Document:

IRU with Enron, Pathnet grantor

* IMPORTANT NOTE:  CERTAIN  MATERIAL,  INDICATED BY AN ASTERISK ("*"),  HAS BEEN
OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

CONFIDENTIAL AND PROPRIETARY
----------------------------

                                  IRU AGREEMENT

                                 BY AND BETWEEN

                       PATHNET OPERATING, INC., AS GRANTOR

                                       AND

                      ENRON BROADBAND SERVICES, AS GRANTEE

                             DATE: January 18, 2001

                                                   IRU AGREEMENT

         THIS IRU AGREEMENT  (this  "Agreement")  is made and entered into as of January 18, 2001 (the  "Effective
                                     ---------                                                           ----------
Date") by and between Pathnet Operating,  Inc., a Delaware corporation  ("Pathnet"),  and Enron Broadband Services,
----                                                                      -------
Inc., an Oregon corporation ("Customer").
                              --------

                                                     RECITALS
                                                     --------

         A.       Pathnet  owns or is planning  to  construct a fiber  optic  communication  system (the  "Pathnet
                                                                                                           --------
System")  between the city pairs and locations  identified in Exhibit A, which is attached hereto and  incorporated
                                                              ---------
herein by this reference (the "System Route").
                               ------------

         B.       Customer  desires to be granted the right to use,  and Pathnet is willing to grant to Customer an
indefeasible  right to use certain  dark fibers and  Associated  Conduit in the  Pathnet  System,  on the terms and
conditions set forth below.

         C.       Each  defined  term shall have the meaning set forth in this  Agreement  where such term is first
used,  or, if no meaning is so set forth,  the  meaning  ascribed  to such term in the  Glossary  of Terms which is
attached hereto and incorporated herein by this reference.

         Accordingly,  in  consideration  of the mutual  promises  set forth  below,  and other  good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

                                                    ARTICLE 1.
                                                   GRANT OF IRU
                                                   ------------

         1.1      Pathnet  hereby grants to Customer,  and Customer  hereby accepts from Pathnet,  an  indefeasible
right to use (the "IRU"):
                   ---

                  (a)      Six (6) dark  fibers on the  segment  from  Chicago,  IL to  Denver,  CO,  which will be
specifically  identified by Pathnet in the Pathnet System,  as more  particularly  described in Exhibit A, attached
hereto and  incorporated  herein,  and  meeting  the  specifications  set forth in Exhibit D,  attached  hereto and
incorporated herein (the "Customer Fibers"); and in
                          ---------------

                  (b)      an undivided  interest in the Conduit  containing  the Customer  Fibers,  calculated pro
rata and based upon the ratio of the number of Fibers in the  Conduit to the total  number of fibers in the Conduit
(the "Associated Conduit").
      ------------------

         1.2      The IRU is granted on the terms and subject to the  covenants  and  conditions  set forth in this
Agreement.  The IRU shall be exclusive as to the Customer Fibers,  and  nonexclusive as to the Associated  Conduit.
The IRU does not include the right of Customer to own, control,  maintain,  modify or revise the Customer Fibers or
Associated  Conduit,  or the right of physical access to, the right to encumber in any manner,  or other use of the
Pathnet  System except as expressly  set forth  herein.  Customer's  rights in the Customer  Fibers and  Associated
Conduit are hereinafter referred to as the "Customer System").

         1.3      Each party shall have full and complete  control and  responsibility  for determining any network
and service  configuration  or designs,  routing  configurations,  regrooming,  rearrangement  or  consolidation of
channels or circuits and all related functions with regard to the use of that party's fiber.

         1.4      Customer  acknowledges  and  agrees  that,  except as  provided  in section  7.2,  Pathnet is not
supplying  nor is Pathnet  obligated to supply to Customer any  optronics or  electronics  or optical or electrical
equipment or other  facilities,  including  without  limitation,  generators,  batteries,  air  conditioners,  fire
protection and monitoring  and testing  equipment,  all of which are the sole  responsibility  of Customer,  nor is
Pathnet responsible for performing any work other than as specified in this Agreement.

         1.5      The Acceptance Date shall be as set forth in Section 4.1.

         1.6      [Intentionally omitted.]

                                                    ARTICLE 2.
                                              CONSIDERATION FOR GRANT
                                              -----------------------

         2.1      In  consideration  of the grant of the IRU hereunder by Pathnet to Customer,  Customer  agrees to
pay to  Pathnet,  within  five (5) days  after the  Acceptance  Date,  an IRU fee (the "IRU  Fee") of the amount of
                                                                                        --------
"*",  payable on the Delivery Date.  Payment shall be made to an escrow account specified by Pathnet..

2.2      In addition to the amounts  payable under  Section 2.1,  Customer shall pay directly or reimburse  Pathnet
for all costs and expenses to be paid by Customer as set forth in this Agreement,  including,  without  limitation,
the costs and expenses described in Articles 7, 8 and 13.

2.3      The  consideration for the use of the space in Pathnet's  facilities  described in section 7.2 shall be as
provided in the Collocation Agreement attached hereto as Exhibit H, and payable as set forth therein.

         2.4      Customer  shall pay the IRU Fee by wire transfer of  immediately  available  funds to the account
or accounts designated by Pathnet.

         2.5      If Customer  fails to make any payment  under this  Agreement  when due, such amount shall accrue
interest  from the date such  payment is due until paid,  including  accrued  interest  compounded  monthly,  at an
annual rate of twelve  percent  (12%) or, if lower,  the  highest  percentage  allowed by law. If a dispute  arises
concerning  an amount due by  Customer,  and it is later  determined  that the amount is due and owing to  Pathnet,
such amount shall bear interest from the date when due until paid, at the foregoing rate.

                                                     ARTICLE 3

                                               INTENTIONALLY OMITTED

                                                    ARTICLE 4.
TESTING AND WARRANTY
--------------------

         4.1.     Testing.
                  -------

         (a)      Pathnet shall test all Customer Fibers in accordance  with the procedures  specified in Exhibit C
                                                                                                          ---------
("Fiber  Testing") to verify that the Customer  Fibers have been  installed and  operating in  accordance  with the
  --------------
specifications  described  in Exhibit C.  Pathnet  shall  deliver a copy of the test  results to  Customer no later
                              ---------
than ten (10) days after  completion  of testing.  If,  within ten (10) days after receipt by Customer from Pathnet
of the initial test results or of the results of  re-testing  as set forth below,  Customer  reasonably  determines
that the test results are  unacceptable,  Customer shall,  within such ten (10) day period,  notify Pathnet of such
determination  and Customer shall have the right, but not the obligation,  at its sole expense,  to conduct its own
fiber  acceptance  testing  of the  Customer  Fibers  to verify  that they are  operating  in  accordance  with the
specifications  in Exhibit C ("Fiber  Acceptance  Testing").  Customer shall commence its Fiber Acceptance  Testing
                   ----------------------------------------
of the  Customer  Fibers  within ten (10) days of such notice to Pathnet and shall  complete  such  testing  within
fourteen (14) days thereafter.  Pathnet shall have the right,  but not the obligation,  to have a person or persons
present to observe and validate  Customer's  Fiber  Acceptance  Testing.  Within ten (10) days of the conclusion of
Customer's  Fiber  Acceptance  Testing of the Customer  Fibers,  Customer shall provide  Pathnet with a copy of the
test results and notify  Pathnet in writing of  acceptance of the Customer  Fibers or that the Customer  Fibers are
unacceptable.

         (b)      In the event the results of  Customer's  tests of the Customer  Fibers show the  Customer  Fibers
are not operating  within the parameters of the applicable  specifications  and Customer has so notified Pathnet in
writing,  Pathnet  shall  expeditiously  take such action as shall be  reasonably  necessary  with  respect to such
portion of the  Customer  Fibers that do not  operate  within the  parameters  of the  specifications  to bring the
operating  standards of such portion of the Customer Fibers within such  parameters.  After taking such actions and
re-testing  of the  Customer  Fibers,  Pathnet  shall  provide  Customer  with a copy of the new test  results  and
Customer  shall  again have the right to conduct its own Fiber  Acceptance  Testing as set forth  above.  The cycle
described above of testing,  taking  corrective  action and re-testing  shall take place as many times as necessary
to ensure that the Customer Fibers operate within the parameters of the applicable specifications.

                  (c)      Customer  shall be  deemed to have  accepted  the  Customer  Fibers  unless it  notifies
Pathnet  within ten (10) days of receipt of the test  results,  as  specified  in this  Section 4 that such results
are  unacceptable.  If the test results of Customer's  Fiber  Acceptance  Testing are within the  parameters of the
specifications  in Exhibit C, Customer shall,  within ten (10) days of receipt of Customer's test results,  provide
                   ---------
Assignor  with a written  notice  accepting  the  Customer  Fibers.  The date of this  notice or the date of deemed
acceptance, as the case may be, of the Customer Fibers for all Assigned Segments shall be the "Acceptance Date."

                  (d)      The  Customer  Fibers  will  be  terminated  at  a  fiber   distribution  panel  in  the
Facilities.  Customer shall provide its own stub cables from the fiber distribution panel to Customer's equipment.

4.2      Warranty.  Beginning on the  Effective  Date,  and ending twelve  months  following  the  Effective  Date,
         --------
Pathnet shall warrant that,  except for those items that are supplied or specified by Customer the Customer  Fibers
shall comply with the  specifications  set forth in Exhibit C. If within one year  following  the  Effective  Date,
                                                    ---------
Customer  discovers  that the Customer  Fibers do not meet the warranty  described  above,  Pathnet  shall,  within
fifteen  (15) days of receipt of written  notice of such defect from  Customer,  inspect such  Customer  Fibers and
promptly  thereafter,  and at no cost to Customer,  correct any such defect or notify Customer of its dispute as to
any defects  recited in Customer's  notice.  EXCEPT AS SET FORTH IN THIS SECTION OR IN ARTICLE 21, PATHNET MAKES NO
WARRANTY,  EXPRESS OR IMPLIED,  WITH RESPECT TO THE CUSTOMER FIBERS OR OTHER ASSOCIATED  MATERIALS FOR THE CUSTOMER
FIBERS,  INCLUDING ANY WARRANTY OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE,  AND ALL SUCH WARRANTIES ARE
EXPRESSLY  DISCLAIMED.  IN ADDITION,  PATHNET MAKES NO WARRANTIES OR  REPRESENTATIONS  OF ANY TYPE  CONCERNING  THE
INTEGRITY OR PERFORMANCE OF THE MATERIALS FURNISHED OR DESIGNATED BY CUSTOMER.

(a)      With respect to items of materials  furnished  or  specified  by Customer,  Pathnet  agrees to pass on and
assign to Customer any warranty it may have received from the  manufacturer  or supplier,  to the extent that it is
assignable.

(b)      Customer's  sole and exclusive  remedy for breach of the  warranty,  shall be repair and  replacement,  at
Pathnet's  expense,  of the portions of Customer Fibers found to be defective.  In no event shall Pathnet be liable
to Customer for any  indirect,  exemplary,  special or  consequential  damages,  including  but not limited to lost
profits or the cost of providing or obtaining alternative service.

                                                    ARTICLE 5.
                                                  DOCUMENTATION
                                                  -------------

         Not later than sixty (60) days after the  Facilities  Delivery Date,  Pathnet shall provide  Customer with
the following documentation:

                  (a)      As-built   drawings  in  accordance  with  the   requirements   described  in  Exhibit B
                                                                                                          ---------
("As-Builts").
-----------

                  (b)      Technical  specifications  of the optical fiber cable and  associated  splices and other
equipment placed in the Pathnet System.

                                                    ARTICLE 6.
                                                      TERM
                                                      ----

6.1      The grant of the IRU shall become  effective on the  Effective  Date and shall extend until June 30, 2020.
The period of the IRU is herein  defined as the "Initial  Term."  Subject to the  conditions  and  limitations  set
                                                 -------------
forth below,  and subject to the extension of the Underlying  Rights,  Customer may, by written notice,  extend the
IRU grant and this  Agreement  for an  additional  ten (10) year period or such  shorter  period as required by the
Underlying  Rights,  and, if it has so elected to so extend,  it may, by written  notice,  extend the IRU grant and
this  Agreement  for a second ten (10) year period or such  shorter  period as required  by the  Underlying  Rights
(each of such periods being  referred to herein as a "Renewal  Term").  Customer  shall provide such written notice
                                                      -------------
at least one (1) year in advance of the date the Initial Term or the  extension  thereof  would expire  absent such
notice.  Within thirty (30) days after the date on which Pathnet has received  Customer's  written notice  electing
to extend the term of this IRU and  requesting a report on the remaining  term of the  Underlying  Rights,  Pathnet
will advise Customer of the remaining term of all applicable  Underlying Rights,  and, if such Underlying Rights do
not extend for the entire length of the extended  term,  Customer shall have the right to (i) extend this Agreement
for the entire  renewal term or for less than the renewal term (but in either of such events  Customer shall obtain
renewals of such Underlying  Rights,  in Customer's name, at Customer's sole cost, prior to such renewal term), or,
at Pathnet's  option,  in Customer's and Pathnet's names, in which latter case Customer and Pathnet shall share the
costs,  with Pathnet paying the costs  attributable  to all IRU holders in the same Cable who claim through Pathnet
(except  Customer  and its  assignees)),  or (ii)  withdraw  its  election  to extend  the term of this  Agreement.
Customer  shall not be  responsible  for any IRU for any Renewal  Term,  but shall be liable for its  Proportionate
Share (as  defined in  Section  9.3) of the costs  incurred  under all  Underlying  Rights,  and all other  charges
incurred  under  this  Agreement  during  any  such  Renewal  Term,  including,  without  limitation,  charges  for
maintenance,  collocation  services and  Impositions.  Customer  shall have the right (but not the  obligation)  to
extend or obtain  modification  of any  Underlying  Right,  on  Customer's  own behalf and at its sole cost, to the
extent Customer deems appropriate in connection with any extension of the Term.

         6.2      At the end of the Initial Term or the last Renewal Term, as  applicable,  Pathnet shall  transfer
title to the Customer Fibers and Associated  Conduit to Customer  pursuant to a bill of sale reasonably  acceptable
to both  parties.  Upon  such  conveyance  the IRU in the  Customer  Fibers  shall  immediately  terminate  and all
rights of Customer  pursuant to this  Agreement  shall cease and,  except as to  liabilities  or  obligations  that
accrue prior to such termination,  expressly survive  termination or expiration of this Agreement,  or are incurred
pursuant to Articles XI, XII,  XIII, XV, or Article XIX,  neither Party shall owe the other any  additional  duties
or  consideration  hereunder.  Unless  Pathnet and Customer shall have entered into an Operation,  Maintenance  and
Repair Agreement  substantially  in the form of Exhibit I, Customer shall,  within sixty (60) days after the end of
                                                ---------
the Term (unless the Parties agree to a longer  period),  remove all  electronics  and  equipment  from the System,
including any Pathnet  facilities,  at Customer's sole cost, under Pathnet's  supervision.  In the event of failure
of Customer  to remove  same  within said  period,  Pathnet  may remove  same at  Customer's  sole  expense,  to be
reimbursed  by  Customer  within  thirty  (30) days of  receipt of  Pathnet's  invoice  therefor.  In order for the
equipment  or  facilities  of Customer to be or remain  connected  to the System,  Customer  and Pathnet  must have
entered into an Operation Maintenance and Repair Agreement substantially in the form of Exhibit I.
                                                                                        ---------

         6.3      It is  understood  and agreed  that  Pathnet  must and does  maintain  legal  title to the entire
Pathnet  System,  subject to the IRU  hereunder.  Notwithstanding  the  foregoing,  it is understood  and agreed as
between  the  parties  that the grant of the IRU  hereunder  shall be treated  for  accounting  and federal and all
applicable state and local tax purposes as the sale and purchase of the Customer  Fibers,  and that on or after the
Effective  Date,  Customer  shall be treated as the owner of the  Customer  Fibers for such  purposes.  The parties
agree to file their respective  income tax returns,  property tax returns,  and other returns and reports for their
respective  Impositions  on such  basis  and,  except  as  otherwise  required  by law,  not to take any  positions
inconsistent  therewith.  Notwithstanding  the  foregoing,  if a party's  third-party  financial  auditors,  in the
exercise of their good faith judgment,  determine that a different  treatment is more  appropriate,  such party may
use the treatment  recommended  by its auditors.  In that event,  such party will give written  notice to the other
party of the reasons for such requirement as provided by its auditors.

