Document:

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                                                                  Exhibit 10.47

                                                                 EXECUTION COPY

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    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
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                                SYSTEM AGREEMENT

                                 by and between

                           NEON COMMUNICATIONS, INC.,

                                NEON OPTICA, INC.

                                       and

                              EXELON VENTURES CORP.

                                      dated

                               SEPTEMBER 14, 2000

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                                TABLE OF CONTENTS

   ARTICLE I
           GRANT OF IRU BY Exelon TO NEON......................................2
           1.1    Grant of Indefeasible Right of Use...........................2
                  1.1.1     Conveyance.........................................2
                  1.1.2     Term...............................................2
                  1.1.3     Use of the Fiber Network...........................2
           1.2    Schedule for Delivery of the NEON Fibers.....................3
                  1.2.1     Regulatory Approvals...............................3
                  1.2.2     Completion Schedule................................3
           1.3    Testing and Acceptance of the NEON Fibers....................3
                  1.3.1     Access to NEON Fibers for Acceptance Testing.......3
                  1.3.2     Compliance and Acceptance..........................3
                  1.3.3     Noncompliance and Corrective Action................3
           1.4    Representations and Warranties Relating to the NEON Fibers...4
                  1.4.1     Required Rights....................................4
                  1.4.2     Liens and Nondisturbance Agreements................4
                  1.4.3     Noninterference with Operation.....................4
                  1.4.4     Acknowledgement....................................5
           1.5    Maintenance and Repair of the NEON Fibers....................5
                  1.5.1     Emergency Maintenance..............................5
                  1.5.2     Routine Maintenance................................5
                  1.5.3     Relocation.........................................5
           1.6    Taxes, Fees and Other Governmental Impositions...............6
                  1.6.1     Intent.............................................6
                  1.6.2     Pre-Acceptance Impositions.........................6
                  1.6.3     Post-Acceptance Impositions........................6
                  1.6.4     Procedures.........................................7
                  1.6.5     Impositions Based On Income........................8
                  1.6.6     Relocation to Reduce Impositions...................8
                  1.6.7     Further Procedures.................................8
                  1.6.8     Future Changes.....................................9
                  1.6.9     Provision of Information...........................9
                  1.6.10    Excise Taxes.......................................9
                  1.6.11    Sales and Transfer Taxes...........................9
           1.7    Condemnation, Taking or Interference.........................9
           1.8    Right of Way Fees and Revocable Consents....................10
           1.9    Alternative Source of Rights................................10
   ARTICLE II
           INTERCONNECTION....................................................11
           2.1    Interconnection.............................................11
           2.2    Installation Plans..........................................11
           2.3    Maintenance.................................................11

                                      -i-

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   ARTICLE III
           NETWORK OPERATION..................................................12
           3.1    Network Performance and Operating Standards.................12
                  3.1.1     NEON Network......................................12
                  3.1.2     Exelon Network....................................12
           3.2    Marketing Services..........................................12
                  3.2.1     NEON to Act as Marketing Agent....................12
                  3.2.2     Pricing...........................................12
                  3.2.3     Exclusivity.......................................12
                  3.2.4     Inter-Party Services..............................13
                  3.2.5     Acceptance of Orders..............................13
           3.3    Exelon's Contributions......................................13
                  3.3.1     Cash Contributions................................13
                  3.3.2     Operating Expense Contributions...................13
                  3.3.3     In-Kind Contribution..............................14
                  3.3.4     Conditions Precedent to Exelon's Contributions....14
                  3.3.5     Completion of POPs................................14
   ARTICLE IV
           RIGHTS OF CARRIAGE AND PROVISION OF TELECOMMUNICATIONS SERVICES....15
           4.1    NEON's Exclusive Right and Obligation to Provide Service to
                  Exelon......................................................15
           4.2    Exelon's Exclusive Right and Obligation to Provide Service
                  to NEON.....................................................15
           4.3    Exelon's Services...........................................16
                  4.3.1     Service to On-Net Locations.......................16
                  4.3.2     Service to Off-Net Locations......................16
           4.4    NEON's Services.............................................17
                  4.4.1     Service to On-Net Locations.......................17
                  4.4.2     Service to Off-Net Locations......................17
           4.5    Billing and Payment.........................................18
                  4.5.1     General...........................................18
                  4.5.2     Interest on Late Payments.........................18
                  4.5.3     Disputes..........................................18
                  4.5.4     Suspension of Service.............................18
                  4.5.5     Interest on Disputed Amounts......................19
                  4.5.6     Partial Months....................................19
           4.6    Covenant Regarding Network Standards........................19
                  4.6.1     Compliance........................................19
                  4.6.2     Error Rate; Diversity.............................19
                  4.6.3     Sole Warranties...................................19
           4.7    Outage Credits, Allowances and Termination..................20
                  4.7.1     Outage Credits for On-Net Services................20
                  4.7.2     Limitations.......................................21
           4.8    Expiration..................................................21
           4.9    Competition.................................................21

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   ARTICLE V
           PROPRIETARY INFORMATION, TRADEMARKS AND PUBLICITY..................22
           5.1    Proprietary Information.....................................22
                  5.1.1     Protection of Proprietary Information.............22
                  5.1.2     Proprietary Information Defined...................22
                  5.1.3     Ownership of Proprietary Information..............22
                  5.1.4     Exceptions........................................22
                  5.1.5     Permitted Disclosures.............................23
           5.2    Use of Advertising Materials; Logos.........................23
           5.3    Right to Review Publicity Material..........................23
           5.4    No License to Marks.........................................23
           5.5    No License to Copyrights; Patents...........................23
           5.6    Survival....................................................23
   ARTICLE VI
           INDEMNIFICATION AND INSURANCE......................................24
           6.1    Indemnification.............................................24
           6.2    Insurance...................................................24
   ARTICLE VII
           MISCELLANEOUS......................................................25
           7.1    Assignment..................................................25
           7.2    Liens.......................................................25
           7.3    Force Majeure...............................................25
           7.4    Default.....................................................26
                  7.4.1     Defaults..........................................26
                  7.4.2     Remedies..........................................26
                  7.4.3     Limitations of Liability..........................26
           7.5    Notices.....................................................27
                  7.5.1     Addresses.........................................27
                  7.5.2     Method of Delivery................................27
           7.6    Governing Law...............................................27
           7.7    Dispute Resolution..........................................28
                  7.7.1     General...........................................28
                  7.7.2     Arbitration.......................................28
                  7.7.3     Pending Resolution................................28
           7.8    Headings....................................................28
           7.9    Plurals and Conjunctions....................................28
           7.10   Severability................................................28
           7.11   Amendments..................................................28
           7.12   No Imputed Waiver...........................................29
           7.13   Entire Agreement............................................29
           7.14   Counterparts................................................29
           7.15   Relationship of Parties.....................................29
           7.16   Compliance With Law.........................................29
           7.17   Guaranty of Exelon's Obligations............................29
           7.18   Glossary of Terms...........................................30

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<TABLE>
<S>                      <C>
Appendix 1.1.1    --     Description of the NEON Fibers

Appendix 1.9      --     Terms and Conditions of Third Party IRU

Appendix 1.3.1    --     Acceptance Test Plan

Appendix 1.4.2    --     Encumbrances on the NEON Fibers

Appendix 1.5.2    --     Exelon Routine Maintenance Schedule

Appendix 3.1.1    --     Network Standards

Appendix 3.3.1    --     Equipment

Appendix 3.3.2    --     Schedule of Operating Expense Contributions

Appendix 4.3.1(a) --     Exelon's Services and Pricing

Appendix 4.3.1(c) --     Processing of Service Orders for On-Net Services

Appendix 4.4.1(a) --     NEON's Services

Appendix 7.18(i)  --     NEON's POPs

Appendix 7.18(ii) --     Exelon's POPs
</TABLE>

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                                SYSTEM AGREEMENT

         This SYSTEM AGREEMENT dated as of September 14, 2000 by and between
NEON Communications, Inc., a Delaware corporation ("NEON"), NEON Optica, Inc., a
Delaware corporation and a wholly owned subsidiary of NEON ("NEON Optica"), and
Exelon Ventures Corp., a Pennsylvania corporation ("Exelon"). NEON and Exelon
are sometimes referred to together as the "Parties" and, individually, as a
"Party." References in this Agreement to "NEON" (including the term "Party" as
it refers to NEON) shall mean NEON and/or NEON Optica, as the context requires,
and NEON and NEON Optica shall be jointly and severally liable for their
respective representations, warranties and obligations hereunder.

                                    RECITALS

         WHEREAS the potential efficiencies and economies of scale, increased
aggregate market and expanded geographic coverage makes a business arrangement
integrating their separate systems attractive to NEON and Exelon;

         WHEREAS, NEON, through NEON Optica, and Exelon own and operate certain
telecommunications facilities which they wish to make available for each other's
use;

         WHEREAS, NEON and Exelon desire to provide for the joint marketing,
maintenance and operation of certain of their telecommunications facilities and
services and to provide certain services to each other and their respective
customers;

         WHEREAS, NEON and Exelon are parties to a Subscription Agreement dated
as of November 23, 1999 (as amended to date, the "Subscription Agreement")
providing for the issuance to Exelon of the Exelon NEON Shares (as defined in
the Subscription Agreement);

         WHEREAS, the execution, delivery and performance of this Agreement by
Exelon represents the consideration contributed for the Exelon NEON Shares to be
received by Exelon pursuant to the terms of the Subscription Agreement;

         WHEREAS in connection with the transactions contemplated by this
Agreement and the Subscription Agreement, and for good business reasons,
immediately prior to the execution of this Agreement, NEON's wholly-owned
subsidiary NEON Acquisition, Inc. ("NEON Acquisition") has merged with and into
NEON's former sole stockholder, NEON Optica, pursuant to Section 251(g) of the
Delaware General Corporation Law, and the terms and conditions of an Agreement
and Plan of Merger by and among NEON, NEON Acquisition and NEON Optica dated as
of the date of this Agreement, with NEON Optica being the surviving entity and a
wholly-owned subsidiary of NEON (the "Reorganization"); and

         WHEREAS for federal income tax purposes it is intended that the
Reorganization and the Contribution Transactions (as defined in the Subscription
Agreement) qualify as exchanges under Section 351 of the Internal Revenue Code
of 1986, as amended (the "Code").

                                      -1-
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              and Exchange Commission. Asterisks denote omissions.
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         NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the parties agree as follows:

                                   ARTICLE I

                         GRANT OF IRU BY Exelon TO NEON

         1.1 GRANT OF INDEFEASIBLE RIGHT OF USE.

             1.1.1 CONVEYANCE. Effective as of the Acceptance Date (as defined
in Section 1.3.2), Exelon grants to NEON an exclusive, indefeasible right of use
("IRU") in the fiber filaments in and between the locations, by the
manufacturers' type and in the number described on APPENDIX 1.1.1 attached to
this Agreement (the "NEON Fibers"), or, alternatively, agrees to obtain such an
IRU from a third party for the benefit of NEON (by assignment dated the date
hereof from Exelon to NEON or by a negotiated IRU agreement to be executed by
NEON and such third party, the fee for such IRU agreement to be paid in either
case by Exelon to NEON for subsequent payment to such third party). For the
avoidance of doubt, this IRU is granted to NEON Communications, Inc.

             1.1.2 TERM. The term of the IRU conveyed in the NEON Fibers shall
commence on the Acceptance Date and shall terminate 20 years thereafter. For
purposes of this Agreement (other than the conveyance of the IRU from Exelon to
NEON as set forth in the preceding sentence, there shall be, unless otherwise
stated (as in Section 4.8 of this Agreement), an initial term which shall
commence on the Acceptance Date and terminate 20 years thereafter (the "Initial
Term"). Unless either Party provides notice to the other Party at least 365 days
prior to the end of the Initial Term of its desire to terminate the remaining
terms and conditions of this Agreement (other than the conveyance of the IRU)
upon the expiration of the Initial Term, then such remaining terms and
conditions shall automatically be extended for one additional five-year term
(the "Initial Extension"). Unless either Party provides notice to the other
Party at least 365 days prior to the end of the Initial Extension or any Renewal
Term (as defined below), of its desire to terminate the remaining terms and
conditions of this Agreement (other than the conveyance of the IRU) upon the
expiration of such Initial Extension or Renewal Term, then such remaining terms
and conditions of this Agreement shall automatically be extended for additional
successive five-year terms (each, a "Renewal Term") on such terms and conditions
as may be negotiated in good faith by the Parties. Exelon shall have no
responsibility for extending the operational or physical life of the NEON Fibers
beyond the expiration of the Initial Term and, if applicable, the Initial
Extension.

             1.1.3 USE OF THE FIBER NETWORK. NEON may use the NEON Fibers for
[**] purpose. NEON shall have no limitations on the types of electronics,
optronics or technologies employed to utilize the NEON Fibers, except for
those limitations required to support Inter-Party Services (as defined
herein). Exelon acknowledges that it has no right to use any portion of the
NEON Fibers during the Initial Term, the Initial Extension and any Renewal
Term.

                                      -2-
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         1.2 SCHEDULE FOR DELIVERY OF THE NEON FIBERS.

             1.2.1 REGULATORY APPROVALS. Exelon shall obtain and/or maintain all
regulatory and other governmental approvals required by law in connection with
its grant of an IRU in the NEON Fibers and its delivery of the NEON Fibers to
NEON under this Agreement (the "Required Regulatory Approvals") and all other
approvals necessary for Exelon's performance hereunder.

             1.2.2 COMPLETION SCHEDULE. On or before the date hereof (the
"Target Date"), the NEON Fibers shall be completely installed and tested in
accordance with the Specifications, whereupon Exelon shall provide written
notice of the availability of the NEON Fibers to NEON (the "Completion Notice").
Nothing contained herein shall prohibit the Parties from undertaking a joint
testing program.

         1.3 TESTING AND ACCEPTANCE OF THE NEON FIBERS.

             1.3.1 ACCESS TO NEON FIBERS FOR ACCEPTANCE TESTING. Unless a joint
testing program has been agreed to by the Parties, within five days of NEON's
receipt of the Completion Notice, NEON shall notify Exelon of the dates and
times (the "Initial Testing Dates") on which NEON will determine whether the
NEON Fibers are installed and operational in accordance with the Specifications
("Acceptance Testing"). Exelon shall provide NEON with access to the NEON Fibers
for Acceptance Testing at the times and on the dates requested by NEON. NEON
shall conduct Acceptance Testing in good faith and without unreasonable delay in
accordance with the procedures set forth in the Acceptance Test Plan attached as
APPENDIX 1.3.1 (the "Acceptance Test Plan") and shall complete its Acceptance
Testing within thirty (30) days after the last of the Initial Testing Dates (the
"Acceptance Test Plan Date").

             1.3.2 COMPLIANCE AND ACCEPTANCE. NEON shall provide Exelon with
prompt written notice of the results of its Acceptance Testing within five (5)
days after the Acceptance Test Plan Date (the "Acceptance Notice Date"). Upon
receipt of such notice by Exelon indicating NEON's acceptance of the NEON
Fibers, or in the absence of such written notice, the NEON Fibers shall be
deemed accepted by NEON (the "Acceptance Date"). On or prior to the Acceptance
Notice Date, Exelon shall provide NEON with (a) as-built drawings reflecting the
route of the NEON Fibers, (b) all technical specifications of the optical fiber
cable, associated splices and other equipment used in installing and providing
the NEON Fibers, (c) a list of names and 24-hour telephone numbers for Exelon
personnel responsible for maintaining and repairing the NEON Fibers and (d)
other material information as the Parties shall agree.

             1.3.3 NONCOMPLIANCE AND CORRECTIVE ACTION. If all or a portion of
the NEON Fibers do not meet the Specifications, NEON shall provide Exelon with
written notice thereof on or before the Acceptance Notice Date, which notice
shall specify in reasonable detail the portions of the NEON Fibers that are out
of compliance with the Specifications. Upon receipt of such notice, Exelon shall
use its best efforts with respect to the portion of the NEON Fibers that are not
in compliance with the Specifications to take all necessary corrective action to
bring such portion into compliance with the Specifications. After taking such
corrective action, NEON shall promptly conduct Acceptance Testing of the NEON
Fibers and provide Exelon with prompt written notice of the results of its
Acceptance Testing in accordance with this Section 1.3. The

                                      -3-
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              and Exchange Commission. Asterisks denote omissions.
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Parties shall comply with the procedures set forth in this Section 1.3 as many
times as necessary to ensure that the NEON Fibers are installed and operational
in accordance with the Specifications. Any dispute arising under this Section
1.3 shall be resolved in accordance with the provisions of Section 7.7 of this
Agreement.

         1.4 REPRESENTATIONS AND WARRANTIES RELATING TO THE NEON FIBERS.

             1.4.1 REQUIRED RIGHTS. Exelon represents that it has obtained
(or will have obtained prior to the delivery of the NEON Fibers pursuant to
Section 1.2.2) all Required Rights (as defined below) and other rights,
licenses, permits and authorizations necessary to grant to NEON an IRU in the
NEON Fibers and to maintain such NEON Fibers in accordance with this
Agreement. Exelon shall, [**], defend and protect Exelon's rights in and
interests under the Required Rights and NEON's right to use the NEON Fibers
as provided in this Agreement against interfering or infringing rights,
interests or claims of third parties, which defense and protection shall
include, without limitation, the acquisition of additional or substantially
similar rights necessary to preserve NEON's right to use the NEON Fibers in
the manner contemplated by this Agreement. Exelon shall use [**] to notify
NEON promptly of the occurrence of any event which could reasonably be
foreseen to give rise to any damage to or loss of the functionality of the
NEON Fibers. Without limiting the generality of the foregoing, Exelon shall
promptly forward to NEON a copy of any notice of default received by Exelon
with respect to its obligations under any of the Required Rights if such
default is not promptly cured by Exelon. Exelon agrees, so long as such
action would not violate the terms of any Required Right, upon request of
NEON, to execute, file and/or record such documents or instruments as NEON
shall deem reasonably necessary or appropriate to evidence or safeguard the
IRU granted to NEON hereunder.

