Filed by Bowne Pure Compliance



 





EXHIBIT 10.11




SECOND
AMENDED AND RESTATED AGREEMENT FOR THE PROVISION




OF FIBER OPTIC FACILITIES AND SERVICES




BETWEEN




NORTHEAST UTILITIES SERVICE COMPANY,




THE CONNECTICUT LIGHT AND POWER COMPANY,




WESTERN MASSACHUSETTS ELECTRIC COMPANY,




PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE,




AND




NEON OPTICA, INC.




AS SUCCESSOR IN INTEREST TO




NECOM LLC




AS OF December 23, 2002




PHASE ONE




CONFIDENTIAL





 


 









 







SECOND AMENDED AND RESTATED AGREEMENT FOR THE

PROVISION OF FIBER OPTIC FACILITIES AND SERVICES




1. PREAMBLE




This Second Amended and Restated Agreement for the Provision of Fiber Optic Facilities and Services
(this “Agreement”) is entered into as of December 23, 2002, but effective as of September 27, 1994
(the “Effective Date”) between Northeast Utilities Service Company, a Connecticut corporation, The
Connecticut Light and Power Company, a Connecticut corporation, Western Massachusetts Electric
Company, a Massachusetts corporation, and Public Service Company of New Hampshire, a New Hampshire
corporation, (collectively, the “Grantor”) and NEON Optica, Inc., a Delaware corporation, as
successors in interest to NECOM LLC (“NECOM”, and as succeeded in interest by NEON Optica, Inc.,
referred to herein as the “Grantee”).



2. RECITALS




2.1 WHEREAS, the Grantor is the owner of transmission structures, subtransmission structures,
conduits, and associated civil works (“Structures”) and has certain rights to use easements, and/or
rights of way within which the Structures are located in the State of Connecticut, the Commonwealth
of Massachusetts, the State of Maine and the State of New Hampshire as part of the Grantor’s
electric transmission system;



2.2 WHEREAS, the Grantee seeks to use certain of the Structures to install a fiber optic cable
which will consist of not less than 48 and not more than 144 singlemode fiber optic filaments, at
least 36 of which will be used by Grantee for its communication system and 12 of which will be used
by Grantor for its communication system or otherwise as permitted by this Agreement; and



2.3 WHEREAS, the Grantor is willing to grant the use of certain of its Structures for the purposes
described in clause 2.2 hereof and to grant the use of certain of the fiber filaments in the fiber
optic cable to the Grantee, once it is installed, in exchange for certain annual fees and the use
of 12 singlemode fiber optic filaments; and



2.4 WHEREAS, the Grantor and FiveCom, Inc., a Massachusetts corporation (“FiveCom”) entered into an
Agreement for the Provision of Fiber Optic Facilities and Services dated September 27, 1994 (the
“1994 Agreement”); and



2.5 WHEREAS, the 1994 Agreement was amended pursuant to letter agreement among the Grantor and
FiveCom dated February 23, 1996 (the 1994 Agreement as so amended is herein called the “Prior
Agreement”); and



2.6 WHEREAS, the rights and obligations of FiveCom under the Prior Agreement were assigned to NECOM
by an Assignment and Assumption Agreement dated as of May 23, 1996; and



2.7 WHEREAS, the Grantor and NECOM amended the Prior Agreement by entering into an Amended and
Restated Agreement for the Provision of Fiber Optic Facilities and Services — Phase One, dated as
of February 27, 1998 (the “1998 Amended Agreement” or “Phase 1
Agreement”); that governs the installation of Cable, hereinafter defined, that occurs before the
date of execution of the Phase 2 Agreement and



 


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2.8 WHEREAS, the Grantor and NECOM also entered into another Amended and Restated Agreement for the
Provision of Fiber Optic Facilities and Services — Phase Two dated as of February 27, 1998 (the
“Phase 2 Agreement”) that governs the installation of Cable, hereinafter defined, that occurs after
the date of execution of the Phase 2 Agreement; and



2.9 WHEREAS, the Grantor and Grantee have entered into an Amendment and Restatement of the Phase 2
Agreement dated the date hereof (the “2002 Phase 2 Agreement”); and



2.10 WHEREAS, pursuant to a corporate reorganization, NEON Optica, Inc. has become the Successor in
Interest to NECOM; and



2.11 WHEREAS, Grantee filed voluntary Chapter 11 bankruptcy petitions for reorganization pursuant
to title 11, Chapter 11 of the United States Code, in which the parties have entered into a letter
agreement dated June 5, 2002 (the “June 2002 Letter Agreement”) agreeing to further amend the 1998
Phase 1 Agreement and the Phase 2 Agreement; and



2.12 WHEREAS, Grantor and Grantee have entered into a Common Stock Purchase Agreement as of the
date hereof (the “Common Stock Purchase Agreement”); and



2.13 WHEREAS, Grantor and Grantee desire to further amend and restate the 1998 Amended Agreement to
incorporate the terms of the June 2002 Letter Agreement herein;



NOW THEREFORE, in consideration of the mutual covenants, terms, and conditions contained in this
Agreement, the parties agree as follows:



3. DEFINITIONS




3.1 Activation Date — The date on which the Cable on a Route Segment is accepted by the
parties as operational in accordance with the acceptance specifications set forth in Exhibit
3.31.



3.2 Actual Cost — Reasonable direct cost plus appropriate overhead cost but without other
mark-up or profit.



3.3 Additional NUNet Fibers -Fiber optic filaments described in Exhibit 4.1A




3.3 Annual Fee — See Section 22.1.



3.4 Cable — Fiber optic filaments consisting of either NUNet, NEON Network fibers, or both,
and any suitable core, jacketing or sheath.



3.5 Cable Accessories — The attachment and suspension hardware, splice closures and other
components necessary either for the placement of the Cable or for the continuity of the fiber
filaments within the Cable but excluding antennas or other communication devices whether or not
attached to the Structures or to the Cable.


3.6  Claims — See Section 33.1.




 


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3.7 Demarcation Point — See Section 9.1.



3.8  Ending Date — See Section 21.1.




3.9 Equipment — The power equipment, electronic and optronic equipment, including, without
limitation, repeaters, junctions, patch panels, alarm monitoring equipment and other equipment
necessary to provide a network of fiber optic transmission capacity located on the network side of
the Demarcation Point. The word “equipment” when not capitalized, refers to equipment of any type.



3.10  Favored Customer Rates — See Section 16.3.



3.11  Force Maieure Events — See Section 23.1.



3.12  Grantee — See Section 1.



3.13 Grantee’s Space — Floor space to be provided to Grantee by Grantor, as available in
the sole judgment of Grantor, in existing facilities or in New Buildings of Grantor along the Route
for the placement of Equipment to be used solely in connection with the NEON Network.



3.14 Grantor — See Section 1.



3.15 Grantor’s Space — Floor space to be provided to Grantor by Grantee in New Buildings or
facilities of the Grantee for the placement of Equipment to be used solely in connection with
NUNet.



3.16 Grantee’s Total Route Miles — The sum of all miles traversed by one or more fibers
owned, leased, controlled through indefeasible rights of use, or otherwise under the control of
Grantee for normal, commercial operating purposes.



3.17 Grantor’s Territory — The geographical areas where the Grantor provides retail or
wholesale electric service; owns or operates electric transmission facilities or, has obtained
rights, interests or permissions which would allow the Cable to be installed in such areas.



3.18 In Service Date — A date after the Activation Date when theNEON Network fibers are
transmitting light from a revenue producing customer including, without limitation, the Grantor.



3.19 IRU — indefeasible right of use.



3.20 IRU Option — See Section 4.l B




3.20 IRU ROFR — See Section 4.I C




3.21
Make Ready Work — See Section 7.1.



3.22 NEON Network — The fiber optic filaments in the Cable (other than the 12 fiber optic
filaments to be used by the Grantor as NUNet), Grantee’s Equipment and Grantee’s Space.


 


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3.23 Network Addition — Any subsequent Grantor designated Route Segment not initially
included in the Route.



3.24 New Buildings — Buildings and shelters, including repeater housings that are to be
constructed, erected or positioned on real property to house Grantee’s and/or Grantor’s Equipment
of which either the Grantor or Grantee is the fee simple owner or lessee.



3.25 NUNet — Twelve fiber optic filaments in one or more single color-coded tubes within
the Cable, Grantor’s Equipment and Grantor’s Space.



3.26 Periodic Inspection — The inspections conducted at irregular intervals by Grantor on
all or portions of the Route for the sole purpose of determining that the Grantee’s occupancies of
Grantor’s property is as authorized and is maintained in conformance with the tenns and conditions
contained in this Agreement.



3.27 Program Managers — See Section 14.1.



3.28 Proprietary Information — See Section 24.1.



3.29 Route — That portion of Grantor’s transmission route designated in Exhibit
3.30, as it may be amended from time to time by written agreement of the parties.



3.30 Route Segment — A portion of the Route between any two of the numbered points set
forth in Exhibit 3.30.



3.31 Specifications — The acceptance and performance specifications for the Cable set forth
in Exhibit 3.31.



3.32 Structures — See Section 2.1.



3.33 Term — See Section 21.1.



3.34 Third Party — Any party, person or entity that is not a signatory to this Agreement or
an affiliate (as that term is defined under the Securities Act of 1933, as amended) of a signatory
and any party, person, or entity that is not a successor or permitted assignee of the signatories
hereto.



4. GRANTEE’S RIGHT OF USE; OBLIGATION TO BUILD




4.1 Grant of Right. Grantor grants to Grantee the indefeasible right of use of the fiber
optic filaments within the Cable as it is placed on the Grantor’s Structures, except for the 12
fiber optic filaments reserved for the Grantor’s use.



4.1A Additional NUNet Fibers. Grantor hereby also grants an indefeasible right of use to
Grantee, for the purposes described herein, in additional NUNet dark optical fibers (“Additional
NUNet Fibers”) and certain other dark optical fibers, to the extent not already granted, as
described in Exhibit 4.1 A attached hereto, and incorporated herein by reference and the
contents of which shall be deemed to add to and supplement Exhibit 3.30 of the Agreement
For purposes of this Agreement, such fibers shall be considered the NEON Network.


 


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4.1B IRU Option. Grantor hereby grants to Grantee an option, through June 30, 2005, for an
indefeasible right of use (“IRU Option”) in up to 8 fibers on NUNet, where available in light of
Grantor’s reasonably foreseeable service needs and the rights of third parties in existence at the
time or times such IRU Option is exercised. Until Grantee exercises its IRU Option with respect to
any portion of NUNet, Grantor will, subject to the IRU ROFR described in Section 4.1 C below, be
able to grant rights therein, including indefeasible rights of use for any duration and subject to
any terms, to third parties without restriction as may be permissible hereunder. If the parties
cannot agree on the terms or the price of such IRU Options, the open issues shall be determined
pursuant to Section 38 hereof.



