Document:

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                                                                   EXHIBIT 10.16

                                                          Agreement No. FT19901M

                           MASTER PURCHASE AGREEMENT

This Master Purchase Agreement ("Agreement"), effective as of the 31st day of
December, 1999, is entered into by and between FiberNet Telecom Group, Inc.
(hereinafter "FiberNet") with executive offices located at 570 Lexington Avenue,
New York, New York 10022, and Nortel Networks Inc. (hereinafter "Nortel
Networks"), with offices located at 5405 Windward Parkway, Alpharetta, Georgia
30004.

WHEREAS, FiberNet is engaged in providing communication services and products,
and providing and maintaining public and private communication networks; and

WHEREAS, Nortel Networks, in conjunction with Nortel Networks Affiliates, is
engaged in the design, development, manufacture and sale of various products and
offers services associated with such products, which can be used in connection
with the communication services, products and networks of FiberNet; and

WHEREAS, FiberNet wishes to be able to purchase and/or license various products
and services for delivery and installation in the United States from Nortel
Networks, which FiberNet will use for its own internal use and not for resale or
as stock in trade and Nortel Networks is willing to sell and/or license such
products to FiberNet, subject to the terms and conditions of this Agreement; and

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth, the parties agree as follows:

ARTICLE 1.   DEFINITIONS

The following words shall have the meanings set forth below. Words in the
singular shall be held to include the plural and vice versa and words of gender
shall be held to include the other gender as the context requires.

1.1     "Acceptance" shall mean that either (i) FiberNet has indicated that an
        ordered Product is operating substantially in accordance with the
        applicable Specification; or (ii) an ordered Product has been deemed to
        be accepted pursuant to criteria set forth in Article 6.

1.2     "Applications" shall mean any program, product, service, development or
        invention developed by a party using the Building Blocks, including any
        modified or created Building Blocks, created by FiberNet.

1.3     "Building Block(s)" shall mean those Software files provided by Nortel
        Networks with Modifiable Software that are manipulatable or which may be
        created by FiberNet with such Modifiable Software and which can be used,
        created or manipulated by FiberNet to create Applications.

1.4     "Confidential Information" shall mean all information, including without
        limitation, specifications, drawings, documentation, know-how and
        pricing information, of every kind or description which may be disclosed
        by one party to the other party in connection with this Agreement,
        provided the disclosing party shall clearly mark all such information
        disclosed in writing as the confidential property of the disclosing
        party and, in the case of oral disclosure, the disclosing party shall
        identify the confidential nature of any such information at the time of
        such oral disclosure and shall provide a written summary labeled as
        confidential of the orally disclosed information to the recipient within
        fifteen (15) business days of such disclosure.

1.5     "Customer" shall mean entities to whom FiberNet provides communication
        services as a result of FiberNet's use of the Products.

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1.6     "Customer Information" or "CI" shall mean the information provided by
        FiberNet to Nortel Networks in order for Nortel Networks to engineer
        and/or provide the components of Systems.

1.7     "Documentation" shall mean the documents which Nortel Networks generally
        makes available to its customers containing descriptive, operating,
        installation, engineering and maintenance information for Products,
        including Specifications, as such documents may be amended from time to
        time.

1.8     "Effective Date" shall mean the date this Agreement becomes effective
        which shall be the date first identified above.

1.9     "Extension" shall mean Hardware and/or Software that is engineered by
        Nortel Networks and added to an Initial System after the Turnover Date
        of the Initial System.

1.10    "Hardware" shall mean, individually and collectively, the Nortel
        Networks equipment listed in the Product Annexes of Exhibit A, and shall
        be deemed to include any equipment which Nortel Networks adds to its
        generally available Hardware price lists or so identifies to FiberNet in
        a Quotation.

1.11    "Hazardous Material" shall mean any pollutants or dangerous, toxic or
        hazardous substances (including without limitation, asbestos) as defined
        in, or pursuant to the OSHA Hazard Communication Standard (29 CFR Part
        1910, Subpart Z), the Resource Conservation and Recovery Act (15 USC
        Section 6901, et seq.), the Toxic Substances Control Act (15 USC Section
        2601, et seq.), the Comprehensive Environmental Response Compensation
        and Liability Act (42 USC Section 9601, et seq.), and any other federal,
        state or local environmental law, ordinance, rule or regulation or
        equivalent law or regulation in the location to which the Product is
        shipped by Nortel Networks.

1.12    "Initial System" shall mean Hardware and Software, inclusive of a
        central processor unit, included in a configuration which Nortel
        Networks identifies as a System and which is initially engineered by
        Nortel Networks and installed at a specific Installation Site.

1.13    "Installation Site" shall mean the location or facility identified in an
        Order at which the applicable Products will be installed.

1.14    "Licensed Software" shall mean the Software that FiberNet has licensed
        pursuant to this Agreement.

1.15    "Merchandise" shall mean any Hardware or other parts or components that
        are not ordered as part of a System and with respect to which no
        engineering, installation or other Services are provided by Nortel
        Networks.

1.16    "Modifiable Software" shall mean Software, or a portion of Software that
        is identified as such by Nortel Networks in its applicable
        Documentation, which FiberNet may have certain rights to modify and
        potentially create Applications or Building Blocks in accordance with
        the applicable Documentation.

1.17    "Non-Licensed Software" shall mean Software for which FiberNet has not
        yet obtained a license nor paid applicable right-to-use fees, but which
        Software may be included with Software loads delivered to FiberNet
        hereunder.

1.18    "Nortel Networks Affiliate" shall mean Nortel Networks' parent
        corporation, Northern Telecom Limited and any corporation controlled
        directly or indirectly by Northern Telecom Limited through the ownership
        or control of shares or other securities in such corporation.

1.19    "Order" shall mean a numerically controlled purchase authorization
        document issued by FiberNet to Nortel Networks specifying the types and
        quantities of Products and Services to be furnished by Nortel Networks.

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1.20    "Product(s)" shall mean, individually and collectively, the Hardware,
        Software, and Documentation.

1.21    "Product Annex" shall mean, with respect to a specific Product,
        additional or modified terms and conditions as set forth in Exhibit A,
        inclusive of but not limited to those that may apply to any Third Party
        Hardware or Third Party Software, unique to such Product.

1.22    "Quotation" shall mean a written budgetary or firm price quotation
        issued by Nortel Networks to FiberNet for the supply of any Products or
        Services pursuant to this Agreement.

1.23    "Service(s)" shall mean, individually and collectively, any of the
        services set forth in this Agreement that FiberNet may acquire from
        Nortel Networks, such as but not limited to maintenance, engineering,
        installation, training, data management, program management, project
        management, commissioning, testing, technical assistance Service with
        respect to Products and installation, and consulting.

1.24    "Services Software" shall mean that Software and related documentation
        made available by Nortel Networks that may be used by FiberNet for
        estimation, planning or information purposes.

1.25    "Ship Date" shall mean the date as agreed to by the parties, on which a
        Product ordered by FiberNet is scheduled to be shipped from Nortel
        Networks' facility or in the case of Software which is downloaded, the
        date upon which such Software is to be downloaded to the System;
        however, Ship Date shall not mean the date on which Non-Licensed
        Software is activated.

1.26    "Software" shall mean (i) computer programs in object code form or
        firmware which (a) are owned by, or licensed to, Nortel Networks, (b)
        reside in Product memories, tapes, disks or other media, and (c) provide
        basic logic operating instructions and user-related application
        instructions; and (ii) documentation associated with such computer
        programs which may be furnished by Nortel Networks to FiberNet from time
        to time, including both Licensed Software and Non-Licensed Software, but
        in no event shall Nortel Networks have the obligation to license source
        code.

1.27    "Software Release" shall mean Software or revisions to Software
        containing problem fixes, new features and/or enhancements.

1.28    "Specifications" shall mean with respect to any Product the
        specifications and/or practices set forth in Northern Telecom Practices
        ("NTPs") or similar documents published by Nortel Networks which Nortel
        Networks identifies as the standard performance specifications and
        practices for such Product.

1.29    "System" shall mean a configuration of Hardware and Software providing a
        specified functionality and includes an Initial System and its
        Extensions, if any.

1.30    "Third Party Hardware" shall mean any hardware not of Nortel Networks'
        manufacture which shall be deemed to include any such hardware which
        Nortel Networks adds to its generally available Third Party Hardware
        price lists or so identifies to FiberNet in a Quotation. Nortel Networks
        shall use commercially reasonable efforts to provide FiberNet with prior
        written notice of any Third Party Software required for the use of the
        Products.

1.31    "Third Party Software" shall mean any Software not owned by Nortel
        Networks which is included within Licensed Software or Non-Licensed
        Software.  Nortel Networks shall use commercially reasonable efforts to
        provide FiberNet with prior written notice of any Third Party Software
        required for the use of the Products.

1.32    "Turnover" shall mean, with respect to any System installed by Nortel
        Networks, that Nortel Networks has completed its standard manufacturing,
        verification cycle, installation

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                                                          Agreement No. FT19901M

        and/or agreed-upon test procedures, as applicable, and that the System
        is ready for acceptance testing by FiberNet.

1.33    "Turnover Date" shall mean, with respect to any Product installed by
        Nortel Networks hereunder, the date on which Nortel Networks provides a
        notice of Turnover to FiberNet.

ARTICLE 2.  SCOPE OF AGREEMENT

2.1     This Agreement sets forth the terms and conditions under which FiberNet
        may order Products and/or Services from Nortel Networks. FiberNet may
        use the Products itself, including use to provide services to others,
        subject to the terms and conditions of this Agreement. FiberNet
        expressly represents that it is not buying Product for resale. All
        Products shall be delivered and installed in the United States.

2.2     To the extent any terms and conditions set forth in this Agreement are
        inapplicable to a Product, the applicable terms and conditions and any
        additional terms and conditions for such Product shall be set forth in a
        Product Annex.

2.3.1   During the Initial Term as set forth in Section 13.1, FiberNet shall
        purchase and take delivery of optical networks Products and Services
        listed in Annex A.1 attached hereto ("Optical Products and Services").
        FiberNet shall purchase and take delivery of Optical Products and
        Services in the net minimum aggregate amounts of (i) Fifteen Million
        Dollars ($15,000,000.00) in the first year of the Initial Term; (ii)
        Twenty Million Dollars ($20,000,000.00) in the second year of the
        Initial Term; and (iii) Twenty-five Million Dollars ($25,000,000.00) in
        the third year of the Initial Term ("Optical Commitment"). For purposes
        of the Optical Commitment, the first year of the Initial Term shall
        begin upon the execution of this Agreement and conclude on December 31,
        2000; the second year shall begin on January 1, 2001 and conclude on
        December 31, 2001; and the third year shall begin on January 1, 2002 and
        conclude on December 31, 2002.

2.3.2   In consideration of FiberNet's Optical Commitment, Nortel Networks shall
        provide FiberNet with discounted pricing as set forth in Annex A.1
        hereto, in addition to any training and/or services that may be set
        forth in a quote in accordance with Section 3.6 of this Agreement.

2.3.3   The Optical Commitment shall be satisfied by the net total prices and
        fees paid by FiberNet for such Optical Products and Services.  Purchase
        Orders that may have been submitted to Nortel Networks prior to the
        execution of this Agreement shall count towards the first year of the
        Optical Commitment.

2.3.4   In consideration of FiberNet's Optical Commitment, Nortel Networks shall
        extend tier 4 pricing to FiberNet as set forth in Annex A.1, Schedule A.
        In the event that FiberNet fails to meet its Optical Commitment by the
        end of the first, or any subsequent, year of the Initial Term, FiberNet
        shall pay to Nortel Networks, as liquidated damages and not as a
        penalty, the difference between the total tier 4 prices paid during the
        applicable year and the total of the applicable tier prices FiberNet
        would have paid based on its actual cumulative purchases for such year
        pursuant to the Tier Level Determination Table set forth in Annex A.1,
        Schedule D. For example, if FiberNet's cumulative purchases at the end
        of year 2 of the Initial Term equal Twenty-Five Million Dollars
        ($25,000,000), the applicable tier (based on Schedule D) would be tier
        3, and FiberNet would be responsible for paying the difference between
        total tier 4 prices actually paid and total tier 3 prices applicable for
        its aggregate year 2 purchases. Nortel Networks shall invoice FiberNet
        immediately upon expiration of each such year of the Initial Term for
        such liquidated damages and such invoice shall be due and payable within
        thirty (30) days of the date of such invoice. Nortel Networks agrees
        that its sole and exclusive remedy under this Section 2.3.4 in the event
        the Optical Commitment is not met by FiberNet shall be collection of the
        liquidated damages specified herein.

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2.4     If specified in a Product Annex as a requirement, FiberNet shall,
        fifteen (15) days prior to each calendar quarter, submit to Nortel
        Networks a consolidated non-binding forecast of Products by geographic
        region, that FiberNet anticipates purchasing or licensing over the next
        four (4) calendar quarters. In addition to the type, quantity and
        cumulative dollar amount of Products, the parties may agree upon
        additional information to be included in such forecast.

