Document:

<PAGE>

                                                                   EXHIBIT 10.41

         THIRD AMENDMENT, dated as of December 10, 2001 (this "Third
                                                               -----
Amendment"), among FIBERNET OPERATIONS, INC., a Delaware corporation
---------
("FiberNet"), DEVNET L.L.C., a Delaware limited liability company ("Devnet" and,
together with FiberNet, the "Borrowers"), and DEUTSCHE BANK AG NEW YORK BRANCH
("DBAG"), as administrative agent for the Lenders (in such capacity, the
"Administrative Agent") for the financial institutions party to the Credit
Agreement (as defined below) as lenders (collectively, the "Lenders"), to the
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 9, 2001 (the "Credit
Agreement"), among the Borrowers, the Lenders, the Administrative Agent, TORONTO
DOMINION (USA) SECURITIES INC. ("TD"), as syndication agent for the Lenders (in
such capacity, the "Syndication Agent"), and FIRST UNION INVESTORS, INC., as
documentation agent for the Lenders (in such capacity, the "Documentation
Agent").

                                    RECITALS
                                    --------

         WHEREAS, the Borrowers wish to make certain amendments to the Credit
Agreement, which are more particularly described herein.

                                    AGREEMENT
                                    ---------

         NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

         Capitalized terms used but not otherwise defined herein shall have the
meanings given to such terms in the Credit Agreement.

                                  ARTICLE II.
                                  AMENDMENTS

Section 2.01      Definitions.
                  -----------

         (a) The following defined terms are added to Section 1.1 of the Credit
                                                      -----------
Agreement in their proper alphabetical order:

         "First Closing" means the issuance of $2,300,000 of Series J
Convertible Preferred stock by Parent to SDS Merchant Fund, L.P., representing
the first installment of the SDS Merchant Equity Contribution.

         "SDS Merchant Equity Contribution" means the contribution of cash to
the equity capital of the Parent by SDS Merchant Fund, L.P. in an aggregate
amount of not less than $8,000,000.

         "SDS Merchant Equity Contribution Documents" means the definitive
documentation regarding the SDS Merchant Equity Contribution.

                                       1

<PAGE>

         "Second Closing" means the issuance of $2,600,000 of Series J
Convertible Preferred stock by Parent to SDS Merchant Fund, L.P., representing
the second installment of the SDS Merchant Equity Contribution.

         "Third Closing" means the issuance of $3,100,000 of Series J
Convertible Preferred stock by Parent to SDS Merchant Fund, L.P., representing
the third installment of the SDS Merchant Equity Contribution.

(b) The definition of "Stage 1" is amended by replacing the words "December 30,
2002" in the fourth line thereof with the words "March 31, 2003".

(c) The definition of "Change in Control" is amended by adding the words "(other
than the sale of up to 35% of the Capital Stock of the Parent to SDS Merchant
Fund, L.P. and its Affiliates)" after the words "to any such `person' or
`group'" in the sixth line thereof

Section 2.02      Equity Financing Fee.
                  ---------------------

     (a) Section 2.4.D. of the Credit Agreement is deleted in its entirety.
         --------------

Section 2.03      Borrowing Mechanics.
                  --------------------

     (a) Section 2.1.B.(i) of the Credit Agreement is amended by adding the
         -----------------
words ", or the entire remaining undrawn amount thereof" after the words "in
excess of that amount" in the forth line thereof.

Section 2.04      Prepayments Due to Issuance of Debt or Equity.
                  ----------------------------------------------

     (a) Section 2.5.B.(iii)(d) of the Credit Agreement is amended by (i)
         ----------------------
replacing the words "the first $38,000,000" in the twentieth line thereof with
the words "the first $39,000,000" and (ii) replacing the words "December 31,
2001" in the twenty-third line thereof with the words "December 31, 2002".

Section 2.05      Monthly Statements.
                  ------------------

     (a) The following covenant shall be added to Section 5.1 of the Credit
                                                  -----------
Agreement:

                  (xvi) Monthly Statements: as soon as available, and in any
                        ------------------
         event within (a) 15 days after the end of each calendar month (other
         than the months of March, June, September and December) or (b) 30 days
         after then end of the months of March, June, September and December, a
         monthly statement of the members of the Borrower Group as at the end of
         such month setting forth (1) their Available Cash as at such date, (2)
         their accounts receivable balance as at such date and the actual number
         of days such receivables are outstanding, and (3) their accounts
         payable balance as at such date and the actual number of days such
         payables are outstanding.

                                       2

<PAGE>

Section 2.06      Additional Equity Contribution.
                  ------------------------------

     (a) The following covenant shall be added to Article V of the Credit
                                                  ---------
Agreement:

                  SECTION 5.16      ADDITIONAL EQUITY CONTRIBUTION
                                    ------------------------------

                  The Administrative Agent shall have received evidence
         demonstrating to the reasonable satisfaction of the Administrative
         Agent, the Syndication Agent and the Documentation Agent that the
         Parent shall have received cash proceeds (net of underwriting
         discounts, commissions and the reasonable expenses associated
         therewith) in an amount equal to or greater than $5,000,000 from the
         issuance of its Capital Stock during the period from and after the
         First Closing to and including December 31, 2002 (which $5,000,000
         shall be in addition to the SDS Merchant Equity Contribution), and the
         Parent shall have contributed (or shall concurrently contribute) the
         proceeds thereof as equity to FiberNet pursuant to an equity
         contribution agreement reasonably satisfactory to the Administrative
         Agent, the Syndication Agent and the Documentation Agent.

