Document:

<PAGE>   1
                                                                  EXHIBIT 10.11

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

         THIS AGREEMENT IS DELIVERED WITH THE EXPRESS UNDERSTANDING THAT
      CSX TRANSPORTATION, INC.'S LEGAL COUNSEL WILL HAVE THE RIGHT OF FINAL
                    REVIEW AND APPROVAL PRIOR TO EXECUTION.

                             FIBER OPTIC ACCESS AND
                                LICENSE AGREEMENT

                               dated as of ________, 1999

                                     between

                            CSX TRANSPORTATION, INC.
                     A VIRGINIA CORPORATION, FOR ITSELF AND
    AS OPERATOR FOR NEW YORK CENTRAL LINES LLC, A DELAWARE LIMITED LIABILITY
   COMPANY AND A WHOLLY-OWNED SUBSIDIARY OF CONSOLIDATED RAIL CORPORATION, A
                            PENNSYLVANIA CORPORATION

                                       and

                        PATHNET TELECOMMUNICATIONS, INC.,
                             a Delaware corporation

<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE                                                                     PAGE
<S>       <C>                                                              <C>
   1.      Certain Definitions
   2.      License
   3.      Term
   4.      Exclusivity
   5.      Equity Consideration
   6.      Title Limits
   7.      Third Party Joint Facilities and Trackage Rights
   8.      Conduit (Innerduct); Fiber; and Capacity
   9.      Disclaimer
</TABLE>

<TABLE>
<CAPTION>
EXHIBIT SUMMARY
<S>                                    <C>
  Exhibit 1                             Form Build Supplement
  Exhibit 2                             Description of NYC and CSXT Corridor
  Exhibit 3                             Depiction of Radii Around Tier Cities
  Exhibit 4                             Designation of Tier Cities
  Exhibit 5                             Depiction of [* * *] and [* * *] Builds
  Exhibit 6                             Initial Designation of NYC Corridor
  Exhibit 7                             [* * *]
</TABLE>
<PAGE>   3

                    FIBER OPTIC ACCESS AND LICENSE AGREEMENT

      THIS FIBER OPTIC ACCESS AND LICENSE AGREEMENT (this "License Agreement")
is made as of ___________, 1999 ("Effective Date"), by and between CSX
TRANSPORTATION, INC., a Virginia corporation ("CSXT"), for itself and as
operator for New York Central Lines LLC, a Delaware limited liability company
("NYC Lines") and a wholly owned subsidiary of Consolidated Rail Corporation, a
Pennsylvania corporation (CSXT and NYC Lines, collectively, the "Railroad"),
whose mailing address is 500 Water Street, Jacksonville, Florida 32202, and
PATHNET TELECOMMUNICATIONS, INC., a Delaware corporation ("Pathnet"), whose
mailing address is 1015 31st Street, N.W., Washington, D.C. 20007.

                                R E C I T A L S:

      A. Railroad is the owner or operator of a continuous right-of way (by fee,
easement, license, operating agreement, joint use agreement or other interest)
within certain real property upon which it operates an interstate rail
transportation system, as shown on Railroad's current System Map (hereinafter
referred to as the "Rail Corridor").

      B. Pursuant to the Contribution Agreement and Stockholder Agreement being
executed in connection herewith, Pathnet desires to enter into an agreement with
Railroad to permit Pathnet to install, market, sell and/or maintain a Fiber
Optic Communication System, including Conduit (Innerduct), Cable, Optical Fibers
and related equipment and structures, along, in and on up to [ * * * ] miles of
Rail Corridor, along Segments of the Rail Corridor to be selected in accordance
herewith.

     C. Pursuant to the Contribution Agreement and Stockholder Agreement being
executed in connection herewith, Railroad is willing to transfer certain
property interests to Pathnet in exchange for stock in Pathnet, provided that
Pathnet accepts a license to use the selected Segments of the Rail Corridor
subject to all of the terms and conditions of this License Agreements and the
Right of Way Operating Agreement being entered into by and between Railroad and
Pathnet concurrently herewith (hereinafter, the "Operating Agreement" and,
together with this License Agreement, the "Agreements"), which Agreements
provide, among other things, that (i) the license granted thereby shall be
subject to the existing rights and interests of other parties, including,
without limitation, [ * * * ] and [ * * * ], and (ii) Railroad makes no
representation or warranty with respect to its right, title or interest, if any,
in and to any portion of the Rail Corridor or its right to grant any type of
license or other right for any party, including Pathnet, to use or occupy the
same.

      NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Railroad and Pathnet hereby agree as
follows:

                                      2
<PAGE>   4

1.    CERTAIN DEFINITIONS.

1.1 General Interpretive Principles. For purposes of this License Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
(i) the terms defined in this Section have the meanings assigned to them in this
Section and include the plural as well as the singular, and the use of any
gender in this License Agreement shall be deemed to include the other gender;
(ii) the word "including" means "including, but not limited to," and (iii) the
article, section and paragraph headings in this License Agreement are for
convenience only and are not intended to describe, interpret, define or limit
the scope, extent, or intent of any of the provisions of this License Agreement.

      1.2 Incorporation of Recitals. The Recitals set forth above are
incorporated herein by this reference.

      1.3 Definitions. As used in this License Agreement, the following terms
shall have the following respective meanings (unless otherwise expressly
provided):

      "Affiliate" shall mean any Person that, directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under common
control with, another Person. The term "control," for this purpose, shall mean
the ability, whether by the ownership of shares or other equity interest, by
contract or otherwise, to elect a majority of the directors of a corporation,
independently to select the managing partner of a partnership or the managing
member of a limited liability company, or otherwise to have the power
independently to remove and then select a majority of those Persons exercising
governing authority over an entity. Control shall be conclusively presumed in
the case of the direct or indirect ownership of fifty percent (50%) or more of
the equity interests in an entity.

      "Agreements" shall be as defined in Recital C.

      "Broadform Telecommunications Rights" shall mean, exclusive of the Limited
Telecommunications Rights granted hereunder, the right of owners of and other
parties with interests in the land underlying the Rail Corridor to license
generally, for telecommunications purposes, any and all portions of Rail
Corridor.

      "Build Supplement" shall have the meaning set forth in Section 2.6 below

      "Cable" shall mean a single cable containing Optical Fiber, and any
support material and protective casing, capable of transmitting data or voice
communications in a Fiber Optic Communication System.

      "Conduit (Innerduct)" shall mean a single duct or pipe, not exceeding two
inches (2") inside diameter (or similar cross sectional equivalent), except
where specifically required or approved by Railroad, suitable for housing a
Fiber Optic Cable.

      "Construction Exclusivity" shall have the meaning set forth in Section 4.2
below.

      "Construction Plans" shall mean the drawings, plans and specifications for
the construction and installation of Pathnet's System and Facilities, showing
the proposed location of all Pathnet's System and Facilities, in sufficient
detail, with distance shown from nearest track, with separate detailed drawings
of all junction, Repeater (Regen) Sites, bridge and tunnel occupancies, showing
depth of installation, details and methods

                                       3
<PAGE>   5

of the proposed construction, with numbers and size of Conduit(s) (Innerduct(s))
to be placed, including Optical Fiber count and total mileage for each Segment.
Construction Plans shall clearly note Railroad Valuation Map references,
Railroad Survey Station and Milepost references for all beginning and ending
points and all alignment transition points. Each set of Construction Plans for
each Segment shall have an overview map showing all of the required information.

      "Construction Schedule" shall have the meaning set forth in Section 2.6

below

      "Contribution Agreement" shall mean that certain Contribution Agreement
dated as of _____________, 1999 by and between, among others, Railroad and
Pathnet.

      "CSX Conduits" shall have the meaning set forth in Section 8.5 below.

      "CSXT Corridor" shall mean, subject to Section 2.1 of this Agreement, all
of the Rail Corridor exclusive of the NYC Corridor, as described in Exhibit 2,
attached hereto and incorporated herein.

      "Designated Rail Corridor" shall mean a Segment of the Rail Corridor
selected by Pathnet and approved by Railroad in accordance with the terms of the
Agreements.

      "Designation Period" shall have the meaning set forth in Section 2.6
below.

      "Exclusivity Period" shall have the meaning set forth in Section 4.2
below.

      "Facilities", when applied to property of or installed by Pathnet, shall
mean Conduit (Innerduct), Cable, carrier pipes, Pathnet wires and poles, Optical
Fibers, junctions, Repeaters (Regens), Handholds, terminals, power sources,
fault alarm system(s), emergency equipment storage shelters, attachments, and
all other structures and articles of personal property connected with, necessary
for, appurtenant to, or useful to the installation, operation, maintenance,
repair, re-installation, replacement, relocation or removal of Pathnet's Fiber
Optic Communication System.

      "Fiber Optic" or "Optical Fiber" shall mean a strand of optical waveguide
permitting the transmission of communications signals.

      "Fiber Optic Communication System" or "System" shall mean the system
utilizing Optical Fiber as the medium for communications and transmission to be
installed by Pathnet in the Designated Rail Corridor, which may contain
Conduit(s) (Innerducts(s)), Cable(s) and Optical Fiber(s). Such terms shall
include all Conduit (Innerduct), Cable, Optical Fiber, Handholds, manholes,
marker tape, signs, coupler, structure attachment, pull rope, other necessary
ancillary hardware, and bridge, tunnel and trestle attachments, and shall also
include such communications technologies as may hereafter evolve from or
relating to Optical Fiber but which utilize Pathnet's Facilities and/or System
as initially installed or as thereafter modified pursuant to the Agreements.

      "Handholds" shall include Cable loops, or boxes or vaults placed in or
above ground at junctions, Repeaters (Regens) or at areas of Cable splicing and
connection, for storage of slack Cable.

      "Interest Notice" shall have the meaning set forth in Section 4.2 below.

      "License" shall have the meaning set forth in Section 2.1 below.

      "Limited Telecommunications Rights" shall mean Pathnet's right to
construct, install, operate, repair and maintain the Facilities and System as
more particularly described in, and subject to the terms and conditions of, the
Agreements, including, without limitation, those contained in Article 6 of the
License Agreement.

      "Negotiation Exclusivity" shall have the meaning set forth in Section 4.2
below.

      "NYC Corridor" shall mean that certain portion of the Rail Corridor
operated by CSXT pursuant to that certain Operating Agreement dated as of June
1, 1999 by and

                                       4
<PAGE>   6

between NYC Lines, as owner, and CSXT, as operator, as described in Exhibit 2,
attached hereto and incorporated herein.

      "Operating Agreement" shall have the meaning set forth in Recital C above.

      "Optical Fiber" shall mean Fiber Optic.

      "Person" shall mean any individual, association, partnership, limited
liability company, corporation, joint stock company, trust, joint venture,
unincorporated organization or governmental entity or any department, agency or
political subdivision thereof.

     "[ * * * ] Obligations" shall mean that Railroad, in accordance with that
certain Agreement, dated as of [ * * * ], between Railroad and [ * * * ], now
known as [ * * * ], shall refer Pathnet's Route Plan on CSXT Corridor to
[ * * * ], in writing, and [ * * * ] shall have ten (10) business days from
receipt to confirm its intent to negotiate with Pathnet for the installation of
a proposed portion of the Pathnet System. If [ * * * ] declines to negotiate
with Pathnet or fails to advise Railroad of its intent to negotiate within ten
(10) business days following its receipt of notification, the terms of this
Agreement shall become operative as to the Build Supplement evidenced by the
Route Plan, except in those areas subject to the following exclusivity
provisions. In addition, [ * * * ] has exclusivity on those segments of CSXT
Corridor on which [ * * * ] has commenced installation of its fiber optic
communications system. Such exclusivity does not apply: (i) to any segment in
which all conduit or fiber optic capacity has been sold or utilized; and (ii)
to third party installations of ten (10) miles or less.

      "Rail Corridor" shall have the meaning set forth in Recital A above.

      "Railroad Duct" shall have the meaning set forth in Section 8.1 below.

      "Repeater (Regen)" shall mean a device which regenerates, amplifies or
extends optical signals, used to send the light impulse through Optical Fiber,
and includes attendant equipment, facilities, power source, and technological
changes.

      "Repeater (Regen) Sites" shall mean those permitted portions of the Rail
Corridor on which Repeaters (Regens) are located, and shall be limited to an
area of five hundred (500) square feet or less, and located beyond the
Restricted Working Area, unless otherwise specifically permitted in writing by
Railroad.

      "Restricted Working Area" shall mean the area parallel to and located
thirty feet (30') (or the top of any ditch slope if that distance is greater
than thirty feet (30')) from the centerline of the outermost track (on each
side) in the Rail Corridor.

       "Segment" shall mean either a longitudinal section of Rail Corridor or a
longitudinal section of Conduit (Innerduct) or Cable installed by Pathnet, as
applicable.

      "Stockholder Agreement" shall mean that certain Stockholder Agreement
dated as of ____________, 1999 by and between, among others, Railroad and
Pathnet.

      "Substitution Notice" shall have the meaning set forth in Section 4.2
below.

      "System" shall mean Fiber Optic Communication System.

      "System Map" shall mean Railroad's line map, published periodically,
designating the general location of the Railroad's operating lines.

                                       5
<PAGE>   7

      "Term" shall have the meaning set forth in Section 3.1 below.

      "Title Deficient Areas" shall mean those portions of the Rail Corridor, if
any, for which Railroad holds title in less than fee simple absolute and for
which Railroad may not otherwise have the right to grant to Pathnet the license
for use and occupancy as contemplated by this License Agreement.

      "Trackage Rights" shall mean the rights arising by agreement of one
railroad to use the tracks or right-of-way of another railroad for the carriage
of rail traffic; said agreement ordinarily imparting no ownership interest in
the burdening carrier relating to the tracks or rights-of-way of the burdened
carrier.

      "[*   *   *] Obligations" shall mean that in CSXT Corridor occupied by a
fiber optic communications system installed by [*   *   *] (or any predecessor
entity) (collectively "[*   *   *]") or, in any CSXT Corridor over which [* * *]
has exercised its option to install its system within the preceding [*   *   *]
prior to the date of the applicable Build Supplement, Pathnet's System shall not
be installed in any length longer than [*   *   *] contiguous miles and no
closer than [*   *   *] from any existing [*   *   *] facility. For the purposes
of this limitation only, any two (2) Segments of Pathnet's Fiber Optic
Communications System of which the respective ends are less than [* * *] apart
shall be deemed a single Segment and the aggregate length of such two (2)
Segments (but not the length between the respective ends of such Segments) shall
be considered in determining contiguous mileage.

      2.    LICENSE

      2.1 Grant of License. (a) Subject to the terms and conditions contained in
the Agreements, including, without limitation, Article 6 of this Agreement,
Railroad hereby grants to Pathnet a license of Limited Telecommunications
Rights, for the Term and upon the conditions, covenants and agreements set forth
in the Agreements, to select up to [*  *  *] miles of Rail Corridor (including
up to 2,000 miles of NYC Corridor) to be designated (as provided herein and
subject to Railroad's approval rights as set forth in the Agreements) as
Designated Rail Corridor and to use such Designated Rail Corridor for the
purpose of constructing, installing, operating, maintaining, repairing,
replacing and removing (and including rights of access subject to the
conditions, covenants and agreements set forth in the Agreements) a Fiber Optic
Communications Systems containing no more than eight (8) Conduits (Innerducts)
and an unlimited number of Optical Fibers therein, together with necessary
appurtenant equipment and structures (the "License"). Subject to Railroad's
prior consent, which may be withheld in Railroad's sole discretion, Pathnet may
install additional Conduits (Innerducts), if Railroad and Pathnet can reach
agreement on how to share in the revenue resulting from sales of such Conduits
(Innerducts) or the Optical Fiber contained therein.

            (b) With respect to CSXT Corridor located within the State of
[*   *   *], Pathnet acknowledges the pendancy of certain class action litiga-
tion concerning the use of railroad rights of way by telecommunications
companies. During the pendancy of this or any related litigation, Pathnet shall
not have any right under this Agreement to install its System or Facilities upon
CSXT Corridor in the State of [*   *   *] without the prior written consent of
Railroad, which shall not be unreasonably withheld, provided however, that if
the court rules that telecommunications companies (such as Pathnet), cannot
install their systems and facilities on such rights of way, Pathnet shall have
the obligation, prior to the installation of any portion of its System or
Facilities on the CSXT Corridor in the State of [*   *   *], to acquire Broad-
form Telecommunications Rights sufficient in Railroad's reasonable discretion to
authorize such installation. Pathnet understands and agrees that any Broadform
Telecommunications Rights acquired by Pathnet are subject to the terms and
conditions of this License Agreement.

      2.2 Acknowledgement of Condition of Title. Pathnet understands,
acknowledges and agrees that (a) portions of the Designated Rail Corridor may be
in Title Deficient Areas, and (b) Pathnet accepts the License in any Title
Deficient Areas

                                       6
<PAGE>   8
 subject to the terms and conditions of the Agreements. Subject to the
provisions of this Article 2, with respect to any Segment of the Designated Rail
Corridor in Title Deficient Areas, the License herein granted Pathnet shall
include the additional right in favor of Pathnet to procure all Broadform
Telecommunications Rights from third parties as Pathnet determines are necessary
to enable it to construct, install, operate, maintain, repair, replace and
remove Pathnet's Facilities and System in such Title Deficient Areas provided
that Pathnet shall not acquire exclusive Broadform Telecommunications Rights
(such that the underlying fee owner no longer has the right to grant such rights
to third parties) without the prior written consent of Railroad, which may be
withheld in Railroad's sole discretion. All provisions of the Agreements,
including, but not limited to, Pathnet's obligations for the payment or other
delivery of the consideration described in this License Agreement, shall apply
as between Railroad and Pathnet with respect to any Title Deficient Areas,
notwithstanding that Pathnet's right to occupy the Title Deficient Areas is or
may be derived, in whole or in part, from Broadform Telecommunications Rights
obtained by Pathnet from third parties. The License is made and given subject to
the [* * *] Obligations, the [*   *   *] Obligations and the rights and
interests of all other third parties, existing as of the Effective Date or the
date of any Build Supplement.

      2.3 Operating Agreement. The parties acknowledge and agree that the
License shall be exercised in accordance with the terms and provisions of this
License Agreement and the Operating Agreement, the terms of which are
incorporated herein by this reference. In the event of any conflict between the
Operating Agreement and this License Agreement with respect to any rights or
obligations under this License Agreement, the terms of this License Agreement
shall control. Notwithstanding any contrary provision in the Agreements, the
parties agree that (i) any dispute relating to this License Agreement, except a
dispute arising under Section 8.5 hereof, shall not be subject to Article 25
(Liaison; Coordination and Dispute Resolution) of the Operating Agreement, it
being the specific intention of the parties to litigate any and all disputes
hereunder, without resort to arbitration or mediation, and (ii) the
indemnification provisions contained in this License Agreement shall not be
governed or affected by Article 17 (Liability; Indemnity) of the Operating
Agreement.

      2.4 Transfer of Broadform Telecommunications Rights. In the event that
Pathnet obtains Broadform Telecommunications Rights with respect to any Title
Deficient Areas that provide use and occupancy rights in excess of the Limited
Telecommunications Rights granted by Railroad to Pathnet pursuant to the
Agreements, then Pathnet shall immediately offer, by way of assignment, to
convey such Broadform Telecommunications Rights to Railroad. Upon receipt of
Pathnet's offer of assignment, Railroad shall promptly determine, in its sole
and absolute discretion, to accept such assignment or reject the same. In the
event Railroad accepts such assignment, Railroad shall pay to Pathnet, fifty
percent (50%) of the actual direct out of pocket costs (exclusive of Pathnet's
internal overhead) incurred by Pathnet in connection with the acquisition of
such rights together with the actual direct costs including overhead of any
Pathnet field personnel to the extent dedicated to such acquisition.

                                       7
<PAGE>   9

          2.5 Sublicenses. Pathnet may sell, lease, license, or otherwise grant
rights in and to Optical Fibers, telecommunications capacity, Conduit
(Innerduct) or other portions of Pathnet's System on such terms as Pathnet may
determine in its sole discretion. Pathnet may also involve customers or
co-development or strategic partners in the installation of Pathnet's System on
Designated Rail Corridors on such terms as Pathnet determines, in its sole
discretion. Any such arrangements shall be expressly subject and subordinate to
the terms and conditions of the Agreements, Pathnet shall remain fully liable
for its obligations under the Agreements, Pathnet shall remain the sole point of
contact with Railroad in connection with such arrangements, and Pathnet shall be
responsible for and shall supervise any and all activities on or affecting the
Designated Rail Corridor. Pathnet shall have no right to sell, sublicense or
otherwise transfer the right to access any portion of the Designated Rail
Corridor to a third party without the prior written consent of Railroad, which
consent may be withheld in Railroad's sole discretion.

      2.6 Selection and Development of Rail Corridor. Pursuant to one or more
supplements to this License Agreement, the form of which is attached hereto as
Exhibit 1 (each a "Build Supplement"), Pathnet shall, except as otherwise
provided herein, designate as Designated Rail Corridor for its System and
Facilities up to the maximum number of miles of Rail Corridor authorized
hereunder. Pathnet may designate such Designated Rail Corridor at any time
during the first [*   *   *] years after the Effective Date (the "Designation
Period"). Railroad shall approve each Build Supplement within thirty (30) days
of submission thereof unless such approval cannot be granted due to existing
contractual or other legal limitations, safety concerns, operational or
engineering conflicts or interference with existing or foreseeable future
development of the Rail Corridor for railroad purposes. Designation of the Rail
Corridor pursuant to an approved Build Supplement shall remove the designated
mileage from the mileage bank granted under this License Agreement. Together
with each Build Supplement, Pathnet shall also submit a proposed schedule of
construction (the "Construction Schedule") of its System and Facilities over the
Segment designated in the Build Supplement. Railroad shall have the right, to be
exercised in its reasonable discretion within thirty (30) days after submission,
to approve or reject any proposed Construction Schedule (giving the reasons for
any such rejection and leave for Pathnet to resubmit such Construction Schedule
within the Designation Period), provided that Pathnet shall commence physical
installation of Conduit (Innerduct) in the ground no sooner than sixty (60) days
after Railroad's approval of the Build Supplement and Construction Schedule, but
no later than three (3) years of Pathnet's submission of the applicable Build
Supplement, unless otherwise provided herein. If Pathnet fails to timely
commence such physical installation, Pathnet shall be prohibited from installing
any portion of its Facilities or System within such Segment and shall not be
entitled to any refund of the miles deducted (from the mileage bank granted
hereunder) as a result of such Build Supplement, provided that Pathnet may
submit a second Build Supplement and Construction Schedule for such Segment
during the Designation Period (which second submission shall be treated as an
initial submission hereunder).

                                       8
<PAGE>   10

      3.    TERM

      3.1 Term. Unless sooner terminated in accordance with the provisions of
the Agreements, the License, the Agreements and the rights granted under any
Build Supplement shall be for a term commencing as of the Effective Date and
ending thirty (30) years hence (the "Term").

      4.     EXCLUSIVITY

      4.1 Exclusive Rights. Except as set forth below in this Article 4,
Pathnet's rights and interests under the License and with respect to the
Designated Rail Corridor (including those portions of the Designated Rail
Corridor for which Pathnet obtains Broadform Telecommunication Rights) shall be
non-exclusive.

      4.2 NYC Corridor Development. For a period of three (3) years from the
Effective Date hereof (the "Exclusivity Period"), with respect to the Segments
of the NYC Corridor (up to a maximum of 2,000 miles) designated by Pathnet upon
execution of this License Agreement as set forth in Exhibit 6 hereof, Pathnet
shall have the exclusive right to place and operate its System and Facilities
within such Segment(s) (the "Construction Exclusivity"); provided, however, that
the foregoing exclusivity right will not apply to any Segment of less that [*
*   *] unless either (i) the Segment connects two cities in which Pathnet
establishes a point of presence; or (ii) the Segment connects Pathnet's network
on property that is not within the NYC Corridor to a city on the NYC Corridor in
which Pathnet establishes a point of presence. Notwithstanding the foregoing,
Pathnet will not have exclusivity rights within the radii around the cities
designated on Exhibits 3 and 4, attached hereto and incorporated herein. For the
four (4) years following the expiration of the Exclusivity Period (although the
foregoing exclusivity shall no longer apply), Railroad shall promptly notify
(the "Interest Notice") Pathnet in writing of any serious inquiries from third
parties who wish access to a Segment of the NYC Corridor which Pathnet and
Railroad have executed a Build Supplement for construction and installation of
Pathnet's System and/or Facilities. Within ten (10) days after its receipt of
the Interest Notice, Pathnet shall notify Railroad if it has a good faith
interest in pursuing negotiations with the interested third party. If Pathnet
fails to notify Railroad that it has an interest within such ten (10) day
period, then Pathnet shall be deemed to have conclusively waived its right to
negotiate with such third party. If Pathnet notifies Railroad that it is
interested in such negotiations within such ten (10) day period, Pathnet shall,
for a period of [*   *   *] after Pathnet's receipt of such Interest Notice,
have the exclusive right to negotiate with such third party with respect to

                                       9
<PAGE>   11
 such third party's access, construction, installation and/or use of a fiber
optic communications system along such Segment (the foregoing rights,
collectively "Negotiation Exclusivity"). If Pathnet and such third party have
not executed a definitive agreement within such [*   *   *] period, Railroad
shall be free to negotiate and enter into an agreement with such third party for
the development of the referenced Segments of the NYC Corridor. Upon written
notice to Railroad (the "Substitution Notice"), Pathnet may substitute
additional Segments of NYC Corridor for Segments of NYC Corridor previously
designated in Exhibit 6, provided that (i) any such substitute NYC Corridor
shall be subject to the rights of third parties in such NYC Corridor as of the
date of the Substitution Notice; (ii) the aggregate mileage of Pathnet's
designation of NYC Corridor (after deducting the mileage of the originally
designated Segment(s) and adding the mileage of the substitute Segment(s)) does
not exceed 2,000 miles; (iii) the Construction Exclusivity which initially
attached to the originally designated Segment(s) shall no longer apply to such
Segment(s) after the Substitution Notice; (iv) no Construction Exclusivity shall
attach to the substitute Segment(s); and (v) with respect to such substitute
Segment(s), the Negotiation Exclusivity shall commence upon the date of
completion of such substitute Segment(s) and shall continue for a period of four
(4) years following the expiration of the Exclusivity Period (even though the
Construction Exclusivity shall not apply).

      4.3 Third Party Non-Exclusive Grants. Except as provided in Section 4.2
above, Railroad may grant development rights for fiber optic and other
communication systems in the Rail Corridor (including the Designated Rail
Corridor) to any third party on a non-exclusive basis.

      4.4 Third Party Exclusive Grants. Except as provided in Section 4.2 above,
Railroad may grant development rights for fiber optic and other communication
systems in the Rail Corridor (including the Designated Rail Corridor) to any
third party on an exclusive basis; provided, however, that Pathnet shall not be
subject to such exclusivity provisions.

      4.5 Additional Restrictions. In addition to the foregoing restrictions,
Pathnet represents that (i) Pathnet will commence and diligently pursue to
completion the installation of its System and Facilities over five hundred (500)
miles of NYC Corridor in each of the first three (3) years after the Effective
Date hereof; and (ii) in all stages of its development of the NYC Corridor,
seventy five percent (75%) of the Designated Rail Corridor miles completed and
under development (in accordance with the applicable Construction Schedule(s))
will be in contiguous segments of at least two hundred (200) miles each. In the
event Pathnet breaches either of these representations, then as Railroad's sole
and exclusive remedy, Pathnet will automatically lose Construction Exclusivity
as to the entirety of the NYC Corridor except as to those Segments of NYC
Corridor which Pathnet has completed in accordance with this Section 4.5,
provided that Pathnet shall be entitled to Negotiation Exclusivity commencing on
the date of completion of any Segment(s) for which Construction Exclusivity was
lost hereunder and continuing for a period of four (4) years following the
expiration of the Exclusivity Period (even though the Construction Exclusivity
shall not apply).

      5.    EQUITY CONSIDERATION

      5.1 Consideration. As consideration for the License, Railroad shall
receive an equity interest in Pathnet pursuant to the Contribution Agreement.

      6.    TITLE LIMITS.

      6.1 General. Pathnet understands and acknowledges that Railroad occupies,
uses and possesses lands, rights-of-way and rail corridors under all forms and
qualities of ownership rights or facts, from fee simple absolute to bare
occupation. Accordingly, nothing in the Agreements shall act as or be deemed to
act as any warranty, guaranty or

                                       10
<PAGE>   12

representation of the quality or quantity of Railroad's title in and to any
particular Segment occupied, used or enjoyed in any manner by Pathnet under any
rights created in the Agreements. It is expressly understood that Railroad does
not warrant title to any portion of the Rail Corridor, and Pathnet hereby
accepts the grants and privileges contained herein, subject to all lawful
outstanding existing liens, mortgages and superior rights or interests in and to
the Rail Corridor, and all leases, licenses and easements or other interests
previously granted to or reserved by others therein.

      6.2 Limitations of License. The term "License" herein shall mean: (a) with
regard to any portion of Rail Corridor which is owned by Railroad in fee simple
absolute or in which the uses contemplated hereunder are otherwise statutorily
authorized or approved by the state in which such Rail Corridor is located,
merely a "license"; (b) with regard to any portion of Rail Corridor owned,
occupied, used or controlled by Railroad in less than fee simple absolute (e.g.,
fee simple determinable, fee simple conditional, lease or rail easement or other
occupancy right), where the applicable law permits such grants by Railroad to
Pathnet, merely "a right of occupancy" commensurate with the term and extent of
Railroad's ownership, occupancy, etc; and (c)with regard to any portion of Rail
Corridor for which Railroad does not possess the right to license the same to
third parties for telecommunications purposes, the Agreements shall not convey
any rights to Pathnet except that Railroad merely waives its exclusive rights to
occupy, use and/or control the Rail Corridor commensurate with the term and
extent of such Railroad rights.

      6.3 Broadform Telecommunications Rights. Pathnet understands and agrees
that the rights conveyed hereunder may not be sufficient to permit installation
of its System and Facilities at all desired locations throughout the Designated
Rail Corridor. Accordingly, except as otherwise provided herein, Pathnet may, as
Pathnet reasonably deems necessary, obtain Broadform Telecommunication Rights in
accordance herewith before commencing construction on any Segment, provided,
however, that Pathnet understands and agrees that any such Broadform
Telecommunications Rights acquired by Pathnet within the Designated Rail
Corridor are subject to the terms and conditions of this License Agreement.

      6.4 Waiver of Claims. Pathnet agrees it shall not have and hereby
completely and absolutely waives its right to any claim against Railroad for
damages or any other legal or equitable relief on account of any deficiencies in
title to the Designated Rail Corridor.

      6.5 Indemnity. In addition to the indemnities contained in the Operating
Agreement, Pathnet shall indemnify, defend (at Pathnet's sole cost and expense,
with counsel selected and controlled by Railroad, if Railroad so requests) and
hold Railroad and its Affiliates, officers, directors, employees and agents
harmless from and against all claims or litigation for trespass, slander of
title, overburden of easement, or any other claims arising out of or based upon
(i) Pathnet's Conduit (Innerduct), Cable or Optical Fiber placement, or (ii) the
presence of Pathnet's Conduit (Innerduct), Cable or Optical

                                       11
<PAGE>   13

Fiber or other Facilities in, on or along the Designated Rail Corridor, or (iii)
Pathnet's failure to obtain sufficient Broadform Telecommunications Rights, or
(iv) the presence of Pathnet's purchasers, sublicensees, customers,
co-development or strategic partners, agents, invitees, their respective
employees or any other third party acting for the benefit or at the direction of
Pathnet or any such third party, on the Designated Rail Corridor, or their
individual or collective use of Pathnet's Conduit (Innerduct), Cable or Optical
Fiber or other Facilities in, on or along the Designated Rail Corridor, or (v)
the title related claims of Pathnet's purchasers, sublicensees, customers,
co-development or strategic partners, agents, invitees, their respective
employees or any other third party acting for the benefit or at the direction of
Pathnet or any such third party, including all claims for damages, including,
but not limited to, civil, criminal, compensatory, consequential, direct,
indirect, treble, exemplary, special, punitive and all other damages or
penalties of any kind available at law or in equity.. This indemnity shall
survive the expiration or termination of the Agreements. The foregoing indemnity
shall not be deemed to apply to any of the foregoing claims, liabilities, costs
or expenses to the extent attributable to Railroad's own operations or to
Railroad's grant of rights of way for fiber optic, utility or other uses to any
parties other than Pathnet.

      6.6 [*   *   *] Obligations and [*   *   *] Obligations. The License and
all other rights and interests granted pursuant to the Agreements and all of the
terms and provisions of the Agreements are made expressly subject to the [* * *]
Obligations and the [*   *   *] Obligations. The parties acknowledge that the
[*   *   *] Obligations and the [*   *   *] Obligations affect all or part of
the CSXT Corridor. The portions of the CSXT Corridor over which [*   *   *] and
[*   *   *] have installed conduit are depicted on Exhibit 5, attached hereto
and incorporated herein. Railroad shall promptly give written notice to Pathnet
of all future installations and/or designations of CSXT Corridor by Pathnet and
[*   *   *]. Nothing in this paragraph will be deemed to expand the [*   *   *]
or [*   *   *] Obligations beyond the scope of such obligations arising pursuant
to the agreements between Railroad and [*   *   *] and [*   *   *],
respectively.

      7.     THIRD PARTY JOINT FACILITIES AND TRACKAGE RIGHTS.

      7.1 This Agreement does not pertain to any occupancies over or
structures upon rights-of-way owned jointly by Railroad with another Person
which is not an Affiliate of Railroad or upon any Rail Corridor on which
Railroad has only Trackage Rights. Railroad, however, agrees to reasonably
cooperate with and assist Pathnet in obtaining any approvals of third parties
necessary to permit Pathnet to use any such jointly owned rights-of-way, and
agrees not to block Pathnet's application to use any portion of the Rail
Corridor on which Railroad only has Trackage Rights; provided, however, that
Pathnet shall reimburse Railroad, upon demand, for any costs, including
reasonable attorneys' fees, incurred by Railroad in connection with such
cooperation. The portion of the Rail Corridor over which Railroad possesses only
Trackage Rights are depicted on the Railroad System Map which has been made
available to Pathnet.

      8.    CONDUIT (INNERDUCT); FIBER; AND CAPACITY.

                                       12
<PAGE>   14

      8.1 Railroad Ducts and Signal Cable. Pathnet, at its sole cost and
expense, shall install one (1) two-inch (2.0") SDR-11 or equivalent single duct
or pipe, of not less than one and nine-tenths inches (1.9") inside diameter for
Railroad (the "Railroad Duct"). The Railroad Duct shall be installed by Pathnet
along the entire length of Designated Rail Corridors in which Pathnet installs
the Pathnet System and where installation of such Railroad Duct in addition to
the Conduits (Innerducts) to be installed by Pathnet, is physically feasible,
with such installation to be concurrent with Pathnet's Conduit (Innerduct)
installation. The Railroad Duct shall become the sole property of Railroad upon
installation, and Railroad, its successors and/or assigns, shall have the
exclusive right of use of such Railroad Duct. To the extent assignable, Pathnet
shall assign to Railroad, without charge, any service and product warranties
relating to such Railroad Duct that it obtains from its manufacturer and/or
installation contractor(s). The Railroad Duct may be used only for Railroad's
internal communications needs, and neither the Railroad Duct, nor Optical Fiber
therein, nor telecommunications capacity thereon, may be sold, assigned, leased,
licensed, or otherwise made available to third-parties, or used in connection
with any telecommunications business, until the earlier of (a) five (5) years
after completion of construction of the relevant Segment containing the Railroad
Duct, (b) the sale, option to purchase, or use by Pathnet of all installed
Conduits (Innerducts) or Optical Fibers on such Segment other than those held in
reserve by Pathnet, or (c) ten (10) years from the Effective Date hereof.

      8.2 Fiber Optic Capacity.

      A. Pathnet will provide up to [*  *  *] at no charge to Railroad, provided
that the maximum number of [*  *  *] miles shall not exceed [*  *  *] miles.
Such mileage shall be calculated in straight line (i.e. airline) miles, not
route miles. Pathnet will make such capacity available to Railroad at Pathnet's
points of presence, including at any central office where Pathnet is co-located,
where Pathnet has equipment in place to offer [*  *  *] service. Notwithstanding
the foregoing, Pathnet agrees that if and when it offers services in the cities
listed on [*  *  *] Pathnet will install equipment to offer [*  *  *] service
and will provide such [*  *  *] service to Railroad pursuant to this Agreement.
Railroad will be responsible for any costs required to transport such capacity
from Pathnet's point of presence to Railroad's required point of termination,
including costs of interconnection, provisioning, co-location of additional
required equipment, and the cost of any local loop, leased lines, or other means
of transport. At Railroad's request, Pathnet will arrange such transport and
interconnection costs, provided Railroad reimburses Pathnet for all actual and
reasonable costs incurred by Pathnet in connection therewith, including internal
costs, but excluding any overhead, without mark-up for profit. Prior to
incurring any such costs, Pathnet will discuss such arrangements with Railroad
so that the parties may identify the most cost-effective solution.

      B. The maximum cross-section of the capacity provided to Railroad
pursuant to this Section at any point shall not exceed [*  *  *] of the total
capacity of Pathnet's network at such point. In addition, the number of
[*  *  *] terminated at any point shall not exceed [*  *  *] of the capacity
terminated at such point.

      C. The capacity described in this Section may be utilized by Railroad and
its Affiliates for its internal communications only, and may not be sold,
assigned, leased, licensed, or otherwise made available to third-parties.

      8.3 Ability to Purchase Telecommunications Capacity. CSX shall also have
the right, subject to availability as determined by Pathnet in its reasonable
discretion, to purchase telecommunications capacity anywhere on Pathnet's entire
fiber optic communications system at prices at least as favorable as Pathnet is
then offering as its best rate to other unrelated parties for like amounts of
telecommunications capacity in like markets. The foregoing capacity may be used
only for Railroad's or any Railroad Affiliate's internal communications needs,
and may not be sold, assigned, leased, licensed, or otherwise

                                       13
<PAGE>   15

made available to third-parties.

      8.4 Last Available Build in Segment. If, in any Segment of Designated Rail
Corridor, Railroad determines that it is likely that Pathnet's construction
will, due to engineering or construction limitations, be the last Conduit
(Innerduct) placed or constructed within such Segment, Railroad may require
Pathnet to build additional Conduits (Innerducts) for Railroad's benefit. In
such event Railroad will pay a sum equal to the ratio of the additional
Conduit(s) (Innerduct(s)) installed in such Segment to the total number of
Conduits (Innerducts) installed therein, multiplied by the total actual direct
out of pocket costs (exclusive of Pathnet's internal overhead) of the entire
installation together with the actual costs (including overhead) of any Pathnet
field personnel to the extent dedicated to such installation. The foregoing
additional Conduits (Innerducts) will be subject to the same restrictions as
apply to the Railroad Duct.

      8.5 Boston to Framingham Conduits (Innerducts). On the Effective Date
hereof, Pathnet shall submit a Build Supplement and Construction Schedule for
the development of the Segment of Rail Corridor between Boston and Framingham,
provided that, notwithstanding any provision hereof to the contrary, Pathnet
shall commence physical installation of Conduit (Innerduct) in such Segment
within one (1) year of the Effective Date hereof. In connection with such
installation, Pathnet shall also install, at Pathnet's sole cost and expense,
four (4) two inch (2") Conduits (Innerducts) for Railroad's exclusive use and/or
for sale by Railroad to third parties (the "CSX Conduits"). The CSX Conduits
shall be in lieu of the Railroad Duct to be installed along such Segment by
Pathnet in accordance with Section 8.1. In the event that Pathnet determines
that the Boston to Framingham Segment is not commercially practicable (taking
into consideration Pathnet's obligation to install the CSX Conduits), Pathnet
shall not be obligated to install such Segment, provided that, in recognition of
the value of the CSX Conduits to Railroad, which constituted a material aspect
of the bargain achieved through the Agreements, Pathnet and Railroad shall
negotiate, in good faith, for Pathnet to deliver equivalent value to Railroad
pursuant to a mutually agreed alternative. If the parties are unable to agree
upon such mutually agreed alternative, the dispute shall be subject to Article
25 (Liaison; Coordination and Dispute Resolution) of the Operating Agreement.

      9.    DISCLAIMER

      9.1 Disclaimer Relating to Certain Information. Railroad does not warrant
the accuracy of those maps, descriptions and depictions attached hereto as
Exhibits 2, 3 and 5, nor does it warrant the accuracy of the Railroad Valuation
Maps or the Railroad System Map. Railroad states that such items were prepared
and are utilized in the ordinary course of Railroad's business. With respect to
Exhibit 5 only, Railroad's Assistant Vice President, T. R. Jackson, represents
that such Exhibit accurately depicts the current status of the occupancies of
[*   *   *] and [*   *   *] on CSXT Corridor, to the best of his knowledge.

      IN WITNESS WHEREOF, the undersigned have executed this License Agreement
as of the Effective Date.

                                       14
<PAGE>   16

                            CSX TRANSPORTATION, INC.,
                            a Virginia corporation, for itself and as Operator
                            for New York Central Lines, L.L.C.

                            By: ____________________________
                            Title: ___________________________

                            PATHNET TELECOMMUNICATIONS, INC.,

                            a Delaware corporation

                            By: _________________________
                            Title: ____________________________

                                       15

<PAGE>   17

                                    EXHIBIT 1
                        NYC BUILD SUPPLEMENT NO. -------

Utility Project Name:______________________________________________________
Segment:___________________________________________________________________
Railroad Project Name:_____________________________________________________

     THIS BUILD SUPPLEMENT NO._______ ("Build Supplement") is made as of this
_______ day of ____________________, _______ (the "Effective Date"), between CSX
TRANSPORTATION, INC., a Virginia corporation, as Operator for New York Central
Lines LLC, a Delaware limited liability company and a wholly owned subsidiary of
Consolidated Rail Corporation, a Pennsylvania corporation ("Railroad"), and
PATHNET TELECOMMUNICATIONS, INC., a Delaware corporation ("Utility").

                                    RECITALS:

     A.   Railroad and Utility have previously entered into those certain Fiber
          Optic License and Access Agreement and Right of Way Operating
          Agreement both dated as of _____ ____________________, as amended and
          supplemented from time to time by the parties (collectively, the "Base
          Agreement").

     B.   The Base Agreement grants certain rights to Utility, including the
          right to install a Fiber Optic Communications System pursuant to one
          or more Build Supplements over certain Segments of Designated Rail
          Corridor as more fully defined therein.

