Filed by Bowne Pure Compliance



 




EXHIBIT 10.12




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




Amending and Restating Agreement dated as of February 27, 1998




PHASE TWO




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
- Phase 2 (this “Agreement”) is entered into as of December 23, 2002 between Northeast Utilities
Service Company, a specially chartered 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, “NU”) 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 “NEON
Optica”).



2. RECITALS




2.1 WHEREAS, the parties have entered into an Agreement for the Provision of Fiber Optic Facilities
and Services — Phase Two dated as of February 27, 1998 (the “Phase 2 Agreement”) and wish to amend
and restate it for the purposes set forth herein; and



2.2 WHEREAS, NU 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 NU’s electric
transmission system; and



2.2 WHEREAS, NEON Optica 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 NEON Optica for its communication system and 12 of which will be
used by NU for its communication system or otherwise as permitted by this Agreement; and



2.3 WHEREAS, NU is willing to permit the use of certain of its Structures for the purposes
described in clause 2.2 in exchange for title to the Cable as and to the extent set forth in
Sections 15.1 and 15.2, and the ownership and use of 12 singlemode fiber optic filaments and the
payment of certain annual fees; and



2.4 WHEREAS, NU 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 NU and FiveCom dated
February 23, 1996 (the 1994 Agreement as so amended is herein called the “Prior Agreement”); and


 


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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, NECOM and NU 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



2.8 WHEREAS, in order for NECOM to obtain financing for continued development of NEON on the Route,
NECOM’s lenders required that NECOM have not only the indefeasible right of use for NEON but also
hold legal title to the portions of NEON in Cable that is installed on or after the date of the
1998 Amended Agreement; and



2.9 WHEREAS, the parties agreed to an arrangement by which it is not detrimental to NU that legal
title to the portions of NEON in Cable that is installed on or after the date of the 1998 Amended
Agreement and not reflected on Exhibit 2.7 to the 1998 Amended Agreement be vested in
NECOM, and entered into the Phase 2 Agreement that governs the installation of Cable, as
hereinafter defined, that occurs after the date of execution of such agreement; and



2.10 WHEREAS, the continued effectiveness of the Phase 2 Agreement and installation of the Cable is
advantageous to the parties, and that one of the benefits to NU is the expansion of NUNet at the
expense of NEON Optica; and



2.11 WHEREAS, pursuant to a corporate reorganization, NEON Optica, Inc. has become the successor
in interest to NECOM; and



2.12 WHEREAS, NEON Optica 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 Phase 1 Agreement and the Phase 2 Agreement; and



2.13 WHEREAS, NU and NEON Optica have entered into an Amendment and Restatement of the Phase 1
Agreement dated the date hereof (the “2002 Phase 1 Agreement”); and



2.14 WHEREAS, NU and NEON Communications, Inc. have entered into a Common Stock Purchase Agreement
as of the date hereof (the “Common Stock Purchase Agreement”); and



2.15 WHEREAS, NU and NEON Optica wish to amend and restate the Phase 2 Agreement to incorporate the
terms and conditions contained in the June 2002 Letter Agreement;



 


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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 Annual Fee — See Section 22.1.



3.4 Cable — Fiber optic filaments consisting of either NUNet, NEON, 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.



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 Majeure Events — See Section 23.1.



3.12 Indefeasible Right of Use (or IRU) — An indefeasible right of use, for the use of NEON in
accordance with the purposes described herein, in NU’s Structures, Space and the Route, as set
forth in Section 4.1, including without limitation, all of the rights and privileges of an
Indefeasible Right of Use as generally understood and interpreted in the communications industry as
an exclusive ownership right relating to communication transmission capacities and facilities.



3.12
IRU Option — See Section 4.1B



3.13 IRU ROFR — See Section 4.1C



3.14 NEON Optica — See Section 1.


 


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



3.16 “NEON Optica’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
NEON Optica for normal, commercial operating purposes.



3.17 NU — See Section 1.



3.18 NU’s Space — Floor space to be provided to NU by NEON Optica in New Buildings or facilities of
NEON Optica for the placement of Equipment to be used solely in connection with NUNet.



3.19 NU’s Territory — The geographical areas where NU 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.



3.20 In Service Date — A date after the Activation Date when the NEON fibers are transmitting light
from a revenue producing customer including, without limitation, NU.



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 NU as NUNet), NEON Optica’s Equipment and NEON Optica’s Space.



3.23 Network Addition — Any subsequent NU 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 NEON Optica’s and/or NU’s Equipment of
which either NU or NEON Optica 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,
NU’s Equipment and NU’s Space.



3.26 Periodic Inspection — The inspections conducted at irregular intervals by NU on all or
portions of the Route for the sole purpose of determining that NEON Optica’s occupancies of NU’s
property is as authorized and is maintained in conformance with the terms 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 NU’s transmission route designated in Exhibit 3.30 to this
Agreement, as it may be amended from time to time by written agreement of the parties.