                                                    ARTICLE 7.
                                     NETWORK ACCESS; REGENERATION FACILITIES
                                     ---------------------------------------

         7.1      (a)      The  locations  along  the  Pathnet  System  right-of-way  where  Pathnet   regenerator,
amplifier,  junction  and POP  facilities  are  located  are set forth in  Exhibit E, that is  attached  hereto and
                                                                           ---------
incorporated  herein by this reference (the "Facility  Locations").  Provided that Pathnet has received  payment in
                                             -------------------
full of the IRU Fee, Pathnet shall provide Customer with:

(1)      access to the Pathnet fiber distribution panels at those locations described in Exhibit E-1;
                                                                                         -----------

(2)      the right to space in the  Facilities  as  described  in  Exhibit  E-2 and  Exhibit H.  Customer's  use of
                                                                   ------------      ---------
Facility   Locations  is  subject  to  the  Underlying   Rights   Requirements.   A  description  of  the  material
specifications for the Facility Locations is set forth in Exhibit F.
                                                          ---------

                  (b)      Pathnet  shall provide  Customer with access to the Customer  Fibers by cable stub taken
by  Pathnet  from the  Pathnet  System and  delivered  to  Customer's  system at fiber  distribution  panels at the
Facilities (the "Connecting  Points").  Customer shall provide its own cable from the fiber  distribution  panel to
                 ------------------
Customer's equipment.

                  (c)      If Customer  desires  additional  Connecting  Points on the Pathnet System,  the parties
will  negotiate in good faith the terms and  conditions  for such  additional  Connecting  Points.  All  Connecting
Points shall be placed at splice points.

                  (d)      All connections shall be performed by Pathnet,  in accordance with Pathnet's  applicable
specifications  and  operating  procedures.  The cost of such  connections  will be borne  by  Customer.  It is the
responsibility  of Customer to obtain all governmental and other approvals and consents  necessary for the delivery
of the cable stub.

                  (e)      Customer shall pay Pathnet's  Costs for each  connection  within thirty (30) days of the
date of  Customer's  receipt  of  Pathnet's  invoice  therefor.  In order to  schedule a  connection  of this type,
Customer  shall  request  and  coordinate  such work not less than  ninety  (90)  days in  advance  of the date the
connection is requested to be  completed.  Such work will be  restricted  to a Planned  System Work Period,  unless
otherwise agreed to in writing for specific  projects.  Subject to all applicable  Underlying Rights  Requirements,
Pathnet shall provide Customer with reasonable  access to the Connecting  Points at all times.  Neither Pathnet nor
Customer shall have any  limitations on the types of  electronics or  technologies  employed to utilize its fibers,
subject to Pathnet safety  procedures and so long as such  electronics  or  technologies  do not interfere with the
use of or present a risk of damage to any portion of the other party's system.

                  (f)      Pathnet may route the Customer Fibers through  Pathnet's  separate  terminal,  end link,
POP or  regeneration  facilities  at its sole  discretion,  and  Pathnet  shall be  responsible  for all  costs and
expenses associated therewith.

         7.2      If Pathnet makes available to Customer space in any Facility  Location,  Customer's  occupancy of
such space shall be governed by the terms of Pathnet's standard form of collocation  agreement,  attached hereto as
Exhibit H, as well as the terms of this  Agreement.  In addition,  the provisions of  Section 8.2  shall apply with
---------
respect  to  sharing  of  operating   costs.   Customer  shall  execute  and  deliver  the  collocation   agreement
contemporaneously with the execution and delivery of this Agreement.

                                                    ARTICLE 8.
                                  MAINTENANCE AND REPAIR OF THE PATHNET SYSTEM
                                  --------------------------------------------

8.1      From and after the Fiber  Testing,  the  maintenance of the Pathnet System shall be provided in accordance
with  the  maintenance  requirements  and  procedures  set  forth  in  Exhibit G  hereto.  Customer  agrees  to pay
                                                                       ---------
maintenance fees in accordance with the provisions of Exhibit G.
                                                      ---------

8.2      Customer shall pay its share of all set-up  charges and operating  costs incurred by Pathnet in connection
with the operation or maintenance  of the  regeneration,  amplifier,  junction and POP or terminal  facilities,  in
accordance  with the form of collocation  agreement that is attached hereto as Exhibit G, and  incorporated  herein
by this reference.

                                                    ARTICLE 9.
                                     PERMITS; UNDERLYING RIGHTS; RELOCATION
                                     --------------------------------------

         9.1      Pathnet shall obtain and maintain  throughout  the Initial Term all Underlying  Rights  necessary
to permit Customer to use and enjoy the IRU Fibers,  its share in the Associated  Conduit and collocation  space as
provided  herein.  The IRU granted  hereunder is further  subject and subordinate to the prior right of the grantor
of the Underlying  Rights to use the right of way for other business  activities,  including  railroad  operations,
telecommunications  uses, pipeline  operations or any other purposes,  and to the prior right of Pathnet to use its
rights granted under the Underlying Rights.

         9.2      On Customer's  written request,  Pathnet shall make available for inspection by Customer,  at the
location  where  such  records  are kept,  copies of all  information,  documents,  agreements,  reports,  permits,
drawings and specifications  that are material to the grant of the IRU to  Customer, including,  without limitation
and to the extent  available,  the Underlying  Rights,  to the extent that their terms or other legal  restrictions
permit disclosure.  Pathnet may redact confidential or proprietary business terms.

         9.3      If during the Term,  Pathnet is required,  by a party with the  contractual  or legal right to so
require,  to  relocate  any part of the  Customer  System,  including  any of the  facilities  used or  required in
providing the IRU,  Pathnet shall proceed with such relocation,  including,  but not limited to, the right, in good
faith, to reasonably  determine the extent of, the timing of, and methods to be used for such relocation;  provided
that (a) any such relocation  shall be constructed and tested in accordance  with the  specifications  and drawings
set  forth in  Exhibits B  and C,  and  incorporate  fiber  meeting  the  specifications  set forth in  Exhibit  D;
               ----------      -                                                                        ----------
(b) Pathnet  shall maintain the same end points and Facility  locations of the Customer System;  (c) the relocation
shall be coordinated with Customer to minimize any effect on the Customer's  System;  and (d) (i) if the relocation
is due to  circumstances  beyond the control of Pathnet,  then Customer shall be responsible for its  Proportionate
Share (as  hereinafter  defined) of any costs in excess of $"*";  (ii) if the relocation is due to the negligence
or willful  misconduct  of Pathnet,  or for the  convenience  of Pathnet,  or if it is  required  due to  Pathnet's
failure to maintain an Underlying  Right during the Initial  Term,  the  relocation  shall be conducted at the sole
cost and expense of Pathnet;  and (iii)  otherwise,  the parties will negotiate in good faith to determine  whether
relocation  is  appropriate   and  how  costs  should  be  allocated.   For  purposes  of  determining   Customer's
Proportionate  Share,  applicable costs (net of  reimbursements  from  third-persons  not having an interest in the
System) shall be allocated  equally across all the conduits in the affected  segment of the System,  and then, with
respect to a conduit,  equally among the fibers (whether sold or unsold,  dark or lit) in such conduit.  Customer's
"Proportionate Share" shall be the costs allocated to its individual fibers in such manner.

         9.4      Pathnet shall deliver to Customer  updated  As-Builts  with respect to the relocated  segment not
later than ninety (90) days following the completion of such relocation.

         9.6      Pathnet has  obtained or will obtain  Underlying  Rights that have a stated term of not less than
the Initial Term.

                                                    ARTICLE 10.
                                               USE OF PATHNET SYSTEM
                                               ---------------------

         10.1     The  requirements,  restrictions,  and/or  limitations  on  Customer's  right to use the Customer
Fibers and Associated Conduit,  and safety,  operational and other rules and regulations imposed in connection with
the Underlying Rights are referred to collectively as the "Underlying Rights Requirements."
                                                           ------------------------------

10.2     Customer  represents,  warrants and covenants that it will use the  Customer Fibers and Associated Conduit
in  compliance  with and  subject to the  Underlying  Rights  Requirements  and all  applicable  government  codes,
ordinances,  laws, rules and  regulations,  provided that such Underlying  Rights  Requirements do not unreasonably
and materially interfere with Customer's use and enjoyment of the Customer Fibers and Associated Conduit.

10.3     Subject to the  limitations  set forth in this  Agreement,  Customer may use the  Customer  Fibers and the
Associated  Conduit for any lawful  telecommunications  purpose.  Customer agrees and  acknowledges  that it has no
right to use any of the fibers  that are part of the  Pathnet  System,  other than the  Customer  Fibers.  Customer
shall  keep all  portions  of the  Pathnet  System  free from any  liens,  rights  or  claims  of any  third  party
attributable  to Customer,  except that  Customer  may encumber the IRU granted to Customer in the Customer  Fibers
and  Customer's  interest  in  Associated  Conduit,  on the  condition  that the  interest  of any lien  holder  is
subordinate  to the  interest  of Pathnet  and other  interests  and rights in and to the  Customer  Fibers and the
Associated Conduit.

10.4     Pathnet acknowledges and agrees that it has no right to use the Customer Fibers during the Term hereof.

         10.5     Customer  and Pathnet  shall  promptly  notify each other of any  matters  pertaining  to, or the
occurrence (or impending  occurrence) of, any event which would be reasonably  likely to give rise to any damage or
impending damage to or loss of the Pathnet System that are known to such party.

         10.6     Customer  shall  not use its  systems  in a way  that  interferes  in any way  with or  adversely
affects the use of the fibers or cable of any other  person  using the  Pathnet  System.  The  parties  acknowledge
that the Pathnet System includes or will include other  participants,  including Pathnet and other owners and users
of telecommunication systems.

         10.7     Customer and Pathnet each agrees to  cooperate  with and support the other in complying  with any
requirements applicable to their respective rights and obligations hereunder.

                                                    ARTICLE 11
                                                 INDEMNIFICATION;
                                                 -----------------
                                             LIMITATION OF LIABILITY.
                                             -----------------------

         11.1     Subject to the  provisions of Section  11.4,  Customer  hereby  releases and agrees to indemnify,
defend,  protect and hold harmless  Pathnet,  its Affiliates,  and its and their  employees,  officers,  directors,
agents,  contractors,  and shareholders  ("Indemnified  Persons"),  from and against any third party claims, suits,
proceedings and actions ("Claims") for:

         (a)      Any injury,  death,  loss or damage to any person,  tangible property or facilities of any person
                  or entity  (including  reasonable  attorney  fees and costs at trial and  appeal)  to the  extent
                  arising out of or resulting  from the acts or  omissions,  negligent or  otherwise,  of Customer,
                  its officers,  directors,  employees, agents or contractors in connection with its performance or
                  non-performance under this Agreement;

         (b)      Any  liabilities or damages  (including  reasonable  attorney fees and costs at trial and appeal)
                  arising out of any violation by Customer of regulations,  rules,  statutes or court orders of any
                  local,  state or federal  governmental  agency,  court or body in connection with its performance
                  under this Agreement; and

         (c)      Any  liabilities  or damages  asserted  by  Customer's  telecommunications  clients  and  arising
                  directly  or  indirectly  from any  outages,  disruptions  or  interruptions  of  service  in the
                  operation  of the  Customer  Fibers or any  failure of such  fibers to  transmit  accurately  any
                  message.

         11.2     Subject to the  provisions  of Section  11.4,  Pathnet  hereby  releases and agrees to indemnify,
defend,  protect and hold  harmless  Customer and its  Indemnified  Persons from and against any third party Claims
for:

         (a)      Any injury,  death,  loss or damage to any person,  tangible property or facilities of any person
                  or entity  (including  reasonable  attorney  fees and costs at trial and  appeal),  to the extent
                  arising out of or resulting from the acts or omissions,  negligent or otherwise,  of Pathnet, its
                  officers,  directors,  employees,  agents or  contractors in connection  with its  performance or
                  non-performance under this Agreement;

         (b)      Any  liabilities or damages  (including  reasonable  attorney fees and costs at trial and appeal)
                  arising out of any violation by Pathnet of  regulations,  rules,  statutes or court orders of any
                  local,  state or federal  governmental  agency,  court or body in connection with its performance
                  under this Agreement; and

         (c)      Any failure by Pathnet to obtain and/or  maintain,  throughout  the Initial Term,  all Underlying
                  Rights  reasonably  necessary  or  appropriate  to permit  Customer to use and enjoy the Customer
                  Fibers,  Associated  Conduit  and  collocation  space,  as  provided  herein.  Customer  shall be
                  permitted to participate  in any such defense at its sole cost and expense,  provided it conducts
                  such participation in a manner that does not interfere with Pathnet's defense.

         11.3     Pathnet and  Customer  hereby  expressly  recognize  and agree that each  Party's  obligation  to
indemnify,  defend,  protect and save  harmless  Indemnified  Persons is a material  obligation  to the  continuing
performance of the Parties' other  obligations,  if any,  hereunder.  However,  in the event that either Pathnet or
Customer fails for any reason to so indemnify,  defend,  protect and save harmless, the injured Party's sole remedy
in such  event  shall be the right to bring an  arbitration  proceeding  pursuant  to the  terms of this  Agreement
against the other for damages as a result of such failure to  indemnify,  defend,  protect and save  harmless.  The
obligations of this Section 11.3 shall survive the expiration or earlier  termination  of this  Agreement.  Pathnet
and  Customer  each  affirmatively  state and  warrant to the other that its  indemnity  obligation  as to property
damage or personal  injury will be supported by liability  insurance to be furnished by it;  provided that recovery
                                                                                             --------
under or in respect of this indemnity shall not be limited to the proceeds of any such insurance.

         11.4     Notwithstanding  any provision of this  Agreement to the contrary,  neither party shall be liable
to the other  party for any  special,  incidental,  indirect,  punitive  or  consequential  costs,  liabilities  or
damages,  whether  foreseeable  or not,  arising out of, or in connection  with,  such party's  performance  of its
obligations  under this Agreement.  Nothing  contained  herein shall operate as a limitation on the right of either
Pathnet or  Customer to bring an action for  damages  against any third  party,  including  indirect,  special,  or
consequential  damages,  based on any acts or omissions  of such third party as such acts or  omissions  may affect
the  construction,  operation  or use of the  Customer  Fibers or the  System  or any  portion  thereof;  provided,
                                                                                                          --------
however,  the above  limitation  of liability  shall apply to indirect  liability  including  Claims  against third
parties  who,  directly  or  through  one or more  other  parties,  have a  right  of  indemnification,  impleader,
cross-claim,  contribution  or other  right of  recovery  against a Party to this  Agreement.  Each of Pathnet  and
Customer  shall  assign such rights or claims,  execute  such  documents  and do  whatever  else may be  reasonably
necessary to enable the other to pursue any such action against such third party.

                                                    ARTICLE 12.
                                                    INSURANCE
                                                    ---------

         12.1     At all times during the Term each party shall procure and maintain in force, at its own expense:

                  (a)      not less than  $10,000,000  (which may include  umbrella  liability  coverage)  combined
single limit liability  insurance,  on an occurrence  basis,  for personal injury and property  damage,  including,
without  limitation,  injury or damage  arising  from the  operation  of vehicles or equipment  and  liability  for
completed operations;

                  (b)      workers'  compensation  insurance in amounts  required by applicable  law and employers'
liability insurance with a limit of at least $1,000,000 per occurrence;

                  (c)      automobile  liability  insurance  covering death or injury to any person or persons,  or
damage to property  arising from the  operation of vehicles or equipment,  with limits of not less than  $2,000,000
per occurrence; and

                  (d)      any  other  insurance  coverages   specifically  required  of  such  party  pursuant  to
Pathnet's right-of-way agreements with railroads or other third parties.

         12.2     Both parties  expressly  acknowledge  that a party shall be deemed to be in  compliance  with the
provisions  of  this  Article  if  it  maintains  a  self-insurance  program  providing  for a  retention  of up to
$1,000,000.  If either  party  provides  any of the  foregoing  coverages on a  claims-made  basis,  such policy or
policies  shall be for at least a three-year  extended  reporting or discovery  period.  Unless  otherwise  agreed,
Customer's and Pathnet's  insurance  policies shall be obtained and maintained  with companies  rated "A" or better
by Best's Key  Rating  Guide and each party  shall  provide  the other  with an  insurance  certificate  confirming
compliance with this requirement for each policy providing such required coverage.

         12.3     If  either  party  fails to  obtain  the  required  insurance  or fails to  obtain  the  required
certificates  from any  contractor  and a claim is made or suffered,  such party shall  indemnify and hold harmless
the other party from any and all claims for which the required  insurance  would have provided  coverage.  Further,
in the event of any such failure which  continues  after seven (7) days' written notice thereof by the other party,
such  other  party  may,  but  shall not be  obligated  to,  obtain  such  insurance  and will have the right to be
reimbursed for the cost of such insurance by the party failing to obtain such insurance.

         12.4     In the event coverage is denied or  reimbursement  of a properly  presented  claim is disputed by
the carrier for  insurance  provided  above,  the party  carrying such coverage  shall make  good-faith  efforts to
pursue such claim with its carrier.

