Document:

PROMISSORY NOTE

$1,000,000                                                           May 5, 2000

FOR VALUE RECEIVED,  the  undersigned,  Hamid Akhavan (the  "Borrower"),  hereby
promises to pay to Teligent Services,  Inc., a Delaware company (the "Company"),
the  principal  sum (the  "Principal  Sum") of One Million Six Hundred  Thousand
Dollars  ($1,600,000)  in lawful  money of the  United  States of  America.  The
Borrower also agrees to pay interest  (computed on the basis of a 365 or 366 day
year,  as the case may be) on any unpaid  amount of the  Principal  Sum from and
after the date of this Promissory  Note set forth above (the  "Effective  Date")
until the entire  Principal  Sum has been paid in full, at a rate equal to 7.45%
per  annum;  provided  that in no event  shall such  interest  be charged to the
extent it would violate any applicable  usury law.  Payment of the Principal Sum
and accrued interest thereon shall not be secured.  Borrower shall be personally
liable for the Principal  Sum and the accrued  interest  thereon,  calculated in
accordance with this Promissory Note.

This Promissory Note is subject to the following further terms and conditions:

1.       PAYMENT  UPON  MATURITY.  The  Principal  Sum and all accrued  interest
         thereon  will become due and payable on the second  anniversary  of the
         Effective Date (the "Maturity Date").

2.       PAYMENT AND  PREPAYMENT.  All payments and prepayments of the Principal
         Sum of, and the accrued interest thereon,  shall be made to the Company
         or its order,  in lawful  money of the United  States of America at the
         principal offices of the Company (or at such other place as the Company
         shall notify the Borrower in writing). The Borrower may, at his option,
         prepay this  Promissory  Note in whole or in part at any time from time
         to time without  penalty or premium.  Any prepayments of any portion of
         the  Principal  Sum of this  Promissory  Note shall be  accompanied  by
         payment of all  interest  accrued but unpaid  hereunder.  Upon full and
         final payment,  or  forgiveness,  of the Principal Sum of, and interest
         accrued on, this  Promissory  Note, it shall be canceled by the Company
         and  surrendered  by the  Borrower.  All  payments  hereunder  shall be
         applied  first  to the  payment  of any  costs of  collection  then due
         hereunder,  second to the payment of accrued and unpaid  interest  then
         due  hereunder,  and the  remainder,  if any,  shall be  applied to the
         unpaid  Principal Sum. The Borrower agrees that, if any payment made by
         the  Borrower  is  applied to this  Promissory  Note and is at any time
         annulled, set aside, rescinded,  invalidated, declared to be fraudulent
         or preferential or otherwise  required to be refunded or repaid,  then,
         to the extent of such payment, the Borrower's liability hereunder shall
         be and remain in full force and effect as fully as if such  payment had
         never been made.
<PAGE>
3.       LOAN FORGIVENESS. Notwithstanding the foregoing, the Principal Sum, and
         accrued and unpaid interest  thereon,  shall be automatically  forgiven
         upon the  happening of either of the following  events:  (a) the second
         anniversary of the Effective  Date, if, and only if, the Borrower shall
         be employed by the  Company on such date,  (b) if,  prior to the second
         anniversary  of the  Effective  Date,  Borrower's  employment  with the
         Company is  terminated  by the  Company  for any reason  other than for
         Cause (as defined  below) or (c) the  occurrence of a Change of Control
         (as defined  below) prior to the second  anniversary  of the  Effective
         Date. For purposes  hereof,  a "Change of Control" means (i) any person
         or entity, or group of affiliated  persons or entities,  other than the
         Liberty  Media  Corporation,  a Delaware  corporation,  and  Telcom-DTS
         Investors,  L.L.C., a Delaware limited liability company (collectively,
         the "Shareholders")  and/or their respective  affiliates acquires stock
         of Teligent  representing more than 50% of the voting power of all such
         outstanding  stock;  or (ii) the  majority of the Board of Directors of
         Teligent  consists of persons who are designees of any person or entity
         or  group  of  affiliated  persons  or  entities  which  hold  stock in
         Teligent,   other  than  the   Shareholders   and/or  their  respective
         affiliates;  or (iii) Teligent  adopts a plan of liquidation  providing
         for the distribution of all or substantially all of its assets; or (iv)
         all or  substantially  all of the  business  enterprise  of Teligent is
         disposed  of  pursuant  to a sale of  assets  transaction  or a merger,
         consolidation  or  similar  transaction  in which  Teligent  is not the
         surviving  entity  (unless  (A)  no  person  or  entity,  or  group  of
         affiliated  persons or  entities,  other than the  Shareholders  and/or
         their respective  affiliates,  owns immediately  after such transaction
         stock or other equity  interests  of the entity  which  succeeds to the
         business of Teligent as a result of such transaction  representing more
         than 50% of the voting power of all such  outstanding  stock,  or (B) a
         majority of the board of directors (or  comparable  governing  body) of
         the entity  which  succeeds to the  business of Teligent as a result of
         such  transaction  consists of persons (or persons  designated  by such
         persons)  who  constituted  a  majority  of the Board of  Directors  of
         Teligent  immediately prior to such  transaction.  For purposes of this
         definition,  "affiliate"  (or  derivations  thereof)  of any  person or
         entity  means  any  other  person  or  entity  directly  or  indirectly
         controlling or controlled by or under direct or indirect common control
         with such  person  or  entity;  and for  purposes  of this  definition,
         "control"  when used with  respect  to any  person or entity  means the
         power to direct the  management  and policies of such person or entity,
         directly  or  indirectly,  whether  through  the  ownership  of  voting
         securities or other equity interests, by contract or otherwise, and the
         terms  "controlling" and "controlled" have meanings  correlative to the
         foregoing.