2.5     All references to prices, charges, fees or other amounts herein shall be
        in U.S. dollars and all documentation, correspondence and communication
        shall be in the English language.

2.6     In the event FiberNet shall not have received financing for the purchase
        of Products or Services hereunder on terms and conditions reasonably
        acceptable to FiberNet by June 30, 2000 FiberNet shall have the right
        until such time, but not the obligation, upon providing Nortel Networks
        ten (10) business days prior written notice given prior to June 30, 2000
        to terminate this Agreement in its entirety without cost, expense or
        penalty to FiberNet (a "Special Termination"); provided that (i)
        FiberNet will remain liable for any then outstanding Orders, and (ii)
        notwithstanding anything contained in this Agreement to the contrary,
        FiberNet will not be responsible for any price increases for purchased
        and/or ordered Products due to FiberNet's failure to meet its minimum
        purchase commitments set forth in Article 2 hereof due to any such
        Special Termination, and (iii) subject to Section 13.3 (Term and
        Termination).

ARTICLE 3.   PLACEMENT OF ORDERS

3.1     To order Products and/or Services, FiberNet shall submit to such person
        as Nortel Networks shall designate, an Order which shall at a minimum
        specify the following, if applicable:

        (i)  the types and quantities of Products and Services to be furnished
             by Nortel Networks;

        (ii) the applicable prices, charges and fees with respect to such
             Products and Services;

        (iii)the location or facility to which the Products are to be delivered;

        (iv) the incorporation by reference of this Agreement;

        (v)  the Installation Site, if known;

        (vi) the requested Ship Date and Turnover Date of the System; and

        (vii)any other information required under this Agreement to be included
             in an Order.

3.2     All purchases pursuant to this Agreement shall be made by means of
        Orders issued from time to time by FiberNet and accepted by Nortel
        Networks in writing within fifteen (15) days after receipt of Order. In
        the event Nortel Networks fails to provide its acceptance of an Order in
        writing within such fifteen (15) day period, such Order shall be deemed
        to be accepted provided that no additional or special terms and
        conditions have been written on the face of or otherwise incorporated
        into such Order. Nortel Networks shall have the right to reject any
        Order, or the applicable portion of such Order, placed hereunder where
        FiberNet has a separate agreement with Nortel Networks for the provision
        of the Products or Services requested in such Order or the Order is
        otherwise not in accordance with this Agreement.

3.3     All Orders issued by FiberNet pursuant to this Agreement shall refer to
        and specifically incorporate this Agreement by reference and the terms
        and conditions herein shall govern the transaction resulting from such
        Order provided that such Order is accepted or deemed accepted by Nortel
        Networks. Preprinted terms and conditions set forth in Orders issued by
        FiberNet, or in any prior Quotations, acknowledgments or other related
        documentation

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        issued by any party, shall be considered null and void and shall have no
        force or effect. However, any special terms and conditions written on
        the face of or otherwise incorporated into an Order shall, upon
        acceptance in writing by Nortel Networks, for such Order only, supersede
        the specific terms and conditions contained in this Agreement, including
        all Exhibits attached hereto, which are in conflict, but only to the
        extent of such conflict.

3.4     FiberNet may at any time request additions, alterations, deductions or
        deviations to an Order subject to the condition that such changes and
        any adjustments resulting from such changes including, but not limited
        to, schedules and prices, shall be mutually agreed upon and, if so
        agreed, subsequently detailed in a written revision to the applicable
        Order ("Change Order"). FiberNet acknowledges that a premium charge may
        be applied by Nortel Networks should Nortel Networks agree to process a
        Change Order outside of its standard Order processing cycle for a
        Product or in the event that a Change Order requires an amount of
        additional work (such as additional engineering) to be undertaken to
        comply with such changes.

3.5     If FiberNet desires to receive a budgetary or firm Quotation from Nortel
        Networks for a Product or Service, FiberNet shall submit such request in
        writing to Nortel Networks' Director, Commercial Marketing, or such
        other person as designated by Nortel Networks. The request for Quotation
        shall include the information listed in Section 3.1, as applicable.

3.6     Nortel Networks shall respond in writing to requests for budgetary
        Quotations and requests for firm Quotations. Unless otherwise specified
        in the firm Quotation, such firm Quotation shall be valid for one
        hundred and twenty (120) days from the date of such Quotation. Budgetary
        Quotations shall be provided for information and planning purposes only
        and shall not be considered to be a final or firm statement binding on
        either party. The Quotations shall include the following information:

        (i)  Budgetary Quotations

             (a)  preliminary Hardware and Software lists;

             (b)  the estimated charges for the Products;

             (c)  the estimated charges for Services requested; and

             (d)  any other information requested by FiberNet.

        (ii) Firm Quotations

             (a)  the price to be paid by FiberNet for the Products, after
                  applying the applicable discounts, if any;

             (b)  fixed charges for Services requested;

             (c)  complete Hardware and Software lists and detailed and firm
                  project schedules; and

             (d)  any other information requested by FiberNet.

3.7     The Ship Date shall be based on Nortel Networks' standard intervals for
        the applicable Product; however, the parties shall always mutually agree
        on the Ship Date and take into consideration any unique aspect of the
        applicable project.

3.8     Orders may be issued either electronically, such as through electronic
        data interchange, or via traditional manual methods, as mutually agreed
        to by the parties.

ARTICLE 4.  PRICE AND PAYMENT

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4.1     Nortel Networks shall charge FiberNet for each Product and/or Service
        ordered by FiberNet in accordance with the prices set forth in each
        accepted Order, which prices shall be based upon prices identified in
        one of (i) a Product Annex; (ii) a Firm Quotation; (iii) Except with
        respect to optical Products listed in Annex A.1, Nortel Networks' then
        current prices; or (iv) as specified elsewhere in this Agreement or as
        otherwise mutually agreed in writing.

4.2     Nortel Networks' prices, if set forth in Exhibit A, may be revised by
        Nortel Networks no more than once each calendar year, by providing sixty
        (60) days prior written notice to FiberNet. If such price revisions
        exceed an increase of ten percent (10%) in any such calendar year,
        FiberNet may terminate the Agreement subject to Section 13.3 (Term and
        Termination) subject to the proviso at the end of Section 2.6 (Scope of
        Agreement), and such termination shall constitute a Special Termination
        pursuant to Section 2.6, and such termination shall be governed by
        Section 2.6. Such notice shall specify the effective date of the price
        change and shall apply to all Orders received by Nortel Networks on or
        after the effective date of the price change.

4.3     Nortel Networks shall promptly extend to FiberNet any price reductions
        made by Nortel Networks in its generally available, then current list
        prices for Products and/or Services. Such price reduction shall apply to
        all Orders received on or after the effective date of such price
        reduction.

4.4     For all Orders, Nortel Networks shall invoice FiberNet for Products and
        Services as follows, unless otherwise agreed to in writing:

     (i)  for Systems, whether or not installation has been ordered from Nortel
          Networks, ninety percent (90%) of the price of the Products on the
          date Products are shipped, ten percent (10%) of the price of the
          Products on the date of Acceptance, one hundred percent (100%) of the
          price of any Services upon the date of completion of such Services,
          except with respect to installation Services, if any, which shall be
          invoiced one hundred percent (100%) upon Turnover. Except for
          installation Services, for Services that have a duration of more than
          one (1) month to complete, Nortel Networks may invoice FiberNet
          monthly for that portion of such Services which have been performed as
          of such invoicing date.  Except for invoices based on Acceptance
          above, in the event of partial shipments against a single Order,
          Nortel Networks shall issue no more than two (2) invoices for such
          Order; the first upon initial Product shipment, the second upon
          shipment of remaining Products.

     (ii) for Merchandise or Documentation provided on a furnish-only basis,
          one hundred percent (100%) of the price on the Ship Date; and (iii)
          for Orders covering Services only, one hundred percent (100%) of the
          price for such Services following completion of performance, except
          for recurring support Services which shall be billed quarterly in
          advance unless otherwise agreed. Some Services may be subject to
          monthly invoicing as set out in a Product Annex or separate Service
          agreement.  To the extent such Services are to be invoiced differently
          then set out in this paragraph (iii), such differences shall be set
          forth in the applicable Product Annex or separate Service agreement
          and such provisions shall take precedence.

4.5     Each invoice shall be paid in full within thirty (30) days after the
        date of such invoice. In the event that FiberNet does not pay an invoice
        in full within such thirty (30) day period, then Nortel Networks may
        charge FiberNet interest on the outstanding portion of such invoice,
        from day thirty one (31) forward, at the rate of one percent (1.0%)
        simple interest per month, or such lesser amount as may be the maximum
        permissible rate under applicable law, until such time as the
        outstanding invoice is paid. In addition, FiberNet agrees to pay all
        collection costs and reasonable legal fees incurred by Nortel Networks
        as a result of late payment or non-payment by FiberNet.

ARTICLE 5.   SHIPMENT, TITLE AND RISK OF LOSS

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5.1  Prior to the Ship Date, FiberNet shall have the right to reschedule any
     pending Orders provided that (i) a minimum period of notice prior to such
     Ship Date is given to Nortel Networks by FiberNet in accordance with the
     applicable Product Annex; and (ii) the new Ship Date is within ninety (90)
     days of the original Ship Date. However, each Order may only be rescheduled
     once. Nortel Networks shall be responsible for any storage fees, insurance
     and demurrage costs incurred with respect to such rescheduled Orders.

5.2  Risk of loss and damage to Products shall pass to FiberNet upon delivery to
     the loading dock at the Installation Site or other delivery location
     specified by FiberNet in an Order. FiberNet shall keep such Products fully
     insured for the total amount then due Nortel Networks for such Products.
     FiberNet shall pay transportation charges, including insurance, associated
     with the shipment of Products; however if the parties agree, Nortel
     Networks shall prepay transportation charges, and insurance for delivery of
     Products to the Installation Site or other delivery location or other
     designated receiving point as specified in an Order.  The charges therefore
     shall be invoiced by Nortel Networks and paid by FiberNet to Nortel
     Networks in accordance with Article 4 above.

5.3  Good title to Hardware furnished hereunder, free and clear of all liens and
     encumbrances, shall vest in FiberNet upon full payment to Nortel Networks
     of the total amount payable by FiberNet for such Hardware ("Total Fee")
     furnished by Nortel Networks in connection with such Hardware.  Except as
     provided in Section 15.4.3 prior to payment of the Total Fee for the
     Products and Services in an Order, FiberNet shall not sell or lease the
     Hardware, or allow any liens or encumbrances to attach to the Hardware or
     Software, or remove the Hardware or Software from the Installation Site
     without the prior written consent of Nortel Networks, such consent not to
     be unreasonably withheld.

5.4  Except as set forth in Article 5.1, if FiberNet notifies Nortel Networks
     prior to a Ship Date that FiberNet does not wish to receive such Products
     on the Ship Date, or the Installation Site or other delivery location is
     not prepared in sufficient time for Nortel Networks to make delivery in
     accordance with such date, or FiberNet fails to take delivery of any
     portion of the Products in an Order when shipped, Nortel Networks may place
     the applicable Products in storage. In that event, FiberNet shall be liable
     for all additional actual costs (including storage costs), which additional
     costs Nortel Networks shall use reasonable efforts to mitigate, thereby
     incurred by Nortel Networks; however, if such costs are incurred solely due
     to the fault or negligence of Nortel Networks, they shall be Nortel
     Networks' responsibility.  Delivery by Nortel Networks of any Products to a
     storage location as provided above shall be deemed to constitute delivery
     of the Products to FiberNet for purposes of this Agreement, including,
     without limitation, provisions for payment, invoicing, passage of risk of
     loss, and commencement of the warranty period.

5.5  Until the Total Fee is paid, FiberNet grants to Nortel Networks a purchase
     money security interest in the Products in an Order and their proceeds or
     such other similar protection as may be available in the applicable
     jurisdiction. FiberNet shall cooperate with Nortel Networks in preserving
     and perfecting Nortel Networks' security interest in the Products and
     FiberNet shall promptly (i) execute and deliver to Nortel Networks such
     financing statements as Nortel Networks may reasonably require; and (ii)
     execute and deliver to Nortel Networks such other agreements, documents and
     instruments as Nortel Networks may reasonably require to perfect and
     maintain the validity, effectiveness and priority of the security interest
     created or intended to be created by this Agreement.  FiberNet authorizes
     Nortel Networks to file one or more financing or continuation statements
     and amendments thereto, relating to all or any part of the Products in an
     Order without signature of the FiberNet where permitted by law. A carbon,
     photographic or other reproduction of this Agreement or of any financing
     statement covering the Products or any part thereof shall be sufficient as
     a financing statement and may be filed as a financing statement.

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5.6.1  FiberNet shall use reasonable efforts to provide Nortel Networks or its
       subcontractors with access to its Installation Sites or other FiberNet
       facilities during the times specified by Nortel Networks and as are
       reasonably necessary for Nortel Networks to perform its obligations
       hereunder. Nortel Networks shall be under no obligation to provide
       Services where access is not granted. Nortel Networks shall comply with
       FiberNet's reasonable site and security regulations of which Nortel
       Networks is informed by FiberNet.