             1.4.2 LIENS AND NONDISTURBANCE AGREEMENTS. Except as set forth
on APPENDIX 1.4.2 hereto, Exelon represents that, to its knowledge, the NEON
Fibers are not subject to (or, upon the delivery of the NEON Fibers pursuant
to Section 1.2.2, will not be subject to) any mechanics', artisans' or
materialmens' lien, or other encumbrance (each, an "Encumbrance"), chargeable
to or through Exelon or Parent (as defined herein) which is not fully
subordinated to NEON's rights under this Agreement. Exelon agrees that, from
and after the execution of this Agreement during the Initial Term, the
Initial Extension and any Renewal Term, Exelon shall keep the NEON Fibers and
the IRU granted hereunder free from any liens or security interests of any
third party attributable to Exelon. In addition, Exelon agrees that it shall
use [**] to obtain from any entity in favor of which Exelon or Parent has
granted a security interest or lien on all or part of the NEON Fibers, a
written nondisturbance agreement substantially to the effect that such
lienholder acknowledges NEON's rights and interests in and to the NEON Fibers
and the IRU granted under this Agreement and agrees that such lienholder
shall take no action that diminishes, disturbs, impairs or interferes with
the NEON Fibers so long as NEON complies with the terms of this Agreement.

             1.4.3 NONINTERFERENCE WITH OPERATION. Neither Exelon nor NEON shall
use any fibers in its Network in any way which materially interferes with or
materially adversely affects the use of the fibers in the other Party's Network,
and shall obtain a similar agreement from any person or entity that acquires the
right to use fibers controlled by that Party after the date hereof

                                      -4-
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to the extent that such use might materially interfere with or materially
adversely affect the use of the fibers in the other Party's Network.

             1.4.4 ACKNOWLEDGEMENT. NEON acknowledges that the NEON Fibers will
be located in, on, over or through licensed property that is in close proximity
to electrical cables that are subject to fault, burnout or other malfunction
which can result in damage, destruction or disruption to the NEON Fibers, and
that, without limiting Section 1.5.1 of this Agreement, such damage, destruction
or disruption will be, or could result in, a "Failure" as defined in Section
1.5.1 of this Agreement. NEON acknowledges that neither Parent nor any of its
Affiliates assumes any liability for any such damage, destruction or disruption.

         1.5 MAINTENANCE AND REPAIR OF THE NEON FIBERS.

             1.5.1 EMERGENCY MAINTENANCE. If the operation of the NEON Fibers at
any time during the Initial Term, the Initial Extension and any Renewal Term
shall be interrupted, impaired or otherwise shall fail to comply with the
Specifications in a manner that results in an interruption or impairment of
service (a "Failure"), Exelon shall promptly perform maintenance and repair to
correct the Failure. In the event of a Failure or the occurrence of an event
which may reasonably be foreseen to give rise to a Failure, NEON, to assist
Exelon in its maintenance activities, shall notify Exelon of the Failure or the
occurrence of such event and, if reasonably feasible, diagnose the trouble
through OTDR testing or other means and ascertain and notify Exelon of the
location of the Failure or such foreseeable Failure. NEON shall have the right,
but not the obligation, to have a reasonable number of persons present during
any maintenance or repair operations as necessary to ensure that the NEON Fibers
comply with the Specifications. During the Initial Term, the Initial Extension
and any Renewal Term, the Parties agree to the following emergency maintenance
standards: (a) Exelon shall respond to any Failure within two (2) hours after
receiving a report from NEON of the Failure, (b) Exelon shall use its best
efforts to restore the NEON Fibers as promptly as practicable after receiving
such notification and (c) Exelon shall focus its restoration efforts at any
given time on at least that number of NEON Fibers as is proportionate to the
total number of fibers as is contained in the affected cable. During the Initial
Term and the Initial Extension, Exelon shall absorb all costs and expenses of
repairing a Failure up to the first $[**]. Any costs and expenses of repairing a
Failure over $[**] shall be reimbursed pro rata to Exelon by NEON as determined
by reference to the proportion which the number of NEON Fibers in the affected
cable bears to the total number of fibers in the affected cable. The costs of
such repair services during any Renewal Term shall be billed to NEON at Exelon's
standard rates then in effect, except as otherwise agreed between the Parties.

             1.5.2 ROUTINE MAINTENANCE. Exelon will schedule and perform at its
own cost specific periodic maintenance and repair activities during the Initial
Term and the Initial Extension in accordance with the schedule attached hereto
as APPENDIX 1.5.2 ("Exelon Routine Maintenance Schedule"). The costs for such
maintenance and repair services during any Renewal Term shall be at Exelon's
standard rates then in effect, except as otherwise agreed between the Parties.

             1.5.3 RELOCATION. If after the Acceptance Date, Exelon is required
to relocate any portion of the NEON Fibers by a third party with legal authority
to so require (other than as a result of a taking, condemnation or interference,
which events shall be governed by Section

                                      -5-
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1.7), or if NEON agrees to relocate any portion of the NEON Fibers, Exelon shall
proceed with such relocation, and shall have the right, in good faith,
reasonably to determine the extent of, the timing of, and methods to be used for
such relocation; PROVIDED THAT any such relocation (a) shall be constructed and
tested in accordance with the Specifications and (b) shall not materially
adversely affect the operations, performance or connection points with NEON's
Network. NEON shall reimburse Exelon for NEON's proportionate share (based on
the proportion of the NEON Fibers to the total fibers in the relocated cable) of
reasonable relocation expenses incurred by Exelon, less any reimbursement
received by Exelon from one or more third parties, PROVIDED, HOWEVER, THAT NEON
shall have no liability for any cost of any relocation initiated during the
first [**] years of the Initial Term or any relocation resulting from the
failure of Exelon to possess a Required Right. In the event that such a
relocation results in an interruption to service over the NEON Fibers, Exelon
shall use [**] to make alternative fiber or capacity on Exelon's
Network available to NEON on a [**] to mitigate any such interruption
of service on the NEON Fibers.

         1.6 TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS.

             1.6.1 INTENT. The parties acknowledge and agree that it is their
mutual objective and intent (i) to minimize, to the extent feasible, the
aggregate Impositions, payable with respect to Exelon's Network and (ii) to
share such Impositions according to their respective interests in Exelon's
Network. The parties agree to cooperate with each other and coordinate their
mutual efforts to achieve these objectives in accordance with the provisions of
this Section 1.6.1.

             1.6.2 PRE-ACCEPTANCE IMPOSITIONS. Exelon shall be responsible for
and shall timely pay, before any interest or penalty shall accrue thereon, all
Impositions with respect to the construction or operation of Exelon's Network
which are (i) imposed or assessed prior to the Acceptance Date or (ii) imposed
or assessed after the Acceptance Date with respect to events which occurred or
the ownership of property or obligations of Exelon prior to the Acceptance Date.
Exelon shall have the right to challenge any such Impositions without payment
therefor, as provided in the preceding sentence, so long as the challenge of
such Impositions does not materially adversely affect the title, rights or
property to be delivered to NEON pursuant to this Agreement, or delay the
delivery of such title, rights or property.

             1.6.3 POST-ACCEPTANCE IMPOSITIONS. Except as to Impositions
described in clause (ii) of Section 1.6.2, following the Acceptance Date, Exelon
shall timely pay, before any interest or penalty shall accrue thereon, all
Impositions imposed upon or with respect to Exelon's Network to the extent such
Impositions may not be separately assessed or imposed upon or against the
respective interests of Exelon and NEON in Exelon's Network; provided that, upon
receipt of a notice of any such Imposition, Exelon shall promptly notify NEON of
such Imposition and, following payment of such Imposition by Exelon, NEON shall
promptly reimburse Exelon for its proportionate share of such Imposition, which
shall be determined as follows:

                   (a) to the extent possible, based upon the manner and
methodology used by the particular authority imposing such Impositions; or

                                      -6-
<PAGE>

                   (b) if the same cannot be so determined, then based upon
NEON's proportionate share of the total fiber count in the affected portion of
Exelon's Network.

Exelon shall provide NEON with reasonable supporting documentation for
Impositions for which Exelon seeks reimbursement. If Exelon's assessed value,
for property tax purposes, is based on its entire operation in any state (i.e.,
central and/or unitary assessment), Exelon and NEON shall work together in good
faith to allocate a proper portion of said assessment to Exelon and to NEON's
interest in Exelon's Network.

             1.6.4 PROCEDURES. After the Acceptance Date, upon notice of the
assertion or proposed assertion of any Imposition, Exelon shall promptly and in
good faith consult with NEON concerning the underlying facts and whether to
contest or continue to contest such assertion or proposed assertion.

                   (a) Notwithstanding any provision herein to the contrary,
Exelon shall have the right to contest any Imposition during the Initial Term,
Initial Extension and any Renewal Term, provided, however such contest does not
materially, adversely affect the title, rights or property to be delivered to
NEON pursuant to this Agreement. The out-of-pocket costs and expenses (including
reasonable attorneys' fees) incurred by Exelon in any such contest shall be
shared by Exelon and NEON in the same proportion as to which the parties share
in any such Imposition, as it was originally assessed. Any refunds or credits
resulting from a contest brought pursuant to this Section 1.6.4 shall be divided
between Exelon and NEON in the same proportion as to which such refunded or
credited Imposition was borne by Exelon and NEON. Exelon shall provide timely
notice of any challenge to any Imposition to NEON. If NEON objects to such
challenge in writing within ten (10) Business Days after receipt of such notice
from Exelon, and Exelon proceeds with such challenge, Exelon shall conduct such
challenge at its own cost and expense, provided that NEON shall not receive the
benefit of any refund or credit, if any, or any portion thereof, obtained as a
result of such challenge, nor shall NEON be responsible in that circumstance for
interest, penalty, or other delinquent payment charges resulting from such
challenge.

                   (b) Notwithstanding any provision herein to the contrary,
NEON shall have the right to contest any Imposition during the Initial Term, the
Initial Extension and any Renewal Term upon written notice to Exelon, provided
however, such contest does not materially, adversely affect the title, property
or rights of Exelon. The out-of-pocket costs and expenses (including reasonable
attorneys' fees) incurred by the Parties in any such contest shall be shared by
NEON and Exelon in the same proportion as to which the Parties shared in such
Imposition, as it was originally assessed. Any refunds or credits resulting from
a contest brought pursuant to this Section 1.6.4(b) shall be divided between
NEON and Exelon in the same proportion as to which such refunded or credited
Imposition was borne by NEON and Exelon. If Exelon objects to such challenge in
writing within ten (10) Business Days after receipt of such notice from NEON,
and NEON proceeds with such challenge, NEON shall conduct such challenge at its
own cost and expense, provided that Exelon shall not receive the benefit of any
refund or credit, if any, or any portion thereof, obtained as a result of such
challenge. If NEON is audited with respect to an Imposition or contests an
Imposition, with or without objection by Exelon, Exelon will cooperate fully
with NEON and will provide complete and accurate

                                      -7-
<PAGE>

documentation in order for NEON to appropriately pursue such matters and/or to
minimize any applicable tax assessment.

             1.6.5 IMPOSITIONS BASED ON INCOME. Following the Acceptance Date,
Exelon and NEON, respectively, shall be separately responsible for any and all
Impositions (i) expressly or implicitly imposed upon, based upon, or otherwise
measured by the gross receipts, gross income, net receipts or net income
received by or accrued to such party due to its ownership or use of the NEON
Fibers, or (ii) which have been separately assessed or imposed upon the
respective ownership interest of such party in Exelon's Network. Notwithstanding
any provision herein to the contrary, either Party shall have the right to
contest by appropriate proceedings any Imposition described in this Section
1.6.5. In such event, the Party pursuing such contest shall indemnify and hold
the other Party harmless from any expense, legal action or cost, including
reasonable attorneys' fees, resulting from such Party's exercise of its rights
hereunder. In the event of any refund, rebate, reduction or abatement to such
Party of any such Imposition imposed upon and/or paid by such Party, such Party
shall be entitled to receive the entire benefit of such refund, rebate,
reduction or abatement attributable to its use of Exelon's Network.

             1.6.6 RELOCATION TO REDUCE IMPOSITIONS. If NEON has exhausted all
its rights of appeal in protesting any Imposition affecting the NEON Fibers and
has failed to obtain the relief sought in such proceedings or appeals ("Finally
Determined Taxes and Fees"), NEON and Exelon may jointly agree to relocate a
portion of Exelon's Network (including the affected NEON Fibers) to bypass the
jurisdiction which had imposed or assessed such Finally Determined Taxes and
Fees with the total costs thereof to be shared proportionately as follows: (i)
if the affected portion of Exelon's Network includes any conduit other than the
conduit in which the NEON Fibers are located, the total costs of relocation of
the conduits (i.e., relocation of the conduits only without regard to whether
the conduits contain fibers) shall be allocated based on the overall number of
conduits in Exelon's Network which are relocated; and (ii) such costs allocated
to the conduit carrying the NEON Fibers plus the costs specifically associated
with the relocation of the fiber (i.e., relocation of the fiber only without
regard to relocation of conduit) to be further allocated to NEON based upon
NEON's proportionate share of (A) all costs of fiber acquisitions, splicing and
testing, prorated based on the total fiber count in the cable, as so relocated;
and (B) all other costs associated with the relocation of the conduit housing
the affected cable, prorated based upon the total number of interest holders in
the affected cable, as so relocated. Exelon shall deliver to NEON updated
as-built drawings with respect to the relocated portion of Exelon's Network not
later than 60 days following the completion of such relocation. If NEON and
Exelon do not agree to relocate the affected portion of Exelon's Network within
60 days after a written request by NEON, NEON shall have the right to terminate
its use of the NEON Fibers in the affected portion of Exelon's Network. Such
termination shall be effective on the date specified by NEON in a written notice
of termination, which date shall be at least 90 days after the date of such
notice. Upon such termination, the IRU in the affected portion of Exelon's
Network shall immediately terminate.

             1.6.7 FURTHER PROCEDURES. Notwithstanding the provisions of Section
1.6.6, with respect to any Impositions relating to Exelon's Network which are
imposed upon both Exelon and NEON (or both of their respective interests
therein), NEON, at its option, shall have the right to direct and manage any
such contest; subject, however, to reasonable and appropriate consultation with
Exelon, and Exelon hereby agrees to cooperate with NEON in any such

                                      -8-
<PAGE>

contest. Notwithstanding the foregoing, NEON shall not be entitled to make any
settlement with respect to any such Imposition without the prior written consent
of Exelon. The right of NEON to contest any Imposition pursuant to this Section
1.6.7 shall be contingent upon reasonable and appropriate assurances that any
such contest will not adversely affect Exelon's right, title, and interest in
and to the Exelon Network or any of Exelon's rights hereunder.

             1.6.8 FUTURE CHANGES. Exelon and NEON agree to cooperate fully in
the preparation of any returns or reports relating to the Impositions. Exelon
and NEON further acknowledge and agree that the provisions of this Section 1.6
are intended to allocate the Impositions expected to be assessed against or
imposed upon the Parties with respect to Exelon's Network based upon the
procedures and methods of computation by which Impositions generally have been
assessed and imposed to date, and that material changes in the procedures and
methods of computation by which such Impositions are assessed and imposed could
significantly alter the fundamental economic assumptions of the Parties
underlying the transactions hereunder to the Parties. Accordingly, the Parties
agree that, if in the future the procedures or methods of computation by which
Impositions are assessed or imposed against the Parties, or either of them,
change materially from the procedures or methods of computation by which they
are imposed as of the date hereof, the Parties will negotiate in good faith an
amendment to the provisions of this Section 1.6 in order to preserve, to the
extent reasonably possible, the economic intent and effect of this Section 1.6.

             1.6.9 PROVISION OF INFORMATION. In connection with any inquiry from
any governmental authority, each of the Parties hereby agrees to provide the
other Party with such information concerning itself as such other Party may
reasonably request, including information necessary for the calculation of
revenues for franchise fee purposes and records or information required to be
kept pursuant to the rules and regulations of governmental authorities.

             1.6.10 EXCISE TAXES. For the avoidance of doubt, the Parties hereby
acknowledge that NEON shall be responsible for any property, excise or similar
taxes levied in respect of any POP or optronic equipment owned or leased by or
under the control of NEON, and that the party which holds legal title to the
NEON Fibers shall be responsible for any property, excise or similar taxes
levied in respect of the NEON Fibers. The cost-sharing provisions of this
Agreement, including, without limitation, the cost-sharing provisions of this
Article I, shall not apply to the property, excise or similar taxes described in
this Section 1.6.10.

             1.6.11 SALES AND TRANSFER TAXES. For the avoidance of doubt, the
Parties hereby acknowledge that Exelon shall be responsible for any sales or
transfer taxes arising out of the grant of the IRU in the NEON Fibers
contemplated by this Agreement.

         1.7 CONDEMNATION, TAKING OR INTERFERENCE. Exelon shall promptly notify
NEON upon its receipt of a formal written notice of condemnation, taking or
interference with the NEON Fibers, or of any requirement by any Governmental
Authority to alter or relocate the NEON Fibers, or of any proceeding filed or
threatened against a portion of Exelon's Network containing the NEON Fibers or
Exelon's property in or upon which the NEON Fibers shall have been installed. If
a taking, condemnation, interference or any other requirement of a Governmental
Authority requires relocation of the portion of Exelon's Network containing the
NEON Fibers, Exelon shall use its best efforts to obtain an alternative route
over which the NEON Fibers may

                                      -9-
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be relocated. The cost for such relocation shall be borne by NEON and Exelon in
proportion to the number of NEON Fibers over the total number of fibers within
the cable(s) to be relocated, less any compensation received by Exelon in
connection with such relocation. Exelon shall be entitled to use any
condemnation or relocation proceeds otherwise payable to NEON to defray the cost
of such relocation of Exelon's Network along such alternative route. Subject to
the foregoing, both Parties shall be entitled, to the extent permitted under
applicable law, to participate in any condemnation, taking, interference or
relocation proceedings to seek to obtain compensation by either joint or
separate awards for the economic value of their respective interests. Exelon
shall not sell the NEON Fibers to an acquiring agency, authority or other party
in lieu of condemnation without notice to NEON. Notwithstanding anything in this
Section 1.7 to the contrary, for a period of five years following the Acceptance
Date, Exelon will be responsible for the costs associated with the relocation of
the NEON Fibers as a result of any condemnation, taking or interference, as
follows: [**]% of such costs incurred during the first year after the Acceptance
Date, [**]% of such costs incurred during the second year after the Acceptance
Date, [**]% of such costs incurred during the third year after the Acceptance
Date, [**]% of such costs incurred during the fourth year after the Acceptance
Date and [**]% of such costs incurred during the fifth year after the Acceptance
Date and [**]% of such costs incurred thereafter.

         1.8 RIGHT OF WAY FEES AND REVOCABLE CONSENTS. The Parties agree that
Exelon shall be responsible for the payment of any fees for rights-of-way and
revocable consents ("ROW Fees") for Exelon's Network and the NEON Fibers during
the Initial Term and the Initial Extension. During any Renewal Term, NEON shall
be responsible for a proportional share of any ROW Fees and revocable consents,
as determined by reference to the number of NEON Fibers in a particular cable to
the total number of fibers in that same cable.