Section 2.07      Pro Forma Compliance.
                  ---------------------

     (a) Section 3.2.E. of the Credit Agreement is amended by replacing the
         --------------
words "set forth in Sections 6.6.A., 6.6.B. and 6.6.E." in the forth line
                    ---------------  ------     ------
thereof with the words "set forth in Sections 6.6.A. and 6.6.E.".
                                     ---------------     ------

Section 2.08      Financial Covenants.
                  -------------------

     (a) Section 6.6.B. of the Credit Agreement is deleted in its entirety.
         --------------

     (b) Section 6.6.C. of the Credit Agreement is amended by deleting the chart
         --------------
which appears immediately after the words "set forth below:" in the fourth line
thereof and adding the following chart after the words "set forth below:" in the
fourth line thereof:

       =================================== ================================
                      Date                 Minimum Cumulative Net Revenue
                                                From January 1, 2000
                                                    (in Dollars)

       ----------------------------------- --------------------------------
                 March 31, 2001                      28,014,300
       ----------------------------------- --------------------------------
                 June 30, 2001                       34,728,200
       ----------------------------------- --------------------------------
               September 30, 2001                    36,761,700
       ----------------------------------- --------------------------------
               December 31, 2001                     49,121,300

                                       3

<PAGE>

       ----------------------------------- --------------------------------
                 March 31, 2002                      56,398,000
       ----------------------------------- --------------------------------
                 June 30, 2002                       65,677,000
       ----------------------------------- --------------------------------
               September 30, 2002                    76,669,100
       ----------------------------------- --------------------------------
               December 31, 2002                     89,437,900
       =================================== ================================

     (c) Section 6.6.D. of the Credit Agreement is amended by deleting the chart
         --------------
which appears immediately after the words "set forth below:" in the fourth line
thereof and adding the following chart after the words "set forth below:" in the
fourth line thereof:

       ==================================== ===============================
                      Date                        Minimum Cumulative
                                               Consolidated EBITDA From
                                                   January 1, 2000
                                                     (in Dollars)
       ------------------------------------ -------------------------------
                 March 31, 2001                      (28,501,900)
       ------------------------------------ -------------------------------
                  June 30, 2001                      (34,821,300)
       ------------------------------------ -------------------------------
               September 30, 2001                    (39,691,600)
       ------------------------------------ -------------------------------
                December 31, 2001                    (36,233,100)
       ------------------------------------ -------------------------------
                 March 31, 2002                      (36,842,800)
       ------------------------------------ -------------------------------
                  June 30, 2002                      (35,515,000)
       ------------------------------------ -------------------------------
               September 30, 2002                    (33,491,500)
       ------------------------------------ -------------------------------
                December 31, 2002                    (29,268,000)
       ==================================== ===============================

     (d) Section 6.6.F. of the Credit Agreement is amended by deleting the chart
         --------------
which appears immediately after the words "set forth below:" in the fourth line
thereof and adding the following chart after the words "set forth below:" in the
fourth line thereof:

---------------------------------- -----------------------------------
              Date                  Maximum Cumulative Consolidated
                                          Capital Expenditures
                                          From January 1, 2000
                                              (In Dollars)
---------------------------------- -----------------------------------

                                       4

<PAGE>

      ------------------------------- -------------------------------
      March 31, 2001                              98,341,200
      ------------------------------- -------------------------------
      June 30, 2001                              112,119,400
      ------------------------------- -------------------------------
      September 30, 2001                         124,627,000
      ------------------------------- -------------------------------
      December 31, 2001                          130,732,200
      ------------------------------- -------------------------------
      March 31, 2002                             132,860,300
      ------------------------------- -------------------------------
      June 30, 2002                              135,182,400
      ------------------------------- -------------------------------
      September 30, 2002                         137,509,500
      ------------------------------- -------------------------------
      December 31, 2002                          140,219,800
      ------------------------------- -------------------------------
      March 31, 2003                             142,935,300
      ------------------------------- -------------------------------
      June 30, 2003                              145,215,200
      ------------------------------- -------------------------------
      September 30, 2003                         147,626,400
      ------------------------------- -------------------------------
      December 31, 2003                          150,169,000
      ------------------------------- -------------------------------
      March 31, 2004                             152,906,100
      ------------------------------- -------------------------------
      June 30, 2004                              155,459,700
      ------------------------------- -------------------------------
      September 30, 2004                         158,082,000
      ------------------------------- -------------------------------
      December 31, 2004                          161,025,000
      ------------------------------- -------------------------------
      March 31, 2005                             163,469,700
      ------------------------------- -------------------------------
      June 30, 2005                              165,920,200
      ------------------------------- -------------------------------
      September 30, 2005                         168,439,500
      ------------------------------- -------------------------------
      December 31, 2005                          170,964,900
      ------------------------------- -------------------------------
      March 31, 2006                             173,471,200
      ------------------------------- -------------------------------
      June 30, 2006                              175,872,700
      ------------------------------- -------------------------------
      September 30, 2006                         178,342,700
      ------------------------------- -------------------------------
      December 31, 2006                          181,023,000
      ------------------------------- -------------------------------