5.6.2  All sites at which the Products shall be delivered or installed shall be
       prepared by FiberNet in accordance with reasonable commercial standards,
       including such additional requirements as may be provided in writing by
       Nortel Networks in advance, including, without limitation, environmental
       requirements. Prior to and during installation, FiberNet shall ensure the
       timely and adequate delivery, installation and functioning of the
       electrical and communications connections and other reasonable
       environmental requirements, including but not limited to, HVAC systems,
       specified in Nortel Networks's applicable written instructions,
       Specifications, Documentation or in a Product Annex.

5.6.3  FiberNet shall provide reasonable working space and facilities, including
       heat, light, ventilation, telephones, electrical current, waste removal
       and other necessary utilities for use by Nortel Networks personnel
       performing installation or other Services, and adequate secure storage
       space, if reasonably required by Nortel Networks, for Products and
       materials. FiberNet shall also provide adequate security against theft,
       damage or other loss for the Products while on FiberNet's Installation
       Site or other delivery location specified by FiberNet.

5.6.4  FiberNet shall obtain all necessary governmental permits applicable to
       FiberNet in connection with the installation, operation, and maintenance
       of Products furnished hereunder, excluding any applicable permits
       required in the normal course of Nortel Networks's doing business. Any
       information which Nortel Networks reasonably requests from FiberNet and
       which is necessary for Nortel Networks to properly install or maintain
       the Products shall be provided by FiberNet to Nortel Networks in a timely
       fashion and in a form reasonably specified by Nortel Networks.

5.7    If (i) due to the fault or negligence of Nortel Networks, shipment from
       the factory of a Product listed in Annex A.1 ordered hereunder pursuant
       to an accepted Order is delayed by more than ten (10) working days after
       the scheduled Ship Date for that Order, or (ii) FiberNet has provided
       written notice within (10) days of receipt of a Product that such Product
       is not functional, and due to the fault or negligence of Nortel Networks
       shipment from the factory of a replacement Product has not occurred
       within 10 days of receipt of such notice; (in either case, the "Grace
       Period"), then at FiberNet's election, Nortel Networks shall pay to
       FiberNet, not as a penalty but as liquidated damages, an amount equal to
       two percent (2.0%) of the purchase price of affected Product for each
       period of seven (7) days (or portion thereof) between the end of the
       Grace Period and the date on which such Product is actually shipped from
       the factory by Nortel Networks, provided that such liquidated damages
       shall not exceed fifteen percent (15%) of the purchase price of such
       affected Product. Payment of liquidated damages shall be made in the form
       of product credits issued to FiberNet for redemption against future
       purchases or then-open Nortel Networks invoices, at FiberNet's sole
       discretion, of Products listed in Annex A.1. The parties agree that
       damages resulting from delays in delivery of Product would be impossible
       to calculate accurately, and that the foregoing measure of liquidated
       damages represents a fair accommodation as to resulting damages. FiberNet
       agrees that if it elects liquidated damages under this provision, such
       liquidated damage payment set forth herein constitutes its sole remedy in
       connection with damages to the extent resulting from delays in delivery
       of Product.

ARTICLE 6.   TESTING, TURNOVER AND ACCEPTANCE

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6.1  If installation Services are ordered by FiberNet, Nortel Networks shall,
     upon completion of such installation test the Products in accordance with
     Nortel Networks' Turnover procedures and a mutually agreed test plan to
     verify that such Products function substantially in accordance with the
     applicable Specifications. Upon completion of such verification, Nortel
     Networks shall provide to FiberNet a written notice of Turnover. FiberNet
     shall be permitted an opportunity to have an appropriately qualified
     individual in attendance to observe the performance of such tests and
     Nortel Networks shall use reasonable efforts to give FiberNet seventy-two
     (72) hours prior notice (which may be provided orally to FiberNet's Senior
     Vice President of Network Engineering and Operations, or his/her designee)
     of such tests, however, the absence of such FiberNet individual for any
     reason shall not invalidate the tests nor be a reason for FiberNet to
     withhold Acceptance.

6.2  Within thirty (30) calendar days after the Turnover Date, FiberNet shall
     either accept the Product in writing by execution of a notice of
     Acceptance, or notify Nortel Networks in writing, specifying in reasonable
     detail those particulars in which, in FiberNet's opinion, the Product is
     not in material conformance with the Specifications. If Acceptance does not
     occur within such thirty (30) days after the Turnover Date and FiberNet has
     not indicated to Nortel Networks in writing its basis for not accepting
     such Product, then Acceptance shall be deemed to have occurred.  The term
     "material" as used in this Section 6.2, and Sections 6.3 and 6.6, shall
     mean a service-affecting defect.

6.3  If Nortel Networks does not install Products furnished hereunder, Nortel
     Networks shall, prior to delivery of the Products, perform such factory
     tests as Nortel Networks determines to be appropriate in order to confirm
     that such Products perform in material conformance with the applicable
     Specifications. Upon FiberNet's request, Nortel Networks shall provide
     written certification of such testing and compliance.  In such case
     Acceptance shall be deemed to have occurred upon the earlier of 1)
     FiberNet's installation and commissioning of such Products, or 2) thirty
     (30) days after the Ship Date. In the event FiberNet or any other entity
     intends to perform installation of Products, (except for installation of
     Products which are not permitted to be installed other than by Nortel
     Networks, as specified in the applicable Product Annex or Documentation)
     FiberNet or such entity may be required to complete prerequisite training
     or certification prior to FiberNet being allowed to install such Products.

6.4  In the event FiberNet is utilizing any Product in a revenue-generating
     capacity, Acceptance shall be deemed to have occurred without limitation or
     restriction, upon the date of placement of such Product into revenue-
     generating service.

6.5  Products, such as Merchandise, which are purchased separately from a
     System, shall be deemed accepted upon the Ship Date.  Services that are
     purchased separately from a Product shall be deemed to be accepted upon
     completion of such Services or upon specific milestones as may be
     identified in a Product Annex.

6.6  FiberNet shall not unreasonably withhold Acceptance. Nortel Networks shall
     correct any deficiencies identified by FiberNet in the manner described in
     this Article whereby such Products do not materially conform to the
     Specifications. When Nortel Networks has corrected all such deficiencies,
     FiberNet shall accept the Products in writing. FiberNet's failure to either
     accept or provide notice of non-conformance within the timeframe from the
     Turnover Date, as prescribed in Section 6.2, shall constitute Acceptance of
     the Products.

6.7  Following Acceptance of Products, FiberNet shall execute Nortel Networks'
     Acceptance notice, confirming Acceptance without any conditions,
     restrictions, or limitations of any nature whatsoever.

6.8  Acceptance shall not be withheld or postponed due to:

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                                                          Agreement No. FT19901M

     (i)  Deficiencies of such Products resulting from causes not attributable
          to Nortel Networks, Nortel Networks employees, agents or
          subcontractors, such as, but not limited to (a) material change or
          inaccuracy of Customer Information, (b) relevant inadequacy or
          deficiencies of any relevant materials, information, facilities or
          services provided directly or indirectly by FiberNet and tested in
          conjunction with the applicable Products, or spurious outputs from
          adjacent material, or (c) other conditions external to the Products
          which are beyond the limits specified by Nortel Networks in the
          Specifications for the Products; or

     (ii) Minor deficiencies or shortages with respect to such Products which
          are attributable to Nortel Networks, but of a nature that do not
          prevent operation of the Products in revenue-generating service.

6.9  With respect to any deficiencies of the type described in Section 6.8(i),
     Nortel Networks shall at FiberNet's request and expense assist FiberNet in
     the elimination or minimization of any such deficiencies. With respect to
     any deficiencies or shortages as described in Section 6.8(ii), Nortel
     Networks shall, at Nortel Networks' expense, correct any such deficiencies
     or shortages within thirty (30) days of the date of Acceptance or as
     otherwise agreed by the parties.

6.10 In the event FiberNet notifies Nortel Networks of non-acceptance of a
     Product and Nortel Networks personnel travels to the Installation Site to
     remedy such non-acceptance and determines that non-acceptance is due to a
     deficiency of the type described in Section 6.8(i), Nortel Networks will
     invoice FiberNet for Nortel Networks' investigation of the matter
     consisting of the standard labor rate for Nortel Networks' personnel who
     travel to the Installation Site and the reasonable actual travel and living
     expenses incurred by such personnel.  However Nortel Networks shall not
     charge expenses for 1st class air travel, 1st class hotel or for
     entertainment.  Upon request Nortel Networks shall provide reasonable
     detail to FiberNet for its travel and living expenses.

ARTICLE 7.   ORDER CANCELLATION

7.1  If, prior to the Ship Date, FiberNet cancels all or any part of an Order,
     FiberNet shall pay to Nortel Networks a cancellation charge for the
     Products or each item of Third Party Hardware or Third Party Software that
     has been canceled in accordance with the schedule set forth in the
     applicable Product Annex.

7.2  Orders for Products that have been shipped may not be canceled.
     Furthermore, Orders for Products that Nortel Networks substantially
     customizes in accordance with a specific FiberNet request may not be
     canceled.

ARTICLE 8.   WARRANTY

8.1  Nortel Networks warrants that for a period of twenty-four (24) months from
     the earlier of 1) Acceptance if installation Services are ordered from
     Nortel Networks, or the date of installation and commissioning if
     installation is not done by Nortel Networks, or 2) 90 days after Ship Date,
     Hardware listed in Annex A.1 when used in accordance with the applicable
     Specifications will be free from defective material and faulty workmanship
     and shall comply with the applicable Specifications. The warranty period
     for Merchandise shall be ninety (90) days from the Ship Date of such
     Merchandise. The foregoing warranties shall not apply to items normally
     consumed during operation of a System such as, but not limited to, lamps
     and fuses.

8.2  Nortel Networks warrants that any installation Services performed by Nortel
     Networks will be free from defects in workmanship for a period of twelve
     (12) months from the completion date of such Services.

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                                                          Agreement No. FT19901M

8.3  Nortel Networks warrants that any Licensed Software shall function during
     the warranty period of the Hardware with respect to which such Licensed
     Software is furnished without any service-affecting, non-conformance to the
     applicable Specifications, and that generally available Licensed Software
     shall be backward compatible with the immediately prior release of such
     Licensed Software. Licensed Software that is delivered separately from
     Hardware is warranted for a period of twelve (12) months from the
     applicable Ship Date. If the Licensed Software fails to so function,
     FiberNet's exclusive remedy and Nortel Networks' sole obligation under this
     warranty is for Nortel Networks to correct such failure through, at Nortel
     Networks' option, the replacement or modification of the Licensed Software
     or such other actions as Nortel Networks reasonably determines to be
     appropriate, all within a reasonable time. Any modification to the Software
     not performed by Nortel Networks, or Nortel Networks' employees, agents or
     subcontractors, other than with respect to Modifiable Software, shall void
     this warranty.

8.4  If Hardware is not free from defects in material or workmanship and fails
     to comply with the applicable Specifications during the warranty period,
     Nortel Networks will, within a reasonable period of time, repair, replace
     or modify at its sole option the defective Hardware so that it
     substantially complies with the applicable Specifications. The warranty
     service shall be performed at the Installation Site or Nortel Networks'
     facility as determined by Nortel Networks. If Nortel Networks is unable to
     repair or modify the defective Hardware within a reasonable period of time
     so that such Hardware conforms to the applicable Specification, Nortel
     Networks shall replace the defective Hardware with Hardware that conforms
     to such Specifications. Replacement Hardware may be new or reconditioned at
     Nortel Networks' option; however, during the first ninety (90) days of the
     warranty period, consistent with Nortel Networks' then-current practices,
     new replacement Hardware listed in Annex A.1 will be provided.  Nortel
     Networks' sole obligation and FiberNet's exclusive remedy under the
     warranty provisions of this Article with respect to Hardware and
     installation Services shall be limited to repair, modification or
     replacement of the defective Hardware or correction of the defective
     installation Services.

8.5  Notwithstanding the foregoing, the warranty period of Hardware which has
     been subject to repair or replacement by Nortel Networks shall commence
     upon the Ship Date of the repaired or replacement Hardware to FiberNet and
     shall expire on the later of ninety (90) days or the last day of the
     original warranty period with respect to the Hardware which was repaired or
     replaced. The warranty period of Licensed Software which has been
     corrected, due to a material, service-affecting non-conformance found in
     such Licensed Software, shall expire on the later of ninety (90) days from
     the Ship Date of the corrected Licensed Software to FiberNet or the last
     day of the original warranty period with respect to such Licensed Software.

8.6  Nortel Networks warrants that its Products shall comply in all material
     aspects with all applicable laws and regulations known to Nortel Networks,
     which are in force on the date of acceptance of the applicable Order
     therefor, which laws or regulations directly impose obligations upon any
     manufacturer, seller or, if applicable, installer of such Products.

