Document:

EXHIBIT 4.14

                          AMENDED AND RESTATED WARRANT
                          REGISTRATION RIGHTS AGREEMENT

                           Dated as of March 30, 2000

                                     Between

                        PATHNET TELECOMMUNICATIONS, INC.,
                                       and
                        SPECTRUM EQUITY INVESTORS, L.P.,
               NEW ENTERPRISE ASSOCIATES VI, LIMITED PARTNERSHIP,
                      ONSET ENTERPRISE ASSOCIATES II, L.P.,
                     FBR TECHNOLOGY VENTURE PARTNERS, L.P.,
                      TORONTO DOMINION CAPITAL (USA) INC.,
                          GROTECH PARTNERS IV, L.P. and
                                RICHARD A. JALKUT

<PAGE>
<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

                                                                                                               PAGE
<S>                                                                                                              <C>

Section 1.        Definitions.....................................................................................1

Section 2.        Registration Rights.............................................................................6
          2.1     (a)    Demand Registration......................................................................6
                  (b)    Effective Registration...................................................................7
                  (c)    Selection of Underwriter.................................................................7
                  (d)    Expenses.................................................................................8
          2.2     (a)    Piggy-Back Registration..................................................................8
                  (b)    Priority in Piggy-Back Registration......................................................9
          2.3     Limitations, Conditions and Qualifications to Obligations Under
                  Registration Covenants..........................................................................9
          2.4     Restrictions on Sale by the Company and Others.................................................10
          2.5     Rule 144 and Rule 144A.........................................................................11
          2.6     Underwritten Registration......................................................................11

Section 3.        Transfers......................................................................................12
          3.1     Generally......................................................................................12
          3.2     Tag-Along Rights...............................................................................12
          3.3     Drag-Along Rights..............................................................................14

Section 4.        Registration Procedures........................................................................14

Section 5.        Indemnification and Contribution...............................................................20

Section 6.        Miscellaneous..................................................................................23
          (a)     Remedies.......................................................................................23
          (b)     No Inconsistent Agreements.....................................................................24
          (c)     No Piggy-Back on Demand Registrations..........................................................24
          (d)     Amendments and Waivers.........................................................................24
          (e)     Notices........................................................................................24
          (f)     Successors and Assigns.........................................................................24
          (g)     Counterparts...................................................................................25
          (h)     GOVERNING LAW..................................................................................25
          (i)     Severability...................................................................................25
          (j)     Headings.......................................................................................25
          (k)     Entire Agreement...............................................................................25
          (l)     Securities Held by the Company or Its Affiliates...............................................25

</TABLE>

<PAGE>

                          AMENDED AND RESTATED WARRANT
                          REGISTRATION RIGHTS AGREEMENT

                  This  AMENDED  AND  RESTATED   WARRANT   REGISTRATION   RIGHTS
AGREEMENT  (this  "AGREEMENT")  is made and entered  into as of March 30,  2000,
between   PATHNET   TELECOMMUNICATIONS,   INC.  (the   "COMPANY"),   a  Delaware
corporation,  and SPECTRUM EQUITY INVESTORS, L.P., NEW ENTERPRISE ASSOCIATES VI,
LIMITED  PARTNERSHIP,  ONSET  ENTERPRISE  ASSOCIATES  II, L.P.,  FBR  TECHNOLOGY
VENTURE PARTNERS,  L.P.,  TORONTO DOMINION CAPITAL (USA) INC.,  GROTECH PARTNERS
IV, L.P., and RICHARD A. JALKUT (the "PERMITTED HOLDERS").

                  The  predecessor  to this  Agreement was  originally  executed
pursuant to the Purchase Agreement dated as of April 8, 1998, among Pathnet, Inc
("PATHNET")  and the Initial  Purchasers,  with respect to the issue and sale by
Pathnet and the purchase by the Initial Purchasers, severally, of the respective
number of Pathnet's  Units,  each Unit consisting of $1,000  principal amount of
the Company's  12.25% Senior Notes due 2008 (the "Notes") and one warrant (each,
a "PATHNET  WARRANT"),  each initially  entitling the holder thereof to purchase
1.1 shares of common  stock,  par value $0.01 per share,  of Pathnet,  set forth
opposite such Initial  Purchaser's name on Schedule I to the Purchase Agreement.
This Agreement,  which amends and restates the original agreement,  reflects the
substitution  of the Company as a party to this Agreement in lieu of Pathnet and
the conversion of each Pathnet Warrant into a warrant (each, a "WARRANT") which,
as of the date hereof,  entitles the holder  thereof to purchase  3.19 shares of
common stock, par value $0.01 per share, of the Company ("COMMON STOCK").

                  In consideration of the foregoing, the parties hereto agree as
follows:

                  Section 1.  DEFINITIONS. As used in this Agreement, the
                              -----------
following defined terms shall have the following meanings:

                  "ADVICE"  shall  have the  meaning  ascribed  to such  term in
Section 4 hereof.

                  "AFFILIATE"  shall have the  meaning  ascribed to such term in
the Indenture.

                  "AGREEMENT"  shall have the  meaning  ascribed to such term in
the preamble hereto.

                  "BUSINESS DAY" shall mean a day that is not a Legal Holiday.

                  "CAPITAL  STOCK" shall mean,  with respect to any Person,  any
and all shares, interests, partnership interests,  participations,  rights in or
other equivalents (however designated and whether voting or non-voting) of, such
Person's capital stock,  and any rights (other than debt securities  convertible
into capital stock),  warrants or options  exchangeable  for or convertible into
such capital stock whether outstanding on the Issue Date or thereafter issued.

                  "CHANGE OF CONTROL"  shall have the  meaning  ascribed to such
term in the Indenture.

                  "COMPANY" shall have the meaning  ascribed to such term in the
preamble  of this  Agreement  and shall also  include  the  Company's  permitted
successors and assigns.

                  "COMMON STOCK" shall have the meaning ascribed to such term in
the preamble of this  Agreement  and any other class or series of common  equity
equivalent   shares  of  the  Company  into  which  such  Common  Stock  may  be
reclassified and sold to the public in an Initial Public Equity Offering.

                  "CONVERTIBLE  PREFERRED STOCK" shall mean the Series Preferred
Stock (as  defined in the  Indenture)  of the  Company  and any other  series of
preferred  stock  convertible  or  exchangeable   into  Common  Stock,   whether
outstanding on the date hereof or thereafter issued.

                  "CURRENT MARKET VALUE" shall have the meaning ascribed to such
term in the Warrant Agreement.

                  "DEMAND  REGISTRATION" shall have the meaning ascribed to such
term in Section 2.1(a) hereof.

                  "DRAG-ALONG  RIGHT"  shall have the  meaning  ascribed to such
term in Section 3.3 hereof.

                  "DTC" shall have the meaning  ascribed to such term in Section
4(i) hereof.

                  "EFFECTIVENESS PERIOD" shall have the meaning ascribed to such
term in Section 2.1(a) hereof.

                  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.

                  "FAIR MARKET VALUE" shall mean the value of any  securities as
determined  (without  any  discount  for lack of  liquidity,  the amount of such
securities  proposed  to be sold or the fact  that such  securities  held by any
Holder of such security may represent a minority  interest in a private company)
by a nationally or regionally  recognized  independent financial expert selected
by the Company for the determination of such value.

                  "HOLDER"  shall  mean  each  holder of any  Warrants,  Warrant
Shares or  Registrable  Securities,  and each of their  successors,  assigns and
direct and indirect  transferees who become  registered owners of such Warrants,
Warrant Shares or Registrable Securities for so long as such Person continues to
hold such Warrants, Warrant Shares or Registrable Securities.

                  "INCLUDED  SECURITIES" shall have the meaning ascribed to such
term in Section 2.1(a) hereof.

                  "INDENTURE"  shall  mean the  Indenture,  dated as of April 8,
2000 between  Pathnet and The Bank of New York,  Trustee,  pursuant to which the
Notes were issued,  as amended as of March 30, 2000,  and as further  amended or
supplemented from time to time in accordance with the terms thereof.

                  "INDEPENDENT   FINANCIAL  EXPERT  "  shall  have  the  meaning
ascribed to such term in the Indenture.

                  "INITIAL  PUBLIC EQUITY  OFFERING" shall mean a primary public
offering  (whether or not  underwritten,  but excluding any offering pursuant to
Form S-8 under the  Securities  Act or any other  publicly  registered  offering
pursuant to the  Securities  Act  pertaining  to an issuance of Common  Stock or
securities  exercisable  therefor under any benefit plan, employee  compensation
plan, or employee or director  stock  purchase plan) of Common Stock pursuant to
an effective registration statement under the Securities Act.

                  "INITIAL PURCHASERS" shall mean Merrill Lynch & Co., Merrill
                   ------------------
Lynch,  Pierce,  Fenner & Smith  Incorporated,  Bear,  Stearns  & Co.  Inc.,  TD
Securities (USA) Inc., and Salomon Brothers Inc.

                  "INSPECTORS"  shall have the meaning  ascribed to such term in
Section 4(m) hereof.

                  "ISSUE DATE" shall mean the date hereof.

                  "LEGAL  HOLIDAY"  shall mean a Saturday,  a Sunday or a day on
which  (i)  banking  institutions  in The  City  of New  York  are  required  or
authorized by law or other government action to be closed and (ii) the principal
U.S.  securities exchange or market, if any, on which any Common Stock is listed
or admitted to trading and the principal U.S.  securities exchange or market, if
any,  on which the  Warrants  are listed or  admitted  to trading are closed for
business.

                  "NOTES"  shall have the  meaning  ascribed to such term in the
preamble hereof.

                  "PARTICIPATING HOLDER" shall have the meaning ascribed to such
term in Section 3.2(c).

                  "PERMITTED  HOLDER"  shall have the  meaning  ascribed to such
term in the preamble hereof.

                  "PATHNET" shall have the meaning  ascribed to such term in the
preamble hereof.

                  "PATHNET  WARRANT" shall have meaning ascribed to such term in
the preamble  hereof "PERSON" shall mean any  individual,  corporation,  limited
liability company, partnership, joint venture, association, joint-stock company,
trust, business trust,  unincorporated  organization or government or any agency
or political subdivision thereof,  including any entity that is a predecessor of
any such entity.

                  "PIGGY-BACK  REGISTRATION"  shall have the meaning ascribed to
such term in Section 2.2(a) hereof.

                  "PROPOSED  PURCHASER"  shall have the meaning ascribed to such
term in Section 3.2(a) hereof.