                                       5

<PAGE>

     (e) Section 6.6.G. of the Credit Agreement is amended by deleting the chart
         --------------
which appears immediately after the words "set forth below:" in the fourth line
thereof and adding the following chart after the words "set forth below:" in the
fourth line thereof:

      =================================== ================================
                     Date                   Consolidated Leverage Ratio

      ----------------------------------- --------------------------------
      From  and  after  the  last day of            6.0 to 1.0
      the first Fiscal  Quarter to occur
      during    Stage   2   until    and
      including March 31, 2003
      ----------------------------------- --------------------------------
      June 30, 2003                                 4.25 to 1.0
      ----------------------------------- --------------------------------
      September 30, 2003                            3.75 to 1.0
      ----------------------------------- --------------------------------
      December 31, 2003                             3.25 to 1.0
      ----------------------------------- --------------------------------
      March 31, 2004                                2.75 to 1.0
      ----------------------------------- --------------------------------
      June 30, 2004                                 2.25 to 1.0
      ----------------------------------- --------------------------------
      September  30,  2004  and the last            2.00 to 1.0
      day   of   each   Fiscal   Quarter
      thereafter
      ----------------------------------- --------------------------------

     (f) Section 6.6.H. of the Credit Agreement is amended by deleting it in its
         --------------
entirety and replacing it with the following:

          H. Consolidated Interest Coverage Ratio. At the end of each Fiscal
     Quarter of the Borrower Group during Stage 2, no Borrower shall permit the
     Consolidated Interest Coverage Ratio to be less than (i) from and after the
     last day of the first Fiscal Quarter to occur during Stage 2 until and
     including March 31, 2003, 2.00 to 1.0 and (ii) from and after June 30, 2003
     until and including the first day of each Fiscal Quarter thereafter, 3.0 to
     1.0.

     (g) Section 6.6.I. of the Credit Agreement is amended by deleting it in its
         --------------
entirety and replacing it with the following:

          I. Consolidated Fixed Charge Coverage Ratio. At the end of each Fiscal
     Quarter of the Borrower Group during Stage 2, no Borrower shall permit the
     Consolidated Fixed Charge Coverage Ratio to be less than (i) from and after
     the last day of the first Fiscal Quarter to occur during Stage 2 until and
     including

                                       6

<PAGE>

     March 31, 2003, 1.75 to 1.0, (ii) from June 30, 2003 until and including
     December 31, 2003, 2.00 to 1.0 and (iii) from and after March 31, 2004
     until and including the last day of each Fiscal Quarter thereafter, 1.50 to
     1.0.

Section 2.09      Events of Default.
                  ------------------

     (a) Article VII of the Credit Agreement is amended by replacing the words
"Section 7.1 through Section 7.17" in the second line thereof with the words
"Section 7.1 through Section 7.19".

Section 2.10      SDS Merchant Equity Contribution.
                  ---------------------------------

     (a) The following event of default shall be added to Article VII of the
                                                          -----------
Credit Agreement:

SECTION 7.19      SDS MERCHANT EQUITY CONTRIBUTION
                  --------------------------------

     The Parent shall have opted out of the Second Closing or Third Closing of
the SDS Merchant Equity Contribution without the prior written consent of the
Majority Lenders.

Section 2.11      Remedies.
                  ---------

     (a) Section 7.19 of the Credit Agreement is renumbered as Section 7.20 of
         ------------                                          ------------
the Credit Agreement.

                                  ARTICLE III.
                                  MISCELLANEOUS

Section 3.01      Execution of this Third Amendment; Effectiveness.
                  ------------------------------------------------

         This Third Amendment is executed and shall be construed as an amendment
to the Credit Agreement, and, as provided in the Credit Agreement, this Third
Amendment forms a part thereof. This Third Amendment shall be effective only if
each of the following conditions is satisfied prior to 5:00 p.m. New York City
time on a Business Day occurring on or before December 10, 2001:

     (a) The First Closing shall have been consummated on the terms set forth in
the SDS Merchant Equity Contribution Documents and upon satisfaction of the
conditions therein set forth; and

     (b) The Borrowers shall have paid to each of the Lenders an amendment fee
equal to the product of 0.1% multiplied by the amount of each such Lender's Loan
Exposure as of December 10, 2001.

Section 3.02      Representations and Warranties.
                  ------------------------------

         The Borrowers hereby represent and warrant to the Administrative Agent
and the Lenders that (a) all consents, approvals and authorizations necessary
for the Borrowers' execution,

                                       7

<PAGE>

delivery and performance of this Third Amendment have been obtained or made and
(b) this Third Amendment has been duly executed and delivered by the Borrowers
and constitutes a legal, valid and binding obligation of each Borrower,
enforceable against such Borrower in accordance with its terms.

