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 FIELD PURSUANT TO RULE 13d-2(a)
(Amendment No. __ )1
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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)
Paul Baskowsky, Esq., Dilworth Paxson LLP, 1735 Market Street,
3200 Mellon Bank Center, Phila. Pa 19103 215-575-7000
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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.
(Continued on following pages)
--------
1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE>
Schedule 13D Forms
CUSIP No. 640 506 10 1
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATIN NO. OF ABOVE PERSONS (ENTITIES ONLY)
Exelon Ventures Corp. EIN: 23-7866286
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO, WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
----------------------------- ------------ ------------------------------------
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
2,131,143
----------------------------- ------------ ------------------------------------
10 SHARED DISPOSITIVE POWER
None
-------------- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,381,9161
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
56.3 %
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
1 Includes 7,250,773 shares beneficially held by others who, together with
Exelon Ventures Corp., may be held to constitute a group.
<PAGE>
Schedule 13D Forms
CUSIP No. 640 506 10 1
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATIN NO. OF ABOVE PERSONS (ENTITIES ONLY)
PECO Energy Company EIN: 23-0970240
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
None
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
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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
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,381,9162
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
56.3 %
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14 TYPE OF REPORTING PERSON*
CO, HC
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
2 Includes 7,250,773 shares beneficially held by others who may be held to
constitute a group of which subsidiary is a member.
<PAGE>
Item 1. Security and Issuer.
(a) Class:
Common Stock, par value $.01 per share
(b) Name of Isssuer:
NEON Communications, Inc
(c) Address of Issuer's Principal Executive Office:
2200 West Park Drive, Westborough, Massachusetts 01851
Item 2. Identity and Background.
PECO Energy Company, a Pennsylvania corporation, owns all of the issued and
outstanding stock of Exelon Ventures Corp.
(a) Name of Filing Person:
PECO Energy Company
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Provider of power generation and other services.
Directors of PECO Energy Company:
(a) Name:
Corbin A. McNeil, Jr.
(b) Residence or Business Address:
2301 Market Street, S26-1, Philadelphia, PA 19103
(c) Present Principal Occupation:
Chairman, President and Chief Executive Officer of PECO Energy Company.
(a) Name:
Susan W. Catherwood
(b) Residence or Business Address:
2301 Market Street, Philadelphia PA 19103
(c) Present Principal Occupation:
Former chairman of the Trustee Board,
University of Pennsylvania Medical Center and Health System.
<PAGE>
(a) Name:
Daniel L. Cooper
(b) Residence or Business Address:
2301 Market Street, Philadelphia PA 19103
(c) Present Principal Occupation:
Former Vice-President and General Manager, Nuclear
Services Division Gilbert/Commonwealth, Inc.
(a) Name:
M. Walter D'Alessio
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Prinicipal Occupation:
Chairman, President and Chief Executive Officer
Legg Mason Real Estate Services.
(a) Name:
G. Fred DiBona, Jr.
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
President and Chief Executive Officer, Independence Blue Cross.
(a) Name:
R. Keith Elliott
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Chairman and Chief Executive Officer, Hercules Incorporated.
(a) Name:
Richard H. Glanton, ESQ.
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Partner of the law firm Reed Smith Shaw & McClay, LLP.
<PAGE>
(a) Name:
Rosemarie B. Greco
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Principal, GRECO Ventures.
(a) Name:
Dr. John M. Palms
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Office of the President of the University of South Carolina.
(a) Name:
Joseph F. Paquette, Jr.
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Former President, Chief Executive Officer and Chief Operating
Officer of PECO Energy Company.
(a) Name:
Ronald Rubin
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103.
(c) Present Principal Occupation:
Chief Executive Officer, The Pennsylvania Real Estate Investment Trust.
(a) Name:
Robert Subin
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Former Senior Vice-President Global Sourcing and Engineering,
Campbell Soup Company.
Officers of PECO Energy Company:
(a) Name:
Corbin A. McNeil, Jr.
(b) Residence or Business Address:
2301 Market Street, S26-1, Philadelphia, PA 19103
(c) Present Principal Occupation:
Chairman, President and Chief Executive Officer.
<PAGE>
(a) Name:
Michael J. Egan
(b) Residence or Business Address:
2301 Market Street, S26-1, Philadelphia, PA 19103
(c) Present Principal Occupation:
Senior Vice-President Finance and Chief Financial Officer.