                  "PROSPECTUS"  shall  mean  the  prospectus   included  in  any
Registration Statement (including, without limitation, any prospectus subject to
completion and a prospectus  that includes any  information  previously  omitted
from a  prospectus  filed  as part of an  effective  registration  statement  in
reliance upon Rule 430A  promulgated  under the  Securities  Act), as amended or
supplemented  by any  prospectus  supplement,  with  respect to the terms of the
offering  of  any  portion  of  the  Registrable   Securities  covered  by  such
Registration  Statement,  and  all  other  amendments  and  supplements  to  the
Prospectus,  including post-effective  amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

                  "REGISTRABLE  SECURITIES"  shall  mean  any of (i) the  Common
Stock  issued and  issuable  upon  exercise of the  Warrants  and (ii) any other
securities  issued or issuable with respect to the Warrants or Warrant Shares by
way of stock  dividend or stock split or in  connection  with a  combination  of
shares,  recapitalization,  merger,  consolidation  or other  reorganization  or
otherwise.  As to any particular Registrable  Securities,  such securities shall
cease to be  Registrable  Securities  when  (a) a  Registration  Statement  with
respect to the offering of such securities by the holder thereof shall have been
declared  effective under the Securities Act and such securities shall have been
disposed of by such holder  pursuant to such  Registration  Statement,  (b) such
securities  have been sold to the public  pursuant to, or are eligible (or would
have been  eligible if the holder of Warrants had elected  cashless  exercise of
the Warrant or Warrants) for sale to the public without volume or manner of sale
restrictions under, Rule 144(k) (or any similar provision then in force, but not
Rule 144A)  promulgated under the Securities Act, (c) such securities shall have
been otherwise  transferred and new certificates for such securities not bearing
a legend  restricting  further transfer shall have been delivered by the Company
or its transfer agent and subsequent  disposition of such  securities  shall not
require  registration or  qualification  under the Securities Act or any similar
state  law  then in  force  or (d)  such  securities  shall  have  ceased  to be
outstanding.

                  "REGISTRATION  EXPENSES"  shall mean all expenses  incident to
the Company's  performance  of or  compliance  with this  Agreement,  including,
without  limitation,  all SEC and stock  exchange  or  National  Association  of
Securities  Dealers,  Inc.  registration and filing fees and expenses,  fees and
expenses of  compliance  with  securities or blue sky laws  (including,  without
limitation,  reasonable fees and  disbursements  of counsel for the underwriters
and the Holders in connection  with blue sky  qualifications  of the Registrable
Securities,  such counsel fees not to exceed  $5,000 per  registration),  rating
agency fees, printing expenses, messenger, telephone and delivery expenses, fees
and  disbursements  of counsel  for the Company  and all  independent  certified
public  accountants and fees and disbursements of underwriters  customarily paid
by issuers or sellers of securities (but not including underwriting discounts or
commissions,  fees  of  counsel  to the  Holders  or  transfer  taxes,  if  any,
attributable to the sale of Subject Equity by Holders of such Subject Equity).

                  "REGISTRATION    STATEMENT"   shall   mean   any   appropriate
registration  statement  of the  Company  filed  with  the SEC  pursuant  to the
Securities Act which covers any of the Subject Equity pursuant to the provisions
of this Agreement and all amendments  and  supplements to any such  Registration
Statement,  including  post-effective  amendments,  in each case  including  the
Prospectus   contained   therein,   all  exhibits   thereto  and  all  materials
incorporated by reference therein.

                  "RULE  144"  shall  mean  Rule  144   promulgated   under  the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing
for offers and sales of  securities  made in compliance  therewith  resulting in
offers and sales by subsequent  holders that are not  affiliates of an issuer of
such  securities  being  free  of  the  registration  and  prospectus   delivery
requirements of the Securities Act.

                  "RULE  144A"  shall  mean  Rule  144A  promulgated  under  the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule (other than Rule 144) or regulation hereafter adopted by the SEC.

                  "SEC" shall mean the Securities and Exchange Commission.

                  "SECURITIES  ACT" shall mean the  Securities  Act of 1933,  as
amended from time to time.

                  "SELLING  HOLDER"  shall mean a Holder who is selling  Subject
Equity or  Registrable  Securities in accordance  with the provisions of Section
2.1 or 2.2, respectively.

                  "SUBJECT  EQUITY" shall have the meaning ascribed to such term
                  in Section 2.1(a) hereof.  "SUSPENSION  PERIOD" shall have the
                  meaning ascribed to such term in Section 2.3(a).

                  "TAG-ALONG  NOTICE"  shall have the  meaning  ascribed to such
term in Section 3.2(c) hereof.

                  "TAG-ALONG RIGHT" shall have the meaning ascribed to such term
in Section 3.2(a) hereof.

                  "TRANSFER"  shall have the  meaning  ascribed  to such term in
Section 3.2(a) hereof.

                  "TRANSFER NOTICE" shall have the meaning ascribed to such term
in Section 3.2(c) hereof.

                  "TRIGGERING DATE" shall mean the date of the consummation of a
bona fide underwritten  public offering of Common Stock, as a result of which at
least  20% of the  outstanding  shares  of  Common  Stock  are  listed on a U.S.
national securities exchange or the Nasdaq National Market.

                  "WARRANT  AGENT"  shall  mean  The  Bank of New  York  and any
successor warrant agent for the Warrants pursuant to the Warrant Agreement.

                  "WARRANT  AGREEMENT"  shall  mean  the  Supplemental   Warrant
Agreement  dated as of the date  hereof,  between  the  Company  and the Warrant
Agent, as amended or supplemented from time to time in accordance with the terms
thereof.

                  "WARRANT  SHARES"  shall mean shares of Common Stock issued or
issuable upon  exercise of the Warrants at an exercise  price of $0.01 per share
or any other  securities  issued or issuable with respect to the Warrants by way
of stock dividend or stock split or in connection  with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.

                  "WARRANTS" shall have the meaning ascribed to such term in the
preamble hereof.

                   Section 2.  REGISTRATION RIGHTS.
                               -------------------

                  2.1  (a)  DEMAND  REGISTRATION.  After  the  occurrence  of an
Exercise  Event (as such  term is  defined  in the  Warrant  Agreement)  and the
completion  of an Initial  Public  Equity  Offering,  the holders of a number of
Warrants, Warrant Shares and Registrable Securities (collectively,  the "SUBJECT
EQUITY")  equivalent to at least a majority of the Warrant Shares subject to the
Warrants  originally  issued on the Issue  Date,  from time to time,  may make a
written  request  to  the  Company  to  effect  one  registration  (the  "DEMAND
REGISTRATION")  under the Securities Act of the Subject Equity. Any such request
will specify the number of shares of Subject Equity proposed to be sold and will
also specify the intended  method of disposition  thereof.  Within 10 days after
the receipt of such written request for a Demand Registration, the Company shall
notify the Holders of all Subject  Equity  that a Demand  Registration  has been
requested.  Within 45 days after receipt by any Holder of Subject Equity of such
notice from the Company,  such Holder may request in writing that such  Holder's
Subject Equity be included in such Registration  Statement and the Company shall
include  in such  Registration  Statement  the  Subject  Equity  of such  Holder
requested to be so included (the  "INCLUDED  SECURITIES").  Each such request by
such other Holders shall specify the number of Included  Securities  proposed to
be sold and the intended method of disposition thereof. Furthermore, the Company
shall  prepare,  file with the SEC and use its best  efforts  to cause to become
effective under the Securities Act within 150 days of such demand a Registration
Statement in respect of all of the Subject Equity which the Holders  request and
keep such  Registration  Statement  continuously  effective until the earlier to
occur  of  (i)  the  date  that  is  180  days  after  such  effectiveness  (the
"EFFECTIVENESS  PERIOD"),  (ii) such period of time as all of the Subject Equity
included in such  Registration  Statement  shall have been sold  thereunder  and
(iii) the Subject Equity  included in such  registration  becomes fully saleable
under paragraph (k) of Rule 144.

                  If a Demand Registration occurs during the "lock up" or "black
out"  period (not to exceed 180 days)  imposed on the Company  pursuant to or in
connection  with  any  underwriting  or  purchase   agreement   relating  to  an
underwritten  Rule  144A or  registered  public  offering  of  Common  Stock  or
securities convertible into or exchangeable or exercisable for Common Stock, the
Company  shall not be required to so notify  Holders of Subject  Equity and file
such Registration Statement with respect to the Subject Equity which the Holders
request prior to the end of such "lock up" or "black out" period, in which event
the Company  will use its best efforts to cause such  Registration  Statement to
become  effective  no later than the later of (i) 150 days after such  demand or
(ii) 30 days after the end of such "lock up" or "black out" period. In the event
of any "lock up" or "black out"  period or any  underwriting  or other  purchase
agreement, the Company shall so notify the holders of Registrable Securities.

                  Notwithstanding  the foregoing,  in lieu of filing and causing
to become  effective  the Demand  Registration,  the  Company  may  satisfy  its
obligation  with  respect  thereto  by making  and  consummating  (or having its
designee make and consummate) an offer to purchase all Subject Equity at a price
at least equal to Current Market Value (as defined in the Warrant Agreement, but
without the inclusion of clause (i)(a)  thereof),  less any applicable  Exercise
Price.

                  (b) EFFECTIVE REGISTRATION. A Registration Statement shall not
be deemed to have been  effected as a Demand  Registration  unless it shall have
been declared effective by the SEC, and the Company has complied in all material
respects with its  obligations  under this  Agreement with respect  thereto,  no
later than the later of (i) 150 days after the request for a Demand Registration
or (ii) 30 days after the end of any "lock up" or "black out"  period  described
in Section 2.1(a) hereof;  PROVIDED,  HOWEVER,  that if, after such Registration
Statement has become effective,  the offering of Subject Equity pursuant to such
Registration  Statement is or becomes the subject of any stop order,  injunction
or other order or requirement of the SEC or any similar  governmental,  judicial
or  administrative  order or requirement  that prevents,  restrains or otherwise
limits the sale of Subject Equity pursuant to such Registration  Statement,  and
such  Registration  Statement has not become  effective within a reasonable time
period thereafter,  such Registration Statement shall be deemed not to have been
effected.  If (i) the registration  requested pursuant to this Section 2.1 shall
be deemed not to have been  effected  or (ii) the Demand  Registration  does not
remain  effective under the Securities Act until at least the earlier of (A) the
end of the  Effectiveness  Period or (B) the consummation of the distribution by
the  Holders of all of the  Subject  Equity  covered  thereby,  then such Demand
Registration  shall not count towards  determining  if the Company has satisfied
its obligation to effect a Demand Registration pursuant to this Section 2.1. The
Holders of Subject  Equity shall be permitted to withdraw all or any part of the
Registrable  Securities from the Demand  Registration.  Notwithstanding any such
withdrawal by a Holder of Subject  Equity,  if the Company has complied with all
of its obligations  hereunder and has effected a Demand  Registration within 150
days after the request for such Demand  Registration,  such withdrawal shall not
require the Company to effect an additional Demand Registration.