Section 3.03      Waiver.
                  ------

         This Third Amendment is made in amendment and modification of, but not
extinguishment of, the obligations set forth in the Credit Agreement and the
other Loan Documents and, except as specifically modified pursuant to the terms
of this Third Amendment, the terms and conditions of the Credit Agreement and
the other Loan Documents remain in full force and effect. Nothing herein shall
limit in any way the rights and remedies of the Administrative Agent and the
Lenders under the Credit Agreement and the other Loan Documents. The execution
and delivery by the Lenders of this Third Amendment shall not constitute a
waiver, forbearance or other indulgence with respect to any Potential Event of
Default or Event of Default now existing or hereafter arising.

Section 3.04      Counterparts; Integration; Effectiveness.
                  ----------------------------------------

         This Third Amendment may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Third Amendment and any agreements referred to herein constitute
the entire contract among the parties hereto relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. In addition to the requirements
set forth above in Section 3.01, this Third Amendment shall become effective
when it shall have been executed by each of the Borrowers and the Administrative
Agent and when the Administrative Agent shall have received the written consent
of the Majority Lenders to the entering into of this Third Amendment, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and, subject to and in accordance with Section 9.16 of the Credit Agreement,
their respective successors and assigns. Delivery of an executed counterpart of
a signature page of this Third Amendment by telecopy shall be as effective as
delivery of a manually executed counterpart of this Third Amendment.

Section 3.05      Severability.
                  ------------

         Any provision of this Third Amendment held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof, and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 3.06      Governing Law.
                  -------------

         This Third Amendment shall be construed in accordance with and governed
by the laws of the State of New York without regard to the conflicts of law
provisions thereof, other than Sections 5-1401 and 5-1402 of the General
Obligations Law of the State of New York.

                                       8

<PAGE>
Section 3.07      Headings.
                  --------

         Article and Section headings used herein are for convenience of
reference only, are not part of this Third Amendment and shall not affect the
construction of, or be taken into consideration in interpreting, this Third
Amendment.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       9

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be duly executed by their respective authorized officers as of the day and
year first above written.

                                   FIBERNET OPERATIONS, INC.

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

                                   DEVNET L.L.C.

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

                                   DEUTSCHE BANK AG NEW YORK

                                   BRANCH, as Administrative Agent

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

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

                                       10<PAGE>

                                                                   EXHIBIT 10.42

                                 PROMISSORY NOTE

$2,321,117.00                   New York, New York              December 7, 2001

         FOR VALUE RECEIVED, the undersigned, FIBERNET OPERATIONS, INC., a
Delaware corporation ("Maker"), a wholly owned subsidiary of FiberNet Telecom
                       -----
Group, Inc., a Delaware corporation ("Holdings"), promises to pay to the order
                                      --------
of NORTEL NETWORKS INC., a Delaware corporation ("Payee"), the principal sum of
                                                  -----
TWO MILLION THREE HUNDRED TWENTY ONE THOUSAND ONE HUNDRED SEVENTEEN AND NO/100
DOLLARS ($2,321,117.00), together with interest as provided below. All payments
on this Promissory Note (the "Note") shall be due and payable in lawful money of
                              ----
the United States of America, without offset, counterclaim or deduction, at the
office of Payee at 2221 Lakeside Boulevard, GMS 991 15 A40, Richardson, Texas
75082-4399, or such other place as Payee shall request.

         1. Indebtedness. The indebtedness evidenced by this Note represents all
amounts payable, and shall become due and shall be paid in accordance with the
payment schedule attached hereto as Exhibit A, to Payee by Maker for equipment
                                    ---------
and services provided by Payee to Maker prior to the date hereof and is provided
in exchange for the extinguishment of the corresponding amount owed by Maker to
Payee under that certain Master Purchase Agreement dated effective as of
December 31, 1999, by and between Maker and Payee, (as amended, the "MPA").
                                                                     ---

         2. Unsecured Indebtedness. The indebtedness evidenced by this Note is
unsecured.

         3. Interest. The unpaid principal balance from day to day outstanding
hereunder shall bear interest at a rate per annum which shall from day to day be
equal to the lesser of (a) fourteen percent (14%), based upon a 360-day year and
the actual number of days elapsed, or (b) the Maximum Lawful Rate (as
hereinafter defined). All past due principal of and, to the extent permitted by
law, accrued interest on this Note shall bear interest from maturity (whether by
acceleration or otherwise) until paid at an annual rate equal to the lesser of
(i) eighteen percent (18%), based upon a 360-day year and the actual number of
days elapsed, or (ii) the Maximum Lawful Rate. Interest shall be due and payable
in eight monthly installments, on the fifteenth day of each calendar month
beginning on January 15, 2002, and continuing on the fifteenth day of each
calendar month thereafter through and including August 15, 2002, all as
described on that certain payment schedule attached hereto as Exhibit A. Default
                                                              ---------
interest shall be due on demand.