(a) Name:
Gerald R. Rainey
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
President and Chief Nuclear Officer, PECO Energy Nuclear.
(a) Name:
James W. Durham
(b) Residence or Business Address:
2301 Market Street, S26-1, Philadelphia, PA 19103
(c) Present Principal Occupation:
Senior Vice-President and General Counsel.
(a) Name:
Kenneth G. Lawrence
(b) Residence or Business Address:
2301 Market Street, S24-1, Philadelphia, PA 19103
(c) Present Principal Occupation:
Senior Vice-President, Corporate and President, PECO Energy Distribution.
(d) , (e) Neither PECO Energy Company nor, to the best knowledge of PECO Energy
Company, has any director or officer of PECO Energy Company, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), or
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:
PECO Energy Company is organized under the laws of the Commonwealth of
Pennsylvania.
Each of PECO Energy Company's Officers and Directors are citizens of the United
States of America.
<PAGE>
(a) Name of Person Filing:
Exelon Ventures Corp., a Pennsylvania corporation, is a wholly-owned
subsidiary of PECO Energy Company.
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Owns and manages capital investments.
Directors of Exelon Ventures Corp:
(a) Name:
Gregory A. Cucchi
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Chairman, Chief Executive Officer, Exelon Ventures Corp.
(a) Name:
Robert A. Shinn
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
President, Exelon Ventures Corp.
(a) Name:
Michael J. Eagan
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Senior Vice-President Finance and Chief Financial Officer
of PECO Energy Company.
Officers of Exelon Corp:
(a) Name:
Gregory A. Cucchi
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Chairman, Chief Executive Officer.
<PAGE>
(a) Name:
Joseph J. Kerecman
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Vice-President
(a) Name:
Katherine K. Combs
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Secretary
(a) Name:
Robert A. Shinn
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
President
(a) Name:
J. Barry Mitchell
(b) Residence or Business Address:
2301 Market Street, Philadelphia, PA 19103
(c) Present Principal Occupation:
Treasurer
(d), (e) Neither Exelon Ventures Corp. nor, to the best knowledge of Exelon
Ventures Corp., has any director or officer of Exelon Ventures Corp., been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or 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:
Exelon Ventures Corp. is organized under the laws of the Commonwealth of
Pennsylvania.
Each of Exelon Ventures Corp.'s Officers and Directors are citizens of the
United States of America.
<PAGE>
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 Exelon
Corporation (now known as Exelon Ventures Corp.), 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 2,131,143 shares of its common stock to Exelon
Ventures Corp. in exchange for certain intangible rights of use and services
related thereto to be provided by Exelon Ventures Corp. and certain cash
payments made or to be made in the aggregate amount of $9,175,373, the source of
which is and will be working capital.
Item 4. Purpose of Transaction.
On September 14, 2000, NEON Communications and Exelon Ventures Corp. completed a
transaction (the "Transaction") which involved, among other things, (i) the
issuance by NEON Communications of the 2,131,143 shares of its Common Stock (the
"Shares") to Exelon Ventures Corp. in exchange for the agreement by Exelon
Ventures Corp. to pay to NEON Communications $9,175,373, $4,032,375 of which was
paid at closing, and Exelon Ventures Corp.'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 Consolidated Edison Communications,
Inc. ("CEC") completed a similar transaction (the "CEC Transaction").
In connection with the Transaction and the CEC Transaction, NEON Communications'
Board of Directors was set at nine members. One individual designated by Exelon
Ventures Corp. and one individual designated by CEC were elected to the Board of
Directors of NEON Communications on September 14, 2000.
Although neither PECO Energy Company nor Exelon Ventures Corp. ("the Reporting
Persons") have any 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
-------------- ------------------ ------------------
PECO Energy Company 9,381,916* 56.3%
Exelon Ventures Corp. 9,381,916* 56.3%
Consolidated Edison
Communications, Inc. 9,381,916* 56.3%
Mode 1
Communications, Inc. 9,381,916* 56.3%
PECO Energy Company owns all of the issued and outstanding shares of Exelon
Ventures Corp., and is, therefore, indirect beneficial owner of all of the
Shares. Pursuant to Section 13(d)(3) under the Securities Exchange Act, Exelon
Ventures Corp., CEC and Mode 1 Communications, Inc. ("Mode 1") may each 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 2,131,143, as to Exelon Ventures
Corp., 2,476,735, as to CEC, 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 CEC 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, Exelon Ventures Corp. and NEON Communications are parties to
a Subscription Agreement pursuant to which the Reporting Persons acquired the
Shares.
