SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
NEON Communications, Inc.
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(Name of Issuer)
Common Stock, $.01 par value per share
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(Title of Class of Securities)
640 506 10 1
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(CUSIP Number)
Edward P. Reardon, Jr., Esq., Consolidated Edison Company of New York, Inc.
4 Irving Place, New York, NY 10003, (212) 460-4374
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 14, 2000
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition that is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13-d1(e),
13d-1(f) or 13d-1(g), check the following box .
Note. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
Rule 13d-7 for other parties to whom copies are to be sent.
<PAGE>
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATIN NO. OF ABOVE PERSONS (ENTITIES ONLY)
Consolidated Edison Communications, Inc. (EIN 13-3984646)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) (b) x
----------- -----------
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH None
REPORTING PERSON WITH
8 SHARED VOTING POWER
9,381,916
9 SOLE DISPOSITIVE POWER
2.476,735
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,381,916 (Includes 6,905,181 shares beneficially held by
others who, together with Exelon Ventures Corp.,
may be held to constitute a group.)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
56.3 %
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATIN NO. OF ABOVE PERSONS (ENTITIES ONLY)
Consolidated Edison, Inc. (EIN 13-3965100)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) (b) x
----------- -----------
3 SEC USE ONLY
4 SOURCE OF FUNDS*
None
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH None (Item 5)
REPORTING PERSON WITH
8 SHARED VOTING POWER
None
9 SOLE DISPOSITIVE POWER
None (Item 5)
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,381,916 (Includes 6,905,181 shares beneficially held by
others who may be held to constitute a group of
which subsidiary is a member.)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
56.3 %
14 TYPE OF REPORTING PERSON*
CO, HC
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Item 1. Security and Issuer.
(a) Class:
Common Stock, par value $.01 per share
(b) Name of Issuer:
NEON Communications, Inc
(c) Address of Issuer's Principal Executive
Office:
2200 West Park Drive, Westborough, Massachusetts 01851
Item 2. Identity and Background.
<PAGE>
Consolidated Edison, Inc., a New York corporation, owns all of the issued and
outstanding stock of Consolidated Edison Communications, Inc.
(a) Name of Filing Person:
Consolidated Edison, Inc.,
(b) Residence or Business Address:
4 Irving Place, New York, NY 10003
(c) Present Principal Occupation:
Holding company for provider of power transmission and distribution and
providers of other services.
Directors of Consolidated Edison, Inc.,
(a) Name:
Eugene R. McGrath
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Chairman, President and Chief Executive Officer of Consolidated Edison, Inc.
(a) Name:
George Campbell, Jr.
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
President, The Cooper Union for the Advacement of Science and Art
(a) Name:
E. Virgil Conway
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Chairman, Metroplitan Transportation Authority, New York, NY
<PAGE>
(a) Name:
Gordon J. Davis
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Partner, LeBoeuf Lamb Greene & McRae, Attorneys at Law, New York NY.
(a) Name:
Ruth M. Davis
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
President and Chief Executive Officer, The Pymatuning Group, Inc.,
Alexandria, VA (Technology Management).
(a) Name:
Michael J. Del Giudice
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Managing Director/Principal, Millennium Credit Markets, LLC, New York, NY.
(a) Name:
Joan S. Freilich
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(b) Present Principal Occupation:
Executive Vice President and Chief Financial Officer.
(a) Name:
Ellen V. Futter
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
President, American Museum of Natural History, New York, NY.
<PAGE>
a) Name:
Sally Hernandez-Pinero
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Senior Vice President, The Related Companies, L.P., New York, New York.
(a) Name:
Peter W. Likins
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
President, The University of Arizona, Tucson, AZ
(a) Name:
Richard A. Voell
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Private investor and retired President and Chief Executive Officer,
The Rockefeller Group, Inc., New York, NY (real estate services and
communications and communications services).
(a) Name:
Stephen R. Volk
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Senior Partner, Shearman & Sterling, Attorneys at Law, New York, NY.
<PAGE>
Officers of Consolidated Edison, Inc.:
(a) Name:
Eugene R. McGrath
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Chairman, President and Chief Executive Officer.
(a) Name:
Joan S. Freilich
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Executive Vice President and Chief Financial Officer.
(a) Name:
John D. McMahon
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Senior Vice-President and General Counsel.
(a) Name:
Archie M. Bankston
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Secretary.
(a) Name:
Hyman Schoenblum
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Vice-President and Controller.
<PAGE>
(a) Name:
Robert P. Stelben
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Vice-President and Treasurer.
(d) , (e) Neither Consolidated Edison, Inc. nor, to the best knowledge of
Consolidated Edison, Inc., any director or officer of Consolidated Edison, Inc.,
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors), or has been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction as a result of which he or she
is subject to a judgment, decree or final order enjoining future violations of
or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violations with respect to such laws.
(f) Citizenship:
Consolidated Edison, Inc. is organized under the laws of the State of New York.
Each of Consolidated Edison, Inc.'s Officers and Directors are citizens of the
United States of America.
(a) Name of Person Filing:
Consolidated Edison Communications, Inc., a New York corporation, is a
wholly-owned subsidiary of Consolidated Edison, Inc.
(b) Residence or Business Address:
132 West 31st Street, 13th Floor, New York, NY 10001
(c) Present Principal Occupation:
Owns and manages fiber optic infrastructure and capital investments.
Directors of Consolidated Edison Communications, Inc.:
(a) Name:
John A. Nutant
(b) Residence or Business Address:
132 West 31st Street, 13th Floor, New York, NY 10001
(c) Present Principal Occupation:
Chairman, Consolidated Edison Communications, Inc.
<PAGE>
(a) Name:
Louis Rana
(b) Residence or Business Address:
4 Irving Place New York, New York 10003
(c) Present Principal Occupation:
Vice President, Manhattan Customer Service,
Consolidated Edison Company of New York, Inc.
(a) Name:
Robert P. Stelben
(b) Residence or Business Address:
4 Irving Place New York, New York 10003
(c) Present Principal Occupation:
Vice-President and Treasurer, Consolidated Edison Company of New York, Inc.
Officers of Consolidated Edison Communications, Inc.:
(a) Name:
Peter A. Rust
(b) Residence or Business Address:
132 West 31st Street, 13th Floor, New York, NY 10001
(c) Present Principal Occupation:
President and Chief Executive Officer.
(a) Name:
Felipe J. Alvarez
(b) Residence or Business Address:
132 West 31st Street, 13th Floor, New York, NY 10001
(c) Present Principal Occupation:
Vice-President, Marketing and Sales.
<PAGE>
(a) Name:
Christopher Metaxas
(b) Residence or Business Address:
132 West 31st Street, 13th Floor, New York, NY 10001
(c) Present Principal Occupation:
Vice President, Business Development.
(a) Name:
John F. Pinto
(b) Residence or Business Address:
132 West 31st Street, 13th Floor, New York, NY 10001
(c) Present Principal Occupation:
Vice President, Engineering.
(a) Name:
Edward P. Reardon, Jr.
(b) Residence or Business Address:
4 Irving Place, New York, New York 10003
(c) Present Principal Occupation:
Secretary.
Also Senior Attorney, Consolidated Edison Company of New York, Inc.
(d), (e) Neither Consolidated Edison Communications, Inc. nor, to the best
knowledge of Consolidated Edison Communications, Inc., any director or officer
of Consolidated Edison Communications, Inc. has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), or has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which he or she is subject to a judgment, decree or
final order enjoining future violations of or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violations with respect to such laws.