                  (c)  SELECTION OF  UNDERWRITER.  If the Holders so elect,  the
offering of such Subject Equity pursuant to such Demand Registration shall be in
the  form  of  an  underwritten   offering.   The  Holders  making  such  Demand
Registration shall select one or more nationally  recognized firms of investment
bankers,  who  shall be  reasonably  acceptable  to the  Company,  to act as the
managing  underwriter or underwriters in connection with such offering and shall
select any additional  investment  bankers and managers to be used in connection
with the offering.

                  (d) EXPENSES.  The Company will pay all Registration  Expenses
in  connection  with the  registrations  requested  pursuant  to Section  2.1(a)
hereof.  Each Holder of Subject Equity shall pay all underwriting  discounts and
commissions and transfer  taxes, if any,  relating to the sale or disposition of
such Holder's  Subject  Equity  pursuant to a Registration  Statement  requested
pursuant to this Section 2.1.

                  2.2 (a)  PIGGY-BACK  REGISTRATION.  If at any time the Company
proposes to file a Registration  Statement under the Securities Act with respect
to an  offering  by the Company for its own account or for the account of any of
its securityholders of any class of its common equity securities (other than (i)
a registration  statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the SEC) or any other publicly  registered  offering  pursuant to the
Securities  Act  pertaining  to the  issuance  of  shares  of  Capital  Stock or
securities  exercisable  therefor under any benefit plan, employee  compensation
plan, or employee or director stock purchase plan, (ii) a registration statement
filed in connection with an offer of securities solely to the Company's existing
securityholders  or (iii) a Demand  Registration),  then the Company  shall give
written notice of such proposed filing to the Holders of Registrable  Securities
as  soon as  practicable  (but  in no  event  fewer  than  15  days  before  the
anticipated  filing date or 10 days if the Company is subject to filing  reports
under the Exchange Act and able to use Form S-3 under the  Securities  Act), and
such notice shall offer such Holders the  opportunity to register such number of
shares of  Registrable  Securities  as each such  Holder may  request in writing
within 12 days (or eight days if the Company is subject to filing  reports under
the  Exchange  Act and able to use Form S-3  under  the  Securities  Act)  after
receipt of such written notice from the Company (which request shall specify the
Registrable Securities intended to be disposed of by such Selling Holder and the
intended method of distribution thereof) (a "PIGGY-BACK REGISTRATION").  In such
case  where the  intended  method of  distribution  thereof  is on a delayed  or
continuous  basis pursuant to Rule 415 under the Securities  Act, or any similar
rule that may be adopted by the SEC,  the Company  shall use its best efforts to
keep such Piggy-Back  Registration  continuously  effective under the Securities
Act in the  qualifying  jurisdictions  until at least the earlier of (A) 60 days
after the effective date thereof or (B) the  consummation of the distribution by
the Holders of all of the Registrable  Securities  covered thereby.  The Company
shall  use  its  reasonable  efforts  to  cause  the  managing   underwriter  or
underwriters,  if any,  of such  proposed  offering  to permit  the  Registrable
Securities requested to be included in a Piggy-Back  Registration to be included
on the same terms and conditions as any similar securities of the Company or any
other  securityholder   included  therein  and  to  permit  the  sale  or  other
disposition  of such  Registrable  Securities  in  accordance  with the intended
method of  distribution  thereof.  Any  Selling  Holder  shall have the right to
withdraw  its  request  for  inclusion  of  its  Registrable  Securities  in any
Registration  Statement pursuant to this Section 2.2 by giving written notice to
the Company of its request to  withdraw.  The Company may  withdraw a Piggy-Back
Registration  at any time prior to the time it becomes  effective or the Company
may elect to delay the registration;  PROVIDED,  HOWEVER, that the Company shall
give prompt written notice thereof to participating Selling Holders.

                  The Company will pay all  Registration  Expenses in connection
with each  registration  of Registrable  Securities  requested  pursuant to this
Section  2.2,  and  each  Holder  of  Registrable   Securities   shall  pay  all
underwriting  discounts and commissions and transfer taxes, if any,  relating to
the sale or disposition of such Holder's  Registrable  Securities  pursuant to a
Registration Statement effected pursuant to this Section 2.2.

                  No  registration  effected  under  this  Section  2.2,  and no
failure to effect a  registration  under this  Section  2.2,  shall  relieve the
Company of its obligation to effect a  registration  upon the request of Holders
of  Registrable  Securities  pursuant to Section  2.1 hereof,  and no failure to
effect  a  registration  under  this  Section  2.2 and to  complete  the sale of
securities  registered  thereunder  in  connection  therewith  shall relieve the
Company of any other obligation under this Agreement.

                  (b) PRIORITY IN  PIGGY-BACK  REGISTRATION.  In a  registration
pursuant  to Section  2.2 hereof  involving  an  underwritten  offering,  if the
managing  underwriter or underwriters of such  underwritten  offering shall have
informed  the Company  and the  Selling  Holders  requesting  inclusion  in such
offering,  in writing,  that in such  underwriter's or underwriters'  reasonable
opinion the total number or type of  Registrable  Securities  which the Company,
the  Selling  Holders and any other  persons  desiring  to  participate  in such
registration  intend to include in such  offering is such as to  materially  and
adversely affect the success of such offering, including the price at which such
securities  can be sold,  then the Company  shall be required to include in such
registration  only the amount of  securities  which it is so  advised  should be
included in such registration.  In such event, securities shall be registered in
such  offering in the following  order of priority:  (i) first,  the  securities
which the Company proposes to register (a) in the Initial Public Equity Offering
or (b)  pursuant to an exercise of "demand"  registration  rights  pursuant to a
contractual  commitment  of the  Company  and  (ii)  second,  provided  that  no
securities  sought to be included  by the  Company or any such Person  under the
immediately  preceding  clause (i) have been  excluded  from such  registration,
securities which have been requested to be included in such  registration by the
Company  (other  than  those  covered  by  clause  (i))  and by the  Holders  of
Registrable  Securities pursuant to this Agreement,  and the securities of other
Persons  entitled  to  exercise  "piggy-back"  registration  rights  pursuant to
contractual  commitments  of the  Company  (pro  rata  based  on the  amount  of
securities sought to be registered by the Company and such Persons).

                  If, as a result of the provisions of this Section 2.2(b),  any
Selling Holder shall not be entitled to include all Registrable  Securities in a
Piggy-Back  Registration  that such Selling Holder has requested to be included,
such  Selling  Holder may elect to withdraw  his request to include  Registrable
Securities in such registration.

                  2.3 LIMITATIONS,  CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS
UNDER  REGISTRATION  COVENANTS.  The  obligations  of the  Company  set forth in
Sections  2.1 and 2.2 hereof are subject to each of the  following  limitations,
conditions and qualifications:

                  (a) The  Company  may  postpone  the filing of, or suspend the
         effectiveness  of, any  Registration  Statement or  amendment  thereto,
         suspend the use of any Prospectus and shall not be required to amend or
         supplement the Registration  Statement,  any related  Prospectus or any
         document  incorporated  therein by  reference  (other than an effective
         Registration  Statement being used for an underwritten offering) in the
         event that, and for a period (a  "SUSPENSION  PERIOD") not to exceed an
         aggregate of 60 days.  A Suspension  period used in respect of Sections
         2.1 and 2.2 may be effected only if (i) an event or circumstance occurs
         and is continuing as a result of which the Registration Statement,  any
         related Prospectus or any document incorporated therein by reference as
         then  amended or  supplemented  or proposed to be filed  would,  in the
         Company's  good  faith  judgement,  contain  an untrue  statement  of a
         material  fact or omit to state a material  fact  necessary in order to
         make the statements  therein,  in the light of the circumstances  under
         which  they  were  made,  not  misleading,  and  (ii)  (A) the  Company
         determines in its good faith  judgement  that the disclosure of such an
         event  at  such  time  would  have a  material  adverse  effect  on the
         business,  operations or prospects of the Company or (B) the disclosure
         otherwise relates to a material business  transaction which has not yet
         been publicly disclosed;  PROVIDED that the Effectiveness  Period shall
         be extended by the number of days in any  Suspension  Period;  PROVIDED
         FURTHER that the Company shall not be entitled to the  postponement  or
         suspension more than once in any 12-month period; PROVIDED FURTHER that
         the Company may suspend the effectiveness for a period not in excess of
         five  Business  Days  to  allow  for  the  updating  of  the  financial
         statements included in a Registration  Statement to the extent required
         by law, not to exceed 45 days in the aggregate in any 12-month  period.
         If the Company shall so postpone the filing of a Registration Statement
         it shall, as promptly as possible,  deliver a certificate signed by the
         chief  executive  officer of the Company to the  Selling  Holders as to
         such  determination,  and the Selling Holders shall (1) have the right,
         in the case of a  postponement  of the  filing  or  effectiveness  of a
         Registration Statement, upon the affirmative vote of the Holders of not
         less than a  majority  of the  Subject  Equity to be  included  in such
         Registration  Statement,  to withdraw the request for  registration  by
         giving  written  notice to the Company  within 10 days after receipt of
         such  notice  or (2) in the case of a  suspension  of the right to make
         sales,  receive an  extension of the  registration  period equal to the
         number of days of the suspension.  Any Demand  Registration as to which
         the withdrawal  election referred to in the preceding sentence has been
         effected  shall not be counted for purposes of the Demand  Registration
         the Company is required to effect pursuant to Section 2.1 hereof.

                  (b) The Company's  obligations  under this Agreement  shall be
         subject to the  obligations of the Selling  Holders,  which the Selling
         Holders  acknowledge,  to furnish all  information and materials and to
         take any and all actions as may be required  under  applicable  federal
         and state  securities  laws and  regulations  to permit the  Company to
         comply with such laws and regulations  and all applicable  requirements
         of the SEC and to obtain any acceleration of the effective date of such
         Registration Statement.

                  2.4  RESTRICTIONS  ON  SALE BY THE  COMPANY  AND  OTHERS.  The
Company  covenants and agrees that (i) it shall not, and that it shall not cause
or  permit  any of its  subsidiaries  to,  effect  any  public  sale  or  public
distribution  of any  securities  of the same  class as any of the  Warrants  or
Registrable  Securities or any securities  convertible  into or  exchangeable or
exercisable  for  such  securities  (or any  option  or  other  right  for  such
securities)  during the 30-day  period  prior to, and during the 180-day  period
beginning  on, the  commencement  of any  underwritten  offering  of Warrants or
Registrable  Securities  pursuant  to  a  Demand  Registration  which  has  been
requested  pursuant to this Agreement,  or a Piggy-Back  Registration  which has
been  scheduled,  prior  to the  Company  or any  of its  subsidiaries  publicly
announcing its intention to effect any such public sale or public  distribution;
(ii) the  Company  will  not,  and the  Company  will not  cause or  permit  any
subsidiary of the Company to, after the date hereof, enter into any agreement or
contract that conflicts with or limits or prohibits the full and timely exercise
by the Holders of Warrants or  Registrable  Securities  of the rights  herein to
request a Demand Registration or to join in any Piggy-Back  Registration subject
to the other terms and provisions  hereof; and (iii) upon request of the Holders
of not less than a majority of the  Warrants  or  Registrable  Securities  to be
included in such  Registration  Statement or any  underwriter,  it shall use its
reasonable best efforts to secure the written  agreement of each of its officers
and  directors  to not  effect  any public  sale or public  distribution  of any
securities of the same class as the Warrants or  Registrable  Securities (or any
securities  convertible into or exchangeable or exercisable for such securities)
or any option or other right for such securities  during the period described in
clause (i) of this Section 2.4.

