas 76131

                  and to:

                  Vice President -Law
                  The Burlington Northern and Santa Fe Railway Company
                  2500 Lou Menk Drive, AOB-3
                  Fort Worth, Texas 76131-2830

            29.  Brokers and Agents.  BNSF and Pathnet  represent and warrant to
each other than neither has employed any broker,  agent or finder in  connection
with this Lease, and each indemnifies and agrees to hold harmless the other from
and against  any  commission  or fee  claimed by any broker,  agent or finder in
connection with this transaction.

            30. Force Majeure.  Except as may be elsewhere specifically provided
in this Lease,  any failure or delay in the performance by a party hereto of its
obligations  hereunder,  including,  without limitation,  Pathnet's  obligations
pursuant  to  Section  5 hereof,  shall  not be a breach  of this  Lease if such
failure or delay results from causes beyond that party's control,  including but
not  limited to acts of God,  governmental  action or  inaction  (whether in its
sovereign or contractual capacity), fire, flood, or other catastrophe,  national
emergency, insurrection, riot, and




                                       29
<PAGE>

war. The phrase  "beyond that party's  control" shall not include any failure to
reach  agreement with a party with whom Pathnet is  negotiating  pursuant to the
exclusive right to negotiate  provided in Section 4(b) of the Fiber Optic Access
Agreement.

            31.   Costs. Except as specifically provided in this Lease, each
party hereto shall be responsible for its own costs (including legal fees)
incurred in connection with the preparation, execution and performance of this
Lease.

            32. Severability.  If any provision of this Lease or the application
thereof,  shall be held invalid,  illegal or  unenforceable in whole or in part,
the remainder of this Lease and the  application  thereof shall not be affected,
and shall be enforceable to the fullest extent permitted by law, and the portion
hereof found to be invalid shall be enforced to the fullest extend  permitted by
law,  and, if  possible,  shall be reformed to carry out as much as possible the
intent of the parties as expressed herein.

            33. Amendment,  Waiver.  This Lease may be amended only by a written
instrument  executed by both parties hereto. No failure to exercise and no delay
in  exercising,  on the part of a party  hereto,  any right,  power or privilege
hereunder  shall operate as a waiver of any other provision of this Lease, or as
a waiver of that right,  power or privilege either before,  or after, the period
of waiver.

            34. Entire  Agreement.  This Lease and all Exhibits attached hereto,
together with the Fiber Optic Access  Agreement and the  Contribution  Agreement
between the parties  hereto  dated as of  __________  __, 1999,  constitute  the
entire  agreement  of the  parties  hereto with  respect to the subject  matters
hereof,  and  supersede  any  and all  prior  negotiations,  understandings  and
agreements, whether oral or written, with respect hereto.

            35.   Interpretation; Construction.

                  (a) Section  headings  contained  in this Lease are solely for
            purpose of reference  and shall not be construed  with the substance
            of the  Section  they  caption or in any way  affect the  meaning or
            interpretation of this Lease.

                  (b) Wherever  used in this Lease:  (i) any pronoun or pronouns
            shall be deemed to include  both the plural and the  singular and to
            cover all genders,  and (ii) "or" is used in the inclusive sense, in
            all cases where such meanings would be appropriate.

            36.   Legal Forum. This Lease shall be interpreted, construed and
enforced in accordance with the laws of the State of Texas.

            37.   Counterparts. This Lease may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.


                                       30
<PAGE>



IN WITNESS WHEREOF, authorized representatives of BNSF and Pathnet have executed
this Lease as of the date first set forth herein.


PATHNET TELECOMMUNICATIONS, INC.             THE BURLINGTON NORTHERN AND
                                             SANTA FE RAILWAY COMPANY

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




                                       31
<PAGE>
                                    EXHIBIT A





                        [to be agreed to by the parties]


<PAGE>
                                    EXHIBIT B




                           Map of BNSF Railway Network

                        [to be agreed to by the parties]


<PAGE>
                                    EXHIBIT C

                     Additional Construction Specifications
                     --------------------------------------

                        [to be agreed to by the parties]





                                      -13-
<PAGE>


                                    EXHIBIT B

                               EXCLUSIVE CORRIDORS

                                     Approx.
Corridor                            Route
Description                         Miles

[* * *]                            [* * *]

Total:                              4,052



                                      -14-
<PAGE>


                                    EXHIBIT C

                              RESTRICTED CORRIDORS

                                     Approx.
Corridor                            Route
Description                         Miles

[* * *]

Total:                             [* * *]
------                              -----


                                      -16-