<PAGE>

         4. Payments, Maturity. The unpaid principal balance of this Note,
together with all accrued but unpaid interest thereon, shall be due and payable
in eight monthly installments, on the fifteenth day of each calendar month
beginning on January 15, 2002, and continuing on the fifteenth day of each
calendar month thereafter through and including August 15, 2002 (the "Maturity
                                                                      --------
Date"), all as described on that certain payment schedule attached hereto as
----
Exhibit A. The unpaid principal balance of this Note and any accrued but unpaid
---------
interest thereon shall be due and payable in full on the Maturity Date.

         5. Voluntary Prepayments. The unpaid principal balance of this Note may
be prepaid in whole or in part without premium or penalty upon written notice to
Payee at least five Business Days in advance of such prepayment. No amounts
prepaid may be re-borrowed.

         6. Mandatory Prepayments. The unpaid principal balance of this Note,
together with all accrued but unpaid interest, shall be due and payable in full
following the occurrence of (a) a Change in Control, or (b) the incurrence of
any debt or the issuance of any debt or equity securities by Maker or Holdings
that would trigger a prepayment under Section 2.5 B.(iii)(d) of that certain
Amended and Restated Credit Agreement, dated as of February 9, 2001, among Maker
and the other parties signatory thereto or that may become a party thereto, and
as further amended, restated, supplemented or modified (the "Credit Agreement");
                                                             ----------------
provided, however, that Maker shall not be obligated to make any mandatory
prepayments on this Note until after such time as Maker has fully satisfied any
and all mandatory prepayment requirements under the Credit Agreement, including,
without limitation, the mandatory prepayments required by Section 2.5 of the
Credit Agreement. As used in this Note, a "Change in Control" shall have the
                                           -----------------
meaning given such term in the Credit Agreement.

         7. Financial Reporting. So long as any amounts remain outstanding
hereunder or Payee has any obligation to advance funds to Maker hereunder, Maker
agrees to provide to Payee all financial statements and other reports that Payee
is required to provide to the Administrative Agent (as such term is defined in
the Credit Agreement) pursuant to Section 5.1 of the Credit Agreement. Such
financial statements and other reports shall be provided by Maker to Payee
within the time periods set forth in Section 5.1 of the Credit Agreement.

         8. Maintenance of Insurance. Maker, at such time as its physical assets
are worth in excess of $1,000,000, will keep insured by financially sound and
reputable insurers all property and other assets of a character usually insured
by responsible corporations engaged in the same or a similar business similarly
situated against loss or damage of the kinds and in the amounts customarily
insured against by such corporations or entities and carry such other insurance
as is usually carried by such

                                       2

<PAGE>

corporations or entities, provided that in any event Maker will maintain (a)
                          --------
general liability insurance with coverage of at least $1,000,000 and (b)
worker's compensation insurance (including employers' liability insurance) to
the extent required by applicable law, which may be self-insurance to the extent
permitted by applicable law. Such insurance shall be written by financially
responsible companies selected by Maker and having an A.M. Best Rating of "A-"
or better and being in a financial size category of "VI" or larger, or by other
companies reasonably acceptable to Payee. Maker will advise Payee promptly of
any policy cancellation, reduction or amendment. At the request of Payee, Maker
shall provide to Payee original certificates evidencing all such policies of
insurance and copies of such policies.

         9. Absence of Liens. Maker will not permit or suffer to exist, and will
not permit Holdings to create or suffer to exist, any Lien on or with respect to
any of its respective assets or properties other than Permitted Liens. As used
in this Note, "Lien" shall mean any lien, mortgage, security interest, tax lien,
               ----
financing statement, pledge, charge, hypothecation or other encumbrance of any
kind or nature whatsoever (including, without limitation, any conditional sale
or title retention agreement), whether arising by contract, operation of law or
otherwise. As used in this Note, "Permitted Liens" shall mean (a) Liens existing
                                  ---------------
as of the date of this Note; provided that no such Lien shall at any time be
extended to or cover any asset or property other than the asset or property
subject thereto on the date hereof; and (b) Liens included in the definition of
"Permitted Liens" in the Credit Agreement.

         10. Restricted Payments; Affiliate Transactions. Maker will not, and
will not permit Holdings to, make any Restricted Payments except for (i)
payments by Maker to Holdings in an amount not to exceed $150,000 made in
connection with the redemption by Holdings of up to 1,488,000 warrants issued by
Holdings to certain investors and other parties pursuant to warrant agreements
with each such investor or other party dated as of February 1, 2001 in
connection with the directed public offering completed by Holdings on or about
February 1, 2001 and (ii) distributions by Maker or any of its subsidiaries in
respect of its Capital Stock (as defined in the Credit Agreement) which are
payable solely in additional Capital Stock which is subject to a first priority
lien in favor of the Administrative Agent (as defined in the Credit Agreement).
As used in this Note, a "Restricted Payment" means (a) any dividend or other
                         ------------------
distribution (whether in cash, property or obligations), direct or indirect, on
account of (or the setting apart of money for a sinking or other analogous fund
for) any shares of any class of capital stock of Maker or Holdings now or
hereafter outstanding, except a dividend or distribution payable solely in
equity securities of Maker or Holdings, respectively; (b) any redemption,
conversion, exchange, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
capital stock of Maker or Holdings now or hereafter outstanding; and (c) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of capital stock of Maker
or Holdings now or

                                       3

<PAGE>

hereafter outstanding. Subject to Paragraph 11 hereof, Maker will not, and will
                                  ------------
not permit Holdings to, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any affiliate of Maker or Holdings or to any director, officer or
employee of Maker or Holdings or any affiliate of Maker or Holdings except
transactions permitted under Section 6.10 of the Credit Agreement.