4.       LOAN  PRORATION;  LOAN  ACCELERATION.  In the  event of the  Borrower's
         voluntary  termination of his employment  with the Company prior to the
         second  anniversary  of the  Effective  Date,  the  Borrower  agrees to
         reimburse the Company for the entire outstanding  Principal Sum and all
         accrued interest thereon immediately, prorated (i.e. multiplied) by the
         following  ratio:  the number of days between the termination  date and
         the second  anniversary  of the Effective Date divided by 730. Upon (a)
         any termination of the Borrower's employment with the Company for Cause
         (as defined below),  (b) the Borrower's death, (c) the inability of the
         Borrower to continue  employment  with the Company due to a disability,
         or  (d) an  Event  of  Default  (as  defined)  the  entire  outstanding
         Principal  Sum and all accrued  interest  thereon  shall become due and
         payable  by  the   Borrower   to  the  Company   immediately,   without
         presentment,  demand, protest, notice of dishonor and all other demands
         and notices of any kind, all of which are hereby expressly waived,  For
         purposes  hereof,  "Cause"  means (i) the  engaging by the  Borrower in
         willful  misconduct or negligence  that is materially  injurious to the
         Company; (ii) the embezzlement or misappropriation of funds or property
         of the Company by the Borrower or the  conviction  of the Borrower of a
         felony or the  entrance  of a plea of guilty or nolo  contendre  by the
         Borrower to a felony;  or (iii) the  willful  failure or refusal by the
         Borrower to perform his duties or responsibilities that continues after
         being brought to the attention of the Borrower.  Determination of Cause
         shall be made by Company in its discretion,  and any such determination
         shall be final and binding on the  Borrower.  The Borrower  promises to
         pay to the Company on demand by the Company  all  reasonable  costs and
         expenses  incurred  by the  Company  after  an  event  giving  rise  to
         acceleration  in connection with the collection and enforcement of this
         Promissory Note, including,  without limitation,  reasonable attorneys'
         fees and expenses and all court costs.

5.       EVENTS OF DEFAULT; DEFAULT INTEREST; DEFAULT ACCELERATION AND EXPENSES.
         The  occurrence  of any  one or  more  of the  following  events  shall
         constitute an event of default (individually, an "Event of Default" and
         collectively,  the  "Events  of  Default")  under  the  terms  of  this
         Promissory  Note: (a) the failure of the Borrower to pay to the Company
         within  fourteen  (14) days of when due any and all amounts  payable by
         the Borrower to the Company  under the terms of this  Promissory  Note;
         (b) if a petition in  bankruptcy  is filed by  Borrower  under the U.S.
         Bankruptcy Code, as amended, or under any other insolvency laws or laws
         providing  for the  relief  of  debtors;  (c) if the  Borrower  becomes
         insolvent or executes a general assignment for the benefit of creditors
         or if any appointment is made or a receiver or trustee for the property
         of the  Borrower;  or (d) if a petition is filed  against the  Borrower
         under the U.S. Bankruptcy Code, as amended, and is not dismissed within
         sixty (60) days of filing.

6.       NOTICE. For the purposes of this Promissory Note, notices,  demands and
         all other  communications  provided  for herein shall be in writing and
         shall be deemed to have been duly  given  when  delivered  in person or
         five  business  days after being mailed by United  States  certified or
         registered mail, return receipt requested,  postage prepaid,  addressed
         as follows:

If to the Borrower:                 If to the Company:

Hamid Akhavan                       Teligent Services, Inc.
11620 Piney Spring Lane             8065 Leesburg Pike, Suite 400
Potomac, MD 20854                   Vienna, VA 22182
                                    Attn: Laurence E. Harris, General Counsel

         Or such  other  address  as any party may have  furnished  to others in
writing in accordance herewith.

7.       MISCELLANEOUS.

A.       No  delay  or  failure  by the  Company  or the  legal  holder  of this
         Promissory Note in the exercise of any right or remedy shall constitute
         a waiver thereof, and no single or partial exercise by the legal holder
         hereof of any right or remedy  shall  preclude  other  future  exercise
         thereof,  or the exercise of any other right or remedy. This Promissory
         Note may be assigned by the Company  without the prior written  consent
         of the Borrower.  This Promissory Note may be amended or modified,  and
         the terms and conditions hereof may be waived,  only by a majority vote
         of the  Board of  Directors  of  Teligent;  provided,  however,  if any
         amendment  or  modification  to this  Promissory  Note  materially  and
         adversely   affects  the  rights  of  the  Borrower   hereunder,   such
         modification  or  amendment  shall  require the written  consent of the
         Borrower.

B.       The  headings  contained  in this  Promissory  Note  are for  reference
         purposes only.

C.       No  provisions  hereof  shall  confer  upon the  Borrower  the right to
         continue in the employment of the Company,  any of its  subsidiaries or
         any of their  perspective  successors  or affect any  rights  which the
         Company or any of such  subsidiaries or successor may have to terminate
         the employment of the Borrower.