(f) Citizenship:
Consolidated Edison Communications, Inc. is organized under the laws of the
State of New York. Each of Consolidated Edison Communications, Inc.'s Officers
and Directors are citizens of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to the terms of a Subscription Agreement between Northeast Optic
Network, Inc., NEON Communications, Inc. ("NEON Communications") and
Consolidated Edison Communications, Inc., dated as of November 23, 1999, as
amended by Amendment No. 1 dated May 1, 2000 among the parties and Amendment No.
2 dated September 6, 2000 among the parties (as amended the "Subscription
Agreement"), executed in connection with the transaction described in Item 4,
below, NEON Communications issued 2,476,735 shares to Consolidated Edison
Communications, Inc., in exchange for certain intangible rights of use and
services related thereto to be provided by Consolidated Edison Communications,
Inc., and certain cash payments made or to be made in the aggregate amount of
approximately $13.5 million, the sources of which are and will be the parent
affiliate and working capital.
<PAGE>
Item 4. Purpose of Transaction.
On September 14, 2000, NEON Communications and Consolidated Edison
Communications, Inc. completed a transaction (the "Transaction") which involved,
among other things, (i) the issuance by NEON Communications of the 2,476,735
shares of its Common Stock (the "Shares") to Consolidated Edison Communications,
Inc., in exchange for the agreement by Consolidated Edison Communications, Inc.,
to pay to NEON Communications approximately $13.5 million, $5,889,750 of which
was paid at closing, and Consolidated Edison Communications, Inc.'s agreement to
provide certain intangible rights of use and services related thereto.
The Shares were acquired as an investment in connection with the completion of
the Transaction.
On the same date, NEON Communications and Exelon Ventures Corp. completed a
similar transaction (the "Exelon Transaction").
In connection with the Transaction and the Exelon Transaction, NEON
Communications' Board of Directors was set at nine members. One individual
designated by each of Consolidated Edison Communications, Inc., and Exelon
Ventures Corp. were elected to the Board of Directors of NEON Communications on
September 14, 2000.
Although neither Consolidated Edison, Inc., nor Consolidated Edison
Communications, Inc., ("the Reporting Persons") have no current intention to do
so, the Reporting Persons may, from time to time, determine to purchase
additional shares of NEON Communications on the open market, in negotiated
transactions, pursuant to the rights described in Item 6, below, or otherwise.
Although the Reporting Persons have no current intention to do so, the Reporting
Persons may also sell the Shares.
Except as described herein, the Reporting Persons have no plans or proposals of
the type described in paragraphs (a) through (j) of Item 4 of this Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) and (b). The following table sets forth the aggregate number of shares and
percentages of the outstanding shares of Common Stock of NEON Communications
beneficially owned by each Reporting Persons and by each executive officer,
director and controlling person, if any, of the Reporting Persons, and, with
respect to the knowledge of the Reporting Persons, each other party who may be
deemed together with Exelon Ventures Corp. to constitute a group. Any of the
aforementioned persons whose names do not appear in the table below do not
beneficially own any shares of Common Stock of NEON Communications. Except as
otherwise noted, each person listed has sole voting and dispositive power over
all shares listed opposite its name.
<PAGE>
Number of shares Percentage of
Name of Person beneficially owned outstanding shares
-------------- ------------------ ------------------
Consolidated Edison, Inc., 9,381,916* 56.3%
Consolidated Edison
Communications, Inc. 9,381,916* 56.3%
Exelon Ventures Corp. 9,381,916* 56.3%
Mode 1
Communications, Inc. 9,381,916* 56.3%
Consolidated Edison, Inc. owns all of the issued and outstanding shares of
Consolidated Edison Communications, Inc., and is, therefore, indirect beneficial
owner of all of the Shares. Pursuant to Section 13(d)(3) under the Securities
Exchange Act, Consolidated Edison Communications, Inc., Exelon Ventures Corp.,
and Mode 1 may be deemed to beneficially own the shares of Common Stock of NEON
Communications owned by the others as result of the limited agreement as to
voting described in Item 6, below.
*Shared voting power as to all shares for the limited purpose described in Item
6, below, and sole dispositive power over 2,476,735, as to Consolidated Edison
Communications, Inc., 2,131,143, as to Exelon Ventures Corp., and 4,774,038, as
to Mode 1.
No person named in response to Item 2 has effected any transaction in the class
of securities reported on during the past 60 days. To the knowledge of the
reporting persons named herein, neither Exelon Ventures Corp nor Mode 1 has
effected any transaction in the class of securities reported on during the past
60 days.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.
Subscription Agreement
As noted in Item 3, Conslidated Edison Communications, Inc. and NEON
Communications are parties to a Subscription Agreement pursuant to which the
reporting persons acquired the Shares.
Stockholders' Agreement
Consolidated Edison Communications, Inc., Exelon Ventures Corp., Mode 1
Communications, Inc. ("Mode 1" and together with Exelon Ventures Corp. and
Consolidated Edison Communications, Inc., collectively the, "Stockholders" and
individually a "Stockholder") and NEON Communications are parties to a
Stockholders' Agreement dated as of September 14, 2000 under which the
Stockholders agreed to vote all of the shares of Common Stock of NEON
Communication owned by them or over which any of them had voting control, so as
to fix the numbers of directors of NEON Communications at nine, to elect two
directors designated by Mode 1 initially John H. Forsgren and Gary D. Simon, one
director designated by Exelon Ventures Corp., initially Robert A. Shinn, and one
member designated by Consolidated Edison Communications, Inc., initially Peter
A. Rust. Each of the Stockholders also agreed not to vote to remove any director
designated by any of the other Stockholders, except for bad faith or willful
misconduct. Mode 1's right to designate two directors shall be reduced to one in
the event its stock ownership is reduced below certain specified levels.
<PAGE>
Each of the Stockholders also granted to the other Stockholders on a pro rata
basis certain rights of first offer with respect to any transfers (including
upon the occurrence of certain bankruptcy or insolvency events) of shares of
Common Stock of Neon Communications owned by it, except for transfers of up to
160,000 shares within any rolling 12-month period, transfers to certain
affiliated parties, and certain change in control transactions with respect to
the ultimate parent of the Stockholder.
In addition, under a certain FiveCom, Inc. Principal Stockholders Agreement (the
"CMP Agreement"), dated May 28, 1998 between Northeast Utitilies, Inc., the
parent of Mode 1, and Central Maine Power Company ("CMP"), Mode 1 and NEON
Communications have certain rights to acquire shares of NEON Communications
owned by CMP and NEON Communications has certain rights to acquire its shares
owned by Mode 1, in each case in the event of a third party offer and upon the
occurrence of certain bankruptcy and insolvency events. NEON Communications has
granted to each of the Stockholders on a pro rata basis an option to acquire any
shares of NEON Communications which NEON Communications has a right to acquire
from CMP and to each of the Stockholders other than Mode 1 on a pro rata basis
an option to acquire any shares of NEON Communications which NEON Communications
has a right to acquire from Mode 1. NEON Communications has agreed to exercise
its rights under the CMP Agreement upon exercise of these rights by the
Stockholders.
Registration Rights Agreement
Under the terms of a Registration Rights Agreement, (the "Registration
Agreement") among NEON Communications, Consolidated Edison Communications, Inc.,
and Exelon Ventures Corp. dated as of September 14, 2000, NEON Communications
granted to each of Exelon Ventures Corp. (with respect to the Shares which it
acquired in the Exelon transaction) and Consolidated Edison Communications,
Inc., (with respect to the shares of NEON Communication which it acquired in the
Transaction) the right to one demand registration on Form S-3 at any time after
the first anniversary of the date of closing of the Transaction, and to
participate in the demand registration of the other, which such offering(s) may
be underwritten at the election of the initiating holder(s). In the event that
Form S-3 is not available, Consolidated Edison Communications, Inc. and Exelon
Ventures Corp. are entitled to jointly demand one registration on Form S-1 in
lieu of their right to demand registration on Form S-3. In addition,
Consolidated Edison Communications, Inc. and Exelon Ventures Corp. were granted
certain "piggyback" registration rights with under the terms of the Registration
Rights Agreement. In connection with any such registration, NEON Communications
and the selling holders will mutually indemnify each other against certain
liabilities, including liabilities under the federal securities laws.