4.1C IRU Right of First Refusal. Grantor also grants to Grantee a right of first refusal
(“IRU ROFR”), through June 30, 2010, to obtain indefeasible rights of use in all fiber optic
filaments that it owns or otherwise controls or subsequently builds, obtains or otherwise controls.
In the event that Grantor receives a bona fide offer for any such fiber optic filaments, then
Grantor shall provide written notice to Grantee of such offer providing reasonable details thereof.
To exercise its IRU ROFR, Grantee must provide written notice to Grantor within 30 days of receipt
of the written notice from Grantor indicating that Grantee is willing to (a) provide comparable or
better terms, and (b) pay not less than 105% of the Alternative offer.



4.1D IRU Not Exercised. Should Grantee not consummate the acquisition of fiber optic
filaments through either an exercised IRU Option or an IRU ROFR within 30 days after providing
notice to Grantor of Grantee’s desire to exercise such option or right, the affected fiber optic
filaments will thereafter be free from such rights of Grantee.



4.1E Non-NUNet Fibers. Indefeasible rights of use obtained by Grantee through exercise of
either the IRU Option or the IRU ROFR shall, (a) to the extent they relate to NUNet, be subject to
the terms of this Agreement in all respects, and (b) to the extent they relate to non-NUNet fibers,
be subject to the terms of such separate agreement as the parties may develop in accordance with
the general IRU ROFR described above and standard commercial terms for such transactions as they
exist at the time. IRUs granted to Grantee by Grantor under the Agreement for the Swap of Fiber
Optic Facilities and Services between the parties hereto, dated the date hereof, shall be subject
to the terms and conditions of this Agreement or the 2002 Phase 1 Agreement, as applicable, except
for Section 32 “Taxes and Governmental Charges” of each of this Agreement and the 2002 Phase 2
Agreement.



4.2 Grant Subject to Security Interests. Grantor has granted to Third Parties security
interests in certain of its real and personal property and releases, approvals and waivers may
therefore be required from the Third Parties as a result of the grant provided for in Section 4.1.
Grantor agrees to use its best efforts to secure nondefeasance agreements or other releases,
approvals and waivers from these Third Parties as may be required or permitted under the terms of
the applicable security agreements within nine months from the date of this Amended
and-Restated agreement; provided, however, that if such releases, approvals or waivers
cannot be obtained because the Cable has not been installed on the Structures then the nine month
period shall commence upon such installation.



4.3 Limitation on Use. The grants in Sections 4.1 through 4.1E are solely for Grantee’s
use in providing telecommunications services. The Grantee shall exercise the right of use of the
NEON
Network solely to serve its customers and internal business purposes in accordance with the
applicable state and federal regulations.



 


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4.4 Obligation to Build. Both parties agree to use their best efforts to install the Cable
on the Route according to a schedule to be subsequently agreed upon by the parties but in any case
by September 27, 1999. The parties’ obligations under this Section 4.4 shall be subject to
manufacturing or supplier delays, governmental regulatory delays and delays caused by the Grantor
as a supplier of services or equipment under the terms of this Agreement or as a result of the
Grantor’s obligation to maintain reliable electric service. Subsequent to February 27, 1998, the
rights and obligations of the parties set forth in this Section 4.4 shall be governed by the 2002
Phase 2 Agreement.



4.5 Cable Measurement. All of the Cable upon the Route Segments shall be measured on a
linear footage basis, using the right-of-way monumented line-of-location stationing, when
available.



4.6 Other Cables/Facilities. This Agreement shall not be construed as limiting or
restricting the Grantor in any manner from using its structures, easements and/or rights of way for
the installation of its fiber optic cables or telecommunication facilities for its own use or that
of Third Parties.



4.7 Warranty. Subject to the terms and conditions of this Agreement, Grantor warrants that
it shall not interfere with nor disturb Grantee in its use and full enjoyment of Grantee’s
indefeasible right of use set forth in Sections 4.1 through 4.1 E.



5. MODIFICATIONS TO THE ROUTE




5.1 Additional Route Segments Designated by Grantor. If the Grantor shall determine the
need for any Network Additions from Third Parties, the Grantee shall have the first right to
provide such Network Additions. If, for any reason, the Grantee is unwilling or unable to provide
such Network Additions on the terms requested by the Grantor, the Grantor shall be free to obtain
such Network Additions from Third Parties. If the Grantor shall obtain such Network Additions other
than from Grantee, Grantor shall use its best efforts to provide Grantee with the unimpeded use of
not less than 12 usable singlemode fibers in such Network Addition on terms no less favorable than
those provided to Grantor. The Grantee shall pay the incremental cost of material necessary to
provide such fibers. If the Grantor does not designate an addition to its fiber optic
communications system as a Network Addition to a Route Segment, the Grantor shall have no
obligations to the Grantee under this Section 5.1 with respect to such Addition. Subsequent to the
date of execution of this Amended and Restated Agreement, the rights and obligations of the parties
set forth in this Section 5.1 shall be governed by the 2002 Phase 2 Agreement.



5.2 Withdrawal of Route Segments by Grantor. During the one year period ending September
27, 1995, the Grantor shall have the right to withdraw from this Agreement, upon notice to the
Grantee, any Route Segment that it deems, in its sole and absolute judgment, not to have adequate
capacity or structural suitability for the Cable. The Grantee shall have no obligations to Grantor
with respect to any Route Segment so withdrawn.


 


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5.3 Additional Route Segments Designated By Grantee. If the Grantee wishes to extend the
Route by installing Cable on transmission facilities marked in red on Exhibit 5.3 (Network
Expansion) or if any Route Segment requires material modifications or unusual expense to make it
available for the Cable or if Grantor withdraws Route Segments pursuant to Section 5.2 or Section
21.4, then the Grantee shall have the right, subject to the Grantor’s approval, to designate
additional Route Segments, or an alternative path for the Cable on Structures or property of the
Grantor by submitting a request in the form of Exhibit 11.1. The Grantor shall not
withhold its approval of such additional Route Segments unless such additional Segments would
materially adversely affect the Grantor’s ability to provide reliable electric service, cause or
create safety problems or not be feasible for structural reasons. Subsequent to the date of
execution of this Amended and Restated Agreement, the rights and obligations of the parties set
forth in this Section 5.3 shall be governed by the 2002 Phase 2 Agreement.



5.4 Cost and Means of Right of Way Acquisitions. The Grantee shall be responsible for, and
the Grantor shall cooperate in, the acquisition of any easement or right-of-way rights that may be
required in order to permit (1) the installation, operation and maintenance of the Cable on the
Route or (ii) the use of the NEON Network fibers by Grantee. New easements obtained by Grantee
shall be assigned to Grantor, if possible. If the use of the power of eminent domain is necessary
in order to acquire any additional right-of-way rights required for the use of the NEON Network
fibers by Grantee, then any required condemnation action shall be brought by Grantee in its own
behalf, if such action is available to Grantee. Any easement or right obtained by the Grantee by
using the power of eminent domain shall be subsequent and subordinate to any existing rights of the
Grantor. Except in the case of condemnation by Grantee, Grantor shall exert its best efforts to
minimize the cost of such additional land or rights in land. In the event that additional rights
are required by both parties the cost of the acquisition of such additional rights shall be shared
by the parties pro rata based on the number of fibers controlled by each party. This Section is not
intended as an acknowledgment by either party that any such acquisition of additional rights is
required but only to allocate the responsibility for such acquisition if required.



5.5 Grantee’s Right to Build and Connect Third Party Segments. In the event that the
Grantor (1) does not have Structures available to replace Route Segments not available for any
reason to the Grantee or (ii) does not provide such Structures at the request of the Grantee, the
Grantee shall have the right to build or otherwise obtain such Structures from Third Parties, at
the Grantee’s sole cost and expense. The Grantee may connect such Third Party facilities to the
Route Segments and Cable subject to the approval by Grantor of Grantee’s connection plans. The work
to connect such Third Party facilities located on the Grantor’s property shall be performed by the
Grantor. The provisions of the last two sentences of Section 6.1 shall apply to this work to be
performed by the Grantor. Grantee shall pay all of Grantor’s Actual Costs to review these
connection plans and to oversee the construction of such connections. If the Grantee interconnects
Third Party facilities to the Cable or Structures, Grantee shall, upon Grantor’s request, use its
best efforts to provide the right to use up to 12 singlemode fibers on such Third Party’s
facilities to maintain the continuity of NUNet within Grantor’s Territory and up to eight
singlemode fibers outside Grantor’s Territory on terms no less favorable than those provided
Grantee for the NEON Network. Subsequent to the date of execution of this Amended and Restated
Agreement, the rights and obligations of the parties set forth in this Section 5.5 shall be
governed by the 2002 Phase 2 Agreement.


 


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5.6 Third Party Connections. In the event of use of connections to the Cable from public
and private property, Grantee shall designate the location and manner in which the Cable will enter
and exit Grantor’s property and connect to the Cable and shall provide such specifications as
needed unless so provided in the engineering plans of Grantor’s property. Such specifications will
be subject to change from time to time by the written consent of the parties hereto. The Grantor
shall have the right to review and approve (which shall not be unreasonably withheld) connections
made pursuant to this Section 5.6.



5.7 Connection Grants. Grantor hereby grants Grantee the right to install, maintain, and
operate the connections to the Cable as described in this Section 5.



6. ENGINEERING AND DESIGN




6.1 Grantor’s Obligations. In consultation with Grantee, and in accordance with the
Specifications, the Grantor and/or its consultants shall engineer, provide detailed specifications,
construction working prints and other data necessary to permit the construction and installation of
the Cable on the Route. Grantor shall also design all alternating current power sources, New
Buildings and other necessary and related articles of property which, together with the articles of
property to be designed by Grantee, are required to provide usable fiber optic transmission
capacity throughout the Grantor’s system over the Route Segments. All such detailed specifications,
construction working prints and other information shall be subject to Grantee’s approval which
approval shall not be unreasonably withheld or delayed. Grantee shall reimburse the Grantor for the
Grantor’s Actual Costs incurred pursuant to this Section 6.1. The Grantor shall use its best
efforts to perform the work called for by this Section 6.1 at the lowest possible cost to the
Grantee. The services provided by Grantor in this Section 6.1 shall be performed in a professional
and workmanlike manner.



6.2 Grantee’s Obligations. The Grantee, at its sole cost and expense, shall design, in
cooperation with Grantor, all electronic and optronic equipment and provide detailed
specifications, construction working prints and other necessary data for NUNet and the NEON Network
including, without limitation, the Cable and repeaters, patch panels, terminations, terminals,
splice cases and closures, alarm monitoring equipment and all Equipment and all other necessary and
related articles of property which, together with the articles of property to be designed by
Grantor pursuant to Section 6.1 are required to provide fiber optic transmission capacity
throughout the Route Segments. All Equipment and other equipment utilized solely in connection with
NUNet shall be paid for solely by Grantor.



7. MAKE READY WORK




7.1 Responsibility for Performance. In the event the Grantor and Grantee determine that
any work is required or desirable to install intermediate or supplementary Structures, make
existing Structures capable of supporting the Cable, define the Route more clearly or provide for
alternative Route Segments (collectively “Make Ready Work”), Grantor will either perform such Make
Ready Work or permit Grantee or its contractor to perform such Make Ready Work. Any charges for
Make Ready Work performed by Grantor (other than to satisfy the representation made in Section
18.3) will be paid at Grantor’s Actual Costs 30 days after presentation of an invoice for such
work. If Grantor elects to perform any Make Ready Work, Grantor will either (i)
endeavor to include such work in its normal work load schedule, or (ii) at the request of Grantee,
based on the availability of Grantor’s manpower, shall perform such Make Ready Work after normal
hours and at prevailing overtime rates, but not less than straight-time rates.