D.       The Provisions of this  Promissory Note shall be governed and construed
         in accordance  with the laws of the State of Delaware,  without  giving
         effect to the choice of law principals  thereof.  The Company,  but not
         the Borrower, shall have the right to assign this Promissory Note.

         IN WITNESS  WHEREOF,  this  Promissory  Note has been duly executed and
delivered to the Company by the Borrower on the date first above written.

                                                   /S/ HAMID AKHAVAN
                                                   -----------------------------
                                                       Hamid AkhavanTHE CONSOLIDATED EDISON, INC.

                               STOCK PURCHASE PLAN

                As Amended and Restated Effective April 20, 2000

203530

<PAGE>

                          THE CONSOLIDATED EDISON, INC.
                               STOCK PURCHASE PLAN

                                Table of Contents

Article     Title
   Page

   1.       Definitions......................................................1

   2.       Maximum Employee Investment......................................4

   3.       Means of Payment of Employee Contributions.......................5

   4.       Employer Contributions...........................................7

   5.       Purchase of Shares...............................................8

   6.       Custody of Shares; Distributions from Accounts...................9

   7.       Termination of Status as Employee; Leave of Absence.............11

   8.       Stock Dividends and Stock Splits; Rights Offerings; Other Non-Cash
            Distributions...................................................12

   9.       Voting of Shares................................................13

   10.      Termination and Modification; Responsibility of
            Company and Plan Director  .....................................14

   11.      Administration, Operation and General Provisions................15

Appendix A - Employer Contributions

Appendix B - Employer and Participating Employers

                                       i

<PAGE>

                             Article 1. Definitions.

      (a)  "Account"  means a custodian  account  established  with the Agent to
           hold Shares  purchased under the Plan, and any Shares  transferred to
           such  Account  pursuant  to  Article  11,  beneficially  owned  by an
           Employee.  Such Account  shall be an individual  Account  unless such
           Employee shall designate in writing that it shall be a joint Account,
           in which case it shall be a joint  Account of such  Employee and such
           other person as such Employee shall have designated.  A joint Account
           may be converted to an individual Account of an Employee who is joint
           holder of such Account,  upon written request signed by such Employee
           and the  other  joint  holder of such  Account.  Any  transfer  taxes
           payable in connection  with a change from individual to joint Account
           or vice versa will be the responsibility of the Employee. An Employee
           may not have more than one Account,  except that two Employees,  each
           having an Account, may hold one or both of such Accounts jointly. All
           distributions from a joint Account,  whether of cash or Shares, shall
           be made  jointly to the  Employee  and the other holder of such joint
           Account.  All references in this Plan to distributions to an Employee
           shall in the case of a joint  Account  be  subject  to the  preceding
           sentence.  Ineligibility of an Employee to make investments under the
           Plan  shall  render  the other  holder of a joint  Account  with such
           Employee  likewise   ineligible  to  make  investments  through  such
           Account.

(b)  "Affiliate"  means any company  which is a member of a controlled  group of
     corporations (as defined in Section 414(b) of the Code) which also includes
     as a member the Company;  any trade or business  under  common  control (as
     defined in Section 414(c) of the Code) with the Company;  any  organization
     (whether or not  incorporated)  which is a member of an affiliated  service
     group  (as  defined  in  Section  414(m) of the Code)  which  includes  the
     Company;  and any other entity  required to be aggregated  with the Company
     pursuant to regulations under Section 414(o) of the Code.

      (c)  "Agent"  means State Street Bank and Trust  Company or a successor or
           successors designated by the Board to serve as Agent under this Plan.

      (d)   "Anniversary  Date" for any  Share or  fractional  Share  held in an
            Account  shall  mean the  first  day of the  thirteenth  month  next
            following the Purchase  Period during which such Share or fractional
            Share was purchased for such Account.

      (e)  "Basic Rate of Pay" means in respect of a particular Purchase Period:

           (i)    In the case of an Employee  compensated on an hourly basis, 40
                  times his or her basic hourly rate in effect at the  beginning
                  of such Purchase Period;

                                       1
<PAGE>

           (ii)  In the case of an Employee  compensated on a monthly basis, his
                 or her basic  annual  rate in effect at the  beginning  of such
                 Purchase Period, divided by 12; and

           (iii) In the case of an Employee compensated on a semi-monthly basis,
                 his or her basic annual rate in effect at the beginning of such
                 Purchase Period, divided by 24.

      (f)  "Board of Directors"  means the Board of Directors of the Company.

      (g)  "Board of Trustees"  means the Board of Trustees of the Employer.

      (h)  "Company"  means Consolidated Edison, Inc.

      (i)  "Effective Date" means April 20, 2000.

      (j)  "Employee"   means  any  person   employed  by  the   Employer  or  a
           Participating  Employer who has attained  regular status as an active
           employee  or who has  completed  three  months  of the "on  trial" or
           "probationary"  period as of the beginning of a Purchase Period.  For
           purposes of this Plan only,  "Employee"  shall also  include a person
           who is a member of the Board of Directors  of the Company,  the Board
           of  Trustees  of the  Employer,  and,  if  applicable,  the  board of
           directors of a Participating  Employer and not otherwise an Employee.
           Employee  also  means a duly  elected  or  appointed  officer  of the
           Company, the Employer or a Participating Employer.

      (k)  "Employer"  means Consolidated Edison Company of New York, Inc.