                  2.5 RULE 144 AND RULE 144A.  While any Warrants or Registrable
Securities  remain  outstanding,  the Company  covenants  that it shall file the
reports  required  to be filed  by it  under  the  Exchange  Act and the  rules,
regulations and policies adopted by the SEC thereunder in a timely manner and in
accordance with the requirements of the Exchange Act. If at any time the Company
is not  required  to file such  reports,  it will  distribute  to each Holder or
beneficial owner of Warrants that are "restricted securities" within the meaning
of Rule 144 and are not  saleable  in full  under  paragraph  (k) of Rule 144 or
Registrable Securities such information as is necessary to permit sales pursuant
to Rule 144A under the  Securities  Act. The Company  further  covenants that it
will  take  such  further  action  as any  Holder  of  Warrants  or  Registrable
Securities may reasonably request,  all to the extent required from time to time
to enable  such  Holder  to sell  Warrants  or  Registrable  Securities  without
registration  under the  Securities  Act within the limitation of the exemptions
provided  by (a) Rule  144(k) and Rule 144A under the  Securities  Act,  as such
Rules may be amended from time to time,  or (b) any similar  rule or  regulation
hereafter  adopted by the SEC.  Upon the  request of any Holder of  Warrants  or
Registrable  Securities,  the Company  will in a timely  manner  deliver to such
Holder a written  statement as to whether it has complied with such  information
requirements.

                  2.6  UNDERWRITTEN  REGISTRATIONS.  No  Holder  of  Registrable
Securities  may  participate  in any  underwritten  registration  pursuant  to a
Registration  Statement filed under this Agreement unless such Holder (a) agrees
to (i) sell such Holder's Registrable Securities on the basis provided in and in
compliance  with any  underwriting  arrangements  approved by the Holders of not
less than a majority of the  Registrable  Securities to be sold  thereunder  and
(ii) comply with Rules 101,  102 and 104 of  Regulation M under the Exchange Act
and  (b)  completes  and  executes  all  questionnaires,   powers  of  attorney,
indemnities,  underwriting  agreements and other documents  reasonably  required
under the terms of such underwriting arrangements.

                  Each  Holder of  Warrants  and  Registrable  Securities  whose
Warrants and  Registrable  Securities  are covered by a  Registration  Statement
filed pursuant to Sections 2.1 and 2.2 and are to be sold thereunder  agrees, if
and  to  the  extent  reasonably   requested  by  the  managing  underwriter  or
underwriters  with respect to an  underwritten  public  offering  (including any
underwritten  public offering with respect to which registration  rights are not
available  to  holders  of the  Warrants),  not to  effect  any  public  sale or
distribution  of Warrants and  Registrable  Securities  or of  securities of the
Company  of the  same  class as any  securities  included  in such  Registration
Statement,  including  a sale  pursuant  to  Rule  144  (except  as part of such
underwritten  offering),  during  the  30-day  period  prior to,  and during the
180-day period beginning on, the closing date of each underwritten offering made
pursuant  to such  Registration  Statement,  to the extent  timely  notified  in
writing by the Company or such managing underwriter or underwriters.

                  The provisions of the foregoing  paragraph  shall not apply to
any Holders of Warrants and  Registrable  Securities if such Holder is prevented
by  applicable  statute or regulation  from  entering  into any such  agreement;
provided,  however,  that any such  Holder  shall  undertake,  in its request to
participate in any such underwritten  offering, not to effect any public sale or
distribution of any Warrants and Registrable  Securities  commencing on the date
of sale of such Warrants and  Registrable  Securities  unless it has provided 45
days'  prior  written  notice  of such  sale  or  distribution  to the  managing
underwriter or underwriters.

                  Section 3.  TRANSFERS.
                              ---------

                  3.1 GENERALLY. All Subject Equity at any time and from time to
time  outstanding  shall be held subject to the conditions and  restrictions set
forth in this Section 3. All shares of Capital  Stock now or  hereafter  held by
the Permitted  Holders shall be held subject to the conditions and  restrictions
set forth in this  Section 3. Each  Holder of Subject  Equity and the  Permitted
Holders by executing this  Agreement or by accepting a certificate  representing
Capital Stock or other indicia of ownership therefor from the Company agree with
the Company and with each other stockholder to such conditions and restrictions.

                  3.2 TAG-ALONG  RIGHTS.  (a) Prior to the Triggering Date, each
of the Holders of Subject Equity shall have the right (the "TAG-ALONG RIGHT") to
require the Proposed  Purchaser (as defined below) to purchase from each of them
all Subject  Equity owned by such Holder in the event of any proposed  direct or
indirect sale or other disposition (collectively,  a "TRANSFER") of Common Stock
or Convertible  Preferred Stock (whether now or hereafter  issued) to any Person
or Persons  (such other Person or Persons being  hereinafter  referred to as the
"PROPOSED  PURCHASER")  by any Permitted  Holder or Permitted  Holders or any of
their  Affiliates  in  any  transaction  or a  series  of  related  transactions
resulting in a Change of Control;  provided that no such  Tag-Along  Right shall
exist  as a result  of  sales  pursuant  to one or more  underwritten  offerings
registered under the Securities Act which result in a Change of Control.

                  (b)  Any  Subject  Equity  purchased  from  the  Participating
Holders  pursuant  to this  Section  3.2  shall be paid for in the same  type of
consideration  and at the same price per share of Common Stock and upon the same
terms and conditions of such proposed  Transfer of Common Stock by any Permitted
Holder or any of its Affiliates;  provided that the price per Warrant to be paid
by the Proposed  Purchaser  shall be less the aggregate  Exercise  Price of such
Warrant. If the Subject Equity to be purchased from the Permitted Holders or the
Participating  Holders includes  securities or property other than Common Stock,
the price to be paid for such securities or property shall be the same price per
share or other  denomination paid by the Proposed  Purchaser for like securities
purchased  from  any  Permitted  Holder  or any of its  Affiliates  or,  if like
securities are not purchased from any Permitted Holder or any of its Affiliates,
the Fair Market Value of such securities  determined by an independent financial
expert selected by the Company.

                  (c)  Each  Permitted  Holder  shall  notify,  or  cause  to be
notified, each Holder of Subject Equity in writing (a "TRANSFER NOTICE") of each
such proposed  Transfer at least 30 days prior to the date thereof.  Such notice
shall set forth:  (a) the name and  address of the  Proposed  Purchaser  and the
number of shares of Common Stock and other  securities,  if any,  proposed to be
transferred,  (b) the proposed amount of consideration  and terms and conditions
of payment offered by such Proposed Purchaser (if the proposed  consideration is
not  cash,  the  Transfer  Notice  shall  describe  the  terms  of the  proposed
consideration)  and (c) that either the Proposed  Purchaser has been informed of
the  "TAG-ALONG  RIGHT" and has agreed to purchase  Subject Equity in accordance
with the terms  hereof  or that the  Permitted  Holder or any of its  Affiliates
shall make such purchase.  The Tag-Along Right may be exercised by any Holder of
Subject Equity (a "PARTICIPATING HOLDER") by delivery of a written notice to the
Company and the  Permitted  Holder  that gave the  Transfer  Notice  ("TAG-ALONG
NOTICE"), within 10 days following such Holder's receipt of the Transfer Notice,
indicating its election to exercise the Tag-Along  Right.  The Tag-Along  Notice
shall state the amount of Subject Equity that such Holder proposes to include in
such  Transfer  to the  Proposed  Purchaser.  Failure by any Holder to provide a
Tag-Along  Notice  within the 10-day notice period shall be deemed to constitute
an election by such Holder not to exercise its Tag-Along Right. The closing with
respect to any sale to a Proposed  Purchaser  pursuant to this Section  shall be
held at the time and place  specified  in the  Transfer  Notice but in any event
within 60 days of the date such  Transfer  Notice  is  given;  provided  that if
through the exercise of  reasonable  efforts the Company is unable to cause such
transaction  to close  within 60 days,  such  period  may be  extended  for such
reasonable  period  of time  as may be  necessary  to  close  such  transaction.
Consummation  of the sale of Common Stock or Convertible  Preferred Stock by any
Permitted  Holder or any of its  Affiliates  to a  Proposed  Purchaser  shall be
conditioned upon consummation of the sale by each  participating  Holder to such
Proposed  Purchaser (or the Permitted  Holder) of the Subject Equity entitled to
be transferred as described above, if any.

                  (d)  [RESERVED]

                  (e) If the  Proposed  Purchaser  does not purchase the Subject
Equity  entitled to be  transferred as described in this Section 3.2 on the same
terms and  conditions as purchased  from the  Permitted  Holders or any of their
Affiliates,  then the Permitted  Holders or their Affiliates shall purchase such
Subject Equity if the Transfer occurs.  If any Subject Equity shall be sold by a
Holder  pursuant to this Section 3.2 upon the  occurrence of a Change of Control
triggered  by the sale of Common  Stock by a  Permitted  Holder,  then the other
Permitted  Holders  shall have the right to purchase  up to 50% of such  Subject
Equity.

                  (f) If at the end of 60 days  following  the  date on  which a
Transfer Notice was given, or as otherwise  extended  pursuant to the provisions
of Section  3.2(a),  the sale of Common Stock by the Permitted  Holders or their
Affiliates  and the sale of the Subject  Equity  entitled to be  transferred  as
provided  above  have not been  completed  in  accordance  with the terms of the
Proposed  Purchaser's  offer, all certificates  representing such Subject Equity
shall be returned to the  Participating  Holders,  and all the  restrictions  on
Transfer  contained in this  Agreement with respect to Common Stock owned by the
Permitted Holders and their Affiliates shall remain in effect.