<PAGE>
Item 7. Material to be Filed as Exhibits.
Exhibit A: Subscription Agreement dated November 23, 1999, incorporated by
reference to the Annual Report on Form 10-K for the year ended December
31, 1999 filed by Northeast Optic Network Inc.
Exhibit B: Stockholders' Agreement dated September 14, 2000.
Exhibit C: Registration Rights Agreement dated September 14, 2000.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
/s/ Peter A. Rust
Date: September 25, 2000 Peter A. Rust
President and Chief Executive Officer
Consolidated Edison Communications, Inc.
Date: September 25, 2000 /s/ Hyman Schoenblum
Hyman Schoenblum
Vice President and Controller
Consolidated Edison, Inc.
<PAGE>
EXHIBIT B
NEON COMMUNICATIONS, INC.
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement dated as of September 14, 2000, is entered
into by and among Mode 1 Communications, Inc. a Connecticut corporation ("M1"),
Exelon Ventures Corp., a Pennsylvania corporation ("Exelon"), Consolidated
Edison Communications, Inc., a New York corporation1 ("CEC") and NEON
Communications, Inc., a Delaware corporation (the "Company"). M1, Exelon and CEC
are sometimes referred to in this Agreement collectively as the "Stockholders."
Recitals:
A. M1 owns, either directly or indirectly, certain outstanding
shares of the Common Stock, par value $.01 per share ("Common Stock"), of the
Company;
B. Exelon and CEC shall receive certain shares of the Common Stock of
the Company pursuant to the transactions contemplated by those certain
Subscription Agreements, dated as of November 23, 1999, by and between the
Company, NorthEast Optic Network, Inc. and each of Exelon and CEC (the
"Subscription Agreements"), and those certain System Agreements of even date
herewith, by and between the Company and each of Exelon and CEC (together with
the Subscription Agreements, the "Touchdown Agreements"); and
C. The Company and the Stockholders wish to provide for the
continuing representation of the Stockholders on the Board of Directors of the
Company in the manner set forth below.
In consideration of the mutual covenants contained herein and the
consummation of the transactions contemplated by the Touchdown Agreements, and
for other valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. Voting of Shares.
----------------
(a) In any and all elections of directors of the Company
(whether at a meeting or by written consent in lieu of a meeting), each
Stockholder shall vote or cause to be voted all Shares (as defined in Section 2
below) owned by it, or over which it has voting control, and otherwise use its
respective best efforts, so as to fix the number of directors of the Company at
nine and to elect (i) two members designated by M1, initially John H. Forsgren
and Gary D. Simon, (ii) one member designated by Exelon, initially Robert A.
Shinn and (iii) one member designated by CEC, initially Peter A. Rust; provided,
however, that the Stockholders shall have no obligation to elect any designee
whom the Board of Directors of the Company, in its reasonable discretion, has
deemed an unacceptable candidate for election.
<PAGE>
(b) No Stockholder shall vote to remove any director
designated by another Stockholder, except for bad faith or willful misconduct
with respect to the business affairs of the Company on the part of such
director.
2. Shares. "Shares" shall mean and include any and all shares of Common
Stock and/or shares of any other class of the capital stock of the Company, by
whatever name called, which carry voting rights (including voting rights which
arise by reason of default) and shall include any such shares now owned or
subsequently acquired by a Stockholder, or any of its respective affiliates, as
such term is defined in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended ("Affiliates"), however
acquired, including, without limitation, shares acquired as a result of any
stock splits, stock dividends or recapitalizations. Without limiting the
generality of the foregoing, "Shares" shall include, as applicable, all shares
of Common Stock of the Company received by Exelon or CEC under their respective
Subscription Agreements including, without limitation, any such shares received
by Exelon or CEC under Section 12.04 ("Assignment; No Third Party
Beneficiaries") of their respective Subscription Agreements.
3. Reduction in Board Representation. Subject to the provisions of
Section 4 of this Agreement, in the event that M1 shall hold a number of the
outstanding Shares of the Company which is both (i) equal to or less than the
lower of the number of such shares then held by either Exelon or CEC, and (ii)
less than the number of shares held by such entity on the date hereof (other
than as a result of a reverse stock split, recapitalization or the like), then
M1 shall only be entitled to designate one member of the Board of Directors
pursuant to Section 1(a) of this Agreement.
4. Termination. This Agreement shall terminate in its entirety upon the
sale of all or substantially all of the assets or stock of the Company, whether
by merger, sale of assets or otherwise. If any Stockholder shall hold less than
one half of the percentage of the outstanding Shares of the Company beneficially
owned on the date hereof by Exelon or CEC, whichever is lower (the "Minimum
Percentage"), then such Stockholder's rights and obligations hereunder (but not
the rights and obligations of the other Stockholders hereunder) shall terminate.
5. No Revocation. The voting agreements contained herein are coupled
with an interest and may not be revoked, except by an amendment, modification or
termination effected in accordance with Section 9(e) hereof. Nothing in this
Section 5 shall be construed as limiting the provisions of Section 4 or 9(e)
hereof.
6. Representations and Warranties. Each Stockholder hereby represents
and warrants to the others that, as of the date of this Agreement, such
Stockholder owns, directly or indirectly, the number of Shares set forth
opposite such Stockholder's name on Schedule 1 hereto.
7. Legend. Each of the Stockholders agrees that, upon the execution of
this Agreement and for so long as this Agreement remains in effect, such
Stockholder will cause all certificates for Shares now owned or hereafter
acquired by such Stockholder to be submitted to the Company, which shall then
cause such certificates to be endorsed with a legend in substantially the
following form:
-2-
<PAGE>
"This Certificate and the shares represented hereby are
subject to the provisions of a Stockholders' Agreement, dated
September 14, 2000, by and among certain stockholders of the
Company. A copy of that Stockholders' Agreement is on file at
the principal office of the Company and is available from the
Company upon request."
8. Right of First Offer; Option to Purchase on Certain Events;
Determination of Fair Market Value.
(a) Right of First Offer. Except as set forth in the last
sentence of Section 8(a), in Section 8(e) or in Section 8(h), no Stockholder
shall sell, transfer or otherwise dispose for value or agree to sell, transfer
or otherwise dispose for value, in either case directly or indirectly (i.e., if
control of the Stockholder, or an Affiliate of the Stockholder which holds its
Shares, is sold or otherwise transferred to a third party other than (A) an
Affiliate of the Stockholder or of such Affiliate of the Stockholder or (B) in
or by way of any merger, consolidation, sale of assets or similar transaction
where control of the ultimate parent of the Stockholder is assumed or acquired
by another entity whose common shares are publicly traded), all or any of its
Shares, unless in each such case such Stockholder (the "Offering Stockholder")
shall have first complied with this Agreement. Such Offering Stockholder shall
deliver to each of the other Stockholders (the "Offeree Stockholders") a written
notice (the "Offer Notice") of any proposed or intended sale, transfer or other
disposition for value of the Shares (the "Offered Securities"), which Offer
Notice shall:
(i) identify the number of Shares to be transferred;
(ii) describe the price and other terms upon which they are to be sold,
transferred or otherwise disposed;
(iii)at the election of the Offering Stockholder, identify the persons or
entities to which the Offered Securities are to be sold, transferred or
otherwise disposed (the "Proposed Transferee"); and
(iv) offer to sell or transfer to each of the Offeree Stockholders such portion
of the Offered Securities as the aggregate number of Shares then held by
such Offeree Stockholder bears to the total number of Shares then held by
all of the Offeree Stockholders (the "Basic Amount").