8.7  The performance by Nortel Networks of any of its obligations described in
     this Article 8 shall not extend the applicable warranty period.

8.8  The warranties set forth in this Article shall not apply to any Products
     where the defect or non-conformance is due to (i) accident, fire,
     explosion, power failure, power surge or other power irregularity,
     lightning, alteration, abuse, misuse where such event exceeded the
     specified tolerances of the Products, or repair not performed by Nortel
     Networks, or Nortel Networks' employees, agents or subcontractors; (ii)
     improper storage; (iii) failure to comply with all applicable environmental
     requirements for the Products as specified by Nortel Networks or any other
     applicable supplier, such as but not limited to temperature or humidity
     ranges; (iv) improper performance of installation, maintenance, operation
     or other service in connection with the Products, provided such service was
     not performed by

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                                                          Agreement No. FT19901M

     Nortel Networks or on Nortel Networks' behalf; (v) use in conjunction with
     an incompatible product or a product not purchased under this Agreement;
     (vi) any error, act or omission by anyone other than Nortel Networks; or
     (vii) where written notice of the defect has not been given to Nortel
     Networks within the applicable warranty period. The warranties set forth in
     this Article shall not apply to Third Party Software or Third Party
     Hardware, provided however that Nortel Networks shall assign to FiberNet
     (to the extent of Nortel Networks' right to do so) the warranty rights
     granted to Nortel Networks by the appropriate vendor of such Third Party
     Software or Third Party Hardware.

8.9  Unless Nortel Networks elects to repair or replace defective Hardware at
     FiberNet's facility, all Hardware to be repaired or replaced, whether in or
     out of warranty, shall be de-installed and packed by FiberNet in accordance
     with Nortel Networks' instructions. Nortel Networks shall use reasonable
     efforts to ship repaired or replacement Hardware within thirty (30) days of
     receipt of the defective Hardware. To facilitate the processing of the
     defective Hardware returned hereunder, Nortel Networks will ship
     replacement Hardware prior to Nortel Networks receiving the defective
     Hardware in accordance with prevailing Nortel policies (including without
     limitation those relating to problem severity and significance if any), but
     in any event Nortel Networks shall us commercially reasonable efforts to
     ship such replacement Hardware within twenty-four (24) hours after Nortel
     Networks receives notice of a service-affecting Hardware outage, which
     policies shall be provided to FiberNet upon request. In the event FiberNet
     fails to return defective Hardware and Nortel Networks has shipped such
     replacement Hardware, Nortel Networks shall invoice FiberNet at Nortel
     Networks' applicable prices as set forth herein for such replacement
     Hardware, thirty (30) days after the Ship Date of such replacement
     Hardware. If mutually agreed, Nortel Networks will make repairs on-site at
     Nortel Networks' then-current charge for such repairs.

8.10 If the Hardware returned to Nortel Networks pursuant to the immediately
     preceding section is reasonably determined by Nortel Networks to be beyond
     repair and is outside the warranty period, Nortel Networks shall notify
     FiberNet and if requested Nortel Networks shall sell FiberNet replacement
     Hardware at prices as set forth herein for such replacement Hardware.

8.11 FiberNet shall bear risk of loss or damage and shall pay for all
     transportation charges for Hardware returned to Nortel Networks, and Nortel
     Networks shall bear risk of loss or damage and pay for transportation
     charges for repaired or replacement Hardware shipped to FiberNet.  Title to
     repaired Hardware shall pass to Nortel Networks upon receipt.  Title to
     replacement Hardware shall pass to FiberNet upon receipt.

8.12 Nortel Networks and Nortel Networks' vendors of Third Party Hardware and
     Third Party Software, as appropriate, shall not have any responsibility to
     Customers for warranties offered by FiberNet to such Customers and FiberNet
     hereby indemnifies and holds harmless Nortel Networks and Nortel Networks'
     vendors, as appropriate, from any claims, damages or liabilities to the
     extent specifically arising out of any warranties offered by FiberNet to
     such Customers.

8.13 THE WARRANTIES, CONDITIONS AND REMEDIES SET FORTH HEREIN CONSTITUTE THE
     ONLY WARRANTIES, OBLIGATIONS OR CONDITIONS OF NORTEL NETWORKS WITH RESPECT
     TO THE PRODUCTS AND SERVICES AND ARE FIBERNET'S SOLE AND EXCLUSIVE REMEDIES
     IN THE EVENT SUCH WARRANTIES OR CONDITIONS ARE BREACHED. THEY ARE IN LIEU
     OF ALL OTHER WARRANTIES OR CONDITIONS, WRITTEN OR ORAL, STATUTORY, EXPRESS
     OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
     MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

8.14 Nortel Networks represents and warrants that both before and after January
     1, 2000, any Software licensed by Nortel Networks to FiberNet under this
     Agreement shall function,

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                                                          Agreement No. FT19901M

     during the warranty period of the Nortel Product with which such Software
     is provided, without any service-affecting nonconformance to the applicable
     specifications. If the Software fails to so function, FiberNet's sole
     remedy and Nortel Networks' sole obligation under this warranty is for
     Nortel Networks to correct such failure through, at Nortel Networks'
     option, the replacement or modification of the software or such other
     actions as Nortel Networks reasonably determines to be appropriate.

     Without limiting the generality of the immediately preceding paragraph,
     Products may continue to use two digit year representations where such
     representations do not constitute a service-affecting nonconformance to the
     applicable Specifications.  Nortel Networks shall not be responsible for
     the failure of any Product to comply with the applicable specifications if
     such failure was the result of (i) the combination of Nortel Products with
     non-Nortel Networks Products; or, (ii) modification of a Product by
     FiberNet or any other third party.

8.15 Nortel Networks warrants that its Products, and its performance of the
     Agreement, shall comply in all material aspects with all applicable laws
     and regulations known to Nortel Networks, which are in force on the date of
     acceptance of the applicable Order therefor, which laws or regulations
     directly impose obligations upon any manufacturer, seller or, if
     applicable, installer of such Products.

ARTICLE 9.   NORTEL NETWORKS' ADDITIONAL OBLIGATIONS

9.1  Nortel Networks shall make training available to representatives of
     FiberNet with respect to the operation, configuration, installation,
     service, maintenance and support of the Products at Nortel Networks' then
     current prices and at Nortel Networks' facilities, subject to course and
     class availability.

9.2  Upon request, Nortel Networks shall provide FiberNet with copies of its
     then current training catalogue. Upon the request of FiberNet, Nortel
     Networks shall provide to FiberNet such training as FiberNet requests, at a
     time and place mutually agreed upon and at the prices to be quoted for such
     training. The cancellation fees set forth in the training catalogues shall
     apply.

9.3  Nortel Networks shall include its standard Documentation package, if any,
     with each shipment of Products. Nortel Networks shall make the
     Documentation available on its choice of media, which may include CD-ROM or
     other electronic media. Nortel Networks shall provide FiberNet with any
     other Documentation that is ordered at its then-current prices therefor.
     Documentation provided via Nortel Networks' CD-ROM media may be printed and
     copied and Documentation provided in paper format may be copied, to the
     extent such Documentation so provides, and only to the extent such printing
     or copying is necessary for the operation and maintenance of the Products
     to which the Documentation pertains. However, FiberNet may not press or
     burn any copies of CD-ROM discs.

9.4  During the term of this Agreement, FiberNet may acquire various support
     Services from Nortel Networks in connection with the Products FiberNet
     acquires from Nortel Networks under this Agreement. These Services may
     include, but are not limited to the following: technical assistance
     Services, installation Services, Hardware maintenance Services, Software
     maintenance Services and parts repair and replacement Services.

ARTICLE 10.   SOFTWARE LICENSE

10.1 FiberNet acknowledges that the Software may contain programs that have
     been supplied by, and are proprietary to, Third Party Software vendors. In
     addition to the terms and conditions herein, FiberNet shall abide by any
     additional terms and conditions specified in a Product Annex with respect
     to any Software provided by any Third Party Software vendor.

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                                                          Agreement No. FT19901M

10.2 Upon FiberNet's payment to Nortel Networks of the applicable fees as set
     forth herein with respect to any Software furnished to FiberNet pursuant to
     this Agreement, Nortel Networks hereby grants to FiberNet, subject to the
     applicable terms and conditions of this Article 10, a personal, non-
     exclusive, right and license to use the Licensed Software furnished to
     FiberNet only in conjunction with FiberNet's use of the Hardware with
     respect to which such Licensed Software was furnished for the life of that
     Hardware as it may be repaired, replaced or modified. FiberNet shall be
     granted no title or ownership rights to the Software, which rights shall
     remain in Nortel Networks or its suppliers.

10.3 As a condition precedent to this license and to the supply of Software by
     Nortel Networks pursuant to this Agreement, Nortel Networks requires
     FiberNet to give proper assurances to Nortel Networks for the protection of
     the Software. Accordingly, all Software supplied by Nortel Networks under
     or in implementation of this Agreement shall be treated by FiberNet as the
     exclusive property, and as proprietary and a trade secret, of Nortel
     Networks and/or its suppliers, as appropriate, and FiberNet shall: (i) hold
     the Software, including, without limitation, any methods or concepts
     utilized therein in confidence for the benefit of Nortel Networks and/or
     its suppliers, as appropriate; (ii) not provide or make the Software
     available to any person except to its employees on a 'need to know' basis
     and then only under confidentiality obligations; (iii) not reproduce, copy,
     or modify the Software in whole or in part except as authorized by Nortel
     Networks; (iv) not attempt to decompile, reverse engineer, disassemble,
     reverse translate, or in any other manner decode the Software; (v) issue
     adequate instructions to all persons, and take all actions reasonably
     necessary to satisfy FiberNet's obligations under this license; and (vi)
     forthwith return to Nortel Networks, or with Nortel Networks' consent
     destroy (a) upon termination of the license for any reason, or (b) upon
     receipt of replacement, modified, or updated Software, any magnetic tape,
     disc, semiconductor device or other memory device or system memory and/or
     Documentation or other material, including, but not limited to all printed
     material furnished by Nortel Networks to FiberNet.

10.4 The obligations of FiberNet hereunder shall not extend to any information
     or data relating to the Software which is now available to the general
     public or becomes available by reason of acts or failures to act not
     attributable to FiberNet.

10.5 Nortel Networks may issue updates to the Software from time to time, and
     upon FiberNet's payment of applicable right to use fees, if any, shall
     license such updates to FiberNet.  The right to use fees for updates do not
     include the price of any associated Hardware that may be required.

10.6 Neither FiberNet nor any successor to FiberNet's title in the applicable
     Hardware shall have the right to (i) assign this license as to the
     applicable Licensed Software to any other person who acquires legal title
     to such Hardware; or (ii) sublicense the rights herein granted as to such
     Licensed Software to any other person who subsequently acquires the right
     to use such Hardware, unless agreed to in writing by both Nortel Networks
     and FiberNet. Such consent shall not be unreasonably withheld or delayed.

10.7 FiberNet shall indemnify and hold Nortel Networks and its suppliers, as
     appropriate, harmless from any loss or damage resulting from a breach of
     this Article 10. The obligations of FiberNet under this Article 10 shall
     survive the termination of the Agreement and shall continue if the Software
     is removed from service.

Non-Licensed Software
---------------------

10.8  Certain Software delivered by Nortel Networks may include Non-Licensed
     Software. Non-Licensed Software includes (i) any Software for which the
     applicable right to use fees have not been paid; and (ii) Software for
     which a periodic right to use fee has expired and the applicable additional
     periodic right to use fees have not been paid. FiberNet shall

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                                                          Agreement No. FT19901M

      submit to Nortel Networks an Order for any Non-Licensed Software that
      FiberNet desires to license or renew .

10.9  When Non-Licensed Software is placed into service, the applicable right to
      use fees shall be payable. FiberNet shall also have the option to pay the
      applicable right to use fees for any Non-Licensed Software upon
      installation of a Software load containing such Non-Licensed Software.

10.10 Nortel Networks may from time to time request FiberNet to provide a
      certification that actual use of the Products is in compliance with the
      terms of this Agreement. With fifteen (15) business days advance notice
      FiberNet will allow Nortel Networks reasonable access to its facilities
      during regular business hours in connection with performing a mutually
      agreed upon audit provided the scope of such audit shall be sufficient to
      enable Nortel Networks to verify FiberNet's use of the Products is in
      compliance with the Agreement, but in no event will such audit, or Nortel
      Networks' performance thereof, interfere with FiberNet's business
      operations or its systems.

10.11 Nortel Networks shall issue invoices to FiberNet, in addition to those
      amounts previously invoiced, for amounts found to be payable as a result
      of FiberNet's activation and/or usage of any Software which Nortel
      Networks determines as a result of the audit of a site and for which
      FiberNet has not previously paid the appropriate right to use fee.

10.12 The warranty period for Software activated later than the original Ship
      Date of the Software load shall be for the same period as such original
      Software load and shall not be extended to provide for an additional
      period of warranty based upon the date individual features or units are
      activated and/or utilized by FiberNet or the date FiberNet pays any
      applicable right to use fees.