      (l)  "Investment  Funds" means all funds received by the Agent pursuant to
           Articles 3(a),  3(b),  4(a),  4(b), and 4(c),  plus the amount of all
           cash dividends  received by the Agent, other than dividends which are
           to be  distributed  to  Employees  in  accordance  with  instructions
           pursuant to Article 3(c).

      (m)  "Participating  Employer" means an Affiliate which, with the approval
           of the Board of Directors, has adopted the Plan for its Employees.

      (n)  "Plan"  means  the  Consolidated  Edison  Inc.  Stock  Purchase
           Plan,  as now or hereafter in effect.

                                       2
<PAGE>

      (o)  "Plan  Director"  means the Vice  President - Human  Resources of the
           Employer or such other  person or persons as may from time to time be
           designated  by the  Company  or the Chief  Executive  Officer  of the
           Employer  to act as such Plan  Director  in respect of the Plan.  The
           Plan  Director  shall serve as such without  compensation  and at the
           discretion  of the  Company  or the Chief  Executive  Officer  of the
           Employer.

      (p)  "Purchase Period" means a calendar month.

      (q)  "Shares"  means  shares of Common  Stock of the Company and  includes
           both full and fractional Shares unless otherwise specified.

      (r)  "Share  Price"  for any  Purchase  Period  means  the  average  cost,
           exclusive of brokerage commissions and other expenses of purchase, of
           all Shares  purchased by the Agent  pursuant to Article 5 during such
           Purchase Period.

                                       3
<PAGE>

                     Article 2. Maximum Employee Investment.

      (a)  With respect to a particular  Purchase Period, and subject to Article
           6(e),  an Employee may invest in the  purchase of Shares  pursuant to
           the Plan an amount not in excess of 20% of such Employee's Basic Rate
           of Pay,  multiplied  by the number of pay  periods  of such  Employee
           ending  within  such  Purchase  Period;  provided,  however,  that an
           Employee may not invest more than $25,000 pursuant to the Plan during
           any calendar  year;  and  provided  further than an Employee who is a
           member of the Board of  Directors  or Board of  Trustees  or board of
           directors of a  Participating  Employer  and who is not  otherwise an
           Employee  may  invest  up to  $1,000  in each  Purchase  Period;  and
           provided further that amounts invested pursuant to Article 3(c) shall
           not be subject to such limits.

      (b)  If at any time it is discovered  that an Employee has invested in any
           Purchase  Period  an  amount  in  excess  of the  maximum  investment
           permitted  by this  Article  2 for  such  Employee  in such  Purchase
           Period, then the maximum investment permitted for such Employee shall
           thereafter be reduced by  subtracting  the amount of such excess from
           the maximum amount which such Employee  would  otherwise be permitted
           to invest in the  Purchase  Period or  Periods  next  following  such
           discovery,  until the  aggregate of such  reductions  shall equal the
           amount of such excess.  In any such case the Employee  involved shall
           be notified  by the Plan  Director  and  requested  to  appropriately
           restrict or suspend his or her investments under the Plan during such
           Purchase  Period or Periods.  If an Employee  repeatedly  exceeds the
           limitations  of this Article 2, the Plan  Director may, in his or her
           sole  discretion,  suspend the  eligibility of such Employee for such
           period  as the  Plan  Director,  in his or her sole  discretion,  may
           determine. Any such suspension shall have the same effect as a period
           of ineligibility pursuant to Article 6(e).

                                       4

<PAGE>

                      Article 3. Means of Payment of Employee Contributions.
                      -----------------------------------------------------

      Subject to the limitations of Article 2, an Employee may provide funds for
  the  purchase  of Shares  under  the Plan by any one or more of the  following
  methods:

(a)  Payroll  deductions.  On a form provided by the Employer or a Participating
     -------------------  Employer,  or in some other means as authorized by the
     Plan  Director,  an Employee may  authorize  payroll  deductions to be made
     which are not less than $2.00 per week for weekly-paid Employees, $5.00 per
     pay  period  for  semi-monthly-paid  Employees  or  $10.00  per  month  for
     monthly-paid  Employees,  but in no case more  than 20% of such  Employee's
     Basic Rate of Pay.  Payroll  deductions  shall commence with respect to the
     first Purchase Period ending in the first calendar month beginning not less
     than 15 days after receipt by the Employer, Participating Employer or Agent
     of the payroll deduction  authorization.  Payroll deductions shall continue
     for successive Purchase Periods until such Employee instructs the Employer,
     Participating Employer or Agent to make no further deductions or until such
     Employee's   participation  in  the  Plan  shall  be  suspended  under  the
     provisions of Articles 2(b), 6(e) or 7(b), or until his or her status as an
     Employee  ceases,  whichever  shall first occur. An Employee may change the
     rate of or terminate his or her payroll  deductions,  but no such change or
     termination  shall be effective until the first Purchase  Period  beginning
     not less than 15 days  after  receipt  by the  Employer,  or  Participating
     Employer or Agent of a new authorization to terminate such deductions.  The
     Employer and any  Participating  Employer shall pay over the amount of each
     payroll  deduction  so  authorized  to the  Agent,  for the  Account of the
     Employee,  within  five  business  days  after the date such  amount  would
     otherwise have been payable to such Employee.