 


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7.2 Condition of Structures. Grantor shall make available its Structures and other
facilities owned or controlled by Grantor as required to provide for continuous locations on which
the Cable can be placed. Grantor shall perform such work, if any, at its expense, as may be
required to satisfy the representation made in Section 18.3. Any additional improvements necessary
to permit the Structures to support the Cable shall be made at the expense of the Grantee. Work
required which is common to both Sections 7.2 and 18.3 shall be performed at the sole cost of the
Grantee.



7.3 Costs. Grantee shall reimburse Grantor for Grantor’s Actual Cost incurred in
connection with any Make Ready Work done pursuant to Section 7.1 or in connection with engineering,
construction and installation of the Cable, including without limitation the labor and equipment
cost or removal of existing shield wire, and any New Building and the Equipment. Grantee shall
reimburse Grantor its Actual Cost of any upgrading or replacement of Structures or facilities that
is necessary in order to make such Structures or facilities capable of supporting the Cable (other
than to satisfy the representation made in Section 18.3). The Grantor shall use its best efforts to
perform the work called for by Section 7.1 at the lowest possible cost to the Grantee. The services
provided by Grantor in Section 7.1 shall be performed in a professional and workmanlike manner.



8. INSTALLATION




8.1 Grantee’s Right to Select Contractors. The Grantor shall provide the Grantee with an
estimate of Grantor’s Actual Cost for the installation of the Cable and Cable Accessories. The
Grantee may then request that the Grantor seek bids from qualified contractors and Grantor’s Actual
Cost shall then be based on the lowest qualified bid. If an outside contractor is selected, the
Grantor may, however, act as general contractor on the work done under this Section 8. The
provisions of the last two sentences of Section 7.3 shall apply to any work done under this Section
8.1 by the Grantor.



8.2 Grantee’s Right to Issue Specifications. The Grantee shall have the right but not the
obligation to participate in the Grantor’s issuance of contracts containing general provisions,
technical specifications, conditions of installation, work schedules, and construction
documentation which may include design prints, engineering plans, installation procedures and
manuals, construction methods and practices, material handling properties, safety procedures,
performance standards, payment schedules, testing and acceptance requirements and other contractual
terms and conditions which may be issued prior to the commencement of any work.



8.3 Grantor’s Installation Obligations. Grantor shall supervise and, in consultation with
Grantee, be responsible for the construction or oversight of the construction and installation as
necessary to install the Cable and Cable Accessories, including without limitation installation
hardware, required for the NEON Network and NUNet, in accordance with the engineering and design
requirements finalized pursuant to Section 6, and
Exhibit 3.31, Cable and
Performance Specifications.


 


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8.4 New Buildings. In Grantor’s sole discretion, Grantor shall provide all electric power
service to all New Buildings and to all Grantee’s Space in the Grantor’s retail service territory.
Grantor shall perform and be responsible for site preparation and shall prepare foundations and
fencing for all New Buildings on Grantor’s property.



Grantee shall install all New Buildings and Equipment used in equipping the NEON Network and in
cooperation with Grantor when such installation is on Grantor’s property. Grantee shall reimburse
Grantor for its Actual Costs incurred pursuant to this Section 8.4. The parties shall, by
subsequent agreement, apportion the costs of service and maintenance and space in any New Buildings
containing both Grantee and Grantor Equipment.



8.5 State Fees. Grantee shall either pay directly or reimburse Grantor for any fees
payable to any State agency for the use of any public rights-of-way as a result of Grantee’s use of
or right to use the NEON Network. Grantor will cooperate with Grantee in obtaining such legal and
regulatory permits and authorizations as are needed in order to allow Grantee to be an authorized
condemnation party in each applicable state. Grantee shall reimburse Grantor for its Actual Costs
incurred pursuant to this Section 8.5.



8.6 Public Rights of Way. Grantee shall at its sole cost and expense obtain all federal,
state and municipal occupancies and other rights that may be required for the installation of the
NEON Network in public rights-of-way or the use thereof.



9. POINT OF DEMARCATION; BUILDING EXTENSIONS




9.1 Marking. The point of demarcation (the “Demarcation Point”) for the purpose of this
Agreement shall be indicated by a visible, indelible mark or tag of long-lasting durability, at a
point on one side of which is Grantee’s responsibility, termed network side, on the other side of
the Demarcation Point, termed premise side, both the Grantor and Grantee shall be responsible for
their respective Equipment and any Cable extensions. The color coding of the tube(s) and fibers
dedicated for Grantor’s use shall remain consistent throughout the Route.



9.2 Building Extensions. The NEON Network will be extended by the Grantee for use by the
Grantee within buildings as required. In such extensions the entire Cable beyond the building patch
panel shall remain the property of Grantee and Grantor shall receive an indefeasible right to use
12 fibers for NUNet to the point of the building patch panel. The Grantee or its customer shall
obtain approval from the owners of the property for all such use and as to the physical location of
Cable and, as to installation, maintenance and operation of Grantee’s facilities on said property.



10. MAINTENANCE




10.1 Grantee’s Obligations. Provided that the Grantee has been given the permission
referred to below in this Section 10, the Grantee shall maintain and repair the Cable, including
emergency repairs and splices, pursuant to the terms and conditions outlined in Exhibit
10.1 — Maintenance Specifications. In the event Grantee fails to perform any necessary splicing
or maintenance in accordance with the procedures and time frames set forth therein, Grantor shall
have the right, but not the obligation, to undertake such splicing or maintenance of the Cable, at
Grantee’s sole cost and expense, as provided for in Exhibit 10.1. In no event shall Grantee
be permitted access to Grantor’s property without Grantor’s prior permission



 


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unless Grantee is acting pursuant to
Section 39.2. The Grantor reserves the right, but not the obligation, to perform such maintenance
with its own crews or contractor when required by the need to insure the safe and reliable
operation of its electric system. The provisions of the last two sentences of Section 7.3 shall
apply to any work done under this Section 10.1. Grantee shall be solely responsible for all aspects
of the operation of the NEON Network and the operation and maintenance of Equipment thereon.
Grantee shall perform routine inspections of the Cable including, without limitation, once a year
ride-outs of Route Segments, in accordance with its standard maintenance procedures and with
Grantor’s approval. Grantee shall provide notice to Grantor at least 10 working days in advance of
any maintenance upon any Route Segment upon which any repair is to be conducted as a result of such
maintenance procedures in accordance with Section 37. The Grantor shall have 10 working days to
confirm the availability of any Route Segment for maintenance.



10.2 Grantor’s Obligations. Grantor shall be solely responsible for all aspects of the
operation of NUNet and the operation and maintenance of Equipment thereon. Grantor shall, at its
own expense, perform routine inspections of the Cable in conjunction with the periodic inspection
of its electric facilities and Structures and routine rights of way maintenance. Grantor shall
provide notice to Grantee at least 10 working days in advance of any maintenance upon any Route
Segment upon which any repair is to be conducted on the Cable as a result of such maintenance
procedures.



11. RELOCATION, REPLACEMENT, REBUILDS OF THE CABLE




11.1 By Grantee. In the event that Grantee requests relocation, replacement, or rebuild of
the Cable during the term of this Agreement, the cost of any such work shall be paid by Grantee,
and Grantee shall submit to Grantor a completed copy of Exhibit 11.1 to request an
acceptable new location. No relocation or replacement shall be performed on Grantor’s property by
Grantee without the prior written approval of Grantor.



11.2 By Grantor. In the event that during the Term of this Agreement Grantor is required
by public authorities or by lawful order or decree of a regulatory agency or court to relocate or
modify any or all Structures upon which the NEON Network or any part thereof is located, Grantor
and Grantee shall cooperate in performing such relocation or modifications so as to minimize any
interference with the use of the NEON Network or NUNet by either party and to avoid unreasonably
impairing the ability of each to provide communications services of the type, quality and
reliability contemplated by this Agreement. Any such relocation shall be accomplished in accordance
with the provisions of Exhibit 3.31 Cable Specifications. Unless otherwise agreed by the
Parties, all costs directly associated with the relocation of the Cable, Equipment and New
Buildings located on the subject property shall be shared by the Parties on a pro rata basis based
on the number of fiber optic filaments each Party controls.



11.3 Emergency Relocations; Third Party Relocations. In the event of an emergency
affecting Grantor’s Structures, transmission facilities or public safety, Grantor shall be
permitted to replace, remove and relocate the Cable or any portion thereof without prior notice to
Grantee when such notice is not practicable. Grantor shall incur no liability for service
interruptions in connection with any such removal or relocation and Grantee shall incur no
liability for service
interruptions pertaining to Grantor’s services, if so affected. If the relocation or replacement of
the Cable is requested or caused by a Third Party, Grantor shall attempt to obtain reimbursement of
Grantor’s costs from said Third Party. Any costs not recovered from said Third Party shall be
shared by the Parties on a pro rata basis based on the number of fiber optic filaments each Party
controls.



 


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11.4 Cable Failure; NUNet Equipment. The Grantor makes no representations with respect to
the Cable. Should the Cable fail to function according to its design specifications, Grantor shall
assign its warranty enforcement rights to Grantee. Grantee shall be entitled to any recovery from a
Third Party, and Grantee shall have the right, where allowed by law, to recover directly from that
Third Party. Should the Cable fail to function for any reason, Grantee shall have the right to
expeditiously replace the Cable, subject to the Grantor’s review and approval of Grantee’s
replacement plans. Grantee shall have no responsibility for Equipment to be used solely in
connection with NUNet, including without limitation, any such equipment installed or located in
Grantor’s Space in any New Building or at any of Grantee’s facilities. To the extent Grantee
realizes any proceeds from Grantor’s assignment of its warranty rights to the Cable that are not
expended in replacing Cable, such proceeds shall be retained by the Grantee.



12. CONSTRUCTION, MAINTENANCE AND REMOVAL OF THE CABLE




12.1 Interference With Other Joint Users. The Parties shall design, engineer, construct
and maintain the Cable within the Route Segments in a manner so intended not to physically conflict
or interfere with the Grantor’s property and any facilities attached thereon or placed therein by
joint users or others.



12.2 Grantor’s Approval of Third Party Work. Prior to Grantee engaging the services of a
Third Party to commence work to install, remove, reconfigure or maintain the Cable in any section
or part of the Route Segments, the Grantee will obtain Grantor’s prior written consent of any Third
Party chosen to perform such work, and the date when such work is scheduled to commence, which
consent shall not be unreasonably withheld.



12.3 Grantor’s Right to Maintain Service. Grantor shall at all times have the right to
take all action necessary to maintain and repair Grantor’s property and maintain Grantor’s services
to its customers, unconstrained by this Agreement but shall take reasonable precautions to protect
the Cable against damage. In the event of any service outage affecting the Cable, Grantor shall
have the right to repair its facilities first. If conditions permit, Grantee may repair its
facilities concurrently with Grantor. Grantee acknowledges that all or a portion of the Cable will
be placed on Structures that are part of Grantor’s electric transmission system and that at all
times the safe and continuous operation of such system and the provision of electric service is
Grantor’s foremost priority.