Modifiable Software
-------------------

10.15.1 Notwithstanding anything to the contrary above, upon payment to Nortel
        Networks of the fees as set forth herein, Nortel Networks hereby grants
        to FiberNet, subject to the applicable terms and conditions of this
        Article 10, a personal, non-transferable, non-assignable and non-
        exclusive right and license to modify Licensed Software which Nortel
        Networks identifies as Modifiable Software. Upon the modification or
        creation of any Applications, or the modification or creation of any
        Building Blocks, Nortel Networks shall have no obligations with regard
        to warranty under Article 8 or indemnity under Article 11 for such
        Applications or Building Blocks with respect to any such created or
        modified Applications or Building Blocks.

10.15.2 Nothing contained in Sections 10.15.1 - 10.15.5 shall transfer, or be
        deemed to transfer, or contemplate the transfer of, any rights in or to
        the Software other than those rights specifically granted herein, and in
        particular but without restricting the generality of the foregoing,
        Nortel Networks does not in any way transfer any right, title or
        interest in or to the Software or any element constituting a portion
        thereof to FiberNet, other than the right of FiberNet to modify or
        create Building Blocks and Applications.

10.15.3 For any Building Blocks and Applications created solely by FiberNet, and
        for all FiberNet-modified portions of the Nortel Networks-provided
        Building Blocks with respect to such modified portion only, FiberNet
        shall own all forms of intellectual property rights (including but not
        limited to patent, trade secret, copyright and mask rights) pertaining
        to such Applications, Building Blocks or portions thereof and shall have
        the right to file for or otherwise secure and protect such rights. For
        all such FiberNet created Applications or Building Blocks or modified
        portions of Building Blocks, the parties shall, on a case by case basis,
        negotiate in good faith to determine whether FiberNet may desire to
        license any such Applications or Building Blocks to Nortel Networks.

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                                                          Agreement No. FT19901M

10.15.4 For any Applications created solely by Nortel Networks, and for the
        Nortel Networks-provided Building Blocks, Nortel Networks shall own all
        forms of intellectual property rights (including but not limited to
        patent, trade secret, copyright and mask rights) pertaining to such
        Applications or Building Blocks and shall have the right to file for or
        otherwise secure and protect such rights. For all such Nortel Networks
        Applications or Building Blocks, FiberNet may license any such
        additional Nortel Networks Products upon Nortel Networks making such
        software generally available to its customers.

10.15.5 In the event FiberNet and Nortel Networks intend to jointly create
        Applications or Building Blocks, the parties shall mutually agree as to
        applicable terms and conditions.

Services Software
-----------------

10.16.1 With respect to Services Software, FiberNet shall: (i) utilize such
        Services Software and the results thereof solely for estimation,
        planning or information purposes; and (ii) comply with additional terms,
        if any, applicable to such Services Software as specified in a Product
        Annex. Nortel Networks may, at any time and without liability or
        obligation to FiberNet, modify the Services Software, any computer
        equipment of Nortel Networks or suppliers used in connection with such
        Services Software, and identification codes, manuals or other
        information or Documentation used in connection with the Services
        Software.

10.16.2 SERVICES SOFTWARE IS PROVIDED AS IS AND WITHOUT WARRANTY OR CONDITION OF
        ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE
        IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
        PURPOSE. NORTEL NETWORKS DOES NOT AND CANNOT WARRANT THE PERFORMANCE OR
        RESULTS THAT MAY BE OBTAINED BY USING SERVICES SOFTWARE. COMPANY ASSUMES
        SOLE RESPONSIBILITY FOR THE SELECTION OF THE SERVICES SOFTWARE TO
        ACHIEVE COMPANY'S INTENDED RESULTS, AND FOR THE INSTALLATION, USE, AND
        RESULTS OBTAINED FROM THE SERVICES SOFTWARE.

ARTICLE 11.  LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE AND PATENT
             INFRINGEMENT

11.1    A party hereto shall defend the other party against any suit, claim, or
        proceeding brought against the other party for direct damages due to
        bodily injuries (including death) or damage to tangible property which
        allegedly result from Hardware product liability or the negligence or
        willful misconduct of the defending party in the performance of this
        Agreement. The defending party shall pay all litigation costs,
        reasonable attorney's fees, settlement payments and such direct damages
        awarded or resulting from any such suit, claim or proceeding.

11.2    Nortel Networks shall defend FiberNet against any suit, claim or
        proceeding brought against FiberNet alleging that the sale to, or use by
        FiberNet of, any Products, excluding Third Party Hardware or Third Party
        Software, furnished hereunder infringes any patent ("Infringement
        Claim"). Upon the request of FiberNet Nortel Networks shall immediately
        assume the defense of any such Infringement Claim in which case Nortel
        Networks shall pay, subject to Section 11.3 below, all litigation costs,
        reasonable attorney's fees, settlement payments and damages awarded or
        resulting from any such suit, claim or proceeding. With respect to Third
        Party Hardware or Third Party Software, Nortel Networks shall assign any
        rights with respect to infringement of patents granted to Nortel
        Networks by the supplier of such items to the extent of Nortel Networks'
        right to do so.

11.3    Nortel's cumulative liability, pursuant to this Article 11 and including
        its costs and expenses incurred in satisfying its obligations set forth
        below, shall not exceed one hundred percent (100%) of the purchase price
        of the Products giving rise to the claim. Notwithstanding the preceding
        sentence, and solely with respect to Nortel Networks' cumulative
        liability pursuant to Section 11.2, and including its costs and expenses

                                       17
<PAGE>

                                                          Agreement No. FT19901M

     incurred in satisfying its obligations pursuant to Section 11.2, shall not
     exceed two hundred and fifty million dollars ($250,000,000).

11.4 Nortel Networks shall not be liable and FiberNet shall indemnify Nortel
     Networks for any costs incurred by Nortel Networks or liabilities of Nortel
     Networks arising under this Article in excess of the amounts so stated
     above.

11.5 Nortel Networks shall have no liability, in respect of any Infringement
     Claim based on the use of a Product in the event such Product:  (i) is
     manufactured, designed or supplied by Nortel Networks in accordance with
     any written design or any special written instruction furnished by
     FiberNet; (ii) is used by FiberNet in a manner or for a purpose not
     contemplated by this Agreement; (iii) is used by FiberNet in combination
     with other products not contemplated by this Agreement, any applicable
     Product Annex or any applicable Specifications, including, without
     limitation, any software developed solely by FiberNet through the permitted
     use of Products furnished hereunder, to the extent the Infringement Claim
     arises from such combination or the use thereof; or (iv) is modified by
     FiberNet where such modification is not authorized by Nortel Networks. In
     the excepted cases stated above, FiberNet shall indemnify and hold Nortel
     Networks harmless against any loss, cost, expense, damage, settlement or
     other liability, including, but not limited to, attorneys' fees, which may
     be incurred by Nortel Networks with respect to any suit, claim, or
     proceeding described in this Section 11.5.

11.6 Nortel Networks shall not be liable for, and FiberNet shall indemnify
     Nortel Networks in respect of, any damages awarded based on FiberNet's
     willful infringement of a patent, copyright, trade secret, trademark or
     other proprietary right where such infringement results in a pecuniary
     damage award.

11.7 Nortel Networks may provide FiberNet with notice of an actual or potential
     Infringement Claim. Nortel Networks shall consult with FiberNet regarding
     the Infringement Claim and the course of action to be pursued as a result
     thereof. In the event the parties fail to agree on a satisfactory course of
     action for dealing with the matter, FiberNet may either:

     (i)  return to Nortel Networks the affected portion of the Product(s) in
          return for a refund of the depreciated value (as carried on the books
          of FiberNet) of the Product(s) so returned; or

     (ii) continue to use the Product(s) at FiberNet's own risk.

11.8 Nortel Networks shall not be liable for, and FiberNet shall indemnify
     Nortel Networks in respect of any Infringement Claim(s) where Nortel
     Networks has provided notice to FiberNet of the Infringement Claim(s) and
     FiberNet elects to continue its use of the Product(s) covered by the
     Infringement Claim to the extent damages arise out of such continued use.

11.9 If as a result of an Infringement Claim, other than those contemplated
     above, an injunction is obtained against FiberNet's use of any Product,
     Nortel Networks shall, at Nortel Networks' option:

     (i)  procure for FiberNet the right to continue using the alleged
          infringing Product(s);

     (ii) replace or modify the same with equivalent or better Product(s) so
          that FiberNet's use is non-infringing; or

    (iii) accept return of the affected portion of the Product(s) and refund
          to FiberNet the depreciated value (as carried on the books of
          FiberNet) of the Product(s) so returned.

11.10 The defense of any claim that is predominantly covered by the provisions
      of the Agreement shall be controlled by the party upon whom the majority
      of the ultimate liability is likely to

                                       18
<PAGE>

                                                          Agreement No. FT19901M

      be imposed. Such controlling party shall give the other party a reasonable
      opportunity to participate in negotiation or defense of the claim so that
      such other Party may reasonably protect its own interests. Neither Party
      shall be liable for any settlement obligation incurred without its written
      consent.

11.11 FiberNet shall waive any and all claims that FiberNet may have against
      Nortel Networks that FiberNet may have to the extent arising from any
      modification FiberNet may have made to a Product, or Modifiable Software.
      Further, FiberNet shall be responsible for any additional hardware,
      software or services required as a result of such modifications.

11.12 THE REMEDIES SET FORTH IN THIS ARTICLE 11 ESTABLISH THE ENTIRE OBLIGATION
      OF THE PARTIES IN REGARD TO CLAIMS RELATING TO INTELLECTUAL PROPERTY
      RIGHTS INCLUDING CLAIMS DIRECTED TO THE INFRINGEMENT OF PATENTS,
      COPYRIGHT, TRADE SECRETS AND OTHER PROPRIETARY RIGHTS.

ARTICLE 12.   REMEDIES AND LIMITATION OF LIABILITY

12.1  Nortel Networks shall have the right to suspend its performance, upon
      written notice to FiberNet, and forthwith remove and take possession of
      all Products that shall have been delivered to FiberNet, if, prior to
      payment to Nortel Networks of any amounts due pursuant to this Agreement
      with respect to such Products, FiberNet shall (i) become bankrupt or
      cease, be unable, or admit in writing its inability, to pay all debts as
      they mature, or make a general assignment for the benefit of, or enter
      into any arrangement with, creditors; (ii) authorize, apply for, or
      consent to the appointment of, a receiver, trustee, or liquidator of all
      or a substantial part of its assets or have proceedings seeking such
      appointment commenced against it which are not terminated within sixty
      (60) days of such commencement; or (iii) file a voluntary petition under
      any bankruptcy or insolvency law or under the reorganization or
      arrangement provisions of the United States Bankruptcy Code or any similar
      law of any jurisdiction or have proceedings under any such law instituted
      against it which are not terminated within sixty (60) days of such
      commencement.

12.2  In the event of any material breach of this Agreement which shall continue
      for thirty (30) or more days after written notice of such breach
      (including a reasonably detailed statement of the nature of such breach)
      shall have been given to the breaching party by the aggrieved party, the
      aggrieved party shall be entitled at its option to avail itself of any and
      all remedies available at law or equity, except as otherwise limited in
      this Agreement.

12.3  NOTWITHSTANDING ANYTHING TO THE CONTRARY, EXCEPT FOR FIBERNET'S BREACH OF
      ARTICLE 10 (SOFTWARE LICENSE) OR EITHER PARTY'S BREACH OF ARTICLE 14
      (CONFIDENTIALITY), AND EXCEPT FOR DAMAGES AWARDED TO A THIRD PARTY
      PURSUANT TO ARTICLE 11 (LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE AND
      PATENT INFRINGEMENT), NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT,
      INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT
      LIMITATION.

12.4  Any action for breach of this Agreement or to enforce any right hereunder
      shall be commenced within two (2) years after the cause of action accrues
      or it shall be deemed waived and barred, except any action for nonpayment
      by FiberNet of any prices, charges, fees or other amounts actually due and
      payable hereunder may be brought by Nortel Networks at any time permitted
      by applicable law, and Nortel Networks may suspend performance of any of
      its obligations hereunder until all such payments are made.

ARTICLE 13.   TERM AND TERMINATION

13.1  This Agreement will be in effect from the Effective Date until December
      31, 2002 (the "Initial Term"). Thereafter, this Agreement shall
      automatically renew for one (l) year terms (each, a "Subsequent Term"),
      unless either party provides the other party with written

                                       19
<PAGE>

                                                          Agreement No. FT19901M

      notice of its intent not to renew at least sixty (60) days prior to the
      end of the original term or any renewal term.