(b)  Cash Payments.  From time to time, but not more frequently than once during
     -------------- each Purchase Period, an Employee may deliver to the Agent a
     money  order or a check  acceptable  to,  and  payable to the order of, the
     Agent,  in an amount in each case not less  than  $10.00,  together  with a
     direction,  on a form provided by the Employer,  Participating  Employer or
     the Agent,  to purchase Shares pursuant to the Plan. If such money order or
     check shall prove  uncollectible,  the Agent shall  notify the Employee and
     allow the  Employee  15 days to  substitute  a  collectible  money order or
     check,  failing  which the Agent  shall be  authorized  to sell  sufficient
     Shares from such  Employee's  Account to pay,  net of the expenses of sale,
     the uncollected  amount.  The aggregate  amount so delivered by an Employee
     during any Purchase Period may not exceed $1,000.00.

                                       5

<PAGE>

      (c)  Dividend  Reinvestment.  Unless the Employee otherwise  instructs the
           Agent,  the Agent  shall apply  dividends  received  with  respect to
           Shares  held in his or her  Account  to the  purchase  of  additional
           Shares. However, the Employee may instruct the Agent to distribute to
           the Employee any such  dividends  received by the Agent for which the
           record date has not  occurred  prior to the  Agent's  receipt of such
           instructions.  Any dividends  covered by such  instructions  shall be
           distributed by the Agent to such Employee as promptly as practicable.
           Such instructions shall be revocable by the Employee,  effective with
           respect to any  dividends  for which the record date has not occurred
           prior to the Agent's receipt of such revocation.

      (d)  No  Interest.  There  shall be no payment or accrual of  interest  in
           respect of payments  under the foregoing  Articles 3(a), (b) and (c),
           while held by the Employer,  any Participating Employer or the Agent,
           or otherwise.

      (e)  Automated  Telephone System.  The Agent's  automated  telephone voice
           response system enables  Employees to access account  information and
           authorize  transactions  over the telephone  twenty-four (24) hours a
           day and generally  replaces,  other than the initial enrollment form,
           all written authorization forms.

                                       6
<PAGE>

                       Article 4. Employer Contributions.

       The Employer and any Participating  Employer shall separately  determine,
   in its sole and absolute discretion,  whether to make contributions on behalf
   of  its  Employees  who  participate  in  the  Plan.  If  the  Employer  or a
   Participating  Employer  decides  to  make  contributions  on  behalf  of its
   Employees,  Appendix  "A",  attached and  incorporated  herein as part of the
   Plan, shall provide the terms and conditions for such  contributions  made by
   the Employer and any Participating Employer.

       Appendix B, attached and  incorporated  herein as part of the Plan,  sets
   forth a list of the Employer and  Participating  Employers and states whether
   the Employer or Participating  Employer has determined to make  contributions
   on behalf of its Employees.

                                       7
<PAGE>

                         Article 5. Purchase of Shares.

      (a)  As and when  Investment  Funds are  received  by it, the Agent  shall
           promptly apply the same to the purchase, in one or more transactions,
           of the maximum number of whole Shares  obtainable at then  prevailing
           prices,  exclusive of  brokerage  commissions  and other  expenses of
           purchase. Such purchases may be made on any securities exchange where
           Shares are traded, in the  over-the-counter  market, or in negotiated
           transactions,  and may be on such  terms as to  price,  delivery  and
           otherwise as the Agent may  determine  to be in the best  interest of
           the Employees  participating  in the Plan.  The Agent shall  complete
           such  purchases  as soon as  practical  after  receipt of such funds,
           having due regard for any  applicable  requirements  of law affecting
           the timing or manner of such purchases.

      (b)  If, for any reason, the Agent is unable, on or before the last day of
           any  Purchase  Period,  to  apply,  pursuant  to  Article  5(a),  all
           Investment Funds received by it during such Purchase Period, then any
           such  Investment  Funds  remaining  in any Account at the end of such
           Purchase  shall be held by the Agent and applied as soon as practical
           in a  subsequent  Purchase  Period or Periods as  provided in Article
           5(a).

      (c)  Notwithstanding  Article  5(b),  an Employee may at any time elect to
           instruct the Agent to promptly  return any  Investment  Funds held by
           the Agent for such  Employee's  Account as of the end of the  current
           month which have not been applied  pursuant to Article  5(a),  except
           that if such instructions are received by the Agent less than 10 days
           before the end of the current month,  the Agent shall return any such
           unapplied  funds  remaining in such Account as of the end of the next
           succeeding  month.  In such case,  funds  contributed by the Employee
           pursuant to Article 3 shall be returned to the Employee and funds, if
           applicable,  contributed  by the Employer or  Participating  Employer
           pursuant  to  Article  4  shall  be  returned  to  the   Employer  or
           Participating Employer.

      (d)   Promptly  after the end of each  Purchase  Period,  the Agent  shall
            compute the Share Price for such Purchase  Period and shall allocate
            the  Shares   purchased   during  such  Purchase  Period  among  the
            Employees' Accounts by allocating to each Account the number of full
            and fractional  shares obtained by dividing the Share Price for such
            Purchase Period into the amount of Investment Funds applied for such
            Account  during such Purchase  Period  pursuant to Articles 5(a) and
            5(b).

                                       8
<PAGE>

                 Article 6. Custody of Shares; Distributions from Accounts.