         12.5     Customer and Pathnet  hereby  mutually  waive their  respective  rights of recovery  against each
other  and the  officers,  directors,  shareholders,  partners,  joint  venturers,  employees,  agents,  customers,
invitees,  or business  visitors of either  party,  for any loss  arising  from any cause  covered or that would be
covered by fire,  extended  coverage,  All Risks or other insurance  required to be carried under this Agreement or
now or hereafter  existing for the benefit of the  respective  party.  Customer and Pathnet will cause from time to
time their  respective  insurers to issue  appropriate  waiver of subrogation  rights  endorsements to all property
insurance policies carried in connection with their respective property.

                                                    ARTICLE 13.
                                 TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS
                                 ----------------------------------------------

         13.1     The parties  acknowledge  and agree that it is their mutual  objective and intent to (a) minimize
the aggregate  Impositions payable with respect to the Pathnet System, and (b) share such Impositions  according to
their  respective  interests in the Pathnet  System.  They agree to cooperate with each other and coordinate  their
efforts to achieve such objectives in accordance with the provisions of this Article.

         13.2     Pathnet shall be  responsible  for and shall timely pay any and all  Impositions  with respect to
the  construction  or operation of the Pathnet System which  Impositions  are  (a) imposed or assessed prior to the
Effective  Date;  or  (b) imposed  or assessed in exchange  for the approval of the  original  construction  of the
Pathnet  System;  or (c) that were  assessed in return for the  original  right to install  the  Pathnet  System on
public property or in public right of way.

         13.3     Except as to Impositions  described in section 13.2,  following the Effective Date Customer shall
be  responsible  for and shall pay all  Impositions  (a) imposed  on, based on, or otherwise  measured by the gross
receipts,  gross  income,  net  receipts  or net income  received  by or accrued to  Customer  with  respect to the
ownership  (consistent  with  Section  6.3) or use of the  Customer  Fibers;  or  (b) which  have  been  separately
assessed,  allocated to, or imposed on the Customer  Fibers.  If the Customer Fibers are the only fibers located in
a segment from the point where the segment  leaves the Pathnet  System  right-of-way  to a Customer  POP,  Customer
shall be solely responsible for any and all Impositions imposed on or with respect to such segment.

(a)      To the extent such  Impositions  are not  separately  assessed,  allocated  to or imposed on the  Customer
Fibers,  Pathnet will pay all such  Impositions.  Pathnet shall notify  Customer of such  Imposition,  and Customer
shall promptly reimburse Pathnet for Customer's Proportionate Share of all such Imposition.

         13.4     Pathnet  shall  have the  right to  contest  any  Imposition  (including  by  nonpayment  of such
Imposition).  The out-of-pocket  costs and expenses (including  reasonable  attorneys' fees) incurred by Pathnet in
any such  contest  shall be shared by Pathnet and  Customer in the same  proportion  as to which the parties  would
have shared in such  Impositions as they were  assessed.  Any refunds or credits  resulting from a contest  brought
pursuant to this  Section shall  be divided  between  Pathnet and  Customer in the same  proportion  as  separately
determined or as originally  assessed.  In any such event,  Pathnet shall provide  timely notice of such  challenge
to Customer.

13.5     Customer  shall  have the right to protest by  appropriate  proceedings  any  Imposition.  In such  event,
Customer shall indemnify and hold Pathnet  harmless from any expense,  legal action or cost,  including  reasonable
attorneys' fees, resulting from Customer's exercise of its rights hereunder.

(a)      The  foregoing  notwithstanding,  Pathnet,  at its option and at its own expense,  shall have the right to
direct and manage any  contest  regarding  an  Imposition  that  relates to the  Pathnet  System  that  affects the
interest of Pathnet;  subject,  however, to reasonable and appropriate consultation with Customer.  Customer agrees
to cooperate with Pathnet in any such contest.

(b)      If Customer has exhausted all its rights of appeal in protesting  any  Imposition and has failed to obtain
the relief sought in such proceedings or appeals  ("Finally  Determined Taxes and Fees"),  Customer and Pathnet may
                                                    ----------------------------------
agree to relocate a portion of the Pathnet System to avoid the  jurisdiction  that imposes or assesses such Finally
Determined  Taxes and Fees (subject to the consent and  participation of the other interest holders in the affected
portion of the Pathnet  System).  If Customer and Pathnet do not determine to relocate the affected  portion of the
Pathnet System,  Customer shall have the right to terminate its use of the Customer Fibers in the affected  portion
of the Pathnet  System.  Such  termination  shall be  effective  on the date  specified  by Customer in a notice of
termination,  but not  earlier  than  ninety  (90) days after the  notice.  Upon such  termination,  the IRU in the
affected  portion of the Pathnet  System  shall  immediately  terminate,  and the  Customer  Fibers in the affected
portion of the Pathnet System shall  thereupon  revert to Pathnet  without  reimbursement  of any of the IRU Fee or
other payments previously made with respect thereto.

         13.6     Pathnet  and  Customer  agree to  cooperate  fully in the  preparation  of any returns or reports
relating to the  Impositions.  Pathnet and  Customer  further  acknowledge  and agree that the  provisions  of this
Article are intended to allocate the  Impositions on procedures  and methods of  computation  that are in effect on
the date of this  Agreement.  Material  changes  in such  procedures  and  methods  could  significantly  alter the
fundamental  economic  assumptions of the parties underlying this Agreement.  Accordingly,  the parties agree that,
if such  procedures  or methods of  computation  change  materially,  the parties  will  negotiate in good faith an
amendment to this Article to  preserve,  to the extent  reasonably  practicable,  the economic intent and effect of
this Article.

                                                    ARTICLE 14.
                                                     NOTICES
                                                     -------

         All notices and other  communications  required or permitted  under this Agreement shall be in writing and
shall be given by United  States  first class mail,  postage  prepaid,  registered  or  certified,  return  receipt
requested,  or by hand  delivery  (including  by means of a  professional  messenger  service  or  overnight  mail)
addressed as follows:

         All notices and other communications shall be given to Customer at:

                           Enron Broadband Services, Inc.
                           1400 Smith Street
                           Houston TX 77002
                           Attn: Vice President, IRU Transactions
with a copy to:

                           Enron Broadband Services, Inc.
                           1400 Smith Street
                           Houston TX 77002
                           Attn:  General Counsel

         All notices and other communications shall be given to Pathnet at:

                           Pathnet
                           11720 Sunrise Valley Drive
                           Reston, Virginia 20191
                           Attn: Vice President, Network Operations
                           Attn: General Counsel

                  Any such notice or other  communication  shall be deemed to be effective  when actually  received
or  refused.  Either  party may by similar  notice  given  change  the  address  to which  future  notices or other
communications shall be sent.

                                                    ARTICLE 15.
                                                 CONFIDENTIALITY
                                                 ---------------

         15.1     As used herein,  "Confidential  Information"  shall mean this Agreement and all materials,  maps,
                                    -------------------------
and other  documents  that are  marked  confidential  and  disclosed  by one party to the other in  fulfilling  the
provisions  and  intent of this  Agreement,  as well as  confidential  or  proprietary  information  that is orally
disclosed,  provided that, for information  that is orally  disclosed,  the disclosing party indicates to recipient
at the time of disclosure the  confidential  or proprietary  nature of the  information  and confirms in writing to
the recipient  within 30 days after such disclosure  that such  information is  confidential.  Each party agrees to
hold the  Confidential  Information  of the other party in  confidence.  Neither  party shall  divulge or otherwise
disclose  the  provisions  of this  Agreement  to any third party  without the prior  written  consent of the other
party,  except that either party may make  disclosure to those required for the  implementation  of this Agreement,
and to customers and prospective customers,  purchasers and prospective purchasers,  auditors, attorneys, financial
advisors,  lenders and prospective  lenders,  investors and prospective  investors,  provided that in each case the
recipient  agrees  in  writing  to be  bound by the  confidentiality  provisions  set  forth  in this  section.  In
addition,  either party may make disclosure as required by a court order or as otherwise  required by law or in any
legal  or  arbitration  proceeding  relating  to  this  Agreement.  If  either  party  is  required  by  law  or by
interrogatories,  requests for information or documents,  subpoena,  civil investigative  demand or similar process
to disclose  the  provisions  of this  Agreement or the design  information  referred to in this  Section,  it will
provide the other party with prompt  prior  written  notice of such request or  requirement  so that such party may
seek an  appropriate  protective  order and/or  waive  compliance  with this  Section.  The party whose  consent to
disclose  information is requested shall respond to such request,  in writing,  within five (5) working days of the
request by either  authorizing  the disclosure or advising of its election to seek a protective  order,  or if such
party fails to respond within the prescribed period the disclosure shall be deemed approved.

                  (a)      Nothing  herein  shall  be  construed  as  granting  any  right  or  license  under  any
copyrights, inventions, or patents now or hereafter owned or controlled by Pathnet.

                  (b)      Upon  termination of this Agreement for any reason or upon request of Pathnet,  Customer
shall return all  Confidential  Information,  together with any copies of same,  to Pathnet.  The  requirements  of
confidentiality set forth herein shall survive return of such Confidential Information.

                  (c)      Customer  shall  not,  without  first  obtaining  written  consent of  Pathnet,  use any
trademark or trade name of Pathnet or refer to the subject matter of this  Agreement or Pathnet in any  promotional
activity or otherwise, nor disclose to others any specific information about the subject matter of this Agreement.

         15.2     The provisions of this Article shall survive expiration or other termination of this Agreement.

                                                    ARTICLE 16.
                                                      DEFAULT
                                                      -------

16.1     A party shall be in default under this Agreement in the following events:

                  (a)      in the case of a failure to pay any amount  when due under  this  Agreement,  such party
                  fails to pay such amount within ten (10) days after written notice specifying such breach, or

                  (b) the making by such party of a general assignment for the benefit of its creditors;

                  (c) the filing of a voluntary  petition in  bankruptcy  or the filing of a petition in bankruptcy
                  or other insolvency  protection  against such party that is not dismissed within ninety (90) days
                  thereafter;

                  (d) the filing by such party of any petition or answer  seeking,  consenting  to, or  acquiescing
                  in reorganization,  arrangement,  adjustment,  composition,  liquidation,  dissolution or similar
                  relief,

                  (e)      in the case of any other material breach of this  Agreement,  a party fails to cure such
                  within thirty (30) days after notice  specifying  such breach,  provided that if the breach is of
                  a nature  that cannot be cured  within  thirty (30) days,  a default  shall not have  occurred so
                  long as the  breaching  party has  commenced  to cure  within  said time  period  and  thereafter
                  diligently  pursues  such  cure to  completion,  provided  that  no such  cure  period  shall  be
                  permitted in connection with a default that  materially  interferes with service on the System or
                  otherwise materially and adversely affects the integrity of the System.

         16.2     A waiver by either party at any time of any of its rights as to anything  herein  contained shall
not be deemed to be a waiver of any breach of covenant or other matter subsequently occurring.

         16.3     Upon the  failure  by a party  to  timely  cure  any  such  default  after  notice  thereof,  the
non-default  party may: (i) take such action as it determines,  in its sole discretion,  to be necessary to correct
the default;  and (ii) pursue any legal remedies it may have under  applicable law or principles of equity relating
to such breach.

                                                    ARTICLE 17.
                                               INTENTIONALLY OMITTED

                                                    ARTICLE 18.
                                                  FORCE MAJEURE
                                                  -------------

         Neither  party shall be liable to the other  party,  and each  party's  performance  under this  Agreement
shall be excused,  if and to the extent that any failure or delay  in such  party's  performance  of one or more of
its  obligations  hereunder is caused by any of the  following  conditions,  and such party's  performance  of such
obligation or  obligations  shall be excused and extended for and during the period of any such delay:  act of God;
fire; flood; fiber,  Cable, or other material failures,  shortages or unavailability or other delay in delivery not
resulting  from  the  responsible  party's  failure  to  timely  place  orders  therefor;   lack  of  or  delay  in
transportation;   government  codes,   ordinances,   laws,  rules,   regulations  or  restrictions   (collectively,
"Regulations");  war or civil disorder; strikes or other labor disputes;  inability of Pathnet to obtain track time
or access to the  Pathnet  System;  or any other  cause  beyond the  reasonable  control of such  party.  The party
claiming  relief under this Article  shall notify the other in writing of the  existence of the event relied on and
the cessation or termination  of said event,  and the party claiming  relief shall exercise  reasonable  commercial
efforts to minimize the time of any such delay.

                                                    ARTICLE 19.
                                               DISPUTE RESOLUTION
                                               ------------------

         19.1     Application.  Any claim,  controversy or dispute,  whether sounding in contract,  statute,  tort,
                  -----------
fraud,  misrepresentation  or other legal  theory,  related  directly or  indirectly  to this  Agreement,  whenever
brought and whether  between the parties to this  Agreement or between one of the parties to this Agreement and the
employees,  agents or affiliated  businesses of the other party,  shall be resolved by arbitration as prescribed in
this section.  The Federal  Arbitration  Act, 9 U.S.C.ss.ss.1-15, not state law, shall govern the  arbitrability  of
all claims.

         19.2     Arbitrator.  A single  arbitrator  engaged in the practice of law who is knowledgeable  about the
                  ----------
subject  matter of this  Agreement  shall  conduct the  arbitration  under the then  current  rules of the American
Arbitration  Association  (the "AAA").  The arbitrator  shall be selected in accordance  with AAA procedures from a
                                ---
list of qualified  people  maintained  by the AAA.  The  arbitration  shall be  conducted  in a  mutually-agreeable
location in the Dallas, Texas area, and all expedited procedures prescribed by the AAA rules shall apply.

         19.3      Discovery.  Discovery  shall  be  conducted  in  accordance  with  the  Federal  Rules  of Civil
                   ---------
Procedure.  Each party shall bear its own costs and  attorneys'  fees, and the parties shall share equally the fees
and expenses of the arbitrator.  The  arbitrator's  decision and award shall be final and binding,  and judgment on
the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

         19.4      Enforcement.  If any party files a judicial or  administrative  action  asserting claims subject
                   -----------
to arbitration as prescribed herein,  and another party  successfully  stays such action or compels  arbitration of
said claims,  the party filing said action shall pay the other party's costs and expenses  incurred in seeking such
stay or compelling arbitration, including reasonable attorneys' fees.

         19.5     Limitation on Damages.  In no event shall the arbitrator or  arbitrators  have the power to award
                  ---------------------
any damages for lost or prospective profits, or any other special, punitive, exemplary,  consequential,  incidental
or indirect  losses or damages as a result of the  performance  or  nonperformance  of its  obligations  under this
Agreement,  or its acts or  omissions  related to this  Agreement,  whether  or not  arising  from  sole,  joint or
concurrent negligence,  strict liability,  or otherwise,  regardless of whether such damages may be available under
applicable  law. Each party hereby waives its rights,  if any, to recover any such damages,  whether in arbitration
or litigation

                                                    ARTICLE 20.
                                     ASSIGNMENT AND CUSTOMER FIBER TRANSFERS
                                     ---------------------------------------

         20.1     Subject to Section 6.3,  following the Effective Date,  Customer may sell, lease,  assign or swap
an IRU in, or  otherwise  lease,  license,  or permit the use of, the Customer  Fibers.  Customer may not assign or
otherwise  transfer  this  Agreement or its rights or  obligations  hereunder to any other party  without the prior
written  consent of  Pathnet,  which  consent  shall not be  unreasonably  withheld;  provided,  however,  any such
                                                                                      --------   -------
assignee or  transferee  shall  agree in writing to be bound and abide by this  Agreement.  If any such  consent is
given,  Customer  nevertheless  shall remain fully and primarily  liable for all obligations  under this Agreement.
Customer  shall have the right,  without  Pathnet's  consent,  to assign or otherwise  transfer  this  Agreement as
collateral  to any  lender,  or to  any  Affiliate  of  Customer,  or to  any  corporation  that  purchases  all or
substantially  all of the assets of Customer;  provided,  however,  that: (a) any such assignment or transfer shall
                                               --------   -------
be subject to  Pathnet's  rights under this  Agreement  and any assignee or  transferee  shall  continue to perform
Customer's  obligations  to Pathnet  under the terms and  conditions  of this  Agreement;  and (b) such assignee or
transferee  shall agree in writing to be bound and abide by this Agreement.  In the event of any permitted  partial
assignment  of any rights  hereunder or in any  Customer  Fibers,  Customer  shall remain the sole point of contact
with Pathnet.