12.4 Notice. Grantee shall give Grantor 60 days prior written notice of any removal(s) or
material modification(s) of the Cable provided that no such removal or modification will be
permitted which adversely effects Grantor’s use of NUNet.



 


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12.5 Emergency Use of Grantor’s Property. With Grantor’s prior written consent and in its
sole discretion, Grantee may temporarily use any of Grantor’s available property for emergency
restoration and maintenance purposes. Any such temporary use shall be subject to such reasonable
terms and conditions as may be imposed by the Grantor and shall be terminated within 90 days, or
sooner, unless Grantee applies for and Grantor grants permission for such temporary use to be
extended.



12.6 Return of Removed Material. In the event Grantor under the provisions of this
Agreement shall remove any portion of the Cable from Grantor’s property, Grantor will deliver to
Grantee the Cable and Equipment so removed upon payment by Grantee of the cost of removal, storage
and delivery, and all other amounts due Grantor.



13. PERIODIC INSPECTIONS




13.1 By Grantor. Grantor shall have the right to make Periodic Inspections of any part of
Grantee’s operations occupying Grantor’s property. Grantor will give Grantee reasonable advance
written notice of any periodic inspections, except in those instances where, in the sole judgment
of Grantor, safety considerations justify the need for a Periodic Inspection without the delay of
waiting until a written notice has been forwarded to Grantee. A representative of the Grantee may
accompany the Grantor’s representative on all Periodic Inspections.



13.2 Grantee’s Obligations. The making of Periodic Inspections or the failure to do so
shall not impose upon Grantor any liability of any kind whatsoever nor relieve Grantee of any
responsibility, obligations or liability assumed under this Agreement.



13.3 Cost. Grantee shall reimburse Grantor for its Actual Costs of Periodic Inspections
only if material violations are found. Charges for such inspections shall be at Grantor’s Actual
Cost.



14. APPROVALS AND CONSULTATION




14.1 Role of Program Managers. Each party shall designate a Program Manager (a Program
Manager”). Whenever either party is entitled to approve a matter, the Program Manager for the party
responsible for the matter shall notify the Program Manager of the other party of the nature of
such matter. The Program Managers shall discuss such matter, and each Program Manager is authorized
to approve such a matter on behalf of his company.



14.2 Definition of Consultation/Cooperation and Approval. Whenever in this Agreement it is
provided that Grantor will take action “in consultation with Grantee,” it is intended that such
consultation shall be thorough and meaningful, and that the views of Grantee with regard to the
matter under consultation shall be given the weight appropriate to the experience and expertise of
Grantee in telecommunications. Whenever in this Agreement it is provided that Grantee will take
action “in cooperation with Grantor,” it is intended that such cooperation shall be thorough and
meaningful, and that the views of Grantor with regard to the matter under consultation shall be
given the weight appropriate to the experience and expertise of Grantor in telecommunications and
in the transmission and use of electric power. Whenever in this Agreement it is provided that the
approval of one party is required, it is intended that such approval will not be unreasonably
withheld or delayed.


 


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15. OWNERSHIP OF THE CABLE




15.1 Title, Tax Accounting. Legal title to the Cable and to any item of Equipment
installed upon the Grantor’s Structures shall be held by Grantor. With respect to the Cable and
NUNet, Grantor shall have absolute legal and beneficial ownership, subject to the provisions of
Section 16.1. With respect to the NEON Network fibers installed upon the Grantor’s Structures,
Grantor shall hold legal title to the same as Grantee’s nominee and, with respect to such property,
Grantee shall have the right of use granted in Section 4 of this Agreement and will be the
beneficial owner. Accordingly, Grantee shall for tax purposes account for such property as the
owner thereof and, as between the Parties, shall be entitled to any investment tax credits,
depreciation and any other tax attributes or liabilities with respect to those fibers. Grantor
agrees that it will not, for tax purposes, account for the property associated with the NEON
Network fibers as though it were the tax owner thereof and shall not attempt to claim any of the
tax attributes or liabilities with respect thereto. The parties agree they shall file all income
tax returns and otherwise take all actions with respect to taxes in a manner which is consistent
with the foregoing.



15.2 Reversion of Beneficial Ownership. Grantee’s right of use under Section 4 of this
Agreement and beneficial ownership of the NEON Network shall revert to the Grantor apon termination
of this Agreement or of any applicable Route Segment. Upon such termination, Grantee shall deliver
to Grantor such deeds, bills of sale, releases or similar documents as Grantor shall reasonably
request to confirm said reversion.



16. USE OF THE CABLE BY GRANTOR




16.1 Fibers and Use. The Grantee shall provide not less than 12 usable singlemode fibers
in the Cable for the unimpeded and unrestricted use by Grantor, provided however that the
requirement of usability shall not apply to any fibers located upon a Route Segment as to which the
Term has expired. The Grantor shall use these 12 singlemode fibers exclusively for the Grantor’s
own business purpose and other uses permitted by this Section 16.1, which shall include but not be
limited to the right of the Grantor to assign any number of the 12 fibers, or resell capacity on
any of the 12 fibers, provided however, that such right to assign or resell said capacity is
subject to Grantee’s indefeasible right to use certain NUNet fibers, its IRU Option and its IRU
ROFR, as defined in Sections 4. IA through 4.1 C and the Non-Compete Section 26.3 hereof.



Notwithstanding the foregoing, in times of emergencies affecting the Grantor’s other
telecommunications networks, the Grantor shall have the right to use the 12 singlemode fibers not
previously provided to Grantee under the IRU ROFR or IRU Option or otherwise acquired by Grantee
for any purpose until alternative arrangements can be made. If the Grantor violates the provisions
of this Section 16.1 and fails to cease such violation within 90 days following written notice of
such violation by the Grantee, the Grantor’s rights to use the fibers involved in such violation
shall cease and the Grantee shall then have the right to use such fibers for its own business
purpose.



16.2 Option to Purchase Additional Fibers. The Grantor may purchase, if mutually
acceptable terms can be agreed upon between Grantee and the Grantor, additional singlemode fibers
from the Grantee at a price that is mutually acceptable.


 


15









 





16.3 Additional Service. In addition to providing 12 singlemode fibers, the Grantee shall,
upon Grantor’s request and so long as Grantor is not in breach of this Agreement, provide Grantor
with commercial telecommunication services into all locations served by Grantee’s networks in the
service area at Grantee’s Actual Cost for any incremental labor and provisioning equipment required
for the service being requested and, if provided using fibers other than Grantor’s 12, Grantor
shall also pay, without duplication of such actual cost, , the then lowest commercial price for
such service(s) that Grantee offers the same or similar services to its largest customers (“Favored
Customer Rates”).



16.4 Space in Grantee’s Locations. Where available and requested by Grantor, Grantee
shall, so long as Grantor is not in breach of this Agreement, provide or cause to be provided
Grantor Space in the Grantee offices and other common access areas of Grantee facilities along the
Route Segments in New Buildings or buildings adjacent thereto, adequate in each case to permit
Grantor to install racks of its optronics, multiplex and associated equipment used to equip NUNet
and to interconnect NUNet with the NEON Network. Unless otherwise agreed, Grantor Space will comply
with power, ground, physical and environmental requirements of the Grantee technical publications.
Such Grantor Space shall be used by Grantor to house Grantor Equipment necessary to permit the use
of the NUNet and interconnection with the Grantor’s networks. Unless otherwise agreed, Grantor
Space in a Grantee facility other than a New Building, or buildings adjacent thereto, shall be in a
common access area of such facility, and to the extent reasonably practicable, Grantor Space in a
New Building shall be separate from any area containing Grantee’s Equipment. Grantee shall provide
Grantor Space in the common access areas of Grantee facilities at the then prevailing rate for such
space according to Grantee’s tariff.



17. CASUALTY




17.1 Cable Damage. If any portion of the Cable is damaged or destroyed by casualty at any
time during the Term each party shall pay a share of the cost of repair, restoration or replacement
based on the pro rata percentage of fibers, NUNet and NEON Network, contained in the Cable. With
respect to the Route Segment on which such portion of the Cable is installed, the Grantee shall
have the option of having the Grantor repair, restore, or replace such portion of the Cable (and
the Grantee shall reimburse Grantor’s Actual Cost of doing so) or terminating that Route Segment.
Unless Grantee notifies Grantor of its election to terminate that Route Segment within 12 business
days of the casualty, Grantee shall be deemed to have elected repair, restoration and replacement
of the Cable. If Grantee elects to terminate such Route Segment as set forth in the preceding
sentence, the NEON Network fibers upon such portion of the Route Segment so effected, shall be
available for use by Grantor and Grantee shall assign, at no cost to Grantor, all its rights and
title to all New Buildings and Equipment on such Route Segments so effected immediately thereafter.



18. REPRESENTATIONS AND WARRANTIES




18.1 Common Representations. Each of the parties represents and warrants that it has full
authority to enter into and perform this Agreement, that this Agreement does not conflict with any
other document or agreement to which it is a party or is bound, and that this Agreement is fully
enforceable in accordance with its terms.


 


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18.2 Representations by Grantor. The Grantor represents and warrants that Grantor is a
corporation duly organized, validly existing and in good standing under the laws of the state under
which it is incorporated. The execution and delivery of this Agreement and performance thereunder
will not conflict with or violate or constitute a breach or default under the Grantor’s Articles or
Certificate of Incorporation and will not violate any law, rule or regulation applicable to
Grantor. No consents need to be obtained from any governmental agency or regulatory agency to allow
Grantor to execute, deliver and perform this Agreement except those for which provision has been
made in Section 21.4(iii).



18.3 Representation by Grantor As To Structures. The Grantor represents and warrants that
the Structures are suitable for their current use and were designed and installed at a minimum to
meet the requirements of the National Electrical Safety Code and/or other applicable standards then
in effect.



18.4 Representation by Grantor As to Right to Place Cable. The Grantor represents and
warrants that it has the right to have the Cable placed on the Structures on the Route and to have
the Cable used by the Grantor as contemplated by this Agreement, subject to the governmental
approvals for which provision has been made in Section 21.4(iii) and the approvals from certain
lienholders referred to in Section 4.2.



18.5 Work Clearances and Related Delays. Grantor represents and warrants that it cannot
guarantee line outages or special contingency line operating conditions that may be necessary for
the installation, maintenance and repair of the Cable and that delays may be necessary. Such work
clearances must be obtained from regional dispatching organization(s) with authority over the
lines. The Grantee shall be responsible for the Grantor’s Actual Costs associated with last minute
delays caused by these regional authorities which are reasonably beyond the control of the Grantor.