                  3.3 DRAG-ALONG  RIGHTS. If at any time prior to the Triggering
Date,  one or more  Permitted  Holders  or any of  their  respective  Affiliates
determines  to sell all of the Capital  Stock of the Company  owned by them to a
Person other than a Permitted Holder or its Affiliate in a transaction resulting
in a Change of Control,  the transferring  Permitted Holder or Permitted Holders
(whether directly or through an Affiliate) shall have the right (the "DRAG-ALONG
RIGHT") to require the Holders of Subject  Equity to sell such Subject Equity to
such  transferee;  PROVIDED  THAT (i) the  consideration  to be  received by the
Holders of Subject  Equity shall be the same type of  consideration  received by
the Permitted  Holders and their Affiliates and, in any event,  shall be cash or
freely transferable marketable securities,  and (ii) after giving effect to such
transaction,  the Permitted Holder or Permitted Holders making the transfers and
their  Affiliates  shall not own,  directly or indirectly,  any Capital Stock or
rights to  purchase  Capital  Stock of the  Company  (excluding  successors  for
purposes of this section 3.3). Any Warrants or Registrable Securities,  or both,
purchased  from the Holders  thereof  pursuant to this Section 3.3 shall be paid
for at the same  price  per share of  Common  Stock and upon the same  terms and
conditions  as such proposed  transfer of Common Stock by the Permitted  Holders
and their Affiliates. The price per Warrant to be paid by the Proposed Purchaser
shall be less the  aggregate  Exercise  Price of such Warrant per share.  If the
Subject Equity to be purchased includes  securities other than Common Stock, the
price to be paid for such securities  shall be the same price per share or other
denomination paid by the proposed  purchaser for like securities  purchased from
the  Permitted  Holders  and their  Affiliates  or, if like  securities  are not
purchased from the Permitted Holders and their Affiliates, the Fair Market Value
of such securities determined by an independent financial expert selected by the
Company.

                  Section 4.  REGISTRATION  PROCEDURES.  In connection  with the
obligations of the Company with respect to any Registration  Statement  pursuant
to Sections 2.1 and 2.2 hereof, the Company shall, except as otherwise provided:

                  (a) A reasonable period of time prior to the initial filing of
         a Registration  Statement or Prospectus and a reasonable period of time
         prior to the filing of any amendment or supplement  thereto  (including
         any document that would be  incorporated  or deemed to be  incorporated
         therein  by  reference),  furnish  to  the  Holders  and  the  managing
         underwriters,  if any,  copies  of all such  documents  proposed  to be
         filed,  which documents (other than those  incorporated or deemed to be
         incorporated  by  reference)  shall be  subject  to the  review of such
         Holders,  and such  underwriters,  if any,  and cause the  officers and
         directors  of the  Company,  counsel  to the  Company  and  independent
         certified  public  accountants  to  the  Company  to  respond  to  such
         reasonable  inquiries as shall be necessary,  in the opinion of counsel
         to such underwriters,  to conduct a reasonable investigation within the
         meaning of the Securities Act;  PROVIDED THAT the foregoing  inspection
         and information gathering shall be coordinated on behalf of the Holders
         by a nationally  recognized  underwriting  firm to be designated by the
         Company. The Company shall not file any such Registration  Statement or
         related  Prospectus or any amendments or supplements  thereto which the
         Holders of a majority of the  Registrable  Securities  included in such
         Registration Statement shall reasonably object to a timely basis.

                  (b) Subject to Section 2.3, prepare and file with the SEC such
         amendments,  including post-effective  amendments, to each Registration
         Statement  as may be  necessary  to keep  such  Registration  Statement
         continuously   effective  for  the  applicable   time  period  required
         hereunder;  cause the  related  Prospectus  to be  supplemented  by any
         required  Prospectus  supplement,  and as so  supplemented  to be filed
         pursuant  to Rule  424  (or  any  similar  provisions  then  in  force)
         promulgated under the Securities Act; and comply with the provisions of
         the Securities Act and the Exchange Act with respect to the disposition
         of all securities  covered by such  Registration  Statement during such
         period in accordance  with the intended  methods of  disposition by the
         sellers thereof set forth in such Registration  Statement as so amended
         or in such Prospectus as so supplemented.

                  (c) Notify the Holders of  Registrable  Securities  to be sold
         and the managing  underwriters,  if any, promptly, and (if requested by
         any  such  person)  confirm  such  notice  in  writing,  (i)(A)  when a
         Prospectus or any Prospectus supplement or post-effective  amendment is
         proposed to be filed, and (B) with respect to a Registration  Statement
         or any  post-effective  amendment,  when the same has become effective,
         (ii)  of  any  request  by  the  SEC  or any  other  Federal  or  state
         governmental  authority for amendments or supplements to a Registration
         Statement or related Prospectus or for additional information, (iii) of
         the issuance by the SEC,  any state  securities  commission,  any other
         governmental  agency  or any  court of any stop  order  suspending  the
         effectiveness  of  such  Registration  Statement  or of  any  order  or
         injunction  suspending  or  enjoining  the use of a  Prospectus  or the
         effectiveness  of a  Registration  Statement or the  initiation  of any
         proceedings for that purpose, (iv) of the receipt by the Company of any
         notification  with respect to the  suspension of the  qualification  or
         exemption from  qualification of any of the Registrable  Securities for
         sale in any  jurisdiction,  or the  initiation  or  threatening  of any
         proceeding for such purpose, and (v) of the happening of any event, the
         existence of any  information  becoming  known that makes any statement
         made in a Registration  Statement or related Prospectus or any document
         incorporated or deemed to be incorporated  therein by reference  untrue
         in any material  respect or omit to state any material fact required to
         be stated  therein or necessary  to make the  statements  therein,  not
         misleading, and that in the case of the Prospectus, it will not contain
         any untrue  statement of a material  fact or omit to state any material
         fact required to be stated  therein or necessary to make the statements
         therein,  in light of the circumstances under which they were made, not
         misleading.

                  (d) Use its reasonable efforts to avoid the issuance of or, if
         issued,  obtain the withdrawal of any order enjoining or suspending the
         effectiveness of the Registration  Statement or the use of a Prospectus
         or the lifting of any  suspension  of the  qualification  (or exemption
         from  qualification)  of  any  of the  Registrable  Securities  covered
         thereby for sale in any  jurisdiction  described in Section 4(h) at the
         earliest practicable moment.

                  (e) If requested by the managing  underwriters,  if any, or if
         none, by the Holders of a majority of the Registrable  Securities being
         sold pursuant to such Registration Statement,  (i) promptly incorporate
         in a Prospectus supplement or post-effective amendment such information
         as  the  managing  underwriters,  if  any,  or if  none,  such  Holders
         reasonably  believe,  upon  advice  of  counsel,  which  need not be in
         writing  should be included  therein,  and (ii) subject to Section 2.3,
         make  all  required  filings  of  such  Prospectus  supplement  or such
         post-effective   amendment   under  the   Securities  Act  as  soon  as
         practicable after the Company has received  notification of the matters
         to be  incorporated  in such  Prospectus  supplement or  post-effective
         amendment; PROVIDED, HOWEVER, that the Company shall not be required to
         take any  action  pursuant  to this  Section  4(e) that  would,  in the
         opinion of counsel for the Company, violate applicable law.

                  (f) Upon  written  request  to the  Company,  furnish  to each
         Holder of Registrable  Securities to be sold pursuant to a Registration
         Statement and each managing  underwriter,  if any,  without charge,  at
         least  one  conformed  copy  of the  Registration  Statement  and  each
         amendment thereto,  including financial  statements and schedules,  all
         documents   incorporated  or  deemed  to  be  incorporated  therein  by
         reference,   and  all  exhibits  to  the  extent  reasonably  requested
         (including those previously  furnished or incorporated by reference) as
         soon as practicable after the filing of such documents with the SEC.

                  (g) Deliver to each  Holder of  Registrable  Securities  to be
         sold   pursuant  to  a   Registration   Statement   and  each  managing
         underwriter,  if any, without charge, as many copies of each Prospectus
         (including  each form of  Prospectus)  and each amendment or supplement
         thereto as such. Persons may reasonably request; and the Company hereby
         consents to use of such  Prospectus  and each  amendment or  supplement
         thereto and each document  supplemental  thereto by each of the selling
         Holders of Registrable  Securities and the  underwriters or agents,  if
         any,  in  connection  with the  offering  and  sale of the  Registrable
         Securities  covered by such  Prospectus and any amendment or supplement
         thereto.

                  (h) Prior to any offering of Registrable  Securities,  use its
         reasonable efforts to register or qualify or cooperate with the Holders
         of  Registrable  Securities  to be sold,  the managing  underwriter  or
         underwriters,  if any, and their respective  counsel in connection with
         the registration or qualification  (or exemption from such registration
         or  qualification)  of such  Registrable  Securities for offer and sale
         under the securities or Blue Sky laws of such jurisdictions as any such
         Holder or underwriter  reasonably  requests in writing;  keep each such
         registration or qualification (or exemption therefrom) effective during
         the period such Registration Statement is required to be kept effective
         hereunder  and do any  and  all  other  acts  or  things  necessary  or
         advisable  to  enable  the  disposition  in such  jurisdictions  of the
         Registrable   Securities   covered  by  the   applicable   Registration
         Statement; PROVIDED, HOWEVER, that the Company shall not be required to
         (i) qualify  generally to do business in any  jurisdiction  where it is
         not then so qualified or (ii) take any action that would  subject it to
         general  service of process  in any such  jurisdiction  where it is not
         then so subject or to taxation in any  jurisdiction  where it is not so
         subject.

                  (i) In  connection  with any sale or transfer  of  Registrable
         Securities  that  will  result  in  such  securities  no  longer  being
         Registrable  Securities,  cooperate  with the  Holders  of  Registrable
         Securities  and the managing  underwriters,  if any, to facilitate  the
         timely   preparation   and   delivery  of   certificates   representing
         Registrable  Securities to be sold, which  certificates  shall not bear
         any restrictive  legends whatsoever and shall be in a form eligible for
         deposit with The Depository Trust Company  ("DTC");  and to enable such
         Registrable  Securities to be in such  denominations  and registered in
         such names as the managing underwriter or underwriters, if any, or such
         Holders may reasonably  request at least two business days prior to any
         sale of Registrable Securities.

                  (j) Subject to Section 2.3,  upon the  occurrence of any event
         contemplated  by Section  4(c)(v)  above,  as promptly  as  practicable
         prepare  a  supplement  or  amendment,   including  if   appropriate  a
         post-effective amendment to each Registration Statement or a supplement
         to the related Prospectus or any document  incorporated or deemed to be
         incorporated therein by reference, and file any other required document
         so that, as thereafter  delivered,  such Prospectus will not contain an
         untrue  statement of a material  fact or omit to state a material  fact
         required  to be stated  therein  or  necessary  to make the  statements
         therein,  in light of the circumstances under which they were made, not
         misleading.

                  (k) Prior to the effective date of a  Registration  Statement,
         (i)  provide  the  registrar  for  the   Registrable   Securities  with
         certificates  for such  securities  in a form eligible for deposit with
         DTC and (ii) provide a CUSIP number for such securities.