         1.9 ALTERNATIVE SOURCE OF RIGHTS. In the event Exelon obtains its
rights in the NEON Fibers from a third party for the benefit of NEON (whether by
assignment dated the date hereof from Exelon or by a negotiated IRU agreement to
be executed by NEON and such third party, the fee for such IRU agreement to be
paid in either case by Exelon to NEON for subsequent payment to such third
party), such IRU agreement shall be substantially in the form attached hereto as
APPENDIX 1.9 (the "Third Party IRU"); PROVIDED, HOWEVER, the final form of such
Third Party IRU shall not vary the terms of Section 4.1 thereof in any respect
without the consent of NEON. NEON shall cooperate with Exelon in the negotiation
of the final terms of an acceptable Third Party IRU. Upon execution of such
Third Party IRU by NEON or NEON's acceptance of the assignment of such Third
Party IRU from Exelon (which execution or acceptance may not be withheld if such
Third Party IRU is substantially in the form attached hereto as APPENDIX 1.9 and
the terms of Section 4.1 thereof have not been varied in a manner to which NEON
has not consented), NEON and Exelon shall be deemed to have amended this
Agreement in any and all respects as necessary to conform the terms and
conditions of Article I of this Agreement, and the other terms and conditions of
this Agreement to the extent that they relate or are to be applied to the terms
and conditions of this Article I, to the terms and conditions set forth in such
Third Party IRU, and any inconsistency between any of the terms of this Article
I, and the other terms of this Agreement to the extent that they relate or are
to be applied to the terms and conditions of this Article I, and the terms of
such Third Party IRU, the terms of such Third Party IRU shall be determinative.

                                      -10-

<PAGE>

                                   ARTICLE II

                                 INTERCONNECTION

         2.1 INTERCONNECTION. NEON shall provide a Demarcation Point
("Demarcation Point") at the NEON Philadelphia POP at which point Exelon will
interconnect its Network with NEON's Network. NEON shall provide the necessary
interconnection cabling from NEON's equipment to the Demarcation Point. Exelon
shall provide cabling from the Demarcation Point to Exelon's Network.

         2.2 INSTALLATION PLANS. No later than thirty (30) days prior to the
date on which Exelon intends to interconnect its Network to NEON's Network at
the Demarcation Point, Exelon shall submit for NEON's review all engineering
plans and specifications pertaining to Exelon's interconnection.

         2.3 MAINTENANCE. NEON shall maintain its equipment in a manner that
will not physically, optically or electrically interfere with facilities of
Exelon. Exelon shall maintain its equipment in a manner that will not
physically, optically or electrically interfere with the facilities of NEON.

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                                  ARTICLE III

                                NETWORK OPERATION

         3.1 NETWORK PERFORMANCE AND OPERATING STANDARDS.

             3.1.1 NEON NETWORK. NEON covenants that NEON's Network will perform
and operate in accordance with the standards set forth in APPENDIX 3.1.1.

             3.1.2 EXELON NETWORK. Exelon covenants that Exelon's Network will
perform and operate in accordance with the standards set forth in APPENDIX
3.1.1.

         3.2 MARKETING SERVICES.

             3.2.1 MARKETING OF INTER-PARTY SERVICES. Exelon hereby appoints
NEON to perform, and NEON shall perform, all sales and marketing services for
Exelon relating to telecommunication products and services sold to
certificated carriers that utilize Exelon's Network and NEON's Network
(including the NEON Fibers) during the Initial Period and any Extension (as
such terms are defined in Section 4.8) ("Inter-Party Services"). Exelon
hereby grants to NEON [**], subject to the terms set forth in this Agreement,
including without limitation those set forth in this Section 3.2 and in
Article IV.

             3.2.2 PRICING.

                   (a) NEON shall [**]. Exelon's price for such Inter-Party
Services shall be subject to change from time to time, but shall not be
changed for a particular customer for a period of 30 days after such price
has been quoted to NEON if a price has been quoted by NEON to such customer.

                   (b) Exelon's price for its portion of Inter-Party Services
between any locations [**].

             3.2.3 EXCLUSIVITY. NEON shall be the exclusive sales and marketing
agent party with respect to Inter-Party Services, and all such sales, whether
initiated by NEON or Exelon, shall be finalized through NEON. In performing such
sales and marketing services, NEON shall at all times during the Initial Period
and any Extension retain competent employees and contractors who have sales and
marketing skills appropriate for the services being rendered by NEON under this
Section 3.2. Exelon shall refer all customers for Inter-Party Services to NEON.
NEON will pay commissions to Exelon in respect of Inter-Party Services sold to
customers referred to NEON by Exelon at commission rates [**]. NEON shall refer
to Exelon all customers for telecom products and services that use solely
Exelon's Network. Exelon will

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pay commissions to NEON in respect of any such Services using solely Exelon's
Network sold by Exelon to customers referred by NEON at commission rates [**].

             3.2.4 INTER-PARTY SERVICES. NEON's obligation to market and sell
Inter-Party Services shall include, without limitation, the following sales and
marketing services to the best of NEON's abilities with the goal of maximizing
sales on Exelon's Network:

                   (a) the development and implementation of a marketing program
and plan for sales of Inter-Party Services, specifically telecommunications
services employing the integration of Exelon's Network and NEON's Network
(including the NEON Fibers);

                   (b) making contact with, or otherwise initiating sales
relationships with potential customers;

                   (c) exercise responsibility for all sales relationships with
potential customers, including sales engineering, sales support, after-sales
record keeping and support; and

                   (d) all billing, collection and distribution of revenues
shall be performed by NEON.

         In marketing and selling Inter-Party Services, NEON may take orders for
Inter-Party Services in the name of NEON and may promote the NEON(R) brand as
the brand name of the Inter-Party Services. All sales will be made on the basis
of written agreements executed by duly-authorized representatives of NEON and
its customers.

             3.2.5 ACCEPTANCE OF ORDERS. Neither Party shall refuse to accept
any orders procured through the other Party for Inter-Party Services in
compliance with this Agreement.

         3.3 EXELON'S CONTRIBUTIONS.

             3.3.1 CASH CONTRIBUTIONS. Exelon agrees to make cash contributions
("Cash Contributions") as set forth in this Section 3.3.1 on the date of this
Agreement. Exelon agrees to contribute to NEON $[**] for the cost of a dual
building entry fully built-out POP in Philadelphia, Pennsylvania at [**] (the
"NEON Philadelphia POP") of at least [**] square feet with interior, HVAC and
back-up power. Unless stated otherwise, the Parties agree that the on-going
operating expenses for the NEON Philadelphia POP will be the responsibility of
NEON. Exelon agrees to contribute to NEON $[**] for the cost of optronic and
ancillary equipment in accordance with NEON's specifications at the NEON
Philadelphia POP and NEON's POP in New York City. NEON shall install the
equipment listed on APPENDIX 3.3.1 or equipment of equivalent functionality.
NEON shall complete construction of the NEON Philadelphia POP on or before the
Target Date.

             3.3.2 OPERATING EXPENSE CONTRIBUTIONS. Exelon agrees to make
operating expense contributions ("Operating Expense Contributions") to NEON in
accordance with APPENDIX 3.3.2. On-going operating expenses for the NEON
Philadelphia POP are the responsibility of NEON. The Parties agree that NEON
will execute the lease for the NEON Philadelphia POP directly with the lessor or
sublease the NEON Philadelphia POP from Exelon. NEON's scope of responsibility
shall include: Inter-Party Network supervision, circuit

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supervision, diagnostic testing, carrier billing, call center and dispatch for
the Exelon Network during the period from November 1, 2000 to [**].

             3.3.3 IN-KIND CONTRIBUTION. On or prior to the delivery of the NEON
Fibers in accordance with Section 1.2.2, Exelon agrees to provide one (1)
regenerator site with three (3) equipment racks and one (1) amplification site
with one (1) equipment rack (the "In-Kind Contribution") spaced upon the route
between the NEON New York City POP and the NEON Philadelphia POP, in accordance
with the standards set forth in Appendix 3.1.1, such spacing being coincident
with the location of other third party regenerator and amplification sites along
such route.

             3.3.4 CONDITIONS PRECEDENT TO EXELON'S CONTRIBUTIONS. The
obligation of Exelon to grant any IRU or to make any cash contribution, any
Operating Expense Contribution or the In-Kind Contribution hereunder shall be
subject to the condition that the representations and warranties of NEON in
Sections 3.01, 3.02 and 3.03 of the Subscription Agreement shall have been true
and correct as of the date of the Subscription Agreement and as of the Closing
Date, as defined therein.

             3.3.5 COMPLETION OF POPS. Exelon will complete construction and
interconnection of the POPs set forth on Appendix 7.18(ii) on or prior to [**].
NEON agrees that this interconnection obligation will be satisfied so long as
the relevant fiber optic cable is within one block of each of the buildings set
forth on APPENDIX 7.18(ii), PROVIDED THAT such cable is eventually extended to a
point directly in front of each such location for which, and at such time as,
there is a customer order for connection at such location.

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                                   ARTICLE IV

                       RIGHTS OF CARRIAGE AND PROVISION OF
                           TELECOMMUNICATIONS SERVICES

         4.1 NEON'S EXCLUSIVE RIGHT AND OBLIGATION TO PROVIDE SERVICE TO EXELON.

                   (a) Subject to the provisions of this Article IV, during the
Initial Period and any Extension, NEON shall have the exclusive right, and shall
have the obligation, to provide Services to Exelon and its certificated carrier
customers to any point covered by NEON's Network. Except as set forth in Section
4.1(b)(ii) or the next sentence, such Services shall be provided at NEON's
standard prices, as such may be set by NEON from time to time. NEON's price for
such Services shall [**].

                   (b) Notwithstanding the foregoing, except with respect to
service to locations listed in Appendix 7.18(i) or any other location to which
NEON's Network has already been built, Exelon shall have the right to seek
another provider for, and NEON shall not be obligated to provide a particular
Service if, after requesting such Service from NEON, the parties determine that:

                       (i) NEON is unable to provide the Service requested by
Exelon at the level of quality or within the time frame required by Exelon; or

                       (ii) NEON is unwilling to provide the Service at a
price [**] for such Service. For purposes of this Section 4.1 and Section
4.2, [**] for a Service shall be determined by good faith negotiations
between the Parties. If the Parties cannot agree on a competitive market
price within [**] Business Days of the commencement of such negotiations, the
competitive market price for such Service shall be deemed to be the average
price for such Service determined by at least [**] bona fide written offers
received by Exelon from an unaffiliated third party, copies of which shall
have been provided to NEON, for identical Service and for identical periods
from established carriers. If NEON refuses to provide the Service at such
average competitive market price for such Service within [**] days of receipt
of the copies of the written offers received by Exelon, then Exelon shall be
entitled to seek another provider of the Service.

         In the event that Exelon acquires such Service from a third party
pursuant to this Section 4.1(b), then, at such time as NEON informs Exelon that
it is willing to provide the Service at the quality, in the time frame and at
the competitive market price, then Exelon shall use commercially reasonable best
efforts to transfer the ASR for such Service from the third party to NEON,
provided that it may do so without financial or other penalty.

         4.2 EXELON'S EXCLUSIVE RIGHT AND OBLIGATION TO PROVIDE SERVICE TO NEON.

                   (a) Subject to the provisions of Article IV, during the
Initial Period and any Extension, Exelon shall have the exclusive right, and
shall have the obligation, to provide Services to NEON and its customers to any
point covered by Exelon's Network. Except as set forth in Section 4.2(b)(ii) and
the next sentence, such Services shall be provided at Exelon's standard prices,
as such may be set by Exelon from time to time. Exelon's price for such Services
shall [**].

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                   (b) Notwithstanding the foregoing, except with respect to
service to locations listed in Appendix 7.18(ii) or any other location to which
Exelon's Network has already been built, NEON shall have the right to seek
another provider for, and Exelon shall not be obligated to provide, a particular
Service if, after requesting such Service from Exelon, the parties determine
that:

                       (i) Exelon is unable to provide the Service requested by
NEON at the level of quality or within the time frame required by NEON; or

                       (ii) Exelon is unwilling to provide the Service at a
price [**] as determined in accordance with the procedures set forth in Section
4.1(b).

         In the event that NEON acquires such Service from a third party
pursuant to this Section 4.2(b), then, at such time as Exelon informs NEON that
it is willing to provide the Service at the quality, in the time frame and at
the competitive market price, then NEON shall use commercially reasonable best
efforts to transfer the ASR for such Service from the third party to Exelon,
provided that it may do so without financial or other penalty.

         4.3 EXELON'S SERVICES. Exelon shall provide Service to NEON in
accordance with the following procedures.

         4.3.1 SERVICE TO ON-NET LOCATIONS.

               (a) NEON shall order Service to On-Net Locations from Exelon by
tendering to Exelon an ASR. The applicable non-recurring and recurring charges
shall be as set forth in the form illustrated in APPENDIX 4.3.1(a). The
non-recurring and recurring charges may be amended by Exelon from time to time,
but in any event not more frequently than once in any [**]-month period. Unless
Exelon notifies NEON in writing within seven (7) Business Days after receipt of
an ASR that Exelon declines to provide the Service covered thereby, such ASR
shall be deemed accepted by Exelon and shall form part of this Agreement,
subject to all terms and conditions herein.

               (b) Service to On-Net locations shall include normal maintenance,
inspection, repair and testing.

               (c) Service Orders for On-Net Services shall be made and
processed in accordance with APPENDIX 4.3.1(c).

         4.3.2 SERVICE TO OFF-NET LOCATIONS.

               (a) NEON shall order Service to Off-Net Locations from Exelon by
tendering to Exelon a Request For Quotation ("RFQ") specifying the Service
requested, the location to be served, the requested Start of Service Date, the
period of time the Circuit is to be in use (the "Circuit Term"), and other
information specific to the applicable RFQ.

                                      -16-
<PAGE>

               (b) Exelon shall, within five (5) Business Days after receipt of
an RFQ, contact NEON verbally as to whether or not Exelon can provide the
requested Service; in default of which Exelon shall be deemed to have declined
to provide the Service covered thereby and to have waived its rights under
Section 4.2 of this Agreement. Notwithstanding the preceding sentence, Exelon
shall only be entitled to provide the requested service if, within ten (10)
Business Days after receipt of an RFQ, Exelon submits to NEON a written
quotation specifying (i) the Service to be provided; (ii) the location to be
served; (iii) the applicable non-recurring charge; (iv) the applicable monthly
recurring charge; and (v) the Circuit Term.

               (c) If Exelon has submitted a quotation under Subparagraph (b),
above, NEON may order the applicable Service from Exelon by tendering to Exelon
an ASR with a copy of the quotation attached. Upon receipt of such ASR by
Exelon, such ASR shall be deemed accepted by Exelon and shall form a part of
this Agreement, subject to all terms and conditions herein.

               (d) In the event the ASR is inconsistent with any of the terms of
Exelon's quotation under Subparagraph (b) above, then the terms stated in the
ASR shall govern unless Exelon notifies NEON in writing within ten (10) Business
Days after receipt of such ASR that Exelon declines to provide the Service
covered thereby for failure of the ASR to conform to the terms of the applicable
quotation.

         4.4 NEON'S SERVICES. NEON shall provide Service to Exelon in accordance
with the following procedures:

         4.4.1 SERVICE TO ON-NET LOCATIONS.

               (a) Exelon shall order Service to On-Net Locations from NEON by
tendering to NEON an ASR. NEON's Services shall be as set forth in APPENDIX
4.4.1(a). Unless NEON notifies Exelon in writing within seven (7) Business Days
after receipt of an ASR that NEON declines to provide the Service covered
thereby, each such ASR shall be deemed accepted by NEON and shall form part of
this Agreement, subject to all terms and conditions herein.

               (b) Service to On-Net locations shall include normal maintenance,
inspection, repair and testing.

               (c) Service Orders for On-Net Services shall be made and
processed in accordance with APPENDIX 4.3.1(c).

         4.4.2 SERVICE TO OFF-NET LOCATIONS.

               (a) Exelon shall order Service to Off-Net Locations from NEON by
tendering to NEON a Request For Quotation ("RFQ") specifying the Service
requested, the location to be served, the requested Start of Service Date, the
Circuit Term, and other information specific to the applicable RFQ.

               (b) NEON shall, within three (3) Business Days after receipt of
an RFQ, contact Exelon verbally as to whether or not NEON can provide the
requested Service. Notwithstanding the preceding sentence, NEON shall only be
entitled to provide the requested service if, within seven (7) Business Days
after receipt of an RFQ, NEON submits to Exelon a written quotation specifying
(i) the Service to be provided; (ii) the location to be served; (iii) the
applicable non-recurring charge; (iv) the applicable monthly recurring charge;
and (v) the Circuit Term.

                                      -17-
<PAGE>

               (c) If NEON has submitted a quotation under Subparagraph (b),
above, Exelon may order the applicable Service from NEON by tendering to NEON an
ASR with a copy of the quotation attached. Upon receipt of such ASR by NEON such
ASR shall be deemed accepted by NEON and shall form a part of this Agreement,
subject to all terms and conditions herein.

               (d) In the event the ASR is inconsistent with any of the terms of
NEON's quotation under Subparagraph (b) above, then the terms stated in the ASR
shall govern unless NEON notifies Exelon in writing within seven (7) Business
Days after receipt of such ASR that NEON declines to provide the service covered
thereby for failure of the ASR to conform to the terms of the applicable
quotation.

         4.5 BILLING AND PAYMENT.

             4.5.1 GENERAL. As compensation for the Services provided by the
Parties to each other, each Party shall bill the other Party monthly and the
other Party shall pay the recurring and non-recurring rates and charges set
forth herein and/or in the ASR beginning on the Start of Service Date. The
Parties agree to pay each other's appropriate recurring and nonrecurring
charges for the Services at the address provided, within thirty (30) days
after receipt of an invoice therefor (the "Payment Date"). The Parties shall
provide one another with reasonably requested information for bill validation
including, but not limited to, the number of circuits and charges for each
transport Service. Each Party warrants that the rates and charges will be in
compliance with all applicable laws and governmental regulations.

             4.5.2 INTEREST ON LATE PAYMENTS. Except for amounts disputed in the
manner provided below, payments not made on or before the date due shall bear
interest at the Interest Rate from the date due until payment is made.