 


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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. NEON Optica’s RIGHT OF USE; OBLIGATION TO BUILD




4.1 Right of Use. The parties will install, or cause to be installed, the Cable in
accordance with the provisions of this Agreement. Upon installation on or after February 27, 1998
with respect to the Cable on a Route Segment or alternate path, NEON Optica shall have an
Indefeasible Right of Use, for the purposes described herein, in that Route Segment or alternate
path and in NU’s Structures and Space for the operation of the NEON Network, for the Term defined
in Section 21.1 and on the terms and subject to the conditions set forth herein.



4.1A [Intentionally Omitted]




4.1B IRU Option. NU hereby grants to NEON Optica an option, through June 30, 2005, for an
IRU (“IRU Option”) in up to 8 fibers on NUNet, where available in light of NU’s reasonably
foreseeable service needs and the rights of third parties in existence at the time or times such
IRU Option is exercised. Until NEON Optica exercises its IRU Option with respect to any portion of
NUNet, NU will, subject to the IRU ROFR described in the next paragraph below, be able to grant
rights therein, including IRUs 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 price for
such IRU’s, such open issues shall be resolved pursuant to Section 38 hereof.



4.1C IRU Right of First Refusal. NU also grants to NEON Optica a right of first refusal
(“IRU ROFR”), through June 30, 2010, to obtain IRUs in all fiber optic filament which it owns or
otherwise controls or subsequently builds, obtains or otherwise controls. In the event that NU
receives a bona fide offer for any such fibers, then NU shall provide written notice to NEON Optica
of such offer providing reasonable details thereof. To exercise its IRU ROFR, NEON Optica must
provide written notice to NU within 30 days of receipt of the written notice from NU indicating
that NEON Optica 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 NEON Optica 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 NU of NEON Optica’s desire to exercise such option or right, the affected fibers will
thereafter be free from such rights of NEON Optica.


 


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4.1E Non-NUNet Fibers. IRUs obtained by NEON Optica 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-NLTNet 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 NEON Optica by NU 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 1 Agreement.



4.2 Grant Subject to Security Interests. NU 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 provisions of Section 4.1. NU
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 February 27, 1998; 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 4.1 E are solely for NEON
Optica’s use in providing telecommunications services. NEON Optica 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.



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 NU as a
supplier of services or layout equipment under the terms of this Agreement or as a result of NU’s
obligation to maintain reliable electric service.



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 NU 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, NU warrants that it
shall not interfere with nor disturb NEON Optica in its use and full enjoyment of NEON Optica’s
Indefeasible Right of Use set forth in Sections 4.1 through 4.1 E.



4.8 Reservation of Security Interest. NEON Optica reserves a security interest in NUNet,
and all products and proceeds thereof, as security for NU’s performance of its obligations under
Section 4.7 of this Agreement, and NU shall confirm such reservation by executing and
delivering to NEON Optica a security agreement in the form attached as Exhibit 4.8. NEON
Optica, or any assignee or purchaser from NEON Optica, shall have an Indefeasible Right of Use in
NU’s Structures, Space and Route for the operation of NUNet in the event NUNet is acquired by NEON
Optica, or any assignee or purchaser from NEON Optica, pursuant to such security agreement.


 


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5. MODIFICATIONS TO THE ROUTE




5.1 Additional Route Segments Designated by NU. If NU shall determine the need for any
Network Additions from Third Parties, NEON Optica shall have the first right to provide such
Network Additions. If, for any reason, NEON Optica is unwilling or unable to provide such Network
Additions on the terms requested by NU, NU shall be free to obtain such Network Additions from
Third Parties. If NU shall obtain such Network Additions other than from NEON Optica, NU shall use
its best efforts to provide NEON Optica 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 NU.
NEON Optica shall pay the incremental cost of material necessary to provide such fibers. If NU
does not designate an addition to its fiber optic communications system as a Network Addition to a
Route Segment, NU shall have no obligations to NEON Optica under this Section 5.1 with respect to
such Addition.



5.2 Intentionally Omitted.



5.3 Additional Route Segments Designated By NEON Optica. If NEON Optica 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 NU withdraws Route Segments pursuant to Section 5.2 or
Section 21.4, then NEON Optica shall have the right, subject to NU’s approval, to designate
additional Route Segments, or an alternative path, for the Cable on Structures or property of NU by
submitting a request in the form of Exhibit 11.1. NU shall not withhold its approval of
such additional Route Segments unless such additional Segments would materially adversely affect
NU’s ability to provide reliable electric service, cause or create safety problems or not be
feasible for structural reasons.