         20.2     Pathnet  may not  assign or  otherwise  transfer  this  Agreement  or its  rights or  obligations
hereunder  to any  other  party  without  the  prior  written  consent  of  Customer,  which  consent  shall not be
unreasonably  withheld;  provided,  however, any such assignee or transferee shall agree in writing to be bound and
                         --------   -------
abide by this  Agreement.  Pathnet  shall  have the  right,  without  Customer's  consent,  to assign or  otherwise
transfer  this  Agreement as  collateral  to any  institutional  lender or to any  Affiliate of Pathnet,  or to any
entity into which Pathnet may be merged or  consolidated or that purchases all or  substantially  all of the assets
of Pathnet;  provided,  however,  that: (a) any such  assignment or transfer shall be subject to Customer's  rights
             --------   -------
under this  Agreement and any assignee or transferee  shall  continue to perform  Pathnet'  obligations to Customer
under the terms and  conditions of this  Agreement;  and (b) such assignee or transferee  shall agree in writing to
be bound and abide by this  Agreement.  In the event of any permitted  partial  assignment of any rights  hereunder
or in any fibers in the Cable, Pathnet shall remain the sole point of contact with Customer.

         20.3     A transfer or  assignment  in  violation of this Article  shall  constitute a material  breach of
this Agreement.

                                                    ARTICLE 21.
                                 REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS
                                 -----------------------------------------------

         21.1     Each party represents and warrants that:

                  (a)      it has the full right and  authority  to enter  into,  execute,  deliver and perform its
obligations under this Agreement;

                  (b)      this Agreement  constitutes a legal,  valid and binding obligation  enforceable  against
such party in  accordance  with its  terms,  subject  to  bankruptcy,  insolvency,  creditors'  rights and  general
equitable principles; and

                  (c)      its execution of and  performance  under this Agreement shall not violate any applicable
existing  regulations,  rules,  statutes or court orders of any local, state or federal government agency, court or
body.

                  (d)      Subject to Section  21.2(d)  below as to  Pathnet,  neither  Party shall cause or permit
any portion of its interest in the Customer  Fibers or its interest in the Pathnet  System to become subject to any
material  mechanics  lien,  materialmans'  lien,  vendor's  lien or any similar lien whether by operation of law or
otherwise.  In the  event  either  Pathnet  or  Customer  breaches  its  obligations  in  this  Section,  it  shall
immediately  notify the other in writing,  shall  promptly  cause such lien to be discharged and released of record
without cost to the other,  and shall  indemnify  the other  against all costs and expenses  (including  reasonable
attorneys fees and court costs at trial and on appeal)  incurred in discharging  and releasing such lien;  provided
                                                                                                           --------
that:  (a) Pathnet and  Customer  shall each have the right to contest  such lien or the  validity  thereof in good
faith by  appropriate  proceeding  which shall operate to prevent the  collection or  foreclosure  of the contested
lien;  and (b) the contesting  party shall cause any such lien to be discharged  prior to the  commencement  of any
foreclosure action on such lien.

21.2     Pathnet represents and warrants to Customer that:

                  (a) Pathnet has obtained all permits and other  governmental and third-party  approvals  required
for the installation of the Pathnet System and the performance of its obligations under this Agreement.

                  (b)      In its ownership,  operation and maintenance of the Pathnet System,  Pathnet will comply
with all applicable local, municipal, state or federal laws, orders and regulations.

                  (c)      Notwithstanding  anything to the contrary  contained herein,  that it has obtained,  and
shall maintain  throughout the term, any and all rights of way,  easements,  licenses and other agreements relating
to the grant of rights and interests,  and/or access to the real property  underlying the Pathnet System (including
the  Associated  Conduit)  and such  other  rights,  licenses,  permits,  authorizations,  and  approvals  that are
necessary in order to permit  Pathnet to grant the IRUs,  and otherwise to perform its  obligations  hereunder,  in
accordance  with the terms and  conditions  hereof,  and to  permit  Customer  to use the  Associated  Conduit  and
Customer  Fibers  as dark  fibers  as  provided  and  permitted  hereunder  and in  accordance  with the  terms and
conditions  hereof  (collectively,  the  "Underlying  Rights").  Underlying  Rights  shall not be deemed to include
franchises,  municipal  licenses and other  approvals or permits  issued by  governmental  authorities  that may be
necessary  for the  creation and sale of  telecommunications  capacity on the  Customer  Fibers.  In the event that
Pathnet  receives notice that it has not obtained a necessary  Underlying  Right, or that an Underlying Right is or
may be  defective,  and such  failure  or defect  poses a  significant  threat  to, or  actually  interferes  with,
Customer's  continued  use and  enjoyment  of the  System,  Pathnet  will take such  steps as it  reasonable  deems
appropriate to confirm the integrity of the Underlying Rights,  acquire additional  Underlying Rights, or take such
other action as may be appropriate to protect  Customer's rights to exercise its rights hereunder.  Notwithstanding
the foregoing,  if Customer  becomes aware that a failure or defect in an Underlying Right poses an imminent threat
to Customer's  continued  ability to exercise its rights  hereunder,  including,  without  limitation,  an imminent
threat of injunction  threatening  Customer's  right to operate the system,  Customer will promptly advise Pathnet,
either  telephonically  or in writing,  and will discuss in good faith the appropriate  actions to be taken. If, in
Customer's  sole judgment,  Pathnet's  proposed  actions are not adequate to resolve the  situation,  or if Pathnet
takes action but, in  Customer's  sole  judgment,  such actions are not  resolving  the  situation  satisfactorily,
Customer  may take such action that it deems  appropriate  to ensure its  continuing  right to exercise  its rights
hereunder, and Pathnet shall reimburse Customer on demand for all costs and expenses incurred in doing so.

         (d)      Pathnet owns clear,  exclusive,  legal title to the Customer Fibers and Associated Conduit,  free
and clear of all liens,  security interests or other  encumbrances,  except that the Pathnet System,  including the
Customer Fibers and Associated  Conduit are subject to a lien in favor of certain lenders as more  particularly set
forth in that certain Amended and Restated  Collateral  Agency  Agreement and  Intercreditor  Agreement dated as of
September  7, 2000 between  Pathnet and certain  lenders  referenced  therein  that are  currently  parties to such
Agreement  or who may be added in the  future.  Pathnet  has all  necessary  right and  authority  to  perform  its
obligations pursuant to this Agreement.

         21.3     EXCEPT AS SPECIFICALLY SET FORTH IN THIS ARTICLE AND IN SECTION 4.2, PATHNET MAKES NO WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO THE CUSTOMER FIBERS, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.

         21. 4    Pathnet  will assign to Customer  all  manufacturers'  warranties  that  pertain to the  Customer
Fibers,  to the extent that they are  assignable.  If a  manufacturer's  warranty is not  assignable,  Pathnet will
exercise reasonable efforts to enforce such warranty on behalf of Customer.

                                                    ARTICLE 22.
                                                      GENERAL
                                                      -------

         22.1     Binding  Effect.  This  Agreement  and each of the  parties'  respective  rights and  obligations
                  ---------------
under this  Agreement,  shall be binding on and shall inure to the benefit of the parties  hereto and each of their
respective permitted successors and assigns.

         22.2     Waiver1.  The  failure of either  party  hereto to enforce  any of the
                  ------
provisions of this  Agreement,  or the waiver  thereof in any instance,  shall not be construed as a general waiver
or  relinquishment on its part of any such provision,  but the same shall  nevertheless be and remain in full force
and effect.

         22.3     Governing  Law.  This  Agreement  shall be  governed  by and  construed  in  accordance  with the
                  --------------
domestic laws of the State of New York, without reference to its choice of law principles.

         22.4     Rules of  Construction.  The captions or headings in this Agreement are strictly for  convenience
                  ----------------------
and shall not be  considered  in  interpreting  this  Agreement  or as  amplifying  or limiting any of its content.
Words in this Agreement  which import the singular  connotation  shall be  interpreted  as plural,  and words which
import the  plural  connotation  shall be  interpreted  as  singular,  as the  identity  of the  parties or objects
referred to may require.

                  (a)      Unless  expressly  defined  herein,  words having well known technical or trade meanings
shall be so  construed.  All listing of items shall not be taken to be  exclusive,  but shall  include other items,
whether similar or dissimilar to those listed, as the context reasonably requires.

                  (b)      Except as set forth to the contrary  herein,  any right or remedy of Customer or Pathnet
shall be cumulative and without prejudice to any other right or remedy, whether contained herein or not.

                  (c)      Nothing in this  Agreement  is  intended  to provide  any legal  rights to anyone not an
executing party of this Agreement.

                  (d)      This Agreement has been fully negotiated between and jointly drafted by the parties.

                  (e)      All actions,  activities,  consents,  approvals and other undertakings of the parties in
this  Agreement  shall be  performed  in a  reasonable  and timely  manner,  it being  expressly  acknowledged  and
understood  that time is of the  essence in the  performance  of  obligations  required to be  performed  by a date
expressly  specified  herein.  Except as  specifically  set forth  herein,  for the purpose of this  Agreement  the
standards and practices of performance within the  telecommunications  industry in the relevant market shall be the
measure of a party's performance.

         22.5     Entire Agreement.  This Agreement,  together with any  Confidentiality  Agreement entered into in
                  ----------------
connection  herewith,  constitutes  the entire and final  agreement  and  understanding  between the  parties  with
respect to the subject  matter hereof and supersedes  all prior  agreements  relating to the subject matter hereof,
which are of no  further  force or effect.  The  Exhibits  referred  to herein are  integral  parts  hereof and are
hereby  made a part of this  Agreement.  To the  extent  that  any of the  provisions  of any  Exhibit  hereto  are
inconsistent  with the express terms of this Agreement,  the terms of this Agreement shall prevail.  This Agreement
may only be modified or  supplemented  by an  instrument  in writing  executed by each party and  delivered  to the
party relying on the writing.

         22.6     No Personal  Liability.  Each  action or claim  against  any party  arising  under or relating to
                  ----------------------
this Agreement  shall be made only against such party as a corporation,  and any liability  relating  thereto shall
be enforceable  only against the corporate  assets of such party.  No party shall seek to pierce the corporate veil
or otherwise seek to impose any liability  relating to, or arising from,  this Agreement  against any  shareholder,
employee,  officer or director of the other party.  Each of such persons is an intended  beneficiary  of the mutual
promises set forth in this Article and shall be entitled to enforce the obligations of this Article.

         22.7     Relationship  of the Parties.  The  relationship  between  Customer and Pathnet shall not be that
                  ----------------------------
of partners,  agents,  or joint venturers for one another,  and nothing contained in this Agreement shall be deemed
to constitute a  partnership  or agency  agreement  between them for any  purposes,  including,  but not limited to
federal income tax purposes.  Customer and Pathnet,  in performing  any of their  obligations  hereunder,  shall be
independent  contractors or independent  parties and shall  discharge  their  contractual  obligations at their own
risk subject, however, to the terms and conditions hereof.

         22.8     Severability.  If any term,  covenant  or  condition  contained  herein is, to any  extent,  held
                  ------------
invalid or  unenforceable  in any respect under the laws governing this Agreement,  the remainder of this Agreement
shall  not be  affected  thereby,  and each  term,  covenant  or  condition  of this  Agreement  shall be valid and
enforceable to the fullest extent permitted by law.

         22.9     Counterparts.  This  Agreement  may be executed in one or more  counterparts,  all of which taken
                  ------------
together shall constitute one and the same instrument.

         In  confirmation  of their  consent  and  agreement  to the terms  and  conditions  contained  in this IRU
Agreement and intending to be legally bound  hereby,  the parties have executed this  IRU Agreement  as of the date
first above written.

                  PATHNET OPERATING, INC.

                  By:     /s/ William R. Smedberg V
                          -----------------------------------------------------
                           Name:William R. Smedberg V
                           Title: Vice President

                  ENRON BROADBAND SERVICES, INC.

                  By:    /s/ Matt Harris
                         -----------------------------------------------------
                           Name:Matt Harris
                           Title: Vice President

                                                 GLOSSARY OF TERMS
                                                 -----------------

         The following terms shall have the stated definitions in this Agreement.

                  "As-Builts" is defined in section 5.01.

                  "Cable" means the fiber optic cable and the fibers  contained  therein,  and associated  splicing
connections, splice boxes, and vaults to be installed by Pathnet as part of the Pathnet System.

                  "Costs"  means all  reasonable,  actual,  direct  costs paid or payable  in  accordance  with the
established  accounting  procedures  generally  used by Pathnet and which it utilizes in billing  third parties for
reimbursable  projects which costs shall include,  without  limitation,  the following:  (i) internal  labor costs,
including  wages and salaries,  and benefits,  and overhead  allocable to such labor costs equal to fifteen percent
(15%),  and  (ii) other  direct  costs  and  out-of-pocket  expenses  on a  pass-through  basis  (e.g.,  equipment,
materials, supplies, contract services, etc.).

                  "Effective Date" is defined in the introductory paragraph to this Agreement.

                  "Impositions"  means all taxes, fees,  levies,  imposts,  duties,  charges or withholdings of any
nature (including,  without limitation,  franchise, license and permit fees), together with any penalties, fines or
interest thereon arising out of the  transactions  contemplated by this Agreement that are imposed upon the Pathnet
System by any federal, state or local government or other public taxing authority.

                  "POP" means a point of presence or terminal.

                  "Planned  System  Work  Period"  or  "PSWP"  means a  prearranged  period  of time  reserved  for
performing  certain  work on the Pathnet  System  that may  potentially  impact  traffic.  Generally,  this will be
restricted  to  weekends,  avoiding the first and last weekend of each month and  high-traffic  weekends.  The PSWP
shall be agreed upon pursuant to Exhibit G.
                                 ---------

                  "Pathnet System" shall have the meaning ascribed thereto in Recital A.
                                                                              ---------

                  "Segment" shall mean a city pair described in Exhibit A.
                                                                ---------

                  "Underlying Rights" is defined in Section 21.2.

                  "Best  efforts"  and  "reasonable  commercial  efforts",  when used herein in  connection  with a
covenant of a party to this Agreement,  shall not obligate such party,  unless otherwise  specifically  required by
the operative  covenant,  to make unreimbursed  expenditures (other than costs or expenditures that would have been
required of such party in the absence of the  requirements of such covenant) that are material in amount,  in light
of the circumstances to which the requirement to use best efforts applies.IRU with Enron, Enron grantor

* IMPORTANT NOTE:  CERTAIN  MATERIAL,  INDICATED BY AN ASTERISK ("*"),  HAS BEEN
OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

                       Amended and Restated IRU Agreement

                                     Between

                   Enron Broadband Services, Inc., as Grantor

                                       And

                       Pathnet Operating, Inc., as Grantee

                       Effective As Of December ___, 2000

                                       ii

                                        i
                                TABLE OF CONTENTS

ARTICLE I.                 CONSTRUCTION

ARTICLE II.                CONFIRMATION OF IRU AND PAYMENT; OTHER PROVISIONS

ARTICLE III.               CONNECTION TO THE SYSTEM AND COLLOCATION

ARTICLE IV.                RESULTS OF TESTING OF IRU FIBERS

ARTICLE V.                 SYSTEM DOCUMENTATION

ARTICLE VI.                TERM AND TERMINATION

ARTICLE VII.      OPERATION, MAINTENANCE AND REPAIR OF THE SYSTEM

ARTICLE VIII.     PERMITS AND REQUIRED RIGHTS

ARTICLE IX.                RELOCATION

ARTICLE X.                 USE OF THE SYSTEM

ARTICLE XI.                INDEMNIFICATION

ARTICLE XII.      INSURANCE

ARTICLE XIII.     TAXES AND FRANCHISE; LICENSE AND PERMIT FEES

ARTICLE XIV.      SYSTEM WARRANTIES

ARTICLE XV.       NOTICE

ARTICLE XVI.      CONFIDENTIALITY

ARTICLE XVII.     DEFAULT; LIMITATION OF LIABILITY

ARTICLE XVIII.    FORCE MAJEURE

ARTICLE XIX.      ARBITRATION

ARTICLE XX.       WAIVER

ARTICLE XXI.      GOVERNING LAW

ARTICLE XXII.     RULES OF CONSTRUCTION

ARTICLE XXIII.    ASSIGNMENT

ARTICLE XXIV.     REPRESENTATIONS AND WARRANTIES

ARTICLE XXV.      ENTIRE AGREEMENT; AMENDMENT

ARTICLE XXVI.     RELATIONSHIP OF THE PARTIES

ARTICLE XXVII.    SEVERABILITY

ARTICLE XXVIII.   COUNTERPARTS

ARTICLE XXIX.     AUDIT RIGHTS

ARTICLE XXX.      CERTAIN DEFINITIONS

                                                       EXHIBITS

Exhibit A                    Cable Installation Specifications

Exhibit B                    Fiber Specifications

Exhibit C                    Fiber Splicing, Testing, and Acceptance Standards

Exhibit D                    As-Built Drawing Specifications

Exhibit E                     Maintenance/Operations Specifications

Exhibit F                  Collocation Agreement

Exhibit G                  Bill of Sale

Exhibit H                  Operation and Maintenance and Repair Agreement

                                                      ATTACHMENTS

Attachment 1                System Route  Map and IRU Fiber Assignment Numbers

                                                          27

                                                           1
                                          AMENDED AND RESTATED IRU AGREEMENT

THIS AMENDED AND RESTATED IRU AGREEMENT ("Agreement") is entered into as of December ____, 2000, but shall be
effective on the date (the "Effective Date") on which the IRU Payment is made by Customer to Backbone Trust I
pursuant to the Partial Assignment (as such terms are defined below), by and among Enron Broadband Services, Inc., an
Oregon corporation (hereinafter referred to as "EBS"), having its principal office at 1400 Smith Street, Houston,
Texas  77002, and Pathnet Operating, Inc., a Delaware corporation, having its principal office at 11720 Sunrise
Valley Drive, Reston VA 20191  (hereinafter referred to as "Customer").  (EBS and Customer may hereinafter be
referred to individually as a "Party" and collectively as the "Parties".)  Certain capitalized terms used in this
Agreement are defined in Article XXX of this Agreement.