18.6 Representations by Grantee. The Grantee represents and warrants that (a) Grantee is
duly organized and validly existing under the laws of its State of organization and the execution
and delivery of this Agreement and the performance thereunder will not conflict with or violate or
constitute a breach or default under the constitutional documents of Grantee and will not violate
any law, rule or regulation applicable to Grantee. No consents need to be obtained from any
government agency or regulatory agency to allow Grantee to execute, deliver and perform this
Agreement, and



(b) Grantee represents and warrants it is not entering into any amendments to its fiber agreements
with Energy East, nor Project Touchdown Agreements with Exelon, and Consolidated Edison,
respectively, at the present time.



 


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19. INSURANCE




19.1 Liability Insurance. The Grantee, at its own expense, shall provide and maintain in
force during the term of this Agreement a policy or policies of general liability insurance with an
aggregate limit of no less than 10,000,000. The policy or policies shall include contractual
liability coverage to insure the indemnification agreement and products completed operations
coverage. Any such policy(ies) shall be procured by the Grantee from a responsible insurance
company with a “Best” rating of A or better, satisfactory to the Grantor. Certificates evidencing
such policy(ies) shall be delivered to the Grantor within 30 days of the date of this Agreement.
Not less than 30 days prior to the expiration date of such policies, certificates evidencing the
renewal thereof shall be delivered to the Grantor. Such policies shall further provide that not
less than 30 days’ written notice shall be given to the Grantor before such policy(ies) may be
cancelled, materially changed or undergo a reduction in Insurance limits provided thereby. Grantor
shall be named as an additional insured. The coverage required herein shall not be deemed to limit
the Grantee’s liability as set forth elsewhere in this Agreement. Upon timely notice to the
Grantee, Grantor may require reasonable increases in the amount of insurance coverage which will be
obtained by Grantee within 30 days after Grantor’s request.



20. GRANTEE’S BOND




20.1 Bond. Within 120 days of the Effective Date of this Agreement, the Grantee shall
provide Grantor with either of the following at the option of Grantee: (i) a performance bond in
the amount of the $62,000 per mile of NUNet running from Millstone, CT to Seabrook, NH as set forth
in Exhibit 3.30 (the Route) in form and substance reasonably satisfactory to Grantor and
issued by a responsible and reputable insurance company, or (ii) a letter of credit of equal value
in form and substance reasonably satisfactory to Grantor and issued by a responsible bank. This
bond or letter of credit shall be reduced by $62,000 for each mile of NUNet installed on the Route.



20.2 Effect of Bond. If a bond or letter of credit is issued and remains in effect to the
benefit of Grantor pursuant to Section 20. l, the Grantee shall not be found to be in default of
any provision of this Agreement if such default is based on the installation of NUNet or any other
associated Cable relating thereto.



21. TERM AND TERMINATION




21.1 Period. The term of this Agreement shall be for a period of 40 years (the “Term”)
commencing on September 27, 1994, and ending on September 27, 2034 (the “Ending Date”) and shall
automatically renew on September 27, 2034 and thereafter for five year periods until terminated by
either party upon notice given one year or more prior to September 27, 2034 or any renewal date
thereafter.



21.2 Payment to Grantee. If the Grantor elects to terminate this Agreement pursuant to
Section 21.1, the Grantor shall, at its option, either: (i) pay the Grantee the fair market
appraised value of the NEON Network (determined, if no agreement can be reached between the parties
on such value, pursuant to Section 38) or (ii) elect to receive 10% of the Grantee’s gross revenue
from the use of the Cable as determined by an independent auditor selected by the mutual consent of
the Parties. If Grantor elects clause (ii), the payments provided for in that clause shall be in
addition to any Annual Fees due Grantor and this Agreement shall be extended for another 30 years
from the date it would have otherwise terminated.



21.3 Early Termination of Agreement. This Agreement may be terminated prior to the Ending
Date upon any one of the following events:



(i) by Grantee upon 180 days, prior notice to Grantor.


 


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(ii) by Grantor upon 90 days, prior notice to Grantee if (x) the Grantee has not provided a
bond or letter of credit pursuant to Section 20, and (y) the Grantee has not completed NUNet
according to Section 4.4.




(iii) by Grantor in the event of a default by Grantee under Section 34.




(iv) by Grantor upon 90 days, prior notice in the event of a violation of Section 36.1.



Grantee shall have the right to cure or correct any default specified under clauses (ii) or (iv)
above within the time period of the notices set forth above.



21.4 Termination of Route Segment. Any Route Segment may be terminated:



(i) by Grantor upon reasonable notice for the purposes of providing safe and economical
electrical service; or



(ii) by Grantee upon five days’ prior written notice if two Cable failures per month for three
consecutive months occur on a Route Segment as a result of Grantor’s electric operations and
Grantor fails to take steps to cure such failure with due diligence, unless Grantor shall have
cured such failure prior to the expiration of said five day period, or where cure is not possible
within said five day period, Grantor is proceeding to cure with due diligence.



(iii) by the Grantor at any time after consultation with Grantee if it cannot obtain the
regulatory approvals needed by it to perform its obligations under this Agreement with respect to
such Route Segment or can obtain them but on terms that are unduly burdensome on the Grantor.



21.5 Cost Reimbursement. In the event of the termination of this Agreement or a portion of the
Route Segments thereof pursuant to Section 21.4, Grantor shall reimburse Grantee a percentage of
the cost of the Cable, for such terminated portion according to the following schedule:



	 	 	 	 	 
	Year 1-5 (9/27/94-9/27/99)
	 	 	100	%
	Year 6
	 	 	80	%
	Year 7
	 	 	60	%
	Year 8
	 	 	40	%
	Year 9
	 	 	20	%
	Year 10
	 	 	10	%
	Year 11 and thereafter,
	 	 	0	%






The Annual Fee described below for the portion of the year following termination of a Route Segment
shall be refunded to the Grantee. The amount of the refund shall be determined by prorating the
Annual Fee for the terminated Route Segment equally over 365 days. In no event shall the amount of
the refund exceed the amounts collected on the terminated Route Segment during that period by the
Grantor.


 


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22. ANNUAL FEE




22.1 Amount. Grantee shall pay an annual fee (“Annual Fee”) for its use of the NEON
Network fiber optical filaments in the Cable, which shall be, as of the Effective Date and
thereafter adjusted pursuant to Section 22.2 hereof, calculated as follows:




(a) As to Grantor’s underground facilities: $4.00 per duct foot per annum; and




(b) As to Grantor’s aerial Structures, as follows:



(i) $2,000.00 per mile per annum where Grantor’s Structures support Cable containing NUNet.
Said rate shall not be due for the period of 10 years from the Effective Date of this Agreement for
the Route shown in Exhibit 3.30.



(ii) $2,500.00 per mile per annum where Grantor’s Structures support Cable not containing
NUNet.



(iii) $350.00 per mile per annum for solely owned utility distribution poles located within
the public right of ways, private ways, ancient ways, or on private property or on easements.



(iv) $500 per mile one-time payment, $100 per mile per annum during the term of any agreements
between Grantee and any Third Party for route segments containing Grantee’s cable or NEON Network’s
extensions supported by any transmission structures, aerial plant, civil works, and underground
facilities owned by any utility operating in any of Connecticut, Maine, Massachusetts, New
Hampshire, New York, Rhode Island, Vermont and certain parts of Canada which share a border with
any of those States if the Grantor contributed in a material way to the Grantee’s obtaining such
route segments. The one-time payment will be paid upon execution of an agreement with such Third
Party but the annual fee will not be due until the sooner of the Activation Date or the In-Service
Date of such route segments. (Grantee seeks route segments into New York from Connecticut; into
Rhode Island from Connecticut and Massachusetts; into Vermont from Massachusetts, New Hampshire,
New York, and Canada; and into Maine from New Hampshire and Canada.).



Provided, however, that Grantor hereby agrees to accept from the Grantee $3,432,657
(the “Fiber Payments”) in full and complete satisfaction of any and all amounts due and owing by
the Grantee to the Grantor hereunder through June 25, 2002, with the exception of any amounts owing
pursuant to section 32.2 hereof and section 32.2 of the 2002 Phase 2 Agreement, and Grantor and
Grantee agree that the Fiber Payments shall be offset against the acquisition price of the common
stock of NEON Communications, Inc, pursuant to the terms of the Common Stock Purchase Agreement.



 


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(c) As to the indefeasible rights of use in the Additional NLJNet fibers granted to Grantee
pursuant to Section 4.1 A hereof, Grantee shall also pay an annual fee (the “IRU Fee”) as follows:



$125,000 per annum, as adjusted pursuant to Section 22.2 hereof, for the term of this
Agreement as it may be extended, payable in advance on the first business day of each year. For
calendar year ending December 31, 2002, the fee shall be pro rated for the actual number of
days remaining in the year from date hereof through December 31, 2002 and such fee for calendar
year 2002 shall payable upon the execution of this Amendment.



22.2 CPI Adjustments. (a) The Annual Fee shall be adjusted annually from the Effective
Date by an escalation factor equal to changes in the Consumer Price Index All Urban (CPI-U)
published by the US Department of Labor, Bureau of Labor Statistics, which shall be calculated each
October based on changes in the CPI-U from the previous October. In no instance shall the CPI-U
change be applied if it results in a smaller payment than the previous year’s payment. As to any
period during which fees have been waived, the CPI-U shall accrue to the rate during such waiver
period.



(b) The IRU Fee shall be adjusted annually from the date hereof by an escalation factor equal
to changes in the Consumer Price Index All Urban (CPI-U) published by the US Department of Labor,
Bureau of Labor Statistics, which shall be calculated each October based on changes in the CPI-U
from the previous October. In no instance shall the CPI-U change be applied if it results in a
smaller payment than the previous year’s payment. As to any period during which fees have been
waived, the CPI-U shall accrue to the rate during such waiver period.



22.3 Additional Amounts. In addition to the amounts due and payable pursuant to Section
22.1, as adjusted pursuant to Section 22.2, Grantee shall pay Grantor an amount equivalent to 2% of
Grantee’s gross revenues realized from the NEON Network on Grantor’s Structures. The payment shall
be made each and every year that Grantee’s gross revenues realized from the NEON Network on
Grantor’s Structures exceed $15 million. For purposes of this section Grantee’s gross revenues
realized from the NEON Network on Grantor’s Structures shall be the ratio of route miles of the
NEON Network on Grantor’s Structures to Grantee’s Total Route Miles applied to Grantee’s annual
gross revenues, as of, in each case, December 31 of each year. This calculation is set forth in the
following formula: “If ((route miles of the NEON Network on Grantor’s Structures divided by
Grantee’s Total Route Miles) times Grantee’s annual gross revenues) is more than $15,000,000, then
Payment will equal ((route miles of the NEON Network on Grantor’s Structures divided by Grantee’s
Total Route Miles) times Grantee’s annual gross revenues) times 0.02”. Payment will be due no later
than July 1 of the year following the computation year. The parties will agree to revisit this
methodology in the event Grantee acquires the ability to track revenues by fiber route or combines
with another telecommunications company.



22.4 When Due. All Annual Fees shall be paid on January 1st of each year. All pro-rata
payments made during the year shall be based on this date. All payments shall be paid within 30
days of invoicing.