Stockholders' Agreement
-----------------------
Exelon Ventures Corp., CEC, Mode 1 (collectively, "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
Communications 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 CEC, 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 transactions that involve a change in control of
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 for such
shares or 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 under the CMP Agreement 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 under the CMP Agreement. 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, Exelon Ventures Corp. and CEC dated as of
September 14, 2000, NEON Communications granted to each of Exelon Ventures Corp.
(with respect to the Shares) and CEC (with respect to the shares of NEON
Communications which CEC acquired in the CEC 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, Exelon Ventures Corp. and CEC 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, Exelon Ventures Corp. and CEC were granted certain "piggyback"
registration rights 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.
Item 7. Material to be Filed as Exhibits.
Exhibit A: Subscription Agreement dated November 23, 1999, incorporated by
reference to Exhibit 10.45 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.
<PAGE>
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.
Date: September 25, 2000
PECO ENERGY COMPANY
By: /s/ Gregory A. Cucchi
------------------------
Name: Gregory A. Cucchi
------------------------
Title: Senior Vice-President
------------------------
EXELON VENTURES CORP.
By: /s/ Gregory A. Cucchi
------------------------
Name: Gregory A. Cucchi
------------------------
Title: CEO
------------------------
The original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
Attention: Intentional misstatements or omissions of fact constitute
federal criminal violations (see 18 U.S.C. 1001).
<PAGE>
JOINT FILING STATEMENT
In accordance with Rule 13d-1(f) promulgated pursuant to the Securities Exchange
Act of 1934, the undersigned hereby agree to the joint filing on behalf of each
of them of a Statement on Schedule 13D, including amendments thereto, with
respect to the Common Stock, par value $.01 per share, of NEON Communications,
Inc. and that this Joint Filing Statement be included as an Exhibit to such
joint filing.
Date: September 25, 2000
PECO ENERGY COMPANY
By: /s/ Gregory A. Cucchi
----------------------------------------
Name: Gregory A. Cucchi
----------------------------------------
Title: Senior Vice-President
----------------------------------------
EXELON VENTURES CORP.
By: /s/ Gregory A. Cucchi
----------------------------------------
Name: Gregory A. Cuccchi
----------------------------------------
Title: CEO
----------------------------------------
<PAGE>
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 corporation ("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 (as amended to
date, 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
Ml 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:
"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.
<PAGE>
(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 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
<PAGE>
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
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
<PAGE>
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 l (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 Ml, is a party to that certain FiveCom, Inc.
Principal Stockholders Agreement, dated May 28, 1998 (the "NU/CMP Agreement")
with Central Maine Power 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
<PAGE>
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 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
if to Exelon:
Exelon Ventures Corp.
2301 Market Street
Philadelphia, PA 19101
Attention: President
Facsimile: (215) 841-6374
<PAGE>
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).
(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.
<PAGE>
(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.
[the remainder of this page intentionally left blank]
<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
---------------------------------------
NEON COMMUNICATIONS, INC.
By: /s/ Victor Colantonio
---------------------------------------
Name: Victor Colantonio
---------------------------------------
Title: President
---------------------------------------
Northeast Utilities executed 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
---------------------------------------
<PAGE>
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>
NEON COMMUNICATIONS, INC.
REGISTRATION RIGHTS AGREEMENT
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 (as amended to date,
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.
"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).
<PAGE>
"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.
"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
<PAGE>
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 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 of 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).
(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
<PAGE>
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 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;
<PAGE>
(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 number 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;
(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 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
<PAGE>
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).
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 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)
<PAGE>
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 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 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
<PAGE>
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 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.
<PAGE>
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 (5) 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 or enforceability of
any other provision of this Agreement.
(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.
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
<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.
(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.
<PAGE>
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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
-------------------------------------------------
EXELON VENTURES CORP.
By: /s/ Gregory A. Cucchi
----------------------------------------------------
Name: Gregory A. Cucchi
--------------------------------------------------
Title: Chairman and Chief Executive Officer
-------------------------------------------------