                                                      BACKGROUND

WHEREAS, EBS has constructed a fiber optic communication system which includes the route from Denver, Colorado to
Houston, Texas; and

WHEREAS, EBS, pursuant to an IRU Agreement, as amended (the "LJM2 IRU Agreement"), dated June 30, 2000, between EBS
and LJM2-Backbone II, LLC ("LJM2"), EBS granted to LJM2 an IRU in certain strands of fiber in such system; and

WHEREAS, LJM2, pursuant to that certain Assignment of IRU Agreement dated December 21, 2000, between LJM2 and
Backbone Trust I ("Backbone"), LJM2 has assigned to Backbone all its right, title, and interest in and to all such
strands of fiber in such system; and

WHEREAS, EBS and Backbone entered into that certain Amended and Restated IRU Agreement  ("Backbone IRU Agreement")
dated December 21, 2000; and

WHEREAS, through that certain Assignment and Assumption of IRU Agreement (the "Partial Assignment") between Backbone
and Customer, Backbone has assigned to Customer all of Backbone's right, title, and interest in and to four (4) of
such strands of fiber between the cities listed in Attachment 1 (such fibers being the "IRU Fibers," as defined
below), and has assigned to Customer Backbone's associated rights under the Backbone IRU Agreement, subject to
certain exclusions set forth in the Partial Assignment; and

WHEREAS, pursuant to the Partial Assignment, LJM2 and Backbone have no continuing right to the IRU Fibers, from and
after the Effective Date hereof; and Customer holds an exclusive indefeasible right of use ("IRU") in such IRU
Fibers, and Customer and EBS are each obligated to perform to each other the duties of the IRU grantee and IRU
grantor, respectively, with respect to the IRU Fibers; and

WHEREAS, EBS and Customer desire to amend and restate the Backbone IRU Agreement, as partially assigned to Customer,
to include certain additional understandings requested by Customer and by EBS; and

WHEREAS, Customer and EBS desire that this Agreement amend and restate the Backbone IRU Agreement, as to the IRU
Fibers, such that EBS assumes all obligations of the grantor of the IRU Fibers except those excl uded provisions as
defined in the Partial Assignment; and

NOW, THEREFORE, in consideration of the mutual promises set forth below, the Parties hereby agree as follows:

ARTICLE I.                                                    CONSTRUCTION
                                                              ------------

1.1.              EBS, directly or through Affiliates, has installed the Cable as described in this Article I.
Specifically, EBS represents and warrants that it has:

1.1.1.   Installed the Cable according to the specifications set forth in Exhibit A, along the System Route.
                                                                          ---------

1.1.2.   Spliced and tested the installed Cable pursuant to the requirements set forth in Article IV of this
                  Agreement and in Exhibit C.
                                   ---------

1.1.3.   Complied with all applicable laws, rules and regulations (including environmental) and obtained all EBS
                  Required Rights (as hereinafter defined), including any and all necessary permits, franchises,
                  easements, rights obtained through perfection of title, and rights-of-way needed to install the
                  Cable and to deliver the IRU Fibers.

1.2.     In the event that Customer has optronic equipment in space operated by EBS pursuant to Article III of this
Agreement, EBS shall allow Customer access, at no additional cost, to all environmental alarms relating to such space
by means of an electrical contact point located in such space; provided, Customer shall pay all costs to connect to
such alarms.  Customer shall be responsible for obtaining any facilities needed to connect these contact points to
EBS monitoring system.  In the event that Customer does not connect to the alarms, EBS shall, at Customer's request,
establish procedures to allow Customer, at its expense, to share or receive alarm information.

1.3      EBS warrants and represents that:

1.3.1.   The System has been designed, engineered, installed and constructed to perform in accordance with the
                  specifications set forth in the Exhibits A, B and C to this Agreement.
                                                  -------------------

1.3.2.   EBS has performed all necessary surveying and mapping for the System, including, without limitation:

                  a.       A complete locations survey of the System Route, in accordance with standard
                           telecommunication engineering practices; and

                  b.       A complete locations survey of sites for regeneration stations and other facilities along
                           the System Route  in accordance with standard telecommunications engineering practices.

1.3.3.   Subject to Article VIII of this Agreement, EBS has acquired all EBS Required Rights necessary for the
                  continuous operation and maintenance of the System  and for the connection, in accordance with
                  Article III of this Agreement, of Customer's network to the System  to enable Customer to use the
                  IRU Fibers to provide communications services throughout the Initial Term of this Agreement.

1.3.4.   EBS owns clear, exclusive, legal title to the IRU Fibers and Associated Conduit, free and clear of all
                  liens, security interests or other encumbrances, and has all necessary right and authority to
                  perform its obligations pursuant to the Backbone IRU Agreement and this Agreement.

ARTICLE II.                                       CONFIRMATION OF IRU; CONSIDERATION;
                                                  ------------------------------------
                                            OTHER PROVISIONS
                                            ----------------

2.1.              Upon the terms, covenants and conditions contained in this Agreement and subject to the provisions
on conveyance of title to the IRU Fibers and Associated Conduit as set forth in Section 6.2, below, EBS hereby
confirms and recognizes the grant by Backbone to Customer of an exclusive IRU in and to the IRU Fibers, together with
a non-exclusive right of use in the property needed or appropriate for the use of such IRU Fibers as dark fibers,
including, but not limited to, the Associated Conduit, but excluding any electronic or optronic equipment.  EBS
hereby assumes, and agrees that Customer may look to EBS to perform all of, the obligations of the grantor under the
Backbone IRU Agreement and this Agreement, except those excluded provisions as set forth in the Partial Assignment

2.2.              The consideration for the grant herein of the IRU in and to the IRU Fibers shall be (i) Customer's
payment of the IRU Payment (as defined in the Partial Assignment) to Backbone pursuant to the provisions of the
Partial Assignment, and (ii) the Parties' respective obligations to each other hereunder.  Customer shall not owe any
payment to EBS hereunder for the grant of the IRU.

2.3      It is understood and agreed that EBS must and does maintain legal title to the System  subject to the
confirmation of the IRU in this Agreement, until such time as title to the IRU Fibers and Associated Conduit is
conveyed to Customer in accordance with the provisions of Section 6.2, below.  Notwithstanding the foregoing, it is
understood and agreed as between the Parties that the grant of the IRUs by Backbone to Customer shall be treated for
accounting and federal and all applicable state and local tax purposes as the sale and purchase of the IRU Fibers and
the Associated Conduit, and that on or after the exercise of its IRU, Customer shall be treated as the owner of the
IRU Fibers and the Associated Conduit for such purposes.  The Parties agree to file their respective income tax
returns, property tax returns and other returns and reports for their respective Assessments on such basis and,
except as otherwise required by law, not to take any positions inconsistent therewith.  Notwithstanding the
foregoing, however, in the event that Customer's independent auditors advise Customer that Customer is not permitted
to report this transaction as a purchase and sale, then Customer may report in accordance with its auditor's advice;
provided, that Customer shall provide prompt written notice to EBS of the reasons for such auditor's conclusions.
2.4      This Agreement amends and restates the Backbone IRU Agreement in its entirety, as it applies to the IRU
Fibers, and Customer shall have no further obligations or liabilities thereunder.  This Agreement does not amend or
restate the Partial Assignment, which continues in full force and effect according to its terms.  Customer retains
whatever rights it may have against LJM2 and/or Backbone pursuant to the Partial Assignment.

ARTICLE III.                                    CONNECTION TO THE SYSTEM AND COLLOCATION
                                                ----------------------------------------

3.1.              The IRU Fibers will be terminated at an EBS fiber optic patch panel in the same general space as
described in Exhibit E hereto,  or reasonably close thereto.  Subject to the provisions herein, Customer shall be
responsible for all costs to connect its facilities with the IRU Fibers.  Subject to Exhibit E, Customer may connect
                                                                                     ---------
its system or other fiber optic systems controlled by it with the IRU Fibers at Customer's sole cost, at a Connecting
Point at any optical amplifier, regenerator or junction site or other splice points agreed to by EBS, which agreement
will not be unreasonably withheld or delayed; provided, however, any connection requiring a splice to be entered
                                              --------  -------
shall be performed by EBS at Customer's sole expense.  In order to schedule a connection through a splice point,
Customer shall coordinate the work at least thirty (30) days in advance of the date the connection is requested to be
completed.  EBS shall use commercially reasonable efforts to accommodate the request.  Such work shall be restricted
to the planned system work period set forth in Exhibit E to this Agreement unless otherwise agreed to in writing.
                                               ---------
Notwithstanding the above, EBS may prohibit Customer from making a connection at any Connecting Point if EBS can
demonstrate to Customer reasonable satisfaction that use of a proposed Connecting Point would materially and
adversely affect the System.

3.2.              Customer shall not employ equipment or technologies that will interfere with the use of any of the
fibers in the System or damage the IRU Fibers or any other fibers in the System.

3.3.              As more particularly indicated on Exhibit A, EBS will provide spacing of not more than fifty (50)
miles between Transmission Sites, except where geographic factors require different spacing. The Parties shall
execute, contemporaneous with the execution of this Agreement, a Collocation Agreement substantially in the form of
Exhibit F, under which agreement EBS will provide collocate space to Customer at such sites as are set forth in such
---------
Collocation Agreement.  The collocate space will be 300 square feet at each regenerator station and 100 square feet
at each optical amplifier site unless otherwise agreed in the Collocation Agreement.  EBS will provide such
collocation space as provided in and pursuant to the terms and conditions of such Collocation Agreement.  In
addition, EBS will accommodate Customer on a non-discriminatory basis at EBS point of presence locations as space is
available, at EBS standard rates and in accordance with EBS' standard terms and conditions.  Upon conveyance of title
to the IRU Fibers and Associated Conduit to Customer in accordance with the provisions of Section 6.2, below, EBS
will continue to provide such collocate space and services to Customer so long as there remains in place a valid
Collocation Agreement substantially in the form of Exhibit F.
                                                   ---------

ARTICLE IV.                                         RESULTS OF TESTING OF IRU FIBERS
                                                    --------------------------------

         Acceptance and testing of the IRU Fibers is addressed in the Partial Assignment, and will have been
completed prior to the Effective Date of this Agreement.

ARTICLE V.                                                SYSTEM DOCUMENTATION
                                                          --------------------

5.1.              As soon as available, but in no event later than sixty (60) days after the Effective Date, EBS
shall provide Customer with documentation ("Deliverables") that shall consist of the following:

5.1.1.   As-built drawings for the System  complying with the specifications for as-built drawings set forth in
                  Exhibit D; and
                  ---------

5.1.2.   Technical specifications of the Cable and associated splices and other equipment placed in the System  as
                  set forth on Exhibits A, B and C, as well as specifications with respect to optical amplifier and
                               -------------------
                  regeneration sites, if applicable.

ARTICLE VI.                                               TERM AND TERMINATION
                                                          --------------------

6.1.              This Agreement shall have a term (the "Term") that begins on the Effective Date and shall remain
effective until the end of the Initial Term (as defined in the next sentence), or, if applicable, the end of the last
renewal of the Initial Term.  The initial term ("Initial Term") of the grant of the IRU in and to the IRU Fibers
shall begin on the Effective Date and shall end on June 30, 2020.  Subject to the conditions and limitations set
forth below, and subject to the extension of the EBS Required Rights, Customer may, by written notice, extend the IRU
grant and this Agreement for an additional ten (10) year period or such shorter period as required by the EBS
Required Rights, and, if it has so elected to so extend, it may, by written notice, extend the IRU grant and this
Agreement for a second ten (10) year period or such shorter period as required by the EBS Required Rights.  Customer
shall provide such written notice at least one (1) year in advance of the date the Initial Term or the extension
thereof would expire absent such notice.  Within thirty (30) days after the date on which EBS has received Customer's
written notice electing to extend the term of this IRU and requesting a report on the remaining term of the EBS
Required Rights, EBS will advise Customer of the remaining term of all applicable EBS Required Rights.  If such EBS
Required Rights do not extend for the entire length of the extended term, Customer shall have the right to (i) extend
this Agreement for the entire renewal term or for a term shorter than the renewal term (but in either of such events
Customer, prior to such renewal term, shall obtain renewals of such EBS Required Rights, in Customer's name, at
Customer's sole cost, or, at EBS' option, in Customer's and EBS' names, in which latter case Customer and EBS shall
share the costs, with EBS paying the costs attributable to all IRU holders in the same Cable who claim through EBS
(except Customer and its assignees) or (ii) withdraw its election to extend the term of this Agreement.  Subject only
to the charges for the Basic Maintenance Services as provided in Article VII, any extension of this Agreement shall
be on the same terms and conditions as contained in this Agreement and for no additional consideration.  Customer
shall have the right (but not the obligation) to extend or obtain modification of any EBS Required Right, on
Customer's own behalf and at its sole cost, to the extent Customer deems appropriate in connection with any extension
of the Term. Customer may not extend this Agreement if, at least six (6) months prior to the date of the proposed
extension, EBS, based on its reasonable opinion, notifies Customer that it is not commercially practicable tocontinue
operation or maintenance of the System beyond the Initial Term or beyond the first extension, as applicable.

         6.2      Subject to the extension rights described above, upon the expiration of the Term of this Agreement
EBS shall convey title to the IRU Fibers and Associated Conduit to Customer pursuant to a bill of sale substantially
in the form of Exhibit G hereto.  Upon such conveyance the IRU in the IRU Fibers shall immediately terminate and all
               ---------
rights of Customer pursuant to this Agreement shall cease and, except as provided in Section 6.3, below, neither
Party shall owe the other any additional duties or consideration hereunder.  Unless EBS and Customer shall have
entered into an Operation, Maintenance and Repair Agreement substantially in the form of Exhibit H, Customer shall,
                                                                                         ---------
within sixty (60) days after the end of the Term (unless the Parties agree to a longer period), remove all
electronics and equipment from the System , including any EBS facilities, at Customer's sole cost, under EBS'
supervision.  In the event of failure of Customer to remove same within said period, EBS shall remove same at
Customer's sole expense, to be reimbursed by Customer within thirty (30) days of receipt of EBS' invoice therefor.  In
order for the equipment or facilities of Customer to be or remain connected  to the System, Customer and EBS must
have entered into an Operation Maintenance and Repair Agreement substantially in the form of Exhibit H.
                                                                                             ---------

6.3      Notwithstanding the foregoing, no termination of this Agreement shall affect the rights or obligations of
any Party hereto with respect to (a) any payment hereunder for services rendered prior to the date of termination, or
(b) pursuant to Article XI, Article XII, Article XIII, Article XVI, Section 17.4 and Article XIX of this Agreement.

6.4      During any extension of this Agreement as provided in this Article VI, Customer shall pay EBS its
proportionate share of any recurring fees charged pursuant to the EBS Required Rights.  Customer's proportionate
share will be based upon the number of fibers in which it has an IRU and the total number of fibers in the System.
EBS will advise Customer of the amount of such fees, within one hundred and twenty (120) days after Customer's
election to renew the Term of the Agreement, and within thirty (30) days thereafter Customer may elect to withdraw
its renewal of the Term.

ARTICLE VII.                                 OPERATION, MAINTENANCE AND REPAIR OF THE SYSTEM
                                             -----------------------------------------------

7.1.              EBS shall maintain the System and the IRU Fibers at all times in good working order and in a safe
condition, in conformity with the operations specifications set forth on Exhibit E and all applicable laws and
                                                                         ---------
regulations. During the Initial Term, EBS shall provide Basic Maintenance Services for the System , the IRU Fibers
and any common equipment on the System , all pursuant to the operations specifications set forth on Exhibit E.
                                                                                                    ---------
Customer will be billed for Basic Maintenance Services at a rate of $"*" per Actual Route Mile per year, prorated
to accommodate any partial year during the term of this Agreement, and adjusted annually to reflect annual changes in
the U.S. Producer Price Index (Bureau of Labor Standards "All Finished Goods" Series ID WPUSOP3000); provided that in
                                                                                                     --------
no event shall the rate be less than $"*" per Actual Route Mile per year.  Customer shall pay EBS' annual invoice
for Basic Maintenance Services within thirty (30) days after receipt of invoice.  Late payments of such amounts shall
accrue interest from the date due until paid at a rate equal to twelve percent (12%) per annum or, if lower, the
highest percentage allowed by law.