13.2  Either party may delay performance under this Agreement or terminate this
      Agreement, in whole or in part, in the event of a default by the other,
      provided that the non-defaulting party so advises the defaulting party in
      writing of the event of alleged default and the defaulting party does not
      remedy the alleged default within thirty (30) days after written notice
      thereof. If the alleged default is not capable of being remedied within
      thirty (30) days, the defaulting party must commence to remedy the alleged
      default within such thirty (30) day period and provide to the non-
      defaulting party a plan for timely remedying the alleged default in order
      to avoid termination. A default shall include:

     (i)  a party's initiation of bankruptcy or receivership proceedings by or
          against a party or the execution of an assignment for the benefit of
          creditors; or

     (ii) either party's material breach of any of the terms or conditions
          hereof including the failure to make any payment when due.

13.3 The expiration or termination of this Agreement for any cause shall not
     release either party from:

     (i)  any obligations and duties remaining under any Order entered into
          prior to such expiration or termination;

     (ii) any liability, excluding the Optical Commitment, which at the time of
          expiration or termination has already accrued to the other party, or,
          which thereafter may accrue in respect to any event prior to
          expiration or termination; or

     (iii) any liability from any obligation specified in Section l5.l8 below
           to survive expiration or termination.

ARTICLE 14. CONFIDENTIALITY

l4.1 Each party which receives the other party's Confidential Information shall
     use reasonable care to hold such Confidential Information in confidence and
     not disclose such Confidential Information to anyone other than to its
     employees and employees of a Nortel Networks Affiliate, FiberNet's
     affiliates agents or consultants under obligation of confidentiality, as
     applicable, with a need to know. A party that receives the other party's
     Confidential Information shall not reproduce such Confidential Information,
     except to the extent reasonably required for the performance of its
     obligations pursuant to this Agreement and in connection with any permitted
     use of such Confidential Information.

14.2 FiberNet shall take reasonable care to use Nortel Networks' Confidential
     Information only for study, operating, or maintenance purposes in
     connection with FiberNet's use of Products furnished by Nortel Networks
     pursuant to this Agreement.

14.3 Notwithstanding the foregoing, either party shall be free to use that
     portion of the Confidential Information which may be retained in intangible
     form by those employees who have had access to the Confidential
     Information, for any purpose, including use in the development,
     manufacture, marketing and maintenance of its products and services. The
     marketing of any product or service, including the dissemination of
     supporting documentation, which inherently discloses the disclosing party's
     Confidential Information shall not be deemed a breach by the recipient of
     such obligations provided however that ownership of the Confidential
     Information and all intellectual property rights to such Confidential
     Information remain with the disclosing party.

14.4 The obligations of either party pursuant to this Article 14 shall not
     extend to any Confidential Information which a recipient can demonstrate
     through written documentation was already known to the recipient prior to
     its disclosure to the recipient

                                       20
<PAGE>

                                                          Agreement No. FT19901M

     and without confidential obligations was known or generally available to
     the public at the time of disclosure to the recipient, becomes known or
     generally available to the public (other than by act of the recipient)
     subsequent to its disclosure to the recipient, is disclosed or made
     available in writing to the recipient by a third party having a bona fide
     right to do so and without similar confidentiality obligations, is
     independently developed by recipient, or is required to be disclosed by
     subpoena or other process of law, provided that the recipient shall notify
     the disclosing party promptly of any such subpoena or other process of law
     requiring disclosure.

14.5 This Agreement shall be considered Confidential Information between the
     parties.

ARTICLE 15.  MISCELLANEOUS

15.1 Publicity.  A party shall not release any advertising or other publicity
     ----------
relating to this Agreement or the contents hereof wherein such other party may
reasonably be identified without the prior written approval of the other party.
In addition, each party shall take reasonable precautions to keep the existence
of this Agreement confidential so long as this Agreement remains in effect and
for a period of five (5) years thereafter, except as may be otherwise expressly
provided in this Agreement or as may be reasonably required to enforce this
Agreement by law.  Notwithstanding anything contained in this Agreement to the
contrary, FiberNet will have the right to disclose this Agreement, or any part
hereof, to any party(s) providing and/or proposing to provide financing (equity
or debt) to FiberNet or its subsidiaries.  However, if FiberNet discloses the
Agreement in connection with a financing, such disclosure must be subject to an
obligation of confidentiality.  Furthermore, FiberNet will have the right to
disclose this Agreement in accordance with applicable securities laws provided
that it will use reasonable efforts (in coordination with the other party) to
seek confidential treatment of any pricing or other sensitive and confidential
terms set forth in this Agreement in the event of any such disclosure required
by applicable securities laws.

15.2 Applicable Law.  The validity, construction and performance of this
     ---------------
     Agreement shall be governed by and interpreted in accordance with the laws
     of the State of New York, except for its rules with regard to the conflict
     of laws.

15.3 Effects of Headings.  All headings used herein are for index and reference
     --------------------
     purposes only, and shall not be given any substantive effect. This
     Agreement has been created jointly by the parties and no rule of
     construction requiring interpretation against the drafter of this Agreement
     shall apply in its interpretation.

15.4 Assignment.
     -----------

     15.4.1 Other than as explicitly stated below, neither party may assign or
            transfer this Agreement or any of its rights hereunder without the
            prior written consent of the other party, such consent not to be
            unreasonably withheld. A change in control of FiberNet shall not be
            deemed an assignment hereunder. FiberNet's consent shall not be
            required for any assignment or transfer by Nortel Networks (i) to
            any Nortel Networks Affiliate of all or any part of this Agreement
            or of Nortel Networks' rights hereunder; or (ii) to any third party
            of Nortel Networks' right to receive any monies ("Receivables")
            which may become due to Nortel Networks pursuant to this Agreement.

     15.4.2 FiberNet hereby consents to the sale of Receivables by Nortel
            Networks without the necessity for any further notice and without
            any qualification on such consent. FiberNet grants permission for
            Nortel Networks to disclose the provisions of this Agreement to
            purchasers and prospective purchasers of Receivables, or their
            affiliates and others with a present or prospective financial
            interest in such Receivables, and their respective agents,
            attorneys, auditors, rating agencies and other advisors.

                                       21
<PAGE>

                                                          Agreement No. FT19901M

     15.4.3 Notwithstanding anything contained in this Agreement to the
            contrary, FiberNet will have the right to assign (by way of
            collateral assignment or otherwise) this Agreement and/or its rights
            hereunder to any financing party of FiberNet or any of its
            subsidiaries (a "Financing Party"). This right shall include, but
            will not be limited to, the right to collaterally assign this
            Agreement, affect a sale - leaseback transaction with respect to
            this Agreement and/or the Products hereunder and/or any other
            financing arrangement intended to finance the purchase of Products
            and/or Services hereunder. Upon receiving written notice from
            FiberNet, Nortel Networks will take any and all reasonable actions,
            including without limitation execution of appropriate documentation,
            in furtherance of the terms of this provision. Furthermore, to the
            extent any Financing Party requests a reasonable modification or
            supplement to this Agreement or the terms hereof in order to
            consummate any such financing, Nortel Networks will cooperate with
            FiberNet and any such Financing Party to make such modification or
            supplement to the extent such modification or supplement is
            reasonable and does not adversely affect Nortel Network's rights
            hereunder; provided that a Financing Party request to have the right
            to cure FiberNet breaches or defaults hereunder shall be deemed
            reasonable and shall in no event be deemed to adversely affect
            Nortel Networks' rights hereunder. FiberNet agrees that any such
            assignment shall not relieve FiberNet of any obligations hereunder
            and that it shall remain responsible for the due performance
            thereof.

15.5 Subcontracting.  Nortel Networks may subcontract any of its obligations
     ---------------
     under this Agreement, but no such subcontract shall relieve Nortel Networks
     of responsibility for performance of its obligations.

15.6 Non-Waiver. The failure by either party hereto at any time to require
     -----------
     performance by the other party or to claim a breach of any provision of
     this Agreement shall not be construed as affecting any subsequent breach or
     the right to require the performance with respect thereto or to claim a
     breach with respect thereto.

15.7 Relationship of the Parties. The provisions of this Agreement shall not be
     ----------------------------
     construed to establish any form of partnership, agency or joint venture of
     any kind between Nortel Networks and FiberNet, nor to constitute either
     party as the agent, employee or legal representative of the other. All
     persons furnished by either party to accomplish the intent of this
     Agreement shall be considered solely as the furnishing party's employees or
     agents and the furnishing party shall be solely responsible for compliance
     with respect to its employees with all laws, rules and regulations
     involving, but not limited to, employment of labor, hours of labor, working
     conditions, workers' compensation, payment of wages, and withholding and
     payment of applicable taxes, including, but not limited to income taxes,
     unemployment taxes, and social security taxes.

15.8 Force Majeure.  If the performance by a party of any of its obligations
     --------------
     under this Agreement shall be interfered with by reason of any
     circumstances beyond the reasonable control of that party, including
     without limitation, fire, explosion, acts of God, war, revolution, civil
     commotion, unavailability of supplies or sources of energy, power failure,
     breakdown of machinery, delays regarding zoning, easements or deed
     restrictions, any legal proceedings between parties unrelated to the
     parties hereto or labor difficulties, including without limitation,
     strikes, slowdowns, picketing or boycotts, then that party shall be excused
     from such performance for a period equal to the delay resulting from the
     applicable circumstances and such additional period as may be reasonably
     necessary to allow that party to resume its performance. In the event such
     a force majeure condition continues for more than one hundred and twenty
     (120) days, either party may terminate the Agreement with respect to future
     Orders subject to Section 13.3 (Term and Termination).  With respect to
     labor difficulties as described above, a party shall not be obligated to
     accede to any demands being made by employees or other personnel.

                                       22
<PAGE>

                                                          Agreement No. FT19901M

15.9 Taxes.  FiberNet shall at Nortel Networks' direction promptly reimburse
     ------
     Nortel Networks or pay directly to the applicable government or taxing
     authority all taxes and charges arising hereunder, including, without
     limitation, penalties and interest, except for taxes computed upon the net
     income of Nortel Networks.  If FiberNet provides Nortel Networks with a
     certificate of exemption for the applicable taxes, in a timely manner, then
     Nortel Networks shall not invoice FiberNet for such taxes.

15.10  Hazardous Materials.
       --------------------

     15.10.1  Prior to issuing any Order for Services to be performed at
              FiberNet's facilities, FiberNet shall identify and notify Nortel
              Networks in writing of the existence of all Hazardous Materials
              which Nortel Networks may encounter during the performance of such
              Services, including without limitation, any Hazardous Materials
              contained within any equipment to be removed by Nortel Networks.

     15.10.2  If FiberNet breaches its obligations pursuant to the immediately
              preceding paragraph, (i) Nortel Networks may discontinue the
              performance of the applicable Services until all the Hazardous
              Materials have been removed or abated to Nortel Networks'
              satisfaction by FiberNet at FiberNet's sole expense; and (ii)
              FiberNet shall defend, indemnify and hold Nortel Networks harmless
              from any and all damages, claims, losses, liabilities and
              expenses, including without limitation, attorney's fees, which
              arise out of FiberNet's breach of such obligations subject to
              Nortel Networks providing notice of any such claims, reasonable
              assistance in connection with the defense of such claims, and
              permitting FiberNet to control the defense of any such claims.

15.11  Notice.  All notices required or permitted to be given hereunder shall be
       -------
       in writing and shall be deemed given when delivered (i) by hand; or (ii)
       by facsimile transmission (confirming the same by mail); or (iii) by
       certified or next-day mail addressed as follows:

       If to FiberNet:       FiberNet Telecom Group, Inc.
                             -------------------------------------------------
                             570 Lexington Avenue
                             -------------------------------------------------
                             New York, NY  10022
                             -------------------------------------------------

                             -------------------------------------------------
        Attention:           Mr. Trey Farmer, COO; phone: 212-421-4900
                             -------------------------------------------------
        Facsimile:           212-421-8860
                             -------------------------------------------------

        With copy to FiberNet counsel:

        Mr. Gordon Caplan
        Mintz, Levin, Cohn, Ferris, Clovsky and Popeo, PC

        If to Nortel Networks: Nortel Networks
                               -----------------------------------------------
                               5405 Windward Parkway
                               -----------------------------------------------
                               Alpharetta, GA  USA 30004
                               -----------------------------------------------

                               -----------------------------------------------
        Attention:             VP, Optical Products
                               -----------------------------------------------
        Facsimile:             (770) 708-7170
                               -----------------------------------------------

Either party hereto may change its address by a notice given to the other
party hereto in the manner set forth above.

                                       23
<PAGE>

                                                          Agreement No. FT19901M

15.12  Information and Documentation. FiberNet shall provide any information
       ------------------------------
       and/or documentation that Nortel Networks reasonably requests from
       FiberNet and that is necessary for Nortel Networks to properly perform
       any of its obligations hereunder.

15.13  Export. FiberNet shall not export any Products or technical data received
       -------
       from Nortel Networks pursuant to this Agreement, or release any such
       Products or technical data with the knowledge or intent that such will be
       exported or transmitted to any country or to foreign nationals of any
       country, except in accordance with applicable U.S. laws and regulations
       concerning exporting and with written consent of Nortel Networks.
       FiberNet shall obtain all government authorizations, in accordance with
       applicable law prior to exporting or transmitting any such Products or
       technical data. Subject to Section 15.9 (Taxes) with respect to Federal,
       State or local sales or use taxes, Nortel Networks is solely responsible
       for all export/import obligations, taxes, fees or duties with respect to
       the use or sale of the Products within the United States.