The terms set forth in the Offer Notice is referred to herein as the "Offer". In
determining the pro rata portions of Shares owned by Exelon or CEC, any Shares
that they have a right to acquire if they satisfy certain objectives set forth
in the Subscription Agreements shall be deemed to be owned by them for the
purposes of this Agreement even if not yet issued to them or issued to them but
subject to divestment if those objectives are not satisfied. Notwithstanding the
foregoing, any Stockholder may sell, transfer or otherwise dispose of up to
160,000 Shares in any rolling 12-month period, such amount to be adjusted
appropriately in the event of stock splits, stock dividends, recapitalizations
and the like, or any or all Shares owned beneficially by
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<PAGE>
such Stockholder to an Affiliate of such Stockholder, in either case without
compliance with the terms of this Section 8.
(b) Acceptance Procedures. To accept an Offer, in whole or in
part, an Offeree Stockholder shall deliver a written notice to the Offering
Stockholder (with copies to the other parties to this Agreement) within five
Business Days of the delivery of the Offer Notice (the "Acceptance Date"),
setting forth (i) the portion of such Offeree Stockholder's Basic Amount that
such Offeree Stockholder elects to purchase and (ii) whether such Offeree
Stockholder desires to purchase its pro rata portion or any Offered Securities
not accepted or purchased by the other Offeree Stockholders in accordance with
this Agreement (the "Notice of Acceptance") and confirming its agreement to pay
105% of the price stipulated in Section 8(a)(ii). For purposes of this
Agreement, "Business Day" shall mean any day other than Saturday, Sunday and any
day which is a legal holiday or a day on which banking institutions in New York,
NY are authorized or required by law or other action of any applicable
governmental authority to close.
(c) Sales Procedures. If less than all Offered Securities are
subscribed by a Notice(s) of Acceptance by the Acceptance Date, then the
provisions of this Agreement shall be deemed satisfied and the Offering
Stockholder, during the 100 calendar days following the Acceptance Date, may
sell, transfer or otherwise dispose of the Offered Securities on substantially
the terms stated in the Offer Notice and at a price no lower than the price set
forth in the Offer Notice. If all of the Offered Securities have been subscribed
by a Notice(s) of Acceptance by the Acceptance Date, then the Offeree
Stockholders who have so accepted the Offer shall have 30 calendar days after
the Acceptance Date in which to consummate the purchase (the "Closing Period").
The Closing Period shall be extended by a reasonable period, not to exceed 30
calendar days, in the event that an Offeree Stockholder must obtain regulatory
approval in order to purchase the Offered Securities in compliance with
applicable laws. In the event that any Offeree Stockholder who has submitted a
Notice of Acceptance is unable to consummate the purchase within the Closing
Period for reasons beyond such Offeree Stockholder's control (as such period may
be extended pursuant to the preceding sentence), then the Offering Stockholder,
within 100 calendar days after the expiration of the Closing Period, may sell,
transfer or otherwise dispose of the Offered Securities on substantially the
terms stated in the Offer Notice and at a price no lower than the price set
forth in the Offer Notice. Under no circumstance shall any Offering Stockholder
be required to consummate a sale to any Offeree Stockholder unless and until all
Offered Securities have been subscribed by a Notice(s) of Acceptance from one or
more Offeree Stockholders which are able to consummate their respective
purchases within the Closing Period, or any permitted extension thereof.
Notwithstanding the fact that the compensation offered by the Proposed
Transferee has an in-kind component (as discussed below), all purchases of
Offered Securities by the Offeree Stockholders shall be made in cash, by
certified check or wire transfer of immediately available funds.
(d) Valuation of In-Kind Compensation. If the compensation
offered by the Proposed Transferee has an in-kind component, then the Offering
Stockholder shall submit an appraisal of the cash value of such in-kind
component (which may be prepared by the Offering Stockholder or by a third
party, at the Offering Stockholder's election) to the Offeree Stockholders with
the Offer Notice. If the Offeree Stockholders, or any of them, desire to obtain
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<PAGE>
an independent appraisal of the cash value of the in-kind component, such
Offeree Stockholders may do so at their expense (to be shared pro rata among
such Offeree Stockholders), and, except as set forth in the next sentence, the
Acceptance Period shall run from the date such independent appraisal is rendered
(which date shall not be more than 30 calendar days after the date of the Offer
Notice). If the Offering Stockholder does not accept such independent appraisal,
or the parties cannot otherwise agree on the cash value of the in-kind component
within 15 calendar days of the delivery of such independent appraisal, then the
parties shall submit their respective appraisals to an arbitrator appointed by
the Boston Office of the American Arbitration Association who will choose one of
the appraisals, and the Offering Stockholder and the Offeree Stockholders shall
each be responsible for a pro rata portion of the costs of such arbitration
process, which decision shall be binding upon the parties.
(e) Option to Purchase on Certain Events. Upon any
Stockholder's filing for bankruptcy or other similar relief, making a general
assignment for benefit of its creditors or having a petition for bankruptcy or
similar relief filed against it which results in an order not dismissed within
60 days, the other Stockholders shall have a right of first offer to purchase
their pro rata portions of the Shares owned by such Stockholder's predecessor in
interest (or, in the case of the debtor in possession, owned by such
Stockholder) under the procedures set forth in Sections 8(b) and (c), except
that (i) the applicable purchase price shall be the Fair Market Value, as
determined in accordance with subsection (f) below, and (ii) if an Offeree
Stockholder does not receive an Offer Notice, the rights of the other
Stockholders shall accrue upon the receipt of actual notice of the event
triggering its rights under this subsection (e). The provisions of Sections 8(a)
and 8(b) above shall also govern in the event that the options under this
subsection (e) are not fully exercised.
(f) Determination of Fair Market Value. If the Company's
Common Stock is traded on the Nasdaq National or Small Capital Markets or any
other national securities market, the "Fair Market Value" per share shall be the
average of the closing prices over the 20 trading days preceding the date as of
which the Fair Market Value is to be determined. If the Company's Common Stock
is not so traded, then the parties shall attempt to agree on the Fair Market
Value of the Shares. If not agreed to by the parties within 30 calendar days
after a request seeking an agreement as to Fair Market Value, then the
procedures set forth in Section 8(d) shall apply.
(g) Identity of the Proposed Transferee. If the Offering
Stockholder has elected not to identify the Proposed Transferee in the Offer
Notice and wishes to transfer the right to designate a director or directors as
permitted by Section 1(a) of this Agreement relating to the election of
directors of the Company, then the Offering Stockholder shall notify the other
parties to this Agreement of the name of the Proposed Transferee and the
procedures set forth in Sections 8(a) - (c) shall commence again starting with
the delivery of the notice identifying the Proposed Transferee which, along with
the terms set forth in the original Offer Notice, as they may be modified in the
notice identifying the Proposed Transferee, shall be deemed to constitute a new
Offer Notice.
(h) Rights under Principal Stockholders' Agreement. Northeast
Utilities ("NU"), the parent of M1, is a party to that certain FiveCom, Inc.
Principal Stockholders Agreement, dated May 28, 1998 (the "NU/CMP Agreement")
with Central Maine Power
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<PAGE>
Company ("CMP"). As long as the NU/CMP Agreement remains in effect, the terms of
this Section 8(h) shall apply.