7.2.              EBS, at Customer's sole expense and at EBS' then prevailing rates, shall repair damage to the
System or the IRU Fibers caused by Customer's negligence or willful misconduct or elective maintenance or repair
requests.  EBS shall not perform nor be responsible for any maintenance or repair of any of Customer's equipment.

7.3.              EBS may subcontract for maintenance and restoration services hereunder including Basic Maintenance
services.  All such subcontractors shall perform their work in accordance with the applicable specifications
contained in this Agreement and Exhibits C and E attached hereto, and then-prevailing industry standards.   No such
                                ----------------
subcontracting shall relieve EBS of its obligations hereunder.

7.4.              Upon notification from Customer of any Service Interruption, EBS shall promptly begin to mobilize
crews and make its best effort to achieve necessary repairs or restoration, in accordance with the procedures set
forth in Exhibit E.  For purposes hereof, "best efforts" means activities and performance consistent with prudent
         ---------
industry practice, and response times that do not jeopardize the health and safety of employees or agents of EBS or
Customer.

7.5.              EBS shall use a degree of care in performing repair and maintenance pursuant to this Agreement that
equals or exceeds that which is normal and customary in the communications industry, and complies with the standards
set forth in Exhibit E, attached hereto and incorporated herein.

7.6.              In the event Customer notifies EBS, or EBS otherwise becomes aware, of a need for repair to the
System, or of damage to the System that results from a specific accident or disaster, or deterioration of the IRU
Fibers in the System requiring replacement of IRU Fibers ("Damage or Deterioration"), EBS, at its cost, shall
promptly repair such Damage or Deterioration using its best efforts as defined in Section 7.4 above.  However, if the
Damage or Deterioration is due to the negligence or willful misconduct of EBS or Customer, the party responsible for
such Damage or Deterioration shall be responsible for the costs of repairing the System to the extent the Damage or
Deterioration was caused by  such party.  EBS and Customer shall reasonably cooperate with each other to collect any
available insurance proceeds or other recoverable amounts and to resolve any disputes with insurance carriers
regarding the availability of insurance proceeds to repair any Damage or Deterioration to the System.  To the extent
any costs are recovered from a third party not having an interest in the fibers in the Cable, or, in the case of a
third person's having an interest in the cable, costs in excess of such third person's proportionate share in the
cable, Customer's share of such costs, if any, shall be reduced proportionately.

7.7.              To the extent that repair of Damage or Deterioration (not caused by the negligence or willful
misconduct of EBS or Customer or another person with an interest in the System) exceeds Basic Maintenance Services,
EBS and Customer shall exert good-faith efforts to minimize the costs to repair such Damage or Deterioration, as
follows:  (i) EBS shall attempt to recover such costs from any third persons who may be responsible therefor, and
(ii) in the event EBS is not completely successful in that effort, Customer may attempt to recover any such costs not
recovered by EBS.  Customer shall pay EBS' invoice for Customer's Proportionate Share (as hereinafter defined) of the
cost to repair the Damage or Deterioration, within thirty (30) days after receipt of the invoice.  The Parties shall
adjust Customer's payment of such costs to EBS by the amount, if any, recovered by Customer.  Upon request by one
Party, the other Party shall promptly provide the necessary substantiating information that will allow the first
Party to verify the accuracy of the invoice.  For purposes hereof, all costs in excess of Basic Maintenance shall be
allocated equally across all the conduits in the affected segment of the System, and then, with respect to a conduit,
equally among the fibers (whether sold or unsold, dark or lit) in such conduit.  Customer's "Proportionate Share"
shall be the costs allocated to its individual fibers in such manner.

7.8.              In the event this Agreement is extended as provided in Article VI, EBS will continue to provide the
Basic Maintenance Services for each extension at EBS' then current rates.

ARTICLE VIII.                                          PERMITS AND REQUIRED RIGHTS
                                                       ---------------------------

8.1.     EBS has obtained all R of W Agreements as well as any other licenses, permits, franchises, easements, rights
obtained to perfect easements or other property rights for telecommunications purposes, authorizations (including any
necessary state, tribal or federal authorizations such as environmental permits), indefeasible rights of use, leases
and other agreements necessary for (i) the installation and operation of the System  hereunder, and (ii) the grant of
the IRU to LJM2, to Backbone, and to Customer, and (iii) the use and operation of the IRU Fibers by Customer (all of
which interests are referred to as "EBS Required Rights").

8.2.     EBS shall cause all EBS Required Rights to remain effective through the Initial Term.

8.3.     EBS' obligation to maintain the EBS Required Rights as provided above shall cease upon the expiration of the
Initial Term.  After such cessation, Customer shall be responsible for obtaining any permits, easements, and other
right of way-related documents relating to Customer's fibers and interest in the Associated Conduit.

8.4.     In the event that, during the Initial Term, EBS receives notice that it has not obtained a necessary EBS
Required Right, or that an EBS Required Right is or may be defective, EBS will promptly so notify Customer, in
writing, and will promptly take such steps as it reasonably deems appropriate to confirm the integrity of the EBS
Required Right, acquire an additional EBS Required Right, or take such other action as may be appropriate to protect
Customer's rights to exercise its rights hereunder.  Notwithstanding the foregoing, if Customer becomes aware that a
failure of defect in an EBS Required Right poses a threat to Customer's continued ability to execise its rights
hereunder, including, without limitation, a threat of injunction threatening Customer's right to operate the System,
Customer shall immediately so notify EBS in writing and allow EBS a reasonable opportunity to confirm the integrity
of the EBS Required Right; provided, that in the event EBS cannot or will not do so within a reasonable time given
the circumstances, Customer, upon providing written notice thereof to EBS, may take such action that it deems
appropriate to ensure its continuing right to exercise its rights hereunder, and EBS shall reimburse Customer on
demand for all Customer's reasonable costs and expenses incurred in doing so.

ARTICLE IX.                                                    RELOCATION
                                                               ----------

If, following the Effective Date, EBS is required to relocate the Cable or any of the facilities used or required in
providing Customer with the IRU, EBS shall give Customer sixty (60) days prior notice of any such relocation, if
possible, and shall proceed with such relocation.  EBS shall have the right to direct such relocation, including, but
not limited to, the right to determine the extent of, the timing of, and methods to be used for such relocation;
provided that any such relocation: (a) shall be constructed and tested in accordance with the specifications and
--------
requirements set forth in Exhibits A and C; (b) shall not result in a materially adverse change to the operations,
                          ----------------
performance, Connecting Points with the network of Customer, or end points of the System; and (c) shall not
unreasonably interrupt service on the System.  If the relocation is required due to EBS' failure to maintain an EBS
Required Right, EBS shall pay the Relocation Costs.  In all other circumstances, where the Relocation Cost (excluding
reimbursements) of EBS' relocation exceeds $"*" per occurrence and is beyond the reasonable control of EBS,
Customer shall reimburse EBS for Customer's Proportionate Share of the Relocation Costs (including, without
limitation, fiber acquisition, splicing and testing).   In the event that a third party that does not have an
interest in the fibers in the Cable reimburses EBS for all of or a portion of the cost to relocate the System, or a
third person with an interest in the Cable reimburses EBS for more than its Proportionate Share of such Relocation
Costs, then reimbursement amount shall reduce on a dollar-for-dollar basis the aggregate amount of Relocation Costs
deemed to have been spent by EBS under this Article IX.  EBS shall deliver to Customer updated as-built drawings
consistent with the specifications set forth in Exhibit D with respect to any relocated portion of the System  no
                                                ---------
later than ninety (90) days following completion of the work.  EBS shall prepare a budget for the costs associated
with such relocation and, except in the event of an emergency, at least thirty (30) days prior to beginning such
relocation work provide Customer a copy.  EBS shall provide information and documentation to Customer sufficient to
demonstrate the basis for and the proportionate amount of the Relocation Costs chargeable to Customer.  Customer
shall pay Customer's proportionate share of such Relocation Costs within thirty (30) days of receipt of the foregoing
information

ARTICLE X.                                                  USE OF THE SYSTEM
                                                            -----------------

10.1.    Customer warrants that its use of the IRU Fibers and the System shall comply in all material respects with
applicable government codes, ordinances, laws, rules, regulations and restrictions and shall not have an adverse
effect on the System or its use.

10.2.    Customer may use the IRU Fibers for any lawful purpose.  EBS agrees and acknowledges that EBS has no right
to use the IRU Fibers during the Term.

10.3.    EBS and Customer shall promptly notify each other of any matters pertaining to any damage or impending
damage to or loss of the System or any part thereof, that are known to such Party and that could reasonably be
expected to affect the System.

10.4.    Customer shall take all reasonable precautions against, and shall assume liability, subject to the terms of
this Agreement, for any damage caused by Customer to the fibers used or owned by EBS or third parties.  EBS shall
take all reasonable precautions against, and shall assume liability, subject to the terms of this Agreement, for any
damage caused by EBS to the IRU Fibers or to fibers or other portions of the System used or owned by third parties.

10.5.    Customer shall not use the IRU Fibers or any portion of the System  in a manner that interferes in any way
with or adversely affects the use of the fibers of EBS or third parties within the System or their respective
equipment and facilities associated with the Cable or their use of any portion of the System.  EBS shall not use and
shall prohibit third parties from using the System or any part of the System in a manner that interferes in any way
with or adversely affects Customer's use of the IRU Fibers or Customer's equipment and facilities associated with the
IRU Fibers.

10.6.    EBS and Customer each agree to cooperate with and support the other in complying with any requirements
directly applicable to the IRU Fibers by any governmental or regulatory agency or authority.

ARTICLE XI.                                                  INDEMNIFICATION
                                                             ---------------

11.1.    Subject to the provisions of Section 17.3, Customer hereby releases and agrees to indemnify, defend, protect
and hold harmless EBS, its Affiliates, and its and their employees, officers, directors, agents, contractors, and
shareholders ("Indemnified Persons"), from and against any third party claims, suits, proceedings and actions
("Claims") for:

11.1.1.  Any injury, death, loss or damage to any person, tangible property or facilities of any person or entity
                  (including reasonable attorney fees and costs at trial and appeal) to the extent arising out of or
                  resulting from the acts or omissions, negligent or otherwise, of Customer, its officers, directors,
                  employees, agents or contractors in connection with its performance or non-performance under this
                  Agreement;

11.1.2.  Any liabilities or damages (including reasonable attorney fees and costs at trial and appeal) arising out of
                  any violation by Customer of regulations, rules, statutes or court orders of any local, state or
                  federal governmental agency, court or body in connection with its performance under this Agreement;
                  and

11.1.3.  Any liabilities or damages asserted by Customer's telecommunications clients and arising directly or
                  indirectly from any outages, disruptions or interruptions of service in the operation of Customer's
                  IRU Fibers or any failure of such fibers to transmit accurately any message.

11.2.    Subject to the provisions of Section 17.3, EBS hereby releases and agrees to indemnify, defend, protect and
hold harmless Customer and its Indemnified Persons from and against any third party Claims for:

11.2.1.  Any injury, death, loss or damage to any person, tangible property or facilities of any person or entity
                  (including reasonable attorney fees and costs at trial and appeal), to the extent arising out of or
                  resulting from the acts or omissions, negligent or otherwise, of EBS, its officers, directors,
                  employees, agents or contractors in connection with its performance or non-performance under this
                  Agreement;

11.2.2.  Any liabilities or damages (including reasonable attorney fees and costs at trial and appeal) arising out of
                  any violation by EBS of regulations, rules, statutes or court orders of any local, state or federal
                  governmental agency, court or body in connection with its performance under this Agreement; and

11.2.3.  Any failure by EBS to obtain and/or maintain, throughout the Initial Term, all EBS Required Rights
                  reasonably necessary or appropriate to permit Customer to use and enjoy the IRU Fibers, Associated
                  Conduit, and Transmission Sites, as provided herein.  Customer shall be permitted to participate in
                  any such defense at its sole cost and expense, provided it conducts such participation in a manner
                  that does not interfere with EBS' defense.

11.3.    EBS and Customer hereby expressly recognize and agree that each Party's obligation to indemnify, defend,
protect and save harmless Indemnified Persons is a material obligation to the continuing performance of the Parties'
other obligations, if any, hereunder.  However, in the event that either EBS or Customer fails for any reason to so
indemnify, defend, protect and save harmless, the injured Party's sole remedy in such event shall be the right to
bring an arbitration proceeding pursuant to the terms of this Agreement against the other for damages as a result of
such failure to indemnify, defend, protect and save harmless.  The obligations of this Section 11.3 shall survive the
expiration or earlier termination of this Agreement.  EBS and Customer each affirmatively state and warrant to the
other that its indemnity obligation as to property damage or personal injury will be supported by liability insurance
to be furnished by it; provided that recovery under or in respect of this indemnity shall not be limited to the
                       --------
proceeds of any such insurance.

11.4.    Nothing contained herein shall operate as a limitation on the right of either EBS or Customer to bring an
action for damages against any third party, including indirect, special, or consequential damages, based on any acts
or omissions of such third party as such acts or omissions may affect the construction, operation or use of the IRU
Fibers or the System or any portion thereof; provided, however, the above limitation of liability shall apply to
                                             --------  -------
indirect liability including Claims against third parties who, directly or through one or more other parties, have a
right of indemnification, impleader, cross-claim, contribution or other right of recovery against a Party to this
Agreement.  Each of EBS and Customer shall assign such rights or claims, execute such documents and do whatever else
may be reasonably necessary to enable the other to pursue any such action against such third party.

ARTICLE XII.                                                    INSURANCE
                                                                ---------

12.1.    During the Term, the Parties shall each obtain and maintain the following insurance:

12.1.1.  Commercial General Liability Insurance with a combined single limit of $10,000,000 for bodily injury and
                  property damage.

12.1.2.  Worker's Compensation Insurance in amounts required by applicable law and Employers Liability Insurance with
                  limits of $1,000,000 each accident.

12.1.3.  Automobile Liability Insurance with a combined single limit of $2,000,000 for bodily injury and property
                  damage, to include coverage for all owned, non-owned and hired vehicles.

The limits set forth above are minimum limits and shall not be construed to limit the liability of either Party.

12.2.    EBS' insurance policies required above shall be obtained and maintained with companies rated A- or better by
Best's Key Rating Guide; provided however that all or part of the Commercial General Liability Insurance provided by
                         -------- -------
EBS may be provided through a self-insurance program of Enron Corp., EBS' ultimate parent corporation.  All such
insurance or self-insurance shall, to the extent of EBS' indemnity obligations under this Agreement, be primary to
any other available coverage.  Upon request, EBS shall provide Customer with an insurance certificate confirming
compliance with the insurance requirements of this Article XII.  The insurance certificate shall indicate that
Customer shall be notified not less than thirty (30) days prior to any cancellation or material change in coverage.

12.3.    Unless otherwise agreed, Customer's insurance policies required above shall be obtained and maintained with
companies rated A- or better by Best's Key Rating Guide; provided however, that upon approval of EBS, which approval
                                                         -------- -------
will not be unreasonably withheld or delayed, all or part of the Commercial General Liability Insurance to be
provided by Customer may be provided through a self-insurance program of Customer or the ultimate parent corporation
of Customer.  All such insurance or self-insurance shall, to the extent of Customer's indemnity obligation contained
in this Agreement, be primary to any other available coverage. Customer shall provide EBS with an insurance
certificate confirming compliance with the insurance requirements in this Article XII.  The insurance certificate
shall indicate that EBS shall be notified not less than thirty (30) days prior to any cancellation or material change
in coverage.

12.4.    In the event coverage is denied or reimbursement of a properly presented claim is disputed by the carrier
for insurance provided above, the Party carrying such coverage shall make commercially reasonable efforts to pursue
such claim with its carrier.

12.5.    The Parties shall each obtain from the insurance companies providing the coverage required by this Agreement
a waiver of all rights of subrogation or recovery in favor of the other Party and, as applicable, its parent
corporation, shareholders, affiliates, subsidiaries, assignees, officers, directors, and employees or any other party
entitled to indemnity under this Agreement.

ARTICLE XIII.                                 TAXES AND FRANCHISE; LICENSE AND PERMIT FEES
                                              --------------------------------------------

13.1.    Subject to Section 13.2 below, Customer shall be responsible for and pay to any taxing authority any and all
sales, use, income, gross receipts, excise, transfer, ad valorem or other taxes, and any and all franchise fees or
similar fees ("Assessments") (excluding income taxes (or gross receipts taxes in lieu of income taxes) of EBS
resulting from this transaction), assessed against Customer due to (i) its ownership (consistent with Section 2.3) of
an IRU, (ii) its use of the IRU Fibers, including the providing of services over the IRU Fibers, (iii) its lease or
use of any portion of the System, (iv) its ownership, lease or use of facilities connected to the IRU Fibers, or (v)
the sale to Customer of the IRU Fibers and the Associated Conduit.