             4.5.3 DISPUTES. In the event one Party disputes any billing by the
other Party, the disputing party shall notify the billing party in writing,
providing the billing identification, Circuit number, any trouble ticket number
and an explanation for the dispute, and shall nevertheless pay all charges not
disputed in this manner on or before the Payment Date. No charges may be
disputed more than 120-days after the date such charges are invoiced. Payment
shall not prejudice either Party's right to dispute charges, so long as they are
disputed in the manner and within the time specified in this section. The
Parties will cooperate in good faith to resolve any such disputes within 60 days
after the dispute is submitted to the billing Party. If the dispute is not
resolved during this period, either party may seek alternative dispute
resolution in accordance with Section 7.7.

         4.5.4 SUSPENSION OF SERVICE. If a Party does not pay undisputed
invoiced charges on or before the Payment Date, the billing Party may suspend
Service unless the other Party pays such charges within fifteen (15) days after
written notice from the billing Party.

                                      -18-
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         4.5.5 INTEREST ON DISPUTED AMOUNTS. If a disputed amount is determined
to be a legitimate charge, either by the agreement of the parties or as
determined pursuant to Section 7.7, interest shall accrue on such disputed
amount at the Interest Rate from the Payment Date until paid in full, and shall
be payable on demand. If a disputed amount is determined not to be a legitimate
charge, no interest shall accrue thereon.

         4.5.6 PARTIAL MONTHS. When Service is initiated on other than the first
day of the month or terminates on other than the last day of the month, the
charge for that month shall be determined by prorating the monthly payment by
the number of days during which Service was provided.

         4.6 COVENANT REGARDING NETWORK STANDARDS.

             4.6.1 COMPLIANCE. Each Party warrants that it shall at all
times, comply with (i) the specifications set forth in APPENDIX 3.1.1 and
APPENDIX 3.1.2 to this Agreement (as applicable to each Party's Network) and
(ii) all relevant provisions of Appendix 1, AT&T Compatibility Bulletin No.
119 (TA-34) and the following Bellcore Publications: FR-NWT-000440
(transmission facilities interfaces); FR-NWT-000064 (related Local Access
Transport Area switching); and FR-NWT-000439 (operational technology generic
requirements), in each case, as such specifications or provisions are updated
from time to time. The Parties agree that if any Party, in its sole
discretion, determines that an emergency action is necessary to protect its
own Network the Party may block any transmission path over its Network by the
other Party where transmissions do not meet the above requirements of such
AT&T Compatibility Bulletin, Bellcore Technical Publications, and Appendix 1.
The Parties further agree that none of their respective obligations to one
another under this Agreement shall be affected by any such blockage except
that the Party affected by such blockage shall be relieved of all obligations
to make payments for charges relating to such Service which is so blocked and
that no Party shall have any obligation to the other Party for any claim,
judgment or liability resulting from such blockage.

             4.6.2 ERROR RATE; DIVERSITY. Each Party warrants that, with respect
to Services that are Lit Services, (i) the Service provided over its Network
hereunder shall be [**]% free of errored seconds over a one (1) month period for
each Service, other than for reasons of Planned Service Outages, or reasons set
forth in Section 7.3 hereof; and (ii) the Circuits connecting [**] locations
shall have a physically diverse serve and protect path (except with respect to
laterals off the backbone and building entrances).

             4.6.3 SOLE WARRANTIES. The warranties set forth in this Section 4.6
constitute the only warranties with respect to the Services provided pursuant to
this Section 4.6. SUCH WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, WRITTEN
OR ORAL, STATUTORY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR USE.

                                      -19-
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         4.7 OUTAGE CREDITS, ALLOWANCES AND TERMINATION.

             4.7.1 OUTAGE CREDITS FOR ON-NET SERVICES. Subject to the terms
of the ASR, in the event that the Party providing the Service (the
"Provider") is unable to restore a portion of the Service as required
hereunder, or in the event of a Service Outage, the Party using the Service
(the "User") shall be entitled to a credit for the prorated monthly charges
for the affected circuits for all unplanned Service Outages. The Provider
will grant a credit allowance to a User for a Service Outage calculated as
specified below. A Service Outage will be deemed to have occurred only where
the interruption is not the result of: (i) the negligence or acts of the User
or the End-User or any of their agents; (ii) a Planned Service Outage; (iii)
a Force Majeure event as provided herein, or (iv) any other event or
condition not arising out of the negligence of the Provider. Credits for a
Service Outage will be granted to a User only if: (a) the User affords the
Provider reasonable access to the User's premises to make appropriate
repairs; and (b) the Provider is not impeded in its efforts to repair,
maintain, or test the equipment by the User's unreasonable demand to continue
use of the Services on an impaired basis. A Service Outage begins as soon as
the disruption or degradation of Service commences, provided the User
promptly notifies the Provider of such Service Outage, unless the other Party
is or should be aware of such Service Outage. A Service Outage ends when the
Services, facility or circuit is operative in accordance with the terms of
this Agreement. If the User reports Services or a facility or Circuit to be
inoperative but declines to release it for testing and repair, it is
considered to be impaired, but shall not be deemed a Service Outage. The User
must request a credit allowance for a Service Outage within one hundred
twenty (120) days after the Service Outage occurs or any claim for an
allowance is waived. [**] Service Outages of [**] minutes or more
during any [**] period shall be aggregated for purposes of computing the
credit allowance. Credit allowances with respect to Lit Services shall be
calculated as follows (unless otherwise stipulated in the applicable ASR):

<TABLE>
<CAPTION>
         LENGTH OF                                    PERCENTAGE OF MONTHLY RECURRING CHARGE
         SERVICE OUTAGE (PER MONTH)                   TO BE CREDITED*
         <S>                                          <C>
         Less than [**]                               [**]%
         [**] up to but not including [**]            [**]%
         [**] up to but not including [**]            [**]%
         [**] up to but not [**]                      [**]%
         Greater than [**]                            [**]%
</TABLE>

*Credit is based on the monthly recurring revenue of the Circuit experiencing
the Service Outage.

<TABLE>
<S>       <C>    <C>
NOTES:    1.     [**] Service Outages of [**] or more during any [**] period
                 shall be aggregated for purposes of computing the credit allowance.

          2.     Allowances will never exceed monthly recurring charge for the circuit experiencing
                 the service outage.

          3.     Applies to On-Net facilities as specified in Appendix 7.18(ii).
</TABLE>

                                      -20-

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             4.7.2 LIMITATIONS. Notwithstanding a Party's obligation to
provide credit allowances in the event of Service Outages, such Party may
disconnect a Circuit or Service, which disconnection shall not constitute a
Default, if the specific Circuit or Service experiences Service Outages
giving rise to cumulative credit allowances equal to [**] the monthly
Recurring Charge during any continuous [**] period or a single continuous
outage of [**] or more. Whenever a Party reports to the other Party that a
Service has a Chronic Trouble, the Party providing the Service shall promptly
perform a detailed investigation and report the findings to the other Party.
In the event that the Service continues to experience Chronic Trouble after
clearing the most recent trouble, the Party providing the Service may
disconnect the specific Service, which disconnection shall not constitute a
Default.

         4.8 EXPIRATION. The provisions of this Article IV (except for
Section 4.9, which shall remain in effect until this Agreement expires or is
terminated) shall remain in effect for an initial period of seven years from
the date of this Agreement (the "Initial Period") and shall automatically be
extended for successive three year periods (each, an "Extension") throughout
the Initial Term, the Initial Extension and each Renewal Term unless either
Party gives written notice to the other Party at least twelve months before
the expiration of the Initial Period or any Extension that it does not wish
to extend such provisions. Notwithstanding any expiration of any of the
provisions of this Article IV (except for Section 4.9), the provisions of
Sections 4.5 through 4.7 shall remain in full force and effect with respect
to any Services ordered and accepted prior to the expiration of the Initial
Period or any Extension.

         4.9 COMPETITION. Except as otherwise set forth herein, this Agreement
shall not prevent competition between Exelon and NEON.

                                      -21-

<PAGE>

                                   ARTICLE V

                PROPRIETARY INFORMATION, TRADEMARKS AND PUBLICITY

         5.1 PROPRIETARY INFORMATION.

             5.1.1 PROTECTION OF PROPRIETARY INFORMATION. NEON and Exelon hereby
agree that if either Party (the "Disclosing Party") provides (or prior to the
execution of this Agreement, has provided) any Proprietary Information (as
defined in Section 5.1.2) to the other Party (the "Receiving Party"), such
Proprietary Information shall be held in confidence, and the Receiving Party
shall afford such Proprietary Information the same care and protection as it
affords generally to its own confidential and proprietary information (which in
any case shall be not less than reasonable care) in order to avoid disclosure to
or unauthorized use by any third party.

             5.1.2 PROPRIETARY INFORMATION DEFINED. As used herein, "Proprietary
Information" shall mean any and all confidential information or technical or
business information furnished, in whatever form or medium, or disclosed by one
Party to the other including, but not limited to, product or service
specifications, prototypes, computer programs, models, drawings, marketing
plans, financial data, and personnel statistics. In addition, the Parties
acknowledge and agree that this Agreement, including all of the terms,
conditions and provisions of this Agreement, all drafts of this Agreement, and
all information disclosed by either Party to the other in connection with or
pursuant to this Agreement constitutes Proprietary Information.

             5.1.3 OWNERSHIP OF PROPRIETARY INFORMATION. All Proprietary
Information, unless otherwise specified in writing, shall remain the property of
the Disclosing Party, shall be used by the Receiving Party only for the intended
purpose, and such written Proprietary Information, including all copies thereof,
shall be returned to the Disclosing Party or destroyed after the Receiving
Party's need for it has expired or upon the request of the Disclosing Party.
Proprietary Information shall not be reproduced except to the extent necessary
to accomplish the purpose and intent of this Agreement, or as otherwise may be
permitted in writing by the Disclosing Party.

             5.1.4 EXCEPTIONS. The foregoing provisions of this Section 5.1
shall not apply to any Proprietary Information which (a) becomes publicly
available other than through the Receiving Party; (b) is required to be
disclosed by a governmental or judicial law, order, rule or regulation; (c) is
independently developed by the Receiving Party either before or during the
Initial Term, the Initial Extension and any Renewal Term; (d) becomes available
to the Receiving Party without restriction from a third party; or (e) becomes
relevant to the settlement of any dispute or enforcement of either Party's
rights under this Agreement in accordance with the provisions of this Agreement,
in which case appropriate protective measures shall be taken to preserve the
confidentiality of such Proprietary Information as fully as possible within the
confines of such settlement or enforcement process. If any Proprietary
Information is required to be disclosed pursuant to the foregoing clause (b),
the Receiving Party shall promptly inform the Disclosing Party in writing of the
requirements of such disclosure.

                                      -22-
<PAGE>

             5.1.5 PERMITTED DISCLOSURES. Notwithstanding the foregoing, either
Party may disclose Proprietary Information to its employees, agents, and legal,
financial, and accounting advisors and providers (including its lenders and
other financiers) to the extent necessary or appropriate in connection with the
negotiation and/or performance of this Agreement or its obtaining of financing,
PROVIDED THAT each such party is notified of the confidential and proprietary
nature of such Proprietary Information and is subject to or agrees to be bound
by similar restrictions on its use and disclosure of Proprietary Information.

         5.2 USE OF ADVERTISING MATERIALS; LOGOS. Neither Party shall publish or
use any advertising, sales promotions, or other publicity materials that use the
other Party's name, logo, trademarks or service marks ("Marks") without the
prior written approval of the other Party, which approval shall not be
unreasonably withheld or delayed. The Parties acknowledge that NEON shall use
the NEON(R) brand name for all Inter-Party Services provided by NEON.

         5.3 RIGHT TO REVIEW PUBLICITY MATERIAL. Each Party shall have the right
to review and approve any publicity material, press releases, or other public
statements by the other that refer to such Party or that describe any aspect of
this Agreement. Each Party agrees not to issue any such publicity materials,
press releases, or other public statements containing the other Party's Marks
without the prior written approval of the other Party, which approval shall not
be unreasonably withheld or delayed.

         5.4 NO LICENSE TO MARKS. Nothing in this Agreement establishes a
license for either Party to use any of the other Party's Marks without prior
written approval of the other Party.

         5.5 NO LICENSE TO COPYRIGHTS; PATENTS. Nothing herein shall be
construed as granting any right or license under any copyrights, inventions or
patents now or hereafter owned or controlled by the other Party.

         5.6 SURVIVAL. The provisions of this Article V shall survive expiration
or termination of this Agreement.

                                      -23-

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                                   ARTICLE VI

                          INDEMNIFICATION AND INSURANCE

         6.1 INDEMNIFICATION. In addition to the rights of indemnification
set forth in Section 9 of the Subscription Agreement, each Party agrees to
indemnify, defend, protect and save the other harmless from and against any
claim, damage, loss, liability, cost, and expense (including reasonable
attorney's fees) in connection with any personal injury, including death,
loss or damage to any property, or facilities of any party (including NEON,
Exelon or any other party operating or using any part of the System) arising
out of or resulting in any way from the negligent acts or negligent omissions
to act of such Party, its employees, servants, contractors, and/or agents in
connection with the exercise of its rights and obligations under the terms of
this Agreement or any breach by such Party of any obligation contained in
this Agreement. Furthermore, each Party agrees to indemnify, defend, protect
and save the other Party harmless from and against any claim, damage, loss,
liability, cost, and expense (including reasonable attorney's fees) (i) for
any damage to NEON's Network or Exelon's Network, as the case may be, arising
out of or resulting in any way from any acts or omissions to act of a Party,
its employees, servants, contractors, and/or agents or (ii) arising out of
either Party's or any other party's use of NEON's Network or Exelon's
Network, as the case may be, and any activities contemplated or permitted
under this Agreement (whether such activities are authorized pursuant thereto
or not).

         6.2 INSURANCE. Each Party shall, at its own expense, secure and
maintain in force throughout the Initial Term, the Initial Extension and each
Renewal Term, General Liability Insurance with competent qualified issuing
insurance companies, including the following coverages: Product Liability,
Hazard of Premises/Operations (including explosion, collapse and underground
coverages); Independent Contractors; Products and Completed Operations; Blanket
Contractual Liability (covering the liability assumed in this Agreement);
Personal Injury (including death); and Broad Form Property Damage in policy or
policies of insurance such that the total available limits to all insured will
not be less than $[**] Combined Single Limit for each occurrence and $[**]
aggregated for each annual period. Such insurance may be provided in policy or
policies, primary and excess, including so-called umbrella or catastrophe forms.
Each Party agrees to name the other Party as an additional insured on the
foregoing insurance. All policies required by this Agreement shall require the
insurance companies to notify the other Party at least thirty (30) days prior to
the effective date of any cancellation or material modification of such
policies, and shall specify that the policy shall apply without consideration
for the other policies separately carried and shall state that each insured is
provided coverage as though a separate policy had been issued to each, except
the insurer's liability shall not be increased beyond the amount for which the
insurer would have been liable had only one insured been covered and only one
deductible shall apply regardless of the number of insured covered. Each Party
shall also carry such insurance as will protect it from all claims under any
workers compensation laws in effect that may be applicable to it.
Notwithstanding any other provision of this Agreement, including, without
limitation, this Section 6.2, each Party may, with the written consent of the
other Party, self-insure all or part of any of the insurance coverages required
to be secured and maintained under this Section 6.2.

                                      -24-

<PAGE>
                                  ARTICLE VII

                                  MISCELLANEOUS

         7.1 ASSIGNMENT. Neither Party shall assign its rights or obligations
under this Agreement to any third person or entity (except an affiliate of such
Party) without the prior written approval of the other Party, which approval
shall not be unreasonably withheld, conditioned or delayed. Subject to the
foregoing, this Agreement, and each of the Parties' respective rights and
obligations under this Agreement, shall be binding upon and shall inure to the
benefit of the Parties and each of their respective permitted successors and
assigns.

         7.2 LIENS. If NEON's Network or Exelon's Network, or any part
thereof, becomes subject to any mechanics', artisans', or materialmen's lien,
or other encumbrances, chargeable to or through the other Party, NEON or
Exelon, as the case may be, shall promptly cause such lien or encumbrance to
be discharged and released of record (by payment, posting of bond, court
deposit or other means) without cost to the other party; provided, however,
that if any such lien or encumbrance is not so discharged and released within
thirty (30) days after written notice by such other Party to the Party to
whom such lien or encumbrance is chargeable, then such other Party may, at
its option pay or secure the release or discharge thereof and the Party to
whom such lien or encumbrance is chargeable shall indemnify such other Party
against all costs and expenses (including reasonable attorneys fees) incurred
in discharging and releasing such lien or encumbrance.

         7.3 FORCE MAJEURE. Except as otherwise provided in Sections 1.5 and
4.7, the obligations of the Parties under this Agreement are subject to, and
neither Party shall be in default under this Agreement due to, any Force
Majeure. For purposes of this Agreement, "Force Majeure" means any failure or
delay in performance which, by exercise of due foresight by the Party affected
could not reasonably have been expected to avoid and, which by exercise of due
diligence, such Party shall be unable to overcome during the period while such
Party shall continue to exercise due diligence, and that is caused by strike or
other labor problems; accidents; acts of God; fire; flood; adverse weather
conditions; material or facility shortages or unavailability not resulting from
such Party's failure to timely place orders therefor; lack of transportation;
the imposition of any governmental codes, ordinances, laws, rules, regulations
or restrictions after the date of this Agreement (but not related to the
obtaining or maintaining of the Required Rights); condemnation or the exercise
of rights of eminent domain; or war, acts of war (whether declared or
undeclared), terrorism or civil disorder. Neither Party shall, however, be
relieved of liability for failure of performance due to a claimed Force Majeure
hereunder if such failure is due to causes arising out of its own gross
negligence or to removable or remediable causes that it fails to remove or
remedy with reasonable dispatch. Any Party affected by an event of Force Majeure
shall promptly notify the other Party of any occurrence or condition which in
the affected Party's reasonable opinion warrants an extension of time for the
performance of any obligation under this Agreement. Such notice must be
submitted in writing to the other Party within five (5) days or such sooner date
as is practicable after the delay is know to the affected Party, or shall, in
the exercise of reasonable diligence, become known. Such notice shall specify in
detail the anticipated length of the delay, the cause of the delay, and a

                                      -25-

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timetable by which any remedial measures shall be implemented. Failure to
provide such notice within such period shall constitute a waiver of any claim of
Force Majeure.