22.5 Initial Annual Fee. Unless otherwise waived according to the provisions of
22.1(b)(i), 22.1(b)(iv) or otherwise, the initial Annual Fee payment will be due and payable within
30 days after preliminary engineering work has been accepted by both parties and shall be based
upon the estimated number of duct feet and aerial feet to be utilized by Grantee over the remainder
of the calendar year.


 


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23. FORCE MAJEURE




23.1 Optional Termination. Should any of the Force Majeure Events defined below occur and
should the Grantor determine that as a direct or indirect result thereof, the parties continued
performance hereunder or with respect to any portion of the Structures and the Cable will be
irreparably impaired or prevented, the parties may mutually agree to terminate this Agreement, in
whole or in part as to any portion of the Route Segments and the Cable so affected with no further
obligation or liability. The parties will attempt to provide a date of termination such that the
parties will have a reasonable time to obtain alternative means of providing service to customers,
but neither party shall have an obligation to do so. A Force Majeure Event shall include fire,
flood, strike or other labor difficulty, natural disasters, acts of God or public enemy, (restraint
or hindrance by any governmental authority), war, insurrection, not, action of any regulating
authorities; or institution of litigation by any Third Party, or any other causes of any nature
reasonably beyond the control of either party which would have a material adverse effect on the
subject matter of this Agreement. Financial difficulties, or events resulting from financial
difficulties, shall not be considered a Force Majeure Event.



23.2 Suspension Pending Force Majeure. If a Force Majeure Event should occur then, and for
a reasonable time thereafter, the parties’ performance of this Agreement shall be suspended. At the
conclusion of a Force Majeure Event the period of time so suspended shall be added to the dates,
schedules and other performance related matters under this Agreement.



24. PROPRIETARY INFORMATION




24.1 Obligation to Maintain as Confidential. Each party acknowledges that in the course of
the performance of this Agreement it may have access to privileged and proprietary information
claimed to be unique, secret, and confidential, and which constitutes the exclusive property and
trade secrets of the other (“Proprietary Information”). This information may be presented in
documents marked with a restrictive notice or otherwise tangibly designated as proprietary or
during oral discussions, at which time representatives of the disclosing party will specify that
the information is proprietary and shall subsequently confirm said specification in writing within
five days. Each party agrees to maintain the confidentiality of the Proprietary Information and to
use the same degree of care as it uses with regard to its own proprietary information to prevent
the disclosure, publication or unauthorized use of the Proprietary Information. Neither party may
duplicate, copy or use Proprietary Information of the other party other than to the extent
necessary to perform this Agreement. Either party shall be excused from these nondisclosure
provisions if the Proprietary Information received from the other party has been or is subsequently
made public by the other party, is independently developed by such party, disclosed pursuant to
order by a court or government agency, or if the other party gives its express, prior written
consent to the disclosure of the Proprietary Information.



24.2 Route Constitutes Proprietary Information. The routing of the NEON Network and the
conditions of Grantee’s contracts with customers and customer names are deemed Proprietary
Information without further notice and will not be disclosed by Grantor absent an order by a court
or regulatory body with jurisdiction over Grantor.


 


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25. ACCESS AND SECURITY




25.1 Access by Grantor. Grantee agrees, upon reasonable request, to allow Grantor direct
ingress and egress to all Grantor Space to be provided to Grantor as described above, and to permit
Grantor to be on Grantee’s premises at such times as may be required for Grantor to perform any
appropriate maintenance and repair of equipment in such Grantor Space. Grantee may require that a
representative of Grantee accompany any representatives of Grantor having access to the Grantor
Space except in New Buildings having separate entrances providing access only to the Grantor Space
therein. Employees and agents of Grantor shall, while on the premises of Grantee, comply with all
rules and regulations, including without limitation security requirements, and, where required by
government regulations, receipt of satisfactory governmental clearances. Grantor shall provide to
Grantee a list of Grantor’s employees or authorized Grantor designee’s employees who are performing
work on, or who have access to, the Grantor’s Space. Grantee shall have the right to notify Grantor
that certain Grantor or authorized Grantor designee employees are excluded if, in the reasonable
judgment of Grantee, the exclusion of such employees is necessary for the proper security and
maintenance of Grantee’s facilities.



25.2 Access by Grantee. Grantor agrees, upon reasonable request, to allow Grantee direct
ingress and egress to all Grantee Space to be provided to Grantee as described above, and to permit
Grantee to be on Grantor’s premises at such times as may be required for Grantee to perform any
appropriate maintenance and repair of Equipment located at such Grantee Space. Grantor may require
that a representative of Grantor accompany any representatives of Grantee having access to the
Grantee Space. Employees and agents of Grantee shall, while on the premises of Grantor, comply with
all rules and regulations, including without limitation security requirements, and, where required
by government regulations, receipt of satisfactory governmental clearances. Grantee shall provide
to Grantor a list of Grantee’s employees or authorized Grantee designee’s employees who are
performing work on, or who have access to, the Grantee Space. Grantor shall have the right to
notify Grantee that certain Grantee or authorized Grantee designee employees are excluded if, in
the reasonable judgment of Grantor, the exclusion of such employees is necessary for the proper
security and maintenance of Grantor’s facilities.



25.3 Access by Grantee to NEON Network Space. Except as provided in Section 25.2 above,
with respect to the Grantee Space, Grantee and authorized Grantee designees shall have the right to
visit any facilities of Grantor utilized in providing the NEON Network upon reasonable prior
written notice to Grantor; provided, however, that Grantor may require that a representative of
Grantor accompany any representation of Grantee or of an authorized Grantee designee making such
visit. Such visitation right shall include the right to inspect the NEON Network and to review
worksheets, to review performance or service data, and to review other documents used in
conjunction with this Agreement. Employees and agents of Grantee or of an authorized Grantee
designee shall, while on the premises of Grantor, comply with all rules and regulations, including
without limitation security requirements and, where required by government regulations, receipt of
satisfactory governmental clearances. Grantor shall have the right to notify Grantee that certain
Grantee or authorized Grantee designee employees are excluded if, in the reasonable judgment of
Grantor, the exclusion of such employees is necessary for the proper security and maintenance of
Grantor’s facilities.


 


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25.4 Grantee’s Work. The Grantee shall at all times perform its work in accordance with
Grantor’s safety and work procedures and in accordance with the applicable provisions of OSHA.
Grantor shall have the authority to suspend Grantee’s work operations in and around Grantor’s
property if, in the sole judgment of Grantor at any time hazardous conditions arise or any unsafe
practices are being followed by Grantee’s employees, agents, or contractors. Grantee agrees to pay
Grantor for having Grantor’s employee or agent present when Grantee’s work is being done in and
around Grantor’s property. Such charges shall be at Grantor’s Actual Cost. The presence of
Grantor’s authorized employee or agent(s) shall not relieve Grantee of its responsibility to
conduct all of its work operations in and around Grantor’s property in a safe and workmanlike
manner, and in accordance with the terms and conditions of this Agreement.



26. NO JOINT VENTURE; COSTS, NON-COMPETE




26.1 Relationship. In all matters pertaining to this Agreement, the relationship of
Grantor and Grantee shall be that of independent contractors, and neither Grantor nor Grantee shall
make any representations or warranties that their relationship is other than that of independent
contractors. This Agreement is not intended to create nor shall it be construed to create any
partnership, joint venture, employment or agency relationship between Grantee and Grantor, and no
party hereto shall be liable for the payment or performance of any debts, obligations, or
liabilities of the other party, unless expressly assumed in writing herein or otherwise. Each party
retains full control over the employment, direction, compensation and discharge of its employees,
and will be solely responsible for all compensation of such employees, including social security,
withholding and worker’s compensation responsibilities.



26.2 Costs. Except for costs and expenses specifically assumed by a party under this
Agreement each party shall pay its own expenses incident to this Agreement, including without
limitation amendments hereto, and the transactions contemplated hereunder, including all legal and
accounting fees and disbursements.



26.3
Non-Compete. Grantor shall not, and none of its affiliates shall, compete with Grantee in the
provision of wholesale telecommunications transport services until after June 30, 2005, provided
that Grantor and its affiliates shall be entitled to fulfill all contractual obligations for
service it was providing as of June 1, 2002, including, but not limited to, Hartford Education and
Library Private Network (HelpNet), Rocket Science (Pease Air Force Base) and Gunver Manufacturing;
and further provided that the granting of rights in any fiber that Grantor owns, builds, obtains or
otherwise controls for any duration, subject to the IRU Option and the IRU ROFR specified in
Section 4.1.B and 4.1C shall not constitute competition as contemplated in this section.



27. PUBLICITY AND ADVERTISING




27.1 Limitations. In connection with this Agreement, neither party shall publish or use
any advertising, sales promotions, or other publicity materials that use the other party’s logo,
trademarks, or service marks or employee name without the prior written approval of the other
party. Except as provided in Section 27.2 below, each party shall have the right to review and
approve any publicity materials, press releases or other public statements by the other party. In
connection with this Agreement, each party agrees not to issue any such publicity materials,
press releases or material produced by the public relations department for the other party without
written consent. Unless otherwise agreed, neither party shall release the existence of the text of
this Agreement or any material portion thereof, other than in the form modified to remove all
references to the identity of the other party, to any person or entity other than the parties
hereto for any purpose other than those specified in Section 27.2.



 


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27.2 Exceptions. The provisions of Section 27.1 shall not apply to reasonably necessary
disclosures in or in connection with regulatory filings or proceedings, financial disclosures which
in the good faith judgment of the disclosing party are required by law, or disclosures that may be
reasonably necessary in connection with the performance of this Agreement.



28. MARKETING RELATIONSHIP




28.1 Grantor Referrals. Upon the written approval of the Grantor, except for the exemption
of customer prospects and customers of Grantee as listed in Exhibit 28, Sales Order
Customer Exclusion List, in the event that communication service orders are received by Grantee, as
a result of Grantee issuing sales literature or promotional material in which the name of Grantor
is mentioned or by Grantor introducing Grantee to customer prospects not listed in Exhibit
28, or by the Grantor undertaking any joint marketing effort with Grantee including joint sales
calls, Grantee shall pay to Grantor compensation equal to the first month that there is recurring
revenue charged by Grantee to those customers receiving such sales literature, promotional material
or joint sales calls.



28.2 Grantee Referrals. In addition, in the event that communications service orders are
received by Grantor as a result of Grantor issuing sales or promotional literature or information
in which the name of Grantee or the NEON Network is mentioned, by Grantee introducing Grantor to
customer prospects, or by Grantee undertaking any joint marketing effort with Grantor, including
joint sales calls, Grantor shall pay to Grantee compensation equal to the first month that there is
recurring revenue charged by Grantor to those customers.



29. SEVERABILITY




29.1 Severability. If any part of any provision of this Agreement or any other agreement,
document or writing given pursuant to or in connection with this Agreement shall be invalid or
unenforceable under applicable law, said part shall be ineffective to the extent of such invalidity
only, without in any way affecting the remaining parts of said provision or the remaining
provisions of said agreement; provided, however, that if any such ineffectiveness or enforcement of
any provision of this Agreement, in the good faith judgment of either party, renders the benefits
to such party of this Agreement as a whole uneconomical in light of the obligations of such party
under this Agreement as a whole, then the other party shall negotiate in good faith in an effort to
restore insofar as possible the economic benefits of this Agreement to such party.