13.2.    Subject to Section 13.1 above, EBS shall be responsible for and pay to any taxing authority any and all
Assessments assessed against it due to its construction, ownership (consistent with Section 2.3) or use of the
System, including providing services over the System, or its ownership or use of facilities connected to the System.

13.3.    In the event that EBS is assessed for any Assessments related to Customer's ownership of an IRU or
Customer's use of the IRU Fibers or any portion of the System which may not feasibly be separately assessed, EBS,
within thirty (30) days of receipt of an invoice therefor, shall provide information and documentation to Customer
sufficient to demonstrate the basis for the Assessments and the amount and due date for payment of the Assessments.
In addition, EBS shall provide Customer with all information reasonably requested by Customer with respect to any
such Assessments.  After such thirty (30) day period, EBS, in it sole discretion, may pay such Assessment and invoice
Customer for reimbursement, provided that EBS will not pay such Assessment if Customer objects and bonds or otherwise
takes action such that EBS' failure to pay such Assessment will not result in a lien on any portion of the System or
result in any forfeiture of title. If Customer does not object and EBS makes such payment, Customer shall reimburse
EBS for such payment within ten (10) days of receipt of EBS' invoice.  Notwithstanding such payment by EBS, Customer,
at its option, shall have the right at its sole cost to contest any such Assessments and EBS will reasonably
cooperate with Customer in pursuing any such contest; provided that Customer shall have reimbursed EBS for such
                                                      --------
Assessments.  In the event EBS, in its sole discretion, elects to not pay such Assessment, it shall so notify
Customer.  Customer, at its option, may pay the Assessments, or contest the payment; provided, that such contest
                                                                                     --------
shall be resolved or such Assessments shall be paid so as to prevent any forfeiture of rights or property or the
imposition of any lien on the System.

ARTICLE XIV.                                                SYSTEM WARRANTIES
                                                            -----------------

14.1.    Beginning on the Effective Date, and ending twelve months thereafter, EBS shall warrant that the IRU Fibers
shall comply with all applicable specifications set forth in this Agreement.  If, within such warranty period,
Customer discovers that the IRU Fibers do not so comply, Customer shall provide written notice of such fact to EBS,
and within fifteen (15) days of receipt of written notice of such defect, EBS shall inspect such IRU Fibers and
promptly thereafter, at no cost to Customer, correct any such defect or notify Customer of EBS' disagreement as to
any defects recited in Customer's notice.  EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THIS SECTION OR THE
REPRESENTATIONS, WARRANTIES, COVENANTS AND CONDITIONS OF THIS AGREEMENT, EBS MAKES NO WARRANTY TO CUSTOMER OR ANY
OTHER PERSON OR ENTITY, WHETHER EXPRESS, IMPLIED OR STATUTORY, AS TO THE INSTALLATION, DESCRIPTION, QUALITY,
MERCHANTABILITY, COMPLETENESS OR FITNESS FOR ANY PURPOSE OF THE CABLE OR ANY FIBERS OR ANY SERVICE OR FACILITY
PROVIDED HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL OF WHICH WARRANTIES ARE HEREBY EXCLUDED AND
DISCLAIMED.

14.2.    Customer's sole and exclusive remedy for breach of the foregoing warranty shall be repair and replacement,
at EBS' expense, of the portion of the IRU Fibers found to be defective.  In no event shall EBS be liable to Customer
for any indirect, exemplary, special or consequential damages, including but not limited to lost profits or the cost
of providing or obtaining alternative service.

14.3.    In procuring and obtaining materials for the installation of the System, EBS has used reasonable efforts to
obtain from the vendors and suppliers thereof, for the mutual benefit of Customer and EBS, warranties that such
materials are:  (a) of the kind and quality described in the purchase order or supply contract; (b) free of defects
in workmanship, material, design and title; (c) of good and merchantable quality; and (d) where appropriate, fit for
their intended purpose.  In addition, EBS has attempted to obtain standard warranty periods for all System materials,
and shall use reasonable efforts to obtain longer warranty periods, if such extended warranties do not materially
increase the cost of such materials.  In no event shall EBS be deemed to have guaranteed to procure any such
warranties or to guarantee such warranties as were procured from vendors or suppliers. Without in any way limiting
Section 14.1 above, or this Section 14.2, to the extent that any manufacturer's warranties can be lawfully assigned
or otherwise made available to Customer, EBS will (provided it is without detriment to EBS' rights under or with
                                                   --------
respect to such warranties) cooperate and assist Customer, at Customer's sole cost and expense, with respect to any
claim that Customer may assert against the manufacturer under such warranties, including such reasonable actions as
may be necessary to assign or otherwise make available to Customer the right to make such claims.

14.4.    In the event any maintenance or repairs to the System  are required as a result of a breach of any warranty
made by any manufacturer, contractor or vendor, EBS shall pursue any remedies it may have against such manufacturer,
contractor or vendor, and EBS shall reimburse Customer for any maintenance or repair costs that Customer has incurred
as a result of any such breach of warranty to the extent the manufacturer, contractor or vendor has paid such costs;
provided that:  (a) EBS shall be entitled to reduce such amount recovered from the manufacturer, contractor or vendor
--------
by legal and collection costs incurred; and (b) EBS shall have the right to prorate such amount so recovered (as so
reduced) among Customer, itself and other parties, based on IRU or fiber ownership.

ARTICLE XV.                                                      NOTICE
                                                                 ------

15.1.    Unless otherwise provided in this Agreement, all notices and communications concerning this Agreement shall
be in writing and addressed to the other Party as follows:

If to Customer    :        Pathnet Operating, Inc.
                           11720 Sunrise Valley Drive
                           Reston VA 20191
                           Attn: Senior Vice President, Operations
                           Attn:  General Counsel

If to EBS:                 Enron Broadband Services, Inc.
                           Attn.: Vice President, Wholesale Origination
                           2100 SW River Parkway., Suite 700
                           Portland, OR 97201
                           Facsimile No.:   (503) 886-0440

with a copy to:            Enron Broadband Services, Inc.
                           Attn: General Counsel
                           1400 Smith Street
                           Houston, TX  77002
                           Facsimile No.:   (713) 646-8537

or at such other address as may be designated in writing to the other Party.

15.2.    Unless otherwise provided in this Agreement, notices shall be sent by registered or certified U.S. Mail,
postage prepaid, or by commercial overnight delivery service, or by facsimile, (with the original of such notice sent
by commercial overnight delivery service) and shall be deemed served or delivered to the addressee at its office on
the date of receipt acknowledgment or, if postal claim notices are given, on the date of its return marked
"unclaimed"; provided however, that upon receipt of a returned notice marked "unclaimed," the sending Party shall make
             -------- -------
reasonable effort to contact and notify the other Party by telephone.

ARTICLE XVI.                                                 CONFIDENTIALITY
                                                             ---------------

16.1.    If the Parties have entered into (or later enter into) a confidentiality agreement, the terms of such an
agreement shall control and Section 16.2 below shall not apply; provided, however, that if any such confidentiality
                                                                --------  -------
agreement expires or is no longer effective at any time when this Agreement is effective, Section 16.2 below shall be
in effect for such periods.

16.2.    In the absence of a separate confidentiality agreement between the Parties, if either Party provides
confidential information to the other in writing and identified as such or if in the course of performing under this
Agreement a Party learns confidential information regarding the facilities or plans of the other, the receiving Party
shall protect the confidential information from disclosure to third parties with the same degree of care accorded its
own confidential and proprietary information; provided, however, that the Parties shall each be entitled to provide
                                              --------  -------
such confidential information to their respective directors, officers, members, managers, employees, agents, and
contractors ("Representatives"), entities controlling, controlled by or under common control with ("Affiliates") EBS
or Customer respectively, or the Representatives of such Affiliates, in each case whose access is reasonably
necessary.  Each such recipient of confidential information shall be informed by the Party disclosing confidential
information of its confidential nature, and shall be directed to treat such information confidentially and shall
agree to abide by these provisions.  In any event, each Party shall be responsible for any breach of this provision
by any person to whom that Party discloses confidential information.  Neither EBS nor Customer shall be required to
hold confidential any information that:  (a) becomes publicly available other than through the recipient; (b) is
independently developed by the disclosing Party; or (c) becomes available to the disclosing Party without restriction
from a third party.  These obligations shall survive expiration or termination of this Agreement for a period of two
(2) years.

16.3.    Notwithstanding Sections 16.1 and 16.2 above, confidential information shall not include information
disclosed by the receiving Party as required by applicable law or regulation; provided, however, that the information
                                                                              --------  -------
disclosed is limited to the existence and general nature of the relationship between EBS and Customer, including, as
required, the scope, approximate revenues, purposes and expectations related to such relationship and a description
of any disputes relating thereto and the disclosing Party uses reasonable efforts to provide the other Party with
written notice of such potential disclosure, prevent such disclosure, and provide the other Party with a reasonable
opportunity to secure the confidential protections thereof.  Notwithstanding the foregoing, this Agreement may be
provided to any governmental agency or court of competent jurisdiction to the extent required by applicable law.

16.4.    Neither Party shall use the name, tradename, servicemark or trademark of the other, nor issue any press
releases regarding this Agreement or the terms and conditions of this Agreement or use the other Party's name in any
promotional or advertising material without the prior written consent of such Party.

ARTICLE XVII.                                       DEFAULT; LIMITATION OF LIABILITY
                                                    --------------------------------

17.1     EBS shall not be in default under this Agreement unless and until Customer shall have given EBS written
notice of such default and, in the case of defaults other than a failure to respond to service-affecting situations
as set forth in Exhibit E, EBS shall have failed to cure the same within thirty (30) days after receipt of such
notice; provided, however, that where such default cannot reasonably be cured within such thirty (30) day period, if
        --------  -------
EBS shall proceed promptly to cure the same and prosecute such curing with due diligence, the time for curing such
default shall be extended for a period as long as necessary to effect such cure; provided, further, that failure to
pay any amounts due hereunder shall be a default if not cured within ten (10) days after written notice specifying
such failure.  Events of default shall include, but not be limited to: (a) the breach by EBS of any material term,
covenant or condition of this Agreement; (b) the making by EBS of a general assignment for the benefit of its
creditors; (c) the filing of a voluntary petition in bankruptcy or the filing of a petition in bankruptcy or other
insolvency protection against EBS that is not dismissed within ninety (90) days thereafter; (d) the filing by EBS of
any petition or answer seeking, consenting to, or acquiescing in reorganization, arrangement, adjustment,
composition, liquidation, dissolution or similar relief, or (e) the failure of EBS to pay any sums owing by EBS to
Customer.  Any event of default by EBS may be waived under the terms of this Agreement at Customer's option, but no
default by EBS shall be deemed waived by Customer unless such waiver is evidenced by a written document executed by
Customer.  Upon the failure by EBS to timely cure any such default after notice thereof from Customer, Customer may:
(i) take such action as Customer determines, in its sole discretion, to be necessary to correct the default; and (ii)
subject to Section 17.3 below and the provisions of Article XIX of this Agreement, pursue any legal remedies it may
have under applicable law or principles of equity relating to such breach.  Notwithstanding the above, if EBS
certifies to Customer in writing that a default has been cured, such default shall be deemed to be cured unless
Customer otherwise notifies EBS in writing within fifteen (15) days of receipt of such notice from EBS; provided,
                                                                                                        --------
however, that this provision shall not apply to a default with respect to the payment of money.
--------

17.2     With respect to any breach or failure to perform by Customer under this Agreement, Customer shall not be in
default under this Agreement unless and until EBS shall have given Customer written notice of such default and
Customer shall have failed to cure the same within thirty (30) days after receipt of such notice; provided, however,
                                                                                                  --------  -------
that where such default cannot reasonably be cured within such thirty (30) day period, if Customer shall proceed
promptly to cure the same and prosecute such curing with due diligence, the time for curing such default shall be
extended for a period as long as necessary to cure such default; provided, further, that failure to pay any amounts
due hereunder shall be a default if not cured within ten (10) days after written notice specifying such failure; and
provided, further, that no cure period shall be permitted in connection with a default that materially interferes
with service on the System or otherwise materially and adversely affects the integrity of the System.  Events of
default shall include, but not be limited to:  (a) the breach by Customer of any material term, covenant or condition
of this Agreement; (b) the making by Customer of a general assignment for the benefit of its creditors; (c) the
filing of a voluntary petition in bankruptcy or the filing of a petition in bankruptcy or other insolvency protection
against Customer that is not dismissed within ninety (90) days thereafter; (d) the filing by Customer of any petition
or answer seeking, consenting to, or acquiescing in reorganization, arrangement, adjustment, composition,
liquidation, dissolution or similar relief; or (e) the failure of Customer to pay any sums owing by Customer to EBS.
Any event of default by Customer may be waived under the terms of this Agreement at EBS' option, but no default by
Customer shall be deemed waived by EBS unless such waiver is evidenced by a written document executed by EBS.  Upon
the failure by Customer to timely cure any such default after notice thereof from EBS, EBS may:  (i) take such action
as it determines, in its sole discretion, to be necessary to correct the default; and (ii) subject to Section 17.3
and the provisions of Article XIX of this Agreement, pursue any legal remedies it may have under applicable law or
principles of equity relating to such breach. Notwithstanding the above, if Customer certifies to EBS in writing that
a default has been cured, such default shall be deemed to be cured unless EBS otherwise notifies Customer in writing
within fifteen (15) days of receipt of such notice from Customer; provided, however, that this provision shall not
                                                                  --------  --------
apply to a default with respect to the payment of money.

17.3     NEITHER PARTY SHALL BE LIABLE FOR SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES
OR DAMAGES AS A RESULT OF THE PERFORMANCE OR NONPERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, OR ITS ACTS OR
OMISSIONS RELATED TO THIS AGREEMENT, WHETHER OR NOT ARISING FROM SOLE, JOINT OR CONCURRENT NEGLIGENCE OR STRICT
LIABILITY OR OTHERWISE.  THE ABOVE LIMITATION OF LIABILITY SHALL APPLY TO INDIRECT LIABILITY INVOLVING SUITS BROUGHT
AGAINST THIRD PARTIES WHO, DIRECTLY OR THROUGH ONE OR MORE OTHER PARTIES, HAVE A RIGHT OF INDEMNIFICATION, IMPLEADER,
CROSS-CLAIM, CONTRIBUTION, OR OTHER RIGHT OF RECOVERY AGAINST A PARTY TO THIS AGREEMENT (e.g., if an affiliate of
Party A sues Party B's contractor under circumstances in which the contractor has a right of indemnity against Party
B).

17.4     In the event either EBS or Customer fails to make any payment under this Agreement when due, such amounts
shall accrue interest, from the date such payment is due until paid, including accrued interest, at a rate (unless
specifically described elsewhere in this Agreement) equal to twelve (12%) per annum or, if lower, the highest
percentage allowed by law.

ARTICLE XVIII.                                                FORCE MAJEURE
                                                              -------------

Neither EBS nor Customer shall be in default under this Agreement with respect to any delay in its performance caused
by any of the following conditions (each a "Force Majeure Event"):  (a) act of God; (b) fire; (c) flood; (d) material
shortage or unavailability not resulting from the responsible party's failure to timely place orders or take other
necessary actions therefor; (e) (lack of or delay in third-party transportation service or access to the System; (f)
delays caused by governmental officials and entities in connection with the compliance by such party with applicable
government codes, ordinances, laws, rules, regulations or restrictions (collectively, "Regulations") (but not to the
extent the delay caused by such Regulations could be avoided by rerouting the Cable if such a reroute was
commercially reasonable); (g) war or civil disorder; or (h) any other cause beyond the reasonable control of such
party; provided, however, that with respect to the payment of money this Article XVIII shall excuse failure to pay
       --------  --------
when due for no more than ten (10) days, and interest shall accrue whether or not such failure to pay is so excused.
The party claiming relief under this Article XVIII shall promptly notify the other in writing of the existence of the
Force Majeure Event relied on, the expected duration of the Force Majeure Event, and the cessation or termination of
the Force Majeure Event.  The party claiming relief under this Article XVIII shall be entitled to invoke Force
Majeure only for so long as it exercises commercially reasonable efforts to minimize the time for any such delay.