(i) The Company hereby agrees that, in the event that the Company is entitled to
purchase shares of the Common Stock of the Company held by CMP, Mainecom
Services or any other Affiliate of CMP (the "CMP Shares") pursuant to Article 2
of the NU/CMP Agreement, the Company will forward to the Stockholders a copy of
any notice received by the Company under Section 2.1(a) or 2.1 (b) of the NU/CMP
Agreement, herein referred to as a "CMP Offer Notice") within five Business Days
of receiving such notice. Except for the price for the CMP Shares, which shall
be as set forth in the CMP Offer Notice, and except as otherwise set forth
below, the procedures set forth in Section 8(b) and Section 8(c) of this
Agreement shall then apply as if the Company were the Offering Stockholder and
the CMP Shares were the Offered Securities. The Company shall purchase such
number of CMP Shares as have been subscribed for by a Notice(s) of Acceptance
from one or more Offeree Stockholders which are able to consummate their
respective purchases within the Closing Period, which, for purposes of this
Section 8(h)(i) shall be deemed to end no later than 30 calendar days after
delivery of the CMP Offer Notice to the Company (up to the total number of CMP
Shares offered to the Company in the CMP Offer Notice). If the Company's
entitlement to purchase the CMP Shares arises pursuant to Section 2.1(b) of the
NU/CMP Agreement, the Closing Period may be extended for a period of 120
calendar days after the date on which CMP or the Company makes a request for an
agreement as to Fair Market Value, as provided in Section 2.1(c) of the NU/CMP
Agreement, and the Offeree Stockholders who have agreed to purchase CMP Shares
hereby agree to pay the Fair Market Value negotiated by the Company in
accordance with the provisions of Section 2.1(c) of the NU/CMP Agreement.
Notwithstanding anything in Section 8(c) of this Agreement to the contrary, the
Offeree Stockholders who have agreed to purchase CMP Shares will deposit the
purchase price for their portion of the CMP Shares with the Company on or prior
to the last day of the Closing Period, and the Company will deliver to each
Offeree Stockholder the number of CMP Shares subscribed to by such Offeree
Stockholder promptly upon delivery of such shares to the Company. Any Offeree
Stockholder who fails to deposit the purchase price for its portion of the CMP
Shares on or prior to the last day of the Closing Period shall be deemed to have
withdrawn its Notice of Acceptance.
(ii) Notwithstanding anything to the contrary contained in this Agreement, M1
shall satisfy its obligations under Section 8(a) of this Agreement by sending a
copy of the Offer Notice to the Company (the "M1 Offer Notice", which term shall
include any notice received by the Company under Section 2.1(a) or 2.1(b) of the
NU/CMP Agreement). The Company shall immediately forward a copy of the M1 Offer
Notice to the other Stockholders, and, except as set forth below, the procedures
set forth in Section 8(b) and Section 8(c) of this Agreement shall then apply as
if the Company were the Offering Stockholder. The Company shall purchase such
number of Offered Securities offered to the Company in the M1 Offer Notice as
have been subscribed for by a Notice(s) of Acceptance from one or more Offeree
Stockholders which are able to consummate their respective purchases within the
Closing Period, which, for purposes of this Section 8(h)(ii) shall be deemed to
be no later than 30 calendar days after delivery of the M1 Offer Notice to the
Company, unless the Company is purchasing the Offered Securities pursuant to
Section 2.1(b) of the NU/CMP Agreement in which case the Closing Period may be
extended for a period of 120 calendar days after the date on which NU or the
Company makes a request
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<PAGE>
for an agreement as to Fair Market Value (as defined in the NU/CMP Agreement),
provided, however, NU hereby agrees that the Fair Market Value shall be
determined in accordance with Section 8(f) of this Agreement and not the NU/CMP
Agreement. Notwithstanding anything in Section 8(c) of this Agreement to the
contrary, the Offeree Stockholders who have agreed to purchase Offered
Securities under this Section 8(h)(ii) will deposit the purchase price for their
portion of the Offered Securities with the Company on or prior to the last day
of the Closing Period, and the Company will deliver to each Offeree Stockholder
the number of Offered Securities subscribed to by such Offeree Stockholder
promptly upon delivery of such shares to the Company. Any Offeree Stockholder
who fails to deposit the purchase price for its portion of the Offered
Securities set forth in the M1 Offer Notice on or prior to the last day of the
Closing Period shall be deemed to have withdrawn its Notice of Acceptance.
(iii) NU agrees that it will enforce the obligation of CMP under the NU/CMP
Agreement to offer the CMP Shares to the Company pursuant to the terms of
Article 2 of the NU/CMP Agreement.
9. General.
-------
(a) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(b) Specific Performance. In addition to any and all other remedies that
may be available at law in the event of any breach of this Agreement, each
Stockholder shall be entitled to specific performance of the agreements and
obligations of the other Stockholders hereunder and to such other injunctive or
other equitable relief as may be granted by a court of competent jurisdiction.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware (without reference to
the conflicts of law provisions thereof).
(d) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given (as of the time of delivery or, in the case of
a telecopied communication, of confirmation and accompanied by another manner of
giving notice provided in this Section) if delivered personally, telecopied
(which is confirmed) or sent by overnight courier (providing proof of delivery)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
if to M1:
Mode 1 Communications, Inc.
107 Selden Street
Berlin, CT 06037
Attention: John H. Forsgren
Facsimile: (860) 665-3718
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if to Exelon:
Exelon Ventures Corp.
2301 Market Street
Philadelphia, PA 19101
Attention: President
Facsimile: (215) 841-6374
with a copy to:
PECO Law Department
2301 Market Street, 23rd Floor
Philadelphia, PA 19101
Attention: John Halderman
Facsimile: 215-841-4474
if to CEC:
Consolidated Edison Communications, Inc.
132 West 31st Street 13th Floor
New York, NY 10001
Attention: President
Facsimile: (212) 324-5050
with a copy to:
Consolidated Edison, Inc.
4 Irving Place, Room 1800
New York, NY 10003
Attention: Senior Vice President and General Counsel
Facsimile: (212) 674-7329
if to the Company:
NorthEast Optic Network, Inc.
2200 West Park Drive
Westborough, MA 01581
Attention: President
Facsimile: (508) 616-7895
(e) Complete Agreement; Amendments. This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and supersedes all prior agreements and understandings relating
to such subject matter. No amendment, modification or termination of, or waiver
under, any provision of this Agreement shall be valid unless in writing and
signed by all Stockholders (and, with respect to Section 8(h), the Company and
NU).
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<PAGE>
(f) Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa.
(g) Counterparts; Facsimile Signatures. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, and
all of which together shall constitute one and the same document. This Agreement
may be executed by facsimile signatures.
(h) Section Headings. The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit or restrict the contractual
obligations of the parties.
(i) Assignment; Transfers of Shares; No Third Party Beneficiaries;
Successors and Assigns.
(1) No Stockholder hereunder shall assign its rights or obligations under this
Agreement to any third person or entity (except to an Affiliate of such
Stockholder), unless and until (a) such Stockholder shall have complied
with Section 8 hereof and (b) such Stockholder shall have transferred to
such assignee an amount of Shares (i) which constitutes at least the
Minimum Percentage and (ii) such that, after giving effect to such
transfer, the Stockholder no longer holds any Shares, provided that such
transferee shall have agreed to be bound by the terms of this Agreement.
(2) The Company shall not effect any transfer of Shares in connection with any
transfer or assignment not in compliance with the terms of this Agreement.
(3) Nothing in this Agreement is intended to confer upon any other person not
party to this Agreement any rights or remedies hereunder.
(4) The terms of his Agreement shall be binding upon the parties hereto and
their respective successors and assigns.