30. LABOR RELATIONS




30.1 Notice by Grantor. Grantor agrees to notify Grantee immediately whenever Grantor has
knowledge that a labor dispute concerning its employees is delaying or threatens to delay Grantor’s
timely performance of its obligations under this Agreement. Grantor shall endeavor to
minimize impairment of its obligations to Grantee (by using Grantor’s management personnel to
perform work, or by other means) in event of a labor dispute.



 


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30.2 Notice by Grantee. Grantee agrees to notify Grantor immediately whenever Grantee has
knowledge that a labor dispute concerning its employees is delaying or threatens to delay Grantee’s
timely performance of its obligations under this Agreement. Grantee shall endeavor to minimize
impairment of its obligations to Grantor (by using Grantee’s management personnel to perform work,
or by other means) in the event of labor dispute.



30.3 Determination by Grantee. If Grantee determines that Grantor’s activities pursuant to
this Agreement in any Grantee facility are causing or will cause labor difficulties for Grantee,
Grantor agrees to discontinue those activities until the labor difficulties have been resolved;
provided, however, that in any such event and notwithstanding any other provision of this
Agreement, Grantee shall during the period of such labor difficulties rerform at its own expense
any such activities that may be reasonably necessary to the operation and maintenance of the
Grantor’s system or any portion thereof.



30.4 Determination by Grantor. If Grantor determines that Grantee’s activities pursuant to
this Agreement in any Grantor facility are causing or will cause labor difficulties for Grantor,
Grantee agrees to discontinue those activities until the labor difficulties have been resolved;
provided, however, that in any such event and notwithstanding any other provision of this
Agreement, Grantor shall during the period of such labor difficulties perform at its own expense
any such activities that may be reasonably necessary to the operation and maintenance of the
Grantee’s system or any portion thereof.



31. CONSENTS AND WAIVERS




31.1 Consent and Waiver. Whenever any party hereto is asked to consent or waive any action
or matter provided herein or whenever any party has the right to do or refuse to do any act in its
sole judgment or discretion provided herein, said party agrees to act reasonably and in good faith
in making or refusing to consent, in waiving or refusing to waive, or in making any such judgments.



32. TAXES AND GOVERNMENTAL CHARGES




32.1 Taxes. The Grantee shall pay the Grantor the pro rata amount based on the number of
fiber optic filaments under each Party’s control, of all taxes assessed on the Grantor which are
attributable to the Grantee’s portion of the Cable, New Buildings and Equipment. The Grantee shall
pay the Grantor said taxes when they become due, which shall include all taxes, assessments and
governmental charges of any kind whatsoever lawfully levied or assessed and attributable against
the Grantee’s installation, maintenance or operation of the connections to the Cable or against the
Grantee’s business with regards to the Cable or the connection thereof, including without
limitation, all franchise and other fees to any Federal, State, City or other jurisdiction having
the authority to tax or assess other governmental charges. Upon said payment to Grantor, Grantor
shall indemnify Grantee against any and all actions which may be brought against Grantor and
Grantee with regard to Grantor’s remittance of said payments to any taxing authority or
governmental agency. Grantee shall have the right to pay the tax or charge under



 


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protest without being subjected to a default notice under Section 34. The Grantor shall pay, when
they become due, the pro rata amount based on the number of fiber optic filaments under each
Party’s control, all taxes, assessments and governmental charges of any kind whatsoever lawfully
levied or assessed against the Cable, installation, maintenance or operation of the connections to
the Cable or against the Grantor’s business with regards to the Cable or the connection thereto,
including without limitation, all franchise and other fees to any Federal, State, City or other
jurisdiction having the authority to tax and assess other governmental charges. Grantor shall have
the right to pay the tax or charge under protest without being subjected to a default notice under
Section 34. Grantor warrants that it shall remit all tax payments to taxing authorities and
governmental agencies and shall not cause the Cable to be levied, attached, or otherwise encumbered
by any taxing authority by not having done so. Each party shall pay without apportionment any taxes
levied on it based on its business profits.



32.2 Income Tax Liability. Grantee shall also reimburse Grantor for any income tax
liability incurred by Grantor as a result of its acquisition of NUNet. Grantee will supply Grantor
on request and no more frequently than quarterly with the costs and other details of any additions
to NUNet such that each separate Grantor operating company can calculate its individual income tax
liability. Grantor shall take reasonable efforts suggested by Grantee to minimize the amount of
said income tax liability on its return(s), in accordance with applicable laws and regulations. The
parties agree that Grantor’s tax liability to be reimbursed hereunder and under the 2002 Phase 2
Agreement through June 25, 2002 is in the amount of $1,425,439. This amount shall be deemed to be
billed in full on July 1, 2004 and be due and payable by Grantee no later than December 31, 2004.
Grantor shall, from time to time, calculate any additional income tax liability for NUNet acquired
after June 25, 2002 and invoice Grantee. Grantee shall pay such amount within sixty (60) days of
receiving such invoice. Grantee shall hold harmless, indemnify and defend Grantor in the event
Grantor’s tax position with respect to NUNet is challenged by the IRS. In lieu of cash, Grantee
shall provide said reimbursement in the form of additional fiber segments, engineering services, or
other telecommunication services that Grantor may request from Grantee from time to time and which
Grantee agrees to provide, which segments and/or services shall have a value (grossed up to take
account of the time value of money and the timing of any actual tax payments) equivalent to
Grantor’s tax liability described in this paragraph. In a given year, Grantee shall only be
obligated to provide reimbursement valued up to an amount equal to the tax liability incurred by
Grantor for the prior tax year, plus any unused reimbursement amounts from earlier years.



33. INDEMNIFICATION




33.1 By Grantee. Grantee agrees to indemnify and hold harmless Grantor, its employees,
contractors, subcontractors, agents, directors, officers, affiliates, and subsidiaries and their
respective employees, subcontractors, agents, directors and officers from and against any and all
liabilities, damages, losses, claims, demands, judgments, costs, and expenses (including, subject
to Section 33.2, the cost of defense thereof and attorney’s fees) based on the Grantee’s use of the
Cable including, without limitation, any claim for infringement of patent or trade secret, made by
Third Parties (collectively, “Claims”).



 


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33.2 Indemnification Procedures. The Grantor shall give prompt notice of any Claim for
which indemnification is or will be sought under this Section and shall cooperate and assist the
Grantee
in the defense of the Claim. The Grantee shall bear the cost of and have the right to control the
defense and shall have the right to select counsel after consulting with the Grantor. The
obligation to indemnify shall be net of any tax or insurance benefit obtained by the Grantor.



33.3 Limitation of Grantor Liability. In no event shall Grantor be liable to the Grantee
or to its customers, whether in contract, tort, or otherwise, including strict liability, for any
special, indirect, incidental or consequential damages or any lost business damages in the nature
of lost revenues or profits, and any such claims by Third Parties against Grantor shall invoke the
obligations under, but subject to the provisions of, Section 33.1 above.



33.4 Limitation of Grantee Liability. In no event shall Grantee be liable to the Grantor
or to its customers, whether in contract, tort, or otherwise, including strict liability, for any
special, indirect, incidental or consequential damages or any lost business damages in the nature
of lost revenues or profits.



34. DEFAULT




If either party shall allow any payment due hereunder to be in arrears more than 60 days after
notice from the other party, shall allow any policy of insurance provided by Section 19 hereof to
expire without renewal, or shall remain in default under any other provision of this Agreement
other than those referred to in Section 21 for a period of 30 days after notice by the other party
of such default, the party so notifying the other party may, at its option, terminate this
Agreement pursuant to Section 21, or avail itself of any other remedy at law or equity, including
without limitation, the remedy of specific performance, provided, however, that, in the case of a
default for other than failure of payment or failure to maintain insurance, where the party in
default proceeds with all due diligence to cure such default and cure is not possible within said
30 days, then the party then in default shall have such time to cure the default as the other party
agrees is reasonably necessary. The parties agree that Grantee’s remedies at law for a breach by
Grantor of the warranty set forth in Section 4.7 may be inadequate and that, for such a breach
where Grantee’s remedies at law are inadequate, Grantee shall be entitled to equitable relief.



35. ASSIGNMENT




35.1 By Grantee. Subject to Section 35.4, the Grantee may not assign or otherwise allow
use of its rights under this Agreement to any person or entity other than an affiliate (as defined
in Section 16.1) without the prior written approval of the Grantor. The Grantor’s approval will be
granted provided the new person or entity demonstrates to the reasonable satisfaction of the
Grantor that the proposed assignee is financially and operationally fit, willing and able to
discharge its obligations under this Agreement, acquires substantially all of the Grantee’s
business within the geographic area of such assignment including substantially all of the assets
used in such business, and agrees to be bound directly and fully by all of the terms and conditions
of this Agreement.



35.2 Change of Control. Any change of control of the Grantee shall be deemed an assignment
if a new person or entity other than an affiliate (as defined in Section 16.1), directly or
indirectly, acquires 50% or more of the voting stock of the Grantee in one or more connected
transactions, except that this Section 35.2 shall not apply to (i) any transaction consummated
within 30 days
of the date of this Agreement involving Applied Telecommunications Technologies, Inc. or (ii) any
other acquiror of any equity interest in the Grantee, if such other acquiror was introduced to the
Grantee by Applied Telecommunications Technologies, Inc., or if Applied Telecommunications
Technologies, Inc. was acting as an advisor for such other acquiror.



 


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35.3 Grantor’s Right to Pledge Agreement and Transfer Property. Grantor shall be free to
mortgage, pledge, or otherwise assign its interests under this Agreement to any Third Party in
connection with any borrowing or other financing activity of Grantor provided that such assignment
shall not limit or otherwise affect Grantor’s obligations under this Agreement. Any transfer of
property of the Grantor included in or subject to this Agreement may be made by Grantor provided
the person acquiring such property takes it subject to this Agreement.



35.4 Grantee’s Right to Pledge Agreement and Lease Fibers. Grantee shall be free to
mortgage, pledge or otherwise assign its interest under this Agreement to any Third Party in
connection with any borrowing or other financing activity (including that contemplated by Section
20) of Grantee provided that such assignment shall not limit or otherwise affect Grantee’s
obligations under this Agreement. Nothing in this Section 35 shall limit or apply to the Grantee’s
right to IRU, lease or sublease fibers of which it has the use under this Agreement to Third
Parties in the normal course of the Grantee’s business.



35.5 Right to Assign. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns where permitted by this Agreement or
where an assignment occurs by operation of law.



36. APPROVALS, PERMITS, AND CONSENTS




36.1 Grantee’s Obligations. During the term of this Agreement, Grantee at its sole cost
and expense shall obtain and maintain any and all necessary permits, licenses, franchises and
approvals that may be required by federal, state or local law, regulation or ordinance, and shall
continuously comply with all such laws, regulations or ordinances as may now or in the future be
applicable to the Grantee’s use and operation of the Cable. If Grantee or any permitted assignee
shall at any time fail to maintain such approvals, Grantor may terminate this Agreement without any
liability or obligation to Grantee pursuant to Section 21.3(iv).