15.14  Severability. If any provision of this Agreement is declared or
       -------------
       determined to be invalid or unenforceable under applicable law, the
       remaining provisions shall continue in full force and effect and the
       parties shall substitute for the invalid provision a valid provision
       which most closely approximates the economic effect and intent of the
       invalid provision.

15.15  Modification of Agreement. No addition to or modification of this
       --------------------------
       Agreement shall be effective or binding on either of the parties hereto
       unless reduced to writing and executed by the respective duly authorized
       representatives of each of the parties hereto.

15.16  Regulatory Compliance. Except with respect to Orders received by Nortel
       ----------------------
       Networks, in the event of any change in the Specifications or Nortel
       Networks' manufacturing or delivery processes for any Products as a
       result of the imposition of requirements by any government, Nortel
       Networks may upon notice to FiberNet, increase its prices, charges and
       fees to cover the added costs and expenses directly and indirectly
       incurred by Nortel Networks as a result of such change. This provision
       15.16 shall not apply with respect to Orders already received by Nortel
       Networks.

15.17  Entire Agreement. This Agreement, including the Exhibits and Annexes
       -----------------
       which are attached hereto and incorporated herein, comprises all the
       terms, conditions and agreements of the parties hereto with respect to
       the subject matter hereof and supersedes all previous negotiations,
       proposals, commitments, writings, publications and understandings of any
       nature whatsoever. No Exhibits or Annexes modified or created subsequent
       to the execution of this Agreement shall be deemed to be incorporated
       into this Agreement unless mutually agreed in a writing and executed by a
       duly authorized representative of each party. FiberNet hereby
       acknowledges and agrees that it has not relied on any representations or
       warranties other than those expressly set forth in this Agreement.

15.18  Survivorship. Any terms of this Agreement, which by their nature are
       intended to survive including but not limited to Articles 8, 10, 11, 12,
       14 and Sections 4.5, 4.6, 9.3, and 13.3

(remainder of page intentionally left blank)

                                       24
<PAGE>

                                                          Agreement No. FT19901M

shall survive the termination or expiration of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement.

<TABLE>
<CAPTION>

NORTEL NETWORKS INC.                                   FIBERNET TELECOM GROUP, INC.
<S>       <C>                                          <C>       <C>

By: /s/ Bob Cantarutti                                 By: /s/ Joel Zimmerman
    -----------------------------------------              -----------------------------------------
                (Signature)                                            (Signature)

Name:   Bob Cantarutti                                 Name:   Joel Zimmerman
     ----------------------------------------                ---------------------------------------
                   (Print)                                                (Print)

Title:  VP of Optical Networks                         Title:  SVP-Engineering and Network
     ----------------------------------------                ---------------------------------------

Date:  12/31/99                                        Date:  12/31/99
     ----------------------------------------               ----------------------------------------
</TABLE>

                                       25<PAGE>

                                                                   Exhibit 10.17

     EMPLOYMENT AGREEMENT dated as of January 18, 2000 (the "Agreement"),
                                                             ---------
between FIBERNET TELECOM GROUP, INC., a Nevada corporation (the "Company"), and
                                                                 -------
LANCE L. MICKEL (the "Executive").
                      ---------

     The parties hereto deem it to be in their best interests to enter into an
employment agreement whereby the Company will employ the Executive pursuant to
the terms set forth herein.

     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:

     1.   Employment. The Company hereby employs the Executive, and the
          ----------
Executive hereby accepts such employment by the Company, on the terms and
subject to the conditions hereinafter set forth. The parties hereto agree that
the Executive shall commence his duties and responsibilities hereunder as soon
as reasonably practicable but in any event on or before March 6, 2000.

     2.   Term. Subject to earlier termination pursuant to the terms of Section
          ----
6 below, the employment of the Executive hereunder shall be for a fixed term
unless terminated earlier or extended in accordance with the terms and
provisions of this Agreement (the "Employment Period") commencing as provided in
                                   -----------------
Section 1 hereof and terminating on the second anniversary of the commencement
of employment as provided in Section 1 hereof (the "Scheduled Termination
                                                    ---------------------
Date"). At the option of the Company, on or before December 6, 2001, the Company
shall notify the Executive of its intention to renew this Agreement or continue
the employment of the Executive after the Scheduled Termination Date; provided,
that, the terms and conditions of the renewal or continuation after the
Scheduled Termination Date shall be mutually agreed upon by the Company and the
Executive.

     3.   Position.
          --------

          (a)  The Executive will be the Senior Vice President - Network
Operations.

          (b)  The Company understands that the Executive will conduct
substantially all of his duties and responsibilities on behalf of the Company
from the executive offices of the Company, which shall be located in the New
York metropolitan area, or from a regional network operations office of the
Company to be opened after the date hereof which is located closer to the
Executive's place of residence. The Company shall reimburse the Executive for
all reasonable and appropriate expenses, including, but not limited to, the
monthly rent of an apartment and a parking space during the time the Executive
is located in the metropolitan New York area.

     4.   Time to be Devoted to Employment. The Executive shall devote all of
          --------------------------------
his business time, attention and energies to the performance of his duties
and responsibilities under this Agreement. During the Employment Period, the
Executive shall not be engaged in any other business activity without the prior
written consent of the President and the Executive Vice President except for (a)
time spent in managing his personal, financial and legal affairs and serving on
corporate, civic or charitable boards or committees, in each case only if, and
to the
<PAGE>

extent that, such activities do not interfere with the performance of the
Executive's duties and responsibilities hereunder and (b) periods of vacation to
which the Executive is entitled, illness and periods of leave of absence as
reasonably approved by the President or Executive Vice President of the Company.

     5.   Compensation; Etc.
          ------------------

          (a)  Base Salary. The Company shall pay to the Executive an annual
               -----------
base salary (the "Base Salary") of a minimum of $225,000, subject to increase,
                  -----------
but not decrease, at least annually at the discretion of the Compensation
Committee of the Board of Directors of the Company (the "Board").  The Base
                                                         -----
Salary shall be payable in such installments as is the policy of the Company
with respect to its executive officers generally, but no less frequently than
monthly.

          (b)  Signing Bonus. The Executive shall receive $30,000 as a bonus
               -------------
("Signing Bonus") for executing this Agreement payable in one lump sum payment
  -------------
upon commencement of employment as provided in Section 1 hereof.

          (c)  Bonus. After a formal review by the President and Executive Vice
               -----
President of the Company during the month of December, 2000 of the Executive's
performance and operations during the year 2000, the Executive may receive an
additional cash or stock bonus payable during the month of January, 2001 which
bonus is anticipated by the Company to be commensurate with the bonuses granted
to other senior executive employees.

          (d)  Benefits. During the Employment Period, the Company shall provide
               --------
the Executive with such employee benefits as are provided by the Company from
time to time to its senior executive officers generally.

          (e)  Options. The Executive shall receive options (the "Options") to
               -------
purchase 275,000 shares of the Company's common stock, $.001 par value per share
("Common Stock"), of which as many as possible shall be allocated as Incentive
  ------------
Stock Options ("ISOs") (as that term is defined in Section 422 of the Internal
                ----
Revenue Code of 1986, as amended (the "Code")). The Options shall have an
                                       ----
exercise price equal to the lowest Fair Market Value (as defined in the Option
Plan) between the date upon which the Employee commences employment in
accordance with Section 1 hereof and March 31, 2000, as determined by the
Compensation Committee of the Board of Directors (the "Grant Date").  The
Options shall vest as follows:

               (i)  245,000 Options shall vest equally over two years from the
commencement of employment as set forth in Section 1 hereof, with 50% of the
such Options vesting one year the commencement of employment as set forth in
Section 1 hereof and the remaining 50% vesting two years from the commencement
of employment as set forth in Section 1 hereof (the ISOs granted pursuant to
this subsection 5(e)(i) are referred to herein as the "Qualified A Options" and
                                                       -------------------
the non-qualified Options granted pursuant to this subsection 5(e)(i) are
referred to herein as the "Non-Qualified A Options"); and
                           -----------------------

               (ii) 30,000 Options shall vest as of the Grant Date, subject to
Section 6(f)(iv) (the ISOs granted pursuant to this subsection 5(e)(ii) are
referred to herein as the

                                       2
<PAGE>

"Qualified B Options" and the non-qualified Options granted pursuant to this
 -------------------
subsection 5(e)(ii) are referred to herein as the "Non-Qualified B Options").
                                                   -----------------------

The Options shall be subject to accelerated vesting as provided for in this
Agreement. If the Executive's employment is terminated pursuant to a Termination
for Cause or a Voluntary Termination, all the then unvested Qualified A Options
and Non-Qualified A Options shall immediately terminate and no longer be
outstanding. The Options are granted pursuant to the Company?s 1999 Stock Option
Plan (the "Option Plan"). Unless otherwise provided herein, any Options granted
           -----------
hereunder are subject to the terms and provisions of the Option Plan and the
execution of a Stock Option Agreement or Agreements between the Company and the
Executive. The parties agree that they shall use reasonable best efforts to
execute the Stock Option Agreement or Agreements promptly after the date the
Options are granted.

          6.   Termination of Employment.
               -------------------------

               (a)  Involuntary Termination.
                    -----------------------

                    (i)  Disability. If the Executive is incapacitated or
                         ----------
     disabled by accident or sickness or otherwise so as to render him mentally
     or physically incapable of performing the services required to be performed
     by him under this Agreement with "reasonable accommodations" (as such term
     is defined in 29 U.S.C. (S) 1211(9), as amended and in common law
     interpretations of same) for a period of 90 consecutive days or longer, or
     for an aggregate of 90 days during any twelve-month period (such condition
     being hereinafter referred to as a "Disability"), the Company may, at that
                                         ----------
     time or any time thereafter, at its option, to the extent not in violation
     of applicable state and federal law and so long as the Disability still
     exists, terminate the employment of the Executive under this Agreement
     immediately upon giving him notice to that effect (such termination, as
     well as a termination under Section 6. (a) (ii) below, being hereinafter
     called an "Involuntary Termination"). In the event of an Involuntary
                -----------------------
     Termination resulting from a Disability, all options granted hereunder
     shall vest on a pro rata basis for time served to the date of such
                     --------
     Involuntary Termination (including the 90 day disability qualifying
     period).

                    (ii) Death. If the Executive dies during the Employment
                         -----
     Period, his employment hereunder shall be deemed to cease as of the date of
     his death, and all options granted hereunder shall vest as of the date of
     his death, and shall be exercisable by his estate for a period of one (1)
     year from the date of death.

               (b)  Termination for Cause. The Company may terminate the
                    ---------------------
employment of the Executive and all the Company's obligations, except
obligations which come due prior to the termination of this Agreement, under
this Agreement at any time during the Employment Period for "cause" (such
                                                             -----
termination being hereinafter called a "Termination for Cause") after the Board
                                        ---------------------
has given the Executive written notice of its intent to terminate the employment
of the Executive for cause, with reasonable specificity of the details thereof
and Executive shall have been provided a reasonable opportunity to cure any such
alleged occurrence constituting "cause" (not in excess of 30 days; provided,
that, in the case of an occurrence which cannot be cured within 30 days, the
Executive shall have an additional 30 days to cure). For the

                                       3
<PAGE>

purposes of this Agreement, "cause" shall mean, including, without limitation,
(i) the Executive's material breach of his material duties hereunder or habitual
neglect of his duties hereunder, (ii) the commission by the Executive of an act
constituting common law fraud, or a felony or criminal act against the Company
or any subsidiary or affiliate thereof or any of the assets of any of them or
(iii) the Executive's conviction of a crime involving moral turpitude.

          (c)  Termination Without Cause. The Company may, with 30 days written
               -------------------------
notice, terminate the employment of the Executive hereunder at any time during
the Employment Period without "cause" (such termination being hereinafter called
a "Termination Without Cause") by giving the Executive notice of such
   -------------------------
termination, upon the giving of which notice such termination shall take effect
30 days from the date such notice was given.

          (d)  Voluntary Termination. Any termination of the employment by the
               ---------------------
Executive hereunder other than as a result of a Termination For Good Reason
shall be deemed to be a "Voluntary Termination."  A Voluntary Termination shall
                         ---------------------
be deemed to be effective immediately upon such termination.

          (e)  Termination for Good Reason.  Each of the events in clauses (i) -
               ---------------------------
(v) below shall be a "Termination for Good Reason":
                      ---------------------------

               (i)   the Executive's title, position, authority or
     responsibilities (including reporting responsibilities and authority) are
     changed in a materially adverse manner;

               (ii)  the Executive's Base Salary is reduced for any reason other
     than in connection with the termination of his employment;

               (iii) other than in connection with the termination of the
     Executive's employment hereunder, the Company materially reduces any
     welfare or insurance benefits generally provided to other executive
     officers of the Company;

               (iv)  a material breach of this Agreement by the Company; and

               (v)   the sale of all or substantially all of the assets or
     capital stock of the Company or the merger, consolidation or combination of
     the Company with another entity in which this Agreement is not assumed by
     any such purchaser or surviving entity.