(j) Effectiveness. This Agreement shall become binding upon each party upon
execution of this Agreement by such party. No party shall have the right to
exercise its rights under this Agreement until it has executed this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Stockholders'
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
MODE 1 COMMUNICATIONS, INC.
By: /s/ David R. McHale
Name: David R. McHale
Title: Vice President and Treasurer
EXELON VENTURES CORP.
By: /s/ Gregory A. Cucchi
Name: Gregory A. Cucchi
Title: Chairman and Chief Executive Officer
CONSOLIDATED EDISON COMMUNICATIONS, INC.
By: /s/ John F. Pinto
Name: John F. Pinto
Title: Vice President, Engineering
NEON COMMUNICATIONS, INC.
By: /s/ Victor Colantonio
Name: Victor Colantonio
Title: President
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<PAGE>
Northeast Utilities executes this Agreement for the sole purpose of being bound
by its obligations under Section 8(h) hereof.
NORTHEAST UTILITIES
By: /s/ David R. McHale
Name: David R. McHale
Title: Vice President and Treasurer
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Schedule 1
Mode 1 Communications, Inc. 4,774,038 Shares
Exelon Ventures Corp. 2,131,143 Shares
Consolidated Edison
Communications, Inc. 2,476,735 Shares
<PAGE>
EXHIBIT C
NEON COMMUNICATIONS, INC.
REGISTRATION RIGHTS AGREEMENT 1
-----------------------------
This Agreement dated as of September 14, 2000 is entered into by and
among NEON Communications, Inc., a Delaware corporation (the "Company"),
Consolidated Edison Communications, Inc., a New York corporation ("CEC") and
Exelon Ventures Corp., a Pennsylvania corporation ("Exelon," and together with
CEC, the "Investors").
Recitals
WHEREAS, the Company has entered into a separate Subscription Agreement
with each of CEC and Exelon dated as of November 23, 1999 (the "Subscription
Agreements"); and
WHEREAS, the Company and the Investors desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Certain Definitions.
-------------------
As used in this Agreement, the following terms shall have the following
respective meanings:
"Business Day" means any day other than Saturday, Sunday and
any day which is a legal holiday or a day on which banking institutions in New
York are authorized or required by law or other action of a governmental
authority to close.
"Commission" means the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
--------
1 In the event that the Reorganization is not consummated on or prior to
the Closing Date of the Subscription Agreement, then Exelon and CEC will assign
their respective Shares to Exelon Capital Partners, Inc. and CEC Delaware, Inc.,
respectively, on the Closing Date and the parties to this agreement will be
amended accordingly.
<PAGE>
"Common Stock" means the common stock, $.01 par value per
share, of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Initiating Holders" means the Investor or Investors
initiating a request for registration pursuant to Section 2.1(a).
"Other Holders" shall have the meaning set forth in Section
2.1(c).
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"Registration Statement" means a registration statement filed
by the Company with the Commission for a public offering and sale of securities
of the Company (other than a registration statement on Form S-8 or Form S-4, or
their successors, or any other form for a similar limited purpose, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation).
"Registration Expenses" means the expenses described in
Section 2.4.
"Registrable Shares" means (i) the Shares and (ii) any other
shares of Common Stock issued in respect of the Shares (because of stock splits,
stock dividends, reclassifications, recapitalizations, or similar events);
provided, however, that shares of Common Stock which are Registrable Shares
shall cease to be Registrable Shares upon (i) any sale pursuant to a
Registration Statement or Rule 144 under the Securities Act (ii) their
eligibility for sale pursuant to Rule 144(k) under the Securities Act or (iii)
any sale in any manner to a person or entity which, by virtue of Section 3 of
this Agreement, is not entitled to the rights provided by this Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Selling Stockholder" means any Stockholder owning Registrable
Shares included in a Registration Statement.
"Shares" means the CEC NEON shares and the Exelon NEON shares
as defined in the Subscription Agreements.
<PAGE>
"Stockholders" means the Investors and any persons or entities
to whom the rights granted under this Agreement are transferred by any
Investors, their successors or assigns pursuant to Section 3 hereof.
2. Registration Rights
-------------------
2.1 Required Registrations.
-----------------------
(1) At any time after the first anniversary of the closing of the Subscription
Agreements, either Investor may request, in writing, that the Company effect the
registration on Form S-3 (or any successor form or any other registration
statement form which the Company is eligible to use) of Registrable Shares owned
by such Investor having an aggregate value of at least $5,000,000 (based on the
then current market price or fair value).
(2) Upon receipt of any request for registration pursuant to this Section 2, the
Company shall promptly give written notice of such proposed registration to all
other Stockholders. Such Stockholders shall have the right, by giving written
notice to the Company within 30 days after the Company provides its notice, to
elect to have included in such registration such of their Registrable Shares as
such Stockholders may request in such notice of election, subject in the case of
an underwritten offering to the approval of the managing underwriter as provided
in Section 2.1(c) below. Thereupon, the Company shall, as expeditiously as
possible, effect the registration of all Registrable Shares which the Company
has been requested to so register.
(3) If the Initiating Holders intend to distribute the Registrable Shares
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to Section 2.1(a), and the
Company shall include such information in its written notice referred to in
Section 2.1(b). The right of any other Stockholder to include its Registrable
Shares in such registration pursuant to Section 2.1(a) shall be conditioned upon
such other Stockholder's participation in such underwriting on the terms set
forth herein. If the Company desires that any officers or directors of the
Company holding securities of the Company be included in any registration for an
underwritten offering requested pursuant to Section 2.1(c) or if other holders
of securities of the Company who are entitled, by contract with, or other
instrument executed by, the Company prior to the date hereof, to have securities
included in such a registration (the "Other Holders") request such inclusion,
the Company may include the securities of such officers, directors and Other
Holders in such registration and underwriting on the terms set forth herein. The
Company shall (together with all Stockholders, officers, directors and Other
Holders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form (including, without
limitation, customary
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<PAGE>
indemnification and contribution provisions on the part of the Company) with the
managing underwriter; provided that such underwriting agreement shall not
provide for indemnification or contribution obligations on the part of
Stockholders materially greater than the obligations of the Stockholders
pursuant to Section 2.5. Notwithstanding any other provision of this Section
2.1(c), if the managing underwriter advises the Company that the inclusion of
all shares requested to be registered would adversely affect the offering, the
securities of the Company held by officers or directors of the Company (other
than Registrable Shares) shall be excluded from such registration and
underwriting to the extent deemed advisable by the managing underwriter, and if
a further limitation of the number of shares is required, the number of shares
that may be included in such registration and underwriting shall be allocated
among all Other Holders and holders of Registrable Shares pro rata in proportion
to the respective number shares they have requested to be registered. If any
holder of Registrable Shares, officer, director or Other Holder who has
requested inclusion in such registration as provided above disapproves of the
terms of the underwriting, such person may elect to withdraw therefrom by
written notice to the Company, and the securities so withdrawn shall also be
withdrawn from registration. If the managing underwriter has not limited the
number of Registrable Shares or other securities to be underwritten, the Company
may include securities for its own account in such registration if the managing
underwriter so agrees and if the number of Registrable Shares and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.
(4) The Initiating Holders shall have the right to select the managing
underwriter(s) for any underwritten offering requested pursuant to Section
2.1(a), subject to the approval of the Company, which approval will not be
unreasonably withheld.
(5) The Company shall not be required to effect more than two registrations
pursuant to Section 2.1(a), and neither Investor, acting individually, shall be
entitled to request a registration pursuant to Section 2.1(a) more than once. In
addition, in the event that Form S-3 is not available to the Company, the
Company shall not be required to effect more than one registration on Form S-1
pursuant to Section 2.1(a), and any request to effect a registration on Form S-1
shall be made jointly by both Investors. For purposes of this Section 2.1(e), a
Registration Statement shall not be counted until such time as such Registration
Statement has been declared effective by the Commission (unless the Initiating
Holders withdraw their request for such registration (other than as a result of
information concerning the business or financial condition of the Company which
is made known to the Stockholders after the date on which such registration was
requested) and elect not to pay the Registration Expenses therefor pursuant to
Section 2.4).