                  (l)  Enter  into such  agreement  (including  an  underwriting
         agreement  in  such  form,  scope  and  substance  as is  customary  in
         underwritten  offerings) and take all such other reasonable  actions in
         connection  therewith  (including  those  reasonably  requested  by the
         managing  underwriters,  if any,  or the  Holders of a majority  of the
         Registrable  Securities  being sold) in order to expedite or facilitate
         the disposition of such Registrable Securities,  and, whether or not an
         underwriting   agreement  is  entered  into  and  whether  or  not  the
         registration   is  an   underwritten   registration,   (i)  make   such
         representations  and  warranties  to the  Holders  of such  Registrable
         Securities and the underwriter or underwriters, if any, with respect to
         the  business  of the  Company  and  the  subsidiaries  of the  Company
         (including  with  respect to  businesses  or assets  acquired  or to be
         acquired by any of them),  and the Registration  Statement,  Prospectus
         and documents,  if any,  incorporated  or deemed to be  incorporated by
         reference  therein,  in each case,  in form,  substance and scope a are
         customarily made by issuers to underwriters in underwritten  offerings,
         and confirm  the same if any when  requested;  (ii) obtain  opinions of
         counsel to the Company and updates  thereof (which counsel and opinions
         (in form, scope and substance) shall be reasonably  satisfactory to the
         managing  underwriters,  if any,  addressed to each  selling  Holder of
         Registrable Securities and each of the underwriters,  if any), covering
         the matters  customarily  covered in opinions requested in underwritten
         offerings and such other matters as may be reasonably requested by such
         underwriters;  (iii) use their  reasonable  efforts to obtain customary
         "cold  comfort"  letters  and  updates  thereof  from  the  independent
         certified  public  accountants  of the Company (and, if necessary,  any
         other independent certified public accountants of any subsidiary of the
         Company or of any business  acquired by the Company for which financial
         statements and financial  data are, or are required to be,  included in
         the Registration  Statement),  addressed (where reasonably possible) to
         each  Selling  Holder  of  Registrable   Securities  and  each  of  the
         underwriters, if any, such letters to be in customary form and covering
         matters of the type  customarily  covered in "cold comfort"  letters in
         connection  with  underwritten  offerings;   (iv)  if  an  underwriting
         agreement  is  entered   into,   the  same  shall   contain   customary
         indemnification  provisions  and  procedures  no less  favorable to the
         Selling  Holder and the  underwriters,  if any, than those set forth in
         Section 5 hereof (or such other provisions and procedures acceptable to
         Holders  of a  majority  of  Registrable  Securities  covered  by  such
         Registration  Statement and the managing underwriter,  if any); and (v)
         deliver such documents and certificates as may be reasonably  requested
         by the Holders of a majority of the Registrable  Securities  being sold
         and the managing underwriters or underwriters to evidence the continued
         validity of the  representations and warranties made pursuant to clause
         (i)  above  and  evidence  compliance  with  any  customary  conditions
         contained in the  underwriting  agreement or other  agreements  entered
         into by the Company. The above shall be done at each closing under such
         underwriting  agreement  or other  agreements,  or as and to the extent
         required thereunder.

                  (m) Make available for inspection by a  representative  of the
         selling   Holders   of   Registrable   Securities,    any   underwriter
         participating  in any such  disposition of Registrable  Securities,  if
         any,  and any  attorney,  consultant  or  accountant  retained  by such
         representative  of the selling  Holders of  Registrable  Securities  or
         underwriter  (collectively,  the  "INSPECTORS"),  at the offices  where
         normally kept, during the reasonable  business hours, all financial and
         other  records,  pertinent  corporate  documents and  properties of the
         Company and the subsidiaries of the Company  (including with respect to
         businesses  and assets  acquired  or to be  acquired to the extent that
         such information is available to the Company),  and cause the officers,
         directors,  agents and employees of the Company and its subsidiaries of
         the Company  (including  with respect to businesses and assets acquired
         or to be acquired to the extent that such  information  is available to
         the  Company)  to  supply  all  information  in  each  case  reasonably
         requested by any such  Inspector in connection  with such  Registration
         Statement;  provided,  however,  that such persons shall first agree in
         writing with the Company that any information that is reasonably and in
         good faith  designated by the Company in writing as confidential at the
         time of delivery of such information shall be kept confidential by such
         Persons, unless (i) disclosure of such information is required by court
         or  administrative  order or is  necessary  to respond to  inquiries of
         regulatory authorities, (ii) disclosure of such information is required
         by  law  (including  any  disclosure   requirements  pursuant  to  U.S.
         securities  laws in  connection  with the  filing  of the  Registration
         Statement or the use of any Prospectus), (iii) such information becomes
         generally  available  to  the  public  other  than  as  a  result  of a
         disclosure or failure to safeguard  such  information by such person or
         (iv) such  information  becomes  available to such person from a source
         other than the  Company  and its  subsidiaries  and such  source is not
         bound by a  confidentiality  agreement;  AND PROVIDED  FURTHER that the
         foregoing  investigation  shall be coordinated on behalf of the selling
         Holders  of   Registrable   Securities   by  a  nationally   recognized
         underwriting firm to be designated by the Company.

                  (n) Comply with all applicable rules, regulations and policies
         of the SEC and make generally available to its securityholders earnings
         statements satisfying the provisions of Section 11(a) of the Securities
         Act and Rule 158  thereunder no later than 60 days after the end of any
         12-month  period (or 135 days after the end of any  12-month  period if
         such period is a fiscal year) (i)  commencing  at the end of any fiscal
         quarter in which  Registrable  Securities are sold to an underwriter or
         to underwriters in a firm commitment or reasonable efforts underwritten
         offering and (ii) if not sold to an underwriter or to  underwriters  in
         such an  offering,  commencing  on the first  day of the  first  fiscal
         quarter  of the  Company  after  the  effective  date  of the  relevant
         Registration  Statement,  which  statements  shall  cover such  period,
         consistent with the requirements of Rule 158 under the Securities Act.

                  (o)  Use its  reasonable  efforts  to  cause  all  Registrable
         Securities relating to such Registration Statement to be listed on each
         securities exchange,  if any, on which similar securities issued by the
         Company are then listed.

                  (p) Cooperate  with each seller of  Registrable  Securities to
         facilitate  the  timely   preparation   and  delivery  of  certificates
         representing  Registrable  Securities  to be sold and not  bearing  any
         restrictive legends and registered in such names as the Selling Holders
         may reasonably  request at least two business days prior to the closing
         of any sale of Registrable Securities.

                  (q)  Cooperate  with  each  seller of  Registrable  Securities
         covered by any  Registration  Statement and each  underwriter,  if any,
         participating in the disposition of such Registrable Securities and its
         respective  counsel in connection with any filings  required to be made
         with the National Association of Securities Dealers, Inc.

                  The Company may require a Holder of Registrable  Securities to
be  included  in a  Registration  Statement  to  furnish  to  the  Company  such
information   regarding  (i)  the  intended   method  of  distribution  of  such
Registrable  Securities  (ii) such Holder and (iii) the  Registrable  Securities
held by such Holder as is required by law to be  disclosed  in such  Registrable
Statement  and the Company  may exclude  from such  Registration  Statement  the
Registrable  Securities  of any  Holder who fails to  furnish  such  information
within a reasonable time after receiving such request.

                  If any such  Registration  Statement  refers to any  Holder by
name or otherwise  as the Holder of any  securities  of the  Company,  then such
Holder shall have the right to require (i) the insertion therein of language, in
form and substance  reasonably  satisfactory to such Holder,  to the effect that
the  holding  by such  Holder of such  securities  is not to be  construed  as a
recommendation  by  such  Holder  of the  investment  quality  of the  Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such  reference  to such  Holder by name or  otherwise  is not
required by the Securities  Act, the deletion of the reference to such Holder in
such  amendment or supplement to the  Registration  Statement  filed or prepared
subsequent to the time that such reference ceases to be required.

                  Each Holder of Registrable Securities agrees by acquisition of
such  Subject  Equity  that,  upon receipt of any notice from the Company of the
happening of any event of the kind  described in Section  4(c)(ii),  4(c)(iv) or
4(c)(v)  hereof,  such Holder will  forthwith  discontinue  disposition  of such
Subject Equity covered by the  Registration  Statement or Prospectus  until such
Holder's  receipt  of the  copies  of the  supplemented  or  amended  Prospectus
contemplated  by Section  4(j)  hereof,  or until it is advised in writing  (the
"ADVICE")  by the  Company  that  the use of the  applicable  Prospectus  may be
resumed,   and  in  either  case  has  received  copies  of  any  additional  or
supplemental  filings  that are  incorporated  or deemed to be  incorporated  by
reference in such  Prospectus.  If the Company  shall give any such notice,  the
Effectiveness Period shall be extended by the number of days during such periods
from and  including  the date of the giving of such notice to and  including the
date when each seller of Subject Equity covered by such  Registration  Statement
shall have  received (x) the copies of the  supplemented  or amended  Prospectus
contemplated by Section 4(j) hereof or (y) the Advice,  and, in either case, has
received copies of any additional or supplemental  filings that are incorporated
or deemed to be incorporated by reference in such Prospectus.

                  Holders  of the  Subject  Equity  shall be  obligated  to keep
confidential   the  existence  of  a  Suspension   Period  or  any  confidential
information communicated by the Company to the Holder with respect thereto.

                  Section 5.  INDEMNIFICATION AND CONTRIBUTION.  (a) The Company
shall  indemnify  and hold  harmless,  each  Selling  Holder (in its capacity as
Selling Holder),  each  underwriter,  if any, who participates in an offering of
Registrable  Securities,  their  respective  affiliates,  and  their  respective
directors, officers, employees, agents and each Person, if any, who controls any
of such  parties  within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:

                  (i) against  any and all loss,  liability,  claim,  damage and
         expense whatsoever, as incurred, arising out of any untrue statement or
         alleged   untrue   statement  of  a  material  fact  contained  in  any
         Registration  Statement  (or any amendment  thereto)  pursuant to which
         Registrable  Securities were registered  under the 1933 Act,  including
         all documents  incorporated  therein by  reference,  or the omission or
         alleged  omission  therefrom of a material  fact  required to be stated
         therein or necessary to make the  statements  therein not misleading or
         arising out of any untrue  statement or alleged  untrue  statement of a
         material  fact  contained  in  any  Prospectus  (or  any  amendment  or
         supplement  thereto) or the omission or alleged omission therefrom of a
         material fact necessary in order to make the statements therein, in the
         light of the circumstances under which they were made, not misleading;

                  (ii) against any and all loss,  liability,  claim,  damage and
         expense whatsoever,  as incurred, to the extent of the aggregate amount
         paid  in  settlement  of  any  litigation,   or  any  investigation  or
         proceeding by any governmental agency or body, commenced or threatened,
         or of any claim  whatsoever,  in each case,  based upon any such untrue
         statement  or  omission,  or  any  such  alleged  untrue  statement  or
         omission;  provided  that  (subject  to  Section  5(d)  below) any such
         settlement is effected with the written consent of the Company; and

                  (iii)  against any and all  expenses  whatsoever,  as incurred
         (including fees and  disbursements of counsel chosen by any indemnified
         party),  reasonably  incurred in investigating,  preparing or defending
         against any litigation,  or investigation or proceeding by any court or
         governmental  agency or body,  commenced  or  threatened,  or any claim
         whatsoever  based upon any such untrue  statement or  omission,  or any
         such alleged untrue statement or omission,  to the extent that any such
         expense  is not paid  under  subparagraph  (i) or (ii) of this  Section
         5(a);