     C.   Utility wishes to expand its current Fiber Optic Communications System
          in accordance with the Base Agreement and this Build Supplement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for the sum of Ten and No/100 Dollars ($10.00) in hand
paid and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Railroad and Utility agree as follows:

     1.   The above Recitals are true and correct and are incorporated herein by
this reference.

     2.   Unless otherwise specifically defined in this Build Supplement, all
capitalized terms used herein shall have the same meanings defined in the Base
Agreement.

     3.   In addition to the rights and obligations set forth in the Base
Agreement and any previously executed Build Supplements, and in accordance
therewith and herewith, Utility is hereby granted a non-exclusive License to
install the following additional Segment(s) of its Fiber Optic Communications
System as shown on Exhibit(s) _______________, attached hereto and by this
reference made a part hereof and described as follows:

Segment:                              from:                     to:

City, State                      _______________          _______________,
County                           _______________          _______________,
Township                         _______________          _______________,
Valuation Map No.                _______________          _______________,
Milepost                         _______________          _______________,

                                                                               1
<PAGE>   18

Railroad Survey Station No.      _______________          _______________,
Total distance:                             ___________________;

Aggregate Optical Fiber Count
   (irrespective of number of Conduit/Innerduct or Cable)   ___________________;
Number of Conduit/Innerduct                                 ___________________;
Size of Conduit/Innerduct                                   ___________________;
Number of Cable                                             ___________________;
Size of Cable                                               ___________________.

     4.   The non-exclusive license granted to Utility with respect to the
additional installation pursuant to this Build Supplement shall be for a term
concurrent with the Base Agreement.

     5.   The parties hereby ratify and affirm the Base Agreement, as
supplemented hereby, which shall continue in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Build Supplement as of
the Effective Date.

Witnesses:                              CSX TRANSPORTATION, INC.,
                                        a Virginia corporation, as Operator for
                                        New York Central Lines LLC,
                                        a Delaware limited liability company

________________________________        By:_______________________________
                                        Print Name:_______________________
________________________________        Print Title:______________________

Witnesses:                               PATHNET TELECOMMUNICATIONS, INC.,
                                          a Delaware corporation

________________________________        By:_______________________________
                                        Print Name:_______________________
________________________________        Print Title:______________________

                                                                               2

<PAGE>   19

                                    EXHIBIT 1
                        CSXT BUILD SUPPLEMENT NO. -------

Utility Project Name:______________________________________________________
Segment:___________________________________________________________________
Railroad Project Name:_____________________________________________________

     THIS BUILD SUPPLEMENT NO._______ ("Build Supplement") is made as of this
day of _____ _______________, _______ (the "Effective Date"), between CSX
TRANSPORTATION, INC., a Virginia corporation ("Railroad"), and PATHNET
TELECOMMUNICATIONS, INC., a Delaware corporation ("Utility").

                                    RECITALS:

     A.   Railroad and Utility have previously entered into those certain Fiber
          Optic License and Access Agreement and Right of Way Operating
          Agreement both dated as of _____ _______________, as amended and
          supplemented from time to time by the parties (collectively, the "Base
          Agreement").

     B.   The Base Agreement grants certain rights to Utility, including the
          right to install a Fiber Optic Communications System pursuant to one
          or more Build Supplements over certain Segments of Designated Rail
          Corridor as more fully defined therein.

     C.   Utility wishes to expand its current Fiber Optic Communications System
          in accordance with the Base Agreement and this Build Supplement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for the sum of Ten and No/100 Dollars ($10.00) in hand
paid and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Railroad and Utility agree as follows:

     1.   The above Recitals are true and correct and are incorporated herein by
this reference.

     2.   Unless otherwise specifically defined in this Build Supplement, all
capitalized terms used herein shall have the same meanings defined in the Base
Agreement.

     3.   In addition to the rights and obligations set forth in the Base
Agreement and any previously executed Build Supplements, and in accordance
therewith and herewith, Utility is hereby granted a non-exclusive License to
install the following additional Segment(s) of its Fiber Optic Communications
System as shown on Exhibit(s) _______________, attached hereto and by this
reference made a part hereof and described as follows:

Segment:                              from:                     to:

City, State                      _______________          _______________,
County                           _______________          _______________,
Township                         _______________          _______________,
Valuation Map No.                _______________          _______________,
Milepost                         _______________          _______________,
Railroad Survey Station No.      _______________          _______________,
Total distance:                             ___________________;

                                                                               1
<PAGE>   20

Aggregate Optical Fiber Count
   (irrespective of number of Conduit/Innerduct or Cable)  ____________________;
Number of Conduit/Innerduct                                ____________________;
Size of Conduit/Innerduct                                  ____________________;
Number of Cable                                            ____________________;
Size of Cable                                              ____________________.

     4.   The non-exclusive license granted to Utility with respect to the
additional installation pursuant to this Build Supplement shall be for a term
concurrent with the Base Agreement.

     5.   The parties hereby ratify and affirm the Base Agreement, as
supplemented hereby, which shall continue in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Build Supplement as of
the Effective Date.

Witnesses:                              CSX TRANSPORTATION, INC.,
                                        a Virginia corporation

_______________________________         By:__________________________________
                                        Print Name:__________________________
_______________________________         Print Title:_________________________

Witnesses:                               PATHNET TELECOMMUNICATIONS, INC.,
                                          a Delaware corporation

_______________________________         By:__________________________________
                                        Print Name:__________________________
_______________________________         Print Title:_________________________

                                                                               2

<PAGE>   21
                                   EXHIBIT 2

                                 CSX System Map
                                 --------------

                          (Map of CSX Railway System)

<PAGE>   22
                                   Exhibit 3

                     Non-exclusivity around specific cities
                     --------------------------------------

                                  [ *  *  * ]
<PAGE>   23

                                    EXHIBIT 4

                                   TIER CITIES

                            [* * *]          [* * *]
                                    [* * *]
<PAGE>   24
                                   Exhibit 5
                       Map of [* * *] and [* * *] Builds
                                    [* * *]
<PAGE>   25
                                   Exhibit 6

                  Pathnet's Initial Designation of Conrail Build

                                  [Map of Conrail ROW]
<PAGE>   26

                                    EXHIBIT 7

                                    [ * * * ]<PAGE>   1
                                                                EXHIBIT   10.12
        Portions of this exhibit have been omitted and filed separately
                  with the Securities and Exchange Commission.
                   These portions are designated "[ * * * ]."

         THIS AGREEMENT IS DELIVERED WITH THE EXPRESS UNDERSTANDING THAT
  CSX TRANSPORTATION, INC.'S LEGAL COUNSEL WILL HAVE THE RIGHT OF FINAL REVIEW
                        AND APPROVAL PRIOR TO EXECUTION.

                        RIGHT OF WAY OPERATING AGREEMENT

                               dated as of   , 1999
                                          ---

                                     between

                            CSX TRANSPORTATION, INC.
                     A VIRGINIA CORPORATION, FOR ITSELF AND
                   AS OPERATOR FOR NEW YORK CENTRAL LINES LLC,
                      A DELAWARE LIMITED LIABILITY COMPANY
         AND A WHOLLY-OWNED SUBSIDIARY OF CONSOLIDATED RAIL CORPORATION,
                           A PENNSYLVANIA CORPORATION

                                       and

                        PATHNET TELECOMMUNICATIONS, INC.,
                             A Delaware corporation

                                       1
<PAGE>   2

                                TABLE OF CONTENTS

ARTICLE                                                                     PAGE

1.   Certain Definitions
2.   Grant of License
3.   Limitation of Rights; Railroad's Use Rights
4.   Planning, Installation and Implementation
5.   Permits
6.   Fouling Track; Safety Rules
7.   Track Use; Clearances; Crossings
8.   Flagging; Watchmen
9.   Facility Location Signs
10.  Maintenance of Rail Corridor, Facilities
11.  Railroad Approvals; Admissions
12.  Railroad Expenses; Employee Costs
13.  Liens and Encumbrances
14.  Taxes
15.  Sites for Non-Cable Facilities
16.  Independent Contractor Status
17.  Liability; Indemnity
18.  Insurance
19.  Notices
20.  Relocations; Alterations
21.  Line Sales; Abandonment
22.  Condemnation
23.  Pathnet Discontinuance
24.  Railroad's Right to Require Suspension of Activities; Failure to Make
     Timely Payment
25.  Liaison; Coordination and Disputes Resolution

                                      xiii
<PAGE>   3

26.  Termination; Removal
27.  Document Confidentiality
28.  General Terms

                                    xiii
<PAGE>   4

                              EXHIBIT SUMMARY

EXHIBIT  A-1   Route Plan
EXHIBIT  A-2   As-Built Drawing(s)
EXHIBIT  B     Planning, Installation and Implementation of Pathnet's System
EXHIBIT  C     Standard Lease Form (Form 3014-FO)
EXHIBIT  D     Sign(s) Design
   (copy)
EXHIBIT  E     Specifications for Underground Cable Crossings Under Tracks and
   (copy)      Rights of Way
EXHIBIT  F     Communications Manual Part 1-B-1, Paragraphs A through S and
   (copy)      Specifications for the Construction of Railroad
               Communication Pole Lines
EXHIBIT  G     Specifications for the Attachment of Cables to Railroad Bridges
EXHIBIT  H     Emergency and Disaster Responses
EXHIBIT  I     Specifications for Pole(s), Cable Crossing Installation Over
   (copy)      Railroad Tracks and Operating Right-of-Way
EXHIBIT  J     EB-2 Schedule
EXHIBIT  K     Arbitration or Mediation Resolution Procedures
EXHIBIT  L     Pathnet's Authorization for Fiber Optic Cable Work (sample)
EXHIBIT  M     Fiber Optic Installation SOP (Standard Operating Procedure,
   (copy)      MWI 1905-01, Issued 6/30/98)

                                      14

<PAGE>   5

                        RIGHT OF WAY OPERATING AGREEMENT

            THIS RIGHT OF WAY OPERATING AGREEMENT (this "Operating Agreement"),
is made as of ____________, 1999 (the "Effective Date"), by and between CSX
TRANSPORTATION, INC., a Virginia corporation ("CSXT"), for itself and as
Operator for New York Central Lines LLC, a Delaware limited liability company
("NYC Lines") and a wholly-owned subsidiary of Consolidated Rail Corporation, a
Pennsylvania corporation (CSXT and NYC Lines, collectively, "Railroad"), whose
mailing address is 500 Water Street, Jacksonville, Florida 32202, and PATHNET
TELECOMMUNICATIONS, INC., a Delaware corporation ("Pathnet"), whose mailing
address is 1015 31st Street, N.W., Washington, D.C. 20007.

                                 R E C I T A L S

            A. Railroad is the owner or operator of a continuous right-of way
(by fee, easement, license, operating agreement, joint use agreement or other
interest) within certain real property upon which it operates an interstate rail
transportation system, as shown on Railroad's current System Map (hereinafter
referred to as the "Rail Corridor").

            B. Pursuant to the Contribution Agreement and Stockholder Agreement
being executed in connection herewith, Pathnet desires to enter into an
agreement with Railroad to permit Pathnet to install, market, sell and/or
maintain a Fiber Optic Communication System, including Conduit (Innerduct),
Cable, Optical Fibers and related equipment and structures, along, in and on up
to [ * * * ] miles of Rail Corridor, along Segments of the Rail Corridor to be
selected in accordance herewith.

            C. Pursuant to the Contribution Agreement and Stockholder Agreement
being executed in connection herewith, Railroad is willing to transfer certain
property interests to Pathnet in exchange for stock in Pathnet, provided that
Pathnet accepts a license to use the selected Segments of the Rail Corridor
subject to all of the terms and conditions of this Operating Agreement and the
Fiber Optic Access and License Agreement being entered into by and between
Railroad and Pathnet concurrently herewith (hereinafter, the "License Agreement"
and, together with this Operating Agreement, the "Agreements"), which Agreements
provide, among other things, that (i) the license granted thereby shall be
subject to the existing rights and interests of other parties, including,
without limitation, [ * * * ] and [ * * * ], and (ii) Railroad makes no
representation or warranty with respect to its right, title or interest, if any,
in and to any portion of the Rail Corridor or its right to grant any type of
license or other right for any party, including Pathnet, to use or occupy the
same.

            NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Railroad and Pathnet hereby agree as
follows:

                                       1
<PAGE>   6

1.    CERTAIN DEFINITIONS.

      1.1 General Interpretive Principles. For purposes of this Operating
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, (i) the terms defined in this Section have the meanings
assigned to them in this Section and include the plural as well as the singular,
and the use of any gender in this Operating Agreement shall be deemed to include
the other gender; (ii) the word "including" means "including, but not limited
to," and (iii) the article, section and paragraph headings in this Operating
Agreement are for convenience only and are not intended to describe, interpret,
define or limit the scope, extent, or intent of any of the provisions of this
Operating Agreement.

      1.2 Incorporation of Recitals. The Recitals set forth above are
incorporated herein by this reference

      1.3 Definitions. As used in this Operating Agreement, the following terms
shall have the following respective meanings (unless otherwise expressly
provided):

      "Abandonment", when applied to a Rail Corridor, shall mean the application
to (and approval of) the necessary and applicable governmental body for
permission to cease all public rail transportation over any Segment of Rail
Corridor and the removal of all Railroad property, tracks and ties, excluding
permitted or required rail banking conveyances.

      "Affiliate" shall mean any Person that, directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under common
control with, another Person. The term "control," for this purpose, shall mean
the ability, whether by the ownership of shares or other equity interest, by
contract or otherwise, to elect a majority of the directors of a corporation,
independently to select the managing partner of a partnership or the managing
member of a limited liability company, or otherwise to have the power
independently to remove and then select a majority of those Persons exercising
governing authority over an entity. Control shall be conclusively presumed in
the case of the direct or indirect ownership of fifty percent (50%) or more of
the equity interests in an entity.

      "Agreements" shall be as defined in Recital C.

      "As-Built Drawing" shall comprise Pathnet's Construction Plans, revised to
reflect all changes made during actual construction, and shall show, without
limitation, the exact location of Pathnet's System and Facilities in relation to
the nearest track, and shall, upon submission to and approval by Railroad, be
attached hereto as Exhibit A-2.

      "Broadform Telecommunications Rights" shall mean, exclusive of the Limited
Telecommunications Rights granted hereunder, the right of owners of and other
parties with interests in the land underlying the Rail Corridor to license
generally, for telecommunications purposes, any and all portions of Rail
Corridor.

      "Cable" shall mean a single cable containing Optical Fiber, and any
support material and protective casing, capable of transmitting data or voice
communications in a Fiber Optic Communication System.

                                       2
<PAGE>   7

      "Conduit (Innerduct)" shall mean a single duct or pipe, not exceeding two
inches (2") inside diameter, except where specifically required or approved by
Railroad, suitable for housing a Fiber Optic Cable.

      "Conduit Right-of-Way" shall mean that portion of the Designated Rail
Corridor on which Pathnet's Fiber Optic Communication System and Facilities
(other than microwave and transmission towers) are located.

      "Construction Plans" shall mean the drawings, plans and specifications for
the construction and installation of Pathnet's System and Facilities, showing
the proposed location of all Pathnet's System and Facilities, in sufficient
detail, with distance shown from nearest track, with separate detailed drawings
of all junction, Repeater (Regen) Sites, bridge and tunnel occupancies, showing
depth of installation, details and methods of the proposed construction, with
numbers and size of Conduit(s) (Innerduct(s)) or bare Cable(s) to be placed,
including Optical Fiber count and total mileage for each Segment. Construction
Plans shall clearly note Railroad Valuation Map references, Railroad Survey
Station and Milepost references for all beginning and ending points and all
alignment transition points. Each set of Construction Plans for each Segment
shall have an overview map showing all of the required information.

      "Contracted Railroad Personnel" shall mean, for purposes of the
establishment of liability between and among the contracting parties of this
Operating Agreement only, those employees of Railroad utilized in performing or
directly involved in the route designation, inspection, survey, design, plan,
installation, construction, maintenance or operation of Pathnet's Facilities or
System, upon request of Pathnet or as otherwise required or permitted by this
Operating Agreement; and the same shall be considered as sole agents or servants
of Pathnet when performing such activity.

      "Contribution Agreement" shall mean that certain Contribution Agreement
dated as of ____________, 1999 by and between, among others, Railroad and
Pathnet.

      "CSXT Corridor" shall mean, subject to Section 2.1 of the License
Agreement, all of the Rail Corridor exclusive of the NYC Corridor, as described
in Exhibit 2 attached to the License Agreement.

      "CSXT" shall mean CSX Transportation, Inc., any of its predecessor
railroads, and any successor by merger, consolidation or reorganization.

      "Default Rate" shall mean a rate of interest equal to the lesser of (a)
the Prime Rate plus five percent (5%) per annum, or (b) the highest non-usurious
rate permitted under applicable law.

      "Designated Rail Corridor" shall mean a Segment of the Rail Corridor
selected by Pathnet and approved by Railroad in accordance with the terms of the
Agreements.

      "Discontinuance," when related to bare Conduit (Innerduct) or dark Optical
Fiber within Pathnet's Fiber Optic Communication System or Segment thereof,
shall mean that Pathnet has ceased dedicating commercially reasonable efforts to
the sale and marketing of telecommunications products and services on the
applicable Segment for a period of six consecutive (6) months and when related
to lit Optical Fiber within Pathnet's Fiber Optic Communication System or
Segment thereof, shall mean, for a period of six (6) consecutive

                                       3
<PAGE>   8

months, complete (a) disconnection from power source; (b) disconnection from
terminal; or (c) cessation of transmission of signal through such Segment or
System. Such term shall not include a temporary disconnection or cessation of
transmission during periods of maintenance or repair of the Fiber Optic
Communication System.

      "Engineer" shall mean the Chief Engineer of CSXT, or the authorized
representative(s) thereof.

      "Facilities", when applied to property of or installed by Pathnet, shall
mean Conduit (Innerduct), Cable, carrier pipes, Pathnet wires and poles, Optical
Fibers, junctions, Repeaters (Regens), Handholds, terminals, power sources,
fault alarm system(s), emergency equipment storage shelters, attachments, and
all other structures and articles of personal property connected with, necessary
for, appurtenant to, or useful to the installation, operation, maintenance,
repair, re-installation, replacement, relocation or removal of Pathnet's Fiber
Optic Communication System.

      "Fiber Optic" or "Optical Fiber" shall mean a strand of optical waveguide
permitting the transmission of communications signals.

      "Fiber Optic Communication System" or "System" shall mean the system
utilizing Optical Fiber as the medium for communications and transmission to be
installed by Pathnet in the Designated Rail Corridor, which may contain
Conduit(s) (Innerduct(s)), Cable(s) and Optical Fiber(s). Such terms shall
include all Conduit (Innerduct), Cable, Optical Fiber, Handholds, manholes,
marker tape, signs, couplers, structure attachment, pull rope, other necessary
ancillary hardware, and bridge, tunnel and trestle attachments, and shall also
include such communications technologies as may hereafter evolve from or
relating to Optical Fiber but which utilize Pathnet's Facilities and/or System
as initially installed or as thereafter modified pursuant to the Agreements.

      "Fouling of Tracks" or "Fouled" shall mean the existence, movement or
placement of equipment and/or personnel on a railroad track or within twelve
feet (12') of the centerline of any track within the Rail Corridor.

      "Handholds" shall include Cable loops, or boxes or vaults placed in or
above ground at junctions, Repeaters (Regens) or at areas of Cable splicing and
connection, for storage of slack Cable.

      "License Agreement" shall have the meaning set forth in Recital C.

      "Limited Telecommunications Rights" shall mean Pathnet's right to
construct, install, operate, repair and maintain Pathnet's Facilities and System
as more particularly described in, and subject to the terms and conditions of,
the Agreements, including, without limitation, those contained in Article 6 of
the License Agreement.

      "NYC Corridor" shall mean that certain portion of the Rail Corridor
operated by CSXT pursuant to that certain Operating Agreement dated as of June
1, 1999 by and between New York Central Lines LLC, as owner, and CSXT, as
operator, as described in Exhibit 2 to the License Agreement.

      "Optical Fiber" shall mean Fiber Optic.

                                       4
<PAGE>   9

      "Pathnet" shall mean Pathnet as defined in the introductory paragraph of
this Agreement, any successor by merger, consolidation or reorganization, and
its permitted assignees. For purposes of Pathnet's construction, maintenance,
repair, replacement or removal of Pathnet's System and/or Facilities, "Pathnet"
shall also mean Pathnet's employees, agents, servants, contractors and
subcontractors.

      "Person" shall mean any individual, association, partnership, limited
liability company, corporation, joint stock company, trust, joint venture,
unincorporated organization or governmental entity or any department, agency or
political subdivision thereof.

      "Prime Rate" shall mean the prime rate of U.S. money center commercial
banks as published in The Wall Street Journal from time to time.

      "[ * * * ] Obligations" shall be as defined in the License Agreement.

      "Railroad" shall mean Railroad as defined in the introductory paragraph of
this Agreement, any of its predecessor railroads (including Consolidated Rail
Corporation), any successor by merger, consolidation or reorganization, and its
permitted assignees. For the purposes of Article 17 (excluding the
indemnification obligation in Section 17.2 which shall be limited to Railroad as
defined in the introductory paragraph of this Agreement) and Article 18 only,
the term "Railroad" shall also include all Affiliates of CSXT, Affiliates of NYC
Lines and their respective officers, directors, employees and agents.

      "Rail Corridor" shall have the meaning set forth in Recital A.

      "Relocation", when related to alteration or removal of Railroad's track
from Rail Corridor, shall mean: (a) change in track grade or location in order
to avoid or eliminate curvature problems; (b) creation or deletion of double or
multiple tracks; or (c) installation of additional passing tracks, storage
sidings, spur or industrial lead tracks, and other track movement for operating
or shipping needs or plans of Railroad. The term, however, shall not include
Abandonment or complete removal of any particular tracks in conjunction with
termination or Abandonment of a service route, branch or main line.

      "Repeater (Regen)" shall mean a device which regenerates, amplifies or
extends optical signals, used to send the light impulse through Optical Fiber,
and includes attendant equipment, facilities, power source, and technological
changes.

      "Repeater (Regen) Sites" shall mean those permitted portions of the Rail
Corridor on which Repeaters (Regens) are located; and shall be limited to an
area of five hundred (500) square feet or less, and located beyond the
Restricted Working Area, unless otherwise specifically permitted in writing by
Railroad

      "Restricted Working Area" shall mean the area parallel to and located
thirty feet (30') (or the top of any ditch slope if that distance is greater
than thirty feet (30')) from the centerline of the outermost track (on each
side) in the Rail Corridor.

                                       5
<PAGE>   10

      "Route Plan" shall mean the plan showing the route of placement of
Pathnet's Facilities and System in, on or over Segments of Railroad's Rail
Corridor, as prepared by Pathnet and approved in writing by Railroad, as shown
on Exhibit A-1 attached hereto.

      "Segment" shall mean either a longitudinal section of Rail Corridor or a
longitudinal section of Conduit (Innerduct) or Cable installed by Pathnet, as
applicable.

      "Stockholder Agreement" shall mean that certain Stockholder Agreement
dated as of ____________, 1999 by and between, among others, Railroad and
Pathnet.

      "System" shall mean Fiber Optic Communication System.

      "Title Deficient Areas" shall mean those portions of the Rail Corridor, if
any, for which Railroad holds title in less than fee simple absolute and for
which Railroad may not otherwise have the right to grant to Pathnet the license
for use and occupancy as contemplated by the License Agreement.

      "Trackage Rights" shall mean the rights arising by agreement of one
railroad to use the tracks or right-of-way of another railroad for the carriage
of rail traffic; said agreement ordinarily imparting no ownership interest in
the burdening carrier relating to the tracks or rights-of-way of the burdened
carrier.

      "Valuation Maps" shall mean Railroad's Rail Corridor maps, prepared by
Railroad originally in 1913-1919 under 49 U.S. Code Sections 19 and 19a (now
Sections 10781-10783) for the U.S. Surface Transportation Board, successor to
the Interstate Commerce Commission ("S.T.B"), and the S.T.B. regulations, as
updated from time to time.

      "[ * * * ] Obligations" shall be as defined in the License Agreement.

2.    GRANT OF LICENSE

      2.1 Exercise of Rights Under License Agreement. Pursuant to the terms of
the License Agreement, Pathnet has been granted a license to select and utilize
up to [ * * * ] miles of Rail Corridor (including up to 2,000 miles of NYC
Corridor) for the installation and operation of its System and Facilities. The
rights and interests granted under the License Agreement shall be implemented in
accordance with the terms and provisions of this Operating Agreement. The term
of this Operating Agreement shall be concurrent with the term of the License
Agreement.

      2.2 Construction of the Facilities. Construction of the System and
Facilities by Pathnet shall occur in accordance with the following:

          (a) Access and Construction. All access and construction activities on
the property by Pathnet shall be conducted in strict accordance with the
requirements of this Operating Agreement and the Exhibits hereto. In the event
of any conflict between the terms of the Exhibits and the body of this Operating
Agreement, the provisions of the body of this Operating Agreement shall control.

          (b) Right to Audit. Railroad shall have the right, during regular
business hours, upon reasonable notice to Pathnet, and at mutually agreeable
times, to conduct field examinations

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<PAGE>   11

of Pathnet's Facilities and System in the presence of an authorized
representative of Pathnet and to examine and audit such books and records of
Pathnet as are appropriate and necessary, in Railroad's sole discretion, to
determine and verify (i) the number and size of Conduits (Innerducts) installed
by Pathnet in the Designated Rail Corridor pursuant to the Agreements, and (ii)
such other items related to Pathnet's compliance with the terms of the
Agreements, as reasonably determined by Railroad. This audit right shall survive
the expiration or other termination of the Agreements for a period of three (3)
years.

3.    LIMITATION OF RIGHTS; RAILROAD'S USE RIGHTS.

      3.1 Limitation of Rights. Pathnet, at Pathnet's sole risk, cost and
expense, shall furnish all materials, construct, maintain, use, change or remove
Pathnet's Facilities and System or any part thereof, in accordance with the
design, specifications and plans approved as provided in this Operating
Agreement, in a manner reasonably satisfactory to Railroad, all in a prudent and
workmanlike manner, in conformity with any applicable statutes, orders, rules,
regulations and specifications of any public body having jurisdiction thereof,
and so as not to interfere with or endanger, in the sole judgment of Railroad,
any property, traffic (freight or passenger), operations (direct or via Trackage
Rights), maintenance, employees or patrons of Railroad, or of others occupying
or using the property of Railroad for railroad operational purposes at each
location, including other lessees or licensees of Railroad. Railroad may
prohibit development on any Rail Corridor where development would unreasonably
interfere with Railroad's current or reasonably foreseeable future development
for railroad purposes. Pathnet shall be limited to a single build (one-time
placement) in a single trench on each Segment of the Designated Rail Corridor
unless Railroad approves an additional trench, which approval may be withheld in
its sole discretion.

      3.2 Railroad's Use Rights. Subject to the terms and provisions of the
Agreements, the rights of Pathnet hereunder shall not limit nor preclude
Railroad's use of its Rail Corridor for other uses and purposes, including
placement and operation of Railroad's own tracks(s), signal and communication
systems (of whatever nature); nor shall this Agreement bar or limit placement
and operation of any other pipe, conduit, cable, optical fiber or wire line by
Railroad or its licensee(s), which does not unreasonably interfere with
Pathnet's Facilities or Fiber Optic Communication System.

4.    PLANNING, INSTALLATION AND IMPLEMENTATION.

      The procedures and conditions for planning, installation and
implementation of Pathnet's System and Facilities are defined in Exhibit B,
attached hereto.

5.    PERMITS.

      5.1 Permit Requirements. Pathnet, at its sole cost and expense, shall
secure and maintain in effect all federal, state and local approvals,
authorizations, permits and licenses required for the construction,
installation, operation, maintenance, repair, replacement and/or removal of
Pathnet's Facilities and System, including zoning, building, health,
environmental and communication service permits and licenses, and shall
indemnify Railroad against claims for payment therefor and against any claims
for fines or penalties that may be levied for failure to procure, or to comply
with, such approvals, authorizations, permits or licenses, and any remedial
costs to cure any violations thereof. Without limiting the foregoing, any
development or

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<PAGE>   12

environmental impact statements required for the Facilities or System shall be
prepared by Pathnet, at Pathnet's sole risk, cost and expense, and all costs for
local zoning, construction and subdivision compliance, approval and permits,
shall be borne solely by Pathnet.

      5.2 Railroad Cooperation. Railroad shall not hinder Pathnet's attempts to
secure, and shall cooperate with and assist Pathnet, at Pathnet's cost and
expense, in obtaining, any permits, licenses or approvals of governmental
agencies or authorities, or of any necessary third parties, for use of any
structures or facilities (including streets, roads or utility poles) along the
Designated Rail Corridor not solely owned by Railroad.

6.    FOULING TRACK; SAFETY RULES.

      6.1 Railroad Safety and Operating Rules. Pathnet employees, agents,
contractors and/or subcontractors seeking to enter or engage in Fouling of
Tracks or any portion of the Rail Corridor (including tunnels and bridges) shall
be trained in the safety and operating rules established by Railroad from time
to time (the "Railroad Safety and Operating Rules"), and shall at all times wear
required identification badges and safety equipment (shoes, hardhat, goggles,
etc.). Pathnet shall bear all travel, lodging, course materials and other
similar costs of its attendees at any program given or administered by Railroad
to train such persons, and Railroad shall bear the costs associated with any
instructors.

      6.2 Contracted Railroad Personnel. Railroad shall provide Contracted
Railroad Personnel, as necessary, at Pathnet's sole risk, cost and expense as
provided herein, to accompany Pathnet's employees, agents, contractors or
subcontractors during their presence on the tracks and the Rail Corridor.

      6.3 Restriction Right. Notwithstanding any contrary provision contained
herein, Railroad reserves the right, in its sole discretion, to exclude or bar
specifically-named individuals from entrance upon Railroad's tracks and/or Rail
Corridor for demonstrating actions dangerous to themselves or others, or for
refusing to comply with Railroad's safety and operating rules, regulations or
directions, or for any other specific cause deemed sufficient in Railroad's sole
discretion.

7.    TRACK USE; CLEARANCES; CROSSINGS.

      7.1 Restricted Working Area. No goods, materials, equipment or fuel shall
be placed or stored within the Restricted Working Area.

      7.2 No Vehicles. Pathnet shall not use Railroad's tracks for maintenance
or the placement of its vehicles without the prior written approval of such use
by Railroad's Engineer, which approval may be withheld in his or her sole
discretion.

      7.3 Pathnet Track Support. During any work of any character at any
location on its System, Pathnet, at its sole risk, cost and expense, shall
support the tracks and roadbed of Railroad to prevent any interference or danger
as necessary in the sole judgment of Railroad's Engineer. Upon the completion of
all work, Pathnet shall restore such tracks, roadbed and other property of
Railroad to the same functional and operational condition as approved by
Railroad's Engineer, which approval may be withheld in his or her sole
discretion.

                                       8
<PAGE>   13

      7.4 Railroad Track Support. Railroad may perform or contract to have
performed any or all the work of supporting tracks and roadbed and of restoring
the same, at the sole risk, cost and expense of Pathnet, if (a) Pathnet fails to
perform such work timely or satisfactorily, (b) such work is required by
Railroad's labor agreements in existence at the time, or (c) requested by
Pathnet (subject to availability of Railroad's personnel and equipment and
satisfactory security for payment of costs by Pathnet).

      7.5 Crossing Specifications. Crossings of Railroad's track and Rail
Corridor necessitated by difficulties in Conduit (Innerduct) or Cable
construction (i.e., locations of manmade or natural structures, waterways,
streets, etc.) shall be coordinated with and approved in writing by Railroad's
Engineer, which approval may be withheld in his or her sole discretion, and
installation of such crossings shall be in accordance with the requirements set
forth in Exhibit I, all at Pathnet's sole risk, cost and expense.

8.    FLAGGING; WATCHMEN.

      8.1 General. Railroad shall have the right, in its sole discretion and at
any time during any period of construction, maintenance, repair, renewal,
alteration or removal of Pathnet's System or Facilities, to place watchers,
flaggers, inspectors or supervisors, for the protection of the operations of
Railroad (including freight and passenger service) or the property of Railroad
(including Amtrak) or others (including Pathnet) on the Rail Corridor or other
Railroad property, at the sole risk, cost and expense of Pathnet.
Notwithstanding any contrary provision contained herein, watchmen, flagmen,
inspectors or supervisors placed upon the Rail Corridor or other Railroad
property while working on Pathnet's System or Facilities under this Article 8
shall be deemed to be Contracted Railroad Personnel of Pathnet.

      8.2 Scheduling. Pathnet recognizes that because of Railroad's labor and
employment agreements: (a) the furnishing of any watchers or flaggers needs to
be requested at least thirty (30) days prior to actual work date for short term
flagmen or forty-five (45) days prior to actual work date for long term flagmen,
or such watchers/flaggers may not be available; (b) once a watcher/flagger is
designated, he/she cannot be pulled from the job less than seven (7) days prior
to work date, or cost thereof may be incurred by Pathnet; (c) once assigned, for
any period of time, such watcher/flagger must be paid for at least an eight (8)
hour shift, regardless of lesser hours worked; and (d) if Pathnet's needs
overlap ordinary shift turns (or tricks), Pathnet may incur flagging costs for
both shifts/tricks.

9.    FACILITY LOCATION SIGNS.

      9.1 Pathnet, at its sole cost and expense, shall furnish, erect and
thereafter maintain, signs showing the location of all underground Facilities
and Pathnet's contact telephone number. Such signs shall be painted and placed
in conformity with the provisions of Exhibit D attached hereto, or as otherwise
mutually agreed upon in writing by Railroad and Pathnet.

10.   MAINTENANCE OF RAIL CORRIDOR, FACILITIES.

      10.1 Maintenance of Conduit Right-of-Way. Unless Railroad and Pathnet
otherwise agree in writing, Railroad shall not be responsible for maintenance of
Pathnet's Conduit Right-of-Way, or for clearing or removing of trees, shrubs,
plants, ice, snow or debris therefrom. If

                                       9
<PAGE>   14

Railroad agrees, at Pathnet's request, to extend maintenance to cover Pathnet's
Conduit Right-of-Way, Railroad shall cut, mow and/or treat such Conduit
Right-of-Way maintenance only at the same time as Railroad performs its own
track or Rail Corridor maintenance. Railroad shall perform such extended
maintenance at Pathnet's sole risk, cost and expense and Railroad's employees
performing such maintenance shall be deemed to be Contracted Railroad Personnel
of Pathnet. Railroad shall be reimbursed for all costs incurred, including,
without limitation, any and all billable expenses, labor costs (Railroad or
contract), supplies, parts, materials, etc., directly associated with such
extended maintenance program.

      10.2 Maintenance of Facilities. Pathnet shall maintain its Facilities, and
all ancillary structures within Conduit Rights-of-Way, at Pathnet's sole risk,
cost and expense.

11.   RAILROAD APPROVALS; ADMISSIONS.

      11.1 Any approval given or supervision exercised by Railroad hereunder, or
failure of Railroad to object to any work done, material used or method of
construction or maintenance of Pathnet's System or Facilities, shall not be
construed as an admission of responsibility by Railroad or as a waiver of any of
the obligations of Pathnet under this Operating Agreement.

12.   RAILROAD EXPENSES; EMPLOYEE COSTS.

      12.1 General. Railroad's costs and expenses for work performed for or at
the expense of Pathnet pursuant to this Agreement (including review and approval
of Pathnet plans and designs) shall be paid by Pathnet within thirty (30) days
of Pathnet's receipt of itemized bills therefor irrespective of any billing
disputes. Interest on unpaid billed amounts shall accrue monthly after the first
thirty (30) days at an annual rate equal to the Default Rate. Pathnet shall have
ninety (90) days from payment to notify Railroad, in writing, of any billing
disputes. Billing disputes that are not resolved within sixty (60) days of such
notice shall be resolved in accordance with the provisions of Article 25.

      12.2 Invoice Format. Railroad bills for labor or supervision shall
include: Railroad's Project I.D. Number, Pathnet's Project I.D. Number,
Pathnet's Authorization for Fiber Optic Cable Work (substantially in the form of
Exhibit L attached hereto), and the dates, locations, party names, hourly or
salaried billing rates, number of hours, outside expenses and total charge.

      12.3 Permitted Costs and Expenses. Documented costs and expenses directly
attributable to work performed for Pathnet shall include only: (a) labor costs,
plus payroll overhead and additives applicable to each Railroad employee's
salary or hourly rate as set forth in Exhibit J and as may be modified or
updated from time to time by Railroad; (b) for contracted labor or consultants,
reasonable market-based amounts as billed to and paid by Railroad; (c) necessary
and reasonable travel and transportation expenses; (d) the reasonable,
market-based total cost of materials used and equipment rentals, plus actual
cost of freight charges and handling; and (e) reasonable rental cost for any
Railroad equipment used by Railroad or Pathnet or their respective employees or
contractors. Costs and expenses for Railroad's own labor and personnel, and
non-contract administrative overhead, shall be limited to the sum of (i) then
current hourly rate plus, (ii) applicable overhead and additives (which shall
include, but not be limited to, vacation, holiday, health and welfare, insurance
and supervision) in accordance with the applicable rates set forth in the then
current EB-2 Schedule in effect at the time the expense is

                                       10
<PAGE>   15

incurred, published by Railroad and amended from time to time. The current EB-2
Schedule applicable as of the Effective Date is attached hereto as Exhibit J.
Updated EB-2 Schedules will be available upon Pathnet's written request.

      12.4 Consultant. Railroad shall have the right, in its sole discretion, to
place a consultant on any installation site in lieu of Railroad's own
supervisory personnel, at Pathnet's sole cost and expense (provided such
expenses are reasonable, market-based and consistent with the provisions of
Section 12.3 above), to monitor installation and compliance with approved
Construction Plans, to log progress, and to log the time spent by Railroad
employees (including Contracted Railroad Personnel) in accordance with the
Agreements (by name, date and purpose). Such consultant shall advise Railroad
and Pathnet of any deviation from approved Construction Plans requested by
Pathnet or any of Pathnet's contractors.

      12.5 Records. Railroad shall keep accurate records of all costs and
expenses attributable to Pathnet pursuant to the Agreements, and Pathnet shall
have the right, at Pathnet's sole cost and expense, to examine and copy the
applicable records of Railroad to verify that such charges accurately reflect
the costs and expenses thereof.

13.   LIENS AND ENCUMBRANCES.

      13.1 Pathnet shall not permit any mortgage, pledge, security interest,
lien or encumbrance, including, without limitation, tax liens or encumbrances
and liens or encumbrances with respect to work performed or equipment furnished
in connection with the construction, installation, operation, repair,
maintenance, replacement or removal of the System or Facilities or any portion
of the Rail Corridor occupied by Pathnet (collectively, "Liens or
Encumbrances"), to be established or remain against the Rail Corridor or any
other property of Railroad. In the event that any Railroad property becomes
subject to any Lien or Encumbrance, Pathnet agrees to pay, discharge, bond off
or remove the same within thirty (30) days of Pathnet's receipt of notice that
such Lien or Encumbrance has been recorded, filed or docketed against such Rail
Corridor or other Railroad property; provided, however, that if Pathnet provides
a bond or other security acceptable to Railroad for the payment and removal of
such Lien or Encumbrance, Pathnet shall have the right to challenge, at its sole
expense, the validity and/or enforceability of any such Lien or Encumbrance.
Pathnet shall indemnify, defend and hold Railroad harmless against all damages,
costs (including reasonable attorneys' fees) and expenses, arising out of any
lien, the enforcement or removal thereof, or encumbrance caused by the same,
with respect to the Rail Corridor or any portion thereof or any other Railroad
property.

14.   TAXES.

      14.1 Transfer Taxes. Except as provided in Section 14.4 of this Operating
Agreement, Pathnet shall pay all transfer or recordation taxes, documentary
stamps, and any similar expenses in connection with the transfer or execution of
the License (as defined in the License Agreement), this Operating Agreement, the
Contribution Agreement, the System and/or the Facilities.

      14.2 Sales and Use Taxes. Except as provided in Section 14.4 of this
Operating Agreement, if, pursuant to the Agreements or the Contribution
Agreement (i) the sale, acquisition, license, grant, transfer or disposition of
property or rights, or (ii) the payment

                                       11
<PAGE>   16

of any fee or compensation or the payment to Railroad for services provided
thereunder, requires the payment of any sales or use tax (including any Canadian
GST or provincial sales tax) under any statute, regulation or rule, Pathnet
shall pay the same, plus any penalty or interest thereon, to Railroad when due
or if allowable, directly to such taxing authority, and shall indemnify and hold
Railroad harmless therefrom.

      14.3 Property Taxes. Pathnet shall pay all annual and periodic ad valorem
and other taxes levied or assessed upon Pathnet's Facilities or the System, and
shall indemnify and hold Railroad harmless therefrom.

      14.4 Taxes Payable by Railroad. Pathnet shall have no responsibility for
(i) any taxes (including but not limited to transfer, sales, use, income or
property taxes), assessments or other impositions attributable to Conduit
(Innerduct) or other telecommunications assets or services provided to Railroad
pursuant to Article 8 of the License Agreement; (ii) taxes based on Railroad's
income or corporate franchise; or (iii) property or franchise taxes that are
attributable to the Rail Corridor and not to Pathnet's Facilities or System.
Railroad shall reimburse Pathnet for any such taxes, assessments or impositions
within thirty (30) days after written request.

      14.5 Mutual Cooperation. Each party shall cooperate with the other party,
at the first party's sole cost and expense, in the prosecution of any claim for
refund, rebate, reduction or abatement of any taxes which are the responsibility
of the first party under the Agreements or the Contribution Agreement, provided
that a reasonable basis exists for such refund, rebate, reduction or abatement.
The first party shall reimburse the second party for all reasonable out of
pocket expenses incurred in connection therewith. Notwithstanding any other
provision of this Section, the first party is not obligated to pay or reimburse
the second party for any tax for which the first party is liable under this
Section if the party first elects to prosecute a claim for reduction or
abatement of such taxes and prepayment thereof is not a condition to prosecuting
the claim. The first party shall pay or reimburse the second party for any such
taxes when the taxes finally are adjudged to be due and owing by the highest
administrative or judicial authority to which an appeal has been taken.