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<PAGE>
(6) If at the time of any request to register Registrable Shares by Initiating
Holders pursuant to this Section 2.1, the Company is engaged or has plans to
engage in a registered public offering or is engaged in any other activity
which, in the good faith determination of the Company's Board of Directors,
would be adversely affected by the requested registration, then the Company may
at its option direct that such request be delayed for a period not in excess of
90 days from the date of such request, such right to delay a request to be
exercised by the Company not more than once in any 12-month period.
2.2 Incidental Registration.
-----------------------
(1) Whenever the Company proposes to file a Registration Statement (other than a
Registration Statement filed pursuant to Section 2.1) at any time and from time
to time, it will, prior to such filing, give written notice to all Stockholders
of its intention to do so; provided, that no such notice need be given if no
Registrable Shares are to be included therein as a result of a determination of
the managing underwriter pursuant to Section 2.2(b). Upon the written request of
a Stockholder or Stockholders given within 20 days after the Company provides
such notice, the Company shall use its best efforts to cause all Registrable
Shares which the Company has been requested by such Stockholder or Stockholders
to register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of such Stockholder or Stockholders;
provided that the Company shall have the right to postpone or withdraw any
registration effected pursuant to this Section 2.2 without obligation to any
Stockholder.
(2) If the registration for which the Company gives notice pursuant to Section
2.2(a) is a registered public offering involving an underwriting, the Company
shall so advise the Stockholders as a part of the written notice given pursuant
to Section 2.2(a). In such event, the right of any Stockholder to include its
Registrable Shares in such registration pursuant to Section 2.2 shall be
conditioned upon such Stockholder's participation in such underwriting on the
terms set forth herein. All Stockholders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for the
underwriting by the Company. Notwithstanding any other provision of this Section
2.2, if the managing underwriter determines that the inclusion of all shares
requested to be registered would adversely affect the offering, the Company may
limit the number of Registrable Shares to be included in the registration and
underwriting. The Company shall so advise all holders of Registrable Shares
requesting registration, and the number of shares that are entitled to be
included in the registration and underwriting shall be allocated in the
following manner. The securities of the Company held by holders other than
Stockholders and Other Holders shall be excluded from such registration and
underwriting to the extent deemed
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<PAGE>
advisable by the managing underwriter, and, if a further limitation on the
number of shares is required, the number of shares that may be included in such
registration and underwriting shall be allocated among all Stockholders and
Other Holders requesting registration in proportion, as nearly as practicable,
to the respective number of shares of Common Stock which they held at the time
the Company gives the notice specified in Section 2.2(a). If any Stockholder or
Other Holder would thus be entitled to include more securities than such holder
requested to be registered, the excess shall be allocated among other requesting
Stockholders and Other Holders pro rata in the manner described in the preceding
sentence. If any holder of Registrable Shares or any officer, director or Other
Holder disapproves of the terms of any such underwriting, such person may elect
to withdraw therefrom by written notice to the Company, and any Registrable
Shares or other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
(c) Notwithstanding the foregoing, the Company shall not be required,
pursuant to this Section 2.2, to include any Registrable Shares in a
Registration Statement if such Registrable Shares can then be sold pursuant to
Rule 144(k) under the Securities Act.
2.3 Registration Procedures.
------------------------
(1) If and whenever the Company is required by the provisions of this Agreement
to use its best efforts to effect the registration of any Registrable Shares
under the Securities Act, the Company shall:
(1) file with the Commission a Registration Statement with respect to such
Registrable Shares and use its best efforts to cause that Registration Statement
to become effective as soon as possible;
(2) as expeditiously as possible prepare and file with the Commission any
amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to comply with the
provisions of the Securities Act (including the anti-fraud provisions thereof)
and to keep the Registration Statement effective for 12 months from the
effective date or such lesser period until all such Registrable Shares are sold;
(3) as expeditiously as possible furnish to each Selling Stockholder such
reasonable numbers of copies of the Prospectus, including any preliminary
Prospectus, in conformity with the requirements of the Securities Act, and such
other documents as such Selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by such Selling Stockholder;
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<PAGE>
(4) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the Selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the Selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the Selling Stockholder; provided, however, that the Company shall not be
required in connection with this paragraph (iv) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction;
(5) as expeditiously as possible, cause all such Registrable Shares to be
listed on each securities exchange or automated quotation system on which
similar securities issued by the Company are then listed;
(6) promptly provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such registration
statement;
(7) promptly make available for inspection by the Selling Stockholders, any
managing underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant or other agent retained
by any such underwriter or selected by the Selling Stockholders, all financial
and other records, pertinent corporate documents and properties of the Company
and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such Registration
Statement;
(8) as expeditiously as possible, notify each Selling Stockholder, promptly
after it shall receive notice thereof, of the time when such Registration
Statement has become effective or a supplement to any Prospectus forming a part
of such Registration Statement has been filed; and
(9) as expeditiously as possible following the effectiveness of such
Registration Statement, notify each seller of such Registrable Shares of any
request by the Commission for the amending or supplementing of such Registration
Statement or Prospectus.
(2) If the Company has delivered a Prospectus to the Selling Stockholders and
after having done so the Prospectus is amended to comply with the requirements
of the Securities Act, the Company shall promptly notify the Selling
Stockholders and, if requested, the Selling Stockholders shall immediately cease
making offers of Registrable Shares and return all Prospectuses to the Company.
The Company shall promptly provide the Selling Stockholders with revised
Prospectuses
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<PAGE>
and, following receipt of the revised Prospectuses, the Selling Stockholders
shall be free to resume making offers of the Registrable Shares.
(3) In the event that, in the judgment of the Company, it is advisable to
suspend use of a Prospectus included in a Registration Statement due to pending
material developments or other events that have not yet been publicly disclosed
and as to which the Company believes public disclosure would be detrimental to
the Company, the Company shall notify all Selling Stockholders to such effect,
and, upon receipt of such notice, each such Selling Stockholder shall
immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Selling Stockholder has received copies of a
supplemented or amended Prospectus or until such Selling Stockholder is advised
in writing by the Company that the then current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under this
Section 2.3(c) to suspend sales of Registrable Shares for a period in excess of
60 days in any 365-day period.
2.4 Allocation of Expenses.
-----------------------
The Company will pay all Registration Expenses for all registrations under this
Agreement; provided, however, that if a registration under Section 2.1 is
withdrawn at the request of the Initiating Holders (other than as a result of
information concerning the business or financial condition of the Company which
is made known to the Stockholders after the date on which such registration was
requested) and if the Initiating Holders elect not to have such registration
counted as a registration requested under Section 2.1, the requesting
Stockholders shall pay the Registration Expenses of such registration pro rata
in accordance with the number of their Registrable Shares included in such
registration. For purposes of this Section, the term "Registration Expenses"
shall mean all expenses incurred by the Company in complying with this
Agreement, including, without limitation, all registration and filing fees,
exchange listing fees, printing expenses, fees and expenses of counsel for the
Company and the fees and expenses of one counsel selected by the Selling
Stockholders to represent the Selling Stockholders, state Blue Sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration, but excluding underwriting discounts, selling commissions and
the fees and expenses of Selling Stockholders' own counsel (other than the
counsel selected to represent all Selling Stockholders).