PROVIDED,  HOWEVER,  that this  indemnity  agreement does not apply to any loss,
liability,  claim,  damage or expense to the extent (i) arising out of an untrue
statement  or omission or alleged  untrue  statement  or omission (A) made in or
omitted from a preliminary Prospectus or Registration Statement and corrected or
included in a subsequent  Prospectus or Registration  Statement or any amendment
or  supplement  thereto  made in reliance  upon and in  conformity  with written
information  furnished  to the  Company by the  Selling  Holders of  Registrable
Securities, any Holder, or any underwriter expressly for use in the Registration
Statement  (or any  amendment  thereto) or the  Prospectus  (or any amendment or
supplement  thereto) or (B) resulting  from the use of the  Prospectus  during a
period  when  the use of the  Prospectus  has  been  suspended  or is  otherwise
unavailable  for sales  thereunder in accordance with Sections  2.1(b),  2.1(c),
2.2(a),  2.3(a), 2.4, 2.6 or 4(c) hereof,  PROVIDED,  in each case, that Holders
received prior notice of such suspension or other unavailability.  The foregoing
indemnity with respect to any untrue statement contained in or any omission from
a  Prospectus  shall not inure to the  benefit  of any  Selling  Holder  (in its
capacity as Selling  Holder),  or any person who controls  such party within the
meaning  of  Section  15 of the 1933 Act or Section 20 of the 1934 Act from whom
the  person  asserting  any such  loss,  liability,  claim,  damage  or  expense
purchased any of the Registrable  Securities that are the subject  thereof,  was
not sent or given a copy of such Prospectus (as amended or supplemented) by such
Selling  Holder (in its  capacity as Selling  Holder) to the extent such Selling
Holder (in its  capacity as Selling  Holder) was required by law to deliver such
Prospectus as amended or supplemented,  at or prior to the written  confirmation
of the sale of such Registrable Securities and the untrue statement contained in
or  the  omission  from  such  Prospectus  was  corrected  in  such  amended  or
supplemented Prospectus,  unless such failure resulted from noncompliance by the
Company with its  obligations  hereunder to furnish such Selling  Holder (in its
capacity  as  Selling  Holder),  with  copies of such  Prospectus  as amended or
supplemented.

                  (b) In the case of any registration of Registrable Securities,
each Selling  Holder  agrees,  severally and not jointly,  to indemnify and hold
harmless the Company,  each Initial  Purchaser,  each  underwriter,  if any, who
participates  in an offering of  Registrable  Securities  and the other  Selling
Holders and each of their  respective  directors  and officers  (including  each
officer of the Company who signed the  Registration  Statement) and each Person,
if any, who controls the Company, any Initial Purchaser,  any underwriter or any
other Selling Holder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act,  against  any and all loss,  liability,  claim,  damage  and
expense whatsoever  described in the indemnity contained in Section 5(a) hereof,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue  statements  or  omissions,  made in the  Registration  Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto) in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by such Holder expressly for use in the  Registration  Statement (or any
amendment thereto),  or the Prospectus (or any amendment or supplement thereto);
PROVIDED,  HOWEVER, that no such Holder shall be liable for any claims hereunder
in excess of the amount of net proceeds received by such Holder from the sale of
Registrable Securities pursuant to such Registration Statement.

                  (c) In case any action shall be commenced involving any Person
in respect of which indemnity may be sought pursuant to either  paragraph (a) or
(b) above, such Person (the  "indemnified  party") shall give notice as promptly
as  reasonably  practicable  to each Person  against whom such  indemnity may be
sought (the  "indemnifying  party"),  but  failure to so notify an  indemnifying
party shall not relieve such indemnifying party from any liability  hereunder to
the extent it is not materially  prejudiced as a result thereof and in any event
shall not  relieve it from any  liability  which it may have  otherwise  than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 5(a) above,  counsel for such indemnified  parties shall be chosen by
such indemnified  parties,  and, in the case of parties indemnified  pursuant to
Section 5(b) above, counsel to such indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of such action; PROVIDED,  HOWEVER, that counsel to the indemnifying party shall
not (except  with the consent of the  indemnified  party) also be counsel to the
indemnified party. In no event shall the indemnifying party or parties be liable
for the fees and  expenses of more than one  counsel  (in  addition to any local
counsel)  separate  from  their  own  counsel  for all  indemnified  parties  in
connection with any one action or separate but similar or related actions in the
same jurisdiction  arising out of the same general allegations or circumstances.
No  indemnifying  party  shall,   without  the  prior  written  consent  of  the
indemnified  parties,  settle  or  compromise  or  consent  to the  entry of any
judgment with respect to any litigation,  or any  investigation or proceeding by
any  governmental  agency  or  body,  commenced  or  threatened,  or  any  claim
whatsoever in respect of which  indemnification  or contribution could be sought
under  this  Section 5 (whether  or not the  indemnified  parties  are actual or
potential  parties thereof),  unless such settlement,  compromise or consent (i)
includes an unconditional  release of each indemnified  party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

                  (d) If at any time an  indemnified  party shall have requested
an indemnifying  party to reimburse the indemnified  party for fees and expenses
of  counsel,  such  indemnifying  party  agrees  that it shall be liable for any
settlement  of the nature  contemplated  by  Section  5(a)(ii)  hereof  effected
without its written  consent if (i) such settlement is entered into more than 45
days after receipt by such  indemnifying  party of the aforesaid  request,  (ii)
such  indemnifying  party  shall  have  received  notice  of the  terms  of such
settlement  at least 30 days prior to such  settlement  being  entered  into and
(iii) such  indemnifying  party shall not have reimbursed such indemnified party
in  accordance  with  such  request  prior  to  the  date  of  such  settlement.
Notwithstanding  the  immediately   preceding  sentence,   if  at  any  time  an
indemnified  party shall have requested an  indemnifying  party to reimburse the
indemnified party for fees and expenses of counsel,  an indemnifying party shall
not be liable for any settlement of the nature  contemplated by Section 5(a)(ii)
effected  without its consent if such  indemnifying  party (i)  reimburses  such
indemnified  party in  accordance  with such  request to the extent it considers
such  request  to  be  reasonable  and  (ii)  provides  written  notice  to  the
indemnified  party  substantiating  the unpaid balance as unreasonable,  in each
case prior to the date of such settlement.

                  (e)  If  the  indemnification  provided  for  in  any  of  the
indemnity  provisions set forth in this Section 5 is for any reason  unavailable
to or  insufficient  to hold  harmless  an  indemnified  party in respect of any
losses, liabilities,  claims, damages or expenses referred to therein, then each
indemnifying  party shall  contribute  to the  aggregate  amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred,  (i) in such  proportion  as is  appropriate  to reflect the  relative
benefits  received by such  indemnifying  party or parties on the one hand,  and
such  indemnified  party or  parties on the other and from the  offering  of the
Registrable  Securities  included in such  offering;  or (ii) if the  allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative  benefits  referred to in clause
(i) above but also the relative fault of such  indemnifying  party or parties on
the one hand,  and such  indemnified  party or  parties  on the other  hand,  in
connection  with the  statements  or  omissions  which  resulted in such losses,
liabilities,  claims,  damages  or  expenses,  as  well  as any  other  relevant
equitable  considerations.  The  relative  fault of such  indemnifying  party or
parties on the one hand, and such indemnified party or parties on the other hand
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue  statement of a material fact or omission or alleged  omission
to state a material fact relates to  information  supplied by such  indemnifying
party or parties and such indemnified party or parties and the parties' relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such  statement  or  omission.  The Company  and the Holders of the  Registrable
Securities  agree  that it  would  not be just  and  equitable  if  contribution
pursuant to this Section 5 were determined by PRO RATA  allocation  (even if the
Selling Holders of Registrable  Securities  were treated as one entity,  and the
Holders were treated as one entity,  for such  purpose) or by another  method of
allocation which does not take account of the equitable  considerations referred
to above in Section 5. The  aggregate  amount of  losses,  liabilities,  claims,
damages and expenses  incurred by an indemnified  party and referred to above in
this Section 5 shall be deemed to include any legal or other expenses reasonably
incurred by such  indemnified  party in  investigating,  preparing  or defending
against any  litigation,  or any  investigation  or proceeding by a governmental
agency or body, commenced or threatened,  or any claim whatsoever based upon any
such untrue or alleged  untrue  statement  or omission or alleged  omission.  No
Person  guilty of  fraudulent  misrepresentation  (within the meaning of Section
11(f) of the 1993 Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 5,
each Person, if any, who controls a Holder within the meaning of this Section 15
of the 1933 Act or  Section  20 of the 1934 Act  shall  have the same  rights to
contribution as such Holder,  and each director of the Company,  each officer of
the Company who signed the Registration Statement,  and each Person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.

                  Section 6. MISCELLANEOUS.
                             -------------

                  (a)  REMEDIES.  In the event of a breach by the Company of any
of its obligations under this Agreement,  each Holder and Permitted Holders,  in
addition to being entitled to exercise all rights provided herein, or granted by
law, including recovery of damages,  will be entitled to specific performance of
its rights under this Agreement.  The Company agrees that monetary damages would
not be adequate  compensation  for any loss incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agrees that in the
event of any action for specific performance in respect of such breach, it shall
waive the defense that a remedy at large would be adequate.

                  (b) NO INCONSISTENT AGREEMENTS.  The Company and the Permitted
Holders will not enter into any agreement which is inconsistent  with the rights
granted to the Holders of Warrants and Registrable  Securities in this Agreement
or otherwise  conflicts  with the provisions  hereof.  The rights granted to the
Holders  hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's  other issued and outstanding
securities, if any, under any such agreements.

                  (c) NO PIGGY-BACK ON DEMAND  REGISTRATIONS.  The Company shall
not  grant  to any of its  securityholders  (other  than  the  Holders  in  such
capacity)  the right to  include  any of their  securities  in any  Registration
Statement filed pursuant to a Demand Registration.

                  (d) AMENDMENTS AND WAIVERS.  The provisions of this Agreement,
including  the  provisions  of this  sentence,  may not be amended,  modified or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given,  otherwise than with the prior written  consent of the Holders
and  Permitted  Holders  of not less  than a  majority  of the then  outstanding
Warrants and each class and series of Registrable Securities and with respect to
Sections affecting the rights or obligations of the Permitted Holders hereunder,
the Permitted Holders who hold not less than a majority of shares of the capital
stock held by the Permitted Holders;  PROVIDED,  HOWEVER, that, for the purposes
of this Agreement,  Warrants and Registrable Securities that are owned, directly
or  indirectly,  by the Company or any of their  Affiliates are not deemed to be
outstanding.  Notwithstanding the foregoing,  a waiver or consent to depart from
the provisions  hereof with respect to a matter that relates  exclusively to the
rights of one or more Holders and  Permitted  Holders and that does not directly
or indirectly affect the rights of other Holders and other Permitted Holders may
be given by a  majority  of the  Holders  and  Permitted  Holders  so  affected;
PROVIDED,  HOWEVER,  that the  provisions  of this  sentence may not be amended,
modified  or  supplemented  except  in  accordance  with the  provisions  of the
immediately  preceding sentence.  Notwithstanding  the foregoing,  no amendment,
modification,  supplement,  waiver or consent with respect to Section 5 shall be
made or given  otherwise than the prior written  consent of each Person affected
thereby.