         11. Asset Dispositions. Maker will not, and will not permit Holdings
to, sell, lease, assign, transfer or otherwise dispose of any of its property,
except (a) dispositions of inventory in the ordinary course of business, (b)
dispositions of property no longer used or useful in the ordinary course of
business, and (c) leases, assignments, transfers or other dispositions of
property to a direct or indirect subsidiary of Maker or Holdings.

         12. Prepayment of Other Debt. Maker will not, and will not permit
Holdings to, directly or indirectly make any payment or distribution on account
of, or voluntarily purchase, acquire, redeem or retire, any indebtedness of any
type or nature, including any contingent obligations, prior to 30 days before
its stated maturity (in effect on the date hereof, for indebtedness outstanding
on the date hereof), or in the case of interest, its stated due date, or
directly or indirectly become obligated to do any of the foregoing by amending
the terms thereof or otherwise, except for (a) prepayments of the indebtedness
evidenced by this Note, (b) mandatory prepayments of indebtedness under the
Credit Agreement as expressly required by the terms of the Credit Agreement, (c)
payments due under Capital Leases (as such term is defined in the Credit
Agreement), and (d) payments of accounts payable in the ordinary course of
business.

         13. Events of Default and Remedies. The entire unpaid principal balance
of, and all accrued but unpaid interest on, this Note shall immediately become
due and payable (i) without notice or demand, which are hereby waived, in the
case of the Events of Default set forth in clauses (c), (d), (e), (f), or (g),
and (ii) upon written notice by Payee to Maker in the case of all other Events
of Default, upon the occurrence and during the continuance of any Event of
Default. The occurrence of any one or more of the following shall constitute an
Event of Default hereunder (each an "Event of Default"): (a) a failure by Maker
                                     ----------------
to make any payment of principal or interest on this Note or any other payment
required of Maker hereunder when due; (b) Maker shall fail to observe or perform
any obligation, requirement, covenant or restriction to be observed or performed
by it under this Note (other than a payment described in subparagraph (a) above)
                                                         ----------------
and such failure continues for a period of thirty (30) days; (c) the appointment
of a receiver, trustee, conservator, or liquidator of Maker or Holdings or any
substantial property of Maker or Holdings which is not dismissed within thirty
(30) days after its filing; (d) a filing by Maker or Holdings of a voluntary
petition seeking an entry of an order for relief as a debtor in a proceeding
under the United States Bankruptcy Code or seeking reorganization or
rearrangement or taking

                                       4

<PAGE>

advantage of any bankruptcy, insolvency, liquidation, conservatorship,
receivership, moratorium, rearrangement, reorganization or other similar law for
the relief of debtors, or an answer by Maker or Holdings admitting the material
allegations of a petition filed against Maker or Holdings in any bankruptcy,
reorganization, insolvency, conservatorship, or similar proceeding, or an
admission by Maker or Holdings in writing of an inability to generally pay its
debts as they become due; (e) the making by Maker or Holdings of a general
assignment for the benefit of creditors in the context of a bankruptcy; (f) the
filing of a petition or entry of an order for relief by or against Maker or
Holdings as debtor in a proceeding under the United States Bankruptcy Code by
any court of competent jurisdiction, or approving a petition seeking
reorganization of Maker or Holdings or an arrangement of their respective debts,
or appointing a receiver, trustee, conservator, or liquidator of Maker or
Holdings or any substantial property of Maker or Holdings not dismissed within
thirty (30) days after filing; (g) the liquidation, termination, or dissolution
of Maker or Holdings; (h) if the validity or enforceability of this Note shall
be contested by Maker or Holdings, or if Maker shall deny that it has any
further liability or obligation hereunder; (i) Maker or Holdings shall fail to
pay any indebtedness greater than $1,000,000 due any third person and such
failure continues beyond any applicable grace period; (j) Maker or Holdings
shall suffer a final judgment or judgments not covered by insurance for payment
of money aggregating in excess of $1,000,000 and shall not discharge such
judgment(s) within sixty (60) days; (k) any default or event of default (other
than a payment default) occurs with respect to any indebtedness for borrowed
money or any lease agreement for which Maker or Holdings has liability in excess
of $1,000,000 and is not cured within any applicable grace period and such
indebtedness is accelerated; (l) Maker shall be in material breach of any
provision of the MPA after the date hereof or any default or event of default
shall arise and exist after the date hereof under the MPA, in each case of which
the Maker has received written notice and is not cured within any applicable
grace period, or (m) the occurrence of a Change in Control. Upon the occurrence
of an Event of Default, the holder of this Note may (i) offset against this Note
any sum or sums owed by the holder hereof to Maker, (ii) proceed to protect and
enforce its rights either by suit in equity and/or by action at law, or by other
appropriate proceedings, whether for the specific performance of any covenant or
agreement contained in this Note, or in aid of the exercise of any power or
right granted by this Note, or to enforce any other legal or equitable right of
the holder of this Note, and/or (iii) pursue the remedies available to Payee
hereunder, at law and otherwise.