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<PAGE>
2.5 Indemnification and Contribution.
---------------------------------
(1) In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless the seller of such Registrable Shares, each underwriter of such
Registrable Shares, and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act or the Exchange Act against
any losses, claims, damages or liabilities, joint or several, to which such
seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse such seller, underwriter
and each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such seller, underwriter or controlling person
specifically for use in the preparation thereof.
(2) In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, each seller of Registrable Shares,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors and officers and each underwriter (if any) and each person, if
any, who controls the Company or any such underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company, such directors and
officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated
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<PAGE>
therein or necessary to make the statements therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information relating to such seller furnished in writing to the Company by or on
behalf of such seller specifically for use in connection with the preparation of
such Registration Statement, prospectus, amendment or supplement; provided,
however, that the obligations of a Stockholder hereunder shall be limited to an
amount equal to the net proceeds to such Stockholder of Registrable Shares sold
in connection with such registration.
(3) Each party entitled to indemnification under this Section (the "Indemnified
Party") shall give notice to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom; provided, that counsel for the Indemnifying Party, who
shall conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld); and,
provided, further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section except to the extent that the Indemnifying Party is adversely
affected by such failure. The Indemnified Party may participate in such defense
at such party's expense; provided, however, that the Indemnifying Party shall
pay such expense if representation of such Indemnified Party by the counsel
retained by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between the Indemnified Party and any other party
represented by such counsel in such proceeding; provided further that in no
event shall the Indemnifying Party be required to pay the expenses of more than
one law firm per jurisdiction as counsel for the Indemnified Party. The
Indemnifying Party also shall be responsible for the expenses of such defense if
the Indemnifying Party does not elect to assume such defense. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld.
(4) In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this Section 2.5 is due in accordance
with its terms but for any reason is held to be unavailable to an Indemnified
Party in respect to any losses, claims, damages and liabilities referred to
herein, then the Indemnifying Party shall, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages or liabilities to which such
party may be subject in such
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<PAGE>
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the Stockholders on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Stockholders shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact related
to information supplied by the Company or the Stockholders and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Stockholders agree that
it would not be just and equitable if contribution pursuant to this Section 2.5
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph of Section 2.5, (a) in no case
shall any one Stockholder be liable or responsible for any amount in excess of
the net proceeds received by such Stockholder from the offering of Registrable
Shares and (b) the Company shall be liable and responsible for any amount in
excess of such proceeds; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve such
party from any other obligation it or they may have thereunder or otherwise
under this Section. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld.
2.6 Other Matters with Respect to Underwritten Offerings.
---------------------------------------------------------
In the event that Registrable Shares are sold pursuant to a Registration
Statement in an underwritten offering pursuant to Section 2.1, the Company
agrees to (a) enter into an underwriting agreement containing customary
representations and warranties with respect to the business and operations of
the Company and customary covenants and agreements to be performed by the
Company, including without limitation customary provisions with respect to
indemnification by the Company of the underwriters of such offering; (b) use its
best efforts to cause its legal counsel to render customary opinions to the
underwriters with respect to the Registration Statement; and (c) use its best
efforts to cause its independent public accounting firm to issue customary "cold
comfort letters" to the underwriters with respect to the Registration Statement.
2.7 Information by Holder.
----------------------
Each holder of Registrable Shares included in any registration shall furnish to
the Company such information regarding such holder and the distribution proposed
by such holder as the Company may reasonably
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<PAGE>
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
2.8 Confidentiality of Notices.
----------------------------
Any Stockholder receiving any written notice from the Company regarding the
Company's plans to file a Registration Statement shall treat such notice
confidentially and shall not disclose such information to any person other than
as necessary to exercise its rights under this Agreement.
2.9 Rule 144 Requirements.
-----------------------
The Company hereby agrees to:
(1) make and keep current public information about the Company available,
as those terms are understood and defined in Rule 144;
(2) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(3) furnish to any holder of Registrable Shares upon request (i) a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144 and of the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other reports
and documents of the Company as such holder may reasonably request to avail
itself of any similar rule or regulation of the Commission allowing it to sell
any such securities without registration.
2.10 Termination.
------------
All of the Company's obligations to register Registrable Shares under Sections
2.1 and 2.2 of this Agreement shall terminate five years after the date hereof.
3. Transfers of Rights.
--------------------
This Agreement, and the rights and obligations of each Investor hereunder, may
be assigned by such Investor to any person or entity to which at least 25% of
the Shares held by such Investor are transferred by such Investor, provided,
however, that for purposes of Section 2.1(a), any such transferees, together
with the transferring Investor if such Investor continues to hold any
Registrable Securities, shall be counted as one Investor, and any decision to
demand a registration pursuant to Section 2.1(a) shall be made by the holders of
a majority of the Registrable Securities held by the transferring Investor and
such transferees.
4. General.
---------
(1) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity orenforceability of any other
provision of this Agreement.
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<PAGE>
(2) Specific Performance. In addition to any and all other remedies that
may be available at law in the event of any breach of this Agreement, each
Investor shall be entitled to specific performance of the agreements and
obligations of the Company hereunder and to such other injunctive or other
equitable relief as may be granted by a court of competent jurisdiction.
(3) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts (without
reference to the conflicts of law provisions thereof).
(4) Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed delivered (i) two
Business Days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) one Business Day after being sent via a
reputable nationwide overnight courier service guaranteeing next Business Day
delivery, in each case to the intended recipient as set forth below:
If to the Company, to: NEON Communications, Inc.
2200 West Park Drive
Westborough, MA 01581
Attention: President
or at such other address or addresses as may have been furnished in writing by
the Company to the Investors
<PAGE>
with a copy to: Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attention: Alexander A. Bernhard, Esq.
Facsimile Number: (617) 526-5000
If to Exelon, to: Exelon Ventures Corp.
2301 Market Street
Philadelphia, PA 19101
Attention: President
Facsimile: (215) 841-6374
with a copy to: PECO Law Department
2301 Market Street, 23rd Floor
Philadelphia, PA 19101
Attention: John Halderman
Facsimile Number: 215-841-4474
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<PAGE>
If to CEC: Consolidated Edison Communications, Inc.
132 West 31st Street 13th Floor
New York, NY 10001
Attention: President
Facsimile Number: (212) 324-5050
with a copy to: Consolidated Edison, Inc.
4 Irving Place, Room 1800
New York, NY 10003
Attention: Senior Vice President
and General Counsel
Facsimile Number: (212) 324-5001]
or at such other addresses as may have been furnished in writing by CEC or
Exelon to the Company.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
(5) Complete Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to such subject
matter.
(6) Amendments and Waivers. Any term of this Agreement may be amended or
terminated and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of at
least 51% of the Registrable Shares held by all of the Stockholders; provided,
that this Agreement may be amended with the consent of the holders of less than
all Registrable Shares only in a manner which applies to all such holders in the
same fashion. Any such amendment, termination or waiver effected in accordance
with this Section 4(f) shall be binding on all parties hereto, even if they do
not execute such consent. No waivers of or exceptions to any term, condition or
provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision.
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<PAGE>
(7) Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa.
(8) Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of which together shall constitute one and the same document. This Agreement may
be executed by facsimile signatures.
(9) Section Headings. The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit or restrict the contractual
obligations of the parties.
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<PAGE>
Executed as of the date first written above.
NEON COMMUNICATIONS, INC.
By: /s/ Victor Colantonio
Name: Victor Colantonio
Title: President
CONSOLIDATED EDISON COMMUNICATIONS, INC.
By: /s/ John F. Pinto
Name: John F. Pinto
Title: Vice President, Engineering
EXELON VENTURES CORP.
By: /s/ Gregory A. Cucchi
Name: Gregory A. Cucchi
Title: Chairman and Chief Executive Officer