15.   SITES FOR NON-CABLE FACILITIES.

      15.1 Non-Cable Areas. Railroad, insofar as it has the right and can
reasonably do so, shall make available to Pathnet for Pathnet's sole use, areas
not to exceed five hundred (500) square feet within the Designated Rail Corridor
for use by Pathnet as Repeater (Regen) Sites, or power or auxiliary power
stations, or sites for construction facilities or temporary storage of materials
and fuel for power stations. Railroad shall have no duty to provide such sites
at a requested location if the width, nature or other uses or planned uses of
the Rail Corridor by Railroad at such location or if restrictions on Railroad's
title or interest in the property preclude such use by Pathnet.

      15.2 Adjacent Land. If for any reason, Railroad is unable to provide such
site within the Designated Rail Corridor, and Railroad has available adjacent
land suitable for the location of such site, then Railroad shall furnish the use
of a reasonable portion of such adjacent land to Pathnet for such site at a fee
to be negotiated; provided, however, that such use will not interfere with
Railroad's current or reasonably foreseeable future use of such property. Such
adjacent land usage shall be documented by Railroad's standard form lease, the
form of which is attached hereto as Exhibit C.

                                       12
<PAGE>   17

      15.3 No Obligation as to Third Parties. Notwithstanding the provisions of
Sections 15.1 and 15.2, Railroad shall have no obligation to provide or make
available any portion of any adjacent land or allow the expansion of any
structure of Pathnet located thereon beyond five hundred (500) square feet or
such additional size initially improved by Pathnet with the approval of
Railroad, which approval may be withheld in its sole discretion, for use by
third party purchasers, sublicensees, transferees or permitted assignees. Any
such accommodation shall be at a fee to be negotiated, shall not interfere with
Railroad's current or future use of such property and shall be documented by
Railroad's standard form lease, the form of which is attached hereto as Exhibit
C. This Section 15.3 shall not apply to Pathnet's partners in development of the
Rail Corridor, and shall not restrict Pathnet's ability to make space in
Pathnet's existing Facilities available to third parties on such terms as
Pathnet determines in its sole discretion. Pathnet shall, except to the extent
caused by Railroad's gross negligence or willful misconduct, (i) assume
responsibility for any and all claims, liabilities, damages, costs (including
reasonable attorneys' fees) and expenses arising out of or based upon the acts
or omissions of any such third party in or around such non-cable facilities, the
Rail Corridor or other Railroad property, and (ii) indemnify, defend and hold
Railroad harmless from and against any and all losses and damages suffered by
such third party as a result of the presence of such third party or its
facilities or equipment in or around such non-cable facilities, the Rail
Corridor or other Railroad property.

      15.4 Rent. Rents for any land(s) outside of the Designated Rail Corridor,
or for lands within the Designated Rail Corridor in excess of five hundred (500)
square feet or for uses other than those described in Section 15.1, shall be at
a fee to be negotiated.

      15.5 Approval of Structure. The location and size of any buildings or
other structures to be placed by Pathnet or any third party within Railroad's
Rail Corridor or on Railroad's other property shall be as approved by Railroad's
Engineer, which approval may be withheld in his or her sole discretion, on plans
submitted in accordance herewith.

16.   INDEPENDENT CONTRACTOR STATUS.

      16.1 Except with respect to the Contracted Railroad Personnel, Railroad
reserves no control whatsoever over the employment, discharge, compensation of
or services rendered by Pathnet's employees, agents or contractors, and it is
the intention of the parties that Pathnet shall be and remain a licensee and
that nothing herein shall be construed as inconsistent with that status or as
creating or implying any partnership or joint venture relationship between
Pathnet and Railroad.

17.   LIABILITY; INDEMNITY.

      17.1 Pathnet's Release and Indemnification. Recognizing that Railroad has
owned and/or operated the Rail Corridor for many years prior to the Effective
Date and prior to entry thereupon by employees, agents, contractors or
representatives of Pathnet, and in addition to the indemnities otherwise
provided in the Agreements, Pathnet hereby assumes, releases and shall defend,
indemnify, protect and save Railroad harmless from and against the following:

           (a) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from: (1) damage to or destruction of Pathnet's Facilities or System except to
the extent attributable to the willful misconduct of

                                       13
<PAGE>   18
Railroad, its employees or contractors and (2) loss of service or use of
Pathnet's Facilities or System or loss of revenue or profit therefrom, including
any claim or loss to any client, customer, patron or other purchaser,
transferee, sublicensee or permitted assignee of Pathnet's rights or services
resulting from any damage to or destruction of Pathnet's Facilities or System.
Railroad shall not under any circumstances be liable for interruption of or
damage to the installation, operation, maintenance or repair of Pathnet's
Facilities or System unless attributable to the willful misconduct of Railroad,
its employees (including Contracted Railroad Personnel), agents, contractors, or
other parties performing services for Railroad. In no event shall Railroad be
liable for loss of income, cost of substitute service, or other consequential
damages of any kind;

           (b) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from injury to or death of any persons on or about Pathnet's Facilities or
System, including, but not limited to, Pathnet's employees, agents, contractors,
subcontractors, invitees, or other such third parties, purchasers, transferees,
permitted assignees, licensees or sublicensees, resulting from the existence,
construction, maintenance, operation, use, repair, change, placement,
replacement, relocation and/or subsequent removal of Pathnet's Facilities or
System, or any part thereof, or the use of the Rail Corridor or other Railroad
Property, regardless of any approvals, reviews, controls or standards imposed by
Railroad or other actions of Railroad, unless such claims, losses, damages,
causes of action, costs, and expenses (including reasonable attorneys' fees and
costs) result from the willful misconduct of Railroad;

           (c) All claims, liabilities, losses, damages, causes of action, costs
and expenses (including reasonable attorneys' fees and costs) arising from any
breach of the Agreements by Pathnet, including, but not limited to, any failure
of Pathnet to support track and/or roadbed, as provided herein or any failure of
Pathnet to secure permits or other approvals as provided herein, regardless of
cause, including Railroad's negligence, but excluding Railroad's willful
misconduct;

           (d) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from any slide, soil disturbance or environmental damage or impairment resulting
from the existence, construction, installation, maintenance, operation, use,
repair, change, placement, relocation and/or subsequent removal of Pathnet's
Facilities or System, regardless of cause, including Railroad's negligence, but
excluding Railroad's willful misconduct;

           (e) Any claim (regardless of merit), loss or damages awarded, whether
civil or criminal, under any antitrust laws, or under any federal, state or
local regulatory actions, attributable to issues arising under the Agreements,
it being understood and agreed that this indemnity shall not apply to any
claims, loss or damage arising out of any other agreement between the parties
or the parties' performance thereunder, including the contributions set forth
in the Contribution Agreement; in any such actions, Railroad shall have the
right to designate and/or employ independent counsel, if deemed necessary by
Railroad, to protect its interests, and the expense of such representation
shall be paid or reimbursed by Pathnet;

           (f) Reserved.

           (g) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from any damage or injury to (including

                                       14
<PAGE>   19
loss of use or service of or loss of revenue or profit from) any facilities,
cables, wires, pipes, casings, conduits, innerducts or ducts of any other party
or Conduit Right-of-Way operator or user, licensee, sublicensee, transferee,
purchaser or permitted assignee arising out of or related to any act or omission
of Pathnet or Pathnet's employees, agents, contractors, subcontractors,
licensees, sublicensees, customers, partners, the Contracted Railroad Personnel
or others acting at the direction of any of the foregoing, unless caused by the
willful misconduct of Railroad or Contracted Railroad Personnel;

           (h) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from any act or omission of Pathnet or Pathnet's employees, agents, contractors,
subcontractors, licensees, sublicensees, customers, partners, the Contracted
Railroad Personnel or others acting at the direction of any of the foregoing
which are not expressly assumed by Railroad under Section 17.2.

      17.2 Railroad's Indemnification. Railroad hereby assumes responsibility
for, and shall indemnify, defend and hold Pathnet harmless from, claims,
liabilities, losses, damages, causes of actions, costs, and expenses (including
reasonable attorneys' fees and costs) arising from:

           (a) Death of or injury to any employee(s) of Railroad or Railroad's
Affiliates, other than Contracted Railroad Personnel;

           (b) Destruction of or damages to any Railroad or Railroad Affiliate
facilities or equipment (moving or stationary) or property;

           (c) Interruption to or cessation of freight rail service;

           (d) The willful misconduct of Railroad's Affiliates or,
notwithstanding anything to the contrary contained herein, Contracted Railroad
Personnel.

UNLESS such claim, liability, loss, damage, cause of action, cost or expense is
caused by, arises from, or results in whole or in part from:

               (i)   any act or omission of Pathnet (including, but not limited
to, any improper or negligent plan and/or design, construction, installation,
maintenance, placement, operation, repair, relocation use or removal of
Pathnet's System or Facilities);

               (ii)  any breach of the Agreements by Pathnet;

               (iii) any direct rescheduling, delay or diversion costs, as set
               forth in Exhibit B; or

               (iv)  any matter which is the subject of Pathnet's release and
indemnification in Section 17.1.

      17.3 Notice of Claims; Indemnification Procedures. Upon receipt of notice
by Railroad or Pathnet, as applicable, (the "Indemnitee"), of any loss, event,
happening or occurrence which would be the basis of a claim by the Indemnitee
under the provisions of this Article 17 (an "Indemnified Claim"), the Indemnitee
shall immediately provide written notice to the other party (the "Indemnitor")
of such Indemnified Claim. So long as the Indemnitor is not in default in the

                                       15
<PAGE>   20

performance of its obligations under the Agreements, as between the Indemnitee
and the Indemnitor, the Indemnitor shall retain primary responsibility for the
conducting of any legal and/or administrative action or other proceeding
regarding any such Indemnified Claim (an "Indemnified Claim Proceeding") and the
defense (and any appropriate appeal) thereof. Legal counsel retained with
respect to any Indemnified Claim proceeding shall be selected by the Indemnitor,
but shall be subject to the reasonable prior approval of the Indemnitee. As
between the Indemnitee and the Indemnitor, all costs incurred with respect to
any Indemnified Claim Proceeding (including, but not limited to, reasonable
costs and attorneys' fees) shall be borne by the Indemnitor, and the
Indemnitor's indemnification obligations set forth in this Article 17 shall
extend to all such costs. Nothing contained herein shall in any way limit the
Indemnitee's right to participate and/or retain independent legal counsel, at
the Indemnitee's expense, with respect to any Indemnified Claim proceeding, but
the Indemnitee shall cooperate with the Indemnitor and coordinate Indemnitee's
participation and/or use of such independent counsel in a matter not
inconsistent with Indemnitor's positions and interests in such Indemnified Claim
Proceeding, to the extent reasonably possible and not adverse to the interests
of Indemnitee. Notwithstanding the foregoing, in the event Indemnitee
determines, in Indemnitee's reasonable opinion, that there is a conflict of
interest or other circumstance whereby such Indemnitor's retained legal counsel
cannot adequately represent Indemnitee's interests in any Indemnified Claim
Proceeding, Indemnitee shall have the right to retain independent legal counsel
and Indemnitor's indemnification obligations set forth in this Article 17 shall
extend to all costs incurred with respect to such separate representation. In
the event that an Indemnitor defends an Indemnitee pursuant to the terms hereof,
and the final adjudication determines that the Indemnitee bears some portion of
liability under the Indemnified Claim which is not subject to the Indemnitor's
indemnification obligations hereunder, the costs of such defense will be
apportioned between the Indemnitor and Indemnitee based upon such parties'
ultimate liability after giving effect to the indemnification provisions hereof.
Any settlement of an Indemnified Claim shall be subject to the written approval
of both the Indemnitee and the Indemnitor. Indemnification payment shall be made
within thirty (30) days of such approval.

      17.4 Exceptions to Liability. Notwithstanding any contrary provision
contained herein, (a) Railroad shall not have any liability whatsoever for any
death of or injury to persons or damage to or loss of property arising from or
resulting in connection with any train derailment, and Pathnet hereby releases
Railroad and its Affiliates from any and all claims, liabilities, losses,
damages, causes of action, costs and expenses (including reasonable attorneys'
fees and costs) arising from or resulting in connection with any train
operation, accident or derailment, irrespective of the negligence, gross
negligence or willful misconduct of Railroad, and (b) Pathnet shall have no
liability relating to any Conduits (Innerducts) installed for or capacity sold
or made available to Railroad pursuant to the License Agreement; provided,
however, that (x) any such Conduits (Innerducts) shall be of equal or greater
quality as Pathnet's own Conduits (Innerducts), and (y) Pathnet shall grant the
same remedies to Railroad with respect to such capacity as Pathnet grants to its
customers in the ordinary course of its business (e.g., outage credits, it being
understood that Pathnet shall not be obligated to make any monetary payments as
a remedy in connection with such capacity), which Railroad acknowledges may not
provide it with any incremental benefit.

      17.5 Survival. The provisions of this Article 17 shall survive the
expiration or earlier termination of the Agreements.

                                       16
<PAGE>   21

18.   INSURANCE.

      18.1 Railroad Protective Liability Insurance. Before any period of
construction of any portion of the System or Facilities (including preliminary
surveys and inspections), Pathnet shall purchase, or cause its contractor(s) to
purchase, and to maintain in full force and effect, Railroad Protective
Liability Insurance ("RPL") naming Railroad as the insured. Said RPL policy
shall be written on the form prescribed in the Federal Aid Highway Program
Manual, Volume 6, Chapter 6, Section 2, Subsection 2, as amended from time to
time, or as superseded by the AAR/AAHSTO form, and shall provide available
limits of not less than $5,000,000 per occurrence, $10,000,000 aggregate for
bodily injury and property damage (unless Pathnet designates a hazardous
material Rail Corridor as a Conduit Right-of-Way, and then $10,000,000 per
occurrence, $20,000,000 aggregate). The original of said RPL policy shall be
furnished to and approved by Railroad, prior to the commencement of any entry or
other operations under the Agreements.

      18.2 Liability Insurance. Pathnet shall purchase and maintain, until all
of its obligations under the Agreements have been fully discharged and
performed, the following insurance coverage: (a) Commercial General Liability
Insurance ("CGL"), including any applicable umbrella policy, with contractual
liability covering actions assumed in the Agreements by Pathnet, providing for
available limits of not less than $5,000,000 single limit, bodily injury and/or
property damage combined, for damages arising out of bodily injuries to or death
of all persons in any one occurrence and for damage to or destruction of
property, including the loss of use thereof, in any one occurrence, including
Federal Employers Liability Act claims ("FELA") against the Railroad, or other
liability arising out of or incidental to railroad operations; (b) Workers'
Compensation, Employer's Liability Insurance and Occupational Disease Insurance;
and (c) Business Automobile Liability Insurance. If any motor vehicles are used
in connection with the work to be performed under the Agreements, Pathnet shall
purchase and maintain Business Automobile Liability Insurance with limits of not
less than $2,000,000 single limit, bodily injury and/or property damage
combined, for damages to or destruction of property including the loss of use
thereof, in any one occurrence. If, in Railroad's reasonable opinion, a higher
limit of liability is necessary for any insurance policy required hereunder,
Railroad shall so notify Pathnet and Pathnet shall, within thirty (30) days of
receipt of such notice, provide a copy of the endorsement to the appropriate
policy increasing the liability coverage to the required limit.

      18.3 Policy Requirements. All insurance required hereunder shall be
effected by valid and enforceable policies issued by insurer(s) of financial
responsibility and authorized to do business in the states where the System
and/or Facilities are located, all subject to the reasonable prior approval of
Railroad. Except for the RPL policy (on which Railroad shall be the named
insured), Pathnet's liability insurance policies shall name Railroad as an
additional insured and will not have any exclusions for liability relating to
railroad operations by endorsement. The Pathnet's Workers' Compensation and
property insurance policies shall include waivers of subrogation rights
endorsements. All policies shall contain a provision for thirty (30) days'
written notice to Railroad prior to any expiration or termination of, or any
change in, the coverage provided. The insurance company shall be required to
provide Railroad with at least thirty (30) days' written notice prior to such
expiration, termination or change in any insurance coverage. Prior to any entry
upon the Rail Corridor pursuant to the Agreements and upon Railroad's request
thereafter, Pathnet shall provide Railroad with the original RPL policy and with
certificates of insurance for all other coverages showing that the required
coverages are in effect for the term of

                                       17
<PAGE>   22

the Agreements. The liability assumed by Pathnet under the Agreements,
including, but not limited to, Pathnet's indemnification obligations, shall not
be limited to the insurance coverage stipulated herein.

19.   NOTICES.

      19.1 General. Unless otherwise provided herein, all notices,
communications and deliveries required or permitted under the Agreements shall
be in writing and shall be (a) delivered personally, (b) sent by facsimile
transmission with subsequently transmitted confirmation of receipt, (c) sent by
overnight commercial air courier (such as Federal Express), or (d) mailed,
postage prepaid, certified or registered mail, return receipt requested; to the
parties at the addresses or facsimile numbers hereinafter set forth:

Pathnet:                                 Railroad:
--------

Pathnet, Inc.                            CSX Real Property, Inc.
1015 31st Street, NW                     301 West Bay Street, Suite 800 (J915)
Washington, D.C.  20007                  Jacksonville, Florida  32202
Attention:     President                 Attention:  Assistant Vice President
               Network Services
Facsimile No:  (202) 625-7369            Real Estate Operations
                                         Facsimile No. (904) 633-4586

With a Copy To:                          With a Copy To:
--------------

Pathnet, Inc.                            CSX Transportation, Inc.
1015 31st Street, NW                     500 Water Street (J150)
Washington, D.C.  20007                  Jacksonville, Florida  32202
Attention:     General Counsel           Attention:  Assistant General Counsel
Facsimile No:  (202) 625-7369            Facsimile No. (904) 359-7518

or at such other address(es) or facsimile number(s) as a party shall have duly
notified the other party.

In addition to the foregoing, any notice, communication or delivery required or
permitted under Sections 17 and 18 shall also be sent to:

                                     CSX Corporation
                                     500 Water Street (J907)
                                     Jacksonville, Florida 32202
                                     Attention:    Risk Manager
                                                   Risk Management Department
                                     Facsimile No. (904) 633-5096

Any such notice, communication or delivery shall be deemed delivered upon the
earliest to occur of: (a) actual delivery; (b) the same day as facsimile
transmission (or the first business day thereafter if faxed on a Saturday,
Sunday or legal holiday); (c) one (1) business day after shipment

                                       18
<PAGE>   23

by commercial air courier as aforesaid; or (d) upon receipt if sent by certified
or registered mailing as aforesaid.

      19.2 Planning, Design, Installation and Construction Phase Access Notice.
During the Planning and Design and the Installation and Construction Phases,
Pathnet shall, except in the case of emergency, give Railroad's Engineer at
least ten (10) days' written notice before commencing construction or bringing
any vehicle or equipment onto the Rail Corridor or other Railroad property, and
forty-eight (48) hours' notice before any other entry. Any such written notice
shall state the name(s) of Pathnet employee(s) in charge or contractor(s) or
subcontractor(s) performing work or making such entry.

      19.3 Maintenance and Operation Phase Access Notice. During the Maintenance
and Operation Phase, in order to secure safety of operated trains, crews,
passengers and cargo of Railroad, and safety of Pathnet employees and/or
contractors, Pathnet shall give CSXT's local Director of Dispatch, (904)
381-2765 and (904) 359-7551, as representative of Engineer, advance telephone or
telegraph notice of entry onto any portion of the Rail Corridor, which entry
shall be subject to consent and approval of Railroad's Engineer as to method and
timing, which approval may be withheld in his or her sole discretion. Any such
notice shall state the name(s) of Pathnet's employee(s) or contractor(s) or
subcontractor(s) performing work or making such entry.

      19.4 Emergency Notice. In case of disaster (such as a train derailment or
System failure) or other emergency demanding immediate examination or repairs to
the existing System or Facilities, notice shall be given by either party to the
other in person or by telephone to the Emergency Response Center(s) designated
on Exhibit H attached hereto or as otherwise designated in writing by each party
to the other. Such initial verbal or telephonic notice, however, must be
confirmed in writing within forty-eight (48) hours. Each party will cooperate
with the other to permit restoration of each party's operations as promptly as
feasible after such emergency.

20.   RELOCATIONS; ALTERATIONS.

      20.1 Relocation to Accommodate Railroad. If Railroad determines that any
Pathnet Facilities or System must be changed, altered or relocated after initial
construction because of Railroad's own track or facility relocations or rail
operational needs or plans (including additions, changes to track(s) to
accommodate freight or passenger customers of Railroad), or any governmental
agency or requirement, Railroad shall promptly give written notice thereof to
Pathnet of such needs, plans or requirements. Within sixty (60) days of receipt
of such notice, Pathnet shall protect or move the Pathnet Facilities and System,
at Pathnet's sole cost and expense, and in a manner satisfactory to Railroad;
provided, however, that Railroad shall reimburse Pathnet for any such costs or
expenses received by Railroad from a governmental entity or other entity in
connection with such relocation.

      20.2 Relocation to Accommodate Third Party. In the event of a Railroad
relocation to accommodate any third party other than as provided in Section
20.1, Pathnet shall protect or move its Facilities and System upon receipt from
Railroad of an agreement, in writing, obligating such third party to reimburse
Pathnet for all costs and expenses incurred by Pathnet, including reasonable
administrative and overhead, in connection therewith, or, if Railroad is unable
to obtain such an agreement from such third party, Railroad's agreement to
reimburse Pathnet for the

                                       19
<PAGE>   24

foregoing costs (not to include any reimbursement of lost income). Pathnet shall
submit any invoice to Railroad within ninety (90) days after such relocation
work is completed.

      20.3 Replacement Land. In the event of any relocation of Pathnet's System
or Facilities under Section 20.1, Railroad shall not be required to purchase for
Pathnet any replacement land or right-of-way or to pay Pathnet the cost to
secure same if there is not available Rail Corridor. However, Railroad agrees to
allow Pathnet to relocate to any other available adjacent or nearby Rail
Corridor or other land owned by Railroad at Pathnet's sole cost; provided,
however, that Railroad shall not be entitled to any additional payment for such
replacement Railroad land or Rail Corridor and the total mileage of such Rail
Corridor or replacement land to which Pathnet relocates shall be deducted from
and the abandoned Rail Corridor shall be added to the total mileage of
Designated Rail Corridor permitted under the License Agreement.

21.   LINE SALES; ABANDONMENT.

      21.1 In the event of a sale or other transfer of any portion of the
Designated Rail Corridor, such sale shall be made expressly subject to the
Agreements and the rights of Pathnet thereunder. Notwithstanding any provision
herein to the contrary, Railroad shall have the absolute right, in its sole
discretion, to effect an Abandonment of all or any portion of the Rail Corridor.

22.   CONDEMNATION.

      22.1 Severance of Interests. In the event that any portion of the
Designated Rail Corridor becomes the subject of a condemnation or appropriation
proceeding or offer to acquire, Pathnet's interest (in its Facilities and/or
System and in its occupation of the Segment) shall be severed from Railroad's
interest (both physical and ownership rights) in such proceedings, and the
parties agree to have any such condemnation or appropriation awards specifically
allocated between Pathnet's interest and Railroad's interest.

      22.2 Removal of Facilities. Should any Segment of the Designated Rail
Corridor used by Pathnet for a part of Pathnet's Fiber Optic Communications
System or Facilities be condemned, appropriated and/or acquired by any
governmental agency (or other party cloaked with the power of eminent domain)
for public purpose or use, then to the extent required by the condemning
authority, any Facilities or System of Pathnet within such Designated Rail
Corridor not condemned, appropriated and/or acquired by such agency or authority
shall be promptly removed by Pathnet at Pathnet's cost, unless Pathnet makes
other arrangements with the condemning or appropriating agency or authority.

      22.3 Notice. Railroad shall promptly notify Pathnet of any condemnation or
appropriation action filed against any portion of the Designated Rail Corridor.
Railroad shall also promptly notify Pathnet of any threatened condemnation or
offer to acquire by any governmental agency (or other party cloaked with the
power of eminent domain) affecting the Designated Rail Corridor (provided the
Railroad employees administering this Agreement have actual knowledge thereof).
Further, any voluntary sale to the condemning or appropriating agency or
authority pursuant to any threatened condemnation or offer to acquire shall be
in accordance with the provisions of Article 21.

                                       20
<PAGE>   25

23.   PATHNET DISCONTINUANCE.

      23.1 In the event of any Discontinuance by Pathnet of its Facilities,
System, Segment or any substantial portion thereof, Railroad shall have the
option, to be exercised in Railroad's sole discretion, to terminate this
Agreement as to the affected Segment(s) upon written notice to Pathnet. Upon
such termination, removal of Pathnet's Facilities and System within such
affected Segment(s) shall be governed by Section 26.2 hereof.

24.   RAILROAD'S RIGHT TO TERMINATE OR REQUIRE SUSPENSION OF ACTIVITIES; FAILURE
      TO MAKE TIMELY PAYMENT

      24.1 Material Breach; Remedy. If Pathnet or Railroad fails to perform,
violates or defaults under any material terms or conditions of the Agreements
("Material Breach"), and fails to remedy any such Material Breach in accordance
herewith, then and in that event, the non-defaulting party shall have the
following rights and remedies:

           (i)   if the Material Breach (a) adversely affects railroad safety or
      operation, or (b) relates to the payment of any fees and expenses due to
      Railroad under the Agreements, Railroad shall have the right to terminate
      this Agreement upon written notice to Pathnet; and

           (ii)  if the Material Breach is not of the type and nature described
      in Subsection 24.1(i), Railroad shall have the right, upon written notice
      to Pathnet, to suspend immediately all then pending and future
      installation, construction, maintenance and/or deployment on the entire
      Rail Corridor until such time as the applicable Material Breach is cured
      and Pathnet demonstrates to Railroad's reasonable satisfaction that
      Pathnet has taken such steps and/or implemented such procedures so that
      the particular Material Breach in question will not recur.

Upon termination as provided in this Section 24.1, removal of Pathnet's
Facilities and System shall be governed by Section 26.2 hereof. Railroad's right
to terminate this Agreement shall be limited to occurrences of Material Breaches
of the type and nature described in Subsection 24(i) above.

      24.2 Examples of Material Breach. For purposes of this Article, any
substantial noncompliance, or any repeated noncompliance, each of which might be
considered minor or singular, may when considered in the aggregate constitute a
Material Breach. In illustration, but without limitation, failure to give
required notices, or failure to give required approvals without cause, or
failure to comply with final decisions under the Dispute Resolution provisions
of Article 25, may constitute a Material Breach.

      24.3 Notice and Cure Period. Pathnet and Railroad agree that neither party
shall proceed against the other for any alleged Material Breach before the
offending party has had written notice and reasonable time to respond and cure
such breach; provided, however, that neither party shall be required to give
time to respond and cure if any such delay will cause irreparable harm or
increased risk of liability or injury. Reasonable time to respond and cure shall
for purposes of Subsections 24.1(i)(b) and 24.1(ii) be presumed to be thirty
(30) days, and for purposes of Subsection 24.1(i)(a) be presumed to be
forty-eight (48) hours. If such breach cannot

                                       21
<PAGE>   26

reasonably be cured within the applicable cure period, but the party proceeds
promptly to cure the same and prosecutes such cure with due diligence, the time
for curing such breach shall be extended for such reasonable period of time as
may be necessary under the circumstances to complete the cure, but under no
circumstances shall such additional period extend beyond, (i) for purposes of
Subsection 24.1(ii), one hundred eighty (180) days without the specific written
approval of the non-breaching party, which such approval may be withheld in such
party's reasonable discretion, and (ii) for purposes of Subsection 24.1(i)(a)
and (b), thirty (30) days. With respect to any Material Breach (i) which is not
cured by the breaching party within the applicable cure period, or (ii) for
which an opportunity to cure is not required to be given, the non-breaching
party may, at its sole option, cure any such breach in the manner it deems
appropriate. In such event, the breaching party, within thirty (30) days of
written demand and without deduction, set-off or abatement, shall reimburse the
non-breaching party for any and all expenses incurred as a result of the
non-breaching party's curing of such default together with interest at the
Default Rate. Nothing contained herein shall create an obligation on the part of
the non-breaching party to cure any uncured breach existing at any time under
the Agreements.

      24.4 No Continuing Waiver. Any waiver by any party at any time of any of
its rights under the Agreements shall not be deemed to be a continuing waiver of
any breach or default or other matter subsequently occurring.

      24.5 Waiver of Certain Damages. Except as otherwise provided in Section
6.5 of the License Agreement, neither party shall be liable to the other party
for any consequential, indirect, special, exemplary or punitive damages,
including, but not limited to, damages attributable to or based upon any loss of
present or future profits, any loss of or injury to customer goodwill, or any
lost or foregone investments and opportunities.

25.   LIAISON; COORDINATION AND DISPUTES RESOLUTION.

      25.1 Specified Disputes. The parties intend that any disputes which may
arise between them relating to access to the Rail Corridor, or the design, plan,
construction, installation, operation, maintenance, repair, replacement, and
removal of Pathnet's Facilities or System or the safe and uninterrupted
operation of the rail system of Railroad (a "Specified Dispute") be resolved as
quickly as possible, which may, in certain instances, involve immediate
decisions. When such quick resolution is not possible, or depending upon the
phase of installation of Pathnet's Facilities and System, the parties agree to
resolve such Specified Disputes as herein provided.

      25.2 Field Representatives. Within thirty (30) days after the designation
by Pathnet of the Route Plan as provided in Exhibit B, Railroad and Pathnet
shall each designate in writing the division or field representative(s) as
point(s) of contact for decision making concerning the Specified Disputes.

      25.3 Railroad Operations. Questions of Railroad operations or track safety
shall in all instances be referred to Railroad's Engineer, whose decision shall,
for any emergency situation, be made within twenty-four (24) hours, or for any
non-emergency situations, be made as provided in Section 25.7.

      25.4 Access. Specified Disputes concerning Pathnet's right of access to
the Rail Corridor during the Planning and Design and Installation and
Construction Phases, including use

                                       22
<PAGE>   27

of an on-rail plow installation machine under Exhibit B, or during the
Maintenance and Operation Phase, or access to or copies of Railroad's documents,
shall be referred initially to the designated representative of the Engineer,
who shall render such decision within twenty-four (24) hours. Decisions of the
Engineer's designated representative shall be referable within twenty-four (24)
hours of such decision, by Pathnet to the Engineer of Railroad, whose decision
shall be issued within twenty-four (24) hours of the notice from Pathnet of
dispute with the authorized representative of Engineer.

      25.5 Reserved.

      25.6 Communications Facilities. Specified Disputes arising out of or in
conjunction with the communications System or Facilities of Pathnet, of
Railroad, or of both, or the capacity and/or installation, maintenance and/or
use of the same, shall be referred initially to Pathnet's system manager (or
other representative designated by Pathnet) for decision, which shall be
rendered, in writing, within thirty (30) days after submission.

      25.7 Remaining Specified Disputes. Any other Specified Dispute between the
parties shall be referred initially to the Engineer for decision, which shall be
rendered, in writing, within fifteen (15) days after submission.

      25.8 Mediation or Arbitration. Either party may appeal any decision made
pursuant to Sections 25.2 through 25.7 by requesting either arbitration or
mediation within thirty (30) days after the date of receipt of such decision in
writing. Failure to request mediation or arbitration within such thirty (30) day
period shall result in such decision becoming final and conclusive. The selected
arbitration or mediation shall proceed in Jacksonville, Duval County, Florida,
in accordance with the Arbitration or Mediation Resolution Procedures attached
hereto as Exhibit K. Any arbitration decision or mediation agreement, or other
final decision herein, may be enforced by any court having jurisdiction hereof.

      25.9 Work Pending Resolution of Specified Dispute. During the period in
which any Specified Dispute is unresolved, any work on the Rail Corridor by or
for Pathnet shall commence or proceed only with maximum security for Railroad
operations, as determined by Railroad's Engineer, and the determination or
allocation of any costs or additional costs therefor shall be resolved
thereafter in accordance with this Article.

26    TERMINATION; REMOVAL.

      26.1 Partial Termination. Pathnet may terminate the Agreements with
respect to any individual Segments of the Designated Rail Corridor at any time
during the Term by providing Railroad with six (6) months' prior written notice
of such termination. Such termination shall be only with respect to the
specified Segment(s) of the Designated Rail Corridor identified in the
termination notice and shall not affect the continuation of the Agreements with
respect to the remaining Segments of the Designated Rail Corridor. With such
partial termination, all further obligations (other than obligations which arose
prior to such termination and any provisions hereof which are intended to
survive the expiration or other termination) shall cease only as to affected
Segment(s) and all terms and conditions of the Agreements shall remain unchanged
and in full force and effect as to the remaining Segments within the Designated
Rail Corridor. In the event of any partial termination hereunder, Pathnet shall
not be entitled to any refund, rebate or

                                       23
<PAGE>   28

set off relating to the consideration paid or given pursuant to the License
Agreement nor any adjustment to the mileage bank.

      26.2 Removal Upon Termination. Within ninety (90) days of the expiration
or earlier or partial termination of the Agreements (or such longer period as
may be reasonably necessary to remove Pathnet's Facilities and System provided
Pathnet begins removal within such ninety (90) day period and continues
diligently to completion), Pathnet, at its own risk, cost and expense, shall
remove all above ground Facilities, System and appurtenances from the Designated
Rail Corridor, all underground Optical Fibers, and such other underground
Facilities, System and appurtenances as Pathnet desires or Railroad reasonably
requests so as to avoid interference with Railroad operations, and restore the
Designated Rail Corridor and other affected property of Railroad to the
functional or operational condition existing prior to the construction or
installation of such Facilities, System and appurtenances. If Pathnet fails to
timely remove the System and Facilities and restore the Designated Rail Corridor
and other affected property as provided in the preceding sentence, Pathnet shall
be deemed to have abandoned such Facilities and System in place, in which event
such Facilities and System shall become the property of Railroad, for purposes
of resale, use or operation by Railroad in any manner and for any purpose
Railroad deems appropriate, in its sole discretion; or Railroad may cause such
removal and restoration to be performed and all costs incurred by Railroad in
such removal and restoration, together with interest thereon at the Default
Rate, shall be due and payable by Pathnet to Railroad upon written demand.

      26.3 Continuing Obligations. The expiration or earlier termination of the
Agreements shall not release any party from any liability or obligation incurred
prior to such expiration or termination or terminate any right or obligation
which would have continuing relevance after such expiration or termination of
this Agreement. Without limiting the foregoing, the indemnification obligations
of Pathnet, the rights of Railroad to review Pathnet's books and records, and
such other provisions which are reasonably intended to have continuing validity,
shall survive the expiration or earlier termination of the Agreements.

27.   DOCUMENT CONFIDENTIALITY.

      27.1 General. Railroad and Pathnet understand and agree that the
Agreements, and all materials, maps, documents and other information that are
referred to therein or attached thereto, exchanged between the parties in
negotiating the Agreements, or utilized in fulfilling the provisions and intent
hereof or thereof, are and shall be confidential, except as may be required by
law or regulation. Any public announcement or press release concerning the
Agreements by either party shall be subject to the prior approval of the other
party, which approval shall not be unreasonably withheld.

      27.2 Restricted Distribution. Railroad and Pathnet each agree to respect
such confidentiality, and shall restrict the distribution of the Agreements and
such materials only to those Persons designated to implement the provisions
hereof, and shall not disclose or furnish to any third parties copies of the
Agreements or any materials referred to herein, without the prior written
consent of the other party hereto or, subject to Section 27.3, a Court Order or
Administrative Subpoena requiring same, except as may be required by law or
regulation. The parties agree that in distributing copies or portions of these
materials to Persons necessary to

                                       24
<PAGE>   29

implement the same, such copies or materials shall be clearly marked as
confidential, and indicating that the further distribution, copying or
reproduction of the same is expressly prohibited.

      27.3 Redacted Copy. The parties shall jointly prepare redacted copies of
the Agreements which may be furnished, as necessary to implement the provisions
hereof, to (a) Arbitration Panel, (b) Court, (c) Administrative Tribunal, (d)
mortgagee(s) or other financial backers of either party, and (e) prospective
users of Pathnet's Conduit (Innerduct), Cable, Optical Fiber or other Facility
authorized in accordance with the Agreements.

      27.4 Injunctive Relief. The parties recognize and acknowledge that any
actual or threatened disclosure of such confidential information by either
party, its agents, employees or contractors, will cause irreparable harm to the
other party, such that monetary remedies available at law will not provide
adequate relief, and therefore the aggrieved party shall be entitled to receive
injunctive relief as an equitable remedy.

      27.5 No Right to Non-Material Information. Neither party shall have the
right to obtain any information or documents from the other which are not
material to the provisions or implementation of the Agreements.

28.   GENERAL TERMS.

      28.1 Entire Agreement. The Agreements, and any exhibits or amendments
which may be attached thereto from time to time, constitute the entire agreement
between the parties hereto with respect to the subject matter thereof and may be
modified only by a writing executed by both parties.

      28.2 Incorporation by Reference. The Agreements, as amended by the parties
from time to time in accordance therewith, shall be incorporated by reference
into any Build Supplement, separate finance agreement or other document executed
between the parties, and such incorporation shall include all amendments and
exhibits to the Agreements, even if made or attached subsequent to the date of
the Agreements.

      28.3 No Third Party Beneficiaries. Except as otherwise provided in the
Agreements, nothing contained therein, in any provision or exhibit thereof, or
in any agreement or provision included by reference, shall operate or be
construed as being for the benefit of any third person.

      28.4 Interpretation. Neither the form of the Agreements, nor any provision
therein, shall be interpreted or construed in favor of or against either party
hereto as the sole drafter thereof.

      28.5 Force Majeure. The parties agree that a party shall not be liable for
its failure to perform its obligations under the Agreements during any period in
which such performance is delayed by fire, flood, war, embargo, riot, labor
strike or unrest, the intervention of any government authority, train
derailment, or any other event or condition outside the reasonable control of
such party, provided that such party promptly notifies the other party of the
delay and the reason(s) for such delay. The provisions of this paragraph shall
not apply to Pathnet's payment obligations under the License Agreement.

                                       25
<PAGE>   30

      28.6  Reasonableness. Wherever the term "reasonable" is used in the
Agreements, the term shall mean: for Railroad, application of standard and
established railroad engineering, operating and safety rules, regulations and
procedures; for Pathnet, application of standard and established carrier
engineering and operating rules.

      28.7  Approval or Consent. Wherever the term "approval" or "consent" is
used in the Agreements, unless otherwise specifically qualified, the term shall
mean that such "consent" or "approval" shall not be unreasonably withheld,
delayed or conditioned.

      28.8  Parties. Wherever used in the Agreements, the terms "Railroad" and
"Pathnet" shall be construed in the singular or plural as the context may
require or admit, and shall include the permitted successors and assigns of such
parties.

      28.9  Severability. The Agreements are executed under the current
interpretations of applicable federal, state, county, municipal and local
statutes, ordinances and laws. However, each separate division (section,
paragraph, clause, item, term, condition, covenant or agreement) thereof shall
have independent and severable status for the determination of the legality
thereof. If any separate division is determined to be void or unenforceable for
any reason, such determination shall have no effect upon the validity or
enforceability of each other separate division, or any combination thereof.

      28.10 Governing Law; Venue. The Agreements shall be construed and governed
under the laws of the State of Delaware. It is the particular intent of the
parties that the indemnification obligations contained in the Agreements shall
be enforceable and shall not be deemed to be against public policy. The parties
consent to the personal jurisdiction of and to exclusive venue in the United
States District Court in and for the Middle District of Florida, Jacksonville
Division.

      28.11 Assignability.

            (a) Except as otherwise specifically provided in the Agreements,
Pathnet shall not assign or transfer any right or interest in the Agreements
without the prior written consent of Railroad, which consent may be withheld in
Railroad's sole discretion. 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
Agreements (in whole or in part) by Pathnet to a subsidiary, affiliate, or
parent company, controlled by, under common control with, or controlling, either
indirectly or directly, Pathnet, provided that no assignment not consented to by
Railroad shall relieve Pathnet of any of its obligations or liabilities under
the Agreements and, provided further, that such Assignee agrees in writing to be
bound by the terms of the Agreements. 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 the Agreements, and that Pathnet
remains fully liable for all obligations thereunder; and (ii) from granting
liens or other security interests in the fiber optic facilities or Pathnet's
rights under the Agreements in connection with financing or investments made
available to Pathnet; provided that all such parties agree that, if and to the

                                       26
<PAGE>   31

extent they acquire an ownership interest thereunder, they shall be bound by and
shall comply with the terms of the Agreements.

            (b) Upon request by Pathnet, Railroad shall execute reasonable
documentation to be provided by Pathnet acknowledging the rights of Pathnet's
lender(s) ("Lender") to obtain ownership of any fiber optic facilities if the
Agreements are 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 agree in writing that it shall become an assignee to the Agreements and
shall become subject to all rights and obligations of Pathnet under the terms of
the Agreements (and Pathnet also shall remain subject to all obligations of
Pathnet under the Agreements). In addition to the rights granted to Pathnet
under the Agreements, Pathnet's Lender shall have the additional right to take
possession, sell, assign or otherwise transfer any fiber optic facilities,
including the right to operate, or permit a third-party to operate, any fiber
optic facilities, provided such operation shall be subject to all terms and
conditions of the Agreements and provided further that Railroad shall approve
such party, in Railroad's reasonable discretion.

            (c) Railroad may assign the Agreements to any Affiliate, any
purchaser(s) of the Designated Rail Corridor to the extent applicable to such
Rail Corridor, or any Person in connection with any merger or consolidation of
Railroad, provided that any such assignment shall be subject to the terms and
conditions of this Agreement.

      28.12 Time is of Essence. Time is of the essence in the performance of
each party's obligations under the Agreements.

      28.13 Incorporation of Exhibits. All exhibits attached to the Agreements
are incorporated by this reference and made a part of the Agreements for all
purposes.

      28.14 Multiple Counterparts. Each of the Agreements may be executed in
several counterparts, each of which shall be deemed an original, and such
counterparts shall constitute one and the same instrument.

      28.15 WAIVER OF JURY TRIAL. RAILROAD AND PATHNET HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION
WITH THE AGREEMENTS OR ANY DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION
THEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS, RIGHTS OR OBLIGATIONS OF EITHER PARTY ARISING OUT OF OR
RELATED IN ANY MANNER TO THE AGREEMENTS (INCLUDING, WITHOUT LIMITATION, ANY
ACTION TO RESCIND OR CANCEL THE AGREEMENTS OR ANY CLAIMS OR DEFENSES ASSERTING
THAT EITHER OF THE AGREEMENTS WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO
AND ACCEPT THE AGREEMENTS.

      28.16 Authorization. Railroad and Pathnet represent and warrant that each
has obtained all necessary corporate approvals authorizing the execution and
delivery of the Agreements, and

                                       27
<PAGE>   32

that the execution and delivery of the Agreements will not violate the articles
of incorporation or by-laws of such corporation, and will not constitute a
material breach of any contract by which such corporation is bound.