36.2 Opinion. Within 90 days of the date of this Agreement, the Grantee shall provide the
Grantor with an opinion of counsel, in form and substance satisfactory to Grantor, stating
Grantee’s compliance with the provisions of law applicable to Grantee’s use of the Cable and its
obligations under this Agreement.



36.3 Grantor’s Obligations. During the term of this Agreement, the Grantor shall, at its
Actual Cost to be paid by the Grantee, obtain all approvals and consents that may be required from
all federal, state, and local authorities regarding all or any portion of the Cable installation or
replacement upon the Route Segments subject to such jurisdiction. Legal counsel used for this
purpose shall be selected by Grantor following consultation with the Grantee.


 


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37. NOTICES




37.1 Form and Address. All notices authorized or required by this Agreement shall be given
in writing and delivered to the following addresses, which may change from time to time by such
notice to either party, which addresses shall also serve as the addresses for the delivery of any
amounts due and payable hereunder:



If to Grantor:




Manager — Real Estate & Land Planning

Northeast Utilities Service Company

107 Selden Street

Berlin, CT 06037




With a copy to:




Director — Transmission Engineering

Northeast Utilities Service Company

107 Selden Street

Berlin, CT 06037




And a copy to:




General Counsel

Northeast Utilities Service Company

107 Selden Street

Berlin, CT 06037



If to Grantee:




NEON Optica, Inc.

2200 West Park Drive

Suite 200

Westborough, MA 01581

Attention: Contract Administration




With a copy to:




NEON Optica, Inc.

2200 West Park Drive

Suite 200

Westborough, MA 01581

Attention: General Counsel



37.2 How Sent. Each notice, demand, request, report approval or communication which shall
be mailed in the manner described above, or delivered by hand or an insured overnight courier,
shall be deemed sufficiently given, served, sent or received for all purposes at such time as it is
delivered to the addressee, with the return receipt or the delivery receipt being deemed conclusive
evidence of such delivery, or at such time as delivery is refused by the addressee upon
presentation.


 


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37.3 Damage Notification. In the event that the Cable is damaged for any reason, the party
discovering such damage shall notify the other party of said damage by telephone at:




for Grantor (860) 665-6000 or (800) 286-5000 extension 6000

for Grantee (877) 789-6366.



These are 24 hour, 7 day per week emergency notification numbers. Calls shall be directed to the
Supervisor on Duty, and the caller should be able to provide the following information:




	 	1.	 	Name of company making report;
	 
	 	2.	 	Location reporting problem;
	 
	 	3.	 	Name of contact person reporting problem;
	 
	 	4.	 	Telephone number to call back with progress report;
	 
	 	5.	 	Description of the problem in as much detail as possible;
	 
	 	6.	 	Time and date the problem occurred or began; and\
	 
	 	7.	 	If appropriate, a statement that “This is an emergency” and
that a problem presents a jeopardy situation to the physical plant of
Grantor or Grantee, as the case may be.





38. DISPUTE RESOLUTION




38.1 Arbitration. If any question shall arise in regard to the interpretation of any
provision of this Agreement or as to the rights or obligations of the parties hereunder, the
question shall be referred to the respective Program Managers who shall deliberate such questions
for not more than 15 days. If a resolution is not forthcoming within said period the matter will be
referred to a senior executive designated by each party who shall, within 30 days of the request of
the party invoking these dispute resolution procedures, meet with each other to negotiate and
attempt to resolve such question in good faith. Such senior executives may, if they so desire,
consult outside experts for assistance in arriving at such a resolution. In the event that the
resolution is not achieved within 30 days after such a request, then the question shall be finally
resolved by the award of arbitrators (all of whom shall be arbitrators certified by the American
Arbitration Association) named as follows:



(i) the party sharing one side of the dispute shall name an arbitrator and give written notice
thereof to the party sharing the other side of the dispute;



(ii) the party sharing the other side of the dispute shall, within 14 days of receipt of such
written notice, name an arbitrator; and



(iii) the arbitrator so named shall within 15 days after the naming the latter of them, select
an additional arbitrator. If such additional arbitrator is not selected within fifteen (15) days of
the appointment of the latter of the arbitrators the party sharing either side of the dispute may
seek to appoint such third arbitrator by applying to the American Arbitration Association. The
arbitrators shall proceed promptly to hear and determine the matter in controversy. The arbitration
shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitrators shall be instructed that their
decision must be made within 45 days after the appointment of the third arbitrator, subject to
any reasonable delay due to unforeseen circumstances.



 


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38.2 Award, Costs. The decision of the arbitrators shall be in writing and signed by the
arbitrators or a majority of them and shall be final and binding on the parties, and the parties
shall abide by the decision and perform the terms and conditions thereof. Unless otherwise
determined by the arbitrators, the fees and expenses of the arbitration shall be borne by the party
losing in these dispute resolution procedures, or if no party prevails in full, as allocated by the
arbitrators based on the relative merits of the parties positions. Judgment upon the award rendered
may be in any court having jurisdiction or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the case may be. All arbitration shall be
conducted in Worcester, Massachusetts.



39. EXERCISE OF RIGHTS




39.1 No Waiver. No failure or delay on the part of either party hereto in exercising any
right, power or privilege hereunder and no course of dealing between the parties shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege.



39.2 Grantee’s Self Help Rights. In the event the Grantor shall default or in any manner
fail to perform any of its maintenance obligations hereunder and such failure shall continue for
twenty (20) days after written notice from the Grantee, then, unless such failure is the result of
a Force Majeure Event, the Grantee shall have the right, but not the obligation, so long as such
failure continues, to perform such obligations of the Grantor in accordance with the relevant
provisions of this Agreement, provided that Grantee shall only use properly qualified and licensed
personnel to perform such maintenance, shall proceed in accordance with all applicable laws, codes
and regulations, and shall provide advance written notice prior to entering Grantor’s property.



40. ADDITIONAL ACTIONS AND DOCUMENTS




40.1 Further Actions. Each of the parties hereto hereby agrees to take or cause to be
taken such further actions, to execute, acknowledge, deliver and file or cause to be executed,
acknowledged, delivered and filed such further documents and instruments, and to use its best
effort to obtain such consents, as may be necessary or as may be reasonably requested in order to
fully effectuate the purposes, terms and conditions of this Agreement, whether at or after the
execution of this Agreement.



41. SURVIVAL




41.1 Survival. It is the express intention and agreement of the parties hereto that all
covenants, agreements, statements, representations, warranties and indemnities made in this
Agreement shall survive the execution and delivery of this Agreement.


 


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42. HEADINGS




42.1 Headings. Article headings contained in this Agreement are inserted for convenience
of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall
not in any way define or affect the meaning, construction or scope of any of the provisions hereof.



43. INCORPORATION OF EXHIBITS




43.1 Exhibits. The Exhibits referenced in and attached to this Agreement shall be deemed
an integral part hereof to the same extent as if written at length herein.



44. COUNTERPARTS




44.1 Counterparts. To facilitate execution, this Agreement may be executed in as many
counterparts as may be required; and it shall not be necessary that the signatures of or on behalf
of each party appear on each counterpart; but it shall be sufficient that the signature of or on
behalf of each party appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in any proof of this Agreement to produce
or account for more than the number of counterparts containing the respective signatures of or on
behalf of all of the parties.



45. APPLICABLE LAW




45.1 Jurisdiction. This Agreement shall be construed under and in accordance with the laws
of the State of Connecticut.



46. PRIOR AGREEMENTS




46.1 Entire Agreement. This Agreement supersedes all prior or contemporaneous proposals,
communications and negotiations, either oral or written, relating to the rights, obligations, or
performance of this Agreement, the 1994 Agreement, Prior Agreement, Phase 1 Agreement by the
parties hereto, and, as such, constitutes the complete and entire agreement of the parties.



[Remainder of Page Intentionally Left Blank]





 


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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first above
written.



	 	 	 	 	 	 	 
	Witnessed by:	 	Northeast Utilities Service Company	 	   
	 
	 	 	 	 	 	 
	/s/ Ellen L. Lindne

	 	By:
	 	/s/ David H. Boguslawski	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: David H. Boguslawski 

Title: Vice President — Transmission Business	 	 
	 
	 	 	 	 	 	 
	 	 	The Connecticut Light and Power Company	 	 
	 
	 	 	 	 	 	 
	/s/ Ellen L. Lindne

	 	By:
	 	/s/ David H. Boguslawski	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: David H. Boguslawski	 	 
	 

	 	 	 	Title: Vice President — Transmission Business	 	 
	 
	 	 	 	 	 	 
	 	 	Western Massachusetts Electric Company	 	 
	 
	 	 	 	 	 	 
	/s/ Ellen L. Lindne

	 	By:
	 	/s/ David H. Boguslawski	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: David H. Boguslawski	 	 
	 

	 	 	 	Title: Vice President — Transmission Business	 	 
	 
	 	 	 	 	 	 
	 	 	Public Service Company of New Hampshire	 	 
	 
	 	 	 	 	 	 
	/s/ Ellen L. Lindne

	 	By:
	 	/s/ David H. Boguslawski	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: David H. Boguslawski	 	 
	 

	 	 	 	Title: Vice President — Transmission Business	 	 
	 
	 	 	 	 	 	 
	 	 	NEON Optica, Inc., Successor in interest to
NECOM LLC	 	 
	 
	 	 	 	 	 	 
	/s/ Barbara Johnson

	 	By:
	 	/s/ Stephen E. Courter	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Stephen E. Courter	 	 
	 

	 	 	 	Title: CEO	 	 






	 	 	 	 	 
	Execution Copy

	 	Signature Page
	 	Phase 1 Fiber Agreement








 


S-1









 







EXHIBIT 3.30

Fiber Route Listing



 


 









 





EXHIBIT 4.1A

Fiber Route Listing




Additional NUNet Fibers




Six fibers of NUNet on Segment 4 (63 miles) — Manchester, NH to Elliot, ME




Six fibers of NUNet on Segment 11 (35 miles) — Manchester, NH to Hudson, NH




Four fibers of NUNet on Segment 3 (22 miles) — Manchester, NH to Hudson, NH




Previously granted




East
Springfield Substation (WMECO) to Ludlow Substation (WMECO) 96 fiber cable — fibers # 49 & 50;



Ludlow
Substation (WMECO) to Manchester Substation (CL&P) 96 fiber cable — fibers 73 & 74;



Manchester
Substation (CL&P) to East Hartford Sub (CL&P) 96 fiber cable — fibers 73 & 74;



East
Hartford Substation (CL&P) to B1 Tower at South Meadow Substation (CL&P) 96 fiber cable — fibers 73 & 74;



Millstone Substation (CL&P) to 475 Building on Millstone complex
12 fiber cable — fibers 9, 10, 11 & 12. (Subject to NU retaining necessary
approvals required from Dominion Nuclear Connecticut, Inc.).


 


 









 





EXHIBIT 3.31

Specifications



 


 









 





EXHIBIT 5.3

Network Expansion



 


 









 





EXHIBIT 10.1

Maintenance



 


 









 





EXHIBIT 11.1

Request for Relocation



 


 









 





EXHIBIT 28

Exempt Projects