                  (e) NOTICES. All notices and other communications provided for
or permitted  hereunder  shall be made in writing by hand  delivery,  registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (i)
if to a Holder or a Permitted Holder, at the most current address of such Holder
or such  Permitted  Holder as set forth in the  register for the Warrants or the
Registrable  Securities or the securities  owned by the Permitted  Holders,  and
(ii) if to the Company, as provided in the Warrant Agreement.

                  All such  notices and  communications  shall be deemed to have
been duly given:  at the time delivered by hand, if personally  delivered;  five
Business Days after being  deposited in the mail,  postage  prepaid,  if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next  Business  Day, if timely  delivered to an air courier  guaranteeing
overnight delivery.

                  (f) SUCCESSORS AND ASSIGNS.  This Agreement shall inure to the
benefit of and be binding upon the successors  and permitted  assigns of each of
the parties and shall inure to the benefit of each Holder.  If any transferee of
any Holder  shall  acquire  Registrable  Securities,  in any manner,  whether by
operation of law or  otherwise,  such  Warrants,  Warrants  Shares or securities
shall be held subject to all of the terms of this  Agreement,  and by taking and
holding such securities such Person shall be conclusively  deemed to have agreed
to be bound by and to perform all of the terms and  provisions of this Agreement
and such Person  shall be entitled to receive the benefits  hereof.  The Company
may not assign  any of its rights or  obligations  hereunder  without  the prior
written  consent of each Holder of Registrable  Securities and each  indemnified
party under  Section  5(a).  Notwithstanding  the  foregoing,  no  successor  or
assignee of the Company shall have any rights granted under the Agreement  until
such person shall  acknowledge its rights and obligations  hereunder by a signed
written statement of such person's acceptance of such rights and obligations.

                  (g) COUNTERPARTS. This Agreement may be executed in any number
of  counterparts  and by the parties  hereto in separate  counterparts,  each of
which when so executed  shall be deemed to be an original and all of which taken
together shall constitute one and the same Agreement.

                  (h)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
                       -------------
 CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  (i)  SEVERABILITY.   If  any  term,  provision,   covenant  or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an  alternative  means to
achieve the same or substantially  the same result as that  contemplated by such
term, provision,  covenant or restriction.  It is hereby stipulated and declared
to be the  intention of the parties that they would have  executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

                  (j)  HEADINGS.   The  headings  in  this   Agreement  are  for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning  hereof.  All  references  made  in  this  Agreement  to  "Section"  and
"paragraph"  refer  to such  Section  or  paragraph  of this  Agreement,  unless
expressly stated otherwise.

                  (k)  ENTIRE  AGREEMENT.  This  Agreement,  together  with  the
Warrant  Agreement,  is intended by the parties as a final  expression  of their
agreement,  and is  intended to be a complete  and  exclusive  statement  of the
agreement  and  understanding  of the  parties  hereto in respect of the subject
matter  contained herein and therein.  This Agreement and the Warrant  Agreement
supersede  all prior  agreements  and  understandings  between the parties  with
respect to such subject matter.

                  (l) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever
the  consent or approval of Holders of a  specified  percentage  of  Registrable
Securities or Warrants is required hereunder, Registrable Securities or Warrants
held by the Company or by any of its affiliates (as such term is defined in Rule
405 under the  Securities  Act) shall not be counted (in either the numerator or
the  denominator)  in determining  whether such consent or approval was given by
the Holders of such required percentage.

<PAGE>

                  IN WITNESS  WHEREOF,  the parties have executed this Agreement
as of the date first written above.

                                           PATHNET TELECOMMUNICATIONS, INC.

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

                                           SPECTRUM EQUITY INVESTORS, L.P.,
                                           In its Capacity as a Permitted Holder

                                           By:/s/ Chris J Maroni
                                           ------------------------------------
                                           Name:  K. J. Maroni
                                           Title: illegible

                                           NEW ENTERPRISE ASSOCIATES VI,Limited
                                           Partnership,
                                           In its Capacity as a Permitted Holder

                                           By: /s/ illegible
                                           ------------------------------------
                                           Name:
                                           Title:

                                           ONSET ENTERPRISE ASSOCIATES II, L.P.,
                                           In its Capacity as a Permitted Holder
                                           By:

                                           By: /s/ R Kuhling
                                           ------------------------------------
                                           Name: Robert F. Kuhling
                                           Title: General Partner
                                                  The General Partner of
                                                  ONSET Enterprise Associates II
                                                       L.P.

                                           FBR TECHNOLOGY VENTURE PARTNERS,L.P.,
                                           In its Capacity as a Permitted Holder

                                           By: /s/ illegible
                                           ------------------------------------
                                           Name:  Gene Riechers
                                                  Managing Director
                                                  FBR Technology Venture
                                                       Partners, L.P.

<PAGE>

                                           TORONTO DOMINION CAPITAL (USA) INC.,
                                           In its Capacity as a Permitted Holder

                                           By:/s/ Martha L. Gariepy
                                           ------------------------------------
                                           Name:  Martha L. Gariepy
                                                  Secretary/Treasurur

                                           GROTECH PARTNERS IV, L.P.,
                                           In its Capacity as a Permitted Holder

                                           By:/s/ Patrick J. Kerins
                                           ------------------------------------
                                           Name: Patrick J. Kerins
                                           Title: Managing Director

                                             /s/ Richard Jalkut
                                           ------------------------------------
                                           Richard A. JalkutPortions  of this exhibit have been  omitted and filed  separately  with
           the Securities and Exchange Commission. These portions are
                             designated "[ * * * ]."

                                                                    Exhibit 10.3

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

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

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

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

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

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

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

                                       -1-
<PAGE>

            NOW, THEREFORE, Pathnet and BNSF agree as follows:

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

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

            2.    Right to Lease.

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

            3.    Procedure to Obtain a Lease.

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

                                       -2-
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            5.    Limitation on Pathnet's Right to Lease.

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

                                       -5-
<PAGE>

            6.    Contribution to Pathnet.

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

            7.    Fiber Optic Network Development Schedule.

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

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

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

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

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

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

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

                                       -6-
<PAGE>

            8.    Reporting Relative to Fiber Optic Network Development
                  Schedule.

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

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

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

            10.   Compliance with Laws.

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

            11.   Limitations on BNSF's Ownership Rights.

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

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

            12.   Confidentiality.

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

            13.   No Assignment.

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

                                       -8-
<PAGE>

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

            14.   Limitation on Damages for Breach of this Agreement.

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

            15.   Taxes and Other Charges.

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

                                       -9-
<PAGE>

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

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

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

            16.   Notices.

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

                  (1)      if to Pathnet:

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

                                      -10-
<PAGE>

                  (2)      if to BNSF:

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

                           and to:

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

            18.   Brokers and Agents.

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

            19.   Force Majeure.

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

            20.   Severability.

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

                                      -11-
<PAGE>

            21.   Amendment.

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

            22.   Entire Agreement.

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

            23.   Applicable Law.

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

            24.   Counterparts.

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

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

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

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

                                      -12-
<PAGE>

                                    EXHIBIT A

                                  FORM OF LEASE

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

                                                                       EXHIBIT B

                            FORM OF FIBER OPTIC LEASE

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

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

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

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

            NOW THEREFORE, Pathnet and BNSF agree as follows:

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

                                        1
<PAGE>

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

                                        2
<PAGE>

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

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

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

                                        3
<PAGE>

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

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

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

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

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

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

                                        4
<PAGE>

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

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

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

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

                                        5
<PAGE>

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

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

            8. Fiber Optic Capacity for BNSF.

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

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

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

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

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

                                        6

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

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

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

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

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

                                        7

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

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

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

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

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

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

            9.    Construction and Operation of Fiber Optic Facilities.

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

                                        9
<PAGE>

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

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

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

                                       10
<PAGE>

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

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

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

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

                                       11
<PAGE>

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

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

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

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

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

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

                                       12
<PAGE>

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

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

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

                                       13
<PAGE>

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

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

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

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

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

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

                                       14
<PAGE>

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

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

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

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

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

                                       15
<PAGE>

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

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

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

            10.   Entry Notice.

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

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

                                       16
<PAGE>

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

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

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

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

                                       17
<PAGE>

            12.   Track Support: Materials Storage.

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

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

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

            14.   Relocations.

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

                                       18
<PAGE>

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

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

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

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

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

                                       19
<PAGE>

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

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

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

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

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

                                       20
<PAGE>

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

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

            19.   Insurance.

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

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

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

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

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

                                       21
<PAGE>

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

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

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

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

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

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

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

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

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

                                       22
<PAGE>

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

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

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

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

            20.   Liens.

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

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

            21.   Liaison, Dispute Resolution and Arbitration.

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

                                       23
<PAGE>

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

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

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

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

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

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

            22.   Representations and Warranties.

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

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

                                       24
<PAGE>

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

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

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

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

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

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

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

            24.   Recordings, Taxes and Other Charges.

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

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

                                       25
<PAGE>

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

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

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

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

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

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

                                       26
<PAGE>

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

            26.   Confidentiality.

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

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

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

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

            27.   Assignment.

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

                                       27
<PAGE>

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

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

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

                                       28
<PAGE>

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

            (1)   if to Pathnet:

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

                  and to:

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

            (2)   if to BNSF:

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

                  and to:

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

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

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

                                       29
<PAGE>

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

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

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

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

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

            35.   Interpretation; Construction.

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

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

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

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

                                       30
<PAGE>

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

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

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

                                       31
<PAGE>
                                    EXHIBIT A

                        [to be agreed to by the parties]

<PAGE>
                                    EXHIBIT B

                           Map of BNSF Railway Network

                        [to be agreed to by the parties]

<PAGE>
                                    EXHIBIT C

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

                        [to be agreed to by the parties]

                                      -13-
<PAGE>

                                    EXHIBIT B

                               EXCLUSIVE CORRIDORS

                                     Approx.
Corridor                            Route
Description                         Miles

[* * *]                            [* * *]

Total:                              4,052

                                      -14-
<PAGE>

                                    EXHIBIT C

                              RESTRICTED CORRIDORS

                                     Approx.
Corridor                            Route
Description                         Miles

[* * *]

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

                                      -16-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00009-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00009-of-00352.parquet"}]]