         7.4 DEFAULT.

             7.4.1 DEFAULTS. A Party shall be deemed in default of this
Agreement upon the occurrence of any one or more of the following events (each,
a "Default"):

                   (a) The filing of bankruptcy or making a general assignment
for the benefit of creditors;

                   (b) a Party violates any applicable laws, statutes,
ordinances, codes or other legal requirements with respect to Services and such
violation(s) are not remedied within thirty (30) days after written notice
thereof;

                   (c) a Party fails to perform its obligations under this
Agreement and such nonperformance is not remedied within (30) days (or, in
the case of Section 1.2.2, 3.3.5 and the last sentence of Section 3.3.1, one
hundred and eighty (180) days) after notice thereof, except for payment
defaults, for which no cure periods shall be available unless specifically
provided herein; or

                   (d) the representations and warranties of a Party set forth
in this Agreement are untrue or inaccurate in any material respect as of the
date such representations and warranties are made (provided that the materiality
qualification set forth in this Section 7.4.1(d) shall not apply to the
representations and warranties set forth in Section 1.4.1 of this Agreement).

             7.4.2 REMEDIES. No remedy provided for in this Agreement is
intended to be exclusive, but each remedy shall be cumulative and in addition to
and may be exercised concurrently with any other remedy available at law or in
equity.

             7.4.3 LIMITATIONS OF LIABILITY.

                   (a) NO PARTY SHALL BE LIABLE FOR LOSS OF PROFIT, GOODWILL OR
OTHER CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES ARISING
OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, EVEN IF SUCH PARTY IS
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

                   (b) Under no circumstances shall the aggregate of Exelon's
liability to NEON in connection with the transactions contemplated by this
Agreement, the Subscription Agreement and all of the Related Agreements (as
defined in the Subscription Agreement), and Parent's liability under Section
7.17 of this Agreement and Section 12.12 of the Subscription Agreement, exceed
$[**]

                                      -26-

<PAGE>

         7.5 NOTICES.

             7.5.1 ADDRESSES. Unless otherwise provided herein, all notices and
communications concerning this Agreement shall be in writing and addressed as
follows:

         If to NEON:

                  NorthEast Optic Network, Inc.
                  2220 West Park Drive, Suite 200
                  Westborough, MA 01581
                  Attention: President
                  Facsimile Number: (508) 616-7895

                  with a copy to

                  Hale and Dorr LLP
                  60 State Street
                  Boston, MA 02109
                  Attention: Alexander A. Bernhard, Esq.
                  Facsimile Number: (617) 526-5000

         If to Exelon:

                  Exelon Ventures Corp.
                  2301 Market Street
                  Philadelphia, PA 19101
                  Attention: President
                  Facsimile: (215) 841-6374

                  with a copy to

                  Exelon Ventures Corp.
                  2301 Market Street
                  Philadelphia, PA 19101
                  Attention: John Halderman, Esq.
                  Facsimile: (215) 841-4474

or at such other address as may be designated in writing to the other Party.

             7.5.2 METHOD OF DELIVERY. Unless otherwise provided herein, notices
shall be sent by certified U.S. mail, return receipt requested, or by commercial
overnight delivery service or by facsimile, and shall be deemed delivered: if
sent by U.S. Mail, five (5) days after deposit; if sent by facsimile, upon
verification of receipt; or, if sent by commercial overnight delivery service,
one (1) Business Day after deposit.

         7.6 GOVERNING LAW. This Agreement shall be interpreted and construed in
accordance with the internal laws of the State of Delaware without giving effect
to its principles of conflicts of laws.

                                      -27-

<PAGE>

         7.7 DISPUTE RESOLUTION.

             7.7.1 GENERAL. It is the intent of the NEON and Exelon that any
disputes which may arise between them, or between the employees of each of them,
be resolved as quickly as possible. Quick resolution may, in certain
circumstances, involve immediate decisions made by the Parties' representatives.
When such resolution is not possible, and depending upon the nature of the
dispute, the Parties agree to resolve such disputes in accordance with the
provisions of this Section 7.7. Notwithstanding anything to the contrary
contained in this Section 7.7, any dispute which may arise between NEON and
Exelon pursuant to any order, statute or regulation of a state public utility
commission or the Federal Communications Commission charged with the oversight
of regulating telecommunications companies shall be resolved before the
applicable regulatory body.

             7.7.2 ARBITRATION. Any dispute arising out of or related to this
Agreement, which cannot be resolved by negotiation between the Parties, shall
be settled in Boston, Massachusetts by binding arbitration in accordance with
the arbitration rules and procedures of the American Arbitration Association.
The costs of arbitration, including the fees and expenses of the arbitrator,
shall be shared equally by the Parties unless the arbitration award provides
otherwise. Each Party shall bear the cost of preparing and presenting its
case. The Parties agree that this provision and the Arbitrator's authority to
grant relief shall be subject to the United States Arbitration Act 9 U.S.C.
1-16 et seq. ("USAA"), the provisions of this Agreement, and the ABA-AAA Code
of Ethics for Arbitrators in Commercial Disputes. The Parties agree that the
arbitrator shall have no power or authority to make awards or issue orders of
any kind except as expressly permitted by this Section 7.7.2, and in no event
shall the arbitrator have the authority to make any award that provides for
punitive or exemplary damages. The arbitrator's decision shall follow the
substantive laws of the State of Delaware and the plain meaning of the
relevant documents, and shall be final and binding. The arbitrator shall make
written findings of fact and conclusions of law in support of the award. The
award may be confirmed and enforced in any court of competent jurisdiction.
All post-award proceedings shall be governed by the USAA.

             7.7.3 PENDING RESOLUTION. During any proceedings described in this
Section 7.7, the Parties shall continue to perform in accordance with this
Agreement.

         7.8 HEADINGS. The headings of the sections of this Agreement are
strictly for convenience and shall not in any way be construed as amplifying or
limiting any of the terms, provisions or conditions of this Agreement.

         7.9 PLURALS AND CONJUNCTIONS. In construction of this Agreement, words
used in the singular shall include the plural and the plural the singular, and
"or" is used in the inclusive sense, in all cases where such meanings would be
appropriate.

         7.10 SEVERABILITY. In the event any term of this Agreement shall be
held invalid, illegal or unenforceable in whole or in part, neither the validity
of the remaining part of such term nor the validity of the remaining terms of
this Agreement shall in any way be affected thereby.

         7.11 AMENDMENTS. This Agreement may be amended only by a written
instrument executed by the Party against whom enforcement of the modification is
sought.

                                      -28-

<PAGE>

         7.12 NO IMPUTED WAIVER. No failure to exercise and no delay in
exercising, on the part of either Party, any right, power or privilege set forth
in this Agreement shall operate as a waiver of such right, power or privilege,
except as expressly provided herein.

         7.13 ENTIRE AGREEMENT. This Agreement, and any exhibits attached or to
be attached to this Agreement, together with the Subscription Agreement and
Related Agreements (as defined therein) constitute the entire agreement between
the Parties with respect to the subject matter contained in this Agreement and
supersede any and all prior negotiations, understandings and agreements between
the Parties, whether oral or written.

         7.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
instrument.

         7.15 RELATIONSHIP OF PARTIES. Nothing contained herein shall be
construed to constitute the parties as partners with or agents for one another
for any purpose, action, or transaction, including those related to the
performance of the Agreement. Nothing herein shall be construed to constitute
the parties as joint employers.

         7.16 COMPLIANCE WITH LAW. Each party shall perform its respective
rights and obligations hereunder in accordance with the Authorizations obtained
by it and all applicable laws, rules and regulations imposed by any Governmental
Authority.

         7.17 GUARANTY OF EXELON'S OBLIGATIONS. PECO Energy Company ("Parent")
unconditionally guarantees the due and prompt payment, but not the performance,
of all of Exelon's obligations set forth in this Agreement. The parties agree
that Parent does not guaranty the performance of Exelon's obligations set forth
in this Agreement, including, without limitation, the performance of any actions
requiring any Governmental Authority consents or approvals. This guaranty is an
irrevocable guaranty of payment (and not just of collection) and shall continue
in effect notwithstanding any extension or modification of the terms of this
Agreement, any assumption of any such guaranteed obligation by any other party
or any other act or event which might otherwise operate as a legal or equitable
discharge of Parent under this Section 7.17. This guarantee is in no way
conditioned upon any requirement that NEON and/or NEON Operations, as
applicable, first attempt to collect or enforce any guaranteed obligation from
or against Exelon, PROVIDED HOWEVER, that NEON and/or NEON Operations, as
applicable, has first requested payment, has not refused payment, and has not
received payment within 30 days from Exelon. So long as any obligation of Exelon
to NEON and/or NEON Operations, as applicable, remains unpaid or undischarged,
Parent hereby waives (but only with respect to NEON and/or NEON Operations, as
applicable, and not as to any other parties) all rights to subrogation arising
out of any payment by Parent under this Section 7.17. Parent hereby waives all
special suretyship defenses, and protest, notice of protest, demand for
performance, diligence, notice of any other action at any time taken or omitted
to be taken by NEON and/or NEON Operations, as applicable, or Exelon and,
generally, all demands and notices of every kind in connection with this Section

                                      -29-

<PAGE>

7.17. If any of the waivers set forth in this Section 7.17 is determined to be
contrary to any applicable law or public policy, such waivers shall be effective
only to the extent permitted by law. This guaranty is subject to the limitations
set forth in Section 7.4.3(b) of this Agreement.

         7.18 GLOSSARY OF TERMS. The following terms shall have the stated
definitions in this Agreement.

         "ACCEPTANCE DATE" has the meaning set forth in Section 1.3.2

         "ACCEPTANCE NOTICE DATE" has the meaning set forth in Section 1.3.2.

         "ACCEPTANCE TEST PLAN" has the meaning set forth in Section 1.3.1.

         "ACCEPTANCE TEST PLAN DATE" has the meaning set forth in Section 1.3.1.

         "ACCEPTANCE TESTING" has the meaning set forth in Section 1.3.1.

         "ACCESS SERVICE REQUEST" or "ASR" shall mean the capacity order for
         Service which delineates the type of Service, location served, Point of
         Termination, protocols, Circuit Term, requested Start of Service Date
         and other information specific to the applicable capacity order.

         "BUSINESS DAY" means any day other than Saturday, Sunday and any day
         which is a legal holiday or day on which banking institutions in New
         York, New York are authorized or required by law or other action of a
         Governmental Authority to close.

         "CASH CONTRIBUTIONS" has the meaning set forth in Section 3.3.1.

         "CHRONIC TROUBLE" is a condition of Service that has experienced the
         same type of Trouble twice or more within a thirty (30) day period, for
         which trouble tickets have been opened.

         "CIRCUIT" shall mean the individual telecommunications facility
         included as part of the Service.

         "CIRCUIT TERM" has the meaning set forth in Section 4.3.2.

         "COMPLETION NOTICE" has the meaning set forth in Section 1.2.2.

         "DEMARCATION POINT" shall mean the point which defines where issues of
         ownership and maintenance begin and end, as set forth in Section 2.1.

         "DICLOSING PARTY" has the meaning set forth in Section 5.1.1.

         "END-USER" shall mean a user to whom a Party will provide
         telecom-munications services utilizing, in part, the telecommunications
         Services provided by the other Party under this Agreement.

         "EXELON" means Exelon Ventures Corp., a Delaware corporation.

         "EXELON'S NETWORK" shall mean anywhere that Exelon provides
         telecommunciations services or has rights to fiber optic
         telecommunications facilities, from time to time, within the Counties
         of Philadelphia, Delaware, Montgomery, Chester, Berks, Lehigh and Bucks
         in the Commonwealth of Pennsylvania and the Counties of Camden and
         Mercer in the State of New Jersey.

         "EXTENSION" has the meaning set forth in Section 4.8.

         "FAILURE" has the meaning set forth in Section 1.5.1.

         "FINALLY DETERMINED TAXES AND FEES" has the meaning set forth in
         Section 1.6.6.

         "FORCE MAJEURE" has the meaning set forth in Section 7.3.

         "GOVERNMENTAL AUTHORITY" means any court, administrative or regulatory
         agency or commission or other governmental entity or instrumentality,
         domestic, foreign or supranational or any department thereof.

                                      -30-
<PAGE>

         "IMPOSITIONS" means all taxes (other than sales and use taxes and
         excise taxes described in Section 1.6.10), fees, levies, imposts,
         duties, charges or withholdings of any nature (including, without
         limitation, gross receipts taxes and franchise, license and permit
         fees), together with any penalties, fines or interest thereon (except
         for penalties or interest imposed as a direct result of acts or
         failures to act on the part of one of the parties) arising out of the
         transactions contemplated by this Agreement and/or imposed upon
         Exelon by any federal, state or local government or other public
         taxing authority.

         "INITIAL EXTENSION" has the meaning set forth in Section 1.1.2.

         "INITIAL PERIOD" has the meaning set forth in Section 4.8.

         "INITIAL TERM" has the meaning set forth in Section 1.1.2.

         "INITIAL TESTING DATES" has the meaning set forth in Section 1.3.1.

         "IN-KIND CONTRIBUTION" has the meaning set forth in  Section 3.3.3.

         "INTEREST RATE" shall mean the rate of interest that is equal to the
         prime rate as then published in The Wall Street Journal, plus one and
         one-half percent (1.5%).

         "INTER-PARTY SERVICES" has the meaning set forth in Section 3.2.1.

         "IRU" or "INDEFEASIBLE RIGHT OF USE" has the meaning set forth in
         Section 1.1.1.

         "LIT SERVICES" means Services provided by a Party using optronic
         equipment owned by such Party at the terminating ends of the fiber on
         which such Services are provided.

         "MARKS" has the meaning set forth in Section 5.2.

         "NEON" means NEON Communications, Inc., a Delaware corporation.

         "NEON FIBERS" has the meaning set forth in Section 1.1.1.

         "NEON OPTICA" means NEON Optica, Inc., a Delaware corporation.

         "NEON PHILADELPHIA POP" has the meaning set forth in Section 3.3.1.

         "NEON'S NETWORK" shall mean anywhere that NEON provides
         telecommunciations services or has rights to fiber optic
         telecommunications facilities, from time to time, within the
         Commonwealth of Massachusetts, the States of New Hampshire, Vermont,
         Connecticut, Maine and Rhode Island, and the City of White Plains in
         the County of Westchester in the State of New York (but, with respect
         to the City of White Plains, only to those locations set forth in on
         APPENDIX 7.18(i)).

         "NETWORK" shall mean the telecommunications network of one of the
         Parties, as defined herein and as the context of the provision requires
         or as contemplated under this Agreement.

         "OFF-NET" facilities and services shall refer to Premises that are not
         connected to a Party's Network.

                                      -31-
<PAGE>

         "ON-NET" facilities and services shall refer to Premises that are
         connected to a Party's Network. A list of Exelon's On-Net facilities is
         set forth on APPENDIX 7.18(ii).

         "OPERATING EXPENSE CONTRIBUTIONS" has the meaning set forth in Section
         3.3.2.

         "PARENT" means PECO Energy Company.

         "PARTY" or "PARTIES" has the meaning set forth in the introductory
         paragraph of this Agreement.

         "PAYMENT DATE" has the meaning set forth in Section 4.5.1.

         "PLANNED SERVICE OUTAGE" shall mean any Service Outage caused by
         scheduled maintenance or planned enhancements or upgrades to a Party's
         Network.

         "POINT OF PRESENCE" OR "POP" shall mean a specific location within a
         Local Access Transport Area ("LATA") where a Party terminates and/or
         originates its service. A list of NEON's POPs is set forth in APPENDIX
         7.18(i) hereto. A list of Exelon's POPs is set forth in APPENDIX
         7.18(ii) hereto.

         "POINT OF TERMINATION" shall mean the point at which a Party's
         responsibility to provide equipment and Service ends and the other
         Party's or the End-User's responsibilities begin. The Point of
         Termination shall be identified in the applicable ASR as the
         demarcation point. The demarcation point shall be located within a
         Party's POP, a local exchange carrier's local serving office, a
         long-distance carrier's POP or an End-User Premise.

         "PREMISES" shall mean the location to which Service is provided, also
         referred to as a Point of Termination on the ASR.

         "PROVIDER" has the meaning set forth in Section 4.7.1.

         "RECEIVING PARTY" has the meaning set forth in Section 5.1.1.

         "RENEWAL TERM" has the meaning set forth in Section 1.1.2.

         "REQUIRED REGULATORY APPROVALS" has the meaning set forth in Section
         1.2.1.

         "REQUIRED RIGHTS" means the Required Regulatory Approvals and any and
         all rights, licenses, authorizations, rights of way and other
         agreements necessary for the use of conduit, cable, poles, wire or
         other physical plant facilities, as well as any other such rights,
         licenses, authorizations (including any necessary local, state, tribal
         or federal authorization such as environmental permits), rights of way
         and other agreements necessary for the installation, use of and access
         to the NEON Fibers.

         "ROW FEES" has the meaning set forth in Section 1.8.

                                      -32-
<PAGE>

         "SERVICE" or "SERVICES" shall mean NEON- or Exelon-provided facilities
         (as the context of the provision requires) and services as agreed to by
         NEON and Exelon, as further described in APPENDIX 4.4.1(a) and APPENDIX
         4.3.1(a) respectively, and as specifically identified on an ASR.

         "SERVICE OUTAGE" shall mean a disruption or degradation of Service.

         "SPECIFICATIONS" means the technical performance specifications of
         Lucent AllWave or TrueWave optical fibers, as the case may be.

         "START OF SERVICE DATE" for Service shall be the later of the date
         requested by a Party for a Circuit to be placed in service, as
         specified on the applicable ASR; (ii) the date the Circuit is
         installed; and (iii) in the event one Party notifies the other Party
         within twenty-four (24) hours after the Circuit has been installed that
         the Circuit does not conform to the specifications required in this
         Agreement, the date the Circuit fully conforms to the required
         specifications.

         "TARGET DATE" has the meaning set forth in Section 1.2.2.

         "TROUBLE" is defined as degradation in Service, an interruption in
         Service, or the initiation of a trouble ticket by either Party.

         "USAA" has the meaning set forth Section 7.7.2.

         "USER" has the meaning set forth in Section 4.7.1.

                                      -33-
<PAGE>

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

                                     NEON COMMUNICATIONS, INC.

                                     By:_______________________________________

                                     Name:_____________________________________

                                     Title:____________________________________

                                     NEON OPTICA, INC.

                                     By:_______________________________________

                                     Name:_____________________________________

                                     Title:____________________________________

                                      EXELON VENTURES CORP.

                                      By:______________________________________

                                      Name:____________________________________

                                      Title:___________________________________

                                      -34-
<PAGE>

The undersigned executes this Agreement for the sole purpose of agreeing to the
provisions of Section 7.17 of this Agreement.

                                      PECO ENERGY COMPANY

                                      By:______________________________________

                                      Name:____________________________________

                                      Title:___________________________________

COUNTY OF ___________________  )
                                            )  ss.
STATE OF ___________________   )

         Before me, the undersigned Notary Public, in and for said County and
State, personally appeared the above-named ________________________, known to me
to be the _______________ of NEON Communications, Inc., who, being duly sworn,
acknowledged that he/she did sign the above instrument and that the same is her
free act and deed.