(a)  The Shares  purchased  under the Plan shall be held in the name and custody
     of the Agent or a nominee.  Promptly after the end of each Purchase  Period
     the Agent shall mail a statement of account to each participating Employee,
     showing  (i) the  number  and (ii)  Share  Price of any  additional  Shares
     purchased  and  allocated to such  Employee's  Account with respect to such
     Purchase Period,  (iii) the total amount of Investment Funds applied to the
     purchase of Shares for such Account  during such Period (i.e.,  the product
     of items (i) and  (ii)),  (iv) the amount of any  Investment  Funds held in
     such Account for investment during subsequent  Purchase Periods pursuant to
     Article 5(b), (v) the aggregate number of Shares held in such Account as of
     the end of such Purchase Period,  (vi) the number of Shares  distributed or
     sold from such  Account  during such  Purchase  Period  pursuant to Article
     6(b),  and (vii) if  applicable,  the  aggregate  number of such Shares for
     which the  Anniversary  Date will have occurred as of the date  immediately
     after the end of such Purchase Period.

      (b)   An Employee may at any time direct that:
            (i)   Certificates  for some or all of the full  Shares in his
                  or her Account be distributed to such Employee; or

            (ii)  Some or all of the  Shares  in his or her  Account,  both full
                  Shares and any  fractional  Share,  be sold, and the resulting
                  cash proceeds distributed to such Employee.

            In any such event,  promptly  after receipt of such direction by the
            Agent, such distribution, or sale and distribution, shall be made by
            the Agent,  whose judgment as to the terms of any such sale shall be
            conclusive and binding.  All cash distributions,  whether in respect
            of sales of full Shares or  fractional  Shares,  shall be net of any
            brokerage  commissions,  transfer taxes and service charges incurred
            in connection with such sales.

      (c)   No  Shares  held  in  an  Account  may  be   assigned,   pledged  or
            hypothecated  prior to distribution from such Account of the related
            Share  certificates.  Neither may any  interest of an Employee in or
            under the Plan be assigned, pledged or hypothecated.

      (d)   Subject to Article 1(a), all Share certificates distributed pursuant
            to this Article 6 shall be in the name of the respective Employee.

                                       9

<PAGE>

(e)  Subject to Article 11(c),  an Employee  participating  in the Plan shall at
     all times  have the right to have all of the  Shares in his or her  Account
     distributed  or  sold in  accordance  with  Article  6(b).  However,  if an
     Employee  shall  direct  that a Share  or  fractional  Share  in his or her
     Account be so  distributed  or sold prior to the  Anniversary  Date of such
     Share or fractional  Share,  such Employee  shall  thereafter be ineligible
     (effective as of the first day of the Purchase  Period next succeeding such
     distribution or sale) to make further  investments under the Plan until the
     Anniversary  Date of the most recently  acquired Share or fractional  Share
     sold or distributed  from such Employee's  Account pursuant to Article 6(b)
     shall occur. In the event of such ineligibility:

            (i)   Any  authorization  for  payroll   deductions  given  by  such
                  Employee  pursuant to Article 3(a) shall thereupon be revoked,
                  such Employee  shall be deemed to have given  instructions  to
                  distribute  dividends pursuant to Article 3(c), any Investment
                  Funds held in such Employee's  Account shall be distributed in
                  the manner  provided  in case of an  instruction  pursuant  to
                  Article 5(c), and no further contributions pursuant to Article
                  3(b) shall be accepted during such ineligibility.

            (ii)  Any full or  fractional  Shares  remaining in such  Employee's
                  Account shall remain in such Account unless and until disposed
                  of in accordance with Article 6(b), 7(a) or 11(c).

           (iii)  The Employee may conclusively rely on the statement  furnished
                  by the Agent  pursuant  to Article  6(a),  for the  purpose of
                  determining  the number of Shares in such  Employee's  Account
                  for which the Anniversary Date has occurred. Any direction for
                  the sale or  distribution  of Shares  pursuant to Article 6(b)
                  shall be satisfied first from those Shares in such Account for
                  which the  Anniversary  Date has at the time occurred,  unless
                  the Employee otherwise expressly directs.  Upon application by
                  an  Employee,  the Plan  Director  may,  for good cause shown,
                  waive  all or any part of any  period of  ineligibility  which
                  would otherwise  result under this Article 6(e) from a sale or
                  distribution   of  a  specified  Share  or  Shares  from  such
                  Employee's  Account.  Such  waiver  shall be  within  the sole
                  discretion of the Plan  Director,  whose  decision on any such
                  application shall be final.

           (iv)   The concept of  "Anniversary  Date" shall only apply to Shares
                  of those  Employees of the  Employer and of any  Participating
                  Employer who has determined to make contributions on behalf of
                  its Employees.

                                       10
<PAGE>

           Article 7.   Termination of Status as Employee; Leave of Absence.

      (a)  Subject to Article  1(a),  when an  Employee's  status as an Employee
           ceases, any fractional Share in such Employee's Account shall be sold
           and the  proceeds  thereof,  together  with all full  Shares  in such
           Employee's Account,  shall be distributed to such Employee (or in the
           event of death or disability,  to his or her legal  representatives),
           without the  necessity of any request by or on behalf of the Employee
           under Article 6(b), as promptly as  practicable  after receipt by the
           Agent of notice of such change of status,  unless the Agent receives,
           within  thirty days after such change of status and prior to any such
           distribution,  an  election by such  former  Employee  (or his or her
           legal  representatives  as aforesaid),  to have such full Shares sold
           and the  resulting  cash  proceeds  distributed.  The judgment of the
           Agent as to the  terms  of any such  sale  shall  be  conclusive  and
           binding.  All cash distributions,  whether in respect of sale of full
           Shares  or  fractional  Shares,  shall  be net of  any  brokerage  or
           commissions,   transfer  taxes,   and  service  charges  incurred  in
           connection  with  such  sales.  Any  Investment  Funds  held  in such
           Employee's  Account shall be  distributed  in the manner  provided in
           case of an instruction pursuant to Article 5(c).