         14. Attorney's Fees and Costs. In the event this Note is placed in the
hands of an attorney for collection, or in the event this Note is collected in
whole or in part through legal proceedings of any nature, Maker promises to pay
all costs of collection, including, but not limited to, attorneys' fees incurred
by the holder hereof on account of such collection, whether or not suit is
filed.

                                       5

<PAGE>

         15. Cumulative Rights. No delay on the part of the holder of this Note
in the exercise of any power or right under this Note, or under any other
instrument executed pursuant hereto, shall operate as a waiver thereof, nor
shall a single or partial exercise of any such power or right.

         16. Maximum Interest Rate. Regardless of any provision contained
herein, or in any other document executed in connection herewith, Payee shall
never be entitled to contract for, charge, receive, take, collect, reserve or
apply, as interest on this Note, any amount in excess of the maximum rate of
interest from time to time permitted under state or federal law applicable to
the indebtedness evidenced hereby, after taking into account any amount, fee or
charge which is characterized as interest under applicable law (the "Maximum
                                                                     -------
Lawful Rate"), and in the event Payee ever contracts for, charges, receives,
-----------
takes, collects, reserves or applies, as interest, any such excess, such amount
which would be deemed excessive interest shall be deemed a partial prepayment of
principal on this Note and treated hereunder as such; and, if this Note is paid
in full, any remaining excess shall promptly be paid to Maker. In determining
whether the interest paid or payable, under any specific contingency, exceeds
the Maximum Lawful Rate, Maker and Payee shall, to the maximum extent permitted
under applicable law, (a) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest, (b) exclude voluntary prepayments and
the effects thereof, and (c) amortize, prorate, allocate and spread, as
appropriate to reflect variations in the Maximum Lawful Rate, the total amount
of interest throughout the entire contemplated term of this Note, so that the
interest rate does not exceed the Maximum Lawful Rate throughout the entire term
of this Note; provided that, if the unpaid principal balance hereof is paid and
              -------- ----
performed in full prior to the end of the full contemplated term hereof, and if
the interest received for the actual period of existence thereof exceeds the
Maximum Lawful Rate, Payee shall refund to Maker the amount of such excess and,
in such event, Payee shall not be subject to any penalties provided by any laws
for contracting for, charging, receiving, taking, collecting, reserving or
applying interest in excess of the Maximum Lawful Rate. Upon the tender by Payee
or any holder of this Note to Maker of any excess amount, Maker will be deemed
to have accepted such excess in full satisfaction of any claim (including,
without limitation, a claim of usury) arising out of such excess being
contracted for, charged, received, taken, collected, reserved or applied.

         17. Waiver. Maker, and each surety, endorser, guarantor, and other
party ever liable for the payment of any sum of money payable on this Note,
jointly and severally waive (except to the extent contemplated hereby) notice,
demand, presentment, protest, notice of protest, notice of nonpayment, notice of
dishonor, notice of intention to accelerate, notice of acceleration, and any and
all lack of diligence or delay in collection or the filing of suit hereon which
may occur, and agree that their liability on this Note shall not be affected by
any renewal or extension in the time of payment hereof, by any indulgences, or
by any release, impairment or change in any

                                       6

<PAGE>

security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases, or changes (including partial
payments), regardless of the number of such renewals, extensions, indulgences,
releases or changes, without notice and for any period or periods of time,
before or after maturity, all without prejudice to the holder. The holder shall
similarly have the right to deal in any way, at any time, with one or more of
the foregoing parties without notice to any other party, and to grant any such
party any extensions of time for payment of any of said indebtedness, or to
grant any other indulgences or forbearances whatsoever, without notice to any
other party and without in any way affecting the personal liability of any party
hereunder.

         18. Successors and Assigns. All of the covenants, stipulations,
promises and agreements in this Note by or on behalf of Maker shall bind Maker's
respective successors and assigns, whether so expressed or not; provided,
                                                                --------
however, that Maker may not, without the prior consent of Payee, assign any
-------
rights, powers, duties, or obligations under this Note. Any holder of this Note
shall succeed to the rights of Payee hereunder.

         19. Invalid Provisions. Any provision in this Note prohibited by law
shall be ineffective only to the extent of such prohibition and shall not
invalidate the remainder of this Note.

         20. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         21. Notices. All notices and other communications provided for in this
Note shall be given or made by telecopy or in writing and telecopied, mailed by
certified mail return receipt requested, or delivered to the intended recipient
at the "Address for Notices" specified below Maker's name on the signature pages
hereof or if to Payee at GMS 991-15-A40, 2221 Lakeside Boulevard, Richardson,
Texas 75082-4399, Attention: Vice President Customer Finance Americas, telephone
no.: 972-684-2271, fax no.: 972-684-3679; or, as to any party at such other
address as shall be designated by such party in a notice to the other party
given in accordance with this Paragraph 21. All such communications shall be
                              ------------
deemed to have been duly given when transmitted by telecopy or when personally
delivered or, in the case of a mailed notice, three Business Days after deposit
in the mails, in each case given or addressed as aforesaid; provided, however,
                                                            --------  -------
that notices to the Payee shall be deemed given when received by the Payee. As
used herein, "Business Day" means any day on which banking institutions are open
              ------------
for business at their offices in the United States.