5.4 Cost and Means of Right of Way Acquisitions. NEON Optica shall be responsible for, and
NU shall cooperate in, the acquisition of any easement or right-of-way rights that may be required
in order to permit (i) the installation, operation and maintenance of the Cable on the Route or
(ii) the ownership and use of the NEON Network fibers by NEON Optica. New easements obtained by
NEON Optica shall be assignable to NU, 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 NEON Optica, then any required condemnation action shall be brought by NEON
Optica in its own behalf, if such action is available to NEON Optica. Any easement or right
obtained by NEON Optica by using the power of eminent domain shall be subsequent and subordinate to
any existing rights of NU. Except in the case of condemnation by NEON Optica, NU 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.


 


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5.5 NEON Optica’s Right to Build and Connect Third Party Segments. In the event that NU
(i) does not have Structures available to replace Route Segments not available for any reason to
NEON Optica or (ii) does not provide such Structures at the request of NEON Optica, NEON Optica
shall have the right to build or otherwise obtain such Structures from Third Parties, at NEON
Optica’s sole cost and expense. NEON Optica may connect such Third Party facilities to the Route
Segments and Cable subject to the approval by NU of NEON Optica’s connection plans. The work to
connect such Third Party facilities located on NU’s property shall be performed by NU. The
provisions of the last two sentences of Section 6.1 shall apply to this work to be performed by NU.
NEON Optica shall pay all of NU’s Actual Costs to review these connection plans and to oversee the
construction of such connections. If the NEON Optica interconnects Third Party facilities to the
Cable or Structures, NEON Optica shall, upon NU’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 NU’s Territory and up to eight singlemode fibers outside NU’s Territory on terms no
less favorable than those provided NEON Optica for the NEON Network.



5.6 Third Party Connections. In the event of use of connections to the Cable from public
and private property, NEON Optica shall designate the location and manner in which the Cable will
enter and exit NU’s property and connect to the Cable and shall provide such specifications as
needed unless so provided in the engineering plans of NU’s property. Such specifications will be
subject to change from time to time by the written consent of the parties hereto. NU 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. NU hereby grants NEON Optica the right to install, maintain, and
operate the connections to the Cable as described in this Section 5.



6. ENGINEERING AND DESIGN




6.1 NU’s Obligations. In consultation with NEON Optica, and in accordance with the
Specifications, NU 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. NU 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 NEON Optica, are required to provide usable fiber optic transmission capacity
throughout NU’s system over the Route Segments. All such detailed specifications, construction
working prints and other information shall be subject to NEON Optica’s approval which approval
shall not be unreasonably withheld or delayed. NEON Optica shall reimburse NU for NU’s Actual
Costs incurred pursuant to this Section 6.1. NU shall use its best efforts to perform the work
called for by this Section 6.1 at the lowest possible cost to NEON Optica. The services provided
by NU in this Section 6.1 shall be performed in a professional and workmanlike manner.


 


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6.2 NEON Optica’s Obligations. NEON Optica, at its sole cost and expense, shall design, in
cooperation with NU, 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 NU 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 NU.



7. MAKE READY WORK




7.1 Responsibility for Performance. In the event NU and NEON Optica 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”), NU will either perform such Make Ready
Work or permit NEON Optica or its contractor to perform such Make Ready Work. Any charges for Make
Ready Work performed by NU (other than to satisfy the representation made in Section 18.3) will be
paid at NU’s Actual Costs 30 days after presentation of an invoice for such work. If NU elects to
perform any Make Ready Work, NU will either (i) endeavor to include such work in its normal work
load schedule, or (ii) at the request of NEON Optica, based on the availability of NU’s manpower,
shall perform such Make Ready Work after normal hours and at prevailing overtime rates, but not
less than straight-time rates.



7.2 Condition of Structures. NU shall make available its Structures and other facilities
owned or controlled by NU as required to provide for continuous locations on which the Cable can be
placed. NU 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 NEON Optica. Work required which
is common to both Sections 7.2 and 18.3 shall be performed at the sole cost of NEON Optica.



7.3 Costs. NEON Optica shall reimburse NU for NU’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 of removal
of existing shield wire, and any New Building and the Equipment. NEON Optica shall reimburse NU
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 able (other than to satisfy
the representation made in Section 18.3). NU shall use its best efforts to perform the work called
for by Section 7.1 at the lowest possible cost to NEON Optica. The services provided by NU in
Section 7.1 shall be performed in a professional and workmanlike manner.


 


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8. INSTALLATION




8.1 NEON Optica’s Right to Select Contractors. NU shall provide NEON Optica with an
estimate of NU’s Actual Cost for the installation of the Cable and Cable Accessories. NEON
Optica may then request that NU seek bids from qualified contractors and NU’s Actual Cost shall
then be based on the lowest qualified bid. If an outside contractor is selected, NU 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 NU.



8.2 NEON Optica’s Right to Issue Specifications. NEON Optica shall have the right but not
the obligation to participate in NU’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 NU’s Installation Obligations. NU shall supervise and, in consultation with NEON
Optica, 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.



8.4 New Buildings. In NU’s sole discretion, NU shall provide all electric power service to
all New Buildings and to all NEON Optica’s Space in NU’s retail service territory. NU shall
perform and be responsible for site preparation and shall prepare foundations and fencing for all
New Buildings on NU’s property. NEON Optica shall install all New Buildings and Equipment used in
equipping the NEON Network and in cooperation with NU when such installation is on NU’s property.
NEON Optica shall reimburse NU 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 NEON Optica and NU Equipment.



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



8.6 Public Rights of Way. NEON Optica 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 NEON Optica’s responsibility, termed network side, on the other side
of the Demarcation Point, termed premise side, both NU and NEON Optica shall be
responsible for their respective Equipment and any Cable extensions. The color coding of the
tube(s) and fibers dedicated for NU’s use shall remain consistent throughout the Route.


 


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9.2 Building Extensions. The NEON Network will be extended by NEON Optica for use by NEON
Optica within buildings as required. In such extensions the entire Cable beyond the building patch
panel shall remain the property of NEON Optica and NU shall receive an indefeasible right to use 12
fibers for NUNet to the point of the building patch panel. NEON Optica 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 NEON Optica’s facilities on said
property.



10. MAINTENANCE




10.1 NEON Optica’s Obligations. Provided that NEON Optica has been given the permission
referred to below in this Section 10, NEON Optica 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 NEON Optica fails to perform any necessary
splicing or maintenance in accordance with the procedures and time frames set forth therein, NU
shall have the right, but not the obligation, to undertake such splicing or maintenance of the
Cable, at NEON Optica’s sole cost and expense, as provided for in Exhibit 10.1. In no
event shall NEON Optica be permitted access to NU’s property without NU’s prior permission unless
NEON Optica is acting pursuant to Section 39.2. NU 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. NEON Optica shall be solely
responsible for all aspects of the operation of the NEON Network and the operation and maintenance
of Equipment thereon. NEON Optica 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 NU’s approval. NEON Optica shall provide notice to NU 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. NU shall have
10 working days to confirm the availability of any Route Segment for maintenance.



10.2 NU’s Obligations. NU shall be solely responsible for all aspects of the operation of
NUNet and the operation and maintenance of Equipment thereon. NU 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. NU shall provide notice to NEON
Optica 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 NEON Optica. In the event that NEON Optica requests relocation, replacement, or
rebuild of the Cable during the term of this Agreement, the cost of any such work shall be paid by
NEON Optica, and NEON Optica shall submit to NU a completed copy of Exhibit 11.1 to
request an acceptable new location. No relocation or replacement shall be performed on NU’s
property by NEON Optica without the prior written approval of NU.


 


11









 





11.2 By NU. In the event that during the Term of this Agreement NU 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, NU and NEON Optica
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 NU’s Structures, transmission facilities or public safety, NU shall be permitted to
replace, remove and relocate the Cable or any portion thereof without prior notice to NEON Optica
when such notice is not practicable. NU shall incur no liability for service interruptions in
connection with any such removal or relocation and NEON Optica shall incur no liability for service
interruptions pertaining to NU’s services, if so affected. If the relocation or replacement of the
Cable is requested or caused by a Third Party, NU shall attempt to obtain reimbursement of NU’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.



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



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 NU’s property and any facilities attached thereon or placed therein by joint
users or others.


 


12









 





12.2 NU’s Approval of Third Party Work. Prior to NEON Optica 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, NEON Optica will obtain NU’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 NU’s Right to Maintain Service. NU shall at all times have the right to take all
action necessary to maintain and repair NU’s property and maintain NU’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, NU shall have the right to repair
its facilities first. If conditions permit, NEON Optica may repair its facilities concurrently
with NU. NEON Optica acknowledges that all or a portion of the Cable will be placed on Structures
that are part of NU’s electric transmission system and that at all times the safe and continuous
operation of such system and the provision of electric service is NU’s foremost priority.



12.4 Notice. NEON Optica shall give NU 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 NU’s use of NUNet.



12.5 Emergency Use of NU’s Property. With NU’s prior written consent and in its sole
discretion, NEON Optica may temporarily use any of NU’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 NU and shall be terminated within 90 days, or sooner,
unless NEON Optica applies for and NU grants permission for such temporary use to be extended.



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



13. PERIODIC INSPECTIONS




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



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



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


 


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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 NU will take action “in consultation with NEON Optica,” it is intended that such
consultation shall be thorough and meaningful, and that the views of NEON Optica with regard to the
matter under consultation shall be given the weight appropriate to the experience and expertise of
NEON Optica in telecommunications. Whenever in this Agreement it is provided that NEON Optica will
take action “in cooperation with NU”, it is intended that such cooperation shall be thorough and
meaningful, and that the views of NU with regard to the matter under consultation shall be given
the weight appropriate to the experience and expertise of NU 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.



15. OWNERSHIP OF THE CABLE




15.1 Title; Tax Accounting. Legal title to the Cable and to any item of Equipment
installed upon NU’s Structures shall be held by NU, except as herein set forth. With respect to
the Cable and NUNet, but excluding the NEON Network, NU shall have absolute legal and beneficial
ownership, subject to the security interest reserved in Section 4.8 and the provisions of Section
16.1. Legal title to the portions of the NEON Network installed on or after February 27, 1998
shall be held by NEON Optica during the term of this Agreement and with respect thereto, NEON
Optica shall have absolute legal and beneficial ownership during the term of this Agreement. NU
agrees and acknowledges that, notwithstanding installation of the NEON Network upon NU’s
Structures, the NEON Network shall not become a fixture on any real estate or real estate interest
of NU but rather shall remain the personal property of NEON Optica. Accordingly, NEON Optica shall
for tax purposes account for the NEON Network 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 thereto. NU agrees that it will not, for tax purposes, account for the
property associated with the NEON Network 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 Vesting of Title in NU. Legal title to the NEON Network shall vest in NU upon
termination of this Agreement or of any applicable Route Segment. Upon such termination, NEON
Optica shall deliver to NU such deeds, bills of sale, releases, or similar documents as NU may
reasonably request to confirm said vesting.


 


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16. USE OF THE CABLE BY NU




16.1 Fibers and Use. NEON Optica shall provide not less than 12 usable singlemode fiber
optic filaments in the Cable for the unimpeded and unrestricted use by NU, 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. NU shall use these 12 singlemode fiber optic filaments exclusively for NU’s
own business purpose and other uses permitted by this Section 16.1, which shall include but not be
limited to the right of NU to assign any number of the 12 fiber optic filaments, or resell capacity
on any of the 12 fiber optic filaments, provided however, that such right to assign or resell said
capacity is subject to NEON Optica’s indefeasible right to use certain NUNet fibers, its IRU Option
and its IRU ROFR, as defined in Sections 4.1B through 4.1C and the Non-Compete Section 26.3 hereof.



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



16.2 Option to Purchase Additional Fibers. NU may purchase if mutually acceptable terms
can be agreed upon between NEON Optica and NU, additional singlemode fiber optic filaments from
NEON Optica at a price that is mutually acceptable.



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



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


 


15









 





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 the NEON Network, contained in the Cable.
With respect to the Route Segment on which such portion of the Cable is installed, NEON Optica
shall have the option of having NU repair, restore, or replace such portion of the Cable (and NEON
Optica shall reimburse NU’s Actual Cost of doing so) or terminating that Route Segment. Unless
NEON Optica notifies NU of its election to terminate that Route Segment within 12 business days of
the casualty, NEON Optica shall be deemed to have elected repair, restoration and replacement of
the Cable. If NEON Optica 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 NU and NEON Optica shall assign, at no cost to NU, 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.



18.2 Representations by NU. NU represents and warrants that NU 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 NU’s Articles or Certificate of
Incorporation and will not violate any law, rule or regulation applicable to NU. No consents need
to be obtained from any governmental agency or regulatory agency to allow NU to execute, deliver
and perform this Agreement except those for which provision has been made in Section 21.4(iii).



18.3 Representation by NU As To Structures. NU 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 NU As to Right to Place Cable. NU 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
NU 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, but this representation and warranty shall not extend to the portions of the NEON Network of
which NEON Optica holds legal title.


 


16









 






18.5 Work Clearances and Related Delays. NU 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. NEON Optica shall be responsible for NU’s Actual Costs associated with last minute delays
caused by these regional authorities which are reasonably beyond the control of NU.



18.6 Representations by NEON Optics. NEON Optica represents and warrants that (a) NEON
Optica 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 NEON Optica and
will not violate any law, rule or regulation applicable to NEON Optica. No consents need to be
obtained from any government agency or regulatory agency to allow NEON Optica to execute, deliver
and perform this Agreement; and



(b) NEON Optica represents and warrants that 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.



19. INSURANCE




19.1 Liability Insurance. NEON Optica, 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 $10,000,000.00. 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 NEON Optica from a responsible insurance
company with a “Best” rating of A or better, satisfactory to NU. Certificates evidencing such
policy(ies) shall be delivered to NU within 30 days of February 27, 1998. Not less than 30 days
prior to the expiration date of such policies, certificates evidencing the renewal thereof shall be
delivered to NU. Such policies shall further provide that not less than 30 days’ written notice
shall be given to NU before such policy(ies) may be cancelled, materially changed or undergo a
reduction in Insurance limits provided thereby. NU shall be named as an additional insured. The
coverage required herein shall not be deemed to limit NEON Optica’s liability as set forth
elsewhere in this Agreement. Upon timely notice to NEON Optica, NU may require reasonable
increases in the amount of insurance coverage which will be obtained by NEON Optica within 30 days
after NU’s request.



20. NEON OPTICA’S BOND




20.1 Bond. Within 120 days of February 27, 1998, NEON Optica shall provide NU with either
of the following at the option of NEON Optica: (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 NU 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 NU 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.


 


17









 





20.2 Effect of Bond. If a bond or letter of credit is issued and remains in effect to the
benefit of NU pursuant to Section 20.1, NEON Optica 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 February 27, 1998, 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 NEON Optica. If NU elects to terminate this Agreement pursuant to Section
21.1, NU shall, at its option, either: (i) pay NEON Optica 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 NEON Optica’s gross revenue from the use of
the Cable as determined by an independent auditor selected by the mutual consent of the Parties.
If NU elects clause (ii), the payments provided for in that clause shall be in addition to any
Annual Fees due NU 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 NEON Optica upon 180 days prior notice to NU.



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



(iii) by NU in the event of a default by NEON Optica under Section 34.



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



NEON Optica 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 NU upon reasonable notice for the purposes of providing safe and economical electrical
service; or



(ii) by NEON Optica 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 NU’s electric operations and NU
fails to take steps to cure such failure with due diligence, unless NU 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, NU is proceeding to cure with due diligence.


 


18









 





(iii) by NU at any time after consultation with NEON Optica 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 NU.



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, NU shall reimburse NEON Optica 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 NEON Optica. 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 NU.



22. ANNUAL FEE




22.1 Amount. NEON Optica shall pay an annual fee (“Annual Fee”) for the support of the
NEON Network in the Cable, which shall be, as of September 27, 1994 and thereafter shall be
adjusted pursuant to Section 22.2 hereof, calculated as follows:



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



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



(i) $2,000.00 per mile per annum where NU’s Structures support Cable containing NUNet. Said
rate shall not be due for the period of 10 years from September 27, 1994 for the Route shown in
Exhibit 3.30.



(ii) $2,500.00 per mile per annum where NU’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.


 


19









 





(iv) $500 per mine one-time payment, $100 per mile per annum during the term of any agreements
between NEON Optica and any Third Party for route segments containing NEON Optica’s cable or the
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 NU
contributed in a material way to NEON Optica’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. (NEON
Optica 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 NU hereby agrees to accept from NEON Optica $3,432,657 (the “Fiber
Payments”) in full and complete satisfaction of any and all amounts due and owing by NEON Optica to
NU 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 1 Agreement through June 25, 2002, and NU and NEON
Optica 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.



22.2 CPI Adjustments. The Annual Fee shall be adjusted annually from September 27, 1994 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, NEON Optica shall pay NU an amount equivalent to 2% of
NEON Optica’s gross revenues realized from the NEON Network on NU’s Structures. The payment shall
be made each and every year that NEON Optica’s gross revenues realized from the NEON Network on
NU’s Structures exceed $15 million. For purposes of this section NEON Optica’s gross revenues
realized from the NEON Network on NU’s Structures shall be the ratio of Route miles of the NEON
Network on NU’s Structures to NEON Optica’s Total Route Miles applied to NEON Optica’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 mile of the NEON Network on NU Structures divided by NEON Optica’s
Total Route Miles) times NEON Optica’s annual gross revenues) is more than $15,000,000, then
Payment equals ((Route miles of the NEON Network on NU Structures divided by NEON Optica’s Total
Route Miles) times NEON Optica’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 NEON Optica 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.


 


20









 





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 NEON Optica over the
remainder of the calendar year.



22.6 Right to Withhold. In the event NU shall be unable or unwilling to perform its
maintenance obligations hereunder, NEON Optica may, at its option, withhold any Annual Fees related
to such nonperformance on any Segment and obtain substituted performance or exercise self-help in
accordance with Section 39.2, and in either case NEON Optica may apply or set-off such fees against
any costs NEON Optica may incur for such substituted performance or self-help, up to the actual
amount of such costs.



23. FORCE MAJEURE




23.1 Optional Termination. Should any of the Force Majeure Events defined below occur and
should NU 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.


 


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



25. ACCESS AND SECURITY




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



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


 


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25.3 Access by NECOM to NEON Space. Except as provided in Section 25.2 above, with respect
to NEON Optics Space, NEON Optics and authorized NEON Optics designees shall have the right to
visit any facilities of NU utilized in providing the NEON Network upon reasonable
prior written notice to NU; provided, however, that NU may require that a representative of NU
accompany any representation of NEON Optics or of an authorized NEON Optics 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 NEON Optica or of an authorized NEON
Optica designee shall, while on the premises of NU, comply with all rules and regulations,
including without limitation security requirements and, where required by government regulations,
receipt of satisfactory governmental clearances. NU shall have the right to notify NEON Optica
that certain NEON Optica or authorized NEON Optica designee employees are excluded if, in the
reasonable judgment of NU, the exclusion of such employees is necessary for the proper security and
maintenance of NU’s facilities.



25.4 NEON Optica’s Work. NEON Optica shall at all times perform its work in accordance
with NU’s safety and work procedures and in accordance with the applicable provisions of OSHA. NU
shall have the authority to suspend NEON Optica’s work operations in and around NU’s property if,
in the sole judgment of NU at any-time hazardous conditions arise or any unsafe practices are being
followed by NEON Optica’s employees, agents, or contractors. NEON Optica agrees to pay NU for
having NU’s employee or agent present when NEON Optica’s work is being done in and around NU’s
property. Such charges shall be at NU’s Actual Cost. The presence of NU’s authorized employee or
agent(s) shall not relieve NEON Optica of its responsibility to conduct all of its work operations
in and around NU’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 NU and
NEON Optica shall be that of independent contractors, and neither NU nor NEON Optica 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 NEON Optica and NU, 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. NU shall not, and none of its affiliates shall, compete with NEON Optica
in the provision of wholesale telecommunications transport services until after June 30, 2005,
provided that NU 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 NU owns, builds, obtains or
otherwise controls for any duration, subject to the IRU Option and the IRU ROFR specified in
Section 413 and 4.1C hereof shall not constitute competition as contemplated in this section.


 


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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.



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 NU Referrals. Upon the written approval of NU, except for the exemption of customer
prospects and customers of NEON Optica as listed in Exhibit 8, Sales Order Customer Exclusion List,
in the event that communication service orders are received by NEON Optica, as a result of NEON
Optica issuing sales literature or promotion material in which the name of NU is mentioned or by NU
introducing NEON Optica to customer prospects not listed in Exhibit 28, or by NU undertaking any
joint marketing effort with NEON Optica including joint sales calls, NEON Optica shall pay to NU
compensation equal to the first month that there is recurring revenue charged by NEON Optica to
those customers receiving such sales literature, promotional material or joint sales calls.



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


 


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30. LABOR RELATIONS




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



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



30.3 Determination by NEON Optics. If NEON Optics determines that NU’s activities pursuant
to this Agreement in any NEON Optics facility are causing or will cause labor difficulties for NEON
Optics, NU 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, NEON Optics 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
NU’s system or any portion thereof.



30.4 Determination by NU. If NU determines that NEON Optica’s activities pursuant to this
Agreement in any NU facility are causing or will cause labor difficulties for NU, NEON Optics
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, NU 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 NEON Optica’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.


 


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32. TAXES AND GOVERNMENTAL CHARGES




32.1 Taxes. NEON Optica shall pay NU the pro rata amount based on the number of fiber
optic filaments under each Party’s control, of all taxes assessed on NU which are attributable to
NEON Optica’s portion of the Cable, New Buildings and Equipment. NEON Optica shall pay NU 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 NEON Optica’s
installation, maintenance or operation of the connections to the Cable or against NEON Optica’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 NU, NU shall indemnify NEON Optica
against any and all actions which may be brought against NU and NEON Optica with regard to NU’s
remittance of said payments to any taxing authority or governmental agency. NEON Optica shall have
the right to pay the tax or charge under protest without being subjected to a default notice under
Section 34. NU 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 NU’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. NU shall have the right to pay the tax or charge under protest without being subjected to
a default notice under Section 34. NU 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. NEON Optica shall also reimburse NU for any income tax
liability incurred by NU as a result of its acquisition of NUNet. NEON Optica will supply NU, on
request and no more frequently than quarterly, with the costs and other details of any additions to
NUNet such that each separate party hereto can calculate its individual income tax liability. NU
shall take reasonable efforts suggested by NEON Optica 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 NEON Optica no later than December 31, 2004. NU
shall, from time to time, calculate any additional income tax liability for NUNet acquired after
June 25, 2002 and invoice NEON Optica. NEON Optica shall pay such amount within sixty (60) days of
receiving such invoice. NEON Optica shall hold harmless, indemnify and defend NU in the event NU’s
tax position with respect to NUNet is challenged by the IRS. In lieu of cash, NEON Optica shall
provide said reimbursement in the form of additional fiber segments, engineering services, or other
telecommunication services that NU may request from NEON Optica from time to time and which NEON
Optica 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 NU’s
tax liability described in this paragraph. In a given year, NEON Optica shall only be obligated to
provide reimbursement valued up to an amount equal to the actual tax liability incurred by NU for
the prior tax year, plus any unused reimbursement amounts from earlier years.


 


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33. INDEMNIFICATION




33.1 By NEON Optics. NEON Optica agrees to indemnify and hold harmless NU, 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 NEON Optica’s use of the
Cable including, without limitation, any claim for infringement of patent or trade secret, made by
Third Parties (collectively, “Claims”).



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



33.3 Limitation of NU Liability. In no event shall NU be liable to NEON Optica 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 NU shall invoke the obligations
under, but subject to the provisions of, Section 33.1 above.



33.4 Limitation of NEON Optics Liability. In no event shall NEON Optica be liable to NU 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




34.1 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 available remedy
provided at law or equity, including without limitation, the remedy of specific performance or, in
the case of NEON Optica, exercising its rights under the security agreement referred to in Section
4.8 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 NEON Optica’s remedies at law for a breach by NU of the warranty set forth in Section 4.7 may
be inadequate and that, for such a breach where NEON Optica’s remedies at law are inadequate, NEON
Optica shall be entitled to equitable relief.


 


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35. ASSIGNMENT




35.1 By NEON Optics. Subject to Section 35.4, NEON Optica 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 NU. NU’s approval will be granted
provided the new person or entity demonstrates to the reasonable satisfaction of NU that the
proposed assignee is financially and operationally fit, willing and able to discharge its
obligations under this Agreement, acquires substantially all of NEON Optica’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 NEON Optica 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 NEON Optica in one or more connected
transactions, except that this Section 35.2 shall not apply to (i) any transaction consummated
within 30 days of February 27, 1998 involving Applied Telecommunications Technologies, Inc. or
(ii) any other acquiror of any equity interest in NEON Optica, if such other acquiror was
introduced to NEON Optica by Applied Telecommunications Technologies, Inc., or if Applied
Telecommunications Technologies, Inc. was acting as an advisor for such other acquiror.



35.3 NU’s Right to Pledge Agreement and Transfer Property. NU 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 NU provided that such assignment shall not limit
or otherwise affect NU’s obligations under this Agreement. Any transfer of property of NU included
in or subject to this Agreement may be made by NU provided the person acquiring such property takes
it subject to this Agreement.



35.4 NEON Optica’s Right to Pledge Agreement and Lease Fibers. NEON Optica 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 NEON Optica provided that such assignment shall not limit or otherwise affect NEON Optica’s
obligations under this Agreement. Nothing in this Section 35 shall limit or apply to NEON Optica’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 NEON Optica’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 NEON Optica’s Obligations. During the term of this Agreement, NEON Optica 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 NEON Optica’s use and operation of the Cable. If NEON Optica
or any permitted assignee shall at any time fail to maintain such approvals, NU may terminate this
Agreement without any liability or obligation to NEON Optica pursuant to Section 21.3(iv).


 


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36.2 Opinion. Within 90 days of February 27,1998, NEON Optica shall provide NU with an
opinion of counsel, in form and substance satisfactory to NU, stating NEON Optica’s compliance with
the provisions of law applicable to NEON Optica’s use of the Cable and its obligations under this
Agreement.



36.3 NU’s Obligations. During the term of this Agreement, NU shall, at its Actual Cost to
be paid by NEON Optica, 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 NU following consultation with NEON Optica.



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 NU:



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 NEON Optica:



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



 


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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.



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 NU (860) 665-6000 or (800) 286-5000 extension 6000  
for NEON
Optica (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 NU or
NEON Optica, 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



 


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(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.



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 Worchester, 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 NEON Optica’s Self Help Rights. In the event NU 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 NEON Optica, then, unless such failure is the result of a Force
Majeure Event, NEON Optica shall have the right, but not the obligation, so long as such failure
continues, to perform such obligations of NU in accordance with the relevant provisions of this
Agreement, provided that NEON Optica 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 NU’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.


 


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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.



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 2 Agreement by the
parties hereto, and, as such, constitutes the complete and entire agreement of the parties.




 


32









 




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. Bogulawski
 

Name: David H. Bogulawski
	 	 
	 

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


	 	 	 	By:
	 	/s/ David H. Bogulawski
 

Name: David H. Bogulawski
	 	 
	 

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


	 	 	 	By:
	 	/s/ David H. Bogulawski
 

Name: David H. Bogulawski
	 	 
	 

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


	 	 	 	By:
	 	/s/ David H. Bogulawski
 

Name: David H. Bogulawski
	 	 
	 

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


	 	 	 	By:
	 	/s/ Stephen E. Courter
 

Name: Stephen E. Courter
	 	 
	 

	 	 	 	 	 	Title: CEO	 	 







 


1









 







EXHIBIT 3.30

Fiber Route Listing





 


2












 




EXHIBIT 3.31

Specifications






 


3









 







EXHIBIT 5.3

Network Expansion




 


4









 







EXHIBIT 10.1

Maintenance




 


5









 







EXHIBIT 11.1

Request for Relocation




 


6









 







EXHIBIT 28

Exempt Prospects




 


7