      (b)  An  Employee  on an  unpaid  leave of  absence  shall  be  ineligible
           (effective as of the first day of the first Purchase Period beginning
           during such an unpaid leave of absence) to make  further  investments
           under the Plan  until  the  termination  of such an  unpaid  leave of
           absence.  Such ineligibility  shall have the same effects as a period
           of ineligibility arising under Article 6(e).

                                       11
<PAGE>

             Article 8.   Stock Dividends and Stock Splits; Rights Offerings;
             ------------------------------------------------------------------
                          Other Non-Cash Distributions.

(a)  Any Shares received as stock  dividends or split shares  distributed by the
     Company on full or fractional  Shares held in the Plan for an Employee will
     be credited to the Employee's Account. The Anniversary Date of any Share so
     received  shall  be that of the  Share  in  respect  of  which  it shall be
     received.

(b)  If the Company should determine to offer securities through the issuance of
     rights  to  subscribe,  warrants  representing  the  rights  on all  Shares
     registered  in the name of the Agent (or a  nominee)  will be issued to the
     Agent. Except as provided in the last three sentences of this Article 8(b),
     the Agent  shall sell such rights and  distribute  the  proceeds  among the
     Employees  in  proportion  to the full and  fractional  Shares held in each
     Employee's  Account on the record date for such  rights.  Any  Employee who
     wishes to exercise  subscription  rights on his or her Plan  Shares  shall,
     prior to the  record  date for any such  rights,  advise  the Agent of such
     desire and make arrangements, satisfactory to the Company and the Agent, to
     provide  the Agent  with  funds to  exercise  such  rights.  Any  Shares so
     purchased  shall  be  added  to  such  Employee's  Account  and  any  other
     securities  so  purchased   shall  be  delivered  to  such   Employee.   No
     contribution   shall  be  made  under  the  Plan  by  the   Employer  or  a
     Participating Employer in connection with any such exercise of rights.

(c)  Any non-cash  distribution  which the Company may make in respect of Shares
     held by the Agent for the  Accounts  of  Employees,  except a  distribution
     subject to Articles  8(a) or 8(b),  shall,  to the extent  practicable,  be
     distributed  in kind  to the  Employees  in  proportion  to the  respective
     numbers of Shares in their Accounts. To the extent that such a distribution
     in kind is not practicable,  such non-cash  distribution  shall be sold and
     the proceeds distributed in like manner.

                                       12

<PAGE>

                          Article 9. Voting of Shares.

        Each Employee  shall be entitled to direct the Agent as to the manner in
    which  any  Shares  held in such  Employee's  Account  are to be  voted  and
    appropriate  procedures  shall be  established  to enable  the  Employee  to
    exercise  such right.  The Company  shall provide to each Employee for whose
    account  Shares are held under the Plan a copy of all proxy  statements  and
    annual, quarterly and other reports distributed by the Company to holders of
    record of Shares.

                                       13

<PAGE>

                    Article 10. Termination and Modification;

                           Responsibility of Company and Plan Director.

      (a)  The  Board of  Directors  of the  Company  shall  have  the  power to
           suspend,  terminate,  amend  or  otherwise  modify  the  Plan and the
           Chairman  of the Board,  the Vice  Chairman  of the  Board,  the Vice
           President-Human  Resources and the Treasurer of the Employer are each
           authorized to make such changes from time to time to the Plan as such
           officer may approve as  necessary  or desirable to comply with law or
           to facilitate  the  administration  of the Plan. No such  suspension,
           termination,  amendment or  modification  shall restrict the right of
           any  Employee to withdraw all full Shares held in his or her Account,
           and to receive  the net  proceeds,  after  expenses  of sale,  of any
           fractional Share held in such Account.  All  participating  Employees
           shall be given notice of any such suspension,  termination, amendment
           or modification at least 30 days prior to the effective date thereof.
           Termination of the Plan shall have the same effects,  with respect to
           each  Employee,  as are  provided for in Article 7(a) in the event of
           termination of such Employee's status as an Employee.

      (b)  Any  Affiliate  may adopt this Plan with the  consent of the Board of
           Directors of the Company; provided, however, that the Chairman of the
           Board,  the  President,   the  Executive  Vice  President  and  Chief
           Financial  Officer  and the  Vice  President-Human  Resources  of the
           Employer  shall each have  authority to permit  participation  in the
           Plan by an Affiliate on such terms and conditions as such officer may
           approve.  Upon the  effective  date of the adoption of the Plan by an
           Affiliate,  the Affiliate shall become a Participating Employer. Each
           Participating  Employer shall be named in Appendix B. A Participating
           Employer may terminate its participation in the Plan upon appropriate
           action.

      (c)  The  Company,  Employer,  Participating  Employer(s),  and  the  Plan
           Director  shall  not be  liable  hereunder  for any act  done in good
           faith,  or for any good faith  omission  to act,  including,  without
           limitation, any claim for delay in paying funds over to the Agent for
           the Account of an Employee.