In the event of a Termination for Good Reason, the Executive may voluntarily
terminate his employment under this Agreement with the Company, which voluntary
termination shall be treated as a Termination Without Cause.

          (f)  Effect of Termination of Employment.
               -----------------------------------

               (i)   Except as otherwise provided in Section 6(f)(ii) below,
     upon the termination of the Executive's employment hereunder for any reason
     whatsoever prior to the expiration of the Employment Period, neither the
     Executive nor his beneficiaries or estate shall have any further rights or
     claims against the Company or any of its

                                       4
<PAGE>

     subsidiaries or affiliates under this Agreement except to receive any
     earned and unpaid portion of the Base Salary and the Signing Bonus, plus a
                                                                         ----
     cash payment for all accrued and unused vacation time through the effective
     date of such termination, and the Executive, the Executive's estate or his
     beneficiaries shall be entitled to exercise all options vested as provided
     for in this Agreement. The Executive shall be indemnified after the
     Scheduled Termination Date (or any later date the Executive's employment
     with the Company is terminated) for any actions in his capacity as a Senior
     Vice President-Network Operations (or any title or position the Executive
     shall then hold) of the Company. In the case of termination of the
     Executive's Employment for death or Disability pursuant to Section 6(a),
     the Executive, the Executive's family or the Executive's beneficiaries, as
     the case may be, shall also be entitled to the same employee benefits, at
     the Company's expense, provided to the Executive and his family by the
     Company prior to the date of the termination of the Executive's employment
     hereunder for Disability or death for six months after such termination of
     employment for Disability or death.

               (ii)  Upon the termination of the Executive's employment
     hereunder prior to the Scheduled Termination Date pursuant to a Termination
     Without Cause or Termination for Good Reason, the Executive shall have the
     right, in addition to the rights provided for in Section 6(f)(i) above, to
     receive (A) severance (payable in such installments as the Base Salary was
     being paid immediately prior to such termination pursuant to Section 5. (a)
     hereof) equal to the then current Base Salary for a term equal to the
     lesser of (1) nine months from the date of termination of the Executive's
     employment pursuant to a Termination Without Cause or Termination for Good
     Reason and (2) the date the Executive executes an employment agreement or
     similar contract with a third party employer (or commences employment with
     a third party employer, whichever occurs earlier) after the termination of
     the Executive's employment pursuant to a Termination Without Cause or
     Termination for Good Reason, (B) all options granted hereunder (subject to
     Section 6(f)(iv)) shall vest and Executive shall have 12 months (unless
     with respect to the Qualified A Options or Non-Qualified A Options, the
     Option Plan shall require a shorter period) thereafter to exercise such
     options, and (C) at the Company's expense, any employee benefits provided
     to the Executive and his family by the Company prior to the Termination
     Without Cause or Termination for Good Reason for a period of nine months
     after such Termination Without Cause or Termination for Good Reason,
     subject to applicable plan documents for any employee benefit plans.

               (iii) Upon the termination of the Executive's employment
     hereunder prior to the Scheduled Termination Date pursuant to a Termination
     for Cause, the Executive shall be entitled to receive his Base Salary pro
                                                                           ---
     rata to the date of his Termination for Cause and the Signing Bonus and
     ----
     shall be entitled to exercise all options vested as of the time of
     termination for 30 days, subject to Section 6(f)(iv).

               (iv)  Upon the termination of the Executive's employment
     hereunder on or prior to May 6, 2000 pursuant to a Termination for Cause or
     Voluntary Termination, the Executive shall return to the Company and
     disclaim ownership of 50% of the Qualified B Options and Non-Qualified B
     Options and execute any amendment or agreement necessary to reflect such
     adjustment.

                                       5
<PAGE>

     7.   Restrictive Covenants.
          ---------------------

          (a)  The Executive acknowledges and recognizes that during the
Employment Period he will be privy to trade secrets and confidential proprietary
information critical to the Company and the Company's business and further
acknowledges and recognizes that the Company would find it extremely difficult
to replace the Executive. In the event of a Voluntary Termination or Termination
for Cause, the Executive shall not, during the Employment Period and for 6
months thereafter, directly or indirectly, engage in any Competitive Business.
So long as the Company is paying (or willing to pay in the event the Executive
shall refuse such payment) all amounts due hereunder, the Executive shall not,
during the Employment Period and for 12 months thereafter (i) directly induce
employees of the Company or its affiliates or subsidiaries to terminate their
employment with the Company or such affiliate or subsidiary for the purposes of
engaging in any Competitive Business or (ii) directly induce any entity or
person with which the Company or any of its subsidiaries or affiliates has a
business relationship to terminate or alter such business relationship.

     "Competitive Business" means and includes any business that builds or
      --------------------
operates in-building communications transmission networks.

          (b)  The Executive understands that the foregoing restrictions may
limit his ability to earn a livelihood in a business similar that of the
Company, but he nevertheless believes that he has received and will receive
sufficient consideration and other benefits as an employee of the Company to
justify clearly such restrictions which, in any event (given his education,
skills and ability), the Executive does not believe would prevent him from
earning a livelihood.

     8.   Non-Disclosure, Assignment of Intellectual Property Rights and
          --------------------------------------------------------------
Documentation.
-------------

          (a)  At all times, both during the Executive's employment by the
Company and for three (3) years after its termination, the Executive will keep
in strict confidence and will not disclose any confidential or proprietary
information relating to the business of the Company, or any client, customer, or
business partner of the Company, to any person or entity, or make use of any
such confidential or proprietary information for the Executive's own purposes or
for the benefit of any person or entity, except as may be necessary in the
ordinary course of performing his duties and responsibilities as an employee of
the Company.

          (b)  If at any time or times during his employment the Executive shall
conceive or discover any Intellectual Property (as defined herein) whatsoever
(herein called "Developments") or any interest therein ("Intellectual Property
                ------------                             ---------------------
Rights") that in each case relates to the business of the Company, such
------
Developments and the benefits thereof shall immediately become the sole and
absolute property of the Company and its assigns, and the Executive shall
promptly disclose to the Company (or any persons designated by it) each such
Development and hereby assign any rights the Executive may have or acquire in
the Developments and benefits and/or rights resulting therefrom to the Company
and its assigns.

                                       6
<PAGE>

          (c)  As used herein, the term "Intellectual Property" shall mean all
                                         ---------------------
industrial and intellectual property, including, without limitation, computer
programs and other software, and all documentation and media constituting,
describing or relating to the above.

     9.   Disability Insurance.  As soon as reasonably practicable, the
          --------------------
Company shall obtain long-term disability insurance covering the Executive at
the Company's expense which provides for an "own occupation" definition of
disability, no less than 60% income replacement and an elimination period no
longer than the period after which the Company can terminate the Executive's
services for disability or such substantially similar provisions.

     10.  Other Agreements. The Executive represents and warrants that the
          ----------------
execution and delivery of this Agreement and the performance of all the terms of
this Agreement do not and will not breach any agreement to keep in confidence
proprietary information acquired by the Executive in confidence or trust. The
Executive has not entered into and shall not enter into any agreement, either
written or oral, in conflict with this Agreement. The Executive represents that
he has not brought and will not bring with him to the Company or use at the
Company any materials or documents of an employer or a former employer that are
not generally available to the public, unless express written authorization from
such employer for their possession and use has been obtained. The Executive
further understands that he is not to breach any obligation of confidentiality
that he has to any employer or former employer and agrees to fulfill all such
obligations during the period of his affiliation with the Company. The Company
represents and warrants that the execution and delivery of this Agreement and
the performance of all of the terms of this Agreement do not and will not breach
any Agreement of the Company and the Company has not and shall not enter into
any agreement, whether written or oral, in conflict with this Agreement.

     11.  Notices. All notices or other communications which are required or
          -------
permitted hereunder shall be in writing and sufficient if (a) delivered
personally or sent by telecopier, (b) sent by nationally-recognized overnight
courier or (c) sent by certified mail, postage prepaid, return receipt
requested, addressed as follows:

     if to the Company, to:

     FiberNet Telecom Group, Inc.
     570 Lexington Avenue, Third Floor
     New York, NY  10022
     Telephone:  212 405-6200
     Facsimile:  212 421-4920
     Attention:   President

                                       7
<PAGE>

     with a copy to:

     Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.
     The Chrysler Center
     666 Third Avenue
     New York, NY  10017
     Telephone:  212 986-7200
     Facsimile:  212 986-3115
     Attention:  Gordon Caplan, Esq.

     if to the Executive, to the Executive's address on the books or records of
     the Company;

or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith.  Any such
communication shall be deemed to have been given (i) when delivered if
personally delivered or sent by telecopier, (ii) on the Business Day (as
hereinafter defined) after dispatch if sent by nationally-recognized, overnight
courier and (iii) on the fifth Business Day after dispatch if sent by mail.  As
used herein, "Business Day" means a day that is not a Saturday, Sunday or a day
              ------------
on which banking institutions in New York, New York are not required to be open.

     12.  Entire Agreement; Amendments. This Agreement contains the entire
          ----------------------------
agreement between the parties with respect to the subject matter hereof and
supersedes all prior or contemporaneous negotiations, correspondence,
understandings and agreements, written or oral, between the parties with respect
thereto. This Agreement may be amended only by an agreement in writing signed by
both parties hereto.

     13.  Assignment; Successors; Benefits of Agreement. This Agreement is
          ---------------------------------------------
personal in its nature and neither party hereto shall, without the consent of
the other, assign or transfer this Agreement or any rights or obligations
hereunder. The provisions of this Agreement shall be binding upon and inure to
the benefit of the respective heirs, executors, administrators and successors
and permitted assigns of the parties hereto. All amounts payable hereunder, and
all option grants provided hereunder, shall be payable to, and exercisable by,
the Executive or the Executive's estate, as the case may be.

     14.  Waiver of Breach. A waiver of any breach of any provision of this
          ----------------
Agreement shall not constitute or operate as a waiver of any other breach of
such provision or of any other provision, and any failure to enforce any
provision hereof shall not operate as a waiver of such provision or of any other
provision.

     15.  Counterparts; Headings. This Agreement may be executed in one or
          ----------------------
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.  Headings said herein are for
convenience of reference only and are not to affect the interpretation of this
Agreement.

                                       8
<PAGE>

     16.  Legal Fees. The Company will promptly pay the reasonable
          ----------
attorney's fees incurred by Executive in connection with the negotiation and
execution hereof.

     17.  GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED
          -------------
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES GOVERNING CONFLICTS OF LAWS.

     18.  Severability. In the event that any provision of this Agreement
          ------------
would be held in any jurisdiction to be invalid, prohibited or unenforceable for
any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

     19.  Indemnification. The Executive shall be indemnified to the full
          ---------------
extent provided for by applicable law and the charter and by-laws of the
Company, which indemnification provisions may not be altered in any material
manner to the detriment of the Executive from those provisions in effect as of
the date hereof.  The Company shall maintain liability coverage for directors
and officers ("D&O Coverage"), which shall include the Executive, during the
Employment Period (and for the applicable statute of limitations period
thereafter), with terms and conditions as in effect as of the date hereof;
provided that such D&O coverage may not be altered in any material manner to the
-------- ----
detriment of the Executive from those provisions in effect as of the date
hereof.

     20.  Due Authorization. This Agreement has been duly authorized,
          -----------------
executed and delivered on behalf of the Company and represents the binding and
enforceable obligation of the Company, in accordance with its term.

     21.  Remedies. The Executive acknowledges and understands that the
          --------
provisions of this Agreement are of a special and unique nature, the loss of
which cannot be adequately compensated for in damages by an action at law, and
that the breach or threatened breach of the provisions of this Agreement would
cause the Company irreparable harm. In the event of a breach or threatened
breach by the Executive of the provisions contained in Section 7 of this
Agreement, the Company shall be entitled to seek an injunction restraining him
from such breach with a court of law. The Company acknowledges and understands
that the provisions of this Agreement are of a special and unique nature, the
loss of which cannot be adequately compensated for in damages by an action at
law, and that the breach or threatened breach of the provisions would cause the
Executive irreparable harm.

     22.  Waiver of Jury Trial. The Executive and the Company hereby agree
          --------------------
that any action, claim or counterclaim in connection with any aspect of any
separation of the Executive's employment (whether voluntary or involuntary) from
the Company shall be resolved

                                       9
<PAGE>

by a judge alone and the Executive and the Company waive and forever renounce
their rights to a trial before a jury.

                                       10
<PAGE>

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

                                     FIBERNET TELECOM GROUP, INC.

                                     By: /s/ Michael S. Liss
                                        ----------------------------------------
                                        Name:  Michael S. Liss
                                        Title: CEO and President

                                        /s/ Lance L. Mickel
                                     -------------------------------------------
                                        Lance L. Mickel

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