         WITNESS my hand and official seal this ______ day of ___________, ____.

                                                 ------------------------------
                                                 Notary Public
                                                 My Commission Expires:________

                                      -35-
<PAGE>

COUNTY OF ___________________      )
                                                  )  ss.
STATE OF  ___________________      )

         Before me, the undersigned Notary Public, in and for said County and
State, personally appeared the above-named ________________________, known to me
to be the _______________ of NEON Optica, Inc., who, being duly sworn,
acknowledged that he/she did sign the above instrument and that the same is her
free act and deed.

         WITNESS my hand and official seal this ____ day of ___________, ____.

                                                 ------------------------------
                                                 Notary Public
                                                 My Commission Expires:________

COUNTY OF ___________________     )
                                                  )  ss.
STATE OF  ____________________    )

         Before me, the undersigned Notary Public, in and for said County and
State, personally appeared the above-named __________________, known to me to be
the _______________ of Exelon Ventures Corp., who, being duly sworn,
acknowledged that he/she did sign the above instrument and that the same is her
free act and deed.

         WITNESS my hand and official seal this ____ day of ___________, ____.

                                                 ------------------------------
                                                 Notary Public
                                                 My Commission Expires:________

                                      -36-
<PAGE>

COUNTY OF ___________________      )
                                                  )  ss.
STATE OF  ___________________      )

         Before me, the undersigned Notary Public, in and for said County and
State, personally appeared the above-named __________________, known to me to be
the _______________ of PECO Energy Company, who, being duly sworn, acknowledged
that he/she did sign the above instrument and that the same is her free act and
deed.

         WITNESS my hand and official seal this ____ day of ___________, ____.

                                                 ------------------------------
                                                 Notary Public
                                                 My Commission Expires:________

                                  -37-

<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

                 APPENDIX 1.1.1 - DESCRIPTION OF THE NEON FIBERS

Within ten (10) days of the date of this Agreement, NEON shall review and
perform a ride-out of the Exelon route. The Parties shall make such reasonable
route modifications as may be necessary for the physical protection and
operational reliability of NEON Fibers.

[**] (Type: Classic), or equivalent fibers between a fiber optic patch panel
located within and between [**] in New York City and a fiber optic patch panel
located within the NEON Philadelphia POP, and a POP to be located at [**]
Street, Baltimore, Maryland (the "Baltimore POP") and a POP to be located at
[**] Washington, D.C. (the "Washington POP").

NEON shall be responsible to obtain building entry and riser approvals for
Exelon's installation of NEON Fibers at the NEON Philadelphia POP. Exelon shall
be responsible to obtain building entries in the Baltimore POP and the
Washington POP. NEON shall be responsible to obtain riser approvals in the
Baltimore POP and the Washington POP. NEON shall be responsible for costs
relating to regeneration and amplifier space and annual maintenance expenses,
including any franchise fees, for the route between the NEON Philadelphia POP
and the Washington POP. Exelon shall be responsible for costs relating to annual
cable maintenance for the route between [**] in New York City and the NEON
Philadelphia POP.

[IF THE REORGANIZATION IS NOT CONSUMMATED, THEN NEON WILL BE RESPONSIBLE FOR ALL
ANNUAL CABLE MAINTENANCE COSTS FOR THE ROUTE BETWEEN [**] IN NEW YORK CITY AND
THE NEON PHILADELPHIA POP.]

                                      -38-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

                      APPENDIX 1.3.1 - ACCEPTANCE TEST PLAN

         ACCEPTANCE TESTING

         A definitive Acceptance Test Plan shall be furnished by NEON to Exelon
         within thirty (30) days of the date of this Agreement. Within twenty
         (20) days of the date of this Agreement, NEON and Exelon shall jointly
         confer with representatives of Lucent Technologies, manufacturer of the
         NEON Fibers, to ensure that the Acceptance Test Plan is complete in all
         respect.

         Acceptance testing shall consist of power testing, OTDR Testing, Test
         Record Delivery and As-Built Documentation Deliverables. After
         completion of each route segment, the contiguous fiber shall be tested
         and documented. NEON Representatives shall be present during all route
         segment testing. Testing shall consist of Power and OTDR testing, with
         resulting in delivery to NEON of test records and supporting
         documentation.

         POWER TESTING

         End-to-end power testing of the route segment shall be performed using
         the three-step procedure insertion loss method. Bi-directional
         end-to-end testing shall be performed using a stabilized laser source
         at 1310nm and 1550nm for each fiber.

         Acceptable route segment attenuation is dependent on the fiber length,
         number of connector pairs and number of splices. The end-to-end
         acceptance criteria for connectorized fibers will be based on the
         following formula:

         Maximum acceptable end-to-end attenuation = (AxL) + (0.1xN) + (Cxn)dB

         Where "A" is the maximum attenuation per kilometer and is defined as:

                  for Depressed Cladding at 1310nm   A=0.4dB/Km
                  for Depressed Cladding at 1550nm   A=0.3dB/Km

                  for [**] at 1310nm        A=0.5dB/Km
                  for [**] at 1550nm        A=0.25dB/Km

         "L" is for the installed length of fiber cable in Km
         "N" is the total number of splices
         "C" is the loss of a connector pair, which is 0.6 for ST, SC, D4PC and
            FCPC connectors
         "n" is the total number of connector pairs along the route segment.

Before initiating power testing, verify with the Owner's Representative the
acceptance criteria for each route segment. All requested data must be clearly
entered on a Power Test form. The Owner's Representative will provide the actual
forms for each route segment. Submittal of the Power Test forms containing the
bi-directional loss information for all fibers is required after completion of
each segment-testing phase.

                                      -39-
<PAGE>

OTDR TESTING

OTDR testing shall consist of bi-directional inspection, test records and
documentation of each fiber. OTDR test shall record splice losses and any other
spot discontinuities in each fiber. For each fiber, bi-directional OTDR
signature traces shall be performed 1550nm for all fiber types. A copy of each
fiber's signature trace shall be recorded by photography, plot trace, or
electronically copied to computer diskette. Each recorded signature trace shall
be clearly labeled to identify route segment, transmit location, fiber number
and test wavelength. The OTDR shall be set using a long pulse width (not to
exceed a two point resolution greater than 2,500 feet), a slow scan option, and
an event threshold of 0.0dB to ensure accurate splice traces and event logging.
The OTDR setting chosen for each sub-segment must be consistent for all splices
contained in that sub-segment.

All requested data must be clearly entered on an OTDR Test form. Submittal of
the OTDR testing documentation shall consist of (i) a diskette containing
bi-directional signature traces of all fibers in the segment; (ii) a paper copy
of each signature trace; and (iii) the completed OTDR Test forms.

AS-BUILT DRAWING DELIVERABLES

Exelon shall deliver to NEON such as-built drawings in electronic format in
addition to five (5) hard copies as is necessary to describe the details
relating to the location of the NEON Fibers.

At a minimum, Exelon's as-built drawings shall include:

1.       A route diagram that illustrates the location of the:

         End Locations
         Splice Locations
         Repeater Locations

2.       Manufacturer, types of cable, fiber count, and reel numbers.

3.       A summary of distances between the locations listed above and offset of
         cable in relation to fixed objects.

4.       The type of cable construction between locations (buried, aerial,
         conduit) and any typicals or details needed for the specified type of
         construction.

5.       Any geographical information deemed necessary to further clarify the
         route.

6.       Detailed route information that includes:

         Street, road and highway names
         Railroad and or highway crossings
         Bridge Crossings
         Manhole Number/Identification
         Manhole-to-manhole distances in feet
         Distances along or between any other attachment points on the route
         New conduit, manhole, and pole installations
         Building riser and lateral conduit locations, if any.

                                      -40-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

                APPENDIX 1.4.2 - ENCUMBRANCES ON THE NEON FIBERS

                                      [**]

                                      -41-
<PAGE>

              APPENDIX 1.5.2 - EXELON ROUTINE MAINTENANCE SCHEDULE

     MAINTENANCE STANDARDS

I.       CABLE ROUTE MAINTENANCE UNDERGROUND CIVIL WORKS AND BURIED PLANT

Exelon will operate according to the following industry standards:

1)       Rural Telephone Association
2)       National Electric Safety Code
3)       Fire Code
4)       One Call: Exelon will maintain membership in and respond to tickets
         from the appropriate one call agency, taking appropriate/prudent
         measures to ensure digging activity does not jeopardize the cable

5)       Participation in a cable awareness program with contractors, local,
         city, country, and state officials.

6)       Place Industry Standards High Visibility Cable Markers at all prominent
         locations along buried cable route, to include, but not limited to:
         a)  One sign on each side of all road crossings.
         b)  At the beginning and end of all cable deviations.
         c)  At all splice locations.
         d)  All river, creek, and major culvert crossings.
         e)  Provide large cable crossing signs, as necessary, on rivers with
             commercial traffic.
         f)  Place signs along all portions of the route with a maximum spacing
             of 1000 feet.

 7)
         Provide adequate surveillance along the right of way to prevent cable
         damage due to erosion or man made activities. This should also include:
         a) Maintenance of the right of way so that signs are always visible
         b)  Mark and maintain all splice points and ground connections.
         c)  Periodically inspect and correct any problems on all bridge
             attachments.

II.      CABLE ROUTE MAINTENANCE TRANSMISSION STRUCTURES AND AERIAL PLANT

1)       Visual Inspection once every twelve (12) months of:
         a)  aerial cable
         b)  electricity poles
         c)  transmission towers
2)       ADSS Fiber Route Requirements:
         a)  ADSS cable will have clearance/separation from electrical power as
             stated in the National Electrical Standards.
         b)  ADSS routes will have routine maintenance to clear trees and brush
             from right-of-way in accordance with Telephone Industry Standards.
         c)  Preventative Maintenance Program as per Telephone Industry
             Standards to include periodic inspection and replacement of any and
             all damaged/defective hardware including, but not limited to,
             lashing wire, strand, down guys, clamps,

                                      -42-
<PAGE>

             bolts, washers and nuts. This would also include periodic
             inspection and replacement of damaged/defective wooden, concrete or
             metal poles.
         d)  The overhead clearance between the ADSS Fiber Cable crossing over
             Rural Roads, Interstate Highway, Rail Road Tracks, Pedestrian
             Crossing and all other crossings would be in accordance with
             Telephone Industry Standards.

III.     MATERIALS READILY AVAILABLE TO EXELON TECHNICIANS

The list below only serves as a reference and is not all inclusive:

Tools, equipment, and sufficiently qualified personnel necessary to effect a
cable restoration.

1)       Any equipment necessary for foul / cold weather and night work.
2)       Test equipment (OTDR) to identify fault location of cable.
3)       100 M emergency restoration cable.
4)       Splicing equipment and equipment necessary to provide communications
         from the damage location, for coordination purposes and speed
         restoration activities.

IV.      MATERIALS AVAILABLE AT A EXELON CENTRAL LOCATION:

The list below only serves as a reference and is not all inclusive:

1)       Cable reel with 100M extended length of cable.
2)       Handholes, manholes, pipe, duct (if applicable).
3)       Materials required for pole attachments, messenger, lashing wire, guy
         anchors (if applicable).
4)       Specialized equipment to repair OPGW and ADSS cable (if applicable).

V.       TRAINING

The training listed below only serves as a reference and is not all inclusive:

1)       Safety training as required, for the particular type of cable
         installation.
2)       Hold periodic restoration exercises, as necessary, to maintain
         technician proficiency at cable repair. NEON will be kept apprised of
         the current scheduling in advance and may choose to participate in or
         witness exercises to be sure personnel are adequately trained.
3)       Cable fault isolation, using test equipment, span correlation and
         as-built drawings.
4)       Cable preparation and splicing exercises. Contract employees would be
         required to meet the above standards as well, if they are expected to
         perform the job function.

VI.      EXELON CONTRACTORS

Exelon must certify that its contractors are capable of performing all the tasks
they are required to perform. This would include, as applicable, cable location
proficiency, excavation, and general safety.

                                      -43-
<PAGE>

                     APPENDIX 1.9 - TERMS OF THIRD PARTY IRU

                                    [To come]

                                      -44-
<PAGE>

                       APPENDIX 3.1.1 - NETWORK STANDARDS

Lit Services Offered On-Net to telecom carrier locations only:

<TABLE>
<S>                       <C>
Availability              GREATER THAN OR EQUAL TO 99.997% measured annually
Bit Error Rate (BER)      LESSER THAN OR EQUAL TO 10-9
Error Free Seconds        GREATER THAN OR EQUAL TO 99.997% measured over any 24 hour period
Mean Time to Repair       8 hours
</TABLE>

The MTTR over any period is the mean of the individual intervals between the
start time and stop time of individual outages for each level of Service (DS-3,
OC-3, etc.). MTTR shall not exceed four hundred eighty (480) minutes, averaged
monthly and over a rolling twelve (12)-month period.

                                      -45-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

                           APPENDIX 3.3.1 - EQUIPMENT

NEON New York City POP:

<TABLE>
<CAPTION>
QUANTITY          EQUIPMENT
<S>               <C>

[**]                        [**] SONET Terminal or [**] Add-Drop Multiplexer

[**]                             Multiwave Optical Repeater

[**]                             Multiwave Optical Repeater plus Optical Amplifier

[**]                             Dense Wave Division Multiplexer Couplers or Filters

[**]                        [**] SONET Terminal with Four Fiber Bidirection Line Switched Ring

[**]                        [**] One : One (1:1) Protected Optical Tributary Shelf

[**]                        [**] Electrical Tributary Shelf

Intermediate Site 1 (ADM)

<CAPTION>
QUANTITY          EQUIPMENT
<S>               <C>
[**]                        [**] SONET Terminal or [**] SONET Add-Drop Multiplexer

[**]                             Multiwave Optical Repeater

[**]                             Multiwave Optical Repeater plus Optical Amplifier

[**]                             Dense Wave Division Multiplexer Couplers or Filters

[**]                        [**] SONET Terminal with Four Fiber Bidirection Line Switched Ring

[**]                        [**] One : One (1:1) Protected Optical Tributary Shelf

[**]                        [**] Electrical Tributary Shelf

Intermediate Site 2 (Line Amp)

<CAPTION>
QUANTITY          EQUIPMENT
<S>               <C>
[**]                             Multiwave Optical Repeater

[**]                             Multiwave Optical Repeater plus Optical Amplifier

                                      -46-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

NEON Philadelphia POP:

QUANTITY          EQUIPMENT

<S>               <C>

[**]                        [**] SONET Terminal or [**] SONET Add-Drop Multiplexer

[**]                             Multiwave Optical Repeater

[**]                             Multiwave Optical Repeater plus Optical Amplifier

[**]                             Dense Wave Division Multiplexer Couplers or Filters

[**]                        [**] SONET Terminal with Four Fiber Bidirection Line Switched Ring

[**]                        [**] One : One (1:1) Protected Optical Tributary Shelf

[**]                        [**] Electrical Tributary Shelf
</TABLE>

                                      -47-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

          APPENDIX 3.3.2 - SCHEDULE OF OPERATING EXPENSE CONTRIBUTIONS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                   RENTAL FEE FOR POP    POP OPER. EXP.     OPTRONICS MAINT.        NOC          MARKETING & SALES         TOTAL
                   ------------------    --------------     ----------------        ---          -----------------         -----
-----------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                 <C>                 <C>                 <C>                 <C>                 <C>
At Closing             $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
Jan. 15, 2001          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
April 15, 2001         $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
July 15, 2001          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
Oct. 15, 2001          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
Jan. 15, 2002          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
April 15, 2002         $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
July 15, 2002          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
Oct. 15, 2002          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
Jan. 15, 2003          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
April 15, 2003         $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
July 15, 2003          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
Oct. 15, 2003          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
Jan. 15, 2004          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
April 15, 2004         $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
July 15, 2004          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
Oct. 15, 2004          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
Jan. 15, 2005          $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
April 15, 2005         $[**]               $[**]               $[**]               $[**]               $[**]               $[**]
                        ====                ====                ====                ====                ====                ====
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              $[**]
</TABLE>

                                      -48-
<PAGE>
--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

                 APPENDIX 4.3.1(a) - Exelon SERVICES AND PRICING

EXELON PRICING PER MONTH

<TABLE>
<CAPTION>
  --------------------------------------------------------------------------------------------------------------
                           DS3                         OC3                          OC12                OC48
  --------------------------------------------------------------------------------------------------------------
  CONTRACT TERM   1YR     3YR      5YR    1YR*      3YR       5YR         1YR*      3YR       5YR
  --------------------------------------------------------------------------------------------------------------
 <S>             <C>     <C>      <C>       <C>       <C>       <C>       <C>      <C>       <C>            <C>
  0 - 1 MILE     $[**]   $[**]    $[**]     $[**]     $[**]     $[**]     $[**]    $[**]     $[**]          ICB
                  ====    ====     ====      ====      ====      ====      ====     ====      ====
  --------------------------------------------------------------------------------------------------------------
  1 - 5 MILES    $[**]   $[**]    $[**]     $[**]     $[**]     $[**]     $[**]    $[**]     $[**]          ICB
                  ====    ====     ====      ====      ====      ====      ====     ====      ====
  --------------------------------------------------------------------------------------------------------------
  5 - 10 MILES   $[**]   $[**]    $[**]     $[**]     $[**]     $[**]     $[**]    $[**]     $[**]          ICB
                  ====    ====     ====      ====      ====      ====      ====     ====      ====
  --------------------------------------------------------------------------------------------------------------
  ADDITIONAL     $[**]   $[**]    $[**]     $[**]     $[**]     $[**]     $[**]    $[**]     $[**]          ICB
  MILE            ====    ====     ====      ====      ====      ====      ====     ====      ====
  --------------------------------------------------------------------------------------------------------------
  INSTALLATION   $[**]   $[**]    $[**]     $[**]     $[**]     $[**]     $[**]    $[**]     $[**]          ICB
                  ====    ====     ====      ====      ====      ====      ====     ====      ====
  --------------------------------------------------------------------------------------------------------------
</TABLE>

* One year term contract pricing only applies to circuits that can be connected
using existing network infrastructure. ICB price for one year term contract
circuits requiring fiber or equipment installations.

VOLUME DISCOUNT
All pricing will be reduced by [**]% when total annual revenue, net of credits,
equals or exceeds [**].