                                       14
<PAGE>

                Article 11. Administration, Operation and General Provisions

(a)  Plan Director Authority All determinations  required or permitted under the
     Plan or in its  administration,  which  are not  reserved  to the  Board of
     Directors of the Company,  the Chief Executive Officer of the Employer,  or
     the Agent or otherwise  specified under the Plan, shall be made by the Plan
     Director. All such determinations,  whether reserved or not reserved, shall
     be conclusive and binding on the Employee or Employees affected.

(b)  Expenses of Plan.  Except as otherwise  provided in the Plan,  the Employer
     and any  Participating  Employer shall pay all expenses in connection  with
     administration of the Plan,  including,  without  limitation,  the fees and
     expenses of the Agent applicable to its Employees

(c)  Recoupment of Company Overpayments.  Notwithstanding  anything in this Plan
     to  ----------------------------------  the contrary,  if at any time it is
     discovered  that  through  error,  inadvertence,  mistake  or for any other
     reason,  the  Employer or any  Participating  Employer has paid over to the
     Agent for the Account of an  Employee  an amount  which is in excess of the
     amount  which  should  have been paid over for such  Account,  pursuant  to
     Article 4 and Appendix A, or if it shall be discovered  that an amount paid
     over to the Agent  pursuant  to  Article  3(a) was in excess of the pay due
     such Employee (net of all other  deductions)  from which such amount was to
     have been deducted,  and if such overpayment shall be discovered and notice
     given to the Agent  prior to the  application  of such  overpayment  by the
     Agent to the purchase of Shares, the Agent shall promptly return the amount
     of such overpayment to the Employer or Participating Employer).

(d)   Agent's Tenure and Responsibility.

     (i)  The Agent may resign at any time by delivering its written resignation
          to the Employer,  and the Employer may remove the Agent at any time by
          delivering  to the Agent a written  notice of removal;  provided  that
          such  resignation or removal shall not take effect until the effective
          date of an appointment of a successor  Agent. A successor Agent may be
          appointed  by the  Employer  upon 30 days notice to the  participating
          Employees and the incumbent Agent. Each  participating  Employee shall
          be deemed to have consented to such  appointment  unless such Employee
          directs,  pursuant  to Article  6(b),  a  distribution  or sale of all
          shares in such Employee's  Account prior to the effective date of such
          appointment.  If no successor Agent shall be appointed

                                       15
<PAGE>

          within 90 days of delivery of the Agent's resignation or notice
          of removal, the Plan shall terminate.

     (ii)The Agent shall not be liable hereunder for any act done in good faith,
          or for any good faith omission to act,  including without  limitation,
          any claims with respect to the prices at which Shares are purchased or
          sold for Employees' Accounts.

                                       16
<PAGE>

                                            APPENDIX A
                                      EMPLOYER CONTRIBUTIONS

           (a)  This  Appendix A applies  tothe  Employer and any  Participating
                Employer  listed  in  Appendix  B who  has  determined  to  make
                contributions  to the Plan for the account of its  Employees who
                participate in the Plan..

           (b)  At the time the Employer or Participating  Employer pays over to
                the Agent any amount for the Account of an Employee  pursuant to
                Article 3(a) of the Plan, the Employer or Participating Employer
                shall  concurrently pay over to the Agent for the Account of the
                Employee an  additional  amount equal to one-ninth of the amount
                so provided by such Employee.

           (c)  Within 10  business  days  after the  receipt  of funds  from an
                Employee  pursuant to Article 3(b) of the Plan,  the Agent shall
                advise the  Employer or  Participating  Employer of such receipt
                and the Employer or  Participating  Employer  shall promptly pay
                over to the Agent for the Account of such Employee an additional
                amount  equal to  one-ninth  of the amount so  provided  by such
                Employee.

           (d)  Not less than 10 business days after each  dividend  record date
                in respect of Shares,  the Agent  shall  advise the  Employer or
                Participating Employer of the amount of dividends to be received
                by  the  Agent  for  the   Account  of  each   Employee  on  the
                corresponding  dividend payment date,  excluding those dividends
                for  which  the  Agent has  received  instructions  pursuant  to
                Article  3(c) of the Plan.  On such  dividend  payment  date the
                Employer or Participating  Employer shall pay over to the Agent,
                for the  Account  of each  such  Employee,  an  amount  equal to
                one-ninth of the amount of such  dividends to be received by the
                Agent on such date for such Account.

           (e)  The Employer or  Participating  Employer  shall,  promptly  upon
                request by the Agent,  reimburse  or provide  funds to the Agent
                for the payment of brokerage  commissions  and other  reasonable
                expenses of purchase  incurred by the Agent  pursuant to Article
                5.
                                       1

<PAGE>

                                              APPENDIX B

                                 EMPLOYER AND PARTICIPATING EMPLOYERS

     (a)  Consolidated  Edison Company of New York, Inc. is the Employer and has
          made  contributions  on  behalf  of its  Employees  since  the  Plan's
          inception.

     (b)  Consolidated Edison Development,  Inc. became a Participating Employer
          in the Plan  effective as of January 1, 2000,  and has  determined  to
          make contributions on behalf of its Employees.

     (c)  Consolidated  Edison Energy,  Inc. became a Participating  Employer in
          the Plan  effective as of January 1, 2000,  and has determined to make
          contributions on behalf of its Employees.

     (d)  Orange  and  Rockland  Utilities,  Inc.  has  become  a  Participating
          Employer in the Plan  effective as of May 1, 2000,  and has determined
          not to make contributions on behalf of its Employees.

      Date: May 1, 2000

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