         22. Headings. The headings of the sections of this Note are inserted
for convenience only and shall not be deemed to constitute a part hereof.

                                       7

<PAGE>

         23. Payments; Business Day. Each payment or prepayment hereon must be
paid at the office of Payee specified above in lawful money as therein specified
and in funds which are or will be available for immediate use by Payee at such
office on or before 2:00 p.m., Dallas, Texas, time on the day such payment or
prepayment is due. If a payment of principal or interest hereon is due on a day
which is not a Business Day, Maker shall make such payment on the next preceding
Business Day.

         24. Confidentiality. This Note is confidential and the matters
described herein are confidential. Neither this Note nor the terms hereof may be
disclosed by Maker or Holdings to any third party or disclosed, circulated or
referred to publicly without the prior written consent of Payee except for such
disclosure, if any, as may be required under federal, state or other applicable
laws or pursuant to valid legal process and except that this Note may be
disclosed to the banks and agents under the Credit Agreement and their counsel;
provided, however, that if Maker or Holdings determines that any such disclosure
is required under federal, state or other applicable laws or pursuant to valid
legal process, such disclosure may be made only following delivery to Payee by
the disclosing party of written notice of any proposed disclosure and the terms
thereof at least ten Business Days prior to such disclosure (unless such number
of Business Days prior written notice is not possible given applicable laws, in
which case the maximum, lesser number of days prior written notice as is
possible, if any, shall be required hereunder) and the party obligated to
disclose shall make all reasonable efforts to redact or delete from such
disclosure such terms or provisions relating to confidential information as may
be reasonably requested by Payee to be so redacted or deleted before such
disclosure is made.

         25. ENTIRE AGREEMENT. THIS NOTE REPRESENTS THE FINAL AGREEMENT OF MAKER
AND PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF MAKERS AND PAYEE. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN MAKER AND PAYEE.

         26. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, MAKER AND EACH SURETY, ENDORSER, GUARANTOR, AND OTHER PARTY EVER LIABLE FOR
THE PAYMENT OF ANY SUM OF MONEY PAYABLE ON THIS NOTE, HEREBY IRREVOCABLY AND
EXPRESSLY AND JOINTLY AND SEVERALLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THE ACTIONS OF PAYEE IN THE NEGOTIATION, ADMINISTRATION
OR ENFORCEMENT HEREOF.

         27. NO FORCE MAJEURE; DISPUTES. Maker's obligation to pay all amounts
due under this Note shall not be affected by (a) any setoff, counterclaim,
recoupment, deduction, abatement, suspension, diminution, reduction, defense or
other

                                       8

<PAGE>

right which Maker may have against Nortel Networks Inc. or any of its affiliates
for any reason whatsoever arising under or pursuant to the MPA or otherwise
relating to the purchase of goods or services from Nortel Networks Inc. or any
of its affiliates, (b) any defect in the condition, design, operation or fitness
for use of, or any damage to or loss or destruction of, any equipment or
material or service provided by Nortel Networks Inc. or any of its affiliates,
(c) any insolvency, bankruptcy, reorganization or similar proceedings by or
against Maker or affecting any of its properties or assets, (d) any action of
any governmental authority or any damage to or destruction of or any taking of
Maker's properties or assets or any part thereof, (e) any change, waiver,
extension, indulgence or failure to perform or comply with, or other action or
omission with respect to, this Note (except for express written modifications to
this Note as and in the manner permitted under this Note), (f) any dissolution
of Maker, (g) any inability or illegality with respect to the use or ownership
of Maker's property or assets, (h) any failure to obtain, or expiration,
suspension or other termination of, or interruption to, any required licenses,
permits, consents, authorizations, approvals or other legal requirements, (i)
the invalidity or unenforceability of this Note or any other infirmity herein or
any lack of power or authority of Payee or Maker, or (j) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing and
whether or not Maker shall have notice or knowledge of any of the foregoing, it
being the intention of Payee and Maker that the obligations of Maker under this
Note shall be absolute and unconditional and shall be separate and independent
covenants and agreements and shall continue unaffected unless the requirements
to pay or perform the same shall have been terminated pursuant to an express
provision hereof.

         EXECUTED at New York, New York, as of the day and year first above
written.

                                    FIBERNET OPERATIONS, INC.

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

                                    Address for Notices:
                                    -------------------
                                    570 Lexington Avenue
                                    3rd Floor
                                    New York, New York 10022
                                    Fax No.: (212) 421-8920
                                    Telephone No.: (212) 405-6119
                                    Attention: President

                                       9

<PAGE>

Agreed and Acknowledged:

NORTEL NETWORKS INC.

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

                                       10

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