                                      -49-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

                                APPENDIX 4.3.1(c)
                PROCESSING OF SERVICE ORDERS FOR ON-NET SERVICES

1.0      BUILDING LISTS
Exelon shall provide its On-Net building list, up dated each quarter, including
Local Exchange Company ("LEC"), local serving offices ("LSOs"), and
InterExchange Carrier (IXC") POPs, to NEON's Access Management group. Building
list information will include street addresses, names of buildings, city and
state, end office CLLI, status and quantity of Entrance Facilities, and NPA/NXX.
Exelon will provide information to NEON in a mutually agreeable format. The
target Building List shall be attached to this Appendix.

2.0      ORDERING VEHICLE
A standard electronic format to transmit ASRs from one Party to the other Party
will be used when available. If an electronic format is utilized, each Party
will follow any of the OBF standards for use thereof. If an electronic format
cannot be utilized, each Party will transmit ASRs to the other Party via
facsimile or electronic mail. Electronic mail and facsimile information will be
provided by each Party to the other Party and updated as needed.

3.0      CONTACTS AND ESCALATION
Each Party will provide a complete escalation list of contacts for the On-Net
Service provided to the other Party, including the Customer Service Center
("CSC").

4.0      SERVICE ORDER INTERVALS
As used in this paragraph 4, "shall" or "will" with respect the performance of a
Party shall mean, "use its best efforts to".

4.1 ASR ISSUANCE - Upon receipt of an ASR from the other Party, the receiving
Party will provide a response to the sending Party pertaining to any corrections
or clarifications required to process the ASR. This will be completed by the
receiving Party within one (1) Business Day following the receipt of the ASR.

4.2 FIRM ORDER COMMITMENT ("FOC") - The Party requested to provide the Service
will provide a firm order commitment to the other Party within three (3)
Business Days of receipt of a complete and accurate ASR. The FOC will provide
any necessary service intervals as well as a committed service date.

4.3 DESIGN LAYOUT RECORD ("DLR") - The party providing the Service will provide
DLR information within ten (10) Business Days of receipt of the ASR. If the
Start of Service Date requested by the other Party is less than five (5)
Business Days from issuance of the FOC and a complete and accurate ASR has been
received by the Party providing the Service, DLR issuance will be negotiated
between the Parties.

5.0      INSTALLATION INTERVALS
The standard installation interval for all On-Net Services will be [**]
calendar days if all optronic equipment necessary to provide the On-Net Services
is already in place, and otherwise will be fourteen (14) calendar days. It is
understood between the Parties that each Party will provide Service on an
individual case basis based on the requirements and expectations of the other
Party and its capabilities. If a shorter installation interval is required that
is less than the

                                      -50-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

standard seven (7) or fourteen (14) days, as the case may be, the Party
providing the Service will use best efforts to meet the expected Service date,
and if it cannot meet the expected Service date, then such Party will make best
efforts to negotiate in good faith the earliest Start of Service date possible
with NEON.

6.0      CANCELLATION CHARGES
There will be no cancellation charge if the Circuit is canceled prior to the
issuance of the DLR. If the Circuit is canceled after the DLR is issued but
prior to the due date, the canceling Party shall pay one (1) month's recurring
changes.

7.0      INSTALLATION DELAY CREDITS
If a Service is ordered with an agreed upon due date and the due date is missed
due to the fault of the Party providing the Service, the other Party will be
entitled to a delay credit in the amount of [**] percent ([**]%) of the monthly
recurring charge for that Circuit for each calendar day of delay. The delay
credits for any Circuit will be capped at [**] percent ([**]%) of one month's
monthly recurring cost for the Circuit.

                                      -51-
<PAGE>

                       APPENDIX 4.4.1(a) - NEON's SERVICES

DARK FIBER LEASES:

NEON leases dark fiber to communications carriers throughout most of the
Northeastern United States.

NEON's Network encompasses approximately 1,000 route miles consisting of 65,000
fiber miles and passes through approximately 540 cities and towns and passes
more than 200 POPs tandems and central offices in six Northeastern states. The
Network footprint covers nearly 500,000 businesses and 18 million people.

The Company's primary cable routes are on utility rights-of-way. The utility
infrastructure includes transmission and distribution plant, underground
conduits, manholes, and building entries. NEON is a supplier of secure primary
and redundant paths.

NEON's uses single mode fiber, TrueWave(R) and AllWave(R) fiber manufactured by
Lucent Technologies.

LIT SERVICE LEASES:

NEON's Network offers carrier customers capacity, enhanced capabilities, route
diversity, and near ubiquitous coverage in most of the Northeastern United
States. NEON uses Nortel's OPTera - Long Haul in the NEON optical backbone.

NEON Lit Service leases include:

NEON's SONET Optical Interface
OC-3, OC-3c, OC-12, OC-12c, OC-48, OC-192, OC-"n" and DWDM
Scrambled NRZ line code
Standard intermediate reach (IR) or short reach (SR) interface as specified by
TR-253
Optical wavelength (i.e. 1310 nm or 1550 nm)
1+1 Protection Ratio
SONET Electrical Interface
DS-3
STS-1

Lambda

NEON offers lambda services consisting of 2.5 Gb/s and 10 Gb/s wavelengths for
long haul and metro systems.

NEON supports ATM, Frame and IP networks.

NEON employs Nortel Networks' latest generation Dense Wavelength Division
Multiplexing (DWDM) technology that provides an initial capacity of up to 160
gigabit per second (Gb/s). This technology enables NEON to send 16 wavelengths
of light through a single fiber. This

                                      -52-
<PAGE>

transport OC-192 system, configured in a high survivable 4 fiber BLSR
(Bidirection Line Switched Ring) topology is the leading SONET platform in the
telecommunications industry.

NEON currently uses OC-48 (2.5 Gb/s) systems to serve as metropolitan on/off
ramps to NEON's geographically diverse backbone.

NEON employs an Integrated Network Management (INM) system for 7x24 management
and surveillance of its Network.

COLOCATION LEASES:

Carriers can lease colocation space within NEON's Points of Presence (POPs).

NEON's colocation products offer sites in 9 cities, including, among other
sites.

Boston, MA           Stamford, CT              White Plains, NY
Springfield, MA      Manchester, NH            Portland, ME
Providence, RI       Hartford, CT              Dover, NH

NEON's "Carrier Class" colocation facilities include:

Climate Controlled Environments
Secure Premises
Back Power, UPS and on Site Emergency Generators

Custom colocation space planning is also provided by NEON, including:

Design and build to suit a customer's specifications.

Standard cabinet floor plan price:

Floor Plans and Specific Area Designs for racks and cabinets

AC and/or DC Power engineering
Overhead cable ladder layouts
Engineering of access to UPS

                                      -53-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

                         APPENDIX 7.18(i) - NEON's POPs

<TABLE>
<CAPTION>
LOCALITY             EXCHANGE            COMPANY                     DELIVERY      SW STREET
<S>                  <C>                 <C>                         <C>           <C>
RHODE ISLAND

Providence           Providence          [**]                          [**]        [**]
                                         ====                          ====        ====
Providence           Providence          [**]                          [**]        [**]
                                         ====                          ====        ====
Green Hill           Green Hill          [**]                          [**]        [**]
                                         ====                          ====        ====

MAINE

Portland             Portland            [**]                          [**]        [**]
                                         ====                          ====        ====
Portland             Portland            [**]                          [**]        [**]
                                         ====                          ====        ====
Portland             Portland            [**]                          [**]        [**]
                                         ====                          ====        ====
Portland             Portland            [**]                          [**]        [**]
                                         ====                          ====        ====
Portland             Portland            [**]                          [**]        [**]
                                         ====                          ====        ====
Portland             Portland            [**]                          [**]        [**]
                                         ====                          ====        ====

NEW YORK

NYC                  NYC                 [**]                          [**]        [**]
                                         ====                          ====        ====
WCHZ 8               Mamaroneck          [**]                          [**]        [**]
                                         ====                          ====        ====
White Plains         White Plains        [**]                          [**]        [**]
                                         ====                          ====        ====
White Plains         White Plains        [**]                          [**]        [**]
                                         ====                          ====        ====
NYC                  NYC                 [**]                          [**]        [**]
                                         ====                          ====        ====
White Plains                             [**]                          [**]        [**]
                                         ====                          ====        ====
NYC                  NYC                 [**]                          [**]        [**]
                                         ====                          ====        ====

CONNECTICUT

Stamford             Stamford            [**]                          [**]        [**]
                                         ====                          ====        ====
Stamford             Stamford            [**]                          [**]        [**]
                                         ====                          ====        ====
Stamford             Stamford            [**]                          [**]        [**]
                                         ====                          ====        ====
Stamford             Stamford            [**]                          [**]        [**]
                                         ====                          ====        ====
Bridgeport           Bridgeport          [**]                          [**]        [**]
                                         ====                          ====        ====
Bridgeport           Bridgeport          [**]                          [**]        [**]
                                         ====                          ====        ====
New Haven            Hartford1           [**]                          [**]        [**]
                                         ====                          ====        ====
Hartford             Hartford            [**]                          [**]        [**]
                                         ====                          ====        ====
Hartford             Hartford            [**]                          [**]        [**]
                                         ====                          ====        ====
Hartford             Hartford            [**]                          [**]        [**]
                                         ====                          ====        ====
Manchester           Manchester          [**]                          [**]        [**]
                                         ====                          ====        ====
New Haven            Hartford1           [**]                          [**]        [**]
                                         ====                          ====        ====
New Haven                                [**]                          [**]        [**]
                                         ====                          ====        ====
New Haven                                [**]                          [**]        [**]
                                         ====                          ====        ====

                                      -54-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

<S>                  <C>                 <C>                           <C>         <C>
MASSACHUSETTS

Springfield          Springfield         [**]                          [**]        [**]
                                         ====                          ====        ====
Springfield          Springfield         [**]                          [**]        [**]
                                         ====                          ====        ====
Springfield          Springfield         [**]                          [**]        [**]
                                         ====                          ====        ====
Springfield          Springfield         [**]                          [**]        [**]
                                         ====                          ====        ====
Springfield          Springfield         [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Cambridge            Cambridge           [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Boston               Boston              [**]                          [**]        [**]
                                         ====                          ====        ====
Lowell               Lowell              [**]                          [**]        [**]
                                         ====                          ====        ====
Framingham           Framingham          [**]                          [**]        [**]
                                         ====                          ====        ====
Lawrence             Lawrence            [**]                          [**]        [**]
                                         ====                          ====        ====
Hudson, NH           Lawrence            [**]                          [**]        [**]
                                         ====                          ====        ====

NEW HAMPSHIRE

Keene                Keene               [**]                          [**]        [**]
                                         ====                          ====        ====
Keene                Keene               [**]                          [**]        [**]
                                         ====                          ====        ====
Manchester           Manchester          [**]                          [**]        [**]
                                         ====                          ====        ====
Manchester           Manchester          [**]                          [**]        [**]
                                         ====                          ====        ====
Nashua               Nashua              [**]                          [**]        [**]
                                         ====                          ====        ====
Nashua               Nashua              [**]                          [**]        [**]
                                         ====                          ====        ====
Portsmouth           Portsmouth          [**]                          [**]        [**]
                                         ====                          ====        ====
Dover                Dover               [**]                          [**]        [**]
                                         ====                          ====        ====
Dover                Dover               [**]                          [**]        [**]
                                         ====                          ====        ====
Portsmouth           Portsmouth          [**]                          [**]        [**]
                                         ====                          ====        ====
Portsmouth           Portsmouth          [**]                          [**]        [**]
                                         ====                          ====        ====
Nashua               Nashua              [**]                          [**]        [**]
                                         ====                          ====        ====
</TABLE>

                                      -55-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

        LSOs THAT THE PARTIES DESIRE TO CONNECT - PENDING NEON EXPANSION

<TABLE>
<CAPTION>
   LOCALITY             EXCHANGE             COMPANY                           DELIVERY              SW STREET
<S>                    <C>                <C>                        <C>        <C>        <C>
RHODE ISLAND

S. Providence          Providence         [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Cranston               Providence         [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Warwick                Providence         [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Pawtucket              Pawtucket          [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====

MAINE

S. Portland            Portland           [**]                       [**]       [**]       [**]
Biddeford              Portland           [**]                       [**]       [**]       [**]
CONNECTICUT

Bridgeport             Bridgeport         [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Waterbury              Waterbury          [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Norwalk                Norwalk            [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Danbury                Danbury            [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Windsor Locks          Windsor Lks.       [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Greenwich              Greenwich                            [**]     [**]       [**]       [**]
                                                            ====     ====       ====       ====

MASSACHUSETTS

Worcester              Worcester          [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Worcester              Worcester          [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Quincy                 Quincy             [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Amherst                Amherst            [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
Framingham             Framingham         [**]                       [**]       [**]       [**]
                                          ====                       ====       ====       ====
</TABLE>

                                      -56-
<PAGE>

--------------------------------------------------------------------------------
    Confidential Materials omitted and filed separately with the Securities
              and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

                       APPENDIX 7.18(ii) - Exelon's Carrier POPs and LSOs List

                                             CARRIER POPS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
NAME                                     STREET ADDRESS                        CITY
--------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                   <C>
[**]                                     [**]                                  Philadelphia
--------------------------------------------------------------------------------------------------------------------
[**]                                     [**]                                  Wayne
--------------------------------------------------------------------------------------------------------------------
[**]                                     [**]                                  Philadelphia
--------------------------------------------------------------------------------------------------------------------
[**]                                     [**]                                  Pottstown
--------------------------------------------------------------------------------------------------------------------
[**]                                     [**]                                  Philadelphia
--------------------------------------------------------------------------------------------------------------------
[**]                                     [**]                                  Philadelphia
--------------------------------------------------------------------------------------------------------------------
[**]                                     [**]                                  Philadelphia
--------------------------------------------------------------------------------------------------------------------
[**]                                     [**]                                  Philadelphia
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                        BELL LSOs
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
BUILDING                               COUNTY                 ADDRESS                                CITY
----------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                    <C>                                    <C>
[**]                                   Montgomery             [**]                                   Ambler
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Montgomery             [**]                                   Bala-Cynwyd
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Delaware               [**]                                   Chester Heights
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Bucks                  [**]                                   Churchville (Bucks)
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Bucks                  [**]                                   Eddington
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Chester                [**]                                   Exton
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Montgomery             [**]                                   Hatboro
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Montgomery             [**]                                   Jenkintown
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Montgomery             [**]                                   King of Prussia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Montgomery             [**]                                   Lansdale
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Bucks                  [**]                                   Langhorne
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Montgomery             [**]                                   Norristown
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Chester                [**]                                   Paoli
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Montgomery             [**]                                   Pottstown
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Delaware               [**]                                   Ridley Park
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Montgomery             [**]                                   Trooper
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Bucks                  [**]                                   Tullytown
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Philadelphia           [**]                                   Philadelphia
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Delaware               [**]                                   Wayne
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Chester                [**]                                   West Chester
----------------------------------------------------------------------------------------------------------------------------------
[**]                                   Montgomery             [**]                                   Willow Grove (Montg)
----------------------------------------------------------------------------------------------------------------------------------
[**]                                                                                                 Conshohocken
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -57-<PAGE>

                                                                   Exhibit 10.48

                            NEON COMMUNICATIONS, INC.

                          REGISTRATION RIGHTS AGREEMENT

         This Agreement dated as of September 14, 2000 is entered into by and
among NEON Communications, Inc., a Delaware corporation (the "Company"),
Consolidated Edison Communications, Inc., a New York corporation ("CEC") and
Exelon Ventures Corp., a Pennsylvania corporation ("Exelon," and together with
CEC, the "Investors").

                                    RECITALS

         WHEREAS, the Company has entered into a separate Subscription Agreement
with each of CEC and Exelon dated as of November 23, 1999 (as amended to date,
the "Subscription Agreements"); and

         WHEREAS, the Company and the Investors desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;

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

         1. CERTAIN DEFINITIONS.

         As used in this Agreement, the following terms shall have the following
respective meanings:

                  "BUSINESS DAY" means any day other than Saturday, Sunday and
any day which is a legal holiday or a day on which banking institutions in New
York are authorized or required by law or other action of a governmental
authority to close.

                  "COMMISSION" means the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.

                  "COMMON STOCK" means the common stock, $.01 par value per
share, of the Company.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.

<PAGE>

                  "INITIATING HOLDERS" means the Investor or Investors
initiating a request for registration pursuant to Section 2.1(a).

                  "OTHER HOLDERS" shall have the meaning set forth in Section
2.1(c).

                  "PROSPECTUS" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.

                  "REGISTRATION STATEMENT" means a registration statement filed
by the Company with the Commission for a public offering and sale of securities
of the Company (other than a registration statement on Form S-8 or Form S-4, or
their successors, or any other form for a similar limited purpose, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation).

                  "REGISTRATION EXPENSES" means the expenses described in
Section 2.4.

                  "REGISTRABLE SHARES" means (i) the Shares and (ii) any other
shares of Common Stock issued in respect of the Shares (because of stock splits,
stock dividends, reclassifications, recapitalizations, or similar events);
provided, however, that shares of Common Stock which are Registrable Shares
shall cease to be Registrable Shares upon (i) any sale pursuant to a
Registration Statement or Rule 144 under the Securities Act (ii) their
eligibility for sale pursuant to Rule 144(k) under the Securities Act or (iii)
any sale in any manner to a person or entity which, by virtue of Section 3 of
this Agreement, is not entitled to the rights provided by this Agreement.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.

                  "SELLING STOCKHOLDER" means any Stockholder owning Registrable
Shares included in a Registration Statement.

                  "SHARES" means the CEC NEON shares and the Exelon NEON shares
as defined in the Subscription Agreements.

                  "STOCKHOLDERS" means the Investors and any persons or entities
to whom the rights granted under this Agreement are transferred by any
Investors, their successors or assigns pursuant to Section 3 hereof.

                                      -2-
<PAGE>

         2. REGISTRATION RIGHTS

                  2.1 REQUIRED REGISTRATIONS.

                  (1) At any time after the first anniversary of the closing of
the Subscription Agreements, either Investor may request, in writing, that the
Company effect the registration on Form S-3 (or any successor form or any other
registration statement form which the Company is eligible to use) of Registrable
Shares owned by such Investor having an aggregate value of at least $5,000,000
(based on the then current market price or fair value).

                  (2) Upon receipt of any request for registration pursuant to
this Section 2, the Company shall promptly give written notice of such proposed
registration to all other Stockholders. Such Stockholders shall have the right,
by giving written notice to the Company within 30 days after the Company
provides its notice, to elect to have included in such registration such of
their Registrable Shares as such Stockholders may request in such notice of
election, subject in the case of an underwritten offering to the approval of the
managing underwriter as provided in Section 2.1(c) below. Thereupon, the Company
shall, as expeditiously as possible, effect the registration of all Registrable
Shares which the Company has been requested to so register.