ARTICLE XIX.                                                   ARBITRATION
                                                               -----------

19.1.    Any dispute or disagreement arising between EBS and Customer in connection with this Agreement that is not
settled to their mutual satisfaction within the applicable notice or cure periods provided in this Agreement, shall
be settled by arbitration in Dallas, Texas in accordance with the Commercial Arbitration Rules of the American
Arbitration Association in effect on the date that such notice is given.  Discovery shall be permitted in accordance
with the Federal Rules of Civil Procedure.  If EBS and Customer cannot agree on a single arbitrator within fifteen
(15) days after the applicable notice or cure period has expired, EBS and Customer shall each select an arbitrator
within such fifteen (15) day period and the two (2) arbitrators shall select a third arbitrator within ten (10)
days.  If the Parties fail to appoint arbitrators or the arbitrators cannot agree on a third arbitrator, then either
Party may request that the American Arbitration Association select and appoint a neutral arbitrator who shall act as
the sole arbitrator.  The decision of the arbitrator or arbitrators shall be final and binding upon EBS and Customer
and shall include written findings of law and fact, and judgment may be obtained thereon by either EBS or Customer in
a court of competent jurisdiction.  EBS and Customer shall each bear the cost of preparing and presenting its own
case.  The cost of the arbitration, including the fees and expenses of the arbitrator or arbitrators, shall be shared
equally by EBS and Customer unless the award otherwise provides.  The arbitrator or arbitrators shall be instructed
to establish procedures such that a decision can be rendered within sixty (60) days of the appointment of the
arbitrator or arbitrators.  In no event shall the arbitrator or arbitrators have the power to award any damages for
lost or prospective profits, or any other special, punitive, exemplary, consequential, incidental or indirect losses
or damages as a result of the performance or nonperformance of its obligations under this Agreement, or its acts or
omissions related to this Agreement, whether or not arising from sole, joint or concurrent negligence, strict
liability, or otherwise, regardless of whether such damages may be available under applicable law.  EBS and Customer
hereby waive their rights, if any, to recover any such damages, whether in arbitration or litigation.

19.2.    The obligation to arbitrate shall not be binding upon any Party with respect to requests for preliminary
injunctions, temporary restraining orders, specific performance or other procedures in a court of competent
jurisdiction to obtain interim relief when deemed necessary by such court to preserve the status quo or prevent
irreparable injury pending resolution by arbitration of the actual dispute or to enforce a judgment awarded at
arbitration.

ARTICLE XX.                                                      WAIVER
                                                                 ------

The failure of either EBS or Customer to enforce any of the provisions of this Agreement, or the waiver thereof in
any instance, shall not be construed as a general waiver or relinquishment on its part of any such provision, but the
same shall nevertheless be and remain in full force and effect.

ARTICLE XXI.                                                  GOVERNING LAW
                                                              -------------

         This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New
York without reference to its choice of law principles.

ARTICLE XXII.                                             RULES OF CONSTRUCTION
                                                          ---------------------

22.1.    The captions or headings in this Agreement are strictly for convenience and shall not be considered in
interpreting this Agreement or as amplifying or limiting any of its content.  Words in this Agreement that import the
singular connotation shall be interpreted as plural, and words that import the plural connotation shall be
interpreted as singular, as the identity of the parties or objects referred to may require.

22.2.    Unless expressly defined herein, words having well-known technical or trade meanings shall be so construed.

22.3.    Except as set forth to the contrary herein, any right or remedy of EBS or Customer shall be cumulative and
without prejudice to any other right or remedy, whether contained herein or not.

22.4.    Except as provided in Article 11, nothing in this Agreement is intended to provide any legal rights to
anyone not an executing party of this Agreement.

22.5.    This Agreement has been fully negotiated between and jointly drafted by EBS and Customer and in any
interpretation of this Agreement no rule which construes ambiguities against the drafting party shall be applied.

22.6.    In the event of a conflict between the provisions of this Agreement and those of any Exhibit, the provisions
                                                                                              -------
of this Agreement shall prevail and such Exhibits shall be corrected accordingly.
                                         --------

22.7.    All actions, activities, consents, approvals and other undertakings of the Parties in this Agreement shall
be performed in a reasonable and timely manner.  Except as specifically set forth herein, the normal standards of
performance within the telecommunications industry in the relevant market shall be the measure of whether a Party's
performance is reasonable and timely.

ARTICLE XXIII.                                                 ASSIGNMENT
                                                               ----------

23.1.    Subject to Section 2.3, following the Effective Date, Customer may sell, lease, assign or swap an IRU in, or
otherwise lease, license, or permit the use of, the IRU Fibers.  Except as set forth in this paragraph, Customer may
not assign or otherwise transfer this Agreement or its rights or obligations hereunder to any other party without the
prior written consent of EBS, which consent shall not be unreasonably withheld; provided, however, any such assignee
                                                                                --------  -------
or transferee shall agree in writing to be bound and abide by this Agreement.  If such consent is given, Customer
shall remain fully and primarily liable for all obligations under this Agreement.  Customer shall have the right,
without EBS' consent, to assign or otherwise transfer this Agreement as collateral to any lender, or to any Affiliate
of Customer, or to any corporation that purchases all or substantially all of the assets of Customer; provided,
                                                                                                      --------
however, that:  (a) any such assignment or transfer shall be subject to EBS' rights under this Agreement and any
-------
assignee or transferee shall continue to perform Customer's obligations to EBS under the terms and conditions of this
Agreement; and (b) such assignee or transferee shall agree in writing to be bound and abide by this Agreement.  In
the event of any permitted partial assignment of any rights hereunder or in any IRU Fibers, Customer shall remain the
sole point of contact with EBS.

23.2.    EBS may not assign or otherwise transfer this Agreement or its rights or obligations hereunder to any other
party (except to a wholly-owned subsidiary of EBS, the corporate parent of EBS, or a wholly-owned subsidiary of the
corporate parent of EBS) without the prior written consent of Customer, which consent shall not be unreasonably
withheld.  EBS shall have the right, without Customer's consent, to assign or otherwise transfer this Agreement as
collateral to any institutional lender or to any Affiliate of EBS, or to any entity into which EBS may be merged or
consolidated or that purchases all or substantially all of the assets of EBS; provided, however, that:  (a) any such
                                                                              --------  -------
assignment or transfer shall be subject to Customer's rights under this Agreement and any assignee or transferee
shall continue to perform EBS' obligations to Customer under the terms and conditions of this Agreement; and (b) such
assignee or transferee shall agree in writing to be bound and abide by this Agreement.  In the event of any permitted
partial assignment of any rights hereunder or in any fibers in the Cable, EBS shall remain the sole point of contact
with Customer.

23.3.    This Agreement and the rights and obligations under this Agreement, shall be binding upon and shall inure to
the benefit of EBS and Customer and their respective permitted successors and assigns.

ARTICLE XXIV.                                        REPRESENTATIONS AND WARRANTIES
                                                     ------------------------------

24.1.    Each Party hereto represents and warrants to the other that:

24.1.1.  It has the full right and authority to enter into, execute, deliver and perform its obligations under this
                  Agreement;

24.1.2.  It has taken all requisite corporate action to approve the execution, delivery and performance of this
                  Agreement;

24.1.3.  This Agreement constitutes a legal, valid and binding obligation enforceable against such party in
                  accordance with its terms; and

24.1.4.  Its execution of and performance under this Agreement shall not violate any applicable existing regulations,
                  rules, statutes or court orders of any local, state or federal government agency, court or body.

24.2.    Neither Party shall cause or permit the Cable or the System  or any portion thereof to become subject to any
material mechanics lien, materialmans lien, vendors lien, or any similar lien whether by operation of law or
otherwise; provided, however, that EBS may encumber the System  in a sale and lease-back or similar financing
           --------  -------
transaction in which the purchaser's or creditor's interest in the System  is subordinate to Customer's rights in and
to the IRU Fibers and Customer may encumber or assign its rights in the IRU as collateral to a lender or any
affiliate of Customer.  In the event either EBS or Customer breaches its obligations in this Section 24.2, it shall
immediately notify the other in writing, shall promptly cause such lien to be discharged and released of record
without cost to the other, and shall indemnify the other against all costs and expenses (including reasonable
attorneys fees and court costs at trial and on appeal) incurred in discharging and releasing such lien; provided
                                                                                                        --------
that:  (a) EBS and Customer shall each have the right to contest such lien or the validity thereof in good faith by
appropriate proceeding which shall operate to prevent the collection or foreclosure of the contested lien; and (b)
the contesting party shall cause any such lien to be discharged prior to the commencement of any foreclosure action
on such lien.

ARTICLE XXV.                                           ENTIRE AGREEMENT; AMENDMENT
                                                       ---------------------------

         Except as set forth in Section 16.1, this Agreement constitutes the entire and final agreement and
understanding between EBS and Customer with respect to the subject matter hereof and supersedes all prior agreements
relating to the subject matter hereof, which are of no further force or effect.  The Exhibits referred to herein are
                                                                                     --------
integral parts hereof and are made a part of this Agreement by reference.  This Agreement may only be modified or
supplemented by an instrument in writing executed by duly authorized representatives of EBS and Customer.

ARTICLE XXVI.                                          RELATIONSHIP OF THE PARTIES
                                                       ---------------------------

         The relationship between EBS and Customer shall not be that of partners, agents or joint ventures for one
another, and nothing contained in this Agreement shall be deemed to constitute a partnership or agency agreement
between them for any purposes, including, but not limited to federal income tax purposes.  EBS and Customer, in
performing any of their obligations hereunder, shall be independent contractors or independent parties and shall
discharge their contractual obligations at their own risk.

ARTICLE XXVII.                                                SEVERABILITY
                                                              ------------

         If any term, covenant or condition in this Agreement shall, to any extent, be invalid or unenforceable in
any respect under the laws governing this Agreement, the remainder of this Agreement shall not be affected thereby,
and each term, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.

ARTICLE XXVIII.                                               COUNTERPARTS
                                                              ------------

         This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one
and the same instrument.

ARTICLE XXIX.                                                 AUDIT RIGHTS
                                                              ------------

29.1     Customer shall have the right to audit EBS' books and records relating to those costs and expenses that EBS,
under the terms of this Agreement, seeks reimbursement or contribution therefor from Customer.  EBS shall have the
right to audit Customer's books and records relating to those costs and expenses that Customer, under the terms of
this Agreement, seeks reimbursement or contribution therefor from EBS.  All audits shall require a minimum of thirty
(30) days prior written notice, may be conducted no more frequently than once in any twelve month period, and shall
be performed at the expense of the Party requesting the audit.  An auditing Party shall comply with all reasonable
restrictions imposed by the audited Party to minimize any disruption to the audited Party's operations including
restrictions to limit the audit to normal business hours.  In no event shall Customer be entitled to audit, review or
otherwise have access to the books and records of EBS with respect to the cost of construction of or EBS' use of or
transfer of any other fibers, ducts, conduit or other elements of the System.  In no event shall EBS be entitled to
audit, review or otherwise have access to the books and records of Customer with respect to Customer's use of or
transfer of any IRU Fibers.

29.2     In addition, Customer may review EBS' records relating to any of the EBS Required Rights which have been
disputed by third persons or if Customer has a good-faith reason to question whether the underlying rights permit the
uses by Customer hereunder.  Such review shall be performed in accordance with the procedures set forth in Section
29.1, and Customer agrees to keep all information so reviewed confidential in accordance with the provisions of
Article XVI.

ARTICLE XXX.                                               CERTAIN DEFINITIONS
                                                           -------------------

The following terms shall have the stated definitions in this Agreement:

 "Affiliates" shall have the definition set forth in Section 16.2 of Article XVI Confidentiality of this Agreement.
                                                                                 ---------------

"Assessments" shall have the definition set forth in Section 13.1 of Article XIII Taxes and Franchise, Licenses and
                                                                                  ----------------------------------
Permit Fees of this Agreement.
-----------

"Associated Conduit" means Customer's undivided interest in the Conduit, calculated pro rata and based upon the ratio
of the number of IRU Fibers in the Conduit to the total number of fibers in the Conduit.

"Basic Maintenance Services" means the activities described in Exhibit E attached hereto, including:  (1) general
route maintenance, including monthly visual inspections and routine equipment maintenance to be provided on a
quarterly basis; (2) disaster restoration; (3) minor relocations (including the first 1000 feet, within the System ,
per year); (4) replacement and repair up to a gross cost (excluding reimbursements) of $"*" per occurrence.

"Cable" means the optical fiber cable and the Optical Fibers contained therein, and associated splicing connections,
splice boxes and vaults, and conduit, to be installed by EBS along the System Route .

"Claims" shall have the definition set forth in Section 11.1 of Article XI  Indemnification of this Agreement.
                                                                            ---------------

 "Conduit" means the conduit along the System Route  in which the IRU Fibers are installed.

 "Connecting Point" means the point where the network or facilities of Customer connect to the System.  The
Connecting Point may be, but is not limited to:  (1) the fiber optic patch panel, if the connection is made in an
existing building; (2) a splice in the "meet me" vault; or (3) a splice point at a hand hole or similar break in the
Cable.

"Damage or Deterioration" shall have the definition set forth in Section 7.6 of Article VII Operation, Maintenance,
                                                                                            ------------------------
and Repair of the System of this Agreement.
------------------------

"Deliverables" shall have the definition set forth in Article V System Documentation of this Agreement.
                                                                --------------------

"EBS Required Rights" shall have the definition set forth in Section 8.1 of Article VIII Permits and Required Rights
                                                                                         ----------------------------
of this Agreement.

"Effective Date" means the date first given in the opening paragraph of this Agreement.

"Fiber Acceptance Testing" means the fiber acceptance testing described in the Partial Assignment.

"Force Majeure Event" shall have the definition set forth in Article XVIII Force Majeure of this Agreement.
                                                                           -------------

"Indefeasible Right of Use" or "IRU" means an unrestricted indefeasible right to use the IRU Fibers, as granted by
this Agreement, provided however, that granting of such IRU does not convey ownership of the fibers.
                -------- -------

"Indemnified Persons" shall have the definition set forth in Section 11.1 of Article XI  Indemnification of this
                                                                                         ---------------
Agreement.

"Initial Term" shall have the definition set forth in Section 6.1 of Article VI  Term and Termination.
                                                                                 --------------------

"IRU Fibers" means the four (4) optical fibers, including four (4) non-zero dispersion shifted Lucent Truewave RS
Optical Fibers from Denver to Dallas, and from Austin to Houston, and four (4) Lucent single-mode fibers, along the
System Route in which EBS, pursuant to this Agreement, grants to Customer an exclusive IRU.

"Optical Fibers" means the dark optical fibers in the Cable as described in Exhibit B.
                                                                            ---------

 "Regulations" shall have the definition set forth in Article XVIII Force Majeure of this Agreement.
                                                                    -------------

"Relocation Costs" means actual and related costs including, without limitation, the following:  (1) labor costs,
including wages and salaries, and benefits and overhead allocable to such labor costs (overhead allocation percentage
shall not exceed the lesser of:  (a) the percentage EBS allocates to its internal projects; and (b) thirty percent
(30%)); (2) travel costs incurred by EBS or by its employees and reimbursed in accordance with EBS policies and
Internal Revenue Service regulations (such as  air fare, personal automobile mileage, lodging, meals); and (3) other
direct costs and out-of-pocket expenses on a pass-through basis (such as equipment, materials, supplies and contract
services).  All costs shall be computed in accordance with generally accepted accounting principles.

"Representative" shall have the definition set forth in Section 16.2 of Article XVI Confidentiality of this Agreement.
                                                                                    ---------------

"R of W Agreements" means all agreements with right of way owners, property owners, utilities, government entities or
other parties that EBS must reasonably obtain in order to have access to or the authority to undertake the activities
on the System Route .

 "Service Interruption" means, with respect to the IRU Fibers, any interruption in service, failure, disrepair,
impairment or other need for repair or restoration of the IRU Fibers.

"System" means the EBS dark-fiber optic communications systems including the Cable and Conduit and Transmission
Sites, to be deployed by EBS along the System Route.

"System Route" means the corridor in which the Cable for the System has been or will be deployed as depicted in
Attachment 1.  The actual route may deviate from that set forth on Attachment 1; provided, however, that EBS shall
                                                                                 --------  -------
construct the System such that it traverses through or has drop points to each city and terminates at the end points
set forth on Attachment 1.

"Term" shall have the meaning stated in Section 6.1 of Article VI  Term and Termination.
                                                                   --------------------

"Transmission Site" shall mean the optical amplifier sites, regenerator station sites, junction sites, or
points-of-presence performing the same function as regeneration stations or junctions at certain locations along the
System Route .

IN WITNESS WHEREOF, EBS and Customer, confirming their consent to the terms and conditions contained in this
Agreement and intending to be legally bound hereby, have executed this Agreement as of the Effective Date.

Enron Broadband Services, Inc.

By:   /s/ E. Ted Sietz
    ---------------------------------------------------------------------------------------------

Name: E. Ted Sietz
     ------------------------------------------------------------------------------------------

Title: Vice President
     ---------------------------------------------------------------------------------------------

Pathnet Operating, Inc.

By:   /s/ William R. Smedberg V
    ---------------------------------------------------------------------------------------------

Name:    William R. Smedberg V
     ---------------------------------------------------------------------------------------------

Title: Vice President
     ---------------------------------------------------------------------------------------------

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