                                       28
<PAGE>   33

            EXECUTED as of the Effective Date.

Witness:                            CSX TRANSPORTATION, INC.,

                                    For itself and as Operator for New York
                                    Central Lines LLC, a wholly-owned subsidiary
                                    of Consolidated Rail Corporation

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

Witness:                            PATHNET TELECOMMUNICATIONS, INC.

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

                                       29
<PAGE>   34
                                   EXHIBIT A

                     DESCRIPTION/DEPICTION OF THE PREMISES

                       [to be agreed to by the parties]
<PAGE>   35

                                    EXHIBIT B

1.   ROUTE DESIGNATION; DOCUMENTATION; INSPECTION; ACCESS.

     1.1  Documentation. Railroad shall furnish to Utility, electronically
if available, at Utility's cost, copies of Valuation Maps with available indices
thereto within thirty (30) days of the date of Utility's written request.
Railroad shall make available to Utility, for reproduction at Utility's cost,
all available Railroad engineering documents relating to bridges, overpasses or
tunnels on or along such Route Plan. Railroad shall also furnish, at Utility's
cost, copies of maps or other documents to assist Utility in determining the
identity and location of other users of those portions of Railroad's Rail
Corridor designated on Utility's Route Plan. The furnishing of maps, documents
or other materials hereunder, however, shall not be a guarantee by Railroad of
the accuracy or completeness of same.

     1.2  Inspection. Railroad agrees to participate with Utility in a joint
inspection of those portions of the Railroad Corridor designated on Utility's
Route Plan for the purpose of identifying problem areas and defining final
Conduit Right-of-Way routes or alternatives. Railroad also agrees to participate
in any additional joint inspections that may be required for the purpose of
detailing and developing solutions for problem areas.

     1.3  Route Plan. Prior to the preparation of detailed Construction Plans as
contemplated in Section 1.7, Utility shall submit to Railroad a proposed Route
Plan marked on Railroad Valuation Maps. Railroad shall review and, through its
Engineer, approve or reject the proposed Route Plan. If rejected for reasons
other than Railroad's plans to Abandon a Segment of the Railroad Corridor,
Railroad shall cooperate with Utility to locate an alternative mutually
acceptable route along Railroad's Rail Corridor to the extent available. Upon
Railroad's approval of Utility's proposed Route Plan, such approved Route Plan
shall be attached to this Agreement as Exhibit A-1, for the purpose, among other
things, of defining the Designated Railroad Corridor.

     1.4  Planning and Design Phase. From and after the date of submission by
Utility to Railroad of Utility's Route Plan, Utility and its designated
employees, agents and representatives shall have the right to enter upon any
portion of Rail Corridor shown on such Route Plan for a period of one hundred
eighty (180) days for the purpose of surveying and inspecting the same, subject
to all applicable notice, approval and other applicable requirements contained
in this Agreement (the "Planning and Design Phase").

     1.5  Conditions of Right of Entry. All surveys or route inspections (or any
other entry by Utility hereunder) shall be made upon reasonable advance notice
to and at times satisfactory to Railroad, in a manner so as not to interfere
with operations of Railroad, and shall be at the sole risk, cost and expense of
Utility. Rights of entry shall not be unreasonably withheld or delayed.

     1.6  Construction Planning Schedule. Utility shall furnish to Railroad a

                                                                               1
<PAGE>   36

proposed schedule of construction and installation (commencement and completion
dates) on each portion of the Designated Rail Corridor to be utilized for
Utility's System. Said schedule of construction shall be sufficient to allow the
coordination of Railroad, Utility and construction personnel and operating train
movements. Utility shall schedule installation and construction to avoid
disruption of Railroad operations (including operation of freight and passenger
trains. Utility may request Railroad to reschedule or divert trains, where
possible, to minimize disruption of Utility's construction schedule, and, to the
extent possible and practical, as solely determined by Railroad's Engineer,
Railroad shall make such diversion or rescheduling. Utility further recognizes
that regulations of the Federal Railroad Administration (FRA) may require "Slow
Orders" to be issued by Railroad to trains operating in areas of Utility's
construction, and that such "Slow Orders" may cause delays in train movements,
including delays in movement of freight and passenger trains. Additional costs,
expenses or losses to Railroad generated by any "Slow Order", rescheduling,
delay or diversion (including detours or rerouting) resulting from any request
of or actions or omissions of Utility, its employees, agents, contractors or
subcontractors, or which results from any Fouling of Track(s), plus any damage
to or destruction of Railroad's signals, tracks or other facilities resulting
therefrom, shall be reimbursed by Utility.

     1.7  Construction Plans. Whenever Utility desires to install or construct
any part or portion of its Facilities or System, including any structural
attachments, within the Designated Rail Corridor, Utility shall submit written
notice (the "Construction Notice") in two (2) signed counterparts, accompanied
by four (4) copies of the relevant Construction Plans, to Railroad's Engineer
for consent and approval of Railroad, which approval shall not be unreasonably
withheld or delayed. Upon approval by Railroad, one (1) signed counterpart of
the Construction Notice shall be returned by Railroad. Upon receipt of the
signed counterpart of the construction Notice by Utility, the Construction
Notice and the Construction Plans so approved shall be considered as being
incorporated into and made a part of this Agreement for all purposes.

     1.8  Limited Scope of Approval. Railroad's right of approval of
Construction Plans, and the location of Utility's Facilities and System, and the
nature of Transmission Technology shall apply only to the extent that
construction or use of Facilities, System or Transmission Technology may affect
train or signal operations or the use of Railroad's Rail Corridor.

     1.9  Installation and Construction Phase. From and after the date of
Railroad's approval of Utility's Construction Plans, as provided in Section 1.7,
Utility, its employees, agents and/or contractors, shall have the right, for a
period of one hundred eighty (180) days, to enter and construct and install
Utility's Facilities and System on that Segment designated in the Construction
Plans. Utility shall coordinate with, and secure advance written approval from
Railroad's Engineer, for all access to track and Restricted Working Area of Rail
Corridor, understanding that the operation of Railroad trains over any Rail
Corridor shall have priority. Construction and installation shall also be in
accordance with Fiber Optic Installation SOP (Standard Operating Procedure, MWI
1905-01, Issued 6/30/98), a copy of which is attached hereto as Exhibit M.

     1.10 As-Built Drawing. Within ninety (90) days after completion of

                                                                               2
<PAGE>   37

construction and installation of each Segment of Utility's System, Utility shall
furnish to Railroad an As-Built Drawing, referencing Railroad stationing,
Valuation Maps and mileposts for such Segment, which, when approved by Railroad
and as amended from time to time, shall be collectively attached hereto as
Exhibit A-2.

     1.11 Maintenance and Operation Phase. Only after construction of each
Segment of Utility's System and approval by Railroad's Engineer of the
applicable As-Built Drawing, shall Utility, its employees, agents and/or
contractors, be permitted operational and maintenance access to such Segment, in
accordance with the provisions of this Agreement. With respect to each
independent Segment, the period after the Planning and Design Phase but prior to
the approval of the applicable As-Built Drawing is herein sometimes called the
"Installation and Construction Phase" and the period after the approval of the
As-Built Drawing is herein sometimes called the "Maintenance and Operation
Phase."

     1.12 Reinstallation, Replacement and Removal. The provisions of this
Article 1 shall apply to any reinstallation, replacement or removal of any
Facilities by Utility.

2.   SURVEYS AND RECORDS; COSTS.

     2.1  Railroad Maps and Surveys. Railroad shall, at Utility's cost and upon
Utility's written request, furnish to Utility a copy of its current System Map,
System Diagram Map and Valuation Maps for Segments identified in the Route Plan
as System Segments. Railroad, however, shall not be deemed to have guaranteed
the accuracy of any map, survey or related records made available to Utility.

     2.2  Utility Maps, Surveys and Records.

          (a)  If Utility performs or contracts to perform formal surveys of the
Rail Corridor, or any constructed Conduit Right-of-Way, Utility shall furnish
Railroad, upon request, a copy thereof, at Utility's cost, subject to lawful
limitations of survey contracts and applicable laws. Utility shall not be deemed
to have guaranteed the accuracy of such surveys. If Utility is required or
chooses to secure and/or file any surveys for any of its Facilities, Utility
shall bear the total cost thereof.

          (b)  Any copies or records made or data compiled by Utility relating
to Railroad's Rail Corridor (including but not limited to: maps; plans; photos;
video tapes; motion pictures; notes; survey data; cassette tapes and other types
of records and measurements) shall become the sole property of Utility. However,
subject to the document confidentiality provisions hereof, Utility shall provide
such data or records to Railroad.

          (c)  Utility shall, at its expense, furnish Railroad, annually, a map
of Utility's Fiber Optic Communication System ("Fiber Optic System Map")
depicting the location of Utility's Facilities and System on the Designated Rail
Corridor and fiber count by Segment.

          (d)  Utility shall update its Fiber Optic System Map after each new

                                                                               3
<PAGE>   38

Segment is constructed, and shall include a copy of the relevant portion thereof
with each As-Built Drawing required in Section 1.10.

3.   LOCATION OF UTILITY FACILITIES.

     3.1  Perimeter Location. Occupation by Utility of the Rail Corridor
(including any portion that shall pass along or through an active operated
Railroad yard, terminal or station) shall be confined where practical to the
outer perimeter of the Rail Corridor, yard, etc. Minimum distance to the
centerline of the nearest track shall be eleven feet (11') unless otherwise
specifically agreed in writing by Railroad. The exact location and depth shall
be determined on a case-by-case basis during the Planning and Design Phase for
the Facilities.

     3.2  Railroad Tunnels. The installation of Cable in Railroad tunnels shall
be avoided whenever possible, by the installation of Cable over Railroad tunnels
within Railroad Rail Corridor. Where such installation over the tunnel is not
reasonably possible, and after specific written approval by Railroad's Engineer,
Cable shall be laid or installed within existing conduits or ducts, where
available and in usable condition, or within suitable conduit (nonflammable,
inert material pipe) installed by Utility on the floor level of the tunnel, at a
point farthest away as practical from the nearest operated rail or track.

     3.3  Entrance into Tunnel or onto Bridge. Any entrance by Utility or its
employees, agents or contractors into Railroad's tunnel, onto Railroad's bridge,
or on Railroad's property adjacent to a bridge or tunnel for any purposes, shall
be in accordance with the provisions of Article 12 of this Agreement.

4.   CONDUIT (INNERDUCT)/CABLE INSTALLATION AND CONSTRUCTION.

     4.1  Underground Installation. In all situations where reasonably possible,
Conduit (Innerduct) or Cable shall be installed by Utility, or its
contractor(s), underground, and in accordance with the "Specifications for
Underground Cables Occupying Railroad Rail Corridor" attached hereto as Exhibit
E. Notwithstanding any contrary provisions contained in Exhibit E, the
installation depths and limits of Cable or Conduit (Innerduct) shall be as
follows:

          (a)  Where Cable crosses underneath tracks, whether mainline,
secondary or industrial, Cable must be installed in Conduit (Innerduct);

          (b)  Cable to be installed within fifteen linear feet (15') of the
centerline of any tracks, shall be installed in Conduit (Innerduct);

          (c)  Conduit (Innerduct) installation is not required for Cable to be
installed more than fifteen linear feet (15') from the centerline of any tracks;

          (d)  The depth of Conduit (Innerduct) under tracks shall be no less
than sixty inches (60") below the bottom of ties, for a length at least two
linear feet (2') beyond the outer end of such ties;

                                                                               4
<PAGE>   39

          (e)  Where on-rail plowing is authorized, as provided herein, Cable
and/or Conduit (Innerduct) shall be installed at a depth of no less than
forty-two inches (42") below ground surface;

          (f)  Cable or Conduit (Innerduct) to be installed within twelve linear
feet (12') of the centerline of the nearest track shall be at a depth of no less
than forty-two inches (42") below ground surface;

          (g)  Cable or Conduit (Innerduct) to be installed twelve linear feet
(12') or more away from the centerline of the nearest track shall be installed
at a depth of no less than thirty-six inches (36") below ground surface.

     4.2  On-Rail Plow. Subject to the sole discretion and approval of
Railroad's Engineer for exact location of use, scheduling and utilization of an
on-rail plow machine, Utility shall have the right to utilize such machine for
construction purposes. If such use is approved, Railroad will provide all
necessary work trains and crews at Utility's sole cost and expense to facilitate
use of such machine. When within fifteen feet (15') of any signal wires,
culverts, grade crossings or other Railroad facilities, Utility must cease all
rail plow installation and (a) utilize only hand-trenching, behind (trackside
of) any Railroad facilities or obstructions (signals, signal boxes, relay cases,
etc.) which have wire or Cable connections to any track, and/or (b) place
Utility Conduit (Innerduct) or Cable only to the front (fieldside) thereof.
Utility shall pay for any repairs to signal wires, culverts, grade crossings or
other Railroad facilities damaged by said plowing or trenching.

     4.3  Aerial Attachments. In situations where Utility determines that
underground installations are not reasonably practicable, installations shall be
by aerial attachments in accordance with the Association of American Railroads
"Communications Manual Part 1-B-1, Paragraphs A through S" and "Specifications
for the Construction of Railroad Communication Pole Lines, Section K", copies of
which are attached hereto collectively as Exhibit F. Details of each aerial
section of Cable shall be shown where appropriate as a part of the Construction
Plans and As-Built Surveys furnished to Railroad for approval as required under
this Agreement.

     4.4  Water Crossings. In the event that Utility elects to perform submarine
Conduit (Innerduct) or Cable installation rather than installation by attachment
to Railroad's existing pole lines or fixed or movable bridges, such submarine
installation shall be performed by Utility or its contractor(s) at Utility's
sole risk, cost and expense.

     4.5  Bridge Attachments. Attachment to all Railroad bridges, where
attachment to an adjacent parallel pole line is not desired by Utility, shall be
as prescribed in the "Specifications for the Attachment of Cables to Railroad
Bridges", a copy of which is attached hereto as Exhibit G.

     4.6  Public Roadway Crossings. Cable or Conduit (Innerduct) crossing under
public roadways shall be at a location and depth as required by any applicable
federal, state or local laws, regulations or lawful orders. To the extent not
pre-empted by such

                                                                               5
<PAGE>   40

authorities, such installation shall also be in accordance with Exhibit E.

     4.7  Public Utility Crossings. Cable or Conduit (Innerduct) crossing over
or under public utilities shall be located and installed in accordance with all
applicable federal, state and local laws, regulations and lawful orders, and
such lawful requirements as may be stipulated by any governmental agency
(including operators of rail passenger services) or public authority. If in the
conduct of any work, any changes or alterations in pipelines, sewers, drains,
conduits, fences, power, signal or communication lines or other utility or
Railroad facilities are necessary (either temporary or permanent) by reason of
the foregoing or the requirements of Railroad, such changes shall be made or
caused to be made solely by Utility at Utility's sole risk, cost and expense;
provided, however, that costs and expenses for any such work, changes or
alterations necessitated by any other third party shall be paid by such third
party.

     4.8  Emergency Repair. Emergency Cable installation, maintenance or repair
methods shall be as set forth in Exhibit H attached hereto.

                                                                               6
<PAGE>   41

                                    EXHIBIT C

                                      LEASE

     THIS LEASE, made as of this ____ day of ______________, ______, between CSX
TRANSPORTATION, INC., a Virginia corporation, [as operator for New York Central
Lines LLC, a Delaware limited liability company] whose address is 500 Water
Street, Jacksonville, Florida 32202 ("Lessor"), and Pathnet Telecommunications,
Inc., a Delaware corporation, whose address is 1015 31st Street N.W.,
Washington, D.C. 20007 ("Lessee"):

                                    RECITALS

     A.   Lessor and Lessee have entered into those certain Fiber Optic Access
          and License Agreement and Right of Way Operating Agreement dated as of
          ____________________, as amended and supplemented from time to time by
          the parties (the "Base Agreement").

     B.   The Base Agreement contemplates Lessee's use of certain land owned by
          Lessor for the placement of non-cable facilities including Repeater
          (Regen) Sites, or power or auxiliary power stations, or sites for
          construction facilities or temporary storage of materials and fuel for
          power stations.

     C.   In order to implement the provisions of the Base Agreement, Lessor and
          Lessee desire to enter into this Lease for the premises described
          herein and on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the rental to be paid by Lessee and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee
hereby agree as follows:

1.   INCORPORATION OF RECITALS.

               The parties represent and acknowledge that the foregoing recitals
are true and correct and are incorporated herein by this reference.

2.   DESCRIPTION OF PREMISES.

               Lessor does hereby lease unto Lessee that certain parcel of
unimproved land (exclusive of tracks and roadbed) located and more particularly
described or depicted on Exhibit "A" attached hereto and by this reference made
a part hereof (the "Premises").

3.   CERTAIN DEFINITIONS.

     3.1       General Interpretive Principles. For purposes of this Lease,
except as otherwise expressly provided herein or unless the context otherwise
requires: (i) the terms used herein include the plural as well as the singular,
(ii) the use of any gender herein shall be deemed to include the other gender,
(iii) the word "including" means "including, but not limited to," and (iv) the
headings used herein shall not describe, interpret, define or limit the scope,
extent or intent of any provision hereof.

     3.2       Definitions. Except as otherwise expressly defined in this
Article 3 or otherwise herein, the capitalized terms used in this Lease shall
have the meanings set forth in the Base Agreement.

               3.2.1     "Lessee" shall mean Lessee as defined in the
introductory paragraph of this Lease, any successor by merger, consolidation or
reorganization, and its permitted assigns.

               3.2.2     "Lessor" shall mean Lessor as defined in the
introductory paragraph of this Lease, any of its predecessor railroads, any
successor by merger, consolidation or reorganization, and its permitted assigns.

               3.2.3     The term "damages" shall mean any and all damages,
including, but not limited to, civil, criminal, compensatory, consequential,
direct, indirect, treble, punitive, exemplary and special damages and all other

                                       1
<PAGE>   42

damages and penalties of any kind available at law and/or in equity.

4.   PERMITTED USE.

     Lessee shall use and occupy the Premises in accordance with Section 21of
the Base Agreement, and for no other purpose (the "Permitted Use").

5.   RENT.

     Lessee shall pay to Lessor, as base rent for the Premises, the sum of *
DOLLARS ($*.00) per * payable * in advance from the date hereof for the duration
of the Term ("Base Rent"). Lessee shall pay all real estate taxes levied against
the Premises and the cost of any Lessee improvements placed on the Premises and
all costs of or charges for water, sewage, electricity, heat and any other
utilities furnished to the Premises. If any of the foregoing is paid by Lessor,
Lessee shall reimburse Lessor, as additional rent, within thirty (30) days after
presentation to Lessee of bills therefor ("Additional Rent"). The payment by
Lessee of any sum in advance shall not create an irrevocable lease for the
period for which the same is paid. Lessor reserves the right to periodically
adjust the Base Rent any time after the expiration of twelve (12) months (and to
adjust any adjusted rent thereafter), by giving notice of such adjustment to
Lessee at least sixty (60) days prior to the effective date of such adjustment.
Lessee's continued occupation of the Premises after such effective date shall be
deemed an acceptance of such adjusted Base Rent.

6.   APPROVAL OF PLANS, TRACK CLEARANCE.

     Lessee, prior to placing any improvement on the Premises, shall submit
plans to, and secure approval in writing of, Lessor, which such approval may be
withheld in Lessor's sole discretion. Lessee shall not erect, place or allow to
be erected or placed on the Premises any buildings, structures, fixtures or
obstructions of any kind, either temporary or permanent, within twenty-five feet
(25') of the centerline of the nearest track, unless Lessee obtains the prior
written consent of Lessor, which may be withheld in Lessor's sole discretion;
provided that the foregoing shall not be construed to permit any track clearance
less than the minimum required by any applicable law, rule, order or regulation.
Any approval by Lessor of any improvement or alteration made by Lessee, or
failure of Lessor to object to any work done or material used, or the method of
construction or installation, shall not be construed as an admission of
responsibility by Lessor or as a waiver of any of Lessor's rights under this
Lease.

7.   FIRE PREVENTION.

     Lessee shall cooperate with the Risk Management Department of Lessor and
shall promptly comply with fire prevention measures requested by said
Department. Lessee shall make no electrical installations or alterations in and
to the improvements or electrical or other circuits (whether for power, light,
heat or other purposes) now or hereafter located on the Premises, except by a
duly licensed electrician, and shall make no installation of natural gas,
propane, kerosene or other combustion fuel heating or cooling units, except by
licensed heating or cooling contractor. No such alterations or installations
shall be made without prior written approval of Lessor's Risk Management
Department, which may be withheld in its sole discretion.

8.   PERMITS, ORDINANCES, REGULATIONS:

     8.1       Lessee, at Lessee's sole cost and expense, shall obtain any
applicable permits and shall comply with all applicable permits, ordinances,
rules, regulations, requirements and laws of any Governmental authority having
jurisdiction over the Premises or the Permitted Use thereof or the placement or
use of any improvements thereon, including but not limited to zoning, health,
safety, building or environmental matters. Lessee shall supply Lessor with
copies of all permits and letters or certificates of such authority's consent to
and/or approval of Lessee's use of the Premises.

                                       2
<PAGE>   43

     8.2       Lessee shall further defend, indemnify and hold Lessor harmless
from all losses, damages, costs of defense (including attorneys' fees) and costs
of compliance relating to any ordinance, rule, regulation, law, citation, order
or notice, any violation thereof, any penalty, levy, fine or assessments
therefrom, including any penalty, levy, fine, assessment, compliance cost or
remedial charge levied during the Term, or after termination of this Lease for
events arising during this Lease.

9.   MAINTENANCE, REPAIRS AND COSTS.

     Lessee will not create or permit any nuisance in, on or about the Premises,
and Lessee shall repair and maintain, at its sole cost and expense, the Premises
and any improvements thereon, in a neat and clean condition to the reasonable
satisfaction of Lessor.

10.  SERVICES, UTILITIES.

     Lessor will be under no obligation to furnish the Premises with water, gas,
sewage, electricity, heat, or other services and supplies that may be necessary
or desirable in connection with Lessee's use and occupancy of the Premises.

11.  ADJACENT AREAS.

     Except as provided in Article 12 hereof, Lessee shall not use any property
of Lessor other than the Premises herein leased without first obtaining Lessor's
prior written consent and complying with all requirements of Lessor applicable
thereto, including payment of such charges, costs or fees as Lessor deems
appropriate, in its sole discretion.

12.  INGRESS AND EGRESS.

     Lessee shall have the right to use, in common with Lessor and others
authorized by Lessor, existing driveways or other property designated by Lessor
as the means of ingress to and egress from the Premises. Lessor shall be under
no obligation with respect to the condition or maintenance of said driveway(s)
or other property, and Lessee's use of same shall be subject to all of the
covenants, terms and conditions of this Lease.

13.  PIPE AND WIRE LINES.

     Lessor shall at all times have the right to maintain and/or construct, and
to permit others to maintain and/or construct, overhead and/or underground pipe
and/or wire lines now or hereafter installed upon or across the Premises, and to
use, repair, renew, replace and remove the same.

14.  CLAIM OF TITLE.

     Lessee shall not at any time claim ownership of or any right, title or
interest in or to the Premises, nor shall the exercise of this Lease for any
length of time give rise to any right, title or interest in or to the Premises,
other than the leasehold herein created.

15.  MECHANIC'S LIENS.

     Lessee shall promptly pay all debts incurred by, and shall promptly satisfy
all liens of, its contractors, subcontractors, mechanics, laborers and material
men in respect to any construction, alteration, maintenance or repair of, in or
to the Premises, and any improvements thereon, and shall indemnify, defend and
hold Lessor harmless from and against all losses, damages, penalties, fines and
legal costs and charges, including attorneys' fees incurred, in any suit
involving any lien, the enforcement or satisfaction thereof, or encumbrance
caused by the same, with respect to the Premises or any part thereof or any
improvements thereon. Further, Lessee shall have no authority to create any
liens for labor or material on or against Lessor's or Lessee's interest in the
Premises, and shall so specify in all contracts let by Lessee for any
construction, erection, installation, alteration, maintenance or repair of the
Premises or any improvement thereon.

                                       3
<PAGE>   44

16.  TERM, TERMINATION, BREACH, REMOVAL:

     16.1      The initial term of this Lease shall be one (1) year, and shall
thereafter run year-to-year (the "Term"). This Lease may be terminated by either
party for any reason and at any time upon not less than three (3) months'
written notice. Notwithstanding the foregoing, in the event of a breach by
Lessee of any covenant, term or condition of this Lease or of the Base
Agreement, Lessor may, at its sole option, terminate this Lease immediately.

     16.2      Upon the expiration or earlier termination of this Lease, Lessee
shall immediately vacate the Premises. Within ninety (90) days of the expiration
or earlier termination of this Lease, Lessee, at its own risk, cost and expense,
shall remove all improvements erected or used by Lessee on the Premises and
shall restore the Premises to the functional and operational condition existing
prior to the execution of this Lease. If within such ninety (90) day period,
Lessee fails to remove such improvements and restore the Premises accordingly,
Lessee shall be deemed to have abandoned its improvements in place, in which
event such improvements shall become the property of Lessor, for purposes of
resale, use or operation by Lessor in any manner and for any purpose Lessor
deems appropriate, in its sole discretion; or Lessor may cause such removal and
restoration to be performed and all costs incurred by Lessor in such removal and
restoration, together with interest thereon at the highest non-usurious interest
rate allowed by law, shall be due and payable by Lessee to Lessor upon written
demand.

     16.3      The expiration or earlier termination of this Lease shall not
release either party from any liability or obligation incurred prior to such
expiration or termination nor terminate any right or obligation reasonably
intended to have continuing validity hereunder.

17.  RELOCATION.

     Lessor shall have the sole and absolute right to require the relocation of
the Premises, including any improvements thereon. The terms and conditions
applicable thereto shall be as stated in the Base Agreement.

18.  LIABILITY, INDEMNITY.

     18.1      In addition to the indemnification obligations stated elsewhere
herein, Lessee hereby releases Lessor, assumes responsibility for and shall
defend, indemnify and hold Lessor harmless from and against all losses, damages,
claims, fines, costs (including attorneys' fees) and expenses arising from or
relating to:

          (a)  any breach of this Lease by Lessee,

          (b)  any violation by Lessee of any law, rule, regulation,
               order, notice, ordinance or any other requirement of a
               public or governmental authority, including Lessee's
               failure to obtain any necessary approval, consent or
               permit,

          (c)  any damage (including environmental damage) to the
               Premises, improvements or other property,

          (d)  any bodily injury, including death, of any person,
               including, without limitation, the agents, employees,
               contractors, licensees, permittees and invitees of
               Lessor or Lessee and trespassers, which occurs on the
               Premises or relates to any action or omission on the
               Premises, and

          (e)  any liability arising from or relating to the condition
               of the Premises, or Lessee's use or occupancy thereof or
               placement or use of any improvements thereon,

whether caused by the fault, failure or negligence of Lessee, Lessor or
otherwise.

     18.2      Lessee agrees it shall not have and hereby completely and
absolutely waives its right to any claim against Lessor for damages or any other
legal or equitable relief on account of any deficiencies in Lessor's title to
the Premises. Lessee shall indemnify and hold Lessor harmless from and against
all claims, litigation and damages for trespass, slander of title, overburden of
easement, or other claims arising out of or based upon Lessee's use or occupancy
of the Premises or any placement or use of any improvements thereon.

                                       4
<PAGE>   45

     18.3      Nothing contained herein shall amend, alter, modify, abridge or
affect the provisions of the Base Agreement relating to indemnification or the
allocation of liability.

     18.4      The provisions of this Article 18 shall survive the expiration or
earlier termination of this Lease.

19.  INSURANCE AND LIABILITY.

          Each and every policy of insurance required under the Base Agreement
shall, prior to and during Lessee's use or occupancy of the Premises or any
placement or use of any improvements thereon, be amended or modified to provide
such coverage for Lessee's obligations hereunder, Lessee's use and occupancy of
the Premises and Lessee's placement or use of improvements thereon. Lessee shall
provide Lessor's Risk Management Department, 500 Water Street (J-907),
Jacksonville, FL 32202 with certified copies, except that, in the case of the
Railroad Protective Liability ("RPL") Policy, the original, of the insurance
policies amended or modified in accordance herewith. If, in Lessor's sole
opinion, higher limits of insurance coverage are necessary, Lessor shall so
notify Lessee and Lessee shall, within thirty (30) days of receipt of such
notice, provide to Lessor's Risk Management Department a certified copy (or the
original for the RPL Policy) of the endorsement to the appropriate policy
increasing the liability coverage to the required limit. The liability assumed
by Lessee under this Lease, including, but not limited to, Lessee's
indemnification obligations, shall not be limited to the insurance coverage
stipulated herein.

20.  CONDEMNATION.

     Should the Premises or any part thereof be condemned, appropriated and/or
acquired for public use, then Lessor, at its sole option, may terminate this
Lease. No part of any damages or award shall belong to Lessee, except to the
extent of any specific award from the governmental authority for improvements of
Lessee. The Premises shall be valued as vacant land, without consideration of
this Lease or Lessee's improvements on the Premises as an enhancement or
detriment to said value. Improvements of Lessee not so condemned, appropriated
and/or acquired shall be removed in accordance herewith.

21.  SUCCESSORS, ASSIGNS; NO TRANSFER, SUBLEASE OR ASSIGNMENT.

     21.1      The terms, covenants and provisions hereof shall inure to the
benefit of and be binding upon the successors and assigns of Lessor and the
successors and permitted assigns of Lessee.

     21.2      The foregoing notwithstanding, Lessee shall not transfer, assign,
encumber or sublet this Lease or any part of the Premises or any rights or
privileges herein granted, without the prior written consent of Lessor, which
may be withheld in Lessor's sole discretion. The foregoing covenant shall also
apply whether such sale or transfer is made voluntarily by Lessee or
involuntarily in any proceeding at law or in equity to which Lessee may be a
party whereby any of the rights, duties and obligations of Lessee shall be sold,
transferred, conveyed, encumbered, abrogated or in any manner altered. Any sale,
conveyance, transfer, assignment, sublease, abrogation or encumbrance of this
Lease, all or any portion of the Premises or any of the rights and privileges
hereunder in violation of this Article 21 shall be null and void and Lessor, at
its sole option, may terminate this Lease.

22.  BANKRUPTCY RIGHTS.

     It is expressly understood and agreed that in the event of any assignment
for the benefit of creditors, or in the event a petition in bankruptcy shall be
filed by Lessee, or if Lessee shall be adjudged bankrupt or insolvent by any
court, or if a trustee in bankruptcy or a receiver of Lessee or Lessee's
property shall be appointed in any suit or proceeding brought by or against
Lessee, and if at such time this Lease is in default by Lessee, then and in such
event Lessor, at its sole option, may (i) immediately terminate this Lease, or
(ii) may request an election of affirmance or rejection of this Lease under
Section 365 of the Bankruptcy Act by giving Lessee or any such assignee,
trustee, or receiver written notice of such demand for election. If Lessee, or
such assignee, trustee or receiver, fails to elect affirmance and fails to
furnish adequate assurances as to the payment of Lessee's existing and future
indebtedness to Lessor and continued performance under the Lease, Lessee shall
be deemed to have rejected the same. If Lessee or such assignee, trustee or
receiver shall

                                       5
<PAGE>   46

reject or be deemed to have rejected this Lease, this Lease shall be deemed
immediately terminated. If Lessee or such assignee, trustee or receiver shall
affirm this Lease, it shall thereupon be bound by all terms hereof, including,
without limitation, the obligation to make payment of all sums then or
thereafter due from Lessee hereunder.

23.  SEVERABILITY, GOVERNING LAW, WAIVER, NOTICES.

     23.1      Each and every separate division (paragraph, clause, item, term,
condition, covenant or agreement) herein contained shall have independent and
severable status from each other separate division, or combination thereof, for
the determination of legality, so that if any separate division herein is
determined to be unconstitutional, illegal, violative of trade or commerce, in
contravention of public policy, void, voidable, invalid or unenforceable for any
reason, that separate division shall be treated as a nullity, but such holding
or determination shall have no effect upon the validity or enforceability of
each and every other separate division herein contained, or any other
combination thereof.

     23.2      This Lease shall be governed by the laws of the State in which
the Premises are located. Nothing contained herein shall amend, alter, modify,
abridge or affect the provisions of the Base Agreement relating to the parties'
choice of governing law as to the rights and obligations contained therein.

     23.3      No waiver by Lessor of any breach of any covenant, condition or
agreement herein contained shall operate as a permanent waiver of such covenant,
condition, or agreement, or of any subsequent breach thereof. No payment by
Lessee or receipt by Lessor of a lesser amount than the installments of rent or
other sums due hereunder shall be deemed to be an acceptance thereof or a waiver
of any of Lessor's rights hereunder or a discharge of any obligation of Lessee
hereunder. Lessor shall have the right, in its sole discretion, to apply such
payment to any indebtedness owing from Lessee to Lessor. No endorsement or
statement on any payment or letter accompanying such payment shall be deemed an
accord and satisfaction, and Lessor may accept such payment without prejudice to
Lessor's right to recover any outstanding balance or to pursue any other remedy
provided in this Lease. No re-entry by Lessor after a breach or termination
shall be considered an acceptance of a surrender of the Premises unless
specifically agreed to in writing by Lessor.

     23.4      All notices and communications required or permitted under or
otherwise concerning this Lease shall be addressed to Lessor or to Lessee, as
appropriate, at their respective addresses set forth herein, or at such other
address as either party may designate in writing to the other party. Copies of
any notices or communications required or permitted under Section 18 or 19 shall
be provided to Lessor's Risk Management Department, 500 Water Street (J-907),
Jacksonville, FL 32202.

24.  OTHER PROVISIONS.

     None

                                       6
<PAGE>   47

     IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed, in duplicate, as of the day and year first above written.

                                    "LESSOR"
                                    CSX TRANSPORTATION, INC.
                                    [as operator for New York Central Lines LLC,
                                    a Delaware limited liability company]

Witnesses:

____________________________        By:_________________________________
                                    Name:_______________________________
____________________________        Title:______________________________

                                    "LESSEE"
                                    PATHNET TELECOMMUNICATIONS, INC.
                                    Name:_______________________________
____________________________        Title:______________________________

                                       7
<PAGE>   48
                                   EXHIBIT D
                                   ---------

                                   [LOGO ART]

                 When working along the Rail Road Right of Way

Make sure you have all the other RR Tenants notified before digging. Long
Distance Telecommunications Companies use RR ROW to route very small Fiber
Optic Cables which carry huge volumes of Telecommunications traffic including:
Banking, Stock Markets, Point of Sale, 911, FAA and Government. Not to mention
YOUR Family trying to call one another.

        LONG DISTANCE PHONE CO.

<TABLE>
<S>                      <C>
WORLDCOM                 1-800-248-0133
AT&T                     1-800-252-1133
MCI                      1-800-624-9675
SPRINT                   1-800-521-0579
QWEST                    1-800-283-1237
Interstate FiberNet      1-800-374-2350
</TABLE>

           ONE-CALL CENTERS
<TABLE>
<S>                      <C>
Alabama                  1-800-292-8525
Connecticut              1-800-922-4455
DC                       1-800-257-7777
Delaware                 1-800-282-8555
Florida                  1-800-432-4770
Georgia                  1-800-282-7411
Illinois (Chicago)       1-312-744-7000
Illinois                 1-800-892-0123
Indiana                  1-800-382-5544
Kentucky                 1-800-752-6007
Louisiana                1-800-272-3020
Massachusetts            1-888-344-7233
Maryland                 1-800-257-7777
Maryland                 1-800-282-8555
Maine                    1-888-344-7233
Michigan                 1-800-482-7171
Mississippi              1-800-227-6477
North Carolina           1-800-632-4949
New Hampshire            1-888-344-7233
New Jersey               1-800-272-1000
New York City
 (Long Island)           1-800-272-4480
New York                 1-800-962-7962
Ohio                     1-800-362-2764
Pennsylvania             1-800-242-1776
Rhode Island             1-888-344-7233
South Carolina           1-800-922-0983
Tennessee                1-800-351-1111
Virginia (South)         1-800-552-7001
Virginia (North)         1-800-257-7777
Vermont                  1-888-344-7233
West Virginia            1-800-245-4848
</TABLE>

                                      .48
<PAGE>   49
                                 CSXT EXHIBIT E

SPECIFICATIONS FOR UNDERGROUND COMMUNICATIONS AND POWER CABLE CROSSINGS AND
LONGITUDINAL OCCUPANCY UNDER TRACKS AND RIGHTS OF WAY

A.     PURPOSE OF SPECIFICATIONS

       The purpose of these specifications is to govern the location and
       installation of underground communication and power cables crossing under
       the track(s) and/or CSXT right of way in a manner that will not interfere
       with present and future CSXT construction operations.

B.     GENERAL LOCATION OF UNDERGROUND FACILITIES

       1.     The cable or duct system of proposed underground crossings shall
              be laid as straight and direct as possible between the points
              where the underground line enters and leaves the property of CSXT.

       2.     Manholes, pull and splice boxes, and terminals in the underground
              crossings should be located off CSXT's right of way where
              possible, or at the outer edge of the right of way when on
              Railroad property. If the structures must be located further from
              the right of way line, and nearer the track(s), they must be
              installed below ground, and marked with identification flush with
              the ground.

C.     DESIGN CRITERIA FOR UNDERGROUND FACILITIES

       1.     The tops of conduits and/or ducts and cable system structures of
              underground cable crossings shall be located at a depth of not
              less than 60 inches below the bottom of the crossties. In
              addition, the installations shall be at least 36 inches below the
              bottom elevations of ditches or 42 inches below ground level for
              parallel installations with the lowest depth governing. Where
              rail-plow is authorized, conduit or cable shall be at a depth of
              not less than 42 inches below ground level.

              When installations are proposed by rail plowing, the minimum
              offset from the centerline of the near track shall not be less
              than 15 feet. When installations are proposed by tractor plowing,
              they shall be located more than 15 feet from the centerline of the
              near track. Tractor plowing will not be permitted on railroad
              embankments without specific site approval. The proposed conduit
              installations shall not be located less than 5 feet from CSXT code
              cables. Plowing through

<PAGE>   50

              public or private road crossings will not be permitted. All
              drainage structures will be located and marked prior to plowing or
              trenching.

              Unless otherwise approved, manholes, hand hole/splice boxes shall
              be located at least 25 feet from the centerline of the near track
              where right of way is available. Unless otherwise approved, bored
              conduits shall clear signal control building and appurtenance
              foundations by 5 feet vertically. The conduits are to be clear
              such facilities horizontally by 5 feet if trenched and 10 feet if
              bored.

       2.     Underground crossings of power supply cables with a maximum
              voltage of 750 volts may be installed by pushing or boring a
              galvanized steel pipe under the tracks at a depth specified above
              to serve as a conduit, provided such pipe extends at least 25 feet
              beyond the outside rail on each end of the crossing and the top of
              pipe casing is buried at least 60 inches below the bottom of the
              crossties and 36 inches below ditch bottoms at all other points on
              the property of CSXT. Longitudinal occupancy shall be approved by
              the Chief Engineer to ensure that such proposed occupancy does not
              impair the normal functioning of Train Control equipment.

              Measurements to the ends of the conduits shall be to the head of
              the outside rail and made at right angles to the track. Additional
              lengths will be required for crossings in fill sections and those
              at angles of less than ninety degrees (90 degrees) and for
              multi-track crossings. Generally, on fills, two feet beyond the
              toes of the slopes or three feet beyond the ditch should be
              sufficient, (refer to Attachment No. 1 and No. 2). All ducts
              and/or encasement beneath the tracks must be capable of
              withstanding E-80 loading and conform to A.R.E.MA. Part 5, Section
              5.3. Conduits and/or encasement larger than four (4) inches shall
              be governed by the specifications which normally cover pipelines.
              Jacking or boring installation is preferred, and no water is to be
              used in the installation of the encasement.

       3.     Underground crossings of communications cables of low voltage
              shall conform to number "2" above, except that encasement may, at
              the discretion of the Chief Engineer or his authorized
              representative, be restricted to 15 feet beyond the outside rail
              of spur or sidetracks measured at right angles to the track. As in
              number "2" above, additional lengths will be required for
              crossings in fill sections, etc. These criteria shall also apply
              to paved street sections.

       4.     Underground crossings of power supply cables operating above 750
              volts will be installed at depths specified above. In addition,
              between the points where the underground crossings enter or leave
              CSXT

                                       2
<PAGE>   51

              property, the cable is to be enclosed in galvanized steel pipe or
              in an approved concrete encased duct for mechanical protection of
              the cable. No cable of this potential, which is unprotected, will
              be permitted. Longitudinal occupancy shall be approved by the
              Chief Engineer to ensure that such proposed occupancy does not
              impair the normal function of Train Control equipment. If risk to
              inductive interference is perceived, a further examination by a
              third party may be required.

       5.     Owners of the conduits and cables shall designate the locations of
              such installations to aid in the prevention of damage to the cable
              as a result of use of Railroad's property. Signs or markers shall
              be placed and maintained preferably at or near the CSXT right of
              way line. The signs/markers shall describe the underground
              facility and include a telephone number of the facility owner
              clearly visible on each side of the track.

       6.     In addition to the requirements of these specifications, the
              underground crossing is to conform to the requirements of the
              National Electrical Safety Code, as published by the National
              Standards Institute, Inc., the latest revised edition of same
              being controlling. The crossing is also to conform to the
              requirements of any local or state laws or regulations of any
              local code enforcing authority that may be in effect at the time
              of the installation.

       7.     All applications for underground facilities described in this
              document shall be submitted to the appropriate Division Engineer
              or Manager, or his or her designated representative(s) having
              jurisdiction and must be accompanied by complete location and
              construction plans referenced to CSXT's milepost. No work is to be
              performed on CSXT property prior to granting of authority from the
              Division Engineer or Manager. All work on the property will be
              performed under the supervision of the Division Engineer or
              Manager. The applicants shall bear any expense incurred by CSXT or
              its forces, will execute the appropriate agreement and pay all
              fees and rentals as required by established standards or as
              negotiated.

       8.     Conduit shall be so installed as to prevent the formation of a
              waterway under the railroad, with an even bearing throughout its
              length, and shall slope to one end (except for longitudinal
              occupancy).

       9.     Bored or jacked installation shall have a bored hole with the
              diameter essentially the same as the outside diameter of the
              conduit plus the thickness of any protective coating. If voids
              should develop or if the hole diameter is greater than the outside
              diameter of the conduit (including coating) by more than one (1)
              inch, remedial measures, as

                                       3
<PAGE>   52

              approved by the railroad's Chief Engineer, shall be taken. Boring
              operations shall not be stopped if such stoppage would be
              detrimental to the railroad.

       10.    Conduits and cables shall be installed by plowing methods where
              practical. Directional boring, and trench and back fill techniques
              shall be used in those locations where plowing is impractical. In
              all cases, the condition of the right of way will be restored,
              including vegetation and erosion controls to CSXT's satisfaction,
              and in accordance with current CSXT specifications for grading
              work.

       11.    All bridge attachment designs must be approved by CSXT. All
              designs are to provide for attachment to the outside of the bridge
              structures. Insertions or burial of casing and/or conduit where
              the ballast is carried across bridge decks will not be approved
              except for aesthetic or historic reasons. Steel pipe casing with
              adequate provision for contraction and expansion shall be used to
              support the conduit. Core drilling for installation of casing
              through bridge back walls, head walls, and wing walls shall be
              located not less than one core diameter from the top or outside
              face of the wall. Steel sleeves secured by approved grout material
              shall be installed in bores through concrete walls prior to the
              installation of casing. All FRA and OHSA safety rules for bridge
              worker safety shall apply when work is performed on bridges. Care
              must be taken to ensure metallic conduit shall not impair or
              circumvent Train Control circuitry.

              Excavation by blasting methods shall be employed only as a last
              resort, must be approved by CSXT in writing in each instance, and
              must comply with Sections 1..3..5..9.. of the Manual for Railway
              Engineering, refer to Attachment No 3.

       12.    Point of Presence, Regeneration and Junction Sites are to be
              located not less than 25 feet from the centerline of the near
              track. Service and access roads are to be located not less than 25
              feet from the centerline of the near track. These site
              installations shall not interfere with existing drainage
              structures and systems, or service roads. Sites involving
              buildings or other types of sight obstructions shall be located in
              accordance with CSXT crossing sight distance criteria, refer to
              Attachment No. 4 and No. 5.

       13.    The owners of the proposed installations are responsible for
              coordination with all existing utilities located on the right of
              way during design and construction, and maintaining the proper
              clearances. The owners of the proposed installations are
              responsible for obtaining all construction and environmental
              permits, and compliance with their

                                       4
<PAGE>   53

              requirements. The owners of the proposed installations are
              responsible for confirmation of title to right of way through
              CSX -- Real Property, Inc.

       14.    Design Plans - All plans shall be submitted to CSXT for review and
              approval. No work is to be initiated without approved plans on
              site. Plans shall be drawn to scale showing the relation of the
              proposed cable system to railroad tracks, railroad signals and
              control facilities, angles of crossings, locations of bores,
              manholes, hand holes, railroad survey stations, railroad mile
              posts with prefixes, right of way lines and general layout of
              tracks and facilities, etc. Also, drawings must show number of
              conduits, size and location of cable in the conduit, fiber count
              in each cable, and details of bridge attachments. A general
              location map together with a legend indicating line and symbol
              designations with on/off milepost (nearest 0.1 mile) is to be
              included. CSXT reserves the right to require plan modifications
              during construction to protect railroad facilities and operations.

D.     CONSTRUCTION OPERATIONS

       Construction operations shall be planned and organized to minimize
       conflicts with railroad operations. All operations are to be conducted in
       accordance with CSXT Safe Way policies and procedures, and are subject to
       CSXT approval.

       1.     Pre-construction conferences shall be held prior to beginning work
              on the right of way. Additional progress meetings and/or
              teleconferences may be required during the course of the work.
              Coordination shall be provided as outlined in CSXT MWI 1905.
              Complete work schedules will be presented at the pre-construction
              conference. The schedules are to be updated monthly at a minimum.

       2.     All construction operations shall be conducted in compliance with
              CSXT MWI 1905 and the CSXT Fiber Optic Program Safety Requirements
              approved 09-09-98, refer to Attachment No. 6.

              All personnel on the projects shall have received CSXT Safe Way
              (including FRA OTS) training prior to entering the right of way.
              Proof of training may be required at anytime. Construction
              operations shall be conducted in accordance with FRA and OSHA
              regulations, and coordinated with and subject to the approval of
              the CSXT Chief Engineer for Design and Construction, the CSXT
              Service Lane or Business Unit Division Engineer, the CSXT Flagmen
              and Signalmen, and the consultant inspection personnel assigned to
              the projects by CSXT. Permissions shall be obtained from CSXT to
              enter the right of way before beginning operations.

                                       5
<PAGE>   54

              All personnel shall receive safety briefings by a CSXT Flagman or
              designated CSXT representative each day before beginning work on
              the right of way. Additional briefings may be required when
              conditions and/or work sites are changed. Requests for flagmen
              deployments and train orders shall be submitted to the lead
              flagman or the designated CSXT representative by 3:00 PM each day
              for the following workday.

       3.     The owners of the facilities shall have construction managers in
              responsible charge on site at all times and shall provide
              production quantities on a daily basis to the CSXT designated
              representative or the consultant inspection personnel assigned to
              the project.

       4.     Accurate notes and records shall be maintained during the course
              of the work to enable the preparation of complete "as-built plans"
              upon completion of the project(s). The "as-built plans" shall
              accurately depict and describe the location of all facilities
              installed on the right of way. As-built plans shall be submitted
              for approval as specified in the contract with CSXT.

       5.     Unless otherwise approved or directed, all plowing shall be
              performed with plow cutting edge perpendicular to the ground
              surface. Plow lines are to be backfilled and compacted, as
              required, as conduit installation progresses. All plow areas are
              to be backfilled before work is suspended for the day. Follow up
              restoration work will be required whenever settlement or erosion
              is observed.

              In the event of equipment breakdowns, severe weather, or railroad
              emergencies that preclude completing and closing excavations or
              disallow complete removal of equipment or materials, the areas are
              to be surrounded with orange construction fence to the
              satisfaction of the CSXT representative. Flashing construction
              barricades may be required if the sites are in or near walk ways,
              switches, signal control cabinets, or services roads used by CSXT
              personnel during night time hours.

              Excavations shall comply with OSHA requirements and be promptly
              backfilled and compacted in accordance with the drawings and
              specifications approved by the CSXT Chief Engineer, refer to
              Attachment No. 7.

       6.     Fouling of the track, ties and ballast will not be permitted.
              Approved ballast stone shall be available on the project at all
              times. Ballast contaminated or disturbed shall be replaced and/or
              reshaped immediately.

                                       6
<PAGE>   55

              All obstructions located within 15 feet of the center of the near
              track or on or adjacent to the walk areas, switches, and signal
              control devices and cabinets are to be removed by the end of each
              workday.

              Conduit at the end of plow lines, directional bores, and trenches
              shall be cut off and buried as the work progresses. In the event
              that it becomes necessary to leave exposed ends or sections of
              conduit due to emergencies or inclement weather, they are to be
              surrounded with orange construction fences until they are
              connected or buried. Messages are to be sent to the CSXT
              dispatcher advising of potential crew or operational hazards.

              Casings and directional bore holes that have failed and are
              abandoned shall be sealed to prevent them from becoming conduits
              for drainage. Excavations associated with abandoned casings and
              bores are to be backfilled and compacted as shown in the
              specifications.

              The telecom owners are responsible for clearing and grubbing
              vegetation that conflicts with the construction and disposal of
              the debris off the right of way.

       7.     Cables and/or wires temporarily installed to monitor or guide
              directional boring operations shall be subject to the following:

              a) CSXT permission is required if they are to be attached to
              railroad structures and the flagmen are to be kept advised of all
              installations.

              b) Clearances over waterways must be maintained to allow free
              unobstructed passage of boat traffic.

              c) Wires and supports located on the ground must be clearly marked
              and located such that they do not conflict with railroad personnel
              and operations. Control wires are not to be installed in advance
              of beginning operations and work deferred.

              d) When directional bores are monitored by electronic devices that
              do not use wire, and the work crosses streets or highways; traffic
              control devices, approved by the State DOT, are to be placed when
              personnel are on the highway right of way and/or interfere with
              traffic.

              e) All wires and supports are to be removed from the site promptly
              after work is completed.

                                       7
<PAGE>   56

       8.     Areas disturbed by construction operations shall be reshaped to
              drain, seeded, mulched or surfaced with crushed stone as required
              to prevent erosion and ensure CSXT personnel and equipment can
              safely use all areas at all times. Restoration of right of way
              disturbed by construction operations shall be scheduled to
              coincide with the installation of conduit and hand hole/splice
              boxes and other appurtenances.

              The owners of the facilities shall comply with all applicable
              CSXT, Federal, State and local environmental laws and regulations.
              The owners shall also prevent construction material and debris
              from entering waterways, wetlands, and detention and retention
              ponds. Any material that inadvertently escapes during construction
              operations shall be recovered and properly disposed of at an
              acceptable site. Erosion control materials such as silt fencing,
              bale checks and mulch shall be available and installed where
              necessary to protect potentially environmentally sensitive areas.

              Existing riprap or other erosion control structures disturbed or
              damaged during the course of the work shall be promptly repaired
              to the satisfaction of CSXT. Completed work shall be re-evaluated
              following storms or other construction activities to ensure that
              the right of way is maintained in a satisfactory manner during the
              course of the work.

       9.     The right of way shall be restored to a condition equal to or
              better than the condition prior to beginning the project before
              final acceptance will be approved. Conduit and cable reels, and
              other debris are to be removed from the right of way as the work
              progresses. Failure to remove such materials and perform
              restoration promptly may result in a suspension of work order
              until satisfactory progress has been demonstrated.

       10.    Final inspections of the right of way condition and restoration
              will be scheduled at CSXT convenience prior to construction
              personnel and equipment leaving the project. Punch lists shall be
              responded to prior to issuance of an acceptance memorandum signed
              by the Division Engineer or his/her designated representative.

                                       8
<PAGE>   57

E.     COMPLIANCE WITH SPECIFICATIONS

       1.     All work performed and materials furnished shall be in reasonably
              close conformity with the provisions contained in the plans and
              specifications approved by CSXT for the project and the provisions
              contained in this document. In the event that materials or the
              finished work are not in reasonably close conformity with the
              plans and specifications, CSXT will determine if the work or
              materials shall be removed and replaced or otherwise corrected to
              the satisfaction of CSXT.

       2.     No revisions to existing installations will be required under
              these specifications. When necessary to install, relocate or
              replace existing facilities, these specifications will govern.

       3.     These specifications will become effective on the date of
              signature below and will remain in effect until revised by the
              Office of Chief Engineer CSX Transportation.

                                      Approved: [SIG]
                                               --------------------------------
                                                      Chief Engineer

                                      Date: Mar. 16, 1999
                                           ------------------------------------

                                      Approved: [SIG]
                                               --------------------------------
                                                Chief Engineer Train Control

                                      Date: 3-18-19
                                           ------------------------------------

       Prepared by:  B.H. Ortgies, P.E., V.P.
                     Wilbur Smith Associates
                     Tallahassee, FL
                     Revised Dec. 28, 1998

                                       9
<PAGE>   58

                                                                ATTACHMENT NO. 1

            [LENGTH OF CASING FOR VARIOUS CROSSING ANGLES DIAGRAM]

<PAGE>   59

                                                                ATTACHMENT NO. 2

                                [FILL DIAGRAM]

<PAGE>   60

                                                                ATTACHMENT NO. 3

               MANUAL FOR RAILROAD ENGINEERING, SECTION 1..3..5..9

1..3..5..9 Controlled Blasting of Rock

The contractor shall make all necessary arrangements satisfactorily to the
engineer for controlled blasting in the vicinity of the track and shall provide
all safeguards required by the railway.

Within the entire area of the contract, complete and continuous precaution shall
be taken by the contractor to prevent any damages to persons, vehicles, trains,
power or communication lines, structures, private dwellings or other
installations by reason of concussion, vibration or flying material.

The contractor shall be familiar with and comply with all regulations governing
the transportation, storage, handling and use of explosives at the location of
the work. He shall obtain such permits as are required.

The contractor shall take all necessary precautions against the effects of
induced currents caused by radio transmitters and receivers, power lines,
transformers, cables, radar beams or any other energy or wave force which might
result in premature firing of the blasting circuits.

All blasting shall be done with extreme care by experienced licensed powder men,
in accordance with procedures approved by the engineer in writing.

The contractor shall submit, in advance of drilling, a drilling and loading
pattern for blasting to the engineer. All drill dust shall be blown out of the
holes and holes shall be protected with suitable plugs or covers.

Approved blasting signals shall be used at all times. All blasting shall be
carried out under strict traffic regulations. Each blast shall be subject to
clearance by the contractor from the engineer to avoid any blasting while a
train is nearby.

When necessary to protect property or facilities, all blasts shall be suitably
covered with blasting mats or other approved protective material, weighted and
secured in such a manner as to prevent projection of debris. The contractor is
fully responsible for the method used in blasting rock and carrying out the
approved procedures and for the prompt removal of all debris deposited on the
track. Approval of the engineer shall not relieve the contractor in any degree
whatsoever of full responsibility for damages caused by blasting operations.

<PAGE>   61

                                                                ----------------
                                                                ATTACHMENT NO. 4
                                                                ----------------

               [ROAD CROSSING SIGHT CLEARANCE DISTANCES DIAGRAM]

<PAGE>   62

                                                                ----------------
                                                                ATTACHMENT NO. 5
                                                                ----------------

               [ROAD CROSSING SIGHT CLEARANCE DISTANCES DIAGRAM]

<PAGE>   63

                                                                ATTACHMENT NO. 6

                               CSX TRANSPORTATION
                               FIBER OPTIC PROGRAM
                               SAFETY REQUIREMENTS

GENERAL

-      All fiber optic workers must receive CSXT SAFETY AWARENESS training and
       have a verification card and/or hard hat sticker. CSXT Safety Rules and
       Contractor Policies will apply to fiber optic workers, where applicable
       to the specific work performed.

-      All personnel must wear proper Personal Protection Equipment, which
       includes a minimum of a hard a hat, safety glasses, steel toed shoes,
       hearing protection, and orange vests with reflective stripes on or around
       road crossings. When working beyond 25 feet from the nearest rail of a
       main track, hard hats, safety glasses, and laced work boots will be
       required.

-      All "FRA Bridge Worker Safety" rules will apply to fiber optic workers
       performing bridge attachments, including proper fall protecting rules.

-      All test holes or pits less than 15 feet from the centerline of main
       tracks, will be filled or covered prior to passing of trains. No open
       pits or holes will be left over night. All pits and trenches will be
       shored according to OSHA requirements.

-      No dirt or debris will be allowed to foul the ballast section of the
       tracks.

-      All excavation or plow trenches will be back filled and compacted
       immediately after the work is done.

-      All public utilities, CSXT Engineering, and the Railroad Train Control
       Office, will be notified prior to any construction.

-      Job Briefings will be conducted each morning and throughout the day when
       conditions or job scope changes.

WORKING ON OR AROUND TRACKS

-      All work in the FRA Red Zone (within 4 feet from outside rail on each
       side of the track) will be done only with a CSXT, FRA qualified flagman
       or watchman as specified by the local Engineering representative. All
       work beyond 4 feet from the outside rails and within 25 feet, must be
       done under the supervision of a CSXT qualified inspector or flagman.

-      Certain types of work done beyond 25 feet from the outside of the rails,
       and with equipment that will not reach beyond this point, may be done
       without flagging protection or a watchman, IF APPROVED BY THE LOCAL
       ENGINEERING REPRESENTATIVE, AND PROTECTED BY A CONSTRUCTION FENCE, IF
       WORK IS STATIONARY (WILL NOT BE USED FOR CAT PLOWING).

-      All work must be stopped while trains are passing within the work zone.

-      All workers will remain off the tracks. If necessary to perform the work
       on track, protection will be provided as stated above.

ALL VIOLATION OF ANY CSXT SAFETY RULES OR POLICY, MAY RESULT IN REMOVAL OF
CONTRACTOR OR PERSONNEL FROM THE RIGHT OF WAY.

CSXT/LLG Rev. 09-02-98 Approved by: Manager Safety 09-09-98

<PAGE>   64

                                                                ----------------
                                                                ATTACHMENT NO. 7
                                                                ----------------

                     [COMPACTION SPECIFICATIONS DIAGRAM]
<PAGE>   65
                                                                       EXHIBIT F

                                      -1-

                       Association of American Railroads
                              Communication Manual

<TABLE>
<CAPTION>
1989                                                                                        Part 1-B-1
-------------------------------------------------------------------------------------------------------
                 Recommended Practices for Communication Lines
                        Crossing the Tracks of Railroads
                     Revised 1988 (76 Pages) (DOC. 1-B-1A)

                               Table of Contents
                               -----------------
                                                                                            Paragraphs
                                                                                           ------------
<S>                                                                                   <C>
Section A -- Purpose................................................................         A-1 to A-2
Section B -- Definitions............................................................        B-1 to B-10
   Communication Lines..............................................................         B-1 to B-4
   Supply Lines.....................................................................         B-5 to B-7
   Voltage of a Circuit.............................................................                B-8
   Minor Tracks.....................................................................                B-9
   Major Tracks.....................................................................               B-10
Section C -- General................................................................         C-1 to C-8
   Permits and Notices..............................................................        C-1 and C-2
   Marking Poles....................................................................                C-3
   Fire Hazard......................................................................                C-4
   Protection for Moving Vehicles...................................................                C-5
   Inspection.......................................................................         C-6 to C-8

                            Part I -- Overhead Crossings
                            ----------------------------
Section D -- General................................................................         D-1 to D-8
   Relative Levels of Supply & Communication Wires..................................         D-1 to D-3
   Protection of Metals Against Corrosion...........................................                D-4
   Vertical Pull....................................................................                D-5
   Length of Crossing Span..........................................................         D-6 to D-8
Section E -- Clearances.............................................................         E-1 to E-7
   General..........................................................................                E-1
   Side Clearances from Rails.......................................................                E-2
   Vertical Clearance Above Rails for Fixed Supports................................        E-3 and E-4
   Vertical Clearances Between Wires Not on the Same
      Supporting Structures.........................................................                E-5
   Increased Clearances.............................................................                E-6
   Clearance of Conductor of a Communication Line
      From the Supports of Another Line.............................................                E-7
Section F -- Loading Assumptions....................................................         F-1 to F-3
Section G -- Poles..................................................................        G-1 to G-10
   Material.........................................................................                G-1
   Sizes............................................................................                G-2
   Gains............................................................................                G-3
   Setting..........................................................................         G-4 to G-6
   Pole Mounts......................................................................                G-7
   Spliced Poles....................................................................                G-8
   Stub Reinforced Poles............................................................       G-9 and G-10
Section H -- Crossarms and Brackets.................................................         H-1 to H-5
Section J -- Crossarm Braces........................................................        J-1 and J-2
Section K -- Pins...................................................................                K-1
Section L -- Insulators.............................................................        L-1 and L-2
Section M -- Tie Wires..............................................................                M-1
Section N -- Conductors.............................................................         N-1 to N-5
Section P -- Sags...................................................................                P-1
</TABLE>

<PAGE>   66

                                      -2-

                      Association of American Railroads
                              Communication Manual

<TABLE>
<CAPTION>
Part 1-B-1                                                                                         1989
-------------------------------------------------------------------------------------------------------
                                                                                            Paragraphs
                                                                                           ------------
<S>                                                                                   <C>
Section Q -- Guys...................................................................        Q-2 to Q-22
   Material.........................................................................                Q-1
   Side Guys........................................................................        Q-2 and Q-3
   Head Guys........................................................................        Q-4 and Q-5
   Guying at Corners and Terminals..................................................         Q-6 to Q-8
   Omission of Guys................................................................         Q-9 to Q-11
   Guying in Special Cases..........................................................               Q-12
   Guy Leads........................................................................               Q-13
   Methods of Anchoring Guys........................................................               Q-14
   Guy Rods.........................................................................               Q-15
   Anchors..........................................................................               Q-16
   Method of Securing Guy Strand....................................................               Q-17
   Guards for Guys..................................................................               Q-18
   Pole Braces......................................................................               Q-19
Section R -- Suspension Strand......................................................         R-1 to R-8
   Material.........................................................................                R-1
   Sizes............................................................................        R-2 and R-3
   Attachment to Poles..............................................................         R-4 to R-7
   Sags.............................................................................                R-8
Section S -- Cable Attachments to Suspension Strands................................                S-1

                        Part II -- Underbridge Crossings
                        --------------------------------
Section T -- General................................................................         T-1 to T-4
   Avoidance of Attachments.........................................................                T-1
   Attachments......................................................................                T-2
   Clearance from Abutments.........................................................                T-3
   Clearance from Bridge Structure..................................................                T-4

                       Part III -- Underground Crossings
                       ---------------------------------
Section U -- General................................................................        U-1 to U-14
   Arrangement for Work.............................................................                U-1
   Location.........................................................................                U-2
   Side Clearance from Rail.........................................................                U-3
   Clearance Below Base of Rail.....................................................        U-4 and U-5
   Arrangement of Conduit System....................................................                U-6
   Protection of Ducts..............................................................        U-7 and U-8
   Excavation.......................................................................                U-9
   Shoring..........................................................................               U-10
   Grading and Drainage.............................................................               U-11
   Backfilling......................................................................               U-12
   Removing Surplus Material........................................................               U-13
   Concrete.........................................................................               U-14
</TABLE>

<PAGE>   67

                                      -3-

                        Association of American Railroads
                              Communication Manual
1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------
                                   A -- Purpose
                                   ------------
A-1     These recommended practices are for construction and maintenance of
        communication lines crossing the tracks and associated parallel
        communication lines of steam and electrified railroads, except street
        railways.

A-2     Where any requirements of this specification do not meet municipal or
        state requirements, such municipal or state requirements shall govern.

                                 B -- Definitions
                                 ----------------

B-1     Communication Lines: Communication lines as used in this manual part
        mean telegraph, telephone and other communication wires and cables and
        their supporting or containing structures which are located outside of
        buildings and are used for public or private communication service and
        which operate at not exceeding 400 volts to ground or 750 volts
        between any two points of the circuit, and the transmitted power of
        which does not exceed 150 watts. For such communication wires, when
        operating at less than 150 volts between wires or to ground, no limit
        is placed on the capacity of the system.

B-2     Interlocking, automatic signal and other similar wires (not including
        electric light and supply wires), which operate at not exceeding the
        voltage and power requirements of communication wires, should be
        classed as communication wires.

B-3     Communication circuits used exclusively in the operation of supply
        lines should, in general, be considered as supply circuits of the
        highest voltage to which they are exposed, and should be constructed
        in accordance with Manual Part 7-1 (Recommended Practices for
        Crossings of Electrical Supply Lines and Facilities of Railroads), but
        in no case need the communication conductors meet the requirements for
        supply conductors in excess of 8,700 volts between conductors.

B-4     Where, however, such communication circuits are below the supply
        conductors in the operation of which they are used, at all points
        throughout their length or throughout the section in which the railroad
        crossing occurs, provided such section of the communication circuits is
        isolated from the remainder of the system by transformers or other
        means,
<PAGE>   68
                                      -4-
                       Association of American Railroads
                              Communication Manual
Part 1-B-1                                                                 1989
-------------------------------------------------------------------------------

     they may be considered as ordinary communication circuits and so
     constructed, if either of the following conditions obtain:
     (a)    Such communication circuits occupy a position below all other
            conductors or equipment or other lines at crossings, conflicts,
            or on commonly used poles throughout the section to which
            reference is made.

     (b)    Such communication circuits are protected by fuseless lightning
            arresters, drainage coils, or other suitable devices to prevent
            the communication circuit voltage form normally exceeding 400
            volts to ground.

B-5  Supply Lines: Electrical supply lines mean those conductors and their
     necessary supporting or containing structures which are located
     entirely outside of buildings and are used for transmitting a supply
     of electrical energy.

B-6  Except as specified in Paragraphs B-4 and B-7, communication and railway
     signaling wires exceeding the voltage or power limitations specified in
     Paragraph B-1, are supply lines within the meaning of this manual part and
     should be so constructed.

B-7  Circuits used for supplying power solely to apparatus forming part of
     a communication system may be run either in open wire or cable as
     follows:
     (a)    Where run in open wire, such circuits should have the strength
            of construction, clearances, insulation, etc., prescribed for
            communication or supply circuits of the voltage concerned.

     (b)    Where run in effectively grounded continuous metal sheath
            cable or in cable which is attached to effectively grounded
            suspension strand by means of metal rings or spirally wound
            lashing wire, the strength of construction, clearances,
            locations, etc., prescribed in this manual part for
            communication cables should apply.

B-8  Voltage of a Circuit: Voltage of a circuit means the highest effective
     voltage between any two conductors of the circuit concerned, except
     that in a grounded multi-wire circuit of 750 volts or less between
     any two conductors, it means the highest effective voltage between any
     wire of the circuit and that point or conductor of the circuit that is
     grounded.

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B-9  Minor Tracks: Minor tracks mean railroad tracks included in the
     following:
     (a) Spur tracks less than 2,000 ft. long and not exceeding two tracks
         in the same crossing span.

     (b) Narrow-gauge or other tracks on which standard rolling stock
         cannot, for physical reasons, be operated.

     (c) Tracks used only temporarily for construction or similar purposes
         for a period not exceeding one year.

     (d) Tracks not operated as a public utility, such as industrial
         railways used in logging, mining, etc.

     (e) By agreement between the parties at interest, other similar minor
         tracks than those listed under (a), (b), (c) and (d) above.

B-10 Major Tracks: Major tracks mean any tracks not included under the
     definition of minor tracks.

                                C-General

C-1  Permits and Notices: A party planning to erect wires across the tracks
     of a railroad shall give to the Superintendent of Communication or
     other designated officer of the railroad, written notice at least 30
     days in advance of starting construction. Such notice shall include
     information regarding the location and general plan of the crossing,
     clearances and other data indicated on Typical Communication Line
     Crossing Data Sheet, Appendix L, and on Figures 1B1-1, 1B1-3, 1B1-4 and
     1B1-5, and any other pertinent information in sufficient detail so that
     it can be determined whether or not the proposed construction will
     conform to this specification.

C-2  In cases where 30 days' notice is impracticable because of service
     demands or emergency, the parties concerned should cooperate to avoid
     unnecessary delay in the construction of the crossing.

C-3  Marking Poles: Crossing poles should be plainly marked by means of
     stencils or metal characters showing the name, initials or trade mark
     of the owning company.  Where lines are located on railroad
     right-of-way for at least three poles adjacent to the crossing and it
     is the standard practice of the owning company to so mark at least
     every fifth pole in the line, the above requirement should be
     considered as having been met.

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C-4  Fire Hazard: Crossing poles or other supporting structures shall be
     located as far distant as practicable from inflammable structures and
     the space around the poles or other supporting structures kept free from
     inflammable material.

C-5  Protection from Moving Vehicles: Supporting structures adjacent to
     traveled highways shall be located with a view to reducing, as far as
     practicable, the danger of being struck by moving vehicles. Structures
     which are exposed to abrasion by moving vehicles or to other damage
     which would affect their strength materially, shall be protected by
     guards.

C-6  Inspection: The construction shall be subject to the inspection of the
     railroad company and shall comply with the requirements of this manual
     part. Defective material shall be rejected and replaced with acceptable
     material.

C-7  All parts of the supporting structures of overhead crossings should be
     inspected at such intervals as are necessary to assure adequate
     maintenance. All defective parts shall be promptly restored to a safe
     condition and, with the exception of wood poles, should be replaced when
     they have deteriorated to 50% of their required initial strength. Wood
     poles should be replaced when they have deteriorated to two-thirds their
     required initial strength. (The ground line circumference of various
     classes and species of poles whose strengths have deteriorated to
     two-thirds their strength when new is given in Appendix G.) In the
     replacement inspection of treated poles where decay is usually internal,
     the extent of the decay shall be determined and evaluated in terms of
     external decay so that the tables in Appendix G may be applied.

C-B  Underground crossings should be properly maintained.

                        Part I - Overhead Crossings
                                 D-General

D-1  Relative Levels of Supply and Communication Wires: Every reasonable
     effort should be made in the construction or reconstruction of a
     crossing to arrange or rearrange the lines so that supply wires should
     be at a higher level than the communication wires. This does not apply
     in the case of trolley contact wires or their associated feeders, which
     must, of necessity, occupy a position below all other wires at the
     crossing.
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D-2     Where communication lines cross over tracks and a supply line in the
        same span, or where supply wires are carried in the lower position on
        the same crossing poles as the communication wires, the construction of
        the crossing should be as follows, depending upon the voltage of the
        supply circuits:

        (a)      Where the supply line is open wire and the voltage does not
                 exceed 750 volts ac or dc to ground, constructions should be
                 in accordance with this manual part.

        (b)      Where supply circuits of any voltage are carried in cable
                 having effectively grounded continuous metal sheath or on
                 effectively grounded suspension strand, the construction
                 should be in accordance with this manual part.

        (c)      Where the supply line is open wire or is in cable not meeting
                 the requirements of (b) above and the voltage exceeds 750
                 volts ac to ground but does not exceed 5,000 volts between
                 conductors (2,900 volts to neutral or ground), the
                 construction should be in accordance with this manual part,
                 except that the communication conductors should be not smaller
                 than No. 6 AWG (0.162 in. in diameter) copper or No. 6 Stl WG
                 (0.192 in. in diameter) steel, or wires the equivalent
                 thereof.

        (d)      Where the supply circuits involved are in excess of the ac
                 voltage limitations in (c) above, or in excess of 750 volts dc
                 to ground, the construction should not be made except with the
                 approval of all parties concerned.

D-3     Supply wires or cables carried on the poles supporting communication
        circuits crossing over railroad tracks should be constructed in
        accordance with the Manual Part 7-1 (Recommended Practices for
        Crossings of Electrical Supply Lines and Facilities of Railroads) For
        construction of signal supply circuits not in excess of 550 volts and
        3,200 watts, located below communication wires Manual Part l-A-6
        (Recommended Practices for Construction of Railroad communication Pole
        Lines).

D-4     Protection of Metals Against Corrosion: All pole line hardware should
        be of material that will not corrode excessively under the prevailing
        conditions. Where galvanizing is used, it should meet the requirements
        of the specifications for galvanizing of the American Society for
        Testing & Materials.

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D-5     Vertical Pull: The vertical distance from the top crossarm of a crossing
        pole to a straight line connecting the top crossarm of the next adjacent
        poles on either side of this crossing pole should not exceed the values
        given in Table D-l.

                                    Table D-l
                            Recommended Vertical Pull

<TABLE>
<CAPTION>
Average Length of Two                                                          Allowable Vertical
Adjacent Spans in Feet                                                         Distance in Feet
----------------------                                                         ----------------
<S>                                                                                 <C>
         Less than 100                                                                8
         101 to 130                                                                  10
         131 to 150                                                                  12
         Over 150                                                                    14
</TABLE>

D-6     Length of Crossing Span: The crossing span should, where practicable,
        not exceed 100 ft. in the heavy loading district, 125 ft. in the
        medium loading district and 150 ft. in the light loading district. Where
        practicable, the adjacent spans should not exceed the length of the
        crossing span by more than 50%.

D-7     Where practicable, the supports for the crossing and next adjoining
        spans should be located in a straight line.

D-8     The crossing and each adjoining span should be kept free from decayed
        trees and as far as practicable from overhanging trees, which might fall
        into the line.

                                  E-Clearances

E-l     General: The conditions under which all clearances are specified are
        15.5C(60F) and no wind. Clearances should be measured between the
        nearest parts of the objects concerned. The clearances required
        by this section should be maintained at not less than the specified
        values.

E-2     Side Clearances from Rails: Poles or towers supporting the crossing
        span should, where practicable, be so located as to provide a minimum
        horizontal clearance of 17 ft. from the nearest track rail and a minimum
        horizontal clearance of 8 ft. between the nearest track rail and any
        crossarm, guy or other attachment. Where it is impracticable or
        undesirable to provide these clearances, they may be reduced if the
        approval of the railroad concerned is obtained. Where necessary to
        provide safe operating conditions, which require uninterrupted view
        along the tracks for signals, signs, etc., the parties concerned should
        cooperate to provide greater clearances than those specified above.

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E-3     Vertical Clearance Above Rails for Fixed Supports: The vertical
        clearance between the lowest wire, guy, or cable and the top of rail
        should be not less than given in Table E-l.

                                    Table E-l
                   Recommended Vertical Clearance Above Rails

<TABLE>
<CAPTION>
                                                                       Vertical Clearance
                                                                               in Feet
                 <S>                                                          <C>
                 For Wires...............                                      27 (a) (b)
                 For guys, or cables carried
                      on suspension strands.                                   25 (b)
</TABLE>

        (a)      Where the wires are paralleled on the same street or highway by
                 a trolley contact conductor at a lower level, this clearance
                 may be reduced to 25 ft.

        (b)      Where agreed to by the railroad concerned, in special
                 situations, less clearance may be provided if safety will not
                 be decreased thereby.

E-4     The clearances specified in Paragraph E-3 are applicable for crossing
        span lengths up to 175 ft. in the heavy loading district, 250 ft. in the
        medium loading district, and 350 ft. in the light loading district.
        Where crossing span lengths greater than these are involved, the
        clearances should be increased in accordance with Paragraph E-6 (a).

E-5     Vertical Clearances Between Wires Not on the Same Supporting Structures:
        The vertical clearances between conductors of the crossing span and
        conductors of other lines should be not less than the values shown
        in Table E-2. These clearances apply under the following conditions:

        (a)      Where the conductors at the upper level have fixed supports
                 (pin or strain type insulators) or are supported on suspension
                 type insulators in a suspended position at both supports, or
                 are arranged so that they are restrained from displacement
                 toward the crossing.

        (b)      Where the length of the span of the conductors in the upper
                 position is not greater than 175 ft. in the heavy loading
                 district, 250 ft. in the medium loading district, or 350 ft. in
                 the light loading district.

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                               Notes for Table E-2

        (a)      These clearances apply also to inverted levels.

        (b)      Except where neutral conductors of primary supply circuits are
                 concerned, a clearance of 2 ft. is permitted where the supply
                 conductor is above the communication conductor, provided the
                 crossing is not within 6 ft. of any pole concerned in the
                 crossing and the voltage to ground of the supply conductor does
                 not exceed 300 volts.

        (c)      This clearance should be increased to at least 6 ft. above
                 trolley contact conductors of more than 750 volts to ground.
                 This increased clearance should also be provided over
                 trolley contact conductors of lower voltage, unless the
                 crossover conductors are beyond reach of a trolley pole leaving
                 the trolley contact conductor, or are suitably protected
                 against damage from trolley poles leaving the trolley contact
                 conductor.

        (d)      A conductor which is effectively grounded throughout its
                 length, such as a multi-grounded neutral wire, and is
                 associated with a circuit of 750 to 15,000 volts between
                 conductors, may have the clearances specified for open supply
                 wires of 0 to 750 volts between conductors.

        (e)      This clearance should be increased to 6 ft. where the supply
                 wires cross over the communication line within 6 ft.
                 horizontally of a communication pole.

        (f)      This clearance should be increased to 4 ft. where communication
                 cables cross over open supply service wires.

        (g)      Where the required clearance is 2 ft., and where conditions
                 are such that the sag in the upper conductor would increase
                 more than 1.5 ft. at the crossing point, under full load
                 conditions, the 2 ft. clearance should be increased by the
                 amount of sag increase less 1.5 ft.

        (h)      Multi-grounded wye circuits not exceeding 8,700 volts to
                 ground may have a 4 ft. clearance if the lowest supply wire
                 at the crossing is not lower than a straight line joining the
                 points of support of the highest communication conductor,
                 provided the crossing does not occur within 6 ft. horizontally
                 of a communication pole.

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                                    TABLE E-2
             Recommended Minimum Vertical Clearance In Feet Between
                        Wires Not on the Same Structures

     (All voltages are between wires, except where otherwise stated,or for
trolley contact wires where voltages are to ground.)

<TABLE>
<CAPTION>

                                     Nature of Wires at Higher Level (a)
                                     Open supply wires,
                                     0-750 volts; supply                                     Guys,
                    Communication    cables, all voltages           Open supply            span wires,
Nature of           wires, cables    having effectively             wires and               lightning
wires crossed       and suspension   grounded metal sheath          service drops           protection
Over (a)            strand           or suspension strand               (d)                   wires
                                                                    750 to   8,700 to
                                     Line wires   Service         8,700     50,000
                                     and cables    drops          Volts     Volts

<S>                  <C>            <C>            <C>            <C>        <C>            <C>
Communication
wires, cables and
suspension strand    2(g)            4(b) (g)      2(g)            4(e)      6(h)               2

Trolley contact      4(c)           -----          -----          ------    ------             4(c)
conductors

Guys and span wires,
lightning protection
wires, supply service
drops of 0 to 750
volts                2(f)             2            2              4            4               2(j)

</TABLE>

         (j)      Completely insulated sections of guys attached to supporting
                  structures having no conductor of more than 8,700 volts
                  may have less than this clearance from each other.

E-6      Increased Clearances: Conductors in the upper position at the
         crossing, except guys or cables supported by suspension strand,
         should have greater clearances than given in Paragraphs E-3 and
         E-5 under the following conditions. The increases in (a), (b)
         and (c) below are cumulative. An example illustrating the
         method of determining the clearance between power wires and
         communication wires where an open wire communication line
         crosses over railroad tracks and under an open wire power line
         in the same span is given in Appendix K.

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         (a)      For crossing spans longer than specified in Paragraphs E-4 and
                  E-5 (b), clearances should be increased as follows:

                  (1) The clearances given in Tables E-l and E-2 should be
                      increased by the following amounts for each 10 ft. by
                      which the crossing span length exceeds the limits
                      specified in Paragraphs E-4 and E-5(b):

                                   Table E-3
                   Recommended Clearance Increase Increments
<TABLE>
<CAPTION>
                                    Amount of Increase per 10 ft.
       Loading District        Large Conductors          Small Conductors*
<S>                                 <C>                       <C>
Heavy and Medium                    0.15 ft.                    0.30 ft.
Light                               0.10 ft.                    0.15 ft.
</TABLE>

* A small conductor is a conductor having an overall diameter of metallic
material equal to or less than the following values:
<TABLE>
<CAPTION>

                              Outside Diameter of Conductor (Inch)
             Material             Solid            Stranded
<S>                              <C>              <C>
All copper                        0.160             0.250
Other than all copper             0.250             0.275
</TABLE>

         (2)      If the crossing point is located elsewhere than at
                  mid-span of the conductors in the upper position, the
                  required clearance may be obtained by multiplying the
                  clearance determined in (1) above by the appropriate
                  reduction factors specified in Table E-4. The factors
                  to be used in any case will depend upon the basic
                  clearance required by Tables E-l and E-2, and in no
                  case should the clearance, after the reduction factor
                  has been applied, be less than such basic clearance.
                  In applying these factors, the point of crossing in
                  the case of a railroad crossing is the track rail which
                  is farthest from the nearer support of the crossing
                  span. In other situations, it is the location under
                  the conductors of any topographical feature which is
                  the determinant of the clearance.

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                                   Table E-4
                     Recommended Clearance Reduction Factors
<TABLE>
<CAPTION>
Distance from Nearer Support                                      Basic Clearance
of Crossing Span to Point of
Crossing, in Percent of
Crossing                                               4 Ft.      6 Ft.     27 Ft.
                        Span Length                         Reduction Factor
<S>                                                   <C>       <C>        <C>
                             5                         0.35       0.47      0.85

                            10                         0.47       0.58      0.88

                            15                         0.60       0.68      0.91

                            20                         0.71       0.78      0.94

                            25                         0.82       0.85      0.96

                            30                         0.90       0.92      0.98

                            35                         0.96       0.98      0.99

                          40-50                        1.00       1.00      1.00
</TABLE>
        Interpolate for intermediate values

         (b)      For voltages in excess of 50,000 volts between wires,
                  the vertical clearances given in Table E-2 shou1d
                  be increased at the rate of 1/2-in. for each 1,000
                  volts of excess.

         (c)      Where the conductors of the line in the upper position
                  at a crossing over a communication line are supported
                  by suspension type insulators, the clearances should
                  be increased by such an amount that the values
                  specified in Table E-2 will be maintained in case of a
                  broken conductor in either adjacent span, provided such
                  conductor is supported as follows:

                  (1)    At one support by suspension type
                         insulators in a suspended position and at
                         the other support by insulators not free
                         to swing (including semistrain-type
                         insulators).

                  (2)    At one support by strain insulators, and
                         at the other support by semistrain-type
                         insulators.

E-7      Clearance of Conductors of a Communication Line from the Supports
         of Another Line: Where conductors of a communication line are
         carried near a supporting structure of any other line and not
         attached thereto, they should have a clearance from any part of
         such structure not less than the larger value required by either
         (a) or (b) below:
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         (a)      3 ft., if practicable.

         (b)      6 in. plus 1 in. for each 2 ft. of the distance from the
                  supporting structure of the line passed to the nearest
                  supporting structure of the communication line.

                              F-Loading Assumptions
F-1      Three degrees of severity are recognized for the loading due to weather
         conditions and are designated, respectively, as heavy, medium and light
         loading. The classification of the United States on the basis of the
         districts in which these loadings should be considered to apply is
         shown on the loading map, Appendix A. Crossing wires and supporting
         structures should be designed for heavy, medium and light loading,
         dependent upon the district in which they are located.

F-2      In those states in which detailed local districting of loading areas
         has been prescribed by state administrative authority, this districting
         should be employed in lieu of that given in Appendix A. Where such
         districting has not been prescribed, detailed districting or different
         loading assumptions from those given in this specification may be
         employed where agreed to by all parties concerned, including such
         administrative authority as may have jurisdiction.

F-3      The specific transverse and longitudinal loadings which should
         be assumed in determining the size of poles or the strength of
         guys in each of the loading districts are indicated below:

         (a)      Transverse Loading (Poles and Side Guys):

                  (1)      Heavy Loading: A horizontal wind pressure at right
                           angles to the direction of the line of 4 lb./sq. ft.
                           upon the projected area of the cylindrical surfaces
                           of all supported conductors and cables, together with
                           their supporting suspension strand when covered with
                           a layer of ice 1/2-in. in radial thickness and on
                           surfaces of poles without ice covering.

                           For supporting structures, other than unguyed poles
                           at crossings over major tracks, carrying more than 10
                           wires, not including cables supported by suspension
                           strand, the transverse load due to the open wires
                           should be calculated on two-thirds of the total
                           number of such wires, with a minimum of 10 wires.

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                  (2)      Medium Loading: A horizontal wind pressure at right
                           angles to the direction of the line of 4 lb./sq. ft.
                           foot of the projected area of cylindrical surfaces of
                           all supported conductors and cables, together with
                           their supporting suspension strand, when covered with
                           a layer of ice 1/4-in, in radial thickness and on the
                           surfaces of the poles without ice covering.

                           For supporting structures, other than unguyed poles
                           at crossings over major tracks, carrying more than 10
                           wires, not including cables supported by suspension
                           strand, the transverse load should be calculated on
                           2/3 of the total number of such wires, with a minimum
                           of 10 wires.

                  (3)      Light Loading: A horizontal wind pressure at right
                           angles to the direction of the line of 9 lb./sq. ft.
                           upon the projected area of cylindrical surfaces of
                           all supported conductors and cables, together with
                           their supporting suspension strand, and poles,
                           without ice covering.

         (b)      Longitudinal Loading (Poles and Head Guys): The longitudinal
                  loading should be assumed equal to a pull in the direction of
                  the crossing of all open wire conductors supported, the pull
                  of each conductor being taken as 50% of its ultimate strength
                  in the heavy loading district, 33-1/3% in the medium loading
                  district, and 22-1/4% in the light loading district.

                                    G-Poles
G-1      Material: Wood poles should be of suitable and selected timber free
         from observable defects that would decrease their strength or
         durability. Poles of Northern White Cedar, Western Red Cedar, Chestnut,
         Southern Pine, Lodgepole Pine and Douglas Fir shall meet the
         requirements of the American National Standards Institute for poles of
         these species. For convenience, tables giving the dimensions of various
         classes and lengths of these species of poles, ANSI Standard
         05.1-1987(Specifications and Dimensions for Wood Poles) are given in
         Appendix J. In the absence of specifications covering other species of
         poles, they should be considered on the basis of the ANSI standard for
         the species of pole having the nearest equivalent ultimate fiber
         stress. A table giving the ultimate fiber stresses of the species of
         poles in more common use in communication plant is included in Appendix
         H. The use of treated poles is recommended where practicable, but is
         not required, except in the case of timbers subject to rapid decay.

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G-2      Sizes: Poles should be of a size not less than the class specified in
         Table G-l for the corresponding number of wires carried. If guys are
         omitted, poles must be of sufficient strength to meet the requirements
         specified in Paragraph Q-9.

<TABLE>
<CAPTION>
                                    Table G-1
                                    ---------
                 Recommended Minimum Class (ANSI Classification)
                 -----------------------------------------------
                 10 Wires     11 to 20     21 to 40     Over 40
                 or less        Wires        Wires       Wires
<S>              <C>          <C>          <C>          <C>
Heavy and
Medium
Loading
Districts           7           6             5            4

Light
Loading
District            7           6             6            5
</TABLE>

G-3      Gains: Gains should not be cut to a depth of more than 1/2-in.

G-4      Setting: Table G-2 specifies the minimum depth of setting for unguyed
         poles in average soil and in rock.

G-5      Where crossing poles are head and side guyed, the depth of setting of
         poles normally employed by a constructing company in the construction
         of its lines may, in general, be used. However, in no case should the
         depth of setting of a pole at a crossing be more than 1 ft. less than
         the depths given in Table G-2, where the pole is set in earth or more
         than 1/2-ft. less when set in rock.

G-6      Where soil conditions are such that the above depths of setting will
         not develop the strength of the pole, the pole should be set to an
         additional depth or other means used to properly secure the pole.

G-7      Pole Mounts: Where a crossing pole is to be set on surface rock, a
         concrete bridge abutment, or other masonry or stone structure, approved
         pole mounts may be used.

G-8      Spliced Poles: Spliced poles should not be used to support the crossing
         span.

G-9      Stub Reinforced Poles: Stub reinforced poles should not be used at
         crossings over major tracks. At crossings over minor tracks, the use
         of stub reinforcements is permitted, provided:

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                                    Table G-2

             Recommended Minimum Depth of Setting for Unguyed Poles

<TABLE>
<CAPTION>
  Length of         Depth in Feet in Average Soil for Different Classes of Poles          Depth in Feet
     Pole                                                                                    in Rock
   in Feet         Class 1 And 2    Class 3 And 4       Class 5 And 6       Class 7        All Classes
<S>                   <C>              <C>                 <C>             <C>               <C>
      16              -----            -----                4                3-3/4             3

      18              -----            -----                4-1/4            4                 3-1/4

      20              4-3/4            4-1/2                4-1/4            4                 3-1/4

      22              5                4-3/4                4-1/2            4-1/4             3-1/2

      25              5-1/2            5-1/4                4-3/4            4-1/2             3-3/4

      27              5-3/4            5-1/2                5                4-3/4             4

      30              6                5-3/4                5-1/4            5                 4-1/4

      35              6-1/2            6                    5-1/2            5-1/4             4-l/2

      40              6-3/4            6-1/4                5-3/4            5-1/2             4-3/4

      45              7                6-1/2                6                5-3/4             5

      50              7-1/4            6-3/4                6-1/4            6                 5-1/4

      55              7-1/2            7                    6-1/2            -----             5-1/2

      60              7-3/4            7-1/4                6-3/4            -----             5-3/4

      65              8                7-1/2                7                -----             6

      70              8-1/2            8                    7-1/2            -----             6

      75              9                8-1/2                8                -----             6

      80              9-l/2            9                    8-1/2            -----             -----

      85              10               9-1/2                9                -----             -----

      90              10-1/2           10                   9-1/2            -----             -----

</TABLE>

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         (a)    The pole above the ground line is in good condition and is of
                sufficient size to develop its required strength.

         (b)    The stub should have a ground line circumference at least as
                great as would be required for a new pole in the same location.

         (c)    The stub should be set to a depth at least as great as that
                required for the pole being stubbed. (See Paragraph G-4.)

         (d)    The stub should be attached to the pole by a method which will
                develop at all times the required strength of the pole.

G-10     Stubs should, in general, be set at the side of the pole in a plane
         perpendicular to the direction of the line. Where the direction of the
         line changes at the pole being stub reinforced, the stub should be at
         the side of the pole in a plane bisecting the angle of the corner and
         in the direction of the corner pull. Where head guys are omitted, as
         permitted in Paragraph Q-9, the stub should be set on the track side of
         the pole in line with the crossing span.

                            H-Crossarms and Brackets

H-1      Wood crossarms supporting the crossing span should be of fir, treated
         yellow pine or other suitable timber. They should have a nominal
         cross-section of not less than the values given in Table H-1.

                                   Table H-1
                    Recommended Dimensions of Wood Crossarms

<TABLE>
<CAPTION>
Number    Nominal  Length       Nominal Cross-section
of Wires  (Feet)  (Inches)             (Inches)

<S>       <C>       <C>        <C>
 2          1        4-1/2      2-5/16 by 3-5/16
 4          3        4-1/2      2-5/16 by 3-5/16
 6          6        0          2-3/4  by 3-3/4
10          8        6          2-3/4  by 3-3/4
10         10        0              3  by 4
12*        10        0          3-1/4  by 4-1/4
16**       10        0          3-1/4  by 4-1/4
</TABLE>

*        Where crossarms are bored for 1/2-in. steel pins, 3-in. by 4-1/4 in.
         crossarms may be used.

**       Permitted in medium and light loading districts only.

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H-2      Galvanized or painted iron or steel crossarms of strengths equal to
         those of the wood crossarms specified in Table H-1 may be used.

H-3      Double crossarms should be provided on crossing poles and shall be
         attached to the pole by means of a 5/8-in. crossarm bolt. Double
         crossarms longer than two-pin should be equipped with double arming
         bolts at a point near each end of the crossarms.

H-4      Wood pole brackets may only be used at crossings over minor tracks and
         should be in duplicate so as to afford two points of support for each
         conductor.

H-5      Single metal brackets, drive hooks or fixtures may be used to support
         distributing wire at railroad crossings provided such bracket, drive
         hook or fixture and the attachment of the wire thereto is such as
         to withstand the ultimate breaking strength of the wire.

                                J-Crossarm Braces

J-1      Crossarms and buckarms, except two-pin crossarms, should be so braced
         as to safely support the loads to which they may be subjected in use,
         including lineman working on them. This strength may be obtained by the
         use of one pair of crossarm braces. Steel crossarm braces should have a
         cross section of not less than 1/8-in. by 1-1/8 in. and a length not
         less than 20 in.

J-2      The braces should be attached to the pole by a drive screw not less
         than 1/2-in. by 3 in. and to the crossarm by bolts 3/8-in. in
         diameter.

                                     K-Pins

K-1      Insulator pins should have strength sufficient to withstand the loads
         to which they may be subjected. Steel or iron pins should have a
         diameter of shank not less than 1/2 in. Wood pins shall be sound and
         straight grained with a diameter of shank not less than 1-1/4 in.

                                  L-Insulators

L-1      Each insulator should be of such pattern, design and material that,
         when mounted on its pin, it will withstand, without injury and without
         being pulled off the pin, the ultimate strength of the conductor which
         it supports.

L-2      Each conductor (not including paired wire) unless dead-ended, should be
         tied to two supporting insulators in such a manner that they will
         securely hold the conductor to its supporting insulators at each
         crossing pole.

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                                  M-Tie Wires

M-1      A type of tie should be used which will develop the greatest
         practicable holding power without injury to the line conductors.

                                  N-Conductors

N-1      Conductors should be of material or combinations of materials which
         will not corrode excessively under the prevailing conditions.

N-2      Conductors of material other than those specified in Table N-1
         should be of such size and so erected as to have a mechanical strength
         not less than that of the sizes of copper conductors specified
         in Table N-1

N-3      The minimum allowable sizes of conductors in a span crossing over a
         railroad which does not in the same span also cross over supply
         conductors in excess of 750 volts to ground, should be as given in
         Table N-1.

                                 Table No. N-1
                         Recommended Minimum Wire Sizes

<TABLE>
<CAPTION>
                                                      Spans Exceeding 125 Ft.
   Conductor           Spans 125 Ft. or Less          up to 150 FT. (Note)

                                      Diameter                          Diameter
                       Gage           Inches          Gage              Inches
<S>                     <C>           <C>           <C>                <C>

   Copper,
   hard-drawn           10 AWG        0.102           9 AWG             0.114

   Steel,
   Galvanized:
       In general       10 BWG        0.134           8 BWG             0.165
       In rural
       districts
       of arid
       regions          12 BWG        0.109          10 BWG             0.134
</TABLE>

Note:    If spans in excess of 150 ft. are necessary, the size of conductors
         specified above, or the sags of the conductors, should be
         correspondingly increased.

N-4      Paired or single distributing wires without a suspension strand should
         in no case be used for spans longer than 100 ft. in a heavy loading
         district, 125 ft. in the medium loading district, and 150 ft. in the
         light loading district. Each wire of a pair not supported by a
         suspension strand should have an ultimate strength of not less than 170
         lb. Single distributing wires not supported by suspension strand
         should have an ultimate strength of not less than 340 lb.

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N-5   Splices should, so far as practicable, be avoided in the crossing and
      adjacent spans, unless they are of such a type and so made as to have a
      strength substantially equal to that of the conductors in which they are
      placed. Taps should be avoided in the crossing span where practicable, but
      if required, they should be of a type which will not impair the strength
      of the conductors to which they are attached.

                                    P-Sags

P-1   Table P-1 specifies recommended sags for wires shown in Table N-1. Where,
      however, the wires in the communication line are strung in accordance with
      recognized practices, the stringing tensions employed in the line,
      generally will be satisfactory in the crossing span.

                                    Table P-1
                        Recommended Wire Stringing Sags
                       Heavy and Medium Loading Districts

<TABLE>
<CAPTION>
Span Length                       Temperature Deg. F
  in Feet        100      80      60      40      20       0      -20
<S>             <C>      <C>     <C>     <C>     <C>      <C>     <C>

                                 Sag in inches

   70            5-1/2    4-1/2   3-1/2   2-3/4   2-1/4   1-3/4   1-1/2

   80            7-1/2    6       4-1/2   3-1/2   2-3/4   2-1/2   2

   90            9-1/2    7-1/2   5-1/2   4-1/2   3-1/2   3       2-1/2

  100           11-1/2    9       7       5-1/2   4-1/2   3-3/4   3-1/4

  110           14       11       8-1/2   6-1/2   5-1/2   4-1/2   4

  120           17       13      10       8       6-1/2   5-1/2   4-1/2

  130           20       15      12       9-1/2   7-1/2   6-1/2   5-1/2

  140           23       18      14      11       8-1/2   7-1/2   6-1/2

  150           26       20      16      13      10       8-1/2   7
</TABLE>

<PAGE>   86

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                             Table P-1 (Continued)
                         Recommended Wire Stringing Sags
                             Light Loading District

<TABLE>
<CAPTION>
Span Length                       Temperature Deg. F
  in Feet        120       100     80      60      40      20       0
<S>            <C>       <C>      <C>     <C>     <C>      <C>     <C>

                                 Sag in inches

   90           7-1/2     6-1/2    5-1/2   4-1/2   3-1/2   3       1-1/2

  100           9-1/2     8        6-1/2   5-1/2   4-1/2   3-3/4   3-1/4

  110          11-1/2     9-1/2    8       6-1/2   5-1/2   4-1/2   4

  120          14        11-1/2    9       7-1/2   6-1/2   5-1/2   4-1/2

  130          16        13       11       9       7-1/2   6-1/2   5-1/2

  140          18        15       13      10-1/2   8-1/2   7-1/2   6-1/2

  150          21        18       15      12      10       8-1/2   7
</TABLE>

                                     Q-Guys

Q-1   Material: Guys should be of galvanized steel or other material that will
      not corrode excessively under the prevailing conditions.

Q-2   Side Guys: Poles supporting the crossing span should be side-guyed with
      guys having strengths specified in Appendix B, except as provided in
      Paragraphs Q-9 and Q-l0. The strength specified in this appendix may be
      obtained by using various combinations of standard guys, which, when taken
      together, will give strength at least as great as that specified.

Q-3   For the purpose of side-guying, aerial cables and their suspension strands
      should have the wire equivalents given in Table Q-1.

                                   Table Q-1
                          Recommended Wire Equiva1ents

<TABLE>
<CAPTION>
                                Equivalent Number of Open Wires

Diameter of Cable       Heavy Loading   Medium Loading   Light Loading
                        District        District         District
<S>                     <C>             <C>              <C>

Less than 1-1/4 in.           3               4                10
1-1/4 to 2-1/4 in.            4               5                15
Over 2-1/4 in.                5               6                20
</TABLE>

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Q-4   Head Guys: Poles supporting the crossing span should be head-guyed away
      from the crossing span with guys having strengths specified in Appendix C,
      except as provided in Paragraph Q-9. The strength specified in this
      appendix may be obtained by using various combinations of standard guys,
      which, when taken together, will give strength at least as great as that
      specified. For lines carrying both open wire and aerial cable, head guying
      need be provided only for the number of wires in excess of 10 if the cable
      is supported by a 6,000-lb. suspension strand or for the number of wires
      in excess of 20 if the suspension strand is 10,000-lb. or stronger.

Q-5   Head guys should be installed so as not to increase tension in the
      crossing span. In order to facilitate the installation of the head guys,
      a section of 6,000-lb. strand may be placed between the crossing poles so
      as to provide an additional support for pulling up the head guys.

Q-6   Guying at Corners and Terminals: Where the line terminates or changes
      direction or has substantially unbalanced tension at any crossing support,
      such additional guying as may be necessary should be provided to take care
      of the additional load.

Q-7   Where a line crossing a railroad changes direction more than ten degrees
      at either crossing support, the side guy within the angle may be omitted
      and the head guy, if required, should be placed in the direction of the
      adjacent span unless the angle of turn is greater than 60 degrees. Where
      the angle is greater than 60 degrees, the head guy should be placed in a
      direction away from the crossing span.

Q-8   Corner guys should conform to standard guying requirements unless the
      guying prescribed in Appendix B is greater, in which case the latter
      guying shall be provided.

Q-9   Omission of Guys: Guys may be omitted in the following cases:

      (a)   Side guys may be omitted where the poles when new will not be
            stressed to more than 25% of their ultimate strengths, when
            subjected to the transverse load specified in Paragraph F-3 (a),
            except as otherwise permitted in Paragraph Q-10. The maximum number
            of wires which can be carried by poles of various classes to meet
            this requirement is given in Appendix D.

      (b)   Head guys may be omitted where the poles when new will not be
            stressed to more than 66-2/3% of their ultimate strengths when
            subjected to the longitudinal load

<PAGE>   88
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        specified in Paragraph F-3 (b). The maximum number of wires of various
        sizes which can be carried by poles of various classes to meet this
        requirement is given in Appendix F.

Q-1O    Where a communication line paralleling a railroad track on the
        right-of-way of the railroad crosses any of the minor tracks listed
        under Subparagraphs (a), (c), (d) and (e) of Paragraph B-9, the side
        guys may be omitted, provided the crossing poles when new will not be
        stressed to more than 33-1/3% of their ultimate strengths when
        subjected to the transverse load specified in Paragraph F-3 (a). The
        maximum number of wires which can be carried by poles of various classes
        to meet this requirement is given in Appendix E.

Q-11    If, however, under the conditions stated in Paragraph Q-l0, there is an
        angle in the line at either crossing pole, corner guys sufficient to
        withstand the unbalanced load on such poles should be installed. Head
        guys may be omitted unless conductor tensions are not balanced at one
        or both poles due to the dead-ending of any of the wires. Where
        conductors are dead-ended, guys of strengths specified in Appendix C
        should be provided.

Q-12    Guying in Special Cases: Where, on account of physical conditions, it
        is impracticable to side guy the crossing poles, as specified in
        Paragraph Q-2, or to provide the strength of an unguyed pole specified
        in Paragraphs Q-9 and Q-l0, the requirements may be met by head-guying
        and side-guying the line as near as practicable to the crossing,
        provided the line is approximately straight and the intermediate poles
        are not of a class lower than those specified in Paragraph G-2 and that
        a strand of strength equivalent to the load in pounds for which
        head-guying is required, is run between the two guyed poles. Where such
        guying is employed, it should meet the requirements of paragraphs Q-2
        to Q-5, inclusive, and should be applied at a distance not exceeding
        500 ft. from the nearest crossing pole. The strand should be attached
        to the guyed poles close to the point at which the head guys are
        attached, and should be securely attached to every pole between the
        guyed poled.

Q-13    Guy Leads: Guy anchors should, where practicable, be located so that
        the horizontal distance from the ground line of the pole to the guy or
        guy rod will be not less than the height above ground of the attachment
        of the guy to the poles for head guys, and not less than one-third that
        height for side guys. The guys should be attached as near to the center
        of the load as practicable. (See Figure 1B1-2 for method of measuring
        guy lead and height.)

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Q-14    Methods of Anchoring Guys: The anchorage for guys shall in all cases be
        adequate to develop the required strength of the guys attached to them.
        Guys should preferably be attached to anchors set in earth or secured
        in rock. Where this is impracticable, guys may be attached to stubs or
        poles which are properly anchor guyed, or to buildings or other secure
        structures. Guys should not be attached to trees.

Q-15    Guy Rods: Guy rods not smaller than those specified in Table Q-2 should
        be employed. The length of guy rods should be sufficient so that where
        the anchor is set to adequate depth, the eye of the rod will not be
        below the surface of the ground.

                                   Table 0-2
                      Recommended Minimum Size of Guy Rods

<TABLE>
<CAPTION>
           Size of Guy                                         Diameter of Guy Rod
            (Pounds)                                                (Inches)
<S>                                                            <C>
             2,200                                                      1/2
             4,000                                                      1/2
             6,000                                                      5/8
            10,000                                                      3/4
            16,000                                                      7/8
</TABLE>

Q-16    Anchors: Where expandable or screw anchors or screw anchors are used,
        manufacturer's specifications must be followed as to depth and size of
        anchor.

Q-17    Method of Securing Guy Strand: In securing guys, clamps, strand clamps
        or guy-grip dead-ends of suitable strength should be employed. A guy
        strand may be attached to the pole either by the wrapping method or by
        attachment to suitable eye bolts or approved connector. The size of the
        eye bolt or approved connector should be sufficient to develop the
        required strength of the guy.

Q-18    Guards for Guys: When anchor guys are located so that persons or
        livestock may come into accidental contact with them, they should be
        equipped with suitable guards.

Q-19    Pole Braces: Pole braces may be used in the place of guys called for in
        Paragraphs Q-2 to Q-8, inclusive, to provide equivalent strength.

                              R-Suspension Strand
R-1     Material: Suspension strands should be of galvanized steel or other
        material that will not corrode excessively under the prevailing
        conditions.

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R-2      Sizes:  For spans of 150 ft. or less, Table R-l gives the minimum
         sizes of suspension strand to be used for supporting different sizes
         of serial cable.

                                   Table R-1
                 Recommended Minimum Sizes of Suspension Strand
<TABLE>
<CAPTION>
        Weights of Cable in                                 Suspension Strand (Nominal
          Pounds per Foot                                   Ultimate Strength in Pounds)
<S>                                                                  <C>
        Less than 2.25                                                  6,000
        2.25 to 5                                                      10,000
        Exceeding 5 and less than 8.5                                  16,000
</TABLE>

R-3     For spans exceeding 150 ft. or for heavier cables, a proportionately
        larger suspension strand or other proportionately stronger means of
        support should be used.

R-4     Attachment to Poles: The suspension strand should be attached to the
        pole by means of standard cable suspension clamp secured by a bolt not
        less than 5/8 in. in diameter extending through the pole. Three-bolt
        suspension clamps should be used with 10,000 and 16,000 lb. suspension
        strand; single-bolt suspension clamps may be used for 6,000 lb.
        suspension strand.

R-5     Where one or both of the crossing poles is a corner pole and the
        corner pull is in excess of 5 ft., suspension clamps with flared
        grooves or other means that will prevent sharp bends in the suspension
        strand should be employed. Where the cable is carried on the inside of
        the corner, reinforcing links or other equivalent means should also be
        used where the corner pull exceeds the values given in Table R-2.

                                   Table R-2
<TABLE>
<CAPTION>
             Size of
        Suspension Strand                                                     Pull on Corner
<S>                                                                           <C>
                6M                                                            15 ft. or over
               lOM                                                            15 ft. or over
               16M                                                            10 ft. or over
</TABLE>

R-6     Safety straps, grade clamps, reinforcing bands or other equivalent
        devices which will prevent progressive stripping of cable from entering
        the crossing span should be placed at each crossing pole for cables
        1-1/2 in. in diameter or larger.

R-7     Where the suspension strand is dead-ended on a crossing pole, it may be
        attached by the wrapping method or by attaching it to a suitable eye
        bolt or approved connector.
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        The size of the eye bolt should be sufficient to develop the required
        strength of the suspension strand.

R-8     Sags: Suspension strands for aerial cables should be strung so that when
        the cables are in place the sags will be not less than given in Table
        R-3.

                    S-Cable Attachments to Suspension Strands

S-1     Cables should be attached to the suspension strand in the crossing span
        by means of suitable metal rings or spirally wound lashing wire which
        will resist corrosion. The spacing of rings should not be greater than
        indicated in Table S-1. The spirals of lashing wire should be so spaced
        that they will safely support the cable and prevent appreciable sagging
        between points of support. The metal rings or lashing wire should be so
        installed that the protective coating will not be damaged.

                                    Table S-1
                       Recommended Spacing of Cable Rings

<TABLE>
<CAPTION>
                  Weight of Cable in                                    Spacing of Cable Rings
                  Pounds per Foot                                            in Inches
                  <S>                                                           <C>
                      Less than 5                                                20
                      5 to 8.5                                                   15
</TABLE>

                         Part II - Underbridge Crossings
                                    T-General

T-1     Avoidance of Attachments: The line preferably should be so graded that
        it will be unnecessary to make attachment to the bridge structure. If,
        for any reason, it is impracticable to grade a cable line to pass under
        a bridge and it is undesirable to attach to the bridge, vertical runs
        may be made on poles adjacent to the bridge.

T-2     Attachments: Unless approved by the railroad company, attachments to
        railroad steel bridges should not be made by devices that require the
        drilling or cutting of the bridge structure or the removal of rivets,
        and the attachments should be so made that wires, cables and suspension
        strand will not be in metallic contact with the bridge structure.

T-2     Clearance from Abutments: The clearance of any conductor from the face
        of the abutment, when not attached thereto, should be not less than 3
        ft. for steel bridges. Cables or paired wires and their suspension
        strand may be attached directly to the face of the abutment if located
        not less than 24 in. below the elevation of the bridge seat, and they
        should provide suitable clearance for pedestrians, vehicles, etc., as
        may be necessary.

<PAGE>   92

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--------------------------------------------------------------------------------

                                    Table R-3
                    Recommended Minimum Sags in Aerial Cables
                            (No Ice or Wind Loading)

<TABLE>
<CAPTION>
Average Weight of              Size of                                Sags in inches for Spans
Cables in Pounds       Temp.   Strand       90       100       110        120       130        140        150
per Foot               F.                   Ft.       Ft.       Ft.        Ft.       Ft.        Ft.        Ft.
<S>                   <C>     <C>           <C>      <C>       <C>     <C>          <C>         <C>       <C>
                        20                    5         6         7          8        10         11         13
Up to .6                60      6,000         5         7         8         10        11         13         15
                       100                    6         8        10         12        14         16         18

Exceeding .6 but        20                    6         7         9         10        12         14         16
not exceeding .8        60      6,000         6         8        10         12        14         16         18
                       100                    8         9        11         13        16         18         21

Exceeding .8 but        20                    7         9        11         13        15         17         20
not exceeding 1.1       60      6,000         8        10        12         14        17         19         22
                       100                    9        11        13         15        18         21         24

Exceeding 1.1 but       20                    9        11        13         16        19         22         25
not exceeding 1.4       60      6,000        10        12        15         17        20         24         27
                       100                   10        13        16         19        22         25         29

Exceeding 1.4 but       20                   10        13        16         19        22         25         29
not exceeding 1.8       60      6,000        11        14        17         20        23         27         31
                       100                   12        15        18         21        25         29         33

Exceeding l.8 but       20                   12        14        17         20        24         28         32
not exceeding 2.25      60      6,000        12        15        18         22        26         30         34
                       100                   13        16        20         24        28         32         37

Exceeding 2.25 but      20                    8        10        12         15        17         20         23
not exceeding 2.8       60     10,000         9        11        13         16        19         22         25
                       100                   10        12        15         17        20         24         27

Exceeding 2.8 but       20                   10        13        16         19        22         25         29
not exceeding 3.9       60     10,000        11        14        17         20        23         27         31
                       100                   12        15        18         21        25         29         33

Exceeding 3.9 but       20                   12        14        17         20        24         28         32
not exceeding 4.4       60     10,000        12        15        18         22        26         30         34
                       100                   13        16        19         23        27         31         36

Exceeding 4.4 but       20                   13        16        19         23        27         31         36
not exceeding 5.0       60     10,000        14        17        20         24        29         33         38
                       100                   14        18        22         26        30         35         40
</TABLE>

<PAGE>   93

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1989                                                                  Part 1-B-1

                              Table R-3 (Continued)

<TABLE>
<CAPTION>
Average Weight of              Size of                                Sags in inches for Spans
Cables in Pounds       Temp.   Strand       90       100       110        120       130        140        150
per Foot               F.                   Ft.       Ft.       Ft.        Ft.       Ft.        Ft.        Ft.
<S>                   <C>     <C>           <C>      <C>       <C>       <C>        <C>         <C>       <C>
                        20                   11        13       16          19       23         26         30
Up to 5.0 but           60     16,000        12        14       17          20       24         28         32
not exceeding 6.3      100                   12        15       18          22       26         30         24

Exceeding 6.3 but       20                   12        14       17          20       24         28         32
not exceeding 7.2       60     16,000        12        15       18          22       26         30         34
                       100                   13        16       20          24       28         32         37

Exceeding 7.2 but       20                   13        16       19          22       26         31         35
not exceeding 8.1       60     16,000        13        16       19          23       27         31         36
                       100                   14        17       20          24       29         33         38

Exceeding 8.1 but       20                   13        16       20          24       28         32         37
not exceeding 8.6       60     16,000        14        17       20          24       29         33         38
                       100                   14        18       22          26       30         35         40
</TABLE>

T-4     Clearance from Bridge Structure: The clearance between any conductor
        attached to the bridge in open construction, and any portion of the
        bridge structure should preferably be not less than 6 in., but in no
        case less than 3 in. The clearance between any conductor not attached to
        the bridge and any portion of the bridge structure should preferably be
        not less than 1 ft., but in no case less than 6 in.

                        Part III - Underground Crossings
                                    U-General

U-1     Arrangement for Work: The work should be done at such time and in such a
        manner as not to interfere with the proper and safe use or operation of
        the property and tracks of the railroad company, previous arrangements
        having been made with the duly authorized representative of the
        railroad company for date and time of commencement. Where iron or mild
        steel pipes are used, as permitted in Paragraph U-7(d), consideration
        should be given to forcing or driving them under the roadbed instead of
        laying in an open trench.

U-2     Location: The underground system on the railroad property should be so
        located as to be subject to the least practicable disturbance. Railway
        tracks and underground structures, including catch basins, gas pipes,
        etc., should be avoided where practicable. The manholes, pull boxes, and
        terminals should, where practicable, be located away from the roadbed.

<PAGE>   94
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U-3     Side Clearance from Rail: Where underground conduit construction
        terminates at terminal poles, the side clearance of such poles from the
        nearest track rail should be as provided in Paragraph E-2. Where
        manholes, handholes, etc., are employed, which project above the surface
        of the ground, the side clearance, unless physical conditions prevent,
        shall be not less than 17 ft. from the nearest track rail, except that
        at sidings, a clearance of 7 ft. may be allowed. At loading sidings,
        sufficient space shall be left for a driveway.

U-4     Clearance Below Base of Rail: The top of all conduit protection, except
        as specified in Paragraph U-8 should generally be located at a depth of
        not less than 48 in. below the base of rail. Where this is
        impracticable, or for other reasons, this clearance may be reduced by
        agreement between the parties concerned. In no case, however, should the
        top of the conduit protection extend higher than the bottom of the
        ballast section which is subject to working or cleaning.

U-5     Where unusual conditions exist or where proposed construction would
        interfere with existing construction, a greater depth than specified
        above may be required.

U-6     Arrangement of Conduit System: The arrangement of ducts in the conduit
        system contemplated under this specification should consist of not more
        than four ducts of vitrified clay, four impregnated fiber ducts or three
        creosoted wood ducts in width. Where other arrangements are
        contemplated, additional strength of construction and protection may be
        required.

U-7     Protection of Ducts: Ducts extending under the roadbed section of the
        right-of-way should be protected under the roadbed section as specified
        below and for a distance of at least 6 ft. beyond each outside rail. In
        other sections of the right-of-way, concrete, creosoted plank or other
        forms of protection should be provided where necessary to prevent injury
        to the conduit system.

        (a)      Vitrified Clay Ducts: The ducts should be laid on at least 4
                 in. of concrete with at least 3 in. of concrete on the top and
                 sides.

        (b)      Impregnated Fiber and Other Tubular Composition Ducts: The
                 ducts should be completely encased in concrete. The encasement
                 should be at least 4 in. thick on bottom and at least 3 in.
                 thick on top and sides.

        (c)      Creosoted Wood Ducts: The ducts should be protected on the top
                 and bottom by means of creosoted wood plank not less than 1-1/2
                 in. in thickness or by 3 in. of concrete.

<PAGE>   95
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        (d)      Iron or Mild Steel Pipes: Such pipes should normally be encased
                 in concrete as provided in (b) above. However, where physical
                 or chemical conditions will permit, a conduit system consisting
                 of a group of not more than four iron or mild steel pipes not
                 more than 4 in. in diameter may be laid beneath the roadbed
                 without any form of protection.

U-8     Where physical and chemical conditions will permit, a conduit consisting
        of not more than two iron pipes, not exceeding 4 in. in diameter, or two
        creosoted wood ducts not exceeding 6 in. square, or one or more cables
        of a type designed for burying directly in the earth may be laid in the
        ground beneath railroad tracks without any form of protection at a
        minimum depth of 48 in. below the base of the rail, unless the worked
        ballast section of the roadbed exceeds 18 in., in which case the conduit
        shall be laid below the ballast section. Cables under main line tracks
        should preferably be installed in conduit to prevent disturbance to the
        roadbed at times of replacement.

U-9     Excavation: The excavated material shall be so placed as not to
        interfere with traffic. Ballast material excavated should be kept
        separate and free from earth.

U-10    Shoring: Where necessary to prevent caving, the sides of trench should
        be supported with suitable planks and bracing. No bracing shall extend
        above the base of the rail or be attached in any way to the rails or
        ties.

U-ll    Grading and Drainage: The trench should be so graded that it will have a
        fall of at least 3 in. in l00 ft. toward the lower manhole or terminal,
        or from an intermediate point toward both manholes or terminals, and the
        bottom of the trench should be graded evenly. Where conditions require,
        a sump or other suitable drainage should be provided for manholes.

U-12    Backfilling: The trench should be backfilled with earth to the subgrade
        line and tamped. Track ballast shall be replaced under railroad
        supervision.

U-13    Removing Surplus Material: All surplus material remaining after the work
        has been finished should be removed, and if disposed of upon railroad
        property, it should be under railroad supervision.

U-14    Concrete: All concrete employed should be such that when tested in 6 by
        12 inch cylinders after 28 days, it should withstand a compressive test
        of not less than 2,000 lb./sq. in. square inch without rupture. Concrete
        should be thoroughly tamped.

<PAGE>   96
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Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                        Appendix A: District Loading Map

                        [DISTRICT LOADING MAP DIAGRAM]
<PAGE>   97

                                      -33-
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--------------------------------------------------------------------------------

                                   Appendix B
             Recommended Strength of Side Guys Required, in Pounds
                (Combinations of Standard Size Guys May Be Used)

            Average of Crossing and Adjacent Spans 100 Feet or Less

<TABLE>
<CAPTION>
Number    Ratio of Guy Lead to Height Not less than
of        1           2/3            1/2           1/3
Wires
                         Heavy Loading
                         -------------
<S>      <C>         <C>            <C>           <C>
  2       2,200       2,200          2,200         2,200
  4       2,200       2,200          2,200         2,200
  6       2,200       2,200          2,200         4,000
 10       2,200       2,200          4,000         4,000
 20       4,000       4,000          4,000         6,000
 30       4,000       4,000          6,000        10,000
 40       4,000       6,000         10,000        10,000
 50       6,000      10,000         10,000        12,000
 60       6,000      10,000         10,000        16,000
 70      10,000      10,000         12,000        16,000
 80      10,000      10,000         16,000        20,000
</TABLE>

<PAGE>   98

                                      -34-
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1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix B (Continued)
             Recommended Strength of Side Guys Required, in Pounds
                (Combinations of Standard Size Guys May Be Used)

            Average of Crossing and Adjacent Spans 100 Feet or Less

<TABLE>
<CAPTION>
Number    Ratio of Guy Lead to Height Not less than
of        1           2/3            1/2           1/3
Wires
                         Medium Loading
                         --------------
<S>       <C>         <C>           <C>           <C>
  2       2,200       2,200          2,200         2,200
  4       2,200       2,200          2,200         2,200
  6       2,200       2,200          2,200         2,200
 10       2,200       2,200          2,200         2,200
 20       4,000       4,000          4,000         4,000
 30       4,000       4,000          4,000         6,000
 40       4,000       4,000          4,000         6,000
 50       4,000       4,000          6,000        10,000
 60       4,000       6,000          6,000        10,000
 70       4,000       6,000         10,000        10,000
 80       6,000       6,000         10,000        10,000
</TABLE>

<PAGE>   99

                                      -35-
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1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix B (Continued)

            Average of Crossing and Adjacent Spans 100 Feet or Less

<TABLE>
<CAPTION>
Number    Ratio of Guy Lead to Height Not less than
of        1           2/3            1/2           1/3
Wires
                         Light Loading
                         -------------
<S>       <C>         <C>           <C>           <C>
  2       2,200       2,200          2,200         2,200
  4       2,200       2,200          2,200         2,200
  6       2,200       2,200          2,200         2,200
 10       2,200       2,200          2,200         2,200
 20       4,000       4,000          4,000         4,000
 30       4,000       4,000          4,000         6,000
 40       4,000       4,000          4,000         6,000
 50       4,000       4,000          6,000         6,000
 60       4,000       4,000          6,000        10,000
 70       4,000       6,000          6,000        10,000
 80       4,000       6,000         10,000        10,000
</TABLE>
<PAGE>   100
                                      -36-
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Part 1-B-1                                                                 1989
-------------------------------------------------------------------------------

                             Appendix B (Continued)
              Recommended Strength of Side Guys Required, in Pounds
                (Combinations of Standard Size Guys May Be Used)

             Average of Crossing and Adjacent Spans 100 to 125 Feet

<TABLE>
<CAPTION>
Number          Ratio of Guy Lead to Height Not less than
of             1            2/3           1/2           1/3
Wires
                               Heavy Loading
                               -------------
<S>           <C>          <C>           <C>           <C>
  2            2,200        2,200         2,200         2,200
  4            2,200        2,200         2,200         2,200
  6            2,200        2,200         2,200         4,000
 10            2,200        4,000         4,000         6,000
 20            4,000        4,000         4,000         6,000
 30            4,000        6,000         6,000        10,000
 40            6,000       10,000        10,000        12,000
 50            6,000       10,000        10,000        16,000
 60           10,000       10,000        12,000        16,000
 70           10,000       12,000        16,000        20,000
 80           10,000       16,000        16,000        26,000
</TABLE>

<PAGE>   101

                                      -37-
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1989                                                                 Part 1-B-1
-------------------------------------------------------------------------------

                             Appendix B (Continued)

            Average of Crossing and Adjacent Spans 100 to 125 Feet

<TABLE>
<CAPTION>
Number         Ratio of Guy Lead to Height Not less than
of             1             2/3           1/2           1/3
Wires
                               Medium Loading
                               --------------
<S>           <C>          <C>           <C>           <C>
  2            2,200         2,200         2,200         2,200
  4            2,200         2,200         2,200         2,200
  6            2,200         2,200         2,200         2,200
 10            2,200         2,200         2,200         4,000
 20            4,000         4,000         4,000         4,000
 30            4,000         4,000         4,000         6,000
 40            4,000         4,000         6,000        10,000
 50            4,000         6,000         6,000        10,000
 60            6,000         6,000        10,000        10,000
 70            6,000        10,000        10,000        12,000
 80            6,000        10,000        10,000        16,000
</TABLE>

<PAGE>   102

                                      -38-
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                              Communication Manual

Part 1-B-1                                                                 1989
-------------------------------------------------------------------------------

                             Appendix B (Continued)
              Recommended Strength of Side Guys Required in Pounds
                (Combinations of Standard Size Guys May Be Used)

             Average of Crossing and Adjacent Spans 100 to 125 Feet

<TABLE>
<CAPTION>
Number             Ratio of Guy Lead to Height Not less than
of             1            2/3           1/2           1/3
Wires
                               Light Loading
                               -------------
<S>           <C>          <C>           <C>           <C>
  2            2,200        2,200         2,200         2,200
  4            2,200        2,200         2,200         2,200
  6            2,200        2,200         2,200         2,200
 10            2,200        2,200         2,200         2,200
 20            4,000        4,000         4,000         4,000
 30            4,000        4,000         4,000         6,000
 40            4,000        4,000         6,000         6,000
 50            4,000        6,000         6,000        10,000
 60            4,000        6,000         6,000        10,000
 70            6,000        6,000        10,000        10,000
 80            6,000        6,000        10,000        12,000
</TABLE>

<PAGE>   103

                                      -39-
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1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix B (Continued)

             Average of Crossing and Adjacent Spans 125 to 150 Feet

<TABLE>
<CAPTION>
Number          Ratio of Guy Lead to Height Not less than
of                1          2/3        1/2         1/3
Wires

                              Heavy Loading
                              -------------

<S>             <C>        <C>        <C>         <C>
 2               2,200      2,200      2,200       2,200

 4               2,200      2,200      2,200       4,000

 6               2,200      2,200      4,000       4,000

10               4,000      4,000      4,000       6,000

20               4,000      4,000      6,000      10,000

30               6,000      6,000     10,000      10,000

40               6,000     10,000     10,000      16,000

50              10,000     10,000     12,000      16,000

60              10,000     12,000     16,000      20,000

70              10,000     16,000     16,000      26,000

80              12,000     16,000     20,000      26,000
</TABLE>

<PAGE>   104

                                      -40-
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                              Communication Manual
Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                             Appendix B (Continued)
             Recommended Strength of Side Guys Required, in Pounds
                (Combinations of Standard Size Guys May Be Used)

             Average of Crossing and Adjacent Spans 125 to 150 Feet

<TABLE>
<CAPTION>
Number          Ratio of Guy Lead to Height Not less than
of                1          2/3        1/2         1/3
Wires

                             Medium Loading
                             --------------

<S>             <C>        <C>        <C>         <C>
 2               2,200      2,200      2,200       2,200

 4               2,200      2,200      2,200       2,200

 6               2,200      2,200      2,200       2,200

10               2,200      2,200      2,200       4,000

20               4,000      4,000      4,000       4,000

30               4,000      4,000      6,000       6,000

40               4,000      4,000      6,000      10,000

50               6,000      6,000     10,000      10,000

60               6,000     10,000     10,000      12,000

70               6,000     10,000     10,000      16,000

80              10,000     10,000     12,000      16,000
</TABLE>

<PAGE>   105

                                      -41-
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1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix B (Continued)

             Average of Crossing and Adjacent Spans 125 to 150 Feet

<TABLE>
<CAPTION>
Number          Ratio of Guy Lead to Height Not less than
of                1          2/3        1/2         1/3
Wires

                             Light Loading
                             -------------

<S>             <C>        <C>        <C>         <C>
 2              2,200       2,200      2,200       2,200

 4              2,200       2,200      2,200       2,200

 6              2,200       2,200      2,200       2,200

10              2,200       2,200      2,200       2,200

20              4,000       4,000      4,000       4,000

30              4,000       4,000      4,000       6,000

40              4,000       4,000      6,000      10,000

50              4,000       6,000      6,000      10,000

60              6,000       6,000     10,000      10,000

70              6,000      10,000     10,000      12,000

80              6,000      10,000     10,000      16,000
</TABLE>

<PAGE>   106

                                      -42-
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                              Communication Manual
Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                             Appendix B (Continued)
             Recommended Strength of Side Guys Required, in Pounds
                (Combinations of Standard Size Guys May Be Used)

             Average of Crossing and Adjacent Spans 150 to 175 Feet

<TABLE>
<CAPTION>
Number          Ratio of Guy Lead to Height Not less than
of                1          2/3        1/2         1/3
Wires

                             Heavy Loading
                             -------------

<S>             <C>        <C>        <C>         <C>
 2              2,200       2,200      2,200       2,200

 4              2,200       2,200      2,200       4,000

 6              2,200       2,200      4,000       4,000

10              4,000       4,000      6,000       6,000

20              4,000       6,000      6,000      10,000

30              6,000      10,000     10,000      12,000

40             10,000      10,000     12,000      16,000

50             10,000      12,000     16,000      20,000

60             10,000      16,000     16,000      26,000

70             12,000      16,000     20,000      30,000

80             16,000      20,000     26,000      30,000
</TABLE>

<PAGE>   107

                                      -43-
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1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix B (Continued)

             Average of Crossing and Adjacent Spans 150 to 175 Feet

<TABLE>
<CAPTION>
     Number                  Ratio of Guy Lead to Height Not less than
     of                  1               2/3             1/2             1/3
     Wires
                                    Medium Loading
                                    --------------
<S>                    <C>            <C>            <C>              <C>
         2               2,200           2,200           2,200           2,200
         4               2,200           2,200           2,200           2,200
         6               2,200           2,200           2,200           4,000
        10               2,200           2,200           4,000           4,000
        20               4,000           4,000           4,000           6,000
        30               4,000           4,000           6,000          10,000
        40               4,000           6,000          10,000          10,000
        50               6,000          10,000          10,000          12,000
        60               6,000          10,000          10,000          16,000
        70              10,000          10,000          12,000          16,000
        80              10,000          10,000          16,000          20,000

</TABLE>

<PAGE>   108

                                      -44-
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                              Communication Manual

Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                             Appendix B (Continued)

             Recommended Strength of Side Guys Required, in Pounds
                (Combinations of Standard Size Guys May Be Used)

             Average of Crossing and Adjacent Spans 150 to 175 Feet

<TABLE>
<CAPTION>
     Number                  Ratio of Guy Lead to Height Not less than
     of                  1               2/3             1/2             1/3
     Wires
                                 Light Loading
                                 -------------
<S>                    <C>            <C>            <C>              <C>
         2               2,200           2,200           2,200           2,200
         4               2,200           2,200           2,200           2,200
         6               2,200           2,200           2,200           2,200
        10               2,200           2,200           2,200           4,000
        20               4,000           4,000           4,000           4,000
        30               4,000           4,000           6,000           6,000
        40               4,000           6,000           6,000          10,000
        50               6,000           6,000          10,000          10,000
        60               6,000          10,000          10,000          12,000
        70               6,000          10,000          10,000          16,000
        80              10,000          10,000          10,000          16,000
</TABLE>

<PAGE>   109

                                      -45-
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                              Communication Manual

1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix B (Continued)

             Average of Crossing and Adjacent Spans 175 to 200 Feet

<TABLE>
<CAPTION>
     Number                  Ratio of Guy Lead to Height Not less than
     of                  1               2/3             1/2             1/3
     Wires
                                 Heavy Loading
                                 -------------
<S>                    <C>            <C>            <C>              <C>
         2               2,200           2,200           2,200           2,200
         4               2,200           2,200           2,200           4,000
         6               2,200           4,000           4,000           6,000
        10               4,000           4,000           6,000          10,000
        20               4,000           6,000          10,000          10,000
        30               6,000          10,000          10,000          16,000
        40              10,000          10,000          16,000          20,000
        50              10,000          16,000          16,000          26,000
        60              12,000          16,000          20,000          26,000
        70              16,000          20,000          26,000          30,000
        80              16,000          20,000          26,000          40,000
</TABLE>

<PAGE>   110

                                      -46-
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                              Communication Manual

Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                             Appendix B (Continued)

             Recommended Strength of Side Guys Required, in Pounds
                (Combinations of Standard Size Guys May Be Used)

             Average of Crossing and Adjacent Spans 175 to 200 Feet

<TABLE>
<CAPTION>
     Number                  Ratio of Guy Lead to Height Not less than
     of                  1               2/3             1/2             1/3
     Wires
                                 Medium Loading
                                 --------------
<S>                    <C>            <C>            <C>              <C>
         2               2,200           2,200           2,200           2,200
         4               2,200           2,200           2,200           2,200
         6               2,200           2,200           2,200           4,000
        10               2,200           2,200           4,000           4,000
        20               4,000           4,000           4,000           6,000
        30               4,000           6,000           6,000          10,000
        40               6,000           6,000          10,000          10,000
        50               6,000          10,000          10,000          16,000
        60              10,000          10,000          12,000          16,000
        70              10,000          10,000          16,000          20,000
        80              10,000          12,000          16,000          20,000
</TABLE>
<PAGE>   111

                                      -47-
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                              Communication Manual
1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix B (Continued)

             Average of Crossing and Adjacent Spans 175 to 200 Feet

<TABLE>
<CAPTION>
Number          Ratio of Guy Lead to Height Not less than
of                1          2/3        1/2         1/3
Wires

                              Light Loading
                              -------------

<S>             <C>        <C>        <C>         <C>
 2               2,200      2,200      2,200       2,200

 4               2,200      2,200      2,200       2,200

 6               2,200      2,200      2,200       2,200

10               2,200      2,200      2,200       4,000

20               4,000      4,000      4,000       6,000

30               4,000      4,000      6,000      10,000

40               4,000      6,000      6,000      10,000

50               6,000      6,000     10,000      12,000

60               6,000     10,000     10,000      16,000

70              10,000     10,000     10,000      16,000

80              10,000     10,000     12,000      16,000
</TABLE>

<PAGE>   112

                                      -48-
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                              Communication Manual
Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                                   Appendix C
             Recommended Strength of Head Guys Required, in Pounds
                (Combinations of Standard Size Guys May Be Used)

<TABLE>
<CAPTION>
Number               Ratio of Guy Lead to Height Not less than
of
Wires             1-1/4       1         3/4        2/3        1/2

                                   Heavy Loading
                                   -------------

<S>             <C>        <C>        <C>         <C>        <C>
 2               4,000      4,000      4,000       4,000      4,000

 6               4,000      4,000      4,000       4,000      6,000

10               6,000      6,000      6,000      10,000     10,000

20              10,000     10,000     12,000      16,000     16,000

30              16,000     16,000     20,000      20,000     26,000

40              20,000     20,000     26,000      26,000     32,000

50              20,000     20,000     30,000      32,000     42,000

60              26,000     30,000     36,000      36,000     48,000

70              30,000     30,000     40,000      48,000     60,000

80              36,000     40,000     48,000      60,000     70,000

                                   Medium Loading
                                   --------------

 2               4,000      4,000      4,000       4,000      4,000

 6               4,000      4,000      4,000       4,000      4,000

10               4,000      4,000      6,000       6,000      6,000

20               6,000     10,000     10,000      10,000     12,000

30              10,000     10,000     12,000      16,000     16,000

40              12,000     16,000     16,000      16,000     20,000

50              16,000     16,000     20,000      20,000     26,000

60              20,000     20,000     26,000      26,000     30,000

70              20,000     20,000     26,000      30,000     36,000

80              26,000     26,000     30,000      32,000     40,000
</TABLE>

<PAGE>   113

                                      -49-
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                              Communication Manual
1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix C (Continued)

<TABLE>
<CAPTION>
Number               Ratio of Guy Lead to Height Not less than
of
Wires             1-1/4       1         3/4        2/3        1/2

                                   Light Loading
                                   -------------

<S>             <C>        <C>        <C>         <C>        <C>

 2               4,000      4,000      4,000       4,000      4,000

 6               4,000      4,000      4,000       4,000      4,000

10               4,000      4,000      4,000       4,000      4,000

20               4,000      6,000      6,000       6,000     10,000

30               6,000     10,000     10,000      10,000     12,000

40              10,000     10,000     10,000      12,000     16,000

50              10,000     10,000     16,000      16,000     20,000

60              12,000     16,000     16,000      16,000     20,000

70              16,000     16,000     20,000      20,000     26,000

80              16,000     20,000     20,000      26,000     30,000
</TABLE>

<PAGE>   114

                                      -50-
                       Association of American Railroads
                              Communication Manual
Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                                   Appendix D

                Recommended Maximum Number of Wires Which can be
               Supported by Poles of Various Classes Without
                Side Guys at Crossings over Railroad Tracks

        (For the Special Case Covered By Paragraph Q-10, See Appendix E)

<TABLE>
Class          Average of Crossing and Adjacent Spans - Feet
of
Pole       100          125          150        175          200

                           Heavy Loading District
                           ----------------------

<S>        <C>          <C>          <C>        <C>          <C>
1           28          22           18          15           13

2           22          18           14          12           11

3           17          14           11          10            8

4           13          11            9           8            7

5           10           8            7           6            5

6            8           6            5           4            4

7            6           5            4           3            3

<CAPTION>
Class          Average of Crossing and Adjacent Spans - Feet
of
Pole       100          125          150        175          200

                           Medium Loading District
                           -----------------------

<S>        <C>          <C>          <C>        <C>          <C>
 1          53          41           33          28           24

 2          41          32           26          22           19

 3          32          25           21          17           15

 4          24          19           16          14           12

 5          18          15           12          10            9

 6          14          11            9           8            7

 7          10           8            7           6            5
</TABLE>

<PAGE>   115
                                      -51-
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                             Communications Manual
1989                                                                 Part 1-B-1
-------------------------------------------------------------------------------

                             Appendix D (Continued)

       (For the Special Case Covered By Paragraph Q-1O,  See Appendix E)

<TABLE>
<CAPTION>
Class     Average of Crossing and Adjacent Spans - Feet
 of
Pole        100      125         150      175      200

                      Light Loading District
                      ----------------------
<S>        <C>        <C>         <C>      <C>      <C>
1           --        82          65       54       46

2           81        61          49       41       35

3           58        45          37       31       27

4           42        33          27       23       20

5           29        23          19       15       14

6           19        15          13       11        9

7           10        10           8        7        6
</TABLE>

<PAGE>   116

                                     -52-
                      Association of American Railroads
                             Communication Manual
Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                                   Appendix E
                Recommended Maximum Number of Wires Which can be
                 Supported by Poles of Various Classes Without
                 Side Guys at Crossings Over Minor Tracks Under
                   the Conditions Specified in Paragraph Q-10

<TABLE>
<CAPTION>
Class              Average of Crossing and Adjacent Spans - Feet
 of
Pole            100       125       150         175        200
                           Heavy Loading District
                           ----------------------
<S>            <C>       <C>       <C>         <C>        <C>
1               62        48        39          33         28

2               48        38        31          26         23

3               38        29        24          20         18

4               29        23        19          16          9

5               22        17         9           8          7

6               16         9         8           7          6

7                8         7         6           5          4
</TABLE>

<TABLE>
<CAPTION>
Class              Average of Crossing and Adjacent Spans - Feet
 of
Pole            100       125       150         175        200

                           Medium Loading District
                           -----------------------
<S>            <C>       <C>       <C>         <C>        <C>
1               --        90        76          63         54

2               --        74        59          50         42

3               75        56        45          39         33

4               55        42        35          29         25

5               40        32        26          22         19

6               20        20        20          17          9

7               10        10        10           8          7
</TABLE>

<PAGE>   117

                                     -53-
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                              Communication Manual
1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix E (Continued)

<TABLE>
<CAPTION>
Class            Average of Crossing and Adjacent Spans - Feet
 of
Pole            100       125       150         175        200

                           Light Loading District
                          -----------------------
<S>            <C>       <C>       <C>         <C>        <C>
1              --        --        --           81         68

2              --        --        75           61         52

3              --        70        55           46         39

4              65        50        40           34         30

5              45        35        29           24         21

6              31        25        20           17         15

7              10        10        10           10         10
</TABLE>

<PAGE>   118

                                     -54-
                       Association of American Railroads
                              Communication Manual
Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                                   Appendix F
                Recommended Maximum Number of Wires Which can be
             Supported by Poles of Various Classes Without Head Guys
<TABLE>
<CAPTION>
                                   Ultimate                       Class of Pole
    Wire              Diameter     Strength
Gage & Material       (Inches)     (Pounds)       1      2      3      4      5     6      7

                                                           Heavy Loading District
                                                           ----------------------
<S>                    <C>          <C>          <C>    <C>    <C>    <C>    <C>   <C>    <C>
10 AWG Copper          0.102          530         11     9      7      6      4     3      2

 9 AWG Copper          0.114          660          8     7      6      4      3     3      2

 8 AWG Copper          0.128          826          7     5      4      4      3     2      1

 8 BWG Copper          0.165        1,325          4     3      3      2      2     1      1

10 BWG Steel           0.134        1,200          4     4      3      2      2     1      1

 8 BWG Steel           0.165        1,710          3     2      2      2      1     1      0
</TABLE>

<TABLE>
<CAPTION>
                                   Ultimate                       Class of Pole
    Wire              Diameter     Strength
Gage & Material       (Inches)     (Pounds)       1      2      3      4      5     6      7

                                                           Medium Loading District
                                                           -----------------------
<S>                    <C>          <C>          <C>    <C>    <C>    <C>  <C>    <C>    <C>
10 AWG Copper          0.102          530         16     13     11    8     6       5     4

 9 AWG Copper          0.114          660         13     11      9    6     5       4     3

 8 AWG copper          0.128          826         10      8      7    5     4       3     2

 8 BWG Copper          0.165        1,325          5      5      4    3     3       2     1

10 BWG Steel           0.134        1,200          7      6      5    4     4       2     1

 8 BWG Steel           0.165        1,700          5      4      3    2     2       2     1
</TABLE>

    Where wires of other sizes or having other ultimate strengths, as in the
case of various grades of steel, are used, the number of wires can be
determined by selecting the wire in the table which has the nearest to the same
ultimate strength as the wire under consideration.

<PAGE>   119

                                      -55-
                       Association of American Railroads
                              Communication Manual
1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix F (Continued)

<TABLE>
<CAPTION>
                                   Ultimate                       Class of Pole
    Wire              Diameter     Strength
Gage & Material       (Inches)     (Pounds)       1      2      3      4      5     6      7

                                                            Light Loading District
                                                            ----------------------
<S>                    <C>       <C>             <C>    <C>    <C>    <C>    <C>   <C>    <C>
10 AWG Copper          0.102        530           24     21     16     13     10    8      6

 9 AWG Copper          0.114        660           20     16     13     10      8    7      5

 8 AWG Copper          0.128        826           16     13     10      8      6    5      4

 8 BWG Copper          0.165      1,325           10      8      6      5      4    3      2

10 BWG Steel           0.134      1,200           10      8      7      5      4    3      2

 8 BWG Steel           0.165      1,710            7      6      5      4      3    2      2
</TABLE>

     Where wires of other sizes or having other ultimate strengths, as in the
case of various grades of steel, are used, the number of wires can be
determined by selecting the wire in the table which has the nearest to the
same ultimate strength as the wire under consideration.
<PAGE>   120
                                      -56-
                       Association of American Railroads
                              Communication Manual
Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                                   Appendix G
       Recommended Ground Line Circumference of Poles of Various Classes
                     and Species which have Deteriorated to
                       Two-Thirds their Strength when New

   Northern White Cedar and Other Species of Poles Having A Fiber Strength of
         3,600 Pounds per Square Inch. (See Group No. 1 in Appendix H)

<TABLE>
<CAPTION>
Length                                                              Class of Pole
of Pole           1               2                 3                  4                    5                6                7
Feet                                                    Ground Line Circumference - Inches

<S>            <C>              <C>               <C>               <C>                    <C>            <C>               <C>
20             34-1/2           32-1/2            30-1/2            28-1/2                 26-1/2          24-1/2            22-1/2

25             38               35-1/2            33-1/2            30-1/2                 29              27                25

30             41-1/2           38-1/2            36                33-1/2                 31              28-1/2            27

35             44               41                38-1/2            35-1/2                 33              30                28

40             46-1/2           43-1/2            40-1/2            37-1/2                 35              32-1/2            ------

45             48-1/2           45-1/2            42-1/2            39-1/2                 36-1/2          ------            ------

50             50-1/2           47-1/2            44-1/2            41                     38              ------            ------

55             52-1/2           49                46                42-1/2                 39-1/2          ------            ------

60             54               51                47-1/2            44                     40-1/2          -------           ------
</TABLE>

<PAGE>   121
                                      -57-
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                             Communications Manual
1989                                                                 Part 1-B-1
-------------------------------------------------------------------------------

                             Appendix G (Continued)

   Western Red Cedar and Other Species of Poles Having a Fiber Strength of
         5,600 Pounds per Square Inch. (See Group No. 2 in Appendix H)

<TABLE>
<CAPTION>
Length                                                          Class of Pole
of Pole       1                 2                 3                   4                      5               6                7
Feet                                                 Ground Line Circumference - Inches

<S>          <C>                <C>               <C>               <C>                    <C>               <C>           <C>
20           30                 28                26-1/2            24-1/2                 22-1/2            21            19-1/2

25           32-1/2             31                29                26-1/2                 25                23            21-1/2

30           35-1/2             33-1/2            31                28-1/2                 26-1/2            25            23-1/2

35           37-1/2             35-1/2            33-1/2            30-1/2                 28-1/2            26-1/2        24-1/2

40           40                 37-1/2            35                32-1/2                 30-1/2            27-1/2        ------

45           42                 39                37                34                     31-1/2            ------        ------

50           43-1/2             41                38-1/2            35                     32-1/2            ------        ------

55           45-1/2             42-1/2            39-1/2            37                     34                ------        ------

60           46-1/2             43-1/2            41                38                     -------           -------       ------

65           48-1/2             45                42                39-1/2                 -------           -------       ------

70           50                 46-1/2            43-1/2            40-1/2                 -------           -------       ------

75           50-1/2             47-1/2            44-1/2            41-1/2                 -------           -------       ------

80           52                 48-1/2            45-1/2            42                     -------           -------       ------

85           53                 49-1/2            46-1/2            -------                -------           -------       ------

90           56                 52-1/2            47-1/2            -------                -------           -------       ------
</TABLE>

<PAGE>   122

                                      -58-
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                              Communication Manual
Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                            Appendix G (Continued)
      Recommended Ground Line Circumference of Poles of Various Classes
                    and Species which have Deteriorated to
                      Two-Thirds their Strength when New

        Chestnut Poles - Fiber Strength, 6,000 Pounds per Square Inch

<TABLE>
<CAPTION>
Length                                                         Class of Pole
of Pole       1                 2                 3                  4                     5                  6            7
Feet                                                  Ground Line Circumference - Inches

<S>          <C>                <C>               <C>               <C>                    <C>               <C>           <C>
20           29                 27-1/2            25-1/2            24                     22                20-1/2        19-1/2

25           32-1/2             30-1/2            28-1/2            26                     24-1/2            22-1/2        21

30           34-1/2             32-1/2            30-1/2            28-1/2                 26                24            22-1/2

35           37                 34-1/2            32-1/2            30-1/2                 28                25-1/2        24-1/2

40           39                 36-1/2            34-1/2            31-1/2                 29-1/2            27            25-1/2

45           41                 38-1/2            36                33-1/2                 31                28-1/2        26-1/2

50           42-1/2             40                37-1/2            34-1/2                 32-1/2            30            27-1/2

55           44                 41-1/2            38-1/2            36                     33-1/2            30-1/2        ------

60           45-1/2             43                40                37                     -------           -------       ------

65           47                 44                41                38-1/2                 -------           -------       ------

70           48                 45-1/2            -------           -------                -------           -------       ------
</TABLE>

<PAGE>   123
                                      -59-
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                             Communications Manual
1989                                                                 Part 1-B-1
-------------------------------------------------------------------------------

                             Appendix G (Continued)

        Lodgepole Pine - Fiber Strength of 6,600 Pounds per Square Inch

<TABLE>
<CAPTION>
Length                                                           Class of Pole
of Pole          1                 2                 3                4                    5                  6            7
Feet                                                         Ground Line Circumference - Inches

<S>          <C>                <C>               <C>               <C>                    <C>               <C>           <C>
20           28-1/2             26-1/2            25                23                     21-1/2            20            19

25           31-1/2             29-1/2            27-1/2            25                     24                21-1/2        20-1/2

30           33-1/2             31-1/2            29-1/2            27-1/2                 25-1/2            23-1/2        22

35           35-1/2             33-1/2            31-1/2            29-1/2                 27                24-1/2        23-1/2

40           38                 35-1/2            33-1/2            30-1/2                 28-1/2            26-1/2        24-1/2

45           39-1/2             37                35                32-1/2                 30                27-1/2        25-1/2

50           41-1/2             38-1/2            36-1/2            33-1/2                 31-1/2            29            27

55           42-1/2             40                37-1/2            35                     32-1/2            30            ------

60           44                 41-1/2            39                36                     33                30-1/2        ------

65           45-1/2             42-1/2            40                37                     34-1/2            -------       ------

70           47                 43-1/2            41                38                     35-1/2            -------       ------

75           48                 45                42                39                     -------           -------       ------

80           49                 46                43                40                     -------           -------       ------

85           50-1/2             47                44                -------                -------           -------       ------

90           53                 49-1/2            45                -------                -------           -------       ------
</TABLE>

<PAGE>   124

                                      -60-
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                              Communication Manual
Part 1-B-1                                                                  1989
--------------------------------------------------------------------------------

                                   Appendix G (Continued)
       Recommended Ground Line Circumference of Poles of Various Classes
                     and Species which have Deteriorated to
                       Two-Thirds their Strength when New

  Southern Pine, Douglas Fir and Other Species of Poles Having a Fiber Strength
        of 7,400 Pounds per Square Inch. (See Group No. 5 in Appendix H)

<TABLE>
<CAPTION>
Length                                                          Class of Pole
of Pole        1                 2                 3                  4                   5                  6            7
Feet                                                 Ground Line Circumference - Inches

<S>          <C>                <C>               <C>               <C>                    <C>               <C>           <C>
20           27-1/2             25-1/2            24                22-1/2                 20-1/2            19            18

25           30                 28                26-1/2            24                     23                21            19-1/2

30           32-1/2             30-1/2            28-1/2            26-1/2                 24-1/2            22-1/2        21

35           34-1/2             32                30-1/2            28-1/2                 26                24-1/2        22-1/2

40           36-1/2             34                32                29-1/2                 27-1/2            25-1/2        24

45           38-1/2             35-1/2            33-1/2            31                     29                26-1/2        25

50           40                 37                35                32-1/2                 30                28            26

55           41-1/2             39                36                33-1/2                 31                29            ------

60           42-1/2             40                37-1/2            35                     32                29-1/2        ------

65           44                 41                38-1/2            35-1/2                 ------            -------       ------

70           45                 42                39-1/2            36-1/2                 ------            -------       ------

75           46-1/2             43                40-1/2            ------                 -------           -------       ------

80           47                 44                41-1/2            ------                 -------           -------       ------

85           48                 45                ------            -------                -------           -------       ------

90           51                 48                ------            -------                -------           -------       ------
</TABLE>

<PAGE>   125
                                      -61-
                        Association of American Railroads
                              Communication Manual

1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                                   Appendix H
             Recommended Ultimate Fiber Stress (Modulus of Rupture)
                        of Various Species of Wood Poles

<TABLE>
<CAPTION>
       Group No. 1                                  (Pounds per Square Inch)
       -----------
<S>                                                          <C>
       *Northern White Cedar                                  3,600
       Eastern White Cedar                                    3,600
       Red Wood                                               3,600

       Group No. 2
       -----------
       *Western Red Cedar                                     5,600
       Southern Red Cedar                                     5,600
       Washington Cedar                                       5,600
       Idaho Cedar                                            5,600
       Port Oxford Cedar                                      5,600
       Cypress                                                5,000

       Group No. 3
       -----------
       *Chestnut                                              6,000

       Group No. 4
       -----------
       *Lodgepole Pine                                        6,600

       Group No. 5
       -----------
       *Douglas Fir                                           7,400
       *Southern Pine, creosoted                              7,400
</TABLE>

   *American National Standards Institute (ANSI)
Standard 05.1-1987 (Specifications & Dimensions
of Wood Poles

<PAGE>   126

                                      -62-
                       Association of American Railroads
                              Communication Manual

Part 1-B-1                                                                 1989
-------------------------------------------------------------------------------

                                   Appendix J
           Recommended Dimensions for New Poles of Various Species as
           Specified in ANSI Specifications 05.1 to 05.6, inclusive,
                  of the American National Standards Institute

                              Northern White Cedar

                 Fiber Strength, 3,600 Pounds per Square Inch.
                              From ANSI 05.1-1979

<TABLE>
<S>                           <C>      <C>       <C>       <C>        <C>        <C>        <C>
Class of Pole                  1        2         3         4          5          6          7
Minimum Top
Circumference (Inches)         27       25        23        21         19         17         15
</TABLE>

<TABLE>
<CAPTION>
Length    Ground
of        Line Distance                  Minimum Circumference at Six Feet from Butt
Pole      from Butt                                       (inches)
Feet      Feet
<S>      <C>                <C>        <C>       <C>       <C>       <C>         <C>        <C>
16        3-l/2              ----       ----      ----      ----       26.0       24.0       22.0

18        3-1/2              ----       ----      32.5      30.0       28.0       25.5       23.5

20        4                  39.5       37.0      34.0      31.5       29.0       27.0       25.0

22        4                  41.0       38.5      36.0      33.0       30.5       28.0       26.0

25        5                  43.5       41.0      38.0      35.5       32.5       30.0       28.0

30        5-1/2              47.5       44.5      41.5      38.5       35.5       33.0       30.5

35        6                  50.5       47.5      44.0      41.0       38.0       35.0       32.5

40        6                  53.5       50.0      46.5      43.5       40.0       37.0       ----

45        6-1/2              56.0       52.5      49.0      45.5       42.0       ----       ----

50        7                  58.5       55.0      51.5      47.5       44.0       ----       ----

55        7-1/2              61.0       57.5      53.5      49.5       46.0       ----       ----

60        8                  63.5       59.5      55.5      51.5       ----       ----       ----
</TABLE>

<PAGE>   127
                                      -63-
                       Association of American Railroads
                             Communication Manual

1989                                                                  Part 1-B-1
--------------------------------------------------------------------------------

                             Appendix J (Continued)

                               Western Red Cedar
                 Fiber Strength, 5,600 Pounds per Square Inch.
                              From ANSI 05.1-1979

<TABLE>
<S>                        <C>      <C>       <C>       <C>        <C>        <C>        <C>
Class of Pole               1        2         3         4          5          6          7
Minimum Top
Circumference (Inches)      27       25        23        21         19         17         15
</TABLE>

<TABLE>
<CAPTION>
Length    Ground
of        Line Distance               Minimum Circumference at Six Feet from Butt
Pole      from Butt                                    (Inches)
Feet      Feet
<S>      <C>               <C>      <C>       <C>       <C>        <C>        <C>        <C>
16        3-1/2             ----     ----      ----      ----       23.0       21.5       19.5

18        3-1/2             ----     ----      28.5      26.5       24.5       22.5       21.0

20        4                 34.5     32.0      30.0      28.0       25.5       23.5       22.0

22        4                 36.0     33.5      31.5      29.0       27.0       25.0       23.0

25        5                 38.0     35.5      33.0      30.5       28.5       26.0       24.5

30        5-1/2             41.0     38.5      35.5      33.0       30.5       28.5       26.5

35        6                 43.5     41.0      38.0      35.5       32.5       30.5       28.0

40        6                 46.0     43.5      40.5      37.5       34.5       32.0       ----

45        6-1/2             48.5     45.5      42.5      39.5       36.5       ----       ----

50        7                 50.5     47.5      44.5      41.0       38.0       ----       ----

55        7-1/2             52.5     49.5      46.0      42.5       39.5       ----       ----

60        8                 54.5     51.0      47.5      44.0       ----       ----       ----

65        8-1/2             56.0     52.5      49.0      45.5       ----       ----       ----

70        9                 57.5     54.0      50.5      47.0       ----       ----       ----

75        9-1/2             59.5     55.5      52.0      48.5       ----       ----       ----

80        10                61.0     57.0      53.5      49.5       ----       ----       ----

85        10-1/2            62.5     58.5      54.5      ----       ----       ----       ----

90        11                63.5     60.0      56.0      ----       ----       ----       ----
</TABLE>

<PAGE>   128
                                      -64-

                        Association of American Railroads
                              Communication Manual
 Part 1-B-1                                                                1989
--------------------------------------------------------------------------------

                              Appendix J (Continued)

           Recommended Dimensions for New Poles of Various Species as
            Specified in ANSI Specifications 05.1 to 05.6. inclusive,
                  of the American National Standards Institute

                                    Chestnut

                  Fiber Strength, 6,000 Pounds per Square Inch.
                               From ANSI 05.1-1979
<TABLE>
<CAPTION>

<S>                                      <C>       <C>        <C>        <C>        <C>        <C>       <C>
      Class of Pole                        1          2          3          4          5         6          7
      Minimum Top
      Circumference (inches)              27         25         23         21         19        17         15

</TABLE>

<TABLE>
<CAPTION>

      Length          Ground
      of              Line Distance             Minimum Circumference at Six Feet from Butt
      Pole            from Butt                                  (inches)
      Feet            Feet

     <S>              <C>                <C>        <C>       <C>        <C>       <C>       <C>         <C>
      16              3-1/2               -----      -----      -----      -----      22.5      21.0       19.5

      18              3-1/2               -----      -----      28.0       26         24.0      22.0       20.5

      20              4                   33.5       31.5       29.5       27.0       25.0      23.0       21.5

      22              4                   35.0       33.0       30.5       28.5       26.5      24.5       22.5

      25              5                   37.0       34.5       32.5       30.0       28.0      25.5       24.0

      30              5-1/2               40.0       37.5       35.0       32.5       30.0      28.0       26.0

      35              6                   42.5       40.0       37.5       34.5       32.0      30.0       27.5

      40              6                   45.0       42.5       39.5       36.5       34.0      31.5       29.5

      45              6-1/2               47.5       44.5       41.5       38.5       36.0      33.0       31.0

      50              7                   49.5       46.5       43.5       40.0       37.5      34.5       32.0

      55              7-1/2               51.5       48.5       45.0       42.0       39.0      36.0      -----

      60              8                   53.5       50.0       46.5       43.5      -----     -----      -----

      65              8-1/2               55.0       51.5       48.0       45.0      -----     -----      -----

      70              9                   56.5       53.0      -----      -----      -----     -----      -----

</TABLE>

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                            Appendix J (Continued)

                                 Lodgepole Pine

                 Fiber Strength, 6,600 Pounds per Square Inch
                              From ANSI 05.1-1979
<TABLE>
<CAPTION>

<S>                                 <C>       <C>       <C>    <C>      <C>       <C>   <C>
      Class of Pole                 1         2         3      4        5         6     7
      Minimum Top
      Circumference (Inches)        27        25        23     21       19        17    15

</TABLE>

<TABLE>
<CAPTION>

      Length       Ground
      of           Line Distance              Minimum Circumference at Six Feet from Butt
      Pole         from Butt                                    (inches)
      Feet         Feet

      <S>         <C>         <C>          <C>        <C>          <C>        <C>       <C>      <C>
      16           3-1/2       -----        -----       -----       -----      22.0      20.5     19.0

      18           3-1/2       -----        -----        27.5        25.5      23.5      21.5     20.0

      20           4            32.5         30.5        28.5        26.5      24.5      22.5     21.0

      22           4            34.0         32.0        30.0        27.5      25.5      23.5     22.0

      25           5            36.0         33.5        31.0        29.0      27.0      25.0     23.0

      30           5-1/2        39.0         36.5        34.0        31.5      29.0      27.0     25.0

      35           6            41.5         38.5        36.0        33.5      31.0      28.5     26.5

      40           6            44.0         41.0        38.0        35.5      33.0      30.5     28.0

      45           6-1/2        46.0         43.0        40.0      . 37.0      34.5      32.0     29.5

      50           7            48.0         45.0        42.0        39.0      36.0      33.5     31.0

      55           7-1/2        49.5         46.5        43.5        40.5      37.5      34.5     -----

      60           8            51.5         48.0        45.0        42.0      38.5      -----    -----

      65           8-1/2        53.0         49.5        46.0        43.0      -----     -----    -----

      70           9            54.5         51.0        47.5        -----     -----     -----    -----

      75           9-1/2        56.0         52.5       -----        -----     -----     -----    -----

</TABLE>

<PAGE>   130

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                             Appendix J (Continued)

           Recommended Dimensions for New Poles of Various Species as
           Specified in ANSI Specifications 05.1 to 05.6, inclusive,
                  of the American National Standards Institute

             Southern Pine (Creosoted) and Douglas Fir (Creosoted)

                  Fiber Strength, 7,400 Pounds per Square inch.
                              From ANSI 05.1-1979
<TABLE>
<CAPTION>

<S>                                       <C>    <C>   <C>   <C>   <C>   <C> <C>
Class of Pole                             1      2     3     4     5     6   7
Minimum Top
Circumference (inches)                    27     25    23    21    19    17  15

</TABLE>

<TABLE>
<CAPTION>

     Length        Ground
     of            Line Distance                        Minimum Circumference at Six Feet from Butt
     Pole          from Butt                                              (inches)
     Feet          Feet

     <S>          <C>                  <C>               <C>        <C>              <C>          <C>        <C>        <C>
     16            3-1/2                -----             -----      ------            -----      21.5       19.5       18.0

     18            3-1/2                -----             -----       26.5             24.5       22.5       21.0       19.0

     20            4                    31.5              29.5        27.5             25.5       23.5       22.0       20.0

     22            4                    33.0              31.0        29.0             26.5       24.5       23.0       21.0

     25            5                    34.5              32.5        30.0             28.0       26.0       24.0       22.0

     30            5-1/2                37.5              35.0        32.5             30.0       28.0       26.0       24.0

     35            6                    40.0              37.5        35.0             32.0       30.0       27.5       25.5

     40            6                    42.0              39.5        37.0             34.0       31.5       29.0       27.0

     45            6-1/2                44.0              41.5        38.5             36.0       33.0       30.5       28.5

     50            7                    46.0              43.0        40.0             37.5       34.5       32.0       29.5

     55            7-1/2                47.5              44.5        41.5             39.0       36.0       33.5       -----

     60            8                    49.5              46.0        43.0             40.0       37.0       34.5       -----

     65            8-1/2                51.0              47.5        44.5             41.5       38.5       -----      -----

     70            9                    52.5              49.0        46.0             42.5       39.5       -----      -----

     75            9-1/2                54.0              50.5        47.0             44.0        -----     -----      -----

     80            10                   55.0              51.5        48.5             45.0        -----     -----      -----

     85            10-1/2               56.5              53.0        49.5            -----        -----     -----      -----

     90            11                   57.5              54.0        50.5            -----        -----     -----      -----

</TABLE>
<PAGE>   131

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                                   Appendix K
Here is an example of computation of clearance between power wires and
communication wires where an open-wire communication line crosses over the
tracks of a railroad and under an open-wire power line in the same span.

Assume the case in which the power line carries a single-phase, two-wire circuit
of 6,900 volts between wires, the wires attached to pin-type insulators on wood
crossarms and that each wire consists of two strands of solid copper and one
strand of copper-covered steel, the overall diameter of which is 0.230 in.
Assume also that the crossing is located in the heavy loading district and that
the length of the power line span concerned is 255 ft. The method of determining
the required clearance between the lowest power wire and the highest
communication wire consists of the following steps:

1.      Referring to Table E-2; the power line takes the classification of open
        supply wires, 750 to 8,700 volts and the basic clearance is, therefore,
        4 ft.

2.      Referring to Paragraph E-6(a); since the crossing is located in the
        heavy loading district, and the power line span exceeds 175 ft. in
        length, an increase in clearance is required. Referring to the second
        table in Subparagraph (1) of Paragraph E-6(a), the wire used in this
        example takes the classification of a "small conductor" since it is
        stranded, is other than all-copper and has an overall diameter less than
        0.275 in. Referring now to the first table in this same subparagraph, it
        will be seen that the amount of clearance increase for a "small
        conductor" in the heavy loading district is 0.30 ft. for each 10 ft. by
        which the span length exceeds 175 ft. The span length of 255 ft. exceeds
        175 ft. by 80 ft., so that the clearance increase is 8 multiplied by
        0.30 ft., or 2.4 ft. The total clearance is, therefore, the sum of 4 and
        2.4, or 6.4 ft.

3.      This clearance is applicable if the communication line crosses under
        the power line at or near the middle of the power line span where the
        sags of the power wires will be greatest when they are loaded with ice.
        Since the increased sag of the power wires caused by ice loading is less
        near the power poles than at mid-span, the clearance need not be as
        great as 6.4 ft. if the point where the communication line crosses under
        the power line (crossing point) is other than at the middle of the power
        line span. To take account of this permissible decrease, another step is
        necessary.

<PAGE>   132

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4.       Referring to Table E-4; assume that the distance from the nearest
         power pole to the center line of the communication line is 51 ft. or
         20% of the length of the power line span. The corresponding reduction
         factor given in the table for a basic clearance of 4 ft. is 0.71.
         Multiplying this by 6.4 gives a net clearance of 4.5 ft. which is the
         clearance that should be provided under the conditions assumed. If
         this clearance had been less than 4 ft., the basic clearance of 4 ft.
         should have been provided in accordance with the requirements of
         Subparagraph (2) of Paragraph E-6 (a).

5.       The above assumes that the supply wires cross over the communication
         wires at a distance of more than 6 ft. horizontally from the nearest
         communication line pole. In accordance with Note (e) of Table E-2, if
         this horizontal distance is less than 6 ft., the basic clearance used
         in the above computations should be 6 ft. and the clearance under the
         conditions assumed above would be 8.4 ft. at mid-span or 6.6 ft. at
         the 20% point.

6.       The above takes care of the clearance increase required by Paragraph
         E-6 (a). The next step is to determine the further increase required by
         the voltage of the power circuit as given in Paragraph E-6 (b). In the
         case assumed, since the voltage is less than 50,000 volts, no increase
         is required and the clearance as determined in Step (d) or (e) above
         would meet the combined requirements of Paragraphs E-6 (a) and E-6(b).
         Had the voltage been 69,000 instead of 6,900 volts, the basic clearance
         from Table E-2 would have been 6 ft., the clearance due to span length
         would have been that determined in Step (e) above to which would be
         added 1/2 in. for each 1,000 volts that the voltage exceeds 50,000
         volts. This increase would amount to 9-1/2 in., or 0.8 ft., and the
         total clearance would have been 9.2 ft. at mid-span, or 7.4 ft. at the
         20% point.

7.       The final factor which enters into the determination of the clearance
         is the method of support of the power conductors as given in Paragraph
         E-6(c). The object of this clearance increase is to insure that a total
         clearance is provided such that at least the basic clearance called for
         in Table E-2 will be maintained in the event that the power conductor
         is broken in the span adjacent to the crossing in those situations
         where the conductor is more or less rigidly supported at one crossing
         structure and at the other crossing structure is supported by
         suspension or other type insulators which are free to swing and thereby
         permit a large increase in the sag of the power wire in the crossing
         span. Where the power conductor is supported by pin-type insulators at
         both crossing structures, as assumed

<PAGE>   133

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         in the example in this appendix, this effect is not present and no
         increase in clearance is required for this item. The same result would
         have obtained had the power conductor been supported by suspension-type
         insulators at both crossing structures. This effect is important only
         where the method of supporting the power conductor is such as not to
         permit the same freedom of movement of the conductor at one crossing
         structure as at the other. The determination of the increase in sag
         which would result from such dissimilar supporting arrangements is
         complicated and since it is a type of construction which will rarely be
         encountered where this specification is involved, it will generally be
         found preferable to obtain the information from the engineers of the
         company owning the power line rather than attempt to compute it.
<PAGE>   134

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                                   Appendix L
           Recommended Typical Communication Line Crossing Data Sheet

     A data sheet of the type illustrated below shall be filled out by the party
planning to erect wires across the railroad and forwarded to the Superintendent
of Communications or other designated officer, together with the plan and other
pertinent information, as a part of the notice required by Paragraph C-1.

Name of party desiring crossing...............................................
Location of proposed crossing.................................................

 1. Poles - Kind of timber - Treated or untreated.............................
 2. Poles - Class and length..................................................
 3. Poles - Depth of setting..................................................
 4. Poles - Poles - Setting - Kind of earth, i.e., rock, firm
    earth or swampy ground....................................................
 5. Guys, Side - Number, kind and size........................................
 6. Guys, Side - Nominal breaking strength....................................
 7. Guys, Head - Number, kind and size........................................
 8. Guys, Head - Nominal breaking strength....................................
 9. Guy Clamps - Kind and size................................................
10. Guy Clamps - Number at pole end...........................................
11. Guy Clamps - Number at guy rod end........................................
12. Guy Rods - Kind and size..................................................
13. Anchors - Kind and size...................................................
14. Anchors - Depth of setting................................................
15. Crossarms - Number, immediate construction................................
16. Crossarms - Number, future construction...................................
17. Crossarms - Material......................................................
18. Crossarms - Size..........................................................
19. Crossarms - Number of pins per arm........................................
20. Pins - Material...........................................................
21. Pins - Type...............................................................
22. Pins - Size...............................................................
23. Pins - If metal, state if galvanized......................................
24. Insulators - Material.....................................................
25. Insulators - Type.........................................................
26. Wires - Material and number...............................................
27. Wires - Size and gage.....................................................
28. Wires, supply, involved in crossing - Voltage.............................
29. Suspension Strand - Kind and size.........................................
30. Suspension Strand - Nominal breaking strength.............................
31. Suspension Strand Attachment - Kind and size of through
    bolt......................................................................
32. Suspension Strand Attachment - Type of suspension clamp...................

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33. Suspension Strand Attachment - Type of safety strap.........................
34. Suspension Strand Attachment - Kind and size of safety
    strap bolt..................................................................
35. Suspension Strand Attachment - Type of reinforcing links....................
36. Suspension Strand Attachment - Kind and size of reinforcing
    link bolts..................................................................
37. Cable, if any, diameter, inches.............................................
38. Cable, if any, weight, pounds, per foot.....................................
39. Cable Rings - Material......................................................
40. Cable Rings - Type..........................................................
41. Cable Rings - Spacing.......................................................
42. Cable Lashing Wires, Size...................................................
<PAGE>   136
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Figure 1B1-1: Typical Drawing for Communication Lines Crossing over Railroads

        [COMMUNICATION LINES CROSSING OVER RAILROADS DIAGRAM]
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Figure 1B1-2: Guy Lead and Height and their Ratio

                         [GUY LEAD AND HEIGHT DIAGRAM]
<PAGE>   138
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Figure 1B1-3: Typical Arrangement of Underground Crossing

                 [ARRANGEMENT OF UNDERGROUND CROSSING DIAGRAM]
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Figure 1B1-4:  Typical Drawing for Communication Line Crossing Under Bridges

              [COMMUNICATION LINE CROSSING UNDER BRIDGES DIAGRAM]
<PAGE>   140
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Figure 1B1-5:  Typical Arrangement of Conduits for Underground Crossing

                  [CONDUITS FOR UNDERGROUND CROSSING DIAGRAM]
<PAGE>   141

                                    EXHIBIT G

                        SPECIFICATION FOR THE ATTACHMENT
                          OF CABLES TO RAILROAD BRIDGES

I.   AVOIDANCE OF ATTACHMENTS

     The cable system preferably should be so graded that it will be unnecessary
     to make attachments to railroad bridge structures.

II.  ATTACHMENTS TO FIXED BRIDGES

     Unless separate written approval of the Railroad's Chief Engineer has been
     obtained, cable will be encased in steel conduit, and attachments to steel
     bridges shall be made with devices that do not require the drilling or
     cutting of the bridge structure or the removal of rivets. Attachments to
     each individual bridge shall be in accordance with drawings prepared by or
     for Utility and approved by the Railroad. Typical attachment drawings may
     be prepared for those types of bridges whose design and construction lend
     themselves to repetition of attachment method and detail. However, the
     Railroad shall make final determination as to the applicability of any
     typical attachment drawings to an individual bridge.

III. ATTACHMENTS TO MOVABLE BRIDGES

     All attachments to movable bridges require separate written approval of the
     Railroad's Chief Engineer and will be made in accordance with requirements
     prescribed for that particular bridge by the Railroad.

IV.  TEMPORARY RELOCATION OF ATTACHMENTS

     Temporary relocation of cable systems attached to bridges will be made
     promptly and without cost to Railroad when necessary for Railroad to
     perform bridge maintenance. Notification will not be less than 30 days
     prior to date that relocation must be complete, except in case of
     emergency. The attachment requirements set forth by the Railroad will
     locate the attachment, to the extent possible, such that the occurrence of
     such temporary relocations will be minimized.

V.   NEW BRIDGES

     In the event that new railroad bridges are to be constructed along the
     right-of-way occupied by Utility and Utility desires to locate its cable
     facility on such bridges, provision for Utility cable will be incorporated
     into the bridge design. Costs of design, construction, and materials
     attributable solely to Utility's use of the structure, as well as costs of
     any temporary relocation of Utility's facilities during bridge
     construction, will be paid by Utility.

<PAGE>   142

                                    EXHIBIT H

                        EMERGENCY AND DISASTER RESPONSES

In the event of an emergency or disaster which results in actual damage to
Facilities or System or to Railroad's facilities or operations, or creates a
situation wherein it is reasonably possible that such damage may occur,
immediate contact shall be established between Railroad's Operations Center, and
applicable division personnel, and Utility's Operation Center and applicable
Area Representatives. Detailed procedures effectuating the above notification
shall be mutually established.

Railroad and Utility will fully cooperate with each other and coordinate their
efforts to jointly and severally restore operation of their respective rail and
communication systems, with each being solely responsible for all costs incurred
in repairing its own facilities. In the event such cooperation results in one
party incurring costs that are for the benefit of the other (e.g., Railroad
providing railroad equipment to Utility), such costs shall be subsequently fully
reimbursed.

Utility will maintain emergency material and repair kits at various points
throughout its System.

Railroad shall have the right to establish priorities for making repairs which
impact upon rail operations, but shall permit Utility to move forward in making
repairs to Utility's System or Facilities when to do so would not impair rail
operations.

<PAGE>   143
                                                                       EXHIBIT I

                                      CSX
                                 TRANSPORTATION

Specifications for crossings of wires or cables of Telegraph, Telephone, Signal,
        and other Circuits of Similar character over CSXT Rights of Way,
                 Tracks, or Lines of wires of the same classes.

1.  PURPOSE.

     The purpose of these specifications is to describe the general
requirements of construction and maintenance of communication lines crossing
the tracks and associated parallel communication lines of railroads. They are
based on National Electrical Safety Code and A.A.R. communications section.
Specification 1 3 1. For further details, see complete specifications.

     Wires covered by these specifications shall not carry more than 400 volts
to ground.

2.  DRAWINGS.

     Complete drawings shall be furnished in duplicate before construction is
commenced. These drawings shall show the general plan of the right of way,
tracks and wires to be crossed and the construction proposed, including the
locations of the poles supporting the crossing span and the adjoining spans on
either side of the crossing span, the number, kind and size of wires, and the
proposed clearances of the existing tracks and wires.

3.  LOCATION OF POLES.

     Spans crossing railroad rights of way, preferably should be supported upon
poles placed outside of the right of way.

     The crossing span shall, where practicable, not exceed 175 ft. in the
heavy loading district, 250 ft. in the medium loading district, and 350 ft. in
the light loading district. Where practicable, the adjacent spans shall not
exceed the length of the crossing by more than 50%. Wherever practicable, the
poles supporting the crossing span and the adjoining span on each side thereof
shall be in a straight line.

4.  CLEARANCES.

     General.  The condition under which all clearances are specified are
60(degrees)F. and no wind. Clearances shall be measured between the nearest
parts of the objects concerned. The clearances required by this section shall
be maintained at not less than the specified values.

     Side Clearance From Rails.  Poles or towers supporting the crossing span
shall, where practicable, be so located as to provide a minimum horizontal
clearance of twelve (12) feet from the nearest track rail (except at sidings a
clearance of not less than eight (8) feet may be allowed) and a minimum
horizontal clearance of eight (8) feet between the nearest track rail and any
crossarm, guy, or other attachments. Where it is impracticable or undesirable
to provide these clearances, they may be reduced if the approval of CSXT is
obtained. Where necessary to provide safe operating conditions, which require
uninterrupted view along the tracks for signals, signs, etc., the parties shall
cooperate to provide greater clearances than those specified above.

     Vertical Clearance Above Rails for Fixed Supports.  The vertical clearance
between the lowest wire, guy, or cable and the top of rail shall not be less
than the Table below:

                         VERTICAL CLEARANCE ABOVE RAILS

<TABLE>
<CAPTION>
                                   Vertical Clearance
                                        in Feet
                                   ------------------

<S>                                       <C>
For wires                                  27

For guys or cables
  carried on suspension
  strands                                  25

</TABLE>

Vertical Clearances Between Wires Not on the Same Supporting Structures.

     The vertical clearances between conductors of the crossing span and
conductors of other lines shall be not less than the values shown in the
following Table.
<PAGE>   144
                   Minimum Vertical Clearance in Feet Between
                        Wires not on the same structure

     (All voltages are between wires, except where otherwise stated or for
              trolley contact wires where voltages are to ground.)

<TABLE>
<CAPTION>
                                                            Nature of Wires at High Level

                                                                   Open supply of wires,
                                                                   0-750 volts, supply                                      Guys,
                                             Communication         cables, all voltages                                  span wires,
         Nature of                           wires, cables          having effectively             Open supply            lightning
       wires crossed                         and suspension        grounded metal sheath            wires and            protection
            over                                 strand            or suspension strand            service drops            wires

                                                                                                750 to     8,700 to
                                                                 Line wires        Service       8,700      50,000
                                                                 and cables         drops        Volts       Volts
<S>                                             <C>                 <C>             <C>          <C>        <C>              <C>

Communication
  wires, cables and
  suspension strand                               2                   4               2            4           6               2

Guys and span wires,
  lightning protection wires,
  supply service drops of
  0 to 750 volts                                  4                   2               2             2          4               2

</TABLE>

                              LOADING ASSUMPTIONS

     Three degrees of severity are recognized on the Railroad for the loading
due to weather conditions and are designated, respectively, as Heavy, Medium,
and Light Loading:

     (a)  Heavy Loading Territory:  All lines north of Virginia-North Carolina
          State Line.
     (b)  Medium Loading Territory:  All lines south of Virginia-North Carolina
          State Line and north of a parallel of latitude passing through
          Charleston, S.C., Fairfax, S.C., Woodbury, Ga, and LaGrange, Ga.
     (c)  Light Loading Territory:  All lines south of territory designated in
          (b) above.

5.  POLES

     Material.  Wood poles shall be of suitable and selected timber free from
observable defects that would decrease the strength of durability.

     Sizes.  Creosoted Southern Pine--Poles shall be of a size not less than the
class specified in Table for the corresponding number of wires carried. If guys
are omitted, poles must be of sufficient strength to meet the requirements
specified in paragraph Q-9 of A.A.R. Specification 131.

                                 MINIMUM SIZES

<TABLE>
<CAPTION>
                                    Over 40 wires              21 to 40 wires           11 to 20 wires       10 wires or less
<S>                                 <C>                        <C>                     <C>                   <C>

Medium Loading Territory
Minimum top Cir. (in.)               21 (class 4)               19 (class 5)             17 (class 6)          15 (Class 7)
Light Loading Territory
Minimum Top Cir. (in.)               19 (class 5)               17 (class 6)             17 (class 6)          15 (Class 7)

</TABLE>

     Gains.  Gains shall not be cut to a depth of more than one-half inch.

     Setting.  Following Table specifies the minimum depth of setting for
unguyed poles in average soil and in rock.

                   MINIMUM DEPTH OF SETTING FOR UNGUYED POLES

<TABLE>
<CAPTION>
Length of       Depth in feet in average soil for different classes of poles     Depth in feet in
 pole in                                                                           Rock For all
   feet               Class 4          Class 5 and 6         Class 7                  classes
<S>                 <C>                  <C>                <C>                      <C>

    16                   --                4                  3 3/4                    3
    18                   --                4 1/4              4                        3 1/4
    20                 4 1/2               4 1/4              4                        3 1/4
    22                 4 3/4               4 1/2              4 1/4                    3 1/2
    25                 5 1/4               4 3/4              4 1/2                    3 3/4
    27                 5 1/2               5                  4 3/4                    4
    30                 5 3/4               5 1/4              5                        4 1/4
    35                 6                   5 1/2              5 1/4                    4 1/2
    40                 6 1/4               5 3/4              5 1/2                    4 3/4
    45                 6 1/2               6                  5 3/4                    5
    50                 6 3/4               6 1/4              6                        5 1/4
    55                 7                   6 1/2                --                     5 1/2
    60                 7 1/4               6 3/4                --                     5 3/4

</TABLE>

     Where soil conditions are such that the above depths of setting will not
develop the strength of the pole, the pole shall be set to an additional depth
or other means used to properly secure the pole.

     Spliced Poles.  Spliced poles shall not be used to support the crossing
span.
<PAGE>   145
6.  CROSSARMS AND BRACKETS.

     Wood crossarms supporting the crossing span shall be of fir, treated
yellow pine or other suitable timber. They shall have a nominal cross-section
on not less than the value given in Table below.

                          DIMENSIONS OF WOOD CROSSARMS

<TABLE>
<CAPTION>

 Number                    Nominal Length                  Nominal Cross-Section
of wires               (Feet)        (Inches)                    (Inches)
<S>                    <C>           <C>                    <C>
    2                     1            4 1/2                  2 5/16 by 3 5/16
    4                     3            4 1/2                  2 5/16 by 3 5/16
    6                     6            0                      2 3/4  by 3 3/4
   10                     8            6                      2 3/4  by 3 3/4
   10                    10            0                      3      by 4
   12*                   10            0                      3 1/4  by 4 1/4
   16**                  10            0                      3 1/4  by 4 1/4

</TABLE>

 * Where crossarms are bored for 1/2 inch steel pine, 3 inch by 4 1/4 inch
   crossarms may be used.
** Permitted in medium and light loading districts only.

     Galvanized or painted iron or steel crossarms of strength equal to those
of the wood crossarms specified in above Table may be used.

     Double crossarms shall be provided on crossing poles and shall be attached
to the pole by means of a 5/8 inch crossarm bolt. Double crossarms longer than
two-pin shall be equipped with double arming bolts, or spacing blocks and
crossarm bolts, at a point near each end of the crossarms. Each wire shall be
attached to each insulator of its pair upon the double arm.

     Wood pole brackets may only be used at crossings over minor tracks and
shall be in duplicate so as to afford two points of support for each conductor.

7.  HARDWARE.

     All pole line hardware shall be galvanized.

8.  PINS.

     Insulator pins shall have strength sufficient to withstand the loads to
which they may be subjected. Steel or iron pins shall have a diameter of shank
not less than 1/2 inch. Wood pins shall be sound and straight grained with a
diameter of shank not less than 1 3/4 inches.

9.  INSULATORS.

     Each insulator shall be of such pattern, design and material that, when
mounted on its pin, it will withstand, without injury, and without being pulled
off the pin, the ultimate strength of the conductor which it supports.

10.  CONDUCTORS.

     Conductors shall be of material or combination of materials which will not
corrode excessively under the prevailing conditions.

     Conductors of material other than those specified in Table below shall be
of such size and so erected as to have mechanical strength not less than that
of the sizes of copper conductors specified.

     The minimum allowable sizes of conductors in a span crossing over a
railroad which does not in the same span also cross over supply conductors in
excess of 750 volts to ground, shall be as given in following Table.

                               MINIMUM WIRE SIZES

<TABLE>
<CAPTION>
                                                                    Spans exceeding 125 feet up to
  Conductor                      Spans 125 feet or less                     150 feet (Note)

                               Gage          Diameter Inches          Gage        Diameter Inches
<S>                          <C>                <C>                 <C>              <C>
  Copper, Hard Drawn          10 AWG              0.102               9 AWG            0.114

  Steel Galvanized:
  In general                  10 BWG              0.134               8 BWG            0.165

  In rural districts
  or arid regions             12 BWG              0.109              10 BWG            0.134

</TABLE>

     NOTE:--If Spans in excess of 150 ft. are necessary, the size of conductors
specified above, or the sags of the conductors, shall be correspondingly
increased.

11.  GUYS.

     Poles supporting the crossing span shall be side guyed in both directions,
if practicable, and shall be head guyed away from the crossing span when the
construction of the crossing span places undue stress on crossing poles. Guys
shall be of galvanized steel wire or stranded steel cable.
<PAGE>   146
12.  SUSPENSION STRAND.

     Material.  Suspension strands shall be of galvanized steel or other
material that will not corrode excessively under the prevailing conditions.

     Size.  For spans of 150 feet or less, the following Table gives the
minimum sizes of suspension strand to be used for supporting different sizes of
aerial cable.

                       MINIMUM SIZES OF SUSPENSION STRAND

<TABLE>
<CAPTION>

Weights of cable in                     Suspension Strand (Nominal Ultimate
 pounds per foot                                Strength in Pounds)
<S>                                                 <C>
Less than 2.25                                         6.000
2.25 to 5                                             10.000
Exceeding 5 and less than 8.5                         16.000

</TABLE>

13.  INSPECTION.

     The construction shall be subject to the inspection of the railroad
company and shall comply with the requirements of these specifications.
Defective material shall be rejected and replaced with acceptable material.

14.  MAINTENANCE.

     The crossing shall be maintained in safe condition. The poles, crossarms,
insulators, guys, wires, and other parts and materials used in the structure of
the crossing shall be periodically inspected, and all defects shall be promptly
repaired by the owner of the line. The guys and anchors shall be maintained so
that the guys are kept taut and serve the purpose for which they are intended.
The line wires shall be kept to the proper sag. Underbrush, grass, or other
inflammable material shall be kept removed by the crossing owner, from the
poles for a sufficient distance to reduce the fire hazard to the minimum.

<PAGE>   147

                                    EXHIBIT J

CSX TRANSPORTATION - EB2 PUBLICATION SCHEDULE OF LABOR OVERHEAD RATES USED FOR
BILLING OUTSIDE PARTIES OTHER THAN GOVERNMENT AGENCIES AND RAILROADS

ITEM 1. SUMMARY OF LABOR SURCHARGES TO BE APPLIED TO DIRECT LABOR EFFECTIVE
1/1/97:

<TABLE>
<CAPTION>
                                                                                                                          NON-
DESCRIPTION                            MOW              SIG            M OF E           TRANS           GOB/SS          CONTRACT
-----------                            ----             ---            ------           -----           ------          --------
<S>                                <C>               <C>            <C>              <C>             <C>             <C>
Vacation and other                     8.35%            6.42%           7.59%           10.60%          12.82%            5.74%
Holiday                                3.97%            3.65%           3.87%            0.69%           3.46%            0.00%
RRUI                                  27.01%           26.48%          26.48%           24.76%          26.64%           18.46%
Suppl. Annuity Tax                     1.86%            1.64%           1.74%            1.60%           1.66%            0.00%
Suppl. Sick Ins.                       1.07%            0.88%           1.21%            0.00%           0.00%            0.00%
Health & Welfare                      16.13%           15.81%          16.01%           15.99%          16.70%            7.44%
Small tools                            2.00%            2.00%           0.00%            0.00%           0.00%            0.00%
Safety/Training                        4.00%            4.00%           4.00%            3.00%           0.00%            0.00%
Supervision                           67.10%           61.33%          32.23%           31.98%          19.32%            0.00%
Force Acct. Ins.                      23.00%           23.00%          23.00%           23.00%           0.00%            0.00%
Funded Pension                         0.00%            0.00%           0.00%            0.00%           0.00%            7.36%

Composite Rate                       154.49%          145.21%         116.13%          111.62%          80.60%           39.00%
</TABLE>

* Other included sick leave, personal leave, jury duty, bereavement,
compassionate leave.

Note: The rates above do not include the surcharge of 24.6% for Signal Shop
Labor

<PAGE>   148

                                    EXHIBIT K

                 ARBITRATION OR MEDIATION RESOLUTION PROCEDURES

     A. In the event of any controversy, claim or dispute between Utility and
Railroad referred to arbitration or mediation pursuant to this Agreement
(hereinafter referred to as "Dispute"), the parties agree to use the procedure
herein.

     B. The parties agree that the only circumstances in which a Dispute will
not be subject to the provisions of this Exhibit are: (i) where a party makes a
good faith determination that a breach of the terms of the Agreement by the
other party will cause irreparable damage to the complaining party unless such
breach is enjoined by a court of competent jurisdiction; or (ii) where one party
has been made a party to a judicial proceeding, and the other party is an
appropriate additional party to such proceeding. Breach of the Agreement will be
deemed to cause irreparable damage if it is incapable of adequate redress if not
promptly enjoined, so that a temporary or preliminary restraining order or other
immediate injunctive relief is the only adequate remedy. If one party files a
pleading seeking injunctive relief, and such pleading is challenged by the other
party, and the injunctive relief sought is not awarded in substantial part, the
party filing the pleading seeking immediate injunctive relief shall pay all the
costs, attorneys' fees and expenses of the party successfully challenging the
pleading.

          1. Notice of Arbitration or Mediation. If the parties have not
succeeded in negotiating a resolution of a Dispute within thirty (30) business
days following the Trigger Notice (which period may be extended by mutual
agreement of the parties), arbitration or mediation shall be conducted as set
forth below. The Trigger Notice shall specify in reasonable detail the nature of
the Dispute and comply with the procedures set forth in Paragraph 2 or Paragraph
3.

          2. Arbitration Procedures. Arbitration shall be conducted in
accordance with the then-current CPR Non-Administered Arbitration Rules (the
"Rules"). The provisions of the Agreement shall control if they conflict with
the Rules. Arbitration shall be before three (3) arbitrators. Each party shall
appoint one (1) arbitrator within fifteen (15) business days following the
commencement of the procedure by Trigger Notice above (which period may be
extended by mutual agreement). Within fifteen (15) business days following their
appointment, the two (2) arbitrators so selected shall appoint the third
arbitrator, who shall serve as Chairman of the arbitration panel. The Chairman
shall be an attorney at law admitted to practice in the United States and
experienced in arbitration. The arbitrators shall determine issues of
arbitrability in accordance with federal law, but may not limit, expand or
otherwise modify the terms of the Agreement. Arbitration shall be governed by
the United States Arbitration Act, 9 U.S.C. Sections 1-16, and judgment upon the
award may be entered by any court having jurisdiction thereof. In addition, the
following shall apply with respect to any arbitration conducted pursuant to this
Appendix:

             (a) Costs/Fees. If either party submits a matter to arbitration,
     and provided that one of the parties prevails over the other, the
     arbitrators may award such prevailing party an amount equal to its
     reasonable attorneys' fees and expenses, experts' fees, and other
     reasonable costs and expenses that it has incurred in connection with the
     arbitration. Otherwise, each party shall be responsible for its own fees
     and expenses.

             (b) Remedies. Upon a showing of material breach of the Agreement,
     the arbitrators are empowered to award actual or compensatory damages,
     unless prohibited by applicable state law or the Agreement. The arbitrators
     may not award consequential, punitive or multiple damages; the parties
     expressly waiving any entitlement to such relief.

             (c) Location of Arbitration. The place of the arbitration shall be
     Jacksonville, Florida.

             (d) Confidentiality. The parties, their representatives, the
     arbitrators and any other participants in the arbitration shall treat all
     aspects of the arbitration as confidential, including but not limited to
     all documents, testimony, information or other things produced, inspected
     or otherwise

                                       1
<PAGE>   149

     made available in connection with the arbitration. Neither the parties nor
     the arbitrators may disclose the existence, content or results of the
     arbitration, except as necessary to comply with applicable law or
     regulatory requirements. Before making any such disclosure, the party
     seeking disclosure shall give written notice to the other party, and shall
     afford such party a reasonable opportunity to protect its interests. In no
     event shall a disclosure necessary to comply with legal or regulatory
     requirements be deemed to waive the confidential nature of the disclosed
     information.

             (e) Discovery. The arbitrators shall permit and facilitate such
     discovery in accordance with Federal Rules of Evidence and Federal Rules of
     Civil Procedure, as they shall determine is appropriate under the
     circumstances, taking into account the needs of the parties, the relevance
     of the requested discovery to the matter in controversy and the
     desirability of making discovery expeditious and cost-effective. The
     parties agree that the following information shall not be subject to
     discovery in connection with the arbitration unless it is expressly
     authorized by the arbitrators upon a showing of substantial need by the
     party seeking discovery: (i) information relating to Railroad's agreements
     with any customers; (ii) information relating to Utility's cost structure,
     contribution or profits under third party usages allowed under the
     Agreement.

          3. Mediation Procedures. Mediation is a voluntary process in which a
neutral third party, who lacks authority to impose a solution, helps
participants reach their own agreement for resolving a dispute or transaction.
Utility and Railroad agree to act in good faith negotiation, with the jointly
appointed mediator, to reach an agreement, utilizing the following basic roles
of the mediator in the Dispute resolution:

               - urging participants to agree to talk;
               - helping participants understand the mediation process;
               - carrying messages between parties;
               - helping participants agree upon an agenda;
               - setting an agenda;
               - providing a suitable environment for negotiation;
               - maintaining order;
               - helping participants understand the problem(s);
               - defusing unrealistic expectations;
               - helping participants develop their own proposals;
               - helping participants negotiate;
               - persuading participants to accept a particular solution.

             (a) Mediation shall be held in Jacksonville, Florida.

             (b) Each party shall be responsible for its own attorney
     fees, and costs (including exhibits, witness fees, etc.), and shall each
     pay one-half (1/2) of the Mediator's fee(s).

             (c) The mediator shall be jointly selected as follows:

                 (1) Railroad shall designate five (5) members from the listed
                 panel of the U.S. District Court, Middle District of Florida as
                 a Potential Mediation Panel;

                 (2) Utility shall select one (1) of such Panel as the mediator;

                 (3) If the selected mediator does not accept the mediation
                 appointment, Utility shall designate an alternative, and
                 continue until a selected mediator accepts the mediation
                 appointment;

                 (4) If none of the Panel accepts the appointment, Utility shall
                 designate a new Potential Mediation Panel of five (5) from the
                 list in Paragraph 2.(b)(1), and Railroad shall select one (1)
                 of such Panel, as in Paragraphs (2) and (3).

             (d) The form of the Agreement to Mediate shall be as follows:

                                       2
<PAGE>   150

                              AGREEMENT TO MEDIATE

          Railroad and Utility, through their respective counsel, stipulate
     that:

          1. The Dispute embodied in the Agreement stated is hereby submitted to
     mediation.

          2. The parties have selected _________________________ to be the
     mediator in this case.

          3. Parties agree to meet with the mediator at _________ on _________,
     and continue to engage in the mediation process thereafter, if appropriate,
     as agreed to by the parties.

          4. The mediator shall be paid an hourly fee of $__________, with said
     fee apportioned equally among the parties.

          5. The mediation shall be private, unless the parties and the mediator
     otherwise agree. No session shall be recorded, and there shall be no
     stenographic record maintained.

          6. Parties and counsel agree that the mediator's work product, case
     file and any communication made in the course of the mediation (other than
     the final signed Mediation Agreement) shall be confidential and not subject
     to disclosure in any subsequent judicial, administrative or private
     proceeding.

          7. Parties and counsel agree that any information, writings or
     disclosures made during the mediation process are governed by Rule 408 of
     the Federal Rules of Evidence, and shall not be admissible in any
     subsequent proceedings unless otherwise discoverable.

          8. Parties and counsel agree to participate fully in the mediation
     process and to do so in good faith.

          9. The mediator shall not be liable to any party for any act or
     omission in connection with the mediation conducted in this case.

          10. If possible, officers of the parties with full authority to settle
     the Dispute shall be present at the Mediation. Should officers of the
     parties, for whatever reason, not be present, counsel for each party agrees
     to attend the mediation and have full and immediate access to the person
     authorized to settle during the entire course of the mediation.

          11. An agreement shall be executed by the parties if the Dispute is
     resolved.

          12. The mediation shall commence at the offices of __________________,
     on ____________________, at ____________________.

     RAILROAD:  By:___________________________ Date:___________________________

     RAILROAD ATTORNEY:_______________________________________

     UTILITY:   By:___________________________ Date:___________________________

     UTILITY ATTORNEY:________________________________________

     Accepted by Mediator:____________________ Date:___________________________

    4. Modification. These procedures may be modified by the parties hereto
without necessity of amending the Agreement.

                                       3
<PAGE>   151

                                    EXHIBIT L

                    AUTHORIZATION FOR FIBER OPTIC CABLE WORK

       FOR __________________________________________________ ("UTILITY")

CSX TRANSPORTATION, INC.
EXPENDITURES BILLING - J686
6735 Southpoint Drive, S
Jacksonville, FL 32216-6177

ATTENTION: GAIL A. LYCETT
(904) 279-6667 - FAX

THIS NOTICE CONFIRMS UTILITY'S AUTHORIZATION FOR FIBER OPTIC CABLE MAINTENANCE
OR EMERGENCY REPAIRS ON CSXT RIGHT-OF-WAY.

CSXT COST COLLECTION NUMBER (OSP):______________________________________________

EFFECTIVE DATE:_________________________________________________________________

LOCATION (S): CITY_____________________________________________  STATE__________

MILEPOST (S):___________________________________________________________________

UTILITY'S PROJECT NUMBER:_______________________________________________________

WORK DESCRIPTION:_______________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

BEGINNING/ENDING DATES:  1.  START________________________________________

                         2.  END  ________________________________________

IF YOU HAVE ANY ADDITIONAL QUESTIONS, PLEASE CALL      _________________________

                                          Utility Representative's Phone Number)

               APPROVED:

               _________________________________  ______________________________
               NAME                               TITLE

CC:  L. L. GALBREATH - CSXT (904)245-1030FAX

<PAGE>   152
                                                                       EXHIBIT M

                                                                     MWI 1905-01
                                                    FIBER OPTIC INSTALLATION SOP
[CSX TRANSPORTATION]                             ISSUED: 6/30/98   INITIAL ISSUE
                                                                     PAGE 1 OF 9

--------------------------------------------------------------------------------

PURPOSE:            To provide a Standard Operating Procedure for all fiber
                    optic installations.

SAFETY:             Observe all applicable Safety, and Operating Rules and
                    Regulations; and Safe Job Procedures. The CSXT Fiber Optic
                    Safety Program Requirements are included in this MWI.

LOCATION:           All CSXT tracks.

ENVIRONMENTAL:      Observe all applicable Federal, State and Local
    MSDS:           environmental rules and regulations.

I.   DISCUSSION

There are three previously issued MWIs concerning Fiber Optic projects. This
MWI is intended to supplement and support those MWIs. The previous MWIs are:

     -  MWI 1902, Fiber Optic Maintenance Projects,
     -  MWI 1903, Protection and/or Relocation of Fiber Optic Cable for CSXT
        Purposes or Installation of Side Tracks Serving CSXT Shippers, and
     -  MWI 1904, New Installation Projects for Fiber Optic Telecommunications.

II.  PROCEDURE

The following procedure is the CSXT Standard Operating Procedure (SOP) for all
fiber optic installations on CSXT properties and will be included in all fiber
optic specifications for construction.

     A. Quarterly Oversight Meetings:

        The Director - Budget and Contracts will schedule these oversight
        meetings once per quarter. Additional meetings may be scheduled, if
        required by the volume of activity. The meetings will be attended by
        representatives from all concerned Fiber Optic Companies (FOC) and CSXT
        Management, Real Property and Engineering. The meetings will review the
        scopes of work and schedules of all current and future projects, as well
        as planning, pre-bid, pre-construction and construction requirements as
        described below.
<PAGE>   153
MWI 1905-01
6/30/98
Page 2 of 9

     B. Plan Review Meeting:

        The Director - Budget and Contracts will schedule these Plan Review
        meetings as necessary. The meeting will be attended by representatives
        from the concerned FOC, CSXT Engineering and the CSXT engineering
        consultant for the project. The meeting will review the pre-bid and
        scheduling, pre-construction and construction requirements described
        below.

     C. Pre-Bid and Scheduling Meeting:

        The FOC will schedule the Pre-Bid and Scheduling meeting. The meeting
        will be attended by representatives from the concerned FOC, Contractors
        and CSXT Engineering (and/or CSXT Consultant). This meeting will assign
        the Point Of Contact (POC) for the FOC and for the CSXT, as well as
        clarify the safety and manpower requirements.

          1. Project Points of Contact

               a) The POC will be assigned for the CSXT Subdivision on which
                  the project is located. There will be a single POC for the
                  Railroad and another designated by the FOC. These two
                  individual will be the contact points and decision makers for
                  the project. All calls, questions or problems will be handled
                  with the assigned POC. This will eliminate many unnecessary
                  calls.

               b) The CSXT POC will be responsible for:

                    -  All contacts within CSXT, including coordination of all
                       departments involved with the pre-construction and
                       construction portions of the project.

                    -  All CSXT Transportation, Engineering, and Train Control
                       decisions during construction.

               c) The CSXT POC and the FOC POC will coordinate all aspects of
                  construction.

          2. Requirements for Safety and Manpower:

               a) Safety Requirements include:

                    -  Daily job briefing and updates as required.

                    -  All workers on CSXT property must comply with CSXT
                       Safety Requirements including wear all required safety
                       equipment (see Safety Requirements, page 5).

                    -  CSXT will train one FOC employee in safety. The FOC is
                       responsible for ensuring all FOC employees & contractors
                       on site are properly trained.

<PAGE>   154
MWI 1905-01
6/30/98
Page 3 of 9

               b) Notification for Flagman and Signalman:

                    -  Because of manpower demands and/or labor agreements, a
                       minimum of 6 weeks notice is preferred, for either
                       position. Less than six weeks notice may result in job
                       delays.

                    -  Because of safety concerns and customer obligations, a
                       10 mile work limit per RR Subdivision is necessary.

          3. Emergency Contact Procedures:

                    -  All emergencies will be reported to both POCs.

                    -  In event the POCs cannot be reached, the emergency
                       information will be reported the CSX Police operator
                       at 1-800-232-0144. The POCs must be notified of existing
                       situation ASAP.

     D. Pre-Construction Meeting:

        The FOC will schedule the Pre-Construction meeting. FOC will provide
        two (2) weeks written notice prior to Pre-Construction Meeting to CSXT
        POC, CSXT Director - Budget and Contracts, CSX Real Property, & CSXT
        Train Control (Jacksonville). The meeting will be attended by both
        POCs, representatives from Contractors and CSXT Engineering (and/or
        CSXT Consultant) and field supervisors, as necessary. The meeting will
        review the pre-bid and scheduling requirements described above.

     E. Construction Meeting:

        The FOC will schedule the Construction meeting. The meeting will be
        attended by both POCs, representatives from Contractors and CSXT
        Engineering (and/or CSXT Consultant) and field supervisors, as
        necessary. The meeting will review the pre-bid and scheduling
        requirements, as well as the results of the construction meeting
        described above.

          1. The project schedule will be reviewed in detail. The CSXT POC,
             after consultation with the Division Engineer's office, will
             advise the FOC POC of all work times and locations.

          2. Track roadbed and ballast protection will be highlighted to the
             FOC and its contractors. The FOC and/or its contractors will
             maintain (at all times) sufficient ballast rock on the job site
             for necessary ballast section repairs and/or backfill, including
             appropriate machinery for placement and compaction.

          3. All excavation will be shored in accordance with CSXT Safe Way
             Rule E-2 and restored as required above.
<PAGE>   155
MWI 1905-01
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Page 4 of 9

          4. All construction and site restoration will be performed to the
             satisfaction of the Division Engineer and approved by the CSXT POC.

III. REFERENCES

     A. The CSX Transportation Fiber Optic Program Safety Requirements are
        included for easy reference. It begins on page five.

     B. The services provided by the consultants provide by CSXT are identified
        in the CSX Transportation Inspection and Supervision of Installation of
        Fiber Optic Conduit System. It begins on page six.
<PAGE>   156
MWI 1905-01
6/30/98
Page 5 of 9

                               CSX TRANSPORTATION
                              FIBER OPTIC PROGRAM
                              SAFETY REQUIREMENTS

GENERAL

-  All fiber optic workers must receive CSXT SAFETY AWARENESS training and have
   a verification card and/or hard hat sticker. All CSXT Safety Rules and
   Contractor Policies will apply to fiber optic workers.

-  All personnel must wear CSXT approved Personal Protection Equipment in
   accordance with "The CSX Safe Way" book, which includes hard hat, safety
   glasses, steel toed shoes, hearing protection, and others as specified, by
   work type or local supervision, WHEN WORKING CLOSER THAN 25 FEET FROM THE
   NEAREST RAIL OF A MAIN TRACK. When working beyond 25 feet from the nearest
   rail of a main track, hard hats, safety glasses, and laced work boots (no
   tennis shoes or street shoes) will be required.

-  All "FRA Bridge Worker Safety" rules will apply to fiber optic workers
   performing bridge attachments, including proper fall protection rules.

-  All test holes or pits less than 15 feet from the centerline of main tracks,
   will be filled or covered prior to passing of trains. No open pits or holes
   will be left over night. All pits and trenches will be shored according to
   OSHA requirements.

-  No dirt or debris will be allowed to foul the ballast section of the tracks.

-  No markings will be made on the rail or ties.

-  All excavation or plow trenches will be back filled and compacted
   immediately after the work is done.

-  All public utilities, CSXT Engineering, and the Railroad Train Control
   Office, will be notified prior to any construction.

-  Job Briefings will be conducted each morning and throughout the day when
   conditions or job scope changes.

WORKING ON OR AROUND TRACKS

-  All work in the FRA Red Zone (4 feet from outside rail on each side of the
   track) will be done only with a CSXT, FRA qualified flagman or watchman as
   specified by the local Engineering representative.

-  All work beyond 4 feet from the outside rails, must be done under the
   supervision of a CSXT qualified inspector or flagman.

-  Certain types of work done beyond 25 feet from the outside of the rails, and
   with equipment that will not reach beyond this point, may be done without
   flagging protection or a watchman, IF APPROVED BY THE LOCAL ENGINEERING
   REPRESENTATIVE, AND PROTECTED BY A CONSTRUCTION FENCE.

-  All work must be stopped while trains are passing within the work zone.

-  All workers will remain off the tracks. If necessary to perform the work on
   track, protection will be provided as stated above.

ANY VIOLATION OF ANY CSXT SAFETY RULES OR POLICY, MAY RESULT IN REMOVAL OF
CONTRACTOR OR PERSONEL FROM THE RIGHT OF WAY.

                              CSXT/LLG Rev. 06-12-98  Approved by Manager Safety
<PAGE>   157
MWI 1905-01
6/30/98
Page 6 of 9

                               CSX TRANSPORTATION
                             ENGINEERING DEPARTMENT
                                JACKSONVILLE, FL
                         INSPECTION AND SUPERVISION OF
                   INSTALLATION OF FIBER OPTIC CONDUIT SYSTEM

    CSXT has retained (consultant) as an engineering consultant to perform
    certain professional services, which primarily entail intellectual work and
    professional judgment, and may or may not require supervision and
    performance of some ancillary tasks or use of equipment such as
    instruments, tools, or machinery.

                     SCOPE OF ENGINEERING SERVICES SUMMARY

    GENERAL

    The engineering services described herein are intended to protect the
    interests of CSXT during the installation of conduit systems by system
    owners and their installers on CSXT right-of-way. These engineering
    services will be performed by (consultant), Inc., hereinafter called
    "Consultant".

    The fiber conduit system will not be owned nor installed by CSXT (CSXT may
    acquire conduits or cables after installation). Plans and specifications
    for the installation of the conduit system will be prepared by conduit
    system owners or their designated representatives. Plans and specifications
    will be subject to the review and approval of CSXT. Installation of the
    conduit system will be performed by system owners or their contracted
    installers.

    SAFETY

    The Consultant's employees that enter CSXT right-of-way shall be trained in
    Railroad Safety Awareness, knowledgeable of "FRA On Track Worker Safety
    Rules", and shall at all times wear required safety equipment (steel toe
    shoes, hard hat, safety glasses with side shields or goggles, and other
    items as specified by CSXT supervisors).

    SUMMARY OF SERVICES

    Engineering services shall include, but not be limited to, the following:

     -    PLAN REVIEW SERVICES

     Review plans and specifications submitted by Fiber Optic Communication
     companies, or their installers, and provide other support as directed by
     CSXT. The tasks assigned may include the following:

          Perform plan reviews and on-site inspections in accordance with CSXT
          Standards, and verify the terms of the installation agreements.

          Obtain and coordinate input from other CSXT units such as Design and
          Construction, Real Estate Properties, Division Engineering Units, or
          their designated representatives.

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          Prepare marked up plans together with reports that identify
          recommended actions and/or changes.

          Communicate with the Fiber Optics Communications companies and/or
          their installers with regard to changes, revisions and approvals.

          Coordinate with other utility and/or fiber optic companies who
          already have facilities and installations in place on CSXT right of
          way, or plan future installations.

          Coordinate the scheduling of High Rail Inspections of projects during
          the planning and design phases.

          Obtain final plan approvals from the Division Engineering Units.

     -    CONSTRUCTION SERVICES

     Provide Construction Engineering and Inspection Services as follows:

          Promote safety at the work site by verifying that the owners and
          their installers comply with instructions of CSXT's flagmen,
          watchmen, etc., and with CSXT Safety and FRA On Track Worker Safety
          Requirements. (CSXT will provide a flagman to provide warning and
          protect the tracks for the movement of trains, when required).

          Provide engineering representation on behalf of CSXT at on-and
          off-site meetings, pre-bid meetings, pre-construction meetings,
          progress meetings, final inspection, etc.

          Represent CSXT in meetings with state and local agencies regarding
          entry and disturbance of road crossings and other public facilities
          by the owners or installers.

          Confirm that the owners or their installers have notified the owners
          of underground facilities on CSXT property which may be affected by
          the proposed work, and confirm that they have coordinated the
          proposed work with them.

          For each inspection location, maintain daily communication (or more
          frequent if required) with CSXT Division Engineer or designated
          representative or D & C Project Manager as may be directed by the
          office of the Assistant Chief Engineer D & C via fax and/or e-mail,
          and cell phone.

          Provide daily on-site observation at all work locations on or
          immediately adjacent to CSXT property during installation of the
          fiber optic conduit systems.

          Verify that the owners and/or their installers are in compliance with
          the requirements for Federal, State, Local and CSXT environmental
          regulations, permits, etc., and coordinate with the CSXT
          Environmental Department.

          Monitor the installation of the conduit system for compliance with
          the approved plans and specifications. Consultant will have the
          authority to act on behalf of CSXT and the Chief Engineer, or his
          representative, to insure such compliance.
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          Approve minor adjustments or deviations from the plan, provided such
          adjustments or deviations are consistent with the criteria furnished
          by CSXT and used for Consultant's review of the plans.

          Promptly report any disputes, major deviations and other items of
          concern to the designated CSXT Division Engineer, CSXT Project
          Manager or any environmental concerns to the designated CSXT
          Environmental Officer.

          Confirm the actual horizontal and vertical location of the fiber
          optic cable conform to the plans and specifications by physical
          measurement at regular intervals and where otherwise required in
          Consultant's judgment. This work shall be coordinated with the owner
          and/or installer, and CSXT as required.

          Ensure prompt clean up and restoration of CSXT property by the owners
          and/or installers following installation of the fiber optic cable
          systems, to the satisfaction of the Division/Service Lane/Business
          Unit engineering representative.

      STAFFING

          Upon notice of project authorization, (consultant) will assign, as a
          minimum, one Senior Construction Inspector to each project.
          Additional inspectors may be assigned to large, urban, or highly
          complex projects when specified by CSXT. The inspectors will be
          equipped with suitable transportation, cell phones, portable
          computers and other equipment as may be required on the project. The
          inspectors will based near the site, and be available during the
          normal hours worked by the owner's and/or installer's forces.

      REPORTS

-    PLAN REVIEW SERVICES

          Prepare marked up plans and reports documenting recommended actions
          and/or proposed changes.

-    CONSTRUCTION SERVICES

          Maintain a daily diary or log of events including items such as:
          supervisory personnel employed by the owners or their installers at
          the work site; type, number and condition of the owner's or
          installer's equipment; time of arrival and departure of CSXT flagmen,
          watchmen, signal inspectors and other personnel; time of arrival and
          departure of work trains and other CSXT furnished equipment; "track
          time" allowed for work; the owners or their installers production and
          progress; and any unusual occurrences.

          Provide detailed weekly status reports for all work locations.

Approved:      signed by R. K. Beckham

Date:          June 5, 1998

                                                          CSXT/LLG-Rev. 06-04-98
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Prepared by:   L. L. Galbreath

Reviewed:      /s/  ILLEGIBLE
               -------------------------------------------
               Director - Standards & Testing

Approved:      /s/ ILLEGIBLE
               -------------------------------------------
               AVP - Equipment & Track Systems Engineering

Office of the Assistant Vice President - Equipment and Track Systems Engineering
Jacksonville, Florida
MWI 1905-01, June 30, 1998

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