                  (3) If the Initiating Holders intend to distribute the
Registrable Shares covered by their request by means of an underwriting, they
shall so advise the Company as a part of their request made pursuant to Section
2.1(a), and the Company shall include such information in its written notice
referred to in Section 2.1(b). The right of any other Stockholder to include its
Registrable Shares in such registration pursuant to Section 2.1(a) shall be
conditioned upon such other Stockholder's participation in such underwriting on
the terms set forth herein. If the Company desires that any officers or
directors of the Company holding securities of the Company be included in any
registration for an underwritten offering requested pursuant to Section 2.1(c)
or if other holders of securities of the Company who are entitled, by contract
with, or other instrument executed by, the Company prior to the date hereof, to
have securities included in such a registration (the "Other Holders") request
such inclusion, the Company may include the securities of such officers,
directors and Other Holders in such registration and underwriting on the terms
set forth herein. The Company shall (together with all Stockholders, officers,
directors and Other Holders proposing to distribute their securities through
such underwriting) enter into an underwriting agreement in customary form
(including, without limitation, customary indemnification and contribution
provisions on the part of the Company) with the managing underwriter; PROVIDED
that such underwriting agreement shall not provide for indemnification or
contribution obligations on the part of Stockholders materially greater than the
obligations of the Stockholders pursuant to Section 2.5. Notwithstanding any
other provision of this Section 2.1(c), if the managing underwriter

                                      -3-
<PAGE>

advises the Company that the inclusion of all shares requested to be registered
would adversely affect the offering, the securities of the Company held by
officers or directors of the Company (other than Registrable Shares) shall be
excluded from such registration and underwriting to the extent deemed advisable
by the managing underwriter, and if a further limitation of the number of shares
is required, the number of shares that may be included in such registration and
underwriting shall be allocated among all Other Holders and holders of
Registrable Shares pro rata in proportion to the respective number shares they
have requested to be registered. If any holder of Registrable Shares, officer,
director or Other Holder who has requested inclusion in such registration as
provided above disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to the Company, and the securities
so withdrawn shall also be withdrawn from registration. If the managing
underwriter has not limited the number of Registrable Shares or other securities
to be underwritten, the Company may include securities for its own account in
such registration if the managing underwriter so agrees and if the number of
Registrable Shares and other securities which would otherwise have been included
in such registration and underwriting will not thereby be limited.

                  (4) The Initiating Holders shall have the right to select the
managing underwriter(s) for any underwritten offering requested pursuant to
Section 2.1(a), subject to the approval of the Company, which approval will not
be unreasonably withheld.

                  (5) The Company shall not be required to effect more than two
registrations pursuant to Section 2.1(a), and neither Investor, acting
individually, shall be entitled to request a registration pursuant to Section
2.1(a) more than once. In addition, in the event that Form S-3 is not available
to the Company, the Company shall not be required to effect more than one
registration on Form S-1 pursuant to Section 2.1(a), and any request to effect a
registration on Form S-1 shall be made jointly by both Investors. For purposes
of this Section 2.1(e), a Registration Statement shall not be counted until such
time as such Registration Statement has been declared effective by the
Commission (unless the Initiating Holders withdraw their request for such
registration (other than as a result of information concerning the business or
financial condition of the Company which is made known to the Stockholders after
the date on which such registration was requested) and elect not to pay the
Registration Expenses therefor pursuant to Section 2.4).

                  (6) If at the time of any request to register Registrable
Shares by Initiating Holders pursuant to this Section 2.1, the Company is
engaged or has plans to engage in a registered public offering or is engaged in
any other activity which, in the good faith determination of the Company's Board
of Directors, would be adversely affected by the requested registration, then
the Company may at its option direct that such request be delayed for a period
not in excess of 90 days from the date of such

                                      -4-
<PAGE>

request, such right to delay a request to be exercised by the Company not more
than once in any 12-month period.

         2.2 INCIDENTAL REGISTRATION.

                  (1) Whenever the Company proposes to file a Registration
Statement (other than a Registration Statement filed pursuant to Section 2.1) at
any time and from time to time, it will, prior to such filing, give written
notice to all Stockholders of its intention to do so; PROVIDED, that no such
notice need be given if no Registrable Shares are to be included therein as a
result of a determination of the managing underwriter pursuant to Section
2.2(b). Upon the written request of a Stockholder or Stockholders given within
20 days after the Company provides such notice, the Company shall use its best
efforts to cause all Registrable Shares which the Company has been requested by
such Stockholder or Stockholders to register to be registered under the
Securities Act to the extent necessary to permit their sale or other disposition
in accordance with the intended methods of distribution specified in the request
of such Stockholder or Stockholders; provided that the Company shall have the
right to postpone or withdraw any registration effected pursuant to this Section
2.2 without obligation to any Stockholder.

                  (2) If the registration for which the Company gives notice
pursuant to Section 2.2(a) is a registered public offering involving an
underwriting, the Company shall so advise the Stockholders as a part of the
written notice given pursuant to Section 2.2(a). In such event, the right of any
Stockholder to include its Registrable Shares in such registration pursuant to
Section 2.2 shall be conditioned upon such Stockholder's participation in such
underwriting on the terms set forth herein. All Stockholders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for the underwriting by the Company. Notwithstanding any other
provision of this Section 2.2, if the managing underwriter determines that the
inclusion of all shares requested to be registered would adversely affect the
offering, the Company may limit the number of Registrable Shares to be included
in the registration and underwriting. The Company shall so advise all holders of
Registrable Shares requesting registration, and the number of shares that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner. The securities of the Company held by holders other
than Stockholders and Other Holders shall be excluded from such registration and
underwriting to the extent deemed advisable by the managing underwriter, and, if
a further limitation on the number of shares is required, the number of shares
that may be included in such registration and underwriting shall be allocated
among all Stockholders and Other Holders requesting registration in proportion,
as nearly as practicable, to the respective number of shares of Common Stock
which they held at the time the Company gives the notice specified in Section
2.2(a). If any Stockholder or Other Holder would thus be entitled to include

                                      -5-
<PAGE>

more securities than such holder requested to be registered, the excess shall be
allocated among other requesting Stockholders and Other Holders pro rata in the
manner described in the preceding sentence. If any holder of Registrable Shares
or any officer, director or Other Holder disapproves of the terms of any such
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, and any Registrable Shares or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.

                  (c) Notwithstanding the foregoing, the Company shall not be
required, pursuant to this Section 2.2, to include any Registrable Shares in a
Registration Statement if such Registrable Shares can then be sold pursuant to
Rule 144(k) under the Securities Act.

         2.3 REGISTRATION PROCEDURES.

                  (1) If and whenever the Company is required by the provisions
of this Agreement to use its best efforts to effect the registration of any
Registrable Shares under the Securities Act, the Company shall:

                  (1) file with the Commission a Registration Statement with
respect to such Registrable Shares and use its best efforts to cause that
Registration Statement to become effective as soon as possible;

                  (2) as expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to comply
with the provisions of the Securities Act (including the anti-fraud provisions
thereof) and to keep the Registration Statement effective for 12 months from the
effective date or such lesser period until all such Registrable Shares are sold;

                  (3) as expeditiously as possible furnish to each Selling
Stockholder such reasonable numbers of copies of the Prospectus, including any
preliminary Prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such Selling Stockholder may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Shares owned by such Selling Stockholder;

                  (4) as expeditiously as possible use its best efforts to
register or qualify the Registrable Shares covered by the Registration Statement
under the securities or Blue Sky laws of such states as the Selling Stockholders
shall reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the Selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the Selling Stockholder;

                                      -6-
<PAGE>

PROVIDED, HOWEVER, that the Company shall not be required in connection with
this paragraph (iv) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction;

                  (5) as expeditiously as possible, cause all such Registrable
Shares to be listed on each securities exchange or automated quotation system on
which similar securities issued by the Company are then listed;

                  (6) promptly provide a transfer agent and registrar for all
such Registrable Shares not later than the effective date of such registration
statement;

                  (7) promptly make available for inspection by the Selling
Stockholders, any managing underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant or other agent
retained by any such underwriter or selected by the Selling Stockholders, all
financial and other records, pertinent corporate documents and properties of the
Company and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such Registration
Statement;

                  (8) as expeditiously as possible, notify each Selling
Stockholder, promptly after it shall receive notice thereof, of the time when
such Registration Statement has become effective or a supplement to any
Prospectus forming a part of such Registration Statement has been filed; and

                  (9) as expeditiously as possible following the effectiveness
of such Registration Statement, notify each seller of such Registrable Shares of
any request by the Commission for the amending or supplementing of such
Registration Statement or Prospectus.

         (2) If the Company has delivered a Prospectus to the Selling
Stockholders and after having done so the Prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly notify the
Selling Stockholders and, if requested, the Selling Stockholders shall
immediately cease making offers of Registrable Shares and return all
Prospectuses to the Company. The Company shall promptly provide the Selling
Stockholders with revised Prospectuses and, following receipt of the revised
Prospectuses, the Selling Stockholders shall be free to resume making offers of
the Registrable Shares.

         (3) In the event that, in the judgment of the Company, it is advisable
to suspend use of a Prospectus included in a Registration Statement due to
pending material developments or other events that have not yet been publicly

                                      -7-
<PAGE>

disclosed and as to which the Company believes public disclosure would be
detrimental to the Company, the Company shall notify all Selling Stockholders to
such effect, and, upon receipt of such notice, each such Selling Stockholder
shall immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Selling Stockholder has received copies of a
supplemented or amended Prospectus or until such Selling Stockholder is advised
in writing by the Company that the then current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under this
Section 2.3(c) to suspend sales of Registrable Shares for a period in excess of
60 days in any 365-day period.

                  2.4 ALLOCATION OF EXPENSES. The Company will pay all
Registration Expenses for all registrations under this Agreement; PROVIDED,
HOWEVER, that if a registration under Section 2.1 is withdrawn at the request of
the Initiating Holders (other than as a result of information concerning the
business or financial condition of the Company which is made known to the
Stockholders after the date on which such registration was requested) and if the
Initiating Holders elect not to have such registration counted as a registration
requested under Section 2.1, the requesting Stockholders shall pay the
Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Shares included in such registration. For purposes
of this Section, the term "Registration Expenses" shall mean all expenses
incurred by the Company in complying with this Agreement, including, without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, fees and expenses of counsel for the Company and the fees and expenses
of one counsel selected by the Selling Stockholders to represent the Selling
Stockholders, state Blue Sky fees and expenses, and the expense of any special
audits incident to or required by any such registration, but excluding
underwriting discounts, selling commissions and the fees and expenses of Selling
Stockholders' own counsel (other than the counsel selected to represent all
Selling Stockholders).

                                      -8-
<PAGE>

         2.5 INDEMNIFICATION AND CONTRIBUTION.

             (1) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the seller of such Registrable Shares, each
underwriter of such Registrable Shares, and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state securities or Blue Sky
laws or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to such Registration
Statement, or arise out of or are based upon the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such seller,
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by such seller, underwriter or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by or on behalf of such seller,
underwriter or controlling person specifically for use in the preparation
thereof.

             (2) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares, severally and not jointly, will indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any)
and each person, if any, who controls the Company or any such underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company, such
directors and officers, underwriter or controlling person may become subject
under the Securities Act, Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated

                                      -9-
<PAGE>

therein or necessary to make the statements therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information relating to such seller furnished in writing to the Company by or on
behalf of such seller specifically for use in connection with the preparation of
such Registration Statement, prospectus, amendment or supplement; PROVIDED,
HOWEVER, that the obligations of a Stockholder hereunder shall be limited to an
amount equal to the net proceeds to such Stockholder of Registrable Shares sold
in connection with such registration.

             (3) Each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; PROVIDED, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, PROVIDED, FURTHER, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section except to the extent that the Indemnifying Party
is adversely affected by such failure. The Indemnified Party may participate in
such defense at such party's expense; PROVIDED, HOWEVER, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding; PROVIDED FURTHER that in
no event shall the Indemnifying Party be required to pay the expenses of more
than one law firm per jurisdiction as counsel for the Indemnified Party. The
Indemnifying Party also shall be responsible for the expenses of such defense if
the Indemnifying Party does not elect to assume such defense. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld.

             (4) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 2.5 is
due in accordance with its terms but for any reason is held to be unavailable to
an Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities to
which such party may be subject in such

                                      -10-
<PAGE>

proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the Stockholders on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Stockholders shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact related
to information supplied by the Company or the Stockholders and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Stockholders agree that
it would not be just and equitable if contribution pursuant to this Section 2.5
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph of Section 2.5, (a) in no case
shall any one Stockholder be liable or responsible for any amount in excess of
the net proceeds received by such Stockholder from the offering of Registrable
Shares and (b) the Company shall be liable and responsible for any amount in
excess of such proceeds; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve such
party from any other obligation it or they may have thereunder or otherwise
under this Section. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld.

             2.6 OTHER MATTERS WITH RESPECT TO UNDERWRITTEN OFFERINGS. In the
event that Registrable Shares are sold pursuant to a Registration Statement in
an underwritten offering pursuant to Section 2.1, the Company agrees to (a)
enter into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of the Company and
customary covenants and agreements to be performed by the Company, including
without limitation customary provisions with respect to indemnification by the
Company of the underwriters of such offering; (b) use its best efforts to cause
its legal counsel to render customary opinions to the underwriters with respect
to the Registration Statement; and (c) use its best efforts to cause its
independent public accounting firm to issue customary "cold comfort letters" to
the underwriters with respect to the Registration Statement.

             2.7 INFORMATION BY HOLDER. Each holder of Registrable Shares
included in any registration shall furnish to the Company such information
regarding such holder and the distribution proposed by such holder as the
Company may reasonably

                                      -11-
<PAGE>

request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.

             2.8 CONFIDENTIALITY OF NOTICES. Any Stockholder receiving any
written notice from the Company regarding the Company's plans to file a
Registration Statement shall treat such notice confidentially and shall not
disclose such information to any person other than as necessary to exercise its
rights under this Agreement.

             2.9 RULE 144 REQUIREMENTS. The Company hereby agrees to:

                 (1) make and keep current public information about the Company
available, as those terms are understood and defined in Rule 144;

                 (2) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and

                 (3) furnish to any holder of Registrable Shares upon request
(i) a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act, (ii) a
copy of the most recent annual or quarterly report of the Company, and (iii)
such other reports and documents of the Company as such holder may reasonably
request to avail itself of any similar rule or regulation of the Commission
allowing it to sell any such securities without registration.

             2.10 TERMINATION. All of the Company's obligations to register
Registrable Shares under Sections 2.1 and 2.2 of this Agreement shall terminate
five years after the date hereof.

         3. TRANSFERS OF RIGHTS. This Agreement, and the rights and obligations
of each Investor hereunder, may be assigned by such Investor to any person or
entity to which at least 25% of the Shares held by such Investor are transferred
by such Investor, provided, however, that for purposes of Section 2.1(a), any
such transferees, together with the transferring Investor if such Investor
continues to hold any Registrable Securities, shall be counted as one Investor,
and any decision to demand a registration pursuant to Section 2.1(a) shall be
made by the holders of a majority of the Registrable Securities held by the
transferring Investor and such transferees.

                                      -12-
<PAGE>

         4. GENERAL.

             (1) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.

             (2) SPECIFIC PERFORMANCE. In addition to any and all other remedies
that may be available at law in the event of any breach of this Agreement, each
Investor shall be entitled to specific performance of the agreements and
obligations of the Company hereunder and to such other injunctive or other
equitable relief as may be granted by a court of competent jurisdiction.

             (3) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the Commonwealth of
Massachusetts (without reference to the conflicts of law provisions thereof).

             (4) NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) two Business Days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one Business Day after
being sent via a reputable nationwide overnight courier service guaranteeing
next Business Day delivery, in each case to the intended recipient as set forth
below:

         If to the Company, to:  NEON Communications, Inc.
                                 2200 West Park Drive
                                 Westborough, MA 01581
                                 Attention: President

or at such other address or addresses as may have been furnished in writing by
the Company to the Investors

         with a copy to:         Hale and Dorr LLP
                                 60 State Street
                                 Boston, MA 02109
                                 Attention:  Alexander A. Bernhard, Esq.
                                 Facsimile Number: (617) 526-5000

         If to Exelon, to:       Exelon Ventures Corp.
                                 2301 Market Street
                                 Philadelphia, PA 19101
                                 Attention: President
                                 Facsimile: (215) 841-6374

         with a copy to:         PECO Law Department
                                 2301 Market Street, 23rd Floor
                                 Philadelphia, PA 19101
                                 Attention: John Halderman
                                 Facsimile Number: 215-841-4474]

                                      -13-
<PAGE>

         If to CEC:              Consolidated Edison Communications, Inc.
                                 132 West 31st Street 13th Floor
                                 New York, NY 10001
                                 Attention: President
                                 Facsimile Number: (212) 324-5050

         with a copy to:         Consolidated Edison, Inc.
                                 4 Irving Place, Room 1800
                                 New York, NY 10003
                                 Attention: Senior Vice President and
                                    General Counsel
                                 Facsimile Number: (212) 324-5001

or at such other addresses as may have been furnished in writing by CECD or
Exelon to the Company.

         Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.

             (5) COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter.

             (6) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or terminated and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of at
least 51% of the Registrable Shares held by all of the Stockholders; PROVIDED,
that this Agreement may be amended with the consent of the holders of less than
all Registrable Shares only in a manner which applies to all such holders in the
same fashion. Any such amendment, termination or waiver effected in accordance
with this Section 4(f) shall be binding on all parties hereto, even if they do
not execute such consent. No waivers of

                                      -14-
<PAGE>

or exceptions to any term, condition or provision of this Agreement, in any one
or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.

             (7) PRONOUNS. Whenever the context may require, any pronouns used
in this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.

             (8) COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same document.
This Agreement may be executed by facsimile signatures.

             (9) SECTION HEADINGS. The section headings are for the convenience
of the parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.

              [the remainder of this page intentionally left blank]

                                      -15-
<PAGE>

         Executed as of the date first written above.

                             NEON COMMUNICATIONS, INC.

                             By:_____________________________________

                             Name:___________________________________

                             Title:__________________________________

                             CONSOLIDATED EDISON COMMUNICATIONS, INC.

                             By:_____________________________________

                             Name:___________________________________

                             Title:__________________________________

                             EXELON VENTURES CORP.

                             By:_____________________________________

                             Name:___________________________________

